Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 1 of 63 Page ID #:9
`Case 2:22-cv-01960 Document1-1 Filed 03/24/22 Page1of63 Page ID#:9
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`EXHIBIT A
`EXHIBIT A
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 2 of 63 Page ID #:10
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`HUESTON HENNIGAN LLP
`John C. Hueston, State Bar No. 164921
`jhueston@hueston.com
`Robert N. Klieger, State Bar No. 192962
`rklieger@hueston.com
`Craig A. Fligor, State Bar No. 323174
`cfligor@hueston.com
`523 West 6th Street, Suite 400
`Los Angeles, CA 90014
`Telephone:
`(213) 788-4340
`Facsimile:
`(888) 775-0898
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`Attorneys for Plaintiff
`Intrivo Diagnostics, Inc.
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`Plaintiff,
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`INTRIVO DIAGNOSTICS, INC., a Delaware
`corporation,
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`vs.
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`ACCESS BIO, INC., a New Jersey corporation;
`AREUM BIO LLC, a Delaware limited liability
`company; IVY PHARMA, INC., a New Jersey
`corporation; and DOES 1 through 10, inclusive,
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`Defendants.
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`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`COUNTY OF LOS ANGELES
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`Case No.
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`COMPLAINT FOR:
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`(1) BREACH OF CONTRACT;
`(2) BREACH OF THE IMPLIED
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`COVENANT OF GOOD FAITH AND
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`FAIR DEALING;
`(3) PROMISORRY FRAUD;
`(4) INTENTIONAL INTERFERENCE
` WITH CONTRACTUAL RELATIONS
`(5) UNLAWFUL BUSINESS PRACTICES
`(6) INTENTIONAL INTERFERENCE
` WITH PROSPECTIVE ECONOMIC
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`ADVANTAGE
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`DEMAND FOR JURY TRIAL
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`6148451
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`COMPLAINT
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`Electronically FILED by Superior Court of California, County of Los Angeles on 03/22/2022 01:58 PM Sherri R. Carter, Executive Officer/Clerk of Court, by H. Flores-Hernandez,Deputy Clerk
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`Assigned for all purposes to: Stanley Mosk Courthouse, Judicial Officer: Richard Fruin
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`22STCV09935
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 3 of 63 Page ID #:11
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`Plaintiff Intrivo Diagnostics, Inc. (“Intrivo”), for its complaint against Defendants Access
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`Bio, Inc. (“Access Bio”), Areum Bio LLC (“Areum”), IVY Pharma, Inc. (“IVY Pharma”), and Does
`1 through 10, inclusive, alleges as follows:
`INTRODUCTION
`Plaintiff Intrivo has been at the forefront of the efforts to develop and deploy rapid,
`1.
`accurate, and easy-to-use COVID-19 tests. Early in the pandemic, Intrivo partnered with Defendant
`Access Bio, then a struggling diagnostics company on the verge of bankruptcy, to develop and
`distribute rapid tests for COVID-19. Intrivo invested tens of millions of dollars in support of its
`partnership with Access Bio, including to create leading COVID-19 tests, secure FDA Emergency
`Use Authorizations (“EUAs”) for the tests, and to build out a world-class distribution network so that
`the tests could be quickly and efficiently delivered to those who need them most. For its part, Access
`Bio agreed to manufacture and sell the tests exclusively to Intrivo at a pre-negotiated price so that
`Intrivo could distribute the tests to help save lives.
`The parties formalized their relationship in a series of contracts beginning in May
`2.
`2020. These contracts afforded Intrivo exclusive distribution rights in the United States for all
`COVID-19 antigen tests, including both the point-of-care (“POC”) test, to be administered by
`healthcare professionals, and the over-the-counter (“OTC”) self-test. Unbeknownst to Intrivo at the
`time, Access Bio never intended to adhere to the contracts with Intrivo. Instead, despite Intrivo’s
`substantial investments to rescue Access Bio from imminent collapse, Access Bio shamelessly and
`repeatedly breached the contracts virtually from the start.
