QLT Inc. announced that the United States Court of Appeals for the First Circuit affirmed the judgment of the United States District Court for the District of Massachusetts in the lawsuit brought against QLT by Massachusetts Eye and Ear Infirmary (MEEI) in connection with events related to US patent No. 5,798,349 (the 349 patent) and certain of MEEI’s research results related to QLT’s Visudyne.
According to a press release by QLT, the Court of Appeals upheld the liability and damages aspects of the 2007 judgment of the District Court in which QLT was found liable under Massachusetts state law for unfair trade practices and ordered to pay to MEEI damages equal to 3.01% on past, present and future worldwide net sales of Visudyne plus interest and certain legal fees.
The decision of the District Court had included an award to MEEI of legal fees in an amount of $14.1 million, to which was applied a reduction of $3 million previously agreed to by MEEI. The Court of Appeals ordered that the amount of legal fees payable by QLT be remanded to the District Court for further consideration.
QLT is currently reviewing the decision of the Court of Appeals with its legal counsel and considering its options for further appellate review.
Unless the decision is altered on further review, based on net sales of Visudyne through December 31, 2008 of approximately $2.6 billion, QLT estimates that the amount of damages and interest that QLT is required to pay MEEI is approximately $113.2 million.
The amount of legal fees and post-judgment interest on those legal fees is yet to be determined. In addition, Massachusetts General Hospital has made a claim to QLT for increased payments based on the amounts QLT must pay to MEEI, a claim that QLT is disputing but that has not been resolved. Massachusetts General Hospital may commence litigation against QLT at any time.
As of September 30 2008, QLT had cash, short term investments and restricted cash totaling $279.9 million. That amount included restricted cash of approximately $124.0 million that is being used as security for the appeal bond that was posted in connection with the appeal in the MEEI litigation decided by the Court of Appeals.
Subject to further review, QLT expects that the current amount of the damages award will initially be paid out to MEEI from QLT’s restricted cash used to secure the appeal bond. Amounts owing under the District Court decision by QLT to MEEI on future quarterly sales of Visudyne will be recorded and paid as they are due.
As a result of the Court’s decision QLT will be mailing to shareholders on or about Friday January 16, 2009 a notice prescribed by Canadian securities laws describing this change in the Company’s affairs and extending the expiry date of the Company’s modified “Dutch Auction” tender offer.
SOURCE：AGIPNEWS
