Johnson & Johnson Sues Aligos, Founders Over Alleged Theft
March 30 2022 - 11:27AM
Dow Jones News
By Colin Kellaher
Johnson & Johnson is suing Aligos Therapeutics Inc. and its
co-founders, alleging the clinical-stage biopharmaceutical company
was built on intellectual property and information stolen from
J&J.
The suit names Aligos and co-founders Lawrence Blatt and Leonid
Beigelman, who sold biotechnology startup Alios BioPharma Inc. to
J&J in 2014 for $1.75 billion and left the company to launch
Aligos in 2018 using the allegedly stolen resources.
Mr. Blatt currently serves as chairman and chief executive of
Aligos, while Mr. Beigelman serves as president and a member of the
board.
Aligos, based in South San Francisco, Calif., said in a filing
with the Securities and Exchange Commission on Wednesday that
J&J's claims are without merit, and that it intends to defend
itself vigorously.
According to J&J's complaint, Messrs. Blatt and Beigelman
assumed senior leadership posts at its Janssen Biopharma LLC unit
after the Alios acquisition, and, while in those roles, developed a
new line of products using Janssen's resources and formed Aligos,
which J&J calls a copycat version of Alios.
J&J alleges Messrs. Blatt and Beigelman stayed at Janssen
"just long enough to obtain their last seven-figure acquisition
payout" in late 2017, then left to market through Aligos the
products they had developed while at Janssen, taking along other
former Alios employees who had joined Janssen.
Meanwhile, the products J&J acquired in the Alios deal,
including its lead compound targeting infants with respiratory
syncytial virus, proved unmarketable, saddling the company with
impairment charges in 2018 and 2019 roughly equal to the purchase
price.
J&J claims Messrs. Blatt and Beigelman stole work related to
at least four different research-and-development programs to create
Aligos' pipeline, including potential therapies for chronic
hepatitis B, an area where J&J has invested heavily.
Aligos went public in late 2020 at $15 a share, and its share
price rose as high $37.51 in early 2021. But the stock has fallen
sharply this year amid recent setbacks and hit an all-time low of
$2.05 on Monday.
Aligos last week said it had ended development of its drug
candidate ALG-020572 in chronic hepatitis B after a patient in a
study suffered a serious adverse event that resulted in a brief
hospitalization.
The company in January ended development of ALG-010133 for
chronic hepatitis B after determining that the drug candidate
wouldn't meaningfully contribute to achieving functional cures for
the serious liver infection.
Aligos' pipeline still includes programs targeting chronic
hepatitis B. Aligos also has a collaboration with Merck & Co.
in nonalcoholic steatohepatitis, a chronic liver condition known as
NASH.
J&J's suit seeks monetary damages, a permanent injunction
prohibiting the use of the allegedly stolen property and ownership
of patent applications filed by Aligos.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
March 30, 2022 12:12 ET (16:12 GMT)
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