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Daiichi Sankyo willfully infringed Seagen patent in creating Enhertu, court rules

A Texas federal court has determined that Daiichi Sankyo willfully infringed a Seagen patent in creating its breast cancer drug Enhertu. But it will not enhance a $41.8 million award resulting from a jury trial in April.

Daiichi Sankyo of Japan acknowledged this week’s result in a Tuesday statement. The original award was based on a calculation of royalties Daiichi owed for the infringement. Now it is up to the court to decide whether Seagen is due future royalties until expiration of the patent in November of 2024.

Daichii said it will “continue to vigorously defend its rights and explore available post-trial motions and remedies to contest the judgment and damages awarded to Seagen.”

In question is U.S. Patent 10,808,039, which covers antibody drug conjugates, an area that Seattle biotech Seagen has pioneered.

The case has been closely watched given the buyout talks between Seagen and Merck, a deal that analysts say could exceed $40 billion. If future royalties are awarded for sales of the potential blockbuster drug, Seagen’s value would increase.

Daiichi partners with AstraZeneca on Enhertu, which racked up sales of $558 million in the United States in 2020 and 2021. The original royalties award to Seagen was determined to be 7.5% of that amount.

AZ paid Daiichi $6.9 billion to help commercialize the treatment, which is likely to garner additional approvals.

Two months ago, Enhertu won FDA approval as a second-line treatment for HER2-positive metastatic breast cancer. That came after a 2019 nod for third-line use in the same indication. In 2021, Enhertu also scored approval as a second-line option for HER-2 positive gastric cancer.

And earlier this year, the companies reported impressive trial data that could open up a brand-new breast cancer category, offering HER2-targeted therapy for many patients with HER2-negative disease. Enhertu showed a 50% reduction in the risk of disease progression or death and a 36% reduction in death in certain patients.

It all adds up to a blockbuster in the making. Enhertu now bears a 2024 sales estimate of around $2.5 billion, with some bullish industry watchers projecting peak sales above $4 billion.