2023-03-01| Special

Genentech Takes Biogen to Court Over Stockpiled Multiple Sclerosis Drug Royalties

by Reed Slater
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Despite doing business together for many years, Genentech is suing Biogen for not paying royalties on the multiple sclerosis drug, Tysabri, which used Genetech’s patented Cabilly method to manufacture antibodies. The Cabilly patent expired in 2018, but Genentech argues that it is owed royalties on Tysabri that Biogen manufactured before 2018 and stockpiled for future sales. 

A Unique Patent Case to Set a Precedent for Future Suits

According to the complaint filed by Genentech, the company initially licensed the Cabilly antibody manufacturing method to Biogen in 2004 for a small percentage royalty on any products made using the technique. The FDA approved Tysabri in November 2004 to treat multiple sclerosis, and the drug has recorded significant sales for Biogen since then. 

The U.S. Patent and Trademark Office initially granted Genentech the Cabilly I patent in 1989. Genetentech subsequently received later iterations of Cabilly II and Cabilly III patents in 2001 and 2011 for the antibody manufacturing method. The most recent Cabilly III patent expired in 2018, which also marks the last time Biogen paid Genentech any royalties for Tysabri. 

In the court document, Genentech noted the industry-standard practice of stockpiling drugs for several months of surplus product. With that in mind, Genentech argues that Biogen owes the company tens of millions of dollars in royalties from Tysabri that Biogen manufactured before 2018 and sold in the years after. 

With a complaint filed, Genentech demanded the case be taken before a jury to settle the dispute. Barring the claim of being owed “tens of millions of dollars,” Genentech has not released a definite figure it wants because it said it is unclear how much money Biogen made on Tysabri that it manufactured before 2018.

Related Article: Dutch Pharmaceutical Watchdog Organization Sues Abbvie over Humira Pricing

Biogen and Genentech’s Future

Even with a lawsuit driving a wedge between Biogen and Genentech, the two companies still plan on working together after they struck a licensing deal in December last year. That deal is between Roche, a Genentech subsidiary, and Biogen and focuses on an investigational drug designed to treat non-Hodgkin’s lymphoma. 

The therapy detailed in the deal, glofitamab, is a CD20xCD3 T-cell engaging bispecific antibody in Phase 2 trials. Upon approval, the agreement would provide Biogen the right to tiered royalties in the mid-single digit range. 

With a long history behind the Cabilly patents, Genentech aims to end its era of antibody manufacturing reign on top. Still, pharmaceutical lawsuits take time, especially given the upper-echelon status that Genentech and Biogen hold in the industry. Major updates are sure to follow in the gripping case. 

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