In the story of the patent case that never gets concluded, yesterday the Associated Press and others reported that Amgen
Roche and Amgen have been at odds over whether Mircera violates the patents on Amgen's $6 billion-a-year anemia drugs Epogen and Aranesp. Besides the little fact that Epogen has been on the market since 1989 in the U.S. (Aranesp was only approved in 2001), last year a judge ruled that Roche was violating Amgen's patents on these compounds and issued an injunction preventing Mircera from entering the market.
I'm not aware of any other drug that has been on the market since the 1980s like Epogen and still has valid patents (besides the whole Genentech
Roche initially balked at the judge's offer, but two weeks ago changed its mind and agreed to the terms. Earlier this week, though, the judge in the patent case decided to seek advice from outside experts on all these issues before letting Roche go ahead with marketing Mircera.
The royalty that Roche would be paying on sales of Mircera is more than double the 10% royalty that Amgen's partner Johnson & Johnson (NYSE: JNJ) pays Amgen on sales of Epogen (marked by J&J under the Procrit brand name) in markets outside of dialysis patients. But what gets Amgen all hot and bothered is that even this 22.5% royalty rate Roche would pay will likely be less than the margins it generates on its own sales of Epogen and Aranesp. Therefore, Amgen has been asking the judge to prevent Mircera from entering the market at all.
To reinforce its position, yesterday Amgen issued a threat that it would sue for damages if (presumably) Roche went ahead with an at-risk launch of Mircera before the judge issued his final ruling. Roche hasn't issued any press releases with its plans for the drug yet, so it looks like we'll probably have to wait to read the next chapter in these anemia-drug wars.
Johnson & Johnson is an active Income Investor pick.