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Suit and Countersuit: Angiotech Trades Barbs with Conor Medsystems

Another skirmish is brewing in the coronary stent patent-infringement wars. The combatants this time are Angiotech Pharmaceuticals Inc. (Vancouver, BC, Canada), a specialty pharmaceutical company with an interest in drug-eluting medical devices, and Conor Medsystems Inc. (Menlo Park, CA), a development-stage company focusing on drug-eluting stents to treat coronary artery disease.

Angiotech initiated joint legal proceedings in The Netherlands in February with its partner, Boston Scientific Corp. (Natick, MA), which licenses Angiotech's paclitaxel drug and polymer carrier as core components of its market-leading Taxus drug-eluting coronary stent. The action followed a ruling of the European Patent Office (Munich, Germany) that upheld the validity of Angiotech's patent.

Conor Medsystems uses paclitaxel in its CoStar cobalt chromium drug-eluting coronary stent. The company recently completed a six-month clinical study of the CoStar device in Europe, the results of which were described by the company as “favorable.” Conor describes the CoStar as “completely different from conventional surface-coated stents” like Taxus, since it incorporates hundreds of small holes that act as reservoirs for drug-polymer compositions. The company asserts that this “unique design” enables a wider range of drug therapies and provides greater control over the direction and rate of release of the drug's therapeutic qualities.

Two weeks after the announcement of the Angiotech-Boston Scientific suit, Conor Medsystems countersued, seeking to have Angiotech's patent revoked by the United Kingdom's High Court of Justice.

Commenting on his company's defensive move, Conor's chief financial officer, Michael Boenninghausen, described Angiotech's patent as lacking “novelty,” and claimed that information about the technology is widely available and is “general common knowledge.”

Anticipating the action, Angiotech advised investors and industry analysts that it “will pursue and defend against, to the fullest, any and all actions of Conor Medsystems respecting Angiotech's extensive patent portfolio and pioneering technology.”

Best
Best: Dismissing Conor's dream.

Boston Scientific weighed in too, letting it be known that it will vigorously defend the market-leading position of Taxus. In a recent conference call with investors and industry analysts, Boston Scientific CFO Lawrence Best dismissed Conor's plans for CoStar as “dreaming in Technicolor.”

Conor plans to continue with its European studies, and hopes to begin U.S. clinical trials with CoStar later this year. FDA approval of the product is currently targeted for 2007.

Angiotech, with 50 employees, reported 2004 revenues of $130.8 million—$98.4 million, or 75%, attributed to royalties from Taxus sales. Overall revenue increased six-fold from 2003's $21.5 million. (Canada-based Angiotech reports in U.S. dollars.)

Conor Medsystems has 68 employees and did not report any income for 2004. The company went public in December 2004, with its IPO generating proceeds of $78 million.

© 2005 Canon Communications LLC

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