Novo Nordisk Sues Singapore-Based KBP Biosciences Over Alleged Data Misrepresentation In $1.3 Billion Hypertension Drug Deal, Seeks Damages

On Friday, Novo Nordisk A/S NVO filed an urgent request for a worldwide freezing order against KBP Biosciences Pte. Ltd. and Dr. Huang Zhenhua, KBP's founder, Executive Chairman and a 40% shareholder.

The case revolves around Novo Nordisk's claim that KBP misled it into buying the rights to Ocedurenone, a drug for hypertension and kidney disease.

Novo argues that KBP failed to disclose crucial data suggesting the drug was ineffective.

In October 2023, Novo Nordisk agreed to acquire ocedurenone for up to $1.3 billion.

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At that time, the company said Ocedurenone was being examined in the phase 3 trial CLARION-CKD in patients with uncontrolled hypertension and advanced chronic kidney disease.

In June 2024, Novo Nordisk announced that the CLARION-CKD phase 3 trial failed to meet its primary endpoint. The Danish drug giant recognized an impairment loss of around 5.7 billion Danish kroner related to the intangible asset ocedurenone.

Tucked in its third-quarter earnings release, Novo Nordisk said that following the stop of the ocedurenone CLARION-CKD phase 3 trial, based on the interim analysis in June, Novo Nordisk has analyzed detailed trial data and decided to terminate further development of ocedurenone.

Novo Nordisk is seeking this order as part of a planned arbitration in New York, where it intends to claim $830 million in damages, with $100 million already held in escrow.

The judge says, "KBP knowingly failed to disclose material information, including interim analyses of Phase 2 clinical trial results showing Ocedurenone's inefficacy, and information concerning quality and compliance issues at a single test site that produced anomalous positive results. Likewise, Dr Huang arguably knew and participated in these misrepresentations."

Price Action: NVO stock is up 0.60% at $82.83 during the premarket session on last check Wednesday.

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