In a significant development in the pharmaceutical industry, Novo Nordisk has launched legal proceedings against Singapore-based KBP Biosciences, alleging fraud in the $1.3 billion acquisition deal for the kidney drug ocedurenone. The Danish pharmaceutical giant is seeking $830 million in damages through the Singapore International Commercial Court.
The dispute centers around ocedurenone, a drug intended for treating hypertension and chronic kidney disease, which Novo Nordisk acquired from KBP Biosciences in October 2023. The acquisition turned sour when the drug failed its Phase III trial in chronic kidney disease in November 2024, resulting in approximately $800 million in impairment charges for Novo Nordisk.
Legal Allegations and Court Findings
According to court documents, Novo Nordisk claims it "was misled into believing the defendants had developed a new and effective drug." The company alleges that KBP Biosciences deliberately withheld crucial information during the acquisition process, including unfavorable Phase II data that demonstrated the drug's lack of efficacy.
The Singapore International Commercial Court has found merit in Novo Nordisk's claims, particularly concerning KBP's founder and chairman, Dr. Huang Zhenhua. The court noted that Dr. Huang, who owns 40% of KBP and personally executed the purchase agreement, "arguably knew and participated in these misrepresentations."
Compliance and Data Integrity Issues
The case has revealed serious concerns about data integrity and compliance. Court documents indicate that KBP allegedly failed to disclose quality and compliance issues at a test site that produced false positive results. This revelation raises significant questions about the reliability of the drug's early-stage testing data.
Asset Freeze and Ongoing Litigation
In a significant development, the Singaporean court has granted Novo Nordisk's request to freeze Dr. Huang's assets while a broader lawsuit proceeds in New York. The $830 million in damages being sought approximately equals the amount Novo Nordisk has already paid through the terms of the deal.
Impact on Drug Development Pipeline
The failure of ocedurenone represents a significant setback in Novo Nordisk's efforts to expand its presence in the kidney disease market. At the time of acquisition, Martin Holst Lange, Novo's Head of Development, had expressed optimism about the drug's "best-in-class potential." The subsequent Phase III failure and fraud allegations highlight the risks and complexities inherent in pharmaceutical acquisitions and development.
