Chiron Settles Complaints on Pricing of Tests

Chiron Corp. said Monday that it settled antitrust complaints by European blood banks over the pricing of hepatitis C and HIV tests.

The Emeryville, Calif.-based biotechnology company said the Commission of the European Communities had accepted a joint settlement proposal made by Chiron and its European licensee, F. Hoffmann-La Roche.

In October 2001, the German Red Cross Donation Service and Working Society of Physicians filed a complaint with the commission alleging that Roche’s prices for its blood-screening kits were unreasonable and should be prohibited. The pricing was based on the number of donations tested and the Chiron royalty, the commission said.

The complaint eventually was joined by groups from the Netherlands, Britain, Finland and Luxembourg.

Chiron said it resolved the complaints by modifying licensing agreements that allow Hoffman-La Roche to use Chiron’s technology in hepatitis C and HIV-1 blood-testing kits. Chiron said the settlement preserves its intellectual property rights and its royalty structure.

As part of the settlement, Chiron agreed to extend a time-limited license offer to blood banks using “home brew” testing, allowing them to continue to use their own in-house technology to screen donations.

As part of this offer, Chiron will provide relief from liability for past infringements to all blood banks that take such a license.

In 2002, royalties and license fees from Roche contributed $48.5 million to Chiron’s total revenue of $1.28 billion for the year. Payments from Roche will continue for the lives of the patents. Chiron’s European patents begin to expire in 2005 for HIV and 2008 for hepatitis C.

Shares of Chiron closed Monday at $45.67, up $1.81, or 4%, on Nasdaq.