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British Columbia, Canada
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N/A
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(State or Other Jurisdiction of Incorporation or Organization)
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(IRS Employer Identification Number)
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887 Great Northern Way, Suite 250,
Vancouver, B.C., Canada
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V5T 4T5
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(Address of principal executive offices)
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(Zip Code)
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Title of class
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Name of each exchange on which registered
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Common Shares, without par value
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The NASDAQ Global Select Market
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Large accelerated filer
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◻
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Accelerated filer
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☒
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Non-accelerated filer
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◻ (Do not check if a smaller reporting company)
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Smaller reporting company
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◻
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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Summary
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Item 1.
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Business.
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◦
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Metreleptin, a recombinant analog of human leptin, is marketed in the U.S. under the brand name MYALEPT (metreleptin) for injection (MYALEPT). MYALEPT is approved in the U.S. as an adjunct to diet as replacement therapy to treat the complications of leptin deficiency in patients with congenital or acquired generalized lipodystrophy (GL). In December 2016, we submitted a marketing authorization application (MAA) to the European Medicines Agency (EMA) to seek approval for metreleptin, under the brand name MYALEPTA, as replacement therapy to treat complications of leptin deficiency in patients with GL and in a subset of patients with partial lipodystrophy (PL). We also expect to submit a supplemental biologics licensing application (sBLA) to the U.S. Food and Drug Administration (FDA) in the first half of 2017, seeking to expand MYALEPT’s indication in the U.S. to the PL subset and plan to file for formal regulatory approvals for metreleptin throughout 2017 and early 2018 in other key markets, including Brazil and Colombia. We offer metreleptin through expanded access programs in countries where permitted by applicable regulatory authorities and under applicable laws, and generate revenue in certain markets where named patient sales are permitted based on the approval of metreleptin in the U.S. In addition to the PL subset, we plan to use our knowledge of the diverse effects of leptin on various physiologic functions to explore new opportunities for metreleptin as a platform drug to potentially treat patients suffering from a range of low leptin-mediated rare and metabolic diseases. We are evaluating and prioritizing these potential opportunities and plan to provide an update in mid-2017.
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◦
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Lomitapide is marketed in the U.S. under the brand name JUXTAPID (lomitapide) capsules (JUXTAPID). JUXTAPID is approved in the U.S. as an adjunct to a low-fat diet and other lipid-lowering treatments, including low-density lipoprotein (LDL) apheresis where available, to reduce low-density lipoprotein cholesterol (LDL-C), total cholesterol (TC), apolipoprotein B (apo B) and non-high-density lipoprotein cholesterol (non-HDL-C) in adult patients with homozygous familial hypercholesterolemia (HoFH). Lomitapide is approved in the EU, under the brand name LOJUXTA (lomitapide) hard capsules (LOJUXTA) for the treatment of adult patients with HoFH, as well as in Japan, Canada, and a small number of other countries. In December 2016, Aegerion out-licensed the rights to commercialize LOJUXTA in the EU and certain other jurisdictions to Amryt Pharma plc (Amryt) and will receive sales milestones and royalties in the low double-digits on net sales in those jurisdictions. In December 2016, following receipt of reimbursement approval, Aegerion launched JUXTAPID as a treatment for HoFH in Japan. Lomitapide is also sold, on a named patient basis, in Brazil and in a limited number of other countries outside the U.S. where such sales are permitted as a result of the approval of lomitapide in the U.S. or the EU.
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building and maintaining market acceptance for MYALEPT in the U.S. for the treatment of complications of leptin deficiency in GL patients, and supporting named patient sales of metreleptin in GL in Brazil, particularly in light of local economic challenges and ongoing governmental investigations, and other key countries, including France and Turkey, where such sales are permitted as a result of the U.S. approval or under local law;
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preparing for the launch of metreleptin in Europe as a treatment for complications of leptin deficiency in GL patients and a subset of PL, in the event we obtain regulatory, pricing and reimbursement approvals in the EU for metreleptin;
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evaluating the potential for future clinical development of metreleptin in additional indications, including a subset of PL, if we are unable to secure approval of such indication with the current metreleptin clinical data package, as well as potentially other low leptin-mediated rare and metabolic diseases;
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stabilizing sales of JUXTAPID as a treatment for adult HoFH patients in the U.S. despite competition from PCSK9 inhibitor products, among other factors, which have had a significant adverse impact on sales of JUXTAPID, and gaining market acceptance in the other countries where lomitapide is approved and being commercialized, or may in the future receive approval and be commercialized;
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managing our costs and expenses to better align with our revenues, and strengthening our capital structure, while supporting approved products in a compliant manner;
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continuing to support patient access to and reimbursement for our products in the U.S. without significant restrictions, particularly given the availability of PCSK9 inhibitor products in the U.S., which has adversely impacted reimbursement of JUXTAPID, and given the considerable number of JUXTAPID patients in the U.S. who are on Medicare Part D and the significant percentage of such patients who may not be able to afford their out-of-pocket co-payments for our products, given that the only source of financial support for some such patients may be through patient assistance programs operated by independent charitable 501(c)(3) organizations that may not provide adequate financial assistance;
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implementing the modified JUXTAPID Risk Evaluation Management Strategy (REMS) program in the U.S., which includes requirements to recertify all prescribers and pharmacies and a new patient counseling and acknowledgment requirement for existing and new patients, by the July 2, 2017 implementation deadline, while working to limit adult HoFH patient attrition from JUXTAPID as a result of such new requirements;
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supporting the recent launch of JUXTAPID in Japan;
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continuing to support sales of lomitapide as a treatment for HoFH in Brazil on a named patient basis, particularly in light of the economic challenges, ongoing government investigations, and ongoing court proceedings reviewing the regulatory framework for named patient sales in Brazil, and in other key countries where named patient sales are permitted, despite the availability of PCSK9 inhibitors on a named patient sales basis in such countries;
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gaining regulatory, pricing and reimbursement approvals to market our products in countries in which the products are not currently approved and/or reimbursed or for new indications, including obtaining approval of the MAA seeking marketing approval of metreleptin in the EU as a treatment for complications of leptin deficiency in GL patients and a subset of PL, and seeking approval of metreleptin in the U.S. for a subset of PL based on the existing clinical data package for metreleptin;
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reviewing the clinical and regulatory pathway for zuretinol to determine the optimal development and business strategy for this product candidate;
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engaging in possible further development efforts related to our existing products, and assessing, and possibly acquiring, potential new product candidates targeted at rare diseases where we believe we can leverage our infrastructure and expertise;
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minimizing the number of patients who are eligible to receive but decide not to commence treatment with our products, or who discontinue treatment, by supporting activities such as patient support programs, to the extent permitted in a particular country;
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continuing to embed a culture of compliance, ethics and integrity throughout Novelion and its subsidiaries;
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Aegerion reaching a definitive agreement with the DOJ and the SEC with respect to its ongoing investigations in accordance with the terms of the agreements in principle it entered into in May 2016 and managing other ongoing government investigations pertaining to its products;
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Aegerion reaching a definitive agreement with respect to its ongoing securities class action in accordance with the terms of the memorandum of understanding entered into in December 2016 (the MOU); and
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defending challenges to the patents or our claims of exclusivity for lomitapide in the U.S., including against potential generic submission with the FDA with respect to lomitapide; and expanding the intellectual property portfolio for our products.
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educate prescribers about the risk of neutralizing antibodies and the risk of lymphoma associated with the use of MYALEPT; and
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restrict access to therapy with MYALEPT to patients with a clinical diagnosis consistent with GL.
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Actual change from baseline in HbA1c at Month 12, and
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Percent change from baseline in fasting serum triglycerides at Month 12.
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A mean change from baseline to Month 12 in HbA1c of -2.2%.
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A mean change from baseline to Month 12 in HbA1c of -0.9%; and
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A mean percent change from baseline to Month 12 in triglycerides of -37.4%.
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the development, validation, and implementation of a ligand binding assay to supplement the neutralizing bioassay that tests for the presence of neutralizing antibodies in serum samples from patients with GL, which we have completed;
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testing all banked clinical samples from the GL clinical program for the presence of neutralizing antibodies against leptin using the ligand binding assay and to correlate neutralizing antibodies with clinical events, which we have initiated and is ongoing; and
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a prospective study to assess the immunogenicity of metreleptin in patients receiving metreleptin, which is in the planning phase.
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significantly elevated LDL-C cholesterol levels (treated or untreated);
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physical signs, which may include the presence of cutaneous xanthomas, Achilles tendon thickening, xanthelasma and/or corneal arcus;
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limited response to statins that is not attributed to statin intolerance or to another identifiable cause (usually dependent on functional LDL receptors), or limited and/or inadequate response to a PCSK9;
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evidence of premature cardiovascular disease (often in the second and third decade of life); and
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a positive history of high cholesterol and/or premature cardiovascular disease, consistent with having familial hypercholesterolemia (FH) on both sides of the family.
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commercializing MYALEPT and JUXTAPID in the U.S. with a new commercialization strategy featuring, among other things, the use of a small contract sales force and analysis of claims data and other information to help identify potential GL and adult HoFH patients; and reorganizing and realigning our sales organization in support of key centers of excellence for both MYALEPT and JUXTAPID;
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stabilizing sales of JUXTAPID as a treatment for adult HoFH patients in the U.S. despite competition from PCSK9 inhibitor products, among other factors, which have had a significant adverse impact on sales of JUXTAPID;
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educating and training healthcare providers about our products and the diseases they are approved to treat;
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continuing to support patient access to and reimbursement for our products in the U.S. without significant restrictions, particularly given the availability of PCSK9 inhibitor products in the U.S., which has adversely impacted reimbursement of JUXTAPID, and given the considerable number of JUXTAPID patients in the U.S. who are on Medicare Part D and the significant percentage of such patients who may not be able to afford their out-of-pocket co-payments for our products, given that the only source of financial support for some such patients may be through patient assistance programs operated by independent charitable 501(c)(3) organizations that may not provide adequate financial assistance;
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obtaining pricing and reimbursement approval for metreleptin on acceptable terms and price levels if it is approved in the EU and other countries outside the U.S., and for lomitapide in countries outside the U.S. where it is or becomes approved; and
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minimizing the number of patients who, although eligible to receive treatment with our products, decide not to commence such treatment, or who discontinue treatment, through activities such as patient support programs, to the extent permitted in a particular country.
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N
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Visual Field
Responders(
a)
Number (%) of Patients
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Visual Acuity
Responders (
b)
Number (%) of Patients
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All Patients
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27
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19 (70%)
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19 (70%)
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All LCA
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13
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7 (54%)
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10 (77%)
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All RP
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14
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12 (86%)
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9 (64%)
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All RPE65
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15
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11 (73%)
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8 (53%)
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All LRAT
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12
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8 (67%)
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11 (92%)
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obtain and maintain patent and other proprietary protection for the products, technology, inventions and improvements we consider important to our business;
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defend our patents;
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preserve the confidentiality of our trade secrets; and
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operate without infringing the patents and proprietary rights of third parties.
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completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices (GLP) and other applicable regulations;
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submission to the FDA of an investigational new drug application (IND), which must become effective before human clinical trials may begin;
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performance of human clinical trials, including adequate and well-controlled trials, according to Good Clinical Practices (GCP) to establish the safety and efficacy of the proposed drug for its intended use, or the safety, purity, and potency of a biological product;
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approval by an independent Institutional Review Board (IRB), representing each clinical site before each clinical trial may be initiated;
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submission to the FDA of an NDA or BLA;
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completion of registration batches and validation of the manufacturing process to show that we are capable of consistently producing quality batches of product;
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satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current Good Manufacturing Practice (cGMP) to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and
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FDA review and approval of the NDA or BLA.
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Phase 1. The investigational drug is initially introduced into healthy human subjects, and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing may be conducted in patients with the target diseases.
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Phase 2. This phase involves trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.
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Phase 3. This phase involves trials undertaken after preliminary evidence of effectiveness has been obtained and are intended to further evaluate dosage and clinical efficacy and safety of the drug, or the safety, purity, and potency of a biological product, in an expanded patient population, often at geographically dispersed clinical trial sites. These trials are intended to establish the overall risk/benefit ratio of the product, and to provide an adequate basis for product approval and product labeling.
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increasing drug rebates under state Medicaid programs for brand name prescription drugs and extending those rebates to Medicaid managed care; and
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requiring drug manufacturers to provide a 50% discount on Medicare Part D brand name prescription drugs sold to Medicare beneficiaries whose prescription drug costs cause the beneficiaries to be subject to the Medicare Part D coverage cap (i.e. the so-called donut hole).
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The federal healthcare Anti-Kickback Statute prohibits persons from, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in cash or in kind, to induce or reward the purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any healthcare item or service for which payment may be made, in whole or in part, by federal healthcare programs such as Medicare and Medicaid. This statute has been interpreted to apply to, among others, arrangements between pharmaceutical manufacturers, on the one hand, and prescribers, purchasers, formulary managers and organizations that provide financial assistance to patients, on the other. Violations of the federal Anti-Kickback Statute are punishable by imprisonment, criminal fines, civil monetary penalties and exclusion from participation in federal healthcare programs. The Healthcare Reform Act, among other things, clarified that liability may be established under the federal Anti-Kickback Statute without proving actual knowledge of the statute or specific intent to violate it. In addition, the Healthcare Reform Act amended the Social Security Act to provide that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. There are a number of statutory exceptions and regulatory safe harbors to the federal Anti-Kickback Statute that protect certain common activities from prosecution or other regulatory sanctions, however, the exceptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exception or safe harbor may be subject to scrutiny.
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The federal civil False Claims Act imposes civil penalties and provides for civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds, or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government, or knowingly concealing or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government. Several pharmaceutical and other healthcare companies have faced enforcement actions under these laws for allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may also implicate the federal civil False Claims Act. Federal civil False Claims Act violations may result in treble monetary damages and penalties and exclusion from participation in federal healthcare programs. Civil liability under the False Claims Act or misdemeanor violation of federal health care laws gives the Inspector General of the Department of Health and Human Services (IG) the discretion to exclude a company’s products from reimbursement by federal healthcare programs. This discretion to exclude often leads companies to negotiate corporate integrity agreements with the IG so their products may continue to receive reimbursement.
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The federal criminal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact, making any materially false, fictitious, or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services. There are also criminal penalties, including imprisonment and criminal fines, for making or presenting a false, fictitious or fraudulent claim to the federal government. Conviction under any of the aforementioned federal criminal statutes requires mandatory exclusion from participation in federal healthcare programs.
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The federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, requires certain pharmaceutical manufacturers to engage in extensive tracking of payments and other transfers of value to physicians and teaching hospitals and to submit such data to CMS, which will then make all of this data publicly available on the CMS website. Pharmaceutical manufacturers, such as our subsidiary, Aegerion, with products for which payment is available
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Analogous state laws and regulations, such as state anti-kickback and false claims laws, apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by Medicaid or other state programs or, in several states, apply regardless of the payer. Several states now require pharmaceutical companies to report expenses relating to the marketing and promotion of pharmaceutical products in those states and to report gifts and payments to certain healthcare providers in those states. Some of these states also prohibit certain marketing-related activities including the provision of gifts, meals, or other items to certain healthcare providers. In addition, several states require pharmaceutical companies to implement compliance programs or marketing codes.
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physicians’ views as to the scope of the approved indication and limitations on use and warnings and precautions contained in the approved labeling or prescribing information for our products, including the boxed warnings on the MYALEPT and JUXTAPID labels and the modifications to the JUXTAPID label to include language instructing patients to cease therapy upon the occurrence of severe diarrhea;
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the willingness of insurance companies, managed care organizations, other private payers, and government entities in the U.S. that provide reimbursement for medical costs to continue to provide reimbursement for MYALEPT and JUXTAPID at the price at which we offer them and without imposing restrictions on the use of the product, such as, for MYALEPT, leptin level tests, which delay or otherwise impact reimbursement;
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the ability and willingness of GL and HoFH patients to pay, or to arrange for payment assistance with respect to, any patient cost-sharing amounts for MYALEPT applicable under their insurance coverage, and the availability of co-pay assistance;
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the extent to which the changes to the JUXTAPID REMS program, approved by the FDA on January 3, 2017, including the requirements set forth above, may negatively affect the ability or willingness of a physician to prescribe JUXTAPID, a patient to be willing to initiate or continue on JUXTAPID therapy, or insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs to continue to provide reimbursement for JUXTAPID;
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the extent to which changes to the labeling for JUXTAPID instructing patients to cease therapy upon the occurrence of severe diarrhea may negatively affect the ability or willingness of a physician to prescribe JUXTAPID, a patient to be willing to initiate or continue on JUXTAPID therapy, or insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs to continue to provide reimbursement for JUXTAPID;
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the efficacy, safety and tolerability of competitive therapies, including, in the case of lomitapide, PCSK9 inhibitor products;
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the extent of the negative impact of the availability of PCSK9 inhibitor products on sales of JUXTAPID in the U.S., which has caused a significant number of JUXTAPID patients to discontinue JUXTAPID and switch to a PCSK9 inhibitor product, and has significantly decreased the rate at which new HoFH patients start treatment with JUXTAPID;
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the provision of free PCSK9 inhibitor drug to adult HoFH patients by the companies that are commercializing PCSK9 inhibitor products, which such companies may have ceased, but which historically has had a negative impact on the rate at which new patients start treatment with lomitapide and has caused more patients than we expected to discontinue lomitapide and switch their treatment to PCSK9 inhibitor products;
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pricing and the perception of physicians and payers as to cost effectiveness of our products in relation to other therapies that treat GL and HoFH, respectively, including therapies with a price substantially lower than that of our products, which, in the case of lomitapide, includes PCSK9 inhibitor products and apheresis; and
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the effectiveness of our sales, marketing and distribution strategies and our ability to achieve these strategies, particularly in light of our conversion from a full-time employee sales force to the use of primarily a contract sales force in the U.S. in early 2017, the use of a contract sales force in Japan, and the continuing challenges to the lomitapide business, including, among other things, the impact of competitive products on JUXTAPID sales.
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we may experience a negative impact on market acceptance and dropout rates;
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regulatory authorities may suspend, withdraw or alter their approval of the relevant product;
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regulatory authorities may require the addition of labeling statements, such as warnings or contraindications or distribution and use restrictions, such as, for example, the modifications to the JUXTAPID label to include language instructing patients to cease therapy upon the occurrence of severe diarrhea;
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regulatory authorities may require us to issue specific communications to healthcare professionals, such as “Dear Doctor” letters;
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regulatory authorities may issue negative publicity regarding the relevant product, including safety communications;
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we may be required to change the way the relevant product is administered, conduct additional preclinical studies or clinical trials or restrict the distribution or use of the relevant product;
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we could be sued and held liable for harm caused to patients;
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the regulatory authorities may require us to amend the relevant REMS or risk management plan; and
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our reputation may suffer.
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The federal healthcare Anti-Kickback Statute prohibits persons from, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in cash or in kind, to induce or reward the purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any healthcare item or service for which payment may be made, in whole or in part, by federal healthcare programs such as Medicare and Medicaid. This statute has been interpreted to apply to, among others, arrangements between pharmaceutical manufacturers, on the one hand, and prescribers, purchasers, formulary managers and organizations that provide financial assistance to patients, on the other. Violations of the federal Anti-Kickback Statute are punishable by imprisonment, criminal fines, civil monetary penalties and exclusion from participation in federal healthcare programs. The Healthcare Reform Act, among other things, clarified that liability may be established under the federal Anti-Kickback Statute without proving actual knowledge of the statute or specific intent to violate it. In addition, the Healthcare Reform Act amended the Social Security Act to provide that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. There are a number of statutory exceptions and regulatory safe harbors to the federal Anti-Kickback Statute that protect certain common activities from prosecution or other regulatory sanctions, however, the exceptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exception or safe harbor may be subject to scrutiny.
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The federal civil False Claims Act imposes civil penalties and provides for civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds, or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government, or knowingly concealing or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government. Several pharmaceutical and other healthcare companies have faced enforcement actions under these laws for allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may also implicate the federal civil False Claims Act. Federal civil False Claims Act violations may result in treble monetary damages and penalties and exclusion from participation in federal healthcare programs. Civil liability under the False Claims Act or misdemeanor violation of federal health care laws gives the Inspector General (IG) of the
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•
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The federal criminal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact, making any materially false, fictitious, or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services. There are also criminal penalties, including imprisonment and criminal fines, for making or presenting a false, fictitious or fraudulent claim to the federal government. Conviction under any of the aforementioned federal criminal statutes requires mandatory exclusion from participation in federal healthcare programs.
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The federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, requires certain pharmaceutical manufacturers to engage in extensive tracking of payments and other transfers of value to physicians and teaching hospitals and to submit such data to Centers for Medicare & Medicaid Services (CMS), which will then make all of this data publicly available on the CMS website. Pharmaceutical manufacturers, such as our subsidiary, Aegerion, with products for which payment is available under Medicare, Medicaid, or the State Children’s Health Insurance Program are required to track reportable payments and transfers of value during each calendar year and must submit a report on or before the 90th day of each calendar year disclosing reportable payments made in the previous calendar year. Failure to comply with the reporting obligations may result in civil monetary penalties.
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Analogous state laws and regulations, such as state anti-kickback and false claims laws, apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by Medicaid or other state programs or, in several states, apply regardless of the payer. Several states now require pharmaceutical companies to report expenses relating to the marketing and promotion of pharmaceutical products in those states and to report gifts and payments to certain healthcare providers in those states. Some of these states also prohibit certain marketing-related activities including the provision of gifts, meals, or other items to certain healthcare providers. In addition, several states require pharmaceutical companies to implement compliance programs or marketing codes.
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increasing drug rebates under state Medicaid programs for brand name prescription drugs and extending those rebates to Medicaid managed care; and
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requiring drug manufacturers to provide a 50% discount on Medicare Part D brand name prescription drugs sold to Medicare beneficiaries whose prescription drug costs cause the beneficiaries to be subject to the Medicare Part D coverage cap (i.e. the so-called donut hole).
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issue warning letters or untitled letters;
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seek an injunction or impose civil or criminal penalties or monetary fines;
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suspend, withdraw or alter the conditions of our marketing approval;
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require us to provide corrective information to healthcare practitioners;
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require us to modify our product labels;
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suspend any ongoing clinical trials;
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require entrance into a consent decree, which is a component of Aegerion’s preliminary agreement in principle with the DOJ related to the JUXTAPID REMS program, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;
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refuse to approve pending applications or supplements to applications submitted by us;
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suspend or impose restrictions on operations, including costly new manufacturing requirements;
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seize or detain products, refuse to permit the import or export of products or request that we initiate a product recall;
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impose further refinements and enhanced obligations under existing risk management and other forms of post-marketing requirements and programs; or
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refuse to allow us to enter into supply contracts, including government contracts.
