Nymox drama heightens as biotech sues AscellaHealth for $250M in damages
The Nymox Pharmaceutical versus AscellaHealth drama has heightened, with the battle heading to court as Nymox seeks $250 million in damages.
The biotech is following up on a promise made this summer, when it pledged to hold the pharmaceutical solutions provider responsible for damages arising from its connection to former Nymox leaders that damaged the relationship between the biotech and its shareholders. The new suit was filed in California Superior Court, Orange County, to protect Nymox’s shareholders’ interests, according to a Nov. 9 company release.
All the trouble started last year when the FDA denied approval for Nymox’s Nymozarfex, a drug designed to be administered in-office for patients with benign prostatic hyperplasia, a condition that causes an enlarged prostate gland. After the regulatory refusal, Nymox’s stock tumbled and eventually was delisted from the Nasdaq after falling short of the minimum $1 list price.
Following the FDA rejection, AscellaHealth exchanged business information with Nymox under a nondisclosure agreement and extended a partnership offer. At the time, Nymox’s Chief Financial Officer Christopher Riley launched “The Committee to Restore Nymox Shareholder Value,” and pushed for the pact with Pennsylvania-based AscellaHealth, with whom it was later discovered that Riley had an ongoing business association with.
Nymox’s former legal counsel Randall Lanham also promoted the deal, which would have immediately awarded Riley and Lanham up to 18 million shares of common stock and future shares of the company, according to Nymox.
Nymox said the terms of the deal—including manufacturing control for the distribution company and outright change of control of Nymox’s board of directors—weren’t in the best interests of its shareholders.
Riley, who was fired in June after serving three months as CFO, was awarded an unauthorized and undisclosed Treasury Issuance Request for 100,000 shares of Nymox stock in March, according to Nymox. The action was executed by Lanham without the approval of independent board members or CEO Paul Averback, M.D., the biotech said.
Both Riley and Lanham have claimed that the AscellaHealth deal would have provided the company with much-needed revenue as it awaits a potential Dutch approval of Nymozarfex. Both former employees continue to speak out against the biotech, an effort Nymox previously dubbed as a “campaign of disinformation and slander.”
This summer, Riley said publicly that he is still supported by AscellaHealth.
Now, in the new lawsuit, Nymox is alleging that AscellaHealth—which Nymox refers to as “a would-be ‘black knight’ competitor”—resorted to “illegal and unlawful corporate espionage” because it couldn’t gain enough support from Nymox shareholders by “legitimate means.”
Nymox is accusing Ascella of using its ties to the ex-Nymox leaders to pass off an investment proposal as a way to learn confidential company information and take control of the company’s assets via a kick-back scheme, according to the biotech’s Nov. 9 release.
The biotech claims that Ascella continues to “relentlessly” interfere with Nymox’s relationship with its shareholders, including publishing confidential Nymox information using the “Committee to Restore Nymox Shareholder Value,” in attempts to reap the benefits of Nymox’s pipeline, including Nymozarfex.
“Nymox is confident that it will be vindicated in court,” the company wrote in the Nov. 9 release.
As of Nov. 10, Ascellahealth has not publicly responded to the lawsuit.