LEGAL PROCEEDINGS	12 Months Ended
Dec. 31, 2014
Loss Contingency, Information about Litigation Matters [Abstract]
LEGAL PROCEEDINGS	LEGAL PROCEEDINGS From time to time, the Company becomes involved in various legal and administrative proceedings, which include product liability, intellectual property, commercial, antitrust, governmental and regulatory investigations, related private litigation and ordinary course employment-related issues. From time to time, the Company also initiates actions or files counterclaims. The Company could be subject to counterclaims or other suits in response to actions it may initiate. The Company believes that the prosecution of these actions and counterclaims is important to preserve and protect the Company, its reputation and its assets. Certain of these proceedings and actions are described below. Unless otherwise indicated, the Company cannot reasonably predict the outcome of these legal proceedings, nor can it estimate the amount of loss, or range of loss, if any, that may result from these proceedings. An adverse outcome in certain of these proceedings could have a material adverse effect on the Company’s business, financial condition and results of operations, and could cause the market value of its common shares to decline. Governmental and Regulatory Inquiries Legacy Biovail Matters On May 16, 2008, Biovail Pharmaceuticals, Inc. (“BPI”), the Company’s former subsidiary, entered into a written plea agreement with the U.S. Attorney’s Office (“USAO”) for the District of Massachusetts whereby it agreed to plead guilty to violating the U.S. Anti-Kickback Statute and pay a fine of $22.2 million. In addition, on May 16, 2008, the Company entered into a non-prosecution agreement with the USAO whereby the USAO agreed to decline prosecution of Biovail Corporation (“Biovail”) in exchange for continuing cooperation and a civil settlement agreement and pay a civil penalty of $2.4 million. A hearing before the U.S. District Court in Boston took place on September 14, 2009 and the plea was approved. In addition, as part of the overall settlement, Biovail entered into a Corporate Integrity Agreement (“CIA”) with the Office of the Inspector General and the Department of Health and Human Services on September 11, 2009. The CIA requires the Company to have a compliance program in place and to undertake a set of defined corporate integrity obligations for a five-year term. The CIA also includes requirements for an annual independent review of these obligations. Pursuant to the terms of the CIA, the Company expects the requirements contained in the CIA to terminate by the end of the second quarter of 2015. Failure to comply with the obligations under the CIA could result in financial penalties. Civil Investigative Demand from the U.S. Federal Trade Commission On May 2, 2012, Medicis received a civil investigative demand from the FTC requiring that Medicis provide to the FTC information and documents relating to various settlement and other agreements with makers of generic SOLODYN® products following patent infringement claims and litigation, each of which was previously filed with the FTC and the Antitrust Division of the Department of Justice, and other efforts principally relating to SOLODYN®. On June 7, 2013, Medicis received an additional civil investigative demand relating to such settlements, agreements and efforts. Medicis is cooperating with this investigative process. If, at the conclusion of this process, the FTC believes that any of the agreements or efforts violates antitrust laws, it could challenge Medicis through a civil administrative or judicial proceeding. If the FTC ultimately challenges the agreements, we would expect to vigorously defend any such action. Subpoenas from the New York Office of Inspector General for the U.S. Department of Health and Human Services On June 29, 2011, B&L received a subpoena from the New York Office of Inspector General for the U.S. Department of Health and Human Services regarding payments and communications between B&L and medical professionals related to its pharmaceutical products Lotemax® and Besivance®. The government has indicated that the subpoena was issued in connection with a civil investigation, and B&L is cooperating fully with the government’s investigation. B&L has heard of no additional activity at this time, and whether the government’s investigation is ongoing or will result in further requests for information is unknown. B&L and the Company will continue to work with the Office of Inspector General regarding the scope of the subpoena and any additional specific information that may be requested. ISTA Settlement with Department of Justice On or about May 24, 2013 (prior to the Company’s acquisition of B&L in August 2013), B&L’s subsidiary, ISTA Pharmaceuticals, Inc. (“ISTA”), reached agreement with the U.S. government to resolve and conclude civil and criminal allegations against ISTA. The settlement involved conduct by ISTA that occurred between January 2006 and March 2011, prior to B&L’s acquisition of ISTA in June 2012. B&L was aware of the government investigation prior to its acquisition, and fully cooperated with the government to resolve the matter. In connection with the settlement, ISTA pled guilty to certain charges and paid approximately $34 million in civil and criminal fines, including interest and attorney’s fees. In addition, B&L agreed to maintain a specified compliance and ethics program and to annually certify compliance with this requirement to the Department of Justice for a period of three years. Failure to comply with the requirements of the settlement could result in fines. Securities Medicis Shareholder Class Actions Prior to the Company’s acquisition of Medicis, several purported holders of then public shares of Medicis filed putative class action lawsuits in the Delaware Court of Chancery and the Arizona Superior Court against Medicis and the members of its Board of Directors, as well as one or both of Valeant and Merlin Merger Sub (the wholly-owned subsidiary of Valeant formed in connection with the Medicis acquisition). The Delaware actions (which were instituted on September 11, 2012 and October 1, 2012, respectively) were consolidated for all purposes under the caption In re Medicis Pharmaceutical Corporation Stockholders Litigation, C.A. No. 7857-CS (Del. Ch.). The Arizona action (which was instituted on September 11, 2012) bears the caption Swint v. Medicis Pharmaceutical Corporation, et. al., Case No. CV2012-055635 (Ariz. Sup. Ct.). The actions all alleged, among other things, that the Medicis directors breached their fiduciary duties because they supposedly failed to properly value Medicis and caused materially misleading and incomplete information to be disseminated to Medicis’ public shareholders, and that Valeant and/or Merlin Merger Sub aided and abetted those alleged breaches of fiduciary duty. The actions also sought, among other things, injunctive and other equitable relief, and money damages. The plaintiff in the Arizona action agreed to dismiss her complaint and, on January 15, 2013, the Arizona Superior Court issued an order granting the parties' joint stipulation to dismiss the Arizona action. The parties agreed to settle the Delaware action and, on November 25, 2013, executed a Stipulation and Agreement of Compromise and Settlement, which provided, among other things, that Medicis and the other defendants would not oppose plaintiffs’ request for a fee award (subject to a capped amount). At the settlement hearing on February 26, 2014, the Delaware Court of Chancery declined to approve the settlement or award plaintiffs any attorneys’ fees and the matter was dismissed with prejudice to allow the plaintiff to revise their fee request, which they have subsequently decided not to bring. The Delaware action is now concluded. Obagi Shareholder Class Actions Prior to the acquisition of all of the outstanding common stock of Obagi, the following complaints were filed: (i) a complaint in the Court of Chancery of the State of Delaware, dated March 22, 2013, and amended on April 1, 2013 and on April 8, 2013, captioned Michael Rubin v. Obagi Medical Products, Inc., et al.; (ii) a complaint in the Superior Court of the State of California, County of Los Angeles, dated March 22, 2013, and amended on March 27, 2013, captioned Gary Haas v. Obagi Medical Products, Inc., et al.; and (iii) a complaint in the Superior Court of the State of California, County of Los Angeles, dated March 27, 2013, captioned Drew Leonard v. Obagi Medical Products, Inc., et al. Each complaint is a purported shareholder class action and names as defendants Obagi and the members of the Obagi Board of Directors. The two complaints filed in California also name Valeant and Odysseus Acquisition Corp. (the wholly-owned subsidiary of Valeant formed in connection with the Obagi acquisition) as defendants. The plaintiffs’ allegations in each action are substantially similar. The plaintiffs allege that the members of the Obagi Board of Directors breached their fiduciary duties to Obagi’s stockholders in connection with the sale of the company, and the California complaints further allege that Obagi, Valeant and Odysseus Acquisition Corp. aided and abetted the purported breaches of fiduciary duties. In support of their purported claims, the plaintiffs allege that the proposed transaction undervalued Obagi, involved an inadequate sales process and included preclusive deal protection devices. The plaintiffs in the Rubin case in Delaware and in the Haas case in California also filed amended complaints, which added allegations challenging the adequacy of the disclosures concerning the transaction. The plaintiffs sought damages and to enjoin the transaction, and also sought attorneys’ and expert fees and costs. The parties executed a Stipulation and Agreement of Compromise, Settlement and Release on January 31, 2014, which set forth the terms for the settlement and dismissal of all of the lawsuits and provided, among other things, that Obagi and the other defendants would not oppose plaintiffs’ request for a fee award (subject to a capped amount). At a settlement hearing on April 30, 2014, the Delaware Court of Chancery declined to approve the settlement or award plaintiff any attorneys’ fees. The Delaware Court of Chancery entered the dismissal of the action with prejudice as to the named plaintiffs on October 8, 2014. On October 15, 2014, plaintiffs in the California actions sought voluntary dismissal without prejudice of each of those actions without notice to the proposed class. On October 20, 2014, the court in the California actions granted the request for dismissal of both actions. Solta Medical Shareholder Class Actions Prior to the Company’s completion of the acquisition of Solta Medical, several purported holders of then public shares of Solta Medical filed putative class action lawsuits in the Delaware Court of Chancery and the Superior Court of the State of California, County of Alameda, against Solta Medical and the members of its board of directors, as well as the Company, Valeant, and Sapphire Subsidiary Corp. (the wholly-owned