Nuvo Research files law suit against Mallinckrodt

Canadian specialty pharma company Nuvo Research (TSX: NRI) says it has commenced legal action against USA-based Mallinckrodt (NYSE: MNK) by filing a complaint in the US District Court for the Southern District of New York.

The complaint asserts that Mallinckrodt has breached its contractual obligations to Nuvo as set out in a licensing agreement dated June 15, 2009, under which Nuvo licensed to Mallinckrodt the rights to market and sell osteoarthritis treatment Pennsaid (diclofenac sodium topical solution) and Pennsaid 2% in the USA.

It claims that Mallinckrodt breached the license agreement in several respects. Most significantly, says Nuvo, Mallinckrodt willfully failed to conduct certain clinical studies required under the contract that are critical to regulatory approval, marketing and sales of Pennsaid 2% throughout the world. The complaint also alleges, amongst other things, that Mallinckrodt made significant errors in certain clinical studies for which it was responsible, failed to apply requisite efforts to commercialize Pennsaid in the USA and has willfully refused to pay the full milestone payments due to Nuvo under the License Agreement.