Ruling: Company stole secrets
Published 12:00 am Wednesday, September 17, 2003
ST. PAUL &045; The future of Albert Lea-based Natural Biologics is in question after a federal judge ruled the drug company has used stolen trade secrets and must stop operating.
U.S. District Judge Joan Ericksen, in a sweeping decision filed Monday, ruled that the company stole trade secrets from Wyeth Pharmaceuticals for the manufacture of a generic version of the Premarin estrogen replacement therapy. The judge also barred Natural Biologics from using a proprietary estrogen-extraction process and formula and ordered the company to retrieve and destroy all of the estrogen it has produced to date.
Natural Biologics also is banned from doing any further research on the therapy, must destroy all documents related to the drug and must identify anyone who may have had access to the extraction technology.
The market for Premarin and Prempro, another drug produced by Wyeth, of Madison, N.J., that combines estrogen with progestin, is significant &045; nearly $1.5 billion this year. More than 5 1/2 million U.S. women use the two drugs.
Steve Severaid, chief financial officer and co-founder of Natural Biologics, said he would not comment, on the advice of his attorney.
The company, which opened in the Northaire Industrial Park in Albert Lea in 1997 after moving from Austin, employs 25 people, according a 2003 employment survey conducted by Greater Jobs, Inc.
Wyeth said it was pleased with the decision.
&uot;No therapy should be approved or marketed based on information obtained unlawfully,&uot; Wyeth spokeswoman Natalie de Vane said. &uot;Our manufacturing process is a carefully guarded trade secret.&uot;
Estrogen for Premarin and Prempro is extracted from the urine of pregnant mares. Wyeth, formerly known as American Home Products Corp., has been using the technology since 1942.
The original complaint against Natural Biologics suggested a Wyeth insider provided information to Natural Biologics about the hormone extraction process and that Natural Biologics &uot;knew or had reason to know that the means of acquisition were improper.&uot;
The judge’s order also threatens a multimillion-dollar agreement between Natural Biologics and New Jersey-based Barr Laboratories Inc. to develop, manufacture and market a generic version of Premarin.
The order prohibits Natural Biologics from &uot;providing services, information, materials or other assistance&uot; to &uot;any other person or entity&uot; involved in the development of the estrogen product.
Barr announced its partnership with Natural Biologics in March 2002, offering the Minnesota company up to $35 million in financing over three years. Barr filed a new-drug application with the U.S. Food and Drug Administration in July.
A statement by Barr said it had been informed that Natural Biologics intends to ask for a rehearing or file an appeal. Barr also said it has $16 million in outstanding loans to Natural Biologics and that the ruling creates uncertainty over the Minnesota company’s ability to repay.