subsidiary of Valeant formed in connection with the Solta Medical acquisition). The Delaware actions were consolidated for all purposes under the caption In re Solta Medical, Inc. Stockholders Litigation, C.A. No. 9170-CS (Del. Ch.). The California actions were filed under the captions Lathrop v. Covert, et al., Case No. HG13-707363 (Cal. Super.); Walter, et al. v. Solta Medical, Inc., et al., Case No. RG13-707659 (Cal. Super.); and Bushansky v. Solta Medical, Inc., et al., Case No. RG13-707997 (Cal. Super.). The plaintiffs’ allegations in each action were substantially similar. The actions all alleged, among other things, that the directors of Solta Medical breached their fiduciary duties to the stockholders of Solta Medical in connection with the Company’s proposed acquisition of Solta Medical. In support of their purported claims, the plaintiffs alleged that the proposed transaction did not appropriately value Solta Medical, was the result of an inadequate process and included preclusive deal protection devices. The plaintiffs also alleged that the Schedule 14D-9 filed by Solta Medical on December 23, 2013, in connection with the proposed transaction contained material omissions and misstatements. The complaints claimed that Solta Medical, the Company, Valeant, and Sapphire Subsidiary Corp. aided and abetted the purported breaches of fiduciary duty. The actions sought, among other things, injunctive and other equitable relief, and money damages. The plaintiffs also sought attorneys’ and expert fees and costs. On July 10, 2014, the parties entered into a Stipulation and Agreement of Compromise, Settlement and Release, which provides for a release and settlement by Solta Medical’s stockholders of all claims against Solta Medical and the other defendants and their respective affiliates and agents in connection with the Company’s acquisition of Solta Medical. In connection with the proposed settlement, the plaintiffs sought an award of attorneys’ fees and expenses. Pursuant to the scheduling order, a settlement hearing was held on September 29, 2014 and the settlement was approved by the Court. Allergan Securities Litigation On August 1, 2014, Allergan commenced the federal securities litigation in the U.S. District Court for the Central District of California against the Company, Valeant, Valeant’s subsidiary AGMS Inc. (“AGMS”), Pershing Square, PS Management, GP, LLC, PS Fund 1, LLC (“PS Fund 1”) and William A. Ackman (Allergan, Inc. et al. v. Valeant Pharmaceuticals International, Inc., et al., Case No. 14-cv-01214-DOC). The lawsuit alleges violations of Sections 13(d), 14(a), 14(e) and 20A of the Exchange Act and rules promulgated by the SEC under those Sections. The complaint seeks, among other relief, a declaration that the defendants violated Rule 14e-3 and Sections 13(d), 14(a) and 14(e); an order requiring rescission of the defendants’ purchases of Allergan securities; an order requiring the defendants to file corrective disclosures; preliminary and/or permanent injunctive relief as may be necessary to prevent the defendants from enjoying any rights or benefits from Allergan securities that were acquired unlawfully and to prevent irreparable injury to Allergan or its stockholders arising out of unlawful solicitations; damages under Section 20A of the Exchange Act; and costs and attorneys’ fees. On August 19, 2014, the Company, Valeant and AGMS filed an Answer to Complaint and Affirmative Defenses. The remaining defendants filed a separate answer on August 19, 2014. Also on August 19, 2014, the Company, Valeant, AGMS, PS Fund 1 and William A. Ackman filed Counterclaims against Allergan and the members of the Allergan Board of Directors. The Counterclaims allege violations of Sections 14(a), 14(e) and 20A of the Exchange Act and rules promulgated by the SEC under those Sections, and seek, among other relief, an injunction requiring Allergan to issue corrective disclosures; an order enjoining further violations of Sections 14(a) and 14(e) of the Exchange Act and SEC Rules 14a-9 and 14a-3, and costs and attorneys’ fees. On September 2, 2014, the counterclaim-defendants filed an Answer to the Counterclaims. On November 4, 2014, the Court denied in part and granted in part a motion filed by plaintiffs seeking a preliminary injunction. The Court directed the defendants to make certain additional disclosures, and otherwise denied the motion. On December 26, 2014, the defendants moved for summary judgment as to all of Allergan’s claims and all of plaintiff Parschauer’s claims except for certain of her Rule 14e-3 and Section 20A claims. A hearing on the motion is set for March 23, 2015. On January 28, 2015, the plaintiffs filed an amended complaint, alleging that all defendants violated Section 14(e) of the Exchange Act and SEC rules under that section. The amended complaint also asserts violations of Sections 13(d) and Schedule 13D thereunder and Section 20A of the Exchange Act against Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund 1 and William A. Ackman. The amended complaint seeks substantially the same relief as the original complaint. Defendants have not yet responded to the amended complaint. Trial is set for June 28, 2016. The Company is vigorously defending this matter. Allergan Shareholder Class Action On December 16, 2014, Anthony Basile filed a putative class action lawsuit against the Company, Valeant, AGMS, Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund 1 and William A. Ackman in the U.S. District Court for the Central District of California (Basile v. Valeant Pharmaceuticals International, Inc., et al., Case No. 14-cv-02004-DOC). The complaint alleges claims on behalf of a putative class of purchasers of Allergan securities between February 25, 2014 and April 21, 2014, against all defendants asserting violations of Sections 14(e) of the Exchange Act and rules promulgated by the SEC thereunder. The complaint also alleges violations of Section 20A of the Exchange Act against Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund 1 and William A. Ackman. The complaint seeks, among other relief, money damages, equitable relief, and attorneys’ fees and costs. Defendants have not yet responded to the Complaint. The Company is vigorously defending this matter. Antitrust Solodyn® Antitrust Class Actions On July 22, 2013, United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund, filed a civil antitrust class action complaint in the United States District Court for the Eastern District of Pennsylvania, Case No. 2:13-CV-04235-JCJ, against Medicis, the Company and various manufacturers of generic forms of Solodyn®, alleging that the defendants engaged in an anticompetitive scheme to exclude competition from the market for minocycline hydrochloride extended release tablets, a prescription drug for the treatment of acne marketed by Medicis under the brand name, Solodyn®. The plaintiff further alleges that the defendants orchestrated a scheme to improperly restrain trade, and maintain, extend and abuse Medicis’ alleged monopoly power in the market for minocycline hydrochloride extended release tablets to the detriment of plaintiff and the putative class of end-payor purchasers it seeks to represent, causing them to pay overcharges. Plaintiff alleges violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and of various state antitrust and consumer protection laws, and further alleges that defendants have been unjustly enriched through their alleged conduct. Plaintiff seeks declaratory and injunctive relief and, where applicable, treble, multiple, punitive and/or other damages, including attorneys’ fees. Additional class action complaints making similar allegations against all defendants, including Medicis and the Company have been filed in various courts by other private plaintiffs purporting to represent certain classes of similarly-situated direct or end-payor purchasers of Solodyn® (Rochester Drug Co-Operative, Inc., Case No. 2:13-CV-04270-JCJ (E.D. Pa. filed July 23, 2013); Local 274 Health & Welfare Fund, Case No. 2:13-CV-4642-JCJ (E.D.Pa. filed Aug. 9, 2013); Sheet Metal Workers Local No. 25 Health & Welfare Fund, Case No. 2:13-CV-4659-JCJ (E.D. Pa. filed Aug. 8, 2013); Fraternal Order of Police, Fort Lauderdale Lodge 31, Insurance Trust Fund, Case No. 2:13-CV-5021-JCJ (E.D. Pa. filed Aug. 27, 2013); Heather Morgan, Case No. 2:13-CV-05097 (E.D. Pa. filed Aug. 29, 2013); Plumbers & Pipefitters Local 176 Health & Welfare Trust Fund, Case No. 2:13-CV-05105 (E.D. Pa. filed Aug. 30, 2013); Ahold USA, Inc., Case No. 1:13-cv-12225 (D. Mass. filed Sept. 9, 2013); City of Providence, Rhode Island, Case No. 2:13-cv-01952 (D. Ariz. filed Sept. 24, 2013); International Union of Operating Engineers Stationary Engineers Local 39 Health & Welfare Trust Fund, Case No. 1:13-cv-12435 (D. Mass. filed Oct. 2, 2013); Painters District Council No. 30 Health and Welfare Fund et al., Case No. 1:13-cv-12517 (D. Mass. filed Oct. 7, 2013); Man-U Service Contract Trust Fund, Case No. 13-cv-06266-JCJ (E.D. Pa. filed Oct. 25, 2013)). On August 29, 2013, International Union of Operating Engineers Local 132 Health and Welfare Fund voluntarily dismissed the class action complaint it had originally filed on August 1, 2013, in the United States District Court for the Northern District of California, and on August 30, 2013, re-filed its class action complaint in the United States District Court for the Eastern District of Pennsylvania (Case No. 2:13-cv-05108). The International Union of Operating Engineers Local 132 Health and Welfare Fund complaint makes similar allegations against all defendants, including Medicis and the Company, and seeks similar relief, to the other end-payor plaintiff complaints. On February 25, 2014, on a motion by Medicis and the Company, the Judicial Panel for Multidistrict Litigation (“JPML”) ordered that the cases pending outside the District of Massachusetts be transferred to the District of Massachusetts, with the consent of that court, for coordinated or consolidated pretrial proceedings with the actions already pending in that district. The Multi-District Litigation (“MDL”), captioned In re Solodyn (Minocycline Hydrochloride) Antitrust Litigation, Case No. 1:14-md-02503-DJC, is now pending before U.S. District Judge Denise Casper. Two additional end-payor actions have been filed in the District of Massachusetts since the February 25th centralization order: Allied Services Division Welfare Fund, Case No. 1:14-cv-10786 (D. Mass. filed Mar. 14, 2014); and NECA-IBEW Welfare Trust Fund, Case No. 1:14-cv-11015 (D. Mass. filed Mar. 19, 2014). These cases have been included in the pending MDL. On September 12, 2014, the Direct Purchaser Plaintiffs and the End-Payor Plaintiffs each filed a consolidated amended class action complaint. The Direct Purchaser Plaintiffs, with the Defendants’ consent, subsequently filed a corrected amended complaint on September 22, 2014. On November 24, 2014, the Defendants jointly moved to dismiss the Direct Purchaser Plaintiffs’ and the End Payor Plaintiffs’ complaints. Oral argument on the Defendants’ motion is scheduled for March 12, 2015. The Company is