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CareDx Accuses Natera of False Advertising in Second Lawsuit

This article has been updated to include a statement from Natera.

NEW YORK (GenomeWeb) – CareDx has filed a second lawsuit against Natera today in the United States District Court for Delaware, accusing the company of trying to "mislead" patients and clinicians into thinking that Natera's Prospera kidney transplant test is superior to CareDx's AlloSure organ transplant diagnostics.

In March, CareDx and Stanford University jointly filed suit against Natera, claiming that the company has infringed US Patent Nos. 9,845,497 and 8,703,652, which are exclusively licensed to CareDx from Stanford University. The patents cover methods of cell-free DNA analysis for non-invasive monitoring of organ transplant rejection, which CareDx uses as the basis for its AlloSure technology.

In that first suit, CareDx asserted that Natera has infringed that intellectual property through its marketing and performance of a kidney transplant rejection test, which it performs at its CLIA-certified laboratory in San Carlos, California, to analyze cell-free DNA from transplant patients to inform rejection.

This new lawsuit, however, alleges that that Natera's comparisons of its kidney transplant test to AlloSure are based on unscientific and unreliable data.

"Natera has begun a false advertising campaign designed to deceive doctors, healthcare professionals, insurance companies, and patients — as well as investors — into believing that Natera's 'me too' test is superior to AlloSure when that has simply not been shown," CareDx states in its complaint. "Natera's dissemination of false and misleading claims about AlloSure is an attempt to poison the marketplace and must be stopped."

CareDx makes several claims against Natera in its brief, starting with the allegation that Natera's study on Prospera's performance and its comparisons to AlloSure is "too flawed and unreliable" to support its conclusions.

"Unlike the CareDx study, which utilized an observational protocol that involved gathering and analyzing samples from 14 clinical centers at pre-defined timepoints, the investigators for the Natera study chose instead to retrospectively select samples that had been collected for unrelated purposes by a single clinical center and archived," CareDx notes in its suit, adding that the study was then published in the Journal of Clinical Medicine, which lacks the "rigorous and prestigious" reputation of the Journal of American Society of Nephrology, which published the CareDx AlloSure study.

CareDx also alleges that Natera's sample set is not representative of the transplant population because the patients were selected retrospectively from a pre-existing sample archive collected from a single study center, with biopsies purportedly re-interpreted by a single pathologist.

Further, CareDx adds, 20 percent of the patients whose samples were analyzed in Natera's study were under the age of 18 and were all classified as having no rejection.

"Such uniform results are surprising and suspicious because children are more likely to suffer active rejection of an organ transplant, yet there is no indication that any attempt was made either to understand these anomalous results or to exclude the samples," the complaint states. "Furthermore, the inclusion of samples from children under 18 generally demonstrates a lack of concern for the potential biasing effect, given the different likelihood of rejection between children and adults."

In addition, CareDx alleges that Natera inappropriately inflated the sample size of its study in filings with the US Securities and Exchange Commission and on calls with investors, representing that its study was based on 292 patients even after some of those patients had been excluded. Also, according to the lawsuit, Natera's study improperly mixed population sets, melding surveillance and for-cause biopsy samples into one pool "in a manner that inappropriately skews the performance metrics of the Natera study in Prospera's favor."

The Natera study, CareDx further claims, doesn't adhere to the Banff Classification of Allograft Pathology — an international consensus classification for the reporting of biopsies from solid organ transplants that provides criteria for the diagnosis of types of kidney rejections.

"Only kidney transplant rejection studies conducted in accordance with the Banff Rules are accepted in the transplant research and scientific community," CareDx notes. "Although the Natera study publication claims to adhere to the 2017 Banff Rules … the detailed criteria found in the Natera study publication do not consistently comport with the 2017 Banff Rules, especially in classifications of T cell-mediated rejection and antibody-mediated rejection forms of [acute rejection]."

These misclassifications distort Prospera's performance metrics and prevent a true comparison to AlloSure, the firm adds. Therefore, Natera's study cannot support any comparative claims between the two technologies, and any such comparisons are "literally false and entirely misleading," according to the brief. "Natera's manipulation of its test results, combined with its pattern of blatant falsehoods concerning the accuracy and veracity of Prospera as compared to AlloSure, reflects Natera's intent to unlawfully deceive and mislead consumers. CareDx respectfully seeks an immediate halt to Natera's continued false and misleading advertising claims, along with monetary damages and other requested relief."

CareDx concludes by appending several examples of Natera press releases, various SEC filings, company presentations, and public statements from Natera executives that it says proves its case for false advertising. Further, CareDx adds, these "false and misleading statements" have harmed and will continue to harm CareDx by causing it to lose sales and by injuring its reputation.

The lawsuit accuses Natera of one count of false advertising in violation of the Lanham Act, one count of trademark disparagement under the Lanham Act, one count of common law unfair competition, and one count of unfair or deceptive trade practices under Delaware law.

CareDx is requesting a trial by jury. It wants monetary damages to cover its lost business and profits, the harm to its goodwill and reputation, and Natera's "ill-gotten and unjustly derived revenues;" punitive and exemplary damages; litigation and attorneys' fees; and statutory damages.

CareDx has also asked the court to issue an order preliminarily and permanently enjoining Natera from disseminating or causing the dissemination of the advertising statements it has outlined in its suit. The company has further asked that Natera be required to "take all necessary corrective measures to correct the false and misleading impressions created among healthcare professionals by the false and misleading statements alleged herein."

In a statement, CareDx attorney Ed Reines of Weil, Gotshal & Manges asserted that the body of evidence presented in the lawsuit shows that Natera's actions were not innocent or unintentional. "Together they suggest a concerted effort by Natera to mislead patients and medical personnel into thinking its study was more credible than it actually was and that it proved Natera's technology is superior to CareDx's, which it is not," he added.

A Natera spokesperson released a statement noting that the company has not yet been served with the complaint and could not, therefore, comment on the specific allegations. However, the firm added, "Natera's performance claims are based on scientific, peer-reviewed evidence. Natera's better clinical and analytic performance is documented in studies recently published in Transplantation and the Journal of Clinical Medicine. We believe our test will become a valuable tool in the management of kidney transplant patients and look forward to serving these patients."

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