[Ip-health] STAT (Pharmalot) - Gilead ordered to pay $2.54 billion to Merck over hepatitis C patents

Thiru Balasubramaniam thiru at keionline.org
Fri Dec 16 06:52:53 PST 2016



Gilead ordered to pay $2.54 billion to Merck over hepatitis C patents

By ED SILVERMAN @Pharmalot

DECEMBER 15, 2016

In a huge blow to Gilead Sciences, a federal jury ordered the company to
pay $2.54 billion to Merck in order to resolve a long-running patent
dispute concerning its Sovaldi and Harvoni hepatitis C treatments, which
have been blockbuster sellers.

The verdict is the latest twist in a heated battle between the two drug
giants over hepatitis C patents, which have proven extremely lucrative over
the last few years. Since its launch three years ago, Sovaldi has generated
more than $19 billion in sales for Gilead, while Harvoni, which is an
enhanced version of its predecessor, has notched more than $23 billion
since becoming available in 2014.

The litigation, however, has a complicated backstory that involves patents,
high-stakes pharmaceutical acquisitions, and a touch of old-fashioned
rivalry between scientists.

Here’s what happened: A small company called Idenix Pharmaceuticals, which
Merck bought in 2014 to bolster its arsenal of hepatitis C products, had
filed a lawsuit the prior year against Gilead, claiming patent
infringement. Idenix argued Sovaldi patents were, effectively, too closely
related to patents for a hepatitis C treatment that had been developed
years earlier and sought to block the Sovaldi launch.

So why is Gilead on the hook? Sovaldi was originally developed by yet
another company called Pharmasset, which Gilead bought in 2011 for $11
billion. And Gilead was the one that owned and launched Sovaldi in 2013
when Idenix filed its lawsuit. In other words, the dispute originated with
smaller companies that are now owned by two of the world’s largest drug

For its part, Gilead plans to appeal. “We remain steadfast in our opinion
that Idenix’s US patent is invalid, and since they made no contribution and
assumed none of the risk in the discovery and development of [Sovaldi and
other medicines based on this drug], do not believe they are entitled to
any level of damages,” a Gilead spokeswoman told Pharmalot.

The verdict overshadows a Gilead victory last June, when a federal court
judge decided the biotech did not have to pay $200 million in damages that
had been awarded in separate patent lawsuit over Sovaldi because Merck
displayed a “pervasive pattern of misconduct.” The judge concluded the
Merck lawyer intentionally gave false testimony about his role in failed
negotiations between Merck and Pharmasset.

During the recent two-week trial, by the way, Idenix argued that Raymond
Schinazi, who founded Pharmasset, conveyed proprietary information
concerning Idenix research to scientists at his company while working as a
consultant for Idenix, according to Law360.

As it so happens, Schinazi was reportedly a close friend of Idenix
cofounder Jean-Pierre Sommadossi, who had testified at the trial that he
shared confidential information with Schinazi while Schinazi was also
leading work at Pharmasset, the legal website reported.

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