Index No. 653320/12
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`VERIFIED COMPLAINT
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
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`INTELLECT NEUROSCIENCES, INC.,
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`Plaintiff,
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`- against -
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`PFIZER INC. and RINAT NEUROSCIENCE
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`CORP.,
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`Defendants.
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`Plaintiff Intellect Neurosciences, Inc., by its attorney,
`Stanley K. Shapiro, complaining of defendants, alleges as follows:
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`The Parties
`1) Plaintiff INTELLECT NEUROSCIENCES, INC. (“Intellect”) is
`a publicly traded Delaware corporation, authorized to do business
`in New York, with principal offices at 45 West 36th Street, New York,
`New York.
`2) On information and belief, defendant PFIZER INC. (“Pfizer”)
`is, and at all relevant times was, a publicly traded Delaware
`corporation, regularly doing business in New York, with its principal
`place and registered county of business at 235 East 42nd Street, County
`of New York, State of New York.
`3) Upon information and belief, defendant RINAT NEUROSCIENCE
`CORP. (“Rinat”) is, and at all relevant times was, a non-domestic
`wholly owned subsidiary of Pfizer, regularly doing business in New
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`VERIFIED COMPLAINT
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
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`INTELLECT NEUROSCIENCES, INC.,
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`Plaintiff,
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`- against -
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`PFIZER INC. and RINAT NEUROSCIENCE
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`CORP.,
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`Defendants.
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`- - - - - - - - - - - - - - - - - - - -x
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`Plaintiff Intellect Neurosciences, Inc., by its attorney,
`Stanley K. Shapiro, complaining of defendants, alleges as follows:
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`The Parties
`1) Plaintiff INTELLECT NEUROSCIENCES, INC. (“Intellect”) is
`a publicly traded Delaware corporation, authorized to do business
`in New York, with principal offices at 45 West 36th Street, New York,
`New York.
`2) On information and belief, defendant PFIZER INC. (“Pfizer”)
`is, and at all relevant times was, a publicly traded Delaware
`corporation, regularly doing business in New York, with its principal
`place and registered county of business at 235 East 42nd Street, County
`of New York, State of New York.
`3) Upon information and belief, defendant RINAT NEUROSCIENCE
`CORP. (“Rinat”) is, and at all relevant times was, a non-domestic
`wholly owned subsidiary of Pfizer, regularly doing business in New
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`York with offices at 235 East 42nd Street, County of New York, State
`of New York.
`4) Upon information and belief, Rinat is, and at all relevant
`times was, operated as a unit or division of Pfizer operating within
`Pfizer’s Worldwide Research and Development division.
`5) Upon information and belief, Rinat presently is, and at all
`relevant times was operated as a unit of Pfizer and under the complete
`dominion and control of Pfizer.
`6) Plaintiff Intellect is, and at all relevant times was, a
`biopharmaceutical company engaged in the discovery and development
`of disease-modifying therapeutic agents for the treatment of
`Alzheimer's and other neurological diseases.
`7) Defendant Pfizer is a “top tier” global pharmaceutical
`company that describes itself as the world’s largest research based
`pharmaceutical company (see www.pfizer.com).
`8) Upon information and belief, in or about 2006 Pfizer
`acquired Rinat, at the time a privately held biotechnology company
`involved in developing drugs for Alzheimer’s disease and other
`neurological disorders.
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`Jurisdiction
`9) In addition to the above, the parties consented by contract
`to the jurisdiction of courts of the State of New York.
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`As and for a First Cause of Action
`(for Breach of Contract)
`10) In 2008, Pfizer negotiated with Intellect to obtain a
`non-exclusive license to practice the technology included or claimed
`in certain of Intellect’s patents and inventions relating to
`antibodies and methods of treatment for Alzheimer’s Disease and other
`human diseases and conditions. Pfizer’s negotiations with Intellect
`culminated in a written contract, made as of October 3, 2008, for
`a license in the name of Rinat.
`11) Plaintiff and defendants entered into a written Option and
`License Agreement (the “Agreement”), dated as of October 3, 2008,
`and an Amendment 1 to such Option and License Agreement made as of
`November 25, 2008, providing an option for the grant of a license
`(the “License”) to Rinat and its Affiliates, including Pfizer, to
`practice the technology included or claimed in Intellect’s pending
`and issued patents listed on a Schedule 1 to the Agreement (the
`“Licensed Patents”) (relating to antibodies and methods of treatment
`for Alzheimer’s Disease and other disorders), and to make, have made,
`use, sell, offer to sell and import “Licensed Products”. The
`“Licensed Products” are defined in the Agreement to include any
`antibody owned or licensed by defendants directed towards Amyloid
`Beta, including the antibody directed toward Amyloid Beta sometimes
`known as ponezumab. (A copy of the Option and License Agreement and
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`of Amendment 1 to the Option and License Agreement are annexed hereto
`as Exhibits 1 and 2, respectively, and are incorporated herein by
`reference.)
