After a disastrous two years for Valeant, the company faces a lawsuit alleging it “engaged in willful ignorance” to bypass a would-be partner and acquire intraocular lens technology from a third-party licensee. But Valeant has hit back with its own counterclaim.
California’s Iconlabs alleges that the ailing drugmaker's Bausch & Lomb unit received two of Icon’s lenses for testing back in 2011, but later terminated their contract, saying it wasn’t interested in purchasing the technology. But B&L's subsidiary in Turkey pursued the technology through a local company that had licensed it, according to the lawsuit.
Valeant denies the allegations, and last week, it filed a countersuit saying as much—alleging, meanwhile, that Iconlabs’ partner is at fault.
Icon alleges B&L Saglik, a Turkish subsidiary, signed an agreement with Anadolu Tip, an Icon partner in the country, to acquire the lens technology. In doing so, it engaged in “willful ignorance” or “negligence,” turning a blind eye to the fact that Icon and Anadolu Tip had an agreement prohibiting such a transfer, according to the device company's suit.
Nonetheless, B&L acquired Icon’s technology through that route, according to the lawsuit. Icon now alleges it’s out $170 million in lost profits, a representative said via email. Among the allegations in Icon’s suit are breach of contract, unjust enrichment, misappropriation of trade secrets, intentional interference with contractual relations and more. Valeant acquired B&L in 2013.
The Icon suit further alleges that the money paid for the assets didn’t go to the Turkish company, but rather to offshore accounts set up by its officers and directors.
A Valeant spokesperson said the company and its B&L subsidiary "deny these allegations, and we believe we acted properly with respect to the purchase of this intraocular lens technology."
The lawsuit and Valeant’s response come as the Laval, Quebec-based company works to recover from two years of devastating setbacks that have wiped 90% off its share price. After allegedly shady dealings with specialty pharmacy Philidor came to light back in 2015, things went south for the drugmaker. Pricing controversy, Capitol Hill hearings, government investigations and lawsuits—plus a mountain of debt—haven’t helped the company.
Meanwhile, hedge fund billionaire John Paulson recently took up a board position at the embattled company, just after another high-profile investor, Bill Ackman, called it quits.