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Note 8 - Commitments and Contingencies
 6 Months Ended
Jun. 30, 2019
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
Note
8
. Commitments and Contingencies
 
We are or
may
be involved in disputes, governmental and/or regulatory inspections, inquiries, investigations, and proceedings that could result in litigation, and other litigation matters that arise from time to time. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect us, our results of operations, financial condition, and cash flows. While it is
not
possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in
one
or more of these items currently pending could have a material adverse effect on our consolidated results of operations, financial position, or cash flows.
 
Abbreviated New Drug Application Litigations
 
RELISTOR Subcutaneous Injection
 
Paragraph IV Certifications
- Mylan
 
On or about
October 6, 2015,
November 20, 2015,
December 22, 2015,
and
December 23, 2015,
Progenics, Salix Pharmaceuticals, Inc. (“Salix”) and Wyeth LLC (“Wyeth”) received
four
separate notifications of a Paragraph IV certification for RELISTOR (methylnaltrexone bromide) subcutaneous injection, for certain patents that are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, also known as “the Orange Book.” The certifications resulted from the filing by Mylan Pharmaceuticals Inc. of an Abbreviated New Drug Application (“ANDA”) with the FDA, challenging such patents for RELISTOR subcutaneous injection and seeking to obtain approval to market a generic version of RELISTOR subcutaneous injection before some or all of these patents expire.
 
District Court Actions
 
Progenics, Salix, Valeant (now Bausch Health Companies Inc., “Bausch”), and Wyeth filed suit against Mylan Pharmaceuticals, Inc. and Mylan Inc. in the District of New Jersey on
November 19, 2015 (
2:15
-cv-
8180
-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.
8,247,425,
8,420,663,
8,552,025,
and
8,822,490
based upon Mylan Pharmaceutical Inc.’s filing of its ANDA seeking to obtain approval to market a generic version of RELISTOR vials before some or all of these patents expire. On
February 4, 2016,
Progenics, Salix, Bausch, and Wyeth filed an amended complaint, identifying Mylan Laboratories Ltd. as an additional Defendant, and further seeking declaratory judgment of infringement of U.S. Patent
No.
9,180,125.
Progenics, Salix, Bausch, and Wyeth filed suit against Mylan Pharmaceuticals, Inc., Mylan Laboratories Ltd., and Mylan Inc. in the District of New Jersey on
January 4, 2016 (
2:16
-cv-
00035
-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.
8,247,425,
8,420,663,
8,552,025,
and
8,822,490
based upon Mylan Pharmaceutical Inc.’s filing of its ANDA seeking to obtain approval to market a generic version of RELISTOR prefilled syringes before some or all of these patents expire. On
January 25, 2016,
Progenics, Salix, Bausch, and Wyeth filed an amended complaint, further seeking declaratory judgment of infringement of U.S. Patent
No.
9,180,125.
Progenics, Salix, Bausch, and Wyeth filed suit against Mylan Pharmaceuticals, Inc., Mylan Laboratories Ltd., and Mylan Inc. in the District of New Jersey on
September 1, 2017 (
2:17
-cv-
06714
-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent
No.
9,669,096
based upon Mylan Pharmaceutical Inc.’s filing of ANDAs seeking to obtain approval to market generic versions of RELISTOR vials and prefilled syringes before the patents expires. On
September 18, 2017,
Progenics, Salix, Bausch, and Wyeth filed an amended complaint, further seeking declaratory judgment of infringement of U.S. Patent
No.
9,492,445.
 
The
2:15
-cv-
8180
-SRC-CLW,
2:16
-cv-
00035
-SRC-CLW,
2:15
-cv-
08353
-SRC-CLW, and
2:16
-cv-
00889
-SRC-CLW actions were consolidated into a single action in the District of New Jersey (
2:15
-cv-
08180
-SRC-CLW). On
May 1, 2018,
the Court granted Plaintiffs’ motion for partial summary judgment as to the validity of claim
8
of U.S. Patent
No.
8,552,025.
On
May 23, 2018,
the Court entered an order for final judgment under Fed. R. Civ. P.
54
(b) in favor of Plaintiffs and against Mylan as to claim
8
of the
’025
patent.
 