`Beginning no later than October 2020, Access Bio undertook to circumvent Intrivo’s
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`exclusive U.S. distribution rights for the POC tests, which were marketed and sold under the
`“CareStart” brand. At Access Bio’s behest, Intrivo entered into a subdistribution agreement with
`Defendant Areum pursuant to which Areum would purchase the CareStart POC tests from, and split
`its profits with, Intrivo. But Areum never adhered to the subdistribution agreement; it instead
`purchased tests directly from Access Bio and failed to make any payments to Intrivo after January
`2021. On information and belief, Areum purchased millions of CareStart POC tests directly from
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 4 of 63 Page ID #:12
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`Access Bio for distribution throughout the U.S., notwithstanding its knowledge of Intrivo’s exclusive
`distribution rights in the territory.
`In the fall of 2021, after the FDA granted an EUA for the OTC test, Intrivo and Access
`4.
`Bio executed a new contract by which Access Bio committed to manufacture and deliver to Intrivo
`no fewer than 53.6 million OTC tests under Intrivo’s “On/Go” brand by the end of December 2021,
`and to thereafter make at least 65% of its antigen test production capacity available to Intrivo for the
`four-year term of that agreement. With a guaranteed supply of at least 53.6 million On/Go tests in
`the fourth quarter of 2021, Intrivo was well positioned to meet the unprecedented demand for
`COVID-19 tests when the Delta and Omicron variants drove case rates to previously unthinkable
`levels. The contract afforded Access Bio the right to sell OTC tests for its own account under the
`CareStart brand, but only once Intrivo’s minimum guarantees had been fulfilled.
`Once again, Access Bio did not abide by its commitments to Intrivo. The Q4 2021
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`delivery deadlines were essential terms in the contract, among the most contentious and important
`terms in negotiations given the cyclical nature of consumer demand and the expectation that major
`pharmaceutical and diagnostics companies would enter the market in subsequent months. Access Bio
`acknowledged that time was of the essence, which was the whole point of minimum guarantees. Yet,
`by the end of December 2021, Access Bio had delivered only about 21.6 million of the promised
`53.6 million On/Go tests—a shortfall of approximately 32 million tests. Rather than devoting
`necessary resources and raw materials to meet the minimum guarantees, Access Bio deliberately
`throttled the supply of On/Go tests so that it could manufacture more of the competing CareStart
`OTC tests from which Access Bio reaped a far greater profit.
`Access Bio’s breaches devastated Intrivo’s ability to meet customer demand for the
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`On/Go tests. Between October 6, 2021, and January 15, 2022, Intrivo received purchase orders for
`approximately 100 million tests, valued at nearly $660 million, from government, retail, and
`enterprise customers. Yet, because Access Bio did not deliver the tests it promised, the vast majority
`of Intrivo’s customer orders were long delayed and ultimately cancelled. Worse yet, in a calculated
`move that Access Bio had undoubtedly planned from the start, Access Bio then swooped in to poach
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 5 of 63 Page ID #:13
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`those same customers, selling them CareStart OTC tests in lieu of the On/Go tests that Intrivo was
`unable to deliver on account of Access Bio’s breaches.
`Throughout the fourth quarter of 2021, Access Bio purposefully misled Intrivo and
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`made pretextual excuses about the cause of the delayed shipments. In truth, Access Bio had diverted
`the lion’s share of its resources not to satisfying Intrivo’s minimum guarantees, but instead to
`manufacturing CareStart OTC tests that Access Bio could distribute in concert with Areum for a
`substantially larger profit than it could have achieved on the sales it had committed to make to Intrivo.
`On information and belief, Access Bio and Areum sold tens of millions of CareStart OTC tests in the
`fourth quarter of 2021 and continuing into early 2022, in willful disregard of its obligations to Intrivo
`and causing Intrivo hundreds of millions of dollars in lost profits, along with catastrophic damage to
`its reputation and future business prospects.
