Thursday, March 24, 2016

[U] Barron's "Patent Expert": Merck v. Gilead -- We Agree, And We Said It All -- Many, Many Months Ago

Updated -- A new post on this appears here -- covering subsequent developments.

As we long suggested, the upshot here is that we will be surprised if Merck is ever able to actually book any royalty revenue from this litigation -- or, at least not more than a few hundred million dollars, in total. Immaterial to both companies -- as we've long guessed.

In any event, here is the Barron's piece, this morning (good to see sanity making a come-back, here) -- and a bit:

. . . .We spoke to a patent expert about the Gilead/Merck patent case related to Sovaldi. The expert notes that this case is not very straight forward and the Jury verdict is only one of the many steps here. Given Gilead’s claim that Merck had “unclean hands” while obtaining information which helped writing of patents in question, this case could take ~2-3 years before reaching conclusion. . . .

The expert believes that Gilead has a strong defense (on the face of it) and common sense is in Gilead’s favor. Gilead could argue that despite having this patent Merck could not develop the drug and, therefore, these patents are not comprehensive. . . .

As ever, we will keep you posted. Feel free to search above for "Sovaldi" -- to read perhaps 75 posts on the topic, stretching back over three years. Onward, on a rainy cold gray Chicago day. . .


Anonymous said...

This article left out that continued royalties of 4% will still be rewarded to MRK. So, this is not over, as GILD will still appeal due to this.

Condor said...

Thanks Anon. --

Yes Gilead will appeal. And as my latest post of tonight indicates, the very able Judge Labson Freeman may reduce the jury award as early as next week -- based on her bench only trial (largely on whether the patents teach enough art to be this valuable, or whether much more patentable art is/was needed -- to make Solvaldi such a valuable finished drug).

Me? I'm betting that the final number is well under $200 million.

We shall see. Great comment!


Unknown said...

The royalties were capped at 4% of $5B in revenues so the total award is $200M.

"The jury settled on a 4% royalty for $5B in sales, after subtracting a Gilead investment of $15B from the revenues."