Children’s Medical Center In Boston Sues Celgene

A case wending its way through U.S. District Court in Massachusetts highlights how research alliances between pharmaceutical companies and academia can turn sour. Children’s Medical Center is suing Celgene Corp. over amino thalidomide-based drugs used to treat cancer.

Children’s Medical Center runs Boston Children’s Hospital, a 395-bed pediatric hospital that functions as one of Harvard Medical School’s teaching hospitals. With 1,100 scientists, Boston Children’s calls itself the “world’s largest research enterprise based at a pediatric hospital.”

Celgene markets Revlimid and Pomalyst, amino thalidomide drugs used to treat multiple myeloma. About 70% of Celgene’s $5.5 billion in 2012 sales came from Revlimid.

The dispute is over royalties. In 2002, Children’s Medical and Celgene signed a license agreement regarding the hospital’s intellectual property for amino thalidomide. Celgene agreed to pay the hospital a 2.5% royalty on sales of amino thalidomide products as well as a 1.0% royalty on drugs containing the active ingredient in Revlimid.

On March 1, 2013, the agreement’s end date, the royalty payments stopped. In its complaint filed in court, Children’s Medical says the payments ought to have continued because Celgene won a patent extension for Revlimid through 2019. The hospital says the royalty payments it is due in the first quarter of 2013 alone amount to about $3 million.

Celgene counters that it owes the hospital nothing. The patent that was extended, U.S. Patent No. 5,635,517, is its own, Celgene says. Children’s Medical never owned the patent, the company says, and thus it is not relevant to the agreement.

A court date for the case has yet to be set.