Medicis Pharmaceutical Corp., a maker of wrinkle treatments and acne drugs, was sued by Revance Therapeutics Inc. (RVNC) for reneging on a buyout agreement tied to development of a wrinkle-reducing gel.
Revance officials contend in a Delaware Chancery Court lawsuit that Medicis executives refused to acknowledge the Newark, California-based drugmaker has hit development targets on its gel that is based on the active ingredient in the Botox wrinkle treatment. Medicis is required to choose whether to acquire Revance or pay licensing fees for the gel after the targets were met under a 2007 agreement, according to the suit.
“By disputing that it now has the obligation to either exercise its option or lose it, Medicis is effectively preventing Revance from raising critical investment funds” or finding other partners, Revance’s lawyers said in the suit, filed yesterday in Wilmington, Delaware.
Revance’s suit comes after Scottsdale, Arizona-based Medicis was named one of the world’s most ethical companies earlier this year by the Ethisphere Institute, a New York-based think tank that focuses on business ethics and corporate social-responsibility issues.
Kara Stancell, a Medicis spokeswoman, didn’t immediately return a call for comment today on Revance’s suit.
Medicis, which makes the acne therapy Solodyn and wrinkle fighter Dysport, made a push to diversify its product lines last year by acquiring Graceway Pharmaceuticals LLC, which makes skin treatments and asthma medicine, in November as part of Graceway’s bankruptcy liquidation.
Graceway filed for bankruptcy in September 2011 after the loss of patent protection on its top-selling product, the skin cream Aldara, led to a decline in sales. The cream is designed to treat precancerous skin growths and genital warts.
Revance officials said that Medicis executives agreed in December 2007 to a $20 million partnership agreement over the wrinkle gel, known as RT001. The gel, which is still in development, will allow consumers to treat wrinkles without getting injections.
After years of tests, Revance submitted RT001 to the U.S. Food and Drug Administration for review to see if the drugmaker could move into the third stage of testing, according to the suit. Earlier this month, FDA officials concluded Revance completed Phase 2 of testing on RT001 and could proceed to Phase 3 trials, the suit said.
That clearance triggered Medicis’ obligations under the 2007 agreement to decide whether it wanted to buy Revance, pay for an exclusive license to RT001 or allow Revance to seek out other partners, the drugmaker’s lawyers said in the suit.
Medicis officials have refused to make that call, demanding instead that Revance “engage in additional lengthy Phase 22 regulatory activities,” according to the suit.
Revance executives contend that Medicis officials are dragging their feet in honoring the agreement “in an attempt to starve Revance to the point that Medicis can obtain Revance’s technology for a bargain price,” the lawyers said in the suit.
The case is Revance Therapeutics Inc. v. Medicis Pharmaceutical Corp., 7549, Delaware Chancery Court (Wilmington).
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