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Merck Gilead Patent Trial 3/30/16
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Gilead Slams Merck's Bid To Boost $200M Award In IP Row
Mar 29, 2016 | Law360
By Kurt Orzeck
Gilead Sciences on Tuesday urged a California federal judge to reject Merck's request for millions in supplemental damages and pre-judgment interest on top of the $200 million that a jury said Gilead must pay for infringing two patents covering Gilead's hepatitis C drugs. -
Gilead meds face little threat from hep C rivals Merck, BMS and AbbVie: analyst
Mar 30, 2016 | FiercePharma
By Tracy Staton
Hepatitis C was supposed to be a boon for an entire slate of drugmakers: Bristol-Myers Squibb ($BMY), Merck & Co. ($MRK), AbbVie ($ABBV), and yes, the current dominant force, Gilead Sciences ($GILD). But that's not how the market has played out. -
Gilead must pay just $200m for hep C patents, says jury
Mar 30, 2016 | PMLive ( Pharmaceutical Market Europe)
By Phil Taylor
Merck & Co may have won its hepatitis C patent dispute with Gilead Sciences, but subsequent court decisions have not gone its way.
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Gilead Slams Merck's Bid To Boost $200M Award In IP Row
Mar 29, 2016 | Law360
By Kurt Orzeck
Gilead Sciences on Tuesday urged a California federal judge to reject Merck's request for millions in supplemental damages and pre-judgment interest on top of the $200 million that a jury said Gilead must pay for infringing two patents covering Gilead's hepatitis C drugs.
In a response and opposition to Merck & Co. Inc.'s request, Gilead Sciences Inc. argued that Merck — which had sought $2 billion from the jury — is using its new request as a de facto motion for judgment as a matter of law that challenges the basis of the jury's verdict.
The patents-at-issue — U.S. Patent Nos. 7,105,499 and 8,481,712 — cover sofosbuvir, a key ingredient used in Sovaldi and Harvoni, which logged combined sales of $19.1 billion last year. In determining the damages, the jury based the $200 million award on a royalty rate of 4 percent on $5 billion in sales, compared with the 10 percent royalty on Gilead’s past sales of more than $20 billion sought by Merck.
Merck subsequently told the court that because the jury’s verdict only considered sales of Gilead’s drugs Sovaldi and Harvoni through the end of last year, an award of supplemental damages was appropriate to cover later sales of the allegedly infringing products. Gilead replied Tuesday that Merck is proposing a flawed model for calculating supplemental damages that the jury rejected.
“Having thrown a Hail Mary with its exorbitant $2 billion damages claim predicated on patents for which Merck and its partners invested less than $20 million, and having admitted that it did not invent sofosbuvir ... Merck should not be surprised that the jury rejected its proofs at trial,” Tuesday's filing said. “In any event, it is improper for Merck to attempt to retry its case under the guise of a request for an accounting for supplemental damages.”
Gilead, which originally sued in 2013, had sought a ruling that it didn’t infringe on two of Merck’s patents or alternatively that Merck’s patents were invalid.
In February, U.S. District Judge Beth Labson Freeman shot down Gilead’s motion for summary judgment of invalidity, saying Merck presented enough evidence to show that a person of ordinary skill could understand the usefulness of sofosbuvir and that there was ample data suggesting nucleoside analogs such as sofosbuvir could be used to treat the potentially lethal hepatitis C virus.
Judge Freeman also granted Merck’s separate motion for summary judgment of infringement, saying Gilead did not contest the motion. The judge noted that the finding of infringement wouldn’t make Gilead liable unless proven at the jury trial.
The same day the jury found Merck’s patents to be valid, Gilead told the court that Merck obtained the two patents deceitfully and with “unclean hands,” which should bar it from receiving any compensation from Gilead.
Merck co-developed the patents with Ionis Pharmaceuticals, which will receive 20 percent of the $200 million damages award.
The jury on Thursday found that all 10 claims of the two patents covering sofosbuvir were valid.
On Monday, Merck said supplemental damages should be awarded at the same rate of 4 percent of Gilead’s sales used to arrive at the $200 million damages verdict. Merck also said it should be awarded $4.8 million in pre-judgment interest.
Gilead replied on Tuesday that, since Merck appears to be challenging the jury's damages verdict, it's too early for the court to consider Merck's request for supplemental damages.
The Tuesday motion added that, if Merck files a motion for judgment as a matter of law or a motion for a new trial challenging the jury’s royalty base determination, Gilead will “provide a fulsome response demonstrating it is proper based on the evidence.”
Merck said in a Tuesday statement that Gilead’s equitable defenses were without merit.
"In its decision, the jury recognized that patent protections are essential to the development of new medical treatments," the statement said. "The compounds and methods at issue in this case facilitated significant advances in the treatment of patients with [hepatitis C] infection, and achieving these advancements required many years of research and significant investment by Merck and its partners.”
Attorneys for Gilead didn't immediately respond to requests for additional comment late Tuesday.
The patents-in-suit are U.S. Patent Nos. 7,105,499 and 8,481,712.
Gilead is represented by John M. Farrell, Jonathan E. Singer and Juanita R. Brooks of Fish & Richardson PC.
