City of Hope awarded $300 million in suit

By Gary Gentile The Associated Press
Tuesday June 11, 2002

LOS ANGELES – A jury awarded the City of Hope medical research center $300.1 million in compensatory damages Monday after finding that Genentech Inc. broke its promise to pay royalties on drugs based on City of Hope research. 

By a vote of 10-2 the Los Angeles County Superior Court jury also found that Genentech, a biotechnology giant, acted with malice or fraud. 

The jury reached its verdict after more than three weeks of deliberation. The panel will reconvene next week to determine punitive damages. 

“We’re going to ask for substantial punitive damages,” said Glenn Krinsky, in-house counsel for City of Hope. 

It was the second trial of the case. The first trial in the civil lawsuit ended in a mistrial last October when the jury failed to reach a verdict after eight days of deliberation. 

“We never lost our confidence,” Krinksy said. “We are elated and feel very vindicated.” 

Genentech, based in South San Francisco, was preparing a statement Monday afternoon. 

City of Hope sued Genentech in 1999, claiming the company concealed licensed sales of protein products such as hepatitis vaccines over a 15-year period that were worth about $16.7 billion. 

The Duarte, Calif.-based research center, which made the protein manufacturing discovery, contended it is owed 2 percent royalties on those sales, plus interest, or $457 million dollars, based on an agreement it signed with Genentech in 1976. 

Genentech claimed that the disputed sales by licensed third parties never qualified for royalty payments under the terms of the agreement. The company said it never concealed deals and paid the hospital everything it was due.