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EXHIBIT 10.49
AMENDED AND RESTATED SETTLEMENT AGREEMENT
PREAMBLE
This AMENDED AND RESTATED SETTLEMENT AGREEMENT, dated as of the 16th day
of April, 2003, ("Execution Date") is among: SmithKline Beecham Corporation and
Beecham Group, p.l.c. (collectively, "Plaintiffs"); Par Pharmaceutical, Inc.
("PAR"); and Pentech Pharmaceuticals, Inc. ("PENTECH") (collectively, the
"Parties").
WHEREAS:
1. This Amended and Restated Settlement Agreement ("this Settlement
Agreement") revises and supersedes the Settlement Agreement between the Parties
dated February 26, 2003.
2. Plaintiffs brought suit against PENTECH and Asahi Glass Co., Ltd.
("ASAHI") (collectively, "Defendants") for infringement of four United States
patents owned by Plaintiffs, namely U.S. Patent No. 4,721,723 ("the `723
patent"), No. 5,872,132, No. 5,900,423, and No. 6,080,759 (collectively, "the
Patents"), under 35 U.S.C. ss. 271(e)(2)(A), and Defendants brought
counterclaims of noninfringement and invalidity with regard to the Patents, in
civil actions in the United States District Court for the Northern District of
Illinois ("the Court"), Civil Action Nos. 00C 2855 and 00C 5831 ("the
Litigation").
3. Plaintiffs and PENTECH wish to settle the Litigation.
4. In the Litigation, Plaintiffs alleged that PENTECH infringed the
Patents by PENTECH's submission of Abbreviated New Drug Application No. 75-771
("PENTECH's ANDA") to the United States Food and Drug Administration ("FDA"),
and that ASAHI induced that infringement.
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5. PENTECH's ANDA was submitted to the FDA under 21 U.S.C. ss. 355(j), and
seeks FDA approval for certain capsule drug products containing as their active
ingredient paroxetine hydrochloride. ** ******
6. ** ******
7. Plaintiffs, PAR, and PENTECH have reached an agreement to settle the
Litigation, which is set forth in this Settlement Agreement, and a separate
Amended and Restated License and Supply Agreement ("License and Supply
Agreement") between SB Pharmco Puerto Rico Inc. ("GSK"), Plaintiffs, and PAR,
each of which is being executed contemporaneously, and an Agreed Motion to
Dismiss All Claims and Counterclaims Between Plaintiffs and Defendant Pentech
Pharmaceuticals, Inc., accompanied by a proposed Order of Dismissal, for
signature by Plaintiffs and PENTECH ("Agreed Motion to Dismiss").
8. The settlement is procompetitive. As a result of the settlement, there
will be generic competition in Puerto Rico immediately, which competition
otherwise would not have existed until the expiration of Plaintiffs' `723
patent, had Plaintiffs prevailed in the litigation. Furthermore, as a result of
the settlement, in the event that another firm successfully launches an
A/B-rated generic version of paroxetene hydrochloride, an additional competitor
would be launched into the marketplace that otherwise would not have been
permitted to compete, had Plaintiffs prevailed in the litigation. The settlement
allows generic entry into the marketplace in advance of the expiration of
Plaintiffs' `723 patent and is therefore procompetitive.
9. This Settlement Agreement, the License and Supply Agreement, and the
Agreed Motion to Dismiss are the only consideration exchanged by or on behalf of
Plaintiffs or GSK, on the one side, and PENTECH or PAR, on the other side, in
reaching the agreement to settle the Litigation. Plaintiffs, GSK, PENTECH, and
PAR have received no consideration for their entry into this settlement other
than that which is described in those three documents. This settlement therefore
constitutes PENTECH's and PAR's best independent judgment as to how most
expeditiously and competitively to enter the marketplace in light of PENTECH's
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relative chances of success in the Litigation.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the License and Supply Agreement, and the Agreed Motion to
Dismiss, Plaintiffs, PENTECH, and PAR hereby agree as follows:
1. PAR consents to the jurisdiction of this Court solely for the purposes
of the settlement of this litigation and enforcement of the terms of this
settlement.
2. The Court has jurisdiction over the Litigation, the Plaintiffs, the
Defendants, and PAR (solely for the purpose of this settlement), and venue is
proper in the Northern District of Illinois.
