Court Opinion

ID: 4705120
Source: CourtListenerOpinion
Date Created: 2021-07-21 14:02:40.670288+00
Date Added: 2024-06-11T08:06:06.519173
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

PAREXEL INTERNATIONAL (IRL)    )
LIMITED,                       )
                               )
                    Plaintiff, )
                               )
      v.                       )                 C.A. No. N19C-07-103
                               )                          PRW CCLD
XYNOMIC PHARMACEUTICALS,       )
INC.,                          )
                               )
                   Defendant. )

                            Submitted: May 26, 2021
                             Decided: July 21, 2021

                          DECISION AFTER TRIAL

A. Thompson Bayliss, Esquire, April M. Kirby, Esquire, ABRAMS & BAYLISS LLP,
Wilmington, Delaware; Kurt S. Kusiak, Esquire, FITCH LAW PARTNERS LLP,
Boston, Massachusetts; Martin F. Mahoney, II, Esquire, Parexel International,
Newton, Massachusetts. Attorneys for Plaintiff Parexel International (IRL) Limited.

Lisa Zwally Brown, Esquire, Samuel L. Moultrie, Esquire, GREENBERG TRAURIG,
LLP, Wilmington, Delaware. Attorneys for Defendant Xynomic Pharmaceuticals,
Inc.

WALLACE, J.
                     I. FACTUAL AND PROCEDURAL BACKGROUND

          This is a breach-of-contract action through which Plaintiff Parexel

International        (IRL)   Limited    seeks     damages   from   Defendant   Xynomic

Pharmaceuticals, Inc., for the latter’s failure to pay numerous outstanding invoices.1

          In the spring of 2018, Xynomic engaged Parexel to launch and conduct global

clinical trials in support of Xynomic’s development of Abexinostat, a cancer treating

biopharmaceutical product.2 Parexel and Xynomic memorialized their contractual

relationship in a Master Services Agreement (“MSA”).3 The MSA governed the

parties’ performance of specific services through the execution of work orders.4

In July 2018, the parties executed their first work order, Work Order for Project

No. 240681 (“Work Order 1”), and in December 2018, the parties executed a second,

Work Order for Project No. 241812 (“Work Order 2”).5

          On July 12, 2019, following Xynomic’s default on numerous invoices,

Parexel brought suit against Xynomic.6

1
    Am. Compl. ¶¶ 97-112, Oct. 31, 2019 (D.I. 15).
2
    Id. ¶ 6.
3
    Id.
4
    Id. ¶ 7.
5
    Id. ¶¶ 13, 71.
6
    Compl. ¶¶ 80-82, July 12, 2019 (D.I. 1).
                                                -1-
           Soon after, Parexel and Xynomic both filed Motions for Summary Judgment.7

Parexel sought summary judgment on Counts I (Breach of Work Order 1) and II

(Breach of Work Order 2) of its Amended Complaint, contending there were no

factual issues in dispute.8 Xynomic sought summary judgment on both of Parexel’s

claims, arguing the Court lacked subject matter jurisdiction over this suit.9

           In September 2020, the Court denied Xynomic’s subject matter jurisdiction

challenge as moot, and denied Parexel’s summary judgment motion as to Count I

(Breach of Work Order 1), finding that Parexel had, as the record then stood, “not

met its burden in showing that it performed or was ready to perform its obligations

under the MSA and the First Work Order before Xynomic allegedly breached.”10 As

to Count II (Breach of Work Order 2), however, the Court found no dispute of

material fact existed           and granted Parexel’s motion.11

           Consequently, the only issue remaining here is Count I (Breach of Work Order

1) of Parexel’s Amended Complaint.

7
    Parexel’s Mot. for Partial Summ. J., Dec. 23, 2019 (D.I. 21); Xynomic’s Mot. for Summ. J.,
Jan. 24, 2020 (D.I. 24).
8
     Parexel’s Mot. for Partial Summ. J. at 12.
9
     Xynomic’s Mot. for Summ. J. at 7.
10
   Parexel Int’l (IRL) Ltd. v. Xynomic Pharms., Inc., 2020 WL 5202083, at *7 (Del. Super. Ct.
Sept. 1, 2020).
11
     Id.

                                                  -2-
                                         II. THE TRIAL

        The Court conducted a three-day bench trial. And the case was deemed fully

submitted for decision after the parties submitted their post-trial briefing.12

        During trial, the Court heard from and considered the testimony of the

following witnesses:

        Francesco Paronelli                             Joseph Scott
        Vineeta Prasad                                  Wentao Jason Wu
        Erin Williams                                   Sophia Paspal
        Bradley McClellan                               Yinglin Mark Xu
        Ronald Kraus

        The parties also submitted an extensive number of exhibits, most of which

were admitted without objection and are cited herein by their designations as joint

exhibits.13

                                   III. FINDINGS OF FACT

        It is difficult at times in the trial of certain actions to fully and cleanly

segregate findings of fact from conclusions of law. To the extent any one of the

Court’s findings of fact here might be more appropriately viewed as a conclusion of

law, that finding of fact may be considered the Court’s conclusion of law on that

point.14

12
     D.I. 76.
13
     Joint Trial Exs. List, Jan. 26, 2021 (D.I. 64).
14
    See Facchina Constr. Litigs., 2020 WL 6363678, at *2 n.12 (Del. Super. Ct. Oct. 29, 2020)
(collecting authority).
                                                  -3-
     A. THE PARTIES AND THE DRUG ROLL OUT.

        Parexel is an Irish corporation with its headquarters in Billerica,

Massachusetts. Parexel is a clinical research organization providing its clients with

“clinical research, drug development, medical communications, data management,

[and] market access planning” services.15

        Xynomic is a Delaware corporation with its headquarters in Shanghai,

China.16      Xynomic is in the business of “develop[ing], manufactur[ing], and

marketing biopharmaceutical oncology products.”17

        Relevant here, Xynomic was in the process of rolling out its “most critical

project”—Abexinostat, a cancer treating drug.18 During this time, Xynomic had

been conducting the clinical trial phase of its roll out and was seeking a clinical

research organization to assist with phase three of its clinical trial.19

     B. THE MSA, WORK ORDER 1,               AND THE       SUBSEQUENT BREAKDOWN     OF THE
        PARTIES’ RELATIONSHIP.

        In April 2018, the parties executed the MSA through which Parexel was to

15
     Am. Compl. ¶ 1.
16
    Id. ¶ 2; About Us, XYNOMIC PHARMA, http://xynomicpharma.com/en/506-11/ (last visited July
20, 2021).
17
     Am. Compl. ¶ 2.
18
     Trial Tr., Jan. 27, 2021 AM (Xu), at 120 (D.I. 74).
19
     Id. at 121-22, 197.
                                                -4-
provide clinical research services for Abexinostat’s phase three clinical trials.20

The MSA structured the parties’ arrangement in subsequently executed work orders,

which outlined details and terms of services to be performed.21

        The MSA required Xynomic to pay for three things: (1) Parexel’s service

fees; (2) Parexel’s out-of-pocket expenses; and, (3) any other payments Parexel and

its affiliates would make to third parties in connection with services under the work

orders (“pass-through fees”).22 The MSA also prescribed invoicing procedures:

(1) the undisputed portions of any invoice for services performed under the MSA

and any work order were due thirty (30) days from receipt; (2) any disputed invoiced

items had to be raised, with notice to Parexel in writing and with specificity, within

ten (10) business days of the invoice date; (3) any invoiced items that were not

disputed by Xynomic within ten (10) business days of the invoice date were deemed

approved; and, (4) interest was to be paid on any unpaid invoice at the rate of one

percent (1%) until such invoice is paid in full.23

20
   Pretrial Stip. Order ¶ 20, Jan. 7, 2021 (D.I. 60) (hereinafter “PSO”); Joint Exhibit (hereinafter
“JX”)-252 (MSA).
21
     PSO ¶ 22; JX-252 (MSA § 2.1).
22
     PSO ¶ 24; JX-252 (MSA § 4.1).
23
     JX-252 (MSA § 4.2).
                                                -5-
        In July 2018, the parties executed Work Order 1 for services related to

Abexinostat’s clinical research studies.24 The official name of the study was

“Protocol XYN602: A Randomized, Phase 3, Double-blind Placebo-controlled

Study of Pazopanib With or Without Abexinostat in Patients with Locally Advanced

or Metastatic Renal Cell Carcinoma.”25 This study was expected to take place over

a five-year period ending in October 2023.26

        Exhibit A of Work Order 1 outlined the scope and specifications of the

services Parexel was to perform under Work Order 1.27 Of significance to Xynomic,

Exhibit A laid out the “three most important parameters” of the scope of

Work Order 1:28

        (1) The nine countries to be included in the study: China, Czech
            Republic, France, Italy, South Korea, Poland, Spain, the United
            Kingdom, and the United States.

        (2) The number of test sites in each country, totaling seventy-five:
            twenty in China, three in Czech Republic, six in France, nine
            in Italy, five in South Korea, seven in Poland, five in Spain,
            five in the the United Kingdom, and fifteen in the United States.

