2.2.0.7 false Commitments and Contingencies 0219 - Disclosure - Commitments and Contingencies true false false false 1 USD false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Commitments and Contingencies [Abstract] 0 vrx_CommitmentsAndContingenciesAbstract vrx false na duration Commitments and Contingencies. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string Commitments and Contingencies. false 3 Commitments and Contingencies 1 us-gaap_CommitmentsAndContingenciesDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0%"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>19. Commitments and Contingencies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">We are involved in several legal proceedings, including the following matters: </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%"><i>SEC Investigation: </i>We are the subject of a Formal Order of Investigation with respect to events and circumstances surrounding trading in our common stock, the public release of data from our first pivotal Phase III trial for taribavirin in March 2006, statements made in connection with the public release of data and matters regarding our stock option grants since January 1, 2000 and our restatement of certain historical financial statements announced in March 2008. In September 2006, our board of directors established a Special Committee to review our historical stock option practices and related accounting, and informed the SEC of these efforts. We have cooperated fully and will continue to cooperate with the SEC in its investigation. We cannot predict the outcome of the investigation. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%"><i>Securities Class Actions</i>: On June 22, 2010, a stockholder of the Company filed a purported class action complaint in Superior Court for Orange County, California captioned Deckter v. Valeant Pharmaceuticals International, et al., Case No. 30-2010-383335-CU-BT-CXC, on behalf of himself and all other stockholders of the Company against the Company and eight of its directors. On July 1, 2010, a stockholder of the Company filed a purported class action complaint in Superior Court for Orange County, California captioned Pronko v. Valeant Pharmaceuticals International, et al., Case No. 30-2010-386784-CU-SL-CXC, on behalf of himself and all other stockholders of the Company against the Company and its directors. On July 13, 2010, a stockholder of the Company filed a purported class action complaint in Superior Court for Orange County, California captioned Martino v. Pearson, et al., Case No. 30-2010-389330-CU-SL-CXC, on behalf of herself and all other stockholders of the Company against the Company and its directors. On July 14, 2010, a stockholder of the Company filed a purported class action complaint in Superior Court for Orange County, California captioned Haro v. Pearson, et al., Case No. 30-2010-389773-CU-BT-CXC, on behalf of himself and all other stockholders of the Company against the Company, certain officers and directors of the Company, Biovail, Biovail Americas Corp., a wholly owned subsidiary of Biovail (“BAC”), and Beach Merger Corp., a newly formed wholly owned subsidiary of BAC (“Merger Sub”). The complaints variously allege that the individual defendants, aided and abetted by the Company, Biovail, BAC and Merger Sub, breached their fiduciary duties of care, loyalty, candor, good faith and independence to stockholders in connection with the proposed merger of the Company with Biovail (see Note 20). Among other things, the complaints allege that the merger agreement fixes a price per share that is inadequate and unfair, and effectively caps the value of the Company’s stock and precludes competitive bidding through measures such as a termination fee, a requirement that any prior or ongoing discussions with other potential suitors be discontinued, non-solicitation and notification covenants, and granting Biovail the right to match any unsolicited proposal. The complaints also allege that the individual defendants are using the proposed merger to aggrandize their own financial position at the expense of the Company’s stockholders and have ignored purported conflicts of interests. The complaints seek various forms of relief, including rescissory damages and declaratory and injunctive relief, including enjoining or rescinding the merger to the extent already implemented and requiring the defendants to effect a transaction which is in the best interests of the Company’s stockholders. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">On July 16, 2010, a stockholder of the Company filed a purported class action complaint in the Court of Chancery for the State of Delaware captioned Porto v. Valeant Pharmaceuticals International, et al., Case No. 5644, on behalf of himself and all other stockholders of the Company against the Company, the Company’s directors, Biovail, BAC and Merger Sub. On July 21, 2010, a stockholder of the Company filed a purported class action complaint in the Court of Chancery for the State of Delaware captioned Marion v. Pearson, et al., Case No. 5658, on behalf of himself and all other stockholders of the Company against the Company and its directors. On July 22, 2010, a stockholder of the Company filed a purported class action complaint in the Court of Chancery for the State of Delaware captioned Soukup v. Valeant Pharmaceuticals International, et al., Case No. 5664, on behalf of himself and all other stockholders of the Company against the Company, the Company’s directors, Biovail, BAC and Merger Sub. The complaints variously allege that the individual defendants, aided and abetted by the Company, Biovail, BAC and Merger Sub, breached their fiduciary duties of care, loyalty, candor, good faith and independence to stockholders in connection with the proposed merger of the Company with Biovail. Among other things, the complaints allege that the merger agreement fixes a price per share that is inadequate and unfair, and effectively caps the value of the Company’s stock and precludes competitive bidding through measures such as a termination fee, a requirement that any prior or ongoing discussions with other potential suitors be discontinued, non-solicitation and notification covenants, and granting Biovail the right to match any unsolicited proposal. The complaints also allege that the individual defendants are using the proposed merger to aggrandize their own financial position at the expense of the Company’s stockholders and have ignored purported conflicts of interests. On July 27, 2010, the plaintiffs in the Porto and Marion actions filed amended complaints that include the additional allegations that the defendants failed to disclose adequate information to ensure an informed stockholder vote and disclosed materially misleading information. The complaints and amended complaints seek various forms of relief, including rescissory damages and declaratory and injunctive relief, including enjoining or rescinding the merger to the extent already implemented and requiring the defendants to effect a transaction which is in the best interests of the Company’s stockholders. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">The cases have just been filed and we have not yet responded to any of the complaints. We intend to vigorously defend the actions and believe we have meritorious defenses to all of the claims asserted. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%"><i>Permax Product Liability Cases: </i>On August 27, 2008, we were served product liability complaints related to the pharmaceutical Permax in six separate cases by plaintiffs Prentiss and Carol Harvey; Robert and Barbara Branson; Dan and Mary Ellen Leach; Eugene and Bertha Nelson; Beverly Polin; and Ira and Michael Price against Eli Lilly and Company and Valeant Pharmaceuticals International in Superior Court, Orange County, California (the “California Permax Actions”). The California Permax Actions were consolidated under the heading of Branson v. Eli Lilly and Company, et al. On September 15, 2008, we were served a complaint in a case captioned Linda R. O’Brien v. Eli Lilly and Company, Valeant Pharmaceuticals International, Amarin Corporation, plc, Amarin Pharmaceuticals Inc., Elan Pharmaceuticals, Inc., Athena Neurosciences, Inc., Teva Pharmaceutical Industries, Ltd., Par Pharmaceutical Companies, Inc., and Ivax Corporation in the Circuit Court of the 11th Judicial Circuit, Miami-Dade County, Florida. On March 24, 2009, we were named as a defendant in the following cases: Richard Andrew Baker v. Eli Lilly and Company, Valeant Pharmaceuticals International, Amarin Corporation, plc, Amarin Pharmaceuticals Inc., Elan Pharmaceuticals, Inc., Athena Neurosciences, Inc., Par Pharmaceutical Companies, Inc., Pfizer, Inc. and Pharmacia Corporation in the United States District Court for the Northern District of Ohio, Eastern Division; Edwin Elling v. Eli Lilly and Company, Valeant Pharmaceuticals International, Amarin Corporation, plc, Amarin Pharmaceuticals Inc., Elan Pharmaceuticals, Inc. and Athena Neurosciences, Inc. in the United Stated District Court for the Northern District of Texas, Ft. Worth Division; and Judith LaVois v. Eli Lilly and Company, Valeant Pharmaceuticals International, Amarin Corporation, plc, Amarin Pharmaceuticals Inc., Elan Pharmaceuticals, Inc., Athena Neurosciences, Inc. and Teva Pharmaceuticals USA, Inc. in the United States District Court for the Southern District of Texas, Houston Division. On March 25, 2009, we were named as a defendant in a case captioned Penny M. Hagerman v. Eli Lilly and Company, Valeant Pharmaceuticals International, Amarin Corporation, plc, Amarin Pharmaceuticals Inc., Elan Pharmaceuticals, Inc., and Athena Neurosciences, Inc. in the United States District