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Amgen USA, Inc. v. Karyopharm Therapeutics, Inc.

Superior Court of Massachusetts, Suffolk, Business Litigation Session

June 12, 2019

AMGEN USA, INC.
v.
KARYOPHARM THERAPEUTICS, INC.

          Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Kaplan, Mitchell H., J.

          MEMORANDUM OF DECISION AND ORDER ON DEFENDANT KARYOPHARM THERAPEUTICS, INC.’S MOTION TO DISMISS

          Mitchell H. Kaplan, Justice

         The plaintiff, Amgen USA, Inc., is a biotechnology company with a principal place of business in California; among the products it produces and sells is the prescription medication: Krypolis. The defendant, Karyopharm Therapeutics, Inc., is an early stage biotechnology company with a principal place of business in Newton, Massachusetts. Karyopharm has announced that the FDA has accepted its drug, Selixnor, for accellerated approval and it hopes to begin sale of Selixnor in 2019. In this action, Amgen alleges that Karyopharm hired a group of Amgen’s leading sales managers and these former Amgen sales managers used trade secret information to target and hire away from Amgen fifteen of Amgen’s most effective sales representatives involved in the sale of Krypolis. Amgen pleads its complaint in three counts: misappropriation of trade secrets in violation of G.L.c. 93, § 42 (Count I); tortious interference with contract (Count II); and violation of G.L.c. 93A (Count III).

         The case is presently before the court on Karyopharm’s motion to dismiss the complaint for failure to state a claim on which relief may be granted. See Mass.R.Civ.P. 12(b)(6). On May 22, 2019, the court heard oral arguments on the motion. For the following reasons, Karyopharm’s motion to dismiss is DENIED .

         BACKGROUND

         The following summary of the facts is drawn from the allegations in the Complaint, which are assumed to be true for the purposes of this motion.

         Krypolis is a prescription medication used to treat patients with relapsed or refractory multiple myeloma (a type of blood cancer). Selixnor, if approved, is intended to treat the same disease.

         Amgen employs a national sales force consisting of a national sales manager, regional sales managers, district managers, and individual specialty sales representatives who specialize in selling Krypolis (the Sales Force). Each member of the Sales Force is required to sign a confidentiality and non-solicitation agreement, which states that employees must keep confidential, among other things, Amgen’s business plans, budgets, financial statements, contracts, prices, suppliers, and customers, as well as information regarding the skills and compensation of Amgen’s employees.

         Amgen closely tracks and ranks each member of the Sales Force and posts weekly sales data, accessible only to authorized personnel who can access this data by username and password; sales managers can access this data for all employees they supervise. Amgen also periodically creates Talent Management Plans that track and rank the skill and performance of sales representatives to assist Amgen in making critical decisions regarding compensation and other adjustments in order to retain top sales talent. The password protected Talent Management Plans are marked confidential and are only accessible to sales managers.

         Additionally, Amgen generates a weekly Customer Data Report (CDR) that provides detailed information about customer purchasing information, including products purchased, the amount of product the customer has purchased, and the potential growth of the customer account. Sales representatives receive a CDR for their accounts, district sales managers receive a CDR for accounts in their district, and regional sales managers receive a CDR for accounts in their region. Amgen also maintains and updates a report on the top 500 Krypolis accounts; only sales managers can access this report.

         In February of 2018, Perry Monaco, an Amgen regional sales manager, resigned from the company and began working for Karyopharm as Vice President of Sales. At the time of his resignation, Monaco had access to Amgen’s Sales Force information and customer account information. Monaco was bound by a confidentiality and non-solicitation agreement, which stated that, for one year after his last day of employment with Amgen, he would not directly or indirectly solicit, induce, or encourage an employee of Amgen to leave the company to work for any other entity.

         Karyopharm allegedly hired Monaco for the purpose of using Amgen’s trade secrets to build its blood cancer sales force in preparation for marketing Selixnor. Then, in July and September of 2018, three district sales managers at Amgen resigned from the company and joined Karyopharm. They too had access to confidential sales staff and customer information and were similarly bound by confidentiality and non-solicitation agreements. Thereafter, Monaco and the three other sales managers breached their obligations to Amgen by using confidential and trade secret information to solicit Amgen’s top Krypolis sales representatives to join Karyopharm.

         On November 30, 2018, Kristina Schultz, a "top-tier" sales representative at Amgen resigned from the company to join Karyopharm. Thereafter, on December 21, 2018, fourteen of Amgen’s "top-tier" sales representatives resigned from Amgen to join Karyopharm. All fourteen sales representatives submitted similar notices of resignation ...


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