Clal Biotechnology (TASE: CBI), managed by Reuven Krupik, and Hyperion Therapeutics (Nasdaq: HPTX) have agreed to seek a resolution of the dispute between over the sale to Hyperion of Clal Biotechnology unit Andromeda Biotech. A month ago, Hyperion cancelled its acquisition of Israeli company Andromeda, which is developing a Type 1 diabetes drug DiaPep277. Hyperion said it had “uncovered evidence” that Andromeda employees falsified the drug’s clinical trial results. The deal was to have been worth hundreds of millions of dollars with the successful approval and marketing of the drug. In response, Clal Biotechnology sued Hyperion for $200 million.
The two companies have now announced that they will attempt to resolve the matter. They have entered into an interim agreement that will allow Clal Biotechnology to evaluate whether there is any clinical efficacy to, and whether there is a potential regulatory path forward for, DiaPep277 that a party other than Hyperion may wish to pursue.
Hyperion will complete the current DIA-AID 2 study of DiaPep277, at its expense. An independent party or parties will be appointed by Clal Biotechnology, at Clal Biotechnology's expense, and will be permitted to have access to relevant non-privileged documentary materials including the statistical analysis plans, the study dataset after unblinding, and any correspondence with the US Food and Drug Administration (FDA) and other medical/clinical regulatory entities. The independent party is expected to assess, for CBI's benefit, the ongoing conduct of the DIA-AID 2 study, the conduct of the completed DIA-AID 1 study, the integrity of the studies' readouts, and any potential regulatory path forward for DiaPep277. The companies' announcement states, "The assessment shall be conducted during the DIA-AID 2 study and thereafter for as long as reasonably required to complete the review. Hyperion will not be obligated to take any action in response to the independent party's observations."
During the interim period (until October 31, 2014, which may be extended by either party for an additional period of 3 weeks), Hyperion and Clal Biotechnology have agreed to not take any additional steps to prosecute any lawsuit, claim, or other litigation against the other party relating to the development of DiaPep277 or the Share Purchase Agreement regarding Andromeda Biotech, Ltd., which Hyperion acquired from Clal Biotechnology in June 2014. Neither party has waived any right, claim or defense relating to the Share Purchase Agreement.
Published by Globes [online], Israel business news - www.globes-online.com - on October 7, 2014
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