Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. In addition, the Company has in the past been, and may in the future be, subject to investigations by governmental and regulatory authorities, which expose it to greater risks associated with litigation, regulatory or other proceedings, as a result of which the Company could be required to pay significant fines or penalties. The costs and outcome of litigation, regulatory or other proceedings cannot be predicted with certainty, and some lawsuits, claims, actions or proceedings may be disposed of unfavorably to the Company and could have a material adverse effect on the Company’s results of operations or financial condition. In addition, intellectual property disputes often have a risk of injunctive relief which, if imposed against the Company, could materially and adversely affect its financial condition or results of operations. If a matter is both probable to result in material liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the possible material loss or range of loss. If such loss is not probable or cannot be reasonably estimated, a liability is not recorded in its condensed consolidated financial statements.

As of March 31, 2022, the Company did not have any material ongoing litigation in which the Company was a party. During the first quarter of 2022, the Company was able to resolve certain litigation matters as set forth below:

On January 31, 2022, the Company entered into a global settlement agreement with Novartis, AAA, Endocyte and certain of their affiliates to settle certain disputes between the parties, as further described below:

German PSMA-617 Litigation

On November 8, 2018, Molecular Insight Pharmaceuticals, Inc., a subsidiary of Progenics (“MIP”), filed a complaint against the University of Heidelberg (the “University”) in the District Court in Mannheim, Germany (the “German District Court” and, such litigation, the “German Litigation”). In this Complaint, MIP claimed that the discovery and development of PSMA-617 was related to work performed under a research collaboration sponsored by MIP. MIP alleged that the University breached certain contracts with MIP and that MIP is the co-owner of inventions embodied in certain worldwide patent filings related to PSMA-617 that were filed by the University. On February 27, 2019, Endocyte, a wholly owned subsidiary of Novartis, filed a motion to intervene in the German Litigation. Endocyte is the exclusive licensee of the patent rights that are the subject of the German proceedings.

In connection with this dispute, MIP filed a Confirmation of Ownership with the United States Patent and Trademark Office (“USPTO”) for certain U.S. patent applications filed by the University to support MIPs claim that it is the co-owner of these pending U.S. patent applications (the “Ownership Claim”).

On February 27, 2019, the German District Court set €0.4 million as the amount MIP must deposit with the German District Court as security in the event of an unfavorable final decision on the merits of the dispute. On August 24, 2020, the German District Court issued its decision dismissing MIP’s claims, stating that MIP failed to discharge its burden of proof in the matter.

MIP filed a Notice of Appeal of the German District Court’s decision on September 24, 2020 and filed its appeal brief on November 26, 2020. The University and Endocyte each filed oppositions to MIP’s Notice of Appeal on March 12, 2021 and an oral hearing for the appeal was scheduled for September 28, 2022, at the Higher Regional Court Karlsruhe.

Pursuant to the terms of the Novartis Agreement, the German Litigation was dismissed and the Ownership Claim withdrawn.

Post-Grant Review Proceeding

On February 4, 2021, AAA, a wholly-owned subsidiary of Novartis and parent of Endocyte, filed a petition for post-grant review of U.S. Patent No. 10,640,461 (the “’461 patent”) with the Patent Trial and Appeal Board (“PTAB”) of the USPTO. The ’461 patent is owned by MIP. In the petition, AAA challenged the patentability of certain claims of the ’461 patent. The PTAB instituted Post-Grant Review proceedings (the “PGR Proceeding”) on July 29, 2021. Pursuant to the terms of the Novartis Agreement, the PGR Proceeding was terminated.

Global Settlement Agreement

In addition to the dismissal of the German Litigation, the withdrawal of the Ownership Claim and the termination of the PGR Proceeding, under the Novartis Agreement, the parties, among other things, cross-licensed certain patent rights to one another, and Novartis made a $24.0 million lump sum payment to the Company and also reimbursed the Company for certain fees and expenses the Company is required to pay to the University in connection with the German Litigation. The Company received the $24.0 million payment in April 2022.

RELISTOR European Opposition Proceedings

In October 2015, Progenics received notices of opposition to three European patents relating to methylnaltrexone: EP1615646, EP2368553 and EP2368554. Notices of opposition were filed separately at the European Patent Office (the “EPO”) by each of Actavis Group PTC ehf and Fresenius Kabi Deutschland GmbH. Between May 11, 2017 and July 4, 2017, the Opposition Division of the EPO (the “Opposition Division”) provided notice that the three European patents would be revoked. Each of these matters was appealed to the Appeal Board of the EPO. On November 13, 2020, Progenics withdrew the appeal for EP2368553 and EP2368554. Notices of termination of the proceedings with revocation of the patent were issued on November 23, 2020 for both patents. Progenics continued its appeal on the revocation of the third patent, EP1615646. Oral proceedings for EP1615646 were held at the Appeal Board of the EPO on September 22, 2020. The revocation decision under appeal was set aside and the case was remitted to the Opposition Division for further prosecution. An oral hearing was held before the Opposition Division on September 27, 2021. The Opposition Division issued its final written opinion on November 11, 2021, indicating that the patent will be maintained in amended form. The final written decision of the Opposition Division was appealable to the Appeal Board of the EPO by either party. Progenics appealed this decision on January 20, 2022 to hold open its option to file Grounds for Appeal.