COMMITMENTS AND CONTINGENCIES	6 Months Ended
Jun. 30, 2017
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	11.COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases office space and certain equipment under cancellable and non-cancelable operating lease agreements. Supply Agreements The Company has various supply, license, distribution and manufacturing agreements with third parties that include purchase minimums or minimum royalties. See the “Contractual Obligations” section on page 44 of this Quarterly Report on Form 10-Q for a summary of the Company’s operating lease obligations and commitments under supply agreements. Legal Proceedings The Company is currently party to legal proceedings arising in the normal course of business, principally patent litigation matters. The Company has assessed such legal proceedings and does not believe that it is probable that a liability has been incurred or that the amount of any potential liability or range of losses can be reasonably estimated. As a result, the Company has not recorded any loss contingencies for any of these matters as of June 30, 2017. While it is not possible to determine the outcome of these matters, in the event of an adverse outcome or outcomes, the Company’s business could be materially harmed. The Company intends to vigorously defend its intellectual property rights. Vimovo® ANDA Litigation Between March 14, 2011 and May 16, 2013, Pozen, now a subsidiary of the Company, received Paragraph IV Notice Letters from Dr. Reddy’s Laboratories (“DRL”), Lupin Ltd. (“Lupin”), Watson Laboratories, Inc. – Florida (“Watson,” now part of Actavis), and Mylan Pharmaceuticals Inc. (“Mylan”), stating that each had filed an Abbreviated New Drug Application (“ANDA”) with the FDA seeking regulatory approval to market a generic version of our Vimovo product before the expiration of U.S. Patent No. 6,926,907 (the “‘907 patent”). On November 20, 2012, Pozen received a second Notice Letter from DRL stating that DRL had filed a second ANDA with the FDA seeking regulatory approval to market a different generic formulation of the Vimovo product before the expiration of the ‘907 patent. The ‘907 patent is assigned to Pozen and listed for the Vimovo product in the FDA’s publication titled “Approved Drug Products with Therapeutic Equivalence Evaluations” (also known as the “Orange Book”). On April 21, 2011, Pozen filed suit against the first ANDA filer, DRL, in the United States District Court for the District of New Jersey (the “District Court”), asserting infringement of the ‘907 patent. Pozen subsequently filed suit against the other three ANDA filers within 45 days of receipt of their respective Paragraph IV Notice Letters. Horizon, the Company’s current marketing partner for the VIMOVO product in the U.S., is Pozen’s co-plaintiff in each suit. The first suit against DRL is considered the lead case and has been consolidated with other suits for the purpose of pre-trial and discovery. On October 15, 2013, the United States Patent & Trademark Office (“USPTO”) issued to Pozen U.S. Patent No. 8,557,285 (the “‘285 patent”). The ‘285 patent is listed in the Orange Book for the VIMOVO product and is related to the ‘907 patent. On October 23, 2013, Pozen filed suits against DRL, Lupin, Watson and Mylan in the District Court asserting infringement of the ‘285 patent. These suits have each been consolidated with the above referenced suits involving the ‘907 patent. Between January 12 and 20, 2017, the District court conducted a 6-day bench trial involving Defendants DRL and Mylan relating solely to the validity and infringement of the ‘907 and ‘285 patents. On July 21, 2017, the District Court issued a Final Judgment that the ‘907 and ‘285 patents are not invalid and that the DRL and Mylan ANDA products infringe the asserted claims of the ‘285 patent and that the Mylan ANDA product infringes the asserted claims of the ‘907 patent. The Final Judgment further orders that the effective date of any final approval by the FDA of the DRL and Mylan ANDA’s not be earlier than the expiration of the patents at issue. Based upon a pre-trial agreement between the parties, Lupin is also bound by the District Court’s Final Judgment. Subject to the immediately following sentence or a successful appeal of the decision by the generic competitors party to the suit, this decision is expected to delay generic entry until the expiration of the applicable patents. There is ongoing litigation with respect to other patents covering Vimovo, which if we are successful, would further prevent generic entry by these potential generic competitors until October 2031, subject to the outcome of the pending appeal of the order of dismissal of claims against Actavis in the Vimovo cases (described below). Between October 7, 2014 and July 19, 2016, the USPTO issued to Pozen U.S. Patent Nos. 8,852,636 (the “‘636 patent”), 