Chiron Corporation - Lawsuits

Lawsuits

When in 1991 Cetus was acquired it was subject to a lawsuit by the Eastman Kodak Company over the rights to the polymerase chain reaction product, which was settled in 1993. In 1998, Chiron filed patent infringement suits in Europe, Japan and the US against Roche over its hepatitis C (HCV) products. Chiron was the first to clone HCV in 1987 after five years of research and had since filed over 100 HCV related patents in over 20 countries. A settlement was reached where Roche Holding A.G. agreed to buy the global semi-exclusive nucleic acid test (NAT) patents for HCV and HIV from Chiron. Bayer, the company which bought Chiron Diagnostics, sued Chiron Corporation in 2002 citing that it hid patent and equipment problems from them during purchase negotiations. The case filed in Delaware alleged breach of warranty, fraud, negligent misrepresentation, violation of the duty of good faith and fair dealing and breach of contract claims in connection with the acquisition. In 2004, Chiron attracted adverse media coverage after the UK government suspended its license for manufacturing Fluvirin, an influenza vaccine, at its plant in Liverpool, England. This action left the United States government short of the vaccine. It later emerged that the Food and Drug Administration (FDA) may have been aware of the problem nine months earlier, but a miscommunication between the company and the FDA left the problem unsolved until the MHRA (Medicines and Healthcare Products Regulatory Agency), the British equivalent of the FDA stepped in and suspended Chiron's license. The company undertook a remediation program and succeeded in restoring the manufacturing license from MHRA in 2005. However, the incident resulted in a class action lawsuit for nearly $280m being brought against Chiron and its executive for allegedly, in 2003, overstating its ability to manufacture and ship the vaccine Fluvirin, thus allowing Novartis to buy Chiron shares below market value when the plant temporarily closed down. The amount settled in 2008 was for $30m.