Gilead, GSK’s ViiV Reach $1.25-Bn Patent SettlementBy
Gilead Sciences has reached a $1.25-billion settlement over patent-infringement litigation for dolutegravir, an HIV medicine by ViiV Healthcare, a specialist HIV company majority owned by GlaxoSmithKline (GSK), with Pfizer and Shionogi hold minority stakes.
ViiV Healthcare, GSK and Shionogi had asserted that Gilead’s Biktarvy, a triple combination HIV medicine containing bictegravir, tenofovir alafenamide, and emtricitabine, infringed certain of their patents relating to dolutegravir.
Under the terms of the settlement agreement, ViiV Healthcare will dismiss all pending lawsuits relating to bictegravir, an active ingredient in Biktarvy. Gilead will make a one-time payment of $1.25 billion and an ongoing royalty payment of 3% until 2027 on future sales of Biktarvy and on the bictegravir component of any future bictegravir-containing products sold in the US. Biktarvy had 2021 US sales of $7.0 billion and global sales of $8.6 billion.
Gilead’s $1.25-billion payment to ViiV Healthcare is expected to be paid in the first quarter of 2022. The royalties will be payable by Gilead to ViiV Healthcare from February 1, 2022 until October 5, 2027, which is the expiry of ViiV’s US patent (US Patent No. 8,129,385). Gilead’s obligation to pay royalties does not extend into any period of regulatory pediatric exclusivity, if awarded. Regulatory pediatric exclusivity would extend the period of exclusivity after the expiry of the patent by six months from October 5, 2027 to April 5, 2028.
The upfront payment and royalty income will be distributed in proportion to the companies’ stakes in ViiV Healthcare (GSK 78.3%, Pfizer 11.7%, and Shionogi 10%) net of the contingent consideration liability to Shionogi and applicable tax.
In addition, as part of the settlement, Gilead has been granted a worldwide license to certain ViiV Healthcare patents relating to dolutegravir and a covenant not to enforce any patents controlled by ViiV Healthcare, GSK, or Shionogi against Gilead in connection with any past or future claims of infringement relating to Biktarvy. ViiV Healthcare, GSK, and Shionogi also have agreed not to enforce their patents against any future product containing bictegravir to the extent that the patent enforcement relates to the bictegravir component of the product.