8,858,996 (the “‘996 patent”), 8,865,190 (the “190 patent”), 8,945,621 (the “‘621 patent”), 9,161,920 (the “‘920 patent”), 9,198,888 (the “‘888 patent”), 9,220,698 (the “‘698 patent”), 9,345,695 (the “‘695 patent”) and 9,393,208 (the “‘208 patent”). The ‘636, ‘996, ‘190, ‘621, ‘920, ‘888, ‘698, ‘695 and ‘208 patents are each listed in the Orange Book for the VIMOVO product. On May 13, 2015, Pozen and Horizon filed suit against DRL, Lupin, Actavis (formerly known as Watson) and Mylan in the District Court asserting infringement of the ‘636 and ‘996 patents. On June 18, 2015, Pozen filed Amended Complaints in each of the suits to assert infringement of the ‘190 patent. On January 25, 2016, Pozen and Horizon filed suit against Actavis in the District Court asserting infringement of the ‘920 and ‘888 patents. On February 10, 2016, Pozen filed Amended Complaints against DRL, Lupin and Mylan to assert infringement of the ‘920 and ‘888 patents. On August 11, 2016, Pozen and Horizon filed suit against DRL, Lupin, Actavis and Mylan in the District Court asserting infringement of the ’621, ’698, ’695 and ‘208 patents. The cases involving the ‘636, ‘996, ‘190, ‘621, ‘920, ‘888, ‘698, ‘695 and ‘208 patents have been consolidated for pretrial and discovery. The District Court has yet to set a trial date. On December 19, 2016, defendant Actavis filed a motion to compel enforcement of an alleged settlement agreement related to those Vimovo cases in which it was involved. On December 22, 2016, oral argument was held by the Magistrate Judge on Defendant Actavis' motion. On December 22, 2016, the Magistrate Judge entered a report and recommendation that Actavis’ motion to compel the enforcement of settlement be granted. On December 30, 2016, the District Court Judge ordered the adoption of the report and recommendation. On January 10, 2017, an Order of Dismissal was entered for all claims against Actavis in the Vimovo cases. The Company filed a Notice of Appeal with the Court of Appeals for the Federal Circuit on February 8, 2017. That appeal is currently pending. As with any litigation proceeding, we cannot predict with certainty the outcome of the patent infringement suits against DRL, Lupin, Mylan and Actavis relating to generic versions of Vimovo. Furthermore, while Horizon is responsible for this litigation, including the costs of same, we nevertheless will have to incur additional expenses in connection with the lawsuits relating to Vimovo, which may be substantial. Moreover, responding to and defending pending litigation results in a significant diversion of management’s attention and resources and an increase in professional fees. Inter Partes Review In 2015, DRL and the Coalition for Affordable Drugs VII L.L.C. (“CFAD”) filed Petitions (“IPR Petitions”) seeking Patent Trial and Appeal Board (“PTAB”) review of the ‘285 patent, the ‘907 patent, the ‘996 patent and the ‘636 patent. The PTAB denied each of those Petitions. On August 12, 2015, CFAD filed an IPR Petition of the ‘621 patent. On February 22, 2016 the PTAB instituted review of the claims of the ‘621 patent. On February 21, 2017, after briefing and oral argument, the PTAB issued a determination that the claims of the ‘621 patent were not shown to be unpatentable. On August 19, 2015, Lupin filed three separate IPR Petitions of the ‘996, ‘636 and ‘190 patents with the PTAB. On March 1, 2016 the PTAB denied Lupin’s petition for review of the ‘636 patent and instituted review of a limited number of the claims in each of the ‘996 and ‘190 patents. On February 28, 2017, after briefing and oral argument, the PTAB issued a determination that the claims of the ‘996 and ‘190 patents were not shown to be unpatentable. On November 12, 2015, Gray Square Pharmaceuticals, LLC (formerly known as Graybar Pharmaceuticals, LLC) filed an IPR Petition of U.S. Patent No. 7,332,183 (the “‘183 patent”) which covers Pozen’s Treximet product. That petition was denied. Canada Vimovo® Litigation On January 20, 2015, the Company’s Canadian licensee, AstraZeneca Canada Inc. (“AstraZeneca Canada”) received a Notice of Allegation from Mylan Pharmaceuticals ULC (“Mylan Canada”) informing them that Mylan Canada has filed an Abbreviated New Drug Submission in Canada (“ANDS”) for approval of its naproxen/esomeprazole magnesium tablets and alleging non-infringement of some of the claims and invalidity of Pozen’s Canadian Patent No. 2,449,098 (the “‘098 patent”). A Notice of Allegation is served pursuant to the Patented Medicines (Notice of Compliance) Regulations in Canada and is similar to a Paragraph IV Notice Letter in the United States. In response, Pozen and AstraZeneca Canada commenced a proceeding in the Federal Court of Canada (the “Canada Court”) in relation to the ‘098 patent on March 5, 2015 seeking to prohibit Health Canada from approving Mylan Canada’s generic naproxen/esomeprazole product