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England and Wales High Court (Chancery Division) Decisions
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University of Sheffield v Kudos Pharmaceuticals Ltd & Ors [2025] EWHC 1476 (Ch) (20 June 2025)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2025/1476.html
Cite as:
[2025] EWHC 1476 (Ch)
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Neutral Citation Number: [2025] EWHC 1476 (Ch) |
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Claim No BL-2023-001252 |
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
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Rolls Building London EC4A 1NL
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20 June 2025 |
B e f o r e :
Master Marsh (sitting in retirement)
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THE UNIVERSITY OF SHEFFIELD |
Claimant |
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and |
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(1) KUDOS PHARMACEUTICALS LIMITED |
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(2) ASTRAZENECA UK LIMITED |
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(3) ASTRAZENECA INTERMEDIATE HOLDINGS LIMITED |
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(4) ASTRAZENECA PLC |
Defendants |
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MATTHEW PARKER KC (instructed by Pinsent Masons LLP) for the Claimant
ALAN MACLEAN KC and CARMINE CONTE (instructed by Freshfields LLP) for the Defendants
(hearing 29 May 2025)
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HTML VERSION OF JUDGMENT
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Crown Copyright ©
Judgment handed down remotely in the absence of the parties on 20 June 2025 by sending the judgment to the parties and to the Public Archive
- The claimant issued an application notice dated 22 May 2025 which was heard at the second case management conference in this claim on 29 May 2025. The claimant sought, amongst other orders, an order that the defendants provide further information about the defence dated 28 August 2024. I made an order requiring the defendants to answer the request by 4pm on 7 October 2025. This judgment provides my reasons for making that order.
- This is the third judgment I have delivered on procedural issues that have arisen in the course of the case management of this claim. The background to the claim and the issues to which it gives rise are summarised in my first judgment dated 9 May 2025 and are not repeated here.
Procedural position of the claim
- Following orders made at the first case management conference held on 23 April 2025, the trial of this claim is listed to commence on 29 June 2026 as a category A claim. Extended disclosure is to take place by 4pm on 7 October 2025 and witness statements are to be exchanged by 4pm on 16 December 2025.
- Permission was given to the parties to rely upon expert evidence in the following terms:
"14. Each party has permission to adduce expert evidence in the field of valuation to address the value of the Claimant's intellectual property in the context of the Merck transaction and the quantum of the Claimant's claim for damages for fraudulent misrepresentation, if the 2017 Letter Agreement has not been rescinded. Such experts shall be instructed to address the issues in Section A of the annexed List of Expert Issues.
15. Each party has permission to adduce expert evidence in the field of pharmaceutical partnership and/or collaboration deals to address the alternative Collaboration terms and/or structures that AstraZeneca and Merck might have concluded, and the likelihood of them doing so, as at the 2017 Letter Agreement Date. Such experts shall be instructed to address the issues in Section B of the annexed List of Expert Issues."
- The order goes on to provide:
"16. All experts in the same discipline shall, by no later than 2 December 2025, hold a discussion for the purpose of identifying and, if possible, narrowing the issues between them.
17. The experts' reports in relation to Issue 1 of the Expert Issues shall be served and exchanged by 4pm on 16 December 2025.
…
19. The Claimant shall serve its expert report in relation to valuation (Issues 2-3 of the Expert Issues) and pharmaceutical and collaboration deals (Issues 4-6 of the Expert Issues) by 4pm on 24 February 2026."
- The permission to rely upon expert evidence therefore has two strands. First, valuation evidence relating to the value of the claimant's intellectual property and its claim for damages if it is successful in establishing liability but does not obtain an order for recission of the 2017 Letter Agreement and secondly, evidence about the alternative collaboration terms and structures that the defendants might have concluded. As to the former, the parties were required to exchange reports by 16 December 2025. As to the latter, reports were required to be served on a sequential basis with the defendants serving their report first by 16 December 2025. However, and crucially for the purposes of this judgment, the preliminary meeting of experts of all disciplines was directed to take place by 2 December 2025. Thus, the claimant's expert dealing with alternative collaboration terms and structures has to be in a position to undertake the preliminary meeting despite being under no obligation to produce a report prior to seeing the report of the defendants' expert.