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•
|
difficulties obtaining regulatory clearance to commence a clinical trial or complying with conditions imposed by a regulatory authority regarding the scope or term of a clinical trial;
|
•
|
delays in reaching or failing to reach agreement on acceptable terms with prospective clinical research organizations (CROs) and trial sites, and problems with the performance of CROs;
|
•
|
insufficient or inadequate supply or quality of a product candidate or other materials necessary to conduct our clinical trials, or other manufacturing issues;
|
•
|
difficulties obtaining institutional review board (IRB) approval or Ethics Committee’s positive opinion to conduct a clinical trial at a prospective site;
|
•
|
challenges recruiting and enrolling patients to participate in clinical trials for a variety of reasons, including the size and nature of a patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the nature of trial protocol, the availability of approved treatments for the relevant disease and the competition from other clinical trial programs for similar indications;
|
•
|
severe or unexpected drug-related side effects experienced by patients in a clinical trial; and
|
•
|
difficulties retaining patients who have enrolled in a clinical trial but may be prone to withdraw due to the rigors of the trials, lack of efficacy, side effects or personal issues, or who are lost to further follow-up.
|
•
|
failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;
|
•
|
failure to respect applicable data privacy obligations;
|
•
|
inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities;
|
•
|
unforeseen safety issues or lack of effectiveness; and
|
•
|
lack of adequate funding to continue the clinical trial.
|
•
|
decreased demand for our products and any product candidate for which we obtain marketing approval;
|
•
|
impairment of our business reputation and exposure to adverse publicity;
|
•
|
increased warnings on product labels;
|
•
|
withdrawal of clinical trial participants;
|
•
|
costs as a result of related litigation;
|
•
|
distraction of management’s attention from our primary business;
|
•
|
substantial monetary awards to patients or other claimants;
|
•
|
loss of revenue; and
|
•
|
the inability to successfully commercialize our products or any product candidate for which we obtain marketing approval.
|
•
|
differing regulatory requirements for drug approvals in foreign countries;
|
•
|
pricing, pricing deals and reimbursement approvals that have a negative impact on our global pricing strategy;
|
•
|
potentially reduced protection for intellectual property rights;
|
•
|
the potential for parallel importing;
|
•
|
unexpected changes in tariffs, trade barriers and regulatory requirements;
|
•
|
economic weakness, including inflation, or political instability in particular foreign economies and markets, including, for example, the current political instability in Brazil, our largest source of revenues on a country-by-country basis outside the U.S.;
|
•
|
compliance with foreign and U.S. laws, rules, regulations or industry codes, including data privacy requirements, labor relations laws, anti-competition regulations, import, export and trade restrictions, and required reporting of payments to healthcare professionals and others;
|
•
|
negative consequences from changes in applicable tax laws;
|
•
|
foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;
|
•
|
workforce uncertainty in countries where labor unrest is more common than in the U.S.;
|
•
|
production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;
|
•
|
dependence upon third parties to perform distribution, pharmacovigilance, quality control testing, collections and other aspects of the distribution, supply chain and commercialization of our products that are required to be performed in order to conduct such activities in international markets, and our ability to effectively manage such third parties; and
|
•
|
business interruptions resulting from geopolitical and economic events or actions, including social unrest, economic crises, war, terrorism, or natural disasters.
|
•
|
we will be able to successfully commercialize our product before some or all of our relevant patents expire, or in countries where we do not have patent protection;
|
•
|
we or our licensors were the first to make the inventions covered by each of our pending patent applications and patents;
|
•
|
we or our licensors were the first to file patent applications for these inventions;
|
•
|
others will not independently develop similar or alternative technologies or duplicate any of our technologies;
|
•
|
any of our pending patent applications or those we have licensed will result in issued patents;
|
•
|
any of our patents or those we have licensed will be valid or enforceable;
|
•
|
we are able to license patents or pending patents that are necessary or desirable to enforce or protect our patent rights on commercially reasonable terms or at all;
|
•
|
any patents issued to us or our licensors and collaborators will provide a basis for any additional commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties;
|
•
|
we will develop additional proprietary technologies or product candidates that are patentable; or
|
•
|
the patents of others will not have an adverse effect on our business.
|
•
|
the patentability of our inventions relating to our product or any product candidates; and
|
•
|
the enforceability, validity or scope of protection offered by our patents relating to our product or any product candidates.
|
•
|
incur substantial monetary damages;
|
•
|
encounter significant delays in bringing our product candidates to market; and
|
•
|
be precluded from manufacturing or selling our product candidates.
|
•
|
coordinate standards, compliance programs, controls, procedures and policies, business cultures and compensation structures;
|
•
|
integrate and harmonize financial reporting and information technology systems of the two companies;
|
•
|
manage operations in a manner that supports and protects the tax benefits related to, and that may be realized from, our Canadian domicile;
|
•
|
coordinate research and drug candidate development efforts to effectuate their product capabilities;
|
•
|
compete against companies serving the market opportunities expected to be available to the companies following the Merger;
|
•
|
manage inefficiencies associated with integrating the operations of the companies;
|
•
|
identify and eliminate redundant or underperforming personnel, operations and assets;
|
•
|
manage the diversion of management’s attention from business matters to integration issues;
|
•
|
control additional costs and expenses in connection with, and as a result of, the Merger;
|
•
|
conduct successful clinical development programs for their respective strategic product candidates and products and achieve regulatory approval for product candidates in major geographic areas;
|
•
|
define and develop successful commercial strategies for our products in markets in which they are approved for sale and obtain reimbursement for such products in these markets;
|
•
|
resolve Aegerion’s ongoing investigations and litigation and manage any future litigation and investigations that may arise from any such resolution of the ongoing investigations and litigation;
|
•
|
service Aegerion’s significant indebtedness;
|
•
|
commercialize Aegerion’s products at commercially attractive margins and generate revenues in line with our expectations, particularly in light of Aegerion’s 2016 reductions in force, the impact of competitive products on JUXTAPID sales and the continuing challenges to the lomitapide business; and
|
•
|
raise capital through equity or debt financing on attractive terms to support the development and commercialization of our products and product candidate.
|
•
|
make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and adverse changes in government regulation;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and our industry;
|
•
|
place us at a disadvantage compared to our competitors who have less debt; and
|
•
|
limit our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes, or raise additional capital through equity or other types of financings.
|
•
|
build and maintain market acceptance for MYALEPT in the U.S. for the treatment of GL, and supporting named patient sales of metreleptin in GL in Brazil, France, Turkey, and other key countries where such sales are permitted as a result of the U.S. approval or under local law;
|
•
|
prepare for the launch of metreleptin in Europe as a treatment for complications of leptin deficiency in GL patients and a subset of PL, in the event we obtain regulatory, pricing and reimbursement approvals in the EU for metreleptin;
|
•
|
pursue possible lifecycle management opportunities for metreleptin, including potential future clinical development of metreleptin in additional indications;
|
•
|
stabilize sales of JUXTAPID as a treatment for adult HoFH patients in the U.S. despite competition from PCSK9 inhibitor products, among other factors, which have had a significant adverse impact on sales of JUXTAPID, and gain such market acceptance in the other countries where lomitapide is approved and being commercialized, including Japan, or may in the future receive approval and be commercialized;
|
•
|
manage our costs and expenses to better align with our revenues and strengthening our capital structure, while supporting approved products in a compliant manner;
|
•
|
continue to have named patient sales of our products in Brazil and other key countries where such sales can occur as a result of the FDA approval, particularly in light of local economic challenges, ongoing governmental investigations, and ongoing court proceedings in Brazil reviewing the regulatory framework for named patient sales;
|
•
|
obtain timely regulatory approval of metreleptin in the EU and other key international markets as a treatment for patients with GL or a subset of PL, and an expansion of the indication in the U.S. to include the PL subset, subject to discussions with the FDA, and obtain timely regulatory approval of lomitapide in other key international markets as a treatment for patients with HoFH where it makes business sense to seek approval, in each case without onerous restrictions or limitations in the resulting label;
|
•
|
gain pricing and reimbursement approvals to market our products in countries in which we elect to seek, and eventually obtain, regulatory approval, at acceptable prices and without significant restrictions, discounts, caps or other cost containment measures, and to effectively launch our products in those countries where it makes business sense to do so, including approval of metreleptin in the EU for GL and the PL subset and in the U.S. for the PL subset, subject to discussions with the FDA;
|
•
|
reviewing the clinical and regulatory pathway for zuretinol to determine the optimal development and business strategy for this product candidate;
|
•
|
minimize the number of patients who are eligible to receive but decide not to commence treatment with our products, or who discontinue treatment, including with lomitapide, due to tolerability issues, and with metreleptin, due to its route of administration as a daily injection, through activities such as patient support programs, to the extent permitted in a particular country;
|
•
|
effectively estimate the size of the total addressable market for our products;
|
•
|
maintain reimbursement policies for JUXTAPID and MYALEPT in the U.S. that do not impose significant restrictions on reimbursement and a payer mix that does not include significantly more Medicaid patients than the current payer mix;
|
•
|
minimize the expected negative impact of the availability of PCSK9 inhibitor products on sales of lomitapide outside the U.S., including in Japan, where we launched JUXTAPID in December 2016 and where a PCSK9 inhibitor product is available, and the degree to which the availability of PCSK9 inhibitor products outside the U.S., and the potential availability of named patient sales of PCSK9 inhibitor products outside the U.S., impacts named patient sales of lomitapide outside the U.S., particularly in Brazil; and
|
•
|
effectively respond to requirements of insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs in the U.S. to require that newly diagnosed adult HoFH patients be treated with PCSK9 inhibitor products prior to JUXTAPID treatment, that current JUXTAPID patients switch to PCSK9 inhibitor products, and that potential JUXTAPID patients fail to adequately respond to PCSK9 inhibitor products before providing reimbursement for JUXTAPID at the prices at which we offer JUXTAPID.
|
•
|
the success of our commercialization efforts and the level of revenues generated from sales of metreleptin and lomitapide in the U.S.;
|
•
|
the level of revenue received from named patient sales of metreleptin and lomitapide in Brazil and other key countries where a mechanism exists to sell the product on a pre-approval basis in such country based on U.S. approval of such products or EU approval of lomitapide, particularly in light of the availability of a PCSK9 inhibitor product in Brazil and the ongoing court proceedings in Brazil reviewing the regulatory framework for named patient sales;
|
•
|
the level of physician, patient and payer acceptance of lomitapide and metreleptin;
|
•
|
our ability to continue to manage our costs and expenses to better align with our revenues and strengthen our capital structure, while supporting approved products in a compliant manner;
|
•
|
gaining regulatory and pricing and reimbursement approvals to market our products in countries in which the products are not currently approved and/or reimbursed, where it makes business sense to seek such approval, without significant restrictions, discounts, caps or other cost containment measures, including regulatory and pricing and reimbursement approval of metreleptin in the EU, in connection with which we filed an MAA in the EMA in December 2016, and regulatory approval of metreleptin in the U.S. for a subset of PL based on the existing clinical data package for metreleptin, subject to discussions with the FDA;
|
•
|
the extent of the negative impact of the availability of PCSK9 inhibitor products on sales of JUXTAPID in the U.S., which, among other factors, have caused a significant number of JUXTAPID patients to discontinue JUXTAPID and switch to a PCSK9 inhibitor product, and significantly decreased the rate at which new HoFH patients start treatment with lomitapide;
|
•
|
the provision of free PCSK9 inhibitor drug to adult HoFH patients by the companies that are commercializing PCSK9 inhibitor products, which such companies may have ceased, but which historically has had a negative impact on the rate at which new patients start treatment with lomitapide and has caused more patients than we expected to discontinue lomitapide and switch their treatment to PCSK9 inhibitor products;
|
•
|
requirements of insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs in the U.S. to require that newly diagnosed adult HoFH patients be treated with PCSK9 inhibitor products prior to JUXTAPID, that current JUXTAPID patients switch to PCSK9 inhibitor products, and that patients fail to adequately respond to PCSK9 inhibitor products before providing reimbursement for JUXTAPID at the prices at which we offer JUXTAPID;
|
•
|
the willingness of insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs in the U.S. to continue to provide reimbursement for our products at the prices at which we offer our products without imposing any additional major hurdles to access or other significant restrictions or limitations, and the ability and willingness of HoFH and GL patients to pay, or to arrange for payment assistance with respect to, any patient cost-sharing amounts for our products applicable under their insurance coverage, particularly in light of recent reductions in contributions to 501(c)(3) patient organizations by pharmaceutical companies;
|
•
|
the cost of building and maintaining the sales and marketing capabilities necessary for the commercialization of our products for their targeted indications in the market(s) in which each has received regulatory approval and we elect to commercialize such products, to the extent reimbursement and pricing approvals are obtained, and certain other key international markets, if approved;
|
•
|
the timing and costs of future business development opportunities;
|
•
|
the timing and cost of seeking regulatory approvals and conducting potential future clinical development of metreleptin in additional indications, pursuing possible lifecycle management opportunities for metreleptin, and conducting potential development of the zuretinol program;
|
•
|
the cost of filing, prosecuting and enforcing patent claims, including the cost of defending any challenges to the patents or our claims of exclusivity;
|
•
|
the status of ongoing government investigations and lawsuits, including the disclosure of possible or actual outcomes, including regarding the preliminary agreements in principle that have been reached with the DOJ and the SEC;
|
•
|
the costs of our manufacturing-related activities and the other costs of commercializing our products;
|
•
|
the costs associated with ongoing government investigations and lawsuits, including any damages, settlement amounts, fines or other payments, or implementation of compliance related agreements or consent decrees, that may result from settlements or enforcement actions related to government investigations or whether we are successful in our efforts to defend ourselves in, or to settle on acceptable terms, ongoing or future litigation;
|
•
|
the levels, timing and collection of revenue received from sales of our products in the future;
|
•
|
the timing and costs of satisfying our debt obligations, including interest payments and any amounts due upon the maturity of such debt, including under the Convertible Notes;
|
•
|
the cost of our observational cohort studies and other post-marketing commitments, including to the FDA and in any other countries where our products are ultimately approved; and
|
•
|
the timing and cost of other clinical development activities.
|
•
|
the short-term or long-term success or failure of our commercialization efforts and the level of revenues generated from sales of our products in the U.S.;
|
•
|
the level of revenue we receive from named patient sales of our products in Brazil and other key countries where a mechanism exists to sell the product on a pre-approval basis in such country based on U.S. approval of such products or EU approval of lomitapide, particularly in light of the regulatory approval of Amgen’s PCSK9 inhibitor product in Brazil in April 2016, the potential availability of that and other PCSK9 inhibitor products on a named patient sales basis in Brazil, and the ongoing court proceedings in Brazil reviewing the regulatory framework for named patient sales;
|
•
|
the short-term or long-term success or failure of the commercialization of our products in key countries outside the U.S. in which we have or obtain approval, and the level of revenues we generate;
|
•
|
our ability to accurately forecast net product sales and operating expenses, and to meet such forecasts;
|
•
|
our ability, or lack thereof, to manage our costs and expenses to better align with our revenues, and strengthen our capital structure, while supporting approved products in a compliant manner;
|
•
|
the timing and cost of seeking regulatory approvals and conducting potential future clinical development of metreleptin in additional indications, pursuing possible lifecycle management opportunities for metreleptin, and conducting potential development of the zuretinol program;
|
•
|
any issues that may arise with our supply chain for our products;
|
•
|
any adverse regulatory decisions, or regulatory issues that arise, made with respect to our products;
|
•
|
any issues that may arise with respect to the safety of our products;
|
•
|
the perception of the terms of the preliminary agreements in principle reached with the DOJ and the SEC and in connection with their investigations, and any adverse consequences that may result from such preliminary agreements in principle, such as additional litigation or investigations, and risks related to finalization of the preliminary agreements in principle and outstanding required approvals in respect thereof;
|
•
|
our ability to defend ourselves successfully against claims made in securities class action lawsuits, and, if we are unsuccessful in such defense or decide to settle, the type and amount of any damages, settlement amounts, fines or other payments or adverse consequences that may result;
|
•
|
the extent to which the changes to the JUXTAPID REMS program, approved by the FDA on January 3, 2017, including the requirements set forth elsewhere in these “Risk Factors” and the “Business” section of this Annual Report, may negatively affect the ability or willingness of a physician to prescribe JUXTAPID, a patient to be willing to initiate or continue on JUXTAPID therapy, or insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs to continue to provide reimbursement for JUXTAPID;
|
•
|
the extent to which changes to the labeling for JUXTAPID instructing patients to cease therapy upon the occurrence of severe diarrhea may negatively affect the ability or willingness of a healthcare professional to prescribe JUXTAPID, a patient to be willing to initiate or continue on therapy, or insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs to continue to provide reimbursement for JUXTAPID;
|
•
|
any adverse actions or decisions related to our intellectual property or marketing or data exclusivity, or any action by a third party to gain approval of a generic or biosimilar product, including, for lomitapide, for which a generic challenge could have been filed with the FDA as of December 21, 2016;
|
•
|
fluctuations in stock market prices and trading volumes of similar companies;
|
•
|
general market conditions and overall fluctuations in U.S. and Canadian equity markets;
|
•
|
low trading volume and short interest positions in our common shares;
|
•
|
international financial market conditions, including the ongoing sovereign debt crisis in the EU;
|
•
|
variations in our quarterly operating results;
|
•
|
changes in our financial guidance or securities analysts’ estimates of our financial performance;
|
•
|
announcements of investigations or litigation, and updates to the status of investigations and litigation, or other notifications from enforcement or regulatory authorities related to our business or business practices;
|
•
|
announcements of clinical data, regulatory submissions, product launches, new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;
|
•
|
changes in or materially incorrect application of accounting principles;
|
•
|
issuance by us of new securities, or sales of large blocks of our common shares, including sales by our executive officers, directors and significant shareholders;
|
•
|
the dilutive effect of the Convertible Notes or any other equity or equity-linked financings or alternative strategic arrangements;
|
•
|
the acceleration of our or Aegerion’s long-term debt;
|
•
|
additional changes in, or loss of, key personnel;
|
•
|
success or failure of products within our therapeutic areas of focus;
|
•
|
discussion of us or our share price by the financial press and in online investor communities;
|
•
|
our relationships with and the conduct of third parties on which we depend; and
|
•
|
other risks and uncertainties described in these risk factors.
|
•
|
responding to proxy contests and other actions by activist shareholders may be costly and time-consuming and may disrupt our operations and divert the attention of our management and our employees;
|
•
|
perceived uncertainties as to our future direction may result in our inability to consummate potential acquisitions, collaborations or in-licensing opportunities and may make it more difficult to attract and retain qualified personnel and business partners; and
|
•
|
if individuals are elected to our Board of Directors with a specific agenda different from our strategy for creating long-term shareholder value, it may adversely affect our ability to effectively and timely execute on our strategic plans and create additional value for our shareholders.
|
•
|
require a 66 2/3% majority of shareholder votes cast in favor of a resolution to effect various amendments to our Articles; and
|
•
|
require shareholder proposals for matters to be acted upon by shareholders at shareholder meetings to be submitted pursuant to, and in accordance with, the applicable provisions of the BCBCA for inclusion in the Company’s proxy materials by a date that is not later than three months prior to the anniversary date of the prior year’s shareholder meeting.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s
Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.
|
|
Toronto Stock Exchange
|
|
NASDAQ Global Select Market
|
||||||||||||
2016
|
High (CAD$)
|
|
Low (CAD$)
|
|
High (U.S.$)
|
|
Low (U.S.$)
|
||||||||
First Quarter
|
C$
|
19.40
|
|
|
C$
|
12.55
|
|
|
$
|
11.85
|
|
|
$
|
8.19
|
|
Second Quarter
|
C$
|
14.10
|
|
|
C$
|
8.00
|
|
|
$
|
9.37
|
|
|
$
|
6.10
|
|
Third Quarter
|
C$
|
14.10
|
|
|
C$
|
8.50
|
|
|
$
|
10.95
|
|
|
$
|
6.52
|
|
Fourth Quarter
|
C$
|
14.75
|
|
|
C$
|
10.25
|
|
|
$
|
13.80
|
|
|
$
|
7.65
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
First Quarter
|
C$
|
28.95
|
|
|
C$
|
23.25
|
|
|
$
|
21.19
|
|
|
$
|
16.13
|
|
Second Quarter
|
C$
|
27.50
|
|
|
C$
|
21.50
|
|
|
$
|
19.18
|
|
|
$
|
14.03
|
|
Third Quarter
|
C$
|
27.60
|
|
|
C$
|
17.75
|
|
|
$
|
18.92
|
|
|
$
|
11.46
|
|
Fourth Quarter
(1)
|
C$
|
21.15
|
|
|
C$
|
17.00
|
|
|
$
|
14.30
|
|
|
$
|
10.81
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
December 31, 2012
|
December 31, 2013
|
December 31, 2014
|
December 31, 2015
|
December 31, 2016
|
||||||
Novelion Therapeutics Inc.
|
100.00
|
|
109.17
|
|
146.40
|
|
105.40
|
|
69.92
|
|
59.79
|
|
S&P/TSX Composite Index
|
100.00
|
|
109.52
|
|
115.83
|
|
117.17
|
|
90.22
|
|
112.31
|
|
NASDAQ Biotechnology Index
|
100.00
|
|
132.74
|
|
220.37
|
|
296.19
|
|
331.05
|
|
260.37
|
|
a.
|
acquisition of common shares by a person in the ordinary course of that person’s business as a trader or dealer in securities;
|
b.
|
acquisition of control of us in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of the Investment Act; and
|
c.
|
acquisition of control of us by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of the Company, through the ownership of voting interests, remains unchanged.
|
Item 6.
|
Selected Financial Data.
|
1.
|
On November 29, 2016, we completed the Merger. Our financial position at the end of 2016 included Aegerion’s financial position. Our results of operations for 2016 consisted of Aegerion’s financial performance from November 29, 2016 to December 31, 2016.
|
2.
|
Per share amounts have been retrospectively restated to reflect the one -for- five share consolidation of Novelion’s common stock effective on December 16, 2016.
|
3.
|
On September 15, 2015, the InSite Merger Agreement was terminated after InSite’s board of directors notified QLT that they had reviewed a second unsolicited offer from Sun Pharmaceuticals Industries Ltd. and determined that it was superior to the proposed InSite Merger with QLT. The Sun Proposal was an all-cash offer to acquire InSite for $0.35 per share of InSite common stock. As a result, InSite notified QLT that it was exercising its right to terminate the InSite Merger Agreement in order to enter into an agreement with Sun, and InSite paid QLT a termination fee of $2.7 million. During the year ended December 31, 2015, QLT incurred consulting and transaction fees of $9.4 million in connection with the pursuit of the InSite Merger and the strategic transactions as described below under Note 3 -
Terminated Merger Transactions.
|
4.
|
On October 8, 2014, the Auxilium Merger Agreement among QLT, Auxilium, HoldCo, and AcquireCo, terminated after Auxilium delivered a notice of termination to QLT informing QLT that Auxilium’s board of directors had determined that the Endo Proposal was a superior proposal under the terms of the Auxilium Merger Agreement. Due to this change in recommendation by Auxilium’s board of directors and in accordance with the termination
|
5.
|
On June 27, 2013, we completed a $200.0 million special cash distribution, by way of a reduction of the paid-up capital of the Company’s common shares (the Cash Distribution). The Cash Distribution was approved by the Company’s shareholders at QLT’s annual and special shareholders’ meeting on June 14, 2013. All shareholders of record as of June 24, 2013 (the Record Date) were eligible to participate in the Cash Distribution and received a payment of approximately $3.92 per share based upon the 51,081,878 common shares issued and outstanding on the Record Date.
|
6.
|
On April 3, 2013, we completed the sale of our punctal plug drug delivery system technology to Mati pursuant to an asset purchase agreement. During the year ended December 31, 2013, we recognized a $1.1 million gain within discontinued operations, which represented $1.2 million of sale proceeds net of the $0.2 million carrying value of certain equipment sold and a negligible amount of other transaction fees.
|
7.
|
On September 24, 2012, we completed the sale of our Visudyne business to Valeant pursuant to an asset purchase agreement. During the year ended December 31, 2012, we recognized a pre-tax gain of $101.4 million related to this transaction within discontinued operations.
|
(In thousands, except per share information)
Quarter Ended |
December 31
(a)
|
|
September 30
|
|
June 30
|
|
March 31
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Net product sales
|
$
|
13,574
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost of product sales
|
5,971
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Selling, general and administrative expenses
|
16,038
|
|
|
3,138
|
|
|
4,451
|
|
|
5,898
|
|
||||
Research and development expenses
|
6,010
|
|
|
2,855
|
|
|
2,929
|
|
|
2,990
|
|
||||
Loss from continuing operations
|
(19,920
|
)
|
|
(5,936
|
)
|
|
(5,120
|
)
|
|
(21,894
|
)
|
||||
Net loss
|
(19,920
|
)
|
|
(5,936
|
)
|
|
(5,120
|
)
|
|
(21,894
|
)
|
||||
Basic and diluted net loss per common share
(b) (d)
|
(1.48
|
)
|
|
(0.55
|
)
|
|
(0.50
|
)
|
|
(2.05
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
(In thousands, except per share information)
Quarter Ended |
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
||||||||
2015 (c)
|
|
|
|
|
|
|
|
||||||||
Net product sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost of product sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Research and development expenses
|
2,036
|
|
|
2,142
|
|
|
3,404
|
|
|
2,208
|
|
||||
Loss from continuing operations
|
(3,680
|
)
|
|
(2,682
|
)
|
|
(10,751
|
)
|
|
(5,896
|
)
|
||||
Net loss
|
(3,680
|
)
|
|
(2,682
|
)
|
|
(10,751
|
)
|
|
(5,896
|
)
|
||||
Basic and diluted net loss per common share
(b) (d)
|
(0.30
|
)
|
|
(0.25
|
)
|
|
(1.05
|
)
|
|
(0.60
|
)
|
a.
|
On November 29, 2016, we completed the Merger. Our financial position at the end of Q4 2016 included Aegerion’s financial position. Our results of operations for Q4 2016 included Aegerion’s financial performance from November 29, 2016 to December 31, 2016.
|
b.
|
Per share amounts have been retrospectively restated to reflect the one -for- five share consolidation of Novelion’s common stock effective on December 16, 2016.
|
c.
|
On September 15, 2015, the InSite Merger Agreement was terminated after InSite’s board of directors notified QLT that they had reviewed a second unsolicited offer from Sun Pharmaceuticals Industries Ltd. and determined that it was superior to the proposed InSite Merger with QLT. The Sun Proposal was an all-cash offer to acquire InSite for $0.35 per share of InSite common stock. Due to this change in recommendation by InSite’s board of directors and in accordance with the termination provisions of the InSite Merger Agreement, InSite paid QLT a termination fee of $2.7 million. During the year ended December 31, 2015, QLT incurred consulting and transaction fees of $9.4 million in connection with the pursuit of the InSite Merger
(as described under Note 3 -
Terminated Merger Transactions
).
|
d.
|
Basic and diluted income (loss) per share are determined separately for each quarter. As a result, the sum of the quarterly amounts may differ from the annual amounts disclosed in the Consolidated Financial Statements due to the use of different weighted average numbers of shares outstanding.
|
Item 7.
|
Management’s Discussion
and Analysis of Financial Condition and Results of Operations.
|
◦
|
Metreleptin, a recombinant analog of human leptin, is marketed in the United States (U.S.) under the brand name MYALEPT (metreleptin) for injection (MYALEPT). MYALEPT is approved in the U.S. as an adjunct to diet as replacement therapy to treat the complications of leptin deficiency in patients with congenital or acquired generalized lipodystrophy (GL). In December 2016, we submitted a marketing authorization application (MAA) to the European Medicines Agency (EMA) to seek approval for metreleptin, under the brand name MYALEPTA, as replacement therapy to treat complications of leptin deficiency in patients with GL and in a subset of patients with partial lipodystrophy (PL). We also expect to submit a supplemental biologics licensing application (sBLA) to the U.S. Food and Drug Administration (FDA) in the first half of 2017, seeking to expand MYALEPT’s indication in the U.S. to the PL subset and plan to file for formal regulatory approvals for metreleptin in GL and the PL subset throughout 2017 and early 2018 in other key markets, including Brazil and Colombia. We offer metreleptin through expanded access programs in countries where permitted by applicable regulatory authorities and under applicable laws, and generate revenue in certain markets where named patient sales are permitted based on the approval of metreleptin in the U.S. In addition to the PL subset, we plan to use our knowledge of the diverse effects of leptin on various physiologic functions to explore new opportunities for metreleptin as a platform drug to potentially treat patients suffering from a range of low leptin-mediated rare and metabolic diseases. We are evaluating and prioritizing these potential opportunities and plan to provide an update in mid-2017.
