Bayer Group - Investor-Relations

BAYER ANNUAL REPORT 2011 CONSOLIDATED FINANCIAL STATEMENTS 259
Blood glucose monitoring devices: In 2007 Roche Diagnostics Operations and Corange International
commenced a lawsuit in the United States against Bayer and several other parties alleging infringement
of two of Roche’s patents relating to blood glucose monitoring devices. Two of the accused devices are
sold by Bayer as part of its Breeze 2 and Contour systems. Bayer believes that these patents are
covered by an existing license agreement between the parties, and the litigation has been dismissed in
favor of an arbitration under this earlier license agreement. Roche has added to the arbitration four additional
patents which Roche alleges the Bayer Contour systems infringe. The proceedings and fi ndings
of the arbitration are confi dential. At this time, Bayer does not believe that the outcome of the arbitration
will have a material effect on the Bayer results.
Betaferon / Betaseron : In 2010 Bayer fi led a complaint against Biogen Idec ma Inc. in u.s.�federal
court seeking a declaration by the court that a patent issued to Biogen in 2009 is invalid and not infringed
by Bayer’s production and distribution of Betaseron , Bayer’s drug product for the treatment of
multiple sclerosis. Biogen is alleging patent infringement by Bayer through Bayer’s production and
distribution of Betaseron and Extavia and has sued Bayer accordingly. Betaseron is manufactured
and distributed in the United States by Bayer. Extavia is also a drug product for the treatment of
multiple sclerosis; it is manufactured by Bayer, but distributed in the United States by Novartis Pharmaceuticals
Corporation, another defendant in the lawsuit.
Levitra : In 2009 Bayer fi led a patent infringement suit in u.s. federal court against Teva Pharmaceuticals
usa, Inc. and Teva Pharmaceutical Industries Ltd. Earlier that year, Bayer had received notice of
an anda iv pursuant to which Teva seeks approval to market a generic version of Levitra , Bayer’s
therapy for the treatment of erectile dysfunction, prior to patent expiration in the United States. Bayer
has reached agreement with Teva to settle the patent litigation. Under the settlement terms agreed
upon, Teva will obtain a license to sell its generic version of Levitra in the United States shortly before
patent expiration in October 2018. The impact on the Levitra business in the u.s. is expected to
be immaterial. Teva acknowledges the validity and enforceability of Bayer’s patents.
Bayer believes it has meritorious defenses in the above patent disputes and intends to defend itself
vigorously.
FURTHER LEGAL PROCEEDINGS
Wholesale prices in the u.s.: Bayer and a number of pharmaceutical companies in the United States
are�defendants in pending lawsuits in which plaintiffs, including states, are alleging manipulation in the
reporting of wholesale prices and / or best prices for their prescription pharmaceutical products. The
plaintiffs seek damages, including disgorgement of profi ts and punitive damages. Bayer believes it has
meritorious defenses and intends to defend itself vigorously. In appropriate cases Bayer has agreed to
settlements and will continue to consider this option in the future.
Bayer Pharma AG former shareholder litigation: In 2008 the squeeze-out of the former minority
shareholders of Bayer Pharma AG (formerly named Bayer Schering Pharma AG), Berlin, Germany, became
effective. As usual in such cases, several shareholders have initiated special court proceedings to
review the adequacy of the compensation payments made by Bayer for the transfer of the shares in the
squeeze-out. The adequacy of the compensation and the guaranteed dividend paid by Bayer in connection
with the Bayer Pharma AG profi t and loss transfer agreement made in 2006 is also being reviewed
by the courts.
Notes
32. Legal risks