3. PENTECH and PAR admit that the commercial manufacture, use, selling,
offering for sale, or importing of the drug products for which PENTECH's ANDA
currently seeks FDA approval would infringe the `723 patent, and admit that the
`723 patent is valid and enforceable.
4. PENTECH warrants that it has provided to attorneys for Plaintiffs in
the Litigation copies of all amendments to PENTECH's ANDA that have been
submitted to the FDA as of the date and time this Settlement Agreement is being
signed by PENTECH.
5. PENTECH and PAR agree that, ** ******
6. PENTECH warrants that it has not granted or assigned to and will not
grant or assign to any entity or individual, directly or indirectly, any rights
under or to its ANDA, other than those to PAR set forth above.
7. Plaintiffs unconditionally represent that they will not sue Defendants
or PAR for any infringement of any claims of three of the patents for which suit
initially had been brought, namely United States Patent No. 5,872,132, No.
5,900,423, and No. 6,080,759, concerning the paroxetine hydrochloride drug
products for which PENTECH seeks FDA approval in PENTECH's ANDA at the time this
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Settlement Agreement is signed, including the paroxetine hydrochloride active
ingredient supplied by ASAHI for those drug products.
8. ** ******
9. ** ******
10. As is more fully set forth in the License and Supply Agreement, **
******
11. As provided in section 13 of this Settlement Agreement, Plaintiffs and
PENTECH will execute and submit to the Court their Agreed Motion to Dismiss,
requesting that the Court dismiss without prejudice all claims in the Litigation
brought by Plaintiffs against PENTECH, and all counterclaims in the Litigation
brought by PENTECH against Plaintiffs, pursuant to Rule 41(a)(2).
12. Plaintiffs and PENTECH each will bear its own costs and legal fees for
the Litigation.
13. The Parties and GSK shall submit this Settlement Agreement, the
License and Supply Agreement, and the Agreed Motion to Dismiss to the Federal
Trade Commission ("Commission") Bureau of Competition ("Bureau") for review. The
Parties agree, and GSK has agreed in the License and Supply Agreement, to fully
cooperate with any Bureau investigation that may ensue as a result of such
submission and not to oppose any motion by the Commission to intervene.
(a) Notwithstanding the above, it is expressly understood that this
Settlement Agreement, the License and Supply Agreement, and the Agreed Motion to
Dismiss are contingent upon none of the following occurring before April 10,
2003: the Bureau decides
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(1) to recommend to the Commission that it intervene, or
otherwise participate, in the Litigation to oppose this Settlement Agreement,
the License and Supply Agreement, or the Agreed Motion to Dismiss,
(2) to recommend to the Commission that it initiate its own
judicial or administrative litigation against GSK, Plaintiffs, PAR, or Pentech
related to this Settlement Agreement, the License and Supply Agreement, or the
Agreed Motion to Dismiss,
(3) to use its current resolution authorizing investigation of
GSK to investigate this Settlement Agreement, the License and Supply Agreement,
or the Agreed Motion to Dismiss, or
(4) to seek a new resolution authorizing investigation of GSK,
Plaintiffs, PAR, or Pentech related to this Settlement Agreement, the License
and Supply Agreement, or the Agreed Motion to Dismiss.
The Parties shall execute the Agreed Motion to Dismiss and submit it to
the U.S. District Court for the Northern District of Illinois, in the event that
none of the events set forth in Section 13(a)(1) through (4), above, have
occurred before April 10, 2003.
If, prior to entry of the order sought by the Agreed Motion to Dismiss,
GSK or PAR is informed that any of the events set forth in Section 13(a)(1)
though (4) of this Settlement Agreement have occurred, the other entity will be
given the opportunity to verify the Bureau's decision, provided that, once
verified, either Plaintiffs or PAR may choose to nullify and void this
Settlement Agreement and the Motion to Dismiss, effective as of the Execution
Date, subject to Section 13(b) of this Settlement Agreement, and either GSK or
PAR may choose to nullify and void the License and Supply Agreement under
Section 7.1(a) of that agreement, effective as of the Execution Date, subject to
Section 7.1(b) of the License and Supply Agreement. If GSK or PAR is informed
that either of the events set forth in Section 13(a)(1) or (2) of this
Settlement Agreement has occurred after entry of the order sought by the Agreed
Motion to Dismiss, the other entity will be given the opportunity to verify the
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Bureau's decision, provided that, once verified, either Plaintiffs or PAR may
choose to nullify and void this Settlement Agreement, effective as of the
Execution Date, subject to Section 13(b) of this Settlement Agreement, and
either GSK or PAR may choose to nullify and void the License and Supply
Agreement under Section 7.1(a) of that agreement, effective as of the Execution
Date, subject to Section 7.1(b) of the License and Supply Agreement.
