Haug Partners Secures Significant Win At The Delaware Chancery Court In Dispute Involving Cancer Drug Shortage

On September 7, 2021, the firm secured a significant win for its client, Takeda Pharmaceutical Company Limited (Takeda), when Vice Chancellor Sam Glasscock III of the Delaware Chancery Court denied AbbVie Endocrine Inc.'s (AbbVie) request for expedited injunctive relief in AbbVie Endocrine Inc. v. Takeda Pharmaceutical Co. Ltd., No. 2020-0953 (Del. Ch.). The decision followed a four-day bench trial held in April and May. AbbVie and Takeda have had a longstanding supply agreement in place, whereby Takeda manufactures Lupron in Japan and supplies AbbVie with its requirements for Lupron in the U.S., while Takeda distributes the drug across other parts of the world. In November 2020, AbbVie filed a complaint, alleging breach of the supply agreement and seeking damages as well as a mandatory injunction to prohibit Takeda from allocating the presently limited supply of Lupron (leuprolide acetate) around the world so that more Lupron could be diverted to the U.S. markets that AbbVie serves.

Vice Chancellor Glasscock denied AbbVie's request for injunctive relief, and allowed the case to proceed to the merits. At trial and oral argument, AbbVie argued that Takeda's alleged breaches of the parties' supply agreement led to the Lupron supply shortage and caused AbbVie to suffer irreparable harm. Takeda argued that, notwithstanding FDA's issuance of a Form 483 and Warning Letter directed to its Lupron manufacturing facility in Hikari, Japan, the company has worked diligently to ensure the Hikari facility is compliant with the expectations of regulators. Takeda also presented evidence at trial that U.S. patients have available alternatives to Lupron while patients in other countries may not.

In a Memorandum Opinion, Vice Chancellor Glasscock did not resolve the question of breach,¹ but held that, "[b]ecause the evidence at trial convinces me that such an injunction would be unworkable, would lead to the necessity for the oversight of Takeda's operations by the Court, and would inevitably lead to contempt hearings at which Takeda's ability to comply with the injunction would be at issue, I conclude I cannot in equity grant the proposed injunctive relief."² The Court found that the injunctive relief AbbVie sought was "unavailable" because it would require the Court to oversee, among other things, complex drug manufacturing and quality oversight processes abroad, which it declined to do.³ Additionally, the Court looked skeptically upon AbbVie's ever-changing requests for relief, finding them to be evidence of "an inability even on the Plaintiff's part to determine exactly what type of injunctive relief might be an effective remedy."⁴ The Court thus denied AbbVie's request for injunctive relief.⁵

Takeda was represented by Fred A. Kelly, Joshua S. Barlow, David A. Zwally, Andrew Wasson, Christopher Gosselin, Mark Basanta, and Tiffany Jang.

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