Litigation in the
2:17
-cv-
06714
-SRC-CLW action is underway. Fact discovery in this action has closed and expert discovery deadlines have
not
yet been set. This action has been consolidated for purposes of trial only with the
2:15
-cv-
8180
action.
 
Federal Circuit Appeal
 
On
May 25, 2018,
Mylan filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit. The matter is currently pending on appeal at the Federal Circuit.
 
On
July 9, 2018,
Bausch and Salix filed a motion to disqualify Katten Muchin Rosenman LLP as counsel for Mylan. On
July 17, 2018,
an order was issued stating the briefing on the merits of Mylan’s appeal pending the disposition of the motion to disqualify. Oral argument was held on
September 12, 2018.
A decision disqualifying Katten Muchin Rosenman LLP as counsel for Mylan was issued on
February 8, 2019,
by the Federal Circuit. Merits briefing is currently underway. Mylan submitted its opening brief on
April 9, 2019.
Plaintiffs filed their responsive brief on
July 2, 2019.
Mylan filed its reply brief on
August 6, 2019.
 
Paragraph IV Certification – Actavis
 
On or about
October 27, 2015,
January 5, 2016,
and
January 8, 2016,
Progenics, Salix and Wyeth received
three
separate notifications of a Paragraph IV certification for certain patents for RELISTOR (methylnaltrexone bromide) subcutaneous injection, for certain patents that are listed in the FDA’s Orange Book. The certifications resulted from the filing by Actavis LLC of an ANDA with the FDA, challenging such patents for RELISTOR subcutaneous injection and seeking to obtain approval to market a generic version of RELISTOR subcutaneous injection before some or all of these patents expire.
 
Settlement Agreement
-
Actavis
 
On
May 25, 2018,
Progenics, Bausch, Salix, Wyeth (Progenics, Bausch and Salix, each “Plaintiff” and collectively “Plaintiffs”) and Actavis LLC (“Actavis”) entered into a Settlement and License Agreement (the “Actavis Agreement”) relating to Civil Action
No.
2:15
-cv-
08180
and Civil Action
No.
2:17
-cv-
06714.
The following is a summary of the material terms of the Actavis Agreement. The Actavis Agreement provides for a full settlement and release by both Plaintiffs and Actavis of all claims that were or could have been asserted in the District Court Cases and all resulting damages or other remedies. Plaintiffs and Actavis have agreed to and, in fact, filed a Stipulated Consent Judgment and Injunction after the execution of the Actavis Agreement. Plaintiffs and Actavis have further acknowledged and agreed that the
30
-month stay imposed by the FDA in relation to the approval of Actavis’ ANDAs for the Actavis Products (the “Actavis ANDAs”) should be terminated.
 
Under the Actavis Agreement, Plaintiffs grant Actavis a non-exclusive, royalty-free, non-transferable, non-sublicensable, limited license under the Patents-In-Suit to make, import, and sell each of the Actavis Products in the U.S. beginning on the earliest of (a)
January 1, 2028; (
b) for each of the Actavis Products, if Actavis is a “First Applicant” (as defined in
21.
U.S.C. §
355
(j)(
5
)(B)(iv)(II)) and has
not
forfeited, relinquished or otherwise waived its
180
-day exclusivity,
180
days prior to the date on which an entity
not
a First Applicant is permitted to commercially sell such Actavis Product in the U.S. under authorization from Plaintiffs; (c) for each of the Actavis Products, if Actavis either is
not
a First Applicant or otherwise has forfeited, relinquished or otherwise waived its
180
-day exclusivity, the earlier of (i)
181
days after any
third
party that is a First Applicant markets a corresponding single-dose vial or pre-filled syringe that has been FDA approved or submitted for approval under an ANDA as a generic version of RELISTOR
®
Injection for subcutaneous use (the “Generic Products”) in the U.S., or (ii) the date on which a
third
party that is either
not
a First Applicant or otherwise has waived its
180
-day exclusivity markets, or is
first
authorized by Plaintiffs to begin marketing, such Generic Product; (d) for each of the Actavis Products, the date on which a
third
party that has sought or received approval from the FDA under a “New Drug Application” (as defined in the US Federal Drug and Cosmetic Act and regulations promulgated thereunder) (“NDA”) for a corresponding single-dose vial or pre-filled syringe of methylnaltrexone bromide for subcutaneous use for which RELISTOR
®
Injection is the listed drug (a “Section
505
(b)(
2
) Applicant”) markets or is
first
authorized by Plaintiffs to begin marketing such corresponding product; (e) for each of the Actavis Products, the date on which a corresponding generic version of the single-dose vial or pre-filled syringe of methylnaltrexone bromide for subcutaneous use approved under NDA
No.
021964
for RELISTOR
®
Injection that is marketed or intended for marketing in the U.S. without the RELISTOR
®
trademark (an “Authorized Generic Product”) is
first
marketed in the U.S. by a
third
party; or (f) the earlier of (i) the date on which a final court decision is entered holding that each of the unexpired claims of the Patents-In-Suit are invalid and/or unenforceable, or (ii) the date on which the Patents-In-Suit have expired, been permanently abandoned, or delisted from the Orange Book. The Actavis Agreement also gives Actavis a limited right to grant sublicenses to its affiliates for certain pre-marketing activities.
 
