Tuesday, April 17, 2007, 4/17/2007 08:18:00 AM

Genzyme and Cytochroma Settle Vitamin D Deficiency Trade Secrets Case

By Todd
Portfolio Media is reporting that two biotechnology companies that specialize in treatments for Vitamin D deficiency have agreed to settle a trade secrets dispute that was initiated after three employees left one firm for the other. Genzyme Corp. and Cytochroma Inc. on Monday announced they had reached an amicable settlement over the lawsuit brought by Genzyme. The terms of the accord, and many details of the complaint, are under seal.

"Cytochroma has remained on track for meeting its financing and clinical development milestones despite the intercurrent lawsuit," said Alan Lewis, chairman of the Cytochroma board. "The recent settlement with Genzyme adds further momentum to Cytochroma for achieving its corporate objectives."A spokesman for Genzyme declined to comment on the case, citing the terms of the settlement.

The dispute between the two companies started when three employees at Bone Care International left to start Preventive Therapeutics LLC. Soon after they moved, Genzyme acquired Bone Care, and Cytochroma took over Preventive, according to Eric Messner, vice president of commercial operations at Cytochroma, who was one of the three employees. Genzyme filed its lawsuit in August 2006, claiming that Messner, Charles Bishop and Keith Crawford had stolen trade secrets regarding its production of treatments for Vitamin D deficiency-related illnesses. According to the settlement, the case has been dismissed.

Genzyme and Biogen Idec Inc. settled another IP lawsuit in August 2005 with Columbia University, over patents that had raised over $600 million in royalties for the university. The companies did not disclose the financial details of that settlement. The agreement would let them continue to sell their drugs to treat multiple sclerosis and Gaucher disease based on a technology developed at Columbia in the 1970s. Until its patents expired in 2000, Columbia University had collected hundreds of millions of dollars in royalties from biotech companies stemming from a genetic engineering technique vital to drug making created by professor Richard Axel, who the 2004 Nobel Prize in medicine. Axel and two colleagues created a way to splice bits of DNA into living cells to create human proteins, a basic technique used to produce many of today's best-selling biotechnology products such as Genzyme's Cerezyme for Gaucher disease and Biogen Idec's multiple-sclerosis drug Avonex.

Regulatory filings with the Securities and Exchange Commission show Biogen Idec paid the school $35 million, and Genzyme paid $25 million in royalties for use of the patent. Genzyme is represented in its case against Cytochroma by Foley & Lardner LLP. Cytochroma is represented by Quarles & Brady LLP. The case is Genzyme Corp. v. Cytochroma Inc. et al., case number 06-C-0428, in the U.S. District Court for the Western District of Wisconsin.

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