1018-00007 · Penterra Pharmaceuticals Corp · Post-Judgment

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MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

To: Linda Osei, Partner

From: Hannah Brinkley, Associate

Date: July 20, 2022

Re: Post-Decision Analysis — Penterra Pharmaceuticals Corp. v. Vantage Medical Distribution, LLC, Docket No. 2184-CV-01537-BLS (MA Superior Court, Business Litigation Session, Suffolk County)

Matter No.: 1018-00007

I. Executive Summary

On July 15, 2022, the Honorable Diane L. Costigan, J., of the Superior Court of Massachusetts, Business Litigation Session, issued a Memorandum of Decision and Order granting Penterra Pharmaceuticals Corp.'s ("Penterra" or "Plaintiff") motion for summary judgment, denying Vantage Medical Distribution, LLC's ("Vantage" or "Defendant") cross-motion for summary judgment, and dismissing all three of Vantage's counterclaims — breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel — on the merits. The decision represents a complete victory for our client on every claim and counterclaim in the case.

In its core holding, the court declared that the "Territory" under the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA") is limited to the six New England states enumerated in Exhibit A to the EDA: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. The court found that Vantage's distribution of Oncalaris® (pegvisomant-axel) in New York, New Jersey, and Pennsylvania beginning on or about September 14, 2020 was unauthorized under the EDA and constituted a breach of Section 2.3 of the agreement. This finding formed the basis for the court's grant of declaratory relief to Penterra and its rejection of Vantage's counterclaims.

Final Judgment was entered on August 5, 2022. Pursuant to Massachusetts Rules of Appellate Procedure, Rule 4(a), Vantage has thirty (30) days from the date of entry of judgment — i.e., until September 4, 2022 — to file a notice of appeal to the Massachusetts Appeals Court.

The purpose of this memorandum is to provide a comprehensive analysis of the court's reasoning, identify the potential appellate arguments that Vantage might raise if it elects to pursue an appeal, and assess the likelihood that any such arguments would result in reversal. This memorandum also addresses the practical implications of the decision for Penterra's business operations, including its pending arrangement with Meridian National Distributors, Inc. for tri-state distribution of Oncalaris®.

Our overall assessment is that the decision rests on solid ground under established Massachusetts precedent and is unlikely to be reversed on appeal. The court's interpretation of the EDA's plain language is straightforward and well-supported, the application of the written-modification clause is consistent with controlling Supreme Judicial Court authority, and the dismissal of all three counterclaims follows logically from the court's contract-interpretation holdings. We recommend monitoring the appeal deadline and, upon its expiration without a filing, preparing to close the litigation file.

II. Procedural Background

The procedural history of this action is set forth below in chronological order for reference purposes.

Penterra commenced this action by filing a Complaint for Declaratory Judgment on April 12, 2021, in the Superior Court of Massachusetts, Suffolk County, Business Litigation Session. The Complaint sought a judicial declaration that the Territory under the EDA is limited to the six New England states enumerated in Exhibit A and that Vantage's distribution of Penterra products in New York, New Jersey, and Pennsylvania constituted a breach of Section 2.3 of the EDA.

On May 14, 2021, Vantage filed its Answer to the Complaint and asserted three counterclaims against Penterra: (1) breach of contract, alleging that Penterra violated Vantage's exclusive distribution rights by engaging Meridian National Distributors, Inc. for the tri-state area; (2) breach of the implied covenant of good faith and fair dealing, alleging that Penterra had encouraged Vantage's investment in tri-state infrastructure and then acted in bad faith by shutting Vantage out of that market; and (3) promissory estoppel, alleging that Penterra had made a clear and definite promise of territorial expansion upon which Vantage had reasonably and detrimentally relied. Vantage sought damages of approximately $35 million across all three counterclaims.

Penterra filed its Answer to Vantage's Counterclaims on June 4, 2021, denying all material allegations and raising affirmative defenses including, inter alia, failure to state a claim, the statute of frauds, and Vantage's own breach of the EDA as a bar to recovery on the counterclaims.

Fact discovery commenced in approximately July 2021 and proceeded through the discovery close on January 14, 2022. During the fact-discovery period, the parties exchanged substantial document productions and conducted four depositions of key witnesses:

• Donald R. Farnham (CEO, Vantage Medical Distribution, LLC) — deposed on October 18, 2021. Mr. Farnham testified regarding Vantage's understanding of the Territory, the circumstances surrounding the January 12, 2018 email from Steven Kapoor, Vantage's decision to commence distribution in the tri-state area, and Vantage's investments in tri-state sales infrastructure.

• Steven Kapoor (Vice President, Commercial Operations, Penterra Pharmaceuticals Corp.) — deposed on November 2, 2021. Mr. Kapoor testified regarding his January 12, 2018 email to Donald Farnham, the intent behind the email, the scope of his authority within Penterra's organizational structure, and Penterra's internal policies regarding distributor territory modifications.

• Rachel Mendez (Senior Director, Distribution Logistics, Penterra Pharmaceuticals Corp.) — deposed on November 19, 2021. Ms. Mendez testified regarding Penterra's distribution logistics systems, the protocols for directing product shipments to authorized distributors, and whether Penterra's internal systems reflected any authorization for Vantage to receive or distribute products destined for tri-state addresses.

• Brian Kopec (Regional Sales Manager, Northeast Division, Vantage Medical Distribution, LLC) — deposed on December 7, 2021. Mr. Kopec testified regarding Vantage's sales operations in the tri-state area, his communications with Penterra personnel, and the revenue generated by Vantage's tri-state distribution activities.

Following the close of fact discovery, Penterra filed its Motion for Summary Judgment on February 11, 2022. The motion was supported by Penterra's Statement of Undisputed Material Facts prepared pursuant to Superior Court Rule 9A(b)(5), the affidavits of Steven Kapoor and Rachel Mendez, and a Memorandum of Law in Support of Summary Judgment.

On February 25, 2022, Vantage filed its Cross-Motion for Summary Judgment on its counterclaims, accompanied by its own Rule 9A(b)(5) statement, the affidavit of Donald R. Farnham, and a Memorandum of Law in Support of Cross-Motion and in Opposition to Penterra's Motion.

Penterra filed its Opposition to Vantage's Cross-Motion for Summary Judgment and its Reply in Support of Penterra's own Motion for Summary Judgment on March 18, 2022. Vantage filed its Opposition to Penterra's Motion and its Reply in Support of its Cross-Motion on April 1, 2022.

The court held oral argument on both motions on May 6, 2022, before Justice Costigan. Counsel for both parties presented argument for approximately ninety minutes.

Justice Costigan issued the Memorandum of Decision and Order on July 15, 2022, granting Penterra's motion, denying Vantage's cross-motion, and dismissing all three counterclaims on the merits. Final Judgment consistent with the Memorandum of Decision and Order was entered on August 5, 2022.

III. The Court's Analysis — Detailed Discussion

The court's Memorandum of Decision and Order runs to twenty-three pages and addresses each of the disputed issues in a structured and methodical fashion. This section summarizes and analyzes the court's reasoning on each major point.

A. Plain Language of the EDA and Exhibit A

The court began its analysis, as is customary under Massachusetts contract-interpretation principles, with the text of the agreement itself. The court observed that "[w]here the language of a contract is unambiguous, it must be enforced according to its plain terms, and the court need not look beyond the four corners of the instrument." Mem. Decision at 7 (citing Bank v. Int'l Bus. Machs. Corp., 145 F.3d 420, 424 (1st Cir. 1998) (applying Massachusetts law)).

Section 2.1 of the EDA provides, in relevant part, that Penterra "hereby grants to Distributor the exclusive right to distribute the Products within the Territory, as defined in Exhibit A." The court reproduced the text of Exhibit A in full. That exhibit defines the Territory as follows:

"The states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont (collectively, the 'New England States')."

The court found this language to be "clear, specific, and unambiguous." Mem. Decision at 8. The Territory is defined by an exhaustive enumeration of six states. New York, New Jersey, and Pennsylvania are conspicuously absent from the list. The court rejected Vantage's invitation to read the definition expansively, noting that the use of the parenthetical "(collectively, the 'New England States')" further confirms that the parties understood the Territory to be coextensive with the six traditionally recognized New England states and nothing more. There is no language in Exhibit A suggesting that the Territory was intended to include any states beyond those expressly enumerated.

The court then turned to Section 2.3 of the EDA, which provides:

"Distributor shall not actively solicit orders for, or deliver, the Products outside the Territory without Supplier's prior written consent."

The court observed that Section 2.3 serves a dual function in the contractual architecture. First, it reinforces the territorial limitation by expressly prohibiting the Distributor from operating outside the Territory without authorization. Second, it establishes a specific mechanism — "prior written consent" — by which the territorial restriction could be relaxed in a particular instance. The court emphasized that the existence of this consent mechanism "confirms the parties' mutual understanding that the Territory, as defined in Exhibit A, represented a firm boundary, not a floor or a starting point for organic expansion." Mem. Decision at 9.

For completeness, the court noted that the products covered under the EDA are Oncalaris® (pegvisomant-axel), in 20 mg and 40 mg vial formulations, and Renuvesta® (cilosporin-beta), in 5 mg capsule formulation. While both products are subject to the territorial restrictions of the EDA, the dispute in this case centered on Vantage's distribution of Oncalaris® in the tri-state area.

Having found the contract language unambiguous, the court proceeded to address and reject each of Vantage's arguments for a broader reading of the Territory or, alternatively, for a modification of the Territory through conduct or informal communications.

B. The January 12, 2018 Kapoor Email

The court next addressed what it characterized as "the centerpiece of Vantage's case" — the email sent by Steven Kapoor (Penterra's Vice President, Commercial Operations) to Donald Farnham (Vantage's CEO) on January 12, 2018. Mem. Decision at 10.

The court reproduced the email in its entirety:

"Don — good catching up yesterday. We're definitely open to exploring expansion into NY/NJ/PA once your New England footprint is fully ramped. Let's circle back mid-year and see where things stand."

Vantage argued that this email constituted "prior written consent" within the meaning of Section 2.3 of the EDA, thereby authorizing Vantage to distribute Penterra products in the tri-state area. In the alternative, Vantage argued that the email constituted a clear and definite promise of territorial expansion supporting its promissory estoppel counterclaim.

The court rejected both characterizations of the email. As to the "prior written consent" argument, the court engaged in a careful textual analysis of the email's language. The court found that the phrases "open to exploring" and "let's circle back mid-year and see where things stand" are "inherently aspirational and conditional, not constitutive of consent." Mem. Decision at 11. The court explained:

"The ordinary meaning of 'consent' is an affirmative grant of permission — an expression of agreement to a specific course of action. The Kapoor Email does not express agreement to anything. It expresses a willingness to discuss a future possibility, contingent on conditions that had not yet been satisfied ('once your New England footprint is fully ramped'). To equate an expression of interest in future negotiations with a grant of 'prior written consent' would drain that contractual term of all meaningful content."

