Ansun website. Screen capture

A local biopharmaceutical company will pay about $2 million to the government to resolve a criminal and civil investigation into the company’s submission of false and fraudulent claims on grants and a contract with the National Institutes of Health, the U.S. Attorney’s Office announced Thursday .

Ansun Biopharma Inc., formerly known as NexBio Inc., is a biotechnology company headquartered in San Diego that, from 2004 through 2011, received research grants and a contract from the NIH.

They included a grant for “Broad-Spectrum Therapeutics for Influenza,” a grant for “Development of Fludase as an Anti-Influenza Agent,” and, in September 2006, a $50 million contract to develop a drug to combat influenza. Fludase was an experimental antiviral drug for the treatment of influenza.

According to the settlements, the company fabricated timesheets for employees to maximize billing on the NIH grants and the Fludase contract.

The company admitted that in 2009, it created a time-keeping policy that required employees to accurately record the number of hours devoted to certain projects, including projects covered under the Fludase contract and other NIH-funded grants.

Despite the time-keeping requirements, accounting personnel were directed to maximize reimbursements from NIH, regardless of the actual number of employee hours spent on the Fludase contract or other grants. Employee hours were billed to the Fludase contract, even if the project the employee was working on did not fall within the scope of the project.

The point of the alterations was to get money from NIH, even if the work was not covered under the terms of the Fludase contract or NIH grants, according to the settlements.

A new Board of Directors was appointed following an investigation into the billing practices.

“We continue to work with leaders in the medical community to develop therapies for unmet medical need,” said Dr. Ronald Moss, NexBio’s chief executive. “Our investigational drugs for influenza and parainfluenza are in late stage clinical development. It is very clear based on the current influenza epidemic that more therapies are urgently needed and Ansun is committed to developing these therapies for patients.”

— City News Service