|
◦
|
Lomitapide is marketed in the U.S. under the brand name JUXTAPID (lomitapide) capsules (JUXTAPID). JUXTAPID is approved in the U.S. as an adjunct to a low-fat diet and other lipid-lowering treatments, including low-density lipoprotein (LDL) apheresis where available, to reduce low-density lipoprotein cholesterol (LDL-C), total cholesterol (TC), apolipoprotein B (apo B) and non-high-density lipoprotein cholesterol (non-HDL-C) in adult patients with homozygous familial hypercholesterolemia (HoFH). Lomitapide is approved in the European Union (EU), under the brand name LOJUXTA (lomitapide) hard capsules (LOJUXTA) for the treatment of adult patients with HoFH, as well as in Japan, Canada, and a small number of other countries. In December 2016, Aegerion out-licensed the rights to commercialize LOJUXTA in the EU and certain other jurisdictions to Amryt Pharma plc (Amryt) and will receive sales milestones and royalties on net sales in those jurisdictions. In December 2016, Aegerion launched JUXTAPID as a treatment for HoFH in Japan, after receiving reimbursement approval. Lomitapide is also sold, on a named patient basis, in Brazil and in a limited number of other countries outside the U.S. where such sales are permitted as a result of the approval of lomitapide in the U.S. or the EU.
|
•
|
building and maintaining market acceptance for MYALEPT in the U.S. for the treatment of complications of leptin deficiency in GL patients, and supporting named patient sales of metreleptin in GL in Brazil, particularly in light of local economic challenges and ongoing governmental investigations, and other key countries, including France and Turkey, where such sales are permitted as a result of the U.S. approval or under local law;
|
•
|
preparing for the launch of metreleptin in Europe as a treatment for complications of leptin deficiency in GL patients and a subset of PL, in the event we obtain regulatory, pricing and reimbursement approvals in the EU for metreleptin;
|
•
|
evaluating the potential for future clinical development of metreleptin in additional indications, including a subset of PL, if we are unable to secure approval of such indication with the current metreleptin clinical data package, as well as potentially other low leptin-mediated rare and metabolic diseases;
|
•
|
stabilizing sales of JUXTAPID as a treatment for adult HoFH patients in the U.S. despite competition from PCSK9 inhibitor products, among other factors, which have had a significant adverse impact on sales of JUXTAPID, and gaining market acceptance in the other countries where lomitapide is approved and being commercialized, or may in the future receive approval and be commercialized;
|
•
|
managing our costs and expenses to better align with our revenues, and strengthening our capital structure, while supporting approved products in a compliant manner;
|
•
|
continuing to support patient access to and reimbursement for our products in the U.S. without significant restrictions, particularly given the availability of PCSK9 inhibitor products in the U.S., which has adversely impacted reimbursement of JUXTAPID, and given the considerable number of JUXTAPID patients in the U.S. who are on Medicare Part D and the significant percentage of such patients who may not be able to afford their out-of-pocket co-payments for our products, given that the only source of financial support for some such patients may be through patient assistance programs operated by independent charitable 501(c)(3) organizations that may not provide adequate financial assistance;
|
•
|
implementing the modified JUXTAPID Risk Evaluation Management Strategy (REMS) program in the U.S., which includes requirements to recertify all prescribers and pharmacies and a new patient counseling and acknowledgment requirement for existing and new patients, by the July 2, 2017 implementation deadline, while working to limit adult HoFH patient attrition from JUXTAPID as a result of such new requirements;
|
•
|
supporting the recent launch of JUXTAPID in Japan;
|
•
|
continuing to support sales of lomitapide as a treatment for HoFH in Brazil on a named patient basis, particularly in light of the economic challenges, ongoing government investigations, and ongoing court proceedings reviewing the regulatory framework for named patient sales in Brazil, and in other key countries where named patient sales are permitted, despite the availability of PCSK9 inhibitors on a named patient sales basis in such countries;
|
•
|
gaining regulatory, pricing and reimbursement approvals to market our products in countries in which the products are not currently approved and/or reimbursed or for new indications, including obtaining approval of the MAA seeking marketing approval of metreleptin in the EU as a treatment for complications of leptin deficiency in GL patients and a subset of PL, and seeking approval of metreleptin in the U.S. for a subset of PL based on the existing clinical data package for metreleptin;
|
•
|
reviewing the clinical and regulatory pathway for zuretinol to determine the optimal development and business strategy for this product candidate;
|
•
|
engaging in possible further development efforts related to our existing products, and assessing, and possibly acquiring, potential new product candidates targeted at rare diseases where we believe we can leverage our infrastructure and expertise;
|
•
|
minimizing the number of patients who are eligible to receive but decide not to commence treatment with our products, or who discontinue treatment, by supporting activities such as patient support programs, to the extent permitted in a particular country;
|
•
|
continuing to embed a culture of compliance, ethics and integrity throughout Novelion and its subsidiaries;
|
•
|
Aegerion reaching a definitive agreement with the DOJ and the SEC with respect to its ongoing investigations in accordance with the terms of the agreements in principle it entered into in May 2016 and managing other ongoing government investigations pertaining to its products;
|
•
|
Aegerion reaching a definitive agreement with respect to its ongoing securities class action in accordance with the terms of the memorandum of understanding entered into in December 2016 (the MOU); and
|
•
|
defending challenges to the patents or our claims of exclusivity for lomitapide in the U.S., including against potential generic submission with the FDA with respect to lomitapide; and expanding the intellectual property portfolio for our products.
|
•
|
Total revenue was
$13.6 million
for 2016, representing revenue from selling lomitapide and metreleptin through our indirect wholly-owned subsidiary, Aegerion, after the acquisition date in 2016.
|
•
|
Costs of sale were
$6.0 million
for 2016 representing costs of selling lomitapide and metreleptin through our indirect wholly-owned subsidiary, Aegerion, after the acquisition date in 2016.
|
•
|
Selling, general and administrative expenses increased from
$16.2 million
in 2015 to
$29.5 million
in 2016, a
82.0%
increase. This increase was primarily due to our recognition, starting on November 29, 2016, of 100% of Aegerion’s financial performance due to our acquisition of Aegerion on November 29, 2016 and our recognition of $8.0 million in total in relation to the advisory fees we paid to Greenhill for the completion of QLT’s $45 million investment in Aralez and the completion of the Merger.
|
•
|
Research and development expenses increased from
$9.8 million
in 2015 to
$14.8 million
in 2016, a
51.0%
increase. This increase was primarily driven by our recognition, starting on November 29, 2016, of 100% of Aegerion’s financial performance due to our acquisition of Aegerion on November 29, 2016.
|
•
|
We used
$34.4 million
of net cash flows from operations for 2016, which were primarily due to our recognition, starting from November 29, 2016, of 100% of Aegerion’s financial performance including cash activities due to our acquisition of Aegerion on November 29, 2016. Cash and cash equivalents totaled approximately
$108.9 million
as of December 31, 2016.
|
|
|
Years Ended December 31,
|
|
|
|||||||||||
(in thousands except percentage and per share information)
|
|
2016 (1)
|
|
2015
|
|
Change
|
|
%
|
|||||||
Net product sales
|
|
$
|
13,574
|
|
|
$
|
—
|
|
|
$
|
13,574
|
|
|
100.0
|
%
|
Costs of product sales
|
|
5,971
|
|
|
—
|
|
|
5,971
|
|
|
100.0
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative expenses
|
|
29,525
|
|
|
16,222
|
|
|
13,303
|
|
|
82.0
|
%
|
|||
Research and development expenses
|
|
14,784
|
|
|
9,790
|
|
|
4,994
|
|
|
51.0
|
%
|
|||
Termination fee
|
|
—
|
|
|
(2,667
|
)
|
|
2,667
|
|
|
(100.0
|
)%
|
|||
Total operating expenses
|
|
44,309
|
|
|
23,345
|
|
|
20,964
|
|
|
89.8
|
%
|
|||
Loss from operations
|
|
(36,706
|
)
|
|
(23,345
|
)
|
|
(13,361
|
)
|
|
57.2
|
%
|
|||
Interest (expense) income, net
|
|
(2,960
|
)
|
|
277
|
|
|
(3,237
|
)
|
|
(1,168.6
|
)%
|
|||
Fair value loss on investment
|
|
(10,740
|
)
|
|
—
|
|
|
(10,740
|
)
|
|
(100.0
|
)%
|
|||
Other (expense) income, net
|
|
(1,999
|
)
|
|
81
|
|
|
(2,080
|
)
|
|
(2,567.9
|
)%
|
|||
Loss before provision for income taxes
|
|
(52,405
|
)
|
|
(22,987
|
)
|
|
(29,418
|
)
|
|
128.0
|
%
|
|||
Provision for income tax expense
|
|
(465
|
)
|
|
(22
|
)
|
|
(443
|
)
|
|
2,013.6
|
%
|
|||
Net loss
|
|
$
|
(52,870
|
)
|
|
$
|
(23,009
|
)
|
|
$
|
(29,861
|
)
|
|
129.8
|
%
|
Basic and diluted net loss per common share
|
|
$
|
(4.69
|
)
|
|
$
|
(2.20
|
)
|
|
$
|
(2.49
|
)
|
|
113.2
|
%
|
|
|
Years Ended December 31,
|
|
|
|||||||||||
(in thousands except percentage and per share information)
|
|
2015
|
|
2014
|
|
Change
|
|
%
|
|||||||
Net product sales
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
Cost of product sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative expenses
|
|
15,646
|
|
|
16,791
|
|
|
(1,145
|
)
|
|
(6.8
|
)%
|
|||
Research and development expenses
|
|
9,790
|
|
|
13,803
|
|
|
(4,013
|
)
|
|
(29.1
|
)%
|
|||
Depreciation
|
|
576
|
|
|
891
|
|
|
(315
|
)
|
|
(35.4
|
)%
|
|||
Restructuring charges
|
|
—
|
|
|
744
|
|
|
(744
|
)
|
|
(100.0
|
)%
|
|||
Termination fee
|
|
(2,667
|
)
|
|
(28,400
|
)
|
|
25,733
|
|
|
(90.6
|
)%
|
|||
Total operating expenses
|
|
23,345
|
|
|
3,829
|
|
|
19,516
|
|
|
509.7
|
%
|
|||
Loss from operations
|
|
(23,345
|
)
|
|
(3,829
|
)
|
|
(19,516
|
)
|
|
509.7
|
%
|
|||
Interest income, net
|
|
277
|
|
|
113
|
|
|
164
|
|
|
145.1
|
%
|
|||
Other income (expense), net
|
|
81
|
|
|
(481
|
)
|
|
562
|
|
|
(116.8
|
)%
|
|||
Loss from continuing operations before income taxes
|
|
(22,987
|
)
|
|
(4,197
|
)
|
|
(18,790
|
)
|
|
447.7
|
%
|
|||
Provision for income tax (expense) recovery
|
|
(22
|
)
|
|
192
|
|
|
(214
|
)
|
|
(111.5
|
)%
|
|||
Net loss from continuing operations
|
|
(23,009
|
)
|
|
(4,005
|
)
|
|
(19,004
|
)
|
|
474.5
|
%
|
|||
Loss from discontinued operations, net of income taxes
|
|
—
|
|
|
(66
|
)
|
|
66
|
|
|
(100.0
|
)%
|
|||
Net loss
|
|
$
|
(23,009
|
)
|
|
$
|
(4,071
|
)
|
|
$
|
(18,938
|
)
|
|
465.2
|
%
|
Basic and diluted net loss per common share
|
|
$
|
(2.20
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(1.80
|
)
|
|
450.0
|
%
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash (used in)/provided by:
|
|
|
|
|
|
||||||
Operating activities
|
$
|
(34,356
|
)
|
|
$
|
(19,359
|
)
|
|
$
|
455
|
|
Investing activities
|
25,327
|
|
|
34
|
|
|
36,672
|
|
|||
Financing activities
|
(23,519
|
)
|
|
5,508
|
|
|
509
|
|
|||
Effect of exchange rates on cash
|
(349
|
)
|
|
(267
|
)
|
|
(249
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
$
|
(32,897
|
)
|
|
$
|
(14,084
|
)
|
|
$
|
37,387
|
|
•
|
A significant increase in the net loss recognized by the Company year-over-year.
|
•
|
A negative operating cash flow variance of
$8.0 million
related to advisory fees paid to Greenhill in connection with the completion of Novelion's
$45.0 million
investment in Aralez and the completion of Novelion's acquisition of Aegerion.
|
•
|
A positive operating cash flow variance of
$10.7 million
related to a loss recorded based on the mark-to-market adjustment on the Aralez investment to reflect changes in value from the acquisition date, February 5, 2016, through the distribution date, April 5, 2016.
|
•
|
Negative operating cash flows were noted as a result of the Company's acquisition of Aegerion, which included cash flows from the acquisition date of November 29, 2016 through December 31, 2016. Significant items noted related to payments made for deal-related consulting fees and litigation during the period. These negative operating cash outflows were offset by period amortization of the JUXTAPID and MYALEPT intangible assets recognized in conjunction with the Merger.
|
•
|
A $25.7 million negative cash flow variance related to a $28.4 million termination fee received in 2014 related to the proposed Auxilium Merger as compared to the $2.7 million termination received in 2015 related to the proposed InSite Merger (refer to Note 3 -
Terminated Merger Transactions
for more information);
|
•
|
A negative operating cash flow variance of $1.5 million related to the portion of the Eligard Contingent Consideration that was received in 2014 and recognized as part of cash used in operations.
|
•
|
A positive cash flow variance of $5.0 million resulting from: (i) lower salary costs related to changes in the R&D and SG&A head count, lower lease costs and the foreign exchange impact of the weakening Canadian dollar, and (ii) higher cash outlays in the prior year related to the following 2014 research and development activities: toxicity studies, preparatory activities for the zuretinol pivotal trial and trailing costs from our Retreatment Study. These positive cash flow variances were partially offset by increased cash outlays in 2015 related to: (i) the transfer and outsourcing of our analytical and bio-analytical testing functions to certain contract research organizations and (ii) spending related to the commencement of our natural history study.
|
•
|
A positive cash flow variance of $1.5 million due to lower consulting and advisory fees paid during the year ended December 31, 2015 as compared to the same period in 2014. During the year ended December 31, 2015, we paid $8.7 million of transaction and consulting fees related to our exploration and pursuit of the InSite Merger and the Aralez Distribution. In comparison, during the year ended December 31, 2014, we paid $10.2 million of transaction and consulting fees related to our pursuit of the Auxilium Merger.
|
•
|
A $0.9 million positive cash flow variance associated with restructuring charges paid out in 2014 for accrued severance and termination benefits.
|
•
|
A positive cash flow variance related to the $28.4 million termination fee received in connection with the proposed Auxilium Merger.
|
•
|
A positive cash flow variance of $2.9 million from lower spending on restructuring costs;
|
•
|
A positive operating cash flow variance from $8.8 million of lower operational spending associated with our 2012 restructuring initiatives;
|
•
|
A negative cash flow variance of $10.2 million associated with consulting and transaction fees paid in 2014 in connection with the proposed Auxilium Merger;
|
•
|
A negative operating cash flow variance related to the fair value change in contingent consideration of $2.6 million;
|
•
|
A negative operating cash flow variance of $0.6 million related to the reversal of certain liabilities recorded for uncertain tax positions; and
|
•
|
A negative operating cash flow variance from other income items of $0.4 million.
|
|
Payments due by period
|
||||||||||||||||||
Contractual Obligations
(1)
(in thousands)
|
Total
|
|
Less than
1 year |
|
1-3 years
|
|
3-5 years
|
|
More than
5 years |
||||||||||
Long-term debt (including interest)
(2)
|
$
|
342,060
|
|
|
$
|
6,500
|
|
|
$
|
335,560
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating Leases
|
6,508
|
|
|
3,083
|
|
|
3,284
|
|
|
141
|
|
|
—
|
|
|||||
Total contractual obligations
(3)
|
$
|
348,568
|
|
|
$
|
9,583
|
|
|
$
|
338,844
|
|
|
$
|
141
|
|
|
$
|
—
|
|
i.
|
Uncertain Tax Positions
|
ii.
|
Purchase Orders
|
iii.
|
Contract Research Organization (CRO) Agreement
|
iv.
|
Milestone Obligations
|
•
|
the success of our commercialization efforts and the level of revenues generated from sales of metreleptin and lomitapide in the U.S.;
|
•
|
the level of revenue received from named patient sales of metreleptin and lomitapide in Brazil and other key countries where a mechanism exists to sell the product on a pre-approval basis in such country based on U.S. approval of such products or EU approval of lomitapide, particularly in light of the availability of a PCSK9 inhibitor product in Brazil and the ongoing court proceedings in Brazil reviewing the regulatory framework for named patient sales;
|
•
|
the level of physician, patient and payer acceptance of lomitapide and metreleptin;
|
•
|
our ability to manage our costs and expenses to better align with our revenues and strengthen our capital structure, while supporting approved products in a compliant manner;
|
•
|
gaining regulatory and pricing and reimbursement approvals to market our products in countries in which the products are not currently approved and/or reimbursed, where it makes business sense to seek such approval, without significant restrictions, discounts, caps or other cost containment measures, including regulatory and pricing and reimbursement approval of metreleptin in the EU, in connection with which we filed an MAA in the EMA in December 2016, and regulatory approval of metreleptin in the U.S. for a subset of PL based on the existing clinical data package for metreleptin, subject to discussions with the FDA;
|
•
|
the extent of the negative impact of the availability of PCSK9 inhibitor products on sales of JUXTAPID in the U.S., which, among other factors, have caused a significant number of JUXTAPID patients to discontinue JUXTAPID and switch to a PCSK9 inhibitor product, and significantly decreased the rate at which new HoFH patients start treatment with lomitapide;
|
•
|
the provision of free PCSK9 inhibitor drug to adult HoFH patients by the companies that are commercializing PCSK9 inhibitor products, which such companies may have ceased, but which historically has had a negative impact on the rate at which new patients start treatment with lomitapide and has caused more patients than we expected to discontinue lomitapide and switch their treatment to PCSK9 inhibitor products;
|
•
|
requirements of insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs in the U.S. to require that newly diagnosed adult HoFH patients be treated with PCSK9 inhibitor products prior to JUXTAPID, that current JUXTAPID patients switch to PCSK9 inhibitor products, and that patients fail to adequately respond to PCSK9 inhibitor products before providing reimbursement for JUXTAPID at the prices at which we offer JUXTAPID;
|
•
|
the willingness of insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs in the U.S. to continue to provide reimbursement for our products at the prices at which we offer our products without imposing any additional major hurdles to access or other significant restrictions or limitations, and the ability and willingness of HoFH and GL patients to pay, or to arrange for payment assistance with respect to, any patient cost-sharing amounts for our products applicable under their insurance coverage, particularly in light of recent reductions in contributions to 501(c)(3) patient organizations by pharmaceutical companies;
|
•
|
the cost of building and maintaining the sales and marketing capabilities necessary for the commercialization of our products for their targeted indications in the market(s) in which each has received regulatory approval and we elect to commercialize such products, to the extent reimbursement and pricing approvals are obtained, and certain other key international markets, if approved;
|
•
|
the timing and costs of future business development opportunities;
|
•
|
the timing and cost of seeking regulatory approvals and conducting potential future clinical development of metreleptin in additional indications, pursuing possible lifecycle management opportunities for metreleptin, and conducting potential development of the zuretinol program;
|
•
|
the cost of filing, prosecuting and enforcing patent claims, including the cost of defending any challenges to the patents or our claims of exclusivity;
|
•
|
the status of ongoing government investigations and lawsuits, including the disclosure of possible or actual outcomes, including regarding the preliminary agreements in principle that have been reached with the DOJ and the SEC;
|
•
|
the costs of our manufacturing-related activities and the other costs of commercializing our products;
|
•
|
the costs associated with ongoing government investigations and lawsuits, including any damages, settlement amounts, fines or other payments, or implementation of compliance related agreements or consent decrees, that may result from settlements or enforcement actions related to government investigations or whether we are successful in our efforts to defend ourselves in, or to settle on acceptable terms, ongoing or future litigation;
|
•
|
the levels, timing and collection of revenue received from sales of our products in the future;
|
•
|
the timing and costs of satisfying our debt obligations, including interest payments and any amounts due upon the maturity of such debt, including under the Convertible Notes;
|
•
|
the cost of our observational cohort studies and other post-marketing commitments, including to the FDA and in any other countries where our products are ultimately approved; and
|
•
|
the timing and cost of other clinical development activities.
|
a.
|
“Excess distributions” by the Company are subject to the following special rules. An excess distribution generally is the excess of the amount a PFIC distributes to a shareholder during a taxable year over 125% of the average amount it distributed to the shareholder during the three preceding taxable years or, if shorter, the part of the shareholder’s holding period before the taxable year. Distributions with respect to the common shares made by the Company during the taxable year to a U.S. Holder that are excess distributions must be allocated ratably to each day of the U.S. Holder’s holding period. The amounts allocated to the current taxable year and to taxable years prior to the first year in which the Company was classified as a PFIC are included as ordinary income in a U.S. Holder’s gross income for that year. The amount allocated to each other prior taxable year is taxed as ordinary income at the highest tax rate in effect for the U.S. Holder in that prior year (without offset by any net operating loss for such year) and the tax is subject to an interest charge at the rate applicable to deficiencies in income taxes (the special interest charge).
|
b.
|
The entire amount of any gain realized upon the sale or other disposition of the common shares will be treated as an excess distribution made in the year of sale or other disposition and as a consequence will be treated as ordinary income and, to the extent allocated to years prior to the year of sale or disposition, will be subject to the special interest charge described above.
|
Item 7A.
|
Quantitative and Qualitative
Disclosures About Market Risk.
|
Item 8.
|
Consolidated Financial Statements
and Supplementary Data.
|
|
Page
|
|
As of December 31,
|
||||||
(in thousands, except share information)
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
(Note 14)
|
$
|
108,927
|
|
|
$
|
141,824
|
|
Restricted cash
(Note 14)
|
390
|
|
|
—
|
|
||
Accounts receivable, net
(Note 2)
|
9,339
|
|
|
287
|
|
||
Inventories - current
(Note 6)
|
15,718
|
|
|
—
|
|
||
Insurance proceeds receivable
(Note 16)
|
22,000
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
9,762
|
|
|
625
|
|
||
Total current assets
|
166,136
|
|
|
142,736
|
|
||
Inventories - non-current
(Note 6)
|
59,003
|
|
|
—
|
|
||
Property and equipment, net
(Note 7)
|
4,159
|
|
|
430
|
|
||
Accounts receivable - non-current
(Note 16)
|
—
|
|
|
2,000
|
|
||
Intangible assets, net
(Note 8)
|
250,324
|
|
|
—
|
|
||
Other assets
|
1,160
|
|
|
—
|
|
||
Total assets
|
$
|
480,782
|
|
|
$
|
145,166
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
17,609
|
|
|
$
|
1,656
|
|
Accrued liabilities
(Note 9)
|
37,180
|
|
|
1,827
|
|
||
Provision for legal settlement
(Note 16)
|
64,010
|
|
|
—
|
|
||
Total current liabilities
|
118,799
|
|
|
3,483
|
|
||
Long-term liabilities:
|
|
|
|
||||
Convertible notes, net
(Note 10)
|
225,584
|
|
|
—
|
|
||
Uncertain tax position liabilities, net
(Note 13)
|
381
|
|
|
342
|
|
||
Other liabilities
|
231
|
|
|
—
|
|
||
Total liabilities
|
344,995
|
|
|
3,825
|
|
||
Contingencies, Commitments and Guarantees
(Note 16)
|
|
|
|
||||
SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Share capital
(Note 11)
|
|
|
|
|
|
||
Common shares, without par value, 100,000,000
(1)
shares authorized at December 31, 2016 and 2015; 18,530,323 and 10,565,489
(1)
shares issued at December 31, 2016 and 2015, respectively.
|
551,259
|
|
|
475,333
|
|
||
Additional paid-in-capital
|
69,149
|
|
|
97,377
|
|
||
Accumulated deficit
|
(587,208
|
)
|
|
(534,338
|
)
|
||
Accumulated other comprehensive items
|
102,587
|
|
|
102,969
|
|
||
Total shareholders’ equity
|
135,787
|
|
|
141,341
|
|
||
Total liabilities and shareholders’ equity
|
$
|
480,782
|
|
|
$
|
145,166
|
|
|
|
|
|
||||
(1) Amounts have been retrospectively restated for all prior periods presented to reflect the one-for-five share consolidation of the Company’s common stock effected on December 16, 2016. See Note 1-
Description of the Business
for details.
|
|||||||
|
|
|
|
||||
See the accompanying Notes to the Consolidated Financial Statements.