The court further noted that the email does not reference the EDA, Section 2.3, Exhibit A, or the concept of "prior written consent." It contains no formal language of authorization. It is, as the court characterized it, "an informal, casual communication of the sort routinely exchanged between business colleagues — not a legal instrument conferring contractual rights." Mem. Decision at 12.

This interpretation was consistent with the deposition testimony of the email's author. Steven Kapoor testified during his November 2, 2021 deposition that the email was intended to express openness to future discussions about a potential expansion of the Vantage relationship but did not grant consent to distribute in the tri-state area and was not intended to amend the Territory as defined in Exhibit A. Kapoor testified that he understood the distinction between expressing interest in future business discussions and granting formal contractual consent, and that he did not intend the email to serve the latter function.

Donald Farnham's own deposition testimony (October 18, 2021) also undercut Vantage's position, albeit less directly. Mr. Farnham acknowledged under questioning that he did not obtain a signed amendment to Exhibit A at any time following the Kapoor Email. When asked what he relied on to justify Vantage's commencement of tri-state distribution in September 2020, Mr. Farnham pointed primarily to the Kapoor Email and to what he characterized as a "subsequent course of dealing" in which Penterra never objected to Vantage's growing presence in the tri-state area. Mr. Farnham did not identify any subsequent written communication in which Penterra expressly authorized tri-state distribution.

Based on this analysis, the court concluded that the Kapoor Email did not constitute "prior written consent" under Section 2.3 of the EDA, either as a matter of contractual interpretation or on the factual record before the court.

C. Written-Amendment Requirement (Section 13.1)

The court's analysis did not end with the Kapoor Email's failure to satisfy Section 2.3. The court proceeded to address the separate and independent bar imposed by Section 13.1, the written-amendment clause. Section 13.1 of the EDA provides:

"No amendment, modification, or waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by both parties."

The court held that even if the Kapoor Email could be construed as a form of written communication reflecting some measure of assent on Penterra's part — which, as noted above, the court did not so construe — it would still fail to satisfy Section 13.1 for the fundamental reason that it was a unilateral communication from a single Penterra employee. It was not a "written instrument signed by both parties." No representative of Vantage signed or countersigned the email, and neither party treated the email as a formal amendment to the EDA.

In reaching this conclusion, the court relied principally on the Supreme Judicial Court's decision in Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000). In Cambridge Biotech, the SJC held that written-modification clauses in commercial contracts are generally enforceable under Massachusetts law and that parties may not circumvent such provisions through informal communications or oral agreements. The SJC reasoned that "[p]arties to a contract have the right to include a provision precluding oral modification, and . . . such provisions serve the salutary purpose of protecting against fraudulent claims of modification and promoting the stability of written agreements." Id. at 130.

The court observed that the Cambridge Biotech rationale applies with particular force in the present case, where both Penterra and Vantage are "commercially experienced entities that were represented by counsel at the time of contracting." Mem. Decision at 14. The EDA was negotiated and drafted with the assistance of legal counsel on both sides. The written-modification clause was not buried in boilerplate but rather reflected a considered allocation of risk: both parties wanted assurance that the carefully negotiated terms of their agreement — including, critically, the territorial boundaries — could not be altered informally. The court stated that to allow the Kapoor Email to override the written-amendment requirement would be to disregard a provision to which both parties freely agreed, thereby undermining the predictability and reliability of commercial agreements.

The court further noted that Section 13.1 requires not merely a writing but a "written instrument signed by both parties." This heightened requirement — bilateral execution — underscores the parties' intent that any modification must reflect the mutual, deliberate agreement of both sides, documented in a manner that leaves no doubt as to its terms. A casual email from a single executive, with no acknowledgment or countersignature from the other party, falls well short of this standard.

D. Integration Clause (Section 14.8) and the Parol Evidence Rule

The court also addressed the role of the EDA's integration clause, Section 14.8, which provides:

"This Agreement, including all Exhibits, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, or agreements relating thereto, whether written or oral."

Based on this language, the court held that the EDA is a fully integrated agreement. Under the parol evidence rule as applied in Massachusetts, a fully integrated agreement cannot be contradicted or supplemented by evidence of prior or contemporaneous agreements, whether oral or written. The court acknowledged that the Kapoor Email, dated January 12, 2018, was a post-execution communication rather than a prior or contemporaneous negotiation, and therefore the parol evidence rule did not apply to it in a technical sense. However, the court observed that the integration clause is part of a broader contractual framework — read in conjunction with the written-modification clause in Section 13.1 — that reflects the parties' clear and mutual intent that the EDA's terms, including the Territory definition in Exhibit A, could not be altered except through a formal, bilateral written instrument.

The court stated: "Reading Sections 13.1 and 14.8 together, the contractual architecture is unmistakable. The parties established a comprehensive written agreement, declared it to be the complete and exclusive statement of their understanding, and specified that any change to that understanding must take a particular form — a written instrument signed by both parties. This framework leaves no room for the kind of informal, unilateral, and conditional communication on which Vantage relies." Mem. Decision at 16.

E. Course-of-Dealing / Implied Modification Argument

Vantage's final argument on the contract-interpretation issues was that Penterra's alleged failure to object to Vantage's shipments to New York beginning in late 2019, combined with a broader course of dealing between the parties over approximately three years, effected an implied modification of Exhibit A to include the tri-state area of New York, New Jersey, and Pennsylvania.

The court rejected this argument on multiple independent grounds, each of which would independently warrant dismissal of the argument.

First, the court held that Section 13.1's written-amendment requirement expressly precludes oral or implied modifications of the EDA. The court reiterated the holding of Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000), that written-modification clauses are enforceable under Massachusetts law and that course-of-dealing evidence cannot override an unambiguous written-modification clause in a fully integrated agreement between sophisticated commercial parties. The court found no basis in the record or in the applicable law to depart from this well-established principle.

Second, the court found that the factual predicate for Vantage's course-of-dealing argument was disputed and, on balance, weak. Rachel Mendez testified during her November 19, 2021 deposition that Penterra's distribution logistics systems directed Oncalaris® shipments to Vantage only for New England addresses. Ms. Mendez testified that Penterra's internal order-management system coded Vantage as an authorized distributor for the six New England states only, and that shipments to end customers located in New York, New Jersey, or Pennsylvania would not have been routed through Vantage under Penterra's standard protocols. Ms. Mendez further testified that Penterra never authorized shipments of Penterra products to tri-state customers through Vantage, either formally or informally.

The court noted that there was no evidence in the record that any Penterra employee or officer affirmatively knew of and acquiesced in Vantage's tri-state distribution activities before the dispute came to a head. Brian Kopec's deposition testimony (December 7, 2021), while establishing that Vantage had generated substantial tri-state revenue, did not establish that any Penterra employee expressly acknowledged or approved those sales. Mr. Kopec testified to various communications with Penterra's sales personnel, but none of the communications cited by Vantage in its briefing reflected an express acknowledgment by Penterra that Vantage was authorized to distribute in the tri-state area.

Third, and perhaps most critically from a legal standpoint, the court held that even if there were some evidence of acquiescence by Penterra — which the court did not find on this record — course-of-dealing evidence cannot override an unambiguous written-modification clause in a fully integrated agreement under Massachusetts law. The court stated: "The written-modification clause exists precisely to prevent this scenario: one party acting unilaterally, claiming the other's silence as consent, and then asserting that the contract has been implicitly rewritten. If that were sufficient, written-modification clauses would be meaningless." Mem. Decision at 18.

Fourth, the court addressed the temporal dimension of the course-of-dealing argument. Vantage began its tri-state shipments on or about September 14, 2020. Penterra issued its formal cease-and-desist letter on March 8, 2021 — a period of approximately six months. The court found this interval insufficient to establish the kind of long-standing, consistent pattern of mutual conduct that would be required for a course-of-dealing modification, even in a hypothetical legal framework where such modifications were cognizable notwithstanding a written-modification clause. The court observed that six months is a relatively brief period in the context of a five-year distribution agreement and that the record showed no evidence that the parties had engaged in a sustained, bilateral pattern of conduct reflecting a shared understanding that the Territory had been expanded.

The court noted for the record that Vantage's tri-state revenues during the relevant period (September 2020 through March 2021) totaled approximately $6.4 million, based on Vantage's own sales records produced during fact discovery. While this figure is not insubstantial, the court declined to treat the generation of revenue through unauthorized activity as evidence that the activity had been authorized.

F. Rejection of Vantage's Counterclaims

Having resolved the core contract-interpretation issues in Penterra's favor, the court turned to Vantage's three counterclaims, each of which was dismissed on the merits.

1. Breach of Contract Counterclaim. Vantage's breach-of-contract counterclaim alleged that Penterra breached the EDA by seeking to appoint Meridian National Distributors, Inc. as a distributor of Oncalaris® in the tri-state area — a market that Vantage claimed fell within its exclusive Territory under the EDA.

The court dismissed this counterclaim as a straightforward consequence of its holding on the Territory issue. Because the Territory does not include New York, New Jersey, or Pennsylvania, Penterra's engagement with Meridian for distribution in those states did not violate Vantage's exclusivity. Section 2.1 of the EDA grants Vantage exclusive distribution rights only "within the Territory, as defined in Exhibit A," and Exhibit A does not include the tri-state area. Penterra's execution of a term sheet with Meridian on February 15, 2021, for tri-state distribution of Oncalaris® was entirely consistent with the terms of the EDA.

Indeed, the court noted that the record indicated Vantage, not Penterra, was the party in breach of the EDA. By distributing Oncalaris® in the tri-state area beginning in September 2020 without prior written consent, Vantage violated Section 2.3 of the EDA. While Penterra did not assert a breach-of-contract counterclaim of its own in this action (having elected to proceed solely on a declaratory-judgment theory), the court observed that this factual finding further undercuts Vantage's attempt to cast Penterra as the breaching party.

2. Breach of Implied Covenant of Good Faith and Fair Dealing. Vantage's second counterclaim alleged that Penterra breached the implied covenant of good faith and fair dealing by encouraging Vantage's investment in tri-state infrastructure — principally through the Kapoor Email and subsequent informal communications — and then shutting Vantage out of the tri-state market by engaging Meridian.

The court dismissed this counterclaim on both legal and factual grounds. As a matter of law, the court held that the implied covenant of good faith and fair dealing, which is implied in every contract under Massachusetts law, cannot be used to create rights that are inconsistent with the express terms of the agreement. The court cited the well-established Massachusetts principle that the implied covenant "is aimed at making sure that parties act 'consistently with the justified expectations of the other party,'" but that it "may not be invoked to create rights and duties not otherwise provided for in the contractual relationship." Mem. Decision at 20 (quoting Vireo & Co. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004)).

