Preview Newsletter
Merck Gilead Coverage
-
Gilead to Pay Merck $200 Million in Damages Over Hepatitis C Drug Patents
Mar 25, 2016 | Wall Street Journal
By Ron Winslow
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. -
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. -
Merck’s Patent Win Over Gilead Reversed Over False Testimony
Jun 6, 2016 | Bloomberg
By Kartikay Mehrotra and Pamela MacLean
Merck & Co.’s $200 million jury verdict against Gilead Sciences Inc. was voided in a patent dispute over a breakthrough for hepatitis C because of misconduct by a witness at the companies’ trial. -
Gilead won’t have to pay $200 million in patent case because Merck lawyer lied
Jun 7, 2016 | STAT News
By Ed Silverman
In an embarrassing blow to Merck, a federal court judge on Monday decided that Gilead Sciences does not have to pay $200 million in damages that was recently awarded in a patent dispute because Merck displayed a “pervasive pattern of misconduct.” -
After Verdict Reversal, Gilead Takes Aim At Merck Patents
Jul 5, 2016 | Law360
By Suevon Lee
Gilead Sciences Inc. reasserted its position Tuesday that two Merck & Co. Inc. patents covering an ingredient in Gilead’s hepatitis C drugs are invalid, a month after a California federal judge reversed Merck’s $200 million jury verdict on unenforceability grounds after concluding its key witness lied.
Online Media
-
Gilead to Pay Merck $200 Million in Damages Over Hepatitis C Drug Patents
Mar 25, 2016 | Wall Street Journal
By Ron Winslow
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.”Advertisement
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) -
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).
-
Merck’s Patent Win Over Gilead Reversed Over False Testimony
Jun 6, 2016 | Bloomberg
By Kartikay Mehrotra and Pamela MacLean
Merck & Co.’s $200 million jury verdict against Gilead Sciences Inc. was voided in a patent dispute over a breakthrough for hepatitis C because of misconduct by a witness at the companies’ trial.
A federal judge concluded Monday that dishonest and duplicitous testimony by a retired Merck scientist before and during a March trial played into the jury’s finding that the company was responsible for early discoveries that led to the development of Gilead’s Sovaldi and Harvoni medicines.
The scientist “intentionally fabricated testimony” and Merck supported his “bad faith conduct,” U.S. District Judge Beth Labson Freeman in San Jose, California, said in her ruling.
The reversal of the fifth-largest U.S. verdict this year vindicates Gilead in its refusal to share royalties with Merck on the more than $20 billion revenue the hepatitis C drugs generated from 2013 through 2015 in the U.S. The Foster City, California-based company’s sales have started to slow this year as competition for the liver disease market intensifies among drugmakers.
“This is a nice little bump for Gilead who’d already accounted for the $200 million,” said Bloomberg Intelligence analyst Asthika Goonewardene. “But of course, this is a big win and will be beneficial to Gilead and how they can claim ownership of the drug in the long run.”Merck Appeal
Merck vowed to appeal Monday’s ruling, saying it “does not reflect the facts of the case.”
“In its decision, the jury recognized that patent protections are essential to the development of new medical treatments,” the company said in an e-mail. “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 it “has always believed Merck’s patents are invalid and unenforceable.”
“We are pleased the court has ruled in Gilead’s favor and determined that Merck’s patents are unenforceable against Gilead, and therefore, Merck is not entitled to recover any damages,” the company said in an e-mail.
Labson Freeman re-opened the case in April after Gilead alleged that ex-Merck scientist Phil Durette gave conflicting statements about his participation in a key phone call some 15 years earlier when the drug’s basic composition was first presented to Merck.Pretrial Deposition
Durette initially said in a pretrial deposition he wasn’t on a phone call in which secrets about the compound’s basic chemistry were discussed while Merck was exploring a take-over of Pharmasset Inc., a company that was later acquired by Gilead. When testifying to the jury after checking his notes, Durette admitted to playing a role in the meeting.
“Dr. Durette’s lying at his deposition, recanting that testimony at trial without proper prior notice to Gilead, and further untruthful testimony at trial all support the court’s conclusion that Merck did intend to deceive Gilead and the court,” the judge wrote.
She said Merck’s actions were “even more egregious” because Durette was acting as the company’s patent attorney.
