Features

SACRAMENTO – Two of biotechnology’s biggest companies are locking horns in a courtroom battle over nearly $1 billion in profits generated by Genentech Inc.’s breast cancer drug Herceptin. 

Some of the world’s smartest scientists will leave their labs during the next few weeks to be grilled by expensive lawyers in the high-stakes biotechnology arena of patent litigation. 

Chiron Corp. sued Genentech over commercial rights, saying it holds a key patent to the technology behind Herceptin, one of biotech’s best-selling drugs. 

U.S. District Court Judge William Shubb has already ruled that Genentech has indeed infringed on a Chiron patent. Now it’s up to Genentech’s lawyers, from whom opening statements were expected Wednesday, to persuade a jury that Chiron’s patent was improperly granted. 

If the lawyers fail, Genentech could be forced to cough up 30 percent of its Herceptin profits — plus triple damages if the jury finds Genentech purposely infringed. 

Good patent lawyers are as important to biotechnology companies as pedigreed scientists. Perhaps more than any other industry, biotech firms call on such lawyers to untangle — or further tangle, depending on objective — the Gordian knot of U.S. patent law. 

No company knows this better than Genentech, the world’s first biotechnology company. 

Founded in 1976 on the then-novel technology of gene splicing by Silicon Valley venture capitalist Robert Swanson and University of California, San Francisco scientist Herbert Boyer, Genentech has grown to 5,000 employees, with 10 products on the market and $2.2 billion in annual revenues last year. Only Amgen Inc. is larger in biotechnology. 

To support, poach from and compete with Genentech, other biotechnology companies soon sprouted nearby, making the San Francisco Bay Area the U.S. biotechnology capital. 

Five years after Genentech’s launch, three UCSF scientists with similar aspirations started Chiron in Emeryville, just across the Bay Bridge. 

But while Chiron is one of the few profitable biotechnology companies, with $1.1 billion in annual revenues last year, analysts and former employees say that until recently, it has focused more on science than business. 

Genentech, meanwhile, decided long ago that aggressive intellectual property litigation would be a big part of its business strategy. 

Genentech’s patent lawyers are constantly vigilant — the company is currently enmeshed in at least eight separate patent cases in the United States alone. Several involve Herceptin, a so-called monoclonal antibody, which is a naturally occurring cancer-fighting molecule that attacks a deadly protein found in about 30 percent of breast cancer patients. 

Using a process it patented in 1997, Genentech produces the antibody by splicing a human gene into Chinese hamster ovary cells, which it brews in giant batches in “bioreactors.” Genentech also received a patent on the antibody itself. 

Through a series of filters and chemical reactions, the human antibodies created in the hamster cells are sucked out, purified and turned into Herceptin as well as two other protein-based therapies. 

In the mid-1980s, scientists at several different labs were racing to find, patent and produce cancer-fighting antibodies in mass quantities. 

Cetus Corp., a small biotech company acquired by Chiron in 1991, filed the first of a long series of Herceptin-related monoclonal antibody applications in 1984. But Genentech was granted the first patent. 

Two years ago, Chiron was granted a patent stemming from the 1984 application. Judge Shubb has ruled that it applied to the same key ingredient for which the Genentech patent was granted. 

“We believe that years of research and development spent by Chiron scientists on identifying specific antibodies that can be used to diagnose and treat breast cancer should bdokesman John Gallagher said. “And the compihe value of the technology on the market.” 

Genentech maintains that Chiron’s antibody is something different, and that Herceptin’s technology was independently developed. 

But even this case won’t resolve Genentech’s fights with Chiron, which filed another lawsuit in March alleging that Herceptin violates yet another one of its patents. That case is scheduled to go to trial next year. 

Last year, Genentech sold a record $347 million worth of the drug, which has racked up nearly $1 billion in sales since the Food and Drug Administration first approved Herceptin in late 1998. 

Genentech is appealing an unrelated $500 million verdict in Los Angeles involving the City of Hope Medical Center, which said the company refused to share profits of drugs developed with help from the hospital.