Paragraph IV Certification - Par
 
On or about
July 15, 2017,
Progenics, Salix and Wyeth received notification of a Paragraph IV certification for RELISTOR (methylnaltrexone bromide) subcutaneous injection, for certain patents that are listed in the FDA’s Orange Book. The certification resulted from the filing by Par Sterile Products, LLC (“Par Sterile”) of an ANDA with the FDA, challenging such patents for RELISTOR subcutaneous injection and seeking to obtain approval to market a generic version of RELISTOR subcutaneous injection before some or all of these patents expire.
 
District Court Actions
 
Progenics, Salix, Bausch, and Wyeth filed suit against Par Sterile Products, Par Pharmaceutical, Inc. (“Par Pharmaceutical” and, together with Par Sterile, “Par”), and Endo International plc in the District of New Jersey on
August 25, 2017 (
2:17
-cv-
06449
-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.
8,247,425,
8,420,663,
8,552,025,
8,822,490,
9,180,125,
and
9,669,096
based upon Par Sterile Product’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR vials before some or all of these patents expire.
 
Progenics, Salix, Bausch, and Wyeth filed suit against Par Sterile Products, Par Pharmaceutical, and Endo International plc in the Southern District of New York on
August 25, 2017 (
1:17
-cv-
06557
-PAE) seeking declaratory judgment of infringement of U.S. Patent Nos.
8,247,425,
8,420,663,
8,552,025,
8,822,490,
9,180,125,
and
9,669,096
based upon Par Sterile Product’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR vials before some or all of these patents expire. This action was voluntarily dismissed on
November 30, 2017.
 
Settlement Agreement - Par
 
On
May 10, 2018,
Progenics, Bausch, Salix, Wyeth and Par entered into a Settlement and License Agreement (the “Par Agreement”) relating to Civil Action
No.
17
-
06449
-SRC-CLW (the “District Court Case”). The following is a summary of the material terms of the Par Agreement.
 
The Par Agreement provides for a full settlement and release by both Plaintiffs and Par of all claims that were or could have been asserted in the District Court Case and all resulting damages or other remedies. Plaintiffs and Par have agreed to and, in fact, filed a Stipulated Consent Judgment and Injunction after the execution of the Par Agreement. Plaintiffs and Par have further acknowledged and agreed that the
30
-month stay imposed by the FDA in relation to the approval of Par’s ANDA for the Par Products (the “Par ANDA”) should be terminated.
 
