Gilead Sciences got to the market first with an interferon-free oral hepatitis C fighter, a category projected to hit $20 billion in sales by 2020. Its Sovaldi has been racking up unprecedented sales, and a raft of litigation, as other drugmakers look for a way to get a piece of that action.
There is litigation involving Gilead ($GILD) and AbbVie ($ABBV), Merck ($MRK) and Idenix Pharmaceuticals ($IDIX) which Merck is buying. All three are developing their own hep C contenders. There is also a lawsuit from Roche ($RHHBY). The lawsuits represent the kinds of patent litigation more often seen in the high-tech industry than in pharma, where patent fights to stop generic products are more common, The Wall Street Journal asserts.
The litigation "speaks to the blockbuster aspect of this drug [Sovaldi], both from a scientific standpoint and obviously from a monetary standpoint, that we're seeing very involved litigation from many different players," lawyer Theresa Kavanaugh, told the WSJ. She is a patent attorney with Goodwin Procter who has represented drugmakers but not in litigation related to hepatitis C drugs.
Sovaldi's sales have been nothing short of stunning. While Gilead has yet to report second quarter results, sales of the drug in Q1 exceeded most analysts outsized expectations, hitting nearly $2.3 billion. It is on pace to reach $11 billion this year, illustrating why other drugmakers might want to get some of that while they are waiting to get their own products to market.
In one lawsuit, Merck is accused of demanding a 10% share of Sovaldi sales in exchange for use of two Merck patents. Cambridge, MA-based Idenix filed suits against Gilead in France, Germany and the U.K. on grounds that the company infringed a recently granted European patent on nucleosides, as well as filing suit in the U.S.
Merck last month said it would pay $3.8 billion to buy Idenix to round out its offerings in the hep C category. At the time, RBC Capital Markets analyst Michael Yee suggested to clients that the size of the offer suggested to him that Merck is uncertain its pipeline products can match Sovaldi's ability to treat different subtypes and cure the disease as quickly as Gilead's drug.
In the litigation involving AbbVie, that company says it has patented the process of combining two of Gilead's drugs--Sovaldi and an experimental drug called ledipasvir, which Gilead plans to combine into one treatment. While AbbVie doesn't have an ownership claim to the drugs, it is legal for companies to get patents for the "method of use" for products they don't own, WSJ points out. AbbVie, which is awaiting FDA action on its own product, says it should receive damages if Gilead brings the combo drugs to market.
Of course Gilead claims that is nonsense. A spokeswoman told the newspaper the company contends it has the sole right to commercialize Sovaldi and any other drugs that include its active ingredient, sofosbuvir. It claims in litigation, that AbbVie and its former parent Abbott Laboratories ($ABT) conducted a "fraudulent scheme" to get the patents for the methods that it and Pharmasset developed for treating hepatitis C, the WSJ reports. Gilead claims Abbott decided to "eclipse its competitors, not through innovation or the advancement of science," but with patents.
- read the WSJ story (sub. req.)