Gilead ordered to pay Merck & Co $2.54 bn by US court

A US court has ordered Gilead to pay Merck & Co $2.54 billion in royalties relating to sales of its Sovaldi and Harvoni hepatitis C drugs.

A jury in the US District Court of Delaware said Gilead’s drugs, violated patents held by Idenix Pharmaceuticals, which Merck bought for $3.9 billion in 2014.

The drugs both include the active ingredient, sofosbuvir, and have revolutionised treatment of hepatitis C, effectively curing the disease and with far fewer side effects than previous treatments.

Merck said the jury awarded the damages as compensation for infringement until the end of August 2016.

According to Merck, the jury also concluded that Gilead “wilfully” infringed upon the patent. As a result, judge Leonard P. Stark, may decide to increase the damages award up to a multiple of three times.

According to press reports, Gilead said it plans to appeal against the ruling, adding that it will be able to continue selling its hepatitis C drugs despite the ruling.

In a separate case in June, a judge reversed a $200 million award that Merck won against Gilead, saying Merck engaged in misconduct to get patents for hepatitis C drugs.

The decision seals a difficult 2016 for Gilead, which has seen sales of its hepatitis C portfolio decline after demand fell back after an initial surge in 2015, and with growing competition from the likes of AbbVie's Viekira and Merck's Zepatier.

The company also saw setbacks to its pipeline: it terminated a phase 2/3 trial of an ulcerative colitis drug, and saw a phase 3 trial of a JAK1/2 inhibitor fail in myelofibrosis fail in November.

In March, Gilead shut down six clinical trials of its Zydelig cancer drug, because of severe side effects including deaths due to infections.

This also led to EU regulators requiring the drug to be taken with antibiotics in its already approved used in chronic lymphocytic leukaemia.

On a more positive note, US and EU regulators have approved Gilead’s next-generation HIV drug, Descovy, and its hepatitis B drug, Vemlidy, has been approved in the US and most recently Japan.