Johnson & Johnson Sues Aligos, Founders Over Alleged Theft

By Colin Kellaher

Johnson & Johnson is suing Aligos Therapeutics Inc. and its co-founders, alleging the clinical-stage biopharmaceutical company was built on intellectual property and information stolen from J&J.

The suit names Aligos and co-founders Lawrence Blatt and Leonid Beigelman, who sold biotechnology startup Alios BioPharma Inc. to J&J in 2014 for $1.75 billion and left the company to launch Aligos in 2018 using the allegedly stolen resources.

Mr. Blatt currently serves as chairman and chief executive of Aligos, while Mr. Beigelman serves as president and a member of the board.

Aligos, based in South San Francisco, Calif., said in a filing with the Securities and Exchange Commission on Wednesday that J&J's claims are without merit, and that it intends to defend itself vigorously.

According to J&J's complaint, Messrs. Blatt and Beigelman assumed senior leadership posts at its Janssen Biopharma LLC unit after the Alios acquisition, and, while in those roles, developed a new line of products using Janssen's resources and formed Aligos, which J&J calls a copycat version of Alios.

J&J alleges Messrs. Blatt and Beigelman stayed at Janssen "just long enough to obtain their last seven-figure acquisition payout" in late 2017, then left to market through Aligos the products they had developed while at Janssen, taking along other former Alios employees who had joined Janssen.

Meanwhile, the products J&J acquired in the Alios deal, including its lead compound targeting infants with respiratory syncytial virus, proved unmarketable, saddling the company with impairment charges in 2018 and 2019 roughly equal to the purchase price.

J&J claims Messrs. Blatt and Beigelman stole work related to at least four different research-and-development programs to create Aligos' pipeline, including potential therapies for chronic hepatitis B, an area where J&J has invested heavily.

Aligos went public in late 2020 at $15 a share, and its share price rose as high $37.51 in early 2021. But the stock has fallen sharply this year amid recent setbacks and hit an all-time low of $2.05 on Monday.

Aligos last week said it had ended development of its drug candidate ALG-020572 in chronic hepatitis B after a patient in a study suffered a serious adverse event that resulted in a brief hospitalization.

The company in January ended development of ALG-010133 for chronic hepatitis B after determining that the drug candidate wouldn't meaningfully contribute to achieving functional cures for the serious liver infection.

Aligos' pipeline still includes programs targeting chronic hepatitis B. Aligos also has a collaboration with Merck & Co. in nonalcoholic steatohepatitis, a chronic liver condition known as NASH.

J&J's suit seeks monetary damages, a permanent injunction prohibiting the use of the allegedly stolen property and ownership of patent applications filed by Aligos.

Write to Colin Kellaher at [e-mail]

(END) Dow Jones Newswires

March 30, 2022 12:12 ET (16:12 GMT)

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