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Biotech / Medical : Immunomedics (IMMU) - moderated

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To: idahoranch1 who wrote (63316)	12/18/2025 5:14:17 PM
From: idahoranch1	Read Replies (1) of 63319

A scientist founded a pharmaceutical company and took it public. For three decades, the company pursued the scientist’s research but never turned a profit. The company’s efforts eventually produced a powerful cancer treatment known as Trodelvy. In 2020, after the FDA approved Trodelvy to treat triple-negative breast cancer, a major pharmaceutical manufacturer bought the company for $21 billion. The scientist and his family members received approximately $700 million. Under the scientist’s pre-acquisition employment agreement, he was entitled to 1.5% of the company’s annual net revenue in any year when the company generated positive net income (the “Revenue-Sharing Provision”). The Revenue-Sharing Provision remained in effect through July 1, 2023, so for about two years and eight months after the acquisition (the “Covered Period”). The employment agreement’s definition of the company included affiliates. In this litigation, the scientist claims that the buyer is an affiliate, so the Revenue- Sharing Provision entitles him to 1.5% of the buyer’s aggregate net revenue across all of its businesses. That would amount to some $365 million. This decision rejects that expansive interpretation. The Revenue-Sharing Provision uses the term “affiliate” in a loose and ambiguous way, making extrinsic evidence relevant under Delaware law. The parties selected New Jersey law to govern the agreement, and New Jersey law permits a court to consider extrinsic evidence even when a provision might initially appear plain and unambiguous. The extrinsic evidence makes clear that the parties intended for the Revenue- Sharing Provision to compensate the scientist with 1.5% of the net revenue generated

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