`In early January 2022, Intrivo confronted Access Bio and demanded that it adhere to
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`its commitments. Access Bio’s response was nothing short of stunning. Rather than agree to cure its
`delivery shortfall in time for Intrivo to mitigate the extraordinary damages from the delivery delays,
`Access Bio told Intrivo that it would stop delivering tests altogether unless Intrivo agreed by 5:00
`p.m. the next day to waive its entitlement to the past-due tests, release Access Bio of all liability, and
`make a series of other material concessions. Intrivo refused to capitulate and, even in the face of
`Intrivo’s assertion of its legal rights, withheld most of the shortfall until late February—by which
`time Access Bio had poached Intrivo’s customers, the Omicron wave had largely subsided, and
`demand had completed dried out—leaving Intrivo with no choice but to refuse delivery or suffer
`heavy losses.
`Intrivo brings this action to seek redress for Access Bio’s and Areum’s willful and
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`bad faith breach of contract and the false promises and other tortious acts by which they and their
`chief executives have inflicted damages upon Intrivo that exceed $1,000,000,000 in the aggregate.
`PARTIES
`Plaintiff Intrivo Diagnostics, Inc. is a Delaware corporation with its corporate offices
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`in Culver City, California.
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 6 of 63 Page ID #:14
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`Defendant Access Bio, Inc. is a New Jersey corporation with a principal place of
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`business in Somerset, New Jersey. Access Bio is a public company traded on the KOSDAQ (Korean
`Stock Exchange).
`Defendant Areum Bio LLC is a Delaware limited liability corporation. On
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`information and belief, Areum’s principal place of business is in Saddle Brook, New Jersey.
`Defendant IVY Pharma, Inc. is a New Jersey corporation. On information and belief,
`13.
`IVY Pharma’s principal place of business is in Paramus, New Jersey. On information and belief,
`Areum was at all times relevant to this dispute an alter ego of IVY Pharma by reason of the following:
`a. IVY Pharma dominated, influenced, and controlled the business, property, and
`affairs of Areum;
`b. there existed such a unity of interest and ownership between IVY Pharma and
`Areum that their corporate separateness and individuality did not truly exist;
`c. IVY Pharma operated Areum as a mere instrumentality and treated its
`corporate assets as its own;
`d. Jong Kim and Minjung Suh transacted nearly all business on Areum’s behalf
`from IVY Pharma’s offices and using IVY Pharma email addresses;
`e. IVY Pharma and Areum comingled funds with one another;
`f. IVY Pharma and Areum did not observe corporate formalities; and
`g. the failure to disregard Areum’s corporate form would sanction a fraud and
`promote injustice.
`The true names and capacities of the defendants named herein as Does 1 through 10,
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`inclusive, whether individual, corporate, or otherwise, are currently unknown to Intrivo, which
`therefore sues such defendants by fictitious names. Intrivo is informed and believes, and based
`thereon alleges, that each of the fictitiously named defendants is responsible in some manner for the
`occurrences alleged herein, and that the damages as alleged herein were proximately caused by their
`conduct. Intrivo will amend this Complaint to identify the true names and capacities of each of the
`fictitiously named defendants when such names and capacities have been determined.
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 7 of 63 Page ID #:15
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`JURISDICTION AND VENUE
`This Court has jurisdiction over all parties pursuant to California Code of Civil
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`Procedure section 410.10.
`This Court may exercise specific personal jurisdiction over Access Bio because
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`Intrivo’s claims arise out of or relate to Access Bio’s suit-related conduct that creates a substantial
`connection to California. Access Bio purposefully availed itself of the benefits of this forum by,
`among other things:
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`• Access Bio representatives placed telephone calls and sent text messages and
`email correspondence to Intrivo at its corporate offices in California in connection
`with the negotiation of the contracts that are the subject of this dispute;
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`• Access Bio representatives engaged in near daily telephone calls and electronic
`communications with employees of Intrivo located in California in connection
`with the performance of the parties’ contracts;
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`• Access Bio utilized clinical studies that were conducted in and that Intrivo
`managed from California to obtain EUAs for the CareStart POC and On/Go OTC
`tests;
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`• Access Bio’s Chairman, Young Choi, traveled to Intrivo’s California offices in
`furtherance of the parties’ business relationship;
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`• Access Bio representatives directed false promises to Intrivo in California;
`• Access Bio intended to cause, and did cause, Intrivo to suffer substantial injury in
`California, including due to its inability to fulfill purchase orders from the State
`of California and other California customers;
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`• On information and belief, Access Bio entered into an agreement with Vivera
`Pharmaceuticals, Inc., based in Newport Beach, California, to distribute CareStart
`POC and OTC tests in contravention of its contracts with Intrivo.
