1.67 Billion Dollar Verdict in East Texas

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NEW YORK (Reuters) – A U.S. federal jury returned a $1.67 billion verdict against Abbott Laboratories (ABT.N) in a patent suit brought by Johnson & Johnson (JNJ.N) related to arthritis treatments, the drug companies said on Monday.

An Abbott spokesman said the company would appeal the verdict delivered in Marshall, Texas.

The case involves Humira, Abbott's newer blockbuster drug that blocks tumor necrosis factor, or TNF, and which competes with Johnson & Johnson's older blockbuster medication Remicade.

The company said in a statement it was pleased with the ruling, which showed its patent was "both valid and infringed." Remicade sales were $1.03 billion in Johnson & Johnson's first quarter.

Abbott spokesman Scott Stoffel told Reuters: "We're disappointed at this verdict, and we are confident in the merits of our case and that we will prevail on appeal."

Humira is a fully-human antibody, meaning it does not have any mouse components, Stoffel said. Remicade, on the other hand, is partly made from mouse DNA.

"Only when Humira was nearing its approval in 2002 did J&J amend the patent at issue in this litigation to claim it had discovered fully-human antibodies in 1994," Stoffel said.

"J&J acknowledged at trial that it did not start working on a fully human antibody until 1997 -- two years after Abbott discovered Humira and one year after Abbott filed its patent applications for Humira."

A spokeswoman for the Johnson & Johnson unit involved in the case, Centocor Ortho Biotech Inc, would not comment beyond the brief statement.

Schering-Plough Corp (SGP.N) has the overseas rights to Remicade. Merck & Co Inc (MRK.N) aims to buy Schering-Plough later this year, and to inherit those rights.

Johnson & Johnson, however, is battling Merck before an arbitrator, claiming it will gain overseas market rights to Remicade if Merck completes its acquisition of Schering-Plough.

Both Merck and Schering-Plough were not immediately available to comment on the implications of the jury's verdict.