Race on to realize value of SARS patent
B.C. organization hopes that mapping genetic sequence of the virus will eventually pay off `It's not for the faint of heart,' on


The B.C. Cancer Agency will learn within a year whether it will receive patent rights for mapping the genetic sequence of SARS.

Yet it might take almost a decade to discover what payoff the discovery might bring.

While the SARS virus raced through nearly 30 countries following its discovery in February, the pursuit by medical researchers to profit from studying the illness likely will be both sluggish and expensive.

"It's a gamble and there's a long time between the patent filing and the potential commercial payoff," says Peter Pekos, chief executive of pharmaceutical researcher Dalton Chemical Laboratories Inc. "It's not for the faint of heart. Most of the time, you're lucky if you can offset your patent costs."

The B.C. Cancer Agency is one of several organizations that have filed confidential patent applications for their SARS research with the U.S. Patent and Trademark Agency in Washington. Others include the U.S. Centers for Disease Control and Prevention and Chiron Corp., a California-based biotechnology firm that also sequenced a sample of the SARS virus — and generates nearly $100 million (U.S.) a year from patent royalties, most of which are tied to its research on the hepatitis-C virus.

Last week, Acacia Research Corp. unit Combimatrix filed patent applications claiming it owned rights to key components of SARS genes that are alleged to control the spreading of the virus once it infects people.

Dr. Samuel Abraham, director of the B.C. Cancer Agency's technology development office, played down the organization's chances to profit from its research, even though it has already hired Smart & Biggar/Fetherstonhaugh, a Vancouver law firm that specializes in patents, to help bolster its case.

"If you're hoping to make money off this, you shouldn't even bother getting started," Abraham says. "We're simply doing this to make the research available to anyone."

Abraham says others that would share in any potential profits would include the B.C. government, Health Canada and the University of Victoria, each of which help fund the B.C. Cancer Agency.

For now, any other agencies or companies are free to use the agency's information. Its research has even been posted on the Internet.

That will change if the U.S. patent office awards rights to the 28-year-old organization. If it gets a patent, the agency will pursue non-exclusive licensing contracts with pharmaceutical companies because its mandate isn't as "profit oriented" as some companies and universities, Abraham says.

Allowing more than one company to use its research would cut into profits.

"If you try to gouge, nobody will come up to bat," he says. "That's the way the game is played."

There are two ways for the agency to profit from its research.

It can license its work to firms such as Abbott Laboratories, Quest Diagnostics Inc. or Switzerland's F. Hoffmann-La Roche Ltd. for use in diagnostic testing, which could help create over-the-counter test kits to help diagnose SARS.

The cancer agency might also sell the patent rights to companies such as Pfizer Inc. that want to develop medication to battle the virus.

"The patents have become a tremendous priority because they're seen almost like an endowment that provides annual revenue," says Jeff Graham, head of the pharmaceutical practice at Borden Ladner & Gervais LLP.

Patents and medicine have gone hand in hand for more than a century.

In 1899, a chemist working for the German pharmaceutical company Bayer — which at one point also owned the trademark Heroin — patented a new wonder drug it called Aspirin. Similarly, in 1957, nearly 30 years after Sir Alexander Fleming discovered penicillin in bread mould, American inventor John Sheehan, a professor at the Massachusetts Institute of Technology (MIT), patented a synthetic form of penicillin, leading to nearly $30 million in revenue for the school.

Later, in the 1980s, American and French scientists were at loggerheads over who held patent rights to the virus that causes AIDS. In 1987, president Ronald Reagan and French prime minister Jacques Chirac reached an agreement to split the royalties, which still today generate millions of dollars.

Now, North American universities, research institutes and teaching hospitals rake in more than $1 billion a year in patent-related revenue, according to a study by the Illinois-based Association of University Technology Managers. While the B.C. Cancer Agency has had less success in reaping royalties, that might soon change.

Using patented information developed by the cancer centre, several companies have been formed and will begin paying proceeds to the centre when they start turning a profit.

Xillix Technologies Corp., for instance, sells devices developed by the B.C. Cancer Agency that help doctors locate pre-cancerous and cancerous cells. Another company spun out of the agency, Inex Pharmaceutical Corp., markets drugs that help treat non-Hodgkin's lymphoma. Xillix and Inex lost a combined $48 million last year.

Dr. George Adams, the founder of medical-device maker Corvita Canada Inc. who runs the University of Toronto's Innovations Foundation, says the B.C. Cancer Agency has the best chance to make money from its discovery if doctors fail to eliminate the illness.

"They'd be best off if it remains endemic and pops up randomly," he says. "It depends on whether China can get hold of this."

China has been widely condemned for its slow response in containing SARS.

However, there's a chance the B.C. Cancer Agency might be left with nothing more than lawyers' bills for its work on SARS.

"Of the companies and agencies that receive patents like this, probably one out of every 10 actually sees any money, and it costs them $300,000 to $400,000 for the patent work," Adams says.

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