By Terence Chea
Washington Post Staff Writer
Tuesday, April 10, 2001; Page E05



Shares of Igen International Inc. rose 22 percent yesterday after the Gaithersburg biotechnology company won a significant victory in its protracted legal fight with German diagnostics firm Roche Diagnostics GmbH.

A U.S. district judge in Maryland ruled that Roche, a division of F. Hoffmann-LaRoche Ltd., breached a licensing agreement with Igen by taking unsubstantiated deductions on reported sales of medical diagnostic products that use Igen's technology. The judge granted summary judgment "in all respects" on a motion Igen filed in January on one of its 14 claims in a lawsuit accusing Roche of breach of contract.

Igen spokesman Steve Push said the decision "demonstrates we were correct in our assessment that Roche has breached its contract with us. This decision may lead to the payment of monetary damages to Igen and enable us to cancel the contract and find an alternative partner to exploit this technology."

Igen shares rose $3.75 to close at $20.50 on the Nasdaq Stock Market as the ruling stoked investor hopes for an early settlement and a substantial windfall.

Igen's technology, called Origen, uses light-emitting compounds to detect a wide array of biological substances. The technology can be used to detect disease, analyze blood samples, discover potential drugs and detect bacteria in food, among other applications.

In a complaint filed in 1997, Igen claims Roche breached a 1992 licensing agreement that granted the German company rights to develop and sell diagnostic products based on Igen's Origen technology in exchange for royalty payments. Igen charges that Roche underpaid royalties and sold products not covered by the contract.

Last month, Igen won a favorable ruling when the federal judge dismissed Roche's counterclaim for fraud and struck down its request for punitive damages. In January, the judge upheld four of Igen's claims, dismissed one of Roche's counterclaims and scheduled a trial for October.

Igen hopes the latest ruling will put pressure on Roche to settle the lawsuit before it goes to trial. The company believes Origen-based products have allowed Roche to gain market share in the $20 billion clinical diagnostic market and that Roche would rather settle than risk losing its licensing deal with Igen.

More stories on BIOTECH/MEDICAL online at Washtech.com.

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