UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 20-F


☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission file number: 001-39365

Amryt Pharma plc
 
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English)

England and Wales
(Jurisdiction of incorporation or organization)
Dept 920a 196 High Road, Wood Green,
London, United Kingdom, N22 8HH
(Address of principal executive offices)
 
Rory Nealon
Chief Financial Officer
Tel: +353 1518 0200
45 Mespil Road, Dublin 4, Ireland
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
 Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
American Depositary Shares (each representing 5 Ordinary Shares, par value £0.06)
AMYT
NASDAQ Global Market
 
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
 
319,814,747 Ordinary Shares (excluding Treasury Shares)
(as of December 31, 2021)
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐  No ☒
 
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes ☐  No ☒
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐
Accelerated filer  ☒
Non-accelerated filer  ☐
Emerging growth company  ☒
 
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
 
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☐
International Financial Reporting Standards as issued
by the International Accounting Standards Board  ☒
Other  ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17  ☐  Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐   No ☒

 
TABLE OF CONTENTS

   
Page
  i
  i
  ii
  ii
   
 
PART I
   
Item 1
 3
Item 2
 3
Item 3
 3
Item 4
 43
Item 4A
 96
Item 5
 97
Item 6
 107
Item 7
 121
Item 8
 128
Item 9
 129
Item 10
 129
Item 11
 136
Item 12
 136
   
 
PART II
  
     
Item 13
 139
Item 14
 139
Item 15
 139
Item 16A
 139
Item 16B
 140
Item 16C
 140
Item 16D
 140
Item 16E
 140
Item 16F
 140
Item 16G
 140
Item 16H
 140
Item 16I
 140
     
 
PART III
  
     
Item 17
 141
Item 18
 141
Item 19
 192

GENERAL
 
Amryt is a global commercial-stage biopharmaceutical company focused on acquiring, developing and commercializing innovative treatments to help improve the lives of patients with rare and orphan diseases. Amryt comprises a strong and growing portfolio of commercial and development assets.
 
As used herein, references to “we,” “us,” “Amryt” or the “Group” in this annual report on Form 20-F shall mean Amryt Pharma plc and its global subsidiaries, collectively. References to the “Company” in this annual report shall mean Amryt Pharma plc.
 
This annual report includes the following historical financial information, presented in US Dollars:
 

 •
the audited consolidated financial statements of Amryt as of December 2021 and 2020 and for the years ended December 31, 2021, 2020 and 2019, prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) (our “audited consolidated financial statements”);
 
All references in this annual report to “€” mean Euros, all references to “£” mean pounds sterling and all references to “$” mean U.S. dollars. Except as otherwise stated herein, all monetary amounts in this annual report have been presented in US Dollars. For presentation purposes all financial information, including comparative figures from prior periods, have been stated in round thousands, unless otherwise indicated.
 
On May 5, 2021, Amryt announced that it had signed a definitive agreement to acquire Chiasma, Inc. in an all-stock combination. Under the terms of the transaction, each share of Chiasma common stock issued and outstanding prior to the consummation of the transaction was exchanged for 0.396 Amryt American Depositary Shares (“ADSs”), each representing five Amryt ordinary shares. The merger agreement provided that, upon the terms and subject to the conditions set forth in the merger agreement, at the effective time, Amryt Merger Sub, an indirect wholly owned subsidiary of Amryt, merged with and into Chiasma with Chiasma surviving as an indirect wholly owned subsidiary of Amryt subsequently renamed Amryt Endo, Inc. which then ceased to be a publicly traded company.

On August 5, 2021, Amryt completed the acquisition of Chiasma, Inc. and, in conjunction with the completion, Amryt allotted and issued a total of 127,733,680 ordinary shares as consideration for the acquisition. Following the completion, shareholdings in Chiasma were rounded in being converted to Amryt shares using the exchange ratio of 0.396. Roundings in converting Chiasma shareholdings to Amryt shares were finalized in August 2021 and resulted in an additional 7,015 ordinary shares being allotted and issued by Amryt as consideration for the acquisition. In total, these ordinary shares were issued to the former Chiasma Shareholders in the form of 25,548,139 ADSs at US$10.19 per share, to acquire Chiasma for a value of US$260,336,000.  On August 5, 2021, the Group repaid US$116,629,000 of Chiasma long term debt. Through the acquisition of Chiasma, Inc, we acquired our third commercial product, Mycapssa® (octreotide capsules) which is approved in the US for long-term maintenance therapy in acromegaly patients who have responded to and tolerated treatment with octreotide or lanreotide. Mycapssa® is the first and only oral somatostatin analog approved by the FDA.  Mycapssa® has also been submitted to the EMA and is not yet approved in Europe.
 
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This annual report contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these identifying words.
 
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and have not been reviewed by our auditors. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements due to a variety of factors, including, but not limited to, those identified under the section titled “Risk Factors” in this annual report.
 
These risks and uncertainties include factors related to:
 

 •
our significant operating losses since our inception and ability to obtain and maintain profitability in the future;

•
our commercial products, including statements regarding the expected strategies and profitability thereof;

•
our product candidates, including statements regarding the expected initiation, timing, progress and availability of data from clinical trials;

•
our ability to successfully commercialize, or enter into strategic relationships with third parties to commercialize, our products or product candidates, if approved;

•
our ability to acquire or in-license new product candidates;
 
i

 •
our competition, most of whom have far greater resources than we have, which may make it more difficult for us to achieve significant market penetration;

•
the size of our addressable markets and market trends;

•
potential strategic relationships;

•
our ability to obtain and maintain intellectual property rights;

•
the impact of potential fluctuations in foreign currency exchange rates; and

•
estimates regarding expenses, future revenues, capital requirements and the need for additional financing.
 
The preceding list is not intended to be an exhaustive list of all of our risks and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this annual report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all.
 
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this annual report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
 
The forward-looking statements and opinions contained in this annual report are based upon information available to us as of the date of this annual report and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. The forward-looking statements contained in this annual report speak only as of the date of this annual report, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.
 
You should read this annual report and the documents referenced herein and have filed as exhibits to the registration statement, of which this annual report forms a part, completely and with the understanding that our actual future results may be materially different from expectations. We qualify all forward-looking statements in this annual report by these cautionary statements.
 
MARKET AND INDUSTRY DATA
 
This annual report contains estimates, projections and other information concerning our industry, our business and the markets for our products and product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. Management estimates are derived from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge, which we believe to be reasonable.
 
