Japanese drugmaker Ono Pharmaceutical is taking AstraZeneca to court on claims that the blockbuster lung cancer med Imfinzi flouts its PD-L1 patents. It’s a strategy that’s successfully triggered payouts from Merck & Co. and Roche in the past—and, this time, Ono is demanding even more in royalty back pay.
In the Tokyo District Court, Ono on Monday slapped AZ with a lawsuit seeking an injunction and 32 billion Japanese yen (roughly $278 million) in damages for Imfinzi’s alleged infringement of an Ono-held patent.
Since cancer patients depend on AZ’s drug, Ono has said it won’t seek a sales injunction if the British drugmaker pledges to pay “an appropriate consideration including royalties even outside the proceedings.”
Ono is seeking about 2.6% of the $10.7 billion in total sales Imfinzi garnered through the end of 2021, Jefferies analysts wrote in a note to clients Monday. That’s quite a bit more than Ono got from Roche and Merck on similar infringement claims tied to Tecentriq and Keytruda, respectively, the Jefferies team pointed out.
Both companies made one-off payments to Ono for historical unpaid royalties and agreed to shell out ongoing royalties that the Jefferies team estimated at about 1.5% to 1.8% of sales. The potential AZ payout “seems a bit steep” compared to the rate Ono earns from Keytruda and Tecentriq, the analysts added.
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It’s unclear whether Ono will emerge triumphant in court or how long any future royalty payments would continue, the Jefferies team said. If Ono earned just 1.7% royalties on sales of Imfinzi in fiscal years 2023 and 2024, the company could add 6 billion yen ($52 million) and 7 billion yen ($60.8 million) to its top line, the analysts noted. That works out to an incremental 4% to 5% boost to profits in both years.
“We recognize intellectual property as an extremely important management asset,” Ono said in a release. “Therefore, we have decided to take appropriate measures against acts that infringe our intellectual property rights, leading to the filing of such a lawsuit this time.”
"AstraZeneca does not comment on pending litigation," a company spokesperson told Fierce Pharma over email.
Beyond its oncology pacts with Merck, Roche and AZ, Ono co-developed Bristol Myers Squibb’s blockbuster cancer drug Opdivo.
Several years back, the Nobel laureate who helped create the drug demanded a bigger piece of the action. In 2019, Tasuku Honjo, Ph.D., a Japanese immunologist and Nobel Prize winner for his identification of the immune cell protein PD-1, sought to renegotiate his contract with Ono, claiming his 1% share of Ono's sales and licensing revenue from Opdivo didn’t fairly reflect his role in the drug’s genesis. A 5% to 10% share would have been “a reasonable level,” Honjo’s lawyer said at the time.