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Royalty War

New York University has filed a lawsuit against Pfizer in an effort to collect royalty payments it says the pharma firm owes it for a lung cancer drug and diagnostic kit, according to PharmaLive.

NYU says Pfizer owes royalties on a drug called Xalkori, a receptor tyrosine kinase inhibitor that FDA cleared two years ago to treat non-small cell lung cancer.

PharmaLive says the legal dispute is an example of a trend of fights over the proceeds from drugs and research that was performed by academia and then later by drugmakers through development deals.

Here, NYU claims that Pfizer has failed to comply with an agreement that came along with its acquisition of Pharmacia in 2003. Pharmacia bought a company called Sugen in the late 1990s that was an NYU spinout, and the royalty fees went along for the ride all the way to Pfizer, PharmaLive says.

NYU says Pfizer owes it 2.5 percent of Xalkori's sales, which were about $100 million last year and have jumped to $120 million in the first half of 2013.

Pfizer has not yet responded in court to the suit, but told PharmaLive that it believes that the allegations in the suit are without merit and it plans to respond accordingly.