2.2.0.25falsefalse0216 - Disclosure - Commitments and Contingenciestruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Jan-01-2010_Dec-31-2010http://www.sec.gov/CIK0001113481duration2010-01-01T00:00:002010-12-31T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0mdco_CommitmentsAndContingenciesAbstractmdcofalsenadurationCommitments and Contingencies.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringCommitments and Contingencies.falsefalse3false0us-gaap_CommitmentsAndContingenciesDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
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</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #0c1c47; background: transparent; text-align: left">
<tr>
<td width="5%"></td>
<td width="95%"></td>
</tr>
<tr valign="top">
<td>
<b><font style="font-family: 'Times New Roman', Times">16.  </font></b>
</td>
<td>
<b><font style="font-family: 'Times New Roman', Times">Commitments
and Contingencies</font></b>
</td>
</tr>
</table>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
The Company’s long-term contractual obligations include
commitments and estimated purchase obligations entered into in
the normal course of business. These include commitments related
to purchases of inventory of the Company’s products,
research and development service agreements, operating leases
and selling, general and administrative obligations, increases
to the Company’s restricted cash in connection with its new
principal office space in Parsippany, New Jersey, and royalty
and milestone payments due.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
Future estimated contractual obligations as of December 31,
2010 are:
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent; text-align: left">
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<td width="5%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="2%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="2%"> </td><!-- colindex=04 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=04 type=lead -->
<td width="3%" align="right"> </td><!-- colindex=04 type=body -->
<td width="1%" align="left"> </td><!-- colindex=04 type=hang1 -->
<td width="2%"> </td><!-- colindex=05 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=05 type=lead -->
<td width="3%" align="right"> </td><!-- colindex=05 type=body -->
<td width="1%" align="left"> </td><!-- colindex=05 type=hang1 -->
<td width="2%"> </td><!-- colindex=06 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=06 type=lead -->
<td width="3%" align="right"> </td><!-- colindex=06 type=body -->
<td width="1%" align="left"> </td><!-- colindex=06 type=hang1 -->
<td width="2%"> </td><!-- colindex=07 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=07 type=lead -->
<td width="6%" align="right"> </td><!-- colindex=07 type=body -->
<td width="1%" align="left"> </td><!-- colindex=07 type=hang1 -->
<td width="2%"> </td><!-- colindex=08 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=08 type=lead -->
<td width="6%" align="right"> </td><!-- colindex=08 type=body -->
<td width="1%" align="left"> </td><!-- colindex=08 type=hang1 -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom" style="border-bottom: 1px solid #0c1c47">
<b><font style="color: #0c1c47">Contractual
Obligations</font></b>
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #0c1c47">
<b><font style="color: #0c1c47">2011</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #0c1c47">
<b><font style="color: #0c1c47">2012</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #0c1c47">
<b><font style="color: #0c1c47">2013</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #0c1c47">
<b><font style="color: #0c1c47">2014</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #0c1c47">
<b><font style="color: #0c1c47">2015</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #0c1c47">
<b><font style="color: #0c1c47">Later Years</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #0c1c47">
<b><font style="color: #0c1c47">Total</font></b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="26" align="center" valign="bottom">
<b><font style="color: #0c1c47">(In thousands)</font></b>
</td>
<td>
 
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Inventory related commitments
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
30,316
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
14,669
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
44,985
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Research and development
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
26,419
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
19,234
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
320
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
119
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
65
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
46,157
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Operating leases
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
8,870
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
8,035
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
6,346
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5,006
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
4,623
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
34,021
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
66,901
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Selling, general and administrative
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,092
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,826
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
216
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5,134
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Unrecognized tax benefits
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,891
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,891
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td style="border-top: 1px solid #0c1c47">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Total contractual obligations
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
70,588
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
43,764
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
6,882
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5,125
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
4,688
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
34,021
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
165,068
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td style="border-top: 3px double #0c1c47">
 
</td>
<td>
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
All of the inventory related commitments included above are
non-cancellable. Included within the inventory related
commitments above are purchase commitments to Lonza Braine
totaling $25.3 million for 2011 and $14.7 million for
2012 for Angiomax bulk drug substance. Of the total estimated
contractual obligations for research and development and
selling, general and administrative activities,
$8.9 million is non-cancellable.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
The Company leases its principal offices in Parsippany, New
Jersey. The lease covers 173,146 square feet and expires
January 2024. The lease for the Company’s old office
facility in Parsippany expires January 2013. In the second half
of 2009, the Company subleased this previous old office space to
two tenants. The first sublease, for the second floor of that
office space, expires in March 2011 and the second sublease,
covering the first floor of the Company’s previous office
space, expires in January 2013. Additionally, certain other
costs such as leasing commissions and legal fees will be
expensed as incurred in conjunction with the sublease of the
vacated office space.
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Approximately 82% of the total operating lease commitments above
relate to the Company’s principal office building in
Parsippany, New Jersey. Also included in total property lease
commitments are automobile leases, computer leases, the
operating lease from the Company’s previous office space
and other property leases that the Company entered into while
expanding the its global infrastructure.
