An antibody-drug conjugate patent arbitration fight that Seagen waged against Daiichi Sankyo has officially ended in a win for the Japanese company.
Rather than getting any compensation from its Japanese ADC rival, Seagen, which has been consumed into Pfizer, will pay Daiichi about $47 million in attorney fees and costs plus interest, as awarded by an arbitrator, according to a Daiichi announcement (PDF) on Friday.
The high-stakes arbitration case, which centered on the ADC technology used in Daiichi’s AstraZeneca-partnered Enhertu, has officially ended; Pfizer did not appeal the decision of a federal court by a deadline.
Still, the larger ADC patent clash between Daiichi and Pfizer may not be over. In a separate lawsuit over Seagen’s so-called “’039 patent,” the U.S. Patent and Trademark Office (USPTO) in January invalided the patent, jeopardizing a previous court verdict in favor of Seagen.
Seagen’s request for a director review of the USPTO’s decision was dismissed in March, according to Daiichi.
Previously, a jury trial in Texas found Daiichi willfully infringed on the ’039 patent and awarded Seagen $41.8 million in damages. A judge later added an 8% royalty on Enhertu’s U.S. sales from April 1, 2022, to Nov. 4, 2024. Daiichi filed an appeal in November 2023.
Thanks in part to a landmark FDA approval in HER2-low breast cancer, Enhertu’s sales as reported by Daiichi jumped 91% to 396 billion Japanese yen ($2.5 billion) during the 12 months that ended in March. That figure included 226 billion yen ($1.4 billion) in U.S. sales.
As for the now-ended arbitration case, the disagreement started in late 2019. Daiichi was accused of misappropriating Seagen’s technology from a failed collaboration between the two companies from 2008 to 2015. Seagen filed the arbitration in response to Daiichi’s submission of a declaratory judgment action against Seagen upon receiving private warnings from the U.S. biotech.
In 2022, an arbitrator denied all claims made by Seagen and then in late 2023 awarded Daiichi about $45.5 million in attorney fees and costs. According to Daiichi, a federal court then denied Seagen’s petition to vacate the arbitration award and instead granted Daiichi additional interest on the previous award. Now, it appears that Pfizer didn’t appeal that court ruling.
As lawyers at Sullivan IP Solutions see it, Pfizer shouldn’t have gone to the federal court, because “an arbitrator’s award is rarely overturned,” especially as the arbitrator was a retired federal court judge who has tried numerous pharmaceutical cases, the lawyers said in a recent blog post.
Seagen should have been more vigilant in monitoring its collaborator’s activities in the first place, the Sullivan lawyers said. Besides, the fact that Seagen waited until after the FDA’s approval of Enhertu to enforce its rights gave Daiichi “an easy 6-year statute of limitations defense” because Daiichi had filed its patent applications in 2012.