Latest Genentech breakthrough traces origins to City of Hope. (Health Care).

A year ago, the City of Hope National Medical Center in Duarte won a $500 million judgment against Genentech Inc. after a jury found the South San Francisco biotech firm withheld royalties owed the hospital under a patent that showed how to produce human insulin.

Now, Genentech has seen its stock soar by more than half over promising results that a drug called Avastin can prolong the survival rate of colon cancer patients by one third. The catch: the technology came from two patents that Genentech jointly holds with City of Hope.

The dispute over the insulin patent continues, with Genentech pursuing an appeal seeking to overturn judgment. Even so, City of Hope continues to help run clinical trials and work in other capacities with Genentech.

The two sides have a collaboration that dates back to the dawn of the biotech age. In 1976, Genentech -- then a start-up -- funded City of Hope's insulin research in a deal that gave the company any patents in exchange for royalties on any resulting products.

Dr. Michael A. Friedman, the medical center's new chief executive, said the collaboration shows that developing new drugs is more important than any legal dispute. "There is a higher goal which we are both aspiring to achieve," he said.

There is also a lot of money at stake, should the new drug become a blockbuster. Both sides declined to discuss the financial agreement surrounding the patents.

SARS Relief

With only two suspected SARS patients remaining hospitalized last week, Los Angeles County looks to be escaping the worst of the crisis.

So far the county has recorded six probable cases and 10 suspected cases, but the latest laboratory tests show that five of the suspected cases turned out not to be SARS after all. Testing is still being conducted on the others. Patients marked probable had abnormal X-rays and other symptoms.

Dr. James Haughton, medical director of the Los Angeles County Department of Health Services, says it's fortunate that SARS first hit North America through Toronto. This provided enough time to institute extensive warnings to medical providers on how to handle and isolate such patients.

"Had we had our first case before Toronto it might have been different," Haughton said. "We were alert and ready."

In L.A. County, there have been no deaths from SARS and no cases have spread to health care providers or anyone outside the patient's immediate family. Haughton believes that's because the local cases have mostly occurred in affluent and healthy local residents and visitors capable of traveling between here and Asia, rather than the aged, poorer population stricken in China and elsewhere.

The two cases involve two visitors from Taiwan who were isolated in a local hospital.

Survivor

Henry Mayo Newhall Memorial Hospital has emerged from Chapter 11 bankruptcy after working out a deal that will pay its unsecured creditors 100 percent of what they are owed.

The hospital will pay its general unsecured creditors $4.5 million up front and the rest over three years at 7.5 percent interest. In all, 675 creditors will be paid $11.9 million.

The hospital filed for bankruptcy two years ago after being left with $10 million in debt as a result of Northridge Earthquake repairs and other problems, including several full-risk insurance contracts that backfired.

Since then it has closed some services, cut jobs and renegotiated contracts, but is now planning several new projects, including expanding its emergency room. The plan was approved May 30 by a U.S. Bankruptcy Court judge.

Staff reporter Laurence Darmiento can be reached at [phone] ext. 237 or at [e-mail].