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Athenex ends $2.9 billion lawsuit against rival drugmakers

The Buffalo biotech firm Athenex has ended its $2.9 billion lawsuit against two rival drugmakers it accused of accepting trade secrets from a former Athenex employee.

The company on Monday filed paperwork in State Supreme Court in Erie County with Fulgent Therapeutics and ANP Technologies that indicated all parties have agreed to discontinue the lawsuit.

The joint filing comes 16 months after Athenex, then known as Kinex Pharmaceuticals, sued California-based Fulgent, Delaware-based ANP and a former top executive, accusing the three of conspiring to improperly gain access to confidential information about a pioneering Kinex delivery method for a cancer drug.

“The last chapter in this dispute was resolved under mutually agreeable terms. We are glad to focus our time, attention and energy on activities which will benefit cancer patients everywhere,” Flint Besecker, Athenex’s chief operating officer, said in an email. The company last May reached a confidential settlement with Lyn Dyster, its co-founder and onetime senior vice president of operations.

In their own court filings, Dyster and officials with Fulgent and ANP had denied wrongdoing, and Fulgent countersued for costs and attorneys’ fees.

Fulgent and ANP did not pay anything to Athenex as part of the discontinuation of the lawsuit, according to a statement provided by Kevin A. Szanyi, the attorney representing the two companies.

Fulgent’s countersuit also has been resolved “amicably,” Szanyi said, but he declined to comment on whether Athenex paid anything to resolve the countersuit. Besecker did not respond to a request for comment on that question.

The events that spurred the October 2014 lawsuit date back two years earlier, to November 2012, when Dyster and other Kinex officials met with Fulgent President Ming Hsieh, a billionaire entrepreneur, in an effort to get him to invest in Kinex, then and now a specialty cancer-drug startup based on the Buffalo Niagara Medical Campus.

Hsieh turned them down, but Dyster later entered into a consulting agreement with Fulgent. Kinex said Dyster didn’t tell anyone she was consulting for Fulgent and said the agreement with Fulgent violated the terms of her contract with the Buffalo company.

Kinex said in its lawsuit that Dyster encouraged a Kinex co-worker to share proprietary information with representatives of Fulgent and ANP and gave employees of the two companies access to Kinex computer systems and research.

Kinex, now Athenex, is one of a number of pharmaceutical companies working to develop a cheaper, more effective way to deliver Paclitaxel, the popular cancer drug that is administered intravenously. Kinex argues that its oral delivery method could grab the company a major share of the market, and efforts by Fulgent or ANP to learn proprietary information about the method could cause serious harm to Kinex. That’s how the company came up with the figure of $2.9 billion in damages outlined in the lawsuit, plus punitive damages to be determined at trial.

In her responses to the suit, Dyster said Kinex officials were well aware of her dealings with Fulgent and ANP and she denied divulging confidential information to the companies.

email: swatson@buffnews.com