24
     PSO ¶ 24; JX-15 (Work Order 1) (effective Sept. 3, 2018).
25
     JX-15 (Work Order 1).
26
     JX-15 (Work Order 1, Ex. C) (estimated timeline spanning from Apr. 2018 to Oct. 2023).
27
     JX-15 (Work Order 1, Ex. A).
28
   Trial Tr., Jan. 27, 2021 AM (Xu), at 128. These parameters were highly important to Xynomic
because the “ultimate end points that would allow the drugs to be approved or disapproved by
agencies, including [the] FDA, are the number of patients.” Id.
                                               -6-
        (3) The number of patients enrolled—534 screened patients and
            413 patients enrolled in the study.29

        Exhibit B of Work Order 1 set out the tasks and responsibilities to be

undertaken by each party.30 And Exhibit C set forth estimated timelines for the

services Parexel was to provide under Work Order 1.31

        Work Order 1 provided for $41,279,270 of payments to Parexel throughout

the five-year course of the study.32 Together, the MSA and Work Order 1 provided

for three types of payments:

        (1) Milestone Payments—which were only due upon Parexel’s
            completion of the identified achievements in Exhibit G of Work
            Order 1;

        (2) Monthly Payments—which amounted to sixty-three monthly
            payments of $187,498 from August 2018 to October 2023, and
            were due regardless of whether work was actually done; and,

        (3) Pass-through and Investigator Fees—which Xynomic was to
            make in the form of two advance payments of $1 million upon
            the execution of Work Order 1.33

29
     JX-15 (Work Order 1, Ex. A).
30
     JX-15 (Work Order 1, Ex. B).
31
     JX-15 (Work Order 1, Ex. C).
32
     JX-15 (Work Order 1 at 1).
33
     JX-252 (MSA § 4.1); JX-15 (Work Order 1, Ex. G).

                                            -7-
        Shortly after the execution of Work Order 1, the parties’ relationship began to

deteriorate. Most notably, Xynomic became increasingly dissatisfied with Parexel’s

performance in China.34 Related to the studies to be conducted in China, Xynomic

criticized: the communication between Parexel’s global team and its local team in

China; Parexel’s lack of effort regarding patient recruitment; mistakes made in key

documents; and the Clinical Research Assistant hired by Parexel.35 In late August

2018, Xynomic and Parexel representatives met to discuss the issues regarding the

China study.36 The parties were unable to resolve the issues raised, leading to

Xynomic’s eventual termination of Parexel’s services in China on April 16, 2019.37

        From October 31, 2018, to June 18, 2019, Parexel sent Xynomic twenty-five

invoices for services rendered, milestones accomplished, and pass-through fees

34
    Xynomic Post-Trial Br. at 11, Mar. 10, 2021 (D.I. 69). Xynomic now criticizes Parexel’s
performance outside of China as well. See, e.g., id. at 13-19 (identifying the issues including:
Parexel’s failure to conduct Site Initiation Visits; errors and inconsistencies made in the Informed
Consent Form given to trial participants; Parexel’s inability to record data according to regulatory
requirements; failure to properly submit regulatory reports and applications; failure to initiate Sites
and enroll patients in the United Kingdom, Italy, France, and Czech Republic; and failure to adhere
to Exhibit C’s expected timeline).
35
     Trial Tr., Jan. 26, 2021 (Wu), at 218-20, 230 (D.I. 74).
36
     JX-255 (XYN-602 F2F Meeting Presentation).
37
    JX-274 (Apr. 16, 2019 e-mail terminating Parexel’s services in China). Even still, the parties
executed a change order to Work Order 1 to reflect additional responsibilities taken on by Parexel
just the day before Xynomic’s termination notice. JX-111 (Form of Change Order).

                                                 -8-
incurred and expected under Work Order 1.38 Xynomic did not object to any of the

amounts reflected in any of the invoices within ten (10) days of the invoice date.39

Between March and May 2019, Xynomic and Parexel attempted to implement new

payment plans for the full payment of Xynomic’s outstanding balance, but Xynomic

failed to meet the payment schedules it proposed.40 Following these defaults,

Parexel informed Xynomic that it would continue its support related to patient safety

for current active sites and patients, but that it would not initiate any additional

sites.41

38
   PSO ¶¶ 31-84. This does not include two invoices for advances toward pass-through fees
pursuant to Exhibit G of Work Order 1. Parexel Post-Trial Br. at 8, Mar. 10, 2021 (D.I. 70).
39
     PSO ¶¶ 33-84.
40
    PSO ¶ 109; JX-106 (E-mail from Y. Mark Xu (“Xu”), Chairman, Chief Exec. Officer, &
President, Xynomic Pharms., Inc., to Joe Scott (“Scott”), Senior Vice President of Fin., Parexel
Int’l (IRL) Ltd., Re: Xynomic Pharmaceuticals - Discussion on Outstanding Payments (Mar. 12,
2019)); JX-117 (E-mail from Xu, to Scott, Re: Proposed plan to pay off outstanding invoices (Apr.
6, 2019)); JX-119 (E-mail from Xu, to Scott, Re: Proposed plan to pay off outstanding invoices),
(Apr. 10, 2019)); JX-121 (Xu and Scott planning via e-mail a time to discuss a proposed payment
plan).
41
    JX-137 (E-mail from Ron Kraus (“Kraus”), Corp. Vice President, Parexel Int’l (IRL) Ltd., to
Xu, Re: Follow up (Apr. 18, 2019)) (“As we agreed, PAREXEL will begin a slow down process
regarding services on the project due to the impact of the substantial overdue amount and to
mitigate PAREXEL’s further financial risk. With immediate effect we plan to continue our support
related to patient safety for the current actives [sic] sites and patients but will no longer initiate
additional sites or continue with the pending protocol amendment submissions.”); JX-137 (E-mail
from Xu, to Kraus, and Scott, Re: Follow up (Apr. 22, 2019)) (“I will advise my project team
regarding the slowdown of activities.”).

                                                 -9-
        In May 2019, Xynomic made two $500,000 payments to Parexel. The parties

agreed this $1,000,000 would be applied to Xynomic’s oldest outstanding invoices.42

Also in May 2019, after Xynomic continued to miss its scheduled payments, Parexel

informed Xynomic that it would not initiate any new sites until Xynomic became

current on its outstanding balance.43 On May 24, 2019, Parexel sent Xynomic a

Notice of Material Breach of the MSA and Work Order 1.44 MSA Section 5.2

required Xynomic to cure its material breach within thirty (30) days from receipt of

that notice.45 Xynomic didn’t. Instead, Xynomic continued to make empty promises

of payment.46

42
    JX-179 (E-mail from Xu, to Scott, Re: Xynomic SOA as of 6-3-2019 (June 10, 2019)); Trial
Tr., Jan. 26, 2021 (McClellan), at 49-50.
43
    JX-147 (E-mail from Kraus, to Xu, Re: Follow-up (PAREXEL) (May 4, 2019)) (“We remain
very concerned with the outstanding balance due to PAREXEL and are disappointed by Xynomic’s
failure to make the $2.5M payment by April 30th that you agreed to last month. We have been
involved in discussions regarding the substantial past due amounts for months now and this is not
the first instance in which promised payments by Xynomic had not been made. As a result, we
must stop all enrollment activities until we receive payment of all open invoices.”).
44
   JX-334 (Letter from Martin F. Mahoney II (“Mahoney”), Corp. Vice President, Assoc. Gen.
Couns. & Chief Compliance Officer, Parexel Int’l (IRL) Ltd., to Chasey Zhang (“Zhang”), Vice
President of Global Strategic Sourcing & Operations, Xynomic Pharms., Inc., Re: Notice of
Material Breach of Master Services Agreement (May 24, 2019)).
45
     JX-252 (MSA § 5.2).
46
    JX-167 (E-mail from Xu, to Scott, Re: Discount (June 1, 2019)) (Xu proposing to pay of all
invoices by June 28, 2019); JX-180 (E-mail from Xu, to Scott, Re: Status (June 12, 2019)) (Xu
stating that Xynomic remained “committed to pay the outstanding invoices by the end of June”).

                                              -10-
        In July 2019, Parexel brought this action seeking payment owed under the

MSA and Work Order 1.47 In September 2019, Parexel ceased all Work Order 1’s

non-patient-safety work.48 Xynomic tried to get Parexel to resume its work under

Work Order 1 by continuing to promise full payment of its outstanding invoices.49

These attempts were unsuccessful and on October 31, 2019, Parexel amended its

complaint in this action to include additional incurred invoices Parexel had

submitted to Xynomic.50 Parexel is now seeking the total unpaid remainder on those

invoices—$5,530,579.30—and corresponding interest.51

     C. TRIAL TESTIMONY.

        Parexel’s first witness in this three-day trial was Francesco Paronelli, a Senior

Project Leader with Parexel, who explained the MSA and Parexel’s role in

Xynomic’s clinical trials.52 Mr. Paronelli testified that the parties signed a change

47
     Compl. (D.I. 1).
48
     Trial Tr., Jan. 25, 2021 (Prasad), at 214-15 (D.I. 74).
49
    JX-241 (E-mail from Xu, to Kraus, Re: Notification – Action Needed {[Parexel]} (Oct. 8,
2019)) (“We will do our ABSOLUTE best to pay the invoices as soon as we complete our next
financing. In the meantime, please provide the minimum support we need for this XYN-602
study.”); JX-245 (E-mail from Jason Wu (“Wu”), Chief Operating Officer, Xynomic Pharms., Inc.,
to Scott, Re: Fw: XYN-602 Trial Discussion (Nov. 7, 2019)).
50
     Am. Compl. (D.I. 15).
51
    Am. Compl. ¶¶ 69, 103; Parexel’s Post-Trial Br. at 35. This figure excludes (i) the $2 million
advance payment of the pass-through and investigator fees that was to be paid by Xynomic at the
execution of Work Order 1; and (ii) the $1 million Xynomic paid Parexel in May 2019. Id. at 8
n.17.

                                                 -11-
order to Work Order 1 in or around April 2019 that reflected the additional

responsibilities Parexel took on.53

         Mr. Paronelli laid out the responsibilities of Parexel under Work Order 1 and

how the contract provided for both regular monthly payments and milestone-based

payments; the latter of these required Parexel to achieve certain performance

milestones to receive compensation.54 In addition to describing the milestone

structure of the contract, Mr. Paronelli explained that the contract allowed Parexel

to invoice Xynomic in advance for the investigator and pass-through fees.55

         Mr. Paronelli told the Court that Parexel had performed services in China

before Xynomic suspended Parexel’s services there.56 According to Mr. Paronelli,

after Xynomic suspended Parexel’s work in China, Parexel “met at the global level

52
     Trial Tr., Jan. 25, 2021 (Paronelli), at 21-24.
53
   Id. at 26-29 (citing JX-128 (E-mail from Zhang, to Francesco Paronelli (“Paronelli”), Senior
Project Leader, Parexel Int’l (IRL) Ltd., Re: PXL240681_Xynomic_CO1_02Apr_2019.docx
(Apr. 16, 2019))).
54
     Id. at 32-34.
55
     Id. at 35.
56
     Id. at 39, 42-44 (“Q: And how much work did Parexel perform in China? A: Mainly we created
the basis or the ground to have the study run in China. We did enough for the main, the most
important, the main site in China. We also obtained the authorizations, so we went through all the
ground activities for these site[s].” (citing JX-305 (slide deck prepared for a meeting with Xynomic
listing services Parexel performed))).

