Roche and Schering-Plough Corporation announced yesterday that they have entered into a cross licensing agreement that settles all patent disputes relative to the two companies' peginterferon products. Each party will also license to the other its patents applicable to peginterferon as combination therapy with ribavirin. The agreement provides for each company to manufacture and market worldwide its separate peginterferon products free from liability for infringement under the other's existing patent rights.

Under the agreement, Roche and Schering-Plough will seek court dismissal of all patent litigations in the United States and Europe to the extent they relate to the two companies' respective peginterferon products. In addition, opposition to the European peginterferon patent of Roche currently pending in the European Patent Office will be withdrawn by Schering-Plough.

Under the terms of the agreement, Roche and Schering-Plough will cross license each other under all their patents applicable to their pegylated alpha interferon products, Pegasys (peginterferon alfa-2a, 40 KD) and Pegintron (peginterferon alfa-2b), respectively. This will allow Roche and Schering-Plough to market their respective products as well as to have them manufactured by others. Financial terms of the agreement are not disclosed.

Pegylation is the process that attaches a polyethylene glycol (PEG) molecule to a compound to increase its circulating time in the body. Latest advances in medical science have allowed to protect interferons, messengers of the body's immuno-system, by the process of pegylation. This optimizes the balance between antiviral activity of these compounds and their elimination half-life.

The Swiss regulatory body IKS, has recently granted Roche clearance to market its breakthrough drug Pegasys for the treatment of chronic hepatitis C, providing new hope of a cure for more than 170 million people infected with this virus worldwide.

Pegasys has also been filed with regulatory authorities in the European Union, U.S., Canada and Brazil, and is progressing through the approval processes.