PDL BioPharma and Alexion Pharmaceuticals resolve patent dispute

Jan 5 2009

PDL BioPharma, Inc. and Alexion Pharmaceuticals, Inc. today jointly announced that the companies have entered into a definitive license agreement and settlement agreement that resolve the legal disputes between them relating to Alexion's humanized antibody, Soliris (eculizumab) and PDL's patents known as the Queen et al. patents.

Under the agreements announced today, PDL has granted Alexion a license under certain claims in the Queen patent portfolio, and provided Alexion a covenant not to sue in respect of other claims in the Queen patent portfolio, thus permitting Alexion to commercialize Soliris for all indications under the Queen patents. In consideration of this license, Alexion will pay PDL $25 million. No additional payments will be owed by Alexion to PDL under the Queen patents in respect of Soliris sales for any indication. As part of the settlement, Alexion has confirmed that the Queen patent claims are valid and that Soliris employs technology covered under the Queen patents. Further, Alexion has agreed not to challenge or assist other parties in challenging the validity of the Queen patents in the future.

PDL's Queen patents are related to the humanization of antibodies. Soliris was approved in the U.S. and European Union in 2007 as a treatment for patients with paroxysmal nocturnal hemoglobinuria ("PNH"), a rare, debilitating and life-threatening blood disease. The use of Soliris as a treatment for other rare and severe disorders is in early stages of investigation.

Under the license agreement announced today, PDL has separately granted Alexion the right to take a royalty-bearing license under PDL's Queen patents to commercialize additional Alexion humanized antibodies that may be covered by the Queen patents in the future. In the event that Alexion takes such a license, Alexion will pay PDL a royalty of 4% of net sales of such non-Soliris products. Additional terms of the agreements were not disclosed.

"PDL helped revolutionize the development of therapeutic antibodies to treat patients with previously untreatable and devastating conditions," said Leonard Bell, M.D., Chief Executive Officer of Alexion.

John P. McLaughlin, President and Chief Executive Officer of PDL said, "We appreciate Alexion's efforts to resolve the dispute and its acknowledgement about our patents' strength. Soliris is an important therapeutic product, and it serves a critical - and otherwise underserved - market."

With the closing of these agreements, the previously announced claims filed by PDL and counterclaims filed by Alexion in the U.S. District Court for the District of Delaware will be dismissed.