Gilead pays $1.25bn to GSK in HIV drug settlement
Gilead Sciences has agreed to pay $1.25 billion upfront with additional royalties to GlaxoSmithKline (GSK) subsidiary ViiV Healthcare to settle claims that it infringed HIV drug patents.
GSK announced on its website on February 2 that Gilead will be making the payment in the first quarter of 2022 as well as a 3% royalty rate on future US sales of its blockbuster treatment Tivicay (dolutegravir).
ViiV Healthcare, alongside its parent company and Japanese pharma firm Shionogi alleged that Gilead’s Biktarvy (Bictegravir/emtricitabine/tenofovir alafenamide) infringed ViiV’s patents.
A stipulation of dismissal was submitted to the US District Court for the District of Delaware on Tuesday, February 1, and was promptly signed off by District Judge Colm Connolly Wednesday, February 2, 2022.
This settlement will see concurrent litigation in the US, UK, France, Ireland, Germany, Japan, Korea, Australia, and Canada discontinued, GSK said..
Settlement terms
The agreement will see Gilead pay the upfront cost and the 3% royalty on all future sales. In 2021, the drug generated $7.26 billion in revenue according to GSK filings. This would mean the royalty portion would be worth approximately $1.97 billion.
These payments will run from February 1, 2022, until the expiration of ViiV Healthcare’s US patent number 8,129,385 on 5 October 2027.
The upfront payment will be distributed to the shareholders of ViiV, with GSK receiving 78.3%, Pfizer 11.7% and Shionogi 10%.
According to the announcement, the global settlement will include a patent licensing agreement under which Gilead has been granted a worldwide licence to ViiV Healthcare’s Tivicay patents.
Gilead has also signed a covenant not to enforce any patents controlled by ViiV, GSK or Shionogi against Gilead.
Case background
ViiV filed the lawsuit against Gilead in 2018 in Delaware claiming that Gilead’s newly approved triple-drug infringed on US patent number 8,129,385, which is assigned to all three plaintiffs.
Alongside this, GSK filed a similar lawsuit in a Canadian federal court, but this time alleging that Gilead’s drug infringed its Canadian patent number 2,606,282.
GSK asked the two courts to rule that the drug infringed on its patents, and sought royalty payments from the get-go rather than an injunction barring Gilead's drug from entering the market.
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