42 Commitments and contingencies

42 Commitments and contingencies

42.1 Capital and other commitments

At 31 December 2019, the Group has committed to spend € 62 million (2018: € 43 million) mainly with respect to expected capital expenditures for the new biological production unit, the bimekizumab production line and the new development building on the Braine site as well as for revamping of offices in Braine and Anderlecht.

UCB has entered into long-term development agreements with various pharmaceutical enterprises, clinical trial operators and financial investors. Such collaboration agreements may include milestone payments which are dependent on successful clinical development or on meeting specified sales targets. The table below sets out the maximum that would be paid if all milestones, however unlikely, are achieved but excludes variable royalty payments based on unit sales and amounts accrued for milestones already achieved. The amounts are not risk-adjusted or discounted and the timing of the payments is based on the Group’s current best estimate of achievement of the relevant milestones.




€ million



Less than 1 year



Between 1 and 5 years



More than 5 years









UCB has concluded several agreements with Contract Manufacturing Organizations for the supply of its products. Total outstanding commitments towards these CMOs amount to € 482 million as per end of 2019 (2018: € 415 million).

As part of UCB’s innovation strategy, UCB has established a corporate venture fund, UCB Ventures. The main objectives of the fund are to add breadth to UCB’s innovation ecosystem, to create a window on new technologies, products, platforms and channels to augment or complement UCB’s existing activities, to develop network and strategic relationships in the venture capital investor community to identify opportunities that UCB might not otherwise see. Within this framework UCB has outstanding commitments at the end of 2019 for a total amount of USD 8 million relating to investments in venture capital funds.

42.2 Guarantees

Guarantees arising in the normal course of business are not expected to result in any material financial loss.

42.3 Contingencies

The Group continues to be actively involved in litigations, claims and investigations. The on-going matters could result in liabilities, civil and criminal penalties, loss of product exclusivity and other costs, fines and expenses associated with findings adverse to UCB’s interests. Potential cash outflows reflected in a provision might take into account the full or partial off-set by insurance in certain circumstances. UCB has not established provisions for potential damage awards for certain additional legal claims against our subsidiaries if UCB currently believes that a payment is either not probable or cannot be reliably estimated.

42.3.1 Intellectual property matters (selected matters)


  • Accord and Teva German Litigation: In the third quarter of 2017, Accord Healthcare and Teva filed nullity actions in the German Patent Court, seeking to invalidate the German part of the European Vimpat® patent/supplementary protection certificate (SPC). Accord has withdrawn its appeal. Teva is continuing its action against the SPC. A hearing in the Federal Patent Court took place on 12 September 2019 after which the panel confirmed the validity of the SPC. Teva can appeal the decision until 17 February 2020. No appeal has been received as of 18 February 2020.
  • Laboratorios Normon, Spanish Litigation: In October 2017, UCB was notified by the Court of Barcelona that a nullity action against the Spanish part of the European Vimpat® patent was filed by Laboratorios Normon, S.A. Trial took place in July 2019, and a decision is expected in 2020.


  • Watson (Actavis) Delaware District Court Abbreviated New Drug Application (ANDA) Litigation: In June 2019 the Court of Appeals for the Federal Circuit affirmed the District Court decision upholding the validity of the Orange Book (OB) listed 6,884,434 patent. UCB has filed a follow-on paragraph IV ANDA suit against Actavis on the basis of its newly granted ‘589 reformulation patent. Trial is set to take place in October 2020.
  • Zydus Delaware District Court ANDA litigation: In November 2016, UCB filed suit in the District Court against Zydus Pharmaceuticals, who is seeking approval of its generic version of Neupro®. Zydus filed a paragraph IV certification challenging, among other things, the validity of certain patents pertaining to Neupro®. The case was stayed until August 2019, UCB required Zydus to convert into Paragraph III, i.e. to wait for expiry of UCB’s Orange Book listed patents.
  • Mylan Delaware District Court ANDA Litigation: In March 2017, UCB filed suit in the district court against Mylan Pharmaceuticals, who is seeking approval of its generic version of Neupro®. Mylan filed a paragraph IV certification challenging, among other things, the validity of certain patents pertaining to Neupro®. UCB has also now asserted UCB’s newly granted and Orange Book listed reformulation patents ‘589 and ‘174. The case has now been transferred to the District Court of Vermont. The trial is scheduled for November 2020 and the Markman hearing will take place on 10 March 2020. In parallel, an opposition proceeding instigated by Luye and Mylan against UCB’s European reformulation patent is pending; oral proceedings will take place in May 2020.