Here, the Territory was plainly defined in Exhibit A. The written-modification clause in Section 13.1 governed the mechanism for any changes to that definition. Penterra did not act in bad faith by enforcing the contract as written. The court stated that "a party does not violate the implied covenant merely by insisting on its contractual rights, even where the other party may find that insistence inconvenient or disappointing." Mem. Decision at 20.

On the factual record, the court reiterated its finding that the Kapoor Email was aspirational and conditional, not a promise or commitment, and that Penterra had not engaged in a pattern of conduct that would give rise to a reasonable expectation on Vantage's part that the Territory had been or would be expanded to include the tri-state area.

3. Promissory Estoppel. Vantage's third counterclaim sounded in promissory estoppel. Vantage alleged that Kapoor's January 12, 2018 email constituted a clear and definite promise of territorial expansion upon which Vantage reasonably relied to its detriment by investing in tri-state sales infrastructure, hiring additional sales personnel, and cultivating customer relationships in New York, New Jersey, and Pennsylvania. Vantage alleged that it invested approximately $4.2 million in tri-state infrastructure and personnel in reliance on the Kapoor Email and related communications.

The court dismissed the promissory estoppel counterclaim on multiple independent grounds.

First, the court held that the email's language — "open to exploring" and "let's circle back mid-year and see where things stand" — does not constitute a "clear and definite promise" capable of supporting a promissory estoppel claim. Under Massachusetts law, promissory estoppel requires, among other elements, a promise that is "clear and definite" in nature. See Loranger Constr. Corp. v. E.F. Hauserman Co., 376 Mass. 757, 761 (1978). A general expression of willingness to explore a future business opportunity, contingent on unspecified conditions, is not a promise of any kind — it is, at most, an expression of preliminary interest.

Second, the court found that Vantage's reliance on the Kapoor Email was unreasonable as a matter of law. The court emphasized that Vantage was a signatory to the EDA and was therefore fully aware of the written-modification clause in Section 13.1, which requires any amendment to the agreement to be set forth in a written instrument signed by both parties. A sophisticated commercial entity, represented by counsel, cannot claim that it reasonably relied on an informal, aspirational email as a basis for making millions of dollars in investment when the governing contract expressly provides that amendments must take a specific, formal written form. The court stated: "Vantage's claimed reliance on the Kapoor Email, in the face of Section 13.1, was not merely unreasonable — it was inconsistent with the contractual framework to which Vantage had agreed." Mem. Decision at 22.

Third, the court observed that promissory estoppel is "disfavored as a mechanism to override express contractual terms, particularly where a fully integrated agreement governs the relationship between the parties." Mem. Decision at 22. The court noted that Massachusetts courts have consistently held that promissory estoppel is an equitable doctrine that serves as a substitute for consideration in the absence of a binding contract — it is not a vehicle for rewriting or expanding the terms of an existing, fully negotiated contract between sophisticated commercial parties.

IV. Potential Appellate Arguments and Assessment

A. Overview of Appellate Standard

If Vantage elects to appeal, it may file a notice of appeal with the Massachusetts Appeals Court within thirty days of the entry of Final Judgment. Final Judgment was entered on August 5, 2022, establishing an appeal deadline of September 4, 2022. Vantage could alternatively seek direct appellate review by the Supreme Judicial Court pursuant to G.L. c. 211A, § 10, although such applications are granted sparingly and typically reserved for cases presenting novel or unsettled questions of law, which this case does not.

The applicable standards of appellate review are as follows:

A grant of summary judgment is reviewed de novo by the appellate court. The reviewing court applies the same standard as the trial court, examining the record in the light most favorable to the non-moving party and determining whether there are any genuine disputes of material fact that preclude judgment as a matter of law. On Penterra's motion, the record would be viewed in the light most favorable to Vantage; on Vantage's cross-motion, it would be viewed in the light most favorable to Penterra.

Questions of contract interpretation, where the language of the contract is found to be unambiguous, are questions of law and are therefore also reviewed de novo. The appellate court owes no deference to the trial court's interpretation of unambiguous contract provisions.

Importantly, however, the applicable legal standards — the enforceability of written-modification clauses, the effect of integration clauses, the elements of promissory estoppel, and the scope of the implied covenant of good faith and fair dealing — are well-settled in Massachusetts. The SJC's decision in Cambridge Biotech remains good law and has been consistently followed by the Appeals Court. No recent developments in Massachusetts jurisprudence suggest any movement toward weakening the enforceability of written-modification clauses in commercial agreements.

We identify below five potential arguments Vantage might raise on appeal, along with our assessment of each.

B. Potential Argument 1: The Kapoor Email as Written Consent Under Section 2.3

Vantage could argue that the court erred in finding that the January 12, 2018 Kapoor Email did not constitute "prior written consent" under Section 2.3 of the EDA. Specifically, Vantage might contend that the term "written consent" is ambiguous — or at least broader than the court construed it — and that an email from a senior Penterra executive expressing openness to territorial expansion satisfies the requirement, particularly when viewed in context and in the light most favorable to Vantage.

Assessment: Low likelihood of success. The email's language is plainly aspirational and conditional. It does not employ the language of authorization, permission, or consent. It does not reference the EDA, Section 2.3, or Exhibit A. It expressly conditions any expansion on future developments ("once your New England footprint is fully ramped") and defers substantive discussion to a future date ("let's circle back mid-year"). The court's interpretation — that "prior written consent" requires an affirmative grant of permission, not merely an expression of willingness to discuss — is consistent with the ordinary meaning of "consent" and with the commercial context in which the term is used. An appellate court conducting de novo review would almost certainly reach the same conclusion. Steven Kapoor's own deposition testimony, in which he stated that the email was not intended to grant consent or amend the Territory, further supports the court's reading. We assess the likelihood of success on this argument as low.

C. Potential Argument 2: Enforceability of the Written-Modification Clause (Section 13.1) in Light of Course of Dealing

Vantage might argue that Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000), does not create an absolute bar to course-of-dealing modifications of commercial contracts and that, under certain circumstances — particularly where one party's conduct creates a reasonable expectation of modification or where both parties have departed from the written terms over an extended period — the written-modification requirement should yield to equitable considerations. Vantage could argue that enforcing the written-modification clause under the circumstances of this case would be inequitable because Penterra's conduct (through the Kapoor Email and alleged failure to object to tri-state shipments) induced Vantage's reliance.

Assessment: Low to moderate likelihood of raising; low likelihood of success. Cambridge Biotech is controlling SJC precedent and strongly favors the enforcement of written-modification clauses in commercial agreements between sophisticated parties. While the SJC has not held that such clauses are absolutely irrebuttable in every conceivable scenario — and Vantage's counsel may attempt to distinguish or limit Cambridge Biotech on its facts — the circumstances of this case do not present the kind of extreme reliance or long-standing mutual departure from the written terms that might, in some future case, prompt a court to carve out a narrow exception.

Several features of the record weigh heavily against Vantage on this point. The tri-state shipments occurred for a period of only approximately six months (September 2020 to March 2021) before Penterra issued its cease-and-desist letter. The record lacks evidence that Penterra had affirmative knowledge of the shipments and acquiesced in them. The Kapoor Email, the only written communication on which Vantage relies, was sent approximately two and a half years before Vantage commenced tri-state distribution and is aspirational and conditional on its face. In short, the equitable case for overriding the written-modification clause is thin at best.

We note that if Vantage were to raise this argument, it would likely style it as a broader policy argument — urging the appellate court to recognize that rigid enforcement of written-modification clauses in all circumstances can produce unjust results. While this type of argument can be intellectually interesting, it is unlikely to move the needle in this case given the weakness of the underlying facts. The appellate court would likely decline to modify or limit Cambridge Biotech on this record.

D. Potential Argument 3: Factual Disputes Regarding Penterra's Knowledge of Tri-State Shipments

Vantage could argue that there were genuine disputes of material fact regarding whether Penterra knew about Vantage's tri-state shipments before March 2021 and tacitly approved them, making summary judgment inappropriate. Vantage might point to circumstantial evidence — such as the volume of tri-state sales ($6.4 million over six months), the involvement of Penterra's sales contacts with Vantage, and the absence of any prior complaint — as creating a triable issue of fact on the question of Penterra's knowledge and acquiescence.

Assessment: Moderate likelihood of raising; low likelihood of success. This is the argument most likely to receive serious attention from an appellate panel, because appellate courts reviewing summary judgment are attentive to the possibility that the trial court may have improperly resolved factual disputes. However, we believe it is unlikely to succeed for two reasons.

First, the factual record on this point is not as ambiguous as Vantage may suggest. Rachel Mendez's deposition testimony was clear and unrebutted: Penterra's distribution logistics systems directed Oncalaris® shipments to Vantage only for New England addresses, and Penterra never authorized shipments to tri-state customers through Vantage. Brian Kopec's deposition testimony, while establishing that Vantage had contacts with Penterra's sales personnel, did not establish that any Penterra employee expressly acknowledged or approved the tri-state sales. The evidence, viewed in the light most favorable to Vantage, might support an inference that some Penterra personnel were generally aware that Vantage was active in the tri-state area, but it does not support an inference that Penterra's management affirmatively sanctioned that activity.

Second, and more fundamentally, even if there were a genuine dispute of material fact about Penterra's knowledge, the legal conclusion would not change. Under Cambridge Biotech, knowledge and acquiescence alone cannot override a written-modification clause. Even if Penterra knew about the tri-state shipments and failed to object for six months, that would not constitute a written instrument signed by both parties, which is what Section 13.1 requires. The court correctly recognized that the factual dispute about knowledge, even if genuine, was not material to the outcome because the legal framework precludes implied modification regardless of the parties' knowledge or conduct.

E. Potential Argument 4: Promissory Estoppel as an Independent Equitable Claim

Vantage might argue that the court improperly conflated its promissory estoppel counterclaim with its contract-based claims and that promissory estoppel can operate as an independent equitable doctrine, separate from and unaffected by the express terms of the EDA. Under this theory, Vantage would contend that even if the EDA's written-modification clause bars implied contract modifications, it does not bar an equitable estoppel claim based on Penterra's conduct outside the four corners of the agreement.

Assessment: Low likelihood of success. The court's analysis of the promissory estoppel claim was careful and thorough, and it addressed the claim as a distinct counterclaim with its own elements, not as a mere subset of the contract claims. The court found two independent deficiencies, each of which is sufficient to defeat the claim. First, the Kapoor Email does not constitute a "clear and definite promise," which is an essential element of promissory estoppel under Massachusetts law. This finding rests on the plain language of the email and is unlikely to be disturbed on appeal. Second, Vantage's reliance on the email was unreasonable as a matter of law given the written-modification clause in Section 13.1, of which Vantage was fully aware. A sophisticated commercial party cannot claim reasonable reliance on an informal, aspirational email when the governing contract specifies the exclusive mechanism for modifying its terms.

