After Bristol-Myers Squibb (Bristol) said on Friday that it won’t ask FDA for faster approval of Opdivo/Yervoy combination for lung cancer, it agreed today with Ono Pharmaceutical to settle all patent-infringement charges related to Merck’s PD-1 antibody Keytruda.
Bristol and Ono, who discovered and developed the PD-1 antibody Opdivo, will dismiss the charges and Merck will pay $625 million to Bristol and Ono.
Bristol and Ono have filed charges saying that Merck’s sale of Keytruda infringed the companies’ patents to use PD-1 antibodies to treat cancer in the U.S., Europe (United Kingdom, Netherlands, France, Germany, Ireland, Spain and Switzerland), Australia, and Japan.
As part of the agreement, beside the initial payment, Merck is also obligated to pay ongoing royalties on global sales of Keytruda of 6.5% from January 1, 2017 through December 31, 2023, and 2.5% from January 1, 2024 through December 31, 2026. The royalties will be shared between Bristol-Myers Squibb and Ono in a 75/25 percent allocation. Bristol will get 75% of the royalties, Ono will get 25%.
“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,” says Giovanni Caforio, M.D., chief executive officer, Bristol-Myers Squibb. “Today’s agreement is also a good decision for patients as it supports the continuation of ongoing research and maintains access to anti-PD-1 therapies for cancer patients around the world.”
Merck’s CEO Kenneth C. Frazier said that today’s announcement eliminates uncertainty and enables Merck to continue to focus on Keytruda. He said: “(Keytruda) is already helping thousands of patients around the world and becoming a foundation for the treatment of cancer through our industry-leading clinical development program,”.
Merck said that the $625 million payment will be recorded in its fourth-quarter 2016 results. The expense will be excluded from Merck’s non-GAAP results.