GSK will have to pay additional royalties to AstraZeneca on cancer drug Zejula

When Emma Walmsley took over as CEO at GSK in 2017, one of her first moves was to beef up the company’s oncology portfolio with a $5.1 billion acquisition of cancer specialist Tesaro and its newly approved drug Zejula.

The ovarian cancer treatment generated (PDF) 463 million pounds sterling ($571 million) in 2022, representing a 17% increase from the previous year. So far, so good, right?

Well, not exactly. After losing a patent case in court Wednesday, GSK will have to surrender a portion of its sales of Zejula to Tesaro’s partner on the drug, AstraZeneca.  

The High Court of Justice Business and Property Court of England and Wales has sided with AZ in a royalty dispute, which could net the company hundreds of millions of pounds, a source told The Times when the suit was filed in 2021.

An AstraZeneca spokesperson said the company was "pleased" with the decision. GSK plans to look at "next steps," a spokesperson told Reuters.

The case involves technology Tesaro licensed from AZ 11 years ago in the development of PARP inhibitor Zejula.

While Tesaro claimed that the royalty was payable only on sales for uses covered by the licensed patents, AZ maintained, according to court documents, that the royalty should be calculated based on total sales of Zejula.

More than a decade later however, PARP inhibitors are under scrutiny. Last year, the FDA persuaded drugmakers to pull their PARP inhibitor approvals in late-line ovarian cancer, including GSK’s for Zejula.

Later this month, the FDA will gather an advisory committee of external experts to review AZ and Merck’s application for Lynparza in metastatic castration-resistant prostate cancer.