Seagen wins future royalties in Enhertu patent dispute

Daiichi Sankyo has been ordered to pay an 8% royalty rate on sales of its breast cancer therapy Enhertu by a Texas court, on top of an earlier award of $41.8 million in damages, in an ongoing patent dispute.

Seagen won a lawsuit in April 2022 which claimed that Enhertu (trastuzumab deruxtecan) infringes a patient it holds (No. 10,808,039) covering antibody-drug conjugates that include auristatin compounds coupled to an antibody via a linker molecule.

The jury in the case awarded Seagen an amount for damages based on past royalties that should have been paid on Enhertu sales in the US to the date of the judgment on 1st April 2022.

In a statement, Daiichi Sankyo said that the court has now said it must pay the royalty on sales of AstraZeneca-partnered Enhertu (trastuzumab deruxtecan) from that date until 4th November 2024, when the ‘039 patent expires.

The decision follows an attempt by Seagen to increase the damage award on the grounds that Daiichi Sankyo’s infringement of the patent was ‘wilful’ – which was denied – as well as the request for future royalty sales.

Daiichi Sankyo has said it will appeal the amended final judgment, which came after requests for judgment as a matter of law – which asks the court to enter a judgment based on the conclusion that no reasonable jury could reach a different conclusion – or a new trial were turned down.

It has also asked the US Patent and Trademark Office (PTO) to take another look at the ‘039 patent, arguing that should never have been granted, and won the right to take that forward earlier this year after it had been blocked in the courts.

The award of future royalties, if it stands up to appeal, could provide a windfall for Seagen – now heading for a takeover by Pfizer, pending antitrust reviews – as Enhertu sales have been growing fast, driven by a string of new regulatory approvals.

First cleared as a later-line therapy for HER2-positive breast cancer in 2019, Enhertu has expanded into earlier use, as well as HER2-positive gastric cancer and non-small cell lung cancer (NSCLC), as well as HER2-low breast cancer that could drive sales to more than $6 billion in 2028, according to Evaluate.

Sales in fiscal 2022/23 were almost $1.2 billion, of which around half was booked by AZ, which paid $1.35 billion upfront to license Enhertu in 2019. Daiichi Sankyo said in April that the drug’s turnover could double to $2.4 billion in the current financial year to end-March 2024.