Signal files complaint against Med Biogene and Precision Therapeutics in Supreme Court

Med Biogene Inc. (TSX Venture: MBI), a Vancouver-based life sciences company, has been charged with fraud, and Pittsburgh-based Precision Therapeutics, Inc., was charged with tortious interference in an amended complaint filed today by Signal Genetics in Supreme Court for the County of New York. On February 11, 2011, Signal filed a complaint charging Med Biogene with breach of agreement, violation of a confidentiality agreement and misuse of proprietary information, among other wrongdoings.

The additional charges against Med Biogene and the new charges against Precision Therapeutics were brought by Signal Genetics LLC and its subsidiary Respira Health LLC. The complaint stems from Med Biogene's breach of its agreement to grant Signal a not less than ten-year exclusive, worldwide license to use MBI's LungExpress DX technology, a product that is complementary to a number of Signal's current product offerings.

The amended complaint charges that Med Biogene used the false promise of granting a license to Signal to induce Signal to provide Med Biogene with confidential information, which Med Biogene then provided to Precision Therapeutics. According to the complaint, after Med Biogene agreed to grant Signal an exclusive license and not to negotiate with any other party, Med Biogene surreptitiously negotiated with Precision Therapeutics and advised Precision Therapeutics that Signal was working with a specific marketing company to commercialize the technology. The amended complaint alleges that Precision Therapeutics then contacted Signal's marketer to advise it that Precision Therapeutics -- and not Signal -- was about to acquire Med Biogene's technology, and to gauge the marketer's interest in commercializing the technology on Precision Therapeutic's behalf.

The amended complaint alleges that, on February 9, 2011, just a few days after Med Biogene's exclusivity period with Signal ended -- and just one day after Med Biogene had assured Signal that their transaction was a "done deal" - Med Biogene advised Signal that Med Biogene had approved a transaction with an unnamed party, which turned out to be Precision Therapeutics.

The case against Med Biogene is detailed in an amended complaint filed with the court in the Supreme Court for the County of New York. The complaint requests judgment requiring Med Biogene to grant Signal an exclusive, worldwide license to use Med Biogene's technology on terms set forth in the parties' term sheet, damages against Med Biogene and Precision Therapeutics in an amount to be determined, and further relief.