LEGAL PROCEEDINGS
−Removed: In May 2019, Theravance Biopharma, which is the owner of 85% of the economic interests in TRC, initiated arbitration against the Company and TRC, relating to a dispute as to the determination by Innoviva (as manager of TRC) to cause TRC to explore potential reinvestment opportunities for the royalty proceeds received by GSK into initiatives that Innoviva believes will increase the value of TRC and TRELEGY® ELLIPTA®.
−Removed: Theravance Biopharma alleged that, in causing TRC to not distribute substantially all royalty proceeds received from GSK, Innoviva breached the limited liability company operating agreement governing TRC (the “Operating Agreement”), as well as the fiduciary duties applicable to Innoviva as manager of TRC.
+Added: In May 2019, Theravance Biopharma, which is the owner of 85% of the economic interests in TRC, initiated arbitration against Innoviva and TRC, relating to a dispute as to the determination by Innoviva (as manager of TRC) to cause TRC to explore potential reinvestment opportunities for the royalty proceeds received by GSK into initiatives that Innoviva believes will increase the value of TRC and TRELEGY ® ELLIPTA ® .
+Added: Theravance Biopharma alleged that, in causing TRC to not distribute substantially all royalty proceeds received from GSK, Innoviva breached the limited liability company operating agreement governing TRC (the “Operating Agreement”), as well as the fiduciary duties applicable to Innoviva as manager of TRC.
The hearing in respect of the arbitration was conducted from July 23, 2019 through July 25, 2019.
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The arbitrator ruled that Innoviva did not breach the Operating Agreement or its fiduciary duties by withholding royalties or pursuing reinvestment opportunities.
−Removed: Accordingly, the Company is permitted to continue to pursue development and commercialization initiatives.
+Added: Accordingly, Innoviva is permitted to continue to pursue development and commercialization initiatives.
The arbitrator did conclude that Innoviva breached a provision of the Operating Agreement requiring Innoviva to deliver quarterly financial plans to Theravance Biopharma.
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Finally, the arbitrator ruled that the Company is entitled to indemnification from TRC for 95% of its fees and expenses incurred in connection with the arbitration.
−Removed: On September 30, 2019, the Company and TRC filed a Verified Complaint in the Court of Chancery of the State of Delaware (“Court of Chancery”) to confirm the arbitration award.
+Added: On September 30, 2019, Innoviva and TRC filed a Verified Complaint in the Court of Chancery of the State of Delaware (“Court of Chancery”) to confirm the arbitration award.
The award was confirmed by the Court of Chancery on May 4, 2020.
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Accordingly, on August 5, 2020, the parties stipulated to the dismissal of the Court of Chancery action.
−Removed: On October 6, 2020, Theravance Biopharma initiated a new arbitration against the Company and TRC, challenging Innoviva’s authority as manager of TRC to cause TRC to pursue non-Trelegy related investment opportunities and again alleging that Innoviva is required to cause TRC to distribute substantially all royalty proceeds from GSK.
−Removed: An arbitration hearing is scheduled for the first quarter of 2021.
−Removed: The Company intends to vigorously defend against the allegations in the new arbitration demand, but there can be no assurances that the defense will be successful.
+Added: On October 6, 2020, Theravance Biopharma initiated a new arbitration against Innoviva and TRC, challenging Innoviva’s authority as manager of TRC to cause TRC to pursue non-Trelegy related investment opportunities and again alleging that Innoviva is required to cause TRC to distribute substantially all royalty proceeds from GSK.
+Added: The hearing in respect of the arbitration was conducted from February 16, 2021 through February 19, 2021.
+Added: Post-arbitration oral argument was heard on March 8, 2021.
+Added: On March 30, 2021, the arbitrator issued a final decision.
+Added: The arbitrator ruled that Innoviva did not breach the Operating Agreement or its fiduciary duties by withholding royalties to pursue non-Trelegy-related investment opportunities.
+Added: Additionally, the arbitrator ruled that the Company is entitled to indemnification from TRC for 100% of its fees and expenses reasonably incurred in connection with the arbitration.
+Added: On April 15, 2021, Innoviva filed a Verified Complaint in the Court of Chancery to confirm the arbitration award.
+Added: On May 19, 2021, Theravance Biopharma submitted an answer to the Verified Complaint and filed a Motion to Modify the Arbitral Award, alleging that it contained a mathematical error.
+Added: The parties filed a proposed stipulation to remand the motion to Chancellor Chandler for his consideration, which the Court of Chancery granted.
+Added: On June 25, 2021, Innoviva submitted a brief to Chancellor Chandler in opposition to the motion and on July 15, 2021, Theravance Biopharma submitted a reply brief.
+Added: On August 6, 2021, Chancellor Chandler issued a modified final award, which did not affect any of his ultimate conclusions.
+Added: The modified award was confirmed by the Court of Chancery on September 16, 2021.
MINE SAFETY DISCLOSURES
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.