Ensure You Receive Negotiated Royalties: Understanding the Mallinckrodt Decision

The Third Circuit recently decided that Sanofi’s right to a 1% royalty on sales of Mallinckrodt’s Acthar Gel did not survive Mallinckrodt’s bankruptcy filing, denying Sanofi of any future royalties. This decision robs Sanofi of nearly $6,000,000 per year based on around $600,000,000 in sales of Acthar Gel in 2021 and 2022. The court suggested that Sanofi could have protected itself by structuring the deal as a license rather than a sale.