Despite a decent market performance, Gilead Sciences, Inc. (NASDAQ:GILD) isn’t having a good time out there. As per the reports, Merck & Co. has demanded over $3 billion in royalties from Gilead in a patent dispute regarding liver disease treatment.
Insights of Matter
Gilead’s well-known drug Harvoni and Sovaldi contained a compound that allegedly infringed the patents of Merck. It was first found by a judge in the previous month. Now the jury, that’s looking after this matter, has to come up with a decision after taking into all the arguments. Two of the biggest doubts at this stage for most of the shareholders are – whether the patents which Merck claims that Gilead has infringed are still valid or not? And if they are still valid, then how much should Gilead Sciences owes Merck & Co. in royalties?
The opening trial of this case was held in federal court in California on Monday. Juanita Brooks, the lawyer representing Gilead Sciences argued that her client had started working on this medicine in the year 2001, a year before Merck received the patent rights for the same. She further added in her argument that Gilead Sciences owes the success of this treatment not to Merck or any other company, but to the extensive research work that Pharmasset Inc. did one and a half decades ago.
Gilead bought Pharmasset Inc. for as much as $11 billion in the year 2011. Brooks said that all the evidence presented in the courtroom suggest that this invention belongs to Pharmasset Inc. and Gilead Sciences and that there’s no point in prolonging this case any longer.
In reply to Brooks’ argument, Merck’s lawyer said that this invention was originally derived from the work done by his client, and not Pharmasset.
Sofosbuvir is one of the most sought after and highest grossing hepatitis C treatments in the market. Merck doesn’t want the sales of this drug to stop; however, it demands royalty payment of over $3 billion from Gilead Sciences.