Justia Drugs & Biotech Opinion SummariesArticles Posted in Contracts
Merck & Co., Inc. v. Bayer AG
In 2014, Merck and Bayer entered a Stock and Asset Purchase Agreement (SAPA) whereby Merck sold, and Bayer purchased, Merck’s consumer care business and consumer care product lines, including the Claritin, Coppertone, Dr. Scholl’s, and Lotrimin foot powder product lines. The transaction closed in October 2014. Bayer paid Merck more than $14 billion. After the transaction closed, both companies were the subject of lawsuits alleging injuries arising from consumers’ use of talc-based products that Merck used in foot powder product lines sold to Bayer; asbestos allegedly contained in talcum powder has caused fatal cancers.The Delaware Court of Chancery dismissed Merck’s suit in which it argued that Bayer breached the SAPA by refusing to assume liability for the claims. Both companies, as sophisticated participants in the pharmaceutical industry, understood that consumer products businesses face potential liability for torts associated with the sale of such consumer products. The SAPA clearly and unambiguously provides that Merck indefinitely retained substantive liability for the product liability claims related to products sold before the transaction closed. Merck attempted to argue that its liability for the product liability claims ceased in 2021; the court found that interpretation contrary to the SAPA's clear and unambiguous terms. Bayer’s interpretation of the SAPA is the only reasonable one. View "Merck & Co., Inc. v. Bayer AG" on Justia Law
Amyndas Pharmaceuticals, S.A. v. Zealand Pharma A/S
The First Circuit affirmed the judgment of the district court dismissing Amyndas Pharmaceuticals, S.A.'s claims against Zealand Pharma A/S and vacated the dismissal of Amyndas's claims against Zealand Pharma U.S., Inc., holding that the district court erred in dismissing Amyndas's claims against Zealand Pharma U.S.When Amyndas was considering separate joint ventures with Zealand Pharma and Alexion Pharmaceuticals, Inc. it shared trade secrets before understanding that neither of the joint ventures would materialize. Zealand Pharma and Zealand US, its newly established affiliate, subsequently announced a partnership with Alexion Pharmaceuticals, Inc. Amyndas sued for misappropriation of trade secrets and other confidential information. The district court (1) dismissed Amyndas's claims against Zealand Pharma on the ground that Amyndas was required to litigate those claims in Denmark; and (2) dismissed Amyndas's claims against Zealand US for failure to state a claim. The First Circuit vacated in part and remanded the case for further proceedings, holding that the district court (1) correctly dismissed Amyndas's claims against Zealand Pharma; and (2) erred in concluding that Amyndas's claims against Zealand US were futile. View "Amyndas Pharmaceuticals, S.A. v. Zealand Pharma A/S" on Justia Law
Robert D. Mabe, Inc v. OptumRX
The Third Circuit vacated in part the order of the district court denying OptumRX's (Optum) motion to compel arbitration in the underlying action alleging breaches of contract and breaches of duties of good faith and fair dealing and violations of certain state statutes, holding that the district court erroneously applied the incorrect standard in ruling on Optum's motion.More than 400 pharmacies brought suit against Optum, a pharmacy benefits manager responsible for administering prescription drug programs on behalf of health-insurance plans. Optum moved to compel arbitration based on arbitration agreements found in various contracts covering the majority of the pharmacies. The district court denied the motion in full, concluding that compelling the pharmacies to proceed with arbitration would be procedurally unconscionable. The Sixth Circuit vacated the judgment in part, holding that the district court erred by not adhering to Guidotti v. Legal Helpers Debt Resolution, LLC, 716 F.3d 764 (3d Cir. 2013). View "Robert D. Mabe, Inc v. OptumRX" on Justia Law
In re: Rotavirus Vaccines Antitrust Litigation v.
Under "loyalty contracts," Physician Buying Groups (PBGs) members are entitled to discounts if they buy a large enough percentage of their vaccines from Merck. The loyalty contracts include an arbitration provision. Membership contracts between PBGs and medical practices give medical practices discounts on Merck vaccines for enrolling in PBGs. PBGs contract with both Merck and medical practices and are middlemen but PBGs never possess the vaccines. Medical practices buy their vaccines directly from Merck, receiving discounts for belonging to a PBG. The Pediatricians, members of PBGs that contracted with Merck, never signed contracts containing an arbitration clause.The Pediatricians filed federal suits alleging Merck’s vaccine bundling program was anticompetitive. Merck moved to compel arbitration. On remand, following discovery, the district court again denied Merck’s motion and granted the Pediatricians summary judgment, reasoning that the Pediatricians were not bound under an agency theory. The Third Circuit reversed. The PBG membership contract made the PBG a “non-exclusive agent to arrange for the purchase of goods and services,” and the PBG acted on this authority by executing the loyalty contract with Merck that included the arbitration clause. The Pediatricians simultaneously demonstrated intent to create an agency relationship and exercised control over the scope of the PBG’s agency by contract. View "In re: Rotavirus Vaccines Antitrust Litigation v." on Justia Law
Takeda Pharmaceuticals U.S.A. v. Mylan Pharmaceuticals, Inc.