In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements.”
 
TRADEMARKS
 
The Amryt logo, Myalept®, Myalepta®, Juxtapid®, Lojuxta®, Episalvan®, Filsuvez®, Oleogel-S-10, Mycapssa®, TPE® and other trademarks or service marks of Amryt appearing in this annual report are the property of Amryt. This annual report includes trademarks, tradenames and service marks, certain of which belong to us and others that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this annual report appear without the ®, TM and SM symbols, but the absence of those symbols is not intended to indicate, in any way, that we will not assert our rights or that the applicable owner will not assert its rights to these trademarks, tradenames and service marks to the fullest extent under applicable law. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply a relationship with, or endorsement or sponsorship of us by, these other parties.
 
ii
PART I
 
Item 1.
Identity of Directors, Senior Management and Advisers
 
Not applicable.
 
Item 2.
Offer Statistics and Expected Timetable
 
Not applicable.
 
Item 3.
Key Information
 
The following selected historical consolidated financial data of Amryt Pharma as at December 31, 2021 and 2020 and for each of the years ended December 31, 2021, 2020 and 2019 have been derived from, and should be read in conjunction with, the audited consolidated financial statements and notes thereto set forth in Item 18 of this annual report. The selected historical consolidated financial data as at December 31, 2019 is derived from the audited consolidated financial statements not appearing in this annual report. This data should be read in conjunction with the financial statements, related notes and other financial information included elsewhere herein.
 
We have not included selected historical consolidated financial data for the years ended December 31, 2018, and 2017 in the table below as we qualify as an emerging growth company (an “Emerging Growth Company”) as defined in Section 2(a)(19) of the Securities Act and we make use of an accommodation for reduced reporting.
 
A. Selected Consolidated Financial Data of Amryt
 
[Reserved]
 
3
B. Capitalization and Indebtedness
 
Not applicable.
 
C. Reasons for the Offer and Use of Proceeds
 
Not applicable.
 
D. Risk Factors
 
Our business is subject to a number of risks. You should carefully consider the risks and uncertainties described below and the other information in this annual report, including our consolidated financial statements and related notes. Our business, financial condition, results of operations or prospects could be materially and adversely affected if any of these risks occur, and as a result, the market price of our ADSs could decline.
 
Summary of Risk Factors
 
Our principal risks include the following:
 

 •
We have incurred significant operating losses since our inception and we may not achieve or maintain profitability in the future.
 

 •
Our future performance depends, in part, on our ability to successfully implement our strategy.
 

 •
We are dependent primarily on three products, lomitapide, Mycapssa® and metreleptin, to generate revenue and these products may not be successful and may not generate sales at anticipated levels.
 

 •
We may not be successful in our efforts to build a pipeline of product candidates and develop additional marketable products.
 

 •
We may need to raise additional funding, which may not be available on acceptable terms, or at all, and failure to obtain this capital when needed may force us to delay, limit or terminate our product development efforts or other operations or to delay payment on future obligations.
 

 •
The terms of our debt and any requirements to incur further indebtedness or refinance our indebtedness in the future could have a material adverse effect on our business and results of operations.
 

 •
Restrictive covenants in certain of the agreements and instruments governing our indebtedness may adversely affect our financial and operational flexibility.
 

 •
We face potential product liability exposure, and if claims are brought against us, we may incur substantial liability.
 

 •
Our global operations subject us to significant tax risks.
 

 •
The occurrence of cyber incidents, or a deficiency in cybersecurity, could negatively impact our business by causing a disruption to its operations, a compromise or corruption of confidential information, exposure to legal and regulatory action, or damage to our patient, partner or employee relationships, any of which could subject us to loss and reputational harm.
 

 •
We have faced, and we may continue to face, challenges integrating the businesses and operations of our company and Chiasma and, as a result, may not realize the expected benefits of the acquisition.
 

 •
Any future acquisitions we make may expose us, to risks that could adversely affect our business, and we may not achieve the anticipated benefits of acquisitions of businesses or technologies.
 

 •
Our assumptions and estimates regarding prevalence and the addressable markets for our products and product candidates may be inaccurate. If there are fewer actual patients than estimated, or if any product approval is based on narrower definitions of patient populations, our revenues and cash position could be materially and adversely affected.
 

 •
Our products may not gain market acceptance, in which case we may not be able to generate product revenues.
 

 •
We face significant competition from other biotechnology and pharmaceutical companies.
 
4

 •
A number of adverse effects have been reported in clinical trials for metreleptin, lomitapide, oral octreotide and Oleogel-S10, and the prescribing information for each of lomitapide, metreleptin and oral octreotide contains significant limitations on use and other important warnings and precautions, any of which could negatively affect the market acceptance, dropout rates and marketing approval for these products, and post-marketing commitments could identify additional adverse events and safety or efficacy risks, which could further harm our business.
 

 •
Recent legislation and proposed federal regulations may permit reimportation of drugs from foreign countries into the United States where the drugs are sold at lower prices and this may adversely affect our operating results and overall financial condition.
 

 •
If we are unable to commercialize or receive regulatory approval for Oleogel-S10, or experience significant delays in doing so, or are not granted a Priority Review Voucher, our business could be materially harmed.
 

 •
Clinical trials are expensive, time consuming and difficult to design and implement and involve uncertain outcomes and, furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinical studies or clinical trials.
 

 •
Our product candidates may not work as intended, may cause undesirable side effects or may have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.
 

 •
The regulatory approval processes of the EMA, the FDA and other comparable regulatory agencies may be lengthy and time consuming and the outcome is unpredictable.
 

 •
We may fail to obtain or maintain Orphan Drug marketing exclusivity for our products and product candidates and may face significant competitive threats to the commercialization of these compounds from other manufacturers.
 

 •
The laws and regulations in the areas of sales and marketing of pharmaceutical products, and interacting with healthcare professionals and patients, are very complex and onerous, and require a robust compliance program. Failure to comply with these laws and regulations could have a material adverse effect on our business, financial condition and results of operations.
 

 •
We are subject to extensive legal and compliance obligations as a pharmaceutical company that commercializes products, as well as under Aegerion’s settlements with the DOJ, OIG, FDA, SEC and other federal and state government agencies.
 