`12) Defendants paid Intellect an up-front fee of $500,000 on
`signing of the Agreement, of which $250,000 was consideration for
`the option to license the Licensed Patents and $250,000 was a credit
`against the license Exercise Fee.
`13) On or about December 19, 2008, defendants made payment to
`plaintiff of the balance of the Exercise Fee to exercise the option
`for the License under the Agreement, to be effective as of December
`19, 2008. (A copy of a letter to plaintiff dated January 7, 2009,
`confirming defendants’ exercise of the option for the License under
`the Agreement effective as December 19, 2008, is annexed hereto as
`Exhibit 3, and incorporated herein by reference.)
`14) At the time of and subsequent to defendants’ exercise of
`its option for the License, defendants engaged in activities relating
`to the development, manufacture, commercialization, marketing or
`sale of the “Lead Compound”, defined in the Agreement as defendants’
`“antibody directed toward Amyloid Beta, commonly referred to within
`Licensee as PF04360365 or RN 1219" (see Agreement Section 1.9), also
`commonly known and hereinafter referred to as “ponezumab”.
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`15) The Agreement defined the “Pfizer Compound” to include the
`Lead Compound, i.e., to include ponezumab (see Agreement Section
`1.15).
`16) The Agreement defined “Licensed Product” to mean "any
`product in any dosage form containing the Pfizer Compound [by
`definition, any product containing ponezumab, the Lead Compound],
`the development, manufacture, use, sale or importation of which
`product would, absent the license...infringe any Valid Claim in any
`Licensed Patent" (see Agreement Section 1.11).
`17) A “Valid Claim” was defined in the Agreement to mean and
`include “any claim of any issued and unexpired patent that has not
`been rejected, revoked, or held unenforceable or invalid by a
`decision of a court or other government agency of competent
`jurisdiction”, which decision is final, with any and all rights of
`appeal exhausted (see Agreement Section 1.20).
`18) At the time of and subsequent to defendants’ exercise of
`its option for the License, defendants were developing ponezumab as
`a treatment for Alzheimer’s Disease.
`19) In 2011 an article by defendants in a scientific journal
`stated that ponezumab (i.e., the Lead Compound as defined in the
`Agreement, which by definition in the Agreement means also a Pfizer
`Compound) binds specifically to the carboxyl C-terminus of Amyloid
`Beta 1-40.
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`20) Defendants accepted the benefits of the Agreement and
`License of plaintiff’s Licensed Patents.
`21) The Agreement provided that once effective, the Agreement
`and License thereunder remained in effect unless or until terminated
`in accordance with the provisions of Section 7 of the Agreement (see
`Agreement Section 7.1).
`22) The Agreement afforded the Licensee the right to terminate
`the Agreement Aupon sixty (60) days written notice to [plaintiff]
`Licensor, at any time after the cessation of [Licensee’s] and its
`Affiliates’ activities relating to the development, manufacture,
`commercialization, marketing or sale of the Lead Compound [i.e.,
`ponezumab]” (see Agreement Section 7.5).
`23) However, defendants never provided written notice of
`termination of the Agreement pursuant to Section 7.5 at any time prior
`to May 8, 2012.
`24) The Agreement and the License were not terminated and
`remained in effect on and as of May 8, 2012.
`25) In addition to the up-front payment and Exercise Fee, the
`Agreement provided that the Licensee was to pay non-refundable
`Milestone Payments when, during the term of the License, certain
`milestone events as described in the Agreement were reached with
`respect to a Licensed Patent or a Licensed Product (see Agreement
`Section 3.1.3).
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`26) One of the milestone events with respect to the Licensed
`Patents was set forth in Section 3.1.3(a) of the Agreement, which
`provides that following the exercise of the Option, a Milestone
`Payment from Licensee to plaintiff in the amount of $2,000,000 would
`become due upon the "grant in the United States of a Licensed Patent
`with at least one Valid Claim that covers a Licensed Product in the
`Territory [i.e., by definition worldwide] in the Field [i.e., very
`broadly defined in the Agreement as ”…treatment, prevention and/or
`control of all disease and/or condition, in humans, including but
`not limited to Alzheimer's Disease..."].