Takeda sued Mylan for patent infringement based on Mylan’s Abbreviated New Drug Application (ANDA) for a generic version of Takeda’s Colcrys® version of the drug colchicine. The parties settled, entering into a License Agreement that allows Mylan to sell a generic colchicine product on a specified date or under circumstances defined in Section 1.2, which refers the date of a final court decision holding that all unexpired claims of the licensed patents that were asserted and adjudicated against a third party are not infringed, invalid, or unenforceable. The parties stipulated that Mylar's breach of Section 1.2 “would cause Takeda irreparable harm.”Takeda also sued Hikma based on Hikma’s FDA-approved colchicine product Mitigare®. The district court granted summary judgment of non-infringement. After Mylan launched its product, Takeda sued, alleging breach of contract and patent infringement.The Federal Circuit affirmed the denial of a preliminary injunction. Takeda failed to show it is likely to succeed on the merits or that it will suffer irreparable harm. Section 1.2(d) was triggered by the third-party litigation; all unexpired claims of the three patents that were “asserted and adjudicated” were held to be not infringed. An objective, reasonable third party would not read Section 1.2(d) to be limited to generic equivalents of Colcrys® excluding section 505(b)(2) products like Mitigare®. Because Takeda had not established that Mylan breached the Agreement, the irreparable harm stipulation did not apply. Money damages would remedy any harm Takeda would suffer as a result of Mylan launching its generic product. View "Takeda Pharmaceuticals U.S.A. v. Mylan Pharmaceuticals, Inc." on Justia Law
Robertson v. Saadat
Under California law, the donor's intent controls the disposition of his or her gametic material upon death. Plaintiff appealed the trial court's judgment sustaining demurrers to her causes of action alleged against defendants. After plaintiff's husband entered into an irreversible coma, she arranged to extract his sperm in hopes of one day conceiving a child with it. Plaintiff stored the sperm in a tissue bank that ultimately came under the control of defendants, and, ten years later, when she requested the sperm, defendants disclosed that they could not locate it. Plaintiff filed suit, alleging contract and tort claims based on the loss of her ability to have a child biologically related to her deceased husband.The Court of Appeal affirmed the trial court's judgment, holding that the complaint failed to adequately plead facts supporting tort damages. In this case, plaintiff's tort causes of action are all premised on the loss of her ability to conceive with her deceased husband's sperm. However, the court held that the complaint failed to allege facts establishing that plaintiff was legally entitled to use her husband's sperm to conceive a child after he died. In this case, plaintiff's status as his spouse did not entitle her to conceive with his sperm; absent an affirmative showing that the husband intended to allow plaintiff to conceive with his sperm, plaintiff was not entitled to do so; and thus the complaint failed to allege that it was the husband's intent that his sperm be used for posthumous conception. Finally, the court held that plaintiff cannot recover emotional distress damages on her breach of contract cause of action. View "Robertson v. Saadat" on Justia Law
Cardiorentis AG v. Iqvia Ltd.
In this action asserting claims for breach of contract and fraud the Supreme Court granted Defendants' motion to stay proceedings under N.C. Gen. Stat. 1-75.12 on forum non conveniens grounds and denied as moot all other requested relief, holding that the balance of all relevant factors showed it would be more convenient for the parties to litigate these claims in England. Plaintiff, a Swiss biopharmaceutical company, sued an English contract research organization and its North Carolina-based parent, asserting claims for, inter alia, breach of contract and fraud. Defendants filed, among other pre-answer motions, a motion seeking to stay the proceedings under section 1-72.12. The Supreme Court granted Defendants' motion to stay and denied as moot all other requested relief, holding that, after considering the convenience of witnesses, ease of access to sources of proof, applicable law, and local interest factors, this case should be stayed on forum non conveniens grounds because Defendants showed that a substantial injustice would result if this case were to proceed in North Carolina and that England was a convenient, reasonable, and fair place of trial. View "Cardiorentis AG v. Iqvia Ltd." on Justia Law
Antrim Pharmaceuticals LLC v. Bio-Pharm, Inc.
