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23 June 2021Big PharmaAlex Baldwin

Pharma company fails to block €140m licence payment

Taiwanese pharmaceutical company PharmaEssentia Corporation (PEC) has failed to convince a district court judge to throw out a €140 million award to AOP Orphan Pharmaceuticals (AOP).

AOP filed a lawsuit against PEC in the US District Court for the District of Massachusetts in November 2020, alleging that the company breached a licensing contract for a rare blood cancer treatment.

PEC moved to adjourn this case until a related case between the two parties taking place in Germany—which it had petitioned to set aside—had been resolved. Failing this, it looked to dismiss the case for lack of personal jurisdiction and insufficient service of process.

Judge Mark Wolf said that the adjournment was “inappropriate” as the German court had already denied the motion to set aside that PEC was relying on for its adjournment case.

It also dismissed, with prejudice, the petition for lack of personal jurisdiction and insufficient service of process.

In response to the PEC’s request to adjourn, AOP had petitioned for judicial discovery if the court found it had not shown sufficient jurisdiction and moved to strike an affidavit filed by PEC.

Wolf wrote that PEC’s allegations, alongside its supporting affidavits, “creates a colourable claim that jurisdiction exists” but also denied AOP’s motion to strike the affidavit.

Licensing Dispute

Litigation began between the two pharma companies after they entered a licence and manufacturing agreement to develop and market a treatment for rare blood cancer.

The agreement was for PEC to produce the product and AOP develop and sell it in Europe, the Middle East and North Africa regions.

In March 2018 AOP requested arbitration before the International Chamber of Commerce regarding the contracts, alleging four breaches of contract from December 2011 through July 2019 concerning delays by PEC.

The Chamber tribunal ruled in favour of AOP and awarded it €142,221,201.

Case history

AOP filed the lawsuit against PharmaEssentia in Massachusetts in November 2020, seeking confirmation and enforcement of the arbitration award and judgment.

It also asked the court to order PEC to carry out the award “without delay” and to enforce an ex parte temporary restraining order and preliminary injunction prohibiting PEC from transferring its US patents.

In December 2020, the district court denied AOPs motion for a restraining order, claiming that such orders could not be issued under Federal Rule of Civil Procedure 64 due to prior case law in Grupo Mexicano v All Bond Fund.

In response, AOP filed a motion for equitable attachment pursuant to Procedure 64 and a motion to seal proceedings until PEC was notified of the motion for equitable attachment, which the court allowed.

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