|
|
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands, except per share information)
|
2016
|
|
2015
|
|
2014
|
||||||
Net product sales
|
$
|
13,574
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost of product sales
|
5,971
|
|
|
—
|
|
|
—
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Selling, general and administrative
|
29,525
|
|
|
16,222
|
|
|
17,682
|
|
|||
Research and development
|
14,784
|
|
|
9,790
|
|
|
13,803
|
|
|||
Restructuring charges
|
—
|
|
|
—
|
|
|
744
|
|
|||
Termination Fee
(Note 3)
|
—
|
|
|
(2,667
|
)
|
|
(28,400
|
)
|
|||
Total operating expenses
|
44,309
|
|
|
23,345
|
|
|
3,829
|
|
|||
Loss from operations
|
(36,706
|
)
|
|
(23,345
|
)
|
|
(3,829
|
)
|
|||
Interest (expense) income, net
|
(2,960
|
)
|
|
277
|
|
|
113
|
|
|||
Fair value loss on investment
(Note 4)
|
(10,740
|
)
|
|
—
|
|
|
—
|
|
|||
Other income (expense), net
|
(1,999
|
)
|
|
81
|
|
|
(481
|
)
|
|||
Loss from continuing operations before income taxes
|
(52,405
|
)
|
|
(22,987
|
)
|
|
(4,197
|
)
|
|||
Provision for Income tax (expense) recovery
(Note 13)
|
(465
|
)
|
|
(22
|
)
|
|
192
|
|
|||
Loss from continuing operations
|
$
|
(52,870
|
)
|
|
$
|
(23,009
|
)
|
|
$
|
(4,005
|
)
|
Loss from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
(66
|
)
|
|||
Net loss
|
$
|
(52,870
|
)
|
|
$
|
(23,009
|
)
|
|
$
|
(4,071
|
)
|
Basic and diluted net loss per common share
(1)
(Note 15)
|
|
|
|
|
|
|
|
|
|||
Continuing operations
(1)
|
$
|
(4.69
|
)
|
|
$
|
(2.20
|
)
|
|
$
|
(0.40
|
)
|
Discontinued operations
(1) (2)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss per common share
(1)
|
$
|
(4.69
|
)
|
|
$
|
(2.20
|
)
|
|
$
|
(0.40
|
)
|
Weighted-average shares outstanding—basic and diluted (thousands)
(1)
|
|
|
|
|
|
|
|
|
|||
Basic and diluted
(1)
|
11,284
|
|
|
10,434
|
|
|
10,225
|
|
|||
|
|
|
|
|
|
||||||
(1) Amounts have been retrospectively restated for all prior periods presented to reflect the one-for-five share consolidation of the Company’s common stock effected on December 16, 2016. See Note 1 -
Description of Business
for details.
|
|||||||||||
(2) Rounded to zero.
|
|||||||||||
See the accompanying Notes to the Consolidated Financial Statements.
|
|
|
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Net loss
|
$
|
(52,870
|
)
|
|
$
|
(23,009
|
)
|
|
$
|
(4,071
|
)
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation
|
(382
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive loss
|
(382
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive loss
|
$
|
(53,252
|
)
|
|
$
|
(23,009
|
)
|
|
$
|
(4,071
|
)
|
|
|
|
|
|
|
||||||
See the accompanying Notes to the Consolidated Financial Statements.
|
|
|
|
|
(in thousands, except share and per share information)
|
Common Shares
|
|
Additional Paid-In
|
|
Accumulated
|
|
Accumulated Other Comprehensive
|
|
Total Shareholders’
|
|||||||||||||
|
Shares
(1)
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Income
|
|
Equity
|
|||||||||||
Balance at December 31, 2013
|
10,215,985
|
|
|
$
|
466,229
|
|
|
$
|
95,844
|
|
|
$
|
(507,258
|
)
|
|
$
|
102,969
|
|
|
$
|
157,784
|
|
Exercise of stock options, for cash, at prices ranging from CAD $22.7 to CAD $26.9 per share
(1)
|
20,809
|
|
|
750
|
|
|
(241
|
)
|
|
—
|
|
|
—
|
|
|
509
|
|
|||||
Shares issued in connection with RSUs vested (Note 12)
|
2,800
|
|
|
55
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Uncertain tax position liability recovery (Note 13)
|
—
|
|
|
—
|
|
|
837
|
|
|
—
|
|
|
—
|
|
|
837
|
|
|||||
Stock-based compensation expense (Note 12)
|
—
|
|
|
—
|
|
|
1,453
|
|
|
—
|
|
|
—
|
|
|
1,453
|
|
|||||
Net loss and comprehensive loss
|
—
|
|
—
|
|
|
|
|
|
(4,071
|
)
|
|
—
|
|
|
(4,071
|
)
|
||||||
Balance at December 31, 2014
|
10,239,594
|
|
|
467,034
|
|
|
97,838
|
|
|
(511,329
|
)
|
|
102,969
|
|
|
156,512
|
|
|||||
Exercise of stock options, for cash, at prices ranging from CAD $20.4 to CAD $22.7 per share
(1)
|
313,095
|
|
|
8,077
|
|
|
(2,569
|
)
|
|
—
|
|
|
—
|
|
|
5,508
|
|
|||||
Shares issued in connection with RSUs vested (Note 12)
|
12,800
|
|
|
222
|
|
|
(222
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense (Note 12)
|
—
|
|
|
—
|
|
|
2,330
|
|
|
—
|
|
|
—
|
|
|
2,330
|
|
|||||
Net loss and comprehensive loss
|
—
|
|
|
—
|
|
|
|
|
|
(23,009
|
)
|
|
—
|
|
|
(23,009
|
)
|
|||||
Balance at December 31, 2015
|
10,565,489
|
|
|
475,333
|
|
|
97,377
|
|
|
(534,338
|
)
|
|
102,969
|
|
|
141,341
|
|
|||||
Shares issued in connection with the Acquisition of Aegerion (Note 5)
|
6,060,288
|
|
|
59,381
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59,381
|
|
|||||
Shares issued in a private placement net of share issuance cost (Note 11)
|
1,904,546
|
|
|
16,545
|
|
|
4,936
|
|
|
—
|
|
|
—
|
|
|
21,481
|
|
|||||
Stock-based compensation expense (Note 12)
|
|
|
|
—
|
|
|
797
|
|
|
—
|
|
|
—
|
|
|
797
|
|
|||||
Cash distribution to shareholders (Note 4)
|
—
|
|
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|
(15,000
|
)
|
|||||
Aralez shares distributed to shareholders (Note 4)
|
—
|
|
|
—
|
|
|
(19,296
|
)
|
|
—
|
|
|
—
|
|
|
(19,296
|
)
|
|||||
Uncertain tax position liability recovery (Note 13)
|
—
|
|
|
—
|
|
|
335
|
|
|
—
|
|
|
—
|
|
|
335
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(382
|
)
|
|
(382
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,870
|
)
|
|
—
|
|
|
(52,870
|
)
|
|||||
Balance at December 31, 2016
|
18,530,323
|
|
|
$
|
551,259
|
|
|
$
|
69,149
|
|
|
$
|
(587,208
|
)
|
|
$
|
102,587
|
|
|
$
|
135,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
(1) Amounts have been retrospectively restated for all prior periods presented to reflect the one-for-five share consolidation of the Company’s common stock effected on December 16, 2016. Refer to Note 1 -
Description of Business
for further details.
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
See the accompanying Notes to the Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Cash (used in) provided by operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(52,870
|
)
|
|
$
|
(23,009
|
)
|
|
$
|
(4,071
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
264
|
|
|
576
|
|
|
891
|
|
|||
Amortization of intangible assets
|
2,134
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
797
|
|
|
2,330
|
|
|
1,453
|
|
|||
Noncash interest expense
|
2,676
|
|
|
—
|
|
|
—
|
|
|||
Fair value change in contingent consideration (Notes 14, 16)
|
2,042
|
|
|
—
|
|
|
2,000
|
|
|||
Unrealized foreign exchange gain (losses)
|
118
|
|
|
(120
|
)
|
|
75
|
|
|||
Loss (gain) on sale of long-lived assets
|
50
|
|
|
(36
|
)
|
|
—
|
|
|||
Fair value loss on investment (Note 4)
|
10,704
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
(214
|
)
|
|
18
|
|
|
(177
|
)
|
|||
Impairment of long-lived assets
|
—
|
|
|
11
|
|
|
—
|
|
|||
Changes in assets and liabilities, excluding the effect of acquisition:
|
|
|
|
|
|
||||||
Accounts receivable
|
(893
|
)
|
|
10
|
|
|
73
|
|
|||
Inventories
|
2,079
|
|
|
—
|
|
|
—
|
|
|||
Prepaid and other assets
|
705
|
|
|
442
|
|
|
810
|
|
|||
Accounts payable
|
4,441
|
|
|
(184
|
)
|
|
(607
|
)
|
|||
Accrued liabilities
|
(6,389
|
)
|
|
570
|
|
|
108
|
|
|||
Accrued restructuring
|
—
|
|
|
—
|
|
|
(130
|
)
|
|||
Income taxes receivable/payable
|
—
|
|
|
33
|
|
|
30
|
|
|||
Net cash (used in) provided by operating activities
|
(34,356
|
)
|
|
(19,359
|
)
|
|
455
|
|
|||
Cash provided by investing activities
|
|
|
|
|
|
||||||
Cash acquired through acquisition (Note 5)
|
28,290
|
|
|
—
|
|
|
—
|
|
|||
Cash consideration for acquisition - loan to Aegerion (Note 5)
|
(3,000
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of long-lived assets
|
192
|
|
|
43
|
|
|
115
|
|
|||
Purchases of property and equipment
|
(155
|
)
|
|
(9
|
)
|
|
(25
|
)
|
|||
Proceeds from contingent consideration (Notes 16)
|
—
|
|
|
—
|
|
|
36,582
|
|
|||
Net cash provided by investing activities
|
25,327
|
|
|
34
|
|
|
36,672
|
|
|||
Cash (used in) provided by financing activities
|
|
|
|
|
|
||||||
Issuance of common shares
|
21,481
|
|
|
5,508
|
|
|
509
|
|
|||
Cash distribution paid to common shareholders
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|||
Settlement of Backstop Agreement (Note 4)
|
15,000
|
|
|
—
|
|
|
—
|
|
|||
Aralez investment
|
(45,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
(23,519
|
)
|
|
5,508
|
|
|
509
|
|
|||
Exchange rate effect on cash
|
(349
|
)
|
|
(267
|
)
|
|
(249
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(32,897
|
)
|
|
(14,084
|
)
|
|
37,387
|
|
|||
Cash and cash equivalents, beginning of period
|
141,824
|
|
|
155,908
|
|
|
118,521
|
|
|||
Cash and cash equivalents, end of period
|
$
|
108,927
|
|
|
$
|
141,824
|
|
|
$
|
155,908
|
|
Supplemental cash flow information
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid for taxes
|
$
|
105
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash financing activities
|
|
|
|
|
|
||||||
Shares issued in the acquisition
(Note 5)
|
$
|
59,088
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible notes of Aegerion, at fair value
(Note 10)
|
$
|
222,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investment activities
|
|
|
|
|
|
|
|
|
|||
Purchases of property and equipment included in accounts payable
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
See the accompanying Notes to the Consolidated Financial Statements.
|
|
|
|
|
Number of Novelion common shares issued in connection with the acquisition of Aegerion
|
|
6,060,288
|
|
|
|||
Novelion share price on November 29, 2016
|
|
$
|
9.75
|
|
|
||
Fair value of Novelion common shares issued to Aegerion stockholders
|
|
|
$
|
59,088
|
|
||
Liability assumed
(2)(3)
|
|
|
3,000
|
|
|||
Stock compensation assumed
(1)
|
|
|
293
|
|
|||
Total acquisition consideration
|
|
|
$
|
62,381
|
|
|
|
|
|
|
|
November 29, 2016
|
||
Cash and cash equivalents
|
|
|
|
|
|
$
|
28,290
|
|
Restricted cash
|
|
|
|
|
|
390
|
|
|
Accounts receivable
(1)
|
|
|
|
|
|
8,182
|
|
|
Inventories
|
|
|
|
|
|
76,800
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
9,839
|
|
|
Insurance proceeds receivable
|
|
|
|
|
|
22,000
|
|
|
Property and equipment, net
|
|
|
|
|
|
4,020
|
|
|
Intangible assets
|
|
|
|
|
|
252,458
|
|
|
Other Assets
|
|
|
|
|
|
1,352
|
|
|
Accounts payable
|
|
|
|
|
|
(11,459
|
)
|
|
Accrued liabilities
|
|
|
|
|
|
(41,883
|
)
|
|
Provision for legal settlement
|
|
|
|
|
|
(63,968
|
)
|
|
Long-term debt
|
|
|
|
|
|
(222,908
|
)
|
|
Other liabilities
|
|
|
|
|
|
(732
|
)
|
|
Net assets acquired
|
|
|
|
|
|
$
|
62,381
|
|
•
|
Legal Matters - Aegerion has been the subject of certain ongoing investigations and other legal proceedings. See Note 16 -
Contingencies, Commitments and Guarantees
for further information regarding these and other legal proceedings.
|
•
|
Tax Matters - Net liabilities for income taxes payable approximated
$0.1 million
and unrecognized tax benefits approximated
$0.9 million
as of the acquisition date. A net deferred tax asset related to Aegerion’s foreign subsidiaries approximated
$1.1 million
as of the acquisition date.
|
|
Valuation
( in thousands ) |
|
Amortization period
(in years) |
||
Developed Technology:
|
|
|
|
||
JUXTAPID
|
$
|
42,300
|
|
|
10.75
|
MYALEPT
|
210,158
|
|
|
9.25
|
|
Total
|
$
|
252,458
|
|
|
|
(in millions, except for per share information)
|
|
|
November 29, 2016 - December 31, 2016
|
||
Net product sales
|
|
|
$
|
13.6
|
|
Net loss
|
|
|
(6.3
|
)
|
|
Basic and diluted net loss per share
|
|
|
$
|
(0.34
|
)
|
|
Unaudited Supplemental Pro Forma Consolidated Results
|
||||||
|
Year ended December 31,
|
||||||
(in millions, except for per share information)
|
2016
|
|
2015
|
||||
Net product sales
|
$
|
153.2
|
|
|
$
|
239.9
|
|
Net loss
|
(207.8
|
)
|
|
(96.3
|
)
|
||
Basic and diluted loss per share
|
$
|
(18.41
|
)
|
|
$
|
(9.23
|
)
|
|
December 31, 2016
|
||||||||||
(
in thousands
)
|
Cost
|
|
Accumulated
Depreciation |
|
Net
Book Value |
||||||
Leasehold improvements
|
$
|
1,869
|
|
|
$
|
263
|
|
|
$
|
1,606
|
|
Office furniture and equipment
|
539
|
|
|
20
|
|
|
519
|
|
|||
Research equipment
|
1,962
|
|
|
1,810
|
|
|
152
|
|
|||
Computer and office equipment
|
10,236
|
|
|
8,693
|
|
|
1,543
|
|
|||
Construction in progress
|
339
|
|
|
$
|
—
|
|
|
339
|
|
||
|
$
|
14,945
|
|
|
$
|
10,786
|
|
|
$
|
4,159
|
|
|
|
|
|
|
|
|
December 31, 2015
|
||||||||||
(
in thousands
)
|
Cost
|
|
Accumulated
Depreciation |
|
Net
Book Value |
||||||
Leasehold improvements
|
$
|
207
|
|
|
$
|
207
|
|
|
$
|
—
|
|
Office furniture and equipment
|
258
|
|
|
246
|
|
|
12
|
|
|||
Research equipment
|
3,471
|
|
|
3,092
|
|
|
379
|
|
|||
Computer and office equipment
|
9,844
|
|
|
9,805
|
|
|
39
|
|
|||
|
$
|
13,780
|
|
|
$
|
13,350
|
|
|
$
|
430
|
|
|
|
|
|
|
|
Cost basis:
|
Balance as of December 31, 2015
|
2016 Acquisitions
|
Balance as of December 31, 2016
|
||||||
Definite-lived intangibles:
|
|
|
|
||||||
Developed Technology - Juxtapid (weighted average life of 10.75 years)
|
$
|
—
|
|
$
|
42,300
|
|
$
|
42,300
|
|
Developed Technology - Myalept (weighted average life of 9.25 years)
|
—
|
|
210,158
|
|
210,158
|
|
|||
Total definite-lived intangibles (weighted average life of 9.50 years)
|
$
|
—
|
|
$
|
252,458
|
|
$
|
252,458
|
|
|
|
|
|
||||||
Accumulated amortization:
|
Balance as of December 31, 2015
|
2016 Amortization
|
Balance as of December 31, 2016
|
||||||
Definite-lived intangibles:
|
|
|
|
||||||
Developed Technology - Juxtapid
|
$
|
—
|
|
$
|
(328
|
)
|
$
|
(328
|
)
|
Developed Technology - Myalept
|
—
|
|
(1,806
|
)
|
(1,806
|
)
|
|||
Total definite-lived intangibles
|
$
|
—
|
|
$
|
(2,134
|
)
|
$
|
(2,134
|
)
|
Net intangible assets
|
$
|
—
|
|
|
|
$
|
250,324
|
|
Years Ending December 31,
|
|
Estimated Amortization of Intangible Assets
|
||
2017
|
|
$
|
25,614
|
|
2018
|
|
25,614
|
|
|
2019
|
|
25,614
|
|
|
2020
|
|
25,614
|
|
|
2021
|
|
$
|
25,614
|
|
|
December 31
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Accrued employee compensation and related costs
|
$
|
7,920
|
|
|
$
|
1,460
|
|
Accrued sales allowances
|
7,849
|
|
|
—
|
|
||
Other accrued liabilities
|
21,411
|
|
|
367
|
|
||
Total
|
$
|
37,180
|
|
|
$
|
1,827
|
|
|
|
|
|
•
|
The Convertible Notes are senior unsecured obligations of Aegerion and bear interest at a rate of
2.0%
per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2015. The Convertible Notes will mature on August 15, 2019, unless earlier repurchased or converted.
|
•
|
After the Merger, the Convertible Notes are convertible into the Company’s common shares at a conversion rate of
4.9817
common shares per
$1,000
principal amount of the Convertible Notes, as adjusted for the Exchange Ratio and the Consolidation. Aegerion can, at its election, settle the conversion of the Convertible Notes through payment or delivery of cash, common shares, or a combination of cash and common shares.
|
•
|
On or after February 15, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes, in multiples of
$1,000
principal amount, at the option of the holder.
|
•
|
The indenture does not contain any financial covenants or restrict the Company’s ability to repurchase the Company’s securities, pay dividends or make restricted payments in the event of a transaction that substantially increases the Company’s level of indebtedness.
|
•
|
The indenture contains customary terms and covenants and events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving Aegerion) occurs and is continuing, the Trustee by notice to Aegerion, or the holders of at least
25%
in principal amount of the outstanding Convertible Notes by written notice to Aegerion and the Trustee, may declare
100%
of the principal of and accrued and unpaid interest, if any, on all of the Convertible Notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving Aegerion,
100%
of the principal and accrued and unpaid interest, if any, on the Convertible Notes will become due and payable automatically. Notwithstanding the foregoing, the indenture provides that, upon Aegerion’s election, and for up to
180
days, the sole remedy for an event of default relating to certain failures by Aegerion to comply with certain reporting covenants in the indenture consists exclusively of the right to receive additional interest on the Convertible Notes.
|
Liability component:
|
|
||
Principal
|
$
|
324,998
|
|
Less: debt discount
|
(99,414
|
)
|
|
Net carrying amount
|
$
|
225,584
|
|
Equity component
|
$
|
—
|
|
|
|
|
Years Ending December 31, 2016
|
||
Contractual interest expense
|
$
|
577
|
|
Amortization of debt discount
|
2,676
|
|
|
Total
|
$
|
3,253
|
|
Years Ending December 31,
|
|
||
2017
|
$
|
6,500
|
|
2018
|
6,500
|
|
|
2019
|
329,060
|
|
|
|
342,060
|
|
|
Less amounts representing interest
|
(17,062
|
)
|
|
Less amortization of debt discount, net
|
(99,414
|
)
|
|
Net carrying amount of convertible notes
|
$
|
225,584
|
|
|
|
|
Years Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Expected share price volatility
|
38.23
|
%
|
|
41.30
|
%
|
|
42.40
|
%
|
Risk-free interest rate
|
1.93
|
%
|
|
1.40
|
%
|
|
1.60
|
%
|
Expected life of options (years)
|
6.19
|
|
|
6.80
|
|
|
6.80
|
|
Expected dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Weighted
|
|
|
|||||
|
|
|
Weighted-
|
|
Average
|
|
|
|||||
|
|
|
Average
|
|
Remaining
|
|
Aggregate
|
|||||
|
Number of
|
|
Exercise Price
|
|
Contractual
|
|
Intrinsic Value
(2)
|
|||||
|
stock options
(2)
|
|
Per Share
(2)
|
|
Life (years)
|
|
(in thousands)
|
|||||
Outstanding at December 31, 2015
(3)
|
85,630
|
|
|
C$
|
25.35
|
|
|
8.26
|
|
C$
|
—
|
|
Granted
(1)
|
1,629,563
|
|
|
$
|
8.27
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Forfeited/cancelled
|
(600)
|
|
|
$
|
25.35
|
|
|
|
|
|
||
Outstanding at December 31, 2016
|
1,714,593
|
|
|
$
|
9.01
|
|
|
9.65
|
|
$
|
528
|
|
Vested and expected to vest at December 31, 2016
|
1,231,203
|
|
|
$
|
9.24
|
|
|
9.58
|
|
$
|
437
|
|
Exercisable at December 31, 2016
|
205,030
|
|
|
$
|
13.86
|
|
|
8.49
|
|
$
|
140
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Aggregate intrinsic value of options outstanding
(1)
|
$
|
528
|
|
|
C$
|
—
|
|
|
C$
|
2,435
|
|
Aggregate intrinsic value of options exercisable
(1)
|
140
|
|
|
—
|
|
|
240
|
|
|||
|
|
|
|
|
|
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Intrinsic value of stock options exercised |
$
|
—
|
|
|
$
|
4,930
|
|
|
$
|
230
|
|
Cash from exercise of stock options
|
—
|
|
|
5,508
|
|
|
509
|
|
|||
|
|
|
|
|
|
|
|
|
Number
of DSUs (1) |
|
Outstanding at December 31, 2015
|
|
|
30,800
|
|
Granted
|
|
|
8,960
|
|
Redeemed
|
|
|
(11,360
|
)
|
Cancelled
|
|
|
—
|
|
Outstanding at December 31, 2016
|
|
|
28,400
|
|
Vested at December 31, 2016
|
|
|
28,400
|
|
|
|
|
|
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Cash payments under the DDSU plan |
$
|
105
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Number of RSUs
(3)
|
|
Outstanding at December 31, 2015
|
|
|
—
|
|
Granted
(1) (2)
|
|
|
1,036,735
|
|
Redeemed
|
|
|
—
|
|
Cancelled
|
|
|
(7,854
|
)
|
Outstanding at December 31, 2016
|
|
|
1,028,881
|
|
|
|
|
|
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Research and development
|
$
|
155
|
|
|
$
|
1,267
|
|
|
$
|
911
|
|
Selling, general and administrative
|
683
|
|
|
1,108
|
|
|
702
|
|
|||
Total stock-based compensation expense
|
$
|
838
|
|
|
$
|
2,375
|
|
|
$
|
1,613
|
|
|
|
|
|
|
|
(in thousands)
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||
Canada
|
$
|
(46,733
|
)
|
|
$
|
(22,987
|
)
|
|
$
|
(4,197
|
)
|
U.S.
|
(9,521
|
)
|
|
—
|
|
|
—
|
|
|||
Other Foreign
|
3,849
|
|
|
—
|
|
|
—
|
|
|||
Loss before provision for income taxes
|
$
|
(52,405
|
)
|
|
$
|
(22,987
|
)
|
|
$
|
(4,197
|
)
|
|
|
|
|
|
|
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Canada
|
$
|
105
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. state, net of federal income tax benefit
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Other Foreign
|
(517
|
)
|
|
—
|
|
|
—
|
|
|||
|
$
|
(414
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred:
|
|
|
|
|
|
||||||
Canada
|
$
|
—
|
|
|
$
|
(22
|
)
|
|
$
|
192
|
|
Other Foreign
|
(51
|
)
|
|
—
|
|
|
—
|
|
|||
|
(51
|
)
|
|
(22
|
)
|
|
192
|
|
|||
(Provision for) recovery of income taxes
|
$
|
(465
|
)
|
|
$
|
(22
|
)
|
|
$
|
192
|
|
|
|
|
|
|
|
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Loss from continuing operations before income taxes
|
$
|
(52,405
|
)
|
|
$
|
(22,987
|
)
|
|
$
|
(4,197
|
)
|
Canadian statutory tax rates
|
26.00
|
%
|
|
26.00
|
%
|
|
26.00
|
%
|
|||
Expected income tax recovery
|
13,625
|
|
|
5,977
|
|
|
1,091
|
|
|||
Net decrease (increase) in valuation allowance
|
(13,684
|
)
|
|
(2,486
|
)
|
|
731
|
|
|||
Non-taxable portion of capital gains
|
—
|
|
|
—
|
|
|
230
|
|
|||
Investment tax credits
|
868
|
|
|
(222
|
)
|
|
1,628
|
|
|||
Stock-based compensation
|
(133
|
)
|
|
(606
|
)
|
|
(377
|
)
|
|||
Foreign rate differential
|
532
|
|
|
—
|
|
|
—
|
|
|||
Non-taxable (deductible) expenditures
|
—
|
|
|
76
|
|
|
1,752
|
|
|||
Changes in uncertain tax positions
|
—
|
|
|
(1,784
|
)
|
|
(4,793
|
)
|
|||
Adjustments to capital losses for settlement of uncertain tax positions
|
—
|
|
|
(560
|
)
|
|
—
|
|
|||
Other
|
(1,673
|
)
|
|
(417
|
)
|
|
(70
|
)
|
|||
(Provision for) recovery of income taxes |
$
|
(465
|
)
|
|
$
|
(22
|
)
|
|
$
|
192
|
|
|
|
|
|
|
|
(in thousands)
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
51,808
|
|
|
$
|
45,365
|
|
Research and development credits
|
14,028
|
|
|
14,164
|
|
||
Stock-based compensation
|
108
|
|
|
—
|
|
||
Capitalized research expenses
|
2,124
|
|
|
—
|
|
||
Capital loss carryforwards
|
37,452
|
|
|
36,207
|
|
||
Depreciable and amortizable assets
|
13,597
|
|
|
1,645
|
|
||
Other temporary differences
|
13,736
|
|
|
197
|
|
||
Total gross deferred tax assets
|
132,853
|
|
|
97,578
|
|
||
Valuation allowance
|
(131,858
|
)
|
|
(97,578
|
)
|
||
Net deferred tax assets
|
$
|
995
|
|
|
$
|
—
|
|
|
|
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Total uncertain tax position liabilities as of January 1,
|
|
$
|
7,278
|
|
|
$
|
5,557
|
|
|
$
|
1,846
|
|
Current year acquisitions
|
|
911
|
|
|
—
|
|
|
—
|
|
|||
Increases related to current year tax positions
|
|
—
|
|
|
347
|
|
|
5,169
|
|
|||
Changes in tax positions of a prior period
|
|
—
|
|
|
1,934
|
|
|
11
|
|
|||
Lapse due to statute of limitations
|
|
(342
|
)
|
|
—
|
|
|
(1,469
|
)
|
|||
Settlements with taxing authorities
|
|
(187
|
)
|
|
(560
|
)
|
|
—
|
|
|||
Total uncertain tax position liabilities as of December 31,
|
|
$
|
7,660
|
|
|
$
|
7,278
|
|
|
$
|
5,557
|
|
|
|
|
|
|
|
|
•
|
Level 1
—Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The Company’s Level 1 assets consist of cash, money market investments, and restricted cash.
