Cosmo to pay Valeant $3 million in breach of contract loss

Ireland-based Cosmo Pharmaceuticals has lost a legal battle against Valeant Pharmaceuticals, costing it $3 million.

In May 2017, Cosmo filed for arbitration against Valeant under the rules of arbitration of the International Chamber of Commerce (ICC), alleging breach of contract.

Cosmo licenses Uceris (budesonide) to Valeant for marketing in the US. It alleged that Valeant had breached the licence agreement and manufacturing and supply agreement—including the obligations to use commercially reasonable efforts to promote Uceris.

As a result, Cosmo sought to terminate the agreements and transfer the marketing authorisation to Cosmo.

Uceris is an oral tablet formulation that is especially effective in the treatment of proximal and distal ulcerative colitis, according to Cosmo.

It was approved for marketing in the US and licensed to Valeant in January 2013.

The Arbitral Tribunal rejected Cosmo’s claims in their entirety on Wednesday, April 12. Both the licence agreement and the manufacturing and supply agreement remain in effect.

Cosmo was also told to pay Valeant’s legal costs of $3 million.

“We decided to promote this arbitration having previously sought qualified advice and upon what we believed were very good grounds,” said Alessandro Della Chà, CEO of Cosmo.

“Thus, we think we did what we had to do to protect shareholders’ interest. While we were hoping for a very different decision, this outcome has no impact on our existing operations, plans nor our financial guidance. As to Uceris, the licence will continue in force under the existing economic terms.”

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