USA – A Texas federal jury determined that Daiichi Sankyo’s breast cancer blockbuster Enhertu infringes on a Seagen patent and awarded the China-based company US$41.8 million in royalty revenue.

While the jury determined that the infringement of patent No. 10,808,039 was willful, no punitive damages were awarded. After hearing both sides’ cases for four days, the jury reached a decision in just two hours.

Seagen claims in the ongoing arbitration that the linker and other an antibody-drug conjugate (ADC) technology used in the compounds are advancements on the company’s pioneering efforts in the field.

Furthermore, Seagen has requested royalties from Enhertu sales in the United States until the patent expires in November 2024. Later this year, that case will be arbitrated.”

“Daiichi Sankyo disagrees with the jury verdict” and will “explore options” for the case moving forward, Naoto Tsukaguchi, Daiichi’s general counsel, said in a statement.

The ADC is already approved as a third-line treatment for HER2-positive breast cancer and gastric cancer, but it is poised to move into earlier treatment lines as well as breast and gastric cancers with low HER2 expression levels.

Enhertu scored its first phase 3 win in HER2-low breast cancer in the DESTINY-Breast04 trial in February, which Credit Suisse analysts estimated could unlock US$3 billion in additional sales for the drug.

Breast cancer classified as HER2-positive affects approximately 20% to 25% of all patients with the disease, but this proportion rises to 55% in the HER2-low category.

Separately, the US Patent and Trademark Office has agreed to begin a review of Seagen’s ‘039 patent. Tsukaguchi stated that Daiichi is “pleased” with the news.

While Enhertu is Daiichi Sankyo’s most important antibody-drug conjugate anti-cancer drug, the financial hit is minor, according to Jefferies analysts, who note that the US$41.8 million royalty payment represents 7.5% of Enhertu’s total sales of US$558 million in the United States in 2020 and 2021.

Furthermore, if it is determined that royalties will be paid at a rate of 7.5%in the future, Jefferies believes Daiichi can comfortably absorb that hit as well.

By 2030, Enhertu’s sales are expected to reach US$5.7 billion. Daiichi and AstraZeneca share marketing rights to the drug.

While Seagen received a favorable ruling, analysts at Berenberg Capital Markets warn that the company’s legal proceedings are far from over, as an appeal is likely.

In a separate matter involving the companies, Seagen is challenging Daiichi’s ownership of certain technologies used in the development of trastuzumab deruxtecan and other drug candidates, according to the company’s release.

Seagen has a long history in ADC development, with Adcetris (brentuximab vedotin) receiving FDA approval in 2011 as a treatment for classical Hodgkin lymphoma and anaplastic large cell lymphoma (ALCL).

Padcev (enfortumab vedotin) was approved by the FDA in 2019 for metastatic urothelial cancers, and Tivdak (enfortumab vedotin) was approved by the FDA in 2021 for cervical cancer therapy (tisotumab vedotin).

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