IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

THERMO FISHER SCIENTIFIC 

PSG CORPORATION,

Plaintiff and Counterclaim 

Defendant,

 v.

ARRANTA BIO MA, LLC,

Defendant and Counterclaim 

Plaintiff.

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C.A. No. 2022-0608-NAC

 

MEMORANDUM OPINION

Date Submitted: February 10, 2023

Date Decided: April 4, 2023

Philip Trainer, Jr., Marie M. Degnan, ASHBY & GEDDES, Wilmington, Delaware; 

Michael Klisch, Joshua Siegel, Georgina Inglis, COOLEY LLP, Washington, DC; 

Robert Cahill, David A. Vogel, COOLEY LLP, Reston, VA; Counsel for Plaintiff 

and Counterclaim Defendant Thermo Fisher Scientific PSG Corporation.

Michael A. Barlow, ABRAMS & BAYLISS, LLP, Wilmington, Delaware; John B. 

Quinn, Jennifer J. Barrett, Rachel E. Epstein, Evan Hess, Michael Linneman, Neil 

T. Phillips, Phillip B. Jobe, QUINN EMANUEL URQUHART & SULLIVAN, 

LLP, New York, New York; Counsel for Defendant and Counterclaim Plaintiff 

Arranta Bio MA, LLC.

COOK, V.C.
This is the first chapter in a dispute among leading contract development and 

manufacturing organizations (“CDMOs”) that provide pharmaceutical and 

biopharmaceutical services. At issue in this case is an agreement to develop 

plasmids. A plasmid is a small circular DNA molecule found in bacterial cells. 

Plasmids have at least one gene, such as genes associated with antibiotic resistance 

or that provide genetic advantages to the host organism, that can be passed from one 

cell to another. Because plasmids can be used as tools to clone, transfer, and 

manipulate genes in ways that are beneficial to humans, they are a central component 

to a growing number of next generation therapies and vaccines. Plasmids are a 

subset of a broader category of drugs referred to as biologics, which are drugs 

generally produced using living cells or organisms. This is in contrast to 

conventional drugs, which are chemically synthesized and are sometimes referred to 

as small-molecule drugs.

While the use of plasmids in drug development is growing rapidly, producing 

plasmids that are compliant with Food and Drug Administration regulations is very 

difficult and expensive. To develop and manufacture plasmids, a developer typically 

starts with a bank of genetically engineered cells that are often proprietary. The 

developer then must develop the specific processes to derive the plasmid from those 

cells and to manufacture those plasmids on a commercially viable scale.
2

CDMOs provide products and services related to the development and 

manufacturing of drugs. Thermo Fisher Scientific PSG Corporation (“PSG”) and 

Recipharm AB (“Recipharm”) are two of the largest CDMOs in the world. Arranta 

Bio MA, LLC (“Arranta”) is also a CDMO and specializes in developing and 

manufacturing complex biological drugs and advanced therapeutic medicinal 

products.

In 2020, PSG and Arranta entered into an agreement under which Arranta 

would manufacture plasmids for PSG. Because the manufacture of plasmids 

involved the transfer of certain proprietary knowledge from PSG to Arranta, PSG 

sought to restrict Arranta from transferring its plasmid development operations to or 

being acquired by certain third parties. In such an event, the parties agreed that PSG 

would obtain the right to prevent Arranta from engaging in plasmid development 

and manufacturing services for 36 months (the “Non-Compete Obligation”), among 

other rights. One of the conditions to PSG’s right to trigger the Non-Compete 

Obligation was that the counterparty to a transfer of the plasmid operations be a 

third-party that derived at least 50% of its revenue from performing contract 

“biopharmaceutical” development or commercial manufacturing services.

In April 2022, Arranta’s grandparent entity was acquired by a wholly owned 

subsidiary of Recipharm. It is undisputed that while Recipharm derived almost all 

its revenue from performing CDMO services for small-molecule drugs, it derived 
3

almost no revenue from such services for biologics. Shortly after the acquisition, 

PSG sued Arranta in this Court seeking to enforce the Non-Compete Obligation.

The central issue in the parties’ dispute is whether “biopharmaceutical” means

only biologics or if it encompasses both biologics and small-molecule drugs. I 

conclude that “biopharmaceutical” unambiguously means only biologics. Thus, 

even assuming that Recipharm was the counterparty in the acquisition of Arranta’s 

grandparent (a point Arranta contests), PSG had no right to trigger the Non-Compete 

Obligation because Recipharm did not derive at least 50% of its revenue from 

services associated with biologics.

I. FACTUAL BACKGROUND1

A. Parties

Arranta is a Delaware limited liability company.

2

 Arranta is a CDMO 

specializing in live biotherapeutic and mRNA products.

3

 Mark Bamforth founded 

Arranta in 2019.4

1 Joint trial exhibits are cited as “JTX ___,” trial testimony is cited as “TT___ (Name),” 

and depositions are cited as “[Name] Dep. ___.”

2 Thermo Fisher Scientific PSG Corp. v. Arranta Bio MA, LLC, C.A. No. 2022-0608-NAC, 

Docket (“Dkt.”) 180, Pretrial Stipulation and Proposed Order for Dec. 15–16, 2022 Trial

(“Pretrial Stipulation”) ¶ 20.

3 JTX 208 (“Supply Agreement”), Recitals; JTX 314 at 3; see also TT135:9–138:9

(Bamforth).

4 TT135:9–138:1 (Bamforth).
4

PSG is a Delaware corporation.5

 PSG described itself in the Supply 

Agreement as “a leading large and small molecule viral vector [CDMO].”6

 PSG is 

a part of Thermo Fisher Scientific Inc. (“Thermo”).7

B. Thermo’s Investments In Bamforth’s Companies

Before founding Arranta, Bamforth founded two other companies: Gallus 

Pharmaceuticals, LLC and Brammer Bio.8

 Gallus was merged into Patheon, Inc., 

which eventually became part of Thermo in 2017. Brammer Bio was acquired 

directly by Thermo in 2019 for $1.7 billion.9

Thermo was also an investor in Arranta Bio Holdings LLC (“Arranta 

Holdings”), which is Arranta’s indirect grandparent company.10 Prior to the merger 

at issue, Thermo was the third largest investor in Arranta Holdings.11 Michel 

Lagarde, who was President of PSG at the time of Thermo’s investment and is now 

Thermo’s Chief Operating Officer, spearheaded Thermo’s investment in Arranta 

5 Pretrial Stipulation ¶ 19.

6 Supply Agreement, Recitals.

7 Id.

8 TT130:12–22; TT133:5–11 (Bamforth).

9 JTX 74 at 1; Lagarde Dep. 98:17–101:24; TT134:6–17 (Bamforth).

10 JTX 247, Sch. A.

11 Id.; TT141:16–142:6 (Bamforth).
5

Holdings.12 Lagarde also led Thermo’s acquisitions of Gallus and Brammer Bio.13 

Lagarde understood that Bamforth’s general business model was to develop new 

ventures using private equity seed money and then sell or transfer the company to 

monetize the investment.14

C. Supply Agreement15

Shortly after Thermo invested in Arranta Holdings, PSG and Arranta began 

negotiating an agreement whereby Arranta would develop and manufacture 

commercial-grade plasmids at Arranta’s Watertown, Massachusetts facility (the 

“Watertown Facility”).16 Plasmids are sometimes a component used to develop 

large-molecule drugs derived from living organisms (sometimes referred to as 

“biologics”).17 Biologics are distinguished from traditional, small-molecule drugs 

12 Lagarde Dep. 14:7–19, 96:9–103:4; TT142:7–143:21 (Bamforth).

13 Lagarde Dep. 96:9–103:4.

14 Lagarde Dep. 104:2–14.

15 As excerpted below, Sections 16.2.2 and 18.4 both contain capitalized terms that are 

defined elsewhere in the Supply Agreement. Except for the term “PSG Competitor,” the 

definitions of these capitalized terms are not relevant to this decision.

16 See JTX 112 at 2, § 1.77 (“PSG desires to engage Arranta to [manufacture] and supply 

Product,” which is defined as “plasmid DNA [manufactured] using E coli fermentation 

production method[.]”).

17 TT535:6–9 (Turck); TT651:17–24 (Lankau). This Memorandum Opinion 

interchangeably uses the terms “biologics,” “large molecules,” “large molecule drugs,” and 

“large-molecule biologics.” While there may be particular distinctions between these 

terms in the relevant industry, these terms mean the same thing for the purpose of this 

Memorandum Opinion.
6

derived from chemical synthesis (e.g., aspirin).18 The core purpose of the Supply 

Agreement was that Arranta would design and build out the Watertown Facility to 

develop and manufacture plasmids exclusively for PSG for an anticipated nine-year 

term, and potentially longer.19

In December 2019, PSG and Arranta signed a non-binding letter of intent, 

which formed the basis for the Supply Agreement.20 PSG drafted the first version 

of the Supply Agreement, which Jesse Boyd sent to Arranta in January 2020.

21 Boyd 

was the lead negotiator for PSG in connection with the Supply Agreement.

22 At the 

time of the parties’ negotiations, Boyd was in a business management and finance 

role at PSG.23 He left PSG in April 2022 to become vice president of finance for 

cell, gene, and protein therapies at Catalent Pharma Services.24 In negotiating the 

18 TT535:2–5 (Turck); TT652:5–10 (Lankau). This Memorandum Opinion 

interchangeably uses the terms “small molecules,” “small-molecule drugs,” 

“pharmaceuticals,” and “small-molecule pharmaceuticals.” While there may be particular 

distinctions between these terms in the relevant industry, these terms mean the same thing

for the purpose of this Memorandum Opinion.

19 See Recitals to Supply Agreement; see also Supply Agreement § 16.1 (“This Agreement 

will remain in effect for nine (9) years from January 1, 2021 (‘Initial Term’) and will 

automatically renew for additional three (3) year periods[.]”).

20 TT174:1–10 (Bamforth); JTX 102.

21 JTX 112; see also JTX 391 (Nos. 19–21) (PSG admitting in interrogatories that it drafted 

the first version of the Supply Agreement).

22 TT11:2–7 (Boyd).

23 TT8:15–20 (Boyd).

24 TT7:8–16 (Boyd).
7

Supply Agreement, Boyd was assisted by two in-house attorneys, Meenu Patel and 

Redi Kasollja, and a commercial person with a science background, Darren Leva.25 

Bamforth, Steve Favaloro, and Lana Gladstein, were the primary negotiators 

for Arranta in connection with the Supply Agreement.26 Favaloro was Arranta’s 

chief financial officer at the time of the negotiations and was responsible for 

“assessing the different opportunities” and “looking at the financial value.”27 

Gladstein was the chief legal officer of Arranta at the time and was primarily 

responsible for offering legal advice on the agreement.28

The final version of the Supply Agreement was executed on June 29, 2020, 

approximately five months after the first draft was sent by PSG to Arranta.29 Over 

the course of those five months, the parties exchanged at least nine drafts, reflecting

the parties’ substantial negotiations of the terms of the Supply Agreement.30 In 

addition to exchanging drafts, the parties had significant in-person and virtual 

25 TT11:2–18 (Boyd).

26 TT145:9–146:5 (Bamforth).

27 Id.

28 Id.

29 Supply Agreement at 1.

30 JTX 110 (draft of January 27, 2020); JTX 133 (draft of April 10, 2020); JTX 159 (draft 

of May 22, 2020); JTX 167 (draft of June 7, 2020); JTX 188 (draft of June 18, 2020); JTX 

191 (draft of June 19, 2020); JTX 195 (draft of June 19, 2020); JTX 197 (draft of June 21, 

2020); JTX 199 (draft of June 22, 2020).
8

discussions.31 The drafts reflect that the parties extensively negotiated Sections 

16.2.2 and 18.4, which address the parties’ exit and assignment rights and 

obligations. Quite notably, the drafts further reflect the absence of significant 

negotiation over the definition of PSG Competitor in Section 1.106.

Sections 16.2.2 And 18.4

Both PSG and Arranta agree that Arranta’s termination rights were of central 

importance in the negotiations. There are two provisions that deal with these

termination rights: Section 16.2.2, which is labeled “Termination for Convenience 

by Arranta,” and Section 18.4, which is labeled “Assignment.” Section 16.2.2 of the 

Supply Agreement provides as follows:

16.2.2. Termination for Convenience by Arranta. Arranta may 

terminate the Agreement for any reason or no reason at all beginning no earlier 

than three (3) years from the date that the Dedicated Space has been 

Commissioned and Qualified upon giving prior written notice to PSG. The 

termination shall become effective at the earlier of eighteen (18) months from 

the date of the notice or such longer period of time that may be mutually 

agreed between the Parties. As part of such termination:

(i) Arranta shall continue to perform Services in accordance with 

this Agreement until the termination becomes effective and shall 

ensure that there will be no interruption to the Manufacture and 

supply of Product in accordance with the Agreement during that 

time.

(ii) at Arranta’s sole expense and cost, Arranta shall provide 

Outgoing Technology Transfer as provided in Section 16.3.3, 

unless PSG is being supplied with Product from an Affiliate or a 

31 TT29:10–30:18 (Boyd); TT154:2–155:2 (Bamforth).
9

Third Party independent of Arranta, before the date of Arranta’s 

notice of termination pursuant to this Section 16.2.2.

