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Merck and Gilead Litigation

National Coverage

Merck Won a Mammoth $2.5 Billion from Gilead After Its Hepatitis C Drug Patent Suit
Dec 15, 2016 | Reuters

Merck merck-co-inc on Thursday was awarded $2.54 billion in royalties by a federal jury in a patent lawsuit against Gilead GILD -1.05% over Gilead‘s blockbusterhepatitis C drugs Sovaldi and Harvoni.
Gilead Sciences Ordered to Pay $2.5 Billion in Damages to Merck & Co.
Dec 15, 2016 | Wall Street Journal
By Jonathan D Rockoff

A federal jury in Delaware on Thursday ordered Gilead Sciences Inc. to pay $2.5 billion in damages to Merck & Co. for infringing its patents in developing hepatitis C drugs.
Merck Wins Record $2.5 Billion Patent Verdict Against Gilead
Dec 15, 2016 | Bloomberg
By Christopher Yasiejko and Susan Decker

Gilead Sciences Inc. was told by a federal jury to pay $2.54 billion to Merck & Co. for using a patented invention as the basis for its blockbuster drugs for the potentially deadly liver disease hepatitis C -- the biggest patent-infringement verdict in U.S. history.

Regional Coverage

Gilead Sciences, Inc. (GILD) to Pay $2.5 Billion to Merck & Co., Inc. (MRK) Over Patent Lawsuit
Dec 16, 2016 | The Country Caller

On Thursday, Delaware US District Court ruled in favor of Merck & Co., Inc. (NYSE:MRK) by imposing a heavy penalty on Gilead Sciences, Inc. (NASDAQ:GILD).The court ordered Gilead to pay $2.54 billion over a patent dispute which suggested that the drug maker had infringed upon Idenix Pharmaceuticals Inc. for its methods used to develop drugs to treat hepatitis C. Idenix was acquired by Merck in 2014 for $3.9 billion.

International Coverage

Merck Gilead Patent Suit: Maker Of Hepatitis C Drugs Harvoni And Sovaldi Ordered To Pay $2.54B In Royalties By Delaware Jury
Dec 15, 2016 | International Business Times
By Marcy Kreiter

Gilead Sciences Inc. has been ordered to pay Merck & Co. $2.54 billion in royalties in a patent lawsuit over Gilead’s blockbuster hepatitis C drugs Sovaldi and Harvoni.
Jury orders Gilead to pay Merck $2.5b in patent case
Dec 16, 2016 | AFP

A US jury has ordered pharmaceutical giant Gilead Sciences to pay $2.5 billion (Dh9 billion) to competitor Merck in a patent infringement case involving a drug used to treat hepatitis C, the two companies said.

Trade Coverage

Gilead to Pay Merck $2.5B in HCV Patent Dispute, Stock Falls
Dec 16, 2016 | Zacks Equity Research

Gilead Sciences Inc. GILD suffered a major setback after a federal jury in the U.S. District Court, District of Delaware ordered the company to pay $2.54 billion in royalties to Merck & Co., Inc. MRK for a patent infringement lawsuit related to its sofosbuvir-based medicines for the treatment of hepatitis C virus (HCV), including its blockbuster drugs, Sovaldi and Harvoni.
Gilead to pay Merck $2.54B in largest-ever patent infringement case
Dec 16, 2016 | MedCity News
By Juliet Preston

The billion-dollar hepatitis C market has set the stage for the largest ever patent infringement case in U.S. history.
Gilead ordered to pay $2.54 billion to Merck over hepatitis C patents
Dec 15, 2016 | STAT News
By Ed Silverman

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.
Gilead Falls on News that It Will Pay $2.54 Billion in Royalties to Merck
Dec 15, 2016 | TheStreet
By Alicia McElhaney

Gilead (GILD) fell 1.8% in after hours trading Thursday on news that it will have to pay rival Merck (MRK) $2.54 billion for a patent dispute over its hepatitis C drugs Sovaldi and Harvoni.
Gilead Must Pay Merck $2.5 Billion For Hep C Patent; Agios Stock Anemic
Dec 16, 2016 | Investor's Business Daily
By Ed Carson

A federal jury late Thursday ordered Gilead Sciences (GILD) to pay $2.54 billion in royalties after ruling that a Merck (MRK) patent on hepatitis C drugs is valid.
Gilead Sciences Inc. (GILD) Is Losing Ground After Court Ruling
Dec 15, 2016 | RTT News

Gilead Sciences Inc. (GILD) was defeated in a patent lawsuit case in Delaware on Thursday. A federal jury ruled that the company must pay Merck & Co. (MRK) $2.54 billion in royalties. The stock is now down 1.24 on 713K shares. Gilead Sciences traded in a range for the majority of Thursday's session and closed down by 0.16 at $75.55.
If Gilead Sciences (GILD) Verdict Stands, Jefferies Sees a $2/Share Hit to Valuation
Dec 16, 2016 | Street Insider

Jefferies analyst Brian Abrahams weighted in on Gilead Sciences (NASDAQ: GILD) after a jury awarded $2.54 billion in damages to Merck in Hep C litigation. If the ruling stands, the analyst sees a $2 hit to valuation.
Baird Incrementally Negative Following Gilead Sciences (GILD) Patent Verdict
Dec 16, 2016 | Street Insider

Baird analyst Brian Skorney is Incrementally negative following yesterday's patent verdict against Gilead Sciences (NASDAQ: GILD). A jury awarded $2.54 billion in damages to Merck in this year's second Merck v. Gilead Hep C patent infringement case.
Gilead shares slip as jury sides with Merck in patent lawsuit
Dec 15, 2016 | Market Watch

