More Bad Luck for Gilead as Merck & Co. Wins Victory in Hep C Patent Dispute

March 23, 2016
By Alex Keown, BioSpace.com Breaking News Staff

CARLSBAD, Calif. – Merck & Co. got a big win over rival Gilead Sciences that could be worth billions after a California jury upheld the validity of two hepatitis C patents owned by the company.

Merck argued Gilead’s blockbuster hepatitis C drugs Harvoni and Sovaldi infringed on patents it owned along with Southern California-based Ionis Pharmaceuticals, Inc. In February, a Judge ruled that Gilead’s two drugs, which provide a near cure for hepatitis C, did infringe on Merck’s patents. Now the jury has agreed, but how much the companies will be awarded in damages remains to be seen. Merck is seeking 10 percent of sales of the drugs. At stake is billions of dollars in annual revenue for Gilead. Harvoni generated nearly $20 billion in sales in 2015. Harvoni and Sovaldi helped drive Gilead to a record revenue year in 2015, nearly $32 billion—more than three times what the company generated in 2012.

In a statement this morning, Ionis Pharmaceuticals, which co-owns the patents with Merck, said it will receive 20 percent of whatever is paid to Merck by Gilead for the patent infringements.

"Ionis is an expert in developing novel nucleic acids for use as therapeutic agents. We used our expertise in a 1998 collaboration with Merck to discover and develop modified nucleosides that benefit patients with HCV. The patents derived from our work with Merck are another example of the strong intellectual property portfolio we have created around our pioneering work in antisense drug technology," Stanley T. Crooke, chairman and chief executive officer of Ionis said in a statement.

Gilead told the Wall Street Journal it was disappointed in the jury’s verdict and that there were still a number of remaining issues to be decided. Gilead argued its scientists were working on the hepatitis C compounds before Merck secured its own patents. The company argued that the compound has its roots at Pharmasset Inc. , which Gilead acquired in 2011 for $11 billion.

Merck said it was pleased with the results and believes the “verdict accurately reflects the evidence in this case,” the Journal reported.

While there is a lot of money at stake, Merck is not seeking for Gilead to cease sales of Harvoni and Sovaldi in favor of its own recently approved hepatitis C drug, Zepatier.

Zepatier was granted breakthrough therapy designation for the treatment of chronic HCV genotype 1 infection in patients with end stage renal disease on hemodialysis and for the treatment of chronic HCV genotype 4 infection. Breakthrough therapy designation is a program designed to expedite the development and review of drugs that are intended to treat a serious condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint.

Gilead isn’t done developing treatments for hepatitis. In January, Gilead submitted a New Drug Application to the U.S. Food and Drug Administration for tenofovir alafenamide, an investigational, once-daily treatment for adults with chronic hepatitis B virus infection. The company is also continuing to use Sovaldi in combination with other drugs, including a triplet drug comprised of Sovaldi, velpatasvir, and a protease inhibitor for the treatment of genotype 3 HCV patients. Also, in the waning days of 2015, Harvoni was approved for expanded use in patients with genotype 4, 5 and 6 chronic hepatitis C virus (HCV) infection and in patients co-infected with HIV by the U.S. Food and Drug Administration. In addition, Harvoni plus ribavirin (RBV) for 12 weeks was approved as an alternate therapy to 24 weeks of Harvoni for treatment-experienced, genotype 1 patients with cirrhosis.