LCS Group, LLC (“LCS”) announced today that it has filed a federal lawsuit in the Southern District of New York against Shire Plc, Shire Development LLC, and Shire LLC (“Shire”) alleging Shire breached its contract with LCS and interfered with LCS’s prospective economic advantage, as well as perpetrated fraud [active case number for the complaint is 1:18-cv-02688-AT].
The lawsuit alleges that Shire breached its contract with LCS when the global pharmaceutical giant publicly filed an Inter Parties Review (IPR) Petition with the Patent Office in May 2014 related to LCS’s U.S. Patent 8,318,813 (the ‘813 Patent), in violation of the contract’s anti-publicity clause. An inter partes review (IPR) is a procedure for challenging the validity of a United States patent before the United States Patent and Trademark Office. The procedure is conducted by the Patent Trial and Appeal Board (PTAB)
The lawsuit also alleges that Shire’s IPR Petition, and the Declaration on which it was based (signed by Dr. Timothy Brewerton), was fraudulent and at odds with the medical literature on eating disorders as well as Shire's own public statements to investors. The ‘813 Patent claimed methods to treat Binge Eating Disorder (“BED”) with Vyvanse, an indication approved by the FDA for adults in January 2015, just months after LCS claims Shire breached its agreement with LCS.
Shire’s alleged breach of contract led to the improper invalidation of the ‘813 Patent (during the IPR proceeding), scoring Shire a massive financial victory as the pharma giant did not have to pay LCS royalties and milestones for the BED indication that Shire’s CEO Dr. Flemming Ornskov has publicly stated he expects will earn Shire several hundred million dollars in revenue annually. The complaint states that “the valuable patent rights LCS lost as a result of the wrongful conduct of Shire and its involved executives and counsel …. have a value into the billons,” notably as the patent’s term would not have expired until 2030 and Shire expects, in the meantime, to earn billions from the BED indication.
