Novo Nordisk Sues KBP Biosciences Over Alleged Data Misrepresentation in $1.3 Billion Hypertension Drug Deal

Novo Nordisk, a Danish pharmaceutical giant, has filed a lawsuit against Singapore-based biotech company KBP Biosciences and its founder, Zhenhua Huang, alleging data misrepresentation in a $1.3 billion deal for the hypertension drug ocedurenone. The lawsuit, filed in the Singapore International Commercial Court, seeks damages of $830 million. Novo Nordisk claims it was misled into believing that KBP had developed a new and effective drug to treat hypertension and kidney disease.

The lawsuit alleges that KBP knowingly failed to disclose interim data from a phase 2 clinical trial dating back to 2022, which showed that ocedurenone was unlikely to show efficacy. Additionally, KBP concealed quality and compliance issues at an investigation site that produced "anomalous positive results." Dr. Huang, KBP's founder, executive chairman, and a 40% shareholder, is also named in the lawsuit, as he allegedly knew and participated in these misrepresentations.

Novo Nordisk acquired ocedurenone in October 2023 in an up to $1.3 billion deal, hoping that the drug, a nonsteroidal mineralocorticoid receptor antagonist (nsMRA), could compete against Bayer's approved nsMRA, Kerendia. However, the drug failed to improve systolic blood pressure in a phase 3 chronic kidney disease trial, leading Novo Nordisk to scrap the asset and incur an $816.5 million impairment loss.

The lawsuit comes after Novo Nordisk sought to freeze KBP's assets after the company transferred $339.1 million to its holding company and declared $578.5 million in dividends. The judge granted the request, citing a real risk of dissipation of assets to frustrate the enforcement of an anticipated arbitral award.



The lawsuit has raised concerns about the integrity and transparency of the biotech industry, potentially damaging the trust that other pharmaceutical companies may have in biotech companies. To mitigate such risks in future deals, pharmaceutical companies should conduct thorough due diligence on biotech companies, maintain open and transparent communication, engage independent third-party experts to verify clinical trial data, and include clear contract terms outlining responsibilities and liabilities in case of misrepresentation or fraud.

Novo Nordisk's investment strategy in the biotech sector may be influenced by this lawsuit, leading to increased scrutiny in due diligence, a more cautious approach to partnerships and acquisitions, and a greater emphasis on reputation management and ethical business practices. The company may also face potential regulatory scrutiny and reputational damage as a result of the lawsuit.

In conclusion, the lawsuit against KBP Biosciences and Zhenhua Huang highlights the importance of integrity, transparency, and thorough due diligence in the biotech industry. As the case unfolds, it will be crucial for both parties to maintain open communication and adhere to ethical business practices to restore trust and reputation in the industry.