Genentech unlikely to fully buy Rituxan

NEW YORK (Reuters) - Genentech Inc DNA.N is unlikely to seek to acquire full rights to the cancer drug Rituxan if its partner, Biogen Idec Inc (BIIB.O), is acquired, according to the chief executive of Roche Holding AG (ROG.VX), which owns a majority stake in Genentech.

Biotechnology companies Genentech and Biogen co-market Rituxan, which is approved to treat non-Hodgkin's lymphoma, a type of bone marrow cancer, and rheumatoid arthritis. But Biogen recently put itself up for sale, and under an agreement between the two companies, Genentech can offer to acquire full rights to the drug.

"I don't think it is necessary for us to do that," Franz Humer, chief executive of the Swiss drugmaker, said on Monday at the Reuters Health Summit in New York. "We have access to a whole range of successor products."

Genentech and Biogen are developing second- and third-generation versions of Rituxan, which was first approved in 1997 and is being studied in a variety of autoimmune disorders. But Biogen would not receive as big a royalty on the second-generation product as on the first.

The next-generation drugs, including ocrelizumab for arthritis, are so-called "humanized" antibodies that are expected to be better tolerated than Rituxan.

The development plans, however, have been challenged by Biogen, which would receive lower royalty payments on the newer drugs. The breach-of-contract charges are under review by an arbitration panel.

If the two sides cannot agree on a settlement, a decision by the arbitration panel is expected by the end of 2008, according to a Genentech spokeswoman.

(For summit blog: summitnotebook.reuters.com/)

(Reporting by Toni Clarke and Deena Beasley; Editing by Brian Moss)