Novartis Ordered to Pay $177.8 million to Plexxikon for Patent Infringements

A federal court in California ordered Novartis to pay Daiichi Sankyo’s research and development subsidiary, Plexxikon, $177.8 million. The ruling holds that BRAF inhibitor Tafinlar® infringes two of Plexxikon’s cancer drug patents. This ruling comes just a few months after the five-year anniversary of the case’s filing. 

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The Infringed Patents

The development for the two infringed patents, 9,469,640 and 9,844.539, began in 2005. Both parents secure the rights to compounds reducing cancer cell growth. In collaboration with Roche, Plexxikon used the patents for the creation of Zelboraf, a melanoma drug. Zelboraf won FDA approval in 2011, eleven years before Novartis’ Tafinlar.

Plexxikon filed a lawsuit against Novartis for alleged infringement of their two patents in 2017. Throughout the suite, Novartis argued that Plexxikon’s two patients were invalid, citing three GSK compounds that preceded them.

However, in July of this year, a jury found that Novartis had not proved that Plexxikon’s patents were invalid. In addition, their verdict ruled Novartis engaged in ‘willing infringement.’

Ordered to pay restitution, Novartis appealed the decision to the U.S. District Court for the Northern District of California.

The Federal Court’s Ruling

The federal court released its ruling, shooting down Novartis’ attempt at a new trial. However, it wasn’t a total loss for the Swiss company. The appeal succeeded in switching the ruled ‘willful infringement’ of Novartis to ‘unintentional infringement.’ This simple change secured Novartis against the potential tripling of their payment to Plexxikon.

However, the original fine still stands, totaling $177.8 million in payment to Plexxikon along with an additional 9% royalty on U.S. sales of Tafinlar. However, the parent company will scoop the awarded money due to Daiichi’s closure of Plexxikon earlier this year. In a press release, Daiichi stated that any financial impact of the decision is under evaluation. 

In the last fiscal year alone, Novartis sold $1.5 billion of Tafinlar. With Plexikkon’s two patents expiring in 2028, Novartis’ payments could end up totaling millions, if not billions, of dollars. 

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Author

Max Heirich