USA – Novartis has reached a settlement, paying US$180 million to Daiichi Sankyo’s Plexxikon subsidiary, effectively concluding a longstanding lawsuit.

The legal battle originated years ago when Plexxikon filed a complaint asserting that Novartis’ cancer drug Tafinlar infringed upon US patents held by Plexxikon.

This legal dispute traces back to Novartis’ acquisition of Tafinlar in 2015 as part of a substantial asset swap with GSK.

The lawsuit claimed that Tafinlar, originally developed by GSK, violated US patents (9,469,640 and 9,844,539) held by Plexxikon for its Zelboraf drug, approved in the US since 2011 for late-stage melanoma treatment.

Plexxikon secured a victory in a lower court in 2021, with a judgment of US$178 million against Novartis.

The ruling, which included damages, pre- and post-judgment interest, and a 9% royalty rate on Tafinlar’s US sales partnered with Roche, was subsequently appealed by Novartis.

The settlement amount of US$180 million, announced recently, brings an end to Novartis’s appeal and satisfies the judgment entered against the company.

The initial complaint alleged that GSK scientists utilized knowledge obtained during partnership talks with Plexxikon, even though no licensing deal materialized to develop Tafinlar.

The settlement provides relief for Novartis, as earlier speculations hinted at potentially higher payouts.

Daiichi Sankyo, the parent company of Plexxikon, stated that the settlement’s conclusion “will result in the dismissal of Novartis’s appeal and full satisfaction of the judgment entered against Novartis.”

Zelboraf, Plexxikon’s drug with high sales expectations, fell short of its anticipated peak sales of $700 million annually, achieving sales around US$200 million.

Tafinlar, on the other hand, quickly outpaced Zelboraf, generating nearly $1.8 billion last year. Tafinlar is used in combination with the MEK inhibitor Mekinist for melanoma treatment, as well as for lung, thyroid, and brain cancers.

Daiichi Sankyo’s acquisition of Plexxikon in 2011 for $935 million marked a pivotal moment in its pivot to oncology.

However, in 2022, Daiichi Sankyo decided to shut down Plexxikon, redirecting its focus toward developing its antibody-drug conjugates (ADC), led by the AstraZeneca-partnered HER2 drug Enhertu (trastuzumab deruxtecan).

This strategic shift marked the closure of Plexxikon, a company that played a central role in Daiichi Sankyo’s move into the oncology space.

Despite the closure of Plexxikon, Daiichi Sankyo remains active in oncology, concentrating efforts on its ADC cancer pipeline, with notable progress seen in the approval of Turalio (pexidartinib) for rare tenosynovial giant cell tumors in 2019.

The settlement with Novartis allows Daiichi Sankyo to conclude this legal chapter and allocate resources to further advance its oncology initiatives.

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