vigorously defending these actions. Intellectual Property Cobalt TIAZAC® XC Litigation On or about August 17, 2012, Valeant International (Barbados) SRL (now Valeant International Bermuda) (“VIB”) and Valeant Canada received a Notice of Allegation from Cobalt Pharmaceuticals Company (“Cobalt”) with respect to diltiazem hydrochloride 180 mg, 240 mg, 300 mg and 360 mg tablets, marketed in Canada by Valeant Canada as TIAZAC® XC, alleging that Cobalt’s generic form of TIAZAC® XC does not infringe Canadian Patent Nos. 2,242,224, and 2,307,547 or, alternatively, that the patents are invalid. Following an evaluation of the allegations in the Notice of Allegation, an application for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Cobalt was issued in the Federal Court of Canada on September 28, 2012 (Case No. T-1805-12) (the “Application”). On May 8, 2014, Valeant Canada, VIB and Cobalt entered into a settlement agreement, which resulted in an adjournment of the Application until certain events occur and a discontinuance of all remaining proceedings and appeals. AntiGrippin® Litigation Two suits have been brought against the Company’s subsidiary, Natur Produkt, seeking lost profits in connection with the registration by Natur Produkt of its AntiGrippin trademark. The plaintiffs in these matters allege that Natur Produkt violated Russian competition law by preventing plaintiffs from producing and marketing their products under certain brand names. The first matter (Case No. A-56-23056/2013, Arbitration Court of St. Petersburg) was accepted for proceedings on June 24, 2013 and a hearing was held on November 28, 2013. In a decision dated December 4, 2013, the court found in favor of the plaintiff (AnviLab) and awarded the plaintiff lost profits in the amount of approximately $50 million. The $50 million charge was recognized in the fourth quarter of 2013 in Other (income) expense in the consolidated statements of income (loss). Natur Produkt appealed this decision, and a hearing in the appeal proceeding was held on March 16, 2014. The appeal court found in favor of Natur Produkt and dismissed the plaintiff’s claim in full. Following this decision, the Company concluded that the potential loss was no longer probable, and therefore the $50 million reserve was reversed in the first quarter of 2014 in Other (income) expense in the consolidated statements of income (loss). Anvilab appealed the appeal court’s decision to the cassation court. On June 19, 2014, the cassation court resolved that the matter is within the jurisdiction of the Intellectual Property (IP) court in this instance. The hearing before the IP court was held on July 30, 2014 and August 1, 2014. The IP court found in favor of the plaintiff and ruled to send the case for the second review to the court of the first instance, indicating that the court of the first instance should decide on the amount of damages suffered by Anvilab. Natur Produkt appealed the decision of the IP Court to the Supreme Court on September 15, 2014, but, on October 22, 2014, the Supreme Court denied that appeal and the matter was sent back to the court of first instance for the second review. The first instance court appointed an expert to provide a report on the claimed lost profit amount. The parties are awaiting the expert’s report. The Company believes that the potential damages in this matter, if any, are not estimable at this time. Natur Produkt intends to continue to vigorously defend this matter. Natur Produkt was served with a claim in the second matter (Case No. A-56-38592/2013, Arbitration Court of St. Petersburg) on July 16, 2013 by the plaintiff in that matter (ZAO Tsentr Vnedreniya PROTEK (“Protek”)). A hearing was held in this matter on September 29, 2013 and, on October 18, 2013, the court found in favor of Natur Produkt. Protek filed an appeal of the decision on November 26, 2013. A hearing in the appeal proceeding was held on January 30, 2014 and the appeal court also found in favor of Natur Produkt. Protek appealed that decision to the cassation court (Case No. A-56-38592/2013) and, on July 7, 2014, the cassation court also found in favor of Natur Produkt. Protek did not exercise its right to appeal the cassation court decision to the Supreme Court. Watson ACANYA® Litigation In response to two Notices of Paragraph IV Certification, dated September 9, 2013 and March 13, 2014, respectively, received from Watson Laboratories, Inc. (“Watson”), which asserted that U.S. Patent No. 8,288,434 (the “'434 Patent”) and 8,633,699 (the “699 Patent”), respectively, which are listed in the FDA’s Orange Book for Acanya® Gel, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Watson’s generic Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/2.5%, for which an ANDA had been filed, Dow and the Company’s subsidiary, Valeant Pharmaceuticals North America LLC (“VPNA”), filed two suits against Watson, pursuant to the Hatch-Waxman Act, on October 24, 2013 in the U.S. District Court for the District of New Jersey (Case No. 13-cv-06401-SRC) and on April 25, 2014 in the U.S. District Court for the District of New Jersey (Case No. 14-cv-02661), thereby triggering a 30-month stay of the approval of Watson’s ANDA. In the suits, Dow and VPNA allege infringement by Watson of one or more claims of the ‘434 Patent and ‘699 Patent, respectively. On May 6, 2014, Watson, Dow and VPNA entered into a settlement agreement to settle all outstanding patent litigation related to Watson’s generic version of Acanya® Gel. Under the terms of the settlement agreement, Dow and VPNA will grant Watson a royalty-bearing license to market its generic version of Acanya® Gel beginning in July 1, 2018 or earlier under certain circumstances. Perrigo ACANYA® Litigation In response to a Notice of Paragraph IV Certification dated October 2, 2013 received from Perrigo Israel Pharmaceuticals Ltd. (“Perrigo”), which asserted that the ‘434 Patent is either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Perrigo’s generic Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/2.5%, for which an ANDA had been filed, Dow and its affiliate, VPNA, filed suit against Perrigo in the U.S. District Court for the District of New Jersey (Case No. 13-CV-06922-SRC) on November 15, 2013, pursuant to the Hatch-Waxman Act, alleging infringement by Perrigo of one or more claims of the ‘434 Patent, thereby triggering a 30-month stay of the approval of Perrigo’s ANDA. On July 30, 2014, Perrigo, Perrigo Company, Dow and VPNA entered into a settlement agreement to settle all outstanding patent litigation related to Perrigo’s generic version of Acanya® Gel. Under the terms of the settlement agreement, Dow and VPNA will grant Perrigo a royalty-free license to market its generic version of Acanya® Gel beginning on December 29, 2018 or earlier under certain circumstances. Taro ACANYA® Litigation In response to a Notice of Paragraph IV Certification dated June 29, 2014 received from Taro Pharmaceutical Sciences Inc. (“Taro”), which asserted that that the ‘434 Patent and the ‘699 Patent are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Taro’s generic Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/2.5%, for which an ANDA had been filed, Dow and VPNA filed suit against Taro in the U.S. District Court for the District of New Jersey (Case No. 2:14-cv-05079-SRS-CLW) on August 13, 2014, pursuant to the Hatch-Waxman Act, alleging infringement by Perrigo of one or more claims of the ‘434 and ‘699 patents, thereby triggering a 30-month stay of the approval of Perrigo’s ANDA. On September 11, 2014, Taro, Dow and VPNA entered into a settlement agreement to settle all outstanding patent litigation related to Taro’s generic version of Acanya® Gel. Under the terms of the settlement agreement, Dow and VPNA will grant Taro a royalty-free license to market its generic version of Acanya® Gel beginning on December 29, 2018 or earlier under certain circumstances. Allergan Patent Infringement Proceeding - Restylane-L® and Perlane-L® On September 13, 2013, Allergan USA, Inc. and Allergan Industrie, SAS (collectively, “Allergan”) filed a Complaint for Patent Infringement in the United States District Court for the Central District of California (Case No. SACV13-1436 AG (JPRX)) against the Company and certain of its affiliates, including Medicis. The complaint alleges that the Company and its affiliates named in the complaint have infringed Allergan’s U.S. Patent No. 8,450,475 (the “‘475 Patent”) by selling, offering to sell and importing in and into the United States the Company’s Restylane-L® and Perlane-L® dermal filler products. Allergan is seeking a permanent injunction and unspecified damages. The matter is proceeding in the ordinary course, with a proposed trial date of July 27, 2015. The products that are the subject of this proceeding were sold by the Company as part of the transaction with Galderma that was completed on July 10, 2014 (see note 4 “DIVESTITURES”); however, the Company and its applicable affiliates remain party to this proceeding. Lupin PROLENSA® Litigation In four Notices of Paragraph IV Certification dated December 19, 2013, May 13, 2014, July 3, 2014, and December 17, 2014, respectively, each received from Lupin, Ltd. (“Lupin”), Lupin asserted that U.S. Patent Nos. 8,129,431 (the “'431 Patent”), 8,669,290 (the “'290 Patent”), 8,754,131 (the “'131 Patent”), and 8,871,813 (the “’813 patent”), respectively, each of which is listed in the FDA’s Orange Book for Prolensa®, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Lupin’s generic bromfenac ophthalmic solution 0.07%, for which ANDAs had been filed by Lupin. B&L holds the NDA for Prolensa® and Bausch & Lomb Pharma Holdings is the exclusive licensee of Senju Pharmaceutical Co., Ltd. (“Senju”) of each of the four patents licensed above. B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed four separate suits against Lupin in the U.S. District of New Jersey, pursuant to the Hatch-Waxman Act, on January 31, 2014 (Case No. 1:14-cv-00667-JBS-KMW), June 26, 2014 (Case No. 1:14-cv-04149-JBS-KMW), on August 15, 2014 (Case No. 1:14-cv-00667-JBS-KMW) and on January 16, 2015 (Case No. 1:15-cv-00335-JBS-KMW), each relating to one of the above mentioned Notice of Paragraph IV Certifications and, in the case of the fourth suit, a fifth patent, U.S. No. 8,927,606 (the “’606 Patent”), which issued in January 2015. As a result of these suits, a 30-month stay of the approval of Lupin’s ANDA for its generic product has been triggered. In each of the suits, the Plaintiffs alleged infringement by Lupin of one or more claims of each of the ‘431 Patent, ‘290 Patent, ‘131 Patent, the ‘813 Patent and the ‘606 Patent, respectively. Each of the matters is proceeding in the ordinary course. Metrics PROLENSA® Litigation Metrics, Inc. (“Metrics”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed suit pursuant to the Hatch-Waxman Act against Metrics and certain of its affiliated entities, namely Coastal Pharmaceuticals, Inc. (“Coastal”), Mayne Pharma Group Limited and Mayne Pharma (USA), Inc. (collectively, with Metrics, the “Defendants”) on June 20, 2014, in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-03962-JBS-KMW), thereby