Antrim Pharmaceuticals LLC v. Bio-Pharm, Inc.

CourtCourt of Appeals for the Seventh Circuit
DecidedFebruary 14, 2020
Docket18-3434
StatusPublished

This text of Antrim Pharmaceuticals LLC v. Bio-Pharm, Inc. (Antrim Pharmaceuticals LLC v. Bio-Pharm, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Antrim Pharmaceuticals LLC v. Bio-Pharm, Inc., (7th Cir. 2020).

Opinion

In the

United States Court of Appeals For the Seventh Circuit ____________________ No. 18-3434 ANTRIM PHARMACEUTICALS LLC, Plaintiff-Appellant, v.

BIO-PHARM, INC., Defendant-Appellee. ____________________

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 16-cv-00784 — Matthew F. Kennelly, Judge. ____________________

ARGUED SEPTEMBER 16, 2019 — DECIDED FEBRUARY 14, 2020 ____________________

Before BAUER, BRENNAN, and ST. EVE, Circuit Judges. BRENNAN, Circuit Judge. Antrim Pharmaceuticals LLC and Bio-Pharm, Inc. arranged to manufacture and sell a generic anti-depressant. When their plan fell apart, litigation fol- lowed. Antrim sued Bio-Pharm for breach of contract, and Bio-Pharm counterclaimed based on promissory estoppel or, in the alternative, breach of contract. Following a five-day trial, a jury found for Bio-Pharm on Antrim’s breach of 2 No. 18-3434

contract claim and for Antrim on Bio-Pharm’s counterclaim. Neither party was awarded damages. Antrim appealed. Antrim challenges the district court’s jury instructions, ev- identiary rulings, and decision to allow Bio-Pharm to request lost profits as a remedy on its counterclaim. Bio-Pharm argues Antrim waived these arguments on appeal because Antrim agreed to a general verdict form and did not file a post-trial motion under Federal Rule of Civil Procedure 50(b). We con- clude that Bio-Pharm’s waiver argument has no merit but af- firm because the district court committed no reversible error. I. As 2011 gave way to the new year, some in the pharma- ceutical industry believed easy money was to be made. The patent for Lexapro, an anti-depressant with billions of dollars in yearly sales, was set to expire in March 2012. See Gary Rob- bins, Consumers to Save Big as Lexapro Patent Expires, SAN DIEGO UNION-TRIBUNE, Mar. 5, 2012, https://www.sandi- egouniontribune.com/business/biotech/sdut-consumes-save- big-lexapro-patent-expires-2012mar05-htmlstory.html. The expiration of Lexapro’s patent presented a potentially lucra- tive business opportunity for pharmaceutical companies looking to sell the generic version of Lexapro, known as es- citalopram. Enter the startup company Antrim and the drug manufac- turer Bio-Pharm. These companies appeared to be a perfect match to profit from Lexapro’s loss of patent protection. Brian Tambi, the head of Antrim, had extensive experience in grow- ing pharmaceutical companies from the ground up. Bio- Pharm was a well-known contract manufacturer for the generic drug industry. And Antrim and Bio-Pharm had No. 18-3434 3

already established a business relationship—BrianT Labora- tories (Antrim’s corporate predecessor), Bio-Pharm, and a third company had signed a non-binding term sheet in De- cember 2009 to develop, manufacture, market, and sell un- specified pharmaceutical products. The parties to the term sheet planned to share equity in that joint pharmaceutical ar- rangement. But the business deal never materialized, and the term sheet lapsed in early 2010. Although Antrim and Bio- Pharm originally intended to sign an updated version of the term sheet for their escitalopram venture, the two companies never signed a written contract to replace the term sheet after its expiration. The two companies forged ahead without a signed agree- ment. In May 2015, the Food and Drug Administration ap- proved Antrim’s Abbreviated New Drug Application (“ANDA”) for escitalopram, which permitted Antrim to sell escitalopram and contract out its manufacturing to Bio- Pharm. Later that year, Bio-Pharm manufactured the first batch. Bio-Pharm, however, never shipped the escitalopram to Antrim. Bio-Pharm insists it was not obligated to supply Antrim with the escitalopram because the companies never signed a new agreement after the term sheet expired. Alt- hough the companies lacked a written contract, Bio-Pharm claims Antrim had promised they would share equity in the new venture according to the now-expired term sheet. But when Antrim told Bio-Pharm that equity was off the table, Bio-Pharm contends it decided to leave the business venture. Antrim tells a different story. According to Antrim, the two parties committed to an oral contract in early 2012, under which Bio-Pharm received a share of net profits instead of 4 No. 18-3434

