Novo seeks US $830M in fraud case against Singaporean biotech firm

DENMARK – Novo Nordisk is taking legal action against KBP Biosciences, alleging that the Singapore-based drugmaker deliberately hid negative clinical trial data before finalizing a US $1.3 billion deal for the hypertension drug ocedurenone (KBP-5074) in late 2023.

Consequently, Novo is seeking US $830 million in damages, and a Singapore court has agreed to freeze KBP’s assets worldwide as the case moves forward.

According to Novo, KBP and its founder, Huang Zhenhua, concealed critical Phase II trial data that revealed the drug’s lack of effectiveness.

The Singapore International Commercial Court supported Novo’s claim, with Judge Philip Jeyaretnam stating, “I am satisfied that Novo has shown that it has a good arguable case against KBP for fraud under New York law.” The dispute will now proceed to arbitration in New York.

Ocedurenone is an oral non-steroidal mineralocorticoid receptor antagonist that was being tested in the Phase III CLARION-CKD trial for uncontrolled hypertension and advanced chronic kidney disease.

However, Novo terminated the study in June 2023 after interim results showed the drug failed to meet its primary goal of reducing systolic blood pressure after 12 weeks. This led Novo to record a financial impairment of DKK 5.7 billion (US $798 million).

The court ruling stated that “KBP knowingly failed to disclose material information, including interim analyses of Phase II clinical trial results showing ocedurenone’s inefficacy.”

Additionally, Novo argues that KBP hid quality and compliance issues at a test site that produced misleadingly positive results.

Further raising concerns, the court found that KBP transferred US $339.1 million to its holding company and declared US $578.5 million in dividends around the time the deal closed.

Novo claims this suggests Dr. Huang intended to move assets beyond Novo’s reach in anticipation of a legal dispute.

The judge noted that there is strong evidence that Dr. Huang was aware of the unfavorable data before signing the agreement.

While pursuing legal action, Novo continues to expand its cardiovascular pipeline, building on its success with Ozempic and Wegovy.

The company’s IL-6 antibody, ziltivekimab, is currently in three Phase III trials, alongside other early-stage cardiovascular candidates.