AstraZeneca is sued by Array BioPharma over cancer drug royalties

Array BioPharma on Thursday sued AstraZeneca, claiming the drug manufacturer refused to pay required royalties for a cancer drug after entering into an $8.5 billion collaboration with Merck. In a complaint filed in the New York State Supreme Court, Array is seeking at least $192 million from AstraZeneca for the alleged breach of a 2003 licensing agreement related to the drug, known as selumetinib. The complaint says that selumetinib is a compound discovered by Array that inhibits activity of an enzyme involved in cell growth and metabolism. Array said the 2003 agreement allowed AstraZeneca to use selumetinib in research to fight cancer, and provided for a 12% royalty on sums that AstraZeneca might receive from sub-licensees such as Merck. But according to the complaint, AstraZeneca said it intends to pay that royalty on what Array called an “absurdly small” fraction of an expected $1.6 billion upfront payment from Merck. The $192 million sought represents 12% of that payment. Both companies agreed to have disputes under the agreement decided by New York courts, the complaint said.