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Endo (ENDP), Watson Pharma (WPI) Settle LIDODERM Litigation

May 29, 2012 7:32 AM EDT Send to a Friend
Endo (Nasdaq: ENDP) has reached an agreement with Watson Pharmaceuticals (NYSE: WPI) resolving two patent infringement lawsuits related to LIDODERM (lidocaine patch 5%). A trial was held on the first of these cases in February 2012, and this resolution was reached prior to the Judge issuing a decision in the case.

The settlement agreement outlines the terms of the agreement, which include:
  • Watson is unable to market a generic version of Lidoderm until the U.S. Food and Drug Administration (FDA) approves Watson's abbreviated new drug application (ANDA) for its lidocaine patch 5% product.

  • If the FDA approves Watson's ANDA prior to September 15, 2013, Watson must wait until that day to market its generic product, except under certain limited circumstances.

  • Endo will provide $12 million in branded Lidoderm product, based on wholesale acquisition cost, to Watson each month from January through August of 2013.

  • If the FDA does not approve Watson's ANDA by Dec. 31st, 2013, Endo will provide $6.67 million in branded Lidoderm product, based on wholesale acquisition cost, to Watson each month in 2014 that Watson's ANDA has not received FDA approval.

  • If the FDA does not approve Watson's ANDA by Dec. 31st, 2014, Endo will provide $7.11 million in branded Lidoderm product, based on wholesale acquisition cost, to Watson each month from January 2015 through September 2015 that Watson's ANDA has not received FDA approval.

  • The license to Watson is exclusive as to Endo's launch of an authorized generic (AG) version of Lidoderm until the earlier of 1) the introduction of a generic version of Lidoderm by a company other than Watson, or 2) seven and a half months after Watson launches its generic version of Lidoderm.

  • During any exclusivity period Watson may have following the launch of its generic product, Watson will pay a 25% royalty on gross profit to Endo until another generic enters the market including any authorized generic.




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