For those curious about invention royalties, consider Brian Seed. The biologist and Massachusetts General Hospital researcher made some discoveries that were crucial to the development of Enbrel, the arthritis treatment.

Seed found a way to fuse proteins that act as decoys, and Enbrel researchers used that technique for arthritis, blocking the body’s inflammatory response to arthritic joint tissue. The upshot: Enbrel generated worldwide sales last year of $4.4 billion.

But fearing competitive drugs, the hospital has sold off royalty rights and settled a patent dispute with Amgen, which manufactures Enbrel, making Seed a very wealthy guy. The Amgent settlement relinquished US rights and yielded $248 million, of which $62 million went to Seed.

Now, rights to royalties on foreign sales were sold for $284 million Drug Royalty, a Toronto investment frim, with $71 million going to Seed (that’s him to the right). The combined payouts represent 25 percent of the two deals’ total, a standard share for inventors under the hospital’s licensing arrangements.

Pete Slavin, the hospital’s ceo, says the combined $532 million, plus previous royalties from Enbrel sales, make the drug the biggest generator of licensing revenue in the hospital’s history. “Lightning occasionally strikes in this area,” he says happily.

Tens of millions of dollars a year in royalties could’ve been collected, but the hospital fears those may dwindle quickly in the face of competing meds. Enbrel, which has also been approved to treat psoriasis, faces competition from Abbott’s Humira and Centocor’s Remicade.

“We certainly believe in the product, but there are market forces that you need to consider,” says Frances Toneguzzo, tech licensing director at Mass General. “There’s an issue with biologics. They are very expensive, there are reimbursement issues, it is injected. If there is a small molecule that would do the same thing and you could take it orally, that would be the end of Enbrel.”

The proceeds will be used to cushion the hospital’s research budgets from flat or declining NIH funding. After Seed’s share is subtracted, the hospital nets $186 million from the Amgen settlement and $213 million from the sale of foreign royalty rights. The $213 million will be divided evenly between Seed’s molecular biology department, the hospital’s center for computational biology, and its treasury.

Source: The Boston Globe.
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