Shire, Impax Settle Litigation Related to Supply of Adderall XR Authorized Generic
Shire plc (NASDAQ: SHPG), announces that its subsidiary, Shire LLC, has settled all pending litigation with Impax Laboratories, Inc. (NASDAQ: IPXL) over Shire's supply of an authorized generic version of Adderall XR. Shire has been supplying Impax with authorized generic Adderall XR since October 2009 pursuant to a supply agreement between the parties.
In November 2010, Impax filed suit claiming that Shire was in breach of its supply obligations, and Shire brought a counterclaim against Impax relating to its ordering practices under the agreement. Under the terms of the settlement, both Impax's claim and Shire's counterclaim will be dismissed, and the parties have entered into an amended supply agreement which will govern the supply of authorized generic Adderall XR from Shire to Impax until the end of the supply term on September 30, 2014. Also as part of the settlement, Shire will make a one-time cash payment to Impax of $48.0 million, which has been recorded as a liability at December 31, 2012. In accordance with US GAAP, as this represents a payment to a customer, the amount has been recorded in the Income Statement as a reduction in reported ADDERALL XR product sales and royalties in 2012. The reduction to revenues for the fourth quarter of 2012 was $8.0 million, with the balance having been recorded in earlier periods. The above mentioned charges will not change Shire's updated financial guidance for 2012 and 2013, as provided on January 8, 2013.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.