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Merck Gilead Patent Trial 3/25/16
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Gilead Must Pay Merck $200 Million for Hepatitis C Patents
Mar 25, 2016 | Bloomberg
By Pamela A Maclean and Kartikay Mehrotra
Gilead Sciences Inc. was ordered by a jury to pay Merck & Co. $200 million for patent infringement over a drug compound that cures hepatitis C, a tenth of what Merck sought. -
Gilead ordered to pay Merck $200M for patent infringement
Mar 25, 2016 | Associated Press
The federal jury in a patent trial has ordered drugmaker Gilead Sciences to pay Merck $200 million in damages for infringing on patents for hepatitis C drugs. -
Jury Gives Merck $200M in Hepatitis C Drug Spat
Mar 25, 2016 | Court House News
By Matthew Renda
SAN JOSE, Calif. (CN) - A jury found Gilead Sciences should pay its pharmaceutical rival Merck $200 million for infringing on patents it developed in the effort to create a cure for hepatitis C. -
CEO Daily: Friday, March 25
Mar 25, 2016 | Fortune
By John Kell and Alan Murray
The Gilead and Merck verdict was featured in Fortunes daily round up of the top news. The relevant section has been included below. -
Gilead v Merck: That’s It?!?!
Mar 25, 2016 | Barron's
By Ben Levisohn
When Merck (MRK) claimed Gilead Sciences (GILD) had infringed on its patents in creating blockbuster hepatitis-C drugs Sovaldi and Harvoni, it asked for royalties of 10% of all sales. While the jury earlier this week found Merck’s patents to be valid, it determined that Gilead would have to pay just $200 million. Leerink’s Geoffrey Porges explains: -
Gilead ordered to pay $200 million in damages to Merck & Co
Mar 25, 2016 | Pharma Letter
A federal jury in California has ordered Gilead Sciences (Nasdaq: GILD) to pay $200 million in damages to Merck & Co (NYSE: MRK) and its partner Ionis Pharmaceuticals (Nasdaq: IONS) for patent infringement.
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Gilead Must Pay Merck $200 Million for Hepatitis C Patents
Mar 25, 2016 | Bloomberg
By Pamela A Maclean and Kartikay Mehrotra
Gilead Sciences Inc. was ordered by a jury to pay Merck & Co. $200 million for patent infringement over a drug compound that cures hepatitis C, a tenth of what Merck sought.
The verdict announced Thursday follows an earlier finding by the jury embracing Merck’s claims that its scientists were responsible for early breakthroughs that led to the development of the Sovaldi and Harvoni medicines which helped Gilead become the world’s largest biotechnology firm by market value.
After siding with Merck on all the patent claims, jurors rejected Merck’s bid for a 10 percent royalty on the $20.7 billion revenue that Gilead’s hepatitis C drugs generated from 2013 through 2015.
The award against Gilead comes amid projections that the Foster City, California-based company’s sales will flatten this year as competition for liver disease treatments intensifies among drugmakers. In the final phase of the trial in federal court in San Jose, California, U.S. District Judge Beth Labson will determine a royalty rate for future sales of Harvoni and Sovaldi.
U.S. Prices
Gilead’s drugs carry U.S. list prices from $84,000 for a 12-week course to $94,500 before discounts. The court fight started 2 1/2 years ago after Merck demanded a royalty, claiming that its laboratory back in 2001 laid the scientific foundation for the sofosbuvir compound to later be developed by Pharmasset Inc., before that company was acquired by Gilead in 2011.
Gilead said it will appeal if a judge upholds the damages verdict.
“Since Merck made no contribution and assumed none of the risk in the discovery and development of sofosbuvir, we do not believe Merck is entitled to any amount of damages,” Michele Rest, a Gilead spokeswoman, said in a statement. “We continue to believe the Merck patents are invalid.”
Merck said in a statement that it’s “pleased that the jury recognized that patent protections are essential to the development of new medical treatments.”
“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,” the company said.
Scientific Advances
At trial, Gilead and Merck each tried to show the other was claiming credit for scientific advances that wasn’t due. Over two weeks, a parade of doctors and scientists for Gilead, Pharmasset and Merck and its partner Ionis Pharmaceuticals Inc. testified about their roles in the patent process.
In the damages phase, the jury settled on a 4 percent royalty for $5 billion in sales.
