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Direct Biologics, LLC v. Kimera Labs, Inc.

United States District Court, E.D. Missouri, Eastern Division

January 14, 2020

DIRECT BIOLOGICS, LLC, Plaintiff,
v.
KIMERA LABS, INC., Defendant.

          OPINION, MEMORANDUM AND ORDER

          HENRY EDWARD AUTREY UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Defendant's Motion to Dismiss Count III, [Doc. No. 40]. The motion is fully briefed. For the reasons set forth below, the Motion is denied.

         Facts and Background [1]

         Plaintiff brought this action seeking specific performance and injunctive relief against Defendant. Plaintiff's First Amended Complaint alleges breach of contract (Count I), seeks injunctive relief against a former employee (Count II), and alleges a breach of an implied warranty of merchantability (Count III).

         With respect to Count III, Plaintiffs' Amended Complaint alleges the following:

         Kimera Labs manufactures an acellular product known as exosomes. An exosome is a nano particle lipid vesicle, and the primary communication device between cells; they transfer ribonucleic acids, as well as other proteins, between cells for the primary purpose of healing.

         Exosomes have been used to treat a variety of conditions, but Kimera Labs' exosomes are marketed for topical applications only.

         From time-to-time from February through August 2018, Direct Biologics purchased exosomes from Kimera Labs. Direct Biologics sold some but not most of the exosomes it purchased from Kimera Labs and gave away many samples to doctors for clinical use.

         Kimera Labs' failure to receive accreditation from the American Association of Tissue Banks led Direct Biologics to question Kimera Labs' manufacturing processes and the quality and safety of its exosomes. It thus had several samples of the exosomes in its inventory tested. The exosomes tests were performed by a firm called RayBiotech, a laboratory known to be used by Kimera Labs.

         The test results were significant in that the protein levels in the samples widely varied where there should have been a consistent and appreciable amount of detected proteins in each lot. The test results confirmed Direct Biologics' concerns regarding Kimera Labs' manufacturing processes, and the quality of its products. Direct Biologics thus quarantined its remaining inventory of Kimera Labs' exosomes, as none of it can be safely sold to a doctor without first testing its chemical composition.

         Kimera Labs breached its implied warranty of merchantability in selling Direct Biologics exosomes that cannot be sold without first testing for their chemical composition.

         Direct Biologics has been damaged by Kimera Labs' breach in that it paid Kimera Labs more than $100, 000 for the unsellable exosomes in its inventory.

         Defendant moves to dismiss Count III for failure to state a cause of action under Rules 12(b)(6).

         Legal ...


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