Merck Announces Settlement and License Agreement Resolving KEYTRUDA® (pembrolizumab) Patent Litigation


January 20, 2017 4:01 pm ET

Merck (NYSE:MRK), known as MSD outside the United States and Canada),
and certain of its affiliates, today announced it agreed to enter into a
settlement and license agreement with Bristol-Myers Squibb Company and
Ono Pharmaceutical Co., Ltd., resolving the worldwide patent
infringement litigation related to the use of an anti-PD-1 antibody for
the treatment of cancer, such as KEYTRUDA® (pembrolizumab).

Under the settlement and license agreement, the company will make a
one-time payment of $625 million to Bristol-Myers Squibb and provide
royalties on the worldwide sales of KEYTRUDA for a non-exclusive license
to market KEYTRUDA in any market in which it is approved. For global net
sales of KEYTRUDA, the company will pay Bristol-Myers Squibb royalties
as follows:

  • 6.5 percent of net sales occurring from Jan. 1, 2017 through and
    including Dec. 31, 2023; and
  • 2.5 percent of net sales occurring Jan. 1, 2024 through and including
    Dec. 31, 2026.

The parties also agreed to dismiss all claims in the relevant legal

“Today’s announcement eliminates uncertainty and enables us to continue
to focus on KEYTRUDA, our immuno-oncology medicine, which is already
helping thousands of patients around the world and becoming a foundation
for the treatment of cancer through our industry-leading clinical
development program,” said Kenneth C. Frazier, chairman and chief
executive officer, Merck.

The $625 million payment will be recorded in the company’s
fourth-quarter and full-year 2016 results. This expense will be excluded
from Merck’s non-GAAP results.

About Merck

For more than a century, Merck has been a global health care leader
working to help the world be well. Merck is known as MSD outside the
United States and Canada. Through our prescription medicines, vaccines,
biologic therapies and animal health products, we work with customers
and operate in more than 140 countries to deliver innovative health
solutions. We also demonstrate our commitment to increasing access to
health care through far-reaching policies, programs and partnerships.
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Forward-Looking Statement of Merck & Co., Inc., Kenilworth, N.J., USA

This news release of Merck & Co., Inc., Kenilworth, N.J., USA (the
“company”) includes “forward-looking statements” within the meaning of
the safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. These statements are based upon the current beliefs
and expectations of the company’s management and are subject to
significant risks and uncertainties. If underlying assumptions prove
inaccurate or risks or uncertainties materialize, actual results may
differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry
conditions and competition; general economic factors, including interest
rate and currency exchange rate fluctuations; the impact of
pharmaceutical industry regulation and health care legislation in the
United States and internationally; global trends toward health care cost
containment; technological advances, new products and patents attained
by competitors; challenges inherent in new product development,
including obtaining regulatory approval; the company’s ability to
accurately predict future market conditions; manufacturing difficulties
or delays; financial instability of international economies and
sovereign risk; dependence on the effectiveness of the company’s patents
and other protections for innovative products; and the exposure to
litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise. Additional factors that could cause results
to differ materially from those described in the forward-looking
statements can be found in the company’s 2015 Annual Report on Form 10-K
and the company’s other filings with the Securities and Exchange
Commission (SEC) available at the SEC’s Internet site (

Pamela Eisele, 267-305-3558
Claire Gillespie, 267-305-0932
Teri Loxam, 908-740-1986
Amy Klug, 908-740-1898

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