Merck, Bristol-Myers and Ono Pharmaceutical agree to settle Keytruda patent suit

As part of the settlement and license agreement, all claims in the relevant legal proceedings will be dismissed, and the companies have granted certain patent rights to each other.

Merck will pay royalties on global Keytruda sales of 6.5% between 2017 and the end of 2023 and 2.5% between 2024 and 2026,

The royalties will be split between Bristol-Myers and Ono in a 75/25 percent allocation, respectively.

Merck said the $625m payment would be recorded in its fourth-quarter and full-year 2016 results, but excluded from its non-GAAP results.

Merck chairman and CEO Kenneth Frazier said: “Today’s announcement eliminates uncertainty and enables us to continue to focus on Keytruda, our immuno-oncology medicine, which is already helping thousands of patients around the world and becoming a foundation for the treatment of cancer through our industry-leading clinical development program.”

Bristol-Myers Squibb and Ono discovered and developed the programmed death-1 (PD-1) antibody Opdivo (nivolumab) to harness the body’s own immune system to help restore anti-tumor immune response.

The companies accused that Merck’s sale of Keytruda infringed their patents regarding the use of PD-1 antibodies for the treatment of cancer in the US, Europe, Australia, and Japan.

Bristol-Myers Squibb CEO Giovanni Caforio said: “Bristol-Myers Squibb and Ono’s agreement with Merck protects our scientific discoveries and validates the strong intellectual property rights we secured as the early innovators in the science of PD-1, a key mechanism in Immuno-Oncology that has proven to have transformational impact in cancer care.”

Image: Keytruda (pembrolizumab) Injection 100 mg. Photo: courtesy of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc.