Cell Therapeutics countersues over cancer-drug testing
By Luke Timmerman
Seattle Times business reporter
Cell Therapeutics, a Seattle biotech company that was sued for more than $13 million last month for breaking a research contract with a German company, has filed a countersuit, claiming it ended the partnership because it was being defrauded.
Cell Therapeutics inherited the partnership with Germany's Micromet when it bought Italy-based Novuspharma in January. Under a deal in 2002, Micromet researchers agreed to test a cancer treatment on animals and humans in experiments paid for by Novuspharma.
In the original suit filed in February in U.S. District Court in Seattle, Micromet claimed that "baseless concerns" about the antibody's progress were raised after the Seattle company agreed to take over Novuspharma last year. A few weeks after the takeover became official, Cell Therapeutics cut off the research funding. Micromet said it was forced to lay off one-third of its 135 employees.
In its countersuit, Cell Therapeutics asked for a full refund of about $15 million plus damages, alleging Micromet made false claims about the research. It said Novuspharma "relied upon mistaken facts" to enter into the agreement, particularly that Micromet claimed to have regulatory approvals it didn't have.
Cell Therapeutics said it learned in September that necessary animal toxicology tests conducted by Micromet were "hopelessly flawed and were invalid." Instead of doing them again, it says, Micromet started a midstage study in humans and demanded payment for meeting a partnership milestone.
Under the original collaboration, Cell Therapeutics said Micromet was supposed to conduct midstage clinical testing of the antibody on 260 patients last year. But it fell so far behind schedule that by December, the antibody had not started a midstage trial in a single patient, Cell Therapeutics says in the countersuit.
Harry Schneider, a partner with Perkins Coie in Seattle who represents Micromet, said his client intends to file a motion to dismiss the counterclaim. Candice Douglass, a spokeswoman for Cell Therapeutics, said, "We're waiting for our time in court."
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