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The lost royalties are from the sale of breakthrough gene-splicing technology developed by the center's scientists. By withholding royalties, Genentech breached a contract to pay the medical center 2 percent of all income generated by Genentech for licensing products using the gene-splicing technology to other companies.
The contract in question was signed August 1976 and, according to Genentech’s general council Sean Johnston, was one of the first biotechnology contracts written. In the mid-1970s while working for City of Hope, two scientists, Arthur Riggs and Keichi Ikatura, “developed a biotech process for manufacturing human proteins…The process was used to insert human genes into fast-growing bacteria and make them produce medically useful proteins, like insulin...
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