Peptech settles Centocor patent dispute

Peptech (ASX:PTD) has its early Christmas present, with the successful settlement of its dispute with Johnson & Johnson subsidiary Centocor.

But the company will remain in a trading halt until Tuesday morning at the earliest while its board prepares a profit guidance statement for the coming year. On Friday, the company's share price closed at AUD$1.67.

An agreement was reached on Friday more than a year after arbitration proceedings were initiated by Peptech to resolve a dispute over the validity of Peptech's anti-TNF patents and Centocor's refusal to pay royalties for its anti-TNF drug Remicade.

Although details of the agreement remain confidential, Peptech's executive chairman said he was very happy with the settlement. "It's a relief to put it behind us," he told Australian Biotechnology News. "And it puts us in a very strong position. In our sector, there will only be one company above us, and that's CSL."

Bridges said the settlement would allow the company to significantly ramp up its expenditure on R&D and regulatory activities, including the acceleration of two leads for its ongoing TNF program and fast-tracking of its promising cancer program. On the animal health side, the company will move forward with registration trials for its Suprelorin pet contraceptive product in the US and European markets.

"The R&D spend for the coming year will be larger that the company has had in its history, but we'll be maintaining our cash reserves," Bridges said. The company's cash reserves stood at $37.6 million at the end of September.

According to Bridges, the settlement of the dispute should see also a renewed effort by the company to grant further licences around its strong anti-TNF patent position, a process that has been on hold since the disputes between Peptech and its two licensees -- Centocor and Abbott Laboratories -- began. "We're now in a premier position for TNF globally," he said.

Bridges said he was looking forward to putting the Centocor dispute behind him. "It's a nice place to be," he said. "I'm looking forward to 2005, let me tell you."