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Aggregate rent expense under the Company’s property leases
was approximately $5.8 million in 2010, $7.5 million
in 2009 and $2.2 million in 2008.
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
In addition to the amounts shown in the above table, the Company
is contractually obligated to make potential future
success-based development, regulatory and commercial milestone
payments and royalty payments in conjunction with collaborative
agreements or acquisitions it has entered into with
third-parties. These contingent payments include royalty
payments with respect to Angiomax under the Company’s
license agreements with Biogen Idec and HRI, royalty and
milestone payments with respect to Cleviprex, contingent cash
payments up to approximately $85.1 million that would be
owed to former Targanta shareholders under the Company’s
merger agreement with Targanta and contingent payments with
respect to cangrelor, oritavancin, MDCO-2010 and MDCO-216. These
payments are contingent upon the occurrence of certain future
events and, given the nature of these events, it is unclear
when, if ever, the Company may be required to pay such amounts.
These contingent payments have not been included in the table
above. Further, the timing of any future payment is not
reasonable estimable. In 2010 and 2009, the Company paid
aggregate royalties to Biogen Idec and HRI of $85.5 million
and $77.4 million and royalties to AstraZeneca with respect
to Cleviprex of $0.7 million and $0.4 million.
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<i><font style="font-family: 'Times New Roman', Times">Litigation</font></i>
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From time to time, the Company is party to legal proceedings in
the course of its business in addition to those described below.
The Company does not, however, expect such other legal
proceedings to have a material adverse effect on the
Company’s business, financial condition or results of
operations
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<b><i><font style="font-family: 'Times New Roman', Times">‘727
Patent and ‘343 Patent Litigations</font></i></b>
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<i><font style="font-family: 'Times New Roman', Times">Teva
Parenteral Medicines, Inc.</font></i>
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
In September 2009, the Company was notified that Teva Parenteral
Medicines, Inc. had submitted an ANDA seeking permission to
market its generic version of Angiomax prior to the expiration
of the ‘727 patent. The ‘727 patent was issued on
September 1, 2009 and relates to a more consistent and
improved Angiomax drug product. The ‘727 patent expires on
July 27, 2028. On October 8, 2009, the Company filed
suit against Teva Parenteral Medicines, Inc., Teva
Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries,
Ltd. (collectively, Teva), in the U.S. District Court for
the District of Delaware for infringement of the ‘727
patent. On October 29, 2009, Teva filed an answer denying
infringement and alleging affirmative defenses of
non-infringement and invalidity. On October 21, 2009, the
case was reassigned in lieu of a vacant judgeship to the
U.S. District Court for the Eastern District of
Pennsylvania. The court has set a pre-trial schedule in the case
and fact discovery is ongoing. No trial date has been set by the
court.
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
On October 8, 2009, the Company was issued U.S. Patent
No. 7,598,343, or the ‘343 patent, which relates to a
more consistent and improved Angiomax drug product made by
processes described in the patent. On January 4, 2010, the
Company filed suit against Teva in the U.S. District Court
for the District of Delaware for infringement of the ‘343
patent. The case was assigned to the same judge in the Eastern
District of Pennsylvania as the Teva ‘727 patent case above.
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The judge in the Eastern District of Pennsylvania has
consolidated the Teva ‘727 and 343 patent cases with the
Pliva ‘727 and ‘343 patent cases (discussed below),
the APP ‘727 and ‘343 patent cases (discussed below)
and the Hospira ‘727 and ‘343 patent cases (discussed
below).
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<i><font style="font-family: 'Times New Roman', Times">Pliva
Hrvatska d.o.o.</font></i>
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In September 2009, the Company was notified that Pliva Hrvatska
d.o.o. had submitted an ANDA seeking permission to market its
generic version of Angiomax prior to the expiration of the
‘727 patent. On October 8, 2009, the Company filed
suit against Pliva Hrvatska d.o.o., Pliva d.d., Barr
Laboratories, Inc., Barr Pharmaceuticals, Inc., Barr
Pharmaceuticals, LLC, Teva Pharmaceuticals USA, Inc. and Teva
Pharmaceutical Industries, Ltd. (collectively, Pliva), in the
U.S. District Court for the District of Delaware for
infringement of the ‘727 patent. On October 28, 2009,
Pliva filed an answer denying infringement and alleging
affirmative defenses of non-infringement and invalidity. On
October 21, 2009, the case was reassigned in lieu of a
vacant judgeship to the U.S. District Court for the Eastern
District of Pennsylvania. The court has set a pre-trial schedule
in the case and fact discovery is ongoing. No trial date has
been set by the court.
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On October 8, 2009, the Company was issued the ‘343
patent, which relates to a more consistent and improved Angiomax
drug product made by processes described in the patent. On
January 4, 2010, the Company filed suit against Pliva in
the U.S. District Court for the District of Delaware for
infringement of the ‘343 patent. The case was assigned to
the same judge in the Eastern District of Pennsylvania as the
‘727 patent case above.
