AstraZeneca vs GSK: Cancer drug court battle could cost hundreds of millions

pharmafile | June 7, 2021 | News story | Sales and Marketing AstraZeneca, GSK, court 

AstraZeneca has launched a court case against Glaxo Smith Kline (GSK), in a claim that could reach hundreds of millions of pounds, over royalties of the cancer drug Zejula.

The High Court case was lodged last month as AstraZeneca claims it should have a higher cut of Zejula’s sales, as the drug was developed using AstraZeneca’s technology.  The company claims therefore, that GSK is in breach of the terms of the licensing agreement, GSK will strongly argue that the case has no merit.

Zejula is one of GSK’s highest earners, with sales rising 48% last year to £339 million, and analysts predict annual sales could surpass $2 billion. Zejula is a PARP inhibitor, which works against tumours by blocking enzymes involved in repairing damaged DNA, helping to kill cancer cells.

Last year Zejula became the first PARP inhibitor cleared for use on its own as a first-line maintenance therapy for ovarian cancer patients, who do not have a mutation of the BRCA enzyme, which occurs in about 20% of women with ovarian cancer.

Maintenance therapy is a lucrative field in drug development as the drug will be used for a longer period of time.

Since 2017, GSK has been paying royalties of less than 5% of Zejula’s sales, as the company believes the licensing agreement covers only certain uses of the PARP inhibitor. Since its launch, GSK has been expanding the use of the drug into different cancers and not paying AstraZeneca for these sales, which is the source of the High Court claim, as AstraZeneca believes it is entitled to royalties of 100% of the sales.

This is not the first time the two companies have clashed, after GSK poached key AstraZeneca staff the companies found themselves in court, eventually settling externally.

The row over Zejula comes at a complex time for both companies, with AstraZeneca already embroiled in a legal battel with the EU over its delivery of their COVID-19 vaccine, and has recently come under fire for a £18 million pay-out to its CEO, Pascal Soriot.

GSK is also struggling with doubts over its leader, Dame Emma Walmsley, alongside plans to split the company in two and plummeting share prices. Since 2017, when Walmsley took over, GSK’s share prices have fallen over 18% whilst AstraZeneca’s have risen almost 64%.

Kat Jenkins

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