Shares of Gilead Sciences Inc. slipped while Merck & Co. rose in the extended session Thursday after a jury awarded Merck billions in royalties over a hepatitis C drug dispute. In a patent lawsuit against Gilead, a federal jury in Delaware awarded Merck $2.54 billion in royalties over Gilead’s Sovaldi and Harvoni hepatitis C drugs, according to Reuters. Gilead shares fell 1.9% to $74.12, while Merck shares advanced 1.2% to $63.10 after hours.
Analysts’ Recommendations Trending Stocks: Merck & Co., Inc. (NYSE:MRK) & Callon Petroleum Company (NYSE:CPE)
Dec 16, 2016 | News Is Money

On Thursday, Shares of Merck & Co., Inc. (NYSE:MRK) gained 0.92% to $62.37. The share price is trading in a range of $61.84 – 63.63. The stock exchanged hands with 8.51 million shares contrast to its average daily volume of 10.55 million shares.
Merck snags record $2.54B in second hep C patent verdict against Gilead
Dec 16, 2016 | FiercePharma
By Arlene Weintraub

An ongoing patent infringement battle between Merck and Gilead over the latter’s hepatitis C blockbusters, Harvoni and Sovaldi, has swung back in Merck’s favor. A federal jury in Wilmington, Delaware, yesterday rejected Gilead’s claim that Merck’s patent, issued in 2009, is invalid and ordered Gilead to pay Merck $2.54 billion—the equivalent of 10% royalties on Harvoni and Sovaldi.
Gilead (GILD) Sinks, Will Pay Rival $2.54 Billion for a Patent Dispute
Dec 16, 2016 | BioSpace
By Alex Keown

Gilead (GILD) is reeling this morning after a jury awarded rival company Merck (MRK) $2.54 billion in a patent dispute over the blockbuster hepatitis C treatments Harvoni and Sovaldi.
10 things you need to know today
Dec 16, 2016 | Markets Insider

... Gilead must pay Merck $2.5 billion in royalties. A federal jury has awarded Merck a $2.54 billion reward in a patent verdict against Gilead related to its hepatitis C drugs Sovaldi and Harvoni, Reuters reports.

National Coverage

Merck Won a Mammoth $2.5 Billion from Gilead After Its Hepatitis C Drug Patent Suit

Dec 15, 2016 | Reuters

Merck merck-co-inc on Thursday was awarded $2.54 billion in royalties by a federal jury in a patent lawsuit against Gilead GILD -1.05% over Gilead‘s blockbusterhepatitis C drugs Sovaldi and Harvoni.
The jury in Delaware reached the verdict following a nearly two-week trial, finding that a patent acquired by Merck in 2014 on hepatitisC treatments was valid.
“The jury’s verdict upholds patent protections that are essential to the development of new medical treatments,” Merck said in a statement Thursday.
Gilead spokeswoman Michele Rest said the company disagreed with the verdict and would appeal it. She said it did not stop Gilead from continuing to sell its drugs.
Merck’s stock rose slightly to $63 in late trade on the New York Stock Exchange. Gilead‘s shares fell 2 percent to $74.06 on the Nasdaq.
Harvoni and Sovaldi have drawn attention for their breakthrough success in curing hepatitis C in more than 90 percent of patients, and for their high cost.
Harvoni’s list price is $1,125 per pill and $94,500 for a 12-week regimen. Foster City, California-based Gilead, one of the world’s largest biotechnology companies, made nearly $20 billion on the two drugs in 2015.
The jury’s award was based on a 10 percent royalty rate from the sales of both drugs through August.
The patent upheld by the jury was originally issued to Idenix Pharmaceuticals, a company Merck bought in 2014. Idenix brought the patent lawsuit against Gilead in 2013 in an effort to block the launch of Sovaldi, which was approved by federal regulators in December of that year.
Harvoni, which combines Sovaldi’s active ingredient, sofosbuvir, with another drug, was approved in October 2014.
Rival drug-maker Gilead says it will appeal the finding, related to drugs Sovaldi and Harvoni.
Merck merck-co-inc on Thursday was awarded $2.54 billion in royalties by a federal jury in a patent lawsuit against Gilead GILD -1.05% over Gilead‘s blockbusterhepatitis C drugs Sovaldi and Harvoni.
The jury in Delaware reached the verdict following a nearly two-week trial, finding that a patent acquired by Merck in 2014 on hepatitisC treatments was valid.
“The jury’s verdict upholds patent protections that are essential to the development of new medical treatments,” Merck said in a statement Thursday.
Gilead spokeswoman Michele Rest said the company disagreed with the verdict and would appeal it. She said it did not stop Gilead from continuing to sell its drugs.
Merck’s stock rose slightly to $63 in late trade on the New York Stock Exchange. Gilead‘s shares fell 2 percent to $74.06 on the Nasdaq.
Harvoni and Sovaldi have drawn attention for their breakthrough success in curing hepatitis C in more than 90 percent of patients, and for their high cost.
Harvoni’s list price is $1,125 per pill and $94,500 for a 12-week regimen. Foster City, California-based Gilead, one of the world’s largest biotechnology companies, made nearly $20 billion on the two drugs in 2015.
The jury’s award was based on a 10 percent royalty rate from the sales of both drugs through August.
The patent upheld by the jury was originally issued to Idenix Pharmaceuticals, a company Merck bought in 2014. Idenix brought the patent lawsuit against Gilead in 2013 in an effort to block the launch of Sovaldi, which was approved by federal regulators in December of that year.
Harvoni, which combines Sovaldi’s active ingredient, sofosbuvir, with another drug, was approved in October 2014.
For more on health, watch this video:
Merck, which sells its own hepatitis C drug, Zepatier, previously won a $200 million jury verdict in March in a separate patent infringement case against Gilead over hepatitisC drugs.
But in June, a federal judge in San Jose, California overturned the verdict after finding that Merck engaged in a pattern of unethical conduct, including lying under oath. Merck is currently appealing that ruling.

