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Commitments and Contingent Liabilities | 9 Months Ended
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Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingent Liabilities | 16. COMMITMENTS AND CONTINGENT LIABILITIES Litigation From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated, the Company would accrue a liability for the estimated loss. Because of uncertainties related to claims and litigation, accruals are based on the Company’s best estimates, utilizing all available information. On a periodic basis, as additional information becomes available, or based on specific events such as the outcome of litigation or settlement of claims, the Company may reassess the potential liability related to these matters and may revise these estimates, which could result in material adverse adjustments to the Company’s operating results. At September 30, 2023, there were no potential material losses from claims, asserted or unasserted, or legal proceedings that the Company determined were probable of occurring. Janssen Arbitration Proceedings In April 2022, Alkermes Pharma Ireland Limited commenced binding arbitration proceedings to settle, among other things, whether, notwithstanding Janssen Pharmaceutica’s partial termination of two license agreements with the Company, Janssen Pharmaceutica has a continuing obligation to pay royalties on sales in the U.S. of INVEGA SUSTENNA, INVEGA TRINZA, INVEGA HAFYERA and CABENUVA. On May 31, 2023, the Company received a Final Award from the Tribunal in these arbitration proceedings. The Final Award reiterated the Tribunal’s findings from, and incorporated by reference, the first interim award and second interim award issued by the Tribunal on December 21, 2022 and April 19, 2023, respectively. As a result of the Final Award, in June 2023 the Company received payment for back royalties, including certain late-payment interest, related to 2022 U.S. net sales of INVEGA SUSTENNA, INVEGA TRINZA, INVEGA HAFYERA and CABENUVA and is entitled to 2023 and future royalty revenues from Janssen Pharmaceutica related to net sales of INVEGA SUSTENNA through August 20, 2024, INVEGA TRINZA through the second quarter of 2030 (but no later than May 2030 when the applicable license agreement expires), INVEGA HAFYERA through May 2030 (when the applicable license agreement expires) and CABENUVA through December 31, 2036. Refer to Note 3, Revenue from Contracts with Customers within the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information regarding royalty revenue recognized following the issuance of the Final Award. The arbitration was conducted pursuant to the Institute for Conflict Prevention and Resolution (CPR) Rules for Non-Administered Arbitration before a panel of three arbitrators. On June 28, 2023, the Company filed an unopposed petition to confirm the Final Award and enter judgment thereon with the U.S. District Court for the Southern District of New York (the “NY Southern District Court”), and on June 30, 2023, Janssen Pharmaceutica filed a notice of non-opposition to such petition. On August 18, 2023, the NY Southern District Court granted the Company’s motion to confirm the Final Award. INVEGA SUSTENNA ANDA Litigation Janssen Pharmaceutica and Janssen Pharmaceuticals, Inc. initiated patent infringement lawsuits in the U.S. District Court for the District of New Jersey (the “NJ District Court”) in January 2018 against Teva Pharmaceuticals USA, Inc. (“Teva”) and Teva Pharmaceuticals Industries, Ltd. (“Teva PI”) (such lawsuit, the “Teva Lawsuit”), in August 2019 against Mylan Laboratories Limited (“Mylan Labs”) and other Mylan entities (the “Mylan Lawsuit”), in December 2019 against Pharmascience, Inc. (“Pharmascience”), Mallinckrodt plc, and SpecGX LLC (the “Pharmascience Lawsuit”), and in February 2022 against Accord Healthcare, Inc., Accord Healthcare, Ltd. and Intas Pharmaceuticals, Ltd (“Accord” and such lawsuit, the “Accord Lawsuit”), and in the U.S. District Court for the District of Delaware (the “DE District Court”) in December 2021 against Tolmar Holding, Inc., Tolmar Pharmaceuticals, Inc., Tolmar Therapeutics, Inc., and Tolmar, Inc. (“Tolmar” and such lawsuit, the “Tolmar Lawsuit”), following the respective filings by each of Teva, Mylan Labs, Pharmascience, Accord and Tolmar of an Abbreviated New Drug Application (“ANDA”) seeking approval from the FDA to market a generic version of INVEGA SUSTENNA before the expiration of U.S. Patent No. 9,439,906. In October 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Teva Lawsuit. In December 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Mylan Lawsuit, based on the parties’ prior stipulation to be bound by the judgment in the Teva Lawsuit. The Teva entities and Mylan Labs each filed notices of appeal of their respective judgments with the U.S. Court of Appeals for the Federal Circuit, which were consolidated in January 2022 (the “Teva Appeal”). A trial was held in the Tolmar Lawsuit in October 2023. The Pharmascience Lawsuit and the Accord Lawsuit were