Disclosed in a regulatory filing, Warner Chilcott (WCRX) and Mayne Pharma have entered into a settlement and release agreement with Mylan (MYL) and Mylan Pharmaceuticals to resolve Mylan’s damages claim under the $36M bond posted by the company and Mayne in September 2011 in connection with patent infringement litigation against Mylan in respect of U.S. Patent No. 6,958,161 covering the Company’s DORYX 150 mg product. The merits of the litigation were previously resolved on October 15, 2012 upon issuance of the judgment of the U.S. Court of Appeals for the Federal Circuit affirming the U.S. District Court for the District of New Jersey’s decision upholding the validity of the DORYX Patent, but determining that Mylan’s proposed generic version of DORYX 150 did not infringe the DORYX Patent. Pursuant to the Agreement, among other things, (i) the Company has agreed to pay $12Mto Mylan in full satisfaction of Mylan’s damages claim under the Bond and (ii) Mylan’s damages claim will be dismissed and the Bond will be released. As a result of the Agreement, the Company expects to record an incremental charge in the quarter ended September 30 in the amount of $6M in addition to the $6M charge that the Company previously recorded in the quarter ended September 30, 2012. The Agreement will be submitted to, and is subject to the review of, the U.S. Department of Justice and the Federal Trade Commission.
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