|
•
|
Level 2
—Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly. The Company’s Level 2 liabilities consist of convertible notes.
|
•
|
Level 3
—Inputs that are unobservable for the asset or liability. The Company does not have any Level 3 assets and liabilities as of December 31, 2016.
|
|
December 31, 2016
|
||||||||||||||
|
|
|
Significant
|
|
|
|
|
||||||||
|
Quoted Prices in
|
|
Other
|
|
Significant
|
|
|
||||||||
|
Active Markets for
|
|
Observable
|
|
Unobservable
|
|
Balance at
|
||||||||
|
Identical Assets
|
|
Inputs
|
|
Inputs
|
|
December 31,
|
||||||||
(in thousands)
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
2016
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
40,693
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,693
|
|
Money market funds
|
68,234
|
|
|
—
|
|
|
—
|
|
|
68,234
|
|
||||
Restricted cash
|
390
|
|
|
—
|
|
|
—
|
|
|
390
|
|
||||
Total assets
|
$
|
109,317
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
109,317
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Convertible notes, net - long-term
|
—
|
|
|
225,584
|
|
|
—
|
|
|
225,584
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
225,584
|
|
|
$
|
—
|
|
|
$
|
225,584
|
|
|
December 31, 2015
|
||||||||||||||
|
|
|
Significant
|
|
|
|
|
||||||||
|
Quoted Prices in
|
|
Other
|
|
Significant
|
|
|
||||||||
|
Active Markets for
|
|
Observable
|
|
Unobservable
|
|
Balance at
|
||||||||
|
Identical Assets
|
|
Inputs
|
|
Inputs
|
|
December 31,
|
||||||||
(in thousands)
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
2015
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
141,824
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
141,824
|
|
Accounts receivable - Laser Earn-Out Payment
(1)
|
—
|
|
|
—
|
|
|
2,000
|
|
|
2,000
|
|
||||
Total assets
|
$
|
141,824
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
|
$
|
143,824
|
|
(in thousands, except per share data)
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator: |
|
|
|
|
|
|
|
||||||
Loss from continuing operations
|
|
|
$
|
(52,870
|
)
|
|
$
|
(23,009
|
)
|
|
$
|
(4,005
|
)
|
Loss from discontinued operations, net of income taxes
|
|
|
—
|
|
|
—
|
|
|
(66
|
)
|
|||
Net loss
|
|
|
$
|
(52,870
|
)
|
|
$
|
(23,009
|
)
|
|
$
|
(4,071
|
)
|
|
|
|
|
|
|
|
|
||||||
Denominator: (thousands) |
|
|
|
|
|
|
|
||||||
weighted-average common shares outstanding
|
|
|
11,284
|
|
|
10,434
|
|
|
10,225
|
|
|||
Basic and diluted net loss per common share
|
|
|
|
|
|
|
|
|
|||||
Continuing operations
|
|
|
$
|
(4.69
|
)
|
|
$
|
(2.20
|
)
|
|
$
|
(0.40
|
)
|
Discontinued operations
(1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss per common share |
|
|
$
|
(4.69
|
)
|
|
$
|
(2.20
|
)
|
|
$
|
(0.40
|
)
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016 |
|
December 31,
2015 |
|
December 31,
2014 |
|||
Stock options
|
|
1,715
|
|
|
86
|
|
|
418
|
|
Unvested restricted stock units
|
|
1,029
|
|
|
—
|
|
|
13
|
|
Warrants
|
|
14,515
|
|
|
568
|
|
|
—
|
|
Convertible notes
|
|
1,619
|
|
|
—
|
|
|
—
|
|
Total
|
|
18,878
|
|
|
654
|
|
|
431
|
|
Insurance Proceeds Receivable
|
|
|
|
|
Class action lawsuit insurance proceeds
|
|
$
|
22,000
|
|
|
|
|
|
|
Provision for Legal Settlement
|
|
|
|
|
Class action lawsuit settlement
|
|
$
|
(22,250
|
)
|
DOJ and SEC settlement
|
|
(40,635
|
)
|
|
Relator legal settlement
|
|
(620
|
)
|
|
Relators legal fees
|
|
(405
|
)
|
|
Other litigation settlement
|
|
(100
|
)
|
|
Total provision for legal settlement
|
|
$
|
(64,010
|
)
|
|
|
|
|
|
For the Year Ended December 31, 2016
|
||||||||||||||
(in thousands)
|
|
U.S.
|
|
Italy
|
|
Other Foreign Countries
|
|
Total
|
||||||||
MYALEPT
|
|
$
|
4,685
|
|
|
$
|
—
|
|
|
$
|
268
|
|
|
$
|
4,953
|
|
JUXTAPID
|
|
6,134
|
|
|
1,209
|
|
|
1,278
|
|
|
8,621
|
|
||||
Total
|
|
$
|
10,819
|
|
|
$
|
1,209
|
|
|
$
|
1,546
|
|
|
$
|
13,574
|
|
|
|
|
|
|
|
|
|
|
Item 9.
|
Changes in and Disagreements
With Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers
and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
Item 13.
|
Certain Relationships
and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees
and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
1.
|
Consolidated Financial Statements (see Item 8).
|
2.
|
All information is included in the Consolidated Financial Statements or notes thereto.
|
3.
|
Exhibits:
|
Item 16.
|
Summary
|
|
NOVELION THERAPEUTICS INC.
|
|
|
|
|
Date: March 30, 2017
|
By:
|
/s/ Mary Szela
|
|
|
Mary Szela
|
|
|
Chief Executive Officer
|
|
|
(principal executive officer) and Director
|
|
|
|
Date: March 30, 2017
|
By:
|
/s/ Gregory D. Perry
|
|
|
Gregory D. Perry
|
|
|
Chief Financial and Administrative Officer
|
|
|
(principal financial officer )
|
|
|
|
Date: March 30, 2017
|
By:
|
/s/ Barbara Chan
|
|
|
Barbara Chan
|
|
|
President and Chief Accounting Officer, Aegerion Pharmaceuticals, Inc.
|
|
|
(principal accounting officer )
|
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
/s/ Mary Szela
|
|
Chief Executive Officer (principal executive officer) and Director
|
|
March 30, 2017
|
Mary Szela
|
|
|
|
|
|
|
|
|
|
/s/ Gregory D. Perry
|
|
Chief Financial and Administrative Officer (principal financial officer)
|
|
March 30, 2017
|
Gregory D. Perry
|
|
|
|
|
|
|
|
|
|
/s/ Barbara Chan
|
|
President and Chief Accounting Officer, Aegerion Pharmaceuticals, Inc. (principal accounting officer)
|
|
March 30, 2017
|
Barbara Chan
|
|
|
|
|
|
|
|
|
|
/s/ Jason Aryeh
|
|
Chairman of the Board of Directors
|
|
March 30, 2017
|
Jason Aryeh
|
|
|
|
|
|
|
|
|
|
/s/ Geoffrey Cox
|
|
Director
|
|
March 30, 2017
|
Geoffrey Cox
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Kevin Kotler
|
|
Director
|
|
March 30, 2017
|
Kevin Kotler
|
|
|
|
|
|
|
|
|
|
/s/ Jorge Plutzky
|
|
Director
|
|
March 30, 2017
|
Jorge Plutzky
|
|
|
|
|
|
|
|
|
|
/s/ Stephen Sabba
|
|
Director
|
|
March 30, 2017
|
Stephen Sabba
|
|
|
|
|
|
|
|
|
|
/s/ Sandford D. Smith
|
|
Vice Chair of the Board of Directors
|
|
March 30, 2017
|
Sandford D. Smith
|
|
|
|
|
|
|
|
|
|
/s/ Donald K. Stern
|
|
Director
|
|
March 30, 2017
|
Donald K. Stern
|
|
|
|
|
|
|
|
|
|
/s/ John Thomas, Jr.
|
|
Director
|
|
March 30, 2017
|
John Thomas, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Anne VanLent
|
|
Director
|
|
March 30, 2017
|
Anne VanLent
|
|
|
|
|
|
|
|
|
|
Exhibit
|
|
Description of Document
|
|
Location
|
2.1
|
#
|
Asset Purchase Agreement, dated September 21, 2012, by and between the Company and Valeant.
|
|
Exhibit 10.65 to the Company’s Current Report on Form 8-K, filed with the SEC on September 27, 2012.
|
2.2
|
#
|
Asset Purchase Agreement, dated April 3, 2013, by and between the Company and Mati Therapeutics Inc.
|
|
Exhibit 10.70 to the Company’s Current Report on Form 8-K, filed with the SEC on April 9, 2013.
|
2.3
|
#
|
Asset Purchase Agreement, dated November 5, 2014, by and among Aegerion Pharmaceuticals, Inc., Amylin Pharmaceuticals, LLC and, solely for purposes of Sections 2.1.1, 2.2.1 and 2.3.2, AstraZeneca Pharmaceuticals LP.
|
|
Exhibit 10.29 to Aegerion Pharmaceuticals, Inc.’s Amendment No. 1 to the Annual Report on Form 10-K, filed with the SEC on July 7, 2015.
|
2.4
|
|
First Amendment to Asset Purchase Agreement dated January 9, 2015, by and among Aegerion Pharmaceuticals, Inc., Amylin Pharmaceuticals, LLC and, solely for purposes of Sections 2.1.1, 2.2.1 and 2.3.2, AstraZeneca Pharmaceuticals LP.
|
|
Exhibit 10.30 to Aegerion Pharmaceuticals, Inc.’s Annual Report on Form 10-K, filed with the SEC on March 2, 2015.
|
2.5
|
|
Share Purchase Agreement, dated June 8, 2015, by and among the Company, Broadfin Healthcare Master Fund, Ltd., JW Partners, LP, JW Opportunities Fund, LLC, EcoR1 Capital Fund Qualified, L.P. and EcoR1 Capital Fund, L.P.
|
|
Exhibit 2.3 to the Company’s Current Report on Form 8-K, filed with the SEC on June 12, 2015.
|
2.6
|
|
Share Purchase and Registration Rights Agreement, dated June 8, 2015, by and among the Company, Broadfin Healthcare Master Fund, Ltd., JW Partners, LP, JW Opportunities Fund, LLC, EcoR1 Capital Fund Qualified, L.P. and EcoR1 Capital Fund, L.P.
|
|
Exhibit 2.4 to the Company’s Current Report on Form 8-K, filed with the SEC on June 12, 2015.
|
2.7
|
|
Letter agreement, dated June 8, 2015, by and among the Company, Broadfin Healthcare Master Fund, Ltd., JW Partners, LP, JW Opportunities Fund, LLC, EcoR1 Capital Fund Qualified, L.P. and EcoR1 Capital Fund, L.P.
|
|
Exhibit 2.5 to the Company’s Current Report on Form 8-K, filed with the SEC on June 12, 2015.
|
2.8
|
|
Second Amended and Restated Agreement and Plan of Merger, dated August 26, 2015, by and among InSite Vision Incorporated, the Company and Isotope Acquisition Corp.
|
|
Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 28, 2015.
|
2.9
|
|
Amended and Restated Share Subscription Agreement, dated December 7, 2015, among the Company, Tribute Pharmaceuticals Canada Inc., POZEN Inc., Aralez Pharmaceuticals, Inc., Aralez Pharmaceuticals Plc, Deerfield Private Design Fund III, L.P., Deerfield International Master Fund, L.P., Deerfield Partners, L.P.,
Broadfin Healthcare Master Fund, Ltd., JW Partners, LP, JW Opportunities Fund, LLC, and J.W. Opportunities Master Fund, Ltd.
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 11, 2015.
|
2.10
|
|
Unit Subscription Agreement, dated June 14, 2016, by and among the Company, Deerfield International Master Fund, L.P., Deerfield Partners, L.P., Broadfin Healthcare Master Fund, Ltd., JW Partners LP, JW Opportunities Master Fund, Ltd., The K2 Principal Fund L.P., Healthcare Value Partners, L.P., Tiger Legatus Capital Management, LLC, Sarissa Capital Domestic Fund LP, Sarissa Capital Offshore Master Fund LP, Armistice Capital Master Fund, Ltd., Levcap Alternative Fund, L.P., Ulysses Partners, L.P., Ulysses Offshore Fund, Ltd. and Jason Aryeh, as amended as applied to Broadfin Healthcare Master Fund, Ltd. on September 9, 2016.
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 5, 2016.
|
Exhibit
|
|
Description of Document
|
|
|
2.11
|
|
Agreement and Plan of Merger, dated June 14, 2016, and Amendment No. 1 thereto, by and among Aegerion Pharmaceuticals, Inc., the Company and Isotope Acquisition Corp.
|
|
Annex A to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on September 12, 2016.
|
3.1
|
|
Articles of the Company, dated May 25, 2005.
|
|
Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 1, 2005.
|
3.2
|
|
Notice of Articles of the Company, dated November 29, 2016.
|
|
Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 5, 2016.
|
4.1
|
|
Specimen Common Share Certificate of the Company.
|
|
Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 16, 2016.
|
4.2
|
|
Indenture, dated August 15, 2014, by and between Aegerion Pharmaceuticals, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 2.00% Convertible Senior Notes Due 2019.
|
|
Exhibit 4.1 to Aegerion Pharmaceuticals, Inc.’s Current Report on Form 8-K, filed with the SEC on August 15, 2014.
|
4.3
|
|
Supplemental Indenture, dated November 29, 2016, by and between Aegerion Pharmaceuticals, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 2.00% Convertible Senior Notes Due 2019.
|
|
Exhibit 4.1 to Aegerion Pharmaceuticals, Inc.’s Current Report on Form 8-K, filed with the SEC on November 29, 2016.
|
10.1
|
#
|
License Agreement, dated February 7, 2006, by and between Amylin Pharmaceuticals, LLC and Amgen Inc.
|
|
Exhibit 10.32 to Aegerion Pharmaceuticals, Inc.’s Annual Report on Form 10-K, filed with the SEC on March 2, 2015.
|
10.2
|
#
|
Patent License Agreement, dated May 19, 2006, as amended September 27, 2006, by and between Aegerion Pharmaceuticals, Inc. and University of Pennsylvania.
|
|
Exhibit 10.6 to Aegerion Pharmaceuticals, Inc.’s Registration Statement on Form S-1, as amended, filed with the SEC on August 10, 2010.
|
10.3
|
#
|
License Agreement, dated July 8, 2009, by and between Amylin Pharmaceuticals, LLC and Shionogi & Co., Ltd.
|
|
Exhibit 10.31 to Aegerion Pharmaceuticals, Inc.’s Annual Report on Form 10-K, filed with the SEC on March 2, 2015.
|
10.4
|
|
Amended and Restated PDT Product Development, Manufacturing and Distribution Agreement, dated October 16, 2009, by and between the Company and Novartis Pharma AG.
|
|
Exhibit 10.48 to the Company’s Current Report on Form 8-K, filed with the SEC on October 22, 2009.
|
10.5
|
#
|
Co-Development Agreement, dated April 4, 2006, by and between the Company and Retinagenix, LLC, as amended by letter agreements dated August 10, 2006, September 11, 2008 and October 20, 2010.
|
|
Exhibit 10.54 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 1, 2011.
|
10.6
|
|
Sublease, dated June 2, 2015, by and between Discovery Parks Realty Corp. and the Company.
|
|
Filed herewith.
|
10.7
|
|
Sublease Amending and Expansion Agreement, dated January 4, 2016, by and between Discovery Parks Realty Corp. and the Company.
|
|
Filed herewith.
|
10.8
|
|
Sublease Renewal Agreement, dated May 18, 2016, by and between Discovery Parks Realty Corp. and the Company.
|
|
Filed herewith.
|
10.9
|
|
Lease, dated January 1, 2011, by and between Aegerion Pharmaceuticals, Inc. and RREEF America REIT II CORP. PPP.
|
|
Exhibit 10.1 to Aegerion Pharmaceuticals, Inc.’s Current Report on Form 8-K, filed with the SEC on January 6, 2011.
|
10.10
|
|
First Amendment to Lease, dated November 7, 2011, by and between Aegerion Pharmaceuticals, Inc. and RREEF America REIT II CORP. PPP.
|
|
Exhibit 10.22 to Aegerion Pharmaceuticals, Inc.’s Annual Report on Form 10-K, filed with the SEC on March 15, 2012.
|
10.11
|
|
Second Amendment to Lease, dated September 4, 2012, by and between Aegerion Pharmaceuticals, Inc. and RREEF America REIT II Corp. PPP.
|
|
Exhibit 10.1 to Aegerion Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2012.
|
10.12
|
|
Third Amendment to Lease, dated June 19, 2013, by and between Aegerion Pharmaceuticals, Inc. and RREEF America REIT II Corp. PPP.
|
|
Exhibit 10.1 to Aegerion Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q, filed with the SEC on August 9, 2013.
|
Exhibit
|
|
Description of Document
|
|
Location
|
10.13
|
|
Fourth Amendment to Lease, dated January 1, 2014, by and between Aegerion Pharmaceuticals, Inc. and RREEF America REIT II Corp. PPP.
|
|
Exhibit 10.25 to Aegerion Pharmaceuticals, Inc.’s Annual Report on Form 10-K, filed with the SEC on March 3, 2014.
|
10.14
|
|
Fifth Amendment to Lease, dated July 19, 2016, by and between Aegerion Pharmaceuticals, Inc. and RREEF America REIT II Corp. PPP.
|
|
Exhibit 10.3 to Aegerion Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q, filed with the SEC on November 4, 2016.
|
10.15
|
|
Loan and Security Agreement, dated June 14, 2016, by and between the Company and Aegerion Pharmaceuticals, Inc.
|
|
Exhibit 10.2 to Aegerion Pharmaceuticals, Inc.’s Current Report on Form 8-K, filed with the SEC on June 15, 2016.
|
10.16
|
|
Letter agreement, dated December 7, 2015, by and among the Company, Broadfin Healthcare Master Fund, Ltd., JW Partners, LP, JW Opportunities Fund, LLC, and J.W. Opportunities Master Fund, Ltd.
|
|
Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on December 11, 2015.
|
10.17
|
|
Form of Warrant Agreement.
|
|
Exhibit C of Amendment No. 1 to the Agreement and Plan of Merger from Annex A to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on September 12, 2016.
|
10.18
|
*
|
Deferred Share Unit Plan For Non-Employee Directors of the Company.
|
|
Exhibit 10.32 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 9, 2005.
|
10.19
|
*
|
Aegerion Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan.
|
|
Exhibit 10.2 to Aegerion Pharmaceuticals, Inc.’s Registration Statement on Form S-1, as amended, filed with the SEC on August 10, 2010.
|
10.20
|
*
|
Aegerion Pharmaceuticals, Inc. Form of Incentive Stock Option Agreement for Executive Officers and forms of Non-Qualified Stock Option Agreement and Restricted Stock Award Agreement for Directors.
|
|
Exhibit 10.6 to Aegerion Pharmaceuticals, Inc.’s Annual Report on Form 10-K, filed with the SEC on March 18, 2013.
|
10.21
|
*
|
Novelion 2016 Equity Incentive Plan.
|
|
Exhibit 99.4 to the Company’s Registration Statement on Form S-8, filed with the SEC on December 5, 2016.
|
10.22
|
*
|
Form of Stock Option Award Grant Notice and Stock Option Award Agreement (Directors) under the Novelion 2016 Equity Incentive Plan.
|
|
Filed herewith.
|
10.23
|
*
|
Form of Stock Option Award Grant Notice and Stock Option Award Agreement (Employees) under the Novelion 2016 Equity Incentive Plan.
|
|
Filed herewith.
|
10.24
|
*
|
Form of Stock Option Award Grant Notice and Stock Option Award Agreement (Executives) under the Novelion 2016 Equity Incentive Plan.
|
|
Filed herewith.
|
10.25
|
*
|
Form of Performance Restricted Stock Unit Award Grant Notice and Performance Restricted Stock Unit Award Agreement under the Novelion 2016 Equity Incentive Plan.
|
|
Filed herewith.
|
10.26
|
*
|
Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the Novelion 2016 Equity Incentive Plan.
|
|
Filed herewith.
|
10.27
|
|
Form of Indemnity Agreement (Directors).
|
|
Filed herewith.
|
10.28
|
*
|
Form of Indemnity Agreement (Officers).
|
|
Filed herewith.
|
10.29
|
*
|
Employment Agreement, dated January 7, 2016, by and between Aegerion Pharmaceuticals, Inc. and Mary T. Szela.
|
|
Exhibit 10.1 to Aegerion Pharmaceuticals, Inc.’s Form 8-K, filed with the SEC on January 11, 2016.
|
10.30
|
*
|
Employment Agreement, dated October 23, 2014, by and between the Company and Geoffrey F. Cox.
|
|
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on October 28, 2014.
|
10.31
|
*
|
Amendment to Employment Agreement, dated April 22, 2015, by and between the Company and Geoffrey F. Cox.
|
|
Exhibit 10.79 to the Company’s Current Report on Form 8-K, filed with the SEC on April 23, 2015.
|
Exhibit
|
|
Description of Document
|
|
Location
|
10.32
|
*
|
Second Amendment to Employment Agreement, dated October 8, 2015, by and between the Company and Geoffrey F. Cox.
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on October 9, 2015.
|
10.33
|
*
|
Third Amendment to Employment Agreement, dated April 7, 2016, by and between the Company and Geoffrey F. Cox.
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 11, 2016.
|
10.34
|
*
|
Fourth Amendment to Employment Agreement, dated June 17, 2016, by and between the Company and Geoffrey F. Cox.
|
|
Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 9, 2016.
|
10.35
|
*
|
Fifth Amendment to Employment Agreement, dated September 16, 2016, by and between the Company and Geoffrey F. Cox.
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 16, 2016.
|
10.36
|
*
|
Form of employee stock option grant to Geoffrey F. Cox.
|
|
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on October 28, 2014.
|
10.37
|
*
|
Employment Offer Letter, dated November 28, 2016, between Novelion Services USA, Inc. and Gregory D. Perry.
|
|
Filed herewith.
|
10.38
|
*
|
Employment Agreement, dated January 5, 2015, by and between the Company and Glen Ibbott.
|
|
Exhibit 10.76 to the Company’s Current Report on Form 8-K, filed with the SEC on January 5, 2015.
|
10.39
|
*
|
Amendment to Employment Agreement, dated November 5, 2015, by and between the Company and Glen Ibbott.
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 12, 2015.
|
10.40
|
*
|
Second Amendment to Employment Agreement, dated June 17, 2016, by and between the Company and Glen Ibbott.
|
|
Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 9, 2016.
|
10.41
|
*
|
Employment Agreement, by and between the Company and Dori Assaly, dated June 14, 2013, as amended November 5, 2015.
|
|
Exhibit 10.29 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 25, 2016.
|
10.42
|
*
|
Amendment to Employment Agreement, dated June 17, 2016, by and between the Company and Dori Assaly.
|
|
Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 9, 2016.
|
10.43
|
*
|
Employment Agreement, by and between the Company and Lana Janes, dated January 1, 2010, as amended November 5, 2015.
|
|
Exhibit 10.27 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 25, 2016.
|
10.44
|
*
|
Change of Control Agreement between the Company and Lana Janes, dated June 1, 2015.
|
|
Exhibit 10.28 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 25, 2016.
|
10.45
|
*
|
Amendment to Employment Agreement, dated June 17, 2016, by and between the Company and Lana Janes.
|
|
Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 9, 2016.
|
10.46
|
*
|
Employment Offer Letter, dated November 28, 2016, between Novelion Services USA, Inc. and Benjamin Harshbarger.
|
|
Filed herewith.
|
10.47
|
*
|
Employment Offer Letter, dated November 28, 2016, between Novelion Services USA, Inc. and Roger Louis.
|
|
Filed herewith.
|
10.48
|
*
|
Employment Offer Letter, dated November 28, 2016, between Novelion Services USA, Inc. and Remi Menes.
|
|
Filed herewith.
|
21.1
|
|
Subsidiaries of the Company.
|
|
Filed herewith.
|
23.1
|
|
Consent of Deloitte LLP.
|
|
Filed herewith.
|
24.1
|
|
Power of Attorney.
|
|
Contained on signature page hereto.
|
31.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002: Mary Szela, Chief Executive Officer (Principal Executive Officer).
|
|
Filed herewith.
|
Exhibit
|
|
Description of Document
|
|
Location
|
31.2
|
|
Certification pursuant to 18 U.S.C. Section 1350. as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002: Gregory D. Perry, Chief Financial and Administrative Officer (Principal Financial Officer).
|
|
Filed herewith.
