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Welcome to the biotech jungle! Lawsuits are as American as apple pie. Just when you thought you'd derisked your tech, raised VC $, got a win.. someone sues or is sued! As an investor, I've seen earn-out disputes over "bio-bucks" (like the one between BMS and Padlock), IP…
This is 1 of the comments in response to $BMY lawsuit news on Sky: "The ability to transact early is based upon these contingent payments, & these early transactions drive cash (& people) back into new development projects more quickly as a result. Overall biotech industry… https://t.co/VGPzhSiDIx
"This ruling could provide a roadmap for VCs writing future earnout agreements, particularly in biotech where they're prevalent. Namely by including specific obligations that constrain what the buyer can do" wrote @danprimack in the J&J/Auris story in Sept, below. The BMS/Padlock… https://t.co/eAUNyGzSwA
Investors in Padlock Therapeutics have filed a lawsuit against Bristol Myers Squibb (BMY) over alleged failures to make 'milestone' payments as part of an acquisition agreement. The lawsuit claims that Bristol Myers reneged on its commitment to provide up to $450 million in additional cash payments to Padlock’s investors and executives, which were contingent upon certain milestones being met. This legal action highlights ongoing tensions in the biotech industry regarding 'biobucks' deals, where payments are tied to specific performance metrics. The case draws parallels to a recent ruling where Johnson & Johnson was ordered to pay $1 billion to Auris Health shareholders, suggesting that the outcome of the Padlock lawsuit could influence future earnout agreements in biotech.