 •
We rely on third parties to conduct clinical trials and registry studies and perform related services, and those third parties may not perform satisfactorily, including by failing to meet established deadlines for the completion of such clinical trials and compliance with post-marketing requirements.
 

 •
We depend on third-party manufacturers to produce the drug substance and the drug product for lomitapide, Mycapssa® and metreleptin, as well as the drug product for commercial supply and clinical trials. We also depend on third-party manufacturers to produce the drug product for Oleogel-S10. Even though we have reserve stock, interruption in supply could materially and adversely affect sales.
 

 •
If our third-party manufacturers are unable to comply with applicable regulatory requirements, unable to source sufficient raw materials, experience manufacturing or distribution difficulties, or are otherwise unable to manufacture and distribute sufficient quantities to meet demand, our commercialization efforts may be materially harmed.
 

 •
It may be challenging or costly for us to obtain, maintain, enforce and defend our intellectual property rights. Failure to obtain or protect these rights could adversely affect our business and our ability to compete.
 

 •
We may infringe or be alleged to infringe the intellectual property rights of others, which may prevent or delay product development and commercialization efforts, requiring us to expend resources on litigation or other resolutions, which may materially and adversely affect our business.
 

 •
If we fail to comply with our obligations in the license agreements for our products or are alleged to have breached such agreements, we could lose license rights that are important to our business, have to make additional payments to our licensors or become involved in costly litigation, which would further reduce cash resources.
 

 •
An active and liquid market for our securities may fail to develop, which could harm the market price of our ADSs.
 

 •
The price and trading volume of our ADSs may be volatile, and purchasers of our ADSs could incur substantial losses.
 
5

 •
The Athyrium Funds hold a significant interest in our company and may be able to influence matters relating to our business.
 

 •
We will incur significant increased costs as a result of operating as a U.S. listed public company, and our management will be required to devote substantial time to new compliance initiatives.
 

 •
As a “foreign private issuer,” we are exempt from a number of rules under the U.S. securities laws and the Nasdaq rules, and we are permitted to file less information with the SEC than are U.S. companies. In addition, we are permitted and expect to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements applicable to domestic issuers. This may make our ADSs and ordinary shares less attractive to investors.
 
Risks Related to our Business, Financial Condition and Capital Requirements
 
We have incurred significant operating losses since our inception and we may not achieve or maintain profitability in the future.
 
To date, we have financed our operations primarily through a combination of revenues from sales of our commercialized products and the sale of our equity securities and convertible bonds. We have incurred operating losses since our inception, including net losses of $50.5 million, $46.5 million and $38.6 million for the years ended December 31, 2019, 2020 and 2021, respectively. Aegerion incurred losses since its inception, including net losses of $96.5 million and $30.9 million for the year ended December 31, 2018, and the six-month period ended June 30, 2019. Chiasma incurred losses since its inception, including net losses of $74,7 million and $50.4 million for the year ended December 31, 2020, and the six-month period ended June 30, 2021. We have devoted most of our financial resources to the acquisition of attractive commercial and near-commercial rare disease assets and research and development. We anticipate that we will continue to incur significant costs associated with the continued commercialization of lomitapide, Mycapssa® and metreleptin, and in connection with ongoing clinical development efforts and post-marketing commitments for these products as well as the continued development of our product candidates. The amount of our future net losses will depend, in part, on the rate of our future expenditures, our ability to continue generating adequate revenues from sales of lomitapide, Mycapssa® and metreleptin and from sales of Oleogel-S10 if approved, and our ability to obtain funding through equity or debt offerings, grant funding, collaborations, strategic partnerships and/or licensing arrangements. If we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis.
 
Our future performance depends, in part, on our ability to successfully implement our strategy.
 
Our future success will depend on our ability to implement our strategy to develop and expand our existing portfolio of drugs to treat patients with rare diseases and to create a rare disease company with a diversified offering of multiple development stage and commercial assets that can provide us with scale to support future growth. The success of our strategy depends, in part, on our ability to drive growth in existing territories and access and drive growth in new territories and indications with existing commercial assets, build a franchise in EB through our lead product candidate, Oleogel-S10 (Filsuvez), and our product candidate AP103, based on our novel polymer-based topical gene therapy delivery platform, expand the indication of Mycapssa® (octreotide capsules) beyond acromegaly into carcinoid syndrome associated with neuroendocrine tumors and expand and diversify our product portfolio through acquisition and in-licensing opportunities. This strategy will require us to, among other things, identify suitable targets, conduct and complete clinical trials, obtain the necessary consents and authorizations for our products and any product candidates, conduct diligence, carry out any acquisition or in-licensing transaction and obtain suitable financing.
 
Implementing our strategy requires substantial time and resources from our management team. Our Board and management may not be able to successfully implement our strategy or other strategies to be developed by management, and implementing these strategies may not sustain or improve, and could even harm, our business, financial condition, results of operations and prospects. We may be unable to realize the anticipated benefits and synergies of our business strategies, which are based on assumptions about future demand for our current products and product candidates, as well as on our continuing ability to produce our products profitably. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history or additional products on the market.
 
We are dependent primarily on three products, lomitapide, Mycapssa® and metreleptin, to generate revenue and these products may not be successful and may not generate sales at anticipated levels.
 
Our ability to meet expectations with respect to sales of lomitapide, Mycapssa® and metreleptin, and to generate revenues from such sales, and attain and maintain positive cash flow from operations, in the time periods anticipated, or at all, will depend on a number of factors, including, among others:
 

 •
the ability to continue to maintain and grow market acceptance for lomitapide, Mycapssa® and metreleptin among healthcare professionals and patients in the United States, European Union and other key markets for the treatment of approved indications;
 
6

 •
continuing market demand and medical need for these products;
 

 •
the development, acquisition, licensing or introduction of competitive products that are more effective, have a more favorable safety profile or are less costly than our products;
 

 •
maintaining regulatory approvals without onerous restrictions or limitations in key markets and securing regulatory approvals in additional markets on a timely basis and with commercially feasible labels, and pricing and reimbursement approvals at adequate levels, where required, on a timely basis;
 

 •
side effects or other safety issues associated with the use of lomitapide, Mycapssa® and metreleptin could require us or our collaborators to modify or halt commercialization of these products or expose us to product liability lawsuits which will harm our business;
 

 •
we may be required by regulatory agencies to conduct additional studies regarding the safety and efficacy of lomitapide, Mycapssa® and metreleptin, which we have not planned or anticipated;
 

 •
generating revenues in markets that allow for sales of pharmaceutical products without regulatory approval based solely on the approvals of such products in the United States or European Union, and in which no promotion or commercialization activities are permitted; and
 

 •
adequately investing in the manufacturing, sales, marketing, market access, medical affairs and other functions that are supportive of our commercialization efforts.
 