until the expiry of the ‘098 patent. The Canadian proceeding is summary in nature and intended to decide only whether approval for Mylan Canada’s naproxen/esomeprazole magnesium tablets should be prohibited until the expiry of the ‘098 patent because none of Mylan Canada’s allegations in respect of the ‘098 patent are justified. The matter was heard on November 21 to 23, 2016. On February 7, 2017, the Court dismissed Pozen and AstraZeneca Canada’s request to prohibit the Minister from approving Mylan’s naproxen/esomeprazole products, deciding that certain of Mylan Canada’s allegations in respect of the ‘098 patent are justified (the “Decision”). However, this summary proceeding did not decide the ‘098 patent validity or infringement. The ‘098 patent expires on May 31, 2022. Following the Decision, the Minister issued approval for Mylan’s 500/20mg strength naproxen/esomeprazole magnesium tablets on February 8, 2017. On March 23, 2016, AstraZeneca Canada received another Notice of Allegation from Mylan Canada in respect of the ‘098 patent, informing them that Mylan Canada has filed a supplemental submission for one of the strengths of its naproxen/esomeprazole magnesium tablets. This Notice of Allegation states that Mylan Canada withdrew from its ANDS the 375/20 mg strength and re-filed a supplemental submission for this strength. In this circumstance, Mylan is required to file, and has provided another Notice of Allegation in respect of the ‘098 patent. The allegations in respect of the ‘098 patent are identical to those asserted in the first Notice of Allegation. In response, Pozen and AstraZeneca Canada commenced another proceeding in the Federal Court of Canada on May 5, 2016 seeking to prohibit Health Canada from approving Mylan Canada’s 375/20 mg strength naproxen/esomeprazole magnesium tablet until the expiry of the ‘098 patent. As the allegations made in respect of the ‘098 patent are identical, on the parties’ consent, the Court stayed the proceeding and the parties agreed that the outcome of the first proceeding discussed above, will determine the outcome for this new proceeding. Following the Decision, this proceeding was discontinued on February, 10, 2017. The Minister issued approval for Mylan’s 375/20 mg strength naproxen/esomeprazole magnesium tablets on February 10, 2017. In May 2017, Mylan’s generic naproxen/esomeprazole magnesium tablets became available in Canada. Yosprala® ANDA Litigation On November 4, 2016, the FDA website indicated that an ANDA for a generic version of Yosprala 81mg/40mg was submitted to the FDA on October 14, 2016. The Company ultimately received the related Paragraph IV Notice Letter on December 12, 2016, as described below. On December 12, 2016, the Company received a Paragraph IV Notice Letter from Teva Pharmaceuticals USA, Inc. (“Teva”) stating that it had filed an ANDA with the FDA seeking regulatory approval to market generic versions of Yosprala 325mg/40 mg and 81mg/40mg prior to the expiration of the ‘907 patent, U.S. Patent No. 8,206,741 (the “‘741 patent”), and U.S. Patent No. 9,364,439 (the “‘439 patent”). The ‘907, ‘741, and ‘439 patents are assigned to Pozen and listed in the Orange Book for the Yosprala product. On January 10, 2017, the USPTO issued to Pozen U.S. Patent No. 9,539,214 (the “‘214 patent”). The ‘214 patent is listed in the Orange Book for the Yosprala product. On March 13, 2017, the Company received a Paragraph IV Notice Letter regarding the ‘214 patent. On January 23, 2017, Aralez Parent and its subsidiaries Aralez Pharmaceuticals Trading DAC, Aralez Pharmaceuticals US Inc., and Pozen Inc. filed a lawsuit in the United States District Court for the Eastern District of Texas against Teva and Teva Pharmaceutical Industries Ltd. for infringement of the ‘907, ‘741, ‘439, and ‘214 patents. The lawsuit was filed within 45 days of receipt of Teva’s Paragraph IV Notice Letter. In accordance with the Hatch-Waxman Act, as a result of having filed a timely lawsuit against Teva, a stay of approval will be imposed by the FDA on Teva’s ANDA for 30 months after the date of the Company’s receipt of Teva’s Paragraph IV Notice Letter on December 12, 2016 or until a final court decision is entered in the infringement suit in favor of Teva, whichever is earlier. On April 13, 2017, the parties entered a joint stipulation to dismiss the complaint against Teva Pharmaceutical Industries Ltd. based on Teva Pharmaceutical Industries Ltd.’s agreement to be bound by any judgment, order, or decision in the lawsuit. The lawsuit will continue against Teva. On July 13, 2017, the District Court set a scheduling order for the lawsuit. A Claim Construction hearing is set for January 31, 2018, and trial is set to begin on February 4, 2019. As with any litigation proceeding, we cannot predict with certainty the outcome of the infringement suit relating to generic versions of Yosprala.

