Legal Matters

6 Months Ended

Jun. 30, 2011

Legal Matters [Abstract]

Legal Matters

10.           Legal Matters

From time to time, the Company is a party to legal proceedings in the course of the Company's business.  The Company does not expect any such current ordinary course legal proceedings to have a material adverse effect on the Company's business or financial condition.  Costs associated with the Company's involvement in legal proceedings are expensed as incurred.

As previously reported, on November 19, 2010, the Company filed a complaint against Genentech in the U.S. District Court for the Southern District of New York seeking a declaratory judgment that no activities relating to the Company's VEGF Trap infringe any valid claim of certain Genentech patents referred to as the Davis-Smyth patents.  On January 12, 2011, Genentech filed a motion to dismiss the complaint, arguing that the lawsuit was premature and thus the Court lacked subject matter jurisdiction. Upon the Company's submission to the FDA of a BLA for EYLEATM (also known as VEGF Trap-Eye) for the treatment of wet AMD, the Company filed a second complaint against Genentech in the same court seeking the same declaratory relief. On April 7, 2011, the Company and Genentech entered into a Joint Stipulation, which was approved and executed by the Court on April 11, 2011.  Pursuant to the Joint Stipulation, the Company voluntarily dismissed its original complaint in favor of proceeding with its second complaint, and Genentech agreed that it would not seek to transfer the case to another judicial district or move to dismiss the second complaint for lack of subject matter jurisdiction or otherwise under Rule 12(b) of the Federal Rules of Civil Procedure.  On April 25, 2011, Genentech filed an answer to the second complaint, denying that the Company is entitled to the declaratory relief being sought by the Company, and asserting counterclaims that the Company's prior or planned activities relating to VEGF Trap have infringed or will infringe one or more claims of the Davis-Smyth patents.  In its answer, Genentech requests a judgment against the Company for damages, including for willful infringement, and other relief as the Court deems appropriate.  On May 11, 2011, Genentech filed an amended answer and counterclaim, again denying that the Company is entitled to the declaratory relief being sought by the Company, and asserting counterclaims that the Company's prior or planned activities relating to VEGF Trap have infringed or will infringe claims of four of the five Davis-Smyth patents.  In its amended answer and counterclaim, Genentech requests a judgment against the Company for damages, including for willful infringement, and other relief as the Court deems appropriate.  On May 25, 2011, the Company replied to Genentech's amended answer and counterclaim, denying Genentech's counterclaims, and denying that any of the Company's prior or planned activities relating to VEGF Trap infringe any valid claim of the Davis-Smyth patents. The Company believes Genentech's counterclaims are without merit and intends to continue to defend against them vigorously.  As this litigation is at an early stage, at this time the Company is not able to predict the probability of the outcome or an estimate of loss, if any, related to this matter.

The Company has initiated patent-related actions against Genentech in Germany and the United Kingdom, and may initiate other actions in other countries outside the U.S.