Venture Capitalists Cheated Us Out Of Royalties: Suit

There are often disputes over rights to drugs under development, but not every spat becomes public. However, a large neuroscience institute has filed a lawsuit against several venture capital firms for allegedly misappropriating its intellectual property and “know-how,” and then selling the rights to its relaxin drug to Novartis. The details are complicated and include a predictable cast of characters – besides the researfch institute and venture capital backers, there was also a large biotech involved at one point. In any event, the case is an example of the sharp elbows that are employed in the high-stakes, drug development game. In this instance, The Florey Institute of Neuroscience and Mental Health, which is based in Australia and calls itself “one of the world’s top six brain research centers” (see here), signed a royalty agreement with a former Genentech entity that was later spun out and backed by several venture capital firms, according to lawsuit. Relaxin is used in childbirth to make delivery easier, but was being studied for other purposes, such as scleroderma, an autoimmune disorder that causes scarring and hardening, and affects the skin and internal organs. In 2003, a new agreement was drafted that assigned rights to Corthera, a new commercial entity that had been created by members of the Genentech unit. Florey claims the agreement stipulated payment of 2 percent of net sales from the proceeds of sales of relaxin-related lic...
Source: Pharmalot - Category: Pharma Commentators Authors: Tags: Uncategorized Genentech Kleiner Perkins Novartis Relaxin Sears Capital Management Source Type: blogs