Massachusetts courts have consistently held that promissory estoppel is not available to override the express terms of a fully integrated, written contract between sophisticated commercial parties. The doctrine is designed to prevent injustice in the absence of a binding contract, not to rewrite the terms of an existing one. The appellate court would likely affirm the dismissal of this counterclaim on either of the two independent grounds identified by the trial court.

F. Potential Argument 5: Declaratory Judgment Ripeness or Procedural Issues

Vantage could raise a procedural argument that Penterra's declaratory-judgment action was premature or that the court improperly exercised its discretion in reaching the merits of the dispute rather than allowing the factual record to develop further. Under G.L. c. 231A, courts have discretion in whether to entertain declaratory-judgment actions, and Vantage could argue that the court should have declined to exercise that discretion under the circumstances.

Assessment: Very low likelihood of success. The dispute was plainly ripe at the time Penterra filed its Complaint in April 2021. Vantage was actively distributing Penterra products in the tri-state area. Penterra had issued a cease-and-desist letter on March 8, 2021. Vantage had rejected Penterra's demand and had threatened a $35 million damages claim. The case presented a live, actual controversy squarely within the scope of G.L. c. 231A — indeed, it is difficult to imagine a more classically justiciable declaratory-judgment action. The court's decision to reach the merits was well within its discretion, and an appellate court would be extremely unlikely to disturb that exercise of discretion on this record.

Moreover, this argument, even if successful, would not produce a favorable result for Vantage. A reversal on ripeness or procedural grounds would simply result in a dismissal without prejudice, leaving the underlying substantive issues unresolved and freeing Penterra to re-file or to pursue its claims through other procedural vehicles. It would not change the merits analysis in any way.

G. Overall Appellate Risk Assessment

Taking all potential appellate arguments together, we assess the aggregate risk of reversal as low. The decision is well-supported by unambiguous contract language, established Massachusetts precedent (principally Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000)), and a clear evidentiary record that was developed through thorough fact discovery, including four depositions of key witnesses.

If Vantage does appeal, the strongest (though still weak) argument would likely be an attempt to develop the factual record around Penterra's knowledge of the tri-state shipments, combined with a policy argument about the limits of written-modification clauses in the face of extensive course of dealing. However, as discussed above, the factual predicate for this argument is thin — only six months of unauthorized shipments, with no evidence of Penterra's affirmative knowledge and acquiescence — and the legal framework is firmly unfavorable to Vantage.

We note as an additional practical consideration that the EDA's original five-year term expired on June 30, 2022. This expiration further reduces the practical stakes of an appeal with respect to future distribution rights, unless Vantage pursues its damages claims on a separate theory. However, all three of Vantage's counterclaims — including its claim for $35 million in damages — were dismissed on the merits. An appeal of those dismissals would face the same legal and factual obstacles described above.

It is our assessment that Vantage's appellate counsel, Hargrove, Sinclair & Polk LLP, is a competent commercial litigation firm, and we cannot rule out the possibility that Vantage will file a notice of appeal for strategic or negotiating reasons even if the likelihood of success is low. We therefore recommend maintaining vigilance through the September 4, 2022 deadline.

V. Impact on Penterra's Business Operations

The court's decision has several significant implications for Penterra's ongoing business operations, which we summarize below.

Tri-State Distribution Rights. The declaration confirms that Penterra's grant of exclusive distribution rights to Vantage under the EDA is limited to the six New England states enumerated in Exhibit A. Penterra is therefore free to appoint Meridian National Distributors, Inc. (or any other distributor) to distribute Penterra products in New York, New Jersey, and Pennsylvania without violating Vantage's exclusivity rights. Penterra executed a non-binding term sheet with Meridian on February 15, 2021, for tri-state distribution of Oncalaris®, and that arrangement may now proceed to a definitive agreement, subject to the prudential recommendations set forth in Section VI.C below regarding the appeal period.

Revenue Significance. The commercial significance of optimized tri-state distribution cannot be overstated. Oncalaris® (pegvisomant-axel) accounted for approximately $412 million in revenue in Penterra's fiscal year ending December 31, 2021, representing approximately 22% of Penterra's consolidated revenue of approximately $1.87 billion. The tri-state area — encompassing New York, New Jersey, and Pennsylvania — includes several of the largest oncology treatment centers and hospital networks in the United States. Securing an authorized, well-capitalized distributor for Oncalaris® in these states is a critical component of Penterra's commercial strategy for the product's continued growth.

Ongoing Relationship with Vantage. We note that Vantage remains a significant distributor in the New England market. Vantage's total revenue was approximately $148 million in FY 2021, of which approximately $67 million (approximately 45.3%) was derived from the distribution of Penterra products — principally Oncalaris® and Renuvesta®. The impact of this ruling on the ongoing commercial relationship between Penterra and Vantage in New England should be carefully considered.

The EDA's initial five-year term expired on June 30, 2022. Under Section 12.2 of the EDA, the agreement automatically renews for successive one-year periods unless either party provides written notice of non-renewal at least 180 days prior to the expiration of the then-current term. The 180-day notice deadline for the initial term would have been approximately December 31, 2021. We should confirm with the client whether timely non-renewal notices were exchanged by either party. If no non-renewal notice was sent, the EDA may have automatically renewed for a one-year period through June 30, 2023, which would have implications for Penterra's distribution arrangements in New England and for the parties' continuing obligations under the agreement.

VI. Recommendations

A. Appeal Monitoring

The most immediate action item is to monitor the thirty-day appeal deadline. Final Judgment was entered on August 5, 2022, establishing an appeal deadline of September 4, 2022. Patrick Gallagher has prepared a separate appeal-tracking memorandum dated August 8, 2022, which includes calendar alerts and a protocol for monitoring the Massachusetts Appeals Court docket for any notice of appeal filed by Hargrove, Sinclair & Polk LLP on behalf of Vantage. We should confirm that this tracking protocol is in place and that the team receives timely notification of any filing.

In the event that Vantage does file a notice of appeal, we should promptly prepare a preliminary assessment of the appeal timeline, staffing needs, and budget, and communicate the same to the client. We should also evaluate at that time whether Penterra should seek sanctions or appellate attorney's fees under any applicable provision or rule, although we note that the EDA does not appear to contain a prevailing-party attorney's fees clause.

B. Client Communication

A client advisory letter was sent by Linda Osei to Jennifer Chao (General Counsel, Penterra Pharmaceuticals Corp.) on July 18, 2022, summarizing the court's decision and identifying the next steps, including the appeal deadline. We recommend a follow-up communication to Ms. Chao once the appeal deadline passes without a filing. That communication should confirm that the litigation has concluded, summarize the final outcome, and outline any remaining administrative matters (such as file preservation and litigation-hold release).

If Vantage files an appeal, the follow-up communication should instead advise the client of the appeal, the anticipated timeline, and our preliminary assessment of the appellate risk (consistent with the analysis in this memorandum).

C. Meridian Arrangement

We recommend that Penterra proceed cautiously with the Meridian distribution arrangement until the appeal period expires. While the likelihood that Vantage would obtain a stay pending appeal is very low — Vantage would need to demonstrate a likelihood of success on the merits and irreparable harm, neither of which is present here — prudence counsels against executing a definitive distribution agreement for the tri-state area until September 4, 2022. If Penterra proceeds to finalize the Meridian agreement before that date and Vantage subsequently obtains a reversal on appeal (an unlikely but non-zero possibility), Penterra could face complications arising from conflicting contractual obligations.

That said, there is no legal bar to Penterra's proceeding with the Meridian arrangement at any time, and the commercial team may wish to continue negotiations, due diligence, and drafting in the interim so that a definitive agreement can be executed promptly after the appeal deadline passes.

D. File Preservation

We recommend that the complete litigation file — including all pleadings, discovery materials, document productions, deposition transcripts, deposition exhibits, affidavits, expert reports (if any), the court's Memorandum of Decision and Order, and the Final Judgment — be preserved in the firm's document management system. This is particularly important in the event of any appellate proceedings, but it is also prudent as a matter of course in the event of any future disputes between the parties or with third parties (such as Meridian) relating to the subject matter of this litigation.

We should coordinate with the Penterra litigation-hold team regarding the status of the litigation hold that was implemented at the outset of this matter. If no appeal is filed by September 4, 2022, the hold may be released following appropriate review and consultation with the client. If an appeal is filed, the hold should remain in place for the duration of the appellate proceedings.

VII. Conclusion

The court's Memorandum of Decision and Order is thorough, well-reasoned, and firmly grounded in the plain language of the Exclusive Distribution Agreement and controlling Massachusetts precedent. The risk of reversal on appeal is low.

Penterra achieved a complete victory in this action. The court declared that the Territory under the EDA is limited to the six New England states enumerated in Exhibit A — Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. The court found that the January 12, 2018 Kapoor Email did not constitute "prior written consent" under Section 2.3 of the EDA and did not effect an amendment of the Territory. The court enforced the written-modification clause in Section 13.1 and the integration clause in Section 14.8, rejecting Vantage's course-of-dealing and implied-modification arguments. All three of Vantage's counterclaims — breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel — were dismissed on the merits.

Calderwood & Harkness LLP recommends monitoring the appeal deadline of September 4, 2022, and preparing to close the matter upon its expiration if no notice of appeal is filed. In the meantime, Penterra may continue to advance its commercial objectives with respect to tri-state distribution of Oncalaris®, subject to the prudential recommendations set forth above.

Appendix: Attachments Referenced

The following documents are referenced in this memorandum and are available in the firm's document management system under Matter No. 1018-00007:

1. Memorandum of Decision and Order, Hon. Diane L. Costigan, J., dated July 15, 2022

2. Final Judgment entered August 5, 2022

3. Exclusive Distribution Agreement dated July 1, 2017 (including Exhibit A — Territory Definition)

4. Email from Steven Kapoor to Donald Farnham, dated January 12, 2018 ("Kapoor Email")

5. Appeal-Period Tracking Memorandum (Patrick Gallagher, dated August 8, 2022)

6. Client Advisory Letter (Linda Osei to Jennifer Chao, dated July 18, 2022)

This memorandum is a privileged and confidential attorney work product prepared by Calderwood & Harkness LLP in connection with the representation of Penterra Pharmaceuticals Corp. in the above-referenced matter. It is intended solely for the use of the attorneys and personnel of Calderwood & Harkness LLP working on this matter and is not to be distributed, disclosed, or relied upon by any third party without the express written consent of the firm. This memorandum reflects the professional judgment of the author as of the date indicated and is subject to revision as circumstances develop.