  • Xyzal® and Xyzal Allergy 24HR® ANDA litigation: UCB is engaged in ANDA litigation with Apotex for Xyzal® oral solution. Apotex had previously filed a petition for Inter Partes Review (IPR) with the United States Patent and Trademark Office (USPTO) of the Xyzal® patent relating to a Xyzal® children formulation. The ANDA litigation has been stayed pending resolution of the IPR. The USPTO instituted trial in July 2019 and UCB filed its response in October 2019.

42.3.2 Product liability matters

  • Distilbène product liability litigation – France: France Entities of the UCB Group have been named as defendants in several product liability cases in France. The claimants in these actions claim that their mothers took Distilbène, a former product of the UCB Group, during their pregnancy, and that as a result of this they suffered bodily injuries. The Group has product liability insurance in place but as this insurance cover will likely not be sufficient, the Group has accounted for a provision. (See Note 33).
  • Opioid Litigation: UCB, Inc. (“UCB”) has been named as a defendant in thirteen state and federal lawsuits in connection with the national opioid litigation. The litigation began several years ago, when plaintiffs – primarily state and local governments – began filing suit against manufacturers and distributors of opioids, alleging generally that: (1) manufacturers worked in concert to perpetuate a false marketing scheme by overstating the safety and efficacy, and understating the risks, of long-term opioid use for chronic pain; and (2) all defendants failed to prevent diversion, and failed to monitor, report and prevent suspicious orders. Plaintiffs assert claims for public nuisance, RICO, civil conspiracy, negligence, fraud/fraudulent misrepresentation, strict products liability, and various state-specific claims.

    In December 2017, the Judicial Panel on Multidistrict Litigation created a multidistrict litigation (MDL) in the Northern District of Ohio to address the cases pending in federal courts. There are currently more than 2,600 cases pending in the MDL.

    In the spring of 2018, UCB was named in two opioid cases – one filed by the Arkansas Prosecuting Attorney in Arkansas state court, and one purported class action filed by third-party payors in the Southern District of Alabama. UCB was dismissed from the Arkansas action in January 2019, after the court concluded the allegations against it were insufficient to establish the court’s personal jurisdiction. The Alabama case was subsequently transferred to the MDL, where it has been stayed.

    In March 2019, four Kentucky plaintiffs amended their complaints to add UCB as a defendant. Three of the cases were brought by hospital plaintiffs and the fourth was brought on behalf of Clay County, Kentucky. These cases have been stayed in the MDL.

    In July 2019, eight Utah counties amended their complaints, adding UCB and other opioid manufacturers as defendants. These actions were consolidated in the Third District Court of Summit County, Utah, where they remain pending.

    In addition, a UCB contract manufacturer, Unither, was named in three MDL cases. One of the cases was brought by hospital plaintiffs, and the two others by municipalities in Puerto Rico. UCB has certain indemnity obligations to Unither. These cases have been stayed.

    None of the complaints contain specific allegations against UCB. The only direct allegation made against UCB is that it manufactures, markets, and distributes opioids in the U.S. While one UCB product is identified in one complaint, there are no other references to any UCB product in any of the other complaints.

    UCB’s overall market share of opioid products remained low throughout the time period at issue. During the 2006-2012 time period, UCB had 0.2% of the nationwide manufacturer market share for hydrocodone and oxycodone pills.

42.3.3 Investigations

  • CIMZIA Investigation: In March 2019, UCB Inc. received a Civil Investigative Demand (CID) from the U.S. Department of Justice (DOJ) and a subpoena from the Department of Health and Human Services (HHS) Office of Inspector General (OIG) both seeking information relating to the sales and marketing practices and pricing of Cimzia® for the periods from 2011 and 2008, respectively, to date. The Company is cooperating fully with DOJ and OIG.
  • BRIVIACT Investigation: In November 2019, UCB, Inc. was served with a CID by DOJ seeking information relating to Briviact® for the period from 2011 to date. The Company is cooperating fully with DOJ.

