US court orders Guardant Health to pay $245 million for cancer patent infringement

A federal judge has finalized a judgment ordering pharma giant Guardant Health to pay more than $245 million to Seattle-based biotech startup TwinStrand Biosciences and the University of Washington for willfully infringing on patented DNA sequencing technology. The final order, entered in the U.S. District Court for the District of Delaware, formalizes an initial November 2023 jury verdict against Guardant. In addition to the upfront payout, the ruling guarantees TwinStrand and the university an ongoing 6% royalty on covered Guardant products through the expiration of the patents in March 2033. TwinStrand was spun out of the University of Washington in 2015 to commercialize the platform. Among its co-founders is molecular biologist and oncologist Dr Jesse Salk—grandson of polio vaccine developer Jonas Salk—who served as CEO until 2022 and now co-leads cancer diagnostics firm CytoTerra. Since its founding, TwinStrand has drawn backing from prominent venture firms, including Madrona Venture Group, Soleus Capital, and Section 32, the latter of which led a $50 million Series B round in 2021. The dispute centers on 'Duplex Sequencing,' a breakthrough method developed at the University of Washington that increases the accuracy of next-generation DNA sequencing by more than 10,000-fold. By eliminating standard sequencing errors, the technology allows clinicians and researchers to detect ultra-rare genetic mutations critical for early cancer detection and monitoring. The jury found that Guardant incorporated this proprietary technology without a license across 11 diagnostic products and services, including its flagship Guardant360, Guardant Reveal, and Guardant Shield tests. Following the verdict, the Delaware court denied Guardant's motions to overturn the decision or grant a new trial. "Duplex Sequencing solved an accuracy problem the sequencing field had worked on for years, and this judgment affirms the jury’s finding that Guardant Health built products on that invention without a license," said Chad Waite, chair of TwinStrand’s board of directors. "We remained steadfast in our conviction that the facts would prevail, and they have." The $245.2 million total includes: $83.4 million in original jury-awarded damages for infringement through June 2023; $119.4 million in accrued royalties; $22.9 million in interest; and $19.5 million in supplemental damages. Guardant Health says that it will appeal Guardant Health announced that it will appeal the final judgment from the U.S. District Court for the District of Delaware related to intellectual property claims brought against Guardant by TwinStrand Biosciences, Inc. and University of Washington, with execution of the final judgment and collection of potential royalties stayed pending appeal. “We strongly disagree with this decision and will promptly be appealing for its overturn,” said John Saia, Guardant Health Chief Legal Officer. “We have full faith in the strengths and merits of Guardant’s intellectual property and R&D and are confident we will ultimately prevail on appeal.” Importantly, the order published regarding the scope of royalties expressly defined the products included as those that existed at the time of the trial in 2023, many of which have been discontinued or significantly upgraded. Based on Guardant’s updated technology the current versions of Guardant Reveal and Shield are excluded from the order and potential royalties. In addition, the company has validated design improvements to Guardant360 and related services that would exclude impact of the potential ongoing royalties in the decision. Guardant remains confident that it did not infringe the asserted patents. Both TwinStrand patents have been preliminarily invalidated in the company’s ongoing challenges before the U.S. Patent and Trademark Office. Separately, Guardant is pursuing appeals before the US Court of Appeals for the Federal Circuit.