                                                  -12-
a couple of times and . . . organized several meeting[s] on the kind of one-to-one to

transfer and to train our counterpart . . . on how to run the global study.”57

           In response to Xynomic’s allegations that Parexel underperformed, or failed

to perform in China, Mr. Paronelli admitted that “[t]here were some

miscommunication or communication problem[s,]” but Parexel addressed those

issues through staffing changes.58 To Mr. Paronelli, any issue that remained was

attributable to Xynomic.59 Additionally, Mr. Paronelli testified that Parexel and

Xynomic mutually agreed to stop performing activities in certain countries due to

either: (1) a joint agreement to do so or, (2) Xynomic’s failure to pay Parexel.60

Specifically addressing services in the United Kingdom, Mr. Paronelli said that

Xynomic and Parexel jointly agreed to “hold on activities . . . waiting for a new

protocol to be created.”61

           Mr. Paronelli explained that, other than certain communications issues in

China, Xynomic had not raised, either when they allegedly occurred or shortly

57
   Id. at 46 (citing JX-333 (E-mail from Hui Liu, Project Director, PPC, to numerous recipients,
Re: Communication on XYN-602 (May 21, 2019))).
58
     Id. at 48.
59
     Id.
60
     Id. at 68.
61
     Id. at 76.

                                             -13-
thereafter, any of the issues it now alleges against Parexel.62 He also clarified that

only after this litigation commenced did he learn of any complaints, besides the

China study, that Xynomic had with Parexel’s service or performance.63

         Next, Parexel’s Director of Project Leadership, Vineeta Prasad, described her

interactions with Xynomic and what data Xynomic had access to.64 Ms. Prasad

testified that Parexel only billed Xynomic for the work Parexel actually performed

in China.65 Additionally, she said that, through the course of the clinical trial,

Xynomic had access to the electronic trial master file for each study, and moreover

was provided all necessary information, data, and vendor contracts. 66 Around

September 2019, after Xynomic ended Parexel’s work in China, Ms. Prasad said

Parexel shut down access to the imaging database, but did not shut down access to

62
   Id. at 111-65; see, e.g., id. at 97 (testifying that Xynomic had not raised any issues with
Pazopanib being classified as a Non-Investigational Medicinal Project); id. at 102 (testifying that
Xynomic had not raised any issues with the Informed Consent Form given to trial participants
before litigation).
63
     Id. at 165.
64
     Trial Tr., Jan. 25, 2021 (Prasad), at 201-05.
65
     Id. at 208-09.
66
     Id. at 210-14.

                                                 -14-
any safety-related data or information.67 Ms. Prasad confirmed that Xynomic never

complained about the work performed by Parexel or about any of the invoices.68

           On the second trial day, Erin Williams, Parexel’s Senior Director and Global

Head of Site Contracts, testified.69 Ms. Williams countered Xynomic’s assertions

about Parexel’s billing practices. Specifically, Ms. Williams testified that the United

States clinical site agreement did not provide that Pazopanib, a drug used in the

clinical trial, was within the standard of care.70 So, Pazopanib would not be covered

by insurance and Xynomic was, therefore, contractually obligated to reimburse

Parexel for this drug as a pass-through fee.71

           Bradley McClellan, Parexel’s Senior Finance Business Partner, then clarified

the billing procedures under Work Order 1 and the MSA.72 Mr. McClellan explained

that, as the contract was partially milestone-based, Parexel could not invoice

Xynomic certain sums until certain milestones were achieved.73 Mr. McClellan

described the investigator fees as the “expenses that confirm individual sites that are

67
     Id. at 216.
68
     Id. at 219.
69
     Trial Tr., Jan. 26, 2021 (Williams), at 6-8.
70
     Id. at 15-17.
71
     Id.
72
     Id. at 23-24 (McClellan).
73
     Id. at 25, 32.
                                                    -15-
treating patients.”74 And he described the pass-through fees as those expenses

incurred by third-parties, including Parexel employees.75 Parexel makes no profit

on either the investigator or pass-through fees.76 And the invoices Parexel sent

Xynomic included individual sites and individual expenses broken down to the

“granular level.”77

         According to Mr. McClellan, under the MSA’s dispute provision, Xynomic

had ten days to dispute any invoiced charge, and if Xynomic didn’t dispute an

invoice, Parexel would, per the MSA’s language, deem that invoice approved.78

Mr. McClellan went through a number of invoices that Xynomic never objected to.79

         As to the investigator and pass-through fees, Mr. McClellan recounted that

the contract provides that Parexel invoice each of these $1 million fees in advance,

yet Xynomic paid neither of those advance fees.80

74
     Id. Examples of these fees include lab visits, lab fees, and any site visits or expenses.
75
     Id. at 26-27.
76
     Id. at 26-28.
77
     Id. at 26.
78
     Id. at 29 (citing JX-252 (MSA § 4.2)).
79
     Id. at 45.
80
     Id. at 33.

                                                 -16-
         Next, Ronald Kraus, former Corporate Vice President and Head of Global

Project Leadership for Parexel, outlined Xynomic’s outstanding payments due.81

And Mr. Kraus confirmed that Xynomic never raised any Parexel performance

issues during the many pre-suit discussions trying to resolve its delinquencies.82

         Mr. Kraus told of the April 16, 2019 phone call with Xynomic’s Yinglin Mark

Xu concerning Xynomic’s next steps to pay Parexel for outstanding invoices. He

recalled that Xynomic failed to make the payment that Mr. Xu promised for the

following week of April 22, 2019.83 Mr. Xu had then said Xynomic would start

making all outstanding late-invoice payments during the week of May 15, 2019; it

didn’t.84 Mr. Kraus acknowledged that Xynomic did pay some outstanding balances

to Parexel, but that Xynomic was still well behind on its total outstanding invoices.85

         As observed, Parexel sent Xynomic a Notice of Material Breach, which gave

Xynomic thirty days to cure the alleged breach.86 After this notice, Xynomic asked

81
     Id. at 87-97 (Kraus).
82
     Id. at 97.
83
   Id. at 101-02; see also JX-140 (E-mail from Kraus, to Xu, Re: Follow up (Apr. 16, 2019))
(memorializing conversation).
84
   Trial Tr., Jan. 26, 2021 (Kraus), at 113; see JX-155 (E-mail from Xu, to Kraus, Re: Quick
update (May 20, 2019)).
85
     Trial Tr., Jan. 26, 2021 (Kraus), at 116.
86
   Id. at 119, 121 (citing JX-334 (Letter from Mahoney, to Zhang, Re: Notice of Material Breach
of Master Services Agreement (May 24, 2019))).
                                                 -17-
Parexel to continue working on the clinical trials and promised it was raising the

money to pay Parexel.87 Again, Mr. Kraus affirmed that Xynomic simply never

raised concerns or issues with Parexel’s performance—neither before nor after

Parexel sent the Notice of Material Breach.88 The core of Mr. Kraus’s testimony:

Xynomic continued to promise to pay Parexel the full amount due, but that just never

happened.89

         Dr. Wentao Jason Wu, Xynomic’s co-founder and its current Chief Operating

Officer, took the stand to detail the clinical trials.90 According to Dr. Wu, Xynomic

was dependent on Parexel’s knowledge and connections in the countries where its

trials were being conducted.91

         Xynomic was obligated to pay monthly invoices that were separate from the

milestone payments and were due each month regardless of the work performed.92

Dr. Wu offered that “if [he] ha[d] [the] chance to redo the contract, [he] wouldn’t

87
     Id. at 139-40.
88
     Id. at 127.
89
     Id. at 143.
90
     Id. at 183, 192-93 (Wu).
91
     Id. at 197.
92
     Id. at 214-15.

                                        -18-
construct the contract this way[,]” i.e. with monthly payments due regardless of work

performed.93

        According to Dr. Wu, Parexel didn’t complete all the services required under

Work Order 1.94 He said he had difficulty communicating with Parexel’s local team

in China and he had brought those issues to Parexel.95 He claimed to have met with

Parexel’s team and to have communicated some of the issues Xynomic had with

Parexel’s performance.96

        Last, Dr. Wu testified that after Xynomic ended Parexel’s work in China,

Xynomic had asked Parexel to transfer some of the non-safety-related data to

Xynomic. Dr. Wu told the Court that Parexel did that.97

        On the last day of trial, Sophia Paspal, Xynomic’s Chief Development

Officer, gave her view of Parexel’s performance of its contractual obligations.98

93
     Id. at 215-16.
94
     Id. at 217-18.
95
   Id. at 219-21 (citing JX 361 (E-mail from Leigh Abbott (“Abbott”), Dir. of Clinical Operations,
Xynomic Pharms., Inc., to Sara Leone, Parexel Int’l (IRL) Ltd., Action Required: Xynomic XYN-
602 China PL Change Request (July 19, 2018))); id. at 224 (citing JX-360 (E-mail from Magdalena
Wianecka-Skoczen, Clinical Operation Leader, Parexel Int’l (IRL) Ltd., to Abbott, Re: Xynomic
XYN-602 Recruitment Requirements (July 26, 2018))); id. at 225-26 (citing
JX-285 (E-mail from Paronelli, to Abbott, Xynomic China Discussion & Expectations (Aug. 3,
2018))).
96
     Id. at 226, 229 (citing JX-255).
97
     Id. at 235-37.
98
     Trial Tr., Jan. 27, 2021 AM (Paspal), at 9-12.
                                                -19-
Ms. Paspal pointed to the proposed timeline attached to Work Order 1 as evidencing

what Xynomic had expected Parexel to perform and when those things were

expected.99 Specifically, Ms. Paspal testified to a March 2019 invoice from Parexel

that showed 25% of sites had been initiated. According to Ms. Paspal, Xynomic

expected all sites to have been initiated by then.100 In addition, Ms. Paspal used the

