North Carolina universities involved in pharmaceutical research may see fallout from a lawsuit filed by the town of Princeton, N.J., against its eponymous university. The municipal business litigation came after the worldwide success of the anti-cancer drug Altima. Sales of the drug brought in $2.5 billion per year for its manufacturer, Eli Lilly, with over $500 million of that being paid to Princeton University as licensing income. The university used some of that income on building construction and payments to faculty. The town made the claim that it was improper for those profits to be distributed by a supposed nonprofit entity that claimed tax exemptions on much of its extensive property holdings.
The matter started more than thirty years ago, when a Princeton University professor invented the compound that ultimately became Altima. That work was rewarded in 2004, when Eli Lilly got approval from the US Food and Drug Administration to market the drug as a treatment for mesothelioma. The company has reported that 11 percent of its overall sales in 2012 were from Altima.
The town’s lawsuit claims that Princeton, with its $17 billion endowment making it the country’s fifth-richest university, was benefiting from a fundamentally unfair situation. A lawyer representing five clients said the university and some of its faculty members were becoming fabulously wealthy, while town taxpayers were paying more than their fair share.
Business disputes can arise between nonprofits and municipalities, between companies big and small, and even between partners in a new venture. A North Carolina attorney with experience in business litigation may be able to provide advice to clients in the middle of a contract dispute or other contentious business situation.
Source: Bloomberg Business Week, “Princeton Sues Princeton for a Share of Its Patent Millions“, David Voreacos and Susan Decker , September 19, 2013