Arbitration Panel Finds that Syneos Health (NASDAQ: SYNH) Failed to Use Commercially Reasonable Efforts in Conducting its Trial for FSD 201
17 Juli 2023 - 11:00PM
Business Wire
FSD Pharma Inc. (NASDAQ: HUGE) (CSE: HUGE) (FRA: 0K9A) (“FSD
Pharma” or the “Company”), a biopharmaceutical company
dedicated to building a portfolio of innovative assets and biotech
solutions for the treatment of challenging neurodegenerative and
metabolic disorders, today announces that the Arbitration Panel
Finds that Syneos Health (NASDAQ: SYNH) Failed to Use Commercially
Reasonable Efforts in Conducting its Trial for FSD 201.
In January 2022, Syneos Health (NASDAQ: SYNH) filed an
arbitration proceeding against FSD Pharma claiming that the Company
owed Syneos Health (NASDAQ: SYNH) USD$3,915,388.69 in damages and
interest on that amount for a failed Phase II FDA trial for FSD
201. Syneos Health (NASDAQ: SYNH) also sought an order requiring
FSD to pay its legal expenses.
The trial originally required the enrollment of 350 patients in
North America; the geographic scope was later expanded to include
several South American countries and 35 sites in total (25 in N.
America and 10 in S. America).
Syneos Health’s (NASDAQ: SYNH) track record of enrollment during
the trial was abysmal:
- Seven months into the trial, Syneos Health had not enrolled a
single patient.
- By mid May 2021, over nine months into the trial, Syneos Health
had enrolled fewer than 50 patients. The enrollment deadline, which
had already been extended once, was 6/15/21. FSD terminated the
trial in August 2021.
FSD disputed that it owed anything to Syneos Health, much less
nearly USD$4 million, and countersued Syneos Health for breach of
contract. In fighting back, FSD made clear that it was not going to
be bullied by a large CRO.
On May 19, 2023, a three-arbitrator panel issued an award
finding, among other things, that Syneos Health breached its
contractual obligations because “given Syneos Health’s poor success
at patient enrollment despite its self-described ‘extraordinary’
efforts, it was not commercially reasonable for it to continue to
throw good money after bad in circumstances where the money in
question was FSD’s.” The Panel awarded Syneos Health
US$1,707,830.52 in damages plus interest for certain unpaid
invoices essentially because FSD’s former management did not timely
object and dispute those invoices in strict adherence with the
boilerplate dispute resolution provisions in Syneos Health’s form
agreement. The damage award is nevertheless less than 50% of what
Syneos Health had demanded, as well as substantially less than what
Syneos Health had offered to accept in settlement. The Panel also
denied Syneos Health’s request for the payment of attorneys’ fees
and litigation expenses.
The award shows how small and midsize pharma and biotech
companies can fight back against CROs who take them for granted and
seek to impose huge costs on them while failing to perform their
end of the bargain.
FSD Pharma would like to get in contact with all and any
companies and entities who find themselves in a similar situation
with Syneos Health
About FSD Pharma
FSD Pharma Inc. is a biotechnology company with two candidates
in different stages of development. Lucid Psychss Inc., a wholly
owned subsidiary, is focused on the research and development of its
lead compounds, Lucid-MS and UNBUZZD™. Lucid-MS is a molecular
compound identified for the potential treatment of
neurodegenerative disorders. UNBUZZD™ is a proprietary formulation
of natural ingredients, vitamins, and minerals to help with liver
and brain function for the purposes of potentially quickly
relieving from the effects of alcohol consumption, such as
inebriation, and restoring normal lifestyle.
Forward Looking Information
This press release contains forward-looking statements and
forward-looking information (collectively, "forward-looking
statements") within the meaning of applicable securities laws.
Any statements that are contained in this press release that are
not statements of historical fact may be deemed to be
forward-looking statements. Forward-looking statements are often
identified by terms such as “plans”, “expects”, “expected”,
“scheduled”, “estimates”, “intends”, “anticipates”, “hopes”,
“planned” or “believes”, or variations of such words and phrases,
or states that certain actions, events or results “may”, “could”,
“would”, “might”, “potentially” or “will” be taken, occur or be
achieved. More particularly, and without limitation, this press
release contains forward-looking statements contained in this press
release include statements concerning the future of FSD Pharma Inc.
and are based on certain assumptions that FSD Pharma has made in
respect thereof as of the date of this press release. FSD Pharma
cannot give any assurance that such forward-looking statements will
prove to have been correct.
Since forward-looking statements relate to future events and
conditions, by their very nature they require making assumptions
and involve inherent risks and uncertainties. The Company cautions
that although it believes the expectations and material factors and
assumptions reflected in these forward-looking statements are
reasonable as of the date hereof, there can be no assurance that
these expectations, factors and assumptions will prove to be
correct and these risks and uncertainties give rise to the
possibility that actual results may differ materially from the
expectations set out in the forward-looking statements. These
forward-looking statements are not guarantees of future performance
and are subject to a number of known and unknown risks and
uncertainties including, but not limited to: the fact that the drug
development efforts of both Lucid and FSD BioSciences are at a very
early stage; the fact that preclinical drug development is
uncertain, and the drug product candidates of Lucid and FSD
BioSciences may never advance to clinical trials; the fact that
results of preclinical studies and early-stage clinical trials may
not be predictive of the results of later stage clinical trials;
the uncertain outcome, cost, and timing of product development
activities, preclinical studies and clinical trials of Lucid and
FSD BioSciences; the uncertain clinical development process,
including the risk that clinical trials may not have an effective
design or generate positive results; the potential inability to
obtain or maintain regulatory approval of the drug product
candidates of Lucid and FSD BioSciences; the introduction of
competing drugs that are safer, more effective or less expensive
than, or otherwise superior to, the drug product candidates of
Lucid and FSD BioSciences; the initiation, conduct, and completion
of preclinical studies and clinical trials may be delayed,
adversely affected, or impacted by COVID-19 related issues; the
potential inability to obtain adequate financing; the potential
inability to obtain or maintain intellectual property protection
for the drug product candidates of Lucid and FSD BioSciences; and
other risks. Accordingly, readers should not place undue reliance
on the forward-looking statements contained in this press release,
which speak only as of the date of this press release.
Further information regarding factors that may cause actual
results to differ materially are included in the Company’s annual
and other reports filed from time to time with the Canadian
Securities Administrators on SEDAR (www.sedar.com) and with the
U.S. Securities and Exchange Commission on EDGAR (www.sec.gov),
including the Company’s Annual Report on Form 20-F for the fiscal
year ended December 31, 2021, under the heading “Risk Factors.”
This list of risk factors should not be construed as exhaustive.
Readers are cautioned that events or circumstances could cause
results to differ materially from those predicted, forecasted or
projected. The forward-looking statements contained in this
document speak only as of the date of this document. FSD Pharma
does not undertake any obligation to publicly update or revise any
forward-looking statements or information contained herein, except
as required by applicable laws. The forward-looking statements
contained in this document are expressly qualified by this
cautionary statement.
Neither the Canadian Securities Exchange nor its regulation
services provider accept responsibility for the adequacy or
accuracy of this release.
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version on businesswire.com: https://www.businesswire.com/news/home/20230717530876/en/
Zeeshan Saeed, Founder, CEO and Executive Co-Chairman of the
Board, FSD Pharma Inc. Email: Zsaeed@fsdpharma.com Telephone: (416)
854-8884
Investor Relations: Email: ir@fsdpharma.com, info@fsdpharma.com
Website: www.fsdpharma.com
ClearThink Email:
nyc@clearthink.capital Telephone: (917) 658-7878
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