The settlement, announced by GSK on Tuesday, relates to Gilead’s antiretroviral drug Biktarvy, a medicine used to check the AIDS-causing virus, which GSK said in 2018 infringed on its unit ViiV Healthcare’s dolutegravir and other similar compounds.
HIV medicines developed by ViiV, in which Pfizer and Japan’s Shionogi also hold small stakes, are a major part of GSK’s plan to support its lagging pharmaceuticals business as it readies to spin off its consumer healthcare arm.
The payment is expected to be made in the first quarter this year, London-listed GSK said. Gilead will also pay a 3 percent royalty until 2027 on sales of Biktarvy and on future U.S. sales of any product containing its main component.
The settlement weighed on Gilead’s fourth-quarter results on Tuesday as its profit missed market expectations.
Shares of GSK were up 0.7 percent at 1,656p by 0821 GMT on Wednesday, while Gilead closed down 3.6 percent on Tuesday.
Gilead’s Biktarvy, which combines three HIV medicines in a single daily tablet, poses the biggest competitive challenge for GSK’s ViiV and is one of Gilead’s top-selling treatments, bringing in sales of $7.05 billion in 2021 from the U.S. market.
Cumulative U.S. sales of Biktarvy until 2027 are estimated to be about $50 billion, Jefferies analysts said, adding that royalties worth roughly 1.5 billion pounds ($2 billion) can be expected for ViiV overall.
While Gilead is the leading supplier of HIV treatments, GSK has been working on challenging its dominance by focusing on longer-lasting treatments, like the two-drug regimen Dovato, to bring down the numbers of medicines patients have to take.
On Tuesday, U.S. regulators expanded the use of ViiV’s Cabenuva injection, taken once every two months, to include virologically suppressed adults with HIV without prior treatment failure or resistance to cabotegravir or rilpivirine.
($1 = 0.7390 pounds)
By Pushkala Aripaka