11.COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases office space and certain equipment under cancellable and non-cancelable operating lease agreements.

Supply Agreements

The Company has various supply, license, distribution and manufacturing agreements with third parties that include purchase minimums or minimum royalties.

See the “Contractual Obligations” section on page 44 of this Quarterly Report on Form 10-Q for a summary of the Company’s operating lease obligations and commitments under supply agreements.

Legal Proceedings

The Company is currently party to legal proceedings arising in the normal course of business, principally patent litigation matters. The Company has assessed such legal proceedings and does not believe that it is probable that a liability has been incurred or that the amount of any potential liability or range of losses can be reasonably estimated. As a result, the Company has not recorded any loss contingencies for any of these matters as of June 30, 2017. While it is not possible to determine the outcome of these matters, in the event of an adverse outcome or outcomes, the Company’s business could be materially harmed. The Company intends to vigorously defend its intellectual property rights.

Vimovo® ANDA Litigation

Between March 14, 2011 and May 16, 2013, Pozen, now a subsidiary of the Company, received Paragraph IV Notice Letters from Dr. Reddy’s Laboratories (“DRL”), Lupin Ltd. (“Lupin”), Watson Laboratories, Inc. – Florida (“Watson,” now part of Actavis), and Mylan Pharmaceuticals Inc. (“Mylan”), stating that each had filed an Abbreviated New Drug Application (“ANDA”) with the FDA seeking regulatory approval to market a generic version of our Vimovo product before the expiration of U.S. Patent No. 6,926,907 (the “‘907 patent”). On November 20, 2012, Pozen received a second Notice Letter from DRL stating that DRL had filed a second ANDA with the FDA seeking regulatory approval to market a different generic formulation of the Vimovo product before the expiration of the ‘907 patent. The ‘907 patent is assigned to Pozen and listed for the Vimovo product in the FDA’s publication titled “Approved Drug Products with Therapeutic Equivalence Evaluations” (also known as the “Orange Book”).