If the Bureau does not recommend to the Commission to intervene or
initiate litigation, or investigate or seek to investigate, as set forth in this
Section 13(a) of this Settlement Agreement, but reserves the right to do so at a
later date, this will be insufficient for GSK, Plaintiffs, or PAR to use the
foregoing contingency to nullify and void this Settlement Agreement, the License
and Supply Agreement, and the Agreed Motion to Dismiss.
(b) If any of the events set forth in Sections 13(a)(1) through (4)
of this Settlement Agreement occur before entry of the order sought by the
Agreed Motion to Dismiss, or the Court refuses to enter the order sought by the
Agreed Motion to Dismiss, then the Parties (and the parties to the License and
Supply Agreement and the Agreed Motion to Dismiss) shall, using good faith,
reasonable commercial efforts, modify, if possible, this Settlement Agreement,
the License and Supply Agreement, and the Agreed Motion to Dismiss to overcome
any objections by the Bureau or the Court, provided that such modifications do
not materially change the economic value of the transaction for any such party.
If any of the events set forth in Sections 13(a)(1) through (4) of this
Settlement Agreement occur after entry of the order sought by the Agreed Motion
to Dismiss, then the Parties (and the parties to the License and Supply
Agreement and Agreed Motion to Dismiss) shall, using good faith, reasonable
commercial efforts, modify, if possible, this Settlement Agreement and the
License and Supply Agreement to overcome any objections by the Bureau, provided
that such modifications do not materially change the economic value of the
transaction for any such party.
(c) Subject to the above provisions, if before entry of the order
sought by the Agreed Motion to Dismiss, either Plaintiffs or PAR exercises its
right under Section 13(a) of this Settlement Agreement to terminate this
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Agreement, or either GSK or PAR exercises its right under Section 7.1(a) of the
License and Supply Agreement to terminate that agreement, both of those
agreements and the Agreed Motion to Dismiss shall be null and void as to all
parties to those agreements and as to all parties to the Agreed Motion to
Dismiss. If after entry of the order sought by the Agreed Motion to Dismiss,
Plaintiffs or PAR exercises its right under Section 13(a) of this Settlement
Agreement to terminate this Settlement Agreement, or GSK or PAR exercises its
right under Section 7.1(a) of the License and Supply Agreement to terminate that
agreement, both of those agreements shall be null and void as to all parties to
those agreements.
14. At the Court Status Conference on February 27, 2003, Plaintiffs and
PENTECH jointly requested that the Court take certain actions, which the Court
took:
(a) toll the stay on FDA approval of PENTECH's ANDA pursuant to 21
U.S.C. ss. 355(j)(5)(B), which had been due to expire on March 3, 2003, through
and including April 25, 2003, to enable Plaintiffs and PENTECH to resolve
important issues being discussed between them. Plaintiffs and PENTECH made this
request solely for the purpose of enabling their current discussions to
continue. Their request to toll the FDA stay was made wholly without prejudice
to their respective positions on the propriety of any extension to the current
FDA stay, including without limitation the position expressed in their motion
papers regarding Plaintiffs' request for an extension of that stay;
(b) defer ruling on the three motions currently pending before the
Court, namely (1) Plaintiffs' Motion to Extend Stay on FDA Approval of Pentech's
ANDA, (2) Defendants' Motion to Reopen Limited Fact Discovery, and (3)
Defendants' Motion to Amend the Answer and Counterclaim, until after the next
Status Conference; and
(c) reset a Status Conference to April 15, 2003.
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15. If any of GSK, Plaintiffs, or PAR, were to exercise its option to
terminate this Settlement Agreement, the License and Supply Agreement, and the
Agreed Motion to Dismiss, as provided in Section 13, above, then Plaintiffs and
PENTECH promptly will jointly request that the Court resume consideration of the
three pending motions mentioned above, and rule on the three pending motions
before the expiration of the tolled stay on FDA approval of PENTECH's ANDA.
16. Each Party to this Settlement Agreement warrants that the person
executing this Settlement Agreement on its behalf has the power and authority to
enter this Settlement Agreement on behalf of that Party.