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Gilead Sciences Ordered to Pay $2.5 Billion in Damages to Merck & Co.

Dec 15, 2016 | Wall Street Journal

By Jonathan D Rockoff

A federal jury in Delaware on Thursday ordered Gilead Sciences Inc. to pay $2.5 billion in damages to Merck & Co. for infringing its patents in developing hepatitis C drugs.
The patent-infringement decision, issued by a jury in a U.S. District Court in Delaware, involved two Gilead drugs that have rung up billions of dollars in sales, Sovaldi and Harvoni.
The jury decided that Gilead’s two drugs violated the patents held by Idenix Pharmaceuticals, a company bought by Merck for $3.9 billion in 2014.
Gilead said it disagrees with the verdict and “intends to vigorously” appeal.
“We remain steadfast in our opinion that Idenix’s U.S. patent is invalid,” Gilead said, adding that the ruling won’t affect the company’s ability to sell its hepatitis C drugs.
Merck said: “The jury’s verdict upholds patent protections that are essential to the development of new medical treatments.”
Merck said the judge could increase the damages award at his discretion. Jury verdicts tend to be just the first step in a long legal process and often are reduced and can be thrown out.
In a separate patent-infringement case in June, a judge reversed a $200 million jury award that Merck won against Gilead, after the judge concluded Merck engaged in misconduct in its efforts to obtain its hepatitis C patents.

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Merck Wins Record $2.5 Billion Patent Verdict Against Gilead

Dec 15, 2016 | Bloomberg

By Christopher Yasiejko and Susan Decker

Gilead Sciences Inc. was told by a federal jury to pay $2.54 billion to Merck & Co. for using a patented invention as the basis for its blockbuster drugs for the potentially deadly liver disease hepatitis C -- the biggest patent-infringement verdict in U.S. history.
The jury in Wilmington, Delaware, deliberated for less than two hours and rejected Gilead’s arguments that Merck’s patent is invalid. The judge in the case had already decided that Merck’s patent was infringed by Gilead’s Sovaldi and Harvoni, which account for more than half the drugmaker’s revenue.
The infringement also was found to be willful, meaning the judge could increase the damage award by as much as three times the amount set by the jury. The jury said on Thursday that Gilead owed 10 percent royalties on $25.4 billion in total sales for the two drugs.
Gilead pledged to appeal.
The patent, issued in 2009, is for a compound that Merck’s Idenix unit contends is the basis for all major treatments for hepatitis C, including ones made by Gilead. Sovaldi was approved by the U.S. Food and Drug Administration in 2013 and Harvoni got regulatory go-ahead a year later. Merck’s drug, Zepatier, was approved this year.
“We were first,” Merck lawyer Stephanie Parker said in closing arguments. “That’s the most important thing. All of the Gilead work comes after ours. Our patent was first. The Gilead story starts years later.”
Merck shares rose 0.9 percent to $62.37 in regular trading and reached as high as $63.40 in after-hours trading. Gilead shares fell 0.2 percent to $75.55 in regular trading and reached a low of $73.20 in after-hours trading.‘No Contribution’
Gilead argued that Idenix never adequately described what it claimed to have invented, and the patent didn’t cover a new idea.
“We remain steadfast in our opinion that Idenix’s U.S. patent is invalid, and since they made no contribution and assumed none of the risk in the discovery and development of sofosbuvir and its metabolites, do not believe they are entitled to any level of damages,” the company said in a statement following the verdict.
Sovaldi is based on the compound sofosbuvir, while Harvoni combines sofosbuvir with the compound ledipasvir. Gilead, based in Foster City, California, got the compounds as part of its 2012 acquisition of Pharmasset Inc.
Gilead added that the verdict doesn’t affect its ability to sell its products.
This is the second trial between the two companies. The first, over different patents, ended in a disaster for Merck. A jury in California said that Gilead should pay $200 million in royalties, but that was thrown out because the judge said a key Merck witness lied. In that case, Merck may have to pay Gilead’s legal fees.
Hepatitis C is a virus that attacks the liver and can lead to cirrhosis or liver cancer. The disease affects 130 million to 150 million globally, according to the World Health Organization, and the Centers for Disease Control has said as many as 4 million Americans may have chronic hepatitis C infections.
Price Tag
The drugs are effective at curing the virus with fewer side effects than earlier treatments, but they have been controversial because of their costs. A complete treatment with Sovaldi costs $84,000, while Harvoni’s price tag is $94,500, though the drugs are typically discounted. A newer version that can treat more genotypes of the virus, called Epclusa, has a list price of $74,760 for a 12-week treatment.
Harvoni generated $4 billion in U.S. sales in the first nine months of the year, and Sovaldi brought in $1.78 billion. Revenue from the two drugs is falling, however, because Gilead has been forced to offer discounts to insurers due to competition from Merck and AbbVie Inc. Merck sells Zepatier for $54,600.
Gilead and Idenix have been engaged in a global fight since 2012 over who was first to invent certain compounds for treating hepatitis C. Merck had claims demanding patent royalties on sales of Sovaldi and Harvoni even before it bought Idenix in 2014, absorbing this case as part of the deal.
The case in California was Merck’s own suit against Gilead, filed in 2013 by the Whitehouse Station, New Jersey-based drugmaker.
Gilead also had been engaged in a patent fight with AbbVie over ways to treat hepatitis C. The companies resolved their disputes in August.
The previous top verdict was a $1.67 billion judgment Johnson & Johnson won against Abbott Laboratories. It was later thrown out on appeal.
The case is Idenix Pharmaceuticals LLC v. Gilead Sciences Inc., 14-846, U.S. District Court, District of Delaware (Wilmington).

