By Tom Harvey, The Salt Lake Tribune Published: May 2, 2012
One month from the scheduled beginning of a complex eight-week trial, Brigham Young University, and drug giant Pfizer Inc. settled a lawsuit Tuesday for $450 million over whether the Utah school had been cheated out of billions of dollars in royalties for aiding in the development of the wildly successful anti-pain drug Celebrex.
Terms of the settlement of the nearly 6-year-long legal dispute were not disclosed in a Pfizer press release but the New York-based company reported separately that it had taken a $450 million charge against its earnings to settle the matter.
BYU claimed in the lawsuit filed in October 2006 that professor Daniel Simmons had discovered an enzyme and a gene called Cox 2 that would allow for the development of an anti-inflammation drug that did not have the long-term side effects of aspirin. The school entered into a contract with Monsanto for a joint research project to develop a drug with BYU supposed to receive royalties.
The Provo school claimed that discovery was a key to the development of Celebrex but Monsanto, which eventually became part of Pfizer, arbitrarily canceled the contract, did not place Simmons on patents and misappropriated his work to create the drug. The product was one of the most financially successful of all time, bringing in revenues of perhaps $35 billion, according to court papers.
BYU has claimed it was owed at least $9.7 billion in royalties, but Pfizer’s exposure at trial was possibly much greater because the jury could have taken the total revenue from Celebrex sales and imposed triple damages.
With a trial scheduled to begin May 29, the two parties sat down Friday for settlement talks in Salt Lake City before U.S. District Judge David Sam. Pfizer put out a news release Tuesday morning announcing that the company had “reached an amicable settlement on confidential terms.” The company declined further comment.
BYU said only, “We are very pleased with how this matter has been resolved. By terms of the settlement, our response this morning can only reiterate what is stated in the released press statement.”
As part of the settlement, Pfizer said that BYU will establish a Dan Simmons Chair in recognition of Simmons.
“We are pleased to resolve this matter and the uncertainty of litigation, and to be in a position to support Dr. Simmons’ research efforts at BYU,” Pfizer said in its statement.
Pfizer had argued in court documents that Simmons’ discovery was not a key to the development of Celebrex, which was largely the result of the work of its own scientists.
Pretrial rulings in March by U.S. District Judge Ted Stewart largely favored BYU and would have allowed the school’s attorneys, led by Leo Beus of Beus Gilbert of Phoenix, to go to the jury with their legal arguments and evidence largely intact.
In another pretrial jockeying last week, Pfizer had claimed that BYU had tainted the potential jury pool by way of a news media blitz that included interviews given to local television stations. BYU is owned by The Church of Jesus Christ of Latter-day Saints, and about 60 percent of Utah residents are members.
In an emergency motion calling for the trial to be moved, Pfizer said, “Whatever hope there may have been of obtaining jurors who, despite potential ties to important local institutions such as BYU or the LDS Church, could be impartial, BYU has now willfully made that task impossible.”
BYU’s attorneys said the claim was without merit.
A BYU spokesperson on Tuesday declined to say what the school’s annual budget is or to what use it might make of the settlement monies.
According to court papers, BYU also had been pursuing a licensing agreement with Teva Pharmaceuticals, a generic drug maker, to license Simmons’ discoveries should BYU have prevailed at trial on patent claims. With the settlement, that apparently is no longer a possibility.
By Lois M. Collins and Geoffrey Fattah, Deseret Morning News Published: October 19, 2006
Brigham Young University and one of its professors are suing pharmaceutical giant Pfizer, claiming BYU was defrauded of profits of at least $1 billion and credit for work that led to the blockbuster drug Celebrex.
The lawsuit, filed Wednesday in U.S. District Court in Salt Lake City, weaves a tale of a trusting university that didn’t know much about patents in biomedical breakthroughs and that was allegedly deceived by an experienced drug company.
The medication, in the non-steroidal anti-inflammatory drugs (NSAID) class, is one of the so-called “super-aspirins.” Celebrex and its second-generation drugs have had sales of more than $20 billion. The super-aspirin blocks the COX-2 enzyme, reducing pain and inflammation without triggering the sometimes-deadly gastrointestinal effects of some other NSAIDs, including aspirin. COX is a scientific shorthand for the enzyme cyclooxygenase.
The lawsuit asks for a jury trial in its claim that Pfizer and its predecessor companies, including Monsanto, unjustly took credit for and profited from the work of Daniel L. Simmons, a professor of biochemistry at BYU. The complaint alleges both fraud and misappropriation of trade secrets and says BYU and Pfizer’s predecessor company Monsanto had a contract to develop such drugs together.
The pharmaceutical company instead terminated the contract “under fraudulent pretenses,” hid information that BYU was entitled to about patents, and profited handsomely while shutting the university out, the lawsuit says.
The lawsuit estimates the university’s lost potential revenue is in excess of $1 billion but does not specify a dollar amount for damages. Instead, the complaint asks that those be determined at trial.
The complaint also asks for a directive to the U.S. Patent and Trademark Office to issue a certificate of correction to various patents saying Simmons was erroneously omitted as an inventor, punitive damages, and costs associated with the litigation.
