QLT Inc., of Vancouver, British Columbia, said its wholly owned subsidiary, QLT USA Inc., agreed to pay $112.5 million to settle a 2003 patent infringement suit filed by TAP Pharmaceutical Products Inc., of Lake Forest, Ill., claiming that QLT's Eligard products infringed TAP's U.S. Patent No. 4,728,721, which expired May 1, 2006.

QLT's commercial partner, Sanofi-Synthelabo Inc., part of Paris-based Sanofi-Aventis, will pay $45 million, bringing the aggregate settlement amount to $157.5 million.

Neither QLT or Sanofi-Synthelabo acknowledged any wrongdoing. As part of the agreement, TAP agreed to release its claims against QLT and Sanofi-Synthelabo in the U.S., and will grant a nonexclusive, perpetual, royalty-free license that will allow QLT to continuing manufacturing and selling Eligard, a luteinizing hormone-releasing hormone agonist for prostate cancer, in the U.S. and Canada. QLT's share of the settlement is expected to be recorded in its consolidated 2006 results.

Prior to the settlement amount, the company's year-end cash, short-term and long-term investments and escrowed funds totaled about $378 million.

Although the arrangement resolves the U.S. litigation, it does not affect an ongoing dispute in Germany commenced by TAP's co-plaintiffs, Takeda Chemical Industries Ltd., and Wako Pure Chemical Industries Ltd., against QLT's European licensees of Eligard. The Takeda patent at issue in that case was declared invalid by a German court, though Takeda is appealing that ruling.

Shares of QLT (NASDAQ:QLTI) gained 10 cents Friday to close at $9.50.