`Access Bio’s contacts with California were not random, fortuitous, or attenuated, but were instead
`part of a continuous course of conduct by which Access Bio derived significant benefits. It is
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 8 of 63 Page ID #:16
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`therefore fair to require Access Bio to defend itself in California in this controversy arising out of
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`that course of conduct.
`This Court may exercise specific personal jurisdiction over Areum and IVY Pharma
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`because Intrivo’s claims arise out of or relate to their suit-related conduct that creates a substantial
`connection to California. Areum and IVY Pharma purposefully availed themselves of the benefits of
`this forum by, among other things:
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`• Areum filed a lawsuit against Intrivo in Los Angeles Superior Court, seeking
`declaratory and injunctive relief, in which Areum acknowledged that a substantial
`portion of the events related to the parties’ business relationship occurred in this
`State, see Complaint, Areum Bio LLC v. Intrivo Diagnostics, Inc., Case No.
`22STCV07453 (filed Mar. 3, 2022);
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`• Areum and IVY Pharma placed telephone calls and sent email correspondence to
`Intrivo at its corporate offices in California in connection with the negotiation of
`Intrivo’s contract with Areum, the breach of which is directly at issue in this
`dispute;
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`• Areum sold millions of CareStart POC tests for distribution in California, in
`knowing disregard of Intrivo’s exclusive distribution rights;
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`• Areum and IVY Pharma directed their false promises to Intrivo in California;
`• Areum and IVY Pharma intended to cause, and did cause, Intrivo to suffer
`substantial injury in California, including due to its inability to fulfill purchase
`orders from the State of California and other California customers;
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`• On information and belief, Areum entered into an agreement with Vivera
`Pharmaceuticals, Inc., based in Newport Beach, California, to distribute CareStart
`POC and OTC tests in knowing disregard of Intrivo’s exclusive distribution rights.
`Venue is proper in this Court pursuant to California Code of Procedure § 395(a)
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`because Defendants do not reside in this state.
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 9 of 63 Page ID #:17
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`FACTUAL BACKGROUND
`Intrivo Partners With Access Bio On COVID-19 Testing Solutions
`A.
`Intrivo is a digital health company that combines science, technology, and user-
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`centered designs to tackle health challenges and help individuals live happier, healthier, and safer
`lives. From the onset of the COVID-19 pandemic, Intrivo’s goal has been to help protect the health
`and welfare of individuals residing in California and throughout the United States against the spread
`of the coronavirus. Intrivo has assisted individuals, federal, state, and local governments, and
`companies to safely reopen the economy by taking a leading role in the development of rapid antigen
`tests that help detect the coronavirus. For example, since October 2021, Intrivo has co-produced and
`exclusively distributed the On/Go test, a reliable and affordable over-the-counter (“OTC”), self-
`administered rapid antigen test that delivers results in just 10 minutes. Independent health and safety
`groups have rated the On/Go Test best-in-class for accuracy and ease of use, in large part due to
`Intrivo’s proprietary and FDA-authorized consumer application that instructs users to properly
`administer and interpret the test results. The On/Go app was ranked #1 on the iPhone App Store and
`#2 on the Google Play Store among healthcare apps. Intrivo established a world-class distribution
`network to ensure that the tests, once authorized, could be quickly and efficiently delivered to those
`who need them most.
`20. When the pandemic hit, Access Bio was a struggling diagnostic test manufacturing
`company best known for a malaria test that it sold overseas. None of Access Bio’s testing products
`had been authorized or approved by the FDA for sale in the United States before 2020. As a result,
`Access Bio had no marketing or distribution network capable of supporting the distribution and sale
`of testing products in this country, let alone on the scale that would be required for COVID-19 rapid
`tests. Access Bio was also struggling financially and, on information and belief, had lost $19 million
`in 2019.
