Gilead defeats U.S. government in big patent trial centered on HIV drugs

A federal jury on Tuesday found in favor of Gilead Sciences Inc. over the U.S. Government in a long and contentious battle for control of three patents pertaining to two important HIV-fighting medications.

The ruling means that Foster City-based Gilead, (NASDAQ: GILD), did not violate the intellectual property rights behind the use the drugs Truvada or Descovy to prevent the spread of HIV through sex. Gilead was sued by the government in U.S. District Court, Delaware for more than $1 billion.

Truvada and Descovy combined last year generated more than $2 billion in revenue, both as a PrEP and a therapeutic drug for people with HIV.

Gilead's stock gained $0.20 in after-hours trades, despite the fact that it was up by 0.27% on Tuesday, to $78.80.

Gilead released a statement in which it said that the decision "confirms the long-held belief that we always had the right to make Truvada for PrEP and Descovy available to those who needed it."

Truvada, an oral antiretroviral drug, combines tenofovir dioproxil fumarate (or TDF) and emtricitabine (or FTC); Descovy, an oral combination of FTC and Tenofovir Alafenamide (or TAF), is a combination FTC.

The U.S. Patent for Truvada expires 2021, while the patent for Descovy is set to expire in 2031. Gilead has been working with HHS and Centers for Disease Control and Prevention on PrEP research for more than 15 year, including researchers from the University of California San Francisco and Gladstone Institutes affiliated with UCSF.

Gilead asked the Patent Trial and Appeal Board in August 2019 to rule on a few patents it claimed were assigned to them by the federal Department of Health and Human Services. Three months later, the U.S. Department of Justice brought a lawsuit claiming that the sale of Truvada and Descovy as PrEP infringed the HHS Patents and Gilead had not compensated the CDC when they discovered that Truvada can be used for PrEP.

Gilead has filed a lawsuit for breach of contract against the federal Government in April 2020. Gilead claims that the Federal government violated two clinical trial agreements and three material transfer agreements relating to the research behind the patents.

The company claimed that doctors and patients used Truvada and Descovy for HIV prevention years before HHS submitted its patents. The company won a case in late 2013 at the U.S. Court of Federal Claims, which found that the government had violated three material transfer agreements.