MEMORANDUM
PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
To: Linda Osei, Partner
From: Hannah Brinkley, Associate
Date: July 20, 2022
Re: Post-Decision Analysis — Penterra Pharmaceuticals Corp. v. Vantage Medical Distribution, LLC, Docket No. 2184-CV-01537-BLS (MA Superior Court, Business Litigation Session, Suffolk County)
Matter No.: 1018-00007
I. Executive Summary
On July 15, 2022, the Honorable Diane L. Costigan, J., of the Superior Court of Massachusetts, Business Litigation Session, issued a Memorandum of Decision and Order granting Penterra Pharmaceuticals Corp.'s ("Penterra" or "Plaintiff") motion for summary judgment, denying Vantage Medical Distribution, LLC's ("Vantage" or "Defendant") cross-motion for summary judgment, and dismissing all three of Vantage's counterclaims — breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel — on the merits. The decision represents a complete victory for our client on every claim and counterclaim in the case.
In its core holding, the court declared that the "Territory" under the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA") is limited to the six New England states enumerated in Exhibit A to the EDA: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. The court found that Vantage's distribution of Oncalaris® (pegvisomant-axel) in New York, New Jersey, and Pennsylvania beginning on or about September 14, 2020 was unauthorized under the EDA and constituted a breach of Section 2.3 of the agreement. This finding formed the basis for the court's grant of declaratory relief to Penterra and its rejection of Vantage's counterclaims.
Final Judgment was entered on August 5, 2022. Pursuant to Massachusetts Rules of Appellate Procedure, Rule 4(a), Vantage has thirty (30) days from the date of entry of judgment — i.e., until September 4, 2022 — to file a notice of appeal to the Massachusetts Appeals Court.
The purpose of this memorandum is to provide a comprehensive analysis of the court's reasoning, identify the potential appellate arguments that Vantage might raise if it elects to pursue an appeal, and assess the likelihood that any such arguments would result in reversal. This memorandum also addresses the practical implications of the decision for Penterra's business operations, including its pending arrangement with Meridian National Distributors, Inc. for tri-state distribution of Oncalaris®.
Our overall assessment is that the decision rests on solid ground under established Massachusetts precedent and is unlikely to be reversed on appeal. The court's interpretation of the EDA's plain language is straightforward and well-supported, the application of the written-modification clause is consistent with controlling Supreme Judicial Court authority, and the dismissal of all three counterclaims follows logically from the court's contract-interpretation holdings. We recommend monitoring the appeal deadline and, upon its expiration without a filing, preparing to close the litigation file.
II. Procedural Background
The procedural history of this action is set forth below in chronological order for reference purposes.
Penterra commenced this action by filing a Complaint for Declaratory Judgment on April 12, 2021, in the Superior Court of Massachusetts, Suffolk County, Business Litigation Session. The Complaint sought a judicial declaration that the Territory under the EDA is limited to the six New England states enumerated in Exhibit A and that Vantage's distribution of Penterra products in New York, New Jersey, and Pennsylvania constituted a breach of Section 2.3 of the EDA.
On May 14, 2021, Vantage filed its Answer to the Complaint and asserted three counterclaims against Penterra: (1) breach of contract, alleging that Penterra violated Vantage's exclusive distribution rights by engaging Meridian National Distributors, Inc. for the tri-state area; (2) breach of the implied covenant of good faith and fair dealing, alleging that Penterra had encouraged Vantage's investment in tri-state infrastructure and then acted in bad faith by shutting Vantage out of that market; and (3) promissory estoppel, alleging that Penterra had made a clear and definite promise of territorial expansion upon which Vantage had reasonably and detrimentally relied. Vantage sought damages of approximately $35 million across all three counterclaims.
Penterra filed its Answer to Vantage's Counterclaims on June 4, 2021, denying all material allegations and raising affirmative defenses including, inter alia, failure to state a claim, the statute of frauds, and Vantage's own breach of the EDA as a bar to recovery on the counterclaims.
Fact discovery commenced in approximately July 2021 and proceeded through the discovery close on January 14, 2022. During the fact-discovery period, the parties exchanged substantial document productions and conducted four depositions of key witnesses:
•  Donald R. Farnham (CEO, Vantage Medical Distribution, LLC) — deposed on October 18, 2021. Mr. Farnham testified regarding Vantage's understanding of the Territory, the circumstances surrounding the January 12, 2018 email from Steven Kapoor, Vantage's decision to commence distribution in the tri-state area, and Vantage's investments in tri-state sales infrastructure.
•  Steven Kapoor (Vice President, Commercial Operations, Penterra Pharmaceuticals Corp.) — deposed on November 2, 2021. Mr. Kapoor testified regarding his January 12, 2018 email to Donald Farnham, the intent behind the email, the scope of his authority within Penterra's organizational structure, and Penterra's internal policies regarding distributor territory modifications.
•  Rachel Mendez (Senior Director, Distribution Logistics, Penterra Pharmaceuticals Corp.) — deposed on November 19, 2021. Ms. Mendez testified regarding Penterra's distribution logistics systems, the protocols for directing product shipments to authorized distributors, and whether Penterra's internal systems reflected any authorization for Vantage to receive or distribute products destined for tri-state addresses.
•  Brian Kopec (Regional Sales Manager, Northeast Division, Vantage Medical Distribution, LLC) — deposed on December 7, 2021. Mr. Kopec testified regarding Vantage's sales operations in the tri-state area, his communications with Penterra personnel, and the revenue generated by Vantage's tri-state distribution activities.
Following the close of fact discovery, Penterra filed its Motion for Summary Judgment on February 11, 2022. The motion was supported by Penterra's Statement of Undisputed Material Facts prepared pursuant to Superior Court Rule 9A(b)(5), the affidavits of Steven Kapoor and Rachel Mendez, and a Memorandum of Law in Support of Summary Judgment.
On February 25, 2022, Vantage filed its Cross-Motion for Summary Judgment on its counterclaims, accompanied by its own Rule 9A(b)(5) statement, the affidavit of Donald R. Farnham, and a Memorandum of Law in Support of Cross-Motion and in Opposition to Penterra's Motion.
Penterra filed its Opposition to Vantage's Cross-Motion for Summary Judgment and its Reply in Support of Penterra's own Motion for Summary Judgment on March 18, 2022. Vantage filed its Opposition to Penterra's Motion and its Reply in Support of its Cross-Motion on April 1, 2022.
The court held oral argument on both motions on May 6, 2022, before Justice Costigan. Counsel for both parties presented argument for approximately ninety minutes.
Justice Costigan issued the Memorandum of Decision and Order on July 15, 2022, granting Penterra's motion, denying Vantage's cross-motion, and dismissing all three counterclaims on the merits. Final Judgment consistent with the Memorandum of Decision and Order was entered on August 5, 2022.
III. The Court's Analysis — Detailed Discussion
The court's Memorandum of Decision and Order runs to twenty-three pages and addresses each of the disputed issues in a structured and methodical fashion. This section summarizes and analyzes the court's reasoning on each major point.
A. Plain Language of the EDA and Exhibit A
The court began its analysis, as is customary under Massachusetts contract-interpretation principles, with the text of the agreement itself. The court observed that "[w]here the language of a contract is unambiguous, it must be enforced according to its plain terms, and the court need not look beyond the four corners of the instrument." Mem. Decision at 7 (citing Bank v. Int'l Bus. Machs. Corp., 145 F.3d 420, 424 (1st Cir. 1998) (applying Massachusetts law)).
Section 2.1 of the EDA provides, in relevant part, that Penterra "hereby grants to Distributor the exclusive right to distribute the Products within the Territory, as defined in Exhibit A." The court reproduced the text of Exhibit A in full. That exhibit defines the Territory as follows:
"The states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont (collectively, the 'New England States')."
The court found this language to be "clear, specific, and unambiguous." Mem. Decision at 8. The Territory is defined by an exhaustive enumeration of six states. New York, New Jersey, and Pennsylvania are conspicuously absent from the list. The court rejected Vantage's invitation to read the definition expansively, noting that the use of the parenthetical "(collectively, the 'New England States')" further confirms that the parties understood the Territory to be coextensive with the six traditionally recognized New England states and nothing more. There is no language in Exhibit A suggesting that the Territory was intended to include any states beyond those expressly enumerated.
The court then turned to Section 2.3 of the EDA, which provides:
"Distributor shall not actively solicit orders for, or deliver, the Products outside the Territory without Supplier's prior written consent."
The court observed that Section 2.3 serves a dual function in the contractual architecture. First, it reinforces the territorial limitation by expressly prohibiting the Distributor from operating outside the Territory without authorization. Second, it establishes a specific mechanism — "prior written consent" — by which the territorial restriction could be relaxed in a particular instance. The court emphasized that the existence of this consent mechanism "confirms the parties' mutual understanding that the Territory, as defined in Exhibit A, represented a firm boundary, not a floor or a starting point for organic expansion." Mem. Decision at 9.
For completeness, the court noted that the products covered under the EDA are Oncalaris® (pegvisomant-axel), in 20 mg and 40 mg vial formulations, and Renuvesta® (cilosporin-beta), in 5 mg capsule formulation. While both products are subject to the territorial restrictions of the EDA, the dispute in this case centered on Vantage's distribution of Oncalaris® in the tri-state area.
Having found the contract language unambiguous, the court proceeded to address and reject each of Vantage's arguments for a broader reading of the Territory or, alternatively, for a modification of the Territory through conduct or informal communications.
B. The January 12, 2018 Kapoor Email
The court next addressed what it characterized as "the centerpiece of Vantage's case" — the email sent by Steven Kapoor (Penterra's Vice President, Commercial Operations) to Donald Farnham (Vantage's CEO) on January 12, 2018. Mem. Decision at 10.
The court reproduced the email in its entirety:
"Don — good catching up yesterday. We're definitely open to exploring expansion into NY/NJ/PA once your New England footprint is fully ramped. Let's circle back mid-year and see where things stand."
Vantage argued that this email constituted "prior written consent" within the meaning of Section 2.3 of the EDA, thereby authorizing Vantage to distribute Penterra products in the tri-state area. In the alternative, Vantage argued that the email constituted a clear and definite promise of territorial expansion supporting its promissory estoppel counterclaim.
The court rejected both characterizations of the email. As to the "prior written consent" argument, the court engaged in a careful textual analysis of the email's language. The court found that the phrases "open to exploring" and "let's circle back mid-year and see where things stand" are "inherently aspirational and conditional, not constitutive of consent." Mem. Decision at 11. The court explained:
"The ordinary meaning of 'consent' is an affirmative grant of permission — an expression of agreement to a specific course of action. The Kapoor Email does not express agreement to anything. It expresses a willingness to discuss a future possibility, contingent on conditions that had not yet been satisfied ('once your New England footprint is fully ramped'). To equate an expression of interest in future negotiations with a grant of 'prior written consent' would drain that contractual term of all meaningful content."
The court further noted that the email does not reference the EDA, Section 2.3, Exhibit A, or the concept of "prior written consent." It contains no formal language of authorization. It is, as the court characterized it, "an informal, casual communication of the sort routinely exchanged between business colleagues — not a legal instrument conferring contractual rights." Mem. Decision at 12.
