- Gilead Sciences Inc. doesn't have to hand over billions of dollars to rival drugmaker Merck & Co. for patent violations — at least not yet, anyway — after a federal judge reversed an earlier decision concerning a lawsuit between the drugmakers.
- Idenix Pharmaceuticals Inc., a Merck subsidiary since 2014, filed the suit more than four years ago. It claims Gilead's products Sovaldi and Harvoni infringed on a patent for the chemical structure of certain hepatitis C treatments. In December, a jury determined Gilead did infringe on the Idenix patent and awarded Merck $2.54 billion in damages.
- Gilead subsequently filed a post-trial motion. While Judge Leonard Stark of the U.S. District Court didn't agree with each argument within that motion, he did conclude the patent at the core of the case was invalid. Merck intends to appeal the reversal, the company told BioPharma Dive in a statement.
The reversal is a considerable win for Gilead. Not only did the company have concerns about the sheer size of the potential payout to Merck, but it's Harvoni (ledipasvir and sofosbuvir) and Sovaldi (sofosbuvir) franchises are far from the revenue drivers they once were.
Gilead recorded sales of $4.37 billion for Harvoni and $964 million for Sovaldi (sofosbuvir) in 2017, down 52% and 76%, respectively, year over year. The ravaged sales stem largely from a smaller population of treatable patients, as Gilead's products have effectively cured large portions of the hep C population.
Yet even with those dramatic sales declines, the drugs still account for about 20% of Gilead's total pharmaceutical revenue. Those figures are surely not lost on Idenix and Merck, which never saw the same commercial success in hep C that Gilead did, even though sofosbuvir has similar chemical characteristics to the treatments Idenix was creating.
"Given the importance of these medical breakthroughs, as well as the massive revenues Gilead has earned, it is perhaps unsurprising that Idenix and Gilead have for years been fighting patent disputes against one another all around the world," Stark wrote in his opinion on the case.
Indeed, each company has notched some kind of victory in patent fights pertaining to sofosbuvir. In 2016, U.S. District Judge Beth Labson Freeman threw out a $200 million verdict against Gilead after ruling that Merck's patent attorney was "dishonest and duplicitous." The win was shorted lived, however, as later in the year Gilead lost out in the high stakes jury ruling.
With $2.54 billion on the line, Gilead warned that if the jury's decision stuck, it could have a "material adverse impact on our results of operations." Fortunately for the company, it didn't.
"The patent 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 our subsidiary and its partners," Merck said in its emailed statement.
"We believe strong patent protection is essential to innovation. Given that it guarantees a firm 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."
Gilead didn't respond to BioPharma Dive request for comment prior to publication.