Merck & Co are to pay Bristol-Myers Squibb and Ono $625 million plus 6.5% in royalties on Keytruda sales, settling its ongoing patent fight with both parties. 

BMS and Ono – developers of Keytruda’s biggest rival in the market, Opdivo (nivolumab) – and Merck have been locked in a bitter dispute after the former parties launched a lawsuit against the latter, claiming Keytruda infringed on their intellectual property.

Now, Merck will pay BMS and Ono a one-off payment of $625 million, 6.5% in royalties on Keytruda sales between 2017 and 2023, and 2.5% royalties between 2024 and 2026.

Keytruda (pembrolizumab) is Merck’s big blockbuster checkpoint inhibitor immunotherapy which is projected to rake in $4.6 billion for the company in 2017 alone. That number is expected to rise to over $10 billion by 2022.

The long-term revenue stream will therefore be sizeable for both BMS and Ono and may act as a nice consolation prize for its struggling Opdivo.

The news comes a day after BMS revealed it was not pursuing early FDA approval for Opdivo as a first-line treatment for non-small cell lung cancer.

The announcement compounded woes caused by Keytruda’s quick FDA approval in the same setting earlier this month.

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