The application
- The defence was served on 28 August 2024. The defendants denied that they had any liability in damages. On 16 December 2024 the claimant made a request for information and a response was provided on 20 January 2025. At paragraph 18.2 of the response, the defendants set out a case that:
"(a) the claimant's loss was to be calculated by ascertaining the difference between the price that the claimant received under the 2017 Letter Agreement plus the increased royalties that the University would receive under clause 6.2 of the Licence as a result of the collaboration and "the objective value" of its rights under the Licence as at 19 July 2017 that were extinguished pursuant to the 2017 Letter Agreement, termed the 'Extinguished Rights'; and
(b) a valuation of the 'Extinguished Rights' would need properly to take into account "the probability of various hypothetical events occurring including that AstraZeneca and Merck: (A) would not have entered into a Collaboration at all; (B) would have entered into a Collaboration with a different structure to that in fact agreed and what that structure may have been; or (C) would have entered into a Collaboration with the same structure as that in fact agreed"
- A further request for information was made on 6 February 2025 seeking information about the nature of the different structures the collaboration might have adopted in the hypothetical scenario proposed by the defendants. The request was answered on 11 March 2025 and at paragraph 17 the defendants stated that the "Alternative Transaction Structures":
"… may have involved (without limitation):
17.1 an equity investment in KuDOS or another joint venture entity plus a shareholder agreement as described in paragraph 9.4 above;
17.2. the licensing of intellectual property relating to olaparib for no upfront or milestone payments; and/or
17.3 a Collaboration not necessitating a licence of the University IP, including because it could rely on KuDOS's existing rights under the Licence." [my emphasis]
- The request made on 21 May 2025 ("the May RFI Request") sought further information about what the key terms of the Alternative Transaction Structures would have been. It is expressed to be a request for information and clarification about the defence and the answers to the previous requests for information:
"Whilst the Claimant has previously sought further information in relation to various matters, it makes this renewed and consolidated request for further information in relation to certain aspects of the Defendants' case on damages, in light of the permission for expert evidence that the Defendants were granted at the last CMC on 23 April 2025. The Claimant requests that by 4pm on Tuesday 27 May 2025, the Defendants respond to confirm: (1) whether they will be providing a substantive response to this request and, if so, (2) when a response will be provided, in default of which the Claimant will apply for an order at the forthcoming CMC.
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Request
1. So that the Claimant can properly prepare its own case (including by taking preliminary steps to prepare its own expert evidence), please identify precisely:
(1) Each Alternative Transaction Structure that the Defendants say might, as at 19 July 2017, have been entered into with Merck, including in particular what that structure would have been, what contracts would have been required to implement that structure and who the parties to those contracts would have been.
(2) In relation to each such Alternative Transaction Structure:
(i). whether it would have involved (i) an equity investment in KuDOS or another joint venture entity plus a shareholder agreement, (ii) the licensing of intellectual property relating to olaparib for no upfront or milestone payments, or (iii) a Collaboration not necessitating a licence of the University IP, including because it could rely on KuDOS's existing rights under the Licence; and
(ii). what the key commercial and payment terms would have been including, without prejudice to the generality of the foregoing, what benefits would have flowed to the Claimant and how they are calculated; and
(iii). whether this was an alternative structuring option that was in fact considered by the Defendants prior to the Collaboration and, if so, at what point this was considered and for how long and, in broad terms, what steps the Defendants took towards exploring the viability of or implementing that alternative structuring option."
Part 18 jurisdiction
- CPR rule 18.1 is expressed in very general terms. It provides that:
"(1) The court may at any time order a party to—
(a) clarify any matter which is in dispute in the proceedings; or
(b) give additional information in relation to any such matter,
whether or not the matter is contained or referred to in a statement of case.
