Item 1.02. Termination of a Material Definitive Agreement
On September 4, 2007, Alpharma Ireland Limited ("Alpharma Ireland"), now a wholly-owned subsidiary of King Pharmaceuticals, Inc. (the "Company"), entered into an Exclusive License Agreement ("License Agreement") with IDEA AG, a privately-held biopharmaceutical company headquartered in Munich, Germany ("IDEA"), through which Alpharma Ireland obtained the exclusive U.S. license and distribution rights from IDEA to market ketoprofen in TransfersomeŽ gel, a prescription topical NSAID (non-steroidal anti-inflammatory drug). TransfersomeŽ gel is IDEA's proprietary technology platform for delivering drugs to targeted areas through the skin barrier. The License Agreement was amended on March 31, 2008. The Company acquired Alpharma Ireland's parent company, Alpharma Inc., on December 29, 2008.
Based upon a review of the progress of the licensed product's development and commercialization, on August 18, 2009, pursuant to provisions in the License Agreement, Alpharma Ireland provided 90 days' written notice to IDEA of its intention to terminate the License Agreement, including the automatic termination of certain warrants, described below, and a related registration rights agreement. The parties are addressing their post-termination obligations and are discussing the possibility of setting a termination date earlier than the end of the original 90-day notice period.
The financial terms of the License Agreement included a $60 million license fee payment from Alpharma Ireland to IDEA, made at the time that the parties entered into the License Agreement, as well as: the issuance of two warrants for the purchase of Class A Common Stock of Alpharma Inc., exercisable upon the occurrence of certain regulatory-related events; milestone payments based upon development and regulatory events, patent issuance and the results of a certain Phase III clinical trial; and specified royalties to IDEA on net product sales. IDEA was to have paid the costs of specified studies, including two Phase III clinical trials with Alpharma Ireland paying additional amounts if it used certain data from one of the Phase III clinical trials for specified promotional purposes. Prior to U.S. product approval, Alpharma Ireland was obligated to make certain market development expenditures. During the 50 months commencing two months prior to the commercial launch of the licensed product in the U.S., Alpharma Ireland would have also been responsible for substantial sales, marketing and medical education expenses.
By its terms, the License Agreement was to expire upon the later of the expiration of all U.S. patent rights licensed by IDEA to Alpharma Ireland or 2029; however, prior to a commercial launch of the licensed product in the U.S., Alpharma Ireland had the right to terminate the License Agreement upon 90 days' prior written notice to IDEA.

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