triggering a 30-month stay of the approval of Metrics’ ANDA. In the suit, the Plaintiffs allege infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent and the ‘131 Patent. Subsequent to the filing of the suit, B&L received, on or about June 27, 2014, a Notice of Paragraph IV Certification dated June 26, 2014 from Coastal, related to the Metrics’ ANDA filing described above, asserting that the ‘431 Patent and the ‘290 Patent are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, importation, offer for sale or sale of Metrics’ generic product. On August 14, 2014, Metrics moved to dismiss the Plaintiffs’ action for an alleged lack of personal jurisdiction, and oral argument on this motion was held on October 3, 2014. A decision on this motion is pending. In addition, the Plaintiffs described above filed two protective suits against the Defendants described above pursuant to the Hatch-Waxman Act against Metrics, on August 7, 2014 in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-04964-JBS-KMW) and on August 8, 2014 in the U.S. District Court for the District of North Carolina (Case No. 4:14-cv-141), respectively. In each suit, the Plaintiffs allege infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent and the ‘131 Patent. These matters are proceeding in the ordinary course. On July 22, 2014, two Notices of Filing Date Accorded papers were issued by the U.S. Patent & Trademark Office (“USPTO”) for petitions filed by Metrics for Inter Partes Reviews (“IPRs”) 2014-01041 and 2014-01043, which correspond to the ‘431 Patent and the ‘290 Patent, respectively. A petitioner for IPR may request the USPTO to cancel as unpatentable one or more claims of a patent on a ground that could be raised under 35 USC 102 or 35 USC 103 of the U.S. Patent Act and only on the basis of prior art consisting of patents or printed publications. A patent owner may file a preliminary response to an IPR petition to provide reasons why no such review should be instituted. A patent owner has three months to submit a preliminary response to an IPR, and a response in these proceedings was filed on November 20, 2014. On July 10, 2014, Plaintiffs, in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-03962-JBS-KMW), moved to enjoin the Defendants from prosecuting these two IPRs, and oral argument on this motion was held on October 3, 2014. A decision on this motion is pending. Innopharma PROLENSA® Litigation Innopharma Licensing, Inc. (“Innopharma”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. In response to Innopharma’s Notice of Paragraph IV Certification dated September 19, 2014, B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed suit pursuant to the Hatch-Waxman Act against Innopharma and certain of its affiliated entities, namely Innopharma Licensing, LLC, Innopharma, Inc., and Innopharma, LLC (collectively, the “Defendants”) on November 3, 2014, in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-06893-JBS-KMW), thereby triggering a 30-month stay of the approval of Innopharma’s ANDA. In the suit, the Plaintiffs allege infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent, the ‘131 Patent, and the ‘813 patent. The matter is proceeding in the ordinary course. Apotex PROLENSA® Litigation Apotex, Inc. (“Apotex”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. In response to Apotex’s Notice of Paragraph IV Certification dated December 10, 2014, B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed a suit pursuant to the Hatch-Waxman Act against Apotex and certain of its affiliated entities, namely Apotex Corp. (collectively, the “Defendants”) on January 16, 2015 in the U.S. District Court for the District of New Jersey (Case No.1:15-cv-00336-JBS-KMW), which triggered a 30-month stay of the approval of Apotex’s ANDA. In the suit, Plaintiffs alleges infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent, the ‘131 Patent, the ‘813 patent, and the ‘606 patent. The matter is proceeding in the ordinary course. Paddock PROLENSA® Litigation Paddock Laboratories, LLC (“Paddock”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. In response to Paddock’s Notice of Paragraph IV Certification dated December 15, 2014, B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed two suits pursuant to the Hatch-Waxman Act against Paddock and certain of its affiliated entities, namely L. Perrigo Company, and Perrigo Company (collectively, the “Defendants”) on January 16, 2015 in the U.S. District Court for the District of New Jersey (Case No. 1:15-cv-00337-JBS-KMW) and on January 26, 2015 in the U.S. District Court for the District of Delaware (Case No. 1:15-cv-00087-SLR), which triggered a 30-month stay of the approval of Paddock’s ANDA. In the suit, Plaintiffs alleged infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent, the ‘131 Patent, the ‘813 patent, and the ‘606 patent. The matter is proceeding in the ordinary course. General Civil Actions Afexa Class Action On March 9, 2012, a Notice of Civil Claim was filed in the Supreme Court of British Columbia which seeks an order certifying a proposed class proceeding against the Company and a predecessor, Afexa (Case No. NEW-S-S-140954). The proposed claim asserts that Afexa and the Company made false representations respecting Cold-FX® to residents of British Columbia who purchased the product during the applicable period and that the proposed class has suffered damages as a result. On November 8, 2013, the Plaintiff served an amended notice of civil claim which sought to re-characterize the representation claims and broaden them from what was originally claimed. On December 8, 2014, the Company filed a motion to strike certain elements of the Plaintiff’s claim for failure to state a cause of action. In response, the Plaintiff proposed further amendments to its claim. The hearing on the motion to strike and the Plaintiff’s amended claim was held on February 4, 2015 and a decision is pending. The Company denies the allegations being made and is vigorously defending this matter. Employment Matters Legacy Medicis Employment Matter In September, 2011, Medicis received a demand letter from counsel purporting to represent a class of female sales employees alleging gender discrimination in, among others things, compensation and promotion as well as claims that the former management group maintained a work environment that was hostile and offensive to female sales employees. Related charges of discrimination were filed prior to the end of 2011 by six former female sales employees with the Equal Employment Opportunity Commission (the “EEOC”). Three of those charges have been dismissed by the EEOC and the EEOC has made no findings of discrimination. Medicis engaged in mediation with such former employees and the parties signed a definitive settlement agreement in this matter, settling the matter on a class-wide basis and resolving all claims with respect thereto, including all of the remaining related EEOC charges. In connection with the settlement, Medicis would pay a specified sum, would pay the costs of the claims administration up to an agreed-upon fixed amount and would also implement certain specified programmatic relief. On September 5, 2013, a putative class action was filed in U.S. District Court for the District of Columbia in the matter of Brown et al. v. Medicis Pharmaceutical Corporation (No. 1:13-cv-01345-RJL) based on the allegations described above. Simultaneously with the filing of the Complaint, the parties filed a motion for preliminary approval of the class action settlement. A hearing on such motion took place in September 2014 and the motion was denied. A hearing to address the Court’s concerns with the motion for preliminary approval took place on October 23, 2014 and November 12, 2014. A revised settlement agreement and related approval materials have now been submitted and the parties are awaiting a settlement approval hearing date. The Company has recognized a reserve in its consolidated financial statements covering the proposed settlement amount, and such amount is not material. Product Liability Matters MoistureLoc™ Product Liability Lawsuits Currently, B&L has been served or is aware that it has been named as a defendant in approximately 321 currently active product liability lawsuits (some with multiple plaintiffs) pending in a New York State Consolidated Proceeding described below as well as certain other U.S. state courts on behalf of individuals who claim they suffered personal injury as a result of using a contact lens solution with MoistureLoc™. Two consolidated cases were established to handle MoistureLoc™ claims. First, on August 14, 2006, the Federal Judicial Panel on Multidistrict Litigation created a coordinated proceeding in the Federal District Court for the District of South Carolina. Second, on January 2, 2007, the New York State Litigation Coordinating Panel ordered the consolidation of cases filed in New York State, and assigned the coordination responsibilities to the Supreme Court of the State of New York, New York County. There are approximately 320 currently active non-fusarium cases pending in the New York Consolidated Proceeding. On July 15, 2009, the New York State Supreme Court overseeing the New York Consolidated Proceeding granted B&L’s motion to exclude plaintiffs’ general causation testimony with regard to non-fusarium infections, which effectively excluded plaintiffs from testifying that MoistureLoc™ caused non-fusarium infections. On September 15, 2011, the New York State Appellate Division, First Department, affirmed the Trial Court’s ruling. On February 7, 2012, the New York Court of Appeals denied plaintiffs’ additional appeal. Plaintiffs subsequently filed a motion to renew the trial court’s ruling, and B&L cross-filed a motion for summary judgment to dismiss all remaining claims. On May 31, 2013, the Trial Court denied Plaintiffs’ motion to renew, and granted B&L’s motion for summary judgment, dismissing all remaining non-fusarium claims. On June 28, 2013, Plaintiffs filed a Notice of Appeal to the Trial Court’s ruling. The appeal was argued January 20, 2015. The Court issued its decision on February 10, 2015, denying plaintiffs’ appeal to renew and affirming the lower court’s decision granting B&L’s motion for summary judgment regarding all remaining non-fusarium claims. Plaintiffs have 30 days from notice of entry of the order in which to move for leave to appeal. All matters under jurisdiction of the coordinated proceedings in the Federal District Court for the District of South Carolina have been dismissed, including individual actions for personal injury and a class action purporting to represent a class of consumers who suffered economic claims as a result of purchasing a contact lens solution with MoistureLoc™. Currently B&L has settled approximately 630 cases in connection with MoistureLoc™ product liability suits. All U.S. based fusarium claims have now been resolved and there are less than five active fusarium claims involving claimants outside of the United States that remain pending. The parties in these active matters are involved in settlement discussions.