Merck’s victory at trial had set the stage for it to seek future royalty payments from Harvoni and Sovaldi, which sells for $1,000-a-pill in the U.S., before discounts and rebates.
While Gilead continues to dominate the market, the lull in its hepatitis C treatment revenue opened the door to Amgen Inc. retaking its place as the world’s top biotech firm by market capitalization.
The case is Gilead Sciences Inc. v. Merck & Co., 13-cv-04057, U.S. District Court, Northern District of California (San Jose).
-
Gilead won’t have to pay $200 million in patent case because Merck lawyer lied
Jun 7, 2016 | STAT News
By Ed Silverman
In an embarrassing blow to Merck, a federal court judge on Monday decided that Gilead Sciences does not have to pay $200 million in damages that was recently awarded in a patent dispute because Merck displayed a “pervasive pattern of misconduct.”
At issue was testimony from a retired Merck patent attorney, who was found to have “lied” repeatedly when recounting events that took place more than a decade ago concerning patents for hepatitis C compounds, according to the 65-page opinion by US District Court Judge Beth Labson Freeman. At the time, Merck held exploratory talks with another company, Pharmasset, about a collaboration.
The judge concluded that the Merck lawyer, Philippe Durette, intentionally gave false testimony during a deposition and a recent trial about his role in those talks. His testimony helped a jury to decide that Merck was responsible for the early discovery work that later led to the development of the Sovaldi and Harvoni pills that are sold by Gilead. And she chided Durette for claiming to have a faulty memory.
Moreover, Freeman decided Merck supported his “bad faith conduct” by directing him to continue work on Merck hepatitis C patents at the same time he was allowed to participate in due diligence meetings with Pharmasset employees. Freeman found that Merck’s misconduct was “egregious” and included lying to Pharmasset, misusing Pharmasset’s confidential information, and breaching confidentiality.
The issue was raised after a jury trial in March and Gilead was allowed to provide new evidence. (The 65-page opinion is dense, but rich with interesting details).
Patent lawsuits are a regular feature of the American courts, but this case has been closely watched for several reasons. For one, the lawsuit involved two titans of the biopharmaceutical industry, both of which are now slugging it out in the highly lucrative market for hepatitis C treatments. And the outcome of the case held the potential to sway their fortunes, at least to some extent.
After spending $11 billion to acquire Pharmasset in 2011, Gilead virtually struck gold when it launched the first of the Pharmasset hepatitis C compounds, called Sovaldi. The medicine initially sold for $1,000 a pill, $84,000 a year, before rebates, thanks to a patient cure rate exceeding 90 percent. A follow-on drugcalled Harvoni was later introduced, and combined sales exceeded $20 billion between 2013 and 2015.
Merck sought royalties from Gilead, claiming the Pharmasset compounds closely mimicked the hepatitis C compounds it was researching a dozen years ago, when talks with Pharmasset were held. Gilead filed a lawsuit in response, arguing the Merck patents were invalid. But the judge noted that Durette improperly revised Merck patent filings after participating in talks with Pharmasset and learning about its compounds.
Unaware of these issues, the jury decided that Gilead had infringed on Merck’s patents and was ordered to pay $200 million in damages to Merck. Given the sales generated by Sovaldi and Harvoni, this was a relatively modest sum. But the decision also meant that Merck could seek royalties from Gilead, although it was never clear whether these would be considerable.
A Merck spokeswoman wrote us that “the judge’s ruling does not reflect the facts of the case” and the drug maker plans to appeal. “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,” she added.
As for Gilead, a spokesman sent us a note saying the company is “pleased” by the decision that “Merck’s patents are unenforceable against Gilead.” The biotech, she continued. “has always believed Merck’s patents are invalid and unenforceable, and we feel vindicated by today’s decision.”
In an investor note, Jefferies analyst Brian Abrahams wrote that the case is likely to generate numerous appeals that will take a year or more to play out. Gilead can be expected to argue that Merck’s patents are invalid and not infringed by Sovaldi, and that both the judge and jury erred in the initial findings during the case. Merck, meanwhile, will continue to deny it had what Freeman called “unclean hands.”
Abrahams posited that Merck may have a slight advantage in appeals courts since they usually give more deference to jury decisions based on facts, at least when it comes to damages and invalid patents. But he also pointed out that Merck “may have a hard time rebounding from the scathing view the judge had of Merck’s attorney’s conduct.”
