Access Bio, the Kosdaq-listed in-vitro diagnostics company based in New Jersey that profited from selling Covid-19 testing kits, has had its legal victory overturned by a New Jersey court. The court’s decision to invalidate a previous ruling in favor of Access Bio has reignited the case against California-based medical personal protective equipment (PPE) supplier, Gredale.
The largest shareholder of Access Bio is PharmGen Science, a Korean pharmaceutical company that owns a 25.26 percent stake.
In a public disclosure released Friday, Access Bio Korea clarified that the retrial is not prompted by new evidence but rather arises from the "complexities of New Jersey’s legal system." Under state law, a judgment can be nullified within a year if a party shows mistake, inadvertence, surprise, or excusable neglect. “Gredale is seeking this nullification based on their own negligence,” an Access Bio official noted, though further details remain confidential.
The dispute began on May 14, 2023, when Gredale claimed a commission agreement related to the sale of Access Bio’s Covid-19 antigen self-testing kit, CareStart. Access Bio quickly filed a lawsuit asserting it bore no legal responsibility. Gredale countered with a counter-suit seeking over $170 million in damages, including $68.57 million for direct damages related to CareStart and $105.14 million in punitive damages, plus legal costs.
After a year of litigation, the case appeared resolved on May 10 this year when the court ruled in favor of Access Bio, determining it was not liable to Gredale and finding that Gredale had breached a confidentiality agreement.
Gredale failed to appear at a May 31 hearing regarding damages related to a non-disclosure agreement, resulting in a court order for Gredale to compensate Access Bio.
An official from Access Bio said that no contract regarding the Covid-19 antigen diagnostic kit could have been formed, despite Gredale's previous claims to rights under a non-existent agreement.
Gredale requested the New Jersey court to nullify the default judgment, citing their own negligence under Rule 4:50-1 of the New Jersey Court Rules. The court approved this request last Thursday. As a result, the court's recent ruling has nullified previous decisions and reopened the case, allowing Gredale to appeal and noting that there was no evidence of intentional or unfair conduct on their part.
Access Bio plans to respond through its legal team, though concerns about potential changes in the case's outcome and significant legal costs remain after the recent court ruling overturned its previous victory.
Despite this challenge, Access Bio is resolute, vowing to “actively pursue legal recourse” and expressing confidence in its legal position. A company official acknowledged the rising legal fees but indicated that Gredale could face even greater financial repercussions as the case continues. “If this situation had been resolved sooner, they would have only had to pay a smaller amount. Now, they could end up covering our attorney fees too,” the official stated, indicating that as legal costs rise, Access Bio plans to seek recovery of those expenses as well.
This isn’t Access Bio’s first legal challenge. The company previously faced a protracted dispute with Miami-based Intrivo over a Covid-19 test kit supply contract, which lasted over a year before being resolved through arbitration. The fallout from that conflict still raises concerns about reputational damage in the market, according to local news reports.
An Access Bio official suggested that Gredale’s tactics may signal to the market that delays could force a favorable settlement. “They seem to think we’ll yield, but we have no intention of accommodating them,” the official said.