March 2019 invoices as exemplars of Parexel’s invoices that, in her view, failed to

provide sufficient detail to justify the charges within.101

         Concerning services in China, Ms. Paspal said there were no initiated sites or

patients enrolled there.102           Concerning services in the United Kingdom,

Ms. Paspal believed that five sites were supposed to have been initiated, but that

none were.103 Ms. Paspal told the Court that the United Kingdom’s regulatory

authority denied Parexel’s submission for Xynomic’s study because Parexel

misclassified the investigational medicinal product.104 And no sites were initiated in

99
      Id. at 25 (citing JX-15).
100
      Id. at 28-29.
101
      Id. at 30-31.
102
      Id. at 31-32.
103
      Id. at 33-34.
104
      Id. at 34 (citing JX-77 (Notice of Grounds for Non-Acceptance and Right to Amend Request)).
                                               -20-
France, Italy, or the Czech Republic, Ms. Paspal declared, because Parexel allegedly

failed to properly submit Xynomic’s clinical trial package.105

          Last, Ms. Paspal complained that, after Parexel left the China study, Parexel

gave Xynomic no access to the data collected during the parties’ relationship except

for certain safety-related data.106

          Another Xynomic co-founder who is now its Chairman and Chief Executive

Officer, Yinglin Mark Xu, then recounted how Parexel was selected to conduct the

clinical trials and explained Xynomic’s expectation of Parexel’s performance.107

          Mr. Xu said Parexel promised “that a lot of work would be done front

ended.”108 According to Mr. Xu, Parexel was to have started on all seventy-five sites

by the end of July 2018, but, come seven months later, had delivered only 25% of

the sites.          So, he purported, Parexel was “nine months late and 75 percent

underperformed.”109          Mr. Xu deponed that Xynomic selected another clinical

research organization for China and it was able to open sites there.110

105
      Id. at 36.
106
      Id. at 74-75.
107
      Id. at 116-17, 120-22 (Xu).
108
      Id. at 133.
109
      Id. at 134.
110
      Trial Tr., Jan. 27, 2021 PM (Xu), at 5 (D.I. 74).
                                                  -21-
          Mr. Xu told the Court that Xynomic paid Parexel $1 million in May 2019, and

that as of May 27, 2019, it had paid Parexel $4.56 million.111 He claimed that, in an

email he sent to Mr. Kraus, he asked for a 25% discount, which—while not stated in

the email—was to account for Parexel’s poor performance.112

          Joseph Scott, former Senior Vice President of Finance at Parexel, was the final

trial witness. He recounted his communications with Xynomic about the payments

due.113 During the many phone and email conversations Mr. Scott had with Mr. Xu,

the latter never mentioned Parexel’s performance issues.114 Instead, Mr. Xu gave

his approval for Parexel to use the $1 million Xynomic had paid Parexel to offset

outstanding invoices.115          And Mr. Scott confirmed that Mr. Xu’s reason for

Xynomic’s non-payment was “[c]ontinuing operating cash flow challenges and

working capital issues.”116 Neither Mr. Xu nor anyone else at Xynomic ever told

111
      Id. at 12.
112
      Id. at 13-14 (citing JX-160).
113
      Id. at 56-58 (Scott).
114
    Id. at 61-63 (citing JX-153 (E-mail from Xu, to Scott, Re: Follow-up (May 8, 2019))); id. at
67 (citing JX-175 (E-mail from Xu, to Kraus, Re: Discount (June 4, 2019))); id. at 68 (citing JX-
200 (E-mail from James Tong (“Tong”), Bison Holding, to Kraus, Re: Xynomic[/]Parexel Call
(July 18, 2019))); id. at 73.
115
      Id. at 65-66 (citing JX-179).
116
      Id. at 73.
                                              -22-
him that Xynomic “was withholding payment of unpaid invoices because of the

performance issues[.]”117

                        IV. GENERAL LEGAL PRINCIPLES

          Though the Court sits without a jury, it has applied the same principles of law

in its deliberations and consideration of each individual claim and counterclaim that

it would have more formally instructed a jury to follow. The Court may highlight

here some of those that are most applicable to this particular case. But the fact that

some particular point or concept may be mentioned here should not be regarded as

any indication that the Court did not—during its deliberations—consider all legal

principles applicable to this case and to the parties’ claims and counterclaims.

           In reaching its verdict, the Court has examined the joint exhibits submitted

and considered the testimony of all witnesses, both direct and cross. The Court has

also considered the applicable Delaware case law that has defined the legal precepts

applicable to the claims and defenses the parties have forwarded. The Court has

applied the Delaware Rules of Evidence to the testimony and exhibits and only used

for its deliberation that which would be allowed under those rules—consistent with

the Court’s knowledge of those rules and the specific rulings that may have been

made and articulated both pre-trial, during the trial proceedings, and post-trial. And,

117
      Id. at 74.
                                            -23-
of course, the Court has considered each party’s respective arguments on the weight

to be accorded the testimony and evidence.

       The Court then reviewed and applied the very instructions that it would give

a jury in these circumstances.118

       In this particular case, Parexel carries the burden of proof by a

preponderance119 of the evidence on the only remaining claim, Count I (Breach of

Work Order 1), in its Complaint.

                             V. FINDINGS AND VERDICT

       “To recover on a breach[-]of[-]contract claim, a party must prove the

existence of an enforceable contract; the party performed or was ready to perform;

that the other contracting party failed to perform; and that the failure to perform

caused damages.”120 The parties agree they had a valid contract. So, the three

contentions to be resolved here are: (1) whether Parexel performed under the MSA

118
    See, e.g., Del. Super. Ct. Civ. Pattern Jury Instr. 4.1 (Burden of Proof by a Preponderance of
the Evidence); id. at 4.2 (Evidence Equally Balanced); id. at 23.1 (Evidence—Direct or
Circumstantial); id. at 23.9 (Credibility of Witnesses—Weighing Conflicting Testimony); id. at
23.10 (Expert Testimony).
119
    See e.g., Reynolds v. Reynolds, 237 A.2d 708, 711 (Del. 1967) (defining preponderance of the
evidence); accord Oberly v. Howard Hughes Med. Inst., 472 A.2d 366, 390 (Del. Ch. 1984).
120
   Gerstley v. Mayer, 2015 WL 756981, at *5 (Del. Super. Ct. Feb. 11, 2015) (citing VLIW Tech.,
LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003)).

                                              -24-
and Work Order 1; (2) whether Xynomic breached the MSA and Work Order 1; and

(3) whether Parexel supported its alleged damages.

      A. PAREXEL PERFORMED UNDER THE MSA AND WORK ORDER 1.

          Parexel contends that it performed under the MSA and Work Order 1 and that

Xynomic never raised any issues with Parexel’s performance or its invoices before

this litigation proceeded.121 As such, it asks the Court to enter judgment in its favor

and award it damages in the amount of the total outstanding invoices, $5,530,609.30,

and also pre- and post-judgment interest.122

          Xynomic says that Parexel failed to perform under the contracts and deserves

no recovery.123          Xynomic’s complaints about Parexel’s supposed deficient

performance (or non-performance) come down to: (1) minor incidents stitched

together to try to fabricate a material breach; and (2) a suggestion that Parexel didn’t

adhere to Xynomic’s expected performance timeline. To determine whether Parexel

performed under the contract and deserves payment, the Court has examined

Xynomic’s allegations and see whether Xynomic could be excused from

performance because of Parexel’s alleged material breach.124

121
      Parexel’s Post-Trial Br. at 1-3.
122
      Id. at 5.
123
      Xynomic’s Post-Trial Br. at 1.
124
   E.g., BioLife Sols., Inc. v. Endocare, Inc., 838 A.2d 268, 278 (Del. Ch. 2003) (“A party is
excused from performance under a contract if the other party is in material breach thereof.”).
                                            -25-
         1. Xynomic did not exercise its contracted-for avenues of contesting
            Parexel’s alleged deficient performance and deficient invoices.

         Section 4.2 of the MSA provided Xynomic a mechanism for challenging

Parexel’s invoices, and Section 18 gave Xynomic the ability to elevate such a

challenge through a dispute resolution procedure.125         Specifically, Section 4.2

provides:

            All invoiced amounts for Services performed in accordance with
            the terms and conditions of this Agreement and any Work Order
            are due net thirty (30) days from the receipt of PAREXEL's
            electronic invoice. If [Xynomic] identifies items in an invoice
            which are disputed, [Xynomic] will notify PAREXEL in writing,
            noting its objection to the disputed item(s) with specificity,
            within ten (10) working days of the date of the invoice. All items
            that are not disputed by [Xynomic] in writing within such period
            shall be deemed to have been approved by [Xynomic]. All
            disputes of which [Xynomic] notifies PAREXEL in accordance
            with this Section shall be addressed as set forth in Section 18
            below. [Xynomic] will pay any undisputed portions of any
            invoice per the agreed upon payment terms. [Xynomic] will pay
            interest on any unpaid invoice (including any undisputed portion
            of a disputed invoice) at the rate of one percent (1%) per month
            until such invoice(s) is paid in full. Payments will be made to
            PAREXEL in accordance with the instructions set forth in the
            applicable Work Order or such other written instructions as may
            be provided by PAREXEL from time to time.126

And Section 18.1 provides:

            If a dispute arises between the parties relating to this Agreement
            or any Work Order, the parties to this Agreement or such Work

125
      JX-252 (MSA §§ 4.2, 18).
126
      JX-252 (MSA § 4.2).

                                          -26-
               Order will meet and attempt to resolve the dispute in good faith.
               In the event the dispute is not resolved through negotiation within
               ten (10) business days after said meeting, the parties will submit
               to confidential, nonbinding mediation before a mutually
               acceptable mediator. Each party will designate at least one
               corporate officer with full authority to resolve the dispute who
               will attend and participate in the mediation. If the dispute
               remains unresolved after mediation, then each party will be free
               to pursue any available remedy at law or in equity.127

In short, after Xynomic received an invoice, it had a ten-day window to raise any

objections. If Xynomic didn’t object within this ten-day window, the invoice was

deemed approved, and twenty days later (thirty days after the invoice was sent) the

undisputed portions of the invoice became due.

