Daiichi Sankyo and Seattle Genetics Headed to Court

Daiichi Sankyo is taking Seattle Genetics to court over the technology the two companies used to develop antibody-drug conjugates during a partnership that spanned seven years. At the core of the argument is a drug candidate that means billions of dollars for the Japan-based company and Seattle Genetics believes it is entitled to a share.

In March, Daiichi Sankyo and AstraZeneca signed a development and commercialization deal for an ADC called trastuzumab deruxtecan (DS-8201) that had its background in the partnership between Daiichi Sankyo and Seattle Genetics. DS-8201 is the lead compound in the ADC franchise of the Daiichi Sankyo Cancer Enterprise and targets HER2-expressing cancers. In addition to the partnership with AstraZeneca, Daiichi Sankyo’s compound is being paired with multiple flagship drugs from companies like Bristol-Myers Squibb and Merck. In March, AstraZeneca paid Daiichi Sankyo $1.35 billion in upfront monies as the U.K. company sees significant potential for DS-8201 as a treatment for HER2-positive breast and gastric cancers. If certain developmental and regulatory milestones are hit, Daiichi Sankyo could receive up to $6.9 billion from the deal with AstraZeneca.

Seattle Genetics believes it is entitled to a share of that money. DS-8201 had its genesis in Seattle Genetics’ cytotoxin and linker technology from that collaborative relationship the two companies had from 2008 to 2015. When Daiichi Sankyo and AstraZeneca signed the deal, Seattle Genetics communicated its belief that its intellectual property was used in the development of DS-8201, which makes it the rightful owner of the drug that is potentially worth billions of dollars. Daiichi Sankyo disagrees with that notion and is taking the company to court over it.

This week, Daiichi Sankyo filed a Declaratory Judgement in response to a communication from Seattle Genetics. Daiichi Sankyo said any claim to certain intellectual property rights for DS-8201 by Seattle Genetics has no merit. In a brief announcement this week, the company said it will “vigorously defend its position that our ADC technology patents are the exclusive intellectual property of Daiichi Sankyo.”

Between July 2008 and June 2015, Seattle Genetics and Daiichi Sankyo collaborated in an exclusive, worldwide development agreement focused on ADCs which are distinct from ADC products currently being developed in the Daiichi Sankyo pipeline, the Japanese company said in its announcement.

In response, Seattle Genetics disagreed with the assessment made by Daiichi Sankyo and said that DS-8201 as well as other product candidates, “rightfully belong to Seattle Genetics” under terms of the agreement the two companies struck in 2008.

“The linker and other ADC technology used in these drug candidates are improvements to Seattle Genetics’ pioneering ADC technology, the ownership of which are automatically assigned to Seattle Genetics under the terms of the agreement,” Seattle Genetics said in response to Daiichi Sankyo. “Seattle Genetics is committed to protecting the company’s intellectual property rights as it continues to find revolutionary new treatments for cancer patients.”