COURT RULES COMPANIES INFRINGED ON TERCICA'S PATENT FOR INCRELEX

Tercica moved one step closer to prevailing in a patent dispute when a federal court determined that several companies had infringed on its patent for Increlex, a growth hormone.

The U.S. District Court for the Northern District of California ruled June 30 that Insmed, Insmed Therapeutic Proteins and Celtrix Pharmaceuticals infringed on Tercica's patent for Increlex (mecasermin [rDNA origin] injection). Increlex is the only product approved by the FDA for long-term treatment of severe primary insulin-like growth factor deficiency, which causes reduced growth in adolescents, Tercica said.

The court granted Tercica's motions for partial summary judgment in Tercica Inc. v. Insmed Inc., ruling that Insmed's process for making its product Iplex violated the patent on Increlex's production process. The court also agreed that Tercica's "method of use" patent for the product was valid over "prior art," which is a collective term for all products available before an item was patented. This means Insmed will have no prior art defense at trial, therefore Tercica does not need to defend the validity of its patent, which it acquired from Genentech last year, Tercica spokeswoman Kathleen Rinehart said.

The court's decision also makes it more difficult for Insmed to prevail in claiming that the U.S. Patent and Trademark Office wrongly issued the patent, which is Insmed's remaining defense, Rinehart added. The ruling "essentially raises the bar" for Insmed, requiring clear and convincing evidence rather than the lesser standard of a preponderance of the evidence that the patent was issued in error, she said.

But Insmed downplayed the significance of the decision. "The court's rulings do not fully resolve all of the pending issues" regarding the patents, company spokeswoman Natalie Wyeth said. "The decision does not have any impact on Insmed's ability to continue to sell Iplex."

The case is expected to go to trial in November.

The decision is available at: http://trca.client.shareholder.com/downloads/063006_Judgment.pdf (http://trca.client.shareholder.com/downloads/063006_Judgment.pdf).