A federal jury in California ordered Gilead Sciences Inc.
to pay Merck
& Co. and a partner $200 million for infringing two Merck
patents in a case involving Gilead’s two blockbuster drugs for treating
hepatitis C, Merck said Thursday.
The award follows the jury’s decision on Tuesday upholding the validity of two patents held by Merck and its partner Ionis Pharmaceuticals Inc. that Merck says should entitle the companies to a portion of the sales of Gilead’s drugs Sovaldi and Harvoni.
While the verdict was a victory for Merck, the damages the jury awarded fell significantly short of the 10% royalty on U.S. sales of the two drugs the company was seeking. The award covers sales between 2013 and 2015, which amounted to more than $20 billion.
The jury pegged sales at $5 billion after deducting Gilead’s expenses from the total, said Leerink analyst Geoffry Porges, and assessed a 4% royalty to reach $200 million.
The court will hold a separate hearing to determine royalty payments on sales beginning Jan. 1.
Last
year, Gilead recorded a combined $12.5 billion in U.S. sales from the
two drugs, which notched a total of $19.1 billion in global sales.
“We are pleased that the jury recognized that patent protections are essential to the development of new medical treatments,” Merck said in a statement. “The compounds and methods at issue in this case facilitated significant advances in the treatment of patients with HCV infection, and achieving these advancements required many years of research and significant investment by Merck and its partners.”
Gilead said Merck didn’t contribute to the development of the drugs and “assumed none of the risk” in the discovery of sofosburvir, the key active ingredient in both medicines. “We do not believe Merck is entitled to any amount of damages,” Gilead said in a statement. “We continue to believe the Merck patents are invalid.”
If the judge upholds the jury’s verdict, Gilead said it would appeal.
The patent trial, which arose from a suit Gilead filed against Merck in 2013, began earlier this month in U.S. District Court Northern District of California in San Jose.
Gilead was seeking a judgment ruling Merck’s patents invalid and argued it shouldn’t have to share any revenues from the two drugs. Merck claimed sofosbuvir infringed two of its patents and was seeking royalties from Gilead.
Merck recently began selling its drug Zepatier for hepatitis C.
Corrections & Amplifications:
Gilead’s hepatitis C drug is called Harvoni. An earlier version of this article incorrectly identified the drug as Harmoni. (March 24, 2016)
The award follows the jury’s decision on Tuesday upholding the validity of two patents held by Merck and its partner Ionis Pharmaceuticals Inc. that Merck says should entitle the companies to a portion of the sales of Gilead’s drugs Sovaldi and Harvoni.
While the verdict was a victory for Merck, the damages the jury awarded fell significantly short of the 10% royalty on U.S. sales of the two drugs the company was seeking. The award covers sales between 2013 and 2015, which amounted to more than $20 billion.
The jury pegged sales at $5 billion after deducting Gilead’s expenses from the total, said Leerink analyst Geoffry Porges, and assessed a 4% royalty to reach $200 million.
The court will hold a separate hearing to determine royalty payments on sales beginning Jan. 1.
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“We are pleased that the jury recognized that patent protections are essential to the development of new medical treatments,” Merck said in a statement. “The compounds and methods at issue in this case facilitated significant advances in the treatment of patients with HCV infection, and achieving these advancements required many years of research and significant investment by Merck and its partners.”
Gilead said Merck didn’t contribute to the development of the drugs and “assumed none of the risk” in the discovery of sofosburvir, the key active ingredient in both medicines. “We do not believe Merck is entitled to any amount of damages,” Gilead said in a statement. “We continue to believe the Merck patents are invalid.”
If the judge upholds the jury’s verdict, Gilead said it would appeal.
The patent trial, which arose from a suit Gilead filed against Merck in 2013, began earlier this month in U.S. District Court Northern District of California in San Jose.
Gilead was seeking a judgment ruling Merck’s patents invalid and argued it shouldn’t have to share any revenues from the two drugs. Merck claimed sofosbuvir infringed two of its patents and was seeking royalties from Gilead.
Merck recently began selling its drug Zepatier for hepatitis C.
Corrections & Amplifications:
Gilead’s hepatitis C drug is called Harvoni. An earlier version of this article incorrectly identified the drug as Harmoni. (March 24, 2016)
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