For years, Novartis said it dutifully shelled out tens of millions to Genentech as part of a patent licensing deal that dated back to 2005. Later, the Swiss pharma discovered it accidentally overpaid by nearly $210 million.
Those are the central arguments in a lawsuit filed by Novartis against its Swiss pharma counterpart seeking $209.5 million. In the suit, which recently made its way to California federal court, Novartis says Genentech isn't coughing up the dough.
Novartis claims Genentech was aware, or at least should’ve known, that the company was overpaying the entire time.
The payments stemmed from a 2005 licensing agreement Genentech struck with then Chiron Corporation related to its antibody patents. Novartis picked up Chiron a year later and developed several commercial antibody products from the pact, notably immunology meds Ilaris and Cosentyx, the suit says.
RELATED: Novartis hits setback in bid to block Regeneron's Eylea prefilled syringe as dual lawsuits drag on
Instead of alerting Novartis of the overpayments, Genentech continued to “seek, accept, and retain” the funds driven by Ilaris and Cosentyx sales, even though they weren’t entitled to them, Novartis argued in the filing.
While terms of the initial licensing deal weren't disclosed, Novartis maintains it “performed all or substantially all of its obligations” under the deal and later learned of the overpayments after it expired.
Meanwhile, lawyers representing Genentech dismissed Novartis’ claims in a filing seeking to move the case from state to federal court, arguing the claims fall under federal patent law.
The companies weren’t immediately available for comment.
Cosentyx, which first launched in 2015, directly inhibits interleukin-17A (IL-17A), an important cytokine involved in the inflammation of psoriatic arthritis, moderate to severe plaque psoriasis, ankylosing spondylitis and non-radiographic axial spondyloarthritis.
The treatment has become Novartis’ largest brand, driving $3.9 billion in sales last year, up 13% compared with the year prior.
Meanwhile, sales of IL-1beta inhibitor Ilaris came in at roughly $873 million, up 30%. Despite efforts to push the medicine, also known as canakinumab, into fields outside immunology, Novartis has run into multiple setbacks, including in heart disease, COVID-19 and, most recently, non-small cell lung cancer.