Merck Settles Litigation with Bristol-Myers Squibb on Use of Antibody Targeting PD-1

Merck announced late last Friday, Jan. 20, 2016, that it will settles a patent infringement case with Bristol-Myers Squibb (BMS) and Ono Pharmaceutical regarding the use of the PD-1 inhibitor for the drug Keytruda (pembrolizumab). Merck will pay a one-time fee of $625 million to the companies, as well as percentage of sales through 2026.

BMS and Ono, who own the patent showing that the PD-1 antibody is efficacious in treating cancer, had previously said that Merck’s sale of Keytruda infringed their patents that are used to make Opdivo (nivolumab). The companies signed a global license agreement allowing Merck to continue to make and market Keytruda, and in return, BMS/Ono will end the patent litigation pertaining to Keytruda.

Opdivo was the first immune checkpoint inhibitor to receive regulatory approval “in the world” (AKA in Japan) in 2014, according to BMS-although Keytruda, Merck’s checkpoint inhibitor, was actually approved before Opdivo in the US. BMS asserted in its original complaint that Merck started developing Keytruda after BMS and Ono started making Opdivo, and that Merck had knowledge of the family of patents used for Opdivo.

Importantly, the royalties will likely span across all future indications in cancer for Keytruda. The drug is currently under investigation for the treatment of at least 15 other types of cancers. Wrote BMS, “Under the agreement, the companies have also granted certain rights to each other under their respective patent portfolios pertaining to PD-1. The royalties will be shared between Bristol-Myers Squibb and Ono in a 75/25 percent allocation, respectively.”

Sources: Merck, BMS