Eli Lilly 2010 Annual Report Download - page 81

FORM 10-K
The activity in the Level 3 investments during 2009 was as follows:
Hedge
Funds Equity-like Funds International Equity Fixed Income Total
Defined Benefit Pension Plans
Beginning balance at January 1, 2009 ..................... $1,387.1 $699.6 $ 3.6 $ 6.5 $2,096.8
Actual return on plan assets, including changes in foreign
exchange rates:
Relating to assets still held at the reporting date .......... 158.0 (41.6) 0.7 1.1 118.2
Relating to assets sold during the period ................ 0.0 (22.9) 0.0 0.0 (22.9)
Purchases, sales and settlements ........................ (163.6) 108.5 (0.4) 1.5 (54.0)
Transfers in and/or out of Level 3 ........................ 0.0 0.0 0.0 (5.6) (5.6)
Ending balance at December 31, 2009 ..................... $1,381.5 $743.6 $ 3.9 $ 3.5 $2,132.5
Retiree Health Benefit Plans
Beginning balance at January 1, 2009 ..................... $ 137.1 $ 64.8 $ 0.4 $ 0.7 $ 203.0
Actual return on plan assets, including changes in foreign
exchange rates:
Relating to assets still held at the reporting date .......... 15.2 (4.4) 0.1 0.1 11.0
Relating to assets sold during the period ................ 0.0 0.0 0.0 0.0 0.0
Purchases, sales and settlements ........................ (11.4) 3.2 (0.1) 0.2 (8.1)
Transfers in and/or out of Level 3 ........................ 0.0 0.0 0.0 (0.6) (0.6)
Ending balance at December 31, 2009 ..................... $ 140.9 $ 63.6 $ 0.4 $ 0.4 $ 205.3
In 2011, we expect to contribute approximately $80 million to our defined benefit pension plans to satisfy minimum
funding requirements for the year. In addition, we expect to contribute approximately $250 million of additional
discretionary funding in the aggregate in 2011 to several of our global defined benefit pension and post-retirement
health benefit plans.
Note 15: Contingencies
We are a party to various legal actions and government investigations. The most significant of these are described
below. While it is not possible to determine the outcome of these matters, we believe that, except as specifically
noted below, the resolution of all such matters will not have a material adverse effect on our consolidated financial
position or liquidity, but could possibly be material to our consolidated results of operations in any one accounting
period.
Patent Litigation
We are engaged in the following U.S. patent litigation matters brought pursuant to procedures set out in the Hatch-
Waxman Act (the Drug Price Competition and Patent Term Restoration Act of 1984):
• Cymbalta: Sixteen generic drug manufacturers have submitted Abbreviated New Drug Applications (ANDAs)
seeking permission to market generic versions of Cymbalta prior to the expiration of our relevant U.S. patents
(the earliest of which expires in 2013). Of these challengers, all allege non-infringement of the patent claims
directed to the commercial formulation, and nine allege invalidity (and some also allege nonenforceability) of
the patent claims directed to the active ingredient duloxetine. Of the nine challengers to the compound patent
claims, one further alleges invalidity of the claims directed to the use of Cymbalta for treating fibromyalgia. In
November 2008 we filed lawsuits in U.S. District Court for the Southern District of Indiana against Actavis
Elizabeth LLC; Aurobindo Pharma Ltd.; Cobalt Laboratories, Inc.; Impax Laboratories, Inc.; Lupin Limited;
Sandoz Inc.; and Wockhardt Limited, seeking rulings that the compound patent claims are valid, infringed, and
enforceable. We filed similar lawsuits in the same court against Sun Pharma Global, Inc. in December 2008 and
against Anchen Pharmaceuticals, Inc. in August 2009. The cases have been consolidated and actions against all
but Wockhardt Limited have been stayed pursuant to stipulations by the defendants to be bound by the outcome
of the litigation through appeal. The Wockhardt Limited trial is scheduled to begin in June 2011.
• Gemzar: Teva Parenteral Medicines, Inc. (Teva); Sun Pharmaceutical Industries Inc. (Sun) and several other
generic companies sought 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). We filed
lawsuits in the U.S. District Court for the Southern District of Indiana against Teva (February 2006) and several
other generic companies, seeking rulings that our patents are valid and are being infringed. In November 2007,
Sun filed a declaratory judgment action in the U.S. District Court for the Eastern District of Michigan, seeking
rulings that our method-of-use and compound patents are invalid or unenforceable, or would not be infringed
by the sale of Sun’s generic product. In August 2009, the district court in Michigan granted a motion by Sun for
partial summary judgment, invalidating our method-of-use patent, and the opinion was affirmed by a panel of
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