GMAB - Genmab's claims dismissed by arbitral tribunal in Darzalex royalty feud with J&J

2023-04-21 06:55:13 ET

Genmab ( GMAB ) announced an award in the second arbitration arising under a license agreement with Johnson & Johnson's ( NYSE: JNJ ) unit Janssen Biotech over cancer drug daratumumab, sold as Darzalex.

Genmab said the arbitral tribunal dismissed its claims on the basis that they should have been brought in the first arbitration. One of the three arbitrators dissented.

Genmab noted that its dismissed claims were a claim for milestone payments linked to the subcutaneous formulation of daratumumab (SC daratumumab, marketed as Darzalex Faspro in the U.S.); and a claim for a new 13-year royalty term, on a country-by-country basis, from the date of the first commercial sale of SC daratumumab in each such country.

Genmab added that it has the right to seek review of the award, within a limited time. The company is currently considering its options.

As per the license agreement, the arbitration was conducted before a tribunal of three arbitrators. But Genmab noted that it has the right to seek review of the award, before a single 'appeal arbitrator,' within a limited time.

Genmab said its financial outlook and the milestone payments were not included in its financial guidance reported on Feb. 22.

In April 2022, Genmab ( GMAB ) had said that the arbitral tribunal ruled in favor of Janssen in both matters related to royalty payments.

On the first issue, the tribunal determined that Janssen's obligation to pay royalties to Genmab extended through the expiration or invalidation of the last-to-expire relevant Genmab-owned patent covering the product or use but not the relevant Janssen-owned patent.

Meanwhile, on the second issue the tribunal ruled that Janssen is permitted to continue reducing its royalty payments to Genmab as an offset against a share of Janssen's royalty payments made to Halozyme Therapeutics ( HALO ).

Janssen pays royalty to Halozyme for using Halozyme's enzyme technology used in Darzalex Faspro in the U.S.

The issue was that Janssen had reduced its royalty payments to Genmab by what it claimed to be Genmab's share in the royalty payments to Halozyme, which began in Q2 2020 and continues.

GMAB -0.25% to $40.59 premarket April 21

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