Protein Design Labs Inc (PDL) said that Genentech Inc and PDL have mutually agreed to extend the Patent Licensing Master Agreement between the companies for an additional five-year term ending December 31, 2008. The financial terms for the exercise of any rights by a party and any royalties payable under the Agreement remain as originally specified in the Agreement.

As originally provided under the Agreement, Genentech and PDL each may obtain non-exclusive licenses under the other company's relevant patents or applications upon payment of a license fee of up to approximately $1 million per antibody. Licensed antibodies will bear royalties on sales, if any. The level of royalties payable on sales of a licensed antibody was not disclosed, but is unaffected by the extension. Initially, each company could select antibodies directed to six antigens to be covered by the license rights. The number of antigens against which licensed antibodies may be directed may be increased for additional fees. Pursuant to the Agreement, in late 1998 Genentech was granted a license for antibodies to the antigen HER2, including Herceptin (trastuzumab), which license agreement remains in effect.

As disclosed previously, Genentech has advised PDL that it has determined that Xolair (omalizumab), a humanized anti-IgE antibody for allergic asthma, is not covered under the claims of PDL's relevant antibody humanization patents. PDL does not agree with Genentech's position, and believes that Xolair would be covered under the claims of PDL's relevant antibody humanization patents. The parties continue in confidential discussions regarding whether or not Xolair would be covered.