Tercica will provide its growth hormone Increlex to patients currently being treated with Insmed's iPlex free of charge while it works with physician offices' to secure reimbursement of the drug during a forthcoming transition period, Tercica CEO John Scarlett said during a conference call March 7.

Tercica and Insmed will work together to transition patients off iPlex and onto Increlex in the coming months under a patent litigation settlement announced March 6.

"We do anticipate that children will likely be transitioning off iPlex quite soon," Scarlett said. "Our job is to make sure that the physicians who have been treating those children are fully informed as to the background of all of this. We are initiating a program to speak to those physicians beginning this morning."

Together with Insmed, Tercica said the companies issued a letter to physicians explaining the settlement and the transition process.

"Very importantly, we have offered ... to give them free drug while we're working on reimbursement and getting the reimbursement sorted out," he said.

Under the terms of the settlement, Richmond, Va.-based Insmed will no longer provide iPlex to patients with severe Primary IGF-1 deficiency and other short stature indications and will withdraw its marketing authorization application for such indications in the European Union. After three months, any sales of iPlex for short stature indications will be subject to 40 percent royalties for Tercica.

In exchange, Brisbane, Calif.-based Tercica and its development partner, Genentech, have granted licensing rights to Insmed to develop and commercialize iPlex for other non-short stature indications including severe insulin resistance, myotonic muscular dystrophy and HIV-associated adipose redistribution syndrome. As part of the agreement, Tercica and Genentech also waived the damages awarded them by a jury in the patent case.

In December, an Oakland, Calif., jury found that Insmed infringed on Tercica's patents with iPlex and awarded Tercica $7.5 million in damages and additional royalty payments.

The settlement represents the end of a long, tangled road for the two drugs, which have been entwined in a regulatory and legal battle since their approvals in 2005. Both drugs were approved by FDA with orphan drug designation despite their similarities. The agency determined that iPlex (mecasermin rinfabate [rDNA origin] injection) and Increlex (mecasermin [rDNA origin] injection) were separate new molecular entities because Increlex is "free" and iPlex is "bound" (¹ Also see "Insmed Growth Treatment iPlex Enters Market" - Pink Sheet, 25 May, 2006.).

Tercica later filed a patent infringement suit against Insmed (² Also see "Insmed, Tercica Head To Court Over Growth Hormone Patents" - Pink Sheet, 5 July, 2006.).

Scarlett estimated there are approximately 130 children currently being treated with iPlex who will need to be transitioned to Increlex if deemed appropriate by their physicians.

The settlement also allows Tercica and Genentech to opt into development and commercialization of each "non-Tercica/Genentech indication" following Phase III.

In a separate same-day conference call, Insmed CEO Geoffrey Allan commented, "The good news for Insmed here is that a black cloud has been lifted from the company's outlook."

In addition, he noted, "It has always been our strategy to develop iPlex first as a treatment for short stature conditions under orphan drug designation and then to expand our reach into larger markets."

"The settlement with Genentech and Tercica allows us to progress to the next phase of that strategy. ...We do give up short-term revenues as a result, but we remain on track to develop the key markets we have always targeted."

Insmed is currently conducting two proof of concept studies evaluating iPlex in patients with HIV associated adipose redistribution syndrome and myotonic muscular dystrophy, the firm reported.

Because of the discontinuation of sales of iPlex in patients with severe short stature, the company said it plans to eliminate its commercial organization and reduce its manufacturing operation, resulting in a total workforce reduction of 34 percent.

- Jessica Merrill (j.merrill@elsevier.com)

Tercica Will Transition Patients On iPlex To Increlex Following Insmed Patent Settlement

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