If we are unable to continue to generate revenue from our current commercial products, our business, financial condition, results of operations and prospects will be adversely affected.
 
We may not be successful in our efforts to build a pipeline of product candidates and develop additional marketable products.
 
We operate in the biopharmaceutical sector and have product candidates in various stages of clinical and preclinical development. In addition, we may continue to explore other opportunities within the sector in order to expand our present development pipeline. Industry experience indicates that there may be a very high incidence of delay or failure to produce valuable scientific results in relation to our present development pipeline. We will also face the risk that in developing new products we may spend substantial sums of money and the new products developed may not effectively meet the perceived need or may not be successfully commercialized. Our ability to develop new products relies on, among other things, the recruitment of sufficiently qualified research and development partners with expertise in the biopharmaceutical sector. We may not be able to develop relationships or recruit research partners of a sufficient caliber to satisfy the rate of growth and develop our future pipeline.
 
We may need to raise additional funding, which may not be available on acceptable terms, or at all, and failure to obtain this capital when needed may force us to delay, limit or terminate our product development efforts or other operations or to delay payment on future obligations.
 
On September 24, 2019, we entered into a five-year term loan facility (“Secured Credit Facility”) and issued 5% senior unsecured convertible notes (“Convertible Notes”). As of December 31, 2021, we had borrowings of $93.4 million under our Secured Credit Facility and $125.0 million under our Convertible Notes, for total debt of $218.4 million. The Secured Credit Facility includes an option to prepay the loan in whole or in part at any time subject to payment of an exit fee, which ranged from 0-5% of the principal amount then outstanding on the Secured Credit Facility. On February 18, 2022, the Secured Credit Facility was repaid in full and the Group secured a $125 million senior credit facility (“Senior Credit Facility”) from funds managed by the Credit Group of Ares Management Corporation (“Ares”) of which US$105 million was drawn down to facilitate the prepayment of the existing Secured Credit Facility. In repaying the Secured Credit Facility, Amryt incurred an exit fee of 5.00% of the outstanding principal amount as at the prepayment date. Furthermore, we may be required to satisfy payment obligations of up to $85 million to holders of contingent value rights (“CVRs”) issued to shareholders and option holders in connection with specified milestones, which we may elect to pay in ordinary shares or notes. If we elect to issue notes, we will settle such notes in cash 120 days after their issue. The specified milestones are related to the success of Oleogel-S10 and $50 million of the payment obligations are dependent on FDA and EMA approval. $35 million is due in respect of FDA approval and $15 million is due in respect of EMA approval if approval is obtained before December 31, 2021, with a sliding scale on a linear basis to zero if before July 1, 2022.
 
We have significant payment obligations in connection with our Senior Credit Facility, the Convertible Notes, the CVRs and royalty obligations under certain of our license agreements.
 
7
We have significant milestone and royalty payments payable under our material contracts if/when certain milestones are met, the terms of which are outlined in the “Material Contracts” section.
 
In addition, while we are currently commercializing our approved products, we are also advancing our product candidates through preclinical and clinical development. Developing product candidates is expensive, lengthy and risky, and we expect our research and development expenses to increase in connection with our ongoing activities, particularly as we advance our product candidates toward commercialization.
 
As of December 31, 2021, our unrestricted cash and cash equivalents were $113.0 million. We expect that our existing cash and cash equivalents will be sufficient to fund our current operations and our payment obligations to third parties for at least the next 12 months. However, these resources might be insufficient to conduct research and development programs, the cost of product in-taking and possible acquisitions, fully commercialize products and operate our business to the full extent currently planned, and our operating plan may change as a result of many factors currently unknown to us. As a result, we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches. Even if we believe we have sufficient funds for our current or future operating plans as well as to satisfy our payment obligations to third parties, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates.
 
If we cannot obtain adequate funds, we may be required to significantly curtail our commercial plans or one or more of our research and development programs or obtain funds through additional arrangements with corporate collaborators or others that may require us to relinquish rights to some of our technologies or product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our shareholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our ADSs or ordinary shares to decline. The sale of additional equity or convertible securities may be dilutive to our shareholders. We may also enter into additional credit facilities from time to time, which may be secured, to fund certain of our operations. If we raise additional capital through debt financing, we would be subject to payment obligations and may be subject to security interests in our assets and covenants restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional capital through marketing and distribution arrangements, sales of assets or other collaborations, or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs. We also could be required to seek collaborators for one or more of our current or future product candidates at an earlier stage than otherwise would be desirable or relinquish our rights to product candidates or intellectual property that we otherwise would seek to develop or commercialize ourselves. If we are unable to raise additional capital in sufficient amounts, at the right time, on favorable terms, or at all, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our products or product candidates, or one or more of our other research and development initiatives. Any of the above events could significantly harm our business, prospects, financial condition and results of operations, cause the price of our ADSs and ordinary shares to decline, and negatively impact our ability to fund operations.
 
The terms of our debt and any requirements to incur further indebtedness or refinance our indebtedness in the future could have a material adverse effect on our business and results of operations.
 
Our level of indebtedness, together with any additional indebtedness we may incur in the future, could adversely affect our business, financial condition, results of operations and prospects. For example, our anticipated level of indebtedness or any additional financing may:
 

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make it more difficult for us to pay or refinance debts as they become due;
 

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require us to use a larger portion of cash flow for debt service, reducing funds available for other purposes;
 

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limit our ability to pursue business opportunities, such as potential acquisitions, and to react to changes in market or industry conditions;
 

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reduce the funds available for other purposes, such as implementing our strategy, funding capital expenditures and making distributions to shareholders;
 

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increase our vulnerability to adverse economic, industry or competitive developments;
 
8

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affect our ability to obtain additional financing, particularly as substantially all of our assets (including our intellectual property) are subject to liens securing indebtedness under our Senior Credit Facility;
 

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decrease our profitability, if we become profitable, or cash flow, or require us to dispose of significant assets in order to satisfy debts and other obligations if we are not able to satisfy these obligations using cash from operations or other sources; and
 

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disadvantage us compared to competitors.
 
