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43. Commitments and contingencies

43.3 Contingencies

43.3 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.

43.3.1 Intellectual property matters (selected matters)

We vigorously protect our patent portfolio and our ability to bring medicines to patients as we deem necessary.  Consequently, UCB is involved in various litigation matters as a plaintiff in various jurisdictions in the U.S. and Europe, including actions relating to Vimpat®, Neupro®, Briviact® and bimekizumab.

Vimpat®

  • Spain:  As previously reported, a local generics company, Normon, challenged the patent. UCB won the first instance trial in the Court of Barcelona and the patent was maintained. Normon filed an appeal in July 2020. An appeal decision is expected late in 2021 or early 2022. 

  • Germany: Inventor compensation dispute whereby two former Schwarz inventors have filed 3 complaints against UCB alleging that the assignment of rights under the Toviaz® formulation patents is invalid and hence royalties from Pfizer should be paid to them.

Neupro®

  • United States: After successfully enforcing the basic formulation patent for Neupro® against Actavis, UCB is now seeking to enforce against Actavis a reformulation patent granted in 2019. The reformulation patent covers the stabilization of the Neupro® patch, which was necessary after Neupro® was removed from the U.S. market in 2008 due to crystals forming in the patch.   The trial took place in federal court in Delaware in 2020.  A decision is anticipated in early- to mid-2021.

  • Europe: In 2018, Mylan, Inc and Luye opposed the Neupro® reformulation patent granted in Europe.  The initial hearing took place in January 2021. A decision was rendered in UCB’s favor.

Briviact®

  • United States: The Briviact Patent Term Extension (PTE) application for the compound patent covering brivaracetam was recently granted and will expire in February 2026. Currently, 8 generic companies have filed ANDA’s.  UCB has filed complaints against all 8 ANDA filers in federal court in Delaware. The trial is expected to take place in 2021

bimekizumab

  • Europe – Opposition: A European patent granted recently to Genentech relates to IL-17A/F antibodies. UCB has filed an opposition with the European Patent Office (EPO). No hearing date is scheduled yet. The grandparent of this Genentech patent was revoked by the EPO. 

  • Europe – Litigation in EU: UCB has also filed revocation and non-infringement actions against the Genentech EU patent mentioned above in the United Kingdom, the Netherlands, Belgium, and Switzerland. In Italy, UCB filed an action seeking a declaration of non-infringement.

43.3.2 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 the insurance coverage will likely not be sufficient. the Group has accounted for a provision (refer to Note 34 ).

Opioid litigation:

UCB, Inc. (“UCB”) has been named as a defendant in thirteen state and federal lawsuits in connection with the national opioid litigation in the United States. The litigation began several years ago, when plaintiffs – primarily state and local governments – began filing suit against manufacturers, pharmacies 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 approximately 2 800 cases pending in the MDL.

In the spring of 2018, UCB was named in two opioid cases – one filed by an Arkansas municipality in Arkansas state court, and one purported class action filed by third-party payers 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 state court 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, subject to UCB’s efforts to have the cases dismissed.

In addition, a UCB contract manufacturer, Unither, was named in four MDL cases, all of which are stayed. The plaintiffs include a hospital, two municipalities in Puerto Rico and a county in Missouri. UCB has certain indemnity obligations to Unither.

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.

43.3.3 Investigations

Cimzia®

  • 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. On March 27, 2020, UCB was informed that DOJ was suspending the inquiry initiated by its office in Georgia. The Company is cooperating fully with DOJ and OIG.

  • Cimzia®  California Department of Insurance (CDI) Investigation: On 28 December 2020, the CDI contacted our outside counsel regarding an investigation it is conducting into UCB, Inc. relating to: (1) physician reimbursement directions for Cimzia® lyophilized powder; and (2) UCB’s relationships with certain group purchasing organizations.  The Company is cooperating fully with CDI.

Briviact®

  • 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.

43.3.4 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. In July 2019, DOJ appealed the denial of its motion to dismiss to the Seventh Circuit Court of Appeals. In August 2020, the Court of Appeals ruled in DOJ’s favor, which resulted in the dismissal of the case. On February 10, 2021, the relator filed a petition for writ of certiorari with the U.S. Supreme Court.

43.3.5 Concluded legal matters

  • Vimpat® - 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 September 12, 2019 after which the panel confirmed the validity of the SPC. Teva can appeal the decision until February 17, 2020. No appeal has been received which means that the validity ruling has become final and proceedings are terminated.

  • Xyzal®: UCB is engaged in litigation with Apotex concerning Xyzal® oral solution. The Xyzal® oral solution patent expiry date is October 2027. Apotex filed a petition with the United States Patent and Trademark Office (UPSTO) to invalidate the Xyzal® formulation patent. UCB’s licensee, Chattam, declined its right to be engaged in litigation. Consequently, UCB exercised its right to defend its patent. In June, the USPTO ruled in UCB’s favor.  Apotex has decided not to appeal the decision.

It is not anticipated that any other material liabilities will arise from the contingent liabilities other than those provided for (refer to Note 34 ).