FSD Pharma Inc. (NASDAQ: HUGE / CSE: HUGE / FRA: 0K9A), a biopharmaceutical company dedicated to building a portfolio of innovative assets and biotech solutions for the treatment of challenging neurodegenerative and metabolic disorders, today announces that the Arbitration Panel Finds that Syneos Health (NASDAQ: SYNH) Failed to Use Commercially Reasonable Efforts in Conducting its Trial for FSD 201.
In January 2022, Syneos Health (NASDAQ: SYNH) filed an arbitration proceeding against FSD Pharma claiming that the Company owed Syneos Health (NASDAQ: SYNH) USD$3,915,388.69 in damages and interest on that amount for a failed Phase II FDA trial for FSD 201. Syneos Health (NASDAQ: SYNH) also sought an order requiring FSD to pay its legal expenses.
The trial originally required the enrollment of 350 patients in North America; the geographic scope was later expanded to include several South American countries and 35 sites in total (25 in N. America and 10 in S. America).
Syneos Health’s (NASDAQ: SYNH) track record of enrollment during the trial was abysmal:
- Seven months into the trial, Syneos Health had not enrolled a single patient.
- By mid May 2021, over nine months into the trial, Syneos Health had enrolled fewer than 50 patients. The enrollment deadline, which had already been extended once, was 6/15/21. FSD terminated the trial in August 2021.
FSD disputed that it owed anything to Syneos Health, much less nearly USD$4 million, and countersued Syneos Health for breach of contract. In fighting back, FSD made clear that it was not going to be bullied by a large CRO.
On May 19, 2023, a three-arbitrator panel issued an award finding, among other things, that Syneos Health breached its contractual obligations because “given Syneos Health’s poor success at patient enrollment despite its self-described ‘extraordinary’ efforts, it was not commercially reasonable for it to continue to throw good money after bad in circumstances where the money in question was FSD’s.” The Panel awarded Syneos Health US$1,707,830.52 in damages plus interest for certain unpaid invoices essentially because FSD’s former management did not timely object and dispute those invoices in strict adherence with the boilerplate dispute resolution provisions in Syneos Health’s form agreement. The damage award is nevertheless less than 50% of what Syneos Health had demanded, as well as substantially less than what Syneos Health had offered to accept in settlement. The Panel also denied Syneos Health’s request for the payment of attorneys’ fees and litigation expenses.
The award shows how small and midsize pharma and biotech companies can fight back against CROs who take them for granted and seek to impose huge costs on them while failing to perform their end of the bargain.
FSD Pharma would like to get in contact with all and any companies and entities who find themselves in a similar situation with Syneos Health
About FSD Pharma
FSD Pharma Inc. is a biotechnology company with two candidates in different stages of development. Lucid Psychss Inc., a wholly owned subsidiary, is focused on the research and development of its lead compounds, Lucid-MS and UNBUZZD™. Lucid-MS is a molecular compound identified for the potential treatment of neurodegenerative disorders. UNBUZZD™ is a proprietary formulation of natural ingredients, vitamins, and minerals to help with liver and brain function for the purposes of potentially quickly relieving from the effects of alcohol consumption, such as inebriation, and restoring normal lifestyle.