This interpretation was consistent with the deposition testimony of the email's author. Steven Kapoor testified during his November 2, 2021 deposition that the email was intended to express openness to future discussions about a potential expansion of the Vantage relationship but did not grant consent to distribute in the tri-state area and was not intended to amend the Territory as defined in Exhibit A. Kapoor testified that he understood the distinction between expressing interest in future business discussions and granting formal contractual consent, and that he did not intend the email to serve the latter function.
Donald Farnham's own deposition testimony (October 18, 2021) also undercut Vantage's position, albeit less directly. Mr. Farnham acknowledged under questioning that he did not obtain a signed amendment to Exhibit A at any time following the Kapoor Email. When asked what he relied on to justify Vantage's commencement of tri-state distribution in September 2020, Mr. Farnham pointed primarily to the Kapoor Email and to what he characterized as a "subsequent course of dealing" in which Penterra never objected to Vantage's growing presence in the tri-state area. Mr. Farnham did not identify any subsequent written communication in which Penterra expressly authorized tri-state distribution.
Based on this analysis, the court concluded that the Kapoor Email did not constitute "prior written consent" under Section 2.3 of the EDA, either as a matter of contractual interpretation or on the factual record before the court.
C. Written-Amendment Requirement (Section 13.1)
The court's analysis did not end with the Kapoor Email's failure to satisfy Section 2.3. The court proceeded to address the separate and independent bar imposed by Section 13.1, the written-amendment clause. Section 13.1 of the EDA provides:
"No amendment, modification, or waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by both parties."
The court held that even if the Kapoor Email could be construed as a form of written communication reflecting some measure of assent on Penterra's part — which, as noted above, the court did not so construe — it would still fail to satisfy Section 13.1 for the fundamental reason that it was a unilateral communication from a single Penterra employee. It was not a "written instrument signed by both parties." No representative of Vantage signed or countersigned the email, and neither party treated the email as a formal amendment to the EDA.
In reaching this conclusion, the court relied principally on the Supreme Judicial Court's decision in Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000). In Cambridge Biotech, the SJC held that written-modification clauses in commercial contracts are generally enforceable under Massachusetts law and that parties may not circumvent such provisions through informal communications or oral agreements. The SJC reasoned that "[p]arties to a contract have the right to include a provision precluding oral modification, and . . . such provisions serve the salutary purpose of protecting against fraudulent claims of modification and promoting the stability of written agreements." Id. at 130.
The court observed that the Cambridge Biotech rationale applies with particular force in the present case, where both Penterra and Vantage are "commercially experienced entities that were represented by counsel at the time of contracting." Mem. Decision at 14. The EDA was negotiated and drafted with the assistance of legal counsel on both sides. The written-modification clause was not buried in boilerplate but rather reflected a considered allocation of risk: both parties wanted assurance that the carefully negotiated terms of their agreement — including, critically, the territorial boundaries — could not be altered informally. The court stated that to allow the Kapoor Email to override the written-amendment requirement would be to disregard a provision to which both parties freely agreed, thereby undermining the predictability and reliability of commercial agreements.
The court further noted that Section 13.1 requires not merely a writing but a "written instrument signed by both parties." This heightened requirement — bilateral execution — underscores the parties' intent that any modification must reflect the mutual, deliberate agreement of both sides, documented in a manner that leaves no doubt as to its terms. A casual email from a single executive, with no acknowledgment or countersignature from the other party, falls well short of this standard.
D. Integration Clause (Section 14.8) and the Parol Evidence Rule
The court also addressed the role of the EDA's integration clause, Section 14.8, which provides:
"This Agreement, including all Exhibits, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, or agreements relating thereto, whether written or oral."
Based on this language, the court held that the EDA is a fully integrated agreement. Under the parol evidence rule as applied in Massachusetts, a fully integrated agreement cannot be contradicted or supplemented by evidence of prior or contemporaneous agreements, whether oral or written. The court acknowledged that the Kapoor Email, dated January 12, 2018, was a post-execution communication rather than a prior or contemporaneous negotiation, and therefore the parol evidence rule did not apply to it in a technical sense. However, the court observed that the integration clause is part of a broader contractual framework — read in conjunction with the written-modification clause in Section 13.1 — that reflects the parties' clear and mutual intent that the EDA's terms, including the Territory definition in Exhibit A, could not be altered except through a formal, bilateral written instrument.
The court stated: "Reading Sections 13.1 and 14.8 together, the contractual architecture is unmistakable. The parties established a comprehensive written agreement, declared it to be the complete and exclusive statement of their understanding, and specified that any change to that understanding must take a particular form — a written instrument signed by both parties. This framework leaves no room for the kind of informal, unilateral, and conditional communication on which Vantage relies." Mem. Decision at 16.
E. Course-of-Dealing / Implied Modification Argument
Vantage's final argument on the contract-interpretation issues was that Penterra's alleged failure to object to Vantage's shipments to New York beginning in late 2019, combined with a broader course of dealing between the parties over approximately three years, effected an implied modification of Exhibit A to include the tri-state area of New York, New Jersey, and Pennsylvania.
The court rejected this argument on multiple independent grounds, each of which would independently warrant dismissal of the argument.
First, the court held that Section 13.1's written-amendment requirement expressly precludes oral or implied modifications of the EDA. The court reiterated the holding of Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000), that written-modification clauses are enforceable under Massachusetts law and that course-of-dealing evidence cannot override an unambiguous written-modification clause in a fully integrated agreement between sophisticated commercial parties. The court found no basis in the record or in the applicable law to depart from this well-established principle.
Second, the court found that the factual predicate for Vantage's course-of-dealing argument was disputed and, on balance, weak. Rachel Mendez testified during her November 19, 2021 deposition that Penterra's distribution logistics systems directed Oncalaris® shipments to Vantage only for New England addresses. Ms. Mendez testified that Penterra's internal order-management system coded Vantage as an authorized distributor for the six New England states only, and that shipments to end customers located in New York, New Jersey, or Pennsylvania would not have been routed through Vantage under Penterra's standard protocols. Ms. Mendez further testified that Penterra never authorized shipments of Penterra products to tri-state customers through Vantage, either formally or informally.
The court noted that there was no evidence in the record that any Penterra employee or officer affirmatively knew of and acquiesced in Vantage's tri-state distribution activities before the dispute came to a head. Brian Kopec's deposition testimony (December 7, 2021), while establishing that Vantage had generated substantial tri-state revenue, did not establish that any Penterra employee expressly acknowledged or approved those sales. Mr. Kopec testified to various communications with Penterra's sales personnel, but none of the communications cited by Vantage in its briefing reflected an express acknowledgment by Penterra that Vantage was authorized to distribute in the tri-state area.
Third, and perhaps most critically from a legal standpoint, the court held that even if there were some evidence of acquiescence by Penterra — which the court did not find on this record — course-of-dealing evidence cannot override an unambiguous written-modification clause in a fully integrated agreement under Massachusetts law. The court stated: "The written-modification clause exists precisely to prevent this scenario: one party acting unilaterally, claiming the other's silence as consent, and then asserting that the contract has been implicitly rewritten. If that were sufficient, written-modification clauses would be meaningless." Mem. Decision at 18.
Fourth, the court addressed the temporal dimension of the course-of-dealing argument. Vantage began its tri-state shipments on or about September 14, 2020. Penterra issued its formal cease-and-desist letter on March 8, 2021 — a period of approximately six months. The court found this interval insufficient to establish the kind of long-standing, consistent pattern of mutual conduct that would be required for a course-of-dealing modification, even in a hypothetical legal framework where such modifications were cognizable notwithstanding a written-modification clause. The court observed that six months is a relatively brief period in the context of a five-year distribution agreement and that the record showed no evidence that the parties had engaged in a sustained, bilateral pattern of conduct reflecting a shared understanding that the Territory had been expanded.
The court noted for the record that Vantage's tri-state revenues during the relevant period (September 2020 through March 2021) totaled approximately $6.4 million, based on Vantage's own sales records produced during fact discovery. While this figure is not insubstantial, the court declined to treat the generation of revenue through unauthorized activity as evidence that the activity had been authorized.
F. Rejection of Vantage's Counterclaims
Having resolved the core contract-interpretation issues in Penterra's favor, the court turned to Vantage's three counterclaims, each of which was dismissed on the merits.
1. Breach of Contract Counterclaim.  Vantage's breach-of-contract counterclaim alleged that Penterra breached the EDA by seeking to appoint Meridian National Distributors, Inc. as a distributor of Oncalaris® in the tri-state area — a market that Vantage claimed fell within its exclusive Territory under the EDA.
The court dismissed this counterclaim as a straightforward consequence of its holding on the Territory issue. Because the Territory does not include New York, New Jersey, or Pennsylvania, Penterra's engagement with Meridian for distribution in those states did not violate Vantage's exclusivity. Section 2.1 of the EDA grants Vantage exclusive distribution rights only "within the Territory, as defined in Exhibit A," and Exhibit A does not include the tri-state area. Penterra's execution of a term sheet with Meridian on February 15, 2021, for tri-state distribution of Oncalaris® was entirely consistent with the terms of the EDA.
Indeed, the court noted that the record indicated Vantage, not Penterra, was the party in breach of the EDA. By distributing Oncalaris® in the tri-state area beginning in September 2020 without prior written consent, Vantage violated Section 2.3 of the EDA. While Penterra did not assert a breach-of-contract counterclaim of its own in this action (having elected to proceed solely on a declaratory-judgment theory), the court observed that this factual finding further undercuts Vantage's attempt to cast Penterra as the breaching party.
2. Breach of Implied Covenant of Good Faith and Fair Dealing.  Vantage's second counterclaim alleged that Penterra breached the implied covenant of good faith and fair dealing by encouraging Vantage's investment in tri-state infrastructure — principally through the Kapoor Email and subsequent informal communications — and then shutting Vantage out of the tri-state market by engaging Meridian.
The court dismissed this counterclaim on both legal and factual grounds. As a matter of law, the court held that the implied covenant of good faith and fair dealing, which is implied in every contract under Massachusetts law, cannot be used to create rights that are inconsistent with the express terms of the agreement. The court cited the well-established Massachusetts principle that the implied covenant "is aimed at making sure that parties act 'consistently with the justified expectations of the other party,'" but that it "may not be invoked to create rights and duties not otherwise provided for in the contractual relationship." Mem. Decision at 20 (quoting Vireo & Co. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004)).
