Abbvie Endocrine Inc. v. Takeda Pharmaceutical Company Limited
2020-0953-SG
| Del. Ch. | Sep 7, 2021Background
- AbbVie Endocrine Inc. (plaintiff) is the exclusive U.S./Canada distributor of Lupron, a leuprorelin drug manufactured solely by Takeda Pharmaceutical Company Limited (defendant) at its Hikari and Osaka plants in Japan under a long‑standing Supply Agreement.
- Beginning in late 2019 FDA inspections revealed sterilization/process defects at Takeda’s Hikari facility (including a failed autoclave requalification and a Form 483), prompting holds, remediation, and later an OAI letter and a warning letter from the FDA.
- Remediation and required third‑party quality oversight (Quantic and Gintegra), plus enhanced QA/QC procedures, materially slowed production: batch processing and review now take ~100–120+ days and output remains constrained, creating a worldwide shortage of leuprorelin products and disrupting AbbVie’s ability to fill firm orders.
- AbbVie sued for breach of contract and sought expedited injunctive relief (initially specific performance and diversion of production; later a court order requiring Takeda to meet a revised April 2021 production schedule or variants thereof).
- After a four‑day expedited trial, the Court assumed (without deciding) breach and irreparable harm but denied injunctive relief because any mandatory injunction compelling specific production was impracticable, unenforceable, and would require intrusive court supervision and likely contempt proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Availability of specific performance / mandatory injunctive relief | AbbVie: specific performance or an order compelling Takeda to follow the April 2021 production schedule (or variants) is necessary because AbbVie has no alternative source and faces irreparable reputational harm. | Takeda: cannot currently produce the required volumes due to legitimate FDA‑driven remediation and third‑party oversight; court‑ordered performance would be impossible or unworkable. | Denied: even assuming breach and irreparable harm, specific performance/mandatory injunction unavailable because compliance appears impossible/unworkable and would require excessive court supervision. |
| Enforceability and practicality of the proposed injunction | AbbVie: a court order and supervision could produce the "will" to remedy production shortfalls and Takeda could meet a schedule if ordered. | Takeda: operational complexity, QA/QC steps, and third‑party reviewers make timely production infeasible; court supervision could not practically ensure compliance. | Held for Takeda: injunction would be unenforceable and would force the Court into intrusive, impractical oversight with likely repeated contempt disputes. |
| Adequacy of monetary damages | AbbVie: damages will not fully remedy reputational/customer losses and thus equitable relief is warranted. | Takeda: (implicit) damages are available and equitable relief is not workable; failure to produce results from remediation, not willful breach. | Court assumed irreparable harm for purposes of decision but held damages remain an available remedy and will be addressed at the damages phase. |
| Scope of relief requested (firm orders, safety reserve, operating in compliance) | AbbVie: seeks reliable, sufficient, and timely supply to remedy alleged breaches (failure to fill firm orders; failure to maintain a safety reserve; noncompliant manufacture). | Takeda: current production bottlenecks stem from necessary remediation and oversight; many plaintiff requests exceed what is practicably deliverable. | Held: The requested relief was ill‑defined and evolved; even limited mandatory relief would not resolve the underlying QA/production restraints and so cannot be granted in equity. |
Key Cases Cited
- N. Del. Indus. Dev. Corp. v. E. W. Bliss Co., 245 A.2d 431 (Del. Ch. 1968) (declining specific performance where court supervision of complex, impracticable work would be required)
- In re Diet Drugs (Phentermine/Fenfluramine/Dexenfluramine) Prods. Liab. Litig., 369 F.3d 293 (3d Cir. 2004) (injunctions must be enforceable, workable, and capable of court supervision)
- Lemon v. Kurtzman, 411 U.S. 192 (1973) (equitable remedies must balance what is necessary, fair, and workable)