UPDATE 1-Roche, Biogen end dispute over Rituxan follow-ons

Thu Oct 21, 2010 5:26pm EDT

* Genentech to fund development of ocrelizumab

* Biogen entitled to royalties on ocrelizumab

LOS ANGELES Oct 21 (Reuters) - Biogen Idec Inc (BIIB.O) and Roche Holding AG's (ROG.VX) Genentech unit agreed to amend the terms of their collaboration to develop antibody drugs, ending a long-term dispute.

Under the agreement, Genentech will be responsible for further development and commercialization of ocrelizumab in multiple sclerosis. Biogen will receive tiered, double-digit royalties on future U.S. sales of the experimental drug that will be close to its 30 percent interest in the compound.

The companies said the new terms do not affect their profit split for Rituxan, the big-selling drug used to treat non-Hodgkin's lymphoma (NHL) and rheumatoid arthritis.

They also said Biogen will increase its share of the U.S. losses and profits related to development and commercialization of GA101 -- a third antibody -- to 35 percent from 30 percent. GA101 is being studied as a treatment for NHL and chronic lymphocytic leukemia.

Biogen will pay Genentech around $10 million as a catch-up payment for expenses incurred to date on GA101.

Once GA101 achieves sales milestones, Biogen's share of Rituxan profits will drop to 35 percent from 40 percent.

The companies earlier this year ended development of ocrelizumab as a treatment for rheumatoid arthritis after the deaths of some clinical trial patients were linked to the drug.

An arbitrator ruled last year that Genentech must suspend certain trials until getting the go-ahead from Biogen, which had argued that Genentech couldn't develop follow-on drugs to Rituxan without its approval. (Reporting by Deena Beasley. Editing by John Wallace and Robert MacMillan)

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