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Novartis Claims It Overpaid Genentech $210M In Patent Licensing Pact

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Novartis Claims It Overpaid Genentech $210M In Patent Licensing Pact
  • Novartis AG (NYSE: NVS) said it dutifully paid millions to Genentech as part of a patent licensing deal dated back to 2005. 
  • But now, Novartis discovered it accidentally overpaid by nearly $210 million to Roche Holding AG's (OTC: RHHBY) unit.
  • The dispute was launched by Novartis in a California state court but recently shifted to a federal court.
  • The payments stemmed from a 2005 licensing agreement Genentech struck with then Chiron Corporation related to its antibody patents. 
  • Novartis picked up Chiron a year later and developed several commercial antibody products from the pact, notably Ilaris and Cosentyx, the suit says.
  • "Genentech was aware or should have been aware that Novartis had overpaid ... to Genentech throughout the term of the Agreement," Novartis lawyers wrote. "By mistake, Novartis overpaid ... to Genentech on its drug products, Ilaris and Cosentyx, to which Genentech was not entitled.
  • Instead of alerting Novartis of the overpayments, Genentech continued to "seek, accept, and retain" the funds, even though they weren't entitled to them, Novartis argued in the filing.
  • While terms of the initial licensing deal weren't disclosed, Novartis maintains it "performed all or substantially all of its obligations" under the agreement and later learned of the overpayments after it expired. 
  • Price Action: NVS shares are down 0.57% at $91.77, and RHHBY shares are down 0.3% at $47.34 during the market session on the last check Tuesday.
 

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Posted-In: BriefsBiotech News Health Care Contracts Legal General

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