• Moorfields Eye Hospital FT defending claim from pharmaceutical company
  • Trust’s former subsidiary company accused of breaching contract over drug manufacturing
  • Case being heard at London’s business courts

A specialist trust is being sued for nearly £2m by a Luxembourg-based pharmaceutical company over allegations of wrongdoing by the provider’s subsidiary company, HSJ can reveal.

Moorfields Eye Hospital Foundation Trust is defending a legal claim brought by Scipharm Sarl, which is seeking £1.9m from the trust in a case being heard by the London Circuit Commercial Court.

Scipharm Sarl, which develops treatments for rare diseases, has accused Moorfields of breaching a contract entered into by the trust’s former subsidiary company, Moorfields Pharmaceuticals.

In 2011, the subsidiary, which was run by the trust for 12 years as its commercial pharma business, agreed a deal to develop and manufacture a drug called Treprostinil. The drug was to be used for treating blocked blood vessels in the lungs, according to papers filed at the court.

The contract was struck with Austrian company CompLex Vertriebs GmbH, but transferred to Scipharm Sarl a year later.

At the time, it was envisaged that Moorfields Pharmaceutical would manufacture the drug exclusively for Scipharm Sarl, on the condition that Scipharm obtained market authorisation in at least one European country, according to court papers filed by Scipharm (see below).

Moorfields Pharmaceutical began manufacturing the drug in late 2013. However, over the next 10 months, the Medicines and Healthcare Products Regulatory Agency  identified “critical and continuing deficiencies” in relation to compliance with European drug manufacturing rules after four inspections of the company’s facility in central London.

While the MHRA’s inspections were ongoing, the company sent batches of Treprostinil to Scipharm, which began to apply for licences in various countries for the drug’s use.

However, the applications were turned down due to Moorfields Pharmaceuticals failing to comply with the manufacturing rules, Scipharm’s court papers state.

In November 2014, nearly a year after the MHRA first raised concerns, the company abandoned its attempt to remedy the deficiencies.

Three months later, the trust closed Moorfields Pharmaceuticals’ production facility. In October 2016, the trust decided to sell the company to Rayner Pharmaceuticals Limited.

Scipharm alleges the subsidiary’s non-compliance, and the trust’s closure of the production facility, constituted a breach of the contract signed in 2011 because it meant the company could no longer “perform its manufacturing obligations”.

A trust spokeswoman said: “We have refuted the allegations made and are preparing to defend the points raised by Scipharm through the appropriate legal process.”

The case is ongoing.

Moorfields’ annual income is around £242m. Its latest board papers indicate it is on track to achieve its control total, which is breakeven.