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Vectura surges as it wins US$90mln patent battle with GlaxoSmithKline

GSK has been ordered to pay US$89.7mln after its Ellipta inhalers were found to have breached Vectura’s patents
Vectura took GSK to court in 2016 after the latter chose not to renew its licensing deal

Shares in Vectura Group PLC (LON:VEC) surged in early deals on Tuesday after the drugmaker came out on top in a patent battle with UK giant GlaxoSmithKline PLC (LON:GSK).

Vectura was awarded US$89.7mln by a US court in Delaware, which found that GSK’s Ellipta inhalers had infringed on its patents.

READ: Hikma and Vectura to develop generic version of GSK’s Ellipta inhaler

The award is equal to a 3% royalty on sales of Ellipta products between August 2016 and December 2018, and Vectura is now looking to guarantee that it receives that same rate for another two years.

It might not be done there, though: the court ruled that GSK’s infringement was “wilful”, clearing the way for Vectura and its lawyers to seek “enhanced damages”.

“Although we regret the need to take a longstanding partner to court, we are pleased with the jury's verdict which confirms the validity of our intellectual property and the decision to progress this action with GSK,” said Vectura chief executive James Ward-Lilley.

Shares in Vectura jumped 11% to 80.2p on Tuesday morning. GSK’s stock was down 0.4% to 1,547p.

Dispute goes back to 2016

The dispute goes back to July 2016, when an original deal between the two companies expired and was due for renewal.

GSK had licensed Vectura’s open-inhale-close technology to use in its Ellipta inhalers since 2010, but it declined to renew the deal in 2016 when the original agreement ran out.

Vectura, which is now developing a rival product to Ellipta with Hikma Pharmaceuticals PLC (LON:HIK), said it was left with no choice but to take its long-term partner to court, and the case went to trial last month.

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