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AlCana Denies Breaking Non-Compete Pact as Tekmira Decries Deception in Ongoing Lawsuit

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By Doug Macron

AlCana Technologies last month denied that its researchers violated non-compete agreements with their former employer, Tekmira Pharmaceuticals, as part of a legal claim filed against it by that company.

In its response to the claims, which are part of a broader trade-secret-misappropriation suit that includes partner Alnylam Pharmaceuticals, AlCana also countered Tekmira's charges that it is “an instrument of Alnylam,” and stated it was careful to conduct research only within the bounds of a contractual agreement between the three companies.

Tekmira, however, contended that the three-way agreement was designed to mislead and had “omitted and/or failed to disclose material facts.”

The legal wrangling began early this year, when Tekmira sued Alnylam for allegedly misusing trade secrets related to proprietary delivery technologies (GSN 3/17/2011).

“Alnylam abused its collaborator status and access to [the] confidential information by improperly using this information for its own internal purposes and to replicate a competing technology in ways that were unauthorized and without our consent,” Tekmira President and CEO Mark Murray said at the time during a conference call held to discuss the lawsuit.

Murray specifically highlighted the so-called MC3 lipid, which Alnylam plans to use in its upcoming hypercholesterolemia drug candidate, ALN-PCS.

“Alnylam stole MC3 from Tekmira,” Tekmira's suit charges.

Shortly thereafter, Alnylam denied the charges and countersued Tekmira for, among other things, violating provisions in the companies' partnership agreements to handle disagreements through “confidential and non-public alternative dispute resolution procedures” (GSN 4/7/2011).

Then, in June, Tekmira expanded its suit to include AlCana, which has been collaborating with Alnylam since it was founded by a group of former Tekmira employees whom the company laid off following its 2008 merger with Protiva Biotherapeutics (GSN 6/9/2011).

According to court filings, Alnylam helped with the creation of AlCana in order to maintain a relationship with key Tekmira scientists who had been closely working with Alnylam on siRNA delivery approaches.

Tekmira’s new management "abruptly terminated" the employment of several of these scientists, who originally worked for Protiva's one-time parent firm Inex Pharmaceuticals and had "invented important RNAi delivery technology licensed by Tekmira to Alnylam,” Alnylam said in the filings.

“Dismayed by the terminations and fearing the loss of access to the expertise of these individuals, Alnylam entered into consulting agreements" with the scientists after they were laid off. The scientists went on to form a new company, AlCana.

According to Tekmira, however, when the former employees began to work with Alnylam they allegedly violated the non-compete agreements to which they were bound. Tekmira further alleged that Alnylam had been using AlCana as a way to avoid its financial obligations to Tekmira and to gain access to otherwise restricted technologies, such as MC3.

Last month, in response to Tekmira's claims, AlCana said that while its scientists were employed by Tekmira and part of a research group that collaborated with Alnylam, their primarily focus was on a class of cationic lipids known as DLin-K-DMA, or K-series lipids.

“In the course of this research, the team discovered that adding a second carbon atom to the linker group of the molecule to form DLin-K-C2-DMA resulted in significant improvements in potency,” AlCana said. “Notably, the further addition of carbon atoms to the linker group … resulted in a loss of activity.

“Based on these experiments, the team concluded that the most active linker group within the K-series lipids consisted of two carbon atoms,” it added.

AlCana stated in its legal response that the research group also experimented with a variety of other cationic lipids including a class known as DLin-M-DMA, or M-series, which is structurally similar to the K-series but does not contain its ketal group characteristic. MC3 is a part of the M-series lipids.

“Like KC2, DLin-M-DMA contained a two-carbon linker,” because of which it was dubbed MC2, AlCana said in last month's court filing. The research group “synthesized only this one M-series lipid with the two-carbon linker because that was the optimal linker length they had identified with the K-series lipids.”

Tekmira did not “synthesize or evaluate any other M-series lipids, nor did it proceed with further development of MC2, which was less active than the optimal K-series lipids,” AlCana noted.

After the Tekmira researchers were let go from the company, they signed consulting agreements with Alnylam and later founded AlCana in order to continue their efforts.

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However, AlCana stressed that “from the outset of their work, the [former employees] were aware of their obligations not to use any confidential information of Tekmira and were careful not to do so.

“Out of an abundance of caution because AlCana was aware of Tekmira's propensity for litigation,” Alnylam, the University of British Columbia, and AlCana crafted an agreement with Tekmira that specified what kind of research AlCana and Alnylam would perform and “what each party's respective rights would be.”

AlCana added that Tekmira “expressly consented” to its former employees continuing their collaboration with Alnylam to develop lipid nanoparticles for siRNA delivery.

“Nothing in the … agreement suggested any limits on the right to experiment with M-series lipids (other than MC2) that were outside the scope of the lipids that had been developed by the AlCana employees when they previously worked for Tekmira,” AlCana stated.

As such, AlCana researchers synthesized an M-series lipid, MC3, with a longer carbon linker chain than MC2. Though the longer carbon linker chain lowered potency of K-series lipids, the team discovered that it enhanced M-series lipids and that MC3 was “much more potent than even the best K-series lipids.”

Alnylam informed Tekmira of this discovery, and even though it had a “full understanding of what its former employees planned to do,” Tekmira disregarded its agreement with Alnylam, AlCana said. Tekmira then filed its suit, “attempting to use litigation to re-write [their] agreement.”

“Tekmira asserts its claims for the sole purpose of bullying AlCana, a small competitive start-up that has made important discoveries in [lipid nanoparticle] technology that makes Tekmira's own technology obsolete or less valuable,” AlCana added.

For its part, Tekmira maintains that at least one of the AlCana researchers had developed MC3 while employed at Tekmira, or at least knew that modifying MC2 would result in an enhanced lipid.

Further, Tekmira's response to AlCana earlier this month described how Alnylam allegedly “caused one of the ex-Tekmira employees to apply for a provisional patent application on MC3 and to assign it to AICana," a move that breached the assignment provision of his employment agreement.

Alnylam then obtained an exclusive license from AICana to use the MC3 compound in the siRNA field, and when the provisional application matured into a non-provisional application, Alnylam had AICana assign to it the ownership rights.

“Thus, Alnylam, with AICana's assistance, used AlCana to funnel Tekmira's MC trade secrets to Alnylam — a deliberate, deceitful, and unfair scheme designed to avoid royalty obligations to Tekmira, to deprive Tekmira of its exclusive ownership of these compounds, and to prevent Tekmira from using its own confidential information, including trade secrets,” Tekmira added

Meantime, Tekmira said that the agreement with AlCana and Alnylam indicated that AlCana researchers would be working on “novel lipids,” not ones based on or derived from Tekmira know-how.

According to Tekmira, AICana and Alnylam told it that the former "would explore new structures, not structures that contain, were based on, and/or derived from Tekmira information.”

“Alnylam and AlCana, with deceptive intent, omitted and/or failed to disclose material facts to Tekmira, including but not limited to that they had not and did not plan to conduct research that was new nor novel, but rather had developed or planned to develop technology that contains, is based on, and/or derived from Tekmira's information.”


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