Any of the foregoing, alone or in combination, could have a material adverse effect on our business, financial condition, results of operations and prospects. A breach of, or the inability to comply with, the covenants in the Senior Credit Facility and the Convertible Notes could result in an event of default, in which case the lenders will have the right to declare all borrowings to be immediately due and payable, which would have a material adverse effect on our business, financial condition, results of operations and prospects and could lead to foreclosure on our assets.
 
In the future, we may need to refinance our indebtedness. However, additional financing may not be available on favorable commercial terms to us, or at all. If, at such time, market conditions are materially different or our credit profile has deteriorated, the cost of refinancing such debt may be significantly higher than our indebtedness existing at that time. Furthermore, we may not be able to procure refinancing at all. Any failure to meet any future debt service obligations through use of cash flow, refinancing or otherwise, could have a material adverse effect on our business, financial condition, results of operations and prospects.
 
Restrictive covenants in certain of the agreements and instruments governing our indebtedness may adversely affect our financial and operational flexibility.
 
The terms of our indebtedness as of the date of this annual report include covenants that, among other things, restrict our ability to: incur liens; dispose of our assets (both material assets and exclusive licensing transactions in material territories); consolidate and merge with other entities; make loans and investments; incur indebtedness; engage in transactions with affiliates; make specified payments; and engage in other customary business activities.
 
If we breach a restrictive covenant under the Senior Credit Facility or the Convertible Notes, or an event of default occurs with respect to such indebtedness, all amounts owing in respect of such indebtedness may be able to be declared due and payable immediately, which could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations. In addition, both our Senior Credit Facility and the Convertible Notes include cross-default provisions, which generally provide that a default under one facility also results in a default under the other. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Principal Shareholders— Senior Credit Facility” and “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Principal Shareholders—Convertible Notes.”
 
If we enter into future debt agreements, they may include similar or more restrictive provisions. These restrictions may also make more difficult or discourage a takeover of our company, whether favored or opposed by management or the Board. Our ability to comply with these covenants may be affected by events beyond our control, and any material deviations from our forecasts could require us to seek waivers or amendments of covenants or alternative sources of financing, or to reduce expenditures. We cannot guarantee that such waivers, amendments or alternative financing could be obtained or, if obtained, would be on terms acceptable to us. A breach of any of the covenants or restrictions in our debt agreements or instruments could result in an event of default. Such a default could allow our debt holders to accelerate repayment of the related debt, as well as any other debt to which a cross-acceleration or cross-default provision applies, or to declare all borrowings outstanding under these agreements to be due and payable. If our debt is accelerated, our assets may not be sufficient to repay such debt.
 
Holders of the Convertible Notes have the right to require the repurchase of their notes for cash upon the occurrence of a fundamental change, such as a change of control of our company, at a repurchase price equal to 100% of the respective principal amount, plus accrued and unpaid interest, if any. If a fundamental change occurs and the Convertible Notes are converted during the related fundamental change conversion period, then the conversion rate may be increased to a corresponding number of shares and share price set forth in the Convertible Notes. Subject to certain exceptions as provided in the indenture governing the Convertible Notes, a fundamental change includes (a) the acquisition of 50% or more of the voting interests in our company, (b) an event in which we merge or consolidate with another entity, (c) an event in which we convey, sell, transfer or lease all or substantially all of our assets to another entity, (d) our liquidation or (e) delisting of our ordinary shares. Among the exceptions provided in the indenture are for transactions described in (a), (b) or (c) in which (i) our stockholders immediately prior to the transaction have the right to exercise, directly or indirectly, 50% or more of the total voting power of the capital stock of the continuing or surviving entity or transferee or parent thereof following the transaction or (ii) 90% of the consideration paid for our ordinary shares in a transaction consists of stock that is or will be quoted on AIM, the New York Stock Exchange or the Nasdaq. Further, unless we elect to deliver our ordinary shares to settle any conversions of Convertible Notes, we would be required to settle a portion or all of the conversion obligation through the payment of cash. We may not have enough available cash or be able to obtain financing at the time it is required to make repurchases of Convertible Notes surrendered therefor or Convertible Notes being converted. The failure to repurchase Convertible Notes at a time when the repurchase is required by the indenture or to pay any cash payable on future conversions of the Convertible Notes as required by the indenture would constitute a default under the indenture. A default under the indenture or a fundamental change itself could also lead to a default under agreements governing our current and future indebtedness. If the repayment of such indebtedness were to be accelerated after any applicable notice or grace periods, we are unlikely to have sufficient funds to repay such indebtedness and repurchase the Convertible Notes or make cash payments upon conversions thereof or other required payments on its other indebtedness, which would materially and adversely affect our business, financial condition and results of operations on a consolidated basis.
 
9
We face potential product liability exposure, and if claims are brought against us, we may incur substantial liability.
 
The use of any product in clinical trials or early access programs, and the sale and use of any product for which we have obtained marketing approval exposes us to the risk of product liability claims. Product liability claims might be brought against us by consumers, healthcare providers or others selling or otherwise coming into contact with our products. If we cannot successfully defend against product liability claims, we could incur substantial liabilities. In addition, regardless of merit or eventual outcome, product liability claims may result in:
 

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decreased demand or coverage for our products;
 

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impairment of our business reputation and exposure to adverse publicity;
 

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warnings on product labels;
 

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withdrawal of clinical trial participants;
 

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substantial monetary awards to trial participants or patients;
 

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significant time and costs to defend the related litigation;
 

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distraction of management’s attention from our primary business;
 

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substantial monetary awards to patients or other claimants;
 

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loss of revenues; and
 

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the inability to successfully commercialize our products.
 
Although we have obtained product liability insurance coverage for both our clinical trials and our commercial exposure, this insurance coverage may not be sufficient to reimburse us for expenses or losses that we may suffer. Moreover, insurance coverage is becoming increasingly expensive, and in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against potential liability. If a claim is brought against us, we might be required to pay legal and other expenses to defend the claim, as well as pay uncovered damages awards resulting from a claim brought successfully against us and these damages could be significant and have a material adverse effect on our financial condition. On occasion, large judgments have been awarded in class action lawsuits relating to drugs that had unanticipated side effects or warnings found to be inadequate. The cost of any product liability litigation or other proceedings, even if resolved in our favor, could be substantial. A product liability claim or series of claims brought against us could harm our reputation and cause the price of our securities to decline and, if the claim is successful and judgments exceed our insurance coverage, it could have a material adverse impact on our business, financial condition, results of operations and prospects.
 