`Intrivo anticipated a significant need for testing that would be borne out early in the
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`pandemic, and it committed to use its healthcare technology, distribution expertise, and financial
`resources to oversee and guide Access Bio’s development and production of COVID-19 rapid tests.
`Intrivo prepared to commercialize the rapid tests by building out an unmatched distribution network
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 10 of 63 Page ID #:18
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`capable of delivering the tests quickly and efficiently to government organizations, businesses, and
`individuals in California and across the country.
`On or about May 29, 2020, Intrivo and Access Bio entered into a Supply and
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`Distribution Agreement (the “Supply Agreement”). This contract granted Intrivo exclusive U.S.
`distribution rights in the COVID-19 antibody tests then under development. Intrivo invested millions
`of dollars, and untold time and energy, in support of Access Bio and in anticipation of exercising its
`distribution rights in those and the other POC and OTC tests, including by:
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`• prepaying millions of dollars so that Access Bio could meet payroll obligations
`and increase its production capacity;
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`• paying for manufacturing and compliance consultants for Access Bio;
`• paying for regulatory consultants to assist Access Bio in obtaining multiple FDA
`EUAs;
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`locating and negotiating leases for additional production sites for Access Bio;
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`• paying to overhaul Access Bio’s brand, including the creation of a new brand,
`logo, and identity for Access Bio’s CareStart product line, and rebuilding Access
`Bio’s website;
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`• assisting Access Bio in the design, negotiation, and funding of numerous studies
`required for Access Bio’s tests to receive FDA EUA; and
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`• hiring dozens of personnel to accommodate the commercialization needs of
`Access Bio’s COVID-19 tests.
`Intrivo expended these substantial resources while at the same time investing heavily
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`to build out a world-class distribution network that would make the tests readily accessible
`throughout California and across the country.
`In August 2020, Intrivo and Access Bio entered into Amendment No. 1 to the Supply
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`Agreement. Among other things, this Amendment No. 1 afforded Intrivo exclusive distribution rights
`in the United States for all COVID-19 rapid antigen tests through May 29, 2025.
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`B.
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`Access Bio Pressures Intrivo to Enter Into a Distribution Agreement with
`Areum, Which Areum Promptly Breaches
`In or about October 2020, Access Bio began selling CareStart POC tests to Areum—
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`a company run by Jong Kim, a former boss and close personal friend of Access Bio Chairman Young
`Choi—for distribution in the U.S. in flagrant violation of Intrivo’s contractual right to exclusivity.
`Later that month, in an apparent effort to paper over that breach, Mr. Choi insisted that Intrivo enter
`into a distribution agreement with Areum (the “Areum Distribution Agreement”) that would
`authorize Areum to act as a subdistributor of CareStart POC tests. Pursuant to that Areum
`Distribution Agreement, a true and correct copy of which is attached hereto as Exhibit A, Areum
`agreed to source CareStart POC tests from Intrivo and to pay Intrivo one half of Areum’s profits
`from its sales of the tests to customers.
`Areum flouted its contractual obligations from the start. Rather than purchasing
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`CareStart POC tests from Intrivo, as the Areum Distribution Agreement required, Areum purchased
`them directly from Access Bio. Areum thereby deprived Intrivo of visibility into the number of tests
`Areum was purchasing for distribution, the cost at which they were acquired, and the price at which
`they were sold, thus leaving Intrivo unable to calculate and enforce the profit share to which it was
`entitled. For the first few months, until January 21, 2021, Areum sent a weekly report to Intrivo
`regarding its sales and profits. However, on information and belief, Areum did not provide complete
`information and misrepresented both the number of CareStart POC Tests it sold and its profits from
`those sales. Areum thereafter ceased accounting to Intrivo altogether and disregarded Intrivo’s
`repeated requests for information and payment.
