Novartis sues Glaxo Smith Kline over vaccine patent:

http://business.timesonline.co.uk/tol/business/industry_sectors/health/article6797752.ece


From The Sunday Times
August 16, 2009

Matthew Goodman

Novartis, the Swiss drugs giant, has launched a legal action against Glaxo Smith Kline claiming that its larger rival is infringing one of its patents.

The move, which will be fiercely resisted by the British company, is the latest twist in a bitter dispute that centres on the techniques used to produce a set of vaccines aimed at preventing childhood illnesses, including bacterial meningitis.

It is unusual for the large drugs companies to sue each other, but the case underscores the importance to all drug developers of protecting their intellectual property — their key asset. Vaccines in particular are becoming a growth area for the big pharma companies.

Sources close to Glaxo, headed by chief executive Andrew Witty, say that the company first registered a patent covering the process used in the production of its version of these “conjugate” vaccines in 1981.

Two decades later, Novartis lodged a patent covering a technique used in the production of a number of its own vaccines tackling this type of disease.

Last year, lawyers for Glaxo kicked off proceedings in London and Belgium to try to get the Novartis patent revoked. A source familiar with the case claimed that the Novartis patent was “weak” and “should never have been granted”. A hearing is scheduled for next January.

Daniel Vasella, the Novartis chief executive, is attempting to resist the move by Glaxo by launching an action in the High Court. The firm has lodged a claim against two Glaxo subsidiaries, GSK Biologicals and Smithkline Beecham.

The Swiss company claims that not only should its patent be allowed to stand, but that Glaxo is infringing its intellectual property. The British drug group has yet to formally respond to the action.

It is not clear whether lawyers for Glaxo will apply to have the new case heard alongside its existing legal action against Novartis, but observers said that this was one option.

Glaxo is working with Rouse Legal, the specialist intellectual property law firm, on the dispute, while Novartis is being advised by McDermott, Will & Emery, an American law firm. All parties involved declined to comment.

Vaccines are becoming increasingly important to the world’s big pharma companies as they attempt to steer their businesses away from a reliance on blockbuster pills.
Glaxo, in particular, has played up its presence in the field as it defended itself recently against charges of profiteering from its planned H1N1, or swine flu, vaccine.

In an interview with The Sunday Times three weeks ago, Witty claimed that his company had spent longer than any of its rivals working on the development of vaccines, helping to give it a head start in the battle against swine flu, and that shareholders, therefore, had a right to expect a return from that investment.

In addition to diversifying into vaccines, large pharmaceutical groups are also expanding into generic drug-making and consumer products as they move away from their traditional “white pill” business.

These sectors are all expected to show significant growth in the coming years.