Amgen Seeks to End Pact With Johnson & Johnson

Amgen Inc., the Thousand Oaks biotechnology powerhouse, is seeking to end a licensing agreement for Johnson & Johnson to sell its version of Amgen’s Epogen drug in the United States.

As part of a long-running dispute between the two companies, Amgen demanded in an arbitration hearing late last month that the arrangement be canceled. Amgen also is seeking unspecified damages.

Amgen spokesman David Kaye told Bloomberg Business News that the request won’t affect his company’s agreements with Johnson & Johnson in Europe.

The product in dispute is sold by Amgen under the brand name Epogen and by Johnson & Johnson as Procrit. In September, 1985, Amgen granted Johnson & Johnson a license for the domestic sale of the drug, whose generic name is erythropoietin. It stimulates red blood cell growth.

Johnson & Johnson received exclusive U.S. rights to sell the drug for all human uses except for dialysis and diagnostics. Other uses include the treatment of anemia in HIV-infected patients and in cancer cases.

Since Epogen and Procrit are essentially the same product, doctors often prescribe one for uses granted to the other under the licensing agreement. The two companies have been disputing the way in which they are paid for these “spillover” uses.

In early 1993, after an arbitrator in Chicago awarded both companies damages for spillover sales, Amgen paid Johnson & Johnson $82.4 million, representing the difference in the awards.

That, however, didn’t end the dispute. The arbitrator has now set a trial date of March 1, 1996.

“There is no basis for termination of the agreement and we will vigorously defend this in arbitration,” said Johnson & Johnson spokesman Bob Kniffin.

Epogen is one of Amgen’s best-selling drugs. Sales of the product rose 22% in the second quarter to $216 million. Johnson & Johnson does not report the sales of Procrit.