Here, the Territory was plainly defined in Exhibit A. The written-modification clause in Section 13.1 governed the mechanism for any changes to that definition. Penterra did not act in bad faith by enforcing the contract as written. The court stated that "a party does not violate the implied covenant merely by insisting on its contractual rights, even where the other party may find that insistence inconvenient or disappointing." Mem. Decision at 20.
On the factual record, the court reiterated its finding that the Kapoor Email was aspirational and conditional, not a promise or commitment, and that Penterra had not engaged in a pattern of conduct that would give rise to a reasonable expectation on Vantage's part that the Territory had been or would be expanded to include the tri-state area.
3. Promissory Estoppel.  Vantage's third counterclaim sounded in promissory estoppel. Vantage alleged that Kapoor's January 12, 2018 email constituted a clear and definite promise of territorial expansion upon which Vantage reasonably relied to its detriment by investing in tri-state sales infrastructure, hiring additional sales personnel, and cultivating customer relationships in New York, New Jersey, and Pennsylvania. Vantage alleged that it invested approximately $4.2 million in tri-state infrastructure and personnel in reliance on the Kapoor Email and related communications.
The court dismissed the promissory estoppel counterclaim on multiple independent grounds.
First, the court held that the email's language — "open to exploring" and "let's circle back mid-year and see where things stand" — does not constitute a "clear and definite promise" capable of supporting a promissory estoppel claim. Under Massachusetts law, promissory estoppel requires, among other elements, a promise that is "clear and definite" in nature. See Loranger Constr. Corp. v. E.F. Hauserman Co., 376 Mass. 757, 761 (1978). A general expression of willingness to explore a future business opportunity, contingent on unspecified conditions, is not a promise of any kind — it is, at most, an expression of preliminary interest.
Second, the court found that Vantage's reliance on the Kapoor Email was unreasonable as a matter of law. The court emphasized that Vantage was a signatory to the EDA and was therefore fully aware of the written-modification clause in Section 13.1, which requires any amendment to the agreement to be set forth in a written instrument signed by both parties. A sophisticated commercial entity, represented by counsel, cannot claim that it reasonably relied on an informal, aspirational email as a basis for making millions of dollars in investment when the governing contract expressly provides that amendments must take a specific, formal written form. The court stated: "Vantage's claimed reliance on the Kapoor Email, in the face of Section 13.1, was not merely unreasonable — it was inconsistent with the contractual framework to which Vantage had agreed." Mem. Decision at 22.
Third, the court observed that promissory estoppel is "disfavored as a mechanism to override express contractual terms, particularly where a fully integrated agreement governs the relationship between the parties." Mem. Decision at 22. The court noted that Massachusetts courts have consistently held that promissory estoppel is an equitable doctrine that serves as a substitute for consideration in the absence of a binding contract — it is not a vehicle for rewriting or expanding the terms of an existing, fully negotiated contract between sophisticated commercial parties.
IV. Potential Appellate Arguments and Assessment
A. Overview of Appellate Standard
If Vantage elects to appeal, it may file a notice of appeal with the Massachusetts Appeals Court within thirty days of the entry of Final Judgment. Final Judgment was entered on August 5, 2022, establishing an appeal deadline of September 4, 2022. Vantage could alternatively seek direct appellate review by the Supreme Judicial Court pursuant to G.L. c. 211A, § 10, although such applications are granted sparingly and typically reserved for cases presenting novel or unsettled questions of law, which this case does not.
The applicable standards of appellate review are as follows:
A grant of summary judgment is reviewed de novo by the appellate court. The reviewing court applies the same standard as the trial court, examining the record in the light most favorable to the non-moving party and determining whether there are any genuine disputes of material fact that preclude judgment as a matter of law. On Penterra's motion, the record would be viewed in the light most favorable to Vantage; on Vantage's cross-motion, it would be viewed in the light most favorable to Penterra.
Questions of contract interpretation, where the language of the contract is found to be unambiguous, are questions of law and are therefore also reviewed de novo. The appellate court owes no deference to the trial court's interpretation of unambiguous contract provisions.
Importantly, however, the applicable legal standards — the enforceability of written-modification clauses, the effect of integration clauses, the elements of promissory estoppel, and the scope of the implied covenant of good faith and fair dealing — are well-settled in Massachusetts. The SJC's decision in Cambridge Biotech remains good law and has been consistently followed by the Appeals Court. No recent developments in Massachusetts jurisprudence suggest any movement toward weakening the enforceability of written-modification clauses in commercial agreements.
We identify below five potential arguments Vantage might raise on appeal, along with our assessment of each.
B. Potential Argument 1: The Kapoor Email as Written Consent Under Section 2.3
Vantage could argue that the court erred in finding that the January 12, 2018 Kapoor Email did not constitute "prior written consent" under Section 2.3 of the EDA. Specifically, Vantage might contend that the term "written consent" is ambiguous — or at least broader than the court construed it — and that an email from a senior Penterra executive expressing openness to territorial expansion satisfies the requirement, particularly when viewed in context and in the light most favorable to Vantage.
Assessment: Low likelihood of success. The email's language is plainly aspirational and conditional. It does not employ the language of authorization, permission, or consent. It does not reference the EDA, Section 2.3, or Exhibit A. It expressly conditions any expansion on future developments ("once your New England footprint is fully ramped") and defers substantive discussion to a future date ("let's circle back mid-year"). The court's interpretation — that "prior written consent" requires an affirmative grant of permission, not merely an expression of willingness to discuss — is consistent with the ordinary meaning of "consent" and with the commercial context in which the term is used. An appellate court conducting de novo review would almost certainly reach the same conclusion. Steven Kapoor's own deposition testimony, in which he stated that the email was not intended to grant consent or amend the Territory, further supports the court's reading. We assess the likelihood of success on this argument as low.
C. Potential Argument 2: Enforceability of the Written-Modification Clause (Section 13.1) in Light of Course of Dealing
Vantage might argue that Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000), does not create an absolute bar to course-of-dealing modifications of commercial contracts and that, under certain circumstances — particularly where one party's conduct creates a reasonable expectation of modification or where both parties have departed from the written terms over an extended period — the written-modification requirement should yield to equitable considerations. Vantage could argue that enforcing the written-modification clause under the circumstances of this case would be inequitable because Penterra's conduct (through the Kapoor Email and alleged failure to object to tri-state shipments) induced Vantage's reliance.
Assessment: Low to moderate likelihood of raising; low likelihood of success. Cambridge Biotech is controlling SJC precedent and strongly favors the enforcement of written-modification clauses in commercial agreements between sophisticated parties. While the SJC has not held that such clauses are absolutely irrebuttable in every conceivable scenario — and Vantage's counsel may attempt to distinguish or limit Cambridge Biotech on its facts — the circumstances of this case do not present the kind of extreme reliance or long-standing mutual departure from the written terms that might, in some future case, prompt a court to carve out a narrow exception.
Several features of the record weigh heavily against Vantage on this point. The tri-state shipments occurred for a period of only approximately six months (September 2020 to March 2021) before Penterra issued its cease-and-desist letter. The record lacks evidence that Penterra had affirmative knowledge of the shipments and acquiesced in them. The Kapoor Email, the only written communication on which Vantage relies, was sent approximately two and a half years before Vantage commenced tri-state distribution and is aspirational and conditional on its face. In short, the equitable case for overriding the written-modification clause is thin at best.
We note that if Vantage were to raise this argument, it would likely style it as a broader policy argument — urging the appellate court to recognize that rigid enforcement of written-modification clauses in all circumstances can produce unjust results. While this type of argument can be intellectually interesting, it is unlikely to move the needle in this case given the weakness of the underlying facts. The appellate court would likely decline to modify or limit Cambridge Biotech on this record.
D. Potential Argument 3: Factual Disputes Regarding Penterra's Knowledge of Tri-State Shipments
Vantage could argue that there were genuine disputes of material fact regarding whether Penterra knew about Vantage's tri-state shipments before March 2021 and tacitly approved them, making summary judgment inappropriate. Vantage might point to circumstantial evidence — such as the volume of tri-state sales ($6.4 million over six months), the involvement of Penterra's sales contacts with Vantage, and the absence of any prior complaint — as creating a triable issue of fact on the question of Penterra's knowledge and acquiescence.
Assessment: Moderate likelihood of raising; low likelihood of success. This is the argument most likely to receive serious attention from an appellate panel, because appellate courts reviewing summary judgment are attentive to the possibility that the trial court may have improperly resolved factual disputes. However, we believe it is unlikely to succeed for two reasons.
First, the factual record on this point is not as ambiguous as Vantage may suggest. Rachel Mendez's deposition testimony was clear and unrebutted: Penterra's distribution logistics systems directed Oncalaris® shipments to Vantage only for New England addresses, and Penterra never authorized shipments to tri-state customers through Vantage. Brian Kopec's deposition testimony, while establishing that Vantage had contacts with Penterra's sales personnel, did not establish that any Penterra employee expressly acknowledged or approved the tri-state sales. The evidence, viewed in the light most favorable to Vantage, might support an inference that some Penterra personnel were generally aware that Vantage was active in the tri-state area, but it does not support an inference that Penterra's management affirmatively sanctioned that activity.
Second, and more fundamentally, even if there were a genuine dispute of material fact about Penterra's knowledge, the legal conclusion would not change. Under Cambridge Biotech, knowledge and acquiescence alone cannot override a written-modification clause. Even if Penterra knew about the tri-state shipments and failed to object for six months, that would not constitute a written instrument signed by both parties, which is what Section 13.1 requires. The court correctly recognized that the factual dispute about knowledge, even if genuine, was not material to the outcome because the legal framework precludes implied modification regardless of the parties' knowledge or conduct.
E. Potential Argument 4: Promissory Estoppel as an Independent Equitable Claim
Vantage might argue that the court improperly conflated its promissory estoppel counterclaim with its contract-based claims and that promissory estoppel can operate as an independent equitable doctrine, separate from and unaffected by the express terms of the EDA. Under this theory, Vantage would contend that even if the EDA's written-modification clause bars implied contract modifications, it does not bar an equitable estoppel claim based on Penterra's conduct outside the four corners of the agreement.
Assessment: Low likelihood of success. The court's analysis of the promissory estoppel claim was careful and thorough, and it addressed the claim as a distinct counterclaim with its own elements, not as a mere subset of the contract claims. The court found two independent deficiencies, each of which is sufficient to defeat the claim. First, the Kapoor Email does not constitute a "clear and definite promise," which is an essential element of promissory estoppel under Massachusetts law. This finding rests on the plain language of the email and is unlikely to be disturbed on appeal. Second, Vantage's reliance on the email was unreasonable as a matter of law given the written-modification clause in Section 13.1, of which Vantage was fully aware. A sophisticated commercial party cannot claim reasonable reliance on an informal, aspirational email when the governing contract specifies the exclusive mechanism for modifying its terms.