Merck is represented by Bruce Genderson, Jessamyn Berniker, Stanley E. Fisher, Sanjiv Laud, Jessica Palmer Ryen and Jessica Bodger Rydstrom of Williams & Connolly LLP, Stephen S. Rabinowitz, David E. Lansky, Mitchell Epner and Patrice P. Jean of Hughes Hubbard & Reed LLP, and Joshua H. Lerner and Laura E. Miller of Durie Tangri LLP.
The case is Gilead Sciences Inc. v. Merck & Co. Inc. et al., case number 5:13-cv-04057, in the U.S. District Court for the Northern District of California.
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Gilead meds face little threat from hep C rivals Merck, BMS and AbbVie: analyst
Mar 30, 2016 | FiercePharma
By Tracy Staton
Hepatitis C was supposed to be a boon for an entire slate of drugmakers: Bristol-Myers Squibb ($BMY), Merck & Co. ($MRK), AbbVie ($ABBV), and yes, the current dominant force, Gilead Sciences ($GILD). But that's not how the market has played out.
Gilead, first to market with its next-gen drug Sovaldi, followed soon after with a combo med Harvoni, the first all-oral regimen in the field. So far, the companies that launched their meds later--AbbVie, Bristol-Myers, and now Merck--have had to settle for the crumbs under Gilead's table.
Unfortunately for the newer launches, it's a pattern likely to continue, says Leerink Partners analyst Geoffrey Porges in a note to investors.
With a title that begins, "Another pretender to the HCV throne," Porges dissects the recent performance of AbbVie's hep C meds, Viekira Pak and Technivie; Bristol-Myers Squibb's Daklinza; and Merck's newest entrant Zepatier. And though it's early days for several of them, particularly Zepatier, Porges finds no evidence that the newer meds are stealing prescription share from Gilead.
Analysts have figured that Gilead's hep C revenue would erode "as a result of further price pressure with share loss--especially given Zepatier's introduction at a 40%-plus discount relative to Harvoni," Porges wrote. "However, our current analysis of IMS script data and review of the largest payer plan formularies reveal that Gilead's HCV [direct-acting antiviral drugs] are continuing to dominate the market, with modest share gains for rivals."
Only Daklinza, which is often prescribed alongside Sovaldi, has captured significant script volume, Porges says. AbbVie's Viekira Pak, launched in late 2014, counts total scripts that amount to 6.7% of Gilead's numbers, on average, over the past four weeks, he says. Technivie's total prescription count was 0.1% of Gilead's over the same period, with Zepatier at 1.1%.
One reason for Gilead's continued dominance is that Sovaldi and Harvoni boast the largest number of indications in the group. One or both are the only meds approved for genotypes 1 through 6, and they're the only ones recommended for patients with decompensated cirrhosis, the analyst points out, citing payer comments. AbbVie's meds now have a warning against use in patients with advanced liver disease, and liver testing is recommended for certain Zepatier patients after 8 weeks of therapy, he notes.
That's not to say that Merck, Bristol-Myers and AbbVie aren't scrapping for share--or that they have no hope of gaining momentum if they can get more payers to sign on for coverage. Zepatier, approved less than three months ago, when payers had already sewn up deals with Gilead and AbbVie for the year, is in the early stages of payer negotiations, and reimbursement is obviously key for capturing scripts.
Express Scripts ($ESRX) CMO Steve Miller says to watch out for Zepatier gains in 2017. "What you'll see is the Merck team doing a lot of negotiating this year, and you'll see the drug gain traction next year," Miller said soon after the Merck launch.
Plus, Merck has connections in hep C, thanks to Incivek, a previous blockbuster knocked off the market by the latest generation of treatments. "[W]e know the players, and we know the managed care organizations very, very well," Adam Schechter, Merck's president of global human health, said during its Q3 conference call. "We intend to be serious about coming into this market strong, and we think there's a real opportunity for us."
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Gilead must pay just $200m for hep C patents, says jury
Mar 30, 2016 | PMLive ( Pharmaceutical Market Europe)
By Phil Taylor
Merck had been pushing for a 10% royalty rate on the $20.7bn Gilead had made from sales of two sofosbuvir-based drugs - Sovaldi and Harvoni - between 2013 and 2015, after a court agreed last week that the two drugsinfringed two patents held by Merck and partner Ionis Pharma.
The jury in the case was unswayed by Merck's arguments, however, and opted instead to award the company a 4% royalty rate on sales of just $5bn. That equated to Gilead's revenues less a figure of $15bn representing its investment in the hepatitis C programme, which included its $11m acquisition of sofosbuvir developer Pharmasset.
A separate hearing to set a royalty rate from the start of this year is due to take place in the coming weeks, while Gilead has indicated it will contest the patent infringement ruling via the Court of Appeals for the Federal Circuit (CAFC).
"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", said Gilead in a statement. "We continue to believe the Merck patents are invalid", it added.
Sovaldi and Harvoni brought in $12.5bn last year although sales momentum is expected to check in 2016 and beyond in light of additional competition from other directly-acting hepatitis C virus (HCV) therapies, including Merck's Zepatier (elbasvir and grazoprevir) which recently reached the market.
Merck said it was pleased that the jury had recognised the validity of its patents, claiming the "compounds and methods at issue in this case facilitated significant advances in the treatment of patients with HCV infection".
The patents - Nos. 7,105,499 and 8,481,712 - cover discoveries that required "many years of research and significant investment by Merck and its partners", it added.
Leerink Partners analyst Geoffrey Porges said in a research note that the decision on royalties places Gilead in a strong position should the two companies decide to settle.
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