August 30, 2013

Gilead Sues Merck Saying New Drug Won’t Infringe Patents

By Karen Gullo - Aug 30, 2013 9:16 PM ET

Gilead Sciences Inc. (GILD), the world’s largest maker of HIV medicines, sued Merck & Co. (MRK) seeking a court order that the experimental hepatitis C drug sofosbuvir won’t infringe patents.

Merck, which sold $502 million of its Victrelis hepatitis C drug last year, contacted Gilead this month requesting it license two patents Merck says are related to sofosbuvir, Gilead’s attorneys said a complaint filed today in federal court in San Francisco.

Merck, based in Whitehouse Station, New Jersey, asked Gilead to pay a 10 percent royalty on the net sales of the medicine until the patents expire, a request “meant to threaten Gilead” on the eve of U.S. regulatory approval of sofosbuvir, according to the complaint. Gilead seeks a judge’s declarations that the patents aren’t enforceable or infringed so it won’t have to license them to sell the medicine.

Gilead, based in Foster City California, said June 7 that sofosbuvir will receive a priority marketing review by U.S. regulators with a target review date of Dec. 8.

Hepatitis C attacks the liver and can lead to liver cancer. The virus affects about 150 million people worldwide and the market for new pills such as sofosbuvir is estimated at $20 billion.

Lainie Keller, a Merck spokeswoman, didn’t immediately respond to an e-mail after regular business hours seeking comment on the lawsuit.

The case is Gilead Sciences v. Merck, 13-04057, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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