On December 20, 2018 Merus N.V. (Nasdaq:MRUS), a clinical-stage immuno-oncology company developing innovative bispecific antibody therapeutics (Biclonics), reported a settlement of all pending patent litigation and administrative proceedings between Merus and Regeneron Pharmaceuticals, Inc. pertaining to certain antibody generation platforms of each company (Press release, Merus, DEC 20, 2018, View Source;p=RssLanding&cat=news&id=2381425 [SID1234532208]).

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As part of the settlement, both parties have signed a global patent cross-license agreement, and Regeneron has agreed to provide an investment in Merus of $15 million through the purchase of 600,000 common shares at a price of $25 per share representing a premium of 118% from the close of trading on December 20, 2018. The cross-license and stock purchase are being made in conjunction with the dismissal of all claims to approximately $10.5 million for the reimbursement of attorney fees and other expenses, plus interest, awarded to Merus by the trial court on July 10, 2018. The settlement marks the end of all adversarial proceedings.

"This settlement marks the conclusion of a multi-year and multi-jurisdiction dispute," said Ton Logtenberg, Ph.D., President and Chief Executive Officer of Merus. "Today’s agreement to resolve these matters in an amicable manner is a positive result, and we believe, continues to ensure that Merus is able to further advance our Biclonics platform to discover and develop differentiated bispecific antibody therapeutics for cancer patients in need."

Under the terms of settlement, all worldwide patent proceedings related to the parties’ respective antibody generation platforms have been resolved. Under the global patent cross-license agreement, the parties have granted certain royalty-free rights to each other, while maintaining the uniqueness of their respective platform technologies. Neither party is licensed to exploit the other party’s products.

The settlement also resolves a pending Dutch proceeding of a related counterpart patent, which has been stayed since 2014, and a number of opposition proceedings in multiple jurisdictions the parties have outstanding.

"Merus’ platform technology and associated patents reflect the Company’s ongoing groundbreaking work in the field of bispecific antibody generation and development," said Peter B. Silverman, J.D., EVP and General Counsel of Merus. "This settlement further validates the strength of our IP portfolio and our ability to develop innovative Biclonics candidates."

Both parties have agreed to keep details relating to the global settlement confidential, other than what is disclosed in this press release or is otherwise required to be disclosed by law.

About U.S. Patent No. 8,502,018 (‘018 patent) Litigation
In March 2014, Regeneron filed a complaint against Merus alleging that it infringed one or more claims in the U.S. Patent No. 8,502,018 (‘018 patent), entitled "Methods of Modifying Eukaryotic Cells." Merus filed counterclaims seeking, among other things, a declaratory judgment that Merus did not infringe the ‘018 patent, that the ‘018 patent was invalid and a declaratory judgment of unenforceability of the ‘018 patent on the basis that the patent was procured by inequitable conduct. Merus prevailed at the trial court on these counterclaims. Regeneron stipulated to non-infringement and invalidity of the patent following the district court’s decision on claim construction. And after a trial in June 2015, the trial court concluded that Regeneron’s ‘018 patent was unenforceable. On July 27, 2017, the Federal Circuit affirmed. On December 26, 2017, the full Federal Circuit denied Regeneron’s request to rehear the matter, and the Supreme Court denied Regeneron’s petition for certiorari on October 1, 2018, ending the case in favor of Merus.

On March 26, 2018, the trial court granted Merus’ motion for attorneys’ fees, expert fees, and costs, and on July 10, 2018, granted Merus’ motion for approximately $10.5 million plus interest. Regeneron appealed the decision to the Federal Circuit. The parties have now agreed to dismiss the appeal and the claim for fees as a result of the settlement and Regeneron’s $15 million investment in Merus.