BioWorld International Correspondent
PowderJect Pharmaceuticals plc told Active Biotech AB it might issue legal proceedings against the Swedish firm, regarding PowderJect's acquisition of the SBL Vaccin unit in 2001.
The maximum potential penalty associated with any such action would be $20 million, said Active Biotech, of Lund, but added it would defend itself against any proceedings with respect to the sale.
"We don't see the logic in this," said Active Biotech's chief financial officer, Hans Kolam. "According to us, there are no claims to be made."
Oxford, UK-based PowderJect originally paid $50 million in cash to acquire the Stockholm-based SBL Vaccin unit. The deal also included provisions for two additional milestone payments, each worth up to $10 million, in connection with regulatory approvals in Europe and the U.S. for SBL's travelers' diarrhea vaccines, Dukoral and ETEC. Active Biotech also stood to gain royalties on product sales, once certain targets were met. (See BioWorld International, July 11, 2001.)
"There were warranties guaranteed as part of the sale, and the legal action relates to these warranties," a PowderJect spokesman told BioWorld International, although the company declined further comment.
"In our view, they don't have anything to claim," Kolam said, adding that the original purchase agreement did not include any sales guarantees.
PowderJect last month reported Dukoral sales of £3.5 million for the year ended March 31 but has discontinued the ETEC product. The current action appears to be a relatively minor affair for PowderJect, given the scale of its imminent £542 million acquisition by Chiron Corp., of Emeryville, Calif. For Active Biotech, however, the implications would be more serious. The company recently netted SEK224.9 million (US$29.2 million) in a rights issue, adding to the SEK245.6 million it had in cash reserves March 31. Its share price slipped by more than 9 percent during trading on the Stockholm Stock Exchange last week, closing at SEK17 Friday.