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Executive Summary

SMITHKLINE BEECHAM TO RECEIVE ROYALTIES FROM GLAXO ON SALES OF ZOFRAN (ondansetron) under an April 15 settlement of a patent dispute. "SB will license all its use patents on ondansetron to Glaxo," SmithKline Beecham said. "In return, Glaxo will make royalty payments to SB based on worldwide sales of ondansetron for the treatment of emesis." SmithKline Beecham filed suit against Glaxo in Philadelphia federal court April 30, 1991 alleging that Zofran infringes SB's U.S. patent 4,783,478 covering the use of 5-HT[3] antagonists to treat nausea and vomiting ("The Pink Sheet" May 6, 1991, T&G-5). Glaxo has a composition patent on ondansetron. In November, the European patent office informed SmithKline Beecham that it intended to issue a use patent to SB analogous to the U.S. '478 patent. That event apparently precipitated the settlement. An NDA for SmithKline Beecham's own 5-HT[3] antagonist, Kytril (granisetron), was not recommended for approval by an FDA advisory committee in March due to concerns about potential carcinogenicity and cardiovascular side effects ("The Pink Sheet" March 15, p. 10). The settlement with Glaxo will take some of the sting out of that setback by providing SB with an unspecified share of the U.S. 5-HT[3] market. Glaxo reported worldwide sales of Zofran of $284 mil. for the six months ended Dec. 31, an increase of 36% ("The Pink Sheet" March 1, p. 23). Zofran is currently marketed in the U.S. for treatment of nausea and vomiting associated with chemotherapy. A tablet dosage form was just launched, and a new indication for post-operative emesis has been recommended for approval. Zofran is also under development for various psychiatric and cognitive disorders for which Glaxo apparently is not liable to pay royalties should the indications be approved.

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