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(3) Where the court makes an order under paragraph (1), the party against whom it is made must—
(a) file their response; and
(b) serve it on the other parties,
within the time specified by the court."
- Practice Direction 18 contains a number of provisions about the form of the request and information it should contain. The defendants took issue with the fact that the request:
11.1 Did not state expressly that it was a request made pursuant to Part 18 (PD18 para. 1.5(1) and 1.6(1)(b)).
11.2 Did not provide a date by which the response was to be made (PD18 para. 1.6(1)(e)). Instead, it asked the defendants to confirm by 27 May 2025 whether they would be responding to the request and, if so, when.
11.3 Did not provide a reasonable time for a response. The defendants submitted that the period should be at least 14 days relying upon PD18 paragraphs 1.1 and 5.5(2).
11.4 Stated that it was a renewed request, for which, the defendants submitted, no provision was made in CPR rule 18.
- In addition, the defendants submitted that the court had no jurisdiction to make an order under CPR rule 18 unless there is a failure to respond to the request or the court considers that the response is inadequate.
- At the hearing Mr Maclean KC, who appeared on behalf of the defendants, helpfully made light of these technical objections. I need only say that the terms of the rule are wide and that the court's jurisdiction to make an order is not restricted by niceties such as whether the correct heading has been placed on the request. The request was made only a short time before the second case management conference and it was sensible for the claimant to invite the defendants to state before the hearing whether they agreed to respond to the request, rather than specifying a date. I need only add that although the time for a response must always be reasonable it is not right, on a proper construction of the rule and practice direction, that the minimum period for a response is 14 days.
- Mr Parker KC who appeared for the claimant submitted that:
14.1 The claimant needed an answer to the request to enable it to identify and instruct its expert.
14.2 The claimant's expert will need to understand the defendants' case about the Alternative Transaction Structures prior to the preliminary meeting of experts if the meeting is to have any value.
14.3 If the information is not provided in advance of that meeting the claimant only has a relatively short period of time in which to prepare and serve its report, just two months from 20 December 2025.
- Mr Maclean KC submitted that the claimant was well able to identify and instruct an expert and there was no need for the information sought to be supplied before the claimant is served with the defendants' report and to make an order now would place an unfair burden upon the defendants at a time when there are other more pressing procedural issues to be dealt with.
Disposal
- It would certainly have been preferable had the defendants been given greater notice of the request before the case management conference but, as I have indicated, I regard the approach that was adopted, in the circumstances, to have been a practical and sensible one.
- The defendants have put forward a counterfactual case on damages that involves the possibility of Alternative Transaction Structures being open to it. Three non-exclusive examples have been provided without providing an outline of the terms upon which they might have proceeded and without stating which, if any, were considered at the time. It is plain that the claimant is entitled to an answer to the further request to clarify the defendants' case.
- It would have been a poor use of court resources to have required the claimant to re-serve the request in a form that was strictly compliant with Practice Direction 18 instead of making an order that the request be answered within a timescale that took account of the overall demands of the timetable. The defendants could not complain that they were taken by surprise by the request when the answer to the second request was given at such a high level of generality.
- I do not accept that the claimant would be unable to identify an expert and provide initial instructions without an answer to the request. However, it is essential that their expert understands the defendants' case prior to the initial meeting of experts. The general purpose of such meetings is to ensure that each expert is able to articulate their approach to the task in hand and understands the issues that their opposite number proposes to tackle. Furthermore, as is common, the order explicitly requires the experts to identify and, if possible, to narrow the issues between them. They would be unable to carry out that exercise without understanding the case they each wish to put forward and are required to meet.
- In my judgment the only issue for the court was not whether an order should be made but what date should be set for compliance. There was no requirement for that date to be within a short period after the case management conference. I concluded that the provision of a response by 7 October 2025, which is the date for providing extended disclosure, would provide the defendants with a reasonable period in which to develop in more detail their counterfactual case on damages and provide a reasonable period for the claimant's advisers and their expert to consider that case prior to the preliminary meeting of experts.