Sanofi coughs up $180M to settle Pompe disease royalty payment dispute

As Sanofi's Pompe disease franchise fuels its growth in rare diseases, the company has inked a $180 million settlement related to a license for a key medicine.

Sanofi Genzyme has agreed to shell out $180 million to resolve a disagreement on royalty payments related to a Pompe license in the U.S. and Europe, Taiwanese company CSRC Group recently said (Chinese).

The investment firm is the owner of Synpac, which is the licenser of Sanofi’s Lumizyme, an enzyme replacement therapy for Pompe disease, past Genzyme securities filings show. In the first nine months of 2021, the drug's sales grew by 8.4% at constant currencies to 749 million euros ($842 million).

Researchers at Duke University originally discovered Lumizyme, which is also known as Myozyme, thanks to efforts by Taiwanese scientist Yuan-Tsong Chen and colleagues.

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After getting its hands on the intellectual property, Synpac signed on Genzyme to develop the drug in 2000. Genzyme is supposed to pay Synpac royalties on net sales of Lumizyme ranging from the mid-single digits to mid-teens depending on patent coverage in a specific country, a previous Genzyme securities filing shows. The Sanofi unit also pays Duke a low-single-digit royalty for the drug.

But in 2019, Genzyme launched an arbitration request to the American Arbitration Association, arguing its Myozyme royalty payment obligations for the European market should have ended March 6, 2018, rather than July 10, 2021, according to CSRC. The Sanofi unit followed in February 2020 with a separate case for the U.S. patent, moving to end payments July 10, 2021, rather than the originally stated patent expiry date of Feb. 26, 2023.

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Considering the time and cost of a litigation process as well as the uncertainty over the arbitration outcome, the CSRC board decided to settle the dispute. Under the deal, Sanofi will pay the firm $180 million, the Taiwanese company said in a recent statement.

Lumizyme is currently the largest asset in Sanofi’s rare disease portfolio; the drug’s third-quarter sales of 266 million euros marked a 10.4% increase at unchanged exchange rates, driven by new patients coming onto treatment.

In August, Sanofi introduced another Pompe therapy, Nexviazyme, in the U.S. for late-onset disease. The French pharma has an ongoing phase 3 trial evaluating the long-term enzyme replacement therapy in infantile-onset Pompe disease.