Chiroscience Faces Lawsuit Over Delayed Launch of Merck Generics' Anti-Inflammatory Drug

Strategic Insights -

Merck Generics, a Dutch pharmaceuticals company, has issued a writ against Chiroscience, a Cambridge-based biotechnology company, claiming that Chiroscience's failure to supply its anti-inflammatory drug, S-Naproxen, resulted in significant losses. The writ, issued in February 1998, alleges that Chiroscience breached an agreement to supply the drug and failed to deliver on its obligations. This led to Merck Generics being unable to distribute the drug in tablet form in Canada and the US, resulting in lost sales.

Key Takeaways:

  • Merck Generics claims that Chiroscience's failure to supply S-Naproxen resulted in significant losses in the US and Canadian market, with the group's share of the market "would have been significantly greater than is now anticipated".
  • Chiroscience agreed to supply S-Naproxen to Resolution Chemicals in May 1996, but unexpectedly transferred its obligations to Shasun Chemicals and Drugs, an Indian company, in May 1997.
  • Resolution Chemicals claims that Chiroscience refused to supply S-Naproxen two months after transferring its obligations, forcing the group to revise its applications to various regulatory authorities.
  • Chiroscience denies breaching the agreement and says it cannot assess the financial impact of an adverse ruling because Resolution's damages have not been particularized.
  • The lawsuit seeks over £593,000 to cover expenses incurred in seeking an alternative supply, as well as damages and an undisclosed sum to cover associated labour costs.

Statistics:

  • The writ was issued in February 1998.
  • Chiroscience agreed to supply S-Naproxen to Resolution Chemicals in May 1996.
  • Chiroscience unexpectedly transferred its obligations to Shasun Chemicals and Drugs, an Indian company, in May 1997.
  • Merck Generics is seeking over £593,000 to cover expenses incurred in seeking an alternative supply.

Sources:

  • Writ issued by Resolution Chemicals in February 1998.
  • Chiroscience's annual report published last month.
  • Chiroscience's annual report published in May 1998.
  • Report on Resolution Chemicals' acquisition of bulk chemicals from various sources.