MDVN signed an agreement with Astellas back in 2009 that offered up to
1) $335 million in development milestones and
2) $320 million in sales milestone payments
I noticed in the latest 10Q that UCLA just initiated a lawsuit saying they think they are entitled to 10% of both the development and sales milestone payments. As of June 30th UCLA has received $13 million from MDVN for its 10% of development milestones. All previous 10Ks had stated UCLA was entitled to development milestones but with no mention of sales milestones. (BTW MDVN does not pay 10% of MDV3100 sales to UCLA. MDVN will only have to pay half of the approximately 4% sales royalty for USA sales while Astellas pays the other half and pays ALL of the Euro sales royalty for MDV3100.)
So what changed to make UCLA's lawyers suddenly bring a lawsuit for an agreement that they signed way back in 2005? I think the lawsuit is a direct result of MDVN'S 2011 lawsuit which says ARN-509 was one of the 160 molecules that was covered in MDVN's license from UCLA. I've read MDVN's complaint and it explains how the UCLA researchers hid 2 similar to MDV3100 drug candidates from MDVN despite the fact MDVN was paying for their research. The UCLA researcher and Sawyers had both joined MDVN's science board and later eached cashed in options that required their signoffs that they had no conflict of interests despite the fact they were at the time in the planning stage for their start up Aragon. There is a lot more in the filing which could be a causing UCLA's lawyers to worry about the breach of contract and possible monetary awards. I think their lawsuit that arrives 7 years after the MDVN license signing is a tit for tat suit and the lawyers are hoping for a we drop ours if you drop yours settlement. Imo MDVN has a lot to gain by letting their lawsuit move slowly thru the courts which has the added benefit of keeping Big pharmas from licensing ARN-509 until there is an outcome. Below comes from MDVN's 10Q.
"In May 2011, we filed a lawsuit in San Francisco Superior Court against the Regents of the University of California, or the Regents, and one of its professors, alleging breach of contract and fraud claims, among others. Our allegations in this lawsuit include that we have exclusive commercial rights to an investigational drug known as ARN-509, which is currently being developed by Aragon Pharmaceuticals, or Aragon, in a Phase 1-2 clinical trial in post-chemotherapy CRPC. ARN-509 is a close structural analog of enzalutamide, was developed contemporaneously with enzalutamide in the same academic laboratories in which enzalutamide was developed, and was purportedly licensed by the Regents to Aragon, a company co-founded by the heads of the academic laboratories in which enzalutamide was developed. On February 9, 2012, we filed a Second Amended Complaint, adding as additional defendants a former Regents professor and Aragon. We seek remedies including a declaration that we are the proper licensee of ARN-509, contractual remedies conferring to us exclusive patent license rights regarding ARN- 509, and other equitable and monetary relief. On August 7, 2012, the Regents filed a cross-complaint against us seeking declaratory relief which, if granted, would require us to share with it 10% of any sales milestone payments we may receive under the Astellas Collaboration Agreement. Under the Astellas Collaboration Agreement, we are eligible to receive up to $320 million in sales milestone payments."