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002: Mary Szela, Chief Executive Officer (Principal Executive Officer).
|
|
Filed herewith.
|
32.2
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002: Gregory D. Perry, Chief Financial and Administrative Officer (Principal Financial Officer).
|
|
Filed herewith.
|
101.1
|
|
The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in Extensible Business Reporting Language:
Consolidated Balance Sheets;
Consolidated Statements of Operations;
Consolidated Statements of Comprehensive Income;
Consolidated Statements of Cash Flows;
Consolidated Statements of Shareholders’ Equity; and Notes to Consolidated Financial Statements.
|
|
|
(a)
|
Premises A for a term (the “
Premises A Term
”) commencing on September 1, 2015 (the “
Commencement Date
”) and expiring on August 31, 2016; and
|
(b)
|
Premises B for a term (the “
Premises B Term
”) commencing on the Commencement Date and expiring on February 28, 2016,
|
(c)
|
$14,500 plus applicable value-added tax (“
GST
”) per month in respect of Premises A during the Premises A Term (being the sum of $13,000 per month plus GST in respect of Premises A1, and $1,500 per month plus GST in respect of Premises A2); and
|
(d)
|
$5,500 plus GST per month in respect of Premises B during the Premises B Term (being the sum of $2,000 per month plus GST in respect of Premises B1, and $3,500 per month plus GST in respect of Premises B2),
|
(e)
|
to comply with and fulfil each of the obligations undertaken by the Subtenant in this Sublease, including the termination of this Sublease or the sublease in the event of default by the Transferee;
|
(f)
|
not to further sublease, assign, transfer or licence the interest of the Subtenant (including a deemed assignment under this Sublease) or part with possession without first obtaining the consent of the Sublandlord as required for an assignment, sublease or transfer of this Sublease;
|
(g)
|
not to do or permit upon the Sublet Premises anything which is, or will result in, a contravention of any term of this Sublease; and
|
(h)
|
to observe and perform each and every one of the covenants and agreements on the part of the Subtenant under this Sublease to be observed and performed other than rent payment and to provide the indemnities provided in this Sublease.
|
(a)
|
to the Sublandlord at the Leased Premises
|
(b)
|
to the Subtenant at the Sublet Premises
|
A.
|
By a lease (the "
Head Lease
") executed as of the 5
th
day of April, 2013
,
Dundee Properties Limited Partnership and 560677 B
.
C. Ltd
.
(together, the "
Head Landlord
") leased to Discovery Parks Holdings Ltd
.
, in its capacity as trustee of Discovery Parks Trust ("
DPT
"
)
,
upon and subject to the terms of the Head Lease, certain premises (the "
Leased Premises
") located in the building with a civic address at 887 Great Northern Way, Vancouver
,
British Columbia
,
which premises are more particularly described in the Head Lease and shown on the floor plan annexed as Schedule
"
A” to the Head Lease
;
|
B.
|
The Sublandlord is the successor in interest to all right and interest of DPT in and to the Head Lease and the Leased Premises
;
|
C.
|
Pursuant to a sublease dated for reference June 2, 2015 (the "
Sublease
"),the Sublandlord sublet to the Subtenant a portion of the Leased Premises (the "
Sublet Premises
"
), which Sublet Premises were described in Recital C of the Sublease as comprising a portion of the second floor of the Building and containing approximately 5,850 square feet of Rentable Area ("Premises A
"
), together with another portion of the second floor of the Building and containing approximately 2,275 square feet of Rentable Area ("
Premises B
"
); and
|
D.
|
The Sublandlord and the Subtenant wish to amend the Sublease in order to include add
i
tional premises located on the second floor of the Building and containing approximately 350 square feet of Rentable Area as shown outlined and denoted as "B3" on the floor plan of the Leased Premises attached hereto as Schedule "B" ("
Premises B3
"), on the terms and conditions set out herein.
|
1.0
|
Interpretation
|
1.1
|
Unless otherwise defined in this Agreement, capitalized terms used in this Ag
r
eement have the meanings ascribed to them in the Sublease
.
|
1.2
|
All schedules attached to this Agreement will form an integral part of this Agreement.
|
2.0
|
Demise
|
2.1
|
As of the Effective Date, in consideration of the rents, covenants, conditions
,
and agreements respectively reserved and contained in the Sublease as amended hereby, the Sublandlord demises to the Subtenant
,
and the Subtenant accepts
,
Premises B3
,
on an
"
as is
,
where is
"
basis
.
|
2.2
|
For certainty, the parties acknowledge and agree that any reference in the Sublease to any rights to rent free periods or requirements on the Sublandlord's part to pay to the Subtenant any tenant improvement allowance
,
inducement or other amount will not apply to Premises B3
.
|
3.0
|
Sublease Amendments
|
3.1
|
From and after the Effective Date
,
the Sublease is hereby amended as follows
:
|
(a)
|
by deleting Recital C in its entirety and replacing
i
t with the following
:
|
"
C.
|
The Sublandlord and the Subtenant wish to enter Into this Sublease for a portion of the Leased Premises (the "
Sublet Premises
") comprised of a portion of the second floor of the Building and containing approximately 5,850 square feet of Rentable Area as shown outlined and denoted as
"
A1
"
("
Premises A1
"
) and
"
A2
"
(
"
Premises A2
"
, and together with Premises A1, "
Premises A
"
) on the floor plan of the Le
a
sed P
r
em
i
ses attached hereto a
s
Schedule
"
B" (the
"
Floor Plan
"
)
,
together with another portion of the second floor of the Building and containing appro
x
imately 2,6
2
5 square feet of Rentab
l
e Area as shown outlined and denoted as
"B
1
"
("
Premises B1
"
)
, "
B
2"
("
Premises B2
"
) and
"
B3" (
"
Premises B3
"
, and together with Premises B1 and Premises B2,
"
Premises B
"
) on t
h
e Floor Plan
,
on the te
r
ms specified in this Sublease
;"
|
"
2
.
1
|
The Sublandlord subleases to the Subtenant and the Subtenant subleases from the Sublandlord:
|
(a)
|
Premises A for a term (the "
Premises A Term
") commencing on September 1, 2015 (the
"
Commencement Date
") and expiring on August 31, 2016 (the "
Expiration Date
");
|
(b)
|
Premises B1 and Premises B2 for a term (the "
Premises B1 and B2 Term
") commencing on the Commencement Date and expiring on the Expiration Date; and
|
(c)
|
Premises B3 for a term (the "
Premises B3 Term
") commencing on January 1, 2016 (the "
Premises B3 Commencement Date
") and expiring on the Expiration Date,
|
(e)
|
by deleting
Section
4
.
2 in its entirety and replacing it w
it
h the
following
:
|
"4.2
|
The Subtenant will pay to the Sublandlord as Sublease Gross Rent (as hereinafter defined) the following amounts
:
|
(a)
|
$14,500 plus applicable value-added tax (
"
GST
"
)
per month
i
n respect of Premises A during
the
Premises A
Term (being the
sum of $13
,
000 pe
r
month plus GST
in
respect of Prem
i
ses A1
,
and
$1,500
per
month
plus GST
in
respect of Premises A2)
;
|
(b)
|
$5,500 plus GST per month in respect of Premises B1 and Prem
i
ses B2 during the Premises B1 and B2 Term
(
being the sum of
$2
,
000 per month plus GST in respect of Premises B1, and
$3,500
per month plus GST in respect of Premises B2);and
|
(c)
|
$750 plus GST per month in respect of Premises B3
during
the Premises B3 Term,
|
(f)
|
by
replacing
Schedule
"
B
"
attached to the Sublease with Schedule
"
B
"
attached
to
this Agreement.
|
4.0
|
Sublease Remains
in
Force
|
4.1
|
Except as amended by this Agreement
,
all other terms
and
cond
i
tions conta
in
ed in the Sublease remain unamended and in full force and effect.
|
5.0
|
Binding Effect
|
5.1
|
This
Agreement will
enure to
the benefit of the part
i
es and
their
r
espect
iv
e
permitted successors
and permitted assigns
.
|
6.0
|
Counterparts
|
6.1
|
This Agreement may be executed
in
one or more counterparts, each of which will be deemed an original
,
and all of which will constitute one
instrument
and may be delivered by electronic means
.
|
(a)
|
$14,500 plus GST per month in respect of Premises A (being the sum of $13,000 per month plus GST in respect of Premises A1, and $1,500 per month plus GST in respect of Premises A2);
|
(b)
|
$5,500 plus GST per month in respect of Premises B1 and Premises B2 (being the sum of $2,000 per month plus GST in respect of Premises B1, and $3,500 per month plus GST in respect of Premises B2); and
|
(c)
|
$750 plus GST per month in respect of Premises B3.
|
1.
|
General
. Pursuant to the Grant Notice (the “
Grant Notice
”) to which this Stock Option Award Agreement (the “
Award Agreement
”) is attached, Novelion Therapeutics Inc. (the “
Company
”) has granted to Grantee an award of an Option under the Company’s 2016 Equity Incentive Plan, as amended from time to time (the “
Plan
”).
|
2.
|
Defined Terms
. All capitalized terms which are not defined in the Grant Notice or below have the meaning given to them in the Plan.
|
3.
|
Term
. Subject to the terms and conditions of the Plan and this Award Agreement, the Option will terminate on the earlier of:
|
(a)
|
The date on which the Option is exercised with respect to all Common Shares subject to the Option; and
|
(b)
|
5:00 p.m. (Vancouver time) on the Expiry Date.
|
4.
|
Vesting
. The vesting provisions applicable to the Option shall be as set forth in the Grant Notice.
|
5.
|
Exercise of Options
.
|
(a)
|
Exercise Notice
. No portion of the Option may be exercised until such portion vests. Grantee may exercise some or all of the vested portion of the Option by giving written notice of exercise (the “
Exercise Notice
”) signed and dated by Grantee (and not postdated), stating that Grantee elects to exercise his or her rights to purchase Common Shares subject to the Option and specifying the number of Common Shares in respect of which the Option is being exercised and specifying the Option Exercise Price to be paid therefor.
|
(b)
|
Delivery and Payment
. Grantee shall deliver the Exercise Notice to the Company at its principal office at 887 Great Northern Way, Suite 101, Vancouver, British Columbia, Canada, V5T 4T5 (or at such other address as the principal office of the Company may be located at the time of exercise) addressed to the attention of the Secretary or assistant secretary (if any) of the Company (or a designee notified in writing from time to time by the Company) and such Exercise Notice shall be accompanied by full payment (payable at par in Vancouver, British Columbia) in any combination of the following (subject to all applicable laws):
|
(i)
|
cash, bank draft or certified cheque;
|
(ii)
|
if and so long as the Common Shares are listed on an Exchange, delivery of a properly executed Exercise Notice, together with irrevocable instructions, to
|
(iii)
|
with prior written consent of the Company and subject to Section 13.3 of the Plan, written instructions from Grantee to the Company to effect a net settlement of Common Shares subject to the Option having a value equal to the Option Exercise Price of any Option and/or the withholding taxes due with respect to the exercise of the Option; and
|
(c)
|
Certificate
. As soon as practicable after any exercise of the Option, a certificate or certificates representing the Common Shares into which the Option is exercised will be delivered by the Company to Grantee or to Grantee’s designated brokered firm, as applicable.
|
6.
|
Rules Upon Termination of Service
. The Option will terminate on the earlier of the expiry of the Option under Section 3 above and the 90th day (effective following the close of trading on the Exchange, if such day is a trading day) after the date of Grantee’s Termination of Service as a director of the Company or its Affiliates, provided that, upon Grantee’s Termination of Service as a result of::
|
(a)
|
ceasing to meet the qualifications set forth in subsection 124(2) of the Business Corporations Act (British Columbia), as amended, or such other qualifications required by the corporate laws in any other jurisdiction under which the Company is continued or amalgamated,
|
(b)
|
a special resolution having been passed by the shareholders of the Company pursuant to subsection 128(3) of the Business Corporations Act (British Columbia), as amended, or an equivalent enactment pursuant to the corporate laws in any other jurisdiction under which the Company is continued or amalgamated, or
|
(c)
|
by order of a securities commission, the TSX, NASDAQ or any other regulatory body having jurisdiction to so order,
|
7.
|
Other
.
|
(a)
|
Sale Event
. In the event that Grantee is party to an effective employment or similar individual agreement with the Company or its Affiliates that provides for the treatment of an equity award in connection with “Sale Event” (as defined in such agreement), such provision shall only apply in connection with a “Sale Event” that occurs on or after the Grant Date (and shall not, for the avoidance of doubt, apply in connection with a “Sale Event” that occurred prior to the Grant Date).
|
(b)
|
Section 4985
. If any amount payable or paid by the Company or any of its affiliates pursuant to this Agreement or otherwise to or for the benefit of Grantee becomes subject to the excise tax imposed by Section 4985 of the Code (including any interest, penalties or additions to tax relating thereto) (the “
4985 Excise Tax
”) by reason of the consummation of the transactions contemplated by the Agreement and Plan of Merger, dated as of June 14, 2016 (as amended), among QLT, Inc., Aegerion Pharmaceuticals, Inc. and certain other parties thereto, as reasonably determined by the Company, then the Company shall pay to Grantee (1) an amount equal to the 4985 Excise Tax, and (2) an amount (the “
4985 Gross-up Payment
”) equal to the amount necessary to put Grantee in the same net after-tax position (taking into account any and all applicable Federal, state, local and foreign income, employment, excise and other taxes) that Grantee would have been in if Grantee had not incurred any liability for taxes under Section 4985 of the Code. Any determination regarding the amount of any payment or payments hereunder shall be made in writing by the Company’s independent accountants or other accounting or consulting firm selected by the Company, whose determination shall be conclusive and binding upon Grantee and the Company for all purposes.
|
8.
|
Conditions to Exercise
. Notwithstanding any of the provisions of the Award Agreement, the Company’s obligation to issue Common Shares to Grantee upon exercise of the Option is subject to the following:
|
(c)
|
Qualification
. Completion of registration or other qualification of the Common Shares or obtaining approval of such governmental authority as the Company determines is necessary or advisable in connection with the authorization, issuance or sale of the Common Shares;
|
(d)
|
Listing
. The admission of the Common Shares to listing or quotation on the Exchange; and
|
(e)
|
Undertakings
. The receipt by the Company from Grantee of such representations, agreements and undertakings, including as to future dealings in the Common Shares, as the Company or its counsel determines are necessary or advisable in order to safeguard against the violation of securities laws of any jurisdiction.
|
9.
|
Tax
. Grantee is solely responsible for the payment of any applicable taxes arising from the grant, vesting, settlement or exercise of the Option and any payment is to be in a manner satisfactory to the Company. Notwithstanding the foregoing, the Company will have the right to withhold from any amount payable to Grantee, either under the Plan or otherwise, such amount as may be necessary to enable the Company to comply with the applicable requirements of any federal, provincial, state, local or foreign law, or any administrative policy of any applicable tax authority, relating to the withholding of tax or any other required deductions with respect to the Option (the “
Withholding Obligations
”). The Company may require Grantee, as a condition to the exercise or settlement of the Option, to make such arrangements as the Company may require so that the Company can satisfy applicable Withholding Obligations, including, without limitation, requiring Grantee to (i) remit the amount of any such Withholding Obligations to the Company in advance; (ii) reimburse the Company for any such Withholding Obligations; (iii) deliver written instructions contemplated in Section 5(b)(iii) hereof, to effect a net settlement of Common Shares subject to the Option in an amount required to satisfy any such Withholding Obligations; or (iv) pursuant to Section 5(b)(ii) hereof, cause such broker to withhold from the proceeds realized from such transaction the amount required to satisfy any such Withholding Obligations and to remit such amount directly to the Company.
|
10.
|
Black Out Periods
. Grantee acknowledges and agrees that the Award Agreement and the grant of the Option to Grantee is subject to Grantee’s agreement to at all times comply with the Company’s policies with respect to black out periods, as more particularly set out in the Company’s Trading Policy, as amended from time to time.
|
11.
|
No Rights as Shareholder
. Grantee will not have any rights as a Shareholder with respect to any of the Common Shares subject to the Option until such time as Grantee becomes the record owner of such Common Shares.
|
12.
|
No Effect on Service
. Nothing in the Award Agreement will:
|
(a)
|
Continue Service
. Confer upon Grantee any right to continue in the service of the Company or any Affiliate or affect in any way the right of the Company or any Affiliate to terminate his or her service at any time.
|
(b)
|
Extend Service
. Be construed to constitute an agreement, or an expression of intent, on the part of the Company or any Affiliate to extend the service of Grantee beyond the time that he or she would normally be retired pursuant to the provisions of any present or future retirement plan or policy of the Company or any Affiliate, or beyond the time at which he or she would otherwise be retired pursuant to the provisions of any contract of service with the Company or any Affiliate.
|
13.
|
Enurement
. The Award Agreement shall enure to the benefit of and be binding upon the parties to the Award Agreement and upon the successors or assigns of the Company and upon the executors, administrators and legal personal representatives of Grantee.
|
14.
|
Further Assurances
. Each of the parties to the Award Agreement will do such further acts and execute such further documents as may required to give effect to and carry out the intent of the Award Agreement.
|
15.
|
Non-Assignable
. The Option is personal to Grantee and may not be assigned or transferred in whole or in part, except by will or by the operation of the laws of devolution or distribution and descent.
|
16.
|
Amendments
.
Any amendments to the Award Agreement must be in writing duly executed by the parties and will (if required) be subject to the approval of the applicable regulatory authorities.
|
17.
|
Time of the Essence
.
Time is of the essence of the Award Agreement.
|
18.
|
Governing Law
. The Award Agreement shall be governed, construed and enforced according to the laws of the Province of British Columbia and is subject to the exclusive jurisdiction of the courts of the Province of British Columbia.
|
19.
|
Interpretation of the Award Agreement and the Plan
. If any question or dispute arises as to the interpretation of the Award Agreement, the question or dispute will be determined by the Committee and such determination will be final, conclusive and binding for all purposes on both the Company and Grantee.
|
20.
|
Conflict Between Award Agreement and the Plan
. If there is any conflict between this Award Agreement and the Plan, the Plan, as amended from time to time, will govern.
|
1.
|
General
. Pursuant to the Grant Notice (the “
Grant Notice
”) to which this Stock Option Award Agreement (the “
Award Agreement
”) is attached, Novelion Therapeutics Inc. (the “
Company
”) has granted to Grantee an award of an Option under the Company’s 2016 Equity Incentive Plan, as amended from time to time (the “
Plan
”).
|
2.
|
Defined Terms
. All capitalized terms which are not defined in the Grant Notice or below have the meaning given to them in the Plan.
|
3.
|
Term
. Subject to the terms and conditions of the Plan and this Award Agreement, the Option will terminate on the earlier of:
|
(a)
|
The date on which the Option is exercised with respect to all Common Shares subject to the Option; and
|
(b)
|
5:00 p.m. (Vancouver time) on the Expiry Date.
|
4.
|
Vesting
. The vesting provisions applicable to the Option shall be as set forth in the Grant Notice.
|
5.
|
Exercise of Options
.
|
(a)
|
Exercise Notice
. No portion of the Option may be exercised until such portion vests. Grantee may exercise some or all of the vested portion of the Option by giving written notice of exercise (the “
Exercise Notice
”) signed and dated by Grantee (and not postdated), stating that Grantee elects to exercise his or her rights to purchase Common Shares subject to the Option and specifying the number of Common Shares in respect of which the Option is being exercised and specifying the Option Exercise Price to be paid therefor.
|
(b)
|
Delivery and Payment
. Grantee shall deliver the Exercise Notice to the Company at its principal office at 887 Great Northern Way, Suite 101, Vancouver, British Columbia, Canada, V5T 4T5 (or at such other address as the principal office of the Company may be located at the time of exercise) addressed to the attention of the Secretary or assistant secretary (if any) of the Company (or a designee notified in writing from time to time by the Company) and such Exercise Notice shall be accompanied by full payment (payable at par in Vancouver, British Columbia) in any combination of the following (subject to all applicable laws):
|
(i)
|
cash, bank draft or certified cheque;
|
(ii)
|
if and so long as the Common Shares are listed on an Exchange, delivery of a properly executed Exercise Notice, together with irrevocable instructions, to
|
(iii)
|
with prior written consent of the Company and subject to Section 13.3 of the Plan, written instructions from Grantee to the Company to effect a net settlement of Common Shares subject to the Option having a value equal to the Option Exercise Price of any Option and/or the withholding taxes due with respect to the exercise of the Option; and
|
(c)
|
Certificate
. As soon as practicable after any exercise of the Option, a certificate or certificates representing the Common Shares into which the Option is exercised will be delivered by the Company to Grantee or to Grantee’s designated brokered firm, as applicable.
|
6.
|
Rules Upon Termination of Service
. The Option will terminate on the earlier of the expiry of the Option under Section 3 above and the 90th day (effective following the close of trading on the Exchange, if such day is a trading day) after the date of Grantee’s Termination of Service, provided that upon Grantee’s Termination of Service by the Company or any Affiliate for Cause (as defined below) (as determined by the Company in its sole discretion), unless otherwise determined by the Committee and approved by the Exchange (if applicable), the Option (whether vested or unvested) will expire automatically on the date of Grantee’s Termination of Service.
|
7.
|
Sale Event
. In the event that Grantee is party to an effective employment or similar individual agreement with the Company or its Affiliates that provides for the treatment of an equity award in connection with “Sale Event” (as defined in such agreement), such provision shall only apply in connection with a “Sale Event” that occurs on or after the Grant Date (and shall not, for the avoidance of doubt, apply in connection with a “Sale Event” that occurred prior to the Grant Date).
|
8.
|
Conditions to Exercise
. Notwithstanding any of the provisions of the Award Agreement, the Company’s obligation to issue Common Shares to Grantee upon exercise of the Option is subject to the following:
|
(a)
|
Qualification
. Completion of registration or other qualification of the Common Shares or obtaining approval of such governmental authority as the Company determines is necessary or advisable in connection with the authorization, issuance or sale of the Common Shares;
|
(b)
|
Listing
. The admission of the Common Shares to listing or quotation on the Exchange; and
|
(c)
|
Undertakings
. The receipt by the Company from Grantee of such representations, agreements and undertakings, including as to future dealings in the Common Shares, as the Company or its counsel determines are necessary or advisable in order to safeguard against the violation of securities laws of any jurisdiction.
|
9.
|
Tax
. Grantee is solely responsible for the payment of any applicable taxes arising from the grant, vesting, settlement or exercise of the Option and any payment is to be in a manner satisfactory to the Company. Notwithstanding the foregoing, the Company will have the right to withhold from any amount payable to Grantee, either under the Plan or otherwise, such amount as may be necessary to enable the Company to comply with the applicable requirements of any federal, provincial, state, local or foreign law, or any administrative policy of any applicable tax authority, relating to the withholding of tax or any other required deductions with respect to the Option (the “
Withholding Obligations
”). The Company may require Grantee, as a condition to the exercise or settlement of the Option, to make such arrangements as the Company may require so that the Company can satisfy applicable Withholding Obligations, including, without limitation, requiring Grantee to (i) remit the amount of any such Withholding Obligations to the Company in advance; (ii) reimburse the Company for any such Withholding Obligations; (iii) deliver written instructions contemplated in Section 5(b)(iii) hereof, to effect a net settlement of Common Shares subject to the Option in an amount required to satisfy any such Withholding Obligations; or (iv) pursuant to Section 5(b)(ii) hereof, cause such broker to withhold from the proceeds realized from such transaction the amount required to satisfy any such Withholding Obligations and to remit such amount directly to the Company.
|
10.
|
Black Out Periods
. Grantee acknowledges and agrees that the Award Agreement and the grant of the Option to Grantee is subject to Grantee’s agreement to at all times comply with the Company’s policies with respect to black out periods, as more particularly set out in the Company’s Trading Policy, as amended from time to time.
|
11.
|
No Rights as Shareholder
. Grantee will not have any rights as a Shareholder with respect to any of the Common Shares subject to the Option until such time as Grantee becomes the record owner of such Common Shares.
|
12.
|
No Effect on Employment
. Nothing in the Award Agreement will:
|
(a)
|
Continue Employment
. Confer upon Grantee any right to continue in the employ of or under contract with the Company or any Affiliate or affect in any way the right of the Company or any Affiliate to terminate his or her employment or service at any time.
|
(b)
|
Extend Employment
. Be construed to constitute an agreement, or an expression of intent, on the part of the Company or any Affiliate to extend the employment or service of Grantee beyond the time that he or she would normally be retired pursuant to the provisions of any present or future retirement plan or policy of the Company or any Affiliate,
|
13.
|
Clawback
. The Option (whether or not vested) is subject to forfeiture, termination and rescission, and Grantee will be obligated to return to the Company the value received with respect to the Option (including any gain realized on a subsequent sale or disposition of Common Shares) in accordance with any clawback or similar policy maintained by the Company, as such policy may be amended and in effect from time to time, or as otherwise required by law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended.
|
14.
|
Enurement
. The Award Agreement shall enure to the benefit of and be binding upon the parties to the Award Agreement and upon the successors or assigns of the Company and upon the executors, administrators and legal personal representatives of Grantee.
|
15.
|
Further Assurances
. Each of the parties to the Award Agreement will do such further acts and execute such further documents as may required to give effect to and carry out the intent of the Award Agreement.
|
16.
|
Non-Assignable
. The Option is personal to Grantee and may not be assigned or transferred in whole or in part, except by will or by the operation of the laws of devolution or distribution and descent.
|
17.
|
Amendments
.
