Press Release

Morgan Lewis Wins $577M, Including $30M in Punitive Damages, for Asahi Kasei Pharma

Wednesday, May 4, 2011

SAN FRANCISCO, May 4, 2011: Late Tuesday in San Mateo County, a Morgan Lewis trial team for Asahi Kasei Pharma Corp. won $30 million in punitive damages against individual defendants, including Actelion Ltd. CEO Jean-Paul Clozel, following a protracted three-month trial resulting in a jury verdict of nearly $547 million against Swiss biopharmaceutical firm Actelion Ltd. and associated defendants last Friday.

Evidence at trial showed that the Actelion defendants "painstakingly killed" the development of Asahi's rival drug Fasudil in order to keep the pharmaceutical market "free" for Actelion's competitive drug Tracleer. Asahi's trial team was led by Morgan Lewis partners Rollin Chippey, II, Benjamin Smith, and Christopher Banks.

Until early 2007, when Actelion acquired South San Francisco-based CoTherix, Inc., Asahi's drug Fasudil was under development by CoTherix for the treatment of Pulmonary Arterial Hypertension ("PAH") and stable angina ("SA"). PAH is a rare but invariably fatal disease primarily affecting younger women. Evidence presented at trial showed that Fasudil holds significant promise to ameliorate or even reverse the disease of PAH, and that the Defendants acquired CoTherix to stop Fasudil's development and protect their "dominance" in the market for treating PAH from emerging competition.

During closing arguments, Asahi argued that each of the Actelion defendants engaged in "deliberate, intentional" interference with Asahi's deal with CoTherix in an effort to preserve Actelion's admittedly "dominant" market share in the PAH market. San Francisco litigation partner Christopher Banks argued that the Defendants "knew the consequences of interfering with [Asahi's] agreement, and went ahead and did it anyway. Fasudil was on its way to success, and if the defendants hadn't done what they did, it would be coming on the market right now." As a result of Actelion's conduct, Banks argued, Fasudil is no longer being developed in the U.S. or the EU—which is "exactly what the defendants intended."

The jury unanimously found that all seven Defendants named in the case, including Actelion CEO Jean-Paul Clozel, intentionally interfered with Asahi's agreement with CoTherix to develop Fasudil, and did so with "malice, oppression, or fraud." As a result of the finding, all Actelion defendants were subject to a punitive damages award.

The Morgan Lewis trial team was guided and advised by San Francisco managing partner Franklin "Brockway" Gowdy, and included San Francisco associates Tera Heintz, Sharon Smith, Eric Iwasaki, Matthew Poole, Daniel Markman, Mark Hitchcock, and Ashley Krupski, Los Angeles associate Tricia Takagi, and Houston associate Lauren Hoffer.

The Actelion Defendants' trial team, consisting of three firms, was led by Joseph Cotchett. Baker Botts LLP and the law offices of Michael Liberty also served as trial counsel for the Actelion defendants.