March 26, 2008 / 5:33 PM / 11 years ago

UPDATE 3-U.S. judge seeks expert advice on Amgen-Roche case

(Adds Amgen comment, paragraphs 10-12)

By Deena Beasley

LOS ANGELES, March 26 (Reuters) - The federal judge overseeing Amgen Inc’s (AMGN.O) patent infringement case against Roche Holding AG ROG.VX ordered an expert be appointed to recommend how to compare the dosing and prices of the companies’ anemia drugs.

The Wednesday order delays until at least mid-June the judge’s decision on whether or not to bar U.S. sales of Roche’s Mircera, a court spokeswoman said.

A U.S. District Court jury in Boston found in October that patents on Amgen’s anemia drugs were valid and that Mircera, which is approved for treatment of anemia in kidney disease patients, infringed three of them.

But U.S. District Judge William Young has declined to issue a permanent injunction barring sales of Mircera in the United States and has said he may instead impose a licensing deal allowing Roche to launch its drug — which is administered less frequently than Amgen’s Epogen and Aranesp — if certain terms were met.

Although Amgen prevailed in the patent case, a compulsory license is a possibility following a 2006 U.S. Supreme Court decision in eBay vs. MercExchange that weakened the powers of courts to issue injunctions barring firms from using infringing technology.

Judge Young has said it may not be in the public interest to ban Mircera sales and Roche agreed last week to his suggested conditions for a license, including the payment of a 22.5 percent royalty to Amgen and a Medicare sales price below that of Epogen.

In the order, Young said he “continues to grapple with complex issues related to Amgen’s request” for a permanent injunction and ordered the appointment of a “special master” to make recommended findings regarding price parity, as well as the dose conversion ratios for Mircera and Epogen.

The judge’s action “indicates he is considering a Mircera launch despite Amgen’s arguments regarding the damage that not issuing a permanent injunction can cause to the U.S. patent system,” Citigroup analyst Yaron Werber said in a research note.

Judge Young gave Amgen and Roche 15 days to submit a list of candidates and said the expert will have 60 days after that to make the requested findings.

Separately, Amgen filed a motion with the court asking the judge to allow for a trial to determine the full amount of compensation due Amgen if Roche is allowed to commercialize its drug in the United States.

Amgen said in a statement that it continues to believe a permanent injunction is the appropriate remedy in the case and said it would withdraw the motion if a permanent injunction is granted.

“The royalty payments and other remedies recently discussed in court would not begin to fully compensate for Amgen’s lost profits,” the company said.

Bear Stearns analyst Mark Schoenebaum said in a conference call he expected Amgen’s combined sales of Epogen and Aranesp for kidney disease to total $2.9 billion next year.

He estimated that for every $100 million in sales that could be lost to Roche, Amgen’s annual earnings would drop by a net 5 cents per share.

Shares of Amgen, which hit a 12 month low last week amid renewed concerns about the safety of anemia drugs for cancer patients, rose $1.16, or 2.84 percent, to close at $42 on Nasdaq. (Reporting by Deena Beasley; Editing by Carol Bishopric and Leslie Gevirtz)

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