Bristol-Myers Squibb reaches $625M settlement with Merck in Keytruda-Opdivo patent dispute

Kenilworth, N.J.-based Merck will enter into a settlement and licensing agreement with London-based Bristol-Myers Squibb and Japan-based Ono Pharmaceutical Co., following a patent dispute with its blockbuster cancer drug Keytruda, reports Reuters.

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Here are three things to know.

1. Bristol-Myers Squibb and Ono co-developed the cancer drug Opdivo. In September 2014, the two drugmakers filed a lawsuit against Merck, claiming sales of Keytruda, a similar type of cancer drug, infringed on their patents in the U.S. and parts of Europe.

2. Through the settlement, Merck will pay $625 million to Bristol-Myers Squibb and Ono, along with a 6.5 percent royalty rate on Keytruda sales from January 2017 to December 2023, according to the report. After 2023, Merck will pay a 2.5 percent in royalties for the following three years.

3. Bristol-Myers Squibb will receive 75 percent of the royalties, with Ono receiving the other 25 percent.

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