Cel-Sci wins 4.5-year-long arbitration case against CRO for breach of contract | Bio Tech

Cel-Sci has emerged victorious in what it describes as the first-ever decision in favor of a pharmaceutical company over a CRO for breach of contract, following a yearslong arbitration battle with inVentiv Health, now known as Syneos Health.

The arbitrator found that inVentiv misled the small biotech with its projections for patient enrollment in a phase 3 head and neck cancer study from 2011 to 2013, and awarded Vienna, Virginia-based Cel-Sci $2.9 million in damages.

In 2010, Cel-Sci contracted with PharmaNet, which was later bought by inVentiv, to enroll 880 untreated patients in 15 to 18 months, starting in January 2011. Over two years later, the clinical trial had only enrolled a total of 117 patients, including patients brought in by Cel-Sci partners Teva and Orient Europharma, the company said in a statement.

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In April 2013, Cel-Sci replaced inVentiv with ICON and Ergomed to finish the study, which went on to enroll 928 patients to evaluate cancer immunotherapy Multikine, becoming one of the largest studies in the indication. The arbitration suit was filed in October 2013, originally demanding $50 million, with closing arguments concluding in April of this year.

RELATED: Cel-Sci lines up cash to fund its $50M suit against ex-partner inVentiv

“With this ruling against inVentiv, we have been vindicated,” said Cel-Sci CEO Geert Kersten, saying the CRO’s actions slowed down clinical development of Multikine. “The delays in the study caused by inVentiv not only delayed the potential approval of this investigational cancer drug by years, but it caused investors to wonder about the utility of the drug.”

However, it may prove to be a hollow victory: the $2.9 million damage award falls short of the $5 million Cel-Sci borrowed in 2015 to finance its legal challenge, with the company only on the hook to repay the amount if it won.

“Usually small companies do not win long legal battles against multi-billion-dollar opponents, but we persevered and won our claim for breach of contract,” Kersten said. “We now move forward with a clean slate and an almost completed phase 3 cancer study, knowing Cel-Sci has prevailed.”

The arbitrator also denied all but one of inVentiv’s $20 million worth of counterclaims: nearly $430,000 in certain unpaid invoices. Syneos—the rebranded entity that followed inVentiv’s merger with INC Research last year—did not respond to requests for comment.

RELATED: Cel-Sci, in trying to escape clinical hold, creates new problems for Multikine R&D program at the FDA

The phase 3 trial is currently in its follow-up phase, enrolling its last participant in September 2016. Cel-Sci believes it will soon be able to begin assessing the study’s primary endpoint of overall survival, based on historical measures of the study’s patient population, with a readout expected in early 2019.

The company hopes to see a 10% improvement in survival with Multikine treatment compared to the standard of care—namely surgery followed by radiotherapy, or a combination of radiation and chemotherapy—according to Cel-Sci Chief Scientific Officer Eyal Talor, Ph.D.

In a letter to shareholders, Cel-Sci said that if the phase 3 trial proves successful and Multikine is approved, it would become the recommended first-line therapy for about 6% of all cancer patients.

While Cel-Sci blames inVentiv and the arbitration for dragging down its valuation, Multikine has seen its own rocky development path, receiving partial and full clinical holds from the FDA.

After receiving a partial hold in September 2016, Cel-Sci met with the agency and later submitted an updated investigator’s brochure and a list of major protocol deviations. However, the FDA said it found new deficiencies in the submission and upgraded its order to a full clinical hold. The hold was eventually lifted in August 2017.

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