17. (a) No public announcement or other disclosure to any third party,
including any government entity, in any manner whatsoever concerning the
existence, terms, or subject matter of this Settlement Agreement, the License
and Supply Agreement, or the Agreed Motion to Dismiss shall be made, either
directly or indirectly, by any Party, except, subject to Section 17(b), below,
in the opinion of legal counsel for the Party desiring to make such
announcement, publicity or disclosure, as may be legally required by applicable
law, without first obtaining the approval of the other Parties and agreement
upon the nature and text of such announcement, publicity or disclosure, which
approval shall not unreasonably be withheld. The Party desiring to make any such
announcement, publicity or disclosure (including those which are legally
required) shall inform the other Parties of the proposed announcement or
disclosure in reasonably sufficient time prior to public release, which shall be
not less than fifteen (15) days (or such shorter period as the Parties may agree
upon in writing) prior to release of such proposed announcement, publicity or
disclosure, and shall provide the other Parties with a written copy thereof in
order to allow such other Parties to comment upon such announcement, publicity
or disclosure. Each Party agrees that it shall cooperate fully with the others
with respect to all disclosures regarding this Settlement Agreement, the License
and Supply Agreement, and the Agreed Motion to Dismiss to any governmental or
regulatory agencies, including requests for confidential treatment of
proprietary information of any Party included in any such disclosure.
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(b) PAR and PENTECH each represents, warrants, and covenants, after
consultation with counsel, that
(1) the act of executing this Settlement Agreement, the License
and Supply Agreement, and the Agreed Motion to Dismiss, or any of them, does not
trigger or otherwise instigate any reporting, filing or other disclosure
obligation on PAR's or PENTECH's (or any of either's affiliates') behalf
pursuant to applicable law (including any U.S. Securities Exchange Commission
reporting or disclosure obligations or requirements) until the order sought by
the Agreed Motion to Dismiss is entered by the U.S. District Court for the
Northern District of Illinois; provided, however,
(2) notwithstanding Section 17(a), above, if the execution of
this Settlement Agreement, the License and Supply Agreement, and the Agreed
Motion to Dismiss, or any of them, were to trigger or otherwise instigate a
reporting, filing or other disclosure obligation on PAR's or PENTECH's (or any
of either's Affiliates') behalf pursuant to applicable law prior to entry of the
order sought by the Agreed Motion to Dismiss by the U.S. District Court for the
Northern District of Illinois, PAR or PENTECH, as applicable, shall immediately
notify GSK of such obligation, and PAR and PENTECH each further agree not to
make, file, or issue such report, filing or disclosure, directly or indirectly,
until the Parties, in good faith, agree upon the content, media and timing of
such report, filing or disclosure.
(c) The prohibition on disclosure to any third party set forth in
Section 17(a), above, ** ****** except as provided in paragraph (d), below, no
** ****** in any manner whatsoever concerning ** ****** either directly or
indirectly, other than ** ****** and further, PAR and PENTECH represent and
warrant that, except as provided in paragraph (d), below, they have not made,
and shall not make for a period of one (1) year after the date hereof, any
disclosure to ** ****** except as the Parties may agree otherwise in writing, **
******
(d) At the Status Conference held before the Court on March 21, 2003,
** ****** At that time, certain information concerning the proposed settlement
was provided confidentially to the Court ** ****** by the respective counsel for
the Parties.
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** ******
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SO AGREED:
SmithKlineBeecham Corporation:
Date: April 16, 2003 By: /s/ David M. Pernock
----------------------------------------
David M. Pernock
Senior Vice President, General
Pharmaceutical Business Unit
Attorney-in-fact for SmithKlineBeecham
Corporation
Beecham Group Ltd., p.l.c.
Date: April 16, 2003 By: /s/ David M. Pernock
----------------------------------------
David M. Pernock
Senior Vice President, General
Pharmaceutical Business Unit
Attorney-in-fact for Beecham Group Ltd.,
p.l.c.
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Par Pharmaceutical, Inc.:
Date: April 16, 2003 By: /s/ Scott Tarriff
-----------------------------------
Name: Scott Tarriff
Title: President & CEO
Pentech Pharmaceuticals, Inc.:
Date: April 16, 2003 By: /s/ Albert F. Hummel
---------------------------------------
Name: Albert F. Hummel
Title: President
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