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.
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