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$516.7 Million Judgment Entered in Morgan Lewis Victory for Asahi

August 19, 2011

SAN FRANCISCO, August 18, 2011: Today, California Superior Court Judge Marie S. Weiner (San Mateo County) entered a $516.7 million judgment in favor of Asahi Kasei Pharma Corp. in the case Asahi Kasei Pharma Corp. v. Actelion Ltd., et al., bringing to a close the trial in Asahi's state-court lawsuit against Swiss drug maker Actelion and various of its executives and subsidiaries. Asahi's trial team was led by Morgan Lewis San Francisco partners Christopher Banks, Rollin Chippey, II, and Benjamin Smith, and associate Tera Heintz. New York partner Alan Neuwirth is responsible for the firm's long-term relationship with Asahi Kasei.

The total awarded to Asahi for its claims in this matter will exceed $607 million, consisting of this judgment and a $91 million International Chamber of Commerce (ICC) arbitration award that Actelion-subsidiary CoTherix, Inc. paid to Asahi in 2010.  In addition, the $516 million state court judgment will now earn approximately $50 million a year in interest while Actelion appeals the decision. Asahi also intends to seek additional fees and costs of suit in post-trial motions.

Asahi's lawsuit concerned intentional interference with the development of Asahi's potentially life-saving drug Fasudil in the United States for anticompetitive purposes.  At trial, Actelion's internal documents showed that Actelion defrauded and intended to extort Asahi, in order to "painstakingly kill" the development of Fasudil and "leave the market for [Actelion's competitive drug] Tracleer free for Actelion."

During closing arguments, San Francisco Litigation partner Christopher Banks argued that each of the Actelion defendants engaged in "deliberate, intentional" interference—including through fraud and extortion—with Fasudil's development in an effort to "pull the wool over the eyes of Asahi" and preserve Actelion's "dominant" market share in the market for treating the deadly disease pulmonary arterial hypertension (PAH). As a result of Actelion's conduct, Banks argued, Fasudil is no longer being developed in the United States 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, and/or fraud." The jury awarded $547 million in damages against the defendants and, as a result of the "fraud, malice or oppression" finding, Dr. Clozel, his wife, Martine Clozel, and Actelion's former President of Business Development Simon Buckingham were subjected to an additional $30 million in punitive damages.

The $516,669,056.08 final judgment entered by Judge Weiner credited defendants with $70.5 million of the $91 million Actelion subsidiary CoTherix paid to Asahi in 2010 as a result of the ICC arbitration, and awarded Asahi interest on the remaining amount since April 29, 2011, when the jury rendered its verdict.

The Morgan Lewis trial team was guided and advised by San Francisco managing partner Franklin "Brock" Brockway Gowdy, and included associates 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.