On April 21, 2011, Pozen filed suit against the first ANDA filer, DRL, in the United States District Court for the District of New Jersey (the “District Court”), asserting infringement of the ‘907 patent. Pozen subsequently filed suit against the other three ANDA filers within 45 days of receipt of their respective Paragraph IV Notice Letters. Horizon, the Company’s current marketing partner for the VIMOVO product in the U.S., is Pozen’s co-plaintiff in each suit. The first suit against DRL is considered the lead case and has been consolidated with other suits for the purpose of pre-trial and discovery.

On October 15, 2013, the United States Patent & Trademark Office (“USPTO”) issued to Pozen U.S. Patent No. 8,557,285 (the “‘285 patent”). The ‘285 patent is listed in the Orange Book for the VIMOVO product and is related to the ‘907 patent. On October 23, 2013, Pozen filed suits against DRL, Lupin, Watson and Mylan in the District Court asserting infringement of the ‘285 patent. These suits have each been consolidated with the above referenced suits involving the ‘907 patent. Between January 12 and 20, 2017, the District court conducted a 6-day bench trial involving Defendants DRL and Mylan relating solely to the validity and infringement of the ‘907 and ‘285 patents. On July 21, 2017, the District Court issued a Final Judgment that the ‘907 and ‘285 patents are not invalid and that the DRL and Mylan ANDA products infringe the asserted claims of the ‘285 patent and that the Mylan ANDA product infringes the asserted claims of the ‘907 patent. The Final Judgment further orders that the effective date of any final approval by the FDA of the DRL and Mylan ANDA’s not be earlier than the expiration of the patents at issue. Based upon a pre-trial agreement between the parties, Lupin is also bound by the District Court’s Final Judgment. Subject to the immediately following sentence or a successful appeal of the decision by the generic competitors party to the suit, this decision is expected to delay generic entry until the expiration of the applicable patents. There is ongoing litigation with respect to other patents covering Vimovo, which if we are successful, would further prevent generic entry by these potential generic competitors until October 2031, subject to the outcome of the pending appeal of the order of dismissal of claims against Actavis in the Vimovo cases (described below).

Between October 7, 2014 and July 19, 2016, the USPTO issued to Pozen U.S. Patent Nos. 8,852,636 (the “‘636 patent”), 8,858,996 (the “‘996 patent”), 8,865,190 (the “190 patent”), 8,945,621 (the “‘621 patent”), 9,161,920 (the “‘920 patent”), 9,198,888 (the “‘888 patent”), 9,220,698 (the “‘698 patent”), 9,345,695 (the “‘695 patent”) and 9,393,208 (the “‘208 patent”). The ‘636, ‘996, ‘190, ‘621, ‘920, ‘888, ‘698, ‘695 and ‘208 patents are each listed in the Orange Book for the VIMOVO product.

On May 13, 2015, Pozen and Horizon filed suit against DRL, Lupin, Actavis (formerly known as Watson) and Mylan in the District Court asserting infringement of the ‘636 and ‘996 patents. On June 18, 2015, Pozen filed Amended Complaints in each of the suits to assert infringement of the ‘190 patent.

On January 25, 2016, Pozen and Horizon filed suit against Actavis in the District Court asserting infringement of the ‘920 and ‘888 patents. On February 10, 2016, Pozen filed Amended Complaints against DRL, Lupin and Mylan to assert infringement of the ‘920 and ‘888 patents. On August 11, 2016, Pozen and Horizon filed suit against DRL, Lupin, Actavis and Mylan in the District Court asserting infringement of the ’621, ’698, ’695 and ‘208 patents. The cases involving the ‘636, ‘996, ‘190, ‘621, ‘920, ‘888, ‘698, ‘695 and ‘208 patents have been consolidated for pretrial and discovery. The District Court has yet to set a trial date.