(iii) at Arranta’s sole expense and cost, Arranta shall remove and 

transfer all portable Capital Equipment (listed in Exhibit C as of 

the Effective Date) and Bespoke Equipment (if any) to another 

facility for plasmid manufacturing in accordance with PSG’s 

reasonable written instructions;

(iv) Arranta shall (a) issue to PSG as a credit against the Royalty the 

remainder (calculated from the effective date of termination 

under this Section 16.2.2 through the end of the Term) of the 

following payments made by PSG for the Term: (x) the 

remaining Capacity Access Fee plus Risk-Free Interest and (y) 

the Advanced Deposit; and (b) refund to PSG within thirty (30) 

days of the effective date of termination under this Section any 

amount set forth in subsections (a)(x) and (a)(y) in excess of the 

Royalty that cannot be applied against the Royalty;

(v) PSG shall have the option, at its sole election, to acquire portable 

Capital Equipment (which is listed in Exhibit C as of the 

Effective Date or added subsequently) with a net book value of 

up to two million US Dollars ($2,000,000) as of the effective date 

of termination under this Section 16.2.2 for no charge and to 

purchase any additional Capital Equipment at net book value; 

and

(vi) PSG shall be relieved of the obligation (if any) to maintain 

Established Capacity Utilization or make Minimum Payment 

pursuant to Section 4.2.4 as of the date of Arranta’s notice of 

termination pursuant to this Section 16.2.2 and through the 

remainder of the Term.

In the event Arranta exercises its right to terminate the Agreement pursuant to 

this Section 16.2.2[], Arranta agrees that it shall not engage in plasmid 

development and manufacturing services for a period of thirty-six (36) months 

from the date of its notice of termination under this Section 16.2.2 (the “NonCompete Obligation”). For the avoidance of doubt, the Non-Compete 

Obligation shall only apply to Arranta and shall not apply to any acquiror, 
10

transferee or a successor in connection with a Change in Control 

Transaction.32

In layman’s terms, Section 16.2.2 imposes various obligations on Arranta if it 

terminates the Supply Agreement for convenience, including obligations concerning

(a) continued performance under the Supply Agreement following a notification of 

intent to terminate, (b) the return of certain equipment to PSG, and (c) Arranta’s 

commitment not to engage in plasmid development and manufacturing services for 

thirty-six months (i.e., the Non-Compete Obligation).

Section 18.4 of the Supply Agreement is a complex provision that provides as 

follows:

18.4. Assignment. Neither this Agreement, any Work Statement or 

Product Addendum, nor any of either Party’s rights or obligations hereunder, 

may be assigned, novated or otherwise transferred by either Party without the 

prior written consent of the other Party, except that either Party may assign 

this Agreement or its rights or obligations hereunder without the other Party’s 

consent (a) to an Affiliate (provided that such Affiliate will assume all 

obligations of its assignor under this Agreement including accrued obligations 

of the assignor); or (b) to an acquiror, transferee or a successor in connection 

with a merger, reorganization, consolidation, business combination or sale, or 

other transfer to a Third Party (a “Change of Control Transaction”) of all or 

substantially all of the assets or business to which this Agreement relates (the 

“Plasmid Operations”), by providing at least thirty (30) days advance written 

notice to the other Party. In the event that (i) Arranta has not exercised its 

right to terminate for convenience pursuant to Section 16.2.2 or the Parties 

have not agreed to relocate the Plasmid Operations at another Facility as set 

forth in Section 4.6.1, and (ii) the counterparty in the Change of Control 

Transaction is a PSG Competitor, then, at PSG’s election; (1) a notice of 

termination by Arranta under Section 16.2.2 shall be deemed to have been 

32 Supply Agreement § 16.2.2. I refer to the termination under this section as a 

“Termination for Convenience.”
11

issued and the Agreement will be terminated pursuant to Section 16.2.2: or 

(2) Arranta, its Affiliate, or their respective successors or assigns, as 

applicable, shall (x) continue to perform Services in accordance with the 

Agreement for the remainder of the Term and (y) implement commercially 

reasonable and appropriate physical and informational barriers so as to 

prevent the dissemination of information related to this Agreement and the 

Services to any Person not directly involved in the performance of Services.33

In short, the first sentence of Section 18.4 generally prohibits either Arranta or PSG 

from assigning the Supply Agreement but sets forth two exceptions: an assignment 

to an affiliate or in connection with a Change of Control Transaction. The second 

sentence of Section 18.4 provides that if the counterparty in the Arranta Change of 

Control Transaction is a PSG Competitor, then, subject to certain conditions, PSG 

may elect to deem that Arranta provided notice of its intent to terminate the Supply 

Agreement for convenience pursuant to Section 16.2.2.

PSG Competitor

Both in the initial draft and final version of the Supply Agreement, PSG 

Competitor is defined as a business that “derives at least fifty percent (50%) of its 

revenues from performing contract biopharmaceutical development or commercial 

manufacturing services.”34 Indeed, over the five months of negotiations concerning

33 Supply Agreement § 18.4.

34 Supply Agreement § 1.106. “Third Party” is defined in the Supply Agreement as “a 

Person who is neither a Party nor an Affiliate of a Party.” Id. § 1.128. “Person” is defined 

in the Supply Agreement as “an individual, partnership, corporation, limited liability 

company, joint stock company, unincorporated organization or association, trust or joint 

venture, or a governmental agency or political subdivision thereof.” Id. § 1.94. “Party” is 

defined in the Supply Agreement as PSG and Arranta. Id., Preamble. “Affiliate” is defined 
12

the Supply Agreement, the only change to the definition of PSG Competitor was the 

insertion of a reference to “Third Party,” which Kasollja testified did not change its 

meaning.35 The term PSG Competitor is used only once in the Supply Agreement,

in Section 18.4. As described above, pursuant to Section 18.4, if the counterparty to 

a Change of Control Transaction is a PSG Competitor, then PSG has certain rights.36

Kasollja, the PSG in-house attorney who was primarily responsible for 

drafting the Supply Agreement, did not recall using any particular template in 

preparing the first draft of the Supply Agreement.37 Generally, however, PSG often

relies on a contract template when negotiating affiliate contracts similar to the 

Supply Agreement.

38 Arranta introduced twenty-five publicly available affiliate 

contracts since 2012 that include the term “Patheon Competitor.” Eight of the 

in the Supply Agreement as, “with respect to an entity, a separate person, corporation, 

partnership or other business entity that directly or indirectly, through one or more 

intermediaries, controls or is controlled by or is under common control with such first 

entity. For the purposes of this definition, the word “control” (including, with the 

correlative meaning, the terms “controlled by” or “under the common control with”) shall 

mean the actual power to direct or cause the direction of the general management and 

policies or activities of such entity, whether through (a) the ownership of at least fifty 

percent (50%) of voting securities or capital stock of such business entity or any other 

comparable equity or ownership interest with respect to a business entity other than a 

corporation, (b) contract or (c) any other basis of control.” Id. § 1.4.

35 TT151:2–14 (Bamforth); TT443:4–19 (Gladstein); Kasollja Dep. 51:21-52:3, 59:12-

60:20.

36 Id. § 18.4.

37 Kasollja Dep. 99:15–100:14. 

38 Conner Dep. 34:11–36:6. The issue of what particular template may have been used to 

prepare the original draft of the Supply Agreement was not developed at trial.
13

examples define the term using the phrase “pharmaceutical and 

biopharmaceutical.”39 The remainder use just “pharmaceutical” standing alone.40 

PSG attributes the varying definitions of the term “Patheon Competitor” (or, in this 

case, PSG Competitor) to the different business relationships to which each contract 

related.41

Both Boyd and Kasollja testified that they understood PSG Competitor to 

capture any CDMO and was not limited to those involved primarily in biologics.42 

During the negotiations of the Supply Agreement, however, PSG’s negotiators never 

expressly told Arranta’s negotiators that PSG purportedly viewed the word 

“biopharmaceutical” within the term PSG Competitor as encompassing both smallmolecule drugs and biologics.43 

39 JTX 61; JTX 76; JTX 77; JTX 78; JTX 87; JTX 155; JTX 252; JTX 457.

40 JTX 17; JTX 21; JTX 23; JTX 28; JTX 30; JTX 35; JTX 37; JTX 40; JTX 42; JTX 44; 

JTX 46; JTX 54; JTX 56; JTX 59; JTX 63; JTX 70; JTX 368.

41 Dkt. 232 (“Pl.’s Post-Trial AB”) at 29 (“[T]he contracts are not ‘similar’ because, unlike 

the Supply Agreement, [PSG] was a service provider (not the customer) in those 

agreements. . . . [PSG] must capture all ways in which [PSG] customers with mixed 

portfolios define themselves, i.e., as biopharmaceutical companies (like Pfizer) or 

pharmaceutical companies (like Roche).”).

42 TT28:21–29:4 (Boyd); Kasollja Dep. 17:17–18:13.

43 TT30:19–31:4 (Boyd) (“Q: At any time during the negotiation of the supply agreement, 

did you ever have a discussion with anyone at Arranta about the meaning of the term 

‘biopharmaceutical’? A: No. Q: And to your knowledge, during the negotiations, did 

anyone at PSG ever have a discussion with anyone at Arranta about the meaning of the 

term ‘biopharmaceutical?’ A: Not to my knowledge.”).
14

At trial, Bamforth recalled telling PSG’s negotiators that biopharmaceutical 

meant biologics only.44 Boyd, however, testified at trial that no one at Arranta told 

PSG that it viewed PSG Competitor as applying only to companies with at least 50 

percent of revenues from biologics only.45 In addition, during his deposition, 

Bamforth stated that he could not recall whether he expressed his view that 

“biopharmaceutical” meant biologics only.46 Arranta was also unable to point to 

contemporaneous documents or communications from these negotiations indicating 

that “biopharmaceutical” meant biologics only. Given Bamforth’s inconsistent 

testimony on this point and the absence of any contemporaneous documents, I 

ultimately find that neither party explicitly stated their view of the meaning of 

“biopharmaceutical” during negotiation of the Supply Agreement.

In April 2020, however, while the parties were still negotiating the Supply 

Agreement, Boyd told Arranta’s negotiators that examples of a PSG Competitor 

would be “Catalent” or “Lonza.”47 Bamforth and Favaloro also documented this 

discussion in contemporaneous notes. For example, Bamforth’s notes of his April 

44 TT153:8–23 (Bamforth) (“Q: And did you communicate to Jesse Boyd and potentially 

the rest of the team your understanding that the word ‘biopharmaceutical’ means biologics 

only? A: Yes.”).

45 TT31:5–13 (Boyd).

46 Bamforth Dep. 46:18–53:12.

47 TT154:2–12 (Bamforth) (“Q: And what were the examples [of a PSG Competitor] that 

Mr. Boyd provided? A: He gave two examples. One was Lonza and one was Catalent.”).
15

10, 2020, negotiations with Boyd referred to Section 18.4 of the draft and say, 

“Cannot have sale to Competitor (CDMO).”48 In addition, in an internal May 12, 

2020, email, Favaloro wrote that “[PSG] clarified that the basis of the push on 

assignability is to ensure the protection of [PSG] clients in the instance a Catalent or 

Lonza were to acquire the business.”49

“Lonza” referred to Lonza Group AG, a large multinational CDMO.50 

Biologics accounted for 56% of Lonza’s total revenue in 2019, and 58% of Lonza’s 

total revenue in 2020.51 “Catalent” referred to Catalent, Inc., another large

multinational CDMO.52 Biologics accounted for 23% of Catalent’s total revenue in 

2019,53 and 33% of Catalent’s total revenue in 2020.54 While Catalent’s revenue 

from biologics was below 50% at the time of the parties’ negotiations, Catalent had 

been aggressively expanding its footprint in the biologics CDMO sector through 

multiple acquisitions.55 As Catalent stated in its 2020 annual report, “[i]n large part 

48 JTX 399 at 70.

49 JTX 153 at 1.

50 JTX 233.

51 JTX 249 at 108; JTX 233 at 92.

52 JTX 213 at 6–7.

53 JTX 80 at 53.

54 JTX 213 at 50.

55 See id. at 7 (describing numerous acquisitions in the biologics CDMO sector from 2017 

to 2020). TT59:22–66:13 (Boyd) (setting forth the timeline of Catalent’s acquisitions and 

organic growth in the biologics space between 2017 and 2020).
16

due to our recent acquisitions and their subsequent organic growth, revenue 

contributions from our biologics business have grown from approximately 10% in 

fiscal 2014 to 33% in fiscal 2020.”56 By June 30, 2022, Catalent derived more than 

50% of its revenue from biologics.57

Bamforth had familiarity with both Lonza and Catalent when Boyd offered 

the two companies as examples of a PSG Competitor.58 Concerning Lonza, 

Bamforth testified that during the negotiation of the Supply Agreement he was aware 

that it was one of the largest CDMOs in the industry, with the majority of its products 

being biologics.

59 Concerning Catalent, Bamforth testified that during the 

negotiation of the Supply Agreement he was aware that Catalent had been making 

multiple acquisitions in the biologics sector.