Any amendments to the Award Agreement must be in writing duly executed by the parties and will (if required) be subject to the approval of the applicable regulatory authorities.
|
18.
|
Time of the Essence
.
Time is of the essence of the Award Agreement.
|
19.
|
Governing Law
. The Award Agreement shall be governed, construed and enforced according to the laws of the Province of British Columbia and is subject to the exclusive jurisdiction of the courts of the Province of British Columbia.
|
20.
|
Interpretation of the Award Agreement and the Plan
. If any question or dispute arises as to the interpretation of the Award Agreement, the question or dispute will be determined by the Committee and such determination will be final, conclusive and binding for all purposes on both the Company and Grantee.
|
21.
|
Conflict Between Award Agreement and the Plan
. If there is any conflict between this Award Agreement and the Plan, the Plan, as amended from time to time, will govern.
|
1.
|
General
. Pursuant to the Grant Notice (the “
Grant Notice
”) to which this Stock Option Award Agreement (the “
Award Agreement
”) is attached, Novelion Therapeutics Inc. (the “
Company
”) has granted to Grantee an award of an Option under the Company’s 2016 Equity Incentive Plan, as amended from time to time (the “
Plan
”).
|
2.
|
Defined Terms
. All capitalized terms which are not defined in the Grant Notice or below have the meaning given to them in the Plan.
|
3.
|
Term
. Subject to the terms and conditions of the Plan and this Award Agreement, the Option will terminate on the earlier of:
|
(a)
|
The date on which the Option is exercised with respect to all Common Shares subject to the Option; and
|
(b)
|
5:00 p.m. (Vancouver time) on the Expiry Date.
|
4.
|
Vesting
. The vesting provisions applicable to the Option shall be as set forth in the Grant Notice.
|
5.
|
Exercise of Options
.
|
(a)
|
Exercise Notice
. No portion of the Option may be exercised until such portion vests. Grantee may exercise some or all of the vested portion of the Option by giving written notice of exercise (the “
Exercise Notice
”) signed and dated by Grantee (and not postdated), stating that Grantee elects to exercise his or her rights to purchase Common Shares subject to the Option and specifying the number of Common Shares in respect of which the Option is being exercised and specifying the Option Exercise Price to be paid therefor.
|
(b)
|
Delivery and Payment
. Grantee shall deliver the Exercise Notice to the Company at its principal office at 887 Great Northern Way, Suite 101, Vancouver, British Columbia, Canada, V5T 4T5 (or at such other address as the principal office of the Company may be located at the time of exercise) addressed to the attention of the Secretary or assistant secretary (if any) of the Company (or a designee notified in writing from time to time by the Company) and such Exercise Notice shall be accompanied by full payment (payable at par in Vancouver, British Columbia) in any combination of the following (subject to all applicable laws):
|
(i)
|
cash, bank draft or certified cheque;
|
(ii)
|
if and so long as the Common Shares are listed on an Exchange, delivery of a properly executed Exercise Notice, together with irrevocable instructions, to
|
(iii)
|
with prior written consent of the Company and subject to Section 13.3 of the Plan, written instructions from Grantee to the Company to effect a net settlement of Common Shares subject to the Option having a value equal to the Option Exercise Price of any Option and/or the withholding taxes due with respect to the exercise of the Option; and
|
(c)
|
Certificate
. As soon as practicable after any exercise of the Option, a certificate or certificates representing the Common Shares into which the Option is exercised will be delivered by the Company to Grantee or to Grantee’s designated brokered firm, as applicable.
|
6.
|
Rules Upon Termination of Service
. The Option will terminate on the earlier of the expiry of the Option under Section 3 above and the 90th day (effective following the close of trading on the Exchange, if such day is a trading day) after the date of Grantee’s Termination of Service, provided that upon Grantee’s Termination of Service by the Company or any Affiliate for Cause (as defined below) (as determined by the Company in its sole discretion), unless otherwise determined by the Committee and approved by the Exchange (if applicable), the Option (whether vested or unvested) will expire automatically on the date of Grantee’s Termination of Service.
|
7.
|
Other
.
|
(a)
|
Sale Event
. In the event that Grantee is party to an effective employment or similar individual agreement with the Company or its Affiliates that provides for the treatment of an equity award in connection with “Sale Event” (as defined in such agreement), such provision shall only apply in connection with a “Sale Event” that occurs on or after the Grant Date (and shall not, for the avoidance of doubt, apply in connection with a “Sale Event” that occurred prior to the Grant Date).
|
(b)
|
Section 4985
. If any amount payable or paid by the Company or any of its affiliates pursuant to this Agreement or otherwise to or for the benefit of Grantee becomes subject to the excise tax imposed by Section 4985 of the Code (including any interest, penalties or additions to tax relating thereto) (the “
4985 Excise Tax
”) by reason of the consummation of the transactions contemplated by the Agreement and Plan of Merger, dated as of June 14, 2016 (as amended), among QLT, Inc., Aegerion Pharmaceuticals, Inc. and certain other parties thereto, as reasonably determined by the Company, then the Company shall pay to Grantee (1) an amount equal to the 4985 Excise Tax, and (2) an amount (the “
4985 Gross-up Payment
”) equal to the amount necessary to put Grantee in the same net after-tax position (taking into account any and all applicable Federal, state, local and foreign income, employment, excise and other taxes) that Grantee would have been in if Grantee had not incurred any liability for taxes under Section 4985 of the Code. Any determination regarding the amount of any payment or payments hereunder shall be made in writing by the Company’s independent accountants or other accounting or consulting firm selected by the Company, whose determination shall be conclusive and binding upon Grantee and the Company for all purposes.
|
8.
|
Conditions to Exercise
. Notwithstanding any of the provisions of the Award Agreement, the Company’s obligation to issue Common Shares to Grantee upon exercise of the Option is subject to the following:
|
(a)
|
Qualification
. Completion of registration or other qualification of the Common Shares or obtaining approval of such governmental authority as the Company determines is necessary or advisable in connection with the authorization, issuance or sale of the Common Shares;
|
(b)
|
Listing
. The admission of the Common Shares to listing or quotation on the Exchange; and
|
(c)
|
Undertakings
. The receipt by the Company from Grantee of such representations, agreements and undertakings, including as to future dealings in the Common Shares, as the Company or its counsel determines are necessary or advisable in order to safeguard against the violation of securities laws of any jurisdiction.
|
9.
|
Tax
. Grantee is solely responsible for the payment of any applicable taxes arising from the grant, vesting, settlement or exercise of the Option and any payment is to be in a manner satisfactory to the Company. Notwithstanding the foregoing, the Company will have the right to withhold from any amount payable to Grantee, either under the Plan or otherwise, such amount as may be necessary to enable the Company to comply with the applicable requirements of any federal, provincial, state, local or foreign law, or any administrative policy of any applicable tax authority, relating to the withholding of tax or any other required deductions with respect to the Option (the “
Withholding Obligations
”). The Company may require Grantee, as a condition to the exercise or settlement of the Option, to make such arrangements as the Company may require so that the Company can satisfy applicable Withholding Obligations, including, without limitation, requiring Grantee to (i) remit the amount of any such Withholding Obligations to the Company in advance; (ii) reimburse the Company for any such Withholding Obligations; (iii) deliver written instructions contemplated in Section 5(b)(iii) hereof, to effect a net settlement of Common Shares subject to the Option in an amount required to satisfy any such Withholding Obligations; or (iv) pursuant to Section 5(b)(ii) hereof, cause such broker to withhold from the proceeds realized from such transaction the amount required to satisfy any such Withholding Obligations and to remit such amount directly to the Company.
|
10.
|
Black Out Periods
. Grantee acknowledges and agrees that the Award Agreement and the grant of the Option to Grantee is subject to Grantee’s agreement to at all times comply with the Company’s policies with respect to black out periods, as more particularly set out in the Company’s Trading Policy, as amended from time to time.
|
11.
|
No Rights as Shareholder
. Grantee will not have any rights as a Shareholder with respect to any of the Common Shares subject to the Option until such time as Grantee becomes the record owner of such Common Shares.
|
12.
|
No Effect on Employment
. Nothing in the Award Agreement will:
|
(a)
|
Continue Employment
. Confer upon Grantee any right to continue in the employ of or under contract with the Company or any Affiliate or affect in any way the right of the Company or any Affiliate to terminate his or her employment or service at any time.
|
(b)
|
Extend Employment
. Be construed to constitute an agreement, or an expression of intent, on the part of the Company or any Affiliate to extend the employment or service of Grantee beyond the time that he or she would normally be retired pursuant to the provisions of any present or future retirement plan or policy of the Company or any Affiliate, or beyond the time at which he or she would otherwise be retired pursuant to the provisions of any contract of employment with the Company or any Affiliate.
|
13.
|
Clawback
. The Option (whether or not vested) is subject to forfeiture, termination and rescission, and Grantee will be obligated to return to the Company the value received with respect to the Option (including any gain realized on a subsequent sale or disposition of Common Shares) in accordance with any clawback or similar policy maintained by the Company, as such policy may be amended and in effect from time to time, or as otherwise required by law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended.
|
14.
|
Enurement
. The Award Agreement shall enure to the benefit of and be binding upon the parties to the Award Agreement and upon the successors or assigns of the Company and upon the executors, administrators and legal personal representatives of Grantee.
|
15.
|
Further Assurances
. Each of the parties to the Award Agreement will do such further acts and execute such further documents as may required to give effect to and carry out the intent of the Award Agreement.
|
16.
|
Non-Assignable
. The Option is personal to Grantee and may not be assigned or transferred in whole or in part, except by will or by the operation of the laws of devolution or distribution and descent.
|
17.
|
Amendments
.
Any amendments to the Award Agreement must be in writing duly executed by the parties and will (if required) be subject to the approval of the applicable regulatory authorities.
|
18.
|
Time of the Essence
.
Time is of the essence of the Award Agreement.
|
19.
|
Governing Law
. The Award Agreement shall be governed, construed and enforced according to the laws of the Province of British Columbia and is subject to the exclusive jurisdiction of the courts of the Province of British Columbia.
|
20.
|
Interpretation of the Award Agreement and the Plan
. If any question or dispute arises as to the interpretation of the Award Agreement, the question or dispute will be determined by the Committee and such determination will be final, conclusive and binding for all purposes on both the Company and Grantee.
|
21.
|
Conflict Between Award Agreement and the Plan
. If there is any conflict between this Award Agreement and the Plan, the Plan, as amended from time to time, will govern.
|
1.
|
Definitions
. In this Agreement, except as otherwise expressly provided:
|
(a)
|
the phrase “decided in a Proceeding” shall mean a decision by a court, arbitrator(s), administrative tribunal, regulatory authority or other entity, having the requisite legal authority to make such a decision, which decision has become final and from which no appeal or other review proceeding is permissible.
|
(b)
|
the terms “Director” and “Officer” include:
|
(i)
|
the Indemnitee’s service as a director or officer of the Company;
|
(ii)
|
the Indemnitee’s service as a director or officer of another corporation:
|
(A)
|
at a time when the corporation is or was an affiliate of the Company as defined in the
Business Corporations Act
(British Columbia), as amended from time to time, or any successor legislation; or
|
(B)
|
at the request of the Company; and
|
(iii)
|
the Indemnitee’s service in a position equivalent to that of a director or officer of a partnership, trust, joint venture or other unincorporated entity, at the request of the Company.
|
(c)
|
the term “Expenses” include costs, charges and expenses, including legal and other fees, and any expenses of establishing a right to indemnification under this Agreement, but does not include judgements, penalties, fines, statutory liabilities or amounts paid in settlement of a Proceeding;
|
(d)
|
the term “Indemnitee” includes his or her heirs and personal or other legal representatives;
|
(e)
|
the term “Liability” includes a judgement, penalty or fine awarded or imposed in, or an amount paid in settlement of, a Proceeding, including any liability which is or may be imposed upon the Indemnitee by statute, rule or regulation; and
|
(f)
|
the term “Proceeding” includes but is not limited to, any action, suit or proceeding, whether current, threatened, pending or completed and whether brought by or in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature in which the Indemnitee, by reason of being or having been a Director or Officer:
|
(i)
|
is or may be joined as a party; or
|
(ii)
|
is or may be liable for, or in respect of, a Liability or Expenses related to such action, suit or proceeding.
|
2.
|
Indemnity of Director or Officer
. Subject only to the limitations set forth in Section 3, the Company shall indemnify the Indemnitee against any Liability to which the Indemnitee is or may be liable and shall pay the Expenses actually and reasonably incurred by the Indemnitee because of any claim or claims made against him or her in a Proceeding by reason of the fact that he or she is or was a Director and/or Officer.
|
3.
|
Limitations on Indemnity
. The Company shall not be obligated under this Agreement to indemnify the Indemnitee against any Liability or pay any Expenses of the Indemnitee:
|
(a)
|
if the Company is prohibited by applicable law from making such payments;
|
(b)
|
if such payments have been paid to, or on behalf of, the Indemnitee under an insurance policy, except in respect of any excess beyond the amount paid under such insurance;
|
(c)
|
for which payments the Indemnitee is indemnified by the Company otherwise than pursuant to this Agreement; or
|
(d)
|
resulting from a claim decided in a Proceeding adversely to the Indemnitee based upon or attributable to the Indemnitee gaining in fact any personal profit or advantage to which he or she was not legally entitled, including any profits made from the purchase or sale by the Indemnitee of securities of the Company.
|
4.
|
Advance Payment Of Expenses
. Expenses incurred by the Indemnitee in defending a claim against him in a Proceeding shall be paid by the Company as incurred and in advance of the final disposition of such Proceeding; provided, however, that Expenses of defence need not be paid as incurred and in advance where a court of competent jurisdiction has decided that the Indemnitee is not entitled to be indemnified pursuant to this Agreement or otherwise. The Indemnitee hereby agrees and undertakes to repay such amounts advanced if it shall be decided in a Proceeding that he or she is not entitled to be indemnified by the Company pursuant to this Agreement or otherwise.
|
5.
|
Enforcement
. If a claim under this Agreement is not paid by the Company, or on its behalf, within thirty days after a written claim has been received by the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim and if successful in whole or in part, the Indemnitee shall also be entitled to be paid the Expenses of prosecuting such claim.
|
6.
|
Subrogation
. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
|
7.
|
Notice
. The Indemnitee, as a condition precedent to his or her right to be indemnified under this Agreement, shall give to the Company notice in writing as soon as practicable of any claim made against him or her for which indemnity will or could be sought under this Agreement. Notice to the Company shall be given at its principal office and shall be directed to the President (or such other address as the Company shall designate in writing to the Indemnitee); notice shall be deemed received if sent by prepaid mail properly addressed, the date of such notice being the date postmarked. In addition, the Indemnitee shall give the Company such information and co-operation as it may reasonably require.
|
8.
|
Indemnification Hereunder Not Exclusive
. Nothing herein shall be deemed to diminish or otherwise restrict the Indemnitee’s right to indemnification under any provision of the Notice of Articles or Articles of the Company or under applicable corporate law.
|
9.
|
Continuation of Indemnification
. The indemnification under this Agreement shall continue as to the Indemnitee even though he or she may have ceased to be a Director and/or Officer and shall inure to the benefit of the heirs and personal representatives of the Indemnitee.
|
10.
|
Coverage of Indemnification
. The indemnification under this Agreement shall cover the Indemnitee’s service as a Director and/or Officer prior to or after the date of the Agreement.
|
11.
|
Applicable Law
. This Agreement is governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein.
|
12.
|
Benefit
. This Agreement will inure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, successors and assigns.
|
13.
|
Severability
. If any provision of this Agreement is determined at any time by a court of competent jurisdiction to be invalid, illegal or unenforceable such provision or part thereof shall be severable from this Agreement and the remainder of this Agreement will be construed as if such invalid, illegal or unenforceable provision or part thereof had been deleted herefrom.
|
14.
|
Further Assurances
. Each party agrees to take all such actions and execute all such documents within its power as may be necessary or desirable to carry out or implement and give full effect to the provisions and intent of this Agreement.
|
15.
|
Time Of Essence
. Time is the essence of this Agreement and no extension of time shall constitute a waiver of this provision.
|
16.
|
Waivers
. No waiver of, no consent with respect to, and no approval required under any provision of this Agreement will be effective unless in writing executed by the party against whom such waiver, consent or approval is sought to be enforced, and then any such waiver, consent or approval will be effective only in the specific instance and for the specific purpose given.
|
17.
|
Counterparts
. This Agreement may be executed in one or more counterparts, each of which when taken together will constitute this Agreement.
|
1.
|
Definitions
. In this Agreement, except as otherwise expressly provided:
|
(a)
|
the phrase “decided in a Proceeding” shall mean a decision by a court, arbitrator(s), administrative tribunal, regulatory authority or other entity, having the requisite legal authority to make such a decision, which decision has become final and from which no appeal or other review proceeding is permissible.
|
(b)
|
the terms “Director” and “Officer” include:
|
(i)
|
the Indemnitee’s service as a director or officer of the Company;
|
(ii)
|
the Indemnitee’s service as a director or officer of another corporation:
|
(A)
|
at a time when the corporation is or was an affiliate of the Company as defined in the
Business Corporations Act
(British Columbia), as amended from time to time, or any successor legislation; or
|
(B)
|
at the request of the Company; and
|
(iii)
|
the Indemnitee’s service in a position equivalent to that of a director or officer of a partnership, trust, joint venture or other unincorporated entity, at the request of the Company.
|
(c)
|
the term “Expenses” include costs, charges and expenses, including legal and other fees, and any expenses of establishing a right to indemnification under this Agreement, but does not include judgements, penalties, fines, statutory liabilities or amounts paid in settlement of a Proceeding;
|
(d)
|
the term “Indemnitee” includes his or her heirs and personal or other legal representatives;
|
(e)
|
the term “Liability” includes a judgement, penalty or fine awarded or imposed in, or an amount paid in settlement of, a Proceeding, including any liability which is or may be imposed upon the Indemnitee by statute, rule or regulation; and
|
(f)
|
the term “Proceeding” includes but is not limited to, any action, suit or proceeding, whether current, threatened, pending or completed and whether brought by or in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature in which the Indemnitee, by reason of being or having been a Director or Officer or legal counsel to the Company:
|
(i)
|
is or may be joined as a party; or
|
(ii)
|
is or may be liable for, or in respect of, a Liability or Expenses related to such action, suit or proceeding.
|
2.
|
Indemnity of Director or Officer
. Subject only to the limitations set forth in Section 3, the Company shall indemnify the Indemnitee against any Liability to which the Indemnitee is or may be liable and shall pay the Expenses actually and reasonably incurred by the Indemnitee because of any claim or claims made against him or her in a Proceeding by reason of the fact that he or she is or was a Director and/or Officer and/or legal counsel to the Company.
|
3.
|
Limitations on Indemnity
. The Company shall not be obligated under this Agreement to indemnify the Indemnitee against any Liability or pay any Expenses of the Indemnitee:
|
(a)
|
if the Company is prohibited by applicable law from making such payments;
|
(b)
|
if a claim is made by the Company and decided in a Proceeding for breach of the Indemnitee's employment agreement (provided the subject matter of such breach is the subject matter of the claim for indemnity);
|
(c)
|
if such payments have been paid to, or on behalf of, the Indemnitee under an insurance policy, except in respect of any excess beyond the amount paid under such insurance;
|
(d)
|
for which payments the Indemnitee is indemnified by the Company otherwise than pursuant to this Agreement; or
|
(e)
|
resulting from a claim decided in a Proceeding adversely to the Indemnitee based upon or attributable to the Indemnitee gaining in fact any personal profit or advantage to which he or she was not legally entitled, including any profits made from the purchase or sale by the Indemnitee of securities of the Company.
|
4.
|
Advance Payment Of Expenses
. Expenses incurred by the Indemnitee in defending a claim against him or her in a Proceeding shall be paid by the Company as incurred and in advance of the final disposition of such Proceeding; provided, however, that Expenses of defence need not be paid as incurred and in advance where a court of competent jurisdiction has decided that the Indemnitee is not entitled to be indemnified pursuant to this Agreement or otherwise. The Indemnitee hereby agrees and undertakes to repay such amounts advanced if it shall be decided in a Proceeding that he or she is not entitled to be indemnified by the Company pursuant to this Agreement or otherwise.
|
5.
|
Enforcement
. If a claim under this Agreement is not paid by the Company, or on its behalf, within thirty days after a written claim has been received by the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim and if successful in whole or in part, the Indemnitee shall also be entitled to be paid the Expenses of prosecuting such claim.
|
6.
|
Subrogation
. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
|
7.
|
Notice
. The Indemnitee, as a condition precedent to his or her right to be indemnified under this Agreement, shall give to the Company notice in writing as soon as practicable of any claim made against him or her for which indemnity will or could be sought under this Agreement. Notice to the Company shall be given at its principal office and shall be directed to the Chief Executive Officer (or such other address as the Company shall designate in writing to the Indemnitee); notice shall be deemed received if sent by prepaid mail properly addressed, the date of such notice being the date postmarked. In addition, the Indemnitee shall give the Company such information and co-operation as it may reasonably require.
|
8.
|
Indemnification Hereunder Not Exclusive
. Nothing herein shall be deemed to diminish or otherwise restrict the Indemnitee’s right to indemnification under any provision of the Notice of Articles and Articles of the Company or under applicable corporate law.
|
9.
|
Continuation of Indemnification
. The indemnification under this Agreement shall continue as to the Indemnitee even though he or she may have ceased to be a Director and/or Officer and/or legal counsel and shall inure to the benefit of the heirs and personal representatives of the Indemnitee.
|
10.
|
Coverage of Indemnification
. The indemnification under this Agreement shall cover the Indemnitee’s service as a Director and/or Officer and/or legal counsel prior to or after the date of the Agreement.
|
11.
|
Applicable Law
. This Agreement is governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein.
|
12.
|
Benefit
. This Agreement will inure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, successors and assigns.
|
13.
|
Severability
. If any provision of this Agreement is determined at any time by a court of competent jurisdiction to be invalid, illegal or unenforceable such provision or part thereof shall be severable from this Agreement and the remainder of this Agreement will be construed as if such invalid, illegal or unenforceable provision or part thereof had been deleted herefrom.
|
14.
|
Further Assurances
. Each party agrees to take all such actions and execute all such documents within its power as may be necessary or desirable to carry out or implement and give full effect to the provisions and intent of this Agreement.
|
15.
|
Time Of Essence
. Time is the essence of this Agreement and no extension of time shall constitute a waiver of this provision.
|
16.
|
Waivers
. No waiver of, no consent with respect to, and no approval required under any provision of this Agreement will be effective unless in writing executed by the party against whom such waiver, consent or approval is sought to be enforced, and then any such waiver, consent or approval will be effective only in the specific instance and for the specific purpose given.
|
17.
|
Counterparts
. This Agreement may be executed in one or more counterparts, each of which when taken together will constitute this Agreement.
|
Signature
|
Date
|
1.
|
The following new definition shall be added to the Employment Agreement:
|
2.
|
The final sentence of Section 7(b) of the Employment Agreement (entitled “Termination Due to Death or Disability”) shall be deleted in its entirety and replaced with the following:
|
3.
|
Section 7(d) of the Employment Agreement (entitled “Termination by the Company without Cause”) shall be deleted in its entirety and replaced with the following:
|
4.
|
The final sentence of Section 7(e) of the Employment Agreement (entitled “Termination by Employee with Good Reason”) shall be deleted in its entirety and replaced with the following:
|
5.
|
The first sentence of Section 7(g) of the Employment Agreement (entitled “Release”) shall be deleted in its entirety and replaced with the following:
|
6.
|
Other Provisions
. The Employment Agreement, as modified by this Amendment, shall remain in full force and effect. This Amendment may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. The execution of this Amendment may be by actual or facsimile signature.
|
1.
|
Position
.
Section 3(a) of the Employment Agreement is hereby amended by deleting the reference to “Chief Financial Officer” and inserting “Chief Financial and Administration Officer” in its place.
|
2.
|
Base Salary
.
Section 4(a) of the Employment Agreement is hereby amended by deleting the reference to “$16,250 ($390,000)” and inserting “Eighteen Thousand Seven Hundred and Fifty Dollars ($18,750) (Four Hundred Fifty Thousand Dollars ($450,000) on an annualized basis)” in its place.
|
3.
|
Target Bonus
.
Section 4(b)(i) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
|
4.
|
Incentive Payments
.
Section 4 of the Employment Agreement is hereby amended by adding the following the new Section 4(e):
|
5.
|
Miscellaneous
.
