- Bristol-Myers Squibb (NYSE:BMY) and Ono Pharmaceutical Company, Ltd. reach a global patent settlement with Merck (MRK) related to cancer med Keytruda (pembrolizumab). BMY and Ono claimed that Keytruda, a PD-1 antibody, infringed on their patents related to the use of PD-1 antibodies [BMY's is Opdivo (nivolumb)] to treat cancer in the U.S., Europe, Australia and Japan.
- Under the terms of the settlement, Merck will make an initial payment of $625M to BMY and Ono and pay a 6.5% royalty on Keytruda sales from January 1 of this year through the end of 2023 followed a 2.5% royalty from January 1, 2024 through 2026. BMY and Ono will share the royalties on a 75/25 basis, respectively.
- The companies have also granted each other certain rights under their respective patent portfolios related to PD-1.
- Inhibiting PD-1, an immune system checkpoint, enhances the immune system's anti-tumor response. Opdivo was the first such antibody to receive regulatory approval anywhere in the world.
- BMY is up a fraction after hours while MRK is unchanged.