While Amgen puts cloned human genes into hamster ovary cells to produce Epogen, TKT induces human cells to make the protein in a laboratory culture. Its version of the drug is now in clinical trials. Wall Street is interested not just because of the billions at stake over Epogen, but because the case could expose Amgen and other companies holding patents on other valuable proteins to competition from upstarts who find new ways to produce them. A pretrial ruling last month narrowed the focus of this case and probably lessened the chances it will send shock waves through the industry. In April, US District Judge William Young ruled that TKT infringed on one of Amgen's patents, limiting the scope of the trial to whether Amgen's patents are enforceable, or whether they were valid in the first place.
Experts are divided on whether the ruling puts TKT at a significant disadvantage.
The company says it already conceded the patents were infringed but believes they are invalid and unenforceable. But the issue that most interests the industry is whether Amgen owns the protein or merely one of several processes to make it. All could conceivably be copied if TKT's technology is validated. While it has other potentially lucrative products in its pipeline, it may depend on the technology in question to make those products. Schmidt estimated a 5 percent downward revenue swing if it loses.