Merck to pay Bristol-Myers Squibb $625m

UPDATED – Merck said it agreed a settlement and license agreement with Bristol-Myers Squibb Company and Ono Pharmaceutical Co. Ltd. resolving the worldwide patent infringement litigation related to the use of an anti-PD-1 antibody for the treatment of cancer such as Keytruda (pembrolizumab).

Merck will make an initial $625 million payment to Bristol-Myers Squibb and provide royalties on the worldwide sales of Keytruda for a non-exclusive license to market Keytruda “in any market in which it is approved.”

For global net sales of Keytruda, Merck said it will pay Bristol-Myers Squibb royalties — 6.5% of net sales occurring from January 1, 2017 through December 31, 2023, and 2.5% of net sales occurring January 1, 2024 through December 31, 2026.

The parties also agreed to dismiss all claims in the relevant legal proceedings.

“Today’s announcement eliminates uncertainty and enables us to continue to focus on Keytruda, our immuno-oncology medicine, which is already helping thousands of patients around the world and becoming a foundation for the treatment of cancer through our industry-leading clinical development program,” said Merck CEO Kenneth Frazier.

Bristol-Myers Squibb and Ono Pharmaceutical said in a statement they had asserted in litigation that Merck’s sale of Keytruda infringed the companies’ patents relating to the use of PD-1 antibodies to treat cancer in the US, Europe (United Kingdom, Netherlands, France, Germany, Ireland, Spain and Switzerland), Australia and Japan.

The royalties will be shared between Bristol-Myers Squibb and Ono in a 75/25 percent allocation, respectively.

“Bristol-Myers Squibb and Ono’s agreement with Merck protects our scientific discoveries and validates the strong intellectual property rights we secured as the early innovators in the science of PD-1, a key mechanism in Immuno-Oncology that has proven to have transformational impact in cancer care,” said Bristol-Myers Squibb CEO Giovanni Caforio.