- A misstep by a Merck scientist prompts the judge to reopen the patent dispute between Merck (MRK +0.1%) and Gilead Sciences (GILD -0.4%). During the first trial, in which Merck was awarded $200M, the jury found that Gilead infringed on two Merck patents covering hep C med sofosbuvir, the active ingredient in Sovaldi and one of the active ingredients in Harvoni.
- A key witness was retired Merck scientist Phil Durette, who testified that he made early scientific advancements that led to sofosbuvir. Merck, however, considered buying Pharmasset which Gilead eventually acquired in November 2011 for $11B. During its diligence, Merck representatives conducted a conference call with Pharmasset, a call Durette was on, but told jurors that he was not. Unsurprisingly, Merck denies that jurors were deliberately misled and maintains that his testimony did not equate to the conduct of the company. Judge Labson Freeman believes the matter should be sorted out in court.
- Merck originally wanted a 10% royalty on the ~$21B Gilead generated from sales of the two drugs. The jury settled on a 4% royalty on $5B in sales, deducting Gilead's overall investment of $15B.
- Previously: Gilead Sciences ordered to pay $200M to Merck in patent case (March 24)
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Update: Mr. Durette appears to be a patent attorney, not a retired scientist. Gilead asserts that he misrepresented his position on the telephone call with Pharmasset and violated confidentiality provisions when he prosecuted one of the patents after he realized Pharmasset was close to developing sofosbuvir.