Eli Lilly and Company (LLY)

Cialis: In July 2005, Vanderbilt University filed a lawsuit in the United States District Court in Delaware against ICOS Corporation seeking to add three of its scientists as co-inventors on the Cialis compound and method-of-use patents. In January 2009, the district court judge ruled in our favor, declining to add any of these scientists as an inventor on either patent. The plaintiff appealed this ruling to the Court of Appeals for the Federal Circuit, which heard oral arguments in November 2009. We await the court’s decision. We believe these claims are without legal merit and expect to prevail in the appeal; however, it is not possible to determine the outcome. An unfavorable final outcome could have a material adverse impact on our consolidated results of operations, liquidity, and financial position.

 

In October 2002, Pfizer Inc. was issued a method-of-use patent in the United States and commenced a lawsuit in the United States District Court in Delaware against us, Lilly ICOS LLC, and ICOS Corporation (both later acquired by Lilly) alleging that the marketing of Cialis for erectile dysfunction infringed this patent. This litigation has been stayed pending the outcome of a reexamination of the patent by the U.S. Patent and Trademark Office. The Office has made a final rejection of the relevant patent claims which Pfizer has appealed to the Board of Patent Appeals and Interferences. In February 2010, the Board affirmed the Office’s rejection of these claims. Pfizer has the right to appeal this decision. We believe Pfizer’s claims are without merit and expect to prevail. However, it is not possible to determine the outcome of this litigation.

 

 

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Strattera:  Actavis Elizabeth LLC (Actavis), Glenmark Pharmaceuticals Inc., USA (Glenmark), Sun Pharmaceutical Industries Limited (Sun), Sandoz Inc. (Sandoz), Mylan Pharmaceuticals Inc. (Mylan), Teva Pharmaceuticals USA, Inc. (Teva), Apotex Inc. (Apotex), Aurobindo Pharma Ltd. (Aurobindo), Synthon Laboratories, Inc. (Synthon), and Zydus Pharmaceuticals, USA, Inc. (Zydus) each submitted an ANDA seeking permission to market generic versions of Strattera prior to the expiration of our relevant U.S. patent (expiring in 2017), and alleging that this patent is invalid. We filed a lawsuit against Actavis in the United States District Court for the District of New Jersey in August 2007, and added Glenmark, Sun, Sandoz, Mylan, Teva, Apotex, Aurobindo, Synthon, and Zydus as defendants in September 2007. In December 2007, Zydus agreed to entry of a consent judgment in which Zydus conceded the validity and enforceability of the patent and agreed to a permanent injunction. In June 2008, Glenmark agreed to entry of a permanent injunction, enjoining it from selling a generic product prior to the expiration of the U.S. patent. Also in June 2008, Synthon notified us that it has withdrawn its ANDA and agreed to a stipulated dismissal of all outstanding claims. For the remaining defendants, trial is anticipated as early as December 2009.

 

Evista:  In June 2005, Dr. Alan Schreiber filed a lawsuit against us in the United States District Court for the Eastern District of Pennsylvania raising a number of claims, including patent infringement, misappropriation of trade secrets, breach of contract, and unjust enrichment, and seeking a declaration for inventorship of Lilly’s Evista method-of-use patents. After the original lawsuit was filed, the University of Pennsylvania was added as a plaintiff. This matter was settled in December 2008. The settlement did not have a material impact on our consolidated results of operations, liquidity, or financial position.

 

Cialis:  In July 2005, Vanderbilt University filed a lawsuit in the United States District Court in Delaware against ICOS Corporation seeking to add three of its scientists as co-inventors on the Cialis compound and method-of-use patents. In January 2009, the district court judge ruled in our favor, declining to add any of these scientists as an inventor on either patent. The plaintiff may appeal this ruling. We believe these claims are without legal merit and expect to prevail in any appeal of this litigation; however, it is not possible to determine the outcome. An unfavorable final outcome could have a material adverse impact on our consolidated results of operations, liquidity, and financial position.

