CTT Pharma sues Aurora for allegedly shirking successful deal
Partnership goes from 'game-on' to game-over as Aurora exits, refutes wrongdoing
Canadian cannabis giant Aurora Cannabis, Inc. (TSX: ACB) is being sued for allegedly breaking a contract with life sciences company CTT Pharmaceutical Holdings, Inc. (OTC: CTTH).
On Thursday CTT Pharma, Inc., a wholly owned Canadian subsidiary, filed a statement of claim with the Ontario Superior Court of Justice against the cannabis company. According to a statement from CTT, Aurora broke off a successful business deal and left the pharma firm in the lurch.
CTT is seeking compensation for Aurora's denial of contractual commitments including expenses, owed royalties, lost royalties and damages.
Aurora says it didn't do anything wrong and that it's willing to go to court to prove it.
In an emailed statement to Mugglehead, Aurora spokesperson Laura Gallant said, "The company believes it has conducted itself in accordance with all relevant agreements, and refutes these claims. The company intends to pursue a full defence against these suits."
The partnership between the two companies began in February 2017, when CTT paired up with CanniMed Therapeutics, Inc. to bring CTT's dissolvable mouth strips to the medical market.
Aurora then acquired CanniMed in May 2018 and took over the agreement with CTT. In September of the same year, Aurora converted its US$1 million held debenture into 9 per cent equity ownership of CTT. That signalled it was "game-on for CTT," its CEO Cam Birge said in a September 2018 statement.
The first product run of Aurora Dissolve Strips sold out in 60 days, according to CTT. Press photo
Aurora's Dissolve Strips hit the medical market October 2019. At the time then-CEO Terry Booth praised the strips and his company's ability to partner with technology companies to bring innovative product formats to market. In the same statement Birge is quoted saying he was looking forward to reporting on updated progress in the coming quarters.
In Thursdays's statement, CTT said sales of the strips were strong — the first product run sold out in 60 days — and that Aurora had met with CTT to discuss an expansion of the product line for the end of Q1 2020. But then Aurora said it was, "unwilling to commit further resources to the partnership and claimed the original agreement was no longer in force."
That move was surprising and disappointing, Birge says.
"Aurora suddenly claiming that the existing agreement was no longer in force, at a time when payments were due to CTT under the original agreement, left the company with no other choice than to seek a legal remedy," he said. "Despite our best efforts to resolve our differences amicably and constructively, we were not able to resolve the impasse and felt we had no other choice than to file a statement of claim seeking legal recourse to the fullest extent possible for the benefit of our stakeholders."
On Thursday CTT also said it appointed Aurora's former chief product officer, Shane Morris, to its advisory board. Morris was closely involved with the commercialization of the strips, and can advise on product and market development as well as regulatory issues, reads the statement.
Morris joined Aurora in March 2018, leading the development and regulatory oversight for Aurora Cloud, the first-ever vape-ready oil cartridge to be introduced under Health Canada regulations.
Read more: Aurora Cannabis updates on debentures, upgrades leadership team
Top image of Aurora Eau facility. Press photo
In this article:$CTTH, ACB, aurora cannabis, Aurora Dissolve Strips, Cam Birge, CanniMed Therapeutics, CTT Pharma, CTT Pharmaceutical Holdings, Laura Gallant, Ontario Superior Court of Justice, Shane Morris, terry booth
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