Retin-A could bring millions in royalties

If the University wins its court battle over ownership of the patent rights to the anti-wrinkle Retin-A invention, the University could earn sizable amounts of money in damages and future royalties. The lawyers on both sides have refused to discuss possible dollar figures, most likely to leave themselves greater freedom in negotiating a possible settlement out of court. But despite the lawyer's secretiveness and a variety of other factors that make an exact determination difficult, a court victory would almost surely be a multi-million dollar windfall for the University. The award money would probably go to fund research, but because the money would then free up part of the University's general funds now earmarked for research, the University as a whole would benefit. The University currently generates less than $4 million per year in royalties on patented inventions, trademarks and copyrights, according to Stephen Sammut, the director of the University's Center for Technology Transfer. He said that unlike Stanford, which earns more than $8 million a year on a gene-splicing patent it co-owns with the University of California, the University does not own rights to any products that generate that level of income. Winning patent rights to the anti-wrinkle Retin-A invention could put the University's annual royalty income on that scale. One of the University's demands is that Johnson & Johnson, the parent company of Retin-A's drug maker, hand over to the University the company's profits made over the past few years on sales of Retin-A as a wrinkle cream. J & J has sold approximately $300 million worth of Retin-A since 1989, according to David Saks, a senior investment analyst at Wedbush Morgan Securities. Any judgement for the University would depend on how those sales break down in terms of prescriptions written for people seeking to rid their acne and those interested in the drug as a wrinkle remover. Another of the University's requests -- for licensing rights for the patent -- will also probably yield monetary benefits, but several factors make the amount gained somewhat uncertain. First, the Retin-A anti-acne patent has lapsed because over 17 years have passed, meaning that under federal law other companies may reproduce Retin-A and market it as an acne treatment under a different name. The rights to the anti-wrinkle patent, if approved for use by the Food and Drug Administration, would grant the owner exlusive rights to license the drug to a pharmaceutical company such as J & J as an anti-wrinkle treatment. Exclusive FDA approval, however, would not stop doctors from prescribing competitor Retin-A formulas as wrinkle cream -- as they now do for Retin-A itself -- and cutting into the profits of the anti-wrinkle patent owner and manufacturer. Second, much of the hype surrounding Retin-A as a supposed fountain of youth has died down recently, meaning sales may drop slightly in the years ahead, according to several financial analysts. And third, some of the potential effects of retinoic acid -- both good and bad -- may not be known with any certainty for some time.

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