Igen reports progress in dispute with Roche

Md. company's stock spurts on word about settlement talks

July 10, 2002|By Ted Shelsby | Ted Shelsby,SUN STAFF

Shares of Igen International Inc., the Gaithersburg-based maker of blood-testing equipment, rose yesterday after the company announced that it had made progress in recent settlement talks with Roche Diagnostics in a dispute over a licensing agreement.

At one point yesterday, Igen shares were up slightly more than 17 percent after the company expressed confidence that it might eventually reach an agreement with Roche to settle the long-standing dispute.

Igen shares settled back in afternoon trading before closing at $30.25, up $1.25, or 4 percent.

The talks are related to a 1997 lawsuit in which Igen charged Roche with multiple breaches of a licensing agreement by using Igen technology in its medical diagnostic equipment.

In January, a federal jury sided with Igen and, after a 10-week trial, awarded the company $105 million in compensatory and $400 million in punitive damages. The jury also found that Roche engaged in unfair competition and gave Igen the ability to terminate its contract with the larger company. Igen had asked for $1 billion in damages.

In April, the U.S. District Court in Greenbelt reaffirmed the $505 million judgment. Roche has appealed the decision.

"In recent negotiations, we have made progress in bridging our differences with Roche on several important issues, and we are growing increasingly confident that we will be able to bring this to a satisfactory conclusion," Samuel J. Wohlstadter, chairman and chief executive of Igen, said in a statement released yesterday.

George V. Migausky, chief financial officer of Igen, said a confidentially agreement between the two companies prevented him from saying more about the talks.

Asked whether a sale of Igen to Roche is still a possibility, he said, "Anything is a possibility."

Last month, Igen disclosed that it had retained Lehman Bros. to explore options for the company.

Dennis Roth, an analyst who follows Igen for Chesapeake Securities Research Inc. in Towson, said Roche needs Igen's technology and "can't walk away from Igen."

He could not say when an agreement might be reached or what form it might take, but said, "Igen is in the driver's seat. It's up to Sam [Wohlstadter] to accept or to not accept a deal."

Roche Diagnostics is the world's largest manufacturer of medical diagnostic equipment. It is a division of Swiss health care giant Hoffmann-La Roche Ltd.

Daniel Piller, a spokesman for Roche, acknowledged that the company was in negotiations with Igen and told Bloomberg News that an agreement between the two companies would be the best solution.

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