09 Aug Genzyme sues former Bone Care employees
Madison, Wis. – Saying former employees began to develop Bone Care International’s trade secrets into new products, the Boston-based company that purchased Bone Care in 2005 is suing three former BCI employees and their new company, Cytochroma, Inc.
Genzyme Corp. filed the suit in United States District Court for the Western District of Wisconsin, claiming that the plaintiffs applied for patents on new Vitamin D products that are based on BCI’s “confidential and proprietary information.”
But Eric Messner, one of the former employees, denied the allegations and suggested that Genzyme filed the suit to gain more information about the products, which are designed to address Vitamin D repletion and have other Vitamin D indications.
BCI, a company that specialized in Vitamin D products, was best known for producing Hectorol, a Vitamin D drug used to treat secondary hyperparathyroidism in patients on dialysis and in the early stages of chronic kidney disease.
As part of a merger, Genzyme purchased BCI last July for an estimated $600 million. The former employees, Charles Bishop, Keith Crawford and Eric Messner, left Genzyme and started a new company called Proventiv Therapeutics, LLC, in September of 2005.
Proventiv recently was purchased by Cytochroma, a Markham, Ontario-based company that develops products to treat Vitamin D deficiency. The three employees became executive officers in Cytochroma, and they plan to open an office in Madison.
Protected body of work
When Genzyme acquired BCI, it not only acquired Hectorol, it purchased the entire body of work that BCI created, said Dan Quinn, director of public relations for Genzyme Corp. “The basis of the suit is that we believe some of the products they have developed were based on intellectual property developed by Bone Care International,” Quinn stated. “We’re asking the court to prevent Cytochroma from using Bone Care’s inventions.”
The issue may center on 12 new Vitamin D product ideas that Bishop allegedly described in an e-mail to Bone Care employees on May 8, 2005, the day after Bone Care and Genzyme announced their execution of the merger agreement. The merger closed on July 1, 2005, the same day that Bishop’s employment ended with Bone Care.
According to the court complaint, Bishop presented the new product concepts, as well as other new Vitamin D product ideas, to Genzyme during its due diligence process.
Whether these ideas belong to Genzyme or Cytochroma might be up to the court to decide.
Messner acknowledged that the three employees signed contracts with non-compete provisions in which they agreed not to use Genzyme’s trade secrets, but he denied they had done anything to violate the agreement.
“The products were developed based on our own knowledge,” he said
Messner is a former director of marketing at BCI, and now is vice president of commercial operations for Cytochroma.
Bishop served as president, CEO and chief scientific officer for BCI, and now is the CEO of Cytochroma.
Crawford, who now serves as vice president of strategic planning for Cytochroma, is the former senior director of medical marketing and scientific affairs at BCI.
Messner said Genzyme could not really know much about the products in question because few specific details have been released. He said the former BCI employees took old Vitamin D products that are off patent and in the public domain, and they hope to develop new uses that can gain patent protection.
The lawsuit comes as Cytochroma is working to develop a $30 million round of venture financing with new and existing investors, and establish an American presence in the Madison biotechnology community.
The company already has raised more than $39 million in private funding from investors such as VenGrowth Advanced Life Sciences Fund, GeneChem Technologies Venture Fund, and Canadian Medical Discoveries Fund.
• Canadian firm buys Proventiv Therapeutics, makes ex-Bone Care exec CEO
• Genzyme acquistion of Bone Care approved, significant impact forecast
• FTC has fast-tracked Bone Care merger
• Massachusetts firm to buy UW spinoff Bone Care for $600 million