Juror Clark Holden of Salinas, California, said after the verdict the panel decided $5 billion was the appropriate basis for calculating a royalty after subtracting Gilead’s investment of $15 billion from its total U.S. revenue.
“Some jurors were at the high end and some wanted to give nothing,” he said in an interview. “We had to find a middle ground.”
Merck’s own liver disease treatments Victrelis and PegIntron last year generated $200 million in global sales, tumbling almost 63 percent in a year. The company said the fall was a contributor to Merck’s 6.5 percent drop in sales in 2015. In 2012, the year before sofosbuvir hit the market, Merck’s two hepatitis C drugs combined to generate about $1.2 billion in sales, according to data compiled by Bloomberg.
The case is Gilead Sciences Inc. v. Merck & Co., 13-cv-04057, U.S. District Court, Northern District of California (San Jose).
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Gilead ordered to pay Merck $200M for patent infringement
Mar 25, 2016 | Associated Press
The federal jury in a patent trial has ordered drugmaker Gilead Sciences to pay Merck $200 million in damages for infringing on patents for hepatitis C drugs.
The award is far below the damages Merck sought, but the trial moves to a new phase Wednesday. The jury, in San Jose, California, then will decide whether Merck is due royalties on sales of Gilead's hepatitis C drugs, Harvoni and Sovaldi.
Merck, which recently launched a hepatitis C drug called Zepatier, claims two patents that Merck and partner Ionis Pharmaceuticals filed in 2002 were the basis for Gilead's sofosbuvir. That's the active ingredient in Sovaldi and part of combination drug Harvoni, which are among the world's top-grossing medicine franchises.
The two Gilead drugs had 2015 worldwide sales of $19.1 billion, mostly in the U.S. That's nearly two-thirds of all revenue for Gilead Sciences, a biologic drugmaker based in Foster City, California.
Merck, which is based in Kenilworth, New Jersey, sought damages amounting to 10 percent of U.S. sales of Harvoni and Sovaldi through the end of 2015, which totaled $23.1 billion. It's also seeking royalties of 10 percent of the U.S. sales of the two drugs from Jan. 1, 2016 on.
Gilead said it will appeal the $200 million award the jury ordered Thursday night, if a judge upholds it.
"Since Merck made no contribution and assumed none of the risk in the discovery and development of sofosbuvir, we do not believe Merck is entitled to any amount of damages. We continue to believe the Merck patents are invalid," Gilead said.
However, the federal judge overseeing the case ruled a month ago that Gilead's two medicines did infringe on the patents. Then on Tuesday, the jury upheld the validity of the two patents, which Merck and Ionis Pharmaceuticals filed in 2002 for "compounds and methods" to treat patients infected with the hepatitis C virus.
The federal jury in a patent trial has ordered drugmaker Gilead Sciences to pay Merck $200 million in damages for infringing on patents for hepatitis C drugs.
The award is far below the damages Merck sought, but the trial moves to a new phase Wednesday. The jury, in San Jose, California, then will decide whether Merck is due royalties on sales of Gilead's hepatitis C drugs, Harvoni and Sovaldi.
Merck, which recently launched a hepatitis C drug called Zepatier, claims two patents that Merck and partner Ionis Pharmaceuticals filed in 2002 were the basis for Gilead's sofosbuvir. That's the active ingredient in Sovaldi and part of combination drug Harvoni, which are among the world's top-grossing medicine franchises.
The two Gilead drugs had 2015 worldwide sales of $19.1 billion, mostly in the U.S. That's nearly two-thirds of all revenue for Gilead Sciences, a biologic drugmaker based in Foster City, California.
Merck, which is based in Kenilworth, New Jersey, sought damages amounting to 10 percent of U.S. sales of Harvoni and Sovaldi through the end of 2015, which totaled $23.1 billion. It's also seeking royalties of 10 percent of the U.S. sales of the two drugs from Jan. 1, 2016 on.
Gilead said it will appeal the $200 million award the jury ordered Thursday night, if a judge upholds it.
"Since Merck made no contribution and assumed none of the risk in the discovery and development of sofosbuvir, we do not believe Merck is entitled to any amount of damages. We continue to believe the Merck patents are invalid," Gilead said.
However, the federal judge overseeing the case ruled a month ago that Gilead's two medicines did infringe on the patents. Then on Tuesday, the jury upheld the validity of the two patents, which Merck and Ionis Pharmaceuticals filed in 2002 for "compounds and methods" to treat patients infected with the hepatitis C virus.
