Pharmaceutical & Life Sciences News

Bionpharma Fails to Get Rival’s GC Disqualified in Supply Spat

Jan. 30, 2019, 7:40 PM

Generic drug distributor P&L Development LLC’s general counsel and an outside firm may continue to represent P&L in its breach-of-contract and fraud suit against Bionpharma Inc., a federal court in North Carolina ruled.

At first glance, Bionpharma (Bion) appeared to have a good argument for disqualifying Charles Cain, the U.S. District Court for the Middle District of North Carolina said.

That’s because P&L, where Cain works, is suing Bion for breach of supply agreements that Cain approved when he was general counsel at a defunct predecessor of Bion’s.

But any confidential information about the predecessor’s capabilities that Cain acquired during the agreements’ drafting wouldn’t help P&L in this suit, the court said.

Specifically, the contracts provided that Banner Pharmacaps Inc. would make, imprint, and package generic drugs for a predecessor of P&L. Banner later split and was sold to Bion and a drug producer, Pantheon.

P&L’s suit alleges that Bion decided to compete with P&L and told Pantheon to redirect its efforts toward supplying Bion instead of P&L, according to the court. In doing so, it allegedly breached the supply agreements.

But the agreements speak for themselves in that dispute, the court said. The agreements’ terms “will determine whether or not Bion was permitted to do what it is alleged to have done or whether it breached those Agreements, no matter what Cain understands the Agreements to mean,” it said.

The only reasoning supporting Cain’s disqualification is that the negotiation history might become relevant, the court said. But that’s too speculative, it said.

Because Cain isn’t disqualified, the firm of Kilpatrick Townsend & Stockton LLP isn’t either, the court said.

The case is P&L Dev. LLC v. Bionpharma Inc., 2019 BL 28519, M.D.N.C., No. 1:17CV1154, 1/29/19.

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com

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