Simmons said in a statement that he looked forward to receiving proper credit for his work. “I appreciate the support of the university, and I’m grateful that the real story behind this research will come out,” he said.
A Pfizer spokesman denied the accusations.
“Dr. Simmons played no role in the discovery of Celebrex, and the allegations raised by BYU and Dr. Simmons are baseless,” said Pfizer spokesman Bryant Haskins, in a statement. “The facts simply don’t support the unfounded claims made in this lawsuit, and Pfizer will, of course, mount a vigorous defense.”
BYU spokesman Michael Smart said the university had attempted to resolve this dispute for years before filing suit.
“BYU initiated phone calls and letters about this issue more than seven years ago,” he said, and university officials also formally met four times with company executives.
The university and Pfizer agreed in January to hire a professional mediator but have been unable to resolve the issue. “Monsanto and its successors gave the university no choice,” Smart said.
BYU maintains in the lawsuit that Simmons discovered the COX-2 enzyme and signed a contract with Monsanto to develop NSAIDs that would protect the stomach while tackling pain and swelling. Instead, the lawsuit says, Monsanto advised BYU against getting patents that the company said would be unenforceable and promised to let the university know if something that could be patented came out of the work.
Patents did, in fact, result, but BYU was not told that it could have had a part in them. The lawsuit asks that dozens of existing patents be changed to reflect Simmons’ role in discovering COX-2 and crediting him as an inventor.
Instead of living up to the contract, the lawsuit alleges that Monsanto officials started taking credit for the COX-2 discovery and cites examples, including news articles where a Monsanto scientist claims he discovered COX-2.
“Dan Simmons and BYU had a written contract with Monsanto to use his recent discovery of COX-2 to collaborate in the development of a new aspirin-like drug,” said Smart. “Until then, Monsanto had been heading down a different research path. Our lawsuit says they took Dr. Simmons’ findings and discoveries and went on to develop a blockbuster drug without him, which we believe violated the contract by sharing none of the credit or compensation.”
The lawsuit asks that dozens of COX-2-related patents be corrected to reflect Simmons’ role. “These patents were all based on the work of Dr. Simmons,” the lawsuit says.
In at least two Monsanto patents, the lawsuit says, “Monsanto fraudulently misrepresented that its cell-testing systems were constructed using human or murine COX-1 or COX-2 fragments” from a Michigan company. “Dr. Simmons has recently learned,” the complaint says, that the cell systems in at least one case “were made using the clones Dr. Simmons had provided Monsanto.”
The lawsuit also claims that the drug company misrepresented to the Food and Drug Administration Monsanto’s “true role” in the development of Celebrex.
At the time Monsanto and BYU entered into their agreement, Monsanto was trying to develop a steroid-like project and was testing compounds for NSAID properties only so it could eliminate them from consideration, the complaint says.
Haskins said Pfizer did acknowledge that Monsanto had a research agreement with Simmons and BYU, but when asked to what extent Simmons’ research was used in the company’s COX-2 project, Haskins said the company would not comment on pending litigation.
The lawsuit says that BYU was not aware that it had been cheated of credit and proceeds it was entitled to under the contract until information came to light in another lawsuit. In 1998, pharmaceutical company Merck asked Simmons to testify in Monsanto’s patent infringement suit against Merck, the BYU lawsuit says, and that’s when Simmons learned that Monsanto was taking sole credit for the discovery of COX-2.
In another lawsuit with the University of Rochester, the BYU complaint says, Monsanto in a brief said that “Brigham Young’s scientists were the first to identify methods of treatment using selective COX-2 inhibitors.”
When BYU tried to resolve the issues with Monsanto, the lawsuit says, the company initially denied “even knowing who Dr. Simmons was. When confronted with the signed agreement,” the complaint says, “Monsanto admitted to working with Dr. Simmons” but continued to deny working with them on a project to develop a COX-2 selective NSAID.
By Charlene Winters, Brigham Young University Alumni Magazine Published: Fall 1998
If BYU’s Alumni Association president were to open a vein, his blood would probably run blue. That’s because Paul E. Gilbert has been associated with BYU throughout his life and says he still feels inspired and thrilled every time he comes to campus.
The Phoenix-based attorney’s affiliation began in childhood when he attended BY Elementary, BY Junior High, and BY High School. He then attended BYU as a history major and served as student body president. His father, who died while Gilbert was a child, was a BYU assistant football coach, and his second father was a BYU dean. The roots go even deeper. His mother taught English at BY High, all seven of his brothers and sisters have attended BYU, and the tradition is continuing with his own children.
“My wife Susan and I have consistently brought our children to Provo for Homecoming to create a feeling of excitement about coming to this fine school,” he says. “Two of my children have already graduated from BYU, another is attending the university, and my last child, a senior in high school, plans to attend BYU.
“That will make us four for four,” he adds. “We do believe in free agency in our home. I have told my children they could attend whatever college they wanted, but I have always added that BYU was paid for.”
Although Gilbert attended the University of California, Berkeley, for his law degree, he says that, despite receiving a very good education there and forming some close and lasting friendships, his feelings toward UC Berkeley don’t approach the depth of his commitment to BYU.