Under the Par Agreement, Plaintiffs grant Par a non-exclusive, royalty-free, non-transferable, non-sublicensable, limited license under the Patents-In-Suit to make, import, and sell the Par Products in the U.S., or make outside the U.S. solely for importation into the U.S. (the “Par License”) beginning on the earliest of (i)
September 30, 2030; (
ii) for either of the Par Products,
one hundred eighty-one
(
181
) days after any
third
party who is the “First Applicant” (as defined in
21.
U.S.C. §
355
(j)(
5
)(B)(iv)(II)) markets a single-dose vial or pre-filled syringe that has been FDA approved or submitted for approval under an ANDA as a generic version of RELISTOR
®
Injection for subcutaneous use (the “Generic Products”); (iii) for either of the Par Products, the date on which a non-First Applicant
third
party markets an authorized generic (under the RELISTOR
®
New Drug Application (“NDA”) but without the RELISTOR
®
trademark) single-dose vial or pre-filled syringe of methylnaltrexone bromide for subcutaneous use in the U.S.; (iv) for either of the Par Products, the date on which a
third
party who is
not
a First Applicant (or who is a First Applicant who has forfeited or otherwise waived its
180
-day exclusivity) markets or is
first
authorized by Plaintiffs to market the Generic Products in the U.S.; (v) the date on which a final court decision is entered holding that each of the asserted claims against Par in the District Court Case from the Patents-In-Suit are invalid and/or unenforceable, or
not
infringed by the single-dose vial Par Product; or (vi) the date on which the Patents-In-Suit have expired, been permanently abandoned or delisted from the FDA’s Orange Book. Plaintiffs have also granted to Par a limited pre-commercialization license to manufacture and/or import the Par Products into the U.S. starting
one hundred fifty
(
150
) days prior to the effective date of the Par License solely to the extent reasonably necessary to enable Par to market the Par Products in the U.S. on or after the effective date of the Par License.
 
RELISTOR Tablets - Actavis
 
Paragraph IV Certifications
 
On or about
October 24, 2016
and
October 24, 2017,
Progenics, Salix, Bausch and Wyeth received
two
separate notifications of a Paragraph IV certification for RELISTOR (methylnaltrexone bromide) tablets, for certain patents that are listed in the FDA’s Orange Book. The certification resulted from the filing by Actavis Laboratories Fl., Inc. (“Actavis”) of an ANDA with the FDA, challenging such patents for RELISTOR tablets and seeking to obtain approval to market a generic version of RELISTOR tablets before some or all of these patents expire.
 
District Court Actions
 
Progenics, Salix, Bausch, and Wyeth filed suit against Actavis, Actavis LLC, Teva Pharmaceuticals USA, Inc., and Teva Pharmaceuticals Industries Ltd. in the District of New Jersey on
December 6, 2016 (
2:16
-cv-
09038
-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.
8,420,663,
8,524,276,
8,956,651,
9,180,125,
and
9,314,461
based upon Actavis’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR tablets before some or all of these patents expire.
 
Progenics, Salix, Bausch, and Wyeth filed suit against Actavis, Actavis LLC, Teva Pharmaceuticals USA, Inc., and Teva Pharmaceuticals Industries Ltd. in the District of New Jersey on
December 8, 2017 (
2:17
-cv-
12857
-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.
9,724,343
and
9,492,445
based upon Actavis’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR tablets before some or all of these patents expire.
 
The
2:16
-cv-
09038
-SRC-CLW and
2:17
-cv-
12857
-SRC-CLW actions were consolidated into a single action in the District of New Jersey (
2:16
-cv-
09038
-SRC-CLW). A
four
day bench trial was held from
May 6, 2019
through
May 9, 2019.
On
July 17, 2019,
the Court issued an Order finding the asserted claims of U.S. Patent
No.
8,524,276
valid and infringed. The Court additionally ordered that the effective date of any approval of Actavis’s ANDA
No.
209615
may
not
be earlier than the expiration date of U.S. Patent
No.
8,524,276.
 
Progenics, Salix, Bausch, and Wyeth filed suit against Actavis, Actavis LLC, Teva Pharmaceuticals USA, Inc., and Teva Pharmaceuticals Industries Ltd. in the District of New Jersey on
June 13, 2019 (
2:19
-cv-
13722
-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent
No.
10,307,417
based upon Actavis’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR tablets before this patent expires. Litigation in the
2:19
-cv-
13722
-SRC-CLW action is
not
yet underway.
 
