Daiichi Sankyo Reaches $182M Settlement with Novartis in Tafinlar Patent Case

Plexxikon, a subsidiary of Daiichi Sankyo, and Novartis have settled a patent infringement suit against over the sale of Novartis’ cancer drug Tafinlar in the U.S. Under the settlement announced Wednesday, Plexxikon will receive an estimated lump sum payment of $182 million.

The settlement will result in the dismissal of Novartis’ appeal and “full satisfaction of the judgment entered against Novartis.”

The U.S. District Court for Northern California issued an order in 2021 sustaining a jury verdict in favor of Plexxikon, which found that Tafinlar had infringed upon several of Plexxikon’s U.S. patents. The court had initially ordered Novaritso to pay over $177 million in damages and a 9% royalty on U.S. drug sales until the patents expire.

Novartis decided to appeal the case in 2022 in the U.S. Court of Appeals for the Federal Circuit. Tafinlar, in combination with Mekinist, brought in over $480 million in sales for Novartis in the third quarter of 2023.

Plexxikon’s case claimed that its patents, which are for compounds that reduce cancer cell growth, were developed in 2005 which the company eventually co-developed the melanoma drug Zelboraf with Roche. In 2011, Plexxikon had received approval for Zelboraf. GSK traded the drug to Novartis in 2015, applied its Tafinlar patents in 2008 and secured approval in 2013.

However, in 2017, Plexxikon filed suit against Novartis, claiming the Swiss pharma had infringed on two patents that covered Zelboraf. Novartis countered that Plexxikon’s patents were invalid due to the three GSK compounds that preceded the patents. However, a jury decided that Novartis could not prove these claims.

Daiichi Sankyo said it will receive a lump sum payment of around 26.4 billion Yenfrom Novartis. The Japanese pharma will mark this as “temporary income” on its financial disclosure sheets. Daiichi Sankyo also noted that the settlement has not been put into its economic forecasts for its fiscal year ending on March 31, 2024.

Plexxikon was shut down in 2022 as Daiichi Sankyo chose to focus on developing its antibody-drug conjugates.