            According to Xynomic, it could not exercise its contractual rights to challenge

the invoices it received because Parexel “did not provide any detail or back up.”128

As Xynomic tells it, it just didn’t know what it was paying for.129

            Xynomic says that it only agreed to these contractual terms because of its

“lack of experience at the time the MSA and [Work Order 1] were signed.”130 That

might account for Xynomic’s initial acceptance of the terms. But it does nothing to

explain why Xynomic didn’t challenge Parexel’s billing under Section 4.2 or elevate

127
      JX-252 (MSA § 18.1).
128
      Xynomic’s Post-Trial Br. at 41.
129
      Id.
130
      Id. at 21 (citing Trial Tr., Jan. 26, 2021 (Wu), at 215-16).
                                                  -27-
any issue to dispute resolution as provided in Section 18. Instead, Xynomic blithely

maintains that it was just “impossible to ascertain what work Parexel had actually

completed within ten days of receipt of an invoice[.]”131

            So Xynomic had the contractual right to challenge the invoices, but it failed

to do so. Xynomic also had the ability to contemporaneously voice its performance

issues with Parexel, but it failed to do so. When asked why, Xynomic answers: it

“need[ed] to keep Parexel involved in the project.”132 Xynomic’s previous silence

would indicate consent to Parexel’s performance—i.e., there really was nothing

wrong on Parexel’s side. And, having considered all the evidence and testimony,

that previous silence is a strong indicator of Xynomic’s concoction of post-hoc

rationales for non-payment as defenses to this action. That is, Xynomic’s now-

minted allegations of Parexel’s deficient performance and deficient invoices seem

conveniently contrived and give Xynomic no cover here.

            2. Parexel did not materially breach the MSA or Work Order 1.

            Once litigation commenced, Xynomic started complaining about Parexel’s

performance. Now, according to Xynomic, Parexel’s performance under Work

Order 1 was inexcusably deficient. It calls out certain discrete “failures” under Work

131
      Id.
132
    Id. at 24 (“Xynomic may not have raised specific issues with Parexel’s performance during
these financial communications, as described above, due to Xynomic’s need to keep Parexel
involved in the project.”).

                                             -28-
Order 1, including Parexel’s alleged failure: to provide Site Initiation Visits and

corresponding reports to Xynomic; to deliver an adequate and workable model

Informed Consent Form; and, to review safety data listings, including failure to

deliver documents to demonstrate whether monitoring was being completed.133

Xynomic argues that these, “in addition to the failures in China, resulted in the non-

delivery of approximately 40 of the 75 anticipated sites, 5 out of the 9 anticipated

countries involved, and most of the 413 patients to be enrolled.”134 Similar to

Xynomic’s reason for not asserting its right to challenge the invoices, Xynomic says

that it didn’t raise performance concerns with Parexel because of its “need to keep

Parexel involved in the project.”135 Xynomic goes further, saying it was “held

captive by Parexel.”136 And that “Parexel took advantage of Xynomic’s dependence

on its services – knowing that Xynomic could not complete the study without

Parexel, Parexel continued to bill for services not performed.”137

133
      Id. at 34.
134
   Id. at 34-35. It’s important to keep in mind that, by the time Parexel completely halted all work
on Work Order 1 (due to persistent non-payment), the parties were less than two years into a five-
year contract.
135
      Id. at 24.
136
      Id. at 22 (internal quotation marks omitted).
137
      Id.

                                                 -29-
          Xynomic asserts, and Parexel acknowledges, that some performance issues

were raised concerning China; the credible evidence demonstrates that, when

noticed, Parexel sought to remedied those issues.138 But as to any other alleged

performance issues, Xynomic admits it never raised those with Parexel explicitly.

And it now asks the Court to read between the lines in email conversations between

the parties.139

          The Court finds Xynomic’s tardy claims of deficient performance unavailing.

Xynomic has—through both trial and post-trial briefing—failed to present any

credible evidence supporting its protestation of material breach by Parexel or its own

powerlessness to call Parexel on such material breach as it was supposedly

occurring. Indeed, aside from operations in China, the record is devoid of any

contemporaneous complaints regarding performance, any use of the performance

dispute procedures outlined in the MSA, or anything to show that these alleged

failures existed at the time Xynomic now says they were so obvious.140 But what

138
      Trial Tr., Jan. 25, 2021 (Paronelli), at 48.
139
   Xu testified that, while not explicitly stated, he had sought a 25% discount on outstanding
payments because of Parexel’s performance. Trial Tr., Jan. 27, 2021 PM (Xu), at 13-14 (citing
JX-160).
140
    See Trial Tr., Jan. 25, 2021 (Prasad), at 219 (“Q: Prior to this litigation, did anyone at Xynomic
ever tell you that they weren’t paying Parexel’s invoices because they were dissatisfied with
performance? A: No. This never came up with my discussions with Sophia or even Melanie.
Q: Ever even a suggestion that this was the case? A: No.”); Trial Tr., Jan. 26, 2021 (Kraus), at
151 (“Q: Did anyone at Xynomic ever tell you Xynomic was withholding payment of the unpaid
invoices because of performance issues? A: No one from Xynomic.”); Trial Tr., Jan. 27, 2021
PM (Xu), at 37 (“Q: Is it your testimony, sir, that you at any point communicated to Parexel in any
                                                     -30-
the record does bear is Xynomic’s repeated failure to engage the MSA’s dispute

methods, its promises to pay, its statements regarding lack of adequate funding, and

its pleas to keep Parexel on its projects.141

of these e-mails that you sent that you wanted a discount based on performance issues? A: I didn’t
mention performance issues in the e-mails.”); Id. at 74 (Scott) (“Q: Did anyone at Xynomic ever
tell you Xynomic was withholding payment of the unpaid invoices because of performance issues?
A.: No, they did not.”).

Now, Xynomic did produce evidence of the rejected United Kingdom regulatory application. See
JX-77 (Notice of Grounds for Non-Acceptance and Right to Amend Request). But this one
discrepancy—which Parexel would have had time to correct but for the MSA’s early termination
due to Xynomic’s persistent non-payment—is no material breach. See Parexel’s Post-Trial Ans.
Br. at 26, Apr. 16, 2021 (D.I. 72) (“Parexel could have, and would have, revised the package
consistent with the regulatory authority’s comments, but it was forced to terminate the MSA before
it had the chance.”); see also BioLife, 838 A.2d at 278 (“The question [of] whether the breach is
of sufficient importance to justify non-performance by the non-breaching party is one of degree
and is determined by weighing the consequences. . . .” (internal quotation marks omitted)); see
generally RESTATEMENT (SECOND) OF CONTRACTS § 241 (AM. L. INST. 1981) (enumerating
factors).
141
      PSO ¶¶ 34-84, 109; JX-106 (Xu’s proposal of a new payment schedule); JX-117 (Xu’s
proposal of a another payment schedule); JX-119 (Xu’s proposal of a another payment schedule);
JX-140 (email from Xu to Kraus memorializing conversation); JX-155 (Xu: “I will start making
payments this week.”); JX-167 (Xu proposing to pay of all invoices by June 28, 2019); JX-180
(Xu stating that Xynomic remained “committed to pay the outstanding invoices by the end of
June”); JX-213 (E-mail from Tong, to Kraus, Re: Call regarding the most recent updates (Aug. 6,
2019)) (“Mark and I have been gathering the funding source to suffice the payment. Our plan is
to pay as much as what is available on the company’s account and pay the remainder as soon as
additional cash is raised or loaned to the company.”); JX-241 (Xu: “We will do our ABSOLUTE
best to pay the invoices as soon as we complete our next financing. In the meantime, please provide
the minimum support we need for this XYN-602 study.”); JX-241 (Xu: “Thank you for the
continuous support. We will provide more frequent and substantive update[s] regarding our
ongoing financing.”); JX-245 (Wu: “Second, on behalf of Xynomic[’s] operation team, I also want
to express our sincere gratitude for Parexel’s support of our RCC study . . ., particularly during our
financial[ly] difficult period starting from early this year. I am now working closely with our CEO
and the finance team on the company’s fund raising activity. I am confident we will get this round
done soon. . . . Right now all I would like to ask Parexel is to keep minimum work on this project.
. . .”); Trial Tr., Jan. 26, 2021 (Kraus), at 97, 101-02, 113, 139-40.

                                                -31-
          One last point here: Xynomic’s cries of being beholden to Parexel and needing

to keep Parexel on the project ring hollow. When Xynomic terminated Parexel’s

services in China, it almost seamlessly replaced Parexel with a new clinical research

organization that was able to open clinical sites there.142

          3. Parties’ failure to meet certain timelines does not
             constitute material breach.

          Xynomic says Parexel failed to perform because it did not meet Work Order

1’s proposed timeline.143 Specifically, Xynomic asserts that, because it is a start-up

biopharmaceutical company, any delay could cause Xynomic to incur more

expenses, which, in turn, could impact its existence as a business.144 In effect,

Xynomic wants the Court to enforce an otherwise unwritten and unbargained-for

time-of-the-essence requirement here.145 But this, the Court cannot do.

