The preliminary injunction filed by SciClone PharmaceuticalsInc. against Alpha 1 Biomedicals Inc. was denied last week bythe U.S. District Court for the Northern District of California.
The motion is the latest development in the ongoing disputebetween the two companies on the terms of the contractualagreement between them on Alpha 1's product Thymosin alpha1, which it has licensed to SciClone (NASDAQ:SCLN). The drug isbeing developed for treating chronic viral infections,particularly hepatitis B.
In effect, the dismissal of the injunction puts the twocompanies back to square one, an arbitration proceeding toresolve each of the parties' respective claims.
Alpha 1 of Bethesda, Md., initiated arbitration proceedingsagainst SciClone in late July, claiming that arbitration was theonly way to resolve a number of contractual disputes that hadarisen.
According to Alpha 1 (NASDAQ:ALBM), these disputes had to doprimarily with the price at which Alpha 1 sold the product toSciClone (which resells it) and with definitions of eachcompany's territorial rights.
A month later, SciClone of San Mateo, Calif., sued Alpha 1,seeking injunctive relief pending the outcome of the arbitrationproceedings. Among other things, SciClone claimed that Alpha 1had not proceeded "diligently" with plans to provide it withbulk product for commercial resale. In its suit, SciClonerequested an order that would allow SciClone to manufacturethe product on its own. -- Jennifer Van Brunt
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