Array Biopharma sues AstraZeneca over drug royalties

BOULDER — Array Biopharma Inc. is suing AstraZeneca plc over royalties for a cancer drug that Array says AstraZeneca has not paid.

Boulder-based Array is seeking at least $192 million, according to a lawsuit filed with the New York State Supreme Court on Feb. 1.

The complaint says that in 2003 Array and AstraZeneca, a company based in the United Kingdom, signed a licensing agreement for the use of Array’s chemical compound, selumetinib. AstraZeneca recently acquired the former Amgen plant in Longmont, where it is in the process of preparing the site to manufacture drugs.

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Under the agreement, AstraZeneca can use selumetinib for diagnosis, treatment and prevention of cancer. The agreement also gave AstraZeneca a sublicense right, provided AstraZeneca paid a 12 percent royalty of all net proceeds from the sublicense, the complaint states.

In July 2017, AstraZeneca signed an $8.5 billion agreement with Merck to sublicense and jointly develop the selumetinib compound. The agreement included $1.6 billion up front.

The complaint says that AstraZeneca intends to pay Array only a minimal fraction of the upfront payment. The $192 million Array is seeking would be 12 percent of that $1.6 billion the company believes it is owed.

What is more, the lawsuit goes on to say that AstraZeneca is working with Merck to use selumetinib to treat a genetic disorder that is not cancer and therefore not within the scope of the license agreement AstraZeneca has with Array. The complaint said that AstraZeneca is free to seek an agreement with Array that permits the use of selumetinib for treating the genetic disorder, but until then, the additional use of the drug is not permitted.

The company previously filed a similar lawsuit on Dec. 7. This one, an Array spokesperson specified, is the same as what was filed in December, but is targeted at AstraZeneca AB, AstraZeneca’s Swedish subsidiary. It’s based on AstraZeneca’s claim that the Swedish subsidiary is the correct legal entity for Array’s dispute.

For their part, AstraZeneca said it believes it has followed the contract.

AstraZeneca believes it followed all legal and contractual requirements related to its 2003 collaboration agreement with Array,” a spokesperson emailed BizWest. “and will defend its position as part of the legal process.”