          Xynomic can’t point to a single MSA or Work Order 1 provision that

explicitly states time is of the essence. Instead, Xynomic relies on Exhibit C of Work

Order 1—the estimated timeline between the parties.146 But, as Exhibit C’s name

142
      Trial Tr., Jan. 27, 2021 PM (Xu), at 5.
143
      Xynomic’s Post-Trial Br. at 19; see JX-15 (Work Order 1 Ex. C).
144
      Xynomic’s Post-Trial Br. at 33-35.
145
      Id. at 33.
146
      Id. at 35; see JX-15.

                                                -32-
itself suggests, this timeline was “estimated.” It set no deadlines. And it certainly

cannot be read as engrafting an enforceable time-of-the-essence clause into the MSA

or Work Order 1.

         Delaware “law presumes contracting parties are familiar with time of the

essence clauses and that they know how to make time of the essence if they so desire,

especially in contracts between sophisticated business[es].”147 While Xynomic

contends that it was naïve to the MSA’s contractual terms and obligations, and that

Parexel took advantage of Xynomic’s ignorance, this is not Xynomic’s (and its

principals’) first time around the drug trial block.148 Xynomic’s two co-founders,

Wentao Jason Wu and Yinglin Mark Xu, have significant experience working in the

pharmaceutical industry and had each previously worked for or with industry-

leading drug companies.149 As such, the parties are experienced and sophisticated

enough in the industry that if they intended to make time of the essence, they could

and would have done so.150

147
      HIFN, Inc. v. Intel Corp., 2007 WL 1309376, at *10 (Del. Ch. May 2, 2007).
148
      Xynomic’s Post-Trial Br. at 22.
149
      Trial Tr., Jan. 26, 2021 (Wu), at 183-85; Trial Tr., Jan. 27, 2021 AM (Xu), at 116-17.
150
    See W. Willow-Bay Ct., LLC v. Robino-Bay Ct. Plaza, LLC, 2007 WL 3317551, at *9 (Del.
Ch. Nov. 2, 2007) (“The presumption that the parties are bound by the language of the agreement
they negotiated applies with even greater force when the parties are sophisticated entities that have
engaged in arms-length negotiations.”), aff’d, 2009 WL 4154356 (Del. Nov. 24, 2009).
                                                -33-
            The facts here are similar to those in HIFN, Inc. v. Intel Corp., where Intel

asserted that the Court of Chancery should read a time of the essence clause into the

parties’ contract governing certain technology development.151 The HIFN court

rightly observed that “judicially insert[ing] a time is of the essence clause

automatically into every contract . . . would be inconsistent with fundamental rules

of contract interpretation.”152 Even more so here. These parties directly spoke to

the element of time in their scrivening. And they decided to set forth estimated

timelines, not hard deadlines backed with time-of-the-essence verbiage.

            Not to be deterred, Xynomic continues its time-of-the-essence contention with

the suggestion that Parexel’s complained-of delay was unreasonable.153 Here,

Xynomic again turns to HIFN, Inc. It argues that a court can—even absent an

express time-of-the-essence provision in the contracting papers—find that a party

failed to perform when it did not complete its obligations in a reasonable time.154

Perhaps so, under the right circumstances. But HIFN, Inc. provides a good example

of what those circumstances might be. There, the Court of Chancery concluded that

HFIN hadn’t performed in a reasonable time only after finding that HIFN spent three

151
      HIFN, Inc., 2007 WL 1309376, at *11.
152
      Id.
153
      Xynomic Post-Trial Br. at 20.
154
      Id. at 37 (citing HIFN, Inc., 2007 WL 1309376, at *17).

                                               -34-
times as long to fulfill its contractual obligations than was expected and after finding

further that “failure to perform was not caused in any way by Intel’s alleged

repudiation.”155

         Not so here. Here, the parties’ expected timeline was delayed by Xynomic’s

failure to pay and with the parties’ mutual assent.156 What’s more, Xynomic has

failed to demonstrate what would have been a reasonable time period for

performance; it’s said only that Parexel should have known time was of the essence.

As such, Xynomic has not proven that any delay was outside of “reasonable time”

and, therefore, has not shown Parexel materially breached the MSA or Work Order

1.157

155
      HIFN, Inc., 2007 WL 1309376, at *17.
156
      Parexel’s Post-Trial Br. at 28-29.
157
    Further sinking Xynomic’s claim here is the fact that even Exhibit C’s timeline was by its own
terms in its infancy. When litigation arose in July 2019, the parties were less than 18 months into
a five-year contract. By then, Parexel only had the opportunity to meet three out of the eleven
tasks outlined in Exhibit C. And the only then-expected task that the Court can see wasn’t met
was the Site Initiation goal that was to be completed on July 29, 2018. That reached 25%
completion in March 2019. Trial Tr., Jan. 27, 2021 AM (Paspal), at 28; JX-116. But Xynomic had
no issue with this delay. In March 2019, when Parexel did complete 25% of the Site Initiation, it
billed Xynomic for that milestone. JX-116. Xynomic neither objected to the billing of this
milestone nor claimed its competition was untimely. No, Xynomic just continued to say it would
pay this bill (as it did all others) when it had its finances straightened out.

                                               -35-
      B. XYNOMIC MATERIALLY BREACHED THE CONTRACT.

          Xynomic admits it didn’t pay Parexel. Xynomic has tried to defend that

failure by decrying what it says was Parexel’s alleged deficient performance.158 Of

course, for Xynomic to have any success, it would need to demonstrate that Parexel

materially breached the contracts.159 And, of course, the Court just found that

Parexel didn’t. So none of Xynomic’s contracted-for performance obligations (i.e.,

payment) can be excused on that basis. Accordingly, the question remaining for the

Court to now resolve is whether Xynomic’s failure to pay was a material breach of

the subject contracts.

          This Court has adopted the Restatement (Second) of Contracts for

determining whether a breach is material.160 Restatement (Second) of Contracts,

§ 241 provides:

              In determining whether a failure to render or to offer
              performance is material, the following circumstances are
              significant:

              (a) the extent to which the injured party will be deprived of the
                  benefit which he reasonably expected;

158
      Xynomic’s Post-Tr. Br. at 37.
159
   Commonwealth Constr. Co. v. Cornerstone Fellowship Baptist Church, Inc., 2006 WL
2567916, at *19 (Del. Super. Ct. Aug. 31, 2006) (“[A] party in material breach of the contract
cannot then complain if the other party fails to perform.”).
160
      E.g., id.

                                            -36-
             (b) the extent to which the injured party can be adequately
                 compensated for the part of that benefit of which he will be
                 deprived;

             (c) the extent to which the party failing to perform or to offer to
                 perform will suffer forfeiture;

             (d) the likelihood that the party failing to perform or to offer to
                 perform will cure his failure, taking account of all the
                 circumstances including any reasonable assurances;

             (e) the extent to which the behavior of the party failing to
                 perform or to offer to perform comports with standards of
                 good faith and fair dealing.161

         Xynomic materially breached the MSA and Work Order 1. Simply put,

Xynomic continually promised to pay Parexel for its outstanding invoices but never

did.162 Xynomic’s repeated excuse for not paying those invoices: internal funding

issues. Yet, when Parexel’s forbearance finally ended and it sued for Xynomic’s

persistent non-payment, Xynomic dropped its funding-issues excuse and went on

offense, complaining for the first time of Parexel’s alleged performance

deficiencies.163

161
      RESTATEMENT (SECOND) OF CONTRACTS § 241.
162
    See, e.g., JX-106, JX-117; JXs-119-23 (series of emails between Xu and Scott on proposed
payment schedule); JX-155; JX-167; JX-180; JX-213; see also RESTATEMENT (SECOND) OF
CONTRACTS § 241 cmt. a (The materiality standard “is to be applied . . . in such a way as to further
the purpose of securing for each party his expectation of an exchange of performances.”);
RESTATEMENT (SECOND) OF CONTRACTS § 241 cmt. b (“[A]n important circumstance in
determining whether a failure [to perform] is material is the extent to which the injured party will
be deprived of the benefit [that] he reasonably expected from the exchange.”).
163
      Trial Tr., Jan. 26, 2021 (Kraus), at 147; JX-241; Xynomic’s Post-Trial Br. at 23.

                                                -37-
          No doubt, Xynomic’s chronic failure to pay the invoices owed to Parexel,

after many assurances of payment, constitutes a material breach.

      C. PAREXEL SUPPORTED ITS ALLEGED DAMAGES.

          To succeed on its breach-of-contract claim, Parexel must prove damages

stemming from the breach.164 Here, Parexel presents a number of invoices sent to

Xynomic, which were deemed accepted under the terms of the MSA but still went

unpaid.165 Parexel presents a breakdown of the figures and types of payments due

under each invoice.166 Parexel is seeking:

          (1) Nine monthly payments for August 2018, September 2018, and
              December 2018 through June 2019, totaling 1,687.482.00;167

          (2) Three milestone payments for the following: (a) $1,200,000
              for the Start of the Work Order; (b) $300,000 for reaching 25%
              of Sites Initiated; and (c) $1,476,548 for the First Patient
              Enrolled, totaling $2,976,548.00;168 and

164
    E.g., Connelly v. State Farm Mut. Auto. Ins. Co., 135 A.3d 1271, 1279 (Del. 2016) (“[A] cause
of action for breach of contract includes damages as an element.”).
165
      Parexel’s Post-Trial Br. at 9-12.
166
      Id. at 7-13.
167
    Id. at 12-13; JX-46 (Month Service Fees for Aug. and Sept. 2018); JX-79 (Monthly Service
Fee for Dec. 2018); JX-89 (Monthly Service Fee for Jan. 2019); JX-105 (Monthly Service Fee for
Feb. 2019); JX-116 (Monthly Service Fee for Mar. 2019); JX-143 (Monthly Service Fee for Apr.
2019); JX-163 (Monthly Service Fee for May 2019); JX-187 (Monthly Service Fee for June 2019);
see also Parexel’s Post-Trial Br. at 12 n.48 (“Xynomic paid the monthly service fees for October
2018 and November 2018”).
168
      JX-45, JX-116; see also JX-15 (Work Order 1, Ex. G).

