Plaintiff Intrivo Diagnostics, Inc.’s suit against defendants Access Bio, Inc., Areum Bio LLC, Ivy Pharma, Inc., and unknown individuals was removed to federal court on Thursday, after being originally filed in the Los Angeles County state court. The complaint alleges that defendant Access Bio breached multiple contracts it held with the plaintiff regarding the manufacture of COVID-19 tests.
When the COVID-19 pandemic began, plaintiff Intrivo partnered with defendant Access Bio to create COVID-19 tests. The complaint explains that prior to partnering with the plaintiff, Access Bio was a “struggling diagnostics company on the verge of bankruptcy.”
The plaintiff contends that they invested tens of millions of dollars into the partnership with Access Bio and the distribution network they needed to build for the testing. In return, Access Bio’s role was to manufacture and sell the COVID-19 tests exclusively to Intrivo at a pre-negotiated price. The agreements were formalized by contracts that were signed in May of 2020.
Just 5 months after signing the contracts, the complaint details that “at Access Bio’s behest, Intrivo entered into a subdistribution agreement with defendant Areum pursuant to which Areum would purchase the [COVID-19 tests] from, and split its profits with, Intrivo.” Despite the agreement, Areum violated their contract with the plaintiff and began purchasing the tests directly from Access Bio and stopped paying Intrivo entirely.
In the fall of 2021, a new contract was devised between Access Bio and Intrivo where Access Bio agreed to manufacture and deliver 53.6 million OTC tests to Intrivo by the end of year, according to the complaint. When the deadline arrived, the plaintiff said that only 21.6 million had been delivered. The plaintiff contends that this shortcoming on behalf of Access Bio was due to them curbing production of Intrivo OTC tests “so that it could manufacture more of the competing [Areum] OTC tests from which Access Bio reaped a far greater profit.”
As a result of Access Bio’s failure to fulfill their contractual obligation to Intrivo, Intrivo said they were forced to delay and cancel many orders. The customers whose orders had been cancelled, the plaintiff alleges, were then intentionally “poached” by Access Bio, who sold them Areum OTC tests due to Intrivo’s inability to deliver.
When Intrivo confronted Access Bio about the situation, they allegedly informed Intrivo that they “would stop delivering tests altogether unless Intrivo agreed by 5:00 p.m. the next day to waive its entitlement to the past-due tests, release Access Bio of all liability, and make a series of other material concessions.”
Intrivo maintains that Access Bio manufactured the Areum OTC tests “in willful disregard of its obligations to Intrivo and causing Intrivo hundreds of millions of dollars in lost profits, along with catastrophic damage to its reputation and future business prospects.”
The complaint cites three counts of breach of contract, two counts of breach of implied covenant of good faith and fair dealing, promissory fraud, two counts of intentional interference with contractual relations, unlawful business practices, and intentional interference with prospective economic advantage. The plaintiff is seeking restitution, preliminary and permanent injunctive relief, prejudgment interest, compensatory and punitive damages, litigation fees, and any other relief deemed proper by the court.
The plaintiff is represented by Hueston Hennigan LLP and the defendants are represented by Quinn Emanuel Urquhart & Sullivan.
