Geller Biopharm, Inc. v. Amunix Pharmaceuticals, Inc.

Background

Geller Biopharm, Inc. provided advisory and consulting services to Amunix Pharmaceuticals, Inc. under a 2018 advisory agreement. The agreement provided for a monthly retainer and a transaction fee if a qualifying transaction closed during the engagement period or the twelve-month period after the agreement ended. The agreement defined a transaction as entering into a partnering, collaboration, or licensing agreement, directly or indirectly, in one transaction or a series of transactions.

Geller assisted Amunix in negotiating a feasibility-study agreement with Roche. Amunix later terminated Geller’s advisory agreement effective November 9, 2018. During the twelve-month tail period, Amunix and Roche began negotiating a licensing agreement. The licensing agreement was announced on January 10, 2020, after the tail period ended. Roche agreed to make a $40 million upfront payment and up to $1.5 billion in future milestone payments. Amunix refused Geller’s request for a success fee.

Geller sued for breach of contract and, alternatively, breach of the implied covenant of good faith and fair dealing. Geller also requested a declaration that it was entitled to a percentage of qualifying future payments under the licensing agreement. Amunix moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim.

Breach-of-Contract Claim

Applying New York law, the court interpreted the 2018 advisory agreement according to its plain meaning because it found the relevant provisions unambiguous. The court rejected Geller’s argument that the feasibility-study agreement and licensing agreement formed one transaction or a series of transactions covered by the fee provision.

The court reasoned that the two agreements were intended to accomplish different results: the feasibility-study agreement concerned a study, while the licensing agreement granted Roche a license to use Amunix’s technology. Geller had not alleged facts showing that the licensing agreement incorporated the feasibility-study agreement, required the parties to honor its terms, modified it, or would have been meaningless without it. The court therefore held that the agreements were separate transactions.

The court also rejected Geller’s argument that the transaction closed when the feasibility-study agreement was signed. Under the advisory agreement, the transaction itself had to close during the engagement period or tail period. Because the licensing agreement was entered after the tail period ended, Geller was not entitled to a transaction fee connected with that agreement. The provision covering payments received after a transaction’s closing allowed later payments—such as milestone payments—to be included; it did not extend the deadline for closing the transaction.

Implied Covenant Claim

Geller alleged that Amunix deliberately delayed signing the licensing agreement until after the tail period to avoid paying the success fee. The court stated that, even assuming Amunix did so, the conduct did not violate the implied covenant of good faith and fair dealing.

The court explained that Geller had a contractual right to payment only if the transaction closed within the specified period. Geller did not have a contractual right to payment merely because the transaction could have closed earlier or because its terms were substantially complete. Treating the implied covenant as creating such a right would change the parties’ negotiated contract.

Declaratory Relief and Disposition

The court dismissed Geller’s request for declaratory relief because the two underlying causes of action had been dismissed, leaving no independent basis for federal jurisdiction or substantive relief under federal law.

The court granted Amunix’s motion to dismiss, dismissed the case with prejudice, directed the clerk to terminate all pending motions and close the case, and ordered that the opinion initially be filed under seal while the parties considered proposed redactions.