Rhythm Pharmaceuticals Sued For Breach of Contract Following Failure to Pay for Clinical Trials

Rhythm Pharmaceuticals removed a Los Angeles County lawsuit on Friday to California federal court; the case, filed originally by ACTCA, concerns Rhythm’s alleged breach of a contract they held with the plaintiff and other companies for the administration of clinical trials for pharmaceuticals.

In 2018, the complaint says, the defendant entered into an agreement with the plaintiff and multiple other companies, including SFCT, ICTLV, and NYCT, regarding clinical trials. The plaintiff and the three other companies, known in the document as the Alliance, entered into the agreement with Rhythm and had the duty of “conducting two separate and distinct clinical trials.” The clinical trials were to be conducted by the Alliance in Los Angeles County.

The plaintiff asserts that they and other members of the Alliance adequately fulfilled the terms, conditions, and promises of the agreement and “diligently performed” the duties that they were responsible to the defendant for.

Per the agreement, the defendant owed the plaintiff and other members of the Alliance certain amounts of money in return for their execution of the clinical trials. In 2021, ACTCA realized that the defendant had no intention to pay the remaining sums that they owed to any members of the Alliance. Rhythm owed more than $2 million collectively, and $900,000 to ACTCA.

After the Alliance demanded that Rhythm pay their debts, they allegedly refused, which the plaintiff argues constitutes a breach of the clinic trial contracts they hold with the defendant. The complaint cites breach of contract against Rhythm due to their failure to “pay sums due and owing to the alliance.”

The plaintiff asserts that members of the Alliance have all sustained damages as a result of the defendant’s breach of contract. ACTCA is seeking general, incidental, and consequential damages, litigation fees, and any other relief deemed necessary and just by the court.

The plaintiff is represented by Briggs & Alexander APLC, while the defendant is represented by Latham & Watkins, LLP.