On December 19, 2016, defendant Actavis filed a motion to compel enforcement of an alleged settlement agreement related to those Vimovo cases in which it was involved. On December 22, 2016, oral argument was held by the Magistrate Judge on Defendant Actavis' motion. On December 22, 2016, the Magistrate Judge entered a report and recommendation that Actavis’ motion to compel the enforcement of settlement be granted. On December 30, 2016, the District Court Judge ordered the adoption of the report and recommendation. On January 10, 2017, an Order of Dismissal was entered for all claims against Actavis in the Vimovo cases. The Company filed a Notice of Appeal with the Court of Appeals for the Federal Circuit on February 8, 2017. That appeal is currently pending.

As with any litigation proceeding, we cannot predict with certainty the outcome of the patent infringement suits against DRL, Lupin, Mylan and Actavis relating to generic versions of Vimovo. Furthermore, while Horizon is responsible for this litigation, including the costs of same, we nevertheless will have to incur additional expenses in connection with the lawsuits relating to Vimovo, which may be substantial. Moreover, responding to and defending pending litigation results in a significant diversion of management’s attention and resources and an increase in professional fees.

Inter Partes Review

In 2015, DRL and the Coalition for Affordable Drugs VII L.L.C. (“CFAD”) filed Petitions (“IPR Petitions”) seeking Patent Trial and Appeal Board (“PTAB”) review of the ‘285 patent, the ‘907 patent, the ‘996 patent and the ‘636 patent. The PTAB denied each of those Petitions.

On August 12, 2015, CFAD filed an IPR Petition of the ‘621 patent. On February 22, 2016 the PTAB instituted review of the claims of the ‘621 patent. On February 21, 2017, after briefing and oral argument, the PTAB issued a determination that the claims of the ‘621 patent were not shown to be unpatentable.

On August 19, 2015, Lupin filed three separate IPR Petitions of the ‘996, ‘636 and ‘190 patents with the PTAB. On March 1, 2016 the PTAB denied Lupin’s petition for review of the ‘636 patent and instituted review of a limited number of the claims in each of the ‘996 and ‘190 patents. On February 28, 2017, after briefing and oral argument, the PTAB issued a determination that the claims of the ‘996 and ‘190 patents were not shown to be unpatentable.

On November 12, 2015, Gray Square Pharmaceuticals, LLC (formerly known as Graybar Pharmaceuticals, LLC) filed an IPR Petition of U.S. Patent No. 7,332,183 (the “‘183 patent”) which covers Pozen’s Treximet product. That petition was denied.

Canada Vimovo® Litigation

On January 20, 2015, the Company’s Canadian licensee, AstraZeneca Canada Inc. (“AstraZeneca Canada”) received a Notice of Allegation from Mylan Pharmaceuticals ULC (“Mylan Canada”) informing them that Mylan Canada has filed an Abbreviated New Drug Submission in Canada (“ANDS”) for approval of its naproxen/esomeprazole magnesium tablets and alleging non-infringement of some of the claims and invalidity of Pozen’s Canadian Patent No. 2,449,098 (the “‘098 patent”). A Notice of Allegation is served pursuant to the Patented Medicines (Notice of Compliance) Regulations in Canada and is similar to a Paragraph IV Notice Letter in the United States. In response, Pozen and AstraZeneca Canada commenced a proceeding in the Federal Court of Canada (the “Canada Court”) in relation to the ‘098 patent on March 5, 2015 seeking to prohibit Health Canada from approving Mylan Canada’s generic naproxen/esomeprazole product until the expiry of the ‘098 patent. The Canadian proceeding is summary in nature and intended to decide only whether approval for Mylan Canada’s naproxen/esomeprazole magnesium tablets should be prohibited until the expiry of the ‘098 patent because none of Mylan Canada’s allegations in respect of the ‘098 patent are justified. The matter was heard on November 21 to 23, 2016. On February 7, 2017, the Court dismissed Pozen and AstraZeneca Canada’s request to prohibit the Minister from approving Mylan’s naproxen/esomeprazole products, deciding that certain of Mylan Canada’s allegations in respect of the ‘098 patent are justified (the “Decision”). However, this summary proceeding did not decide the ‘098 patent validity or infringement. The ‘098 patent expires on May 31, 2022. Following the Decision, the Minister issued approval for Mylan’s 500/20mg strength naproxen/esomeprazole magnesium tablets on February 8, 2017.

