Gilead to pay Merck $200 million in damages for Hep C patents
- A federal jury ordered Gilead to pay Merck $200 million in damages for patent infringement after siding with Merck earlier this week on the validity of two patents related to Gilead's hepatitis C drugs, reports Reuters. Merck had sought $2 billion in damages.
- The U.S. District Court judge presiding over the case will next determine the rate of royalties Merck will receive from sales of the two drugs in question, Harvoni and Sovaldi.
- Merck successfully argued Gilead infringed on two patents it held on the compound sofosbuvir, which comprises Harvoni and Sovaldi. Gilead had bought the rights to the compound when it acquired Pharmasset in 2011, but Merck claimed it was owed a percentage of sales due to its earlier patents.
Harvoni and Sovaldi are Gilead's two best selling drugs, earning $31 billion in global sales over the past two years. But uptake of the drugs is expected to flatten this year, weighing on Gilead's revenue growth. Merck's court victory is a further damaging blow.
However, the jury awarded Merck far less than the $2 billion it sought. But the judge has yet to determine the royalty percentage Merck is owed on future sales of the drugs. Merck is hoping to win 10%.
The jury settled on the $200 million figure after awarding 4% in damages on $5 billion in sales, according to Bloomberg.
Gilead indicated it would appeal if the judge in the case maintains the jury's 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. We continue to believe the Merck patents are invalid," said Gilead spokeswoman Michele Rest.
Merck is also hoping its own hepatitis C drug Zepatier can start making inroads against Gilead's drugs. Approved by the FDA in January, Zepatier is priced competitively at $54,600 - significantly less than the $84,000 to $94,500 list prices Sovaldi and Harvoni command, respectively.
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