PDL BioPharma settles litigation with Genentech and Roche

US drugmaker PDL BioPharma (Nasdaq: PDLI) has entered into an agreement with Genentech and its parent, Swiss drug major Roche (ROG: SIX), resolving all outstanding legal disputes between the parties relating to alleged unpaid royalties going back to 2007.

Under the terms of the accord, effective retroactively to August 15, 2013, Genentech will pay a fixed royalty rate of 2.125% on worldwide sales of Avastin (bevacizumab), Herceptin (trastuzumab), Lucentis (ranibizumab), Xolair (omalizumab), Kadcyla (ado-trastuzumab emtansine) and Perjeta (pertuzumab), compared to the previous tiered royalty rate in the USA and the fixed rate on all ex-USA based manufactured and sold licensed products. Under the deal, Genentech and Roche confirm that Avastin, Herceptin, Lucentis, Xolair and Perjeta are licensed products as defined in the relevant license agreements between the parties, and further agree that Kadcyla is a licensed product.

Genentech will pay these royalties on all worldwide sales of Avastin, Herceptin, Xolair, Perjeta and Kadcyla occurring on or before December 31, 2015. With respect to Lucentis, Genentech will owe no royalties on US sales occurring after June 30, 2013, and will pay a royalty of 2.125% on all ex-US sales occurring on or before December 28, 2014.