Janssen Partner Genmab Loses Arbitration Over Darzalex Royalties

Johnson & Johnson's JNJ Janssen has won an arbitration against Genmab A/S GMAB on two matters related to their licensing pact for multiple myeloma drug Darzalex (daratumumab).
The first issue around daratumumab arose because Janssen announced a deal with Halozyme Therapeutics Inc (NASDAQ: HALO) to develop a subcutaneous formulation of daratumumab.
According to Janssen, Genmab must share in its royalty payments to Halozyme — representing a mid-single-digit percentage rate of sales — so Janssen could cut out its royalty payments to Genmab.
The three-person arbitration tribunal ruled that Janssen can continue to do that as an offset for its payment to Halozyme.
On the second issue, which concerns whether Janssen's obligation to pay royalties to Genmab extends until Genmab-owned patents expire or until Janssen-owned patents expire, the tribunal determined that the line should be drawn at "the expiration or invalidation of the last-to-expire relevant Genmab-owned patent."
According to Genmab, the relevant US, European and Japanese patents will expire in the late 2020s and early 2030s.
Genmab can seek a review of the award that should conclude with issuing a final award before the end of 2022. Genmab is currently considering its options.
Price Action: GMAB shares are down 3.06% at $37.39 during the market session on the last check Friday.