Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Health newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (October 8, 2020, 10:17 PM EDT) -- Becton Dickinson & Co. says it's owed more than $6 million because BioMedomics Inc. developed a COVID-19 antibody test that failed to get U.S. Food and Drug Administration clearance, according to a suit filed Thursday.
In a complaint filed in North Carolina federal court, medical technology company BD alleged that it inked a deal requiring BioMedomics to make and sell units of a test meant to detect COVID-19 antibodies.
BD alleges in its complaint that if the product at issue couldn't be sold in the U.S., BioMedomics agreed it would pay BD back for what it paid for the product. But after the product failed to get the FDA's emergency use authorization, BioMedomics refused to refund BD's money, the company claims.
"However, as of the date of this filing, BioMedomics has not obtained the required EUA for the sale and distribution of the product from the FDA," BD alleges. "Consequently, the product is nonconforming and unsalable."
In March, BD entered into the deal at issue — called a term sheet for exclusive distribution agreement — that required BioMedomics to sell units of the product at issue, according to the suit.
The agreement also required that BioMedomics would be the one in charge of making sure the product met legal and regulatory requirements, according to the complaint.
"Under the term sheet, if the product were not permitted to be sold in the United States due to applicable laws and regulations, BioMedomics was to provide a refund to BD for the full amount paid for the product," the medical technology company alleges.
But the FDA in early May said that the product had to get an emergency use authorization before it could go to market, BD says.
Even though "BioMedomics submitted an EUA application to the FDA," the product was recalled in June by BioMedomics, according to the complaint. In July, the FDA said that the product didn't meet its emergency use authorization requirements, the suit says.
"As a result of BioMedomics' inability to ensure that the product continued to be permitted to be sold pursuant to applicable laws and regulations in the United States, BD sent a notice on Aug. 14, 2020 stating that it did not intend to continue its relationship with BioMedomics and demanded a full repayment of its prepayment for the product, which repayment was expressly required under the term sheet," BD said. "By letter dated Sept. 4, 2020, BioMedomics refused to refund BD's prepayment for the product and has thereafter continued such refusal."
The suit is seeking $6.125 million and additional lost profits and interest.
Representatives for the parties did not immediately respond to requests for comment.
Becton Dickinson & Co. is represented by Mark A. Stafford and Chelsea K. Barnes of Nelson Mullins Riley & Scarborough LLP.
Counsel information for BioMedomics was not immediately available.
The case is Becton Dickinson & Co. v. BioMedomics Inc., case number 5:20-cv-00536, in the U.S. District Court for the Eastern District of North Carolina.
--Editing by Nicole Bleier.
For a reprint of this article, please contact reprints@law360.com.