Adverse events involving any of our products and product candidates may lead the U.S. Food & Drug Administration (“FDA”), the European Medicines Agency (“EMA”) or other regulatory authorities to delay or deny clearance for our products or result in product recalls that could harm our reputation, business and financial results.
 
The FDA and the EMA, as well as similar governmental authorities in other jurisdictions, have the authority to require the recall of certain commercialized products in the event of adverse side effects, material deficiencies or defects in design or manufacture. Manufacturers may, under their own initiative, recall a product if any material deficiency in a product is found. A government-mandated recall or voluntary recall by us or one of our distributors could occur as a result of adverse side effects, impurities or other product contamination, manufacturing errors, design or labeling defects or other deficiencies and issues. Recalls of any of our products or product candidates would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations. A recall announcement could harm our reputation with customers and negatively affect our sales, if any.
 
10
Our future success depends on our ability to hire and retain key executives and to attract, retain and motivate qualified personnel.
 
Our future success depends on our ability to attract and retain key management personnel, scientific and technical personnel, particularly in the biopharmaceutical industry. Our ability to continue our operations and implement our strategy depends upon retaining, recruiting and motivating employees, especially with respect to our management team and research personnel. Experienced employees in the biopharmaceutical and biotechnology industries are in high demand and competition for their talents can be intense, especially in Germany, Ireland, and Boston, Massachusetts, where we maintain our principal operations. We have entered into employment agreements with executive officers and other key employees, but any employee may terminate his or her employment at any time or may be unable to continue in his or her role. The loss of any executive or key employee, or an inability to recruit desirable candidates or find adequate third parties to perform such services on reasonable terms and on a timely basis, could have a material adverse effect on our business, financial condition, results of operations and prospects. If we are not able to attract, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that could significantly impede our ability to achieve our development and commercial objectives, our ability to raise additional capital and our ability to implement our business strategy.
 
For U.S. federal income tax purposes, Amryt is treated as a surrogate foreign corporation, and there is a risk that Amryt may be treated as a U.S. corporation under certain circumstances, including as a result a change in law.
 
Section 7874 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury regulations promulgated thereunder contain two alternative sets of rules under which a U.S. target corporation may be subjected to certain additional U.S. federal income taxes or a non-U.S. acquiring corporation (such as Amryt) may be treated as a U.S. corporation for U.S. federal income tax purposes as a result of a transaction.  Which set of rules applies depends on what percentage of the non-U.S. acquiring corporation’s stock the historic stockholders of the U.S. target corporation own or are treated as owning, under certain counting conventions, by reason of holding shares of the U.S. target corporation following the transaction (the “Section 7874 Percentage”).  One set of rules imposes a tax on certain gain and income of the U.S. target corporation, and potentially certain other taxes, if (in addition to other requirements) the Section 7874 Percentage is at least 60 percent (by vote or value).  The other set of rules under Section 7874 of the Code treats the non-U.S. acquiring corporation as a U.S. corporation for U.S. federal income tax purposes if (in addition to other requirements) the Section 7874 Percentage is at least 80 percent (by vote or value). If the Section 7874 Percentage is at least 60 percent (by vote or value), the non-U.S. acquiring corporation is considered a “surrogate foreign corporation,” and the U.S. target corporation is considered an “expatriated entity” with respect to the non-U.S. acquiring corporation.
 
Amryt believes that, as a result of Amryt’s acquisition of Aegerion in 2019 (the “Prior Acquisition”), Amryt is treated as a surrogate foreign corporation (the 60 percent test), but not as a U.S. corporation (the 80 percent test).  As a result of Amryt’s status as a surrogate foreign corporation, dividends paid in respect of the Amryt ADSs or Ordinary Shares are not expected to be eligible to be taxed at favorable rates that otherwise are applicable to “qualified dividend income” received by non-corporate U.S. holders if certain additional conditions are satisfied.
 
Amryt believes that both Aegerion and Chiasma meet the definition of “expatriated entity” within the meaning of section 7874 of the Code. As expatriated entities, several limitations apply to both Aegerion and Chiasma, including, but not limited to, the prohibition, for a period of ten years from the closing date of the Prior Acquisition, of the use of net operating losses, foreign tax credits and other tax attributes to offset the income or gain recognized by reason of transfer of any property to a foreign related person or to offset any income received or accrued during such period by reason of Amryt’s license of any property to a foreign related person. Moreover, in such case, an additional minimum tax under Section 59A of the Code on certain “base eroding” payments to certain affiliates that are foreign corporations may be imposed.
 
Although Amryt does not expect to be treated as a U.S. corporation under currently applicable law and regulations, it is possible that a future change in law could expand the scope of Section 7874 of the Code on a retroactive basis.  If Amryt were treated as a U.S. corporation, its entire net income would be subject to U.S. federal income tax on a net income basis and would be determined under U.S. federal income tax principles. Further, Amryt’s treatment as a U.S. corporation may have material adverse effects on the business, financial condition, results of operations and prospects of Amryt and its subsidiaries.
 
The application of Section 7874 of the Code is complex and subject to detailed regulations (the application of which is uncertain in various respects and could be impacted by changes in U.S. Treasury regulations with possible retroactive effect). Accordingly, there can be no assurance that the IRS will not challenge the status of Amryt as a non-U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code or that such challenge would not be sustained by a court. If the IRS were to successfully challenge under Section 7874 of the Code Amryt’s status as a non-U.S. corporation for U.S. federal income tax purposes, Amryt and certain Amryt Shareholders may be subject to significant adverse tax consequences, including a higher effective corporate income tax rate on Amryt, the recognition of gain by certain U.S. Amryt Shareholders upon the deemed conversion of Amryt from a non-U.S. corporation to a U.S. corporation, and future withholding taxes on certain Amryt Shareholders, depending on the application of any applicable income tax treaty that may apply to reduce such withholding taxes.
 
