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Santee’s Scantibodies Not Guilty in Patent Suit

A jury in the U.S. District Court for the Southern District of California ruled last week that the Santee-based maker of a diagnostics test Scantibodies Clinical Laboratory, Inc. and Scantibodies Laboratory, Inc. did not infringe a patent belonging to Nichols Institute Diagnostics, Inc., a unit of diagnostic firm Quest Diagnostics, Inc. of Lyndhurst, N.J.

Nichols has long been the market leader with a test to measure parathyroid hormone levels, which doctors rely on to treat patients with kidney disease, said David Doyle, who was the lead trial attorney for Scantibodies, a partner with the law firm Morrison & Foerster in San Diego.

Nichols obtained the patent in 2001 from the German research company Pharis Biotec GmbH, which developed the test, Doyle said.

Meanwhile, Scantibodies had developed its own third-generation test and started offering parathyroid testing services to doctors in early 2001.

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Nichols, which sells its test to large dialysis laboratories nationwide, filed suit in January 2002, alleging that Scantibodies’ technology infringed its patent.

The nine-member jury deliberated for five days before handing down its verdict June 27 for Scantibodies before U.S. District Judge Rudi M. Brewster.

The jury found that the patent claims asserted by Nichols were invalid on three grounds: First, in the U.S. patent, the German inventor failed to adequately describe its scientific method used, which makes it impossible for other scientists to test the patent claims.

Second, the patent also lacks what’s called a “written description,” making it impossible to tell what was actually invented, Doyle said.

Also, German scientists failed to disclose details of their scientific method.

These cases are not uncommon, Doyle said.

“Inventors are often conflicted. They want a valid patent, but they also want to save as much information as they can for their own commercial purposes,” he explained.

Scantibodies has two antibodies that Nichols alleged infringed their patent.

The jury disagreed in part: The panel ruled that one antibody did not infringe the patent, but said the other one did infringe.

Doyle, however, said Scantibodies will not be negatively affected by the split verdict, because the jury invalidated all claims on the patent.

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Job Cuts:

CardioDynamics International Corp., a San Diego-based diagnostics maker, said it would cut 25 jobs to save $2 million annually after reporting disappointing second-quarter financial results.

The company reported a net loss of $682,000, or 1 cent a share, for the second quarter ended May 31, which compares with a net income of $958,000, or 2 cents a share, for the same quarter last year.

Net sales for the second quarter fell 9 percent to $9.4 million from $10.3 million for the same quarter a year ago as a result of shifting from direct-only sales to a team approach, CardioDynamics said June 29.

As of May 31, the firm had $4.6 million in cash left.

“Our second-quarter results fell short of our expectations, and we were particularly disappointed in the lack of growth in the ICG business,” said Michael Perry, the chief executive officer of CardioDynamics.

Shares of CardioDynamics, which trade on the Nasdaq stock exchange, lost 26.55 percent to close at $1.66 on June 29.

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Genentech Names VP Here:

South San Francisco-based biotechnology giant Genentech Inc. announced David Broad as vice president and general manager of its newly acquired Oceanside production plant.

Genentech made the announcement June 28 , four days after it completed its $408 million acquisition of the plant from Biogen Idec, which is based in Cambridge, Mass. Genentech plans to produce its colon cancer drug Avastin at the plant. Avastin also is being tested on several other types of cancer.

Broad has led the design, engineering and construction of the plant since October 2000 as the vice president of manufacturing for Biogen Idec.

Broad, 52, will be responsible for the facilities and engineering, information technology, manufacturing, and manufacturing technology departments at the plant, reporting to Patrick Yang, the senior vice president of product operations.

“We are very pleased that David will be continuing his leadership role and joining Genentech with the acquisition of the biologics manufacturing facility in Oceanside,” Yang said. “David has been involved with the Oceanside facility since its inception and is well respected by his fellow employees and colleagues as a hands-on, thoughtful leader who understands the technical, scientific engineering, operational and organizational aspects of this new biotech production organization.”


Contact Marion Webb at marionw@sdbj.com or call her at (858) 277-6359, Ext. 3108.

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