Daiichi Sankyo unit claims $182m in Novartis patent dispute

Novartis has settled a lawsuit brought by Daiichi Sankyo’s Plexxikon subsidiary, paying $180 million to resolve claims that its Tafinlar cancer drug infringed US patents held by the company.

The long-running dispute has its origins several years ago when Plexxikon filed a complaint alleging that BRAF inhibitor Tafinlar (dabrafenib) – originally developed by GSK – infringed US patents 9,469,640 and 9,844,539 covering its Zelboraf (vemurafenib) drug, which had been approved in the US since 2011 as a late-stage treatment for melanoma.

Novartis acquired Tafinlar as part of a massive asset swap with GSK dating back to 2015, which saw ownership of GSK’s oncology business and Novartis’ vaccines operations change hands.

Plexxikon won a lower court ruling in 2021 that Tafinlar infringed the patents, winning a $178 million judgment that subsequently went to appeal. The complaint alleged that GSK scientists had made use of knowledge acquired during partnership talks with Plexxikon – which never resulted in a licensing deal – to develop Tafinlar.

The $178 million figure included damages, pre- and post-judgment interest, and a 9% royalty rate on US sales of Tafinlar – partnered with Roche – until the expiration of the patents. At the time, it had been speculated that Novartis could have to eventually pay out quite a lot more, so the final settlement agreement of $182 million will be a relief.

Daiichi Sankyo said in a statement that the settlement “will result in the dismissal of Novartis’s appeal and full satisfaction of the judgment entered against Novartis.”

Plexxikon had great expectations for Zelboraf when it first reached the market, pegging peak sales at around $700 million a year, but it never reached those heights with annual sales in the region of $200 million.

It was quickly overtaken by Tafinlar, which pulled in almost $1.8 billion last year as a combination therapy with MEK inhibitor Mekinist (trametinib), approved for melanoma as well as lung, thyroid, and brain cancers.

Daiichi Sankyo acquired Plexxikon in 2011 for $935 million, but said last year it was shutting down the business and devoting its attention to its antibody-drug conjugate (ADC) cancer pipeline, headed by AstraZeneca-partnered HER2 drug Enhertu (trastuzumab deruxtecan).

The closure of Plexxikon was notable as the company had been at the heart of Daiichi Sankyo’s pivot to oncology. However, there had been little news flow from the company over the last few years other than the approval of Turalio (pexidartinib) for rare tenosynovial giant cell tumours in 2019.