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Executive Summary

SMOKING CESSATION BUSINESS IS PATCHWORK QUILT OF LITIGATION with three patent infringement suits pending on nicotine transdermal patches. Meanwhile, shipments of the first patch approved, Marion Merrell Dow/Alza's Nicoderm, are held up pending resolution of one of the lawsuits. That suit, brought by Elan and Lederle against MMD/Alza, was the subject of a Dec. 6 hearing in San Francisco federal court. The court plans to issue an initial ruling Dec. 9 but has continued a temporary restraining order against Nicoderm shipments in the meantime. That situation could provide an opportunity for Ciba-Geigy's Habitrol patch, approved Nov. 27 (see previous T&G). Ciba-Geigy entered the nicotine patch patent fray Nov. 27 by also suing Marion Merrell Dow/Alza. The suit, filed in Federal Court in Newark, N.J., alleges that "the manufacture, use or sale" of Alza and Marion Merrell Dow's Nicoderm nicotine patch "infringes patent rights exclusively licensed to Ciba-Geigy." The court on Dec. 4 refused to grant Ciba-Geigy's request for a temporary restraining order on the manufacture, use or sale of Nicoderm. A hearing is scheduled for Dec. 23 to rule on Ciba- Geigy's request for a preliminary injunction against the Marion Merrell Dow/Alza patch. Alza maintained Dec. 2 that the suit is "without merit" and that it would "defend against it vigorously." Alza said Ciba's suit involves patent 5,106,652, issued May 21, 1991, which covers a "method and apparatus for aiding in the reduction of incidence in tobacco smoking" and is assigned to The Regents of the University of California, Berkeley. The first patent suit on transdermal nicotine patches, Elan v. Cygnus Therapeutic Systems, continues in litigation. Filed last May, the suit alleges that Nicotrol 16, which is pending approval at FDA, violates a method of use patent held by Elan ("The Pink Sheet" May 20, T&G-4). Cygnus and Kabi Pharmacia codeveloped Nicotrol 16 using Cygnus' proprietary matrix technology. Cygnus will manufacture the patch, while Warner-Lambert has licensed the marketing rights from Kabi. Warner-Lambert has stated that it does not forsee any obstacles to its marketing of the patch once regulatory approval is obtained. Marion Merrell Dow Chairman and CEO Joseph Temple predicted Dec. 3 that while MMD sees Nicoderm, approved Nov. 7, as "becoming the lead product in our smoking cessation line," Nicorette gum will retain a "significant share" of the market. Based "on a simultaneous launch by us and one competitor, we've predicted that the combined 1992 sales potential of Nicorette and Nicoderm will be in excess of $ 150 mil. and growing from there," Temple said at the Mabon Securities Research Conference. MMD sales of Nicorette through the third quarter (ended Sept. 30) were $ 86 mil. Temple also outlined the company's strategy for positioning the patch and gum for different types of patients. The Nicoderm patch will be targeted to patients who prefer their physicians to take more charge of treatment, have compliance problems, are more heavily addicted, or have dentures or jaw conditions that preclude frequent gum chewing. Temple noted that MMD is backing up Nicoderm with a 10-week "quitters program" providing patient educational materials to help them taper from the 21 mg patch to the 14 mg and 7 mg patches ("The Pink Sheet" Nov. 11, T&G-1). In contrast, Nicorette gum will be targeted to patients who view themselves as more independent, who are less addicted, or who need either the oral gratification or the "ritual" of chewing gum to replace smoking, Temple said. The gum also is more likely to be used by patients with allergies or skin problems. In addition, Temple said, the gum might have potential for use when smokers are confined to areas where smoking is prohibited, such as airplanes or offices.

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