European Opposition Proceedings
 
In addition to the above described ANDA notifications, in
October 2015,
Progenics received notices of opposition to
three
European patents relating to methylnaltrexone. Notices of opposition against
EP1615646
were filed on
September 24, 2015
separately by each of Actavis Group PTC ehf and Fresenius Kabi Deutschland GmbH. Notices of opposition against
EP2368553
were filed on
September 29, 2015
and
September 30, 2015
by Fresenius Kabi Deutschland GmbH and Actavis Group PTC ehf, respectively. Notices of opposition against
EP2368554
were filed on
September 24, 2015
separately by each of Actavis Group PTC ehf and Fresenius Kabi Deutschland GmbH. On
May 11, 2017,
the opposition division provided notice that
EP2368553
will be revoked. On
June 28, 2017,
the opposition division provided notice that
EP1615646
will be revoked. On
July 4, 2017,
the opposition division provided notice that
EP2368554
will be revoked. Each of these matters are on appeal with the European Patent Office. Oral proceedings for
EP1615646
are set to occur on
September 22, 2020.
A date for oral proceedings has
not
yet been set in the appeals concerning
EP2368553
and
EP2368554.
 
For each of the above-described proceedings, we and Bausch continue to cooperate closely to vigorously defend and enforce RELISTOR intellectual property rights. Pursuant to the RELISTOR license agreement between Progenics and Bausch, Bausch has the
first
right to enforce the intellectual property rights at issue and is responsible for the costs of such enforcement.
 
We are or
may
be from time to time involved in various other disputes, governmental and/or regulatory inspections, inquires, investigations and proceedings that could result in litigation, and other litigation matters that arise from time to time. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect us, our results of operations, financial condition, and cash flows.
 
PSMA-
617
 
German District Court Litigation
 
We announced a lawsuit and associated worldwide patent ownership dispute based on our claims to certain inventions related to PSMA-
617,
a PSMA-targeted radiopharmaceutical compound under development for the treatment of prostate cancer that is the subject of certain European and U.S. Patent Applications filed by the University of Heidelberg (“the University”).
 
On
November 8, 2018,
MIP filed a complaint against the University in the District Court of Mannheim in Germany. In this Complaint, the Company claims that the discovery and development of PSMA-
617
was related to work performed under a research collaboration sponsored by MIP. MIP alleged that the University breached certain contracts with MIP and that MIP is the co-owner of inventions embodied in certain worldwide patent filings related to PSMA-
617,
currently pending in Europe and the United States that were filed by the University in its own name. On
February 27, 2019,
Endocyte, Inc., a wholly owned subsidiary of Novartis AG, filed a motion to intervene in the German litigation. Endocyte is the exclusive licensee of the patent rights that are the subject of the German proceedings.
 
On
November 27, 2018,
MIP requested that the European Patent Office (“EPO”) stay the examination of European Patent (EP)
3
038
996
A1
(EP
14
799
340.6
) and of the Divisional Applications EP
18
172
716.5,
EP18
184
296.4,
and EP
18
203
547.7
pending a decision from the German District Court on MIP’s Complaint. On
December 10, 2018,
the EPO granted MIP’s request and stayed the examination of the patent and patent applications effective
November 27, 2018.
Likewise, on
December 20, 2018,
MIP filed a Confirmation of Ownership with the United States Patent and Trademark Office (“USPTO”) in the corresponding US patent applications (US Serial Nos.
15/131,118;
16/038,729
and
16/114988
). MIP’s filing with the USPTO takes the position that, in light of the collaboration and contracts between MIP and the University, MIP is the co-owner of these pending U.S. patent applications.
 
On
February 27, 2019,
the German District Court entered
two
orders in the litigation. First, the Court set
€416,
000
as the amount MIP must deposit with the Court as security in the event of an unfavorable final decision on the merits of the dispute. Second, the Court set a hearing date of
August 6, 2019
during which it will consider the various arguments of the parties and determine the next steps of the litigation. On
August 6,
the District Court of Mannheim in Germany held the
first
oral hearing in the case. The Court considered procedural matters and granted the parties the right to make further submissions.