Eli Lilly 2010 Annual Report Download - page 82

FORM 10-K
the Court of Appeals for the Federal Circuit in July 2010. We are seeking review of this decision by the U.S.
Supreme Court. In March 2010, the district court in Indiana upheld the validity of our compound patent in the
Teva case, but applied collateral estoppel with regard to our method-of-use patent, given the ruling in the Sun
case. Generic gemcitabine was introduced to the U.S. market in mid-November 2010.
• Alimta: Teva; APP Pharmaceuticals, LLC (APP); and Barr Laboratories, Inc. (Barr) each submitted ANDAs
seeking approval to market generic versions of Alimta prior to the expiration of the relevant U.S. patent
(licensed from the Trustees of Princeton University and expiring in 2016), and alleging the patent is invalid. We,
along with Princeton, filed lawsuits in the U.S. District Court for the District of Delaware against Teva, APP, and
Barr seeking rulings that the compound patent is valid and infringed. In November 2010, the district court ruled
from the bench that judgment would be entered in Lilly’s favor, upholding the patent’s validity. Plaintiffs may
appeal this decision once the judgment is entered.
• Evista: In 2006, Teva Pharmaceuticals USA, Inc. (Teva USA) submitted an ANDA seeking permission to market
a generic version of Evista prior to the expiration of our relevant U.S. patents (expiring in 2012-2017) and
alleging that these patents are invalid, not enforceable, or not infringed. In June 2006, we filed a lawsuit against
Teva USA in the U.S. District Court for the Southern District of Indiana, seeking a ruling that these patents are
valid, enforceable, and being infringed by Teva USA. In September 2009, the court upheld our method-of-use
patents (the last expires in 2014) and the court held that our particle-size patents (expiring 2017) are invalid.
Both rulings were upheld by the appeals court in September 2010, and the period for further appeals has
expired.
• Strattera: Actavis Elizabeth LLC (Actavis), Apotex Inc. (Apotex), Aurobindo Pharma Ltd. (Aurobindo), Mylan
Pharmaceuticals Inc. (Mylan), Sandoz Inc. (Sandoz), Sun Pharmaceutical Industries Limited (Sun Ltd.), and Teva
USA 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. In 2007, we brought a
lawsuit against Actavis, Apotex, Aurobindo, Mylan, Sandoz, Sun Ltd., and Teva USA in the U.S. District Court for
the District of New Jersey. In August 2010, the court ruled that our patent is invalid. Several companies have
received final approval to market generic atomoxetine, but the Court of Appeals for the Federal Circuit granted
an injunction prohibiting the launch of generic atomoxetine until the court renders an opinion. The appeal was
heard by the court in December 2010 and we are waiting for a ruling. Zydus Pharmaceuticals (Zydus) filed an
action in the New Jersey district court in October 2010 seeking a declaratory judgment that it has the right to
launch a generic atomoxetine product, based on the district court ruling. We believe that Zydus is subject to the
injunction issued by the court of appeals.
We believe each of these Hatch-Waxman challenges is without merit and expect to prevail in this litigation. 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 in any of these cases could have a material adverse impact on our future
consolidated results of operations, liquidity, and financial 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 patent
(expiring in 2011). In April 2007, the Canadian Federal Court ruled against the first challenger, Apotex Inc.
(Apotex), and that ruling was affirmed on appeal in February 2008. In June 2007, the Canadian Federal Court
held that an invalidity allegation of a second challenger, Novopharm Ltd. (Novopharm), was justified 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. In September 2009, the
Canadian Federal Court ruled against us in the Novapharm suit, finding our patent invalid. However, in July 2010
the appeals court set aside the decision and remitted the limited issues of utility and sufficiency of disclosure to
the trial court.
• In Germany, the German Federal Supreme Court upheld the validity of our Zyprexa patent (expiring in
2011) in December 2008, reversing an earlier decision of the Federal Patent Court. Following the decision of the
Supreme Court, the generic companies who launched generic olanzapine based on the earlier decision either
agreed to withdraw from the market or were subject to injunction. We have negotiated settlements of the
damages arising from infringement with most of the generic companies.
• We have received challenges in a number of other countries, including Spain, Austria, Australia, Portugal, and
several smaller European countries. In Spain, we have been successful at both the trial and appellate court
levels in defeating the generic manufacturers’ challenges, but additional actions against multiple generic
companies are now pending. In March 2010, the District Court of Hague ruled against us and revoked our
compound patent in the Netherlands. We have appealed this decision. We have also successfully defended
Zyprexa patents in Austria and Portugal.
We are vigorously contesting the various legal challenges to our Zyprexa patents on a country-by-country basis. We
cannot determine the outcome of this litigation. The availability of generic olanzapine in additional markets could
have a material adverse impact on our consolidated results of operations.
Zyprexa Litigation
We were named as a defendant in a large number of Zyprexa product liability lawsuits in the U.S. and notified of
other claims of individuals who have not filed suit. The lawsuits and unfiled claims (together the “claims”) allege a
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