A U.S. appeals court on Thursday threw out a $1.2 billion ruling against Gilead Sciences Inc (GILD.O), finding a patent on a cancer therapy it was accused of infringing was invalid, in a blow to rival Bristol Myers Squibb Co (BMY.N).
The two companies have been embroiled in a case involving accusations that Yescarta, the CAR-T cell cancer immunotherapy from Gilead’s Kite Pharma unit, infringed on a patent for a similar therapy from Bristol’s Juno Therapeutics.
Last year, a federal judge increased the damages from a jury trial and ordered Gilead to pay Bristol Myers $1.2 billion in the patent infringement case. The ruling on Thursday by the U.S. Court of Appeals for the Federal Circuit reversed the decision.
Bristol Myers in a statement said it disagreed with latest ruling and would seek a review of the Federal Circuit’s decision.
Gilead and Kite’s attorney Josh Rosenkranz of Orrick Herrington & Sutcliffe did not immediately respond to a request for comment.
Gilead shares were up 0.3%, while Bristol shares were off 0.5% in midday trading.
The Gilead drug, Yescarta, belongs to a class of cutting-edge cancer treatments known as chimeric antigen receptor T-cell therapy, or CAR-T, which reprograms the body’s own immune cells to recognize and attack malignant cells.
Gilead bought Kite Pharma, which developed Yescarta, for $11.9 billion in 2017, with the treatment securing U.S. approval that year. It recorded sales of $338 million in the first six months of this year.
A jury in 2019 found that Kite willfully infringed and awarded Juno and Memorial Sloan Kettering Cancer Center in New York, which licenses the patent to Juno, $778 million. U.S. District Judge Philip Gutierrez increased the award to $1.2 billion in Los Angeles federal court last year.
Memorial Sloan Kettering did not immediately respond to a request for comment.
Bristol Myers acquired Juno and its CAR-T program with its $74 billion purchase of Celgene in 2019.
Chief U.S. Circuit Judge Kimberly Moore wrote for a unanimous three-judge panel that the relevant parts of Juno’s patent were invalid because they lacked a sufficient written description and details.
Moore was joined by Circuit Judges Sharon Prost and Kathleen O’Malley in the ruling.
During a July oral argument, Moore compared the patent’s description to trying to identify a specific car by saying it has four wheels.