Except as expressly amended herein, the Employment Agreement will continue in full force and effect in accordance with its original terms. This Second Amendment may not be modified or amended, and no breach will be deemed to be waived, unless agreed to in writing by Employee and a duly authorized designee of the Company. The headings and captions in this Second Amendment are for convenience only and in no way define or describe the scope or content of any provision of this Second Amendment. This Second Amendment is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of Massachusetts without giving effect to any conflict of laws principles that would result in the application of the laws of any other jurisdiction. This Second Amendment may be executed in one or more counterparts, each of which will be an original and all of which together will constitute one and the same instrument.
|
1.
|
Defined Terms:
In the Aegerion Agreement, references to the “
Company
” or “
Aegerion
” (or any other references indicating your employer) will be deemed to be references to Novelion Services, references to the “
Board
” will be deemed to be references to the Board of Directors of Novelion Services, and references to the “
Agreement
” or the “
Employment Agreement
” (or any other references to the terms and conditions of your employment) will mean the Aegerion Agreement as modified and supplemented by this letter. In this letter, “
Affiliate
” has the meaning given to it in the Delaware General Corporation Law, and any other capitalized terms that are not defined in this letter will have the meanings given to them in the Aegerion Agreement.
|
2.
|
Responsibilities and Reporting:
As General Counsel & Secretary, you will have the duties and responsibilities set out in Section 3(a) of the Aegerion Agreement in respect of Novelion Services. Your duties and responsibilities will include acting as member of the Board and of the board of directors of Novelion Canada and any Affiliates, if appointed or elected to such positions. As described below, under the Master Service Agreement between Novelion Canada and Novelion Services that will be entered into on or about the completion date of the Merger, as amended from time to time (the “
Service Agreement
”) you may also be required to perform services to Novelion Canada and other Affiliates of Novelion Canada, including holding an office in Novelion Canada. For certainty, you will be an employee of Novelion Services and not an employee of Novelion Canada, and when you provide services to Novelion Canada you will be doing so as an employee of Novelion Services in the context of certain management services it provides to Novelion Canada under the Service Agreement. You will report to the Chief Executive Officer of Novelion Services.
|
3.
|
Base Salary:
Notwithstanding Section 4(a) of the Aegerion Agreement, you will be paid a semi-monthly base salary of USD $14,583.33 (USD $350,000 on an annualized basis). The other terms and condition of Section 4(a) of the Aegerion Agreement will continue to apply.
|
4.
|
Length of Service:
Novelion Services will recognize your length of service with Aegerion for all purposes related to your employment with Novelion Services, including for the purpose of determining your entitlements on termination of your employment pursuant to the Aegerion Agreement.
|
5.
|
Accrued Obligations:
Your employment with Aegerion will cease immediately prior to the Commencement Date and Aegerion will be responsible for providing you with all accrued but unpaid Base Salary and unreimbursed expenses incurred in accordance with the Aegerion Agreement up to such date. Any vacation time that you have accrued under Aegerion’s vacation policy as of the Commencement Date, but not used as of such date, will be “rolled over” to Novelion Services. Novelion Services will credit you with this time for purposes of its vacation policy. By accepting this offer, you consent to the rollover of this vacation time and acknowledge and agree that you are not entitled to any payment for this vacation time in connection with the transfer of your employment from Aegerion to Novelion Services.
|
6.
|
No Severance or Good Reason:
You agree that (a) the transfer of your employment from Aegerion to Novelion Services and any other changes to the terms and conditions of your employment that are expressly contemplated by this letter, and/or (b) any changes to your duties or responsibilities that directly result from the Merger (including without limitation any such changes directly resulting from your new status as an executive officer of a subsidiary of Novelion Canada) shall not, individually or in the aggregate, constitute Good Reason for purposes of the Aegerion Agreement or the Employment Agreement or entitle you to any Severance Benefits, Accelerated Equity Benefit, Retention Bonus Amount, or any other severance benefits or the acceleration of any vesting or other rights, to which you might otherwise be entitled. You agree that, to the extent required by law to permit Aegerion to rely on this paragraph 6, Novelion Services is and will be deemed to be acting as agent or trustee on behalf of and for the benefit of Aegerion.
|
7.
|
Stock Options / Equity Grants:
Any stock options, restricted stock units, or other equity awards that you may have been granted pursuant to the Inducement Plan or 2010 Stock Option and Incentive Plan will be dealt with as set out in the Merger Agreement. Once the Merger is completed, any such outstanding entitlements will be governed by and subject to the applicable stock option plan and stock option agreement.
|
8.
|
Right to Work in Canada:
You will cooperate with Novelion Services to seek, obtain, and maintain the right to work in Canada to provide services on behalf of Novelion Services to Novelion Canada and any of its other Affiliates. Novelion Services will pay the reasonable costs associated with obtaining a permit to work in Canada.
|
9.
|
Commuting to Canada:
You acknowledge that travel will be required in connection with your employment, including commuting on a regular basis to such locations in Canada as are required for Novelion Services to provide its management services to Novelion Canada and its Canadian Affiliates.
|
10.
|
Tax Consultation Expenses:
Each year so long as you are providing management services, you will be entitled to reimbursement for your reasonable expenses up to a maximum of USD $5,000 for an independent tax consultation regarding the Canadian tax implications of your work on behalf of Novelion Services in Canada and/or preparation of your Canadian tax return.
|
11.
|
Tax Equalization:
|
(a)
|
As you will be subject to income tax and social security obligations arising from your services performed in Canada on behalf of Novelion Services, Novelion Services is prepared to address the overall tax and social security burden that you experience with the intention that your total tax and social security burden while working in both the United States and Canada will be equal to what your tax and social security burden would have been had you remained working solely in Massachusetts. Novelion Services will provide you with tax equalization in connection with all income tax and social security liabilities arising from the performance of your employment duties within Canada. Novelion Services intends that the income taxes and social security levies payable by you on all taxable employment income and related benefits, as prescribed by the applicable tax and social security laws, should be no better or worse than the personal taxes and social security levies you would have been required to pay on such amounts if your employment duties had been performed solely in the state of Massachusetts. Where your annual tax and social security obligation yields a higher total obligation than if your employment duties were solely performed in the state of Massachusetts, Novelion Services will reimburse you for the difference. Where your annual tax and social security obligations yields a lower total tax and social security impact than if your employment duties were solely performed in the state of Massachusetts, you will reimburse Novelion Services for the difference.
|
(b)
|
You will provide all information necessary for the preparation of a tax equalization calculation.
|
(c)
|
Novelion Services will pay all reasonable costs and professional fees related to calculating this equalization payment, and reserves the discretion to establish the process and criteria for determining the tax equalization calculation. For clarity, the tax equalization payments described in this paragraph 11 will not take into consideration or apply to any taxable income from sources other than your employment with Novelion Services, and you will remain responsible for all income taxes arising from your personal income.
|
(d)
|
If you establish your primary residence in Canada, Novelion Services’ obligations under this paragraph 11 will cease, provided that there will be a pro-rated adjustment for any partial year.
|
(e)
|
If your employment is terminated for any of the reasons described under Section 7 of the Aegerion Agreement, then between January 1 and July 31 of the calendar year following the calendar year in which such termination occurs, Novelion Services will pay you any remaining tax equalization payments owed in accordance with this paragraph 11 or, in the event that the reconciliation results in you owing money to Novelion Services, you will make such payment to Novelion Services.
|
12.
|
Release:
The form of Release of Claims contemplated in the Aegerion Agreement will be the form attached as Schedule “B” to this Agreement.
|
13.
|
Employment Standards:
This provision applies only if and to the extent that the employment laws of Canada apply to your employment. If the minimum standards in the British Columbia
Employment Standards Act
or Ontario
Employment Standards Act, 2000
, or any other applicable employment standards legislation, as they exist from time to time are more favorable to you in any respect than provided for in the Employment Agreement, including but not limited to the provisions in respect of notice of termination, the provisions of the applicable Employment Standards Act or legislation will apply.
|
14.
|
Confidentiality, Assignment of Intellectual Property and Non-Competition:
As a condition of your employment with Novelion Services, and in consideration of the commitments set forth in this letter, you agree to execute and deliver to Novelion Services the Confidentiality, Assignment of Intellectual Property and Non-Competition Agreement attached as Schedule “C” to this letter (the “
Ancillary Agreement
”), which will take effect on the Commencement Date, following which any references to the “Confidentiality Agreement” in the Aegerion Agreement will be deemed to be references to the Ancillary Agreement. Your acceptance of this offer of employment or execution of the Ancillary Agreement does not affect your obligations to Aegerion or the rights of Aegerion under the Confidentiality Agreement arising from your employment with Aegerion prior to the Commencement Date.
|
15.
|
Priority:
If there is any conflict or inconsistency between these Supplementary Terms and the Aegerion Agreement, these Supplementary Terms will take precedence.
|
1.
|
Defined Terms:
In the Aegerion Agreement, references to the “
Company
” or “
Aegerion
” (or any other references indicating your employer) will be deemed to be references to Novelion Services, references to the “
Board
” will be deemed to be references to the Board of Directors of Novelion Services, and references to the “
Agreement
” or the “
Employment Agreement
” (or any other references to the terms and conditions of your employment) will mean the Aegerion Agreement as modified and supplemented by this letter. In this letter, “
Affiliate
” has the meaning given to it in the Delaware General Corporation Law, and any other capitalized terms that are not defined in this letter will have the meanings given to them in the Aegerion Agreement.
|
2.
|
Responsibilities and Reporting:
As Global Chief Compliance Officer, you will have the duties and responsibilities set out in Section 3(a) of the Aegerion Agreement in respect of Novelion Services. As described below, under the Master Service Agreement between Novelion Canada and Novelion Services that will be entered into on or about the completion date of the Merger, as amended from time to time (the “
Service Agreement
”) you may also be required to perform services to Novelion Canada and other Affiliates of Novelion Canada, including holding an office in Novelion Canada. For certainty, you will be an employee of Novelion Services and not an employee of Novelion Canada, and when you provide services to Novelion Canada you will be doing so as an employee of Novelion Services in the context of certain management services it provides to Novelion Canada under the Service Agreement. You will report to the Chief Executive Officer of Novelion Services.
|
3.
|
Base Salary:
You will be paid the Base Salary reflected in the Aegerion Agreement, subject to adjustment by the Board or Compensation Committee thereof from time to time.
|
4.
|
Length of Service:
Novelion Services will recognize your length of service with Aegerion for all purposes related to your employment with Novelion Services, including for the purpose of determining your entitlements on termination of your employment pursuant to the Aegerion Agreement.
|
5.
|
Accrued Obligations:
Your employment with Aegerion will cease immediately prior to the Commencement Date and Aegerion will be responsible for providing you with all accrued but unpaid Base Salary and unreimbursed expenses incurred in accordance with the Aegerion Agreement up to such date. Any vacation time that you have accrued under
|
6.
|
No Severance or Good Reason:
You agree that (a) the transfer of your employment from Aegerion to Novelion Services and any other changes to the terms and conditions of your employment that are expressly contemplated by this letter, and/or (b) any changes to your duties or responsibilities that directly result from the Merger (including without limitation any such changes directly resulting from your new status as an executive officer of a subsidiary of Novelion Canada) shall not, individually or in the aggregate, constitute Good Reason for purposes of the Aegerion Agreement or the Employment Agreement or entitle you to any Severance Benefits, Accelerated Equity Benefit, Retention Bonus Amount, or any other severance benefits or the acceleration of any vesting or other rights, to which you might otherwise be entitled. You agree that, to the extent required by law to permit Aegerion to rely on this paragraph 6, Novelion Services is and will be deemed to be acting as agent or trustee on behalf of and for the benefit of Aegerion.
|
7.
|
Stock Options / Equity Grants:
Any stock options, restricted stock units, or other equity awards that you may have been granted pursuant to the Inducement Plan or 2010 Stock Option and Incentive Plan will be dealt with as set out in the Merger Agreement. Once the Merger is completed, any such outstanding entitlements will be governed by and subject to the applicable stock option plan and stock option agreement.
|
8.
|
Right to Work in Canada:
You will cooperate with Novelion Services to seek, obtain, and maintain the right to work in Canada to provide services on behalf of Novelion Services to Novelion Canada and any of its other Affiliates. Novelion Services will pay the reasonable costs associated with obtaining a permit to work in Canada.
|
9.
|
Commuting to Canada:
You acknowledge that travel will be required in connection with your employment, including commuting on a regular basis to such locations in Canada as are required for Novelion Services to provide its management services to Novelion Canada and its Canadian Affiliates.
|
10.
|
Tax Consultation Expenses:
Each year so long as you are providing management services, you will be entitled to reimbursement for your reasonable expenses up to a maximum of USD $5,000 for an independent tax consultation regarding the Canadian tax implications of your work on behalf of Novelion Services in Canada and/or preparation of your Canadian tax return.
|
11.
|
Tax Equalization:
|
(a)
|
As you will be subject to income tax and social security obligations arising from your services performed in Canada on behalf of Novelion Services, Novelion Services is prepared to address the overall tax and social security burden that you experience with the intention that your total tax and social security burden while working in both the United States and Canada will be equal to what your tax and social security burden would have been had you remained working solely in Massachusetts. Novelion Services will provide you with tax equalization in connection with all income tax and social security liabilities arising from the performance of your employment duties within Canada. Novelion Services intends that the income taxes and social security levies payable by you on all taxable employment income and related benefits, as prescribed by the applicable tax and social security laws, should be no better or worse than the personal taxes and social security levies you would have been required to pay on such amounts if your employment duties had been performed solely in the state of Massachusetts. Where your annual tax and social security obligation yields a higher total obligation than if your employment duties were solely performed in the state of Massachusetts, Novelion Services will reimburse you for the difference. Where your annual tax and social security obligations yields a lower total tax and social security impact than if your employment duties were solely performed in the state of Massachusetts, you will reimburse Novelion Services for the difference.
|
(b)
|
You will provide all information necessary for the preparation of a tax equalization calculation.
|
(c)
|
Novelion Services will pay all reasonable costs and professional fees related to calculating this equalization payment, and reserves the discretion to establish the process and criteria for determining the tax equalization calculation. For clarity, the tax equalization payments described in this paragraph 11 will not take into consideration or apply to any taxable income from sources other than your employment with Novelion Services, and you will remain responsible for all income taxes arising from your personal income.
|
(d)
|
If you establish your primary residence in Canada, Novelion Services’ obligations under this paragraph 11 will cease, provided that there will be a pro-rated adjustment for any partial year.
|
(e)
|
If your employment is terminated for any of the reasons described under Section 7 of the Aegerion Agreement, then between January 1 and July 31 of the calendar year following the calendar year in which such termination occurs, Novelion Services will pay you any remaining tax equalization payments owed in accordance with this paragraph 11 or, in the event that the reconciliation results in you owing money to Novelion Services, you will make such payment to Novelion Services.
|
12.
|
Release:
The form of Release of Claims contemplated in the Aegerion Agreement will be the form attached as Schedule “B” to this Agreement.
|
13.
|
Employment Standards:
This provision applies only if and to the extent that the employment laws of Canada apply to your employment. If the minimum standards in the British Columbia
Employment Standards Act
or Ontario
Employment Standards Act, 2000
, or any other applicable employment standards legislation, as they exist from time to time are more favorable to you in any respect than provided for in the Employment Agreement, including but not limited to the provisions in respect of notice of termination, the provisions of the applicable Employment Standards Act or legislation will apply.
|
14.
|
Confidentiality, Assignment of Intellectual Property and Non-Competition:
As a condition of your employment with Novelion Services, and in consideration of the commitments set forth in this letter, you agree to execute and deliver to Novelion Services the Confidentiality, Assignment of Intellectual Property and Non-Competition Agreement attached as Schedule “C” to this letter (the “
Ancillary Agreement
”), which will take effect on the Commencement Date, following which any references to the “Confidentiality Agreement” in the Aegerion Agreement will be deemed to be references to the Ancillary Agreement. Your acceptance of this offer of employment or execution of the Ancillary Agreement does not affect your obligations to Aegerion or the rights of Aegerion under the Confidentiality Agreement arising from your employment with Aegerion prior to the Commencement Date.
|
15.
|
Priority:
If there is any conflict or inconsistency between these Supplementary Terms and the Aegerion Agreement, these Supplementary Terms will take precedence.
|
1.
|
Defined Terms:
In the Aegerion Agreement, references to the “
Company
” or “
Aegerion
” (or any other references indicating your employer) will be deemed to be references to Novelion Services, references to the “
Board
” will be deemed to be references to the Board of Directors of Novelion Services, and references to the “
Agreement
” or the “
Employment Agreement
” (or any other references to the terms and conditions of your employment) will mean the Aegerion Agreement as modified and supplemented by this letter. In this letter, “
Affiliate
” has the meaning given to it in the Delaware General Corporation Law, and any other capitalized terms that are not defined in this letter will have the meanings given to them in the Aegerion Agreement.
|
2.
|
Responsibilities and Reporting:
As Global Chief Commercial Officer, you will have the duties and responsibilities set out in Section 3(a) of the Aegerion Agreement in respect of Novelion Services. As described below, under the Master Service Agreement between Novelion Canada and Novelion Services that will be entered into on or about the completion date of the Merger, as amended from time to time (the “
Service Agreement
”) you may also be required to perform services to Novelion Canada and other Affiliates of Novelion Canada, including holding an office in Novelion Canada. For certainty, you will be an employee of Novelion Services and not an employee of Novelion Canada, and when you provide services to Novelion Canada you will be doing so as an employee of Novelion Services in the context of certain management services it provides to Novelion Canada under the Service Agreement. You will report to the Chief Executive Officer of Novelion Services.
|
3.
|
Base Salary:
You will be paid the Base Salary reflected in the Aegerion Agreement, subject to adjustment by the Board or Compensation Committee thereof from time to time.
|
4.
|
Length of Service:
Novelion Services will recognize your length of service with Aegerion for all purposes related to your employment with Novelion Services, including for the purpose of determining your entitlements on termination of your employment pursuant to the Aegerion Agreement.
|
5.
|
Accrued Obligations:
Your employment with Aegerion will cease immediately prior to the Commencement Date and Aegerion will be responsible for providing you with all accrued but unpaid Base Salary and unreimbursed expenses
|
6.
|
No Severance or Good Reason:
You agree that (a) the transfer of your employment from Aegerion to Novelion Services and any other changes to the terms and conditions of your employment that are expressly contemplated by this letter, and/or (b) any changes to your duties or responsibilities that directly result from the Merger (including without limitation any such changes directly resulting from your new status as an executive officer of a subsidiary of Novelion Canada) shall not, individually or in the aggregate, constitute Good Reason for purposes of the Aegerion Agreement or the Employment Agreement or entitle you to any Severance Benefits, Accelerated Equity Benefit or any other severance benefits or the acceleration of any vesting or other rights, to which you might otherwise be entitled. You agree that, to the extent required by law to permit Aegerion to rely on this paragraph 6, Novelion Services is and will be deemed to be acting as agent or trustee on behalf of and for the benefit of Aegerion.
|
7.
|
Stock Options / Equity Grants:
Any stock options, restricted stock units, or other equity awards that you may have been granted pursuant to the Inducement Plan or 2010 Stock Option and Incentive Plan will be dealt with as set out in the Merger Agreement. Once the Merger is completed, any such outstanding entitlements will be governed by and subject to the applicable stock option plan and stock option agreement.
|
8.
|
Right to Work in Canada:
You will cooperate with Novelion Services to seek, obtain, and maintain the right to work in Canada to provide services on behalf of Novelion Services to Novelion Canada and any of its other Affiliates. Novelion Services will pay the reasonable costs associated with obtaining a permit to work in Canada.
|
9.
|
Commuting to Canada:
You acknowledge that travel will be required in connection with your employment, including commuting on a regular basis to such locations in Canada as are required for Novelion Services to provide its management services to Novelion Canada and its Canadian Affiliates.
|
10.
|
Tax Consultation Expenses:
Each year so long as you are providing management services, you will be entitled to reimbursement for your reasonable expenses up to a maximum of USD $5,000 for an independent tax consultation regarding the Canadian tax implications of your work on behalf of Novelion Services in Canada and/or preparation of your Canadian tax return.
|
11.
|
Tax Equalization:
|
(a)
|
As you will be subject to income tax and social security obligations arising from your services performed in Canada on behalf of Novelion Services, Novelion Services is prepared to address the overall tax and social security burden that you experience with the intention that your total tax and social security burden while working in both the United States and Canada will be equal to what your tax and social security burden would have been had you remained working solely in Massachusetts. Novelion Services will provide you with tax equalization in connection with all income tax and social security liabilities arising from the performance of your employment duties within Canada. Novelion Services intends that the income taxes and social security levies payable by you on all taxable employment income and related benefits, as prescribed by the applicable tax and social security laws, should be no better or worse than the personal taxes and social security levies you would have been required to pay on such amounts if your employment duties had been performed solely in the state of Massachusetts. Where your annual tax and social security obligation yields a higher total obligation than if your employment duties were solely performed in the state of Massachusetts, Novelion Services will reimburse you for the difference. Where your annual tax and social security obligations yields a lower total tax and social security impact than if your employment duties were solely performed in the state of Massachusetts, you will reimburse Novelion Services for the difference.
|
(b)
|
You will provide all information necessary for the preparation of a tax equalization calculation.
|
(c)
|
Novelion Services will pay all reasonable costs and professional fees related to calculating this equalization payment, and reserves the discretion to establish the process and criteria for determining the tax equalization calculation. For clarity, the tax equalization payments described in this paragraph 11 will not take into consideration or apply to any
|
(d)
|
If you establish your primary residence in Canada, Novelion Services’ obligations under this paragraph 11 will cease, provided that there will be a pro-rated adjustment for any partial year.
|
(e)
|
If your employment is terminated for any of the reasons described under Section 7 of the Aegerion Agreement, then between January 1 and July 31 of the calendar year following the calendar year in which such termination occurs, Novelion Services will pay you any remaining tax equalization payments owed in accordance with this paragraph 11 or, in the event that the reconciliation results in you owing money to Novelion Services, you will make such payment to Novelion Services.
|
12.
|
Release:
The form of Release of Claims contemplated in the Aegerion Agreement will be the form attached as Schedule “B” to this Agreement.
|
13.
|
Employment Standards:
This provision applies only if and to the extent that the employment laws of Canada apply to your employment. If the minimum standards in the British Columbia
Employment Standards Act
or Ontario
Employment Standards Act, 2000
, or any other applicable employment standards legislation, as they exist from time to time are more favorable to you in any respect than provided for in the Employment Agreement, including but not limited to the provisions in respect of notice of termination, the provisions of the applicable Employment Standards Act or legislation will apply.
|
14.
|
Confidentiality, Assignment of Intellectual Property and Non-Competition:
As a condition of your employment with Novelion Services, and in consideration of the commitments set forth in this letter, you agree to execute and deliver to Novelion Services the Confidentiality, Assignment of Intellectual Property and Non-Competition Agreement attached as Schedule “C” to this letter (the “
Ancillary Agreement
”), which will take effect on the Commencement Date, following which any references to the “Confidentiality Agreement” in the Aegerion Agreement will be deemed to be references to the Ancillary Agreement. Your acceptance of this offer of employment or execution of the Ancillary Agreement does not affect your obligations to Aegerion or the rights of Aegerion under the Confidentiality Agreement arising from your employment with Aegerion prior to the Commencement Date.
|
15.
|
Priority:
If there is any conflict or inconsistency between these Supplementary Terms and the Aegerion Agreement, these Supplementary Terms will take precedence.
|
Signature
|
|
Entity Name
|
Jurisdiction of Organization or Incorporation
|
Aegerion Pharmaceuticals, Inc.
|
Delaware
|
Aegerion Pharmaceuticals Ltd.
|
Bermuda
|
Aegerion Pharmaceuticals (Canada) Ltd.
|
Canada
|
Aegerion Pharmaceuticals Holdings, Inc.
|
Delaware
|
Aegerion Mexico, S. DE R.L. DE C.V.
|
Mexico
|
Aegerion Argentina S.R.L.
|
Argentina
|
Aegerion Pharmaceuticals K.K.
|
Japan
|
Aegerion Taiwan Limited
|
Taiwan
|
Aegerion Securities Corporation
|
United States
|
Aegerion Pharmaceuticals Limited
|
United Kingdom
|
Aegerion Brasil Servicos de Promocao e Administracao de Vendas LTDA
|
Brazil
|
Aegerion Servicios, S. DE R.L. DE C.V.
|
Mexico
|
Aegerion Pharmaceuticals, SAS
|
France
|
Aegerion Pharmaceuticals S.r.l.
|
Italy
|
Aegerion Pharmaceuticals GmbH
|
Germany
|
Aegerion Pharmaceuticals SARL
|
Switzerland
|
Aegerion Ýlaç Ticaret Limited Þirketi
|
Turkey
|
Aegerion Colombia S.A.S.
|
Colombia
|
Aegerion International Ltd.
|
Bermuda
|
Novelion Services USA, Inc.
|
Delaware
|
405030 B.C. Ltd.
|
British Columbia
|
Coast Mercantile Enterprises Inc.
|
British Columbia
|
QLT Phototherapeutics Inc.
|
Delaware
|
QLT Ophthalmics (UK), Ltd.
|
United Kingdom
|
QLT Therapeutics, Inc.
|
Delaware
|
QLT Plug Delivery, Inc.
|
Delaware
|
QLT Ophthalmics, Inc.
|
Delaware
|
QLT Medevice Inc.
|
Canada
|
QLT (Delaware), Inc.
|
Delaware
|
QLT Holdings Corp.
|
Delaware
|
QLT Acquisition Corp.
|
Delaware
|
Quest Intermediate One Corp. 1
|
Delaware
|
Quest Intermediate Two Corp.
|
Delaware
|
Pharmical Manufacturing Ltd.
|
British Columbia
|
1.
|
I have reviewed this annual report on Form 10-K of Novelion Therapeutics Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
/s/ Mary Szela
|
|
|
Name:
|
Mary Szela
|
|
Title:
|
Chief Executive Officer (principal executive officer) and Director
|
|
1.
|
I have reviewed this annual report on Form 10-K of Novelion Therapeutics Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
/s/ Gregory D. Perry
|
|
|
Name:
|
Gregory D. Perry
|
|
Title:
|
Chief Financial and Administrative Officer (principal financial officer)
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
/s/ Mary Szela
|
|
||
Name:
|
Mary Szela
|
|
|
Title:
|
Chief Executive Officer (principal executive officer) and Director
|
|
|
Date:
|
March 30, 2017
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Gregory D. Perry
|
|
|
Name:
|
Gregory D. Perry
|
|
Title:
|
Chief Financial and Administrative Officer (principal financial officer)
|
|
Date:
|
March 30, 2017
|
|