SAN FRANCISCO, March 13, 2014: The California Supreme Court on Wednesday unanimously denied review of an appeals court decision in a drug licensing lawsuit between Japanese pharmaceutical company Asahi Kasei Pharma Corp. and Swiss biopharmaceutical company Actelion, Ltd. In 2011, a jury awarded Asahi damages after finding that Actelion was liable for intentionally interfering in Asahi’s licensing agreement to develop a competing drug, and in December of last year the California Court of Appeals rejected Actelion’s challenges to the trial court judgment. Asahi stands to receive a final judgment of approximately $523 million for lost profits and putative damages after the State Supreme Court’s action.
Asahi’s lawsuit revolved around the question of intentional interference with the development of Asahi’s potentially life-saving drug Fasudil in the United States for anticompetitive purposes. At the 2011 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."
The amended final judgment of $407.3 million, which included lost profits damages of approximately $360 million and punitive damages of $30 million against individual defendants and executives of Actelion, was one of the largest in the United States during 2011. The trial court's judgment was bonded by Actelion and has been collecting more than $40 million per year in interest since the judgment was entered.
Actelion appealed the judgment, claiming, among other things, that Actelion’s interference was absolutely privileged under California law because Actelion bought San Francisco–based CoTherix Inc.—the company that had been developing Fasudil in the United States—as part of Actelion’s plan to kill the drug’s development. The Court of Appeals found substantial evidence supporting the jury’s determination that Actelion employed wrongful means such as fraud and extortion to interfere with CoTherix’s development of Fasudil.
Asahi was represented in the appeal and throughout the underlying trial by a Morgan Lewis team led by Litigation Practice partners Rollin Chippey II, Benjamin Smith and Christopher Banks. This team, which was first engaged in 2008 to handle a related arbitration resulting in a award of $91.5 million to Asahi, also included Litigation partners Franklin Brockway Gowdy and Thomas Peterson and associates Tera Heintz, Sharon Smith, Eric Iwasaki, Matthew Poole, Daniel Markman and Ashley Krupski.