`In March and April 2021, Intrivo took delayed delivery of approximately 20 million
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`CareStart POC tests from Access Bio. But by this time, other major manufacturers had ramped up
`their production of competing POC tests, making it difficult for Intrivo to sell all 20 million CareStart
`POC tests it received at a profit. Areum’s breaches of the Areum Distribution Agreement exacerbated
`this problem. Rather than purchase the CareStart POC tests from Intrivo’s 20 million-test stock,
`Areum purchased tests directly from Access Bio, thereby undercutting demand for Intrivo’s supply.
`To make matters worse, Access Bio supplied Areum with CareStart POC tests that had later
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`expiration dates and, on information and belief, at a lower price point that Access Bio was charging
`Intrivo for the same tests.
`Areum also violated FDA regulatory requirements, thereby jeopardizing the FDA
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`EUA for the CareStart POC test. During an internal review and audit in April 2021 to comply with
`various FDA requests, Intrivo discovered that Areum had concealed a significant number of sales of
`CareStart POC tests and that Areum’s downstream distributors had failed to properly document the
`tests Areum had sold. The ability to trace tests is fundamental to the EUA, and the Areum Distribution
`Agreement therefore required Areum to “maintain records of the Authorized Laboratories to which
`the Test Kits are distributed, including the quantity thereof” and to make those and the other required
`records available for inspection by the FDA.” See Exhibit A (Areum Distribution Agreement)
`§§ 5(b)(iv), (vii). Areum’s violations forced Intrivo to undertake costly mitigation measures,
`including compiling information for the FDA from Areum and other distributors and implementing
`a new compliance regime for its distributors.
`Intrivo’s audit revealed that Areum owed Intrivo more than $2.18 million in
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`connection with CareStart POC tests sold through January 21, 2021. In early May 2021, Areum
`agreed to wire $1.94 million of that amount to Intrivo as a good-faith payment, but two days later
`announced without explanation or justification that it was reducing the payment amount to $1.5
`million. However, no payment was ever received by Intrivo.
`Areum claimed that it sent the $1.5 million payment to a Hong Kong bank account
`30.
`under instructions from Intrivo. Intrivo does not maintain a bank account in Hong Kong and never
`instructed Areum to send the payment to that account. Instead, Areum claims that it was tricked by
`a spoofed email account that used an “@lntrivo.com” email address (with a lower-case “L” instead
`of an “i”) and directed that the funds be wired to a Hong Kong bank account. On information and
`belief, Areum’s story is a fiction, and Areum either did not wire the funds to Hong Kong as stated or
`wired the funds to a known bank account for the purpose of avoiding payment to Intrivo. Whatever
`the explanation, Areum still owes Intrivo its Profit Share in respect to sales from January through
`May 2021, which it has refused to pay.
`
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`6148451
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`- 11 -
`COMPLAINT
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`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 13 of 63 Page ID #:21
`
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`By late May 2021, Areum had altogether ceased acting as a subdistributor for Intrivo.
`31.
`However, on information and belief, Areum has continued thereafter to distribute CareStart POC
`tests as a direct distributor for Access Bio, in knowing violation of the exclusivity rights that Intrivo
`had been granted by Access Bio.
`Access Bio Repeatedly Breaches the Supply And Distribution Agreement
`C.
`32.
`At the time the Supply Agreement and Amendment No. 1 were signed, Intrivo and
`Access Bio anticipated offering a single COVID-19 rapid antigen test, rather than different POC and
`OTC tests. However, in an effort to speed up the FDA’s EUA process, a decision was made to
`bifurcate the tests and seek authorization for the POC version first. That authorization was obtained
`in October 2020, and Intrivo thereafter began distributing CareStart POC tests throughout the United
`States.
`
`Under the Supply Agreement, Intrivo’s U.S. distribution rights in the CareStart POC
`33.
`test were exclusive. Yet, almost from the start, Access Bio violated that exclusivity by selling
`CareStart POC tests to other distributors for domestic distribution. Those distributors included not
`only Areum but also Rodimedi & Associates, Inc., both of which received Letters of Authorization
`signed by Mr. Choi that authorized their distribution of CareStart POC tests within the U.S., in direct
`contravention of Intrivo’s exclusivity rights.
`In June 2021, roughly two months before the FDA issued its EUA for the OTC test,
`34.
