Bayer Loses Bid to Demand Royalties From Abbott on Humira Drug

Bayer AG, Europe’s largest drug and chemical maker, lost its bid to demand royalties from Abbott Laboratories over U.S. sales of the arthritis drug Humira.

Bayer, which sued Abbott in 2008 for violating its intellectual-property rights, conceded in a court filing yesterday that Humira doesn’t infringe its patent under an interpretation by a judge in the case. Bayer’s lawsuit can be revived if an appeals court overturns the judge’s definition of the phrase “human monoclonal antibodies.”

Bayer claimed the arthritis drug violates a patent for antibodies against tumor necrosis factor, or TNF, an immune cell protein that is linked to inflammation. The Leverkusen, Germany- based company demanded royalties on sales of Humira, which generated $4.67 billion in revenue for Abbott Park, Illinois- based Abbott in the first nine months of 2010.

U.S. District Judge Dennis Saylor in Worcester, Massachusetts, ruled in October that Bayer’s patent covered only antibodies with low affinity, referring to the strength of the antibody’s attachment to TNF, and doesn’t neutralize the protein. Both sides agreed that wouldn’t cover Humira.

Abbott is appealing a separate Humira patent-infringement case it lost to Johnson & Johnson that resulted in a $1.67 billion verdict. The company in 2009 settled a royalty dispute with the University of Iowa for undisclosed terms.

Officials with Bayer and Abbott had no immediate comment.

The case is Abbott Laboratories v. Bayer Healthcare LLC, 09cv40002, U.S. District Court for the District of Massachusetts (Worcester).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net.

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