UPDATE 1-Biogen says panel upholds its Rituxan rights

LOS ANGELES, June 16 (Reuters) - Biogen Idec Inc (BIIB.O) on Tuesday said an arbitration panel has reaffirmed its right to participate in development of Rituxan and other anti-CD20 antibodies subject to its collaboration agreement with Genentech Inc.

Biogen and Genentech, which was acquired earlier this year by Roche Holding AG (ROG.VX), co-market Rituxan in the United States as a treatment for non-Hodgkin's lymphoma and rheumatoid arthritis.

Biogen said the panel ruled that a joint development committee comprised of three members from each company must unanimously approve a development plan for each specific indication.

Based on that finding, the panel also ruled that, absent unanimous approval of the joint committee, Genentech may not proceed with further development of 2H7v16 in neuromyelitis optica, 2H7v16 in relapsing-remitting multiple sclerosis, or 2H7v114 for oncology.

Genentech may continue clinical trials for 2H7 in rheumatoid arthritis and lupus, Biogen said.

The company said the arbitration panel rejected Genentech's assertion that the November 2003 merger of IDEC Pharmaceuticals Corp. and Biogen Inc. constituted a change of control.

(Editing Bernard Orr)