60 Both Bamforth and Boyd 

acknowledged that they did not look at the revenues of either Lonza or Catalent to 

determine whether either met the definition of PSG Competitor.61 Bamforth 

56 Id.

57 JTX 378 at 7.

58 TT155:3–160:18 (Bamforth).

59 TT155:3–22 (Bamforth). Bamforth stated that his familiarity with Lonza at the time of 

negotiation was because he had been in competition with Lonza in his prior two businesses 

and because it was one of the largest CDMOs in his industry. TT155:18–22 (Bamforth).

60 TT156:8–160:18 (Bamforth). Bamforth attributed his familiarity with Catalent at the 

time of negotiation to certain conversations with Catalent’s CEO and his general familiarity 

with the biopharmaceutical industry. Id.

61 TT58:20–59:4 (Boyd); TT155:3–160:1 (Bamforth).
17

provided the following reason for not doing so: “I didn’t feel this was something 

where we were trying to be precise. Plus, it was also a condition related to a future 

transaction of Arranta, not a present day check.”62

D. Arranta’s Potential Sale To AMRI

The relationship between Arranta and PSG was strained almost from the 

beginning. In August 2020, shortly after the parties signed the Supply Agreement, 

PSG contracted with a vaccine maker to develop a plasmid-based COVID-19 

vaccine.63 PSG asked Arranta to perform a “study” to determine whether Arranta 

could develop plasmids for the vaccine, and Arranta confirmed it was able to do so.64 

In response, PSG proposed that Arranta produce a significantly higher volume of 

plasmids at a significantly lower royalty rate.65 Arranta attempted to negotiate for a 

higher royalty rate but was rebuffed by PSG, which decided to pursue alternative 

options.66

62 TT156:4–7 (Bamforth).

63 TT73:5–24 (Boyd); TT413:11–21 (Wyszkowski); TT188:4–8 (Bamforth).

64 TT183:20–184:9 (Bamforth).

65 TT184:16–185:11 (Bamforth) (“Q: Do you recall what the delta was, what the actual 

royalty rates would be under [the proposed amendment to the Supply Agreement]? A: Yes, 

it would drop the royalty rate from 27.5% in our contract to the equivalent of about 6% at 

full output for that demand.”).

66 TT185:12–187:21 (Bamforth).
18

Bamforth stated that Arranta was “feeling a little bruised” from PSG’s 

attempts to renegotiate the Supply Agreement and began considering exit options.67 

Beginning in September 2020, the Arranta team looked into various strategic options 

for the Watertown Facility, including a potential sale.

68 Arranta considered three 

options: continue to operate the facility, limit the use of the facility to manufacturing 

COVID-19 vaccines, or pursue a sale of the facility. In connection with the last 

option, the Arranta team discussed internally the implications of the PSG Competitor 

definition in the Supply Agreement.69 In addition, in a slide deck apparently 

prepared by Favaloro, a bullet point was included stating that Arranta would 

“[i]deally . . . avoid sale to any CDMO to avoid ‘PSG Competitor’ entanglement on 

sale.”70

Arranta engaged Morgan Stanley to assist with preparing a list of potential 

buyers.71 The list prepared by Arranta and Morgan Stanley categorized potential 

67 TT187:22–189:3 (Bamforth).

68 TT188:9–189:3 (Bamforth); JTX 216.

69 See JTX 215 at 2 (email from Favaloro to Shailesh Maingi stating that “we can’t sell to 

another CDMO due to the restrictions in the plasmid contract – we are prevented from 

selling to a ‘PSG Competitor’”); id. (response from Maingi to Favaloro stating “I spoke to 

Mark [Bamforth] yesterday about this [and] we can’t sell to someone who has >50% of 

revenue from biopharmaceutical development/manufacturing . . . but we can sell to an 

organization other than that”); id. at 1 (Favaloro stating “Shailesh agree there is some 

nuance to it...we can look at the language together tomorrow and I can share the legal 

opinions we’ve gotten on it”).

70 JTX 216 at 11.

71 TT189:23–190:16 (Bamforth).
19

buyers by type (“CDMO/Other,” “Financial,” or “Product Company”).72 The list 

also included a column identifying whether a potential buyer might be a PSG 

Competitor based on “the collective knowledge of the team . . . who were very 

familiar with many of these companies.”73 In addition, the list contained a column 

titled “Fit,” which included certain comments as to potential issues with a transaction 

with the relevant buyer.74

Consistent with the Supply Agreement negotiations, both Lonza and Catalent 

were identified as PSG Competitors.75 Albany Molecular Research Inc. (“AMRI”)

was included on this list and identified as not a PSG Competitor.76 In the “Fit” 

column for AMRI, the following comment was included: “Confirm 

biomanufacturing less than 50%.”77 Recipharm was also included on this list and 

identified as not a PSG Competitor.78 Both AMRI and Recipharm were listed as 

“CDMO/Other” in the “Buyer Type” column.79

72 JTX 219.

73 Id.; TT190:17–192:18 (Bamforth).

74 JTX 219.

75 Id.

76 Id. AMRI has since changed its name to Curia. This decision refers to the company as 

AMRI for sake of consistency.

77 Id.

78 Id.

79 Id.
20

On October 27, 2020, Bamforth spoke to Lagarde to discuss a potential sale 

of the Watertown Facility.

80 Soon thereafter, AMRI made a non-binding offer to 

acquire the Watertown Facility.

81 On December 16, 2020, Arranta notified PSG that 

AMRI was a potential buyer of the Watertown Facility.

82 Both Arranta and PSG 

were aware that AMRI did not derive more than 50% of its revenues from

biologics.

83

In disclosing AMRI as a potential buyer in December 2020, Bamforth testified 

that his contemporaneous notes reflect that he informed Shafer that AMRI was “not 

a PSG [C]ompetitor because they had very little activity in biopharmaceuticals.”84 

Shafer, however, testified that he did not recall Bamforth ever telling him that AMRI 

was not a PSG Competitor.85 And, on cross-examination, Bamforth modified his 

testimony to say that he could not be certain that he in fact told Shafer that AMRI 

was not a PSG Competitor.86 

80 TT199:2–7 (Bamforth); JTX 399 at 12.

81 TT202:22–203:15 (Bamforth).

82 Id.; TT82:6–83:8 (Shafer); JTX 399 at 8.

83 See TT84:12–16 (Shafer) (“Q: Did you know at the time whether it derived any of its 

revenues from biologics? A: My impression was at the time that it was more small 

molecule, but I didn’t know specifics on it.”).

84 TT203:21–204:9 (Bamforth); JTX 399 at 8.

85 TT85:12–23 (Shafer).

86 TT257:11–21 (Bamforth) (“Q: Do you swear under oath that you told Mr. Shafer that 

when you talked about AMRI that you believed it was not a PSG competitor? A: So this 

was a very important point to us, and we knew it was a very important point to PSG. My 
21

Bamforth set up a call between Shafer and a representative of AMRI to discuss 

a potential partnership between PSG and AMRI following an acquisition of the 

Watertown Facility.

87 During that call, Shafer told AMRI that “it would be kind of 

awkward to partner with a competitor, a CDMO competitor, but I would be open to 

the discussion.”88 AMRI did not take the call with Shafer well. Afterwards, a 

representative of AMRI reached out to one of Arranta’s executives and informed 

him of Shafer’s comments.89 AMRI subsequently decided not to pursue an 

acquisition of the Watertown Facility.

90

PSG never explicitly told Arranta that it viewed AMRI as a PSG Competitor 

under the Supply Agreement, either before or after Shafer’s call with AMRI.

91 

Indeed, Shafer testified that at the time of his discussion with AMRI he “wasn’t 

notes, where I had notes, I take those at face value, but I didn’t try to write everything 

down. So I believe I told him, but I cannot swear to you that there is no doubt that I told 

him, but this was the essence of it.”).

87 TT82:22–86:18 (Shafer).

88 TT83:15–21 (Shafer).

89 TT211:10–212:9 (Bamforth).

90 See JTX 2041 (“AMRI’s view of [the call with Shafer] was that they were scared away 

and they decided not to bid. They felt there was ambiguity about [PSG’s] intentions and 

did not see a desire from [PSG] to partner.”). 

91 TT90:17–91:5 (Shafer). 
22

aware of the details of the supply agreement” and did not know what the term PSG 

Competitor meant because he “didn’t read the supply agreement.”92 

Similarly, no one at Arranta reached out to PSG after the call between AMRI 

and Shafer to convey the view that AMRI was not a PSG Competitor.93 Bamforth 

attributed this to the fact that he viewed the deal as already dead and did not see any 

reason to pursue the point since AMRI had already pulled out of the bidding 

process.94 

E. Merger With Recipharm

In November 2021, approximately one year after Arranta’s discussions with 

AMRI, Arranta Holdings received an unsolicited purchase offer from Recipharm, 

which “is a leading global pharmaceutical [CDMO].”95 The events that followed 

were a major subject of trial, due in particular to the insertion of equitable defenses 

into the scope of trial. 

92 TT90:9–91:5 (Shafer). I note that, during trial, Shafer testified that he at least told 

Bamforth that AMRI was a “competitor.” TT86:2–18; 91:15–92:18 (Shafer). There was 

some dispute during trial whether Shafer’s testimony at trial on this point conflicted with 

his deposition testimony. TT91:15–95:21 (Shafer). Such disputes were not limited to 

Shafer. Bamforth submitted not one, but two errata sheets before trial in this matter. The

second errata sheet adds the word “not” to a response, reversing the answer that appears on 

the deposition transcript to a question concerning whether PSG told Bamforth “at some 

point in time” that it believed AMRI was a PSG Competitor. See Pl.’s Post-Trial OB at 20 

(citing Bamforth Dep. 161:14-22); TT212:17-214:12 (Bamforth).

93 TT258:22–259:1 (Bamforth).

94 TT259:2–22 (Bamforth).

95 TT226:3–227:3 (Bamforth); JTX 262 at 4.
23

Arranta Holdings Notifies Thermo Of Purchase Offer

On December 13, 2021, Arranta Holdings provided Thermo with a 

“Transaction Notice” informing Thermo that Arranta Holdings had received a bona 

fide offer to buy the company.96 This notice was provided to Thermo because it was

an investor in Arranta Holdings.97 Arranta Holdings did not disclose that Recipharm 

was the offeror.98 The notice did state that “Arranta [Holdings] can confirm that the 

offeror is not a PSG Competitor as defined in the [Supply Agreement].”99 Pursuant 

to Section 7.6(b) of the Arranta Holding’s LLC agreement, Thermo had the right to 

make an offer to acquire Arranta Holdings within 45 days after receipt of the notice, 

and Arranta Holdings was required under the LLC agreement to consider the offer 

in good faith.100 Thermo did not make any offer to acquire Arranta Holdings during 

that period.

Bamforth called Shafer the same day that Arranta Holdings sent the 

“Transaction Notice” to Thermo.101 During that call, Shafer stated that Thermo 

“would need to think carefully about whether or not to make an offer to buy the 

96 JTX 263 at 2.

97 JTX 247 § 7.6.

98 TT235:1–12 (Bamforth).

99 JTX 263 at 2.

100 Id.

101 TT236:13–19 (Bamforth).
24

company” because Thermo “had not budgeted the potential acquisition of 

Arranta[.]”102 Bamforth informed Shafer that the buyer was a CDMO and 

“emphasized to [Shafer] that . . . we were deliberate in avoiding the PSG Competitor 

in thinking about whether to move ahead with this or not.”103 Shafer did not 

reference the PSG Competitor term or express concern that the potential buyer was 

a CDMO.104 Nonetheless, he began to “prep to divest” from Arranta Holdings two 

days later.105

The Arranta/PSG Relationship Deteriorates

On January 13, 2022, Thermo’s designated Arranta Holdings board observer 

and Vice President of Strategy, Lorraine Mercurio, requested “identification of the 

offeror” to assist Thermo in its “decision-making process” for an offer.106 

Separately, four days later, PSG sent Arranta a letter requesting a “for cause” audit 

of Arranta based on certain alleged defects with products produced by Arranta.107 

102 TT236:20–237:1 (Bamforth).

103 TT237:9–238:7 (Bamforth).

104 TT237:9–238:14 (Bamforth) (“Q: When you told him it was a CDMO, did Mr. Shafer 

say that PSG believed any CDMO would be a PSG Competitor under the Supply 

Agreement? A: No. Q: Did he say anything at all about the offeror potentially being a 

PSG Competitor? A: No.”).

105 JTX 266 at 120.

106 JTX 277.

107 JTX 396. PSG’s Complaint included claims that Arranta breached the Supply 

Agreement based on the alleged product quality issues that in part formed the basis for 

PSG’s “for cause” audit. Dkt. 1 (“Compl.”) ¶¶ 69–73, 87–98. These issues will be the 

subject of a follow-on trial in this matter, which is currently scheduled for September 2023.
25

Lawrence Pitcher, the head of PSG’s plasmid operations, was the individual that 

recommended that PSG initiate a “for cause” audit, and Leon Wyszkowski, Pitcher’s 

boss, approved the recommendation.108 At the time he emailed Wyszkowski

recommending a “for cause” audit, Pitcher was not aware of the potential acquisition 

of Arranta Holdings.109 Wyszkowski, who approved sending the letter, was aware 

of the potential acquisition.110

Arranta Holdings viewed Mercurio’s request and the “for cause” audit letter 

as a concerted effort by PSG to try to disrupt the sale to Recipharm.111 In response 

to Mercurio’s letter, Bamforth sent her a letter, which was drafted by Gladstein and 

the law firm Goodwin Procter.

112 The letter stated that the board of Arranta Holdings 

concluded that it had no obligation to, and elected not to, disclose the identity of the 

potential buyer to Thermo or Mercurio, in her capacity as a board observer.113 In 

the letter, Bamforth insinuated that Mercurio may have breached her fiduciary duties 

108 JTX 1001 at 1; TT595:18–596:20 (Pitcher).

109 TT600:18–601:3 (Pitcher).

110 TT371:4–7 (Wyszkowski).

111 TT238:18–239:10 (Bamforth).

112 TT321:3–17 (Bamforth).

113 JTX 281 at 1.
26

as a board observer by acting in the interests of Thermo rather than Arranta 

Holdings.114 The letter also took aim at Thermo:

We also note that since [Arranta Holdings] delivered the Transaction Notice 

to Thermo Fisher on December 13, Thermo Fisher has engaged in a series of 

steps that are not in keeping with the collaborative relationship between 

Arranta [Holdings] and Thermo Fisher to date, and appear to be calculated to 

attempt to interfere with the Potential Transaction described in the Thermo 

Fisher Notice. These include the purported “for cause” audit notice that 

Thermo Fisher sent on January 19, 2022, as well as Thermo Fisher’s 

subsequent communication purporting to escalate the audit request to a 

Commercial Dispute[.] Thermo Fisher should cease these attempts to 

interfere with the Potential Transaction.115

PSG and Arranta ultimately agreed to refer to the “for cause” audit as an “operational 

summit,” which occurred in early February 2022.116

Recipharm’s Due Diligence Of Arranta Holdings

While Arranta Holdings and Thermo sparred over the potential acquisition, 

Arranta Holdings continued to move full speed toward signing and closing its 

transaction with Recipharm. After receiving the offer, Arranta Holdings and 

Recipharm each conducted additional due diligence. According to Recipharm’s 

114 Id. at 2 (“[T]he Board notes that certain portions of the Observer Letter . . . appear to 

have been delivered on behalf of, or in the interests of, Thermo Fisher rather than by you, 

in your individual capacity as the Observer. In light of the foregoing, the Board reminds 

you that, in your capacity as Observer, you have certain fiduciary and other duties to the 

Company pursuant to the express terms of the Operating Agreement, including a duty of 

loyalty. The Board is confident that you will comply with those duties moving forward.”).

115 Id.

116 TT602:7–20 (Pitcher).
27

2020 annual report, the company’s revenues from biologics were “well under” 

50%.117 It is not disputed that, both prior to and after the merger, Recipharm derived

nearly all its revenue from CDMO services and virtually none of that revenue was

related to biologics.118

Arranta Holdings retained Goodwin Procter as legal counsel and Morgan 

Stanley as its financial adviser for purposes of the proposed transaction.119 Gladstein 

was intimately involved in the due diligence process on Arranta’s side and “the 

person in charge at Arranta” of providing information to Goodwin.120 Recipharm 

retained Kirkland & Ellis as legal counsel and Centerview as its financial adviser.121 

Among the action items included in the due diligence process, Kirkland 

requested information about the Supply Agreement negotiations.122 In addition, a 

draft timeline of the merger prepared by Recipharm’s advisers included as a gating 

item the receipt of a waiver from PSG of the Supply Agreement’s change-of-control 

provisions.123 

117 TT227:13–21, 229:6–233:8 (Bamforth); JTX 262 at 6–7.

118 Dkt. 220 (“Pl.’s Post-Trial OB”) at 22–23.

119 TT447:16–448:11 (Gladstein).

120 TT501:20–24, TT509:17–23 (Gladstein).

121 TT447:16–448:11 (Gladstein).

122 JTX 291; TT449:23–450:23 (Gladstein).

123 JTX 271 at 3.
28

In light of the prior experience with AMRI, Bamforth and other individuals at 

Arranta Holdings were concerned about any perception by Recipharm that it might 

be a PSG Competitor under the Supply Agreement. Indeed, Bamforth spoke directly 

with Recipharm’s CEO and “told him that there would be consequences if we were 

to try to sell the company to somebody who is a PSG Competitor; and, therefore, it 

was important to establish that Recipharm would not fall into that category.”124 

Upon reviewing the proposed merger timeline, Favaloro sent an email to Morgan 

Stanley and Bamforth that was more explicit in his concerns regarding PSG: 

[W]e’ve seen with [PSG’s] behavior in [AMRI] that they are likely not going 

to play nice here. We need your help messaging that to Centerview and 

Reci—we must hammer home that it is our opinion Reci is not a PSG 

competitor and therefore they can take the contract over without waiver or 

consent.125

To allay any concerns held by Recipharm that it might be a PSG Competitor 

under the Supply Agreement, the executive team of Arranta Holdings took a twoprong approach. First, Bamforth informed Recipharm’s CEO that the term 

“biopharmaceutical” in the PSG Competitor definition meant only biologics and did 

not encompass small molecule drugs.126 Bamforth, however, did not apprise 

124 TT228:5–14 (Bamforth).

125 JTX 272 at 1.

126 TT228:16–229:5 (Bamforth) (“Q: How did you describe the definition [of PSG 

Competitor]? A: As more than 50 percent of their revenue coming from biopharmaceutical 

development or commercial supply. Q: And did you have an understanding as to why 

[Recipharm’s CEO] believed Recipharm was clearly not a PSG [C]ompetitor? A: Yes, 
29

Recipharm’s CEO of the prior discussions with AMRI that fell apart following the 

discussion between Shafer and AMRI’s representatives.127 Bamforth also did not 

tell Recipharm’s CEO that Boyd had used Catalent and Lonza as examples of a PSG 

Competitor.128

Second, Gladstein, Goodwin Procter, and Morgan Stanley addressed concerns 

raised by Kirkland and Centerview. Kirkland emailed the Arranta Holdings’ team 

and advisers on January 31, 2022, asking “to see if you have been able to find any 

additional emails/info in your files on how the PSG Competitor definition was 

agreed at the time of negotiation the Thermo agreement.”129 After discussing 

internally, Goodwin Proctersent an email on February 2, 2022, based on information 

provided by Gladstein.130 The email stated the following in relevant part:

We’ve received some additional context from our client that there were not 

extensive contract negotiations with [PSG] on the “PSG Competitor” 

provision in Section 18.4 (Assignment) or the definition of “PSG Competitor” 

itself. However, as described in greater detail below, [PSG] does appear to 

correlate “biopharmaceutical” with pharmaceuticals derived from biological 

sources or large molecules and “pharmaceuticals” with small molecules and 

not biologics. Moreover, in the contract negotiations, the [Arranta Holdings] 

from having looked at the annual report, it was very clear that the vast majority of their 

activities were not associated with biopharmaceuticals.”).

127 TT323:4–6 (Bamforth).

128 TT323:7–324:1 (Bamforth).

129 JTX 291 at 3.

130 Id.; TT510:11–18 (Gladstein) (“Q: Did you play any role in drafting the Goodwin email 

that appears at the bottom of the page? A: I did not. . . . Let me qualify. We provided the 

information to Goodwin. I did not have any role in drafting the information—the email. 

The email was based on that information.”).
30

team reports that they perceived that [PSG] did seem focused on restricting 

[Arranta Holdings’] ability to sell to a biopharmaceutical competitor.131

Notably, the evidence indicates that Gladstein did not provide Goodwin with 

information concerning Arranta’s prior experience with AMRI or Bamforth’s notes 

describing when Boyd offered Catalent and Lonza as examples of a PSG 

Competitor.

132 In determining what to disclose, Gladstein apparently viewed it 

important to provide information that substantiated Arranta’s understanding of the 

PSG Competitor definition rather than all relevant information that may have given 

Recipharm more context.133

Merger Publicly Announced

On February 17, 2022, the day before the merger was publicly announced, 

Bamforth emailed Lagarde and Shafer informing them that “Arranta Bio Holdings, 

LLC . . . entered into an Agreement and Plan of Merger . . . with a wholly owned 

131 JTX 291 at 1.

132 Id.; TT503:5–504:6, TT509:6–510:18. Gladstein was notably evasive on this topic at 

trial. 

133 JTX 521:5–23 (“Q: [G]iven your view of how clear you believe the term [PSG 

Competitor] is, did you believe it was necessary to provide what has been referenced here 

as ‘public statements’? A: I believe it was helpful. Q: And was it helpful because it 

provided more context? A: No, because it substantiated our understanding. Q: So your 

goal was to provide information that substantiated your understanding. Agreed? A: Not 

mine personally, but the understanding of the definition of the term ‘PSG Competitor.’”).
31

subsidiary of Recipharm AB[.]”134 The email enclosed the executed Agreement and 

Plan of Merger, which was dated February 17, 2022.135

In his email to Lagarde and Shafer, Bamforth also requested Thermo’s

“approval for [him] to join the Board of Recipharm.”136 Thermo’s consent was 

required based on a restrictive covenant agreement that Bamforth entered in 

connection with the prior sale of Brammer Bio to Thermo.137 Under that agreement, 

Bamforth was prohibited from working in a “Competing Business” for five years 

following the sale of Brammer Bio in 2019.138 On March 4, the general counsel of 

Thermo, Claudia Harrington, informed Bamforth that Thermo would not consent to 

Bamforth joining the board of Recipharm. In that email, Harrington stated that 

Thermo had “grave concerns with [Bamforth] advising a competing business, 

particularly in this case, an entity that is competitive with [PSG] across so many 

134 JTX 296 at 1–2; TT242:8–17 (Bamforth).

135 JTX 296 at 11; TT242:18–243:1 (Bamforth).

136 JTX 296 at 2; TT242:8–17 (Bamforth).

137 JTX 71.

138 Id. “Competing Business” is defined in the agreement as a “Person that engages in or 

owns, operates, manages, controls, invests in or participates in, any business engaged in 

the provision of services related to developing or manufacturing gene therapy drug 

substances or drug products.” Id. at 2.
32

relevant areas.”139 As a result, Bamforth did not join Recipharm’s board of 

directors.140

At the time of the Merger, Arranta Bio Midco LLC (“Arranta Parent”) owned 

100% of the membership interests of Arranta.141 Arranta Parent was wholly owned 

by Arranta Holdings, which had thirteen shareholders, including Thermo.142 Arranta 

Holdco Inc., an indirect wholly owned subsidiary of Recipharm, acquired Arranta 

Holdings in a reverse triangular merger where a subsidiary of Arranta Holdco Inc., 

Anatolia Merger Sub, LLC, was merged into Arranta Holdings (the “Merger”).143 

Arranta Holdings was the surviving company of the Merger.

144

139 JTX 323 at 2.

140 Id. at 1.

141 Dkt. 221 (“Def.’s Post-Trial OB”) at 27.

142 Id.

143 See JTX 296 at 17–20, § 1.3.

144 JTX 296 § 1.3.
33

The pre-Merger structure was as follows:
34

The post-Merger structure was as follows:

As described and set forth above, Arranta continued to be wholly owned by Arranta 

Parent, which also continued to be wholly owned by Arranta Holdings. Only the 

ownership of Arranta Holdings changed.

After learning the identity of the counterparty to the merger, the PSG team 

began considering potential options, including terminating the Supply Agreement. 

The PSG team focused in on the definition of PSG Competitor and sought to “think 

broadly” in determining whether Recipharm was a PSG Competitor.145 Over the 

145 JTX 306 at 2 (“The immediate needs are to evaluate the investor/shareholder agreements 

and the ‘PSG Competitor’ definition in the Dedicated Supply Agreement. It will inform 

what are our options. . . . The Supply Agreement is with PSG . . . so we should think 
35

course of one month following the announcement of the Merger, the PSG team 

began modelling various scenarios on how to pursue an exit from the Arranta 

relationship.146 Around that same time, PSG and Arranta continued to represent to 

customers that “[t]he strategic partnership remains intact” and “[w]e have a long 

term agreement and don’t foresee any changes to the relationship.”147

The Merger Closes And PSG Purports To Terminate The 

Supply Agreement

The Merger closed on April 8, 2022.148 As a result of the Merger, Thermo 

received approximately $105 million.149 Bamforth received approximately $240 

million.150 Gladstein and Favaloro each received approximately $3 million.151

On April 15, 2022, Wyszkowski sent a termination letter purporting to 

terminate the Supply Agreement.152 The letter was drafted by lawyers of PSG and 

asserted two bases for termination.

153

broadly, but be mindful that the Agreement describes PSG as ‘a leading large and small 

molecule and viral vector contract development and manufacturing organization.’”).

