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CYGNUS SUES ALZA OVER FENTANYL PATENT

 REDWOOD CITY, Calif., Jan. 18 /PRNewswire/ -- Cygnus Therapeutic Systems (NASDAQ: CYGN) announced it filed suit today in the United States District Court in San Francisco against Alza Corporation for violation of the antitrust laws and for declaration of unenforceability and invalidity of patent. The complaint alleges that Alza procured a U.S. patent covering the transdermal delivery of the narcotic fentanyl through fraud on the Patent Office and used the preclusive power of this patent to stifle competition from Cygnus' superior fentanyl patch. In addition to a declaration of invalidity and unenforceability of the patent, the complaint seeks treble damages under the antitrust laws.
 "Our fentanyl patch is a superior product and has excellent revenue and profit potential for Cygnus," according to Gregory Lawless, president and chief executive officer of Cygnus. "We are pursuing the commercialization of this product aggressively. The facts in this suit are clear and support our position strongly. We expect to prevail."
 Cygnus alleges that the fentanyl patch patent was procured by Alza by making misrepresentations about the state of the prior art. It was solely on account of this conduct that Alza was able to obtain the patent (issued in 1986).
 In 1987 the Patent Office agreed to reexamine the patent. The Patent Office reexamination rules are totally one-sided procedurally. That is, after its initial reexamination request, Cygnus was not permitted to file any further papers in the proceedings. Alza alone was permitted to communicate with the Patent Office. In two separate rulings in 1988, the Patent Office rejected Alza's patent claims, even after Alza amended some claims. After the "final" rejection of the patent claims, Alza personnel attended an interview with the patent examiner. Following this interview, at which no one but the patent examiner and Alza personnel was present, and notwithstanding the prior rejections of the patent, in January 1989 the patent claims were allowed. Cygnus contends that in its communications with the Patent Office during the reexamination proceedings, Alza intentionally, and knowingly, made affirmative misrepresentations and misleading statements and it intentionally omitted material information.
 Cygnus is currently in discussions with Ohmeda Pharmaceuticals (formerly called Anaquest) to recapture all the rights to the fentanyl product which the companies have been jointly developing. The Cygnus patch is in Phase III clinical trials.
 Fentanyl is an analgesic, or pain killer, whose principal uses are for severe post-operative pain and chronic pain, such as is suffered by cancer victims. Alza's Duragesic product is approved only for chronic pain, while Cygnus' product is designed to be used for the treatment of both chronic and post-operative pain. The Cygnus transdermal delivery system for fentanyl is wholly "solid state" an contains no liquid drug.
 Cygnus Therapeutic Systems is a leader in the development and manufacture of advanced drug delivery systems. The company has more than a dozen products in various stages of development, with one product on the market and three in clinical trials.
 -0- 1/18/94
 /CONTACT: Craig Carlson, vice president, corporate communications, of Cygnus, 415-599-2529/
 (CYGN)


CO: Cygnus Therapeutic Systems; Alza Corporation ST: California IN: MTC SU:

RB-LW -- SJ007 -- 2920 01/18/94 16:15 EST
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Publication:PR Newswire
Date:Jan 18, 1994
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