                                              -38-
          (3) Pass-through fees totaling 1,866,579.30.169

          The total amount due under these invoices is $6,530,609.30. This amount is

reduced by two $500,000 payments made by Xynomic in May 2019, adjusting

Parexel’s sought damages to $5,530,609.30.170

          1. Monthly Invoices.

          As Xynomic sees it, Parexel’s invoices—which are the basis for its damages

claim—are “based entirely on assumptions contained in Exhibit A to Work Order 1

that were not met[,]” so Parexel isn’t entitled to damages.171 Too, according to

Xynomic, the parties never executed a change order to reflect Xynomic’s

termination of Parexel’s work in China, so the monthly invoiced totals are not

accurate.172

169
   Parexel’s Post-Trial Br. at 13; JX-62; JX 68; JX-90; JX-91, JX-114; JX-115; JX-145; JX-146;
JX-170; JX-171; JX-185; JX-186; JX-220; JX-226; JX-227; JX-228; JX-230. Parexel also states
that, separate to the invoice, it provided back-up information identifying each specific expense for
which it was seeking reimbursement. Parexel’s Post-Trial Br. at 13; see JX-62; JX-87; JX-88;
JX-112; JX-113; JX-141; JX-142; JX-168; JX-169; JX-182; JX-183; JX-218; JX-223; JX-224;
JX-225; JX-229.
170
      Parexel’s Post-Trial Br. at 8, 14-15.
171
      Xynomic’s Post-Trial Br. at 41.
172
      Id. at 38-39.

                                               -39-
            Parexel says that it was forced to halt opening sites and enrolling patients

because of Xynomic’s repeated failures to pay its bills.173 And so it was Xynomic’s

own failure that caused the delayed timeline.174

            The Court must determine whether Parexel properly invoiced Xynomic for

assumptions that were made, but not met, under Work Order 1 and whether Parexel’s

invoices sent to Xynomic after it terminated Parexel’s work in China were accurate.

            Xynomic and Parexel executed a contract, and subsequent work orders, under

which Xynomic took on three types of payment obligations: “milestone payments,

monthly payments, and reimbursement for pass[-]through expenses[.]”175 Both sides

agree, the monthly invoices weren’t contingent on any event or milestone but were

due every month regardless of the actual work completed.176

            Xynomic says that, when it terminated Parexel’s work in China, “no sites had

been initiated in China, no patients had been enrolled in China, and no regulatory

173
      Parexel’s Post-Trial Ans. Br. at 10-11 (citing JX-137).
174
      Id.
175
      Parexel’s Post-Trial Br. at 6.
176
   Id.; Trial Tr., Jan. 26, 2021 (Wu), at 215. Xynomic’s co-founder, Wentao Wu, testified to this
understanding and added that “if [he] ha[d] [the] chance to redo the contract, [he] wouldn’t
construct the contract this way.” Id.

                                                 -40-
approvals had been submitted by Parexel in China.”177 This alleged inaction by

Parexel, according to Xynomic, precludes Parexel from being awarded damages.178

            Along with this, Xynomic argues that the fact that the monthly billing was not

changed after Xynomic ended Parexel’s work in China shows that the monthly

invoices were inaccurate.179 Moreover, Xynomic contends that Parexel has not

provided “any detailed basis for the services actually provided in connection with

those invoices[.]”180

            Parexel first disputes Xynomic’s suggestion that, because no sites were

opened or patients enrolled in China, Parexel didn’t do any work.181 To the contrary,

Parexel says that it laid the groundwork for its eventual opening of sites and

enrollment of patients in China.182 And while it had not yet opened sites or enrolled

patients, Parexel notes that it did perform services in China.183 And even after the

April 2019 termination from China, Parexel maintains that it continued “working on

177
      Xynomic’s Post-Trial Ans. Br. at 5 (D.I. 73).
178
      Id.
179
      Xynomic’s Post-Trial Br. at 42.
180
      Id.
181
      Parexel’s Post-Trial Ans. Br. at 20-21.
182
      Id. (citing Trial Tr., Jan. 25, 2021 (Prasad), at 229-30).
183
      Id.

                                                   -41-
China sites/activities until the handover with the selected new CRO [was]

completed.”184

          Next, Parexel disputes Xynomic’s assertion that the parties never executed a

change order that reflected Xynomic’s termination of Parexel’s work in China.185

The parties did indeed execute a change order on April 15, 2019, contemporaneous

with Xynomic’s termination of Parexel’s work in China.186 As Parexel points out,

Xynomic had already determined it would remove Parexel from China, so when it

signed the change order it could have requested a lower monthly fee. Xynomic

didn’t.187 No doubt, the monthly fees were in consideration of the parties’ overall

ongoing commitment and relationship that was meant to last five years—not the

specific work completed in any given month or period. The latter was to be

compensated upon the meeting of milestones.

          Even if the parties’ inclusion of monthly fees, regardless of work performed,

was not as beneficial to Xynomic as it might have seemed, the Court cannot save

Xynomic from its decision to agree to those terms.188 Delaware courts “do not

184
      Id. at 29 (citing JX-274).
185
      Id. at 18.
186
      JX-111 (Form of Change Order); JX-274 (Xynomic terminating Parexel’s services in China).
187
      Parexel’s Post-Trial Ans. Br. at 18.
188
   See, e.g., NAMA Holdings, LLC v. World Mkt. Ctr. Venture, LLC, 948 A.2d 411, 419 (Del. Ch.
2007) (“Contractual interpretation operates under the assumption that the parties never include
                                              -42-
relieve [sophisticated parties] of the burden of [their contracts] simply because of

their after-the-fact regrets.          To do so would greatly undermine the utility of

contracts.”189

        The Court finds that Parexel accurately invoiced Xynomic under Work Order

1 and that the invoices Parexel sent to Xynomic even after it terminated Parexel’s

work in China were, likewise, accurate.

        2. Milestone Payments.

        Concerning milestone payments, it’s clear that Parexel only invoiced those

upon Parexel’s accomplishment of the milestones.190 And Xynomic has conceded

that those specific milestones billed-for were met.191 Though Xynomic expected

superfluous verbiage in their agreement, and that each word should be given meaning and effect
by the court.”), aff’d, 2008 WL 571543 (Del. Mar. 4, 2008); see also Nemec v. Shrader, 991 A.2d
1120, 1126 (Del. 2010) (“Parties have a right to enter into good and bad contracts, the law enforces
both.”); W. Willow-Bay, 2007 WL 3317551, at *9 (“[A] court will not disturb a bargain because,
in retrospect, it appears to have been a poor one.”), aff’d, 2009 WL 4154356; Aspen Advisors LLC
v. United Artists Theatre Co., 843 A.2d 697, 707 (Del. Ch. 2004) (Contracting parties cannot use
litigation to extract “contractual protections that they failed to secure for themselves at the
bargaining table.”).
189
   Milford Power Co., LLC v. PDC Milford Power, LLC, 866 A.2d 738, 748 (Del. Ch. 2004).
Furthermore, the record indicates that Parexel stopped billing Xynomic its monthly fee in June
2019. See, e.g., Parexel’s Post-Trial Br. at 10-11 (collecting invoices and billing statements).
190
  Parexel only billed for the three milestones it achieved: (1) $1,200,000 for the Start of the Work
Order; (2) reaching 25% of Sites Initiated; and (3) the First Patient Enrolled milestone. JX-45,
JX-116.
191
    Trial Tr., Jan. 26, 2021 (Wu) at 213-14 (“Q: Can you please tell us your understanding of what
the milestone payments are supposed to be for? A: Well, milestone means once they reached the
particular points that define[d] as . . . a milestone, they – the other party need[s] to pay according
to the number that [is] listed here. So, for instance, . . . [t]here is a line called a first site initiated.
That means[,] among all the global[] sites outlined in [the proposal] . . ., if the very first one site
                                                   -43-
Parexel to have initiated all sites by March 2019, Parexel didn’t. And Parexel didn’t

invoice for any milestone not yet met.192 Had it done so, Parexel would indeed be

invoicing for work not completed. And that the written agreements would not allow.

But, having only billed for the milestones it accomplished, and having confirmed the

achievement of those milestones, Parexel has proven its damages thereon.

         3. Pass-Through and Investigator Fees.

         Xynomic argues that Parexel is double billing for the pass-through and

investigator fees.193 Under Exhibit G of Work Order 1, Xynomic was to make two

advance payments of $1 million for the investigator and pass-through fees.194

Xynomic never made those advance payments.195 Up until trial, Parexel was seeking

payment on those advance payments and on the pass-through and investigator fees

get[s] initiated, then we need to pay the $1.2 million, according to the schedule.”); id. at 217 (“And
I remember Parexel enrolled the first patient. That was in October . . . 2018.”); Trial Tr., Jan. 27,
2021 PM (Xu), at 50 (“Parexel did deliver 19 sites.”).
192
      Trial Tr., Jan. 27, 2021 AM (Paspal), at 28-29.
193
      Xynomic’s Post-Trial Br. at 30.
194
      JX-116 (Work Order 1, Exhibit G).
195
      PSO ¶¶ 32-35.

                                                -44-
it actually incurred.196 At trial, Parexel stipulated that it was no longer seeking

payment of the two invoices for the advance payment of the fees.197

         Xynomic doesn’t dispute Parexel’s right to collect the pass-through and

investigator fees it actually incurred. But Xynomic does maintain that Parexel

cannot recover for the invoiced $2 million advance payments.198 Parexel agrees. At

trial, Parexel produced a reevaluated figure of $5.53 million, excluding the invoices

for the $2 million advance payments, and has reaffirmed that lower sum throughout

its post-trial briefing.199            Given that the amount of actually incurred

pass-through and investigator fees is uncontested, and that Parexel has provided a

breakdown of such fees, Parexel has proven its damages on those as well.

