Seeks damages of £41m for breach of contract
3M is being sued by investors including the UK’s Ministry of Defence for failing to market and develop BacLite, a device that rapidly detects the superbug MRSA.
The Porton Group began legal proceedings against the US firm this week to seek damages of up to £41m for breach of contract.
BacLite uses a type of fluorescent light to detect the presence of the MRSA superbug and has achieved 95% reliability in European medical trials.
Acolyte Biomedica, a public/private venture between Porton and the MoD's civilian research arm Ploughshare Innovations launched the product commercially in 2005.
Acolyte founder Bill Mullen said Baclite could detect MRSA in five hours “before it was able to spread and infect others within the hospital”. According to Mullen, this rapid detection contrasts with most existing technology that takes “at least one if not two days”.
3M purchased BacLite in 2007 for £10.4m and committed to obtain US FDA approval and market the device globally. EU regulators had approved the product in 2006.
The lawsuit claims the firm mismanaged its application for regulatory approval for BacLite with the US FDA and failed to seek similar approval in Canada or Australia. In addition, it alleges that 3M deliberately allowed BacLite to fail commercially by starving it of competent staff and funds.
Former Defence Minister and MP for West Bromwich Tom Watson joined calls for the company to explain why it failed to honour a commitment to commercialise the device.
“The British public has a right to know why such an important, potentially life-saving UK product became obsolete as a result of 3M's failure to re-do those vital FDA trials,” he said.
The St Paul, Minnesota-based firm says it ceased marketing BacLite because it proved not to be commercially viable.
“In the view of the company, BacLite was not commercially viable and it failed to meet certain standards of the marketplace, so the company discontinued its efforts to sell the product,” said William Brewer, partner at Bickel & Brewer and lawyer for 3M.
3M said it had concluded in 2008, after thorough investigation and analysis, that BacLite was not a commercially viable product for the detection of MRSA. The firm alleges that it ultimately determined not to seek regulatory approval in the US because it concluded BacLite would never be commercially viable in the US.
The firm added that the Porton Group had filed a lawsuit in the UK in 2008 – and recently launched a publicity campaign against 3M in the US.
“The profit motives of the Porton Group and its publicity campaign will have no bearing on our client’s position in the current litigation,” Brewer said. “3M welcomes the opportunity to present its case to the court and is confident in the positions it has taken.”
Porton’s strategy for the case will focus on procedural issues in 3M’s testing of BacLite. The company claims the disappointing trials were caused by 3M’s mismanagement.
The case is expected to last three months. 3M will present its case later in the hearing.