LEGAL PROCEEDINGS

From time to time, the Company becomes involved in various legal and administrative proceedings, which include product liability, intellectual property, commercial, antitrust, governmental and regulatory investigations, related private litigation and ordinary course employment-related issues. From time to time, the Company also initiates actions or files counterclaims. The Company could be subject to counterclaims or other suits in response to actions it may initiate. The Company believes that the prosecution of these actions and counterclaims is important to preserve and protect the Company, its reputation and its assets. Certain of these proceedings and actions are described below.

Unless otherwise indicated, the Company cannot reasonably predict the outcome of these legal proceedings, nor can it estimate the amount of loss, or range of loss, if any, that may result from these proceedings. An adverse outcome in certain of these proceedings could have a material adverse effect on the Company’s business, financial condition and results of operations, and could cause the market value of its common shares to decline.

Governmental and Regulatory Inquiries

Legacy Biovail Matters

On May 16, 2008, Biovail Pharmaceuticals, Inc. (“BPI”), the Company’s former subsidiary, entered into a written plea agreement with the U.S. Attorney’s Office (“USAO”) for the District of Massachusetts whereby it agreed to plead guilty to violating the U.S. Anti-Kickback Statute and pay a fine of $22.2 million.

In addition, on May 16, 2008, the Company entered into a non-prosecution agreement with the USAO whereby the USAO agreed to decline prosecution of Biovail Corporation (“Biovail”) in exchange for continuing cooperation and a civil settlement agreement and pay a civil penalty of $2.4 million. A hearing before the U.S. District Court in Boston took place on September 14, 2009 and the plea was approved.

In addition, as part of the overall settlement, Biovail entered into a Corporate Integrity Agreement (“CIA”) with the Office of the Inspector General and the Department of Health and Human Services on September 11, 2009. The CIA requires the Company to have a compliance program in place and to undertake a set of defined corporate integrity obligations for a five-year term. The CIA also includes requirements for an annual independent review of these obligations. Pursuant to the terms of the CIA, the Company expects the requirements contained in the CIA to terminate by the end of the second quarter of 2015. Failure to comply with the obligations under the CIA could result in financial penalties.

Civil Investigative Demand from the U.S. Federal Trade Commission

On May 2, 2012, Medicis received a civil investigative demand from the FTC requiring that Medicis provide to the FTC information and documents relating to various settlement and other agreements with makers of generic SOLODYN® products following patent infringement claims and litigation, each of which was previously filed with the FTC and the Antitrust Division of the Department of Justice, and other efforts principally relating to SOLODYN®. On June 7, 2013, Medicis received an additional civil investigative demand relating to such settlements, agreements and efforts. Medicis is cooperating with this investigative process. If, at the conclusion of this process, the FTC believes that any of the agreements or efforts violates antitrust laws, it could challenge Medicis through a civil administrative or judicial proceeding. If the FTC ultimately challenges the agreements, we would expect to vigorously defend any such action.

Subpoenas from the New York Office of Inspector General for the U.S. Department of Health and Human Services

On June 29, 2011, B&L received a subpoena from the New York Office of Inspector General for the U.S. Department of Health and Human Services regarding payments and communications between B&L and medical professionals related to its pharmaceutical products Lotemax® and Besivance®. The government has indicated that the subpoena was issued in connection with a civil investigation, and B&L is cooperating fully with the government’s investigation. B&L has heard of no additional activity at this time, and whether the government’s investigation is ongoing or will result in further requests for information is unknown. B&L and the Company will continue to work with the Office of Inspector General regarding the scope of the subpoena and any additional specific information that may be requested.

ISTA Settlement with Department of Justice

On or about May 24, 2013 (prior to the Company’s acquisition of B&L in August 2013), B&L’s subsidiary, ISTA Pharmaceuticals, Inc. (“ISTA”), reached agreement with the U.S. government to resolve and conclude civil and criminal allegations against ISTA. The settlement involved conduct by ISTA that occurred between January 2006 and March 2011, prior to B&L’s acquisition of ISTA in June 2012. B&L was aware of the government investigation prior to its acquisition, and fully cooperated with the government to resolve the matter. In connection with the settlement, ISTA pled guilty to certain charges and paid approximately $34 million in civil and criminal fines, including interest and attorney’s fees. In addition, B&L agreed to maintain a specified compliance and ethics program and to annually certify compliance with this requirement to the Department of Justice for a period of three years. Failure to comply with the requirements of the settlement could result in fines.

Securities

Medicis Shareholder Class Actions

Prior to the Company’s acquisition of Medicis, several purported holders of then public shares of Medicis filed putative class action lawsuits in the Delaware Court of Chancery and the Arizona Superior Court against Medicis and the members of its Board of Directors, as well as one or both of Valeant and Merlin Merger Sub (the wholly-owned subsidiary of Valeant formed in connection with the Medicis acquisition). The Delaware actions (which were instituted on September 11, 2012 and October 1, 2012, respectively) were consolidated for all purposes under the caption In re Medicis Pharmaceutical Corporation Stockholders Litigation, C.A. No. 7857-CS (Del. Ch.). The Arizona action (which was instituted on September 11, 2012) bears the caption Swint v. Medicis Pharmaceutical Corporation, et. al., Case No. CV2012-055635 (Ariz. Sup. Ct.). The actions all alleged, among other things, that the Medicis directors breached their fiduciary duties because they supposedly failed to properly value Medicis and caused materially misleading and incomplete information to be disseminated to Medicis’ public shareholders, and that Valeant and/or Merlin Merger Sub aided and abetted those alleged breaches of fiduciary duty. The actions also sought, among other things, injunctive and other equitable relief, and money damages.

The plaintiff in the Arizona action agreed to dismiss her complaint and, on January 15, 2013, the Arizona Superior Court issued an order granting the parties' joint stipulation to dismiss the Arizona action.

The parties agreed to settle the Delaware action and, on November 25, 2013, executed a Stipulation and Agreement of Compromise and Settlement, which provided, among other things, that Medicis and the other defendants would not oppose plaintiffs’ request for a fee award (subject to a capped amount). At the settlement hearing on February 26, 2014, the Delaware Court of Chancery declined to approve the settlement or award plaintiffs any attorneys’ fees and the matter was dismissed with prejudice to allow the plaintiff to revise their fee request, which they have subsequently decided not to bring. The Delaware action is now concluded.

Obagi Shareholder Class Actions

Prior to the acquisition of all of the outstanding common stock of Obagi, the following complaints were filed: (i) a complaint in the Court of Chancery of the State of Delaware, dated March 22, 2013, and amended on April 1, 2013 and on April 8, 2013, captioned Michael Rubin v. Obagi Medical Products, Inc., et al.; (ii) a complaint in the Superior Court of the State of California, County of Los Angeles, dated March 22, 2013, and amended on March 27, 2013, captioned Gary Haas v. Obagi Medical Products, Inc., et al.; and (iii) a complaint in the Superior Court of the State of California, County of Los Angeles, dated March 27, 2013, captioned Drew Leonard v. Obagi Medical Products, Inc., et al. Each complaint is a purported shareholder class action and names as defendants Obagi and the members of the Obagi Board of Directors. The two complaints filed in California also name Valeant and Odysseus Acquisition Corp. (the wholly-owned subsidiary of Valeant formed in connection with the Obagi acquisition) as defendants. The plaintiffs’ allegations in each action are substantially similar. The plaintiffs allege that the members of the Obagi Board of Directors breached their fiduciary duties to Obagi’s stockholders in connection with the sale of the company, and the California complaints further allege that Obagi, Valeant and Odysseus Acquisition Corp. aided and abetted the purported breaches of fiduciary duties. In support of their purported claims, the plaintiffs allege that the proposed transaction undervalued Obagi, involved an inadequate sales process and included preclusive deal protection devices. The plaintiffs in the Rubin case in Delaware and in the Haas case in California also filed amended complaints, which added allegations challenging the adequacy of the disclosures concerning the transaction. The plaintiffs sought damages and to enjoin the transaction, and also sought attorneys’ and expert fees and costs.

The parties executed a Stipulation and Agreement of Compromise, Settlement and Release on January 31, 2014, which set forth the terms for the settlement and dismissal of all of the lawsuits and provided, among other things, that Obagi and the other defendants would not oppose plaintiffs’ request for a fee award (subject to a capped amount). At a settlement hearing on April 30, 2014, the Delaware Court of Chancery declined to approve the settlement or award plaintiff any attorneys’ fees. The Delaware Court of Chancery entered the dismissal of the action with prejudice as to the named plaintiffs on October 8, 2014.

On October 15, 2014, plaintiffs in the California actions sought voluntary dismissal without prejudice of each of those actions without notice to the proposed class. On October 20, 2014, the court in the California actions granted the request for dismissal of both actions.

