BLS PHARMA, INC. FILES COMPLAINT AGAINST INOVIO PHARMACEUTICALS, INC.; BREACH OF CONTRACT OBSTRUCTS ABILITY TO DELIVER TESTOSTERONE REPLACEMENT THERAPY FOR HYPOGONADISM AND THE TRANSGENDER COMMUNITY
SAN DIEGO (November 5, 2019): California-based pharmaceutical company BLS Pharma, Inc. filed a complaint in San Diego Superior Court Friday against Genetronics, Inc. and Inovio Pharmaceuticals, Inc. (NASDAQ-INO), for breaching a contract to supply components of a needle-free injection system BLS Pharma was using to develop a drug-device combination (DDC) for the delivery of medical testosterone replacement therapy, costing BLS Pharma tens of millions of dollars.
Testosterone replacement therapy is a multi-billion-dollar market primarily used to treat male hypogonadism, also known as testosterone deficiency, a condition in which a male’s body fails to produce enough testosterone. Testosterone therapy is also a necessary treatment for the estimated 70% of transgender individuals transitioning and on lifetime cross-sex hormone therapy from female to male.
“Testosterone replacement therapy can make a significant difference in the lives of those in need of treatment. Our product would have allowed users to administer their treatments from the comfort of their own homes using a virtually painless needle-free system,” said Mark Logomasini, President & CEO of BLS Pharma. “BLS Pharma spent significant time, money, and effort developing this DDC, meeting with the Food and Drug Administration, and preparing for clinical trials. Regrettably, this breach of contract prohibited us from bringing a much-needed product to market.”
Prior to forming BLS Pharma, its shareholders, including Logomasini, owned all the preferred stock in a public company called Bioject Inc., which developed a needleless injector technology called “Zetajet.” In March of 2016, Bioject was sold to Inovio and its subsidiary, Genetronics, including the intellectual property rights for the Zetajet injector, with the condition that Genetronics was obligated to execute a license and supply agreement to supply Zetajet units to BLS Pharma upon request. This obligation was a material and critical part of the negotiations for the sale of Bioject and the Zetajet technology, as BLS Pharma’s executives needed access to the Zetajet injectors to continue the DDC development they had started at Bioject and intended to continue.
In accordance with the agreement, BLS Pharma ordered 25,000 Zetajet units in April of 2017 in order to prepare for its clinical trials, and the company was assured shortly thereafter that the order was “in process.” At a meeting in early September, BLS Pharma and Genetronics discussed the logistics of the syringe supply, the progress of BLS Pharma’s DDC and BLS Pharma’s recent meeting with the Food and Drug Administration, as well as BLS Pharma’s intention to offer the product for both male patients with hypogonadism and as a treatment for transgender males.
The next business day, BLS Pharma was informed that Inovio and Genetronics were rejecting their order and would not be supplying the needed syringes. No business reason was given by Inovio and Genetronics as to why they would no longer be providing the Zetajet syringes. Genetronics and Inovio’s refusal to fulfill their contract negated BLS Pharma’s ability to bring its DDC to market.
“In addition to the considerable damages caused by our inability to provide a superior product to administer testosterone to the targeted patient populations, we are particularly disappointed that we cannot offer this solution to the transgender community, who have historically been marginalized by the medical and pharmaceutical community,” stated Logomasini.
The testosterone treatment market is valued at between 1.3 and 1.8 billion dollars annually, with market size growth estimated at 5 percent each year, which offered tremendous revenue potential for BLS Pharma. While at least one other pharmaceutical company recently brought to market an in-home testosterone replacement therapy solution, BLS Pharma’s DDC model would have been the only product on the market to provide a subcutaneous solution that was both needleless and could be injected by users at their own homes.
BLS Pharma’s lost profits due to the breach of contract by Genetronics and Inovio are estimated to be at least $72,900,000. BLS Pharma is represented by attorneys Jason Hartley and Jason Lindner of San Diego-based law firm Hartley LLP.
“The facts present a very compelling case for BLS Pharma. The company invested valuable time and resources in developing a unique and important product, and we look forward to vindicating its rights in court,” said Jason Hartley, Founder of Hartley LLP.
About Hartley LLP
Hartley LLP represents victims of anticompetitive conduct like price fixing agreements, unfair competition, tying agreements and monopolization. Its attorneys have worked to recover hundreds of millions of dollars in damages for their clients. For more information about their practice, visit https://hartleyllp.com/results/.