Genmab (GMAB) said an arbitral tribunal has ruled in favor of Johnson & Johnson's (NYSE:JNJ) Janssen Biotech in both matters related to royalty payments under their license agreement related to cancer drug daratumumab.
On the first issue, the tribunal determined by majority opinion that Janssen’s obligation to pay royalties to Genmab on sales of licensed product, in each applicable country, extends through the expiration or invalidation of the last-to-expire relevant Genmab-owned patent covering the product or use but not the relevant Janssen-owned patent.
Denmark-based company said the relevant Genmab-owned issued U.S., European and Japanese patents will expire in the late 2020s and early 2030s.
On the second issue the tribunal ruled by majority opinion that Janssen is permitted to continue reducing its royalty payments to Genmab (GMAB) as an offset against a share of Janssen’s royalty payments made to Halozyme Therapeutics (HALO).
Janssen pays royalty to Halozyme for using Halozyme's enzyme technology used in the subcutaneous formulation of daratumumab (marketed as Darzalex Faspro in the U.S.).
The issue here was that Janssen had reduced its royalty payments to Genmab (GMAB) by what it claimed to be Genmab’s share in the royalty payments to Halozyme, which began in Q2 2020 and continues.
Genmab (GMAB) said it has the right to seek review of the award issued by the tribunal. Such review should conclude with the issuance of a final award prior to the end of 2022. The company noted that it was considering its options.
Genmab (GMAB) added that its 2022 financial guidance remains unchanged as it had already assumed that Janssen would continue to withhold what it claims to be the company's share of Janssen’s royalty.
Genmab (GMAB), however, noted that its collaboration with Janssen, including relating to daratumumab, will continue.