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Regional Coverage

Gilead Sciences, Inc. (GILD) to Pay $2.5 Billion to Merck & Co., Inc. (MRK) Over Patent Lawsuit

Dec 16, 2016 | The Country Caller

Merck has also asked Gilead a royalty of 9% on the sales of drugs Sovaldi and Harvoni. Merck official in a written statement, said “The jury's verdict upholds patent protections that are essential to the development of new medical treatments. Given that it guarantees a period of return on investment, patent protection provides the research-based pharmaceutical and biotechnology industries with an incentive to invest in research and development." Both the pharmaceutical giants have been fighting each other in the courts for months.
Gilead may likely appeal to this decision and would try to change the verdict. This blow to the company can hold it back in the acquisition game; in the third quarter it had $31.6 billion in cash. The spokeswomen for Gilead, Michele Rest, said that the company disagrees with the verdict given and will challenge it in the upcoming appeals. She further stated that the patent is invalid as they made no contribution nor did they assume any risk in the discovery of Sofosbuvir.
The stock prices for Gilead were seen falling yesterday. The stock lost 0.21% of its value in the last session as it closed at a price of $75.55. The stock started to fall in the after-market hours following the verdict. The shares have lost 2.05% of their value as of 7:59PM EST and are being traded at $74. The development was favorable for Merck stock as it gained 0.92% yesterday and closed in at $62.37. The stock is being traded in the after-market hours after gaining 1.25% as of 7:57PM EST with a price of $63.15.

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International Coverage

Merck Gilead Patent Suit: Maker Of Hepatitis C Drugs Harvoni And Sovaldi Ordered To Pay $2.54B In Royalties By Delaware Jury

Dec 15, 2016 | International Business Times

By Marcy Kreiter

Gilead Sciences Inc. has been ordered to pay Merck & Co. $2.54 billion in royalties in a patent lawsuit over Gilead’s blockbuster hepatitis C drugs Sovaldi and Harvoni.
A federal court jury in Delaware found Thursday Merck’s patent, originally issued to Idenix Pharmaceuticals, a company Merck bought in 2014, was valid and that Gilead “willfully” infringed on it. The lawsuit was filed by Idenix in 2013.
The decision was Merck’s second victory over Gilead. It won a $200 million verdict against Gilead in March in another patent infringement case involving the hepatitis C drugs, but that verdict was overturned.
Gilead, based in Forest City, California, said it would appeal.
Merck sought 9 percent royalties on Harvoni and Sovaldi going forward.
“The jury’s verdict upholds patent protections that are essential to the development of new medical treatments,” Merck said in a statement.
“The patent at issue in this case facilitated significant advances in the treatment of patients with [hepatitis C] infection and was appropriately granted. Achieving these advancements required many years of research and significant investment by our subsidiary and its partners.”
Harvoni, which combines Sovaldi’s active ingredient with another drug, and Solvadi cured hepatitis C in 90 percent of patients but at a price. Harvoni lists for $1,125 per pill. A 12-week regimen runs $94,500. In 2015, Gilead made $20 billion from the two drugs.
The decision sent Gilead stock down 1.8 percent in after hours trading.
The decision came as Express Scripts added Harvoni to its 2017 national formulary but did not say whether it would be covered. Negotiations are still underway between Express Scripts and Gilead.
Some 25 million people suffer from hepatitis C, a liver infection that can result in chronic disease. The virus is spread by contact with contaminated blood. Most people have no symptoms, and those who do suffer fatigue, nausea, loss of appetite and yellowing of the eyes and skin.

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Jury orders Gilead to pay Merck $2.5b in patent case

Dec 16, 2016 | AFP

A US jury has ordered pharmaceutical giant Gilead Sciences to pay $2.5 billion (Dh9 billion) to competitor Merck in a patent infringement case involving a drug used to treat hepatitis C, the two companies said.
A federal jury in Delaware on Thursday sided with Merck subsidiary Idenix, which claimed that Gilead’s blockbuster sofosbuvir drug and its derivatives, sold under the label Solvadi et Harvoni, violated one of its patents.
“The patent at issue in this case facilitated significant advances in the treatment of patients with HCV infection and was appropriately granted,” Merck said in a statement.
“Achieving these advancements required many years of research and significant investment by our subsidiary and its partners,” it added.
Gilead announced plans to appeal the ruling, and said the decision would not affect its ability to supply the drug to US patients.
Sofosbuvir came under the Gilead portfolio in 2011, when the biotech company acquired Pharmasset, which held the drug’s patent.
Hepatitis C, a blood-borne viral disease, affects 130 to 150 million people globally and can result in liver cirrhosis or cancer.
According to the World Health Organisation, it is responsible for 700,000 deaths yearly.