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<i><font style="font-family: 'Times New Roman', Times">APP
Pharmaceuticals, LLC.</font></i>
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
In September 2009, the Company was notified that APP
Pharmaceuticals, LLC had submitted an ANDA seeking permission to
market its generic version of Angiomax prior to the expiration
of the ‘727 patent. On October 8, 2009, the Company
filed suit against APP Pharmaceuticals, LLC and APP
Pharmaceuticals, Inc. (together, APP), in the U.S. District
Court for the District of Delaware for infringement of the
‘727 patent. On October 21, 2009, the case was
reassigned in lieu of a vacant judgeship to the
U.S. District Court for the Eastern District of
Pennsylvania. The Company filed an amended complaint on
February 5, 2010. APP’s answer denied infringement and
raised counterclaims of invalidity, non-infringement and a
request to delist the ‘727 patent from the Orange Book. On
March 1, 2010, the Company filed a reply denying the
counterclaims raised by APP. The court has set a pre-trial
schedule in the case and fact discovery is ongoing. No trial
date has been set by the court.
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On October 8, 2009, the Company was issued the ‘343
patent, which relates to a more consistent and improved Angiomax
drug product made by processes described in the patent. In April
2010, the Company was notified by APP that it is seeking
permission to market its generic version of Angiomax prior to
the expiration of the ‘343 patent. On June 1, 2010,
the Company filed suit against APP in the U.S. District
Court for the District of Delaware for infringement of the
‘343 patent. On June 28, 2010, APP filed an answer
denying infringement and raised counterclaims of invalidity,
non-infringement and a request to delist the ‘343 patent
from the Orange Book. On July 16, 2010, the Company filed a
reply denying the counterclaims raised by APP. The case has been
assigned to a judge in the U.S. District Court for the
District of Delaware. On October 14, 2010, the case was
reassigned to the same judge in the Eastern District of
Pennsylvania who is presiding over the above APP ‘727
patent case and the Teva ‘727 and ‘343 patent cases
and the Pliva ‘727 and ‘343 patent cases. On the same
day, the APP ‘343 patent case was consolidated with these
other cases.
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<i><font style="font-family: 'Times New Roman', Times">Hospira,
Inc.</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
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In July 2010, the Company was notified that Hospira had
submitted two ANDAs seeking permission to market its generic
version of Angiomax prior to the expiration of the ‘727 and
‘343 patents. On August 19, 2010, the Company filed
suit against Hospira in the U.S. District Court for the
District of Delaware for infringement of the ‘727 and
‘343 patents. On August 25, 2010, the case was
reassigned in lieu of a vacant judgeship to the
U.S. District Court for the Eastern District of
Pennsylvania. Hospira’s answer denied infringement of the
‘727 and ‘343 patents and raised counterclaims of
non-infringement and invalidity of the
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‘727 and ‘343 patents. On September 24, 2010, the
Company filed a reply denying the counterclaims raised by
Hospira.
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On September 17, 2010, Hospira filed a motion to be
consolidated with the Teva, Pliva and APP cases. On
October 13, 2010, the court denied Hospira’s motion to
consolidate. As part of setting the schedule in this case, the
Hospira ‘727 and ‘343 case was consolidated with the
above Teva, Pliva and APP cases. No trial date has been set.
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<i><font style="font-family: 'Times New Roman', Times">Mylan
Pharmaceuticals, Inc.</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
In January 2011, the Company was notified that Mylan
Pharmaceuticals, Inc. had submitted an ANDA seeking permission
to market its generic version of Angiomax prior to the
expiration of the ‘727 and ‘343 patents. On
February 23, 2011, the Company filed suit against Mylan
Inc., Mylan Pharmaceuticals Inc. and Bioniche Pharma USA, LLC
(collectively, Mylan) in the U.S. District Court for the
Northern District of Illinois for infringement of the ‘727
and ‘343 patents.
</div>
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<i><font style="font-family: 'Times New Roman', Times">Contingencies</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #0c1c47; background: transparent">
The U.S. Patent and Trademark Office (PTO) rejected the
application under the Hatch-Waxman Act for an extension of the
term of U.S. Patent No. 5,196,404 (the ‘404
patent), the principal U.S. patent that covers Angiomax
(the patent extension filing), beyond March 23, 2010
because in its view the application was not timely filed. In
February 2011, the Company entered into a settlement agreement
and release with the law firm Wilmer Cutler Pickering Hale and
Dorr LLP (WilmerHale) with respect to all potential claims and
causes of action between the parties related to the ‘404
patent (See Note 20). The Company has entered into an
agreement with the other law firm involved in the filing of the
application under the
<font style="white-space: nowrap">Hatch-Waxman</font>
Act that suspends the statute of limitations on the
Company’s claims against them for the filing. The Company
has also entered into a similar agreement with Biogen Idec, one
of its licensors for Angiomax, relating to any claims, including
claims for damages
<font style="white-space: nowrap">and/or</font>
license termination, that Biogen Idec may bring relating to the
patent term extension application filing. Such claims by Biogen
Idec could have a material adverse effect on the Company’s
financial condition, results of operations, liquidity or
business. The Company is involved in discussions with the
remaining law firm involved in the patent term extension
application filing and is currently in related discussions with
Biogen Idec and HRI with respect to the possible resolution of
potential claims among the parties.
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