Cardiff Oncology Inc. (Cardiff Oncology (CRDF)) is taking legal action to protect its rights to the experimental cancer drug onvansertib. On Tuesday, the company filed a lawsuit against Nerviano Medical Sciences (NMS) in the U.S. District Court for the Southern District of California, seeking an injunction to force NMS to honor their licensing agreement and a declaratory judgment that Cardiff did not breach the contract.
The dispute stems from a claim NMS made in February, alleging that Cardiff breached their agreement by failing to name an NMS employee as a joint inventor on two of Cardiff's U.S. patents (12,144,813 and 12,263,173) and by declining to file a joint invention continuation patent application. Cardiff, a clinical-stage cancer biotech, maintains that it did not breach the agreement. The company argues that the contract does not require listing NMS employees on inventions developed solely by Cardiff, and that doing so would require making what it believes would be inaccurate inventorship claims to the U.S. Patent and Trademark Office.
Cardiff said discussions with NMS had taken place, but judicial intervention is now necessary. The company also emphasized that the lawsuit will not affect its path forward or the clinical and regulatory milestones previously outlined.
Analysts are backing Cardiff's legal strategy. William Blair analyst Andy Hsieh wrote on Wednesday, "We believe that Cardiff is taking the appropriate steps by disputing Nerviano's claim." Hsieh noted that the update will confirm that Cardiff is upholding the license agreement and therefore rights to onvansertib, and is defending the value Cardiff has created for onvansertib through clinical development.
Hsieh also addressed skepticism around onvansertib's potential, writing, "We recognize the skepticism surrounding onvansertib's future potential and also acknowledge that Cardiff will likely seek dilutive funding or partnership opportunities to fund the pivotal study for onvansertib." However, he added, "We believe that the current valuation reflects a positive risk/reward scenario, especially given that more detailed data will be presented in the near term."
Cardiff Oncology shares were up 4.83% at $1.84 at the time of publication on Wednesday. Over the past month, CRDF has gained about 3.7% versus a 4.2% rise in the S&P 500, but the stock is down roughly 34% year-to-date compared to the index's 7.7% gain.