42.3.4 Other matters

Cimzia® CIMplicity® Lawsuit: In March 2018, UCB, Inc. was served with a lawsuit alleging that since 2011, the Cimzia® CIMplicity® program, namely the nurse educator services and reimbursement services provided by a UCB vendor, violated federal and state false claims act and anti-kickback statutes. In December 2018, the DOJ moved to dismiss the case. The Court denied the motion, as well as DOJ’s motion for reconsideration. In May 2019, the whistleblower filed an amended complaint. In June, UCB filed a motion to dismiss the case on the basis that its activities did not violate the law. In July 2019, DOJ appealed the denial of its motion to dismiss to the Seventh Circuit Court of Appeals. The case has been stayed pending appeal. The Company has fully cooperated with DOJ in its efforts to dismiss the complaint.

42.3.5 Concluded legal matters


  • Delaware District Court Litigation: In June 2013, UCB filed suit in the District Court of Delaware, against 16 defendants, who were seeking approval of their generic versions of Vimpat®. The defendants filed certifications challenging, among other things, the validity of the RE38,551 (‘551) Vimpat patent. In August 2016, the court ruled in UCB’s favor and upheld the validity of the patent. The defendants appealed and May 2018, the Court of Appeals for the Federal Circuit affirmed the decision. In October 2018, Accord Healthcare and Intas Pharmaceuticals filed a petition for certiorari in the U.S. Supreme Court, which was denied in November 2018. In November 2018, Mylan, Sun and Alembic, filed another petition for certiorari to the U.S. Supreme Court. In April 2019, the U.S. Supreme Court denied the petition for certiorari.
  • Additional Delaware District Court Litigation: In 2016, UCB filed suit in the District Court of Delaware against three defendants, Hetero, Zydus and Aurobindo, who were seeking approval of a second generic version of Vimpat®. The parties stipulated that the outcome of the initial Delaware litigation controlled and terminated these second wave cases.
  • Inter Partes Review (IPR): In November 2015, Argentum Pharmaceuticals filed a petition for an IPR before the U.S. Patent and Trademark Office (USPTO) and Patent Trial and Appeal Board (PTAB), seeking to invalidate the Vimpat® ‘551 patent. In May 2016, the PTAB instituted the review. Mylan, Breckenridge, and Alembic have joined the IPR. In March 2017, the PTAB upheld the validity of the ‘551 patent. Argentum did not appeal the decision, but Mylan, Breckenridge, and Alembic have appealed the decision to the Court of Appeals for the Federal Circuit. In February 2019, the Federal Circuit affirmed the PTAB’s earlier finding that the Vimpat patent is valid. None of the appellants has timely requested a rehearing and/or a review by the U.S. Supreme Court.
  • Accord U.K. Litigation: In July 2016, Accord Healthcare filed a legal action before the United Kingdom High Court, requesting a declaration of invalidity and revocation of European Patent (U.K.) 0 888 829, disclosing and claiming lacosamide. In November 2017, the Court ruled in UCB’s favor, confirming the validity of the UK part of the European patent. Accord initially appealed the decision to UK Court of Appeal, but recently withdrew its appeal.


  • Mylan Inter Partes Review (IPR): In January 2016, Mylan Pharmaceuticals filed a petition for an IPR before the USPTO, seeking to invalidate all of the Orange Book listed patents pertaining to Toviaz®. In July 2016, the PTAB instituted the review. Alembic, Torrent and Amerigan have filed joinder motions. In July 2017, the PTAB upheld the validity of all of the Orange Book listed patents. Mylan has appealed the PTAB ruling at the Federal Circuit together with the ruling of the District Court of Delaware in UCB’s favor. Amerigan joined the appeal. In January 2019, the Federal Circuit ruled in UCB’s favor. None of the appellants timely filed an appeal.
  • Adair Patent Litigation – Chugai: On 14 December 2016, Chugai Pharmaceuticals filed a legal action in the United Kingdom Patents Court, seeking a declaration that the sale of their product Actemra® does not infringe UCB’s U.S. patent 7 556 771. Trial was held in March 2018. The Court found in favor of Chugai in a decision rendered in August 2018. UCB has withdrawn its appeal.

It is not anticipated that any other material liabilities will arise from the contingent liabilities other than those provided for (see Note 33 of the 2019 Annual Report).