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Executive Summary

CENTOCOR WILL PAY XOMA ROYALTIES ON FUTURE U.S. SALES OF CENTOXIN (HA-1A) under a court order handed down Dec. 10 in San Francisco federal court. Judge Robert Schnacke's decision follows an Oct. 28 jury decision finding that Centocor's HA-1A monoclonal antibody for the treatment of gram-negative septic shock infringes Xoma's patent for its MAb product, E5, in the case Xoma v. Centocor ("The Pink Sheet" Nov. 4, T&G-1). Monetary payments to be made by Centocor to Xoma have not yet been determined; the order states that payments "will be determined by this court on the application of the plaintiff thereof." Xoma said it plans to apply for that determination before the end of the year. Xoma had requested that the court enjoin Centocor from selling HA-1A if approved in the U.S. -- a request that, if granted, would have left the U.S. market without a treatment for gram-negative bacteremia until the approval of Xoma's E5. The order provides an arrangement that will allow either product on the market as soon as it obtains FDA approval. The judge's order adds that "Nothing in this order shall preclude either party from seeking further legal or equitable relief from this Court," leaving Xoma the option of later requesting an injunction on the sale of HA-1A. If Centoxin is the first agent approved by FDA, Xoma would have to wait until E5 also is approved before the judge is likely to entertain an injunction against Centoxin. If E5 is the first agent approved, Xoma may file for an injunction immediately. Centoxin was found to be safe and effective for presumptive gram-negative bacteremia in patients with or without septic shock by FDA's Vaccines & Related Biological Products Advisory Committee on Sept. 4 ("The Pink Sheet" Sept. 9, p. 14). The committee put consideration of E5 on hold pending additional analyses of Xoma's two pivotal clinical trials ("The Pink Sheet" Sept. 9, p. 17). Shortly after the committee meeting, FDA's review of E5 was switched to the Division of Bacterial Products. The switch, however, left unclear what the effect would be on the product's continued review within the agency ("The Pink Sheet" Sept. 23, T&G-1). Centocor said it is "encouraged" by the Dec. 10 court order since it vacates the hearing on Xoma's motion for injunctive relief, putting any such action into the future. Any future injunction would be the subject of a new hearing. Another provision of the order requires Centocor to provide by Jan. 1, 1992, "and by the first day of each calendar month thereafter," a report detailing "all instances in which a dose of HA-1A has been used or sold in the United States." The report is to include financial details of each use, and should include information on all use of HA-1A since Nov. 1. Centoxin has been part of an open-label trial, which counted as Centocor's second pivotal clinical. Centocor has not decided yet whether to appeal the jury's decision. The company need not make that decision until 30 days after final judgment is entered by the court, the company said. Currently, the court is considering Centocor's motion for a "judgment notwithstanding the original verdict, or in the alternative, a new trial." That motion is set for a hearing on Jan. 31. A motion asking a judge to overturn a jury verdict, however, is not often granted. Centocor has open a number of options. The company may choose to countersue Xoma for infringement of the HA-1A patent. Alternatively, the company may file a patent interference with the U.S. Patent & Trademark Office. The company received a patent for its antisepsis monoclonal on Oct. 15.

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