California Court Orders Biogen to Pay Royalties for Tysabri Sales
A California federal judge has ruled in favor of Genentech, awarding the Roche subsidiary $124 million in royalties from Biogen. The payment relates to the use of Genentech’s patented antibody manufacturing technology, known as the Cabilly patents.
Background of the Dispute
The Cabilly patents, developed over four decades ago, form the foundation for producing monoclonal antibodies. These antibodies are key components in drugs like Tysabri, used to treat multiple sclerosis and Crohn’s disease.
Genentech filed a breach of contract lawsuit in 2023. The company alleged that Biogen failed to pay royalties on Tysabri vials produced before the patents expired in December 2018 but sold afterward, with some sales extending as late as 2022.
Court Ruling and Financials
Judge Yvonne Gonzalez Rogers sided with Genentech. The court ordered Biogen to pay $88 million in royalties. An additional $36 million in interest was included, bringing the total to $124 million. The judge highlighted that such “tail royalties” are common practice in the biopharma industry.
Significance of the Cabilly Patents
The Cabilly patents have been central to multiple legal battles over the years. Notably, the 2007 U.S. Supreme Court case MedImmune, Inc. v. Genentech, Inc. confirmed that licensees can challenge a patent’s validity while the license is active.
This ruling emphasizes the long-lasting impact of the Cabilly patents. Licensing agreements and royalty obligations in the biopharma sector continue to hinge on these foundational patents.
Industry Impact
The decision may influence how pharmaceutical companies handle post-expiration sales and royalties. Experts note that tail royalties are critical for compensating original patent holders for continued use of their innovations.