Merck claimed that Pharmasset, a company Gilead bought for $11 billion in 2011 to gain the rights to then-experimental drug sofosbuvir, used information in the 2002 patents to develop sofosbuvir. Merck said it, Ionis Pharmaceuticals of Carlsbad, California, and their partners spent years and significant money working on the patents.
Gilead denies any patent infringement, saying Pharmasset began working on sofosbuvir's development in 2001.
According to Merck, Gilead initiated the litigation by seeking a declaratory judgment that the Merck and Ionis patents were invalid.
"The jury's verdict upholds patent protections that are essential to the development of new medical treatments," Merck said late Thursday.
Patents guarantee drugmakers exclusive sales for a decade or more, before generic competition is allowed, so the companies can recoup their investment and use profits to then develop new medicines.
Merck won U.S. approval on Jan. 28 for Zepatier, and priced it well under Harvoni's list price of $94,000 per treatment course. That set up a battle for favorable formulary positions, and thus more sales, from insurers and prescription benefit managers.
Merck was one of two dominant makers of hepatitis C treatments until Gilead's drugs were approved. Those drugs, as well as Merck's Zepatier and new ones from a few other rivals, have revolutionized treatment for hepatitis C. About 3 million Americans and millions more elsewhere have the liver-destroying, bloodborne virus.
Prior generations of hepatitis C medicines required a year of treatment and caused flu-like and other side effects, yet barely cured half of patients. The new drugs cure about 95 percent of patients in eight to 12 weeks, but their high prices have strained the budgets of insurers and government health programs.
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Jury Gives Merck $200M in Hepatitis C Drug Spat
Mar 25, 2016 | Court House News
By Matthew Renda
SAN JOSE, Calif. (CN) - A jury found Gilead Sciences should pay its pharmaceutical rival Merck $200 million for infringing on patents it developed in the effort to create a cure for hepatitis C.
Immediately after the jury returned its findings, Gilead said it would appeal.
"We continue to believe the Merck patents are invalid," a Gilead spokesman said in an emailed statement. "In the event the judge maintains the jury's verdict, we will appeal."
The same jury found earlier this week that Merck's patents for a drug called sofosbuvir are valid.
Merck meanwhile celebrated the ruling, saying it provided vindication for their research and development efforts over a period of years.
""We are pleased that the jury recognized that patent protections are essential to the development of new medical treatment," Merck said through a company spokesman. "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."
The dispute stems from Gilead's development of sofosbuvir, which Gilead markets under the brand names Solvaldi and Harvoni. The medication has proven enormously effective at curing hepaitits C, an often fatal virus that attacks cells in the liver causing cancer, cirrohsis or liver failure.
The drug is a nucleotide, or chemical compound, which essentially prevents the virus from replicating itself in the cell division process in the liver. Solvaldi and Harvoni have generated $19 billion in sales for Gilead.
Last year, Merck demanded royalties from Gilead, saying their scientists made breakthroughs in the development of sofosbuvir.
Specifically, Merck scientists found a certain class of compounds that proved effective in blocking the hepatitis C. It was Merck that found the construction of the compound or nucleotide, upon which Gilead based its on research, according to court documents.
Gilead maintains the scientific breakthrough that led to the development of sofosbuvir was made by biomedical researchers at Pharmasset, a small company Gilead acquired for $11 billion in 2011 for the express purpose of bringing the medicine to market.
"Since Merck made no contribution and assumed none of the risk in the discovery and development of sofosbuvir, we do not believe Merck is entitled to any amount of damages," Gilead said Thursday.