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Trade Coverage

Gilead to Pay Merck $2.5B in HCV Patent Dispute, Stock Falls

Dec 16, 2016 | Zacks Equity Research

Gilead Sciences Inc. GILD suffered a major setback after a federal jury in the U.S. District Court, District of Delaware ordered the company to pay $2.54 billion in royalties to Merck & Co., Inc. MRK for a patent infringement lawsuit related to its sofosbuvir-based medicines for the treatment of hepatitis C virus (HCV), including its blockbuster drugs, Sovaldi and Harvoni.
After an almost two-week long trial, the jury came to a decision that Gilead owed 10% royalties on total sales of a staggering $25.4 billion for the two drugs. While Gilead's shares lost 2.1% in afterhours trading on Dec 15, Merck's stock gained 1.3%.
Gilead's year-to-date share price movement shows that the stock has outperformed the Zacks classified Medical - Biomedical and Genetics industry, albeit marginally. The stock has lost 25.3% so far this year, compared to the industry's 25.5% decline. Merck too outdid the Zacks classified Large Cap Pharmaceuticals industry's performance. It has surged 18.1% so far this year, while the industry lost 6%.
Coming back to the latest news, the decision is reportedly being touted as the largest patent infringement verdict in the history of the U.S. Making matters worse for Gilead, the patent infringement was found to be willful, implying that the judge could increase the damage award by as much as three times the amount set by the jury.
While reports say that Gilead is planning to aggressively appeal to the ruling, the company has asserted that the verdict will not be able to affect sofosbuvir and sofosbuvir-containing drugs sold in the U.S.
We remind investors that Idenix Pharmaceuticals, Inc., which was acquired by Merck in Aug 2014, filed a patent infringement lawsuit against Gilead in Dec 2013, bringing charges against the latter's method of treating HCV using Sovaldi. In Jan 2012, Gilead had acquired Pharmasset, Inc. in a transaction that added sofosbuvir, a nucleotide analog that acts to inhibit the replication of HCV, to its portfolio.
Gilead gained U.S. approval for sofosbuvir, marketed as Sovaldi in Dec 2013, which was followed by the FDA nod for Harvoni, a combination of sofosbuvir and ledipasvir, in Oct 2014. The lawsuit was meant to determine the first to invent the claimed methods of treating HCV. According to Gilead, Idenix never satisfactorily described what it claimed to have invented and the patent didn't cover a new idea either.
We note that this was the second time that Gilead and Merck were involved in a patent infringement lawsuit. The first trial was initially resolved in Mar 2016, after a jury in the U.S. District Court, Northern District of California ordered Gilead to pay $200 million to Merck. However, in June, the court ruled in Gilead's favor and overturned the verdict.
Gilead was also involved in several patent disputes with AbbVie Inc. ABBV related to its HCV treatment. The companies, however, resolved their disputes and entered into a settlement agreement in Aug 2016.
The latest development has dealt a major blow to Gilead's stock, especially at a time when the company's HCV franchise is already reeling under competitive and pricing pressure from Merck's Zepatier and AbbVie's Viekira Pak.
Both Gilead and Merck carry a Zacks Rank #3 (Hold).
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Gilead to pay Merck $2.54B in largest-ever patent infringement case

Dec 16, 2016 | MedCity News

By Juliet Preston

The billion-dollar hepatitis C market has set the stage for the largest ever patent infringement case in U.S. history.
A federal jury awarded $2.54 billion in royalties to Merck, which owns the patents that Gilead allegedly infringed upon to create its two blockbuster hep C drugs, Sovaldi and Harvoni.
Thursday’s settlement was calculated as 10 percent of the drugs’ combined sales of $25.4 billion. Gilead was also found to have willingly infringed on the invention, which means the judge could double or even triple the damages awarded to Merck.
In a statement forwarded to STAT News, Gilead said it would appeal the ruling.
The compound in question is sofosbuvir, the active ingredient in Sovaldi and one of two therapeutic compounds in Harvoni. Approved in 2013 and 2014 respectively, the drugs currently account for more than half of Gilead’s revenue.
Sofosbuvir has taken the biopharma giants to court before. Merck won and then lost a $200 million patent dispute in June 2016. Gilead was initially ordered to share royalties, but the decision was overturned by a California judge based on evidence that a key witness for Merck — a retired scientist — had knowingly lied in a pretrial deposition.
The real origins of the dispute, however, predate both Merck and Gilead. As is often the case with Big Pharma, both companies acquired the patents, the drug programs and the dispute.
Idenix Pharmaceuticals filed the original patent, which Merck alleges guided the development of sofosbuvir. It filed a lawsuit against Gilead for infringing on its patents in late 2013, a week before Sovaldi gained its FDA approval.
Six months later, Idenix was acquired by Merck for $3.85 billion, bolstering the latter’s hepatitis C portfolio. This program went on to deliver Zepatier, approved in January 2016 for the same indication. As part of the acquisition, Merck also inherited the contentious patent estate.
Gilead signed up for its side of the battle through its 2011 purchase of Pharmasset for $11 billion. Despite the acquisition price tag and Thursday’s ruling, Gilead has still come out on top.
The hepatitis C market has broken many records. With a list price of $84,000 — or $1,000 per pill — Sovaldi made Gilead billions, while also triggering debates about pharmaceutical pricing. A year later, Harvoni clocked in with a price tag of $94,500. As with most drugs, discounts were available for both, but the sticker-shock was still very real.
In December, Gilead CEO John Milligan went so far as to apologize for the price tag of Sovaldi, claiming the company greatly underestimated the number of patients in need of the drug.
Milligan may have a little less remorse now, as the company faces the prospect of splitting its hepatitis profits.
There is one silver lining for Gilead: Its R&D engine seems to be much more finely tuned than its rival’s. As quoted by Bloomberg, Merck acknowledged they had a major headstart with Idenix — even though Gilead beat them to the market by several years.
“We were first,” Merck lawyer Stephanie Parker said in closing arguments on Thursday. “That’s the most important thing. All of the Gilead work comes after ours. Our patent was first. The Gilead story starts years later.”

