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Insmed Incorporated Message Board

  • fudfighter3 fudfighter3 Dec 6, 2013 9:52 AM Flag

    The Settlement Agreement revisited ...

    Here's an extract from one of Insmed's old SEC filings -

    [ As part of our settlement agreement with Genentech and Tercica, we entered into a Consent Judgment and Permanent Injunction in the United States District Court for the Northern District of California. If our settlement agreement with Tercica and Genentech is terminated, the Consent Judgment and Permanent Injunction against us will survive termination, which would have a material adverse effect on our business, financial condition and results of operations as we would no longer have a license to manufacture IPLEX™ using the present process without incurring significant penalties and royalties. ]

    Note that they didn't say they wouldn't be able to manufacture iPlex - only iPlex "using the present process".

    The key here is that the Settlement Agreement did little more than offer flexibility in the Permanent Injunction - and the Permanent Injunction ONLY prohibited Insmed from activities covered by the three infringed Genentech US patents.

    When the Settlement Agreement was signed both the US and EU IGFBP-3 patents were still current. Those patents covered the manufacture of IGFBP-3 however sourced, meaning that in 2007 the Agreement covered any form of iPlex.

    After those IGFBP-3 patents expired it was a different story, as the Genentech US IGF-1 patent -

    Preparation of human IGF via recombinant DNA technology, US Patent 6331414 (expires 2018)

    - only covers the manufacture of IGF-1 via e.coli host cells (it doesn't cover manufacture via Yeast), and the EU equivalent was revoked not long after it was issued.

    contd ...

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    • continuation ...

      The Settlement Agreement specifically acknowledged the future EU scenario with the following clause -

      [ Insmed shall not apply for or submit an application with the EMEA or any other governmental authority within the European Union or anywhere else in the Other Territory for Marketing Authorization of a Product for any of the Non-Permitted Indications;

      provided, however, that for any such Marketing Authorization the foregoing covenant shall terminate upon the expiration of the last to expire Licensed Patents (i) that exists in a country in the European Union or the Other Territory and that covers the manufacture, use, sale, offer for sale, or importation of such Product to be performed under the license of the Marketing Authorization ... ]

      Btw - the bashers used to claim that once an indication ceased to be a Non-Permitted Indication under that clause it became subject to the opt-in provisions of the Agreement. That was a blatant lie. The opt-in provisions only ever applied to Permitted Indications, and there is no provision in the Agreement which converts a Non-Permitted Indication into a Permitted Indication.

      ROP is still a Permitted Indication in the US, but ceased to be a Permitted Indication in the EU when it fell outside of the scope of the Agreement with the expiry of the EU patents.

      Insmed has also been free for a few years now to resurrect the EU application for the approval of iPlex for Short stature.

      In a nutshell - if an activity is not covered by an unexpired Genentech patent it is outside of the scope of the Settlement Agreement.

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