Drugmaker GlaxoSmithKline today claimed a landmark victory in its competitive battle to dominate HIV treatment as a US rival agreed to hand over $1.25 billion to end a high-stakes global patent dispute.
Viiv Healthcare, the HIV specialist majority-owned by GSK, will also receive 3% of royalties on future US sales of Gilead Sciences’ HIV pill Biktarvy until 2027.
Last year the medicine generated revenues of $8.6 billion, and cumulative sales are estimated to reach $50 billion by 2027 - leaving Viiv with a windfall from royalties of $1.5 billion.
The settlement marks a truce after three years of infringement litigation between the two groups spanning the world from the US and UK to Japan, Korea and Australia.
Viiv had alleged that Biktarvy, which combines three HIV medicines in a single daily tablet, breached patents covering its blockbuster drug dolutegravir, an anti-retroviral which accounts for $4.7 billion of Viiv’s annual revenues.
In return for the payout, Gilead has been granted a worldwide licence to key dolutegravir patents and a covenant that GSK and Viiv will not pursue any further claims relating to the drug’s novel component.
Industry sources believe the size of the settlement is the largest in any dispute between two pharma companies and comes as the pair vie for dominance in the HIV market.
Analysts at Jefferies said the settlement provided a “welcome upside” for Glaxo’s biopharma division as it prepares to spin off its over-the-counter consumer medicines arm into a separate company later this year.
Nasdaq-listed Gilead yesterday reported HIV sales of $16.3 billion in 2021, a 4% slip on the year prior reflecting the loss of exclusivity of two drugs, Truvada and Atripla.
Biktarvy sales were up 19% in the year to $8. 6billion.
While Gilead is the leading supplier of HIV treatments, GSK has been working on challenging its dominance by focusing on these longer-lasting treatments.
It was this week granted FDA approval meaning patients using its long-acting HIV treatment Cabenuva will only need to inject once every two months.
The royalty from Gilead’s future sales will be shared in proportion to the shareholding in Viiv with GSK receiving 78.3%, Pfizer 11.7% and Japan’s Shionogi 10%.
Gilead Sciences, based in San Francisco bay, specialises in developing new medicines focused on treating HIV, viral hepatitis and cancer.
Shares in Gilead fell 4.5% to $65.37 at the opening bell on Wall Street.
US bank Wells Fargo has cut its price target for Gilead from $72 to $70, while BMO slashed $10 from its target price from $85 to $75.
Shares of GSK were up 0.7% at 1,656p when markets opened in London.
