SciPharm S.a.r.l v Moorfields Eye Hospital NHS Foundation Trust

A pharmaceutical development agreement may impose continuing obligations extending beyond the manufacture and delivery of initial clinical batches. Where the agreement requires co-operation to achieve marketing authorisation and process-validation data for that purpose, the manufacturer may be required to maintain GMP status, complete stability testing, respond to regulatory requests and remain the named commercial manufacturer until the application is determined. Express terms may make implication unnecessary. Damages may include reasonable costs of completing outstanding contractual obligations through another manufacturer. A claimant cannot recover expenditure it neither incurred nor is obliged to reimburse merely because a related third party paid the relevant invoices.

SciPharm claimed damages from Moorfields for breach of a drug development agreement concerning Treprostinil. The agreement covered development, clinical and validation batches, stability testing and regulatory work. Moorfields later lost its GMP status, ceased manufacturing and closed its facility. SciPharm transferred the work to Recipharm and pursued a marketing authorisation application.

The court determined the scope of Moorfields’ express obligations, whether terms should be implied, whether loss of GMP status and closure constituted breach, and which losses were recoverable. Moorfields’ earlier summary judgment application had been dismissed by HHJ Pelling KC: [2020] EWHC 269 (Comm).

1. Liability. The claim succeeded on liability. The agreement was not confined to a fill-and-finish obligation for 12 clinical batches.
2. Construction. The definition of Development, clauses 4.1, 4.4 and 4.5, and Annex 2 required work for both clinical trials and the marketing authorisation process. The obligations included producing process-validation batches usable in the application, stability testing for up to 36 months, regulatory assistance and continuing performance in accordance with GMP.
3. Moorfields had to remain the named commercial manufacturer and maintain European current GMP accreditation until the application was determined. The agreement did not guarantee successful development or regulatory approval.
4. Loss of GMP status, inability to answer regulatory questions, failure to complete stability work and cessation of manufacturing constituted breach. SciPharm was entitled in principle to recover reasonable costs of completing those obligations through Recipharm, including replacement validation, stability, Module 3 work and emergency clinical batches.
5. No implied terms were necessary because the express terms resolved the issues.
6. Losses paid or incurred by CompLex, and work performed by persons employed by CompLex or Amomed without any obligation on SciPharm to reimburse them, were not recoverable. The relevant payments extinguished any loss sustained by SciPharm.
7. Quantum and interest were reserved for agreement or further submissions.

This was a first-instance decision. Moorfields’ earlier application for summary judgment under CPR Part 24 was dismissed in [2020] EWHC 269 (Comm).