SpePharm sues BioAlliance Pharma for breaking up SpeBio joint venture

SpePharm Holding, a pan-European speciality pharmaceutical company, has filed a claim for financial damages and losses of not less than Euro 35m against France-based BioAlliance Pharma.

The company claims that in February BioAlliance wrongfully terminated the licence agreement signed in 2007 with SpeBio, its joint venture with SpePharm, established for the commercialisation of Loramyc in Europe (excluding France). Furthermore, SpePharm asserts that BioAlliance has breached its obligations to SpeBio shareholders.

BioAlliance has filed a request for arbitration against SpePharm and SpeBio with the Arbitration Court of the International Chamber of Commerce in order to obtain reparation for the damage caused to it by non-compliance with contractual obligations and delays in the marketing and sales of Loramyc in Europe. BioAlliance estimates that the damages owed to it are at least â"šÂ¬45m.

Prior to doing this, BioAlliance says it sought an amicable resolution with SpePharm and SpeBio to this conflict.

The request for arbitration follows the complaint filed by BioAlliance with the Commercial Court of Paris and the termination of the licence agreement with SpeBio in February.

SpePharm claims BioAlliance has "totally unrealistic commercial expectations" for Loramyc in Europe and had requested from SpeBio "excessive and wasteful promotional investments", which would have denied any possible return on investment for the joint venture. SpePharm claims this issue was never discussed nor submitted to the board of the joint venture.

Dominique Costantini, president and chief executive of BioAlliance, said: "SpePharm and SpeBio have refused to ensure, as provided by contract, the distribution of Loramyc for a period of six months subsequent to termination. We have therefore immediately put in place all the necessary structures in order to ensure the continuity of patient treatment in the countries where the product has been marketed by SpeBio. We wish to defend the interests of BioAlliance and for Loramyc we are now actively looking for an industrial partner in Europe present in supportive care/oncology."

SpePharm claims BioAlliance's actions are delaying access to the product to cancer patients, damaging the future of Loramyc in the UK, Germany, Denmark, and Sweden and damaging the relationship and reputation of SpePharm with hospital specialists and authorities throughout Europe.

SpePharm estimates that, based on conservative forecasts of European product revenues, the damages will exceed â"šÂ¬35m.

Jean-Francois Labbe, chief executive of SpePharm Holding, said: "We believe Loramyc is a good product, but does not have the potential BioAlliance and SpePharm thought originally.

"SpePharm is determined to protect its and SpeBio's rights and to receive a fair financial compensation using all possible legal means for the damage caused by BioAlliance to both companies."