lost nearly half its value after the Virginia-based biotech settled a patent infringement lawsuit brought by California's
(which soared more than 22% on the news) and
regarding Insmed's Iplex drug, which is indicated for short-stature conditions. In December, a U.S. District Court found Insmed had violated Tercica's patents.
Insmed no longer needs to pay any damages to the two companies, but it is still barred from developing the drug for short-stature indications. If Insmed develops Iplex for certain other permitted indications, Tercica or Genentech can opt in for a 50-50 cut of the profits while paying half the development costs. Insmed needs to pay Genentech royalties on any and all future Iplex products, and at a higher rate if Tercica chooses to opt in.
Insmed is restructuring as a result of the settlement. The company is eliminating its sales and marketing group and scaling back production at its Boulder, Colo., manufacturing site. It will reduce its 150-person workforce by 34%. Insmed shares were losing 75 cents, to trade around 80 cents. Tercica was soaring $1.11, to $5.99. Genentech was off 36 cents to $81.92.
shares were leaping after the Houston-based driller reported positive testing from its well off the coast of northwest Peru. Natural gas flowed at a rate of 40 million cubic feet per day and crude oil at 3,150 barrels a day, the company said. Shares were up 67 cents, or 13.5%, to $5.65.