- Merck reached a settlement late last week with Bristol-Myers Squibb and Japanese drugmaker Ono Pharmaceuticals regarding a lawsuit claiming that the company infringed on patents by marketing its cancer treatment Keytruda (pembrolizumab).
- The settlement comes nearly a year and a half after Bristol and Ono originally filed the lawsuit. It effectively establishes a global patent licensing agreement, through which Merck will pay the companies $625 million upfront plus royalties on net global sales. The royalties will be 6.5% from Jan. 1, 2017 through Dec. 31, 2023, then switch to 2.5% from Jan. 1, 2024 through Dec. 31, 2026.
- Keytruda is in direct competition with Bristol's cancer drug Opdivo (nivolumab). While Opdivo has crushed Keytruda in sales — $920 million versus $356 million during the third quarter, respectively — its recent clinical setbacks have hampered some of Bristol's optimism. Locking down returns on its rival's drug is a good way for Bristol to cut down on losses.
Merck and Bristol have been in what seems like a never-ending episode of Spy vs. Spy since Keytruda gained Food and Drug Administration approval in Sept. 2014. Each time one notches a new indication or collaboration, the other is there to counter it with their own.
Opdivo and Keytruda are both checkpoint inhibitors that employ antibodies to target the programmed death 1 (PD-1) pathway, aiming to unlock the immune system to find and attack cancer cells. Bristol and Ono, which markets Opdivo in Japan, argued in their lawsuit that they held patents for the mechanism through which Opdivo and Keytruda work.
Under the settlement's terms, Bristol will garner a larger portion of the royalties that Merck is required will give over, getting 75% of the payout, while Ono gets a 25% share.
"Bristol-Myers Squibb and Ono’s agreement with Merck protects our scientific discoveries and validates the strong intellectual property rights we secured as the early innovators in the science of PD-1, a key mechanism in Immuno-oncology that has proven to have transformational impact in cancer care," Bristol's CEO Giovanni Caforio said in a Jan. 20 statement.