“I think my alliance to BYU is closely akin to my feelings and support for the LDS Church,” he explains. I also think BYU is such a unique institution that it engenders uncommon loyalty. We feel a real bond with our fellow graduates because of our common goal–and that again comes back to the Church. We are more united as a student body in our goals and aspirations than any other student body in the world.”
“Paul Gilbert is a natural choice for alumni board president,” says George Bowie, executive director of the Alumni Association and an assistant advancement vice president. “He has consistently demonstrated his commitment to BYU and his willingness to help the university in any way.”
When he graduated from BYU in 1968, Gilbert says he left with a feeling of profound joy for the BYU experience and says that whenever he steps on campus, it floods him with pleasant and treasured memories.
“Frankly, I’m always a bit proud to know that I am affiliated with a university that is doing great things and that just gets better and better with time,” he says.
He acknowledges that BYU has undergone major changes in the 30 years since he was a student, but he believes the things that make him love and appreciate BYU have stayed constant.
“BYU continues to be run by an inspired board of trustees with rigorous adherence to Church standards. It remains full of clean-cut young people who believe as I do and who are part of the big picture that is changing the world. It also remains a university where real and meaningful truths are being taught across the disciplines. I just have a feeling BYU is playing and will continue to play an even more important role in the future in helping spread the influence and message of the gospel.”
Even after leaving BYU, Gilbert continued to serve the university. His deceptively simple philosophy about volunteer service–“I do what I am asked”–belies his deep commitment not only to BYU but also to causes in Arizona, where he serves on the board of the John C. Lincoln Foundation (one of the larger hospitals in Phoenix) and the National Conference of Christians and Jews.
“I believe in service,” he says. “I have been an admissions advisor since I was BYU student body president. I helped recruit students when I was a senior there. I helped with fundraising, and I served with the alumni. I have also been a leader of BYU’s alumni chapter in Phoenix.”
Gilbert encourages participation in regional chapters as a way of remaining involved with BYU. “I think many alumni are fiercely loyal to BYU and want to do something that links them to the university,” he says. “Yet they may not know how to do it or where to go. My answer to that question is to join and participate in local chapters.”
Gilbert’s goals as BYU Alumni Association president–a position he will hold through 1999–are many. He looks to the chapters to help coordinate with the BYU Management Society, BYU Law Society, Collegium Aesculapium, and other BYU groups. He wants to encourage regional scholarships to help worthy students who otherwise could not afford to attend BYU. He would like to see chapters participate in community activities that raise awareness about BYU. And he supports chapters as a major force in BYU’s capital campaign fund-raising efforts.
Additionally, he wants to see alumni assist each other in finding jobs. “We have a placement office–you can find it under the Alumni Association’s Web site on the Internet. Alumni should help each other.”
Particularly important to him during his tenure, he says, is to find ways to help alumni understand that the Alumni Association is their advocate and representative to BYU.
A strong believer in community involvement, Gilbert counts his work with the Desert Mission Food Bank for the Lincoln Foundation board as one of his most fulfilling assignments outside of his work with BYU.
“This is a place where people come for food,” he explains. “It is designed to help them overcome a short-term problem.” The food bank began in a small building it quickly outgrew, and Gilbert headed a $2.5 million capital campaign to help the organization meet the demand.
“I still remember the day when a divorced mother with three children came in with tears streaming down her face, saying her husband had left and she did not know how she could take care of her family. I immediately could see the need for the food bank. We now have a large warehouse and a large distribution faculty. All of us are volunteers, including dentists who donate one day a month to work on children’s teeth. We began the dentistry component after some schools approached us and said some children could not concentrate because their teeth hurt so much.”
Another volunteer position has kept Gilbert busy for 15 years as a member of the board of directors for the National Conference of Christians and Jews. He now serves as chair of the Arizona chapter.
“That group was formed when Al Smith, a Catholic, ran for U.S. president,” Gilbert explains. “A lot of religious prejudice emerged from that election, and the conference began to fight prejudice on a religious basis. Since then the goals have expanded to where we fight prejudice of any type–be it religion, race, sex, or prejudice against the economically disadvantaged. Among our many projects is going into schools to promote religious and racial tolerance. Last year we talked to more than 10,000 students in Arizona.
“We also sponsor a summer camp for high school students called ‘Any Town.’ When they arrive at the camp, we assign them a color–red, brown, or yellow–for a week and help them feel firsthand the effects of discrimination based on skin color. We also work on religious tolerance. Toward the end of the week’s camp, we show them ways to overcome prejudice and help them understand how prejudice starts and what they can do to right it.”
The conference has even defended the LDS faith, Gilbert says. “We did a considerable amount of good work with minimizing the effects of the anti-Mormon filmThe Godmakers. We distributed a lot of information against it, and the people who produced the movie were so mad, they sued us. We won the law suit.”
When not serving BYU and his community, Gilbert works as a law partner in the firm of Beus, Gilbert, and Devitt, which he helped found. Previously, he practiced law with former BYU President Rex E. Lee.