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1992, Avitene was manufactured using the patents, know-how,
product specifications (as reflected in the FDA pre-market
approvals), and goodwill owned by MedChem U.S.A. MedChem P.R.
held the legal title to all of the Avitene manufacturing
equipment, the raw materials used to manufacture Avitene, the
Avitene work-in-process, and the finished Avitene inventory until
sold. When the finished Avitene was shipped from the Alcon P.R.
facility, title passed to the purchaser, which in all cases but
one was MedChem U.S.A.3 MedChem P.R. would invoice MedChem
U.S.A. (or the other purchaser) for the Avitene sold to it at a
price equal to MedChem P.R.’s manufacturing cost plus 10 percent.
From September 1, 1989, through August 31, 1992, MedChem U.S.A.
distributed, marketed, and sold Avitene from its offices in
Woburn. MedChem P.R. played no part in these sales or in the
other sales of Avitene to end users. The labels which MedChem
P.R. used during its fiscal year ended August 31, 1992,
3 The sole exception concerned the sale of Avitene for
distribution in Japan through June 6, 1991. In that case,
MedChem P.R. sold Avitene to Alcon Pharmaceuticals, which owned
the distribution rights to the Japanese market until June 6,
1991; title to that Avitene passed to Alcon Pharmaceuticals when
the finished Avitene was shipped from the Alcon P.R. facility.
Alcon Pharmaceuticals sold the distribution rights to the
Japanese market to MedChem U.S.A. on June 6, 1991, for $15
million, and MedChem U.S.A. transferred those rights to MedChem
P.R. on August 31, 1992. MedChem P.R.’s sales of Avitene for the
Japanese market accounted for approximately 20 percent of its
total net sales of Avitene.
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Last modified: May 25, 2011