146 TT612:17–621:24 (Pitcher); JTX 326.

147 JTX 349 at 3.

148 JTX 331.

149 JTX 296; TT144:15–16 (Bamforth).

150 TT261:19–262:9 (Bamforth).

151 TT502:1–19 (Gladstein); Favaloro Dep. 13:23–14:9.

152 JTX 339.

153 TT397:9–15 (Wyszkowski).
36

First, PSG stated that Recipharm was a PSG Competitor because Recipharm 

“derives its revenue from performing biopharmaceutical (i.e., biologics and 

pharmaceutical) services.”154 PSG further claimed such an interpretation “is the only 

meaning that gives effect to the intent of this provision” because 

PSG is defined in the Agreement as engaged in both biologics and 

pharmaceuticals (see first Whereas clause), PSG in fact provides CDMO 

services in both the biologics and pharmaceutical space (which is why this 

word was selected to define the competitive space), and the intent of the 

provision is to protect PSG in the event Arranta is acquired by a competitor 

of PSG.155

PSG asserted in the letter that the acquisition constituted a Change of Control 

Transaction with a PSG Competitor.156 Pursuant to Section 18.4(b)(ii)(1) of the 

Supply Agreement, PSG purported to elect to deem Arranta to have issued a notice 

of termination under Section 16.2.2 of the Supply Agreement.157

Second, PSG claimed in the letter that “Arranta has faced significant and 

material performance issues, which are continuing under the Agreement.”158 PSG 

asserted that it had given Arranta formal notice of such material performance issues 

on January 17, 2022, when PSG sent the letter to Arranta requesting a “for cause” 

154 JTX 339 at 3.

155 Id.

156 Id. at 2.

157 Id.

158 Id. at 3.
37

audit.159 PSG claimed that “Arranta has failed to remedy the Cause noticed on 

January 17, 2022, and such failure constitutes a Termination for Cause by PSG 

pursuant to Section 16.2.3 of the Agreement.”160

On April 25, Arranta responded to the letter claiming that “the purported 

termination of the Agreement by PSG violates the unambiguous terms of the 

Agreement, constitutes a material breach, and amounts to a clear repudiation of the 

Agreement by PSG.”161 Arranta argued in the letter that “PSG improperly seeks to 

define ‘biopharmaceutical’ services as extending to both biologics and 

pharmaceuticals – an interpretation plainly at odds with both the language of the

Agreement and the intentions of the parties.”162 On this basis, Arranta argued that 

Recipharm is not a PSG Competitor because “it does not derive at least 50% of its 

revenues from biopharmaceutical development or at least 50% of its revenues from 

biopharmaceutical commercial manufacturing services.”163 Arranta also disputed 

PSG’s purported “Termination for Cause.”164

The parties exchanged additional letters on May 2, May 12, and May 25.165

159 Id.

160 Id.

161 JTX 346 at 1.

162 Id.

163 Id.

164 Id. at 2–3.

165 JTX 348; JTX 351; JTX 362.
38

F. The Experts

PSG presented an expert to support its case-in-chief, and Arranta presented a 

rebuttal expert. PSG’s expert, Dr. Roland Turck, is a physician with decades of

experience as an executive and consultant working in a variety of companies ranging 

from Bayer Healthcare to a startup firm focused on oncological biologics.

166 In 

rendering his opinion in this case, Turck relied upon annual reports filed with the 

Securities and Exchange Commission (“SEC”), regulatory filings with the Food and 

Drug Administration, and his professional experience.167 Turck testified that it was 

his expert opinion that over the past few decades, there has been increasing overlap 

between pharmaceutical companies and biotech companies. Per Turck, given this 

increasing overlap, “the word ‘biopharmaceutical’ is gradually replacing 

‘pharmaceutical’ as an all-encompassing word describing the small molecule and 

biologics industry, companies, and elements of the value chain.”168 Turck testified 

that “biopharmaceutical” is usually used by sophisticated industry participants to 

mean both biologics and small-molecule drugs.169 Turck stated that 

“biopharmaceutical” can sometimes be used to mean only biologics but, if it was 

166 TT524:9–531:20 (Turck).

167 Id.

168 Id.

169 TT534:17–535:1 (Turck).
39

intended to have this narrower meaning, then that would be indicated by context 

(e.g., putting an explanation in parentheses).170

Arranta’s rebuttal expert, Peter Lankau, has held senior executive roles in a 

number of companies ranging from a specialty pharmaceutical company focused on 

pain management and neurology to an early-stage company that developed agents 

for inflammatory diseases.171 In rebutting Turck’s opinion in this case, Lankau 

primarily relied on dictionary definitions and reviewed the documents relied upon 

by Turck.172 Lankau testified that the meaning of “biopharmaceutical” set forth in 

various dictionaries is that the term means biologics only, and this is consistent with 

how sophisticated industry participants use the word.173 Lankau criticized Turck’s 

reliance on filings with the SEC because, per Lankau, companies often use 

“biopharmaceutical” “as a branding exercise, a marketing term” as it connotes a 

more exciting business than “pharmaceutical.”174 Lankau acknowledged that he 

himself had used the term to mean both biologics and small-molecule drugs for 

marketing purposes.

175

170 TT536:2–19 (Turck).

171 TT644:12–648:14 (Lankau).

172 JTX 384; JTX 386.

173 JTX 384; TT651:2–652:23 (Lankau).

174 JTX 384; TT651:5–16 (Lankau).

175 TT665:18–667:10, TT682:20–683:3, TT687:20–688:2 (Lankau).
40

G. Procedural History

PSG filed its verified complaint (the “Complaint”) in this Court on July 8, 

2022. The Complaint includesfive counts.176 Count I allegesthat Arranta materially 

breached the Supply Agreement by failing to produce compliant products and that 

Arranta failed to cure its material breaches after receiving written notice of such 

breaches from PSG.177 

Count II seeks declaratory judgment that the Merger constituted a 

Termination for Convenience by Arranta under Sections 16.2.2 and 18.4 of the 

Supply Agreement.178 

Count III seeks specific performance (a) requiring that Arranta perform the 

Non-Compete Obligation and not engage in plasmid development and 

manufacturing services until April 14, 2025, and/or (b) permitting PSG to elect to 

purchase the Portable Capital Equipment at net book value after applying a $2 

million credit and to ship the purchase equipment to PSG’s site of choice at Arranta’s 

sole expense.179

176 Compl. ¶¶ 69–98.

177 Id. ¶¶ 69–73.

178 Id. ¶¶ 74–79.

179 Id. ¶¶ 80–86.
41

Count IV seeks declaratory judgment that PSG was permitted to elect, and on 

April 14, 2022, did so elect, to declare a termination for cause.180 

Finally, Count V seeks declaratory judgment that the termination notice PSG 

sent on April 14, 2022, did not anticipatorily repudiate the Supply Agreement.181

On July 29, 2022, Arranta filed its answer and verified counterclaims.182 

Arranta asserted six counterclaims. Count I seeks declaratory judgment that PSG 

did not validly terminate the Supply Agreement pursuant to Sections 16.2.2 and 

18.4.183 Count II seeks declaratory judgment that PSG did not validly terminate the 

Supply Agreement for cause pursuant to Section 16.2.3.184 Count III seeks 

declaratory judgment that PSG repudiated and materially breached the Supply 

Agreement.185 Count IV seeks an order that PSG cease misinforming third parties 

that Arranta is subject to any limitation regarding plasmid manufacturing.

186 In the 

alternative, Count IV seeks damages.187 Count V seeks a judicial order that PSG 

return and delete certain confidential information that Arranta alleges was stolen by 

180 Id. ¶¶ 87–92.

181 Id. ¶¶ 93–98.

182 Dkt. 12 (“Answer and Counterclaims”).

183 Answer and Counterclaims ¶¶ 120–124.

184 Id. ¶¶ 125–129.

185 Id. ¶¶ 130–135.

186 Id. ¶¶ 136–140.

187 Id.
42

PSG.188 In the alternative, Count V seeks damages for alleged improper theft.189 

Finally, Count VI seeks damages for PSG’s alleged material breach of the Supply 

Agreement.190

In connection with its Complaint, PSG also filed a motion to expedite and 

requested that I set trial on all of PSG’s claims in April 2023.

191 In contrast, Arranta 

argued that only the claims concerning the Non-Compete Obligation should be 

expedited and that these claims could be resolved in one day on a largely paper 

record.192 On August 8, 2022, I granted the motion to expedite as to the claims 

concerning the Non-Compete Obligation.193 Based in part on Arranta’s 

representations concerning the narrowness of the issues for decision, I scheduled the 

trial in December 2022 for two days.194 Arranta subsequently sought to present 

equitable defenses at trial that seemed beyond the scope of the narrow and discrete 

Non-Compete Obligation on which Arranta premised its request for bifurcation.195 

188 Id. ¶¶ 141–146.

189 Id.

190 Id. ¶¶ 147–154.

191 Dkt. 1; Dkt. 22 ¶ 18.

192 See Dkt. 11 at 2 (“Whether the non-compete applies is a matter of contractual 

interpretation. It can be resolved by a one-day trial.”); id. ¶ 40 (“Whether Arrant ais subject 

to the Non-Compete Obligation is a discrete issue of [] contract interpretation. The Court 

can resolve it largely on a paper record, with minimal trial testimony.”).

193 Dkt. 35; Dkt. 37.

194 Dkt. 35.

195 Dkt. 139.
43

I permitted Arranta to address these equitable defenses at trial but allowed PSG to 

request additional trial time to ensure that PSG had a fair opportunity to respond.196 

PSG did not request additional time.

Trial was held on the expedited claims, counterclaims, and defenses on 

December 15 and 16, 2022. Post-trial argument was held on February 10, 2023.

II. ANALYSIS

The fundamental dispute before this Court is whether PSG had the right to 

deem the Merger a Termination for Convenience by Arranta. The parties tangle over

the preconditions to trigger a Termination for Convenience by Arranta. PSG’s right 

to deem the Merger a Termination for Convenience by Arranta is partly conditional 

on the counterparty to the Merger being a PSG Competitor. I begin my analysis by 

addressing the meaning of “PSG Competitor.” The analysis proceeds in this manner 

since the primary focus of the two-day trial and much of the parties’ briefing was on 

whether Recipharm was a PSG Competitor.

As explained below, I conclude that “biopharmaceutical” is unambiguous and 

encompasses large-molecule biologics only. The term “biopharmaceutical” does not 

include small-molecule pharmaceuticals. Thus, a PSG Competitor is a “third Party 

whose business derives at least fifty percent (50%) of its revenues from performing 

196 Dkt. 116.
44

contract [biologics] development or commercial manufacturing services.” It is 

undisputed that Recipharm did not derive at least 50% of its revenues from biologic 

CDMO services. Therefore, Recipharm is not a PSG Competitor, and PSG had no 

right to trigger a Termination for Convenience by Arranta.

Based on this, Counts II and III of PSG’s Complaint must be dismissed and 

judgment must be entered for Arranta on Count I of its counterclaims.

A. Meaning Of The Term “PSG Competitor”

PSG Competitor is defined in the Supply Agreement as “a Third Party whose 

business derives at least fifty percent (50%) of its revenues from performing contract 

biopharmaceutical development or commercial manufacturing services.”197 The 

crux of the parties’ dispute is whether “biopharmaceutical” means only largemolecule biologics or means both large-molecule biologics and small-molecule 

drugs.198

197 Supply Agreement § 1.106.

198 PSG has argued at certain points that the term “PSG Competitor” is itself ambiguous. 

See, e.g., Dkt. 182 (“Pl.’s Pretrial Br.”) at 33–34. However, PSG did not meaningfully 

develop this point and instead focused its argument on the meaning of 

“biopharmaceutical.” Thus, I do not address it except to note that, even if PSG had 

meaningfully developed this argument, I would likely not find it compelling because PSG 

Competitor is a defined term within the Supply Agreement and therefore has an explicitly 

given meaning. “[A]mbiguity exists only ‘[w]hen words of an agreement are . . . subject 

to different interpretations and when the words . . . otherwise create ambiguity when 

viewed in light of other contractual provisions[.]’” Sassano v. CIBC World Mkts. Corp., 

948 A.2d 453, 468 n.86 (Del. Ch. 2008) (quoting Cincinnati SMSA Ltd. P’ship v. 

Cincinnati Bell Cellular Sys. Co., 1997 WL 525873, *4 (Del. Ch. Aug. 13, 1997)). The 

term PSG Competitor is defined, and I look to the definition given to PSG Competitor by 
45

“Unless there is ambiguity, Delaware courts interpret contract terms 

according to their plain, ordinary meaning.”199 The “contract’s construction should 

be that which would be understood by an objective, reasonable third 

party.”200 “Absent some ambiguity, Delaware courts will not destroy or twist 

[contract] language under the guise of construing it.”201 “Contract language is not 

ambiguous merely because the parties dispute what it means. To be ambiguous, a 

disputed contract term must be fairly or reasonably susceptible to more than one 

meaning.”202

“Under well-settled case law, Delaware courts look to dictionaries for 

assistance in determining the plain meaning of terms which are not defined in a 

contract.”203 “When a term’s definition is not altered or has ‘no ‘gloss’ in the 

[relevant] industry it should be construed in accordance with its ordinary dictionary 

the parties in the Supply Agreement to determine whether that definition is subject to 

different interpretations. For the reasons set out herein, I conclude that it is not.

199 Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012).

200 Salamone v. Gorman, 106 A.3d 354, 367–68 (Del. 2014) (internal citation omitted).

201 Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1195 (Del. 

1992).

