Ariad says Eli Lilly lawsuit revenues 'may be important,' will move AP23573 to phase 3 testing

By Jennifer Lanning Drey

Eugene, Ore., May 9 - Ariad Pharmaceuticals Inc. said that the $65.2 million and royalty payments it was awarded in a patent-infringement lawsuit against Eli Lilly and Co. will not affect the guidance it has provided for the year, nor will the guidance be modified to take into account potential revenues from the litigation. But the amounts could be significant.

"These may be important revenues for us in the future," said Harvey J. Berger, M.D., chairman and chief executive officer of Ariad in a company conference call on Tuesday.

Last week, a jury in the U.S. District Court for the District of Massachusetts unanimously ordered Eli Lilly to pay the $65.2 million, plus a royalty of 2.3% of U.S. sales of its osteoporosis drug, Evista, and its septic shock drug, Xigris, through 2019 on an ongoing basis.

Berger did not give any specifics as to how those revenues may be used at a later time.

Eli Lilly has indicated it may appeal the case once the judge declares a final verdict, which will happen after certain issues reserved for the judge have been considered. Berger said that although he could not discuss those issues, they are routine and he did not anticipate any major problems with closing the case.

Ariad is also the defendant in a separate patent-infringement lawsuit filed April 24 by Amgen Inc. and its affiliated entities, although Ariad has said in the past it believes there is no basis for the declaratory relief sought by Amgen in the case and will contest the claims as without merit.

Ariad is currently working to move its lead product, AP23573, a cancer-treatment product that displayed clinical benefits in phase 2 testing among patients with advanced sarcomas, toward the phase 3 trial needed for product registration.

When it does reach late-stage or phase 3 status, the company would like to partner with other pharmaceutical and biotechnology companies to launch the product in markets outside the United States.

"I am confident we have the right components in place to make this vision a reality," said Berger, in the conference call.

AP23573 is on track to start phase 3 clinical development in patients with advanced sarcomas later this year.

Ariad reported a net loss of $15.4 million, or 25 cents per share, for the quarter ended March 31, which compares to a net loss was $12.3 million, or 23 cents per share, in the same quarter last year.

Located in Cambridge, Mass., Ariad develops medicines to treat cancer by regulating cell signaling with small molecules.

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