Brickell agrees to weeklong lawsuit settlement talks with Miami company

BOULDER and MIAMI — Brickell Biotech Inc. (Nasdaq: BBI) said it intends to reach a settlement with a Miami-based pharmaceutical company over a federal lawsuit that led to one of its largest investors pulling its support.

In a joint filing Monday morning, Boulder-based Brickell and Bodor Laboratories Inc. said they agreed on an outline for settling the suit and amending a licensing agreement for an excessive sweating treatment. The two companies plan to finalize a settlement by Monday, Dec. 23, and restate the license agreement within 10 days of that settlement.

Bodor sued Brickell in late October, alleging a series of bad-faith practices ranging from Brickell sublicensing Bodor’s intellectual property to a Japanese company without permission and claiming that technology as its own when filing for patents in the U.S. Bodor also unilaterally cancelled the licensing agreement.

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The suit was later stayed when Brickell triggered an arbitration clause in the agreement.

Any settlement Brickell might make to Bodor would be compounded by the loss of NovaQuest Co-Investment Fund X LP, a North Carolina venture fund that cancelled its commitment to up to $25 million in milestone payments to Brickell due to the lawsuit. Brickell inherited that funding agreement when it closed a reverse initial public offering with Vical Inc. in September. The company agreed last month to pay back $5.6 million plus interest to the venture fund.

Brickell said in previous quarterly filings that the loss of funding and the lawsuit could slow down its Phase III trial for its flagship underarm sweating treatment.

Brickell stock fell 16 percent by the close of trading Monday.