The Supreme Court of New York ruled in favor of RedHill Biopharma Ltd. in a breach of contract lawsuit against Kukbo Co. Ltd. of South Korea, awarding the specialty biopharmaceutical company approximately $8 million plus costs. The judgment includes $6.5 million in damages and roughly $1.5 million in interest, representing a significant legal and financial outcome for RedHill. The lawsuit originated from Kukbo's failure to make agreed-upon payments to RedHill as part of a subscription agreement signed in October 2021 and a subsequent exclusive license agreement from March 2022. These agreements were related to the development of opaganib, RedHill's first-in-class orally administered sphingosine kinase-2 selective inhibitor for COVID-19 treatment.
Opaganib is a promising compound with anticancer, anti-inflammatory, and antiviral properties currently being investigated for multiple indications. The drug is part of several U.S. government and academic collaborations, including development for radiation and chemical exposure indications such as Acute Radiation Syndrome, a phase 2/3 program for hospitalized COVID-19 patients, and a phase 2 program in oncology. The court's decision not only awards RedHill the substantial sum but also dismisses Kukbo's counterclaims. While Kukbo retains the right to seek an appeal, the ruling stands as a clear affirmation of RedHill's position. Dror Ben-Asher, RedHill's CEO, expressed gratitude for the court's judgment, which he says affirms the company's stance from the outset of the relationship.
This legal victory carries important implications for RedHill Biopharma. The awarded funds, once collected, will provide the company with additional capital to further develop its pipeline. Moreover, the resolution of this litigation removes a potential source of uncertainty for investors, potentially boosting confidence in the company's future prospects. The timing of this legal win coincides with RedHill's progress in developing opaganib for other infectious diseases, notably Ebola. Recently, the company announced that the U.S. government's Biomedical Advanced Research and Development Authority had selected opaganib for development to treat Ebola virus disease. Under a cost-sharing agreement, BARDA will provide partial funding to advance opaganib's development in mitigating and containing EBOV outbreaks.
In an in vivo EBOV study conducted with the United States Army Medical Research Institute of Infectious Diseases, opaganib demonstrated a statistically significant increase in patient survival time when administered at 150 mg/kg twice daily. RedHill Biopharma reports that opaganib is the first host-directed molecule to show activity against EBOV, marking a potential breakthrough in treating this deadly disease. The positive court ruling, combined with the progress in opaganib's development for various indications, positions RedHill Biopharma as a company to watch in the biopharmaceutical sector. The resolution of the legal dispute with Kukbo allows the company to focus more fully on its drug development efforts and potentially attract increased investor interest.
As RedHill Biopharma moves forward with its research and development programs, particularly in areas of high unmet medical need such as Ebola and other infectious diseases, the financial boost from this legal victory could play a crucial role in accelerating its progress. The company's ability to secure collaborations with U.S. government agencies further underscores the potential significance of its drug candidates in addressing critical health challenges. The judgment represents not only immediate financial relief but also validation of RedHill's contractual position and business practices, which may influence future partnership negotiations and investor perceptions of the company's stability and growth potential in the competitive biopharmaceutical landscape.