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

Dec 15, 2016 | STAT News

By Ed Silverman

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 makers.
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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Gilead Falls on News that It Will Pay $2.54 Billion in Royalties to Merck

Dec 15, 2016 | TheStreet

By Alicia McElhaney

Gilead (GILD) fell 1.8% in after hours trading Thursday on news that it will have to pay rival Merck (MRK) $2.54 billion for a patent dispute over its hepatitis C drugs Sovaldi and Harvoni.
The U.S. District Court for the District of Delaware handed down the decision Thursday, noting that Gilead infringed upon an Idenix Pharmaceuticals Inc. patent for methods used to develop drugs for hepatitis C. Merck acquired Idenix back in June 2014 for $3.9 billion.
Going forward, Merck is asking for 9% royalties on Gilead's sales of Sovaldi and Harvoni.
"The jury's verdict upholds patent protections that are essential to the development of new medical treatments," Merck officials wrote in a statement. "Given that it guarantees a period of return on investment, patent protection provides the research-based pharmaceutical and biotechnology industries with an incentive to invest in research and development."
The two have been sparring for months, trading appeals and arguments in court before Judge Leonard P. Stark in Delaware most recently. Gilead will likely appeal this most recent decision.
Gilead's stock hit $74.20 per share after hours, after falling slightly during intraday trading. The company has seen its share price fall 26% this year.
Gilead has been seen as a company in need of making acquisitions. It was flush with cash, and its R&D pipeline is lacking.
This payment, though, is worth what a company like Gilead would pay for a typical biotech acquisition target. This patent decision may put Gilead out of the acquisition game for some time. At the end of the third quarter, Gilead had $31.6 billion in cash.
Gilead has promised to appeal the decision, which is the largest patent dispute payout ever, according to reports.
Merck, meanwhile, saw shares boost 1.1% after hours. The company's shares hit $63.10 apiece after hours. Merck has done well in 2016, up 14% this year.
Gilead spokeswoman Michele Rest said the company "respectfully disagrees with the jury's verdict and damage award, and intends to vigorously challenge this outcome through the appeal process." Adding, "We remain steadfast in our opinion that Idenix's U.S. patent is invalid, and since they made no contribution and assumed none of the risk in the discovery and development of sofosbuvir and its metabolites, do not believe they are entitled to any level of damages."
She noted that the ruling does not impact on Gilead's ability to continue to make sofosbuvir, and sofosbuvir-containing products available to patients in the U.S.

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Gilead Must Pay Merck $2.5 Billion For Hep C Patent; Agios Stock Anemic

Dec 16, 2016 | Investor's Business Daily

By Ed Carson

A federal jury late Thursday ordered Gilead Sciences (GILD) to pay $2.54 billion in royalties after ruling that a Merck (MRK) patent on hepatitis C drugs is valid.
Gilead said it would appeal the verdict.
Gilead's Sovaldi and Horavni have cure rates of more than 90%, but are very expensive. Merck has its own hepatitis C drug, Zepatier, but didn't get approval until after Gilead's treatments as well as the Viekira Pak from AbbVie (ABBV).
Gilead Sciences fell 1.6% before Friday's opening bell on the stock market today. Merck rose 0.6%.
Separately, Agios Pharmaceuticals (AGIO) tumbled 18% in the premarket after it said late Thursday that it was discontinuing a second candidate for pyruvate kinase deficiency, a rare form of anemia, after discussions with the FDA over liver toxicity. Agios Pharma is still continuing work on another PKD candidate.

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Gilead Sciences Inc. (GILD) Is Losing Ground After Court Ruling

Dec 15, 2016 | RTT News

Gilead Sciences Inc. (GILD) was defeated in a patent lawsuit case in Delaware on Thursday. A federal jury ruled that the company must pay Merck & Co. (MRK) $2.54 billion in royalties. The stock is now down 1.24 on 713K shares.
Gilead Sciences traded in a range for the majority of Thursday's session and closed down by 0.16 at $75.55.

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If Gilead Sciences (GILD) Verdict Stands, Jefferies Sees a $2/Share Hit to Valuation

Dec 16, 2016 | Street Insider

Jefferies analyst Brian Abrahams weighted in on Gilead Sciences (NASDAQ: GILD) after a jury awarded $2.54 billion in damages to Merck in Hep C litigation. If the ruling stands, the analyst sees a $2 hit to valuation.
Abrahams commented, "A jury this afternoon upheld a patent owned by IDIX/MRK, and determined that GILD must pay a 9% royalty on historical HCV U.S. sales (~$2.5B). Still some unknowns - judge will determine if this number should be enhanced/decreased and what future royalty rate should be, and case will go to appeal which could take yrs. If stands as is would negatively impact our valuation by ~$2."
The firm maintained a Buy rating and price target of $91 on GILD.
For an analyst ratings summary and ratings history on Gilead Sciences click here. For more ratings news on Gilead Sciences click here.
Shares of Gilead Sciences closed at $75.55 yesterday.

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Baird Incrementally Negative Following Gilead Sciences (GILD) Patent Verdict

Dec 16, 2016 | Street Insider

Baird analyst Brian Skorney is Incrementally negative following yesterday's patent verdict against Gilead Sciences (NASDAQ: GILD). A jury awarded $2.54 billion in damages to Merck in this year's second Merck v. Gilead Hep C patent infringement case.
"Now, the judge will decide if the penalty should be upped and if Gilead must pay a go-forward royalty," Skorney commented. "Gilead plans to appeal, but a royalty is looking increasingly likely even though we think the basis for infringement claims are tenuous."
The firm updated their model to assume a 50% probability of the $2.54B payout as well as a 35% chance of a 10% royalty on Hep C sales in perpetuity.
The firm maintained an Outperform rating and price target of $100 on GILD.
For an analyst ratings summary and ratings history on Gilead Sciences click here. For more ratings news on Gilead Sciences click here.
Shares of Gilead Sciences closed at $75.55 yesterday.

