GlaxoSmithKline Says Gilead, ViiV Healthcare Settle Patent Dispute Over HIV Drug

GlaxoSmithKline plc (GSK,GSK.L) announced settlement between ViiV Healthcare and Gilead Sciences resolving litigation relating to Gilead's Biktarvy and ViiV's dolutegravir patents. As per the settlement, Gilead will make an upfront payment of $1.25 billion to ViiV Healthcare in the first quarter of 2022.

ViiV Healthcare is the global specialist HIV company majority-owned by GSK, with Pfizer and Shionogi & Co. Limited as shareholders.

ViiV Healthcare, GSK and Shionogi alleged that Gilead's Biktarvy, a triple combination HIV medicine containing the HIV integrase inhibitor bictegravir, tenofovir alafenamide and emtricitabine, infringed certain of their patents relating to dolutegravir, an antiretroviral medication used, together with other medicines, to treat human immunodeficiency virus (HIV).

As a result of the settlement, patent infringement cases in the US, UK, France, Ireland, Germany, Japan, Korea, Australia, and Canada will be discontinued, GlaxoSmithKline said in a statement.

ViiV Healthcare, GSK, Shionogi and Gilead have entered into a global settlement agreement and a patent license agreement under which Gilead has been granted a worldwide licence to certain ViiV Healthcare patents relating to dolutegravir and a covenant not to enforce any patents controlled by ViiV Healthcare, GSK or Shionogi against Gilead in connection with any past or future claims of infringement relating to Biktarvy.

ViiV Healthcare, GSK and Shionogi have also agreed not to enforce their patents against any future product containing bictegravir, to the extent that the patent enforcement relates to the bictegravir component of the product.

As per the terms of the global settlement and licensing agreement, Gilead will make an upfront payment of $1.25 billion to ViiV Healthcare which is expected in the first quarter of 2022.

In addition, Gilead will also pay a 3% royalty on all future US sales of Biktarvy and in respect of the bictegravir component of any other future bictegravir-containing products sold in the US. The royalties will be payable by Gilead to ViiV Healthcare from 1 February 2022 until the expiry of ViiV Healthcare's U.S. Patent on 5 October 2027.

Gilead's obligation to pay royalties does not extend into any period of regulatory paediatric exclusivity, if awarded. Regulatory paediatric exclusivity would extend the period of exclusivity after the expiry of the '385 patent by six months from 5 October 2027 to 5 April 2028.

According to GSK, the upfront payment and royalty income will be distributed in proportion to the ordinary shareholding in ViiV Healthcare (GSK 78.3%, Pfizer 11.7%, Shionogi 10%) net of the contingent consideration liability to Shionogi and applicable tax.

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