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Shire pays Impax $48 million

Published on 12/02/13 at 11:31am
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Shire has paid $48 million to settle a long-running legal spat with Impax Laboratories over Shire’s supply of an authorised generic version of Adderall XR. 

Shire sells its own branded version of the hyperactivity drug and has been supplying California-based Impax with 5mg, 10mg, 15mg, 20mg, 25mg and 30mg doses since October 2009.

The problems began in November 2010 when Impax filed suit against Shire for breach of contract, alleging that Shire had failed to fulfil its orders for the drug, thus letting customers down and losing Impax money in fourth quarter sales.

“Because of Shire’s failure to continue to supply us with product in accordance with our agreement, we have been unable to continue to satisfy our customers’ demands, resulting in declining sales and market share for this product,” Impax alleged in 2010.

The company said it had ‘made numerous attempts’ to resolve supply problems, but believed Shire had “no intention of filling our open orders” - hence the legal action.

The row became increasingly bitter as Shire filed a counterclaim which brought into question Impax’s ordering practices under a licensing and distribution agreement dating back to 2006.

With the newly-announced one-off multi-million dollar settlement, it is all smiles again, however: the legal action by both parties will now be dismissed and the companies have also amended their agreement.

After September 30 2014 - the end of the agreed supply term - Impax will have the right to sell the generic Adderall that it is owed by Shire and will carry on paying Shire a profit share.

Impax is also waiting for FDA approval of an Abbreviated New Drug Application for generic Adderall XR.

Shire has booked the $48 million as a liability in its 2012 accounts, knocking $8 million off its revenue in the fourth quarter as the balance has been accounted for in earlier announcements.

The company says the loss will not change its updated financial guidance for 2013. In addition to the Impax agreement, Shire has a link-up with Teva to sell an authorised version of Adderall.

In June last year US regulators surprised many by allowing Actavis Group to produce its own generic, thus creating three versions of Adderall on to the market and driving pieces down further. 

Shire’s sales of Adderall XR fell 69% between 2009 and 2010.

Adam Hill

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