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Incyte and Flexus: The Grappling Continues

A couple of years back, I wrote about a case of accused stolen pharma intellectual property that looked like it would be heading to court. And here we are in 2017, and it’s. . .heading to court. The wheels of the law have been grinding along this whole time in the matter of Incyte and Flexus, as detailed in this report from Delaware.

This is the one where a high-ranking Incyte employee, Jordan Fridman, left the company for a new job at Flexus. That company had a pretty fast rise from founding to (expensive) acquisition by Bristol-Myers Squibb, and Incyte is suing because they believe that this success was due to intellectual property that Fridman walked out the door with and handed on to Flexus’ management. The Flexus founders naturally deny this.

The argument is about IDO-1 inhibitors to go along with cancer immunotherapy. Anything that improves the efficacy and potential patient numbers for drugs like Keytruda and Opdivo is going to be a big deal these days, and the idea is that an inhibitor of indoleamine 2,3-dioxygenase, which is a key step in a pathway that seems to help tumors evade immune surveillance, will be just such an adjunct. It’s been quite a footrace – that link above mentions a clinical failure that’s already taken place, likely because a substandard drug candidate was pushed too hard in the clinic. But Incyte is partnered with Merck on their own compound, and so far, things have been looking good (and now you can see why Bristol-Myers Squibb went after Flexus, since they were desperate to get their own IDO compound).

It’s a question of timing. The lawsuit says that Flexus changed its whole approach after Fridman joined and put everything into their IDO program. Incyte’s lawyers believe that he told them about (confidential) results from their own program, including useful information about human half-life and trial design, and they say that they have emails from both Fridman and Flexus personnel that will show just that. Among these, apparently, is one from a Flexus board member saying that the nonpublic information Fridman presented to him certainly looked great, but that hiring him could be a huge legal conflict. If that’s an accurate representation – and who knows – then the defendants will have an interesting time explaining that in open court. Incyte also claims that Fridman never told them that he was off to work for a direct competitor, and that they only found out about it months later when a former colleague ran into him at an ASCO meeting (and that even then, he said that he wasn’t doing any more IDO work).

That trial will be very interesting to watch, but we’re going to have to wait until this time next year for it to get started. And I still have my doubts about whether it’ll get that far. The suit is actually against two founders of Flexus as well as the company (which doesn’t actually exist now), and both of them have since left. Fridman’s own employment disputes were subject to arbitration, and he’s moved on too since then. Incyte is not suing Bristol-Myers Squibb, and it’s unclear to me if they can do much about the Flexus drug’s progress there. If they win this case, they might well turn around with another lawsuit demanding compensation for what they will have proven are ill-gotten gains, and I would guess that any settlement agreement would be phrased in such a way as to strengthen that case. But a settlement is still, I think, the most likely outcome, and most of these happen as the trial date gets closer.

I hope that we actually do get some resolution, no matter what happens. I think it’s important to establish whether Fridman really did present his new employer with a pile of confidential data, because that’s a clear violation of the law and the sort of thing that makes companies all over the industry shiver when they think about it. Key unpublished information like this is the highest denomination currency in the whole drug development game, pre-approval. If that’s what happened, can a person (or company) get away with that, as long as the drug works and the deal goes through.

13 comments on “Incyte and Flexus: The Grappling Continues”

  1. SP says:

    Concerning because companies will point to one-off abuses like this as an excuse to enslave employees with enforceable noncompetes. Don’t be a jerk and ruin it for everyone else who isn’t making seven figures.

    1. Chrispy says:

      Spot-on. It will all come down to whether he stole and shared confidential documents, which it sounds like he did. And he did it by email? That’s really foolish. I could easily see this spilling over to affect any scientist working in this business since everyone works on so many of the same things.

      1. pete says:

        Whether he shared it via e-mail or in person, if it’s proven that Fridman dumped privileged Incyte info into the lap of Flexus, then — other than being in deep excrement — Fridman’s also guilty of being recklessly oblivious, given the excitement (at the time) around this line of oncology research.

        1. Derek Lowe says:

          Agreed – and that would make the recipients of that information guilty of at least that as well, since they also should have known better than to run with it.

  2. drsnowboard says:

    err…. I don’t think you meant to post the whole Delaware post you linked to?

    1. Derek Lowe says:

      Um, no, not exactly. Crap. Thought I’d deleted that! That’s what I get for working all day and not even looking at the flippin’ blog, isn’t it. Thanks. . .

  3. Cancer Immunologist says:

    IDO1 was an obvious target and the fact is that the Flexus team made a much better molecule. I’m sure Incyte feels pretty burned, but they got smoked by real chemists who executed at a higher level. I will be rooting for the ex-Flexus team.

    1. Anonymous says:

      I only know the public face of this story as presented here and in the related articles, but it appears that Flexus cheated. Someone told the Flexus chemists what questions were going to be on the exam, what topics ignore and avoid, and what topics to study.

      Since Fridman was high up at Incyte, he probably had lots of meetings and saw lots of internal proposals regarding alternative structures and their justifications. Since time and money are not infinite, you can’t work on every idea. At this point, it would not surprise me if Fridman stole ideas (that he might have rejected while at Incyte) from Incyte chemists and fed them to the Flexus chemists as structures he wanted them to prioritize.

      Even if they are innocent, the work of the Flexus chemists is thus tainted.

  4. ben-chod says:

    No One becomes rich without ” FRAUDULENCE” somewhere along the way.

  5. Oblarg says:

    Perhaps this is an unpopular opinion, but I don’t see why companies should have any legal protection for information that isn’t in a patent. That ought to be the cost of keeping information secret; if you do not let the public know what you have discovered, then you should not have any claim to it.

    Perhaps this would require some additional subtlety to deal with stuff which has just recently been discovered and could not yet reasonably have been patented, but I feel quite strongly about the general principle.

    1. screem says:

      How are non-disclosure agreements any less legitimate than patents as a legal framework? Why should a company be required to let the public know their discoveries if they are not ready or willing to file a patent, and how would there be any incentive to innovate if that was a requirement?

      Considering that patents have a relatively short lifetime in the context of drug discovery, it is not surprising that candidates of early discovery projects are often not protected by patents, and it is also very understandable that this would be the case. Hence companies are justified to seek other legal avenues to protect their IP. I am interested to know how or why you feel otherwise?

    2. Scott says:

      So, you think that the formula for Coca-cola should be open information?

      Because the formula for Coke is a Trade Secret, which has different protections than a Patent, which has different protections than Non-Disclosure Agreements.

      And those are all different protections for specific reasons.

  6. tangent says:

    Gosh, board members put some dumb stuff into discoverable form!

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