202 Alta Berkeley, 41 A.3d at 385 (footnote omitted).

203 Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 738 (Del. 2006). Accord 

In re Solera Ins. Coverage Appeals, 240 A.3d 1121, 1132 n.67 (Del. 2020) (“Delaware 

case law is settled that undefined words are given their plain meaning based upon the 

definition provided by a dictionary.”) (quoting Del. DNREC v. McGinnis Auto & Mobile 

Home Salvage, LLC, 225 A.3d 1251, 1260–61 (Del. 2020) (Valihura, J., dissenting)).
46

meaning.”204 “In addition to relying on dictionary definitions, a court may look to 

how a term or phrase is used in a particular legal context. Put another way, ‘[u]nless 

a different intention is manifested’ in the contract, ‘where language has a generally 

prevailing meaning, it is interpreted in accordance with that meaning,’ and ‘technical 

terms and words of art are given their technical meaning when used in a transaction 

within their technical field.’”205

I conclude that “biopharmaceutical” is unambiguous and encompasses only 

large-molecule biologics. Even if I were to find that “biopharmaceutical” is 

ambiguous, much of the extrinsic evidence put forth at trial would ultimately not be 

relevant to my analysis. And even the limited amount that would be is either neutral

or tends to support the conclusion that “biopharmaceutical” includes only largemolecule biologics, not small-molecule drugs. Thus, PSG has failed to establish by 

a preponderance of the evidence that Recipharm was a PSG Competitor because 

Recipharm did not derive more than 50% of its revenue from “biopharmaceutical” 

CDMO services.

I pause to highlight that this case arguably exemplifies why our courts have

long held that extrinsic evidence may not be used to create ambiguity or to vary the 

204 Lorillard Tobacco, 903 A.2d at 740 (quoting USA Cable v. World Wrestling Fed’n 

Entm’t, Inc., 766 A.2d 462, 474 (Del. 2000)).

205 In re P3 Health Gp. Hldgs., LLC, 282 A.3d 1054, 1067 (Del. Ch. 2022) (quoting 

RESTATEMENT (SECOND) OF CONTRACTS § 202(3) (Am. L. Inst. 1981)).
47

meaning of an unambiguous term. After sitting through the two-day trial and 

devoting considerable time and attention to the parties’ briefing, transcripts, and 

exhibits, I can quite confidently say that none of the negotiators gave much thought 

to the definition of PSG Competitor or, more particularly, the meaning of 

“biopharmaceutical” when they negotiated the Supply Agreement. This is entirely 

understandable because the numerous dictionary definitions and expert testimony 

establish that “biopharmaceutical” is unambiguous. But where one party tries to 

resist this conclusion and search for ambiguity, it is unsurprising to be confronted

with a record like the one here—tea leaf facts and cherrypicked communications that 

simply do not support the weight placed upon them. Even so, the Court must 

interpret contracts “as written and not as hoped for by litigation-driven 

arguments.”206 Accordingly, and despite PSG’s efforts, the only reasonable 

interpretation of “biopharmaceutical” is that it is an unambiguous term 

encompassing only drugs derived from biologics.

“Biopharmaceutical” Is Unambiguous

The clear and unambiguous meaning of “biopharmaceutical”—as established 

by every dictionary definition presented in this matter—is a drug derived from 

biologics. Despite failing to introduce a single contrary dictionary definition, PSG 

tries to avoid this conclusion and create ambiguity through expert testimony and 

206 Urdan v. WR Cap. P’rs, LLC, 244 A.3d 668, 675 (Del. 2020).
48

reliance on caselaw that is distinguishable from the present dispute. As set forth 

below, PSG’s efforts fail.

a. Numerous Dictionaries Establish That 

“Biopharmaceutical” Is Unambiguous

Arranta argues that, under its plain meaning, “biopharmaceutical” refers only 

to large-molecule biologics derived from living organisms and does not include 

small-molecule drugs.207 In support of this argument, Arranta points to multiple 

dictionary definitions of the term “biopharmaceutical.” While each of these 

dictionaries define “biopharmaceutical” in a slightly different manner, every single 

dictionary provides that such term connotes a drug either derived from biological 

sources or living organisms or otherwise consisting of large, complex molecules like 

proteins:

• Merriam Webster: “a pharmaceutical derived from biological sources and 

especially one produced by biotechnology.”208

• American Heritage Dictionary: “[a] drug produced by means of 

biotechnology, consisting of a large, complex molecule such as a protein 

rather than a small molecule.”209

207 Def.’s Post-Trial OB at 43–48.

208 Biopharmaceutical, MERRIAM-WEBSTER, https://www.merriamwebster.com/dictionary/biopharmaceutical (last visited Apr. 4, 2023).

209 Biopharmaceutical, AM. HERITAGE DICTIONARY, 

https://www.ahdictionary.com/word/search.html?q=biopharmaceutical (last visited Apr. 4, 

2023).
49

• Oxford English Dictionary: “[a] pharmaceutical agent, typically a protein or 

peptide, produced by biotechnology.”210

• Cambridge Dictionary: “medicine and drugs that are produced using 

biotechnology (= the use of living things, especially cells and bacteria, in 

industrial processes).”211

• Dictionary of Pharmaceutical Medicine: “[t]herapeutic product involving 

biotechnology, e.g. genetic engineering; product of biotechnological origin 

such as antisense, genetic engineering, transgenics, involving manipulation of 

living organisms.”212

Furthermore, all dictionaries referenced by Arranta define “biopharmaceutical” to 

mean a pharmaceutical or drug that is produced by or involving biotechnology.

213 

The definition of “biotechnology” from these same dictionaries further supports the 

meaning of “biopharmaceutical” as a drug derived from living organisms.214

210 Biopharmaceutical, OXFORD ENG. DICTIONARY, https://www.oed.com/view/Entry/

261445? (last visited Apr. 4, 2023).

211 Biopharmaceutical, CAMBRIDGE DICTIONARY, 

https://dictionary.cambridge.org/us/dictionary/english/

biopharmaceuticals?q=biopharmaceutical (last visited Apr. 4, 2023).

212 Biopharmaceutical, DICTIONARY OF PHARM. MED., 

https://link.springer.com/chapter/10.1007/978-3-211-89836-9_127 (last visited Apr. 4, 

2023).

213 See id.

214 See, e.g., Biotechnology, MERRIAM-WEBSTER, https://www.merriamwebster.com/dictionary/biotechnology (last visited Apr. 4, 2023) (“the manipulation (as

through genetic engineering) of living organisms or their components to produce useful 

usually commercial products (such as pest resistant crops, new bacterial strains, or novel 

pharmaceuticals)”); Biotechnology, AM. HERITAGE DICTIONARY, 

https://www.ahdictionary.com/word/search.html?q=biotechnology (last visited Apr. 4, 

2023) (“The use of living organisms or biological processes for the purpose of developing 

useful agricultural, industrial, or medical products, especially by means of techniques, such 

as genetic engineering, that involve the modification of genes”); Biotechnology, OXFORD 

ENG. DICTIONARY, https://www.oed.com/view/Entry/19255 (last visited Apr. 4, 2023) 
50

b. The Expert Testimony Does Not Establish That 

“Biopharmaceutical” Is Ambiguous

PSG did not offer any contrary dictionary definitions in support of its

interpretation of “biopharmaceutical” as encompassing both large-molecule 

biologics and small-molecule pharmaceuticals. Rather, PSG argues that 

“biopharmaceutical has an industry meaning not portrayed in dictionaries.”215 To 

(“the application of science and technology to the utilization and improvement of living 

organisms for industrial and agricultural production and (in later use) other biomedical 

applications”); Biotechnology, CAMBRIDGE DICTIONARY, 

https://dictionary.cambridge.org/us/dictionary/english/biotechnology (last visited Apr. 4, 

2023) (“the use of living things, especially cells and bacteria, in industrial processes”); 

Biotechnology, DICTIONARY OF PHARM. MED., 

https://link.springer.com/chapter/10.1007/978-3-211-89836-9_129 (last visited Apr. 4, 

2023) (“Development of products by a biological process. Production may be carried out 

by using intact organisms, such as yeasts and bacteria, or by using natural substances (e.g. 

enzymes) from organisms; techniques involving manipulation of living organisms or 

substances made by living organisms, particularly at the molecular genetic level; according 

to the U.S. Office of Science and Technology Policy, the term covers also ‘recently 

developed and newly emerging genetic manipulation techniques, such as recombinant 

DNA (rDNA), recombinant RNA (rRNA), and cell fusion, that are sometimes referred to 

as genetic engineering’”).

215 Pl.’s Post-Trial AB at 8; see also Turck Dep. 125:9–125:16 (“Q: As part of your 

research, did you review any dictionaries? A: I think we talked about that before. I did 

note the definition in the dictionaries but, as I mentioned before, believe that dictionaries 

tend to lag behind the—the common usage of words, not only in this case but in other 

cases.”). In its pretrial brief, PSG cited to a portion of the Lorillard opinion in support of 

the proposition that this Court may reject dictionary definitions. It dropped this argument 

in its post-trial briefing. Pl.’s Pretrial Br. at 37. I highlight this point because the portion 

of Lorillard cited to by PSG does not stand for the proposition for which PSG asserts it 

does in its pre-trial briefing. Rather, in that section of Lorillard, our Supreme Court simply 

discussed how the Court of Chancery expressly declined to consider dictionary definitions. 

Lorillard, 903 A.2d at 736. The Supreme Court later held in that opinion that “the Vice 

Chancellor’s abandonment of all dictionaries . . . [was] not supported by precedent.” Id. at 

738.
51

that end, PSG contends that I must look to extrinsic evidence in the form of its 

expert’s testimony to find a meaning of “biopharmaceutical” that contradicts the 

numerous dictionary definitions.216

PSG’s argument seems to be that the expert testimony in this matter 

constitutes a special form of extrinsic evidence that is not subject to the well-settled 

rule (discussed below) that extrinsic evidence may not be used to manufacture 

ambiguity. PSG’s position would seem to invite mischief in commercial litigation. 

If I were to adopt its approach, then I risk “creating an ambiguity where none exists” 

and imposing rights and obligations on parties to which they did not agree.217 “By 

such judicial action, the reliability of written contracts is undermined, thus 

diminishing the wealth-creating potential of voluntary agreements.”218 In any event, 

I need not resolve this question because I find that PSG’s expert has failed to 

demonstrate why anything other than the apparently unanimous dictionary definition 

of biopharmaceutical should apply in the context of the Supply Agreement.

216 Pl.’s Post-Trial AB at 3–15. I note that, while the numerous dictionaries that Arranta 

presented include a technical dictionary that defines “biopharmaceutical” consistent with 

the understanding that it references only biologics, PSG failed to identify even a single 

technical dictionary definition in support of its position.

217 Allied Cap. Corp. v. GC-Sun Hldgs., L.P., 910 A.2d 1020, 1030 (Del. Ch. 2006) (citation 

omitted).

218 Id. (citation omitted).
52

Turck, PSG’s expert, testified that sophisticated industry participants do not 

use dictionaries to determine the meaning of technical words like 

“biopharmaceutical” when negotiating contracts.219 Turck highlighted that 

“[biopharmaceutical] is a relatively recent term that has been used more frequently 

in the last maybe ten, fifteen years.”220 Per Turck, given that it is a relatively recent 

term, one must look to how sophisticated industry participants use 

“biopharmaceutical” since these participants, not dictionaries, are responsible for 

shaping its meaning.221 Turck testified that sophisticated industry participants may 

use “biopharmaceutical” to mean just large-molecule biologics in some 

circumstances or to mean both biologics and small-molecule drugs in other 

circumstances.222 

219 TT550:19–552:9 (Turck). Turck testified that his “default assumption” is that 

“biopharmaceutical” is used to mean both large-molecule biologics and small-molecule 

drugs but sometimes may be used to mean only large-molecule biologics if indicated by 

the context. TT536:2–8 (Turck). Per Turck, “the context can be indicated by putting an 

explanation in parentheses after biopharmaceutical, for instance, or it can be a pairing, so 

that you would pair ‘biopharmaceuticals’ with another word, or then you would have, in 

the same paragraph, an indication that the narrower sense is intended . . . that the general 

assumption, the default assumption, doesn’t apply.” TT536:12–19 (Turck). 

220 TT536:20–537:1 (Turck). See also TT:537:2–17 (Turck) (stating in response to a 

question about why the term “biopharmaceutical” has emerged to mean both biologics and 

small molecules that “[i]t’s a term that became necessary because the portfolio of 

companies changed” because “over time, large pharma acquired biotech companies or they 

acquired the capabilities to develop biologics, and their portfolio became a mixed portfolio 

between small molecules and biologics”). 

221 TT552:10–557:14 (Turck).

222 Id.
53

While Turck stated that he reviewed regulatory filings and industry 

association publications, Turck pointed primarily to 10-K filings from 2020 and 

2021 for a variety of drug manufacturers during his testimony.

223 Of the eleven 10-K 

filings Turck reviewed, only two of those filings were from CDMOs.224 Notably, 

those two CDMOs were Lonza and Catalent. As counsel for Arranta highlighted 

during Turck’s cross-examination, both Lonza and Catalent distinguish their revenue 

between biologics and small molecules.225 In addition, Turck acknowledged that 

10-K filings from other drug manufacturers at times distinguish between 

pharmaceuticals and biologics.226

223 TT537:18–538:2; 552:10–557:14 (Turck). At trial, Turck focused primarily on 10-K 

filings by certain drug manufacturers, including “Pfizer, AbbVie, Merck, BMS, Biogen, a 

few others.” TT539:4–540:8 (Turck). Per Turck, these large drug manufacturers “shape 

how words have been used” in the pharmaceutical industry. TT540:9–16 (Turck). Turck 

highlighted that these drug manufacturers use “biopharmaceutical” in their 10-K filings “as 

an all-encompassing term, including small molecules as well as biologics, reflecting their 

mixed portfolio.” TT541:3–8 (Turck).

