UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 11, 2011
(Exact Name of Registrant as Specified in Charter)
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| Delaware
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000-31191
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04-3324394 |
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| (State or Other Jurisdiction
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(Commission
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(IRS Employer |
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File Number)
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Identification No.) |
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| 8 Sylvan Way |
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| Parsippany, New Jersey
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07054 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (973) 290-6000
Not applicable.
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On February 11, 2011, The Medicines Company (the “Company”) entered into a Settlement Agreement and
Release (the “Settlement Agreement”) with Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”)
with respect to all potential claims and causes of action between the parties related to United
States Patent No. 5,196,404 (the “‘404 patent”), the extension of the term of the ‘404 patent, any
alleged late filing of the request for an extension of the term of the ‘404 patent and any efforts
to cure such alleged late filing.
Under the Settlement Agreement, WilmerHale agrees to make available to the Company approximately
$232 million, consisting of approximately $117 million from the proceeds of professional liability
insurance policies and $115 million of payments from WilmerHale itself. As described below, a
portion of the available funds will be paid to the Company shortly after entry into the Settlement
Agreement, but most of the available funds would be paid only if the Company suffers damages in the
event that a generic version of the Company’s product bivalirudin is sold in the United States
before June 15, 2015 because the extension of the ‘404 patent is held invalid on the basis that the
application for the extension was not timely filed. Payments by WilmerHale itself would be made
only after payments from its insurance policies are exhausted and cannot exceed $2.875 million for
any calendar quarter.
Pursuant to the Settlement Agreement, WilmerHale will pay approximately $18 million from its
professional liability insurance providers to the Company within sixty (60) days after the date of
the Settlement Agreement. The balance of the approximately $232 million aggregate amount provided
in the Settlement Agreement remains available to pay (1) future expenses incurred by the Company in
continuing to defend the extension of the ‘404 patent, and (2) any damages that may be suffered by
the Company in the event that a generic version of the Company’s product bivalirudin is sold in the
United States before June 15, 2015 because the extension of the ‘404 patent is held invalid on the
basis that the application for the extension was not timely filed. The Settlement Agreement
contains a formula for determining the amount of damages suffered, on a quarterly basis, in the
event of generic entry. The Settlement Agreement also contains provisions under which the Company
will seek to recover damages from third parties potentially liable to the Company and to reimburse
or share with WilmerHale certain damage recoveries from such third parties.
The Company and WilmerHale also agree to a mutual release of claims arising from or relating to the
‘404 patent, the extension of the term of the ‘404 patent, any alleged late filing of any request
for an extension of the term of the ‘404 patent, any efforts to cure such alleged late filing or
any related matter, other than obligations set forth in the Settlement Agreement. The Settlement
Agreement also contains provisions including indemnification, confidentiality, dispute resolution
and other customary provisions for an agreement of this kind.
The foregoing summary description of certain terms of the Settlement Agreement is qualified in its
entirety by reference to the full text of the Settlement Agreement, which the Company intends to
file as an exhibit to its Quarterly Report on Form 10-Q for the quarter ending March 31, 2011.
WilmerHale is outside legal counsel to the Company for securities reporting, general corporate
counseling, business development transactions and other matters from time to time.