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7 February 2023AmericasLiz Hockley

USITC to investigate potential section 337 breach in trade secrets case

Viking alleges Chinese competitor stole information relating to metabolic disorders drug.

The US International Trade Commission (USITC) is set to investigate whether a section 337 breach has taken place following allegations that Chinese firm  Ascletis Bioscience stole trade secrets from California-based rival  Viking Therapeutics.

In a lawsuit filed in December last year, Viking said that Ascletis  had stolen trade secrets related to its leading drug candidate, VK2809, following the two firms discussing a potential collaboration. VK2809 is a selective thyroid hormone receptor-beta agonist, designed to treat metabolic disorders.

Section 337 of the Tariff Act (1930) declares the infringement of US intellectual property to be an unlawful practice in import trade, as well as other unfair acts in the importation and sale of products in the US “the threat or effect of which is to destroy or substantially injure a domestic industry or prevent the establishment of such an industry”.

The Commission will investigate Viking’s allegations based on the importation into the US of certain thyroid hormone receptor-beta agonists, processes for manufacturing or relating to the same, and products containing the same by reason of misappropriation of trade secrets.

Viking claims that, six months after accessing its trade secrets, Ascletis’ CEO started a sister company, Gannex Pharma, to develop and sell a drug that was in direct competition with VK2809. According to the lawsuit, “Gannex Pharma secretly began filing several Chinese and United States patent applications that improperly contained certain of Viking VK2809 trade secrets”. Gannex says its drug was developed in-house using proprietary technology.

Viking has requested that the USITC issue a limited exclusion order and cease and desist orders.

Evidentiary hearing

In a press release issued on February 3, the USITC iterated that the investigation did not mean it had made any decision on the merit of the case. One of the USITC’s administrative law judges will now schedule an evidentiary hearing and make an initial judgment on whether a breach of section 337 has taken place, subject to a review by the Commission.

Viking Therapeutics is a clinical-stage biopharma company developing drugs for metabolic and endocrine disorders. These include VK2809, “a novel, orally available, small molecule selective thyroid hormone receptor beta agonist for the potential treatment of lipid and metabolic disorders, which is currently being evaluated in a Phase 2b study for the treatment of biopsy-confirmed non-alcoholic steatohepatitis (NASH) and fibrosis”, according to the firm.

The defendants in the lawsuit Viking has initiated are listed as Ascletis Bioscience, Gannex Pharma, Ascletis Pharmaceuticals, Ascletis Pharma, and Jinzi Jason Wu.

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