Major Victory for Drug Development

On November 18, 2011 the California Superior Court, County of San Mateo entered Judgment in favor of Asahi-Kasei Pharma Corp. in Case No. 478533 including compensatory damages, punitive damages, costs and interest charges totaling more than $415 million. OnPoint’s Gordon Rausser, Ph.D. served as Asahi’s sole expert on both damages and loss causation. The Judgment, against the Switzerland-based pharmaceutical firm Actelion Ltd., is the result of a lengthy jury trial culminating on May 4, 2011 in a verdict for $547 million plus $30 million in punitive damages against individual officers of the company. Actelion subsequently obtained an offset for a $91 million payment made as a result of an International Chamber of Commerce (ICC) arbitration (in which Dr. Rausser also served as Asahi’s damages expert) and other adjustments. The total awarded to Asahi for its claims in this matter, consisting of the California Superior Court judgment and the arbitration award, exceeds $506 million.

The case is significant not only for its size, but for the precedent it sets regarding interference with drug development. In 2006, Japanese-based Asahi-Kasei contracted with CoTherix to develop and bring to market in the U.S. its patented molecule known as Fasudil. The development was targeted to treat pulmonary arterial hypertension (PAH), a debilitating and deadly disease generally recognized to be inadequately treated with existing therapies. The chief competitor in the market was Actelion, whose PAH drug Tracleer had made billions for the firm. In January 2007, Actelion bought up CoTherix and abruptly terminated Fasudil’s development. At the time, Fasudil had successfully completed Phase 1 clinical trials and was planned to begin Phase 2. In the lawsuit, Asahi-Kasei sought to recover the profits that it would have made if Fasudil had successfully completed phase-2 and 3 clinical trials and been approved for sale in the U.S and the European Union.

Key issues in the case involved whether lost profits could be proven with reasonable certainty, given the risks associated with drug approval, and what Fasudil’s U.S. and European sales ultimately would have been between its targeted launch date and a 2019 patent expiration.