Errant Gene Therapeutics (EGT) Wins Major Victory in New York Appeals Court

CHICAGO--(BUSINESS WIRE)--Errant Gene Therapeutics (“EGT”) announces, that on April 30, 2020, the New York Supreme Court, First Department, Appellate Division unanimously affirmed rulings in EGT’s favor to proceed with fraud, unfair competition, and breach of contract claims in a trial scheduled October 29th, 2020 against Bluebird Bio and Sloan Kettering Institute for Cancer Research (SKI). EGT is represented by Ken Sussmane of McCue Sussmane Zapfel & Cohen P.C. and Kevin Murphy of Wuersch & Gering LLP in New York. http://www.courts.state.ny.us/courts/AD1/calendar/appsmots/2020/April/2020_04_30_dec.pdf (see pages 6-11)

EGT alleges that SKI secretly disclosed EGT’s confidential information to Bluebird Bio in furtherance of a scheme to shelf EGT’s potentially life-saving gene therapy and to exploit EGT’s intellectual property so that Bluebird Bio could develop and commercialize its own gene therapy. In June 2019 Bluebird Bio (now absent competition) raised the price of its therapy to 1.8 million dollars per patient.

The Appellate Court ruling states that Supreme Court Justice Barry R. Ostrager was correct in denying SKI and Bluebird Bio’s motions for summary judgment. "Contrary to defendant’s contentions, this court has already determined that [t]he measure of plaintiff’s damages as alleged, is not speculative as a matter of law” (Errant Gene Therapeutics, LLC v Sloan Kettering Inst. for Cancer Research, 174 AD3d 473, 475 [1st Dept 2019]). Smith Economics Group, Ltd. place damages incurred by EGT at over 1 billion dollars.

In an email presented to the court, which EGT thinks helps prove their case, Nick Leschly, CEO of Bluebird Bio, states openly: “Pat Girondi—need to shut him down…curious what he called about…my emails were clear want to get him to buy into a CDA to review Michel’s data. Be nice, suck up, etc… if you think (and I think) that Michel has valuable data.”

In a case EGT believes to be similar, a California federal judge in April 2020 entered final judgment awarding Juno Therapeutics and SKI enhanced damages of over $389 million, $1.2 billion total, against Gilead/Kite Pharma.

Mr. Girondi, EGT CEO, states that the damages in the EGT case dwarf the Juno/Gilead case and expressed concern about the agreement signed by SKI to indemnify Bluebird Bio for “gross negligence and willful misconduct” on Bluebird Bio’s part involving EGT. “For a non-profit medical center to take on liability for intentional misconduct of a private, for-profit drug company,” Mr. Girondi stated, “seems to be further evidence of SKI and Bluebird Bio’s unlawful scheme.”

“Unfortunately, the industry,” says, Mr. Girondi, “is no stranger to scandal. Craig B. Thompson, CEO of SKI, was sued twice for over a Billion dollars for alleged intellectual property theft at the heart of Agios Pharma. Because of congested courts and costly litigation, companies eventually settle out of court in top secret agreements. Criminal activity is not only tolerated but rewarded with tens or even hundreds of millions in salaries, and/or stock options and shares. EGT will do its best to fight for the real victims, patients.”

In Massachusetts, EGT is hoping to use 93A in litigation against the CEO of Bluebird Bio and their financial arm, Third Rock Ventures.

In Massachusetts and now in New York, EGT is represented by Mark Berthiaume, Zachary Kleinsasser and Gary Greenberg of Greenberg Traurig.