Kite Pharma (Gilead) and their CAR-T therapy Yescarta violated a patent from Memorial Sloan Kettering Cancer Center (MSKCC), which was licensed to BMS’ Juno Therapeutics and to MSKCC. A federal jury finds Kite must pay $752 million. Gilead paid $11.9 billion for the drug in 2017. Something is terribly wrong in this picture.

What is the Court?

The U.S. District Court for the Central District of California in Los Angeles

What is the Jury Order?

Kite Pharma must pay Juno Therapeutics (BMS) $752 million and New York’s Memorial Sloan Kettering Cancer Center because Kite’s Yescarta  (axicabtagene ciloleucel) violated an MSKCC patient that Juno licensed.

What is the Award Breakdown?

$585 million in damages and 27.6% of running royalty on sales of Yescarta—which was $264 million in 2018. Gilead acquired Kite for $11.9 billion in 2017.

What is the Patent in Question?

U.S. Patent No. 7,446,190, concerning the processes used to encode T cells with chimeric antigen receptors or CARs, costimulatory domains and various components enabling them to target CD19—a protein widely expressed on the surface of various blood cancer cells.

When did Yescarta win Approval by the FDA?

October 2017, as a treatment for diffuse large B-cell lymphoma, a form of non-Hodgkin’s lymphomas.

When will Juno file for its Approval?

Juno will submit a new drug application (NDA) for its lead product candidate lisocabtagene maraleucel by the end of this year.

Was Kite aware of the Patent Claims?

Yes. In fact, MedCityNews reported that back in August, 2015 they sought to invalidate the claims in a 190 patent by filing an Inter Partes Review then. The Patent Trial and Appeal Board upheld its decision. So, Kite sought a way to circumvent the situation and thereafter inked an alliance with National Cancer Institute researchers. It is alleged (and apparently a jury agrees) that Kite used MSKCC’s patented research to develop its own CAR-T construct—Yescarta—which was called KTE-C19 at the time.

Gilead Overpaid

Gilead made a blunder of a move as it turns out. Why would it pay so much money for a venture with a contested patent? What was it thinking? Of course, it has its own tango with the government over question around the use of CDC patent.

Brian Skorney, an analyst with Baird, noted that “The market for CAR-T therapies simply does not seem to be large enough to support the high price Gilead paid for Kite and the [cost of goods sold] now (should this order hold) are likely to make any future margin close to non-existent.”

Source: MedCityNews

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