A jury on Monday awarded a non-profit hospital $300 million in compensatory damages at the end of a 10-month battle over unpaid royalties with a pioneering US biotechnology firm.
A Los Angeles jury ruled that San Francisco-based Genentech Inc. must pay $300,1 million to the City of Hope National Medical Centre after the firm broke a promise to pay royalties on drugs based on the hospital’s research.
City of Hope had asked for $457 million in royalties on the drugs licensed by Genentech. The jury will return to court on June 17 to decide punitive damages against the biotech company.
The hospital had alleged that Genentech had deliberately
concealed license agreements that required the firm to pay a 2% royalty for the use of the drugs developed through the hospital’s research.
The drugs – including human insulin, human growth hormone and Hepatitis C treatments – have generated almost $32 billion in sales, but Genentech argued that it had already paid all the royalties it owed City of Hope.
The hospital had alleged that Genentech had flouted a section of a 1976 pact requiring it to pass on royalties earned from other companies that licensed the drug technology.
Those licenses amounted to about $29 billion of the total sales of the drugs, the hospital’s attorney Morgan Chu said.
But Genentech – which was preparing a statement Monday – had claimed that sales by licensed third parties did not fall under the 1976 agreement.
Robert Van Nest, Genentech’s attorney, told the jury that the 1976 agreement clearly did not apply to third party sales.
It was the second trial of the case, following an initial trial which foundered in October when the jury failed to reach a verdict after eight days of deliberations. – Sapa-AFP