Just days before heading to court, Incyte and Novartis have reached a settlement in their long-running dispute over royalties tied to the blockbuster drug Jakafi.
The trial, which was scheduled to begin on May 5, was called off after both companies agreed to a resolution. According to court documents, they filed a joint request with U.S. District Judge Gregory H. Woods to delay the proceedings while finalizing the settlement.
The disagreement dates back to a 2009 licensing deal that gave Novartis rights to sell Jakafi outside the United States. In return, Incyte was set to receive up to $1.1 billion in milestone payments and ongoing royalties. But in 2020, Novartis sued, accusing Incyte of failing to meet its royalty obligations.
Novartis claimed that Incyte slashed royalty payments by 50% starting in 2021 and planned to stop paying them altogether after that. At the time of the lawsuit, Novartis said Incyte owed $27.5 million, including interest.
From Novartis’s perspective, Incyte grew from a $9 million-a-year company into a pharmaceutical heavyweight thanks in large part to the Jakafi partnership—and then tried to “rewrite the deal” once it found success.
Jakafi has continued to be a major earner. Incyte reported $2.7 billion in sales from the drug last year, including $418 million in royalties. Novartis brought in $1.9 billion from its Jakafi-related business during the same period but didn’t report any royalty revenue.
The agreement between the two companies doesn’t include Opzelura, Incyte’s newer topical version of Jakafi.
Looking ahead, Incyte is preparing for life after Jakafi, which is set to lose U.S. market exclusivity in 2028. The company is now turning its attention to other drugs, including Monjuvi, a treatment it previously co-developed with MorphoSys before buying full commercial rights. Novartis, meanwhile, has acquired MorphoSys’s entire clinical pipeline for $2.9 billion.
