accordance with applicable rules, regulations and protocols, and engaging in insider trading. The Consolidated Derivative Complaint sought, among other things, an award of money damages.
On July 31, 2017, the defendants filed a motion to dismiss the Consolidated Derivative Complaint. Plaintiffs filed an opposition to the motion to dismiss on August 31, 2017, and the defendants filed a reply in further support of the motion to dismiss on September 26, 2017. Following supplementation of the complaint by Plaintiffs (the “Supplemental Derivative Complaint”) and additional briefing, the Court held oral arguments on the motion to dismiss on June 19, 2019.
On October 1, 2019, Vice Chancellor Joseph R. Slights III of the Delaware Chancery Court, issued a Memorandum Opinion granting in part and denying in part defendants’ motions to dismiss. The Supplemental Derivative Complaint was dismissed as to Plaintiffs’ derivative claims for unjust enrichment and insider trading. The Court allowed Plaintiffs’ remaining derivative claim for breach of fiduciary duty to proceed.
On December 17, 2019, the parties participated in a mediation, which did not result in a settlement. On December 22, 2019, the Company’s Board of Directors formed a Special Litigation Committee (the “SLC”) to conduct an investigation of the claims asserted in the Supplemental Derivative Complaint. On February 18, 2020, the SLC moved to stay all proceedings in the Consolidated Derivative Action pending completion of its investigation. Plaintiffs filed their opposition to the motion to stay on March 3, 2020 and the SLC filed its reply on March 13, 2020. On May 12, 2020, after hearing oral argument, Vice Chancellor Slights granted the SLC’s motion to stay proceedings until September 18, 2020 so that the SLC may complete its investigation. Pursuant to subsequent requests by the parties, Vice Chancellor Slights ultimately granted extensions of the stay through and until December 15, 2020.
On December 16, 2020, the SLC filed a report (the “SLC Report”) containing the findings of its investigation. The SLC Report concludes that the claims asserted in the Consolidated Derivative Action lack merit. Specifically, the SLC Report finds that the defendants did not breach their fiduciary duties in connection with the Company’s TIGER-X clinical trial. Accordingly, on the same date that the SLC Report was filed, the SLC filed a motion to terminate the Consolidated Derivative Action in Delaware Chancery Court.
Following certain discovery on January 7, 2022, the Plaintiffs, the Company and the SLC participated in a mediation, which resulted in the parties reaching an agreement in principle to settle the pending litigation. While the defendants continue to dispute the allegations, on March 4, 2022, the parties executed a stipulation and agreement of settlement to fully resolve the Consolidated Derivative Action without admitting any liability. The settlement is subject to, among other things, approval by the Court. As part of the settlement, the Company agreed to adopt certain corporate governance reforms, including, among other things, the election of one new independent director to the Clovis Board of Directors by the 2023 Annual Meeting of Stockholders and the creation of a management-level Disclosure Committee. Neither the Company nor any of the defendants would make a financial contribution towards the principal terms of the settlement. Moreover, under the terms of the agreement in principle, the Company agreed not to oppose or object to Plaintiffs’ application for an award of attorneys’ fees and expenses not to exceed $2.325 million in the aggregate, which amount, as ultimately awarded by the Court, is payable by the Company and included in Other accrued expenses on the Consolidated Balance Sheets at March 31, 2022 and December 31, 2021.
On April 13, 2022, the SLC filed a brief in support of the settlement and Plaintiffs filed their opening brief in support of the settlement and award for attorneys’ fees and expenses. Pursuant to the Scheduling Order entered on March 10, 2022, any objections to the settlement were due on or before April 20, 2022, and no objections were received. On May 4, 2022, after a final hearing, the Delaware Chancery Court entered an order and final judgment approving the settlement. The judgment found that notice to the Company’s stockholders was adequate and sufficient, that the settlement is fair, reasonable and adequate in all respects, and releases claims on behalf of the Company’s stockholders that were brought or could have been brought in the Consolidated Derivative Action and forever bars and enjoins them from prosecuting such claims.
European Patent Opposition
Two European patents in the rucaparib camsylate salt/polymorph patent family (European Patent 2534153 and its divisional European Patent 3150610) were opposed. In particular, opposition notices against European Patent 2534153 were filed by two parties on June 20, 2017. During an oral hearing that took place on December 4, 2018, the European Patent Office’s Opposition Division maintained European Patent 2534153 in amended and narrowed form with claims to