PDL disagrees with certain aspects of court's decisions on litigation with MedImmune

PDL BioPharma, Inc.Jan 11 2011

PDL BioPharma, Inc. (PDL) (Nasdaq: PDLI) today announced that on January 7, 2011, the United States District Court for the Northern District of California issued summary judgment order deciding certain issues favorably and other issues adversely to PDL in its litigation with MedImmune.  PDL disagrees with certain aspects of the court's decisions which are adverse to the Company and is evaluating its legal options, including appeal of these decisions.  The sole patent claim at issue in the MedImmune litigation does not cover the products currently marketed by Genentech/Roche.

Specifically, the court ruled that:

1. The sole patent claim that PDL has asserted in the litigation as the basis on which MedImmune's product Synagis® infringes PDL's patent rights, Claim 28 of Queen et al., United States Patent No. 6,180,370, is invalid as anticipated by prior art;
2. MedImmune did not breach its obligations under its license agreement with PDL by failing to pay royalties on sales of Synagis by its exclusive ex-US distributor, Abbott;
3. MedImmune is not entitled to recoup from PDL royalties on sales of Synagis that MedImmune paid based on European patent rights that were ultimately revoked; and
4. A jury must decide on PDL's claim that MedImmune breached its license agreement by demanding that PDL consent to commercially unreasonable and contractually insupportable conditions to permit an audit of sales and revenue associated with Synagis by an independent accountant.

A jury trial that had been scheduled to commence in January of 2011 was previously postponed by the court in December 2010.  A new trial date is expected to be set shortly.

In the event that MedImmune prevails on its most favored licensee claim in the litigation, the Company expects that MedImmune will request the court to order PDL to repay some or all of the royalty payments previously made to PDL under MedImmune's license to the Queen et al. patents.  MedImmune has paid PDL more than $280 million in royalties under the MedImmune agreement from 1998 through the end of 2009 MedImmune did not pay PDL royalties in 2010.  PDL has previously disclosed revenue guidance for the full year ended December 31, 2010 of $345 million which does not include any revenues from MedImmune.