Cardiff Oncology Sues Nerviano As Analyst Backs Onvansertib Defense

Cardiff Oncology Inc. (NASDAQ:CRDF) on Tuesday said that it filed a lawsuit against Nerviano Medical Sciences (NMS), disputing NMS's claim that Cardiff materially breached their licensing agreement for onvansertib.

The complaint, filed in the U.S. District Court for the Southern District of California, seeks an injunction requiring NMS to continue honoring the agreement, along with a declaratory judgment that Cardiff did not breach the contract.

Cardiff Disputes Patent Inventorship Allegations

As previously disclosed in February, NMS alleged Cardiff breached the agreement by failing to name an NMS employee as a joint inventor on Cardiff's U.S. patents 12,144,813 and 12,263,173, and by declining to file a joint invention continuation patent application.

Cardiff, a clinical-stage cancer biotechnology, maintains that it did not breach the agreement, arguing that the contract does not require the company to list NMS employees on inventions developed solely by Cardiff or make what it believes would be inaccurate inventorship claims to the U.S. Patent and Trademark Office.

The company said discussions with NMS had taken place, but judicial intervention is now necessary.

Analysts Back Cardiff's Legal Strategy

William Blair, on Wednesday, wrote, "We believe that Cardiff is taking the appropriate steps by disputing Nerviano's claim."

Analyst Andy Hsieh noted that the update will confirm that Cardiff is upholding the license agreement, and therefore rights to onvansertib, and is defending the value Cardiff has created for onvansertib through clinical development.

Management also emphasized that the lawsuit will not affect the company's path forward or the clinical and regulatory milestones previously outlined.

Analyst Hsieh wrote, "We recognize the skepticism surrounding onvansertib's future potential and also acknowledge that Cardiff will likely seek dilutive funding or partnership opportunities to fund the pivotal study for onvansertib."

"However, we believe that the current valuation reflects a positive risk/reward scenario, especially given that more detailed data will be presented in the near term," Hsieh further commented.

CRDF Price Action: Cardiff Oncology shares were up 4.83% at $1.84 at the time of publication on Wednesday, according to Benzinga Pro data.

Over the past month, CRDF has gained about 3.7% versus a 4.2% rise in the S&P 500 and is down roughly 34% year-to-date compared to the index's 7.7% gain.

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