Biogen and Schering-Plough in dispute over Intron A royalties; mixed S-P

Biogen has announced that royalty revenues, which made up 18% of totalturnover last year, are set to take a significant hit in 2001. The company noted that royalties for 2001 will fall to $85-$95 million, a reduction of 42%-48% on last year's total of almost $165 million, due primarily to a patent-related dispute with Schering-Plough.

The dispute involves royalties connected with S-P's Intron A (interferon alfa-2b) and its follow-up product Peg-Intron (peginterferon alfa-2b) for chronic hepatitis C. S-P is refusing to pay Biogen royalties for Intron A after a patent held by the latter firm covering the manufacture of the drug expired in January this year.

In March 2000, S-P prevailed in an arbitration with Biogen over the method used by the former to calculate royalties payable on sales of Rebetron (which comprises Intron A and ICN's ribavirin) and Intron A. The arbitration decision held that Biogen is only entitled to royalties on the sales value of Intron A whether sold alone or as part of the Rebetron combination therapy.