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Note 8 - Commitments and Contingencies
 3 Months Ended
Mar. 31, 2020
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
Note
8
. Commitments and Contingencies
 
Consulting Agreement
 
On
March 4, 2020,
we entered into a consulting services agreement with Patrick Fabbio, with a term commencing on
March 27, 2020
and continuing until the earlier of the effective date of the proposed merger with Lantheus Holdings or
May 15, 2020
unless terminated by either party as set forth therein (the “Consulting Agreement”). Under the Consulting Agreement, Mr. Fabbio will provide consulting services as requested by us. In consideration for Mr. Fabbio’s services, the Consulting Agreement provides that, if the proposed merger is consummated on or before
July 1, 2020,
Mr. Fabbio will be paid
$180,000
upon consummation of the proposed merger. This payment was originally provided for in his retention agreement with Progenics, except that such payment will now be made in a single lump sum upon the closing of the proposed merger with Lantheus Holdings and will
not
be contingent on Mr. Fabbio’s continued service with Progenics after the closing of the proposed merger.
 
Legal Proceedings
 
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.
 
Abbreviate
d New Drug
App
lication 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.
 
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.
 
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.
 
Progenics, Salix, Bausch, and Wyeth filed suit against Actavis LLC, Actavis, Inc., Actavis Elizabeth LLC, and Allergan PLC fka Actavis PLC in the District of New Jersey on
November 30, 2015 (
2:15
-cv-
08353
-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 Actavis LLC’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR prefilled syringes before some or all of these patents expire. On
February 18, 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 Actavis LLC, Actavis, Inc., Actavis Elizabeth LLC, and Allergan PLC fka Actavis PLC in the District of New Jersey on
February 18, 2016 (
2:16
-cv-
00889
-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 Actavis LLC’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 Actavis LLC, Teva Pharmaceuticals USA, Inc., and Teva Pharmaceutical Industries Ltd. in the District of New Jersey on
August 18, 2017 (
2:17
-cv-
07206
-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.
9,669,096
and
9,492,445
based upon Actavis LLC’s filing of ANDAs seeking to obtain approval to market generic versions of RELISTOR vials and prefilled syringes before the patents expires.
 
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. On
May 16, 2018,
trial on the merits was adjourned in the
15
-
8180
action so that the trial could be consolidated with trial for
17
-
6714
action.
 
The
2:17
-cv-
06714
-SRC-CLW and
2:17
-cv-
07206
-SRC-CLW were consolidated into a single action in the District of New Jersey (
2:17
-cv-
06714
-SRC-CLW). 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.
 
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 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.
 
Federal Circuit Appeal
 
On
May 25, 2018,
Mylan filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit (“CAFC”). 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 has concluded. 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.
Oral argument was held on
February 4, 2020.
On
April 8, 2020,
the CAFC issued its decision reversing the district court’s grant of summary judgment and remanding for further proceedings. The current deadline for Plaintiffs to file a petition for rehearing/rehearing en banc is
May 8, 2020.
On
April 22, 2020,
Plaintiffs filed a motion to extend the deadline to file a petition for rehearing/rehearing en banc to
June 22, 2020.
 
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 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
®
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 underway. Fact discovery has
not
yet begun.
 
Federal Circuit Appeal
 
Actavis filed an appeal of the District Court decision with the Court of Appeals for the Federal Circuit on
August 13, 2019.
The matter is currently pending on appeal at the Federal Circuit and merits briefing is underway. Actavis’s opening brief was filed
February 6, 2020.
The deadline for Plaintiffs to file their responsive brief is currently
July 17, 2020.
 
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.
Oral proceedings for
EP2368554
and
EP2368553,
scheduled for
March 9
and
March 10, 2020,
respectively were cancelled by the Board of Appeals on
March 9, 2020,
due to health concerns. Oral proceedings have been rescheduled for
November 18, 2020
for
EP2368554
and for
November 17, 2020
for
EP2368553.
 
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 patent applications filed worldwide 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
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)
3038996
A1
(EP
14799340.6
) and of the Divisional Applications EP
18172716.5,
EP
18184296.4,
and EP
18203547.7
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.
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;
15/805,900;
16/038,729
and
16/114,988
). 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
November 12, 2019,
the University filed a statement with the USPTO to dispute the Confirmation of Ownership filed by MIP. On
February 21, 2020,
MIP filed declarations confirming the assignment record as correct based upon MIP’s filings dated
December 20, 2018,
as well as a Confirmation of Ownership in pending US patent applications
16/551,198
and
16/510,495.
On
March 6, 2020,
MIP filed with the USPTO a notice stating that the Power of Attorney in pending US patent applications
16/551,198
and
16/510,495
was signed by less than all applicants or owners of the applications.
 
On
February 27, 2019,
the German District 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. On
February 28, 2019,
the Court set a hearing date of
August 6, 2019
at which time it held the
first
oral hearing in the case. The Court considered procedural matters and granted the parties the right to make further submissions. MIP’s further submission was timely filed by the
October 1, 2019
deadline. The University filed a reply brief on
January 31, 2020
and MIP filed a further reply brief on
April 8, 2020.
The Court is in the process of scheduling a further oral hearing to be held in summer
2020.
 
Third Party Patents
 
Post-Grant Review of U.S. Patent
No.
10,112,974
 
On
July 29, 2019
we filed a petition for post-grant review (“PGR”) with the United States Patent and Trademark Office (“USPTO”) of U.S. Patent
No.
10,112,974
(“the
‘974
patent”), which is jointly owned by Max-Planck-Gesellschaft zur Foerderung der Wissenschaften and Universitat zu Koln (“the Patent Owners”). Certain claims of the
‘974
patent recite precursor compounds for preparing prostate-specific membrane antigen (PSMA) targeting conjugates. In our petition, we allege that such precursor compounds were previously disclosed in other publications, and that claims
1
-
15
and
31
are therefore invalid.
 
On
August 13, 2019,
the USPTO mailed a Notice of Filing Date, setting a
three
(
3
)-month deadline for the Patent Owners to file a preliminary response. The Patent Owners did
not
file a response. On
January 29, 2020,
the Patent Trial & Appeal Board (PTAB) at the USPTO instituted post-grant review of the
‘974
patent, setting a deadline of
April 22, 2020
for the Patent Owners to file a response. On
March 13, 2020,
the Patent Owners filed a statutory disclaimer, disclaiming claims
1
-
5,
7,
9,
13
-
15
and
31.
On
April 27, 2020,
the USPTO issued a final written decision, stating remaining claims
6,
8,
and
10
-
12
were
not
shown to be unpatentable.
 
Litigation Related to the Merger
 
Six lawsuits -
four
putative class actions and
two
individual actions - were initially brought against Progenics and the Progenics Board by purported stockholders of Progenics alleging inadequate disclosure by Progenics in the registration statement filed on
November 12, 2019
related to the merger. Three of such lawsuits were voluntarily dismissed without prejudice by plaintiffs, with
no
settlements from, or other agreed obligations by, the respective defendants thereunder. Two additional putative class actions and an individual action were subsequently filed, alleging, among other things, inadequate disclosures in the amended registration statement filed on
March 16, 2020
and the proxy statement filed on
March 19, 2020.
 
 
On
November 
22,
2019,
a purported stockholder filed a putative class action complaint in the United States District Court for the District of Delaware, captioned
Johnson v. Progenics Pharmaceuticals, Inc., et al.
, Civil Action
No.
1:19
-cv-
02183,
against Progenics and members of the Progenics Board, which is referred to in this Quarterly Report on Form
10
-Q as the
Johnson I
Action. On
March 5, 2020,
the
Johnson I
Action was voluntarily dismissed without prejudice. On
November 
25,
2019,
a
second
purported stockholder filed a putative class action complaint in the United States District Court for the District of Delaware, captioned
Thompson v. Progenics Pharmaceuticals, Inc., et al.
, Civil Action
No.
1:19
-cv-
02194,
against Progenics, certain members of the Progenics Board, Lantheus Holdings, and Plato Merger Sub, Inc. ("Merger Sub"), which is referred to in this Quarterly Report on Form
10
-Q as the
Thompson
Action. On
March 10, 2020,
the
Thompson
Action was voluntarily dismissed without prejudice. On
November 
26,
2019,
a
third
purported stockholder filed a complaint in the United States District Court for the Southern District of New York, captioned
Wang v. Progenics Pharmaceuticals, Inc., et al.
, Civil Action
No.
1:19
-cv-
10936,
against Progenics and members of the Progenics Board, which is referred to in this Quarterly Report on Form
10
-Q as the
Wang
Action. On
December 
9,
2019,
a
fourth
purported stockholder filed a putative class action complaint in the United States District Court for the District of New Jersey, captioned
Michael A. Bernstein IRA v. Progenics Pharmaceuticals, Inc. et al.
, Civil Action
No.
2:19
-cv-
21200,
against Progenics, members of the Progenics Board, Lantheus Holdings, and Merger Sub, which is referred to in this Quarterly Report on Form
10
-Q as the
Bernstein IRA
Action. On
April 21, 2020
an amended complaint was filed in the
Bernstein IRA
Action, and on
May 6, 2020,
the
Bernstein IRA
action was transferred to the United States District Court for the Southern District of New York under Civil Action
No.
1:20
-cv-
03521.
On
December 
12,
2019,
a
fifth
purported stockholder filed a putative class action complaint in the United States District Court for the District of Delaware, captioned
Pill v. Progenics Pharmaceuticals, Inc., et al.
, Civil Action
No.
1:19
-cv-
02268,
against Progenics and members of the Progenics Board. The purported stockholder voluntarily dismissed this action without prejudice and the court closed the case on
March 10, 2020.
On
December 
20,
2019,
a
sixth
purported stockholder filed a complaint in the United States District Court for the Southern District of New York, captioned
Hess v. Progenics Pharmaceuticals, Inc., et al.
, Civil Action
No.
1:19
-cv-
11683,
against Progenics, Progenics’ Chief Executive Officer and Chief Financial Officer, and members of the Progenics Board, which is referred to in this Quarterly Report on Form
10
-Q as the
Hess
Action. On
April 8, 2020,
an amended complaint was filed in the
Hess
Action.
 
On
April 
2,
2020,
a
seventh
purported stockholder filed a putative class action in the United States District Court for the Southern District of New York, captioned
Goldstone
v. Progenics Pharmaceuticals, Inc., et al.
, Civil Action
No.
1:20
-cv-
02750,
against Progenics, members of the Progenics Board, Lantheus Holdings, and Merger Sub, which is referred to in this Quarterly Report on Form
10
-Q as the
Goldstone
Action. On
April 
6,
2020,
the purported stockholder in the
Johnson
Action filed a putative class action in the United States District Court for the Southern District of New York, captioned
Johnson
v. Progenics Pharmaceuticals, Inc., et al.
, Civil Action
No.
1:20
-cv-
02847,
against Progenics and members of the Progenics Board, which is referred to in this Quarterly Report on Form
10
-Q as the
Johnson II
Action. On
April 8, 2020,
an
eighth
purported stockholder filed a complaint in the United States District Court for the Southern District of New York, captioned
Krueger v. Progenics Pharmaceuticals, Inc., et al.
, Civil Action
No.
1:20
-cv-
02913,
against Progenics and members of the Progenics Board, which is referred to in this Quarterly Report on Form
10
-Q as the
Krueger
Action.
 
The complaints in the
Wang
,
Bernstein IRA
,
Hess
,
Goldstone
,
Johnson II
, and
Krueger
Actions allege, among other things, that Progenics and the members of the Progenics Board violated Sections
14
(a) and
20
(a) of the Exchange Act, and
17
C.F.R. §
244.100
and Rule
14a
-
9
promulgated under the Exchange Act, by misstating or omitting certain allegedly material information in the registration statement filed with the SEC on
November 
12,
2019
related to the merger, the amended registration statement filed on
March 16, 2020,
or the proxy statement filed on
March 19, 2020.
The
Goldstone
complaint further alleges that members of the Board breached their fiduciary duties to the stockholders of Progenics and that Lantheus Holdings and Merger Sub aided and abetted such breaches of fiduciary duties. The complaints seek, among other things, injunctive relief preventing the consummation of the merger, rescission or damages in the event of consummation of the merger, declaratory relief related to disclosures in the registration statement, and certain fees and expenses. Progenics intends to vigorously defend itself against these complaints.
 
In addition, by letter dated
October 14, 2019,
Progenics received a shareholder demand from the Fireman’s Retirement System of St. Louis under Section
220
of the DGCL to inspect its books and records concerning, among other things, the opposition to the consent solicitation commenced by Velan and the negotiation and execution of the original merger agreement, and asserting that the Progenics Board
may
have breached its fiduciary obligations. Progenics and the Fireman’s Retirement System of St. Louis executed a confidentiality agreement and negotiated the scope of the production of books and records in response to the FRS Demand which Progenics has provided.
 
Whistleblower Complaint
 
In
July 2019,
we received notification of a complaint submitted by Dr. Syed Mahmood, the former Vice President of Medical Affairs for Progenics, to the Occupational Safety and Health Administration of the United States Department of Labor (“DOL”), alleging that the termination of his employment by Progenics was in violation of Section
806
of the Sarbanes-Oxley Act of
2002
(“SOX”). Dr. Mahmood is seeking reinstatement as Vice President of Medical Affairs, back pay, front pay in lieu of reinstatement, interest, attorneys’ fees and costs incurred, and special damages. In
March 2020,
Dr. Mahmood filed a complaint in the U.S. District Court for the Southern District of New York (as permitted by SOX because the DOL had
not
issued a decision within
180
days). Dr. Mahmood’s federal complaint makes similar allegations as his DOL claim. The DOL action will now be dismissed and the action will proceed in federal district court. Progenics’ response in the federal action is due
May 26, 2020. 
The Company believes that it had ample reason for terminating such employment for good and sufficient legal cause, and the Company believes that the claim is without merit and is vigorously defending this claim.