Psychedelic clinical research firm Reunion Neuroscience Inc. (NASDAQ: REUN) is taking Mindset Pharma Inc. (OTCQB: MSSTF) to federal court over claims that the company copied its main psychedelic formula and presented it as its own invention while applying for a patent.
Reunion filed a lawsuit against Mindset in the U.S. District Court for the District of New Jersey and is seeking to have its Chief Scientific Officer, Nathan Bryson, added as an inventor of the RE104 compound patent.
The company is also making claims for co-ownership of the patent, unfair conduct in the patent application process, and breach of contract.
“Reunion is proud of its inventions to further its mission to improve the lives of patients and families who suffer from depression and other mental health disorders and intends to vigorously protect its intellectual property position to the fullest extent,” it said in a Tuesday morning statement.
Reunion said it had been developing RE104 to treat postpartum depression and other mental health conditions and was given a patent by the U.S. Patent and Trademark Office (PTO) in April 2022, allowing the company the exclusive right to make and sell the composition until 2041. The patent made public the composition of Reunion’s psychedelic compound.
According to court documents, Reunion alleges that Mindset, another clinical psychedelics firm, copied RE-104 after it saw it in the patent approval and presented it as its own invention to the PTO in June, a few months after the Reunion’s chemical composition was made public.
It claims Mindset named two of its employees as co-inventors of RE-104, even though Bryson was the sole inventor, the company said. Reunion accused Mindset of misrepresentation and fraudulently omitted Bryson’s involvement.
Reunion alleges that Mindset “brazenly” told Reunion that it needed a license from Mindset to use the compound. Wanting to avoid litigation, the two sides agreed to meet to resolve the conflict. Reunion also noted in the court documents that the issue was affecting its third-party funding and wanted to resolve the issue so that its funding could move forward.
The filing stated, “The parties orally agreed on the timing, form, and amount of upfront payments, milestone payments, and royalties.”
After the meeting between the two companies, the CEOs shook hands on an agreement, but the case accuses Mindset of later walking back on the deal.
Reunion said it is suing Mindset to protect its intellectual property and hold it liable for purposely hurting the company.
In a statement released shortly after Reunion made the case public on Tuesday, Mindset said that it “disagrees with and denies the allegations set forth by Reunion.”
“The company plans to vigorously defend itself against this lawsuit,” it said.
What Reunion wants
Reunion requested a variety of remedies from the court. The company wants the inventorship of the Mindset’s patent to be corrected, meaning that the actual inventors of the patent are recognized, and for the director of the PTO to issue a certificate of correction reflecting this change.
Reunion also wants a declaration that states that it co-owns Mindset’s patent and the inventions claimed within it, and a separate declaration that Mindset engaged in conduct that makes the patent legally unenforceable.
The company is also seeking financial compensation such as its lawyers to be paid, damages resulting from Mindset flipping its position after an oral deal was made, and damages for its interference with Reunion’s ability to profit.
In January, Reunion completed an interim analysis of its phase 1 clinical trial of RE104. The trial involved 32 healthy volunteers who were given ascending doses of RE104, with two of eight subjects receiving a placebo in each cohort.
The drug was found to be safe and well tolerated with no severe adverse events, and showed robust and pervasive pharmacodynamic effects with a shorter duration of psychedelic experience compared to psilocybin.
The company said that it identified a dose level at which most participants achieved a “complete mystical experience,” which has been shown to correlate with psychedelic treatment responses in clinical trials of patients with depression, anxiety, and substance use disorder.
Reunion said it had moved to submit the data to the FDA as part of a pre-Investigational New Drug meeting in preparation for phase 2 trial development.