11
Our global operations subject us to significant tax risks.
 
We are subject to tax rules in the jurisdictions in which we operate. Changes in tax rates, tax relief and tax laws, changes in practice or interpretation of the law by the relevant tax authorities, increasing challenges by relevant tax authorities or any failure to manage tax risks adequately could result in increased charges, financial loss, penalties and reputational damage. Tax authorities may actively pursue additional taxes based on retroactive changes to tax laws which could result in a material restatement to its tax position. Any of these factors could have a negative impact on our business, financial condition, results of operations and prospects.
 
Fluctuations in currency exchange rates and increased inflation could materially adversely affect our financial condition and results of operations.
 
We have operations in Ireland, the United Kingdom, the United States, Germany, Switzerland, Brazil, France, Italy, Spain, Israel and other select markets throughout the world. As a result of the international scope of our operations, fluctuations in exchange rates, particularly between the U.S. dollar, our reporting currency, and the Euro, may adversely affect us. In the year ended December 31, 2021, 2.6% of our sales were denominated in pound sterling (£), 72.6% of our sales were denominated in U.S. dollars, 24.0% were denominated in Euros and the balance was denominated in other currencies. As a result, weakening of the Euro or pound sterling relative to the U.S. dollar presents the most significant risk to us. Any significant fluctuations in currency exchange rates may have a material impact on our business.
 
In addition, economies in Central European and Latin American countries have periodically experienced high rates of inflation. Periods of higher inflation may slow economic growth in those countries. As a substantial portion of our expenses (excluding currency losses and changes in deferred tax) is denominated in U.S. dollars or Euros, the relative movement of inflation significantly affects our results of operations. Inflation also is likely to increase some of our costs and expenses, including wages, rents, leases and employee benefit payments, which we may not be able to pass on to our customers and, as a result, may reduce our profitability. To the extent inflation causes these costs to increase, such inflation may materially adversely affect our business. Inflationary pressures could also affect our ability to access financial markets and lead to counter-inflationary measures that may harm our financial condition, or results of operations or materially adversely affect the market price of our securities.
 
The occurrence of cyber incidents, or a deficiency in cybersecurity, could negatively impact our business by causing a disruption to its operations, a compromise or corruption of confidential information, exposure to legal and regulatory action, or damage to our patient, partner or employee relationships, any of which could subject us to loss and reputational harm.
 
A cyber incident is considered to be any event that threatens the confidentiality, integrity or availability of information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information about patients, suppliers, partners or employees. A number of companies have recently experienced serious cyber incidents and breaches of their information technology systems. Cyber incidents pose risks both to our internal systems and to those we have outsourced operations to, including the risk of operational interruption, damage to our reputation and relationships with patients, partners and employees, and private data exposure. We have implemented processes, procedures and controls to help mitigate these risks. However, these measures, as well as an increased awareness of the risk of a cyber incident, do not guarantee that our reputation, operations and financial results will not be adversely affected by such an incident.
 
In the ordinary course of business, we collect and store sensitive data, including intellectual property, proprietary business information and patient data. This data includes, where required or permitted by applicable laws, personally identifiable information. Certain third parties with whom we contract also collect and store data related to clinical trial subjects and patients. The secure maintenance of this information is critical to our operations and business strategy. Despite our current security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breaches due to employee error, malfeasance or other disruptions. Any such breach could compromise information stored on networks or those of our partners. Any access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, recovery costs, disruption of operations, including delays in our regulatory approval efforts, and damage our reputation, which could adversely affect our business.
 
Risks Related to Acquisitions, Including our Acquisitions of Aegerion and Chiasma
 
We have faced, and we may continue to face, challenges integrating the businesses and operations of our company and Chiasma and Aegerion and, as a result, may not realize the expected benefits of the acquisitions.
 
Integrating the businesses of our company and the businesses of Aegerion and Chiasma is a complex process.. We cannot guarantee that the integration of our business with Aegerion and Chiasma’s will be completed successfully or that we will be able to achieve any of the anticipated benefits. In order for the integration to be successful, we must maintain prior regulatory relationships, clinical trials, product initiatives, license, service DOJ and Corporate Integrity agreement(s) and their related obligations, with violations of these agreements resulting in potential financial penalties, additional time added on to the current terms of the agreements and additional costs for the company. We must also undertake certain actions required to maintain manufacturing, supply and distribution processes. While we have made significant progress, we may not be able to successfully integrate the businesses of our company and Aegerion and Chiasma, and even if successful, the integration may be costly and time consuming, and the anticipated synergies may not be realized, either of which may have a material and adverse effect on our business, financial condition, results of operations and prospects.
 
12
Any future acquisitions we make may expose us, to risks that could adversely affect our business, and we may not achieve the anticipated benefits of acquisitions of businesses or technologies.
 
As a part of our growth strategy, we may make additional acquisitions of complementary businesses. Any future acquisition will involve numerous risks and operational, financial and managerial challenges, including the following, any of which could adversely affect our business, financial condition or results of operations:
 

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limited support and user knowledge for legacy systems of acquired companies;
 

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problems maintaining uniform procedures, controls and policies with respect to our financial accounting systems;
 

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difficulties in managing geographically dispersed operations, including risks associated with entering foreign markets in which we have no or limited prior experience;
 

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underperformance of any acquired technology, product or business relative to our expectations and the price we paid;
 

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negative near-term impacts on financial results after an acquisition, including acquisition-related earnings charges;
 

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the potential loss of key employees, customers and strategic partners of acquired companies;
 

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claims by terminated employees and shareholders of acquired companies or other third parties related to the transaction;
 

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the assumption or incurrence of additional debt obligations or expenses, or use of substantial portions of our cash;
 

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the issuance of equity securities to finance or as consideration for any acquisitions that dilute the ownership of our shareholders;
 

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any collaboration, strategic alliance and licensing arrangement may require us to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us;
 

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risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals;
 

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diversion of management’s attention and company resources from existing operations of the business;
 

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inconsistencies in standards, controls, procedures and policies;
 

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the impairment of intangible assets as a result of technological advancements, or worse-than-expected performance of acquired companies;
 

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assumption of, or exposure to, historical liabilities of the acquired business, including unknown contingent or similar liabilities that are difficult to identify or accurately quantify;
 

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our inability to generate revenue from acquired technology or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs;
 

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risks associated with acquiring intellectual property, including potential disputes regarding acquired companies’ intellectual property; and
 

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future acquired products, employees policies and operations (including pricing/reimbursement) could be subject to Corporate Integrity Agreement compliance and review.
 