      D. ATTORNEY’S FEES

         Parexel contends that it is entitled to attorney’s fees under the bad faith

exception to the American Rule.200 And Parexel cites to two instances of Xynomic’s

196
      PSO ¶¶ 31-84 (original figure of unpaid invoices for Work Order 1 was $7, 408,256.24).
197
   Trial Tr., Jan. 26, 2021, at 83; id. at 177 (“Well, the position is that as of the time we filed . . .
the litigation and the amended complaint [] that those invoices were unpaid. And, as we have
heard testimony through even the amended complaint, Xynomic was still asking Parexel to
continue working on this project. Therefore, those invoices were still outstanding, due, and
payable. Now that we are through the litigation and the study has concluded, Parexel is no longer
doing any work, no one is doing any work on this, those invoices are now not due and payable.”).
198
      Xynomic’s Post-Trial Br. at 32-33 & n.4.
199
    Trial Tr., Jan. 26, 2021, at 177-78; Parexel’s Post-Trial Br. at 8; Parexel’s Post-Trial Ans. Br.
at 28-29.
200
      Parexel’s Post-Trial Br. at 32-33.
                                                 -45-
conduct that it says qualifies under that exception. First, Parexel claims that, by

acknowledging that it owed Parexel money, but failing to identify the invoiced

amounts in dispute, Xynomic wasted Parexel’s time and money and needlessly

prolonged this litigation.201 Second, Parexel alleges that Xynomic’s Chief Executive

Officer, Yinglin Mark Xu, submitted a false, unsworn foreign declaration.202

          Under the American Rule, it is generally presumed that each party will pay its

own attorney’s fees203 unless the bad faith exception applies.204 The bad faith

exception applies only under “extraordinary circumstances.”205 It should not be

invoked merely because some party’s “allegations were disproven at trial.”206

Instead, the party seeking attorney’s fees must show by “clear evidence” that the

opposing party “acted in subjective bad faith.”207 This subjective bad faith must

relate to those actions taken either in the “commencement of” or “during”

litigation.208

201
      Id. at 33.
202
      Id. at 34.
203
       E.g., Mahani v. Edix Media Grp., Inc., 935 A.3d 242, 245 (Del. 2007).
204
      E.g., RBC Cap. Mkts., LLC v. Jervis, 129 A.3d 816, 877 (Del. 2015)
205
   Montgomery Cellular Holding Co., Inc. v. Dobler, 880 A.2d 206, 227 (Del. 2005) (internal
quotation marks omitted).
206
      Gen. Video Corp. v. Kertesz, 2009 WL 106509, at *1 (Del. Ch. Jan. 13, 2009).
207
      RBC Cap., 129 A.3d at 877 (internal quotation marks omitted).

                                               -46-
         According to Xynomic, this trial exposed the fact that Parexel hadn’t engaged

and provided the required reconciliation that would have avoided double billing had

Xynomic not resisted and pressed its defense.209 And as to Mr. Xu’s declaration,

Xynomic claims it was made to the “best of his knowledge at the time[,]” and not in

bad faith.210

         Under the American Rule, the bad faith inquiry is fact-intensive and reserved

for the most serious and extraordinary circumstances that, if not sanctioned, would

harm the judicial process.211 The Court has examined the entire record in this matter

and cannot find that Parexel’s allegations, even if true, rise to a level justifying the

award of such a serious sanction.212 And so, no fee shifting is appropriate. Each

party must pay its own attorney’s fees.

208
    Id. (internal quotation marks omitted); cf. Versata Enters., Inc. v. Selectica, Inc., 5 A.3d 586,
607 (Del. 2010) (“Generally, the bad faith exception to the American Rule . . . does not apply to
the conduct that gives rise to the substantive claim itself.” (internal quotation marks omitted)).
209
      Xynomic’s Post-Trial Ans. Br. at 12-13.
210
      Id. at 14-15.
211
      Montgomery, 880 A.2d at 227.
212
      See Lawson v. State, 91 A.3d 544, 552 (Del. 2014) (“The bad faith exception applies only in
extraordinary cases, and the party seeking to invoke that exception must demonstrate [its
applicability] by clear evidence. . . .” (emphasis added) (internal quotation marks and citation
omitted)); see also RBC Cap., 129 A.3d at 879 (observing that whether to shift fees using the bad
faith exception “is a matter that is within the discretion of the trial judge” and explaining that a
trial court does not “abuse [its] discretion” in shifting or not shifting fees just because another court
“may have come to a different conclusion”); see generally Gatz Props., LLC v. Auriga Cap. Corp.,
59 A.3d 1206, 1222 (Del. 2012) (“[T]here is no single definition of bad faith conduct.” (internal
quotation marks omitted)); cf. Johnston v. Arbitrium (Cayman Is.) Handels AG, 720 A.2d 542, 546
& n.27 (Del. 1998) (giving “falsified records” as an example of bad faith, but also noting that
                                                 -47-
      E. PRE- AND POST-JUDGMENT INTEREST

         A non-breaching party is entitled to pre- and post-judgment interest as a matter

of right, and Delaware courts will not disturb that right.213 When the parties have

contractually expressed an interest rate, the Court will abide by that expressed

interest rate.214

         MSA Section 4.2 does provide that “[Xynomic] will pay interest on any

unpaid invoice (including any undisputed portion of a disputed invoice) at the rate

of one percent (1%) per month until such invoice(s) is paid in full.”215 And Parexel

asks that interest rate be applied here.216 Xynomic never responds to Parexel’s

“insufficient proof that [the] documents in question were falsified” counsels against fee-shifting
(citation omitted)).
213
    Brandywine Smyrna, Inc. v. Millennium Builders, LLC, 34 A.3d 482, 486 (Del. 2011) (“[I]n
addition to the principle that prejudgment interest in Delaware cases is awarded as a matter of
right, the general rule is that interest accumulates from the date payment was due the plaintiff,
because full compensation requires an allowance for the detention of the compensation awarded
and interest is used as a basis for measuring that allowance.” (internal quotation marks omitted));
see also Chaplake Holdings Ltd. v. Chrysler Corp., 2003 WL 22853462, at *4 (Del. Super. Ct.
Oct. 30, 2003) (“Under Delaware law, pre-judgment and post-judgment interest on a debt is
awarded as a matter of right and not of judicial discretion. Courts award pre-judgment and
post-judgment interest to the prevailing injured party for the detention of damages.” (internal
quotation marks and citation omitted)).
214
    Cf. Beard Rsch., Inc. v. Kates, 8 A.3d 573, 620 (Del. Ch. 2010) (computing the statutory
(“default”) interest rate because there was no “express contract rate” (citing DEL. CODE ANN. tit.
6, § 2301(a) (2020))), aff’d sub nom., ASDI, Inc. v. Beard Rsch., Inc., 11 A.3d 749, 750 (Del.
2010).
215
      JX-252 (MSA § 4.2).
216
      Parexel’s Post-Trial Br. at 31-32.

                                               -48-
invocation of Section 4.2—which the Court deems as Xynomic’s concession to the

rate’s application.

       Accordingly, Parexel is entitled to pre- and post-judgment interest at the rate

of one percent (1%) per month of the unpaid invoices.

                                     VI. CONCLUSION

       When it wasn’t paying its accumulating bills, Xynomic engaged a check’s-in-

the-mail approach with Parexel. Once sued, Xynomic took a different tack. It now

says, Parexel didn’t earn those phantom checks.

       In more formal legal terms, Xynomic’s defense here has been that it was

excused from any obligation to pay its outstanding invoices because Parexel either

deficiently performed or failed to perform under the MSA and Work Order 1 to an

extent that Parexel was in material breach of those agreements. Not so. Xynomic

had the contractual right to challenge any invoice it wanted, and moreover was free

to express issues with work performed or withheld. When asked why it didn’t raise

objections to Parexel’s performance before now, the best Xynomic could offer was

that it “need[ed] to keep Parexel involved in the project.”217

       But that begs the question of when, if ever, Xynomic was going to raise its

supposed objections with Parexel. At best, Xynomic sat on its rights and, by not

217
    Xynomic’s Post-Trial Br. at 24 (“Xynomic may not have raised specific issues with Parexel’s
performance during these financial communications, as described above, due to Xynomic’s need
to keep Parexel involved in the project.”).
                                             -49-
asserting its objections, agreed to the volume, substance, and quality of the work

performed. At worst, Xynomic held valid performance complaints in its back pocket

just waiting for litigation over non-payment. And at very worst, these dire

performance issues were nothing more than the bumps expected along road to

approval of a promising drug that are now being miscast to try to excuse Xynomic’s

failure to pay its toll. No matter which it is, Xynomic’s free ride must now end.

      In determining whether the elements of breach of contract were met, the Court

credits the many witnesses who testified that Parexel consistently provided the

consideration required and was performing in the manner agreed to. Though

Xynomic claims that in certain instances Parexel was underperforming or not

performing at all, the Court is unconvinced. Parexel did perform as required under

the contracts, and Xynomic materially breached those same agreements by failing to

pay its properly invoiced obligations thereunder.

      As a result, Xynomic is ordered to pay Parexel $5,530,609.30 and the

corresponding one percent (1%) pre- and post-judgment interest as derived from the

contracts.

                                        -50-
                          VII. VERDICT AND JUDGMENT

   ON PAREXEL’S COMPLAINT:

      - Count I – Breach of Contract (Work Order 1): For Parexel.

Parexel is entitled to pre- and post-judgment interest on Count I. But Parexel is not

entitled to its Attorney’s Fees.

      The parties shall confer and, within 15 days, submit to the Court a proposed

form of Order of Final Judgment consistent with these findings and verdicts.

   IT IS SO ORDERED.

                                                    _
                                                    Paul R. Wallace, Judge

Original to Prothonotary
cc: All counsel via File & Serve

                                        -51-