Onyx Sues Bayer

ONYX PHARMACEUTICALS is suing its partner Bayer, claiming that Bayer secretly developed and tested an anticancer compound, fluoro-sorafenib, that was discovered in joint research between the two firms.

Onyx and Bayer have been partners in cancer drug discovery and development since 1994. Their agreement led to sorafenib, a small-molecule oncology drug, marketed as Nexavar, that has generated sales of more than $1 billion to date.

The complaint that Onyx filed in U.S. District Court for the Northern District of California provides a glimpse at the intricacies of a drug discovery agreement. It also reveals the ugly side of a relationship that persists for the marketing and further development of Nexavar.

According to Onyx, Bayer approached the California firm in the early 1990s for its expertise in the Ras pathway, a biochemical pathway associated with the uncontrolled growth of cancer cells. Onyx says Bayer coveted its technology, its know-how, and its library of compounds that could have effects on the pathway.

In the complaint, Onyx says five years of joint research culminated in a patent, filed by Bayer in January 1999, covering sorafenib and more than 100 other compounds that inhibit a particular Ras pathway protein. Among those compounds was fluoro-sorafenib. Following clinical trials, FDA approved sorafenib to treat kidney and liver cancer in 2005 and 2007, respectively.

But as the trials on that compound progressed, Onyx alleges, Bayer "secretly launched a plan to displace it." The German company, it says, surreptitiously began filing patent applications on fluoro-sorafenib with the goal of launching it as a sorafenib competitor. Onyx seeks damages and 50% of any fluoro-sorafenib profits.

Bayer says that it has not yet received the complaint but that it will defend itself vigorously.

Ramon K. Tabtiang, an attorney with the intellectual property law firm Fish & Richardson, says lawsuits involving drug discovery partners are rarer than suits between unrelated parties claiming patent rights to the same product. "But we could see more as smaller companies provide more R&D to big pharma," he says.

Tabtiang says the case is a reminder that crafting R&D deals requires tremendous attention to detail. "It's important for scientists to understand that these agreements are not just administrative overhead," he adds.