Abbott Labs loses $1.7 billion Humira patent lawsuit to Johnson & Johnson

Jun 30, 2009 (Chicago Tribune - McClatchy-Tribune Information Services via COMTEX) -- JNJ | Quote | Chart | News | PowerRating -- In one of the largest patent verdicts in U.S. history, a federal jury Monday said Abbott Laboratories should pay nearly $1.7 billion in damages to Johnson & Johnson, which claimed the suburban Chicago drug giant used J&J technology to make a blockbuster rheumatoid arthritis drug.

Humira is Abbott's largest-selling product and one of the world's top-selling drugs, generating more than $4 billion in annual sales last year as a treatment for rheumatoid arthritis, Crohn's disease and psoriasis among other autoimmune disorders.

J &J's Centocor subsidiary claimed Humira was made with technology developed by New York University and exclusively licensed to the New Jersey drug giant, which sells a similar drug known as Remicade, which last year notched global sales of nearly $5 billion.

Abbott has argued that Humira was the first of its kind, fully derived from human DNA, compared to Remicade, which is made partially from mouse DNA.

Both drugs, which can cost more than $18,000 a year, are part of a class of biotechnology drugs that were each in the top 15 in global brand-name pharmaceutical sales, according to market research firm IMS Health.

The ruling's long-term impact on Abbott sales is unclear.

Humira sales were forecast to grow more than 15 percent this year alone, and Abbott stock tumbled more than 2 percent in after-hours trading Monday.

The patent in dispute expires in two years, but it's not known whether that means cheaper generic versions would come onto the market. Humira has other patents with longer life spans, and there currently is no regulatory pathway at the Food and Drug Administration to make generic versions, or so-called "biosimilars," of drugs derived from biotechnology.

However, the Obama administration is pushing to make such regulations a part of health-care reform, which could bring lower-cost competition to expensive brand name biotech drugs such as Humira and Remicade.

Richard Sayles, an attorney with Sayles Werbner in Dallas who represented J&J, told Bloomberg News, "We're elated with the result" of the verdict. "It was one we hoped for and we are very pleased with," though "there is work yet to be done."

J&J has said it isn't seeking to block sales of the drug, only to get a share of the sales. Even if it paid the damages, Abbott would make a large profit off the drug, J&J attorneys told the jury earlier Monday.

An Abbott spokesman said, "We are disappointed in this verdict, and we are confident in the merits of our case and that we will prevail on appeal."

The U.S. District Court in Marshall, Texas, is known to be friendly to plaintiffs, according to legal observers and published reports.

In 2001 Abbott paid nearly $7 billion to acquire Knoll Pharmaceuticals largely to get Humira.

Bloomberg News contributed to this report. bjapsen@tribune.com

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