Massachusetts courts have consistently held that promissory estoppel is not available to override the express terms of a fully integrated, written contract between sophisticated commercial parties. The doctrine is designed to prevent injustice in the absence of a binding contract, not to rewrite the terms of an existing one. The appellate court would likely affirm the dismissal of this counterclaim on either of the two independent grounds identified by the trial court.
F. Potential Argument 5: Declaratory Judgment Ripeness or Procedural Issues
Vantage could raise a procedural argument that Penterra's declaratory-judgment action was premature or that the court improperly exercised its discretion in reaching the merits of the dispute rather than allowing the factual record to develop further. Under G.L. c. 231A, courts have discretion in whether to entertain declaratory-judgment actions, and Vantage could argue that the court should have declined to exercise that discretion under the circumstances.
Assessment: Very low likelihood of success. The dispute was plainly ripe at the time Penterra filed its Complaint in April 2021. Vantage was actively distributing Penterra products in the tri-state area. Penterra had issued a cease-and-desist letter on March 8, 2021. Vantage had rejected Penterra's demand and had threatened a $35 million damages claim. The case presented a live, actual controversy squarely within the scope of G.L. c. 231A — indeed, it is difficult to imagine a more classically justiciable declaratory-judgment action. The court's decision to reach the merits was well within its discretion, and an appellate court would be extremely unlikely to disturb that exercise of discretion on this record.
Moreover, this argument, even if successful, would not produce a favorable result for Vantage. A reversal on ripeness or procedural grounds would simply result in a dismissal without prejudice, leaving the underlying substantive issues unresolved and freeing Penterra to re-file or to pursue its claims through other procedural vehicles. It would not change the merits analysis in any way.
G. Overall Appellate Risk Assessment
Taking all potential appellate arguments together, we assess the aggregate risk of reversal as low. The decision is well-supported by unambiguous contract language, established Massachusetts precedent (principally Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000)), and a clear evidentiary record that was developed through thorough fact discovery, including four depositions of key witnesses.
If Vantage does appeal, the strongest (though still weak) argument would likely be an attempt to develop the factual record around Penterra's knowledge of the tri-state shipments, combined with a policy argument about the limits of written-modification clauses in the face of extensive course of dealing. However, as discussed above, the factual predicate for this argument is thin — only six months of unauthorized shipments, with no evidence of Penterra's affirmative knowledge and acquiescence — and the legal framework is firmly unfavorable to Vantage.
We note as an additional practical consideration that the EDA's original five-year term expired on June 30, 2022. This expiration further reduces the practical stakes of an appeal with respect to future distribution rights, unless Vantage pursues its damages claims on a separate theory. However, all three of Vantage's counterclaims — including its claim for $35 million in damages — were dismissed on the merits. An appeal of those dismissals would face the same legal and factual obstacles described above.
It is our assessment that Vantage's appellate counsel, Hargrove, Sinclair & Polk LLP, is a competent commercial litigation firm, and we cannot rule out the possibility that Vantage will file a notice of appeal for strategic or negotiating reasons even if the likelihood of success is low. We therefore recommend maintaining vigilance through the September 4, 2022 deadline.
V. Impact on Penterra's Business Operations
The court's decision has several significant implications for Penterra's ongoing business operations, which we summarize below.
Tri-State Distribution Rights. The declaration confirms that Penterra's grant of exclusive distribution rights to Vantage under the EDA is limited to the six New England states enumerated in Exhibit A. Penterra is therefore free to appoint Meridian National Distributors, Inc. (or any other distributor) to distribute Penterra products in New York, New Jersey, and Pennsylvania without violating Vantage's exclusivity rights. Penterra executed a non-binding term sheet with Meridian on February 15, 2021, for tri-state distribution of Oncalaris®, and that arrangement may now proceed to a definitive agreement, subject to the prudential recommendations set forth in Section VI.C below regarding the appeal period.
Revenue Significance. The commercial significance of optimized tri-state distribution cannot be overstated. Oncalaris® (pegvisomant-axel) accounted for approximately $412 million in revenue in Penterra's fiscal year ending December 31, 2021, representing approximately 22% of Penterra's consolidated revenue of approximately $1.87 billion. The tri-state area — encompassing New York, New Jersey, and Pennsylvania — includes several of the largest oncology treatment centers and hospital networks in the United States. Securing an authorized, well-capitalized distributor for Oncalaris® in these states is a critical component of Penterra's commercial strategy for the product's continued growth.
Ongoing Relationship with Vantage. We note that Vantage remains a significant distributor in the New England market. Vantage's total revenue was approximately $148 million in FY 2021, of which approximately $67 million (approximately 45.3%) was derived from the distribution of Penterra products — principally Oncalaris® and Renuvesta®. The impact of this ruling on the ongoing commercial relationship between Penterra and Vantage in New England should be carefully considered.
The EDA's initial five-year term expired on June 30, 2022. Under Section 12.2 of the EDA, the agreement automatically renews for successive one-year periods unless either party provides written notice of non-renewal at least 180 days prior to the expiration of the then-current term. The 180-day notice deadline for the initial term would have been approximately December 31, 2021. We should confirm with the client whether timely non-renewal notices were exchanged by either party. If no non-renewal notice was sent, the EDA may have automatically renewed for a one-year period through June 30, 2023, which would have implications for Penterra's distribution arrangements in New England and for the parties' continuing obligations under the agreement.
VI. Recommendations
A. Appeal Monitoring
The most immediate action item is to monitor the thirty-day appeal deadline. Final Judgment was entered on August 5, 2022, establishing an appeal deadline of September 4, 2022. Patrick Gallagher has prepared a separate appeal-tracking memorandum dated August 8, 2022, which includes calendar alerts and a protocol for monitoring the Massachusetts Appeals Court docket for any notice of appeal filed by Hargrove, Sinclair & Polk LLP on behalf of Vantage. We should confirm that this tracking protocol is in place and that the team receives timely notification of any filing.
In the event that Vantage does file a notice of appeal, we should promptly prepare a preliminary assessment of the appeal timeline, staffing needs, and budget, and communicate the same to the client. We should also evaluate at that time whether Penterra should seek sanctions or appellate attorney's fees under any applicable provision or rule, although we note that the EDA does not appear to contain a prevailing-party attorney's fees clause.
B. Client Communication
A client advisory letter was sent by Linda Osei to Jennifer Chao (General Counsel, Penterra Pharmaceuticals Corp.) on July 18, 2022, summarizing the court's decision and identifying the next steps, including the appeal deadline. We recommend a follow-up communication to Ms. Chao once the appeal deadline passes without a filing. That communication should confirm that the litigation has concluded, summarize the final outcome, and outline any remaining administrative matters (such as file preservation and litigation-hold release).
If Vantage files an appeal, the follow-up communication should instead advise the client of the appeal, the anticipated timeline, and our preliminary assessment of the appellate risk (consistent with the analysis in this memorandum).
C. Meridian Arrangement
We recommend that Penterra proceed cautiously with the Meridian distribution arrangement until the appeal period expires. While the likelihood that Vantage would obtain a stay pending appeal is very low — Vantage would need to demonstrate a likelihood of success on the merits and irreparable harm, neither of which is present here — prudence counsels against executing a definitive distribution agreement for the tri-state area until September 4, 2022. If Penterra proceeds to finalize the Meridian agreement before that date and Vantage subsequently obtains a reversal on appeal (an unlikely but non-zero possibility), Penterra could face complications arising from conflicting contractual obligations.
That said, there is no legal bar to Penterra's proceeding with the Meridian arrangement at any time, and the commercial team may wish to continue negotiations, due diligence, and drafting in the interim so that a definitive agreement can be executed promptly after the appeal deadline passes.
D. File Preservation
We recommend that the complete litigation file — including all pleadings, discovery materials, document productions, deposition transcripts, deposition exhibits, affidavits, expert reports (if any), the court's Memorandum of Decision and Order, and the Final Judgment — be preserved in the firm's document management system. This is particularly important in the event of any appellate proceedings, but it is also prudent as a matter of course in the event of any future disputes between the parties or with third parties (such as Meridian) relating to the subject matter of this litigation.
We should coordinate with the Penterra litigation-hold team regarding the status of the litigation hold that was implemented at the outset of this matter. If no appeal is filed by September 4, 2022, the hold may be released following appropriate review and consultation with the client. If an appeal is filed, the hold should remain in place for the duration of the appellate proceedings.
VII. Conclusion
The court's Memorandum of Decision and Order is thorough, well-reasoned, and firmly grounded in the plain language of the Exclusive Distribution Agreement and controlling Massachusetts precedent. The risk of reversal on appeal is low.
Penterra achieved a complete victory in this action. The court declared that the Territory under the EDA is limited to the six New England states enumerated in Exhibit A — Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. The court found that the January 12, 2018 Kapoor Email did not constitute "prior written consent" under Section 2.3 of the EDA and did not effect an amendment of the Territory. The court enforced the written-modification clause in Section 13.1 and the integration clause in Section 14.8, rejecting Vantage's course-of-dealing and implied-modification arguments. All three of Vantage's counterclaims — breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel — were dismissed on the merits.
Calderwood & Harkness LLP recommends monitoring the appeal deadline of September 4, 2022, and preparing to close the matter upon its expiration if no notice of appeal is filed. In the meantime, Penterra may continue to advance its commercial objectives with respect to tri-state distribution of Oncalaris®, subject to the prudential recommendations set forth above.
Appendix: Attachments Referenced
The following documents are referenced in this memorandum and are available in the firm's document management system under Matter No. 1018-00007:
1.  Memorandum of Decision and Order, Hon. Diane L. Costigan, J., dated July 15, 2022
2.  Final Judgment entered August 5, 2022
3.  Exclusive Distribution Agreement dated July 1, 2017 (including Exhibit A — Territory Definition)
4.  Email from Steven Kapoor to Donald Farnham, dated January 12, 2018 ("Kapoor Email")
5.  Appeal-Period Tracking Memorandum (Patrick Gallagher, dated August 8, 2022)
6.  Client Advisory Letter (Linda Osei to Jennifer Chao, dated July 18, 2022)
This memorandum is a privileged and confidential attorney work product prepared by Calderwood & Harkness LLP in connection with the representation of Penterra Pharmaceuticals Corp. in the above-referenced matter. It is intended solely for the use of the attorneys and personnel of Calderwood & Harkness LLP working on this matter and is not to be distributed, disclosed, or relied upon by any third party without the express written consent of the firm. This memorandum reflects the professional judgment of the author as of the date indicated and is subject to revision as circumstances develop.

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