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Celebrex makers face suit
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April 12, 2000: 3:56 p.m. ET
University of Rochester takes action to claim royalty payments for painkiller
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NEW YORK (CNNfn) - The University of Rochester demanded Wednesday that drug makers Pharmacia Corp. and Pfizer Inc. pay it royalties for the lucrative painkiller Celebrex, saying it has won a broad patent for the new class of potent pain-relieving drugs known as Cox-2 inhibitors.
The New York university said it received a U.S. "method-of-use" patent Tuesday for all drugs that target the Cox-2 enzyme, which has been linked to pain and inflammation. Cox-2 inhibitors are believed to be free of side effects such as stomach pain or ulcers often associated with aspirin and ibuprofen.
The school said it has sued G.D. Searle, the prescription drug unit of Pharmacia (PHA: Research, Estimates) that developed the drug, and Pfizer (PFE: Research, Estimates), which co-markets the treatment. The lawsuit, which alleges patent infringement, was filed in U.S. District Court for the Western District of New York.
The university brought the case "to preserve any and all legal rights in the future," Terrance O'Grady, an attorney for the university, told CNNfn.com. He said the market for Cox-2 inhibitors is expected to surge from about $2 billion to about $11.5 billion over the next eight years, which could yield the university  billions of dollars in royalty payments. The school's patent lasts for 17 years.
He said the university's attorneys hoped to begin out-of-court negotiations with Searle and Pfizer on potential royalty payments.
Sales of Celebrex totaled about $1.5 billion last year, making the drug the fastest selling new medication in U.S. history. The drug, which is approved to treat osteoarthritis and rheumatoid arthritis in adults, went on the market in January 1999.
The school also said it is entitled to royalties from the main rival to Celebrex, Merck & Co.'s (MRK: Research, Estimates) Vioxx, and any future Cox-2 drugs.
But O'Grady said the university's lawsuit is focused only on Celebrex, since it is the leading drug in the category.
"We have not sued Merck, and we don't have any present plans to do so," he said.
In response, Pharmacia issued a statement saying that it will "vigorously defend" the case, saying that the university's patent was invalid. The company said the school's patent is not a new invention, saying that "a significant body of literature existed before the patent was filed in 1992 that described the potential benefits of treating people with Cox-2 drugs."
"We are disappointed to hear of this development from the media, rather than being contacted directly by the University of Rochester," Pharmacia senor executive vice president Richard U. De Schutter said. "We have complete confidence in our Cox-2 patent estate and will vigorously defend against this challenge."
The University of Rochester said its researchers discovered the Cox-2 enzyme more than 10 years ago, setting in motion "a worldwide race among pharmaceutical companies to identify drugs that would inhibit the action of the enzyme and, in turn, reduce inflammation and pain."
In late afternoon trading, Pharmacia shares slipped 2-1/8 to 55-1/2, while Pfizer stock added 1-1/16 to 40-7/8. Merck stock edged down 5/16 to 67. 
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