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Issue 4COMPANY NEWS
The Biotechnological War
between Amgen and J&J
he multi-billion dollar anemia drug — erythropoietin, or EPO, is the T reason for the ensuing feud between two leading drug companies —
Amgen Inc. and Johnson & Johnson (J&J). Both companies insist on their right to market this highly successful biotechnology drug.
W this year, the demand for the drug
In 1985, Amgen was still a biotechnology upstart, requiring support from J&J. A contract was signed between the two companies whereby Amgen was to manufacture EPO and only have the right to market it in the US to patients undergoing kidney-dialysis treatment. J&J on the other hand, reserves all other rights to the drug. Until today, the disputes have remained unresolved as the products from the two companies are interchangeable.
situation is not quite the same now.
This in turn has led to difficulties in drug tracking (i.e. which company’s drug is going to which patients) and revenue allocation. Also, there is an obvious imbalance in the share of the market. Amgen’s dialysis business is extremely limited while J&J’s demand for cancer drugs is fast-growing.
Recently, Amgen has developed a novel erythropoiesis stimulating protein, or NESP, the successor to EPO. Like EPO, NESP boosts red blood cells, but it does not need to be taken as often. However, the question remains.
Is NESP a new drug, or simply an improved version of EPO? The answer defines the future of Amgen. If NESP is new, Amgen will thus have the chance to be free of its association with J&J, and effectively compete in is the cost of the drug. In recent months, an international arena with big players like Rodre Holding AG (which markets an EPO drug with a different heritage outside the U.S.), and Kirin Brewery (which sells Amgen’s EPO in Japan). If NESP is merely an improved version of EPO, J&J will be able to sell it too. As EPO sales contribute to 5% of the entire company’s revenue, losing this battle may earlier that Viagra sales will drop after prove catastrophic for J&J. The entire proceeding is taking place behind the initial take-off, many were surprised closed doors. A binding decision is expected to be issued before the end no further slowdown in sales is expected.
Amgen scientists claim that NESP is “biologically distinct” from recombinant EPO, and that it behaves very differently from the original product. Moreover, NESP will be patented separately, thus establishing it approved in Europe. Also, despite the fact as a distinct product. But on the other hand, it can be argued upon that NESP was created by a slight modification of the original EPO molecule, and should not be regarded as a separate product.
Biotech attorneys and securities analysts are unwilling to predict the final consumption, many doctors feel that it is outcome of the NESP case. Neither Amgen nor J&J has provided hints of its legal strategy. The arbitrators could settle this feud once and for all by awarding Amgen an increased share of NESP profits. The litigation could were either elderly, or had other medical be one way to get J&J to negotiate a higher royalty.
or nitrates despite package warnings.
APBN • Vol. 2 • Nos. 25 & 26 • 1998
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