Investors in the biotech startup Padlock Therapeutics have accused Bristol Myers Squibb of reneging on payments of up to $450 million that were negotiated as part of a 2016 acquisition agreement, according to a lawsuit unsealed last week.
Bristol paid $150 million in upfront cash to buy Padlock, which at that time was developing a novel antibody technology aimed at discovering new drugs for autoimmune diseases like rheumatoid arthritis. The deal required Bristol to make additional cash payments up to $450 million to Padlock’s investors and executives if certain development and regulatory milestones were achieved.
Padlock’s investors, which include the venture capital firm Atlas Venture and its founding chief executive Michael Gilman, now accuse Bristol of using a “deceptive scheme involving manipulation of the patent process” and “hiding information” to avoid making any milestone payments, according to the lawsuit filed in Delaware Chancery Court.
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