Ionis Pharmaceuticals Inc. (NASDAQ: IONS) led biotech stocks early on Wednesday following a key patent dispute win in the U.S. court system. The company announced that a jury in the U.S. District Court, Northern District of California found in favor of Merck & Co. Inc. (NYSE: MRK) and Ionis in a patent dispute related to Gilead Sciences Inc. (NASDAQ: GILD) sofosbuvir-based medicines for the treatment of hepatitis C virus, including Sovladi and Harvoni.
The jury found in favor of Merck and Ionis upholding all claims from the two patents in the case, including two methods and eight composition of matter claims. Both Ionis and Merck are co-inventors on the patents that serve as the basis for the dispute.
However, this trial is not exactly over yet and could get even worse for Gilead. In the next phase of the trial, the jury in the case will consider the amount of damages to be paid to Merck by Gilead as compensation for its past and future infringement.
Ionis is the big winner in this whole situation as it will receive 20% of the damages awarded to Merck that exceed the costs Merck incurred to conduct the litigation, and Ionis will also receive 20% of all future payments.
Stanley T. Crooke, chairman and CEO of Ionis, commented:
Ionis is an expert in developing novel nucleic acids for use as therapeutic agents. We used our expertise in a 1998 collaboration with Merck to discover and develop modified nucleosides that benefit patients with HCV. The patents derived from our work with Merck are another example of the strong intellectual property portfolio we have created around our pioneering work in antisense drug technology. The verdict today confirms the validity and value of the intellectual property covering the nucleoside analogs and methods we and Merck invented to treat HCV.
Shares of Ionis closed Tuesday up 2.8% at $41.75, with a consensus analyst price target of $57.33 and a 52-week trading range of $30.93 to $71.50. Following the announcement, the stock was up over 11% at $46.49 in early trading indications on Wednesday.
Merck shares closed Tuesday up 0.4% at $53.03, with a consensus price target of $61.11 and a 52-week range of $45.69 to $61.70.50. Early Wednesday, the stock was up 2% at $54.14.
Shares of Gilead closed Tuesday up 1.1% at $93.72, with a consensus price target of $115.10 and a 52-week range of $81.89 to $123.37. In early trading indications, the stock was down 2% at $91.68.
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