Court orders Fresenius to pay €4M over EnzyPep earnout dispute
What's the deal? The Amsterdam District Court has ordered FreseniusDealroom has a profile for this one. Try Dealroom → to pay €4 million to the former shareholders of Dutch biotech EnzyPepDealroom has a profile for this one. Try Dealroom →, ruling that a milestone in the companies' 2018 acquisition agreement had been met. Fresenius Kabi DeutschlandDealroom has a profile for this one. Try Dealroom → acquired the Geleen-based firm in December 2018 for €13.7 million, with up to €5 million more tied to four development milestones.
Who are the shareholders? The sellers include Chemelot VenturesDealroom has a profile for this one. Try Dealroom →, LynnovationDealroom has a profile for this one. Try Dealroom →, Limburg VenturesDealroom has a profile for this one. Try Dealroom →, Nedermaas Hightech VenturesDealroom has a profile for this one. Try Dealroom →, and Vitaefit, plus two private shareholders. The first three milestones, worth €1 million combined, were already paid; the fourth, worth €4 million, triggered the dispute.
What was contested? The milestone centred on liraglutide, an active ingredient the court calls comparable to semaglutide, the compound in Ozempic. EnzyPep developed a chemical production method using peptides and enzymes.
Fresenius argued the milestone was unmet, claiming it required a commercial process using raw rather than purified materials and a 95% conversion rate. The court sided with the shareholders on both points.
Why the court disagreed? The judgement found the parties deliberately chose the term "conversion" over "yield," requiring at least 95% of the so-called 12-31 fragment to be converted. It also ruled the process did not need raw materials, noting EnzyPep was still an R&D company working with purified materials in the lab at the time of the takeover.
A Fresenius research report from July 2022 confirmed a liraglutide content above 95% using purified materials. The court therefore ruled the fourth milestone was reached on July 15, 2022.
What does Fresenius owe? Beyond the €4 million, the company must pay statutory commercial interest from July 29, 2022, plus just over €8,000 in out-of-court costs and just over €16,000 in legal costs.
The signal: The case shows how earnout clauses — common in biotech acquisitions where value hinges on future development — can hinge on precise contract language. For investors backing early-stage research firms, the ruling underscores that the exact wording of milestone terms can decide whether deferred payouts ever land.
Read more: industrylinqs.com
Image credit: Generated with Gemini