Court for the District of Colorado. Eli Lilly, initial holder of the right granted by the FDA to market and sell Permax in the United States, which right was licensed to Amarin Pharmaceuticals Inc. and assigned to Valeant, and the source of the manufactured product, has also been named in the suits. On January 15, 2010, we reached an agreement in principle with plaintiffs to settle the O’Brien, Baker, Elling, LaVois and Hagerman matters. The Hagerman and Baker matters have been settled, and the matters were dismissed on June 2, 2010 and June 25, 2010, respectively and we expect that the O’Brien matter will be dismissed shortly. Settlement documentation is being finalized for the Elling and LaVois matters. On May 5, 2010, we reached an agreement in principle with plaintiffs to settle the California Permax actions, and are in the process of finalizing settlement documentation for those matters. The portion of these settlements for which we are responsible will not have a material impact on our financial results. In addition to the lawsuits described above, we have received, and from time to time receive, communications from third parties relating to potential claims that may be asserted with respect to Permax. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%"><i>Eli Lilly: </i>On January 12, 2009, we were served a complaint in an action captioned Eli Lilly and Company v. Valeant Pharmaceuticals International, Case No. 1:08-cv-1720-SEB-TAB in the U.S. District Court for the Southern District of Indiana, Indianapolis Division (the “Lilly Action”). In the Lilly Action, Lilly brought a claim against us for breach of contract and seeks a declaratory judgment arising out of a February 25, 2004 letter agreement between and among Lilly, Valeant and Amarin Corporation, plc related to cost-sharing for Permax product liability claims. On February 2, 2009, we filed counterclaims against Lilly seeking a declaratory judgment and indemnification under the letter agreement. We have responded to two motions for partial summary judgment brought by Lilly, and are in the process of defending the Lilly Action. Non-expert discovery closed on July 1, 2010, and expert discovery is proceeding. Trial is scheduled for November 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%"><i>Tolmar Matter: </i>On or around January 19, 2009, Tolmar, Inc. (“Tolmar”) notified Galderma Laboratories, L.P. and Dow that it had submitted an ANDA, No. 090-903, with the FDA seeking approval for the commercial manufacture, use and sale of its Metronidazole Topical Gel, 1% (the “Tolmar Product”) prior to the expiration of U.S. Patent Nos. 6,881,726 (the “‘726 patent”) and 7,348,317 (the “‘317 patent). The ‘726 and ‘317 patents are owned by Dow, and licensed to Galderma. The ANDA contains a Paragraph IV certification alleging that the claims of the ‘726 and ‘317 patents will not be infringed by the manufacture, use, importation, sale or offer for sale of the Tolmar Product. On March 3, 2009, Galderma Laboratories, L.P., Galderma S.A., and Dow filed a complaint against Tolmar for the patent infringement of the ‘726 and ‘317 patents, pending in the United States District Court for the Northern District of Texas, Dallas Division. The Court has ordered preliminary mediation in the matter to be completed on or before September 9, 2010. Galderma and Dow have served opposition to Tolmar’s Summary Judgment motion. A date for a hearing on the Summary Judgment motion has not been assigned by the Court. This lawsuit was filed within forty-five days of Tolmar’s Paragraph IV certification. As a result, The Hatch-Waxman Act provides an automatic stay on the FDA’s final approval of Tolmar’s ANDA for thirty months, which will expire in July 2011, or until a decision by the district court, whichever is earlier. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%"><i>Other</i>: We are a party to other pending lawsuits and subject to a number of threatened lawsuits. While the ultimate outcome of pending and threatened lawsuits or pending violations cannot be predicted with certainty, and an unfavorable outcome could have a negative impact on us, at this time in the opinion of management, the ultimate resolution of these matters will not have a material effect on our consolidated financial position, results of operations or liquidity. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0%"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 18pt; text-indent: 4%">There can be no assurance that defending against any of the above claims or any future similar claims and any resulting settlements or judgments will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operation or liquidity. </div> </div>  <!-- Begin Block Tagged Note false false false us-types:textBlockItemType textblock Includes disclosure of commitments and contingencies. 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