equity, but Bio-Pharm backed out of that agreement when Antrim refused to renegotiate the terms of the deal. Antrim sued Bio-Pharm for allegedly breaching the oral contract. Bio-Pharm counterclaimed on the theory of promis- sory estoppel, asserting it relied on Antrim’s false promises of shared equity in the venture. In the alternative, Bio-Pharm counterclaimed against Antrim for breaching the oral contract Antrim claimed existed. Both parties filed motions in limine relevant to this appeal. Antrim argued the district court should preclude expert testi- mony by one of Bio-Pharm’s expert witnesses, Mark Schwartz, on how the FDA regulates ANDA holders. Bio- Pharm argued the district court should preclude expert testi- mony by Sean Brynjelsen, one of Antrim’s expert witnesses, on industry practices and to what degree Bio-Pharm’s alleged breach impaired the value of Antrim’s business under a lost enterprise value theory. The district court denied Antrim’s motion in limine to exclude Schwartz’s testimony on FDA practices, but it granted Bio-Pharm’s motions in limine to ex- clude those portions of Brynjelsen’s testimony on industry practices and Antrim’s losses under a lost enterprise value theory. Several other motions are pertinent to this appeal. In the final pretrial order and later at the jury instruction conference, Antrim proposed Jury Instruction No. 8. That instruction stated that under FDA policy the holder of an ANDA is also the owner of the product underlying that ANDA. The district court rejected Jury Instruction No. 8 after finding the instruc- tion on “what an ANDA means” was irrelevant to the case. DE 169 at 39. Antrim also filed a motion to bar Bio-Pharm from requesting lost profits as a remedy for its counterclaim No. 18-3434 5

because Bio-Pharm missed the disclosure deadline imposed by Federal Rule of Civil Procedure 26(a)(1). The district court ruled that Bio-Pharm violated Rule 26(a)(1) but denied An- trim’s motion on the grounds that the violation was harmless. The case went to trial, and the district court used a general verdict form after neither party objected.1 Following the jury’s verdict in favor of Bio-Pharm on Antrim’s claim and in favor of Antrim on Bio-Pharm’s counterclaim, Antrim timely ap- pealed. II. On appeal, Antrim alleges the district court erred by: (1) rejecting Jury Instruction No. 8, (2) denying its motion to pre- clude Schwartz’s testimony on FDA practices, (3) granting Bio-Pharm’s motion to preclude Brynjelsen’s testimony on in- dustry practices, (4) granting Bio-Pharm’s motion to preclude Brynjelsen’s testimony on Antrim’s lost enterprise value, and (5) allowing Bio-Pharm to request lost profits as a remedy for its counterclaim.2

1 Among the types of jury verdicts that federal courts recognize are general and special. See Turyna v. Martam Const. Co., Inc., 83 F.3d 178, 180– 81 (7th Cir. 1996). “General verdicts simply ask the jury to answer the question ‘who won,’ and if the winning party is entitled to a monetary award, to answer the question ‘how much.’” Id. at 181. Special verdict forms require the jury to make written findings on issues of fact; the court then applies the law to the jury’s findings. See FED. R. CIV. P. 49(a).

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