[Ip-health] Roche, Gilead Tamiflu dispute resolved; revised deal agreed

[James Love]

The royalties reported here are pretty high, but it is not entirely clear
what the royalty base is (before or after costs?), since it is "net
sales," and references to "cost of goods adjustments."  Note that Gillead
is now particpating in negotiations with third party manufacturers.
Jamie

* The two companies will also establish a joint committee to oversee the
coordination of global manufacturing - including the consideration of
third party licenses for manufacturing - and a joint committee to
coordinate the commercialization of Tamiflu for seasonal sales in the most
important markets.


http://www.forbes.com/markets/feeds/afx/2005/11/16/afx2339778.html

AFX News Limited
Roche, Gilead Tamiflu dispute resolved; revised deal agreed UPDATE
11.16.2005, 02:32 AM

(updates with background, details on new agreement, payments to Gilead)

ZURICH (AFX) - Roche Holding AG and Gilead Sciences Inc said that they
have ended their dispute related to influenza drug Tamiflu, seen as the
most effective treatment against so-called bird flu.

Gilead owns the patent on Tamiflu and Roche bought the exclusive worldwide
rights some 10 years ago. It accused the Swiss company of not doing enough
to make and market the drug.

Under a new agreement, Roche has now agreed to waive the pre-existing
contractual cost of goods adjustments from all future royalty
calculations.

Gilead's royalty on net sales of Tamiflu is unchanged and will range from
14-22 pct, depending on the volume of sales in each year.

Based on actual sales for the first nine months of 2005 and estimated
pandemic sales for the fourth quarter, Gilead anticipates receiving a
blended royalty for Roche's full year 2005 Tamiflu sales in the range of
18-19 pct.

As a result, Roche will also pay Gilead 62.5 mln usd in retroactive
royalty adjustments, and Gilead will retain 18.2 mln that had been paid by
Roche under protest in respect of disputed royalty calculations for sales
in the period from 2001-2003.

The two companies will also establish a joint committee to oversee the
coordination of global manufacturing - including the consideration of
third party licenses for manufacturing - and a joint committee to
coordinate the commercialization of Tamiflu for seasonal sales in the most
important markets.

'The redefined agreement with Gilead is an important step. Together, Roche
and Gilead will be able to focus their efforts even more on making sure
that the needs for this medicine can be met, both for the treatment and
prevention of seasonal influenza as well as for the worldwide stockpiling
for pandemic plans,' Roche pharma head William Burns said.

afx.zurich@afxnews.com

scs/hjp/jfr



--
James Love
http://www.cptech.org mailto:james.love@cptech.org
mobile +1.202.361.3040

--
James Love
http://www.cptech.org mailto:james.love@cptech.org
mobile +1.202.361.3040