`Access Bio asserted that Intrivo’s exclusivity rights under the Supply Agreement were limited to the
`CareStart POC tests, and did not extend to OTC tests. Access Bio further began demanding that
`Intrivo remit $140 million to which Access Bio had no entitlement at all.
`Access Bio’s bad faith continued after the OTC test received its EUA from the FDA
`35.
`in August 2021. CVS Pharmacy terminated negotiations to purchase millions of OTC tests from
`Intrivo when Access Bio refused to confirm Intrivo’s exclusive distribution rights. That same month,
`one of Intrivo’s subdistributors, The Mega Company, terminated negotiations on a contract with the
`second largest U.S. health insurance company, Anthem, Inc., when Access Bio again refused to
`confirm Intrivo’s exclusivity. On information and belief, Access Bio also misused Intrivo’s
`confidential customer list, which Intrivo had been required to disclose to Access Bio as part of its
`
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`6148451
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`- 12 -
`COMPLAINT
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`
`
`

`

`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 14 of 63 Page ID #:22
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`FDA submissions, to solicit other U.S. distributors for the OTC tests in direct contravention of
`
`Intrivo’s exclusivity rights.
`Intrivo began preparing to take legal action. When Access Bio learned of those plans,
`36.
`and knowing that its positions could not withstand legal scrutiny, Access Bio resorted to strong-arm
`tactics. Access Bio told Intrivo that it would cease providing any tests to Intrivo, effectively driving
`the company out of business, unless Intrivo waived its exclusive distribution rights, agreed to pay
`Access Bio more than $120 million to which it was not entitled, and released Access Bio from
`liability for all of its wrongful conduct to date. Intrivo capitulated and agreed to renegotiate its
`arrangement with Access Bio under clear commercial duress.
`The October 2021 Agreements
`D.
`37.
`In September and early October 2021, Intrivo and Access Bio hashed out the terms of
`their business relationship going forward. The essential terms included the following:
`
`•
`
`Intrivo agreed to waive its exclusive distribution rights as to all products other
`than the CareStart POC tests, and limited its exclusive territory even as to those
`tests;
`
`• Access Bio agreed to produce and deliver to Intrivo no fewer than 53.6 million
`On/Go tests by December 31, 2021, a figure far lower than Intrivo requested, but
`one Access Bio assured Intrivo it could meet;
`
`• Access Bio agreed to devote 65% of its total antigen test production capacity to
`the manufacture of On/Go tests for Intrivo for the next four years;
`
`• Access Bio agreed to pay Intrivo a license fee of $0.50 per test for each CareStart
`OTC test that Access Bio distributed in the U.S.;
`
`•
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`Intrivo agreed to pay more than $120 million to Access Bio in installments over
`the following 13 months; and
`
`•
`
`Intrivo agreed to release all claims against Access Bio for any and all past
`misconduct, known and unknown.
`Timely fulfillment of the 53.6 million minimum guarantee was far and away the most
`38.
`important contract term to Intrivo given the extraordinary consumer demand for rapid at-home tests
`
`
`6148451
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`- 13 -
`COMPLAINT
`
`
`
`

`

`Case 2:22-cv-01960 Document 1-1 Filed 03/24/22 Page 15 of 63 Page ID #:23
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`heading into the fourth quarter of 2021, the cyclical nature of consumer demand, and the fact that
`
`other major pharmaceutical and diagnostics companies were entering the market and ramping up
`production of competing rapid OTC tests. As part of the negotiations, on October 4, 2021, Mr. Choi
`assured Intrivo Co-CEO Ron Gutman that Access Bio had the capacity to produce at least 92 million
`OTC tests in the fourth quarter of 2021, such that the 53.6 million test minimum guarantee was
`eminently achievable.
`These arrangements were memorialized in a series of three agreements dated October
`39.
`6, 2021. Under the first Term Sheet governing the production and distribution of On/Go OTC tests
`(the “On/Go Contract”), a true and correct copy of which is attached hereto as Exhibit B, Access
`Bio committed to allocate for production and delivery to Intrivo “no less than the following number
`of [On/Go] OTC Tests”: