Jury told to resume deliberating City of Hope-Genentech suit

The Associated Press
Wednesday October 24, 2001

LOS ANGELES — A judge Tuesday ordered a divided jury to resume deliberations on whether City of Hope hospital is owed hundreds of millions of dollars in drug royalties from the biotechnology firm Genentech Inc. 

Superior Court Judge Edward Y. Kakita issued the instruction, which is common in such situations in California courts, the morning after the jury reported it was evenly split on the first question before them, a breach-of-contract claim. 

“Do your best to reach a verdict,” Kakita told the 12 jurors. 

At issue is a 1976 contract between South San Francisco-based Genentech and City of Hope in Duarte which provided that Genentech would fund research at the City of Hope’s Beckman Research Institute. In return, Genentech would own whatever patents would be issued and would pay the hospital a 2 percent royalty on the sales of certain drugs resulting from the research. 

The hospital sued Genentech, alleging it concealed licenses with drug companies over the 25 years of the deal to avoid paying about $340 million in royalties. Genentech owes the hospital more than $400 million, including interest, the hospital argued. 

Genentech argued it only owed royalties for drugs made using synthetic DNA manufactured by City of Hope. 

The jury heard 16 days of testimony in the trial, which began Sept. 4.