 

In October 2002, Pfizer Inc. was issued a method-of-use patent in the United States and commenced a lawsuit in the United States District Court in Delaware against us, Lilly ICOS LLC, and ICOS Corporation (both now subsidiaries of Lilly) alleging that the marketing of Cialis for erectile dysfunction infringed this patent. This litigation has been stayed pending the outcome of a reexamination of the patent by the U.S. Patent and Trademark Office. The Office has now made a final rejection of the relevant patent claims which Pfizer is appealing. We believe Pfizer’s claims are without merit and expect to prevail. However, it is not possible to determine the outcome of this litigation.

 

 

Strattera:  Actavis Elizabeth LLC (Actavis),
Glenmark Pharmaceuticals Inc., USA (Glenmark),
Sun Pharmaceutical Industries Limited (Sun), Sandoz Inc.
(Sandoz), Mylan Pharmaceuticals Inc. (Mylan), Teva
Pharmaceuticals USA, Inc. (Teva), Apotex Inc. (Apotex),
Aurobindo Pharma Ltd. (Aurobindo), Synthon Laboratories, Inc.
(Synthon), and Zydus Pharmaceuticals, USA, Inc. (Zydus) each
submitted an ANDA seeking permission to market generic versions
of Strattera prior to the expiration of our relevant
U.S. patent (expiring in 2017), and alleging that this
patent is invalid. We filed a lawsuit against Actavis in the
United States District Court for the District of New Jersey in
August 2007, and added Glenmark, Sun, Sandoz, Mylan, Teva,
Apotex, Aurobindo, Synthon, and Zydus as defendants in September
2007. In December 2007, Zydus agreed to entry of a consent
judgment in which Zydus conceded the validity and enforceability
of the patent and agreed to a permanent injunction. In June
2008, Glenmark agreed to entry of a permanent injunction,
enjoining it from selling a generic product prior to the
expiration of the U.S. patent. Also in June 2008, Synthon
notified us that it has withdrawn its ANDA and agreed to a
stipulated dismissal of all outstanding claims. For the
remaining defendants, trial is anticipated as early as December
2009.

 

Evista:  In June 2005, Dr. Alan Schreiber
filed a lawsuit against us in the United States District Court
for the Eastern District of Pennsylvania raising a number of
claims, including patent infringement, misappropriation of trade
secrets, breach of contract, and unjust enrichment, and seeking
a declaration for inventorship of Lilly’s Evista
method-of-use patents. After the original lawsuit was filed, the
University of Pennsylvania was added as a plaintiff. This matter
was settled in December 2008. The settlement did not have a
material impact on our consolidated results of operations,
liquidity, or financial position.

 

Cialis:  In July 2005, Vanderbilt University
filed a lawsuit in the United States District Court in Delaware
against ICOS Corporation seeking to add three of its
scientists as co-inventors on the Cialis compound and
method-of-use patents. In January 2009, the district court judge
ruled in our favor, declining to add any of these scientists as
an inventor on either patent. The plaintiff may appeal this
ruling. We believe these claims are without legal merit and
expect to prevail in any appeal of this litigation; however, it
is not possible to determine the outcome. An unfavorable final
outcome could have a material adverse impact on our consolidated
results of operations, liquidity, and financial position.

 

In October 2002, Pfizer Inc. was issued a method-of-use patent
in the United States and commenced a lawsuit in the United
States District Court in Delaware against us, Lilly ICOS LLC,
and ICOS Corporation (both now subsidiaries of Lilly)
alleging that the marketing of Cialis for erectile dysfunction
infringed this patent. This litigation has been stayed pending
the outcome of a reexamination of the patent by the
U.S. Patent and Trademark Office. The Office has now made a
final rejection of the relevant patent claims which Pfizer is
appealing. We believe Pfizer’s claims are without merit and
expect to prevail. However, it is not possible to determine the
outcome of this litigation.

 

 

Dr. Reddy’s Laboratories, Ltd. (Reddy), Teva Pharmaceuticals, and Zenith Goldline Pharmaceuticals, Inc., which was subsequently acquired by Teva Pharmaceuticals (together Teva), each submitted Abbreviated New Drug Applications (ANDAs) seeking permission to market generic versions of Zyprexa^® prior to the expiration of our relevant U.S. patent (expiring in 2011) and alleging that this patent was invalid or not enforceable. We filed lawsuits against these companies in the U.S. District Court for the Southern District of Indiana, seeking a ruling that the patent is valid, enforceable, and being infringed. The district court ruled in our favor on all counts on April 14, 2005, and on December 26, 2006, that ruling was upheld by the Court of Appeals for the Federal Circuit. On October 1, 2007, the United States Supreme Court denied the generic companies’ petition for certiorari, bringing this litigation to a close.

