In a big legal step, on April 30, the New York Supreme Court upheld lawsuits by Errant Gene Therapeutics (EGT) against Sloan-Kettering (SKI) and Bluebird Bio. TrialSite News has been following this saga, with our latest prior update here. According to EGT’s press release (not yet on their press site), the judges, “unanimously affirmed rulings in EGT’s favor to proceed with fraud, unfair competition, and breach of contract claims in a trial scheduled October 29th, 2020 against Bluebird Bio and [SKI].” 

EGT Experts Place Damages Over $1 Billion

According to EGT, SKI secretly disclosed their confidential information to Bluebird Bio in a scheme to “shelf” EGT’s “therapy and to exploit EGT’s intellectual property so that Bluebird Bio could develop and commercialize its own gene therapy.”  EGT notes that experts place their damages at over $1 billion, and continues to hammer home their possible “smoking-gun” email from Bluebird CEO Nick Leschly about EGT’s leader, “Family Man,” Pat Girondi: “need to 2 (sic) shut him down…curious what he called about…my emails were clear want to get him to buy into a CDA to review Michel’s data. Be nice, suck up, etc.… if you think (and I think) that Michel has valuable data.” Also, EGT points out that a similar case in April awarded Juno and SKI $1.2 billion against Gilead/Kite Pharma and that, “Craig B. Thompson, CEO of SKI, was sued twice for over a Billion dollars for alleged intellectual property theft at the heart of Agios Pharma.”

Court Ruling Details Allegations

Other details of this dispute are found in the court’s written opinion. (Oddly, in New York state, the “Supreme Court” is not the highest court, but its Appellate Division is the first level of appeals court.) Specifically, the court upheld the trial court’s denial of the defendants’ motion for summary judgement. These motions decide if the plaintiff,, EGT, has shown enough evidence to warrant a jury trial. The court said a trial is justified on whether it was reasonable for EGT to rely on SKI’s claims as to their “readiness to proceed to the clinical trial stage and its intentions with respect to its commitment to the research.”

Next, the appeals court ruled that the trial court was right in letting EGT’s claim for breach of a 2011 agreement go forward, as there are facts supporting the claim that SKI, “did not, and never intended to, use its best efforts to create and commercialize the gene therapy vector that was created, in part, by [EGT.]” Re SKI, the judges noted that in a prior appeal, it was already decided that the measure of EGT’s damages “is not speculative” in a way that would forgo the right to a trial. Also, EGT deserved a trial on whether SKI breached a 2005 agreement, “by disclosing to Bluebird confidential information regarding [EGT’s] treatment in secret meetings while the agreement was in effect.”

The court also said that there is an issue of, “whether Bluebird used [EGT’s] confidential information about [their] vector as part of a scheme with Sloan-Kettering to market a gene therapy before plaintiff did and, at a minimum, whether Bluebird was aware of any fraud on Sloan-Kettering’s part,” in upholding a claim of unfair competition. In a small concession to Bluebird, the court reversed a $25,000 sanction against them, saying that their motion to dismiss was not, legally speaking, frivolous.

With restrictions due to covid-19, most courts are unsure when it will be safe to do jury selection, so it will be seen if the October, 2020 trial can proceed. TrialSite News will continue to follow this story as it develops.

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