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12 November 2018Americas

BMS company not required to pay damages in trade secrets case

A jury has said that Flexus Biosciences, a company owned by Bristol-Myers Squibb (BMS), does not need to pay damages despite being liable for trade secrets misappropriation.

The jury delivered the decision at the Superior Court of the State of Delaware (New Castle County) on Wednesday, November 7.

Incyte, a biopharmaceutical research company based in Delaware, claimed that personnel from Flexus had misappropriated Incyte’s trade secrets relating to indoleamine 2 3-dioxygenase 1 (IDO-1) inhibitors in cancer treatments.

IDO-1 inhibition is thought to have therapeutic potential in immunodeficiency, including cancer.

According to Incyte, former employee Jordan Fridman was persuaded by Flexus’s CEO, Terry Rosen, and research director, Juan Jaen, to divulge confidential information on Incyte’s IDO inhibitor research.

In 2013, Incyte had compiled sufficient clinical data to show that IDO-1 inhibition was effective in treating cancer, and Fridman had been involved in this research and development.

Incyte said that it valued its trade secrets relating to IDO-1 inhibitors in excess of $1 billion.

In 2013, Fridman gave notice that he intended to leave Inctye, but did not disclose that he was joining competitor Flexus. Until his departure in March 2014, he continued to receive confidential communications about the research.

“Fridman, in fact, requested access to confidential Incyte information relating to IDO-1 inhibitors, even though he and the defendants knew that his new employer, Flexus, would be working almost exclusively on IDO-1 inhibitor research and development”, Incyte claimed.

Inctye said that Fridman went on to make “substantive contributions” to Flexus’s programme.

In 2015, BMS purchased Flexus for $1.25 billion, and BMS announced that it was specifically interested in expanding its immuno-oncology offering with the addition of Flexus’s IDO-1 inhibitor programme.

As a result of misappropriating Incyte’s trade secrets, Flexus was able to be “enriched” in its $1.25 billion acquisition by BMS, Incyte claimed.

The company asked the court to award damages of $180 million, tripled, for the misappropriation.

Incyte also sued Fridman in separate proceedings in the Court of Chancery of the State of Delaware.

Last week, a 12-person jury unanimously found that the company, and Rosen and Jaen, did misappropriate an Incyte trade secret.

The jury agreed with Incyte that the half-life of investigational drug epacadostat (incb024360) constitutes a trade secret.

However, the defendants were not unjustly enriched as a result of this misappropriation, the jury found.

With regard to another trade secret asserted by Incyte, relating to optimising the evaluation of human immune response to a particular stimulus, the jury said that this had not been shown to be a trade secret.

The jury’s findings meant that Incyte was not able to recover damages.

An Incyte spokesperson said that the company will consider all available options, including appeal, if it is deemed appropriate.

A team of lawyers from Kirkland Ellis, led by Jim Hurst, Pat Carson, Diana Watral, Ryan Moorman and Jason Feld, represented Flexus in the dispute.

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