-
After Verdict Reversal, Gilead Takes Aim At Merck Patents
Jul 5, 2016 | Law360
By Suevon Lee
Gilead Sciences Inc. reasserted its position Tuesday that two Merck & Co. Inc. patents covering an ingredient in Gilead’s hepatitis C drugs are invalid, a month after a California federal judge reversed Merck’s $200 million jury verdict on unenforceability grounds after concluding its key witness lied.
Even after that dramatic June 6 reversal by U.S. District Judge Beth Labson Freeman in Gilead's favor, the biopharmaceutical company presented alternative arguments in support of its renewed motion for judgment as a matter of law by turning to the validity of the patents at issue.
“This case is a textbook example of lack of written description support for the claimed inventions,” its motion said. “As such, the jury’s verdict in favor of Merck should be set aside.”
Gilead’s motion attacked the validity of the Merck patents covering sofosbuvir — an ingredient of Gilead’s top-selling hepatitis C drugs Sovaldi and Harvoni, which logged combined sales of $19.1 billion last year — on the basis of lack of written description and lack of enablement, and said Merck derived the subject matter of the asserted claims from Gilead’s predecessor-in-interest, Pharmasset Inc.
Tuesday’s motion coincided with a notice of appeal filed by Merck and Ionis Pharmaceuticals Inc. of Judge Freeman’s decision that Merck could not enforce its patent infringement claims against Gilead under the doctrine of unclean hands because Merck's former in-house patent prosecutor, a key witness, lied in deposition testimony and at trial about his knowledge of and participation in a March 2004 call with the developers of what would later become the hepatitis C drugs.
Judge Freeman handed down the reversal three months after the jury found Gilead liable to Merck for $200 million for infringing U.S. Patent Nos. 7,105,499 and 8,481,712. Merck co-developed the patents with Isis Pharmaceuticals Inc. — now Ionis Pharmaceuticals — which would have received 20 percent of the damages award.
Representatives for Gilead and Merck didn’t immediately respond to requests for comment on Tuesday.
In a footnote to Tuesday's motion, Gilead acknowledged that Judge Freeman’s decision could moot its request for judgment as a matter of law but nonetheless posed the alternative arguments in support.
First, Gilead argued that Merck failed to expressly describe the claimed sub-genuses of the broader chemical genuses in the patents’ shared specification, specifically the “blaze marks” requirement directing a skilled artisan to the specific sub-genus over which it lays claim.
“The Federal Circuit and its predecessor courts have invalidated claims to a sub-genus or compound that was within a broad formula where, as here, the specification contained no blaze marks leading to the claimed invention,” Gilead said.
Gilead also said Merck misapplied the court’s enablement jury instruction and failed to show a practical utility for the claimed inventions.
It also argued that since Gilead predecessor Pharmasset invented the key chemical compound at issue before Merck did, Merck could not say it conceived of the invention and therefore assert patent claims against Gilead.
Judge Freeman’s ruling last month centered on the impact of testimony provided by Merck organic chemist-turned-attorney Philippe Durette, who swore he was not privy to a confidential call on March 17, 2004, between Merck officials and Pharmasset, in which Pharmasset disclosed the discovery and development of an antiviral agent against the hepatitis C virus, a lead compound called PSI-6130.
The judge said Durette would not have written new claims to cover Merck’s then-pending ’499 patent application in February 2005 but for his improper participation in that call, which was supposed to be limited or “firewalled” to certain Merck personnel who were not involved in the company’s internal hepatitis C drug development, as Durette would have been at the time.
The patents-in-suit are U.S. Patent Numbers 7,105,499 and 8,481,712.
Gilead is represented by Elizabeth M. Flanagan, Juanita R. Brooks, Jonathan E. Singer, Douglas E. McCann, John M. Farrell and Michael E. Florey of Fish & Richardson PC.
Merck is represented by Bruce R. Genderson, Jessamyn S. Berniker, Stanley E. Fisher, Jessica Bodger Rydstrom, Sanjiv P. Laud and Jessica Palmer Ryen of Williams & Connolly LLP, Stephen S. Rabinowitz, Patrice P. Jean and Mitchell Epner 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.
Online Media
Add recipients
Suggested