GSK to get $1.25 bln to settle HIV drug patent row with Gilead

HIV medicines developed by ViiV, in which Pfizer (PFE.N) and Japan’s Shionogi (4507.T) also hold small stakes, are a major part of GSK’s plan to support its lagging pharmaceuticals business as it readies to spin off its consumer healthcare arm.

A view shows GlaxoSmithKline headquarters in London, Britain, January 17, 2022. REUTERS/Hannah McKay

The payment is expected to be made in the first quarter this year, London-listed GSK said. Gilead will also pay a 3% royalty until 2027 on sales of Biktarvy and on future U.S. sales of any product containing its main component.

The settlement weighed on Gilead’s fourth-quarter results on Tuesday as its profit missed market expectations. read more

Shares of GSK were up 0.7% at 1,656p by 0821 GMT on Wednesday, while Gilead closed down 3.6% on Tuesday.

Gilead’s Biktarvy, which combines three HIV medicines in a single daily tablet, poses the biggest competitive challenge for GSK’s ViiV and is one of Gilead’s top selling treatments, bringing in sales of $7.05 billion in 2021 from the U.S. market.

Cumulative U.S. sales of Biktarvy until 2027 are estimated to be about $50 billion, Jefferies analysts said, adding that royalties worth roughly 1.5 billion pounds ($2 billion) can be expected for ViiV overall.

While Gilead is the leading supplier of HIV treatments, GSK has been working on challenging its dominance by focusing on longer-lasting treatments, like the two-drug regimen Dovato, to bring down the numbers of medicines patients have to take.

On Tuesday, U.S. regulators expanded the use of ViiV’s Cabenuva injection, taken once every two months, to include virologically suppressed adults with HIV without prior treatment failure or resistance to cabotegravir or rilpivirine.

($1 = 0.7390 pounds)

Reporting by Pushkala Aripaka and Jahnavi Nidumolu in Bengaluru and Ludwig Burger in Frankfurt; Editing by Krishna Chandra Eluri and Arun Koyyur

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