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Gilead shares slip as jury sides with Merck in patent lawsuit

Dec 15, 2016 | Market Watch

Shares of Gilead Sciences Inc. slipped while Merck & Co. rose in the extended session Thursday after a jury awarded Merck billions in royalties over a hepatitis C drug dispute. In a patent lawsuit against Gilead, a federal jury in Delaware awarded Merck $2.54 billion in royalties over Gilead’s Sovaldi and Harvoni hepatitis C drugs, according to Reuters. Gilead shares fell 1.9% to $74.12, while Merck shares advanced 1.2% to $63.10 after hours.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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Analysts’ Recommendations Trending Stocks: Merck & Co., Inc. (NYSE:MRK) & Callon Petroleum Company (NYSE:CPE)

Dec 16, 2016 | News Is Money

On Thursday, Shares of Merck & Co., Inc. (NYSE:MRK)gained 0.92% to $62.37. The share price is trading in a range of $61.84 – 63.63. The stock exchanged hands with 8.51 million shares contrast to its average daily volume of 10.55 million shares.
Merck & Co on Thursday was awarded $2.54 billion in royalties by a federal jury in a patent lawsuit against Gilead Sciences Inc over Gilead’s blockbuster hepatitis C drugs Sovaldi and Harvoni.
The jury in Delaware reached the verdict following a nearly two-week trial, finding that a patent attained by Merck in 2014 on hepatitis C treatments was valid.
“The jury’s verdict upholds patent protections that are essential to the development of new medical treatments,” Merck said in a statement Thursday.
Gilead spokeswoman Michele Rest said the company disagreed with the verdict and would appeal it. She said it did not stop Gilead from continuing to sell its drugs. (Source: Reuters)
Merck & Co., Inc. (NYSE:MRK) have shown a high EPS growth of 41.50% in the last 5 years and has earnings growth of 21.80% yoy. Analysts have a mean recommendation of 2.40 on this stock (A rating of less than 2 means buy, “hold” within the 3 range, “sell” within the 4 range, and “strong sell” within the 5 range). The stock appeared -3.99% below its 52-week highs and is up 2.03% for the last five trades.
Shares of Callon Petroleum Company (NYSE:CPE) declined -0.86% to $16.13. The share price of the stock surged 84.34% for the year.
Callon Petroleum Company (CPE) declared that it has priced an upsized underwritten public offering of 40,000,000 shares of its common stock for total estimated gross proceeds (before the underwriter’s discounts and commissions and estimated offering expenses) of $656 million. The underwriters will have an option to purchase up to an additional 6,000,000 shares of common stock from the Company.
Proceeds from the offering are expected to be used to fund the pending Ameredev Acquisition, as described in the Company’s Current Report on Form 8-K previously filed with the Securities and Exchange Commission on December 13, 2016, and the balance for general corporate purposes. If the pending Ameredev Acquisition is not consummated, the Company intends to use the net proceeds of this offering to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness and working capital.
Analysts give CPE a mean recommendation of 1.80. The company has grown 13.67% in past 3 months and in the last five trades has moved down -5.84%. The stock has earnings growth of 108.20% yoy and showed a high EPS growth of 13.45% over the past five years. The stock’s price moved up its 200-day moving average of $13.72. The stock is presently trading up its SMA-50 of $15.17.

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Merck snags record $2.54B in second hep C patent verdict against Gilead

Dec 16, 2016 | FiercePharma

By Arlene Weintraub

An ongoing patent infringement battle between Merck and Gilead over the latter’s hepatitis C blockbusters, Harvoni and Sovaldi, has swung back in Merck’s favor. A federal jury in Wilmington, Delaware, yesterday rejected Gilead’s claim that Merck’s patent, issued in 2009, is invalid and ordered Gilead to pay Merck $2.54 billion—the equivalent of 10% royalties on Harvoni and Sovaldi.
It was the largest verdict in a patent-infringement case in U.S. history, according to Bloomberg, and it came just four months after a different court ruled against Merck in a separate patent battle involving Gilead’s hep C crown jewels. In that case, Merck initially won but U.S. District Judge Beth Labson Freeman ruled that a Merck scientist gave false testimony about the early discoveries that resulted in Harvoni and Sovaldi. Merck was ordered to pay back a $200 million award it had received and $200 million in legal fees in that case, which it is appealing.
A Gilead spokeswoman told Reuters the company would appeal the verdict.
It’s no surprise Harvoni and Sovaldi are at the center of a massive patent battle. The two drugs, which effectively wipe out what was once an incurable virus for most patients, hauled in almost $20 billion in sales for Gilead in 2015. Merck’s Harvoni competitor Zepatier was approved in January this year and has brought in $326 million so far. Merck’s hepatitis C franchise also includes compounds from its 2014 acquisition of Idenix, which originally brought the lawsuit against Gilead.
“All of the Gilead work comes after ours. Our patent was first,” said Merck’s lawyer, Stephanie Parker, during closing arguments in the Delaware trial, according to Bloomberg. “The Gilead story starts years later.”
But hepatitis C is far from a guaranteed long-term market opportunity. The U.S. market is waning quickly, largely because so many patients have been cured. In September, Leerink Partners predicted that Gilead’s sales on Harvoni, Sovaldi and its third hep C drug, Epclusa, would be just $2.5 billion a year after 2017, and that they would fall to $1.7 billion by 2020. It’s enough to prompt some investors to demand that Gilead look for a merger or acquisition opportunity to prop up its top line.
It didn’t help that Gilead had to offer payers steep discounts to get Sovaldi and Harvoni on drug formularies. According to a September report from the IMS Institute for Healthcare Informatics, Harvoni debuted at $94,500, but it’s net price was only $50,400.
This latest ruling in Merck’s favor could give the company a chance to participate in the Sovaldi/Harvoni heyday, albeit a bit late. In a statement, Merck said that the jury award reflects damages for infringement of Idenix’s patent through August 2016. The judge could triple that, the company says, because the jury ruled the infringement to be willful. "The jury's verdict upholds patent protections that are essential to the development of new medical treatments," Merck said in the statement.

