Court rejects application to set aside worldwide freezing order

Novo Nordisk was found to haver better argument.

The Singapore International Commercial Court has rejected KBP Biosciences Pte. Ltd.’s bid to set aside the order freezing the company’s assets.

The said worldwide freezing order was obtained by Denmark-based Novo Nordisk. Its case was that KBP had deliberately failed to disclose information that was material to its decision to acquire Ocedurenone, a drug under development to treat uncontrolled or resistant hypertension in patients with advanced chronic kidney disease.

According to the decision made by Judhe Philip Jeyaretnam, Novo has the better of the argument. 

The court noted a statement made during a January 2024 KBP Cayman shareholder meeting that said “we have encountered unexpected challenges after the closing of the deal and our road ahead will not be a smooth one, so our core objective now is to properly incentivize the team to complete the [New Development Application] of our product with Novo Nordisk, otherwise not only can’t we receive the milestone and other payments from Novo Nordisk, but also they may claim damages against us.”

Whilst KBP argued that this statement instead relates to a claim that happened to be made by an employee on the same day, alleging that he was the true owner of the patent in Ocedurenone, this argument was not convincing, the court said.

Jeyaretnam also said that KBP Biosciences founder Huang Zhenhua “was not referring to a claim by Novo for breach of the representation and warranty that KBP owned the intellectual property in the drug, but was instead referring to potential claims if the drug did not show efficacy during Phase 3.”

“This was connected to non-disclosures on KBP’s part concerning the Phase 2 results. I conclude that Dr Huang, knowing that Novo had not been told of the consistency issue that had caused Otsuka not to proceed with acquisition at the Phase 2 stage, anticipated a claim against KBP if Phase 3 was not successful,” the document read.

Jeyaretnam said there is powerful evidence that Huang has exhibited dishonesty that bears on the risk of dissipation.

“That dishonesty is shown by KBP deliberately not providing Novo with information concerning the Bulgaria site so that the transaction would conclude and KBP would receive the US$700m, followed by the relatively speedy movement of the proceeds of sale out of KBP and ultimately to himself,” the judge said.