Eli Lilly 2007 Annual Report Download - page 28

FINANCIALS
26
We believe that Barr’s and Teva’s claims are without
merit and we expect to prevail. However, it is not
possible to determine the outcome of this litigation,
and accordingly, we can provide no assurance that
we will prevail. An unfavorable outcome could have a
material adverse impact on our consolidated results
of operations, liquidity, and fi nancial position.
• Sicor Pharmaceuticals, Inc. (Sicor), Mayne Pharma
(USA) Inc. (Mayne), and Sun Pharmaceutical Industries
Inc. (Sun) each submitted ANDAs seeking permission
to market generic versions of Gemzar prior to the
expiration of our relevant U.S. patents (compound
patent expiring in 2010 and method-of-use patent
expiring in 2013), and alleging that these patents are
invalid. We fi led lawsuits in the U.S. District Court
for the Southern District of Indiana against Sicor
(February 2006) and Mayne (October 2006), seeking
rulings that these patents are valid and are being
infringed. In November 2007, the lawsuit against
Mayne was stayed and administratively closed by the
court. Also in November 2007, Sun fi led a declaratory
judgment action in the United States District Court for
the Eastern District of Michigan, seeking a ruling that
our method-of-use patent is invalid or unenforceable,
or would not be infringed by the sale of Sun’s generic
product. Sun informed us in December 2007 that it is
also challenging our compound patent, and that patent
has now been added to the declaratory judgment
action. In January 2008, we fi led a second lawsuit
against Mayne in response to a second ANDA fi led by
Mayne for a new dosage strength. We expect to prevail
in this litigation and believe that these claims are
without merit. However, it is not possible to determine
the outcome of this litigation, and accordingly, we
can provide no assurance that we will prevail. An
unfavorable outcome could have a material adverse
impact on our consolidated results of operations,
liquidity, and fi nancial position.
• Actavis Elizabeth LLC (Actavis), Glenmark Pharma-
ceuticals Inc., USA (Glenmark), Sun Pharmaceutical
Industries Limited (Sun), Sandoz Inc. (Sandoz), Mylan
Pharmaceuticals Inc. (Mylan), Teva Pharmaceuticals
USA, Inc. (Teva), Apotex Inc. (Apotex), Aurobindo
Pharma Ltd. (Aurobindo), Synthon Laboratories, Inc.
(Synthon), and Zydus Pharmaceuticals, USA, Inc.
(Zydus) each submitted an ANDA seeking permission
to market generic versions of Strattera prior to the
expiration of our relevant U.S. patent (expiring in
2017), and alleging that this patent is invalid. We fi led
a lawsuit against Actavis in the United States District
Court for the District of New Jersey in August 2007.
Sandoz fi led a declaratory judgment action in the same
court, but its case has been dismissed. In September
2007, we amended the complaint in the New Jersey
lawsuit to add Glenmark, Sun, Sandoz, Mylan, Teva,
Apotex, Aurobindo, Synthon, and Zydus as defendants.
We fi led a second action against Synthon in the United
States District Court for the Eastern District of Virginia.
Synthon has fi led a motion to dismiss our lawsuit in
New Jersey. In December 2007, Zydus agreed to entry
of a consent judgment in which Zydus conceded the
validity and enforceability of the patent and agreed to
a permanent injunction. We expect to prevail in this
litigation and believe that these claims are without
merit. However, it is not possible to determine
the outcome of this litigation, and accordingly, we
can provide no assurance that we will prevail. An
unfavorable outcome could have a material adverse
impact on our consolidated results of operations,
liquidity, and fi nancial position.
We have received challenges to Zyprexa patents in
a number of countries outside the U.S.:
• In Canada, several generic pharmaceutical
manufacturers have challenged the validity of our
Zyprexa compound and method-of-use patent (expiring
in 2011). In April 2007, the Canadian Federal Court
ruled against the fi rst challenger, Apotex Inc. (Apotex),
and Apotex has appealed that ruling. In June 2007,
the Canadian Federal Court held that the invalidity
allegations of a second challenger, Novopharm
Ltd. (Novopharm), were justifi ed and denied our
request that Novopharm be prohibited from receiving
marketing approval for generic olanzapine in Canada.
Novopharm began selling generic olanzapine in
Canada in the third quarter of 2007. We have appealed
that decision and sued Novopharm for patent
infringement. The appeal was dismissed. In November
2007, Apotex fi led an action seeking a declaration of
the invalidity of our Zyprexa compound and method-of-
use patents (expiring in 2011). The trial court ruled in
our favor in February 2007. Apotex will likely appeal.
• In Germany, generic pharmaceutical manufacturers
Egis-Gyogyszergyar and Neolabs Ltd. challenged the
validity of our Zyprexa compound and method-of-use
patents (expiring in 2011). In June 2007, the German
Federal Patent Court held that our patent is invalid.
We are appealing the decision. Generic olanzapine
was launched by competitors in Germany in the fourth
quarter of 2007.
• We have received challenges in a number of other
countries, including Spain, the United Kingdom (U.K.),
and several smaller European countries. In Spain, we
have been successful at both the trial and appellate
court levels in defeating the generic manufacturers’
challenge, but we anticipate further legal challenges
from generic manufacturers. In the U.K., a trial date
has tentatively been set for July 2008.
We are vigorously contesting the various legal chal-
lenges to our Zyprexa patents on a country-by-country
basis. We cannot determine the outcome of this litiga-