1006010 Informal Interpretation

From:

(Redacted)

Sent:

Tuesday, June 29,20101:14 PM

To:

Verne, B. Michael; Walsh, Kathryn

Cc:

(Redacted)

Subject:

Informal HSR Advice -Confirmation

Mike & Kate,

I apologize for the delay in sendingthis message, but I am writing to ask that you confirm the informal advice thatyou provided orally to (redacted) and myself on Thursday, June 17, 2010.Note that I have also included below, for your reference, an email chainreflecting my prior conversation with Mike on this transaction.

Description of the Transaction

The basic facts outlined in my emailbelow remain unchanged. We now understand, however, that approximately $60million of the $66 million consideration for the transaction is an upfrontpayment for the underlying assets to be acquired when the purchase option isexercised in three years. The underlying assets that will be acquired pursuantto the purchase option include rights to the underlying intellectual property,all books and records relating thereto, and any new drug applications orabbreviated new drug applications relating to the Products. The payment dueupon option exercise varies based upon the aggregate net sales of the Productsduring the option period, but Buyer expects it to be only a nominal amount,well below either the $60 million upfront payment or the expected fair marketvalue of the underlying assets.

Moreover, Buyer's accountants will treatthe initial transaction as a purchase of assets, including the underlyingintellectual property subject to the option, for tax purposes, and will showthe underlying intellectual property as assets on the books of the Buyer.

Question

Would the significant upfront payment,coupled with the option to purchase for a nominal payment in three years andthe tax and accounting treatment described above, indicate a present transferof beneficial ownership in the underlying intellectual property such that anHSR filing would be required now, as opposed to upon exercise of the option? Isthis situation akin to the installment sales contract or equipment leasearrangements discussed in various informal interpretations in the PremergerNotification Practice Manual?

Response

During our call you advised that thesignificant upfront payment, coupled with the option to purchase for a nominalpayment in three years and the tax and accounting treatment described above,indicate a present transfer of beneficial ownership in the underlyingintellectual property. You advised that the parties submit an HSR filing nowfor the acquisition of the assets subject to the option.