(Alliance News) - GlaxoSmithKline PLC on Wednesday said majority-owned investee ViiV Healthcare has agreed to settle a global patent infringement litigation with Gilead Sciences Inc.
The patent infringement case also involved GSK and Shionogi & Co Ltd, another shareholder in ViiV. Pfizer Inc also owns a stake in ViiV, which specialises in HIV treatments.
ViiV Healthcare will receive a payment of USD1.25 billion from Gilead in a deal to use ViiV Healthcare's patents related to the drug dolutegravir.
ViiV Healthcare, GSK and Shionogi had contended that Gilead had infringed on patents held by them for HIV treatment dolutegravir in its drug biktarvy.
The settlement agreement means patent infringement cases in numerous countries worldwide will be discontinued, and future infringement cases will not be enforced against Gilead related to biktarvy. Gilead will also pay a 3% royalty of any future US sales of biktarvy to Viiv Healthcare, until the expiration of its patents in 2027. In 2020, US sales of biktarvy were USD6.09 billion.
The USD1.25 billion will be received in the first quarter of the year, and along with the royalty payments will be distributed proportionately to ViiV Healthcare's shareholders. GSK holds 78%, Pfizer 12% and Shionogi 10%.
The upfront payment will be recorded as an adjusting item in its first-quarter income statement, said GSK, and royalty payments will be recorded in total and adjusted results for the next five years.
GSK shares were up 0.3% at 1,649.00 pence each in London on Wednesday morning.
Gilead's share price closed down 0.3% at USD68.47 in New York on Tuesday. It shed a further 3.6% in after hours trading.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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Glaxosmithkline (GSK)