Gilead wins reversal of $2.54B hepatitis C patent verdict, but Merck says fight not over yet

The latest victory in a years-long hepatitis C patent battle between Gilead Sciences and Merck goes to Gilead. On Friday, a federal judge overturned a $2.54 billion verdict against the biotech on grounds that a key Merck patent used to support the infringement lawsuit is invalid. 

U.S. District Judge Leonard Stark in Delaware wrote that Merck's '597 patent is invalid, even after "taking all the evidence in the light most favorable to Idenix and drawing all reasonable inferences in favor of ldenix," a Merck subsidiary. 

The decision comes after a jury awarded Merck a $2.54 billion verdict back in December 2016 following a 9-day trial between the drugmakers, plus years of discovery and pretrial proceedings. Idenix, which Merck acquired in 2014, filed the patent suit against Gilead in 2013. 

A Merck representative said the company believes the ruling doesn't "reflect the facts of the case" and that it will appeal.

"The patent at issue in this case facilitated significant advances in the treatment of patients with HCV infection, and achieving these advancements required many years of research and significant investment by our subsidiary and its partners," she added

RELATED: Merck snags record $2.54B in second hep C patent verdict against Gilead 

After the trial, Merck filed for enhanced damages and Gilead challenged the result. Judge Stark reviewed all of the proceedings and wrote Friday that the "only reasonable finding, based on the trial record, is that Gilead met its burden to prove nonenablement by clear and convincing evidence." 

According to the judge, patents meet the enablement requirement when they "teach those skilled in the art how to make and use the full scope of the claimed invention without undue experimentation." The requirement is designed to "ensure adequate disclosure" of inventions and to prevent patents that are overly broad. 

In finding that Merck's patent is invalid, the judge struck down the jury verdict, the largest ever in a U.S. patent case, according to Reuters.

A Gilead spokesperson told FiercePharma the company has "always believed Idenix’s patents were invalid."

"We are pleased the Delaware court has confirmed our opinion and we are confident this decision will be upheld on appeal," he added. "This is the third set of patents in the United States that Merck and Idenix have unsuccessfully asserted against Gilead."

With billions in sales on the line, the legal saga between the drugmakers has had its share of drama over the years. In a separate case in California, Merck previously won $200 million in damages but had to refund the money and pay Gilead $200 million in legal fees after a judge determined a Merck witness lied under oath. 

While Gilead has something to celebrate with its legal victory, the company has suffered in the hep C market lately after tremendous early success. In 2017, the company generated $9.1 billion in hep C sales, far short of $19.1 billion in 2015.

Looking ahead, the company expects hep C sales to continue to sink. Gilead recently guided for $3.5 billion to $4 billion in hep C sales for 2018, short of analyst expectations of $5 billion.

RELATED: Dogged by AbbVie's new share-stealing Mavyret, Gilead's hep C forecast comes in far short 

Since it launched hep C meds Sovaldi and Harvoni and generated intense pricing backlash, Gilead has suffered from new competition, including from Merck and AbbVie. New entrants have forced the California biotech to offer bigger discounts to retain market share, hurting sales.