The patent for Lexapro, an anti-depressant, was expiring, creating a potentially lucrative opportunity to sell a generic version, escitalopram. BioPharm, a generic drug manufacturer, and Antrim planned to sign an updated version of the terms for a previous venture, but never signed a contract for the escitalopram venture. The FDA approved Antrim’s Abbreviated New Drug Application for escitalopram. Bio-Pharm manufactured the first batch but never shipped it to Antrim because the companies never signed a new agreement. Antrim sued Bio-Pharm for breaching an oral contract. Bio-Pharm counterclaimed, arguing promissory estoppel or breach of the claimed oral contract. Antrim unsuccessfully argued the court should preclude testimony by Bio-Pharm’s expert on how the FDA regulates ANDA holders. BioPharm successfully argued the court should preclude testimony by Antrim’s expert on industry practices and how Bio-Pharm’s alleged breach impaired the value of Antrim’s business. The court rejected Antrim’s proposed Jury Instruction that under FDA policy an ANDA holder owns the product underlying that ANDA and denied Antrim’s motion to bar Bio-Pharm from requesting lost profits in its counterclaim, despite missing the Rule 26(a)(1) disclosure deadline.A jury ruled in favor of Bio-Pharm on Antrim’s claim and in favor of Antrim on Bio-Pharm’s counterclaim. Neither party was awarded damages. The Seventh Circuit affirmed, rejecting Antrim’s challenges to the jury instructions, evidentiary rulings, and allowing Bio-Pharm to request lost profits. View "Antrim Pharmaceuticals LLC v. Bio-Pharm, Inc." on Justia Law
Quidel Corporation v. Super. Ct.
Quidel Corporation (Quidel) petitioned for a writ of mandate and/or prohibition to direct the trial court to vacate its order granting summary judgment. Quidel contended the trial court incorrectly concluded a provision in its contract with Beckman Coulter, Inc. (Beckman) was an invalid restraint on trade in violation of Business and Professions Code section 16600. In 1996, Biosite Inc. (Biosite; Quidel is the successor in interest to Biosite) licensed patent rights and know-how related to a B-type natriuretic peptide (BNP), which can be measured in a person's blood. The semi-exclusive licensing agreement allowed Biosite to develop an immunoassay to determine the level of BNP in a person's blood sample, to help diagnose congestive heart failure. After acquiring the intellectual property rights and know-how, Biosite developed and created a BNP assay for use with its point-of-care analyzer device, and it obtained regulatory approval. By 2003, Beckman had developed a laboratory analyzer, but it did not have a license for a BNP assay compatible with its analyzer. Around this same time, other companies were also pursuing BNP assays for use with their larger analyzers, which could run multiple, different immunoassays at higher volumes than the point-of-care analyzer Biosite had. Collaborating would mean Biosite could expand its customer base to those who wanted to use the larger capacity laboratory analyzers and Beckman could include the BNP assay in its menu of immunoassay offerings. Biosite and Beckman negotiated the Agreement over several months, and they exchanged numerous drafts before executing it. The Agreement prohibited Biosite from engaging other manufacturers to provide the BNP assay for their competing lab analyzers. The term of the Agreement was negotiated to coincide with the term of a related licensing agreement Biosite had with another company, Scios. Section 5.2.3 of the Agreement prohibited Beckman from researching or developing an assay that detected the presence or absence of the BNP or NT-proBNP proteins or markers for use in diagnosing cardiac disease until two years before the Agreement's expiration. Beckman sued Quidel for declaratory relief for violation of section 16600 and violation of the Cartwright Act, asking the Court to declare section 5.2.3 of the Agreement was void and unenforceable and to issue a permanent injunction preventing the enforcement of section 5.2.3 of the Agreement. Quidel argued the trial court improperly extended the holding from Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) beyond the employment context to section 5.2.3 of the Agreement. The Court of Appeal determined the trial court's per se application of section 16600 to section 5.2.3 of the Agreement between Quidel and Beckman was not correct, granted Quidel’s petition and issued a writ instructing the trial court to vacate the December 7, 2018 order granting summary adjudication on the first cause of action. View "Quidel Corporation v. Super. Ct." on Justia Law
Crowley v. EpiCept Corp.
The Ninth Circuit affirmed the district court's judgment for EpiCept in an action brought by doctors, alleging claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud. The doctors' claims relate to two patents for a non-FDA approved drug (NP-2) and EpiCept's failure to develop those patents into FDA-approved drugs. The doctors' arguments mainly center on the jury's determination that the doctors materially breached their contract with EpiCept by failing to disclose that Dr. Flores treated burn patients with NP-2. The panel held that the district court did not abuse its discretion in formulating the jury instructions, or in determining that the jury's verdict was not against the clear weight of the evidence; neither the jury instructions given in this case nor the evidence presented at trial warrant the do-over the doctors demanded; the district court's response to the jury's question also did not merit a new trial because the jury's question was essentially factual and the district court's answer appropriately directed the jury to consider its original instructions and the evidence presented at trial; and because the panel affirmed the jury's finding that the doctors materially breached the contract, the district court's exclusion of the doctor's damages expert was necessarily harmless. View "Crowley v. EpiCept Corp." on Justia Law