On March 23, 2016, AstraZeneca Canada received another Notice of Allegation from Mylan Canada in respect of the ‘098 patent, informing them that Mylan Canada has filed a supplemental submission for one of the strengths of its naproxen/esomeprazole magnesium tablets. This Notice of Allegation states that Mylan Canada withdrew from its ANDS the 375/20 mg strength and re-filed a supplemental submission for this strength. In this circumstance, Mylan is required to file, and has provided another Notice of Allegation in respect of the ‘098 patent. The allegations in respect of the ‘098 patent are identical to those asserted in the first Notice of Allegation. In response, Pozen and AstraZeneca Canada commenced another proceeding in the Federal Court of Canada on May 5, 2016 seeking to prohibit Health Canada from approving Mylan Canada’s 375/20 mg strength naproxen/esomeprazole magnesium tablet until the expiry of the ‘098 patent. As the allegations made in respect of the ‘098 patent are identical, on the parties’ consent, the Court stayed the proceeding and the parties agreed that the outcome of the first proceeding discussed above, will determine the outcome for this new proceeding. Following the Decision, this proceeding was discontinued on February, 10, 2017. The Minister issued approval for Mylan’s 375/20 mg strength naproxen/esomeprazole magnesium tablets on February 10, 2017. In May 2017, Mylan’s generic naproxen/esomeprazole magnesium tablets became available in Canada.

Yosprala® ANDA Litigation

On November 4, 2016, the FDA website indicated that an ANDA for a generic version of Yosprala 81mg/40mg was submitted to the FDA on October 14, 2016. The Company ultimately received the related Paragraph IV Notice Letter on December 12, 2016, as described below.

On December 12, 2016, the Company received a Paragraph IV Notice Letter from Teva Pharmaceuticals USA, Inc. (“Teva”) stating that it had filed an ANDA with the FDA seeking regulatory approval to market generic versions of Yosprala 325mg/40 mg and 81mg/40mg prior to the expiration of the ‘907 patent, U.S. Patent No. 8,206,741 (the “‘741 patent”), and U.S. Patent No. 9,364,439 (the “‘439 patent”). The ‘907, ‘741, and ‘439 patents are assigned to Pozen and listed in the Orange Book for the Yosprala product.

On January 10, 2017, the USPTO issued to Pozen U.S. Patent No. 9,539,214 (the “‘214 patent”). The ‘214 patent is listed in the Orange Book for the Yosprala product. On March 13, 2017, the Company received a Paragraph IV Notice Letter regarding the ‘214 patent.

On January 23, 2017, Aralez Parent and its subsidiaries Aralez Pharmaceuticals Trading DAC, Aralez Pharmaceuticals US Inc., and Pozen Inc. filed a lawsuit in the United States District Court for the Eastern District of Texas against Teva and Teva Pharmaceutical Industries Ltd. for infringement of the ‘907, ‘741, ‘439, and ‘214 patents. The lawsuit was filed within 45 days of receipt of Teva’s Paragraph IV Notice Letter. In accordance with the Hatch-Waxman Act, as a result of having filed a timely lawsuit against Teva, a stay of approval will be imposed by the FDA on Teva’s ANDA for 30 months after the date of the Company’s receipt of Teva’s Paragraph IV Notice Letter on December 12, 2016 or until a final court decision is entered in the infringement suit in favor of Teva, whichever is earlier.

On April 13, 2017, the parties entered a joint stipulation to dismiss the complaint against Teva Pharmaceutical Industries Ltd. based on Teva Pharmaceutical Industries Ltd.’s agreement to be bound by any judgment, order, or decision in the lawsuit. The lawsuit will continue against Teva.

On July 13, 2017, the District Court set a scheduling order for the lawsuit. A Claim Construction hearing is set for January 31, 2018, and trial is set to begin on February 4, 2019.

As with any litigation proceeding, we cannot predict with certainty the outcome of the infringement suit relating to generic versions of Yosprala.