Novartis to Pay Nearly $178 Million in Patent Infringement Lawsuit

A jury in the Northern District of California recently awarded Plexxikon, Inc. $177.8 million in the lawsuit against Novartis. The jury found that the rival pharmaceutical company had infringed upon two patents held by Plexxikon.

Dani Alexis Ryskamp, J.D.

Written by
— Updated on August 6, 2021

Novartis to Pay Nearly $178 Million in Patent Infringement Lawsuit

The Case Between Novartis and Plexxikon

In 2005, Plexxikon began developing compounds intended to slow the growth of cancer cells in some types of skin cancer. Plexxikon later applied for and was granted patents for the compounds. In partnership with Roche Pharmaceuticals, Plexxikon went on to help develop the skin cancer treatment Zelboraf using the patented technology.

In 2017, Plexxikon filed a complaint for patent infringement against Novartis Pharmaceuticals Corporation. Within the Novartis lawsuit, Plexxikon argued that Novartis’s cancer drug Tafinlar infringes on Plexxikon’s patent.

Both Zelboraf and Tafinlar target cancer cells with a BRAF V600E mutation. Plexxikon argued that its patents focused on the development of a class of “BRAF kinase inhibitors. The inhibitors selectively bind to the BRAF kinase that results from the V600E mutation.” Both Plexxikon and Roche’s Zelboraf and  Novartis’s Tafinlar contain this feature.

Novartis acquired Tafinlar in an asset swap with GlaxoSmithKline. The Plexxikon suit claims the GlaxoSmithKline scientists gained access to its patented information during potential partnership talks between the companies. A partnership or licensing deal never emerged. However, Plexxikon claims GlaxoSmithKline used the information exchanged during those talks to create Tafinlar in violation of Plexxikon’s patent rights.

Plexxikon claims that GlaxoSmithKline filed its first patent application in May 2008. The timing, and the similarity of the drugs, contribute to the “substantial evidence to suggest” GlaxoSmithKline improperly copied Plexxikon’s work. Plexxikon filed for patent protection in 2005 and received approval for Zelboraf in 2011. On the other hand, GlaxoSmithKline received approval of its 2008 patent filing for Tafinlar in 2013.

Potential Implications of the Novartis Lawsuit

In July 2021, the jury returned a verdict in favor of Plexxikon after deliberating for less than a day. The jury’s response included an award of damages to Plexxikon nearing $178 million.

The case is in some ways a David versus Goliath scenario for the pharmaceutical industry. In 2011, Daiichi Sankyo acquired Plexxikon. Nevertheless, the company remains a small oncology developer, particularly when compared to pharmaceutical giants like GlaxoSmithKline and Novartis.

Similarly, Novartis’s Tafinlar has captured a much larger market share than Plexxikon and Roche’s Zelboraf. In 2016, for instance, Tafinlar earned more than three times in sales versus what Zelboraf earned. In 2020, Novartis sold over $1.5 million of Tafinlar by combining it with Mekinist, another cancer medication Novartis owns. The Tafinlar/Mekinist combination gives physicians another option for treating patients with the BRAF mutation. These patients have unresectable or metastatic melanoma. In addition, the medication can treat patients with metastatic non-small cell lung cancer with the BRAF V600E mutation.

Why Such a Large Award?

The case focused on issues surrounding genus patents. The patents not only protect the development of a specific compound or molecule but also closely-related compounds or molecules.

“Genus patents—like those in the lawsuit—are routinely used to prevent competitors from knocking off our scientific innovations with slight molecular changes,” said Plexxikon CEO Chao Zhang.

In Plexxikon’s claim against Novartis in the lawsuit, the jury found that GlaxoSmithKline had in fact violated Plexxikon’s genus patent. The jury found that GlaxoSmithKline’s own BRAF kinase inhibitor, present in Tafinlar, closely resembled Plexxikon’s work.

The jury’s verdict did not only represent the finding that Novartis’s Tafinlar infringes on Plexxikon’s patents. The verdict also shows the reality of Novartis’s marketing power and the space it occupies in the pharmaceutical industry. In its complaint, Plexxikon noted that Tafinlar is eroding sales of Zelboraf by competing directly with the latter drug. This resulted in losses for Plexxikon in precisely the manner that patent protection is intended to address. The jury’s verdict represents an understanding that Plexxikon’s patents protect a vital interest in the development of new medication compounds.

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