A federal jury has awarded Nektar Therapeutics $90 million in damages after finding the pharmaceutical giant breached the implied covenant of good faith and fair dealing in a license agreement between the two companies. The verdict, handed down Thursday, closes out a bitter courtroom fight over the development of an experimental immune-system drug called rezpegaldesleukin.
What The Jury Decided
The jury, in the U.S. District Court for the Northern District of California, concluded that Eli Lilly breached its obligations under the companies' rezpegaldesleukin license agreement. Jurors awarded Nektar $90 million in damages, with additional interest still to be set by the court. As Grafa notes, Nektar had alleged breach of contract and other claims against Eli Lilly stemming from the collaboration.
Nektar Therapeutics has said the verdict remains subject to post-trial proceedings and potential appeals, meaning the case is not yet fully resolved. The trial itself began September 8, according to the same TipRanks account, and wrapped with Thursday's verdict.
How The Dispute Began
Nektar first filed its complaint against Eli Lilly in the Northern District of California in August 2023, court records reviewed by Justia show. The case was docketed as 3:2023cv03943.
The roots of the fight stretch back nearly a decade. Nektar and Eli Lilly began collaborating on developing and commercializing rezpegaldesleukin in 2017, with Lilly paying $150 million upfront at the outset of the partnership, according to MedCity News. The license agreement covered rights and obligations tied to the drug candidate, which Nektar developed through that partnership.
The collaboration did not survive intact. Eli Lilly returned its rights to rezpegaldesleukin, along with raw clinical data, back to Nektar in April, according to Fierce Biotech. That outlet reports the collaboration agreement has since been terminated, leaving Nektar with full control over the drug and the ability to continue developing it independently.
Market Reaction And What Comes Next
Investors took notice of the verdict almost immediately. Nektar Therapeutics shares, which trade on Nasdaq under the ticker NKTR, rose 3.6% in premarket trading Friday following news of the award, per Investing.com. Eli Lilly trades on the New York Stock Exchange under the ticker LLY.
Nektar describes itself as a biopharmaceutical company that develops drug candidates using its own proprietary technologies, with a focus on immunology and oncology, according to TipRanks. The company's broader pipeline targets medicines for cancer, autoimmune diseases, and inflammatory disorders.
For now, the $90 million figure stands as a jury verdict rather than a final judgment. The district court still must determine how much additional interest Eli Lilly owes on top of the damages award, and the outcome could still shift through post-trial motions or an appeal.
