Mezzion Wins Appellate Jurisdiction Fight Against Dr. Reddy's

SEOUL, South Korea, April 9, 2018 /PRNewswire/ -- On March 26, 2018, a New Jersey State Appellate court denied Dr. Reddy's Limited LLC (organized under Indian law) motion for leave to appeal the jurisdiction ruling made by the New Jersey State lower court that it has jurisdiction over Dr. Reddy's Limited LLC in the civil action brought by Mezzion against Dr. Reddy's Limited LLC for claims of common law fraud and fraudulent concealment, negligent misrepresentation, and breach of contract.

On January 17, 2018, the New Jersey State court ruled that it has jurisdiction over Dr. Reddy's Limited LLC (organized under Indian law) and that Mezzion has adequately stated common law fraud and fraudulent concealment, negligent misrepresentation, and breach of contract claims against Dr. Reddy's Limited LLC and its United States arm Dr. Reddy's Limited Inc.

In the New Jersey State action (Docket No. MER-L-98-17), Mezzion has generally alleged that Dr. Reddy's perpetrated fraud on Mezzion by concealing from Mezzion significant deficiencies in its Food and Drug Administration (FDA) cGMP practices and by misrepresenting its FDA compliance.  In the New Jersey lawsuit, Mezzion further alleges that Dr. Reddy's falsely represented to Mezzion repeatedly that Dr. Reddy's was compliant with FDA regulations and FDA cGMP practices, and that Dr. Reddy's hid its misconduct from Mezzion. The suit also states that Dr. Reddy's misconduct was the sole reason given by the FDA to deny approval of Mezzion's new drug application (NDA) for udenafil for the treatment of erectile dysfunction (ED) and to refuse to grant marketing approval of Mezzion's udenafil finished drug product. As a result, Mezzion has incurred significant delay, expense and damages and was forced to seek a new manufacturer and a new supplier for its udenafil and its udenafil finished product.

The FDA issued a Warning Letter to Dr. Reddy's which states that, during an FDA inspection at the Dr. Reddy's facilities in India, the FDA identified numerous deviations and violations in FDA compliance, and also uncovered a previously unknown and uncontrolled "Custom QC laboratory" (CQC), which engaged in a "practice of substituting repeat tests after failing results."

As a result, the FDA, in the Warning Letter, advised Dr. Reddy's that:

At Dr. Reddy's Laboratories Limited CTO Units VI and V facilities, we identified significant deviations from current good manufacturing practice (CGMP) for the manufacture of active pharmaceutical ingredients (APIs). At Dr. Reddy's Laboratories Limited Unit-VII facility, we found significant violations of CGMP regulations for finished pharmaceuticals, Title 21, Code of Federal Regulations, Parts 210 and 211.

These deviations and violations cause your APIs [udenafil] and finished drug products [udenafil tablets] to be adulterated within the meaning of Section 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act), 21 U.S.C. 351(a)(2)(B). The methods used in, or the facilities or controls used for, their manufacture, processing, packing, or holding do not conform to, or are not operated or administered in conformity with, [FDA] CGMP.

The complete Warning Letter (WL: 320-16-02, dated November 5, 2015) is available on the FDA's website at https://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2015/ucm473604.htm. 

Dr. Reddy's present status regarding such FDA violations is unknown to Mezzion, however an article appearing in Chemical & Engineering News suggests that those FDA issues may remain unresolved. See, for example, Jean-François Tremblay: Dr. Reddy's struggles to meet FDA concerns. Chemical & Engineering News. 95(32):page 11, News of the Week, Issue Date: August 7, 2017 | Web Date: August 4, 2017, at https://cen.acs.org/articles/95/i32/Dr-Reddys-struggles-meet-FDA.html.

In this suit filed with the New Jersey State Court, Mezzion seeks to recover from Dr. Reddy's substantial damages for, inter alia, fraud, fraudulent concealment, negligent misrepresentation and breach of contract.

Mezzion Pharma Co. Ltd.

Mezzion Pharma is a publicly-listed biotech company in Korea focusing on the development of new drugs.

Statements under the Private Securities Litigation Reform Act: with the exception of the historical information contained in this release, the matters described herein contain forward-looking statements that involve risk and uncertainties that may individually or mutually impact the matters herein described, including but not limited to FDA review and approval, product development and acceptance, manufacturing, competition, court decisions and/or other factors, which are outside the control of the Company.

Contact:

Mr. Won Geun KIM

Tel: +82 2 560 8008

Email: [email protected]

SOURCE Mezzion Pharma Co. Ltd.