Pharmaceutical Manufacturer Produced COVID-19 Treatments but was Never Paid, Suit Contends

Aurigene Pharmaceutical Services Ltd. (APSL) filed suit against ViralClear Pharmaceuticals, Inc. (ViralClear) and BioSig Technologies, Inc. (BioSig) on Jan. 8, alleging that the defendants failed to pay it for manufacturing an antiviral agent called merimepodib, a treatment for COVID-19. The District of Connecticut complaint explains that APSL seeks repayment of more than $1.5 million of product it allegedly manufactured but was not compensated for last year.

According to the filing, APSL is a Bangalore, India-based pharmaceutical development and manufacturing services provider. The defendants are American companies, and ViralClear is a majority-owned subsidiary of BioSig, the complaint states.

After ViralClear sent out a request for proposals to which APSL responded, ViralClear accepted APSL’s proposal to manufacture 200 kilogram scale-up batches and two “intermediates,” in June 2020. The next month, ViralClear and BioSig accepted APSL’s second proposal to manufacture 1,000 kilograms of each of the two intermediates agreeing to pay APSL a total of $3,175,000, including an initial payment due when APSL began the manufacturing campaign and intended to cover the raw materials necessary.

In September 2020, while that work was in process, ViralClear told APSL that it wanted to put the second project on hold though APSL had already taken steps towards securing materials it needed. On Sept. 21, 2020, the parties discussed the status of the contracted work. ViralClear reportedly agreed that it would reimburse APSL for the costs of the raw materials APSL had acquired.

In addition, and allegedly at ViralClear’s request, APSL agreed to accept the payment pursuant to an extended schedule. Yet, the filing states, APSL issued an invoice to ViralClear at the end of the month that went unpaid in its entirety, in violation of the parties’ agreement.

In October, without APSL’s knowledge, BioSig ostensibly replaced the ViralClear employees involved in the APSL contracts with a “wind-down team” composed of BioSig employees. On or about Oct. 26, 2020, BioSig halted ViralClear’s work on the project. The following month, ViralClear refused to pay APSL’s invoices and, through its attorneys, disclaimed any obligation to pay and any intent to pay in the future.  

The plaintiff alleges breach of contract as to ViralClear and BioSig, and as to the latter defendant, two counts of tortious interference, one associated with the June and one with the July contract, because of BioSig’s alleged refusal to pay APSL’s invoices. For the supposed breaches, the plaintiff seeks an award of $1.53 million, plus prejudgment interest, and its reasonable attorneys’ fees and costs. 

The plaintiff is represented by Greenberg Traurig, LLP.