) recently settled its pending litigation with
Impax Laboratories, Inc.
The litigation is related to Shire's supply of an authorized
generic version of Adderall XR. Both the parties entered
into a supply agreement in Oct 2009 pursuant to which Shire has
been supplying Impax with authorized generic Adderall XR.
However, in Nov 2010, Impax filed a suit against Shire
claiming that the latter had violated its supply contract for the
authorized generic version of Adderall XR. Impax sought
specific performance, equitable relief and damages from
Subsequently, Shire filed a counterclaim against Impax seeking
damages along with a declaratory judgment affirming that Shire
satisfied its obligations under the supply contract.
Shire stated that its ability to supply Adderall XR is
restricted by quota limits imposed by the US Drug Enforcement
Administration on amphetamine, an active ingredient of Adderall
Nevertheless, as per the settlement agreement, both Impax's
claim and Shire's counterclaim will be dismissed. The settlement
also requires Shire to make a one-time cash payment of $48.0
million to Impax.
In addition, Shire and Impax entered into an amended supply
agreement, which shall monitor the supply of authorized generic
Adderall XR from Shire to Impax up to Sep 30, 2014, when the
original supply contract expires.
We note that Shire reached an agreement in principle earlier
in Feb 2013 to resolve the previously disclosed civil
investigation into Shire's sales and marketing practices in the
The investigation was related to key drugs in the Attention
Deficit Hyperactivity Disorder (ADHD) market - Adderall XR,
Vyvanse and Daytrana.
Currently, Shire carries a Zacks Rank #3 (Hold). Other stocks
in the pharma sector that are currently well placed include
Eli Lilly and Company
). Both carry a Zacks Rank #2 (Buy).
BAYER A G -ADR (BAYRY): Free Stock Analysis
IMPAX LABORATRS (IPXL): Free Stock Analysis
LILLY ELI & CO (LLY): Free Stock Analysis
SHIRE PLC-ADR (SHPG): Free Stock Analysis
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