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Mar 25, 2016 | Fortune
By John Kell and Alan Murray
Gilead ordered to pay Merck in dispute
A federal jury ordered Gilead Sciences to pay Merck $200 million in damages for infringing two Merck patents related to a lucrative cure for hepatitis C. The damages amount was far less than the $2 billion Merck had demanded. On Tuesday, the same jury in San Jose, Calif., upheld the validity of the patents, which lie at the heart of the dispute over Gilead’s blockbuster drugs, Sovaldi and Harvoni. Together the medicines had more than $20 billion in U.S. sales in 2014 and 2015. Reuters
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Mar 25, 2016 | Barron's
By Ben Levisohn
When Merck (MRK) claimed Gilead Sciences (GILD) had infringed on its patents in creating blockbuster hepatitis-C drugs Sovaldi and Harvoni, it asked for royalties of 10% of all sales. While the jury earlier this week found Merck’s patents to be valid, it determined that Gilead would have to pay just $200 million. Leerink’s Geoffrey Porges explains:
On March 22, a Northern District of California jury ruled in favor of Merck, finding its two nucleoside patents (US Patent Number 7,105,499 and 8,481,712) valid for sofosbuvir. This set up the first phase of the damages trial, in which the jury just awarded Merck $200mm for all sales of sofosbuvir prior to December 31, 2015. Although the combined US revenues of Sovaldi (sofosbuvir) and Harvoni (sofosbuvir/ ledipasvir) between 2013 and 2015 were $23bn, the jury factored in Gilead’s investment, subtracting it out before assessing 4% on the remaining $5bn. This figure represents a far cry from the 10% Merck was seeking and a little less than triple the $73mm amount Gilead had proposed. In the next phase of the trial, the jury will decide what payments Merck will receive for future sales of sofosbuvir. Assuming the same arithmetic applied by the jury in estimating the damages obligation is then applied to our expected future US sales of Sovaldi and Sovaldi-containing combinations, the value effect per share based on the NPV of these future royalties would be $0.44/share (4% royalties; including the $200mm upfront payment, the combined effect is $0.59/share)…
However, following the jury’s announcement, Gilead announced that it will appeal, leaving the final outcome potentially years away. Nonetheless, the results are a positive for Gilead and a set-back for Merck, with Gilead gaining considerable leverage should the two parties settle. Overall, this judgment was de minimis, and consistent with our original assessment that the impact was likely to be minor. We expect the stock to be trading much higher than it has been over the last few days following last Tuesday’s verdict. Our view has consistently been that Gilead’s IP position is strong and that a large settlement – such as Merck what was seeking – was unlikely. This judgment by the jury was as favorable to Gilead as any legal authority (e.g., judge, arbitrator), in our view, was likely to be in deciding damages. We continue to be bullish on the Gilead stock, and maintain our Outperform Rating and $127 price target.
Shares of Merck gained 1.6% to $53.07 this week, while Gilead Sciences rose 1.2% to $91.32
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Gilead ordered to pay $200 million in damages to Merck & Co
Mar 25, 2016 | Pharma Letter
A federal jury in California has ordered Gilead Sciences (Nasdaq: GILD) to pay $200 million in damages to Merck & Co (NYSE: MRK) and its partner Ionis Pharmaceuticals (Nasdaq: IONS) for patent infringement.
It follows a court decision on Tuesday (March 22) to uphold the validity of two patents held by Merck and Ionis for hepatitis C drug sofosbuvir.
Spokeswoman for Gilead, Michele Rest, confirmed the company would appeal the decision.
“Since Merck made no contribution and assumed none of the risk in the discovery and development of sofosbuvir, we do not believe Merck is entitled to any amount of damages. We continue to believe the Merck patents are invalid. In the event the judge maintains the jury's verdict, we will appeal,” she said.
Gilead’s sofosbuvir-based drugs, including Sovaldi (sofosbuvir) and Harvoni (ledipasvir/sofosbuvir) for Hepatitis C have generated more than $20 billion in US sales since 2013.
Gilead obtained sofosbuvir, the active ingredient in its drugs, by acquiring Pharmasset Inc in 2011.
The court battle began more than two years ago after Merck accused Gilead of infringing its patents, claiming that sofosbuvir was developed by Pharmasset under a Merck patent filed in 2002.
But Gilead, which claimed the patents were derived from Pharmasset’s work, asked the federal court in San Jose, California, to declare the patents invalid, saying they did not accurately describe any disease-fighting effects.
Merck and Ionis counter-sued for infringement, demanding a 10% royalty on US sales for all past and future sales of Gilead’s sofosbuvir-based products.
Yesterday’s award of $200 million falls far short of the $2 billion Merck could have been awarded, although a decision on future sales is still pending.
Merck had been the dominant maker of hepatitis C treatments until Gilead’s drugs were approved in 2013 (Sovaldi) and 2014 (Harvoni). Merck received FDA approval for its new hepatitis C therapy Zepatier (elbasvir/grazoprevir) in January of this year.
Following the announcement Merck’s share were down 50 cents to 452.57, Gilead’s shares rose slightly.
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