224 TT570:2–8 (Turck) (“Q: You cited to two CDMOs in your report as indicative of how 

CDMOs use the term in the industry? A: Yes, as I said, I focused on the drug 

manufacturers. And if I remember correctly, I also focused very much on this – on Lonza 

and Catalent during the last few years.”).

225 TT572:16–573:1 (Turck) (“Q: And so the two CDMOs that you relied on classify their 

revenue between biologics and small molecules. Right? A: Right. And as we’ve seen 

before, Lonza characterizes or includes small molecules in their definition of 

biopharmaceutical. Q: When they use the term ‘biopharmaceuticals,’ but not when they 

split out their revenue between biologics. Correct? A: Right.”).

226 See, e.g., TT581:20–582:12 (Turck) (“THE COURT: Dr. Turck, can you turn back to . 

. . the Catalent 10-K. . . . The first line under revenue. It says, ‘we sell products and 

services directly to our pharmaceutical, biopharmaceutical, and consumer health 

customers.’ How do you interpret the use of ‘pharmaceutical’ and ‘biopharmaceutical’ 

there? THE WITNESS: That could be redundant. It could be also in the narrow sense. I 
54

Arranta’s rebuttal expert, Lankau, testified that the industry operates in two 

segments: “the biologic segment that constitutes large-molecule products used for 

very distinct diseases” and “the larger pharmaceutical or small-molecule market, 

where products are typically developed and commercialized for large patient 

populations.”227 Per Lankau, there are very substantial differences between 

biologics and small-molecule pharmaceuticals in how these products are 

manufactured, the patient populations they serve, how they are regulated, and how 

they are marketed. 

For example, the manufacturing process for biologics is substantially different 

from the process for small-molecule drugs. Lankau testified that small-molecule 

drugs are derived from chemical synthesis and are milled, granulated, and dried to 

create, for example, an oral medication.228 Manufacturers of small-molecule drugs 

use agitators, blenders, and tablet presses to create the drugs.229 In contrast, biologics 

start with a cell line, which may be derived from bacteria or mammalian cells that, 

once adjusted, and are placed into a fermenter to enhance their growth potential to 

mean, that would be kind of the pairing. In general, Catalent distinguishes between, if I 

remember correctly, between biopharmaceuticals versus over-the-counter medicines.”).

227 TT654:17–655:4 (Lankau).

228 TT655:5–17 (Lankau).

229 TT655:18–656:5 (Lankau).
55

increase the volume of cells.230 Ultimately, these cells go through an extraction 

process to separate out the active ingredient from the cell mass itself.231 

In addition, pharmaceuticals are typically used to treat diseases and conditions 

like diabetes and hypertension that involve large patient populations and are 

marketed to a wide variety of physicians.232 In contrast, biologics are typically used 

to treat diseases that involve smaller patient populations (e.g., certain cancers and 

autoimmune diseases) and are marketed primarily to specialists associated with such 

conditions.233 Based on this testimony, Lankau stated that the dictionary definitions 

offered by Arranta are consistent with industry usage.234 

Lankau was critical of Turck’s reliance on 10-K filings. Lankau testified that

a company that primarily derives its revenue from small-molecule drugs might 

describe itself as a “biopharmaceutical company” to convey a positive image to its 

230 TT656:9–18 (Lankau).

231 TT656:19–22 (Lankau). Indeed, the raison d’être for the Supply Agreement itself, the 

Watertown Facility, this dispute and the matter to be tried in September is the distinct 

character of—and great difficultly associated with—commercial manufacturing of 

biologics. Having considered the evidence in this matter, the numerous distinctions 

between biologic and small-molecule manufacturing are clearly something that 

sophisticated industry participants—like the parties here—would readily know and 

appreciate.

232 TT658:5–659:6 (Lankau).

233 TT659:7–660:8 (Lankau).

234 TT653:15–654:14 (Lankau).
56

investors, which are the audience for 10-K filings.235 The term “biopharmaceutical” 

“suggests that the company is involved in innovation, in new technology, whether 

it’s for small molecules or not.”236 Lankau testified that the “branding” that one 

might see in a 10-K must be distinguished from how these companies describe 

themselves when negotiating agreements, where companies are far more precise.237 

Lankau testified that “when companies are sitting down across the table from each 

other looking to negotiate an agreement, they’re very precise in the language they 

use” and “will look at phrases like ‘biopharmaceutical’ as being very explicit to their

[meaning as] a drug derived from living organisms.”238

During his direct testimony and on cross-examination, Lankau acknowledged 

that “biopharmaceutical” may be used by industry participants to encompass both 

large-molecule biologics and small-molecule pharmaceuticals in certain contexts.239

Indeed, Lankau acknowledged that he himself has used “biopharmaceutical” to 

235 TT663:16–664:10 (Lankau).

236 TT664:11–18 (Lankau).

237 TT66419:665:17 (Lankau).

238 TT665:10–17 (Lankau).

239 See, e.g., TT682:20–683:3 (Lankau) (“Q: And I apologize for doing this, and I’m going 

to continue to do it. Your use of the term ‘biopharmaceutical’ [in Lankau’s own website] 

includes both small molecule and biologics; isn’t that right? A: As it relates to pharma and 

biotech services, that’s correct. Q: So that’s yes? A: That’s a yes.”); TT687:20–688:2 

(Lankau) (“Q: So in your testimony earlier, when you—when you affirmatively stated that 

the term ‘biopharmaceutical’ means biologics in all uses of the term, that was incorrect? 

A: That would have been incorrect as it relates to the use of the term within the industry, 

as opposed to a marketing context.”).
57

encompass biologics and small-molecule pharmaceuticals in his own CV, website, 

and to describe the company where he previously served as CEO.240 While PSG 

made significant hay over Lankau’s use of “biopharmaceutical” in this manner, I 

find this fact wholly consistent with his expert testimony. That some participants in 

the industry may use a term broadly for marketing purposes—here, to foster the 

notion in the market that a business is dynamic and cutting edge—does not change 

the fact that “biopharmaceutical” has an unambiguous meaning in a non-marketing 

contractual context.

241 That unambiguous meaning is consistent with all dictionary 

definitions entered in this case.

c. The Caselaw Cited By PSG Is Distinguishable

Furthermore, the two cases on which PSG relies in arguing that I ignore 

dictionary definitions are distinguishable from this dispute. PSG cites to 

Pharmaceutical Product Development, Inc. v. TVM Life Science Ventures VI, L.P.

for the proposition that this Court may look to extrinsic evidence to find 

ambiguity.242 PSG also cites to this Court’s opinion in In re P3 Health Group 

240 TT665:18–667:10, 680:19–689:8 (Lankau); JTX 385 at 1; JTX 402 at 1; JTX 403 at 1.

241 See TT664:11–18 (Lankau) (stating that a company that is primarily involved in the 

small-molecule drug industry may nonetheless market itself as a “biopharmaceutical” 

company because “it suggests that the company is involved in innovation, in new 

technology, whether it’s for small molecules or not.”).

242 Pl.’s Post-Trial OB at 46–47; Pl.’s Post-Trial AB at 9–10.
58

Holdings, LLC for the proposition that dictionary definitions “are not the only source 

of plain meaning.”

In Pharmaceutical Product Development, Inc., the parties disputed the 

meaning of the word “efficacy” in the context of a drug compound used to treat 

psoriasis.243 The defendants argued that “efficacy” meant only a drug’s ability to 

achieve a desired therapeutic or physiological response.244 The plaintiff argued that 

a drug’s potency (i.e., “the relative amount of drug needed to produce a given 

response”) is related to its efficacy.245 In rejecting the defendants’ narrow 

construction at the pleadings stage, this Court highlighted that while some 

dictionaries defined “efficacy” in the more narrow sense advocated by the 

defendants, other pharmacology textbooks broadly considered potency alongside 

efficacy.246 Based on these competing sources, this Court concluded that it was 

reasonably conceivable that a drug compound’s potency was related to its 

efficacy.247

243 2011 WL 549163, at *2 (Del. Ch. Feb. 16, 2011).

244 Id.

245 Id. (quoting Gary C. Rosenfeld & David S. Loose, PHARMACOLOGY 5 (4th ed. 

Lippincott Williams & Wilkins 2007)).

246 Id. at *3–4.

247 Id. at *2, 6.
59

In In re P3 Health, this Court addressed whether it had personal jurisdiction 

over the general counsel of a Delaware limited liability company.248 To resolve the 

dispute over personal jurisdiction at the pleadings stage, this Court had to determine 

the meaning of “material participation,” as that term is used in the Delaware LLC

Act.249 The Court first looked to dictionaries to determine the meaning of “material 

participation.”250 The Court also noted that the concept of “material participation” 

had a long history in federal tax law and looked to that history in determining the 

meaning of “material participation.”251 Notably, while this Court did look to other 

non-dictionary sources in determining the meaning of “material participation,” its

review of federal tax law sources was not used to contradict the dictionaries used but 

to reinforce its analysis of dictionary definitions.252

Both cases are distinguishable from this dispute. In Pharmaceutical Product 

Development, Inc., this Court weighed dictionaries and pharmacology textbooks in 

determining whether it was reasonably conceivable that “efficacy” was ambiguous. 

In contrast, PSG has not cited a single dictionary or textbook that defines 

“biopharmaceutical” as including both biologics and small-molecule drugs. 

248 282 A.3d 1054, 1058 (Del. Ch. 2022).

249 Id. at 1065.

250 Id. at 1065–66.

251 Id. at 1067–69.

252 Id. at 1068.
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Concerning In re P3 Health, PSG asks that I look to extrinsic evidence to contradict 

the numerous dictionary definitions that run contrary to its asserted meaning of 

“biopharmaceutical.” This is inconsistent with the approach taken in that case, 

where this Court used extrinsic evidence to reinforce its interpretation of dictionary 

definitions.

Finally, PSG asks that I find ambiguity in the Supply Agreement by looking 

to the recitals, which describe PSG as “a leading large and small molecule and viral 

vector [CDMO].”253 This argument fails. To begin, “recitals are not substantive 

provisions of an agreement.”254 PSG is correct that recitals can “be used to explain 

some apparent doubt with respect to the intended meaning of the” Supply 

Agreement.255 However, there is no apparent doubt as to the unambiguous meaning 

of “biopharmaceutical.” Furthermore, the recital PSG points to does not even use 

the term “biopharmaceutical.”

d. “Biopharmaceutical” Unambiguously Means Biologics 

Only

In light of these considerations, I conclude that the meaning of

“biopharmaceutical” is unambiguous in the context of the parties’ negotiations. To 

253 Supply Agreement, Recitals.

254 Urdan v. WR Cap. P’rs, LLC, 2019 WL 3891720, at *13 (Del. Ch. Aug. 19, 2019), aff’d, 

244 A.3d 668 (Del. 2020).

255 Id. (quoting New Castle Cty. v. Crescenzo, 1985 WL 21130, at *3 (Del. Ch. Feb. 11, 

1985)).
61

begin, numerous dictionaries define “biopharmaceutical” as a drug derived from 

living organisms, which is consistent with meaning biologics only. While there are 

instances where deviation from dictionary definitions is appropriate, it is notable that 

PSG was unable to point to a single dictionary that supported its interpretation of 

“biopharmaceutical.” Furthermore, even if it was appropriate to look to Turck’s 

testimony and the 10-Ks he discussed, this extrinsic evidence was rebutted by 

Lankau. In any event, Turck’s expert testimony is insufficient to overcome the 

mountain of authoritative sources that define “biopharmaceutical” as encompassing 

biologics only.

I conclude that the unambiguous meaning of “biopharmaceutical” is biologics 

only. Therefore, PSG Competitor means a “third party whose business derives at 

least 50% of its revenues from performing [biologics] development or commercial 

manufacturing services.” Because it is undisputed that Recipharm did not derive at 

least 50% of its revenue from biologics, Recipharm is not a PSG Competitor.

Though Irrelevant Given The Lack Of Ambiguity, Extrinsic 

Evidence From The Negotiation Of The Supply Agreement 

Is Consistent With Arranta’s Interpretation

Where the “contract is unambiguous, extrinsic evidence may not be used to 

interpret the intent of the parties, to vary the terms of the contract or to create an 

ambiguity.”256 Thus, as I have already concluded that “biopharmaceutical” is 

256 Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997).
62

unambiguous, it would be appropriate to conclude my analysis here and go no 

further. Because most of the trial focused on extrinsic evidence relating to the 

meaning of “biopharmaceutical,” however, I nonetheless briefly address the limited 

relevant extrinsic evidence presented at trial to confirm that its consideration would 

not change the outcome here.

If I were to consider extrinsic evidence, “[s]uch extrinsic evidence [could] 

include overt statements and acts of the parties, the business context, prior dealings 

between the parties, [and] business custom and usage in the industry.”257 With that 

said, “relevant extrinsic evidence is that which reveals the parties’ intent at the time 

they entered into the contract” and “backward-looking evidence gathered after the 

time of contract is usually not helpful.”258

The parties presented two categories of extrinsic evidence in support of their 

competing interpretations of the term PSG Competitor: (1) communications between 

or among the parties at the time of drafting the Supply Agreement; and (2) 

subsequent conduct of the parties after executing the Supply Agreement. Having 

considered the parties’ testimony, the only sufficiently reliable evidence from the 

time the parties negotiated the Supply Agreement are Boyd’s comment that Catalent 

257 In re Mobilactive Media, LLC, 2013 WL 297950, at *15 (Del. Ch. Jan. 25, 2013) 

(quoting United Rentals, Inc. v. RAM Hldgs, Inc., 937 A.2d 810, 834–35 (Del. Ch. 2007)).

