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Bay Area Biotech Startup at Odds with Dana-Farber and Novartis Over Cancer Drug Rights

[Updated and corrected, 12:24 pm Eastern time on 11/02/10.] There’s been some wrangling over a potential breakthrough lung cancer drug in U.S. District Court in Boston, according to court records. The legal battle has pitted a little-known biotech firm in Millbrae, CA, called Gatekeeper Pharmaceuticals against the prominent Dana-Farber Cancer Institute in Boston and the Swiss drug giant Novartis.

At the center of the dispute is an anti-cancer molecule discovered by researchers at Dana-Farber—and whether Novartis or Gatekeeper should get to develop it. The molecule could potentially combat cases of non small-cell lung cancer with specific gene mutations that make the deadly cancer resist Roche and OSI Pharmaceuticals’ blockbuster cancer pill erlotinib (Tarceva) and AstraZeneca’s gefitinib (Iressa), according to court documents filed by Gatekeeper’s president, John Chant, and its board of directors. If the anti-cancer molecule in dispute makes it through clinical trials, it could be worth a fortune to the company that brings it to market.

Dana-Farber scientists founded Gatekeeper in March 2009 to commercialize their discovery of the potential lung cancer drug and other similar molecules, according to Chant’s documents. Chant has served as president of the firm since its inception and led negotiations with Dana-Farber to secure an option to exclusively license the molecule in June 2009. This spring, Gatekeeper informed the cancer institute that it wanted to exercise the licensing option. But last month Dana-Farber filed a lawsuit in which it asks the court to let the cancer institute out of its agreement with the startup. The cancer institute’s complaint says that it initially decided last year that Gatekeeper was eligible for to license the drug candidate, but that Dana-Farber later reviewed the matter again and concluded this August that its long-time research supporter, Novartis, has rights to license the molecule. (Download the Dana-Farber complaint here.)

Gatekeeper’s board and its president have made separate filings that dispute Dana-Farber’s latest conclusion.

This case shines a light on the conflicts that can arise when academic groups enter into far-reaching deals with drug companies, which have become a major source of research funding for elite researchers in the Boston area and elsewhere. Unlike government agencies, drug companies often attach strings to their research awards to academics that give the firms the ability to acquire or license the breakthroughs made in the labs they support. [Editor’s note: An earlier version of this paragraph erroneously indicated that Dana-Farber had named some of its own scientists as defendants in the lawsuit. In fact, though three Dana-Farber employees serve on Gatekeeper’s board of directors, the only named defendant in the lawsuit is Gatekeeper. We regret the error.]

According to Dana-Farber’s suit against Gatekeeper, Novartis has provided research funding to the cancer institute under a 2005 agreement that gives Novartis the option to license discoveries that emerge from the funded research. But the parties in this lawsuit disagree … Next Page »

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