Litigation Settlement Reached Between Tercica, Genentech and Insmed
07 Mars 2007 - 1:18AM
Business Wire
Tercica, Inc., (Nasdaq:TRCA) and Insmed Incorporated (Nasdaq:INSM)
today announced that Tercica, Insmed and Genentech, Inc. (NYSE:DNA)
have entered a Settlement, License and Development Agreement that
resolves all outstanding litigation between the companies,
including the patent infringement suits brought by Tercica and
Genentech against Insmed in the United States (N.D. Cal.) and
United Kingdom, and the unfair business practices suit (E.D.
Virginia). The key elements of this settlement are: Insmed will no
longer provide IPLEX� to patients with severe Primary IGF-1
Deficiency and other short stature indications and will withdraw
its IPLEX marketing authorization application for severe Primary
IGF-1 Deficiency in the European Union. Through licensing and
development rights granted by Tercica and Genentech, Insmed will
have freedom to operate regarding the manufacture, development and
commercialization of IPLEX for certain non-short stature
indications including severe insulin resistance, myotonic muscular
dystrophy and HIV associated adipose redistribution syndrome
(HARS), subject to opt-in rights and royalty provisions for Tercica
and Genentech. Tercica and Genentech have waived the damages award
by the jury in the U.S. patent infringement litigation. In a joint
statement, Dr. John A. Scarlett, Tercica�s President and Chief
Executive Officer, and Dr. Geoffrey Allan, Insmed�s President,
Chief Executive Officer and Chairman of the Board of Directors,
stated, �We are very pleased with our new licensing and development
relationship. It allows Tercica to focus its efforts in the short
stature market and allows Insmed, in cooperation with Tercica and
Genentech, to focus its IPLEX development efforts in valuable
non-short stature indications.� U.S./Canada IPLEX Sales for
Tercica/Genentech Indications As a consequence of the court�s
finding that Tercica�s patents were infringed, Insmed will no
longer be able to provide IPLEX in the U.S. for severe Primary
IGF-1 Deficiency and the following indications: Primary IGF-1
Deficiency, Noonan�s Syndrome, Laron Syndrome, Growth Hormone
Deficiency, and all other short stature indications; and Adult
Growth Hormone Deficiency. These indications are collectively
referred to as �the TRCA/Genentech Indications.� Insmed and Tercica
will work closely together with pediatric endocrinologists to
identify therapeutic alternatives for children currently receiving
IPLEX, and where appropriate, to transition patients to Increlex�.
IPLEX Worldwide License and Development Agreement The parties will
form a joint development (and subsequently, a joint
commercialization) committee to guide the development and
commercialization of IPLEX in non-Tercica/Genentech Indications.
Tercica (along with Ipsen, for Ipsen�s Increlex territory) and
Genentech will have the right to opt into Insmed�s development and
commercialization of each non-Tercica/Genentech Indication up to 90
days after Insmed provides �Phase III-enabling� clinical data.
Tercica will have the first right to opt into orphan indications,
and Genentech will have the first right to opt into non-orphan
indications. If Tercica does not opt into an orphan indication,
Genentech will have the right to opt-in. Similarly, if Genentech
does not opt into a non-orphan indication, Tercica will have the
right to opt-in. In the case of an opt-in, Insmed will retain
development control prior to approval, and Tercica or Genentech
would gain commercial control after approval. If the opt-in is
exercised by Tercica, Insmed would be reimbursed 50% of its
incurred development costs for the indication and further
development costs would be shared 50:50. Upon subsequent
commercialization, Insmed and Tercica will split profits 50:50
after accounting for relevant expenses including sales-based tiered
royalties of 6%-15% to Genentech. If the opt-in is exercised by
Genentech, Insmed would be reimbursed 50% of its incurred
development costs for the indication. Subsequent development costs
and profits will be split 50:50, but no royalty will be owed to
Tercica. If neither Tercica nor Genentech opts in, Insmed will pay
a 4% royalty on all commercial sales of the approved drug to
Genentech. Worldwide Pre-Approval IPLEX Sales Outside the U.S. and
Canada, Insmed will be permitted to continue to provide IPLEX to
physicians through its Expanded Access Program for non
Tercica/Genentech indications (excluding severe insulin resistance)
and ALS in Italy. Any cost reimbursement obtained from this program
would be subject to a tiered royalty of 4% to 15% shared between
Tercica, Genentech and Ipsen. The Settlement, License and
Development Agreement is in effect until the later of 2018 or the
expiration of any subsequent Tercica/Genentech issued patents that
cover IPLEX or its indications. About Tercica Tercica is a
biopharmaceutical company committed to improving endocrine health
by partnering with the endocrine community to develop and
commercialize new therapeutics for short stature and other
metabolic disorders. For further information on Tercica, please
visit www.tercica.com. About Insmed Insmed Inc. is a
biopharmaceutical company focused on the development and
commercialization of drug candidates for the treatment of metabolic
diseases and endocrine disorders with unmet medical needs. For more
information, please visit www.insmed.com Tercica Safe Harbor
Statement Except for the historical statements contained herein,
this press release contains forward-looking statements concerning
prospects and results, including statements concerning a worldwide
partnership with opt-in rights for Tercica on non-Tercica/Genentech
Indications and settlement of all outstanding litigation between
Tercica, Genentech and Insmed. Because Tercica�s forward-looking
statements are subject to risks and uncertainties, there are
important factors that could cause actual results to differ
materially from those in the forward-looking statements. These
factors include, without limitation, the risk that none of the
non-Tercica/Genentech Indications demonstrate clinically meaningful
efficacy and safety, and the risks and uncertainties disclosed from
time to time in reports filed by Tercica with the SEC, including
most recently Tercica's Form 10-Q for the quarter ended September
30, 2006 filed with the SEC on November 3, 2006. Insmed Safe Harbor
Statement Statements included within this press release, which are
not historical in nature, may constitute forward-looking statements
for purposes of the safe harbor provided by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements in this
press release include, but are not limited to, statements regarding
business strategies, growth opportunities for approved or proposed
products, plans and objectives of management. Such forward-looking
statements are subject to numerous risks and uncertainties,
including risks that our product candidates may fail in clinical
trials or may not be successfully marketed, we may lack financial
resources to complete development of product candidates, we may be
unable to raise additional financing necessary to continue current
operations competing products may be more successful, demand for
new pharmaceutical products may decrease and the biopharmaceutical
industry may experience negative market trends. As a result of
these and other risks and uncertainties, actual results may differ
materially from those described in this press release. For further
information with respect to factors that could cause actual results
to differ from expectations, reference is made to reports filed by
the Company with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended. The forward-looking
statements made in this release are made only as of the date hereof
and Insmed disclaims any intention or responsibility for updating
predictions or financial guidance contained in this release.
Insmed (NASDAQ:INSM)
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