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Why Patents Matter

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Why Patents Matter

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    1. Why Patents Matter by Trini Vargas, Ph.D., of University of Rochester Medical Center Technology Transfer Office, and David G. Perryman, Tina W. McKeon, Ph.D., David E. Huizenga, Ph.D., and Gibson J. Lanier, Ph.D. Needle & Rosenberg, P.C. dhuizenga@needlerosenberg.com 404-688-0770

    2. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 2 Value of Intellectual Property

    3. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 3 Explosion of IP

    4. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 4 Corporate Value 1978

    5. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 5 Corporate Value 1997

    6. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 6 An Example of Value of a Patent August 9, 2000 U.S. Court of Appeals’ invalidated Eli Lilly’s patent on Prozac Upon news Shareholders dumped $36 billion in Lilly stock, roughly a third of the pharmaceutical giant’s market capitalization.

    7. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 7 Why is This? Specifically in Biotechnology and Pharmacology In general – Provides the reward for all of the risk (See Monopoly Pricing) In Biotech there is a LOT of risk . . . and a lot of cost . . . meaning . . . There is huge value placed on patent position

    8. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 8 What drives Risk vs. Reward in Biotechnology 300 million in actual outlays over 10 years to bring a FDA approved product to market (Biospace Online, 2002) Today it costs approximately $ 802 million to bring a new drug to market adjusting for cost of failures (DiMassi et al, 2001) Estimated cost 1.6 Billion by 2005 adjusting for cost of failures (Lehman Brothers 2001) Biotechnology is driving this cost – drugs and products are getting better, more precise, but genomics and precision make discovery much more expensive

    9. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 9 Drug Discovery Risk

    10. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 10 Publicly Funded Licensing Ventures Create Value University Technology Transfer In 1999 university licenses created $40.9 billion in economic activity and supported 270,900 jobs* 5,545 patents were issued to universities in Fiscal Year 1999* 6,812 patent applications filed by Universities in 2001* 4,058 new licenses between Universities and industry created in 2001* 494 start-ups based on a University license created in 2001 * In the US this activity drives the Biotechnology Industry *Statistics from the Association of University Technology Managers

    11. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 11 Rochester Success Story [A] immunogenic conjugate comprising the reduct[i]ve amination product of an immunogenic capsular polymer fragment having a chain length of from about 10 to about 30 monomeric units and a reducing end, which fragment is derived from the capsular polymer of a Streptococcus pneumoniae or Haemophilus influenzae bacterium, and a bacterial toxin or toxoid. Claim covering Dr. Porter Anderson’s Hib Vaccine, United States Patent No. 4,673,574

    12. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 12 Bench to Market Originally could not be licensed, A start-up, Praxis, was created, to continue to move the technology from the bench to the market What has bringing the product to market done Before the vaccine 20,000 children a year caught bacterial meningitis -- After the vaccine 200 children a year catch bacterial meningitis Rochester has received $96 million in royalties to date

    13. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 13 Patent Portfolio First patent issued June 16, 1987 First application filed Aug. 31, 1981 Eventually seven patents covering technology issued First FDA approval in late 1990 Patents now licensed to Wyeth Portfolio now covers vaccines for Streptococcus pneumoniae (Prevnar®) and Haemophilus influenzae bacterium (HibTiter®)

    14. June 18, 2003 © Needle & Rosenberg, P.C. For informational purposes only and not intended as legal advice 14 Take Home Lessons From Hib Vaccines Almost 10 years from the filing of the application to approval of FDA – patents very important to adding value to this long process Initial transfer failed, a perseverance was required to bring the product to market Took multiple commercialization routes, start-up to large corporation Unlikely that the technology, without patent protection, would have ever protected children

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