ImClone Systems and Sanofi-Aventis have settled a long-running legal battle with Yeda Research and Development Co relating to the cancer drug Erbitux.

The deal comes over a year after ImClone was dealt a serious blow when a court in New York ruled that the firm cannot claim ownership of a particular patent covering Erbitux (cetuximab). Now the three have thrashed out a deal which sees the firms agree that Yeda, a commercial arm of Israel’s Weizmann Institute, is the sole owner of a particular patent (866) on Erbitux (cetuximab) in the USA, while Yeda and Sanofi are co-owners of the patent's foreign counterparts.

The disputed patent involves the use of monoclonal antibodies targeting epidermal growth factor receptor, ie Erbitux, in combination with Sanofi’s anticancer drugs. Under the terms of the settlement, ImClone and Sanofi will each pay Yeda $60 million in cash and the former will be granted a worldwide licence to technology under the 866 patent. In return, the New York-based biotechnology firm will make a contingent payment to the Israeli group of a low single-digit royalty on sales in and outside the USA. ImClone will also pay Sanofi a low single-digit royalty on sales abroad.

ImClone chief executive John Johnson was pleased with the deal, saying that “with this settlement, we have now successfully resolved two important patent litigation claims this year”, referring to an agreement to pay $65 million to the Massachusetts Institute of Technology and Repligen Corp earlier this year. He added that the two “mutually beneficial agreements” enhance the “future commercial and financial potential for ImClone and Erbitux”.

Erbitux, currently indicated for colon and head-and-neck cancer, is ImClone’s only marketed drug, but the firm is under pressure to get approvals for the drug in other indications. In particular, analysts are waiting to see the quality of the data from the FLEX study, as ImClone believes it will establish Erbitux as the only EGFR-expressing monoclonal antibody to demonstrate survival in the first-line treatment of patients with advanced non-small cell lung cancer.