On Wednesday, Cumberland Pharmaceuticals filed a suit in the Southern District of New York against Melinta Therapeutics, LLC and Targanta Therapeutics Corporation over allegations that the defendants breached a contract they held with the plaintiff regarding the development of a pharmaceutical product.
The agreement between the two parties, which was made in late 2016, granted defendant Targanta “exclusive, world-wide license to develop and commercialize certain products under the patents and assistance in using a cyclodextrin in pharmaceutical applications, in exchange for Targanta’s payment of certain specified, fixed payments in addition to royalties on net sales of licensed products.” Defendant Melinta acquired Targanta about one year later, thereby acquiring their rights and obligations under the agreement. The complaint specifically explains that “Melinta acquired Targanta and all of its rights and obligations under the Agreement and expressly assumed Targanta’s post-closing liabilities under the Agreement.”
According to the agreement, the defendants were required to make three fixed payments to the plaintiff of $500,000 each. After completing the first fixed payment, the defendants made no further payments to Cumberland. The next two payments were supposed to be fulfilled within 30 days of the filing of the drug’s [KIMYSRA] sNDA (supplemental New Drug Application) and within 30 days of the FDA’s approval of the sNDA. Neither payment has been made, despite them being due in May of 2020 and March of 2021, respectively.
The plaintiff wrote a letter to the defendant in April of 2021 seeking the appropriate payment. They asserted that the $1 million in total payment were “due under Section 2.3 of the Agreement as a result of Melinta’s NDA for KIMYRSA and the FDA’s subsequent approval.” Melinta countered this letter by expressing that the payments were tied to the filing and approval of an sNDA, when Melinta had in fact filed an NDA.
In June of 2021, Melinta filed an sNDA for KIMYSRA and it was later approved by the FDA in July. Cumberland again notified Melinta and expressed that their actions were in violation of the agreement between the two parties and demanded payment. Once again, Melinta denied and argued that “the sNDA still did not trigger its obligation to pay the Milestone Payments under Section 2.3 of the Agreement.”
However, the defendant acknowledged their responsibilities to pay royalties on KIMYSRA. The complaint alleges that despite this acknowledgement, the defendant also failed to provide royalty payments to the plaintiff within the required time frame. Only after Cumberland reached out through counsel did Melinta provided the necessary sales reports and royalties. However, they have still not paid the fixed payments owed to the plaintiff which total $1 million.
The complaint concludes that the defendant breached a “valid, enforceable contract” with the plaintiff. Cumberland is seeking $1,000,000 in damages, prejudgment interest, litigation costs, and any other relief deemed proper by the court.
The plaintiff is represented by Barton LLP.