258 Eagle Indus., Inc., 702 A.2d at 1233 n.11 (citation omitted) (emphasis in original).
63

and Lonza were examples of PSG Competitors and a handful of internal Arranta 

notes and emails.

259 I conclude that, even if I could consider this extrinsic evidence,

this sparse evidence is either neutral or consistent with Arranta’s interpretation. The 

remaining evidence presented at trial concerned communications and events arising 

after the parties negotiated and signed the Supply Agreement. I conclude that such 

evidence, even if I could consider it, would ultimately be irrelevant to my analysis.

a. Communications During Supply Agreement 

Negotiations Either Support Or Are Consistent With 

Arranta’s Interpretation

The primary piece of extrinsic evidence from the parties’ negotiation of the 

Supply Agreement is Boyd’s statement that PSG did not want Arranta selling itself 

to a company like Lonza or Catalent. At the time Boyd made this statement, Lonza 

derived more than 50% of its revenue from biologic CDMO services.260 In contrast, 

259 The record in this matter also includes vague testimony about what is, at this point, 

perhaps best described as the witnesses’ recollections of the “atmospherics” of the 

negotiations. In the heat of this litigation, I do not find this sort of testimony particularly 

reliable or helpful. Instead, my sense is that such testimony is, perhaps unintentionally, 

informed by the litigation and the outsize importance these matters now have. In any event, 

I find that the parties did not actually express the views about “biopharmaceutical” that 

they now suggest could have been gleaned from the overall context of the discussions. See 

United Rentals, Inc. v. RAM Hldgs., Inc., 937 A.2d 810, 835 (Del. Ch. 2007) (“[T]he 

private, subjective feelings of the negotiators are irrelevant and unhelpful to the Court’s 

consideration of a contract’s meaning, because the meaning of a properly formed contract 

must be shared or common.”) (cleaned up). Indeed, the lack of such discussions is 

consistent with the understanding that “biopharmaceutical” was, and is, unambiguous. 

260 JTX 249 at 108; JTX 233 at 92. For purposes of this Memorandum Opinion, “revenue 

from biologics” encompasses Lonza’s revenues from both the “Biologics” and “Cell & 

Gene” segments identified in Lonza’s business segment reporting within its annual reports.
64

Catalent derived 29% of its revenue from biologics in June 2019 and 33% of its 

revenue from biologics in June 2020.261 Boyd, PSG’s lead negotiator, testified that

he understood PSG Competitor to mean “anyone that derives 50 percent of their 

revenue as a CDMO” and used Catalent and Lonza as examples to convey this 

understanding.262

At first blush, this evidence could support interpreting “biopharmaceutical” 

as meaning both biologics and small-molecule drugs since Catalent derived less than 

50% of its revenue from biologic CDMO services. However, this initial impression 

261 JTX 080 at 53; JTX 213 at 50. For purposes of this Memorandum Opinion, “revenue 

from biologics” encompasses Catalent’s revenues from the “Biologics and Specialty Drug 

Delivery” segment identified in Catalent’s business segment reporting within its annual 

reports.

262 TT27:16–28:1 (Boyd). I note that PSG makes much of the fact in its briefing that Boyd 

is no longer employed with PSG. Pl.’s AB at 16 (stating that Boyd “stand[s] to gain nothing 

from the outcome of this litigation” because he “now works for Catalent, a prime 

competitor of [PSG]”). Boyd, however, was the key negotiator for PSG and is still a highlevel employee in the industry. TT7:8–16 (Boyd) (testifying that he is currently the vice 

president of finance for cell, gene, and protein therapies at Catalent). PSG’s suggestion 

that Boyd does not care about the outcome of this dispute is unreasonable, if for 

reputational purposes alone. This may explain why Boyd’s testimony came across as 

stilted at trial. In any event, based on Boyd’s and Bamforth’s testimony at trial, it does not 

appear that anyone at either PSG or Arranta actually assessed the exact percentage of 

revenue each of Catalent and Lonza derived from biologics. Instead, it appears that all 

parties relied on their general industry knowledge. See TT58:20–59:4 (Boyd) (“Q: So –

and you testified, I believe, that you thought Catalent had roughly 25 percent of its revenue 

derived from biologics? A: Correct. Q: That’s from your memory; right? A: That is. Q: 

You didn’t do an analysis to show what that number is; correct? A: I did not.”); TT155:23–

156:2 (Bamforth) (“Q: Did you look at Lonza’s revenues to confirm that it met the 

definition of ‘PSG Competitor’ when Mr. Boyd raised it during the negotiations? A: I did 

not.”); TT157:6–10 (Bamforth) (“Q: When Mr. Boyd raised Catalent as an example of a 

potential PSG Competitor, did you look at Catalent’s revenues to confirm whether or not 

it met the definition? A: No.”).
65

fades under scrutiny. Around the time the parties negotiated the Supply Agreement, 

Catalent was aggressively growing its biologics business.

263 Indeed, as of June 30, 

2022—just two years after signing—Catalent derived more than 50% of its revenue 

from biologics.264 Both Boyd and Bamforth knew of Catalent’s aggressive 

expansion in biologics and that it could be a potential acquiror of Arranta during the 

nine-year term of the Supply Agreement.

265

To the extent Boyd was trying to convey his subjective belief that 

“biopharmaceutical” meant both small-molecule drugs and biologics, Catalent was 

an odd example to use given the general awareness of Bamforth and Boyd as to its 

aggressive acquisition strategy.

266 This is particularly the case considering the nine263 Catalent stated in its 2020 10-K that “[i]n large part due to our recent acquisitions and 

their subsequent organic growth, revenue contributions from our biologics business have 

grown from approximately 10% in fiscal 2014 to 33% in fiscal 2020.” JTX 213 at 7. That 

10-K further states that “[w]e believe our own internal innovation, supplemented by current 

and future external partnerships and acquisitions, will continue to strengthen and extend 

our leadership positions in the delivery and development of drugs, biologics, cell and gene 

therapies, and consumer health products.” Id.

264 JTX 378 at 7.

265 See TT59:22–66:13 (Boyd) (PSG’s lead negotiator acknowledging his awareness at the 

time the Supply Agreement was negotiated that Catalent had spent billions of dollars since 

2017 to acquire biologics businesses and expand into the biologics market); TT156:11–

157:5 (Bamforth) (Arranta’s lead negotiator stating that, while he was not aware of 

Catalent’s percentage of revenue from biologics during negotiations, he was aware that 

Catalent was very active in the biologics CDMO sector and had prior conversations with 

Catalent’s CEO, who described the company’s intention to expand rapidly in the biologics 

area).

266 Instead, one would expect Boyd to have used an example of a CDMO that had no or 

very little biopharmaceutical activity (like Recipharm)—or to have simply and 

straightforwardly said any CDMO. 
66

year term of the Supply Agreement—practically speaking, and considering the 

business context of the negotiations, it was not as relevant who was a PSG 

Competitor at the time of signing but who might be a PSG Competitor in the nearto intermediate-future when a sale transaction might more reasonably be expected to 

occur.

267 Lonza already derived over 50% of its revenue from biologics. Catalent 

was trending in that direction, and, within two years from the date of the Supply 

Agreement—indeed, at approximately the time of the Merger—it derived over 50% 

of its revenue from biologics.

In addition to these examples, PSG points to two other pieces of extrinsic 

evidence from the time of negotiation to support its asserted meaning of 

“biopharmaceutical.” First, in contemporaneous notes from April 2020 that refer to 

Section 18.4, Bamforth wrote, “Cannot have sale to Competitor (CDMO).”268 

Second, on May 12, 2020, Favaloro sent an email to certain Arranta investors where 

he wrote that “the basis of the push on assignability [ ] is to ensure the protection of 

[PSG] clients in the instance a Catalent or Lonza were to acquire the business.”269 

In a subsequent email to these same investors on May 26, 2020, Bamforth stated that 

267 For example, Lagarde testified at his deposition that he understood that Bamforth’s 

business model was to develop new ventures with private equity seed money with the goal 

of selling the company a few years later to monetize the private equity investors’ 

investment. Lagarde Dep. 104:2–11.

268 JTX 399 at 70.

269 JTX 153.
67

PSG “wanted the right to block a sale to a Competitor,” and wrote that “Competitor” 

meant “>50% CDMO business.”270

I ultimately conclude that these notes and emails support neither Arranta nor 

PSG. Favaloro’s email on May 12, 2020, is consistent with the conclusion that Boyd 

told Arranta’s negotiators that Catalent and Lonza were examples of PSG 

Competitors but never explained that those examples stood in for “any CDMO.” 

Concerning Bamforth’s handwritten notes and email, Bamforth testified that he was 

using shorthand.271 This seems entirely reasonable. Having observed Bamforth’s 

testimony, I am in no way surprised that he did not take the time to write a short note 

or email with the lawyerly precision that PSG suggests is now fatal to Arranta’s case. 

These tea leaf facts are ultimately too thin a reed to support the weight that PSG 

requires them to bear.

Thus, though extrinsic evidence is ultimately irrelevant to my analysis since 

“biopharmaceutical” is unambiguous, the communications from the time of 

negotiation either tend to support or at least are consistent with the conclusion that 

“biopharmaceutical” means drugs derived from biologics only. 

270 JTX 161.

271 TT163:20–164:21 (Bamforth).
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b. The Remaining Extrinsic Evidence Is Irrelevant

The parties focused much of the trial on three other categories of extrinsic 

evidence: evidence surrounding the potential acquisition of the Watertown Facility 

by AMRI, evidence surrounding the Merger, and other agreements involving PSG 

and third parties. As already noted, extrinsic evidence unrelated to the time of 

contract is generally not relevant in determining the parties’ intended meaning of an 

ambiguous term.272 This is doubly the case considering “biopharmaceutical” is not 

ambiguous. Therefore, I expressly do not address this remaining extrinsic evidence 

considering it is irrelevant to my analysis.

B. Additional Arguments Not Addressed In This Memorandum 

Opinion

Arranta argues that PSG’s claims fail for additional reasons. First, Arranta 

argues that Section 18.4 requires that Arranta assign the Supply Agreement before 

PSG’s right to deem a Termination for Convenience is triggered.273 Second, Arranta 

argues that a reverse triangular merger involving its grandparent, Arranta Holdings, 

did not constitute a Change of Control Transaction.274 Per Arranta, this is because a 

condition to any Change of Control Transaction under the Supply Agreement is that 

272 See, e.g., supra Section II.A.2.

273 Def.’s Post-Trial OB at 33–36; Def.’s Post-Trial AB at 5–10.

274 Def.’s Post-Trial OB at 36–42; Def.’s Post-Trial AB at 10–13.
69

Arranta be a party to the applicable transaction.275 Third, Arranta argues that the 

“counterparty” to Arranta Holdings’ in the Merger was Arranta Holdco Inc. (not

Recipharm) because it was the “Buyer” of Arranta Holdings.276 Per Arranta, because 

Arranta Holdco Inc. did not derive any revenue from CDMO services, it would not 

be a PSG Competitor.277 Finally, Arranta raised certain equitable defenses. 

Because I have concluded that Recipharm is not a PSG Competitor, which is 

a condition to PSG’s right to trigger a Termination for Convenience by Arranta, I 

need not reach these other arguments. It is quite notable, however, that with respect 

to which entity was the counterparty to the Merger, PSG’s arguments resort to 

assertions that I apply the step-transactions doctrine and ignore corporate 

formalities. PSG’s reliance on these theories suggests further problems in its 

position concerning Section 18.4.

In summary, “biopharmaceutical” unambiguously means drugs derived from 

living organisms (i.e., biologics) and does not include small-molecule 

pharmaceuticals. Thus, a PSG Competitor is a “Third Party whose business derives 

275 Def.’s Post-Trial OB at 36–42; Def.’s Post-Trial AB at 10–13.

276 Def.’s Post-Trial OB at 42–43; Def.’s Post-Trial AB at 13–14. See also JTX 296 at 17 

(“This Agreement and Plan of Merger . . . is by and among Arranta Holdco Inc., a Delaware 

corporation (“Buyer”) . . . Recipharm AB (publ), a corporation incorporated under the laws 

of Sweden (“Recipharm”), solely with respect to Section 10.19 of this Agreement . . . [and] 

Arranta Bio Holdings, LLC, a Delaware limited liability company (the “Company”)[.]”).

277 Def.’s OB at 43; Def.’s Post-Trial AB at 14.
70

at least fifty percent (50%) of its revenues from performing contract [biologics] 

development or commercial manufacturing services.” It is undisputed that 

Recipharm did not derive at least 50% of its revenues from biologic CDMO services. 

Therefore, PSG had no right to deem the Merger a Termination for Convenience by 

Arranta.

III. CONCLUSION

For the foregoing reasons, Counts II and III of PSG’s Complaint must be 

dismissed, and Arranta is entitled to judgment in its favor on Count I of its 

counterclaims. The parties are directed to confer and submit a proposed form of 

order within three business days.