Last year, Bristol-Myers Squibb (NYSE:BMY) spent $74 billion for Celgene and its mixed bag of commercial and clinical-stage drugs. Analysts are still arguing about whether the big pharma overpaid, but last month a jury helped tip the scales in Bristol's favor by ordering Gilead Sciences (NASDAQ:GILD) to pay Bristol $752 million in damages for infringing on patents that Celgene acquired years earlier.
In a recently filed motion, Bristol-Myers asked a federal judge in California to include punitive damages that would raise Gilead's penalty to $1.5 billion to include punitive damages along with compensation and a royalty rate of 27.6% on Yescarta sales.
Bristol-Myers Squibb's argument
According to Bristol-Myers, the Kite Pharma subsidiary that Gilead acquired for $11.9 billion in 2017 willfully infringed on patents that Juno Therapeutics licensed from Memorial Sloan Kettering Cancer Center. While $752 million is a princely sum, it only covers the amount Juno might have received if Kite had agreed on a licensing arrangement for the patent Yescarta infringed upon.
Bristol-Myers, would like to see Gilead pay punitive damages equal to the compensation already owed because the jury's verdict shows that Kite, and later Gilead knew Yescarta would infringe and avoided striking a costly deal with Juno and Sloan.
Gilead's subsidiary has requested a do-over because it wasn't allowed sufficient time to prepare its full case to the jury and the list of grievances continues to pile up.
Kite claims the patent at the heart of the argument lacked adequate written description and enablement. Kite also wants to argue that the patent involved claims more chimeric antigen receptors than Sloan and Juno actually invented.