`27) The Licensed Patents under the Agreement included
`plaintiff’s then pending United States Patent Application No.
`10/084,380, filed February 28, 2002 (see Schedule 1 to the
`Agreement).
`28) On May 8, 2012, the USPTO granted to Intellect, Patent No.
`US 8,173,127 B (issued upon Patent Application No. 10/084,380, filed
`February 28, 2002) (“Intellect’s '127 Patent”), containing patent
`claims directed to methods of treatment of Alzheimer’s Disease with
`an antibody that recognizes the free C-terminus of Amyloid Beta,
`inter alia, Amyloid Beta 1-40. (A copy of Intellect’s ‘127 Patent,
`Patent No. US 8,173,127 B, dated May 8, 2012, is annexed hereto as
`Exhibit 4, and incorporated herein by reference.)
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`29) Intellect’s '127 Patent is a Licensed Patent under the
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`Agreement.
`30) The defendants’ ponezumab product recognizes the free
`C-terminus of Amyloid Beta and is a Licensed Product under the
`Agreement.
`31) The Intellect '127 Patent has Valid Claims that encompass
`the Pfizer Compound ponezumab for use in treating Alzheimer's
`Disease.
`32) The use of ponezumab to treat Alzheimer's disease would
`infringe at least one Valid Claim in Intellect's '127 Patent.
`33) The grant of Intellect’s ‘127 Patent on May 8, 2012
`satisfied the terms of Section 3.1.3(a) of the Agreement and
`triggered the $2 million Milestone Payment provided therein, such
`that a milestone payment of $2 million became due and owing to
`Intellect.
`34) The milestone payment became due and owing to Intellect
`on May 8, 2012, when the United States Patent and Trademark Office
`granted Intellect’s '127 Patent.
`35) Despite due demand, defendants have failed to pay any part
`of said Milestone Payment due in the stated sum of Two Million
`($2,000,000), and the full amount thereof remains overdue and owing.
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`36) Plaintiff notified defendants in writing in respect to
`such failure to pay, after payment was not made within sixty days
`after the grant of the ‘127 patent on May 8, 2012.
`37) Defendants failed to cure such default and make payment and
`more than thirty additional days have passed, and the full amount
`thereof remains overdue and owing.
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`38) By reason of the foregoing, defendants have materially
`breached the Agreement, and plaintiff has been damaged thereby.
`39) By reason of the aforesaid breach of the Agreement and
`default by defendants, plaintiff has been damaged in the sum of Two
`Million ($2,000,000) Dollars, plus interest from May 8, 2012.
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`Second Cause of Action
`40) The allegations contained in paragraphs 1 through 39 are
`realleged as if repeated in full.
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`41) Defendants have breached the implied duty of good faith
`and fair dealing under the Agreement, and by reason thereof Intellect
`has been damaged.
`42) By virtue of the foregoing, defendants breached the
`Agreement with plaintiff, as a result of which breach plaintiff has
`suffered damages in a sum of not less than Two Million ($2,000,000)
`Dollars, plus interest from May 8, 2012.
`WHEREFORE, plaintiff demands judgment against defendants,
`jointly and severally, in the sum of TWO MILLION DOLLARS
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`($2,000,000), together with interest thereon, at the statutory rate
`of 9% per annum, from the date of May 8, 2012, and costs and
`disbursements, and reasonable attorneys= fees of this action to the
`full extent allowed by law; and grant such other relief as is just
`and proper.
`Dated:
`New York, New York
`December 26, 2012
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`s/
`STANLEY K. SHAPIRO, Esq.
`Attorney for Plaintiff
`225 Broadway, Suite 1803
`New York, New York 10007
`(212) 693-1076
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`VERIFICATION
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`STATE OF NEW YORK
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`COUNTY OF NEW YORK
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`SS.
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`Daniel G. Chain, Ph.D., being duly sworn, says that he is
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`the Chairman and CEO of plaintiff Intellect Neurosciences, Inc.,
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`that he has read and knows the contents of the foregoing Complaint,
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`that the foregoing Complaint is true to the knowledge of the
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`deponent except as to the matters therein stated to be alleged on
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`information and belief, and that as to those matters he believes it
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`to be true.
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`Sw~rn to before me this
`'1.:t-raay of December, 2012.
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`Daniel G. Chain
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`STANLEY •SHAPIRO
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`NOTARY PUBLIC, STATE OF NEW YOIUt
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`Registration No. 31-4907106
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`. Qualified in New York COIIIIIy
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`Commission Expires November 6, 201
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