It appears GSK won’t have to fork over extra Zejula royalties to AstraZeneca after all, thanks to an appeals court victory in the companies’ long-running U.K. legal dispute.
The rival PARP makers have been duking it out in court since 2021, when AstraZeneca filed a lawsuit seeking a larger share of Zejula sales. Tesaro, the cancer drugmaker that initially launched Zejula, licensed technology from AZ to aid in its development of the drug, which was approved in 2017.
GSK brought Tesaro and its Zejula into its fold for $5.1 billion early in CEO Emma Walmsley’s tenure, marking the start of a greater focus on oncology at the British drugmaker.
In its lawsuit, AZ accused GSK of violating the license agreement between Tesaro and AZ and maintained that its royalties should be calculated based on Zejula’s total sales, while GSK claimed that the royalty payments only apply to sales from specific indications covered by the licensed patents. The two were largely at odds over the wording and interpretation of the license agreements.
The High Court of Justice Business and Property Court of England and Wales sided with AZ in April after dissecting the agreements, ordering GSK to pay royalties on all Zejula net sales “in each country in which there are licensed patents from that first commercial sale in that country,” Justice Jonathan Richards ruled.
The win could have amounted to hundreds of millions of pounds for AZ, a source told The Times back when the suit was first filed.
GSK fought back with its appeal early this year. The three-judge panel on the U.K. civil court of appeals was unanimously swayed by the company’s argument, finding Tesaro’s interpretation of the license agreements to be “the correct one,” Lord Justice Richard Arnold noted in the court’s recent judgment.
“We welcome the Court’s decision,” a GSK spokesperson said in an emailed statement. “Throughout this litigation, GSK has focused on making Zejula available for patients around the world, whilst investigating its potential to treat other cancers.”
AstraZeneca, meanwhile, is “disappointed” in the decision and is “considering its options,” a company representative said over email.