administratively terminated in July 2022, pending the outcome of the Teva Appeal. The Company is not a party to any of these proceedings. INVEGA TRINZA ANDA Litigation In September 2020, Janssen Pharmaceutica, Janssen Pharmaceuticals, Inc., and Janssen Research & Development, LLC initiated a patent infringement lawsuit in the NJ District Court against Mylan Labs, Mylan, and Mylan Institutional LLC following the filing by Mylan Labs of an ANDA seeking approval from the FDA to market a generic version of INVEGA TRINZA before the expiration of U.S. Patent No. 10,143,693 (the “’693 Patent”). Requested judicial remedies include recovery of litigation costs and injunctive relief. In May 2023, the NJ District Court issued an opinion in favor of the Janssen entities on the issues of infringement and validity of the ’693 Patent and the Mylan entities filed a notice of appeal of the decision. The Company is not a party to this proceeding. VIVITROL ANDA Litigation In September 2020, Alkermes, Inc. and Alkermes Pharma Ireland Limited filed a patent infringement lawsuit in the NJ District Court against Teva and Teva PI following the filing by Teva of an ANDA seeking approval from the FDA to engage in the commercial manufacture, use or sale of a generic version of VIVITROL (naltrexone for extended-release injectable suspension) before the expiration of the Company’s U.S. Patent No. 7,919,499. A bench trial was held in February 2023 and closing arguments were heard in June 2023. On August 29, 2023, Alkermes, Inc. and Alkermes Pharma Ireland Limited entered into a confidential settlement and license agreement (the “Settlement Agreement”) with Teva to resolve the proceedings between the parties. Pursuant to the terms of the Settlement Agreement, the Company has granted Teva a non-exclusive, royalty-free, non-transferable, non-sublicensable limited license to make, have made, use, import, sell and offer for sale Teva’s product made under Teva’s ANDA in the U.S. beginning on January 15, 2027, or earlier under certain circumstances. The Company and the Teva entities have submitted the Settlement Agreement for review to the U.S. Federal Trade Commission and the U.S. Department of Justice. Pursuant to the Settlement Agreement, on August 30, 2023, the Company and Teva filed a joint proposed Stipulated Consent Judgment and Injunction with the NJ District Court requesting that the court dismiss the pending litigation proceedings between the parties. On September 18, 2023, the NJ District Court approved such Stipulated Consent Judgment and Injunction. VUMERITY ANDA Litigation On July 6, 2023, Biogen Inc., Biogen Swiss Manufacturing GmbH and Alkermes Pharma Ireland Limited filed a patent infringement lawsuit in the DE District Court against Zydus Worldwide DMCC, Zydus Pharmaceuticals (USA) Inc. and Zydus Lifesciences Limited (collectively, “Zydus”) following the filing by Zydus of an ANDA seeking approval from the FDA to engage in the commercial manufacture, use or sale of a generic version of VUMERITY (diroximel fumarate) delayed-release capsules for oral use, 231 mg, before expiration of the Company’s U.S. Patent Nos. 8,669,281; 9,090,558; and 10,080,733. The filing of the lawsuit triggered a stay of FDA approval of the ANDA for up to 30 months in accordance with the U.S. Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”). On October 11, 2023, Zydus filed an answer to the complaint. Government Matters The Company has received a subpoena and civil investigative demands from U.S. state and federal governmental authorities for documents related to VIVITROL. The Company is cooperating with the investigations. Product Liability and Other Legal Proceedings The Company is involved in litigation and other legal proceedings incidental to its normal business activities, including product liability cases alleging that the FDA-approved VIVITROL labeling was inadequate and caused the users of the product to suffer from opioid overdose and death. The Company intends to vigorously defend itself in these matters. In addition, in January 2023, Acorda filed a petition with the NY Southern District Court asking the court to confirm in part and modify in part the final arbitral award rendered by an arbitration panel in October 2022 and, as part of the requested modification, seeking an additional approximately $66.0 million in damages. On August 4, 2023, the NY Southern District Court confirmed the final arbitral award but declined to modify the final award to increase the damages awarded thereunder. On September 1, 2023, Acorda filed a notice of appeal of the NY Southern District Court decision to the U.S. Court of Appeals for the Federal Circuit. On September 22, 2023, the Company filed a motion to transfer the appeal to the U.S. Court of Appeals for the Second Circuit and on October 10, 2023, Acorda filed an opposition to such motion. While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing proceedings would have a material adverse effect on the Company’s business or financial condition.

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