Viking accuses Chinese biotech of 'ruse' to raid trade secrets and make off with NASH cache

Viking Therapeutics thinks it has rumbled a raid on its nonalcoholic steatohepatitis (NASH) trade secrets. In a lawsuit, the San Diego-based biotech has accused China’s Ascletis BioScience of using information shared under a confidentiality agreement to turbocharge its expansion into the NASH development race. 

In the lawsuit (PDF), Viking sets out a story that begins with a request by Ascletis to meet at the 2016 BIO International Convention to discuss a potential business opportunity related to thyroid hormone receptor-beta (TR-beta) agonist VK2809. Viking said it shared information under a confidential disclosure agreement (CDA). Three years later, Viking set up a new CDA after being approached by Ascletis for the second time. In Viking’s telling of events, Ascletis made the second request in bad faith.

“Viking later discovered that the potential business collaboration that Ascletis Bioscience proposed was actually a ruse to steal Viking’s VK2809 trade secrets, circumvent years of research and development, and release its own drug product to compete with Viking’s VK2809,” the U.S. biotech wrote in its lawsuit.

According to Viking, people including Ascletis CEO Jinzi Jason Wu viewed materials shared under the 2019 CDA for more than one month before the Chinese biotech “suddenly reversed course, claiming that it did not want a business collaboration with Viking.” Around five months after the U-turn, Wu founded Gannex Pharma, the lawsuit states, and six months after that the new startup began filing patent applications. In Viking’s view, the patent filings made in early 2020 “improperly contained” certain VK2809 trade secrets.

Ascletis ran a clinical trial of NASH candidate ASC41 shortly before setting up Gannex, according to the lawsuit. And Gannex, a wholly owned subsidiary of Ascletis, then went on to run multiple studies of the drug candidate, including a pair of 180-subject phase 2 trials that are scheduled to wrap up in 2024. Viking is suspicious of the pace of progress of ASC41. 

“ASC41 was unlawfully derived from Viking trade secrets,” the lawsuit states. “Defendants could not have so quickly advanced their development, testing and commercialization efforts without breaching the CDAs and improperly and intentionally misusing Viking Trade Secrets to Viking’s detriment.”

Ascletis’ own materials describe ASC41 as a small-molecule prodrug that is selectively cleaved in the liver by CYP3A4 to form a pharmacologically active TR-beta agonist metabolite. Viking describes VK2809 as a liver-targeted small-molecule prodrug of a potent, selective TR-beta agonist. VK2809 is activated in the liver by CYP3A4.

Based on the similarities between the descriptions of the drug candidates, Viking inferred “that ASC41 is Ascletis’ version of—if not the same compound as—VK2809.” Ascletis sees things very differently, as its parent company Ascletis Pharma set out in a statement (PDF) published in response to Viking’s lawsuit. 

“From the publicly available allegations of Viking set out in the complaints, the company believes that such allegations have no merit and will vigorously defend against the complaints. ASC41 is an in-house developed oral tablet using the company’s own technologies and targeting [TR-beta] for the treatment of non-alcoholic steatohepatitis,” Ascletis wrote.

Viking has requested a trial by jury and issued a list of demands as part of the lawsuit. The list includes “actual damages in an amount to be proven at trial” and “restitution, actual loss, unjust enrichment, and disgorgement of profits,” or, alternatively, “a reasonable royalty.”