AFFY Appealing To Federal Court Over IP Dispute With JNJ

Auriga USA has published a research report on Affymax, Inc.

following the announcement of its co-ownership of certain intellectual property with Johnson & Johnson

. In the report, Auriga writes "AFFY announced the arbitration panel reviewing its IP dispute with Johnson & Johnson (

) determined AFFY and JNJ are co-owners of certain intellectual property, including U.S. patents 5,773,569; 5,830,851; and 5,986,047 related to erythropoietin receptor agonists. The co-ownership permits AFFY to develop any and all products under these patents as well as license them in the U.S. (i.e., status quo). However, the impact on AFFY's ex-U.S. licenses (under AFFY's analogous EU patents) is less clear and may put the current license agreement with Takeda (4502, JP, NR) under a cloud. As such, the Takeda agreement may need to be restructured (e.g., Takeda becomes a “distributor” rather than a licensee). In addition, the arbitration ruling also determined JNJ is the sole owner of U.S. patent 5,767,078 (‘078) and certain related patents (PCT/U.S.96/09469), as well as patent applications in Europe, Japan, Canada, and Australia. AFFY has two defenses available including claiming the ‘078 patent is not valid or, if ‘078 is valid, Hematide falls outside the scope of ‘078 patent." Auriga maintains its Hold rating but has lowered the price target from $9 to $5. Affymax closed Friday at $5.68.