There can be no assurance that any of the acquisitions we may make will be successful or will be, or will remain, profitable. Our failure to successfully address the foregoing risks may prevent us from achieving the anticipated benefits from any acquisition in a reasonable time frame, or at all.
 
13
If intangible assets and goodwill that we record in connection with our acquisitions become impaired, we may have to take significant charges against earnings.
 
In connection with the accounting for our acquisitions, a significant value may be recognized in respect of intangible assets, including developed technology and customer relationships relating to the acquired product lines, and goodwill. Under IFRS, we must assess, at least annually and potentially more frequently, whether the value of intangible assets and goodwill has been impaired. Intangible assets and goodwill will be assessed for impairment in the event of an impairment indicator. Any reduction or impairment of the value of intangible assets and goodwill will result in a charge against earnings, which could materially adversely affect our results of operations and shareholders’ equity in future periods.
 
Risks Related to the Commercialization of our Products
 
Our assumptions and estimates regarding prevalence and the addressable markets for our products and product candidates may be inaccurate. If there are fewer actual patients than estimated, or if any product approval is based on narrower definitions of patient populations, our revenues and cash position could be materially and adversely affected.
 
The patient population for the diseases that our products treat is very small, and networking, data gathering and support channels are not as established as those for more prevalent and researched disease indications. There are limited patient registries or methods of establishing with precision the actual number of Homozygous familial Hypercholesteraemia (HoFH), General Lipodystrophy (GL) and Partial Lipodystrophy (PL), acromegaly, Neuroendocrine Tumour (NET) or Epidermolysis Bullosa (EB) patients in any geography. Estimating the prevalence of a rare disease is difficult and we therefore must rely on assumptions, beliefs and an amalgam of information from multiple sources, resulting in potential under or over-reporting. There is no guarantee that our assumptions and beliefs are correct, or that the methodologies used and data collected have generated or will continue to generate accurate estimates. There is therefore uncertainty around the estimated total potential addressable patient population for treatment with lomitapide, Mycapssa, metreleptin or Oleogel-S10 worldwide.
 
In addition, the potential market opportunity for our product candidates that we may develop is difficult to estimate precisely, particularly given that the orphan drug markets which are targeted are, by their nature, relatively unknown. Our estimates of the potential market opportunity for each of these product candidates are predicated on several key assumptions, such as industry knowledge and publications, third-party research reports and other surveys. If any of our assumptions prove to be inaccurate, then the actual market for lomitapide, Mycapssa, metreleptin, Oleogel-S10 or AP103, or our other or future product candidates, could be smaller than our estimates of the potential market opportunity. If that turns out to be the case, our product revenue may be limited, and we may be unable to achieve or maintain profitability, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
 
Our products may not gain market acceptance, in which case we may not be able to generate product revenues.
 
Physicians, healthcare providers, patients, payers or the medical community may not accept or use our approved products. Efforts to educate the medical community and third-party payers on the benefits of the products may require significant resources and may not be successful. Notwithstanding the level of revenues historically generated from the sale of lomitapide, Mycapssa® and metreleptin, if any of our existing marketed products or product candidates do not achieve an adequate level of acceptance, we may struggle to continue to generate significant product revenues and may not in the future generate any profits from operations. The degree of market acceptance will depend on a variety of factors, including, but not limited to:
 

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whether clinicians and potential patients perceive product candidates to have better efficacy, safety, tolerability profile and ease of use, when compared with the products marketed by our competitors and the prevailing standard of care (“SOC”);
 

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the timing and location of market introduction of any approved products;
 

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our ability to provide acceptable evidence of safety and efficacy;
 

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the frequency and severity and causal relationships of any side effects and a continued acceptable safety profile following approval;
 

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relative convenience and ease of administration;
 

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cost effectiveness;
 

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patient diagnostics and screening infrastructure in each market;
 

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marketing and distribution support;
 

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the availability of healthcare coverage, reimbursement and adequate payment from health maintenance organizations and other third-party payers, both public and private; and
 

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competition from other therapies.
 
14
We face significant competition from other biotechnology and pharmaceutical companies.
 
The specific markets in which we operate are highly competitive and this competition could harm our results of operations, cash flows and financial condition. Our competitors include major international pharmaceutical companies as well as smaller or regional specialty pharmaceutical and biotechnology companies. We may be forced to either lower the selling prices of our products in response to competitor pricing or lose patients who choose lower-priced products. Many of our competitors are larger, have greater financial resources and a lower cost structure. As a result, our competitors may be better equipped to withstand changes in economic and industry conditions. These competitors currently engage in, have engaged in or may in the future engage in the development, manufacturing, marketing and commercialization of new pharmaceuticals, some of which may compete with our products. Competition may also arise from, among other things, other drug development technologies, methods of preventing or reducing the incidence of disease, including vaccines and new small molecule or other classes of therapeutic agents. Smaller or early-stage companies may also be significant competitors, particularly through collaborative arrangements with large, established companies. Key competitive factors affecting the commercial success of our products and any other products that we develop or acquire are likely to be safety, efficacy, tolerability profile, reliability, convenience of dosing, price and reimbursement. We may also face future competition from companies selling generic alternatives to our products in countries where we do not have patent coverage, Orphan Drug status or another form of data or marketing exclusivity or where patent coverage or data or marketing exclusivity has expired, is not enforced, or may, in the future, be challenged.
 
A significant competitor to our lomitapide product is a class of drugs known as PCSK9 inhibitors. Two main brands dominate the marketplace – Praluent and Repatha which are both approved in the European Union and the United States. Sales of PCSK9 inhibitors compete with sales of lomitapide and we expect that this product will continue to compete with lomitapide. In addition, one of our competitors, Regeneron Pharmaceuticals Inc., is developing Evinacumab, a human monoclonal antibody directed against the activity of angiopoietin-like 3 (“ANGPTL3”) for the treatment of HoFH. In August 2019, Regeneron announced positive topline data from its ongoing Phase 3 trial in HoFH and the FDA approved Evinacumab on February 11, 2021, for adults and pediatric patients 12 years and older for treatment of HoFH. EMA approved Evinacumab in June 2021 as an adjunct to diet and other low-density lipoprotein-cholesterol (LDL-C) lowering therapies for the treatment of adult and adolescent patients aged 12 years and older with homozygous familial hypercholesterolaemia (HoFH). Regeneron launched Evinacumab in the United