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Gilead (GILD) Sinks, Will Pay Rival $2.54 Billion for a Patent Dispute

Dec 16, 2016 | BioSpace

By Alex Keown

Gilead (GILD) is reeling this morning after a jury awarded rival company Merck (MRK) $2.54 billion in a patent dispute over the blockbuster hepatitis C treatments Harvoni and Sovaldi.

The reward is the biggest patent infringement in U.S. history, according to reports. As a result, Merck will receive about 10 percent of Harvoni and Sovaldi’s sales—sales that totaled about $20 billion in 2015 alone, more than half of the company’s total revenue that year. Hepatitis C affects about 3.2 million Americans. Sovaldi can treat about 90 percent of those cases. Sovaldi and Harvoni, Gilead’s two hepatitis C drugs, generated $4.8 billion in revenue during the third quarter of 2015. However, Sovaldi’s sales fell 48 percent during the third quarter. The drug generated revenue of $1.47 billion.

It will certainly be some time before Merck sees a single penny from the award as Gilead will certainly appeal the decision.

Following the verdict, shares of Gilead sank nearly 2 percent. This morning the stock continues to decline and is currently trading at $74.48 per share. Shares of Merck, on the other hand, are slightly up, trading at $62.53.

The jury award is the latest in a long-running dispute between the two pharma companies over the roots of the hepatitis C drugs. Earlier this year, Merck was awarded $200 million in the patent fight, but a judge reversed that decision after it was found a Merck scientist falsified his testimony. Gilead has argued that the compounds for Sovaldi and Harvoni have their roots at Pharmasset Inc. (VRUS), which Gilead acquired in 2011 for $11 billion.
The latest award though is a separate fight in the origins of the hepatitis C drugs. Gilead and Idenix have been sparring in the courts since 2013. Merck acquired Idenix (IDIX) in 2014, which meant it had an additional weapon against Gilead. Merck claims Gilead infringed on a hepatitis C patent owned by its subsidiary, Idenix. Merck’s lawyers argued that the compounds developed by the pharma giant were created before Gilead developed Sovaldi and Harvoni, which were approved in 2013 and 2014 respectively.

Gilead argued the Idenix patent was not valid as it “never adequately described what it claimed to have invented,” Bloomberg reported.

“We remain steadfast in our opinion that Idenix’s U.S. patent is invalid, and since they made no contribution and assumed none of the risk in the discovery and development of sofosbuvir and its metabolites, do not believe they are entitled to any level of damages,” Gilead said in a statement Thursday after the verdict was handed down, according to Bloomberg’s report.

The jury though, did not buy Gilead’s argument.

While Gilead has built its reputation on HCV drugs, the company is facing increased competition from other therapies developed by companies like AbbVie (ABBV) and Merck ad its recently approved HCV drug, Zepatier.

Zepatier was granted breakthrough therapy designation for the treatment of chronic HCV genotype 1 infection in patients with end stage renal disease on hemodialysis and for the treatment of chronic HCV genotype 4 infection. Breakthrough therapy designation is a program designed to expedite the development and review of drugs that are intended to treat a serious condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint.

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10 things you need to know today

Dec 16, 2016 | Markets Insider

Here is what you need to know.
Bonds are flashing a warning sign for stocks. The US 10-year yield ticked above 2.60% on Thursday, the level at which Societe Generale's Cross Asset Allocation team says stocks become "rich" to bonds. The US 10-year yield is down 3 basis points at 2.57%.
Eurozone inflation is finally being sustained. Eurozone final CPI printed 0.6% year-over-year in November, its highest level in more than two years. The euro is up 0.3% at 1.0442 against the dollar.
The UK will have to pay a big tab when Article 50 is triggered. Michel Barnier, one of the European Union's chief negotiators, and other EU officials said the UK would have to pay the European Union 50 billion pounds ($62.1 billion) when it triggers Article 50, the mechanism to begin the UK's exit, Sky News reports. The British pound is stronger by 0.1% at 1.2428 versus the dollar.
The world's oldest bank is getting more time to raise cash.Monte Paschi has received regulatory approval to push back the deadline of its debt-for-equity swap to December 21, Bloomberg reports. The Italian bank must raise €5 billion to avoid needing a state rescue.
Gilead must pay Merck $2.5 billion in royalties. A federal jury has awarded Merck a $2.54 billion reward in a patent verdict against Gilead related to its hepatitis C drugs Sovaldi and Harvoni, Reuters reports.
Trivago's IPO priced below expectations. The hotel-booking site raised $287 million through its initial public offering, which priced at $11 a share, well below the range of $13 to $15 that was expected.
Oracle reported a mixed quarter. The company earned $0.61 a share on revenue of $9.0 billion, compared with Wall Street's expectation for earnings of $0.60 on revenue of $9.11 billion.
Priceline has a new CEO. Glenn Fogel, a 16-year veteran of the firm and current head of strategy and executive vice president of corporate development, has been named CEO.
Stock markets around the world are up. Japan's Nikkei (+0.7%) led the overnight advance, and Italy's MIB (+2.1%) paces the gains in Europe. The S&P 500 is set to open little changed near 2,265.
US economic data is light. Housing starts will be released at 8:30 a.m. ET and the Baker Hughes rig count will cross the wires at 1 p.m. ET.

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