Elan faces drug patent fraud suit in US

Irish pharmaceuticals group Elan has been accused of patent fraud by a US university over the discovery of a new treatment for one of its drugs.

The drug, Zonegran, has since been sold by Elan to Japanese group Eisai, which is also named in the lawsuit filed by Duke University.

At the heart of the dispute is the possibility of using the drug, clinically known as zonisamide, as a treatment for obesity.

Duke University says the drugs company approached it see whether Zonegran, better known as a treatment for epilepsy, had potential in relation to tackling bipolar disorder.

The university says its researchers alerted Elan in 2000 to the possibility that the drug might work in tackling obesity.

Elan funded a year-long study of its prospects in this field. However, there was no intellectual property agreement between the two parties - a situation industry observers described as "extremely unusual" in the era of growing commercial links between drug companies and academic institutions.

Duke filed a patent application for the use of zonisamide as part of a treatment in addressing obesity on May 17th, 2002, as a result of its clinical trial. At that stage it discovered that Elan had filed a patent 11 days earlier claiming sole rights as inventor.

Apart from patent fraud, the Duke suit alleges copyright infringement and seeks damages.Eisai is named in the suit, filed in the US District Court in Durham, North Carolina, along with Elan and Ms Julianne Jennings, an Elan product manager named in the patent as inventor of the diet treatment. Duke has been joined in the lawsuit by Orexigen Therapeutics, a New Jersey company, that has licensing arrangements with the university.

A spokeswoman for Elan referred queries on to Eisai, although the disputed patent was filed by Elan before the sale of Zonegran. Asked about Elan's position, she would say only that "as a matter of policy the company would not comment on pending litigation."

Zonegran was first marketed in the US in May 2000. The drug, which is manufactured in Athlone, Co Westmeath, brought in sales of $80.7 million (€65 million) for Elan in 2003, an 87 per cent rise on the previous year.

Elan, which had the rights to sell the drug as an epilepsy treatment in North America and Europe, sold those rights on to Eisai, a US subsidiary of a Japanese pharmaceuticals company, for $130 million in a deal concluded earlier this year.

The company stands to receive additional payments of up to $110 million on the deal, subject to certain conditions.

At the time of the disposal, Elan, which has been involved in a massive disposal of assets to restructure the company following a collapse of its share price amid post-Enron concern about accounting practices, said the sale was not part of its recovery plan.

In its annual report, the company said that the decision to sell the drug for which it had sought European marketing approval late last year was down to a decision to concentrate on its core pipeline products Antegren and Prialt.