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Utah's Myriad Genetics ramps up gene patenting dispute

Published December 9, 2013 8:21 pm

Courts • Utah's Myriad Genetics is involved in nine lawsuits as shares dip.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

In the wake of a case that went all the way to the U.S. Supreme Court, Salt Lake City-based Myriad Genetics is now enveloped in a new spate of lawsuits over its gene patents, this time sparring with companies that want to erode its dominant position in testing of genes related to breast and ovarian cancer.

At stake for Myriad is whether the company can maintain the parts of its patents that the Supreme Court and a lower appeals court did not invalidate.

Myriad uses the patents for tests it now sells exclusively. The sale of those tests accounted for 75 percent of Myriad's $613 million in revenue in the fiscal year that ended June 30.

The risks for the company are underscored by its shares, which have generally declined in price since Dec. 2 when one of its potential competitors sued and reports surfaced that the Centers for Medicare & Medicaid Services would cut what the government pays Myriad for tests related to the genes labeled BRCA1 and BRCA2.

The company's shares finished Nov. 29 at $29.75, then fell to $26.98 on Dec. 2. On Friday, they closed at $25.45.

The company's potential competitors — at least eight of which are involved in lawsuits — are looking for quicker entry into the lucrative revenue stream Myriad now taps.

Myriad has used its patents to keep out competition and provide a return on the hundreds of millions of dollars it has spent to research and develop the tests that can signal the need to take preventive measures or that can help dictate treatments.

In June, though, the U.S. Supreme Court issued a 9-0 ruling that invalidated five parts of 24 patents, ruling that products of nature such as DNA, or segments of DNA that are isolated from the body, are not eligible for patents. A lower court already had tossed out patents directed at certain methods of detecting alterations in the BRCA1 and BRCA2 genes.

Those rulings provided openings other companies pounced on as they announced plans to enter the market.

Since those decisions, Myriad has filed six lawsuits in U.S. District Court for Utah against the companies that say they are offering or plan to offer competing tests, and three have sued Myriad in California. Myriad is asking to consolidate all of the cases in Salt Lake City.

"We continue to believe our patent claims are valid and enforceable and we will defend our rights," said Ronald Rogers, spokesman for Myriad Genetics. "Patent protection provides the research-based industries like Myriad with an incentive to invest in research and development."

The six companies Myriad has sued are: Ambry Genetics Corp. of Aliso Viejo, Calif; Gene by Gene Ltd. of Houston; GeneDX Inc. of Gaithersburg, Md., Quest Diagnostics Inc. of Madison, N.J., Invitae Corp. of San Francisco and, just last week, Laboratory Corp. of Burlington, N.C.

In turn, three California companies, including two already sued by Myriad, have filed lawsuits against the Utah company: Invitae, Quest Diagnostics and Counsyl Inc. of South San Francisco, Calif.

"Myriad continues to assert patent claims that were not part of the case before the Supreme Court but are clearly invalid under its unanimous decisions [in the Myriad and a similar case]," said Sandra Park, an attorney for the American Civil Liberties Union, which filed the original lawsuit against Myriad.

The group has filed a friend of the court brief now in federal court in Salt Lake City on behalf of itself and others, including Breast Cancer Action and the AARP. The brief attacks Myriad's legal arguments.

Quest Diagnostics has joined with the Nichols Institute of San Juan Capistrano, Calif., in one of the California lawsuits.

Quest refers to itself as "the world's leading provider of diagnostic information services" and "the world's leader in cancer diagnostics."

"Myriad's aggressive conduct has deterred other competitors from entering the BRCA1/BRCA2 genetic testing market for fear of being sued," the companies claim in their complaint.

Quest said it is preparing to launch tests that use different methods of detecting alterations in the BRCA1 and BRCA2 genes and wants the court to declare those tests do not infringe on Myriad's patents.

Ambry Genetics also has countersued Myriad, alleging its attempt to maintain a stranglehold on the BRCA1 and BRCA2 testing market is a violation of anti-trust laws.

Quest and Ambry declined or did not respond to a request for comment.

Park said in an email that "enjoining other laboratories from offering BRCA1 and BRCA2 genetic testing would harm the public's interest by limiting patients' access to genetic testing, physicians' provision of medical care, and researchers' ability to develop new biomedical instruments, sequencing technologies, and therapeutics."