MANHATTAN (CN) - A family foundation that donated $100 million for cancer research at the University of Pennsylvania demands $1 billion in damages from the former head of its research institute, who allegedly made a major treatment breakthrough, then formed his own company to cash in on it.
The plaintiff - The Leonard and Madlyn Abramson Family Cancer Research Institute at the Abramson Cancer Center of the University of Pennsylvania - sued Dr. Craig Thompson, Agios Pharmaceuticals and Celgene, in Federal Court.
The Abramson Center claims that Thompson, who was its scientific director from 1999 until October this year, purposely concealed his formation of Agios Pharmaceuticals, because he knew his research was rightly the intellectual property of the institute.
The Abramson Center was created by an agreement between the Abramson family Foundation and the Trustees of the University of Pennsylvania. Since its founding, the institute has been housed at the University of Pennsylvania's Abramson Cancer Center.
The family foundation says it donated more than $100 million "with an ironclad condition that the money was to be utilized to revolutionize the medical treatment of cancer by exploring only new and different approaches to cancer treatment. Another fundamental condition of the agreement was that the Institute would own all or part of all discoveries and developments occasioned or fostered by Institute-funded work," according to the complaint.
The plan, the foundation says, was that the Institute would share in the proceeds from any development achieved through Institute funding. "In that manner, the foundation donation would continue to fund untold advancements in cancer treatment for generations to come."
But that plan came to naught, the institute says, when an "unscrupulous doctor," defendant Thompson, "chose to abscond with the fruits of the Abramson largess generated by his work at the institute and thereby cheat future generations of the intended benefits of the donation and the institute's intellectual property."
"Early in his association with the Institute, Dr. Thompson appeared to adhere to his contractual disclosure requirements relating to any intellectual property conceived, discovered, developed or reduced to practice at the institute, and to any inventions derived from that intellectual property," the complaint states. "Later, however, perhaps when the true magnitude of his discoveries was becoming known, Dr. Thompson fraudulently misrepresented the nature and results of his work at the institute to avoid meeting further disclosure requirements."
While employed at the institute, Thompson developed "a cancer metabolism research platform that would examine the role that metabolic changes play in the origin and progression and death of cancer cells," according to the complaint.
"In 2003, Thompson advised the Institute that his laboratory had recently discovered that cancer cell growth requires an enzyme not previously implicated in cancer.
"In a 2004 memo to the Institute, Dr. Thompson reviewed several innovations in cancer research and, referring to joint projects with GlaxoSmithKline ('GSK') acknowledged that: 'Any intellectual property developed from this collaboration will be shared jointly between the [Institute], University of Pennsylvania and GSK.'"
In 2005, Thompson acknowledged in a memo to the Institute that, "'Over the past six years, the institute has developed considerable intellectual property,'" the complaint states.
That memo added that "'Drs. Thompson and [other institute personnel] are exploring the possibility of forming a non-profit development and therapeutics company through which the institute could capitalize on its intellectual property.'" (Brackets in complaint.)
In 2007, Thompson informed the institute that the intermittent use of certain drugs, such as metformin enhanced the effectiveness of other cancer drugs, while the use of another, AICAR, suppressed the formation of the growth of breast cancer, the complaint states.
In August that year, the institute says, Thompson incorporated Agios in Delaware under the name Cancer Therapeutics, Inc.
But, "Dr. Thompson did not advise the institute of the formation of that entity," according to the complaint.
"In 2009, Agios publicly asserted that it was the first biopharmaceutical company focused on discovering and developing novel cancer metabolism drugs," the institute says.
Later in 2009, "Agios publicly acknowledged that Dr. Thompson was Director of the Abramson Cancer Center at the University of Pennsylvania, stated that Dr. Thompson was one of the three founders of Agios, and announced the publication in the leading scientific journal Science of an article co-authored by Dr. Thompson titled, 'Understanding the Warburg Effect: The Metabolic Requirements of Cell Proliferation.'"
In late 2010, Thompson took a one-year leave of absence from the Institute, during which he commenced work as the president and CEO of Sloan-Kettering Cancer Institute and continued his affiliation with Agios, the institute says.
Shortly thereafter, Agios and defendant Celgene Corporation announced the formation of a global strategic collaboration focused on targeting cancer metabolism.
"The collaboration between Agios and Celgene was stated to be based upon what was described as 'the transformational science of Agios' innovative cancer metabolism research platform,'" the institute says.
"Pursuant to the collaboration, Agios was stated to have received a $130 million upfront payment, including equity investment, in return for Celgene receiving an initial period of exclusivity during which Celgene has the option to develop any drugs resulting from the Agios cancer metabolism research platform," the complaint states.
Since then, the institute says, the financial support Agios received to commercialize its "'innovative cancer metabolism research platform - i.e., the precise description of Dr. Thompson's work at the institute,' has reached $261 million," but Thompson did not disclose that to the institute, according to the complaint.
"Dr. Thompson [also] did not disclose to the institute that Agios purported to sell to defendant Celgene Corporation an exclusive option to develop any drugs resulting from the cancer metabolism research platform," the institute says.
Thompson terminated his employment relationship with the institute and the university on Oct. 31, 2011.
The institute seeks a declaration of its intellectual property rights on Thompson's research done at the institute, and $1 billion in damages for fraudulent misrepresentation, breach of fiduciary duty, and breach of contract.
It is represented by David C. Burger with Robinson, Brog, Leinwand, Greene, Genovese & Gluck.
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