 

In June 2005, Dr. Alan Schreiber filed a lawsuit against us in the United States District Court for the Eastern District of Pennsylvania raising a number of claims, including patent infringement, misappropriation of trade secrets, breach of contract, and unjust enrichment, and seeking a declaration for inventorship of Lilly’s Evista method-of-use patents. After the original lawsuit was filed, the University of Pennsylvania was added as a plaintiff. No trial date has been scheduled. We believe these claims are without legal merit and expect to prevail in this litigation; however, it is not possible to determine the outcome. An unfavorable final outcome could have a material adverse impact on our consolidated results of operations, liquidity, and financial position.

 

Dr. Reddy’s Laboratories, Ltd. (Reddy), Teva Pharmaceuticals, and Zenith Goldline Pharmaceuticals, Inc., which was subsequently acquired by Teva Pharmaceuticals (together Teva), each submitted Abbreviated New Drug Applications (ANDAs) seeking permission to market generic versions of Zyprexa^® prior to the expiration of our relevant U.S. patent (expiring in 2011) and alleging that this patent was invalid or not enforceable. We filed lawsuits against these companies in the U.S. District Court for the Southern District of Indiana, seeking a ruling that the patent is valid, enforceable, and being infringed. The district court ruled in our favor on all counts on April 14, 2005, and on December 26, 2006, that ruling was upheld by the Court of Appeals for the Federal Circuit. On October 1, 2007, the United States Supreme Court denied the generic companies’ petition for certiorari, bringing this litigation to a close.

 

In June 2005, Dr. Alan Schreiber filed a lawsuit against us in the United States District Court for the Eastern District of Pennsylvania raising a number of claims, including patent infringement, misappropriation of trade secrets, breach of contract, and unjust enrichment, and seeking a declaration for inventorship of Lilly’s Evista method-of-use patents. After the original lawsuit was filed, the University of Pennsylvania was added as a plaintiff. No trial date has been scheduled. We believe these claims are without legal merit and expect to prevail in this litigation; however, it is not possible to determine the outcome. An unfavorable final outcome could have a material adverse impact on our consolidated results of operations, liquidity, and financial position.

 

During 2005, two generic pharmaceutical manufacturers, Apotex Inc. (Apotex) and Novopharm Ltd. (Novopharm) (a wholly-owned subsidiary of Teva), challenged the validity of our Zyprexa compound and method-of-use patent (expiring in 2011) in Canada. The generic companies allege that our patent is invalid, obtained by fraud, or irrelevant. We currently anticipate a decision from the Canadian Federal Patent Court by April 2007 in the Apotex case and by September 2007 in the Novopharm case. In May 2004, Egis-Gyogyszergyar, a generic pharmaceutical manufacturer, challenged the validity of our Zyprexa compound and method-of-use patents (expiring in 2011) in Germany. We currently anticipate a decision from the German Patent Court in the second or third quarter of 2007. We have received challenges to Zyprexa patents in a number of other countries as well, including several Eastern European countries. We are vigorously contesting the various legal challenges to our Zyprexa patents. We cannot predict or determine the outcome of this litigation.

 

In October 2002, Pfizer Inc. filed a lawsuit in the United States District Court in Delaware against us, Lilly ICOS LLC, and ICOS Corporation alleging that the proposed marketing of Cialis for erectile dysfunction would infringe its newly issued method-of-use patent. In September 2003, the U.S. Patent and Trademark Office ordered that Pfizer’s patent be reexamined and in March 2006, the PTO finally rejected the broad method-of-use claim. Pfizer is appealing that decision. Meanwhile, the Delaware suit has been stayed pending the final outcome of the reexamination. In the U.K., European Union and Australia, this same patent has been held finally invalid and Pfizer has revoked this patent in New Zealand and South Africa. In Brazil, Pfizer is appealing a lower court decision holding this patent invalid. In Mexico and Canada infringement and nullification actions are still pending. We intend to vigorously defend this litigation and expect to prevail. However, it is not possible to predict or determine the outcome of this litigation.