NIH denies CellPro's march-in petition concerning Johns Hopkins' stem cell selection patents

The National Institutes of Health (Bethesda, MD) denied a petition of CellPro, Inc. (Bothell, WA; 206-485-4787), requesting that NIH exercise "march in rights" under the Bayh-Dole Act in connection with stem cell selection patents owned by The Johns Hopkins University (Baltimore, MD; 410-955-3194). The NIH determined that government intervention is unwarranted because Hopkins and its licensees have taken effective steps to achieve practical application of Hopkins' technology and to ensure that public health needs are satisfied.

Commenting on the decision, John D. Stobo, MD, vice dean for research and technology at the Hopkins School of Medicine, said, "The NIH decision validates our efforts to bring this important technology to people with cancer and other life-threatening diseases and to ensure that these patients have uninterrupted access to the technology."

He added, "By refusing to override our patents, the NIH also has communicated a clear message that it is committed to safeguarding the system of collaboration between industry and universities that makes it possible for patients to benefit from discoveries made at non-profit institutions such as Johns Hopkins."

In March 1997, after it was found guilty in federal court of willfully infringing upon Hopkins' stem cell selection patents, CellPro asked the NIH to exercise an obscure provision of the Bayh-Dole Act which allows the government to "march in" and grant a compulsory license under privately owned patents under certain limited circumstances.

In his ruling, Harold Varmus, MD, Director of the NIH, wrote, "NIH concludes that Hopkins and Baxter have taken effective steps to achieve practical application, as demonstrated by Hopkins' licensing, Baxter's manufacture, practice and operation of the Isolex 300, and the device's availability to and use by the public. NIH also finds that the available information fails to demonstrate an unmet health need that is not reasonably satisfied by Hopkins and Baxter."

He also wrote, "We are wary of forced attempts to influence the marketplace for the benefit of a single company, particularly when such actions may have far-reaching repercussions on many companies' and investors' future willingness to invest in federally funded medical technologies. CellPro had the opportunity to license the invention from Baxter, but decided against doing so, and instead risked patent infringement litigation. It would be inappropriate for the NIH, a public health agency, to exercise its authorities under the Bayh-Dole Act to procure for CellPro more favorable commercial terms than it can otherwise obtain from the Court or from the patent owners."

Last week, United States Federal District Judge Roderick McKelvie entered an injunction against CellPro's infringing Ceprate SC stem cell selection device. At the request of Hopkins and its licensees, Becton Dickinson and Company (Franklin Lakes, NJ; 201-847-6800)(1996 revenue - $2.8 billion) and Baxter International, Inc. (Deerfield, IL; 708-948-2000)(1996 revenue - $5.3 billion), the injunction is delayed pending FDA approval of an alternative stem cell selection system, licensed under the patents. The delay is designed to ensure that patient access will not be compromised.

An alternative system -- Baxter's Isolex 300 Magnetic Cell Separator System -- is under review by the FDA. More than 40 United States transplantation centers are using the Isolex system on a clinical trial basis and the system is available commercially in Europe.

During the period when the injunction is delayed in the United States:

-- CellPro will be permitted to continue selling its system and supplying hospitals, provided that it pays a portion of its profits to Hopkins and its licensees;

-- CellPro will be permitted to complete all FDA-approved clinical trials underway at the time an alternative system is approved; and

-- CellPro will not be required to make any payment for clinical trials in which it provides products free of charge or at cost.

In the unlikely event that CellPro does reduce support of a clinical trial site during the period when the injunction is delayed in the United States, and that site does not already have the Isolex system available as an alternative, Baxter has committed to installing its device at the CellPro site free of charge and to providing that site the same support CellPro was providing on the same contract terms. Baxter will also provide all necessary clinical, regulatory and technical support to these sites to put the Isolex system into operation as quickly as possible.

Having reviewed the terms of the injunction, Dr. Varmus wrote, "We found no convincing evidence that CellPro will be unable to supply patients with its products under the terms of the Court Order."

In his July 24 ruling, Judge McKelvie retained jurisdiction over the issue of public health and promised to consider future applications for modification of the injunction if it were demonstrated that public health so required. The NIH will also continue to monitor issues related to patient access to the CellPro or Baxter devices during the period prior to FDA approval of an alternative device.

The Bayh-Dole Act allows universities to patent their inventions and grant exclusive licenses to companies. By assuring these companies the protection of the patent system, it offers an incentive for industry to invest the millions of dollars required to bring medical innovations to the marketplace. This Act has been credited with initiating and fostering the biotechnology revolution. According to a survey conducted by the Association of University Technology Managers, a mere 250 patents were issued to universities each year prior to the establishment of the Bayh-Dole Act. Today, the number of patents has increased 600 percent, to an average of 1,500 a year. In 1995, licensing agreements with industry provided 76 universities with an additional $113 million in new industry research support. These monies are reinvested to fund further research into new technologies and treatments.

Since the petition first appeared before the NIH, the agency has received letters from concerned congressmen, research institutions and biotechnology companies who fear that exercise of "march-in" rights on behalf of a willful patent infringer will have a devastating impact on the future of technology transfer. On July 30, a letter with signatures from 33 members of the House of Representatives asking Dr. Varmus not to intervene on behalf of CellPro was delivered to the NIH.

In a separate letter to Dr. Varmus, Senator Edward Kennedy (D-MA) wrote, "We must preserve the innovative mechanisms that have encouraged translation of basic science discoveries into health care products that benefit patients and their families. The private sector will not invest the resources needed to advance research to the marketplace if it cannot trust the inviolability of patents and licenses."

Stem cells are located in the bone marrow and blood and are extremely rare. They are immature, undifferentiated cells that can reproduce themselves of differentiate in order to produce all the different cells that make up the blood and immune systems.

Stem cell selection is a process that purifies the cells used in bone marrow and peripheral blood transplantation. These transplantation procedures are used to restore the blood and immune systems of cancer patients following damage caused by high-dose chemotherapy.

Stem cell selection may reduce tumor contamination in patients receiving autologous (patient's own) stem cell transplantation. Clinicians hope this reduced contamination will improve long-term disease survival rates. In allogeneic (donor) transplantation, stem cell selection technology may also reduce the potential for graft-versus-host disease. Finally, stem cell selection concentrates stem cells for future gene therapies.

Stem cell selection may be used in the treatment of various types of cancer, including breast cancer, childhood cancers, multiple myeloma, and lymphoma. It may also be used to treat autoimmune, metabolic and genetic diseases.

Johns Hopkins University School of Medicine provides international leadership in basic biomedical research and the application of medical knowledge to patient care. The University holds patents on CD34 monoclonal antibodies and related inventions.

Becton Dickinson manufactures and sells a broad range of medical supplies and devices and diagnostic systems for use by health care professionals, medical research institutions and the general public. The company's products are manufactured at locations in the United States and other countries for sale worldwide.

Baxter is a global medical-products and services company that is a leader in technologies related to the blood and circulatory system. Baxter has market-leading positions in four global businesses: biotechnology; cardiovascular medicine; renal; and intravenous systems/medical products.