Sorrento Therapeutics says granted contractual damages of $125M in arbitration

In a regulatory filing, Sorrento Therapeutics noted that the company has been engaged in arbitration before the American Arbitration Association against NantPharma relating to alleged breaches of the May 14, 2015 Stock Sale and Purchase Agreement entered into between the company and NantPharma related to the development of the cancer drug Cynviloq. On December 20, the arbitrator in the Cynviloq arbitration issued an award granting contractual damages of $125M to the company, reflecting the value of lost milestone payments for the approval of Cynviloq for the treatment of breast and lung cancers. "The Cynviloq Arbitration is just one of several pending actions filed by the company against Dr. Soon-Shiong and entities he controls. As previously disclosed, in April 2019, the company filed an action in the Los Angeles Superior Court derivatively on behalf of Immunotherapy NANTibody against NantCell and Patrick Soon-Shiong, among others, related to several breaches of the June 11, 2015 Limited Liability Company Agreement for NANTibody entered into between the company and NantCell. The suit alleges breaches of fiduciary duties and seeks, inter alia, a declaration that the Assignment Agreement entered into on July 2, 2017, between NantPharma and NANTibody is void and an equitable unwinding of the Assignment Agreement. The suit calls for the restoration of $90.05M to the NANTibody capital account, thereby restoring the company’s equity method investment in NANTibody to its invested amount as of June 30, 2017 of $40.0M. The parties are currently engaged in discovery in the Derivative Action, with a jury trial likely in 2023. In 2020, the company additionally filed a legal action against Patrick Soon-Shiong in Los Angeles Superior Court, asserting claims for fraudulent inducement and common law fraud alleging that, among other things, Dr. Soon-Shiong acquired the drug Cynviloq for the purpose of halting its progression to the market. The Los Angeles Superior Court claims against Dr. Soon-Shiong had been stayed pending resolution of the Cynviloq arbitration, and the company expects that they will now resume. The company will have the right to a jury trial to pursue these claims," the filing stated.