Supreme Court to hear Teva-Proneuron dispute

Proneuron alleges that Teva was negligent in a trial of Copaxone on patients with Lou Gehrig's Disease.

The Supreme Court has agreed to hear the dispute between Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and Proneuron Biotherapeutics Inc. Proneuron alleges that Teva was negligent in a trial of Copaxone on patients with amytrophic lateral sclerosis (ALS), or Lou Gehrig's Disease.

Judges Elyakim Rubinstein and Ayala Procaccia decided that it was in the public interest to hear the dispute in view of Proneuron's serious claims against Teva, which superseded the agreement between the two companies, which stipulated arbitration to settle any disputes between them. Judge Yoram Danziger disagreed.

In 2005, Teva obtained rights to a molecule developed by Proneuron, which became the basis for Copaxone. Under the agreement, Teva was to conduct a well-planned trial of Copaxone for the treatment of ALS. The agreement stipulated that the parties would settle any disputes in arbitration hearings in London, although Israeli law applied to the agreement.

However, in 2007, Proneuron filed a lawsuit with the Tel Aviv District Court alleging that Teva deliberately sabotaged the trial, to the point of jeopardizing patients' lives. The company asked the court to nullify the agreement.

In its statement of defense, Teva said that the trial was safe, justified, and properly run.

The Tel Aviv District Court ruled that, while it was not possible to prove prior legal proceedings whether Proneuron's claims were true, the severity of the charges and the public interest demanded a court hearing, rather than arbitration.

Teva appealed the ruling, asked for a stay in legal proceedings and fulfilling arbitration proceedings.

Published by Globes [online], Israel business news - www.globes-online.com - on October 15, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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