Solta Medical Shareholder Class Actions

Prior to the Company’s completion of the acquisition of Solta Medical, several purported holders of then public shares of Solta Medical filed putative class action lawsuits in the Delaware Court of Chancery and the Superior Court of the State of California, County of Alameda, against Solta Medical and the members of its board of directors, as well as the Company, Valeant, and Sapphire Subsidiary Corp. (the wholly-owned subsidiary of Valeant formed in connection with the Solta Medical acquisition). The Delaware actions were consolidated for all purposes under the caption In re Solta Medical, Inc. Stockholders Litigation, C.A. No. 9170-CS (Del. Ch.). The California actions were filed under the captions Lathrop v. Covert, et al., Case No. HG13-707363 (Cal. Super.); Walter, et al. v. Solta Medical, Inc., et al., Case No. RG13-707659 (Cal. Super.); and Bushansky v. Solta Medical, Inc., et al., Case No. RG13-707997 (Cal. Super.). The plaintiffs’ allegations in each action were substantially similar. The actions all alleged, among other things, that the directors of Solta Medical breached their fiduciary duties to the stockholders of Solta Medical in connection with the Company’s proposed acquisition of Solta Medical. In support of their purported claims, the plaintiffs alleged that the proposed transaction did not appropriately value Solta Medical, was the result of an inadequate process and included preclusive deal protection devices. The plaintiffs also alleged that the Schedule 14D-9 filed by Solta Medical on December 23, 2013, in connection with the proposed transaction contained material omissions and misstatements. The complaints claimed that Solta Medical, the Company, Valeant, and Sapphire Subsidiary Corp. aided and abetted the purported breaches of fiduciary duty. The actions sought, among other things, injunctive and other equitable relief, and money damages. The plaintiffs also sought attorneys’ and expert fees and costs. On July 10, 2014, the parties entered into a Stipulation and Agreement of Compromise, Settlement and Release, which provides for a release and settlement by Solta Medical’s stockholders of all claims against Solta Medical and the other defendants and their respective affiliates and agents in connection with the Company’s acquisition of Solta Medical. In connection with the proposed settlement, the plaintiffs sought an award of attorneys’ fees and expenses. Pursuant to the scheduling order, a settlement hearing was held on September 29, 2014 and the settlement was approved by the Court.

Allergan Securities Litigation

On August 1, 2014, Allergan commenced the federal securities litigation in the U.S. District Court for the Central District of California against the Company, Valeant, Valeant’s subsidiary AGMS Inc. (“AGMS”), Pershing Square, PS Management, GP, LLC, PS Fund 1, LLC (“PS Fund 1”) and William A. Ackman (Allergan, Inc. et al. v. Valeant Pharmaceuticals International, Inc., et al., Case No. 14-cv-01214-DOC). The lawsuit alleges violations of Sections 13(d), 14(a), 14(e) and 20A of the Exchange Act and rules promulgated by the SEC under those Sections. The complaint seeks, among other relief, a declaration that the defendants violated Rule 14e-3 and Sections 13(d), 14(a) and 14(e); an order requiring rescission of the defendants’ purchases of Allergan securities; an order requiring the defendants to file corrective disclosures; preliminary and/or permanent injunctive relief as may be necessary to prevent the defendants from enjoying any rights or benefits from Allergan securities that were acquired unlawfully and to prevent irreparable injury to Allergan or its stockholders arising out of unlawful solicitations; damages under Section 20A of the Exchange Act; and costs and attorneys’ fees. On August 19, 2014, the Company, Valeant and AGMS filed an Answer to Complaint and Affirmative Defenses. The remaining defendants filed a separate answer on August 19, 2014. Also on August 19, 2014, the Company, Valeant, AGMS, PS Fund 1 and William A. Ackman filed Counterclaims against Allergan and the members of the Allergan Board of Directors. The Counterclaims allege violations of Sections 14(a), 14(e) and 20A of the Exchange Act and rules promulgated by the SEC under those Sections, and seek, among other relief, an injunction requiring Allergan to issue corrective disclosures; an order enjoining further violations of Sections 14(a) and 14(e) of the Exchange Act and SEC Rules 14a-9 and 14a-3, and costs and attorneys’ fees. On September 2, 2014, the counterclaim-defendants filed an Answer to the Counterclaims. On November 4, 2014, the Court denied in part and granted in part a motion filed by plaintiffs seeking a preliminary injunction. The Court directed the defendants to make certain additional disclosures, and otherwise denied the motion. On December 26, 2014, the defendants moved for summary judgment as to all of Allergan’s claims and all of plaintiff Parschauer’s claims except for certain of her Rule 14e-3 and Section 20A claims. A hearing on the motion is set for March 23, 2015. On January 28, 2015, the plaintiffs filed an amended complaint, alleging that all defendants violated Section 14(e) of the Exchange Act and SEC rules under that section. The amended complaint also asserts violations of Sections 13(d) and Schedule 13D thereunder and Section 20A of the Exchange Act against Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund 1 and William A. Ackman. The amended complaint seeks substantially the same relief as the original complaint. Defendants have not yet responded to the amended complaint. Trial is set for June 28, 2016. The Company is vigorously defending this matter.

Allergan Shareholder Class Action

On December 16, 2014, Anthony Basile filed a putative class action lawsuit against the Company, Valeant, AGMS, Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund 1 and William A. Ackman in the U.S. District Court for the Central District of California (Basile v. Valeant Pharmaceuticals International, Inc., et al., Case No. 14-cv-02004-DOC). The complaint alleges claims on behalf of a putative class of purchasers of Allergan securities between February 25, 2014 and April 21, 2014, against all defendants asserting violations of Sections 14(e) of the Exchange Act and rules promulgated by the SEC thereunder. The complaint also alleges violations of Section 20A of the Exchange Act against Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund 1 and William A. Ackman. The complaint seeks, among other relief, money damages, equitable relief, and attorneys’ fees and costs. Defendants have not yet responded to the Complaint. The Company is vigorously defending this matter.

Antitrust

Solodyn® Antitrust Class Actions

On July 22, 2013, United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund, filed a civil antitrust class action complaint in the United States District Court for the Eastern District of Pennsylvania, Case No. 2:13-CV-04235-JCJ, against Medicis, the Company and various manufacturers of generic forms of Solodyn®, alleging that the defendants engaged in an anticompetitive scheme to exclude competition from the market for minocycline hydrochloride extended release tablets, a prescription drug for the treatment of acne marketed by Medicis under the brand name, Solodyn®. The plaintiff further alleges that the defendants orchestrated a scheme to improperly restrain trade, and maintain, extend and abuse Medicis’ alleged monopoly power in the market for minocycline hydrochloride extended release tablets to the detriment of plaintiff and the putative class of end-payor purchasers it seeks to represent, causing them to pay overcharges. Plaintiff alleges violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and of various state antitrust and consumer protection laws, and further alleges that defendants have been unjustly enriched through their alleged conduct. Plaintiff seeks declaratory and injunctive relief and, where applicable, treble, multiple, punitive and/or other damages, including attorneys’ fees. Additional class action complaints making similar allegations against all defendants, including Medicis and the Company have been filed in various courts by other private plaintiffs purporting to represent certain classes of similarly-situated direct or end-payor purchasers of Solodyn® (Rochester Drug Co-Operative, Inc., Case No. 2:13-CV-04270-JCJ (E.D. Pa. filed July 23, 2013); Local 274 Health & Welfare Fund, Case No. 2:13-CV-4642-JCJ (E.D.Pa. filed Aug. 9, 2013); Sheet Metal Workers Local No. 25 Health & Welfare Fund, Case No. 2:13-CV-4659-JCJ (E.D. Pa. filed Aug. 8, 2013); Fraternal Order of Police, Fort Lauderdale Lodge 31, Insurance Trust Fund, Case No. 2:13-CV-5021-JCJ (E.D. Pa. filed Aug. 27, 2013); Heather Morgan, Case No. 2:13-CV-05097 (E.D. Pa. filed Aug. 29, 2013); Plumbers & Pipefitters Local 176 Health & Welfare Trust Fund, Case No. 2:13-CV-05105 (E.D. Pa. filed Aug. 30, 2013); Ahold USA, Inc., Case No. 1:13-cv-12225 (D. Mass. filed Sept. 9, 2013); City of Providence, Rhode Island, Case No. 2:13-cv-01952 (D. Ariz. filed Sept. 24, 2013); International Union of Operating Engineers Stationary Engineers Local 39 Health & Welfare Trust Fund, Case No. 1:13-cv-12435 (D. Mass. filed Oct. 2, 2013); Painters District Council No. 30 Health and Welfare Fund et al., Case No. 1:13-cv-12517 (D. Mass. filed Oct. 7, 2013); Man-U Service Contract Trust Fund, Case No. 13-cv-06266-JCJ (E.D. Pa. filed Oct. 25, 2013)). On August 29, 2013, International Union of Operating Engineers Local 132 Health and Welfare Fund voluntarily dismissed the class action complaint it had originally filed on August 1, 2013, in the United States District Court for the Northern District of California, and on August 30, 2013, re-filed its class action complaint in the United States District Court for the Eastern District of Pennsylvania (Case No. 2:13-cv-05108). The International Union of Operating Engineers Local 132 Health and Welfare Fund complaint makes similar allegations against all defendants, including Medicis and the Company, and seeks similar relief, to the other end-payor plaintiff complaints. On February 25, 2014, on a motion by Medicis and the Company, the Judicial Panel for Multidistrict Litigation (“JPML”) ordered that the cases pending outside the District of Massachusetts be transferred to the District of Massachusetts, with the consent of that court, for coordinated or consolidated pretrial proceedings with the actions already pending in that district. The Multi-District Litigation (“MDL”), captioned In re Solodyn (Minocycline Hydrochloride) Antitrust Litigation, Case No. 1:14-md-02503-DJC, is now pending before U.S. District Judge Denise Casper. Two additional end-payor actions have been filed in the District of Massachusetts since the February 25th centralization order: Allied Services Division Welfare Fund, Case No. 1:14-cv-10786 (D. Mass. filed Mar. 14, 2014); and NECA-IBEW Welfare Trust Fund, Case No. 1:14-cv-11015 (D. Mass. filed Mar. 19, 2014). These cases have been included in the pending MDL. On September 12, 2014, the Direct Purchaser Plaintiffs and the End-Payor Plaintiffs each filed a consolidated amended class action complaint. The Direct Purchaser Plaintiffs, with the Defendants’ consent, subsequently filed a corrected amended complaint on September 22, 2014. On November 24, 2014, the Defendants jointly moved to dismiss the Direct Purchaser Plaintiffs’ and the End Payor Plaintiffs’ complaints. Oral argument on the Defendants’ motion is scheduled for March 12, 2015. The Company is vigorously defending these actions.

Intellectual Property

Cobalt TIAZAC® XC Litigation

On or about August 17, 2012, Valeant International (Barbados) SRL (now Valeant International Bermuda) (“VIB”) and Valeant Canada received a Notice of Allegation from Cobalt Pharmaceuticals Company (“Cobalt”) with respect to diltiazem hydrochloride 180 mg, 240 mg, 300 mg and 360 mg tablets, marketed in Canada by Valeant Canada as TIAZAC® XC, alleging that Cobalt’s generic form of TIAZAC® XC does not infringe Canadian Patent Nos. 2,242,224, and 2,307,547 or, alternatively, that the patents are invalid. Following an evaluation of the allegations in the Notice of Allegation, an application for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Cobalt was issued in the Federal Court of Canada on September 28, 2012 (Case No. T-1805-12) (the “Application”). On May 8, 2014, Valeant Canada, VIB and Cobalt entered into a settlement agreement, which resulted in an adjournment of the Application until certain events occur and a discontinuance of all remaining proceedings and appeals.

AntiGrippin® Litigation

Two suits have been brought against the Company’s subsidiary, Natur Produkt, seeking lost profits in connection with the registration by Natur Produkt of its AntiGrippin trademark. The plaintiffs in these matters allege that Natur Produkt violated Russian competition law by preventing plaintiffs from producing and marketing their products under certain brand names. The first matter (Case No. A-56-23056/2013, Arbitration Court of St. Petersburg) was accepted for proceedings on June 24, 2013 and a hearing was held on November 28, 2013. In a decision dated December 4, 2013, the court found in favor of the plaintiff (AnviLab) and awarded the plaintiff lost profits in the amount of approximately $50 million. The $50 million charge was recognized in the fourth quarter of 2013 in Other (income) expense in the consolidated statements of income (loss). Natur Produkt appealed this decision, and a hearing in the appeal proceeding was held on March 16, 2014. The appeal court found in favor of Natur Produkt and dismissed the plaintiff’s claim in full. Following this decision, the Company concluded that the potential loss was no longer probable, and therefore the $50 million reserve was reversed in the first quarter of 2014 in Other (income) expense in the consolidated statements of income (loss). Anvilab appealed the appeal court’s decision to the cassation court. On June 19, 2014, the cassation court resolved that the matter is within the jurisdiction of the Intellectual Property (IP) court in this instance. The hearing before the IP court was held on July 30, 2014 and August 1, 2014. The IP court found in favor of the plaintiff and ruled to send the case for the second review to the court of the first instance, indicating that the court of the first instance should decide on the amount of damages suffered by Anvilab. Natur Produkt appealed the decision of the IP Court to the Supreme Court on September 15, 2014, but, on October 22, 2014, the Supreme Court denied that appeal and the matter was sent back to the court of first instance for the second review. The first instance court appointed an expert to provide a report on the claimed lost profit amount. The parties are awaiting the expert’s report. The Company believes that the potential damages in this matter, if any, are not estimable at this time. Natur Produkt intends to continue to vigorously defend this matter.

Natur Produkt was served with a claim in the second matter (Case No. A-56-38592/2013, Arbitration Court of St. Petersburg) on July 16, 2013 by the plaintiff in that matter (ZAO Tsentr Vnedreniya PROTEK (“Protek”)). A hearing was held in this matter on September 29, 2013 and, on October 18, 2013, the court found in favor of Natur Produkt. Protek filed an appeal of the decision on November 26, 2013. A hearing in the appeal proceeding was held on January 30, 2014 and the appeal court also found in favor of Natur Produkt. Protek appealed that decision to the cassation court (Case No. A-56-38592/2013) and, on July 7, 2014, the cassation court also found in favor of Natur Produkt. Protek did not exercise its right to appeal the cassation court decision to the Supreme Court.

Watson ACANYA® Litigation

In response to two Notices of Paragraph IV Certification, dated September 9, 2013 and March 13, 2014, respectively, received from Watson Laboratories, Inc. (“Watson”), which asserted that U.S. Patent No. 8,288,434 (the “'434 Patent”) and 8,633,699 (the “699 Patent”), respectively, which are listed in the FDA’s Orange Book for Acanya® Gel, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Watson’s generic Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/2.5%, for which an ANDA had been filed, Dow and the Company’s subsidiary, Valeant Pharmaceuticals North America LLC (“VPNA”), filed two suits against Watson, pursuant to the Hatch-Waxman Act, on October 24, 2013 in the U.S. District Court for the District of New Jersey (Case No. 13-cv-06401-SRC) and on April 25, 2014 in the U.S. District Court for the District of New Jersey (Case No. 14-cv-02661), thereby triggering a 30-month stay of the approval of Watson’s ANDA. In the suits, Dow and VPNA allege infringement by Watson of one or more claims of the ‘434 Patent and ‘699 Patent, respectively.

On May 6, 2014, Watson, Dow and VPNA entered into a settlement agreement to settle all outstanding patent litigation related to Watson’s generic version of Acanya® Gel. Under the terms of the settlement agreement, Dow and VPNA will grant Watson a royalty-bearing license to market its generic version of Acanya® Gel beginning in July 1, 2018 or earlier under certain circumstances.

Perrigo ACANYA® Litigation

In response to a Notice of Paragraph IV Certification dated October 2, 2013 received from Perrigo Israel Pharmaceuticals Ltd. (“Perrigo”), which asserted that the ‘434 Patent is either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Perrigo’s generic Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/2.5%, for which an ANDA had been filed, Dow and its affiliate, VPNA, filed suit against Perrigo in the U.S. District Court for the District of New Jersey (Case No. 13-CV-06922-SRC) on November 15, 2013, pursuant to the Hatch-Waxman Act, alleging infringement by Perrigo of one or more claims of the ‘434 Patent, thereby triggering a 30-month stay of the approval of Perrigo’s ANDA.

On July 30, 2014, Perrigo, Perrigo Company, Dow and VPNA entered into a settlement agreement to settle all outstanding patent litigation related to Perrigo’s generic version of Acanya® Gel. Under the terms of the settlement agreement, Dow and VPNA will grant Perrigo a royalty-free license to market its generic version of Acanya® Gel beginning on December 29, 2018 or earlier under certain circumstances.

Taro ACANYA® Litigation

In response to a Notice of Paragraph IV Certification dated June 29, 2014 received from Taro Pharmaceutical Sciences Inc. (“Taro”), which asserted that that the ‘434 Patent and the ‘699 Patent are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Taro’s generic Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/2.5%, for which an ANDA had been filed, Dow and VPNA filed suit against Taro in the U.S. District Court for the District of New Jersey (Case No. 2:14-cv-05079-SRS-CLW) on August 13, 2014, pursuant to the Hatch-Waxman Act, alleging infringement by Perrigo of one or more claims of the ‘434 and ‘699 patents, thereby triggering a 30-month stay of the approval of Perrigo’s ANDA.

On September 11, 2014, Taro, Dow and VPNA entered into a settlement agreement to settle all outstanding patent litigation related to Taro’s generic version of Acanya® Gel. Under the terms of the settlement agreement, Dow and VPNA will grant Taro a royalty-free license to market its generic version of Acanya® Gel beginning on December 29, 2018 or earlier under certain circumstances.

Allergan Patent Infringement Proceeding - Restylane-L® and Perlane-L®

On September 13, 2013, Allergan USA, Inc. and Allergan Industrie, SAS (collectively, “Allergan”) filed a Complaint for Patent Infringement in the United States District Court for the Central District of California (Case No. SACV13-1436 AG (JPRX)) against the Company and certain of its affiliates, including Medicis. The complaint alleges that the Company and its affiliates named in the complaint have infringed Allergan’s U.S. Patent No. 8,450,475 (the “‘475 Patent”) by selling, offering to sell and importing in and into the United States the Company’s Restylane-L® and Perlane-L® dermal filler products. Allergan is seeking a permanent injunction and unspecified damages. The matter is proceeding in the ordinary course, with a proposed trial date of July 27, 2015. The products that are the subject of this proceeding were sold by the Company as part of the transaction with Galderma that was completed on July 10, 2014 (see note 4 “DIVESTITURES”); however, the Company and its applicable affiliates remain party to this proceeding.

Lupin PROLENSA® Litigation

In four Notices of Paragraph IV Certification dated December 19, 2013, May 13, 2014, July 3, 2014, and December 17, 2014, respectively, each received from Lupin, Ltd. (“Lupin”), Lupin asserted that U.S. Patent Nos. 8,129,431 (the “'431 Patent”), 8,669,290 (the “'290 Patent”), 8,754,131 (the “'131 Patent”), and 8,871,813 (the “’813 patent”), respectively, each of which is listed in the FDA’s Orange Book for Prolensa®, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Lupin’s generic bromfenac ophthalmic solution 0.07%, for which ANDAs had been filed by Lupin. B&L holds the NDA for Prolensa® and Bausch & Lomb Pharma Holdings is the exclusive licensee of Senju Pharmaceutical Co., Ltd. (“Senju”) of each of the four patents licensed above. B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed four separate suits against Lupin in the U.S. District of New Jersey, pursuant to the Hatch-Waxman Act, on January 31, 2014 (Case No. 1:14-cv-00667-JBS-KMW), June 26, 2014 (Case No. 1:14-cv-04149-JBS-KMW), on August 15, 2014 (Case No. 1:14-cv-00667-JBS-KMW) and on January 16, 2015 (Case No. 1:15-cv-00335-JBS-KMW), each relating to one of the above mentioned Notice of Paragraph IV Certifications and, in the case of the fourth suit, a fifth patent, U.S. No. 8,927,606 (the “’606 Patent”), which issued in January 2015. As a result of these suits, a 30-month stay of the approval of Lupin’s ANDA for its generic product has been triggered. In each of the suits, the Plaintiffs alleged infringement by Lupin of one or more claims of each of the ‘431 Patent, ‘290 Patent, ‘131 Patent, the ‘813 Patent and the ‘606 Patent, respectively. Each of the matters is proceeding in the ordinary course.

Metrics PROLENSA® Litigation

Metrics, Inc. (“Metrics”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed suit pursuant to the Hatch-Waxman Act against Metrics and certain of its affiliated entities, namely Coastal Pharmaceuticals, Inc. (“Coastal”), Mayne Pharma Group Limited and Mayne Pharma (USA), Inc. (collectively, with Metrics, the “Defendants”) on June 20, 2014, in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-03962-JBS-KMW), thereby triggering a 30-month stay of the approval of Metrics’ ANDA. In the suit, the Plaintiffs allege infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent and the ‘131 Patent. Subsequent to the filing of the suit, B&L received, on or about June 27, 2014, a Notice of Paragraph IV Certification dated June 26, 2014 from Coastal, related to the Metrics’ ANDA filing described above, asserting that the ‘431 Patent and the ‘290 Patent are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, importation, offer for sale or sale of Metrics’ generic product. On August 14, 2014, Metrics moved to dismiss the Plaintiffs’ action for an alleged lack of personal jurisdiction, and oral argument on this motion was held on October 3, 2014. A decision on this motion is pending.

In addition, the Plaintiffs described above filed two protective suits against the Defendants described above pursuant to the Hatch-Waxman Act against Metrics, on August 7, 2014 in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-04964-JBS-KMW) and on August 8, 2014 in the U.S. District Court for the District of North Carolina (Case No. 4:14-cv-141), respectively. In each suit, the Plaintiffs allege infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent and the ‘131 Patent. These matters are proceeding in the ordinary course.

On July 22, 2014, two Notices of Filing Date Accorded papers were issued by the U.S. Patent & Trademark Office (“USPTO”) for petitions filed by Metrics for Inter Partes Reviews (“IPRs”) 2014-01041 and 2014-01043, which correspond to the ‘431 Patent and the ‘290 Patent, respectively. A petitioner for IPR may request the USPTO to cancel as unpatentable one or more claims of a patent on a ground that could be raised under 35 USC 102 or 35 USC 103 of the U.S. Patent Act and only on the basis of prior art consisting of patents or printed publications. A patent owner may file a preliminary response to an IPR petition to provide reasons why no such review should be instituted. A patent owner has three months to submit a preliminary response to an IPR, and a response in these proceedings was filed on November 20, 2014. On July 10, 2014, Plaintiffs, in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-03962-JBS-KMW), moved to enjoin the Defendants from prosecuting these two IPRs, and oral argument on this motion was held on October 3, 2014. A decision on this motion is pending.

Innopharma PROLENSA® Litigation

Innopharma Licensing, Inc. (“Innopharma”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. In response to Innopharma’s Notice of Paragraph IV Certification dated September 19, 2014, B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed suit pursuant to the Hatch-Waxman Act against Innopharma and certain of its affiliated entities, namely Innopharma Licensing, LLC, Innopharma, Inc., and Innopharma, LLC (collectively, the “Defendants”) on November 3, 2014, in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-06893-JBS-KMW), thereby triggering a 30-month stay of the approval of Innopharma’s ANDA. In the suit, the Plaintiffs allege infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent, the ‘131 Patent, and the ‘813 patent. The matter is proceeding in the ordinary course.

Apotex PROLENSA® Litigation

Apotex, Inc. (“Apotex”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. In response to Apotex’s Notice of Paragraph IV Certification dated December 10, 2014, B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed a suit pursuant to the Hatch-Waxman Act against Apotex and certain of its affiliated entities, namely Apotex Corp. (collectively, the “Defendants”) on January 16, 2015 in the U.S. District Court for the District of New Jersey (Case No.1:15-cv-00336-JBS-KMW), which triggered a 30-month stay of the approval of Apotex’s ANDA. In the suit, Plaintiffs alleges infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent, the ‘131 Patent, the ‘813 patent, and the ‘606 patent. The matter is proceeding in the ordinary course.

Paddock PROLENSA® Litigation

Paddock Laboratories, LLC (“Paddock”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. In response to Paddock’s Notice of Paragraph IV Certification dated December 15, 2014, B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed two suits pursuant to the Hatch-Waxman Act against Paddock and certain of its affiliated entities, namely L. Perrigo Company, and Perrigo Company (collectively, the “Defendants”) on January 16, 2015 in the U.S. District Court for the District of New Jersey (Case No. 1:15-cv-00337-JBS-KMW) and on January 26, 2015 in the U.S. District Court for the District of Delaware (Case No. 1:15-cv-00087-SLR), which triggered a 30-month stay of the approval of Paddock’s ANDA. In the suit, Plaintiffs alleged infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent, the ‘131 Patent, the ‘813 patent, and the ‘606 patent. The matter is proceeding in the ordinary course.

General Civil Actions

Afexa Class Action

On March 9, 2012, a Notice of Civil Claim was filed in the Supreme Court of British Columbia which seeks an order certifying a proposed class proceeding against the Company and a predecessor, Afexa (Case No. NEW-S-S-140954). The proposed claim asserts that Afexa and the Company made false representations respecting Cold-FX® to residents of British Columbia who purchased the product during the applicable period and that the proposed class has suffered damages as a result. On November 8, 2013, the Plaintiff served an amended notice of civil claim which sought to re-characterize the representation claims and broaden them from what was originally claimed. On December 8, 2014, the Company filed a motion to strike certain elements of the Plaintiff’s claim for failure to state a cause of action. In response, the Plaintiff proposed further amendments to its claim. The hearing on the motion to strike and the Plaintiff’s amended claim was held on February 4, 2015 and a decision is pending. The Company denies the allegations being made and is vigorously defending this matter.

Employment Matters

Legacy Medicis Employment Matter

In September, 2011, Medicis received a demand letter from counsel purporting to represent a class of female sales employees alleging gender discrimination in, among others things, compensation and promotion as well as claims that the former management group maintained a work environment that was hostile and offensive to female sales employees. Related charges of discrimination were filed prior to the end of 2011 by six former female sales employees with the Equal Employment Opportunity Commission (the “EEOC”). Three of those charges have been dismissed by the EEOC and the EEOC has made no findings of discrimination. Medicis engaged in mediation with such former employees and the parties signed a definitive settlement agreement in this matter, settling the matter on a class-wide basis and resolving all claims with respect thereto, including all of the remaining related EEOC charges. In connection with the settlement, Medicis would pay a specified sum, would pay the costs of the claims administration up to an agreed-upon fixed amount and would also implement certain specified programmatic relief. On September 5, 2013, a putative class action was filed in U.S. District Court for the District of Columbia in the matter of Brown et al. v. Medicis Pharmaceutical Corporation (No. 1:13-cv-01345-RJL) based on the allegations described above. Simultaneously with the filing of the Complaint, the parties filed a motion for preliminary approval of the class action settlement. A hearing on such motion took place in September 2014 and the motion was denied. A hearing to address the Court’s concerns with the motion for preliminary approval took place on October 23, 2014 and November 12, 2014. A revised settlement agreement and related approval materials have now been submitted and the parties are awaiting a settlement approval hearing date. The Company has recognized a reserve in its consolidated financial statements covering the proposed settlement amount, and such amount is not material.

Product Liability Matters

MoistureLoc™ Product Liability Lawsuits

Currently, B&L has been served or is aware that it has been named as a defendant in approximately 321 currently active product liability lawsuits (some with multiple plaintiffs) pending in a New York State Consolidated Proceeding described below as well as certain other U.S. state courts on behalf of individuals who claim they suffered personal injury as a result of using a contact lens solution with MoistureLoc™. Two consolidated cases were established to handle MoistureLoc™ claims. First, on August 14, 2006, the Federal Judicial Panel on Multidistrict Litigation created a coordinated proceeding in the Federal District Court for the District of South Carolina. Second, on January 2, 2007, the New York State Litigation Coordinating Panel ordered the consolidation of cases filed in New York State, and assigned the coordination responsibilities to the Supreme Court of the State of New York, New York County. There are approximately 320 currently active non-fusarium cases pending in the New York Consolidated Proceeding. On July 15, 2009, the New York State Supreme Court overseeing the New York Consolidated Proceeding granted B&L’s motion to exclude plaintiffs’ general causation testimony with regard to non-fusarium infections, which effectively excluded plaintiffs from testifying that MoistureLoc™ caused non-fusarium infections. On September 15, 2011, the New York State Appellate Division, First Department, affirmed the Trial Court’s ruling. On February 7, 2012, the New York Court of Appeals denied plaintiffs’ additional appeal. Plaintiffs subsequently filed a motion to renew the trial court’s ruling, and B&L cross-filed a motion for summary judgment to dismiss all remaining claims. On May 31, 2013, the Trial Court denied Plaintiffs’ motion to renew, and granted B&L’s motion for summary judgment, dismissing all remaining non-fusarium claims. On June 28, 2013, Plaintiffs filed a Notice of Appeal to the Trial Court’s ruling. The appeal was argued January 20, 2015. The Court issued its decision on February 10, 2015, denying plaintiffs’ appeal to renew and affirming the lower court’s decision granting B&L’s motion for summary judgment regarding all remaining non-fusarium claims. Plaintiffs have 30 days from notice of entry of the order in which to move for leave to appeal.

All matters under jurisdiction of the coordinated proceedings in the Federal District Court for the District of South Carolina have been dismissed, including individual actions for personal injury and a class action purporting to represent a class of consumers who suffered economic claims as a result of purchasing a contact lens solution with MoistureLoc™.

Currently B&L has settled approximately 630 cases in connection with MoistureLoc™ product liability suits. All U.S. based fusarium claims have now been resolved and there are less than five active fusarium claims involving claimants outside of the United States that remain pending. The parties in these active matters are involved in settlement discussions.