Alector, Prevail trade blows over alleged misuse of confidential information

Prevail Therapeutics CEO Asa Abeliovich (Prevail Therapeutics)

Alector and Prevail Therapeutics have traded blows over the work of Asa Abeliovich, a founder of both biotechs. The dispute centers on whether Abeliovich used Alector’s confidential information in connection with his work for Prevail.

California-based Alector highlighted its role in the situation in a Securities and Exchange Commission (SEC) filing covering its quarterly results. As Alector sees it, Abeliovich may have breached a consulting agreement and made improper use of confidential information he learned while providing it with services. 

Alector’s notice contains scant details, but Prevail, the other party involved in the case, was more forthcoming in the regulatory paperwork associated with its $125 million IPO earlier this year.

Prevail said: “On June 7, 2019, we received a letter on behalf of Alector … stating concerns regarding whether confidential information of Alector was used in connection with work on behalf of our company and patents and patent applications filed on behalf of our company, as well as alleging that Alector has certain rights to our patents and patent applications. 

“On June 18, 2019, following our response to Alector’s claims, Alector served Dr. Abeliovich with a demand for arbitration. In the demand, Alector is seeking relief from Dr. Abeliovich in the form of monetary damages, equitable relief in the form of an injunction against Dr. Abeliovich’s activities that may involve Alector’s confidential information and an assignment to Alector of rights to certain of our patents and patent applications.” 

Prevail went on to say that it and Abeliovich, its founder and CEO, plan to “vigorously defend” the arbitration demand and any claim or lawsuit that makes related allegations. The defense sketched out in Prevail’s regulatory filings centers on the belief that its patents are based on work derived from publicly available information or activities separate from Abeliovich’s involvement with Alector.

Whatever the legal situation, there are overlaps between the activities of Alector and Prevail. In the section of its financial filings on the competitive landscape, Prevail lists Alector among the companies with therapies in development that target some of the same diseases as its programs.

At the time of the IPO, Prevail said it and Abeliovich “intend to evaluate any and all potential remedies and counterclaims against Alector to the extent we or Dr. Abeliovich suffer damages resulting from Alector’s actions, claims or demands.” Prevail repeated the statement in another filing with the SEC this week.