Thanks for the notice more documents have been filed in the CSM case. There are about 100 pages + of filings the last couple of days. PPHM is attempting to discover documents in a prior lawsuit by Merix vs. CSM. I've just glanced at a few of the pages of info but it looks quite interesting. If anyone wants a copy PM me. I'll post more when I go through them, but I thought this quote by PPHM's attorney was an amusing description:
"This case concerns CSM's liability for baffling decisions and gross
mishandling of its drug packaging, labeling and distribution responsibilities in a
cancer treatment clinical trial, apparently at the hands of a former employee,
Jeanette Bleecker ("Bleecker"). Peregrine is a clinical-stage biopharmaceutical
company developing first-in-class monoclonal antibodies focused on the treatment
and diagnosis of cancer. CSM is a clinical trial services company, and was retained
by Peregrine to provide packaging, labeling, and distribution services in Peregrine's
Phase II, double-blind, placebo-controlled trial of its Bavituximab drug.
CSM's errors in the trial include (1) erroneously swapping one treatment arm
of Bavituximab with the placebo arm of the trial such that those patients that should
have received 1 mg/kg of Bavituximab received placebo and vice versa; and
(2) even after such swap, vials had improper or no labeling and patients that should
not (according to CSM) have received Bavituximab actually were exposed to the
drug during treatment.
A. The Merix Litigation
It appears that CSM has made similar errors in other clinical trials resulting in
similar and very troubling allegations in other litigation. In that action styled Merix
Pharmaceuticals Corporation v. Clinical Supplies Management, Inc., No. 11-CV-
03318 (N.D. Ill.), CSM confronted allegations of negligence, breach of fiduciary
duty, breach of implied warranty, fraud, conspiracy and other claims related to its
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handling of a clinical trial related to a Merix product called "Releev," designed to
relieve pain and other symptoms associated with cold sores.
Merix was involved in multi-district litigation with its largest competitor to
Releev, GlaxoSmithKline ("GSK"), in which GSK disputed Merix advertising
claims related to Releev. To substantiate the truth of its label and advertising
claims, and thereby negate and overcome the attacks being made against Merix by
GSK, Merix attempted to verify its claims through a multi-site, placebo-controlled,
double-blind clinical trial (the "Releev Clinical Trial").
Under the trial protocol, the active Releev product was to be compared with a
fully-described inactive, chemically inert placebo. In order for the trial leader to
remain "blinded" regarding the clinical supplies (which was the active Releev
product and the placebo) that were being used in the trial, the clinical supplies
needed to be identically bottled, numerically labeled, randomized and distributed to
the trial sites by a third party who, alone, would know the contents of each
numbered bottle until all of the patient data from the trial had been accumulated – at
which time it would be "unblinded" and analyzed.
CSM was hired to facilitate the third-party blinding, labeling, randomization
and distribution of the clinical supplies for the benefit of Merix for use in the Releev
trial and was provided with a copy of the trial protocol. Thereafter, CSM received a
shipment from the contract manufacturer of clinical supplies which were represented
to be the "active" (Releev product) and the "placebo" that specifically detailed the
ingredients of each container.
The trial protocol listed the active ingredients of the Releev product as
including benzalkonium chloride ("BKC"), which active ingredient was expressly
lacking in the listed ingredients for the placebo, and which would need to be
excluded from the placebo for it to be chemically inert as required. CSM approved
and released an adulterated "placebo" for use in the Releev trial. As a result, the
adulterated placebo was bottled, labeled, randomized and distributed. Inclusion of
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active ingredients, such as BKC, in the adulterated "placebo" used in the Releev
trial, rendered the trial results invalid and unusable by Merix, for marketing
purposes or otherwise. Merix thus sued CSM for damages.
B. CSM's Merix Production Should Be Reproduced Here
The parallels to the instant case are startling. While CSM is sure to claim that
liability in this case is not proven by its conduct in that case, the evidence
subpoenaed from that litigation can be expected to reveal highly relevant
information including: (1) the CSM vial labeling and distribution of vial protocol
employed in that case; (2) training of CSM personnel then and potentially with
respect to the same personnel involved in the Peregrine trial; (3) changes to
operating procedures in response to the errors of the Releev trial; (4) CSM standard
operating procedures then and now and whether they were actually followed and
monitored; (5) the cause for and discovery of the drug contamination observed in
the placebo arm of that trial; (6) the role of quality assurance personnel in
preventing such errors; and (7) whether any of the mishandling of trial information
in that trial was done intentionally, which may have occurred in the Peregrine trial.
Peregrine subpoenaed Merix's counsel for such information including the
documents produced to him by CSM in that litigation. He is prepared to turn over
those documents but does not want to run afoul of the Protective Order in that case,
which prohibits him from producing records to Peregrine (even in response to the
subpoena) absent either a court order in that case or CSM indicating to him its
consent (in writing) to turn over the information to Peregrine.
If Peregrine were to incur the time and expense of moving to compel Merix to
produce the information, that would (1) needlessly inconvenience Merix's counsel
who agrees to turn the information over; (2) require Peregrine incur the time and
expense of bringing such motion in Illinois; (3) inconvenience the Illinois court in
considering discoverability of such information in this proceeding; and (4) possibly
end up for consideration before this Court anyway. Consequently, this Court should
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(1) instruct CSM to express its consent to Mr. Cannon to respond to the subpoena by
producing the records to Peregrine; or (2) order CSM to produce the records itself to
Peregrine now. Whatever is produced can and should maintain the confidentiality
designations previously given the documents in Illinois and/or CSM can simply
designate them again under the parties' Protective Order in this case.
Peregrine agrees to honor the Protective Order in both cases although
materials produced may need to be produced to experts. If experts are to receive
such materials they will agree in advance to honor the Protective Orders of both
cases. "
II. CSM'S INTRODUCTORY STATEMENT
CSM has been completely exonerated of any wrongdoing in the
Merix case.
CSM received a defense verdict on all counts in the Merix litigation completely
exonerating it of any alleged wrongdoing. (Hernandez Decl., Exhibit “A”). Peregrine’s
search for documents related to that litigation so that it can complain of similar
“wrongdoing” is inexplicable if not contradictory to its own position.1
For Peregrine to
premise this motion on the notion that the cases are similar is for Peregrine to argue that
CSM committed no wrongdoing in this case.
Setting the above aside, Peregrine’s position in the present motion is
preposterous. Peregrine asks this court to either compel CSM to produce documents
that Peregrine subpoenaed from Merix or to compel CSM to consent to waive or alter
the protective order in place in the Merix litigation so that Merix can produce
documents from that case.
1 Any documents from the Merix case are inadmissible here as Peregrine’s request is clearly a search for character evidence and thus prohibited by FRE 404. Because those
documents have no hope of reaching a jury in light of the explanation for their use as
evidence offered by Peregrine, the request is also not reasonably calculated to lead to
the discovery of admissible evidence. FRCP 26(b)
CSM asks this court to deny Peregrine’s motion for three reasons. First,
Peregrine failed in every respect to meet and confer before serving CSM with this joint
stipulation. Second, Peregrine has offered this court zero authority for either position.
Third, Peregrine has no underlying basis to compel CSM to produce documents from
the Merix litigation.
B. Background of the clinical trial at issue.
The clinical study at issue in this case, PPHM 0902, analyzed patients who
received one of three treatments of bavituximab (a low dose, a high dose, and a
placebo). CSM contends, and the trial documents confirm, that on March 15, 2010,
Peregrine instructed CSM, in writing, to assign each of the three treatment group
identifiers (A, B, and C) to one of the three treatment group descriptions (low dose,
high dose, or placebo) when CSM packaged the study drug vials. Peregrine gave this
instruction so that it would not know the treatments each patient was to receive, and
thus to maintain the study’s double blinded nature. Peregrine’s instruction was
contained in a document dated March 12, 2010, entitled Packaging and Labeling
Requirements (“PLR”), which, not surprisingly, set forth the specific packaging and
labeling requirements that Peregrine required for PPHM 0902 and with which CSM
agreed to comply.
Peregrine’s specific direction in the PLR was that treatment groups were to be
assigned by CSM at the time of packaging to maintain the study blind. Joseph Shan,
Peregrine’s Vice President of Clinical and Regulatory Affairs, confirmed and approved
this specific instruction on March 15, 2010, when he signed the PLR. As Peregrine
directed, CSM made the treatment group assignments at the time that it packaged the
study drug to maintain the study blind.
At the close of the study, Peregrine failed to comply with specific unblinding
procedures (that it also approved) to retrieve the blinded treatment group assignments
from CSM. Peregrine then hastily (and very publically) reported compelling—but
false—data from the study which it derived from its use of incorrect treatment group
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information and without making any effort to first verify the blinded treatment group
descriptions with CSM.
After Peregrine’s colossal error, and when faced with multiple shareholder
derivative class action lawsuits and a drastic drop in the price of its shares, it needed a
scapegoat. This lawsuit is Peregrine’s attempt to wrongfully shift blame to CSM for its
own negligence, and to seek extraordinarily high damages in the billions of dollars.
While this motion is Peregrine’s attempt to obtain and use inadmissible and irrelevant
documents from an unrelated case to cast doubt on CSM’s business and to further cover
up Peregrine’s own errors.
III. JOINT STATEMENT OF ISSUES IN DISPUTE
A. CSM Should Be Ordered To Consent To Merix's Release Of
Records
The subpoenaed records are presumably highly relevant for many reasons set
forth in the Introduction. For whatever reason, the Protective Order in the Merix
litigation appears to omit standard language authorizing Mr. Cannon to release
records on authority of "any" court. The alternative ground for Mr. Cannon to
release the subpoenaed records is to receive assurance from CSM in writing that he
can honor Peregrine's subpoena. CSM has ignored a request from Peregrine that it
do so.
It would be a waste of the parties' time and resources, and that of a
disinterested Illinois court, if Peregrine were forced to travel to Illinois and bring
this motion in that jurisdiction. Further, that Court may defer to this Court in even
considering such motion. It is more economical for the parties to present the present
motion to this Court.
In turn, this Court can and should order CSM to convey permission to
Mr. Cannon to honor the subpoena. Alternatively, it should exercise its discretion
and authority to order CSM to reproduce the same materials to Peregrine that it
turned over to Merix in that litigation. The Protective Order in that case would not
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be disturbed and CSM is free to re-designate materials as "Confidential" in this case
under the present Protective Order, as may be appropriate.
B. CSM Response
1. Peregrine did not meet and confer with CSM regarding the issues in this joint stipulation before serving it.
LR 37-1 is very clear:
“Unless relieved by written order of the Court upon good cause shown, counsel
for the opposing party shall confer with counsel for the moving party within ten (10)
days after the moving party serves a letter requesting such conference. The moving
party’s letter shall identify each issue and/or discovery request in dispute, shall state
briefly with respect to each such issue/request the moving party’s position (and provide
any legal authority which the moving party believes is dispositive of the dispute as to
that issue/request), and specify the terms of the discovery order to be sought.”
1. Peregrine never sent CSM a letter requesting a conference.
2. Peregrine never identified each issue and/or discovery request in dispute.
3. Peregrine never stated its legal position.
4. Peregrine never gave CSM any legal authority for its position.
5. Peregrine never specified the terms of the discovery order sought.
Mr. Hoge’s declaration at ¶ 8 indicates that between January 12 and 20, 2015, he
asked counsel for CSM to consent to release of the Merix documents. Simply
mentioning the issue does not constitute a meet and confer or presentation of the issues
as contemplated by the local rule. As indicated above, Peregrine failed in every respect
to comply with the specific requirements of LR 37-1. See Hernandez Decl., Exhibit
“B.”
2. Peregrine has no legal authority for either of its positions.
Peregrine’s position that CSM should either produce documents that Peregrine
subpoenaed from a different entity or that CSM should consent to waive or alter a
protective order from unrelated litigation so that the subpoenaed entity can produce the
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documents is absurd. Equally troubling is that Peregrine cited nothing in support of
either position. That a motion must contain authority is elementary. LR 7-5 requires
“[a] brief but complete memorandum in support thereof and the points and authorities
upon which the moving party will rely.” Emphasis added. LR 37-2.1 requires that joint
stipulations “contain all issues in dispute and, with respect to each such issue, the
contentions and points and authorities of each party.” Emphasis added. Peregrine’s
only reason for its requests here is that it does not want to file a motion in the proper
court. This is not authority, nor is it even a valid reason.
3. Peregrine has no underlying basis to request the Merix
documents from CSM.
Peregrine wants documents from CSM that it never requested from CSM.
First, Peregrine’s subpoena at issue is directed at Merix. Second, Peregrine has
never requested Merix documents in a request for production from CSM. Note that
Peregrine did not include its RFP in its exhibits. Thus, Peregrine has no basis upon
which to request these documents from CSM and its motion should be denied.
IV. PEREGRINE'S CONCLUSION
The Court should issue appropriate relief.
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V. CSM'S CONCLUSION
Peregrine’s position is absurd, it did not meet and confer, and it has no
underlying basis to request the documents at issue from CSM. The Court should
therefore deny Peregrine’s motion in its entirety.
DATED: February 4, 2015 KIRBY NOONAN LANCE & HOGE LLP
By: /s/ Charles T. Hoge
Charles T. Hoge
Genevieve M. Ruch
Attorneys for Plaintiff Peregrine
Pharmaceuticals, Inc.
DATED: February 4, 2015 MORRIS POLICH PURDY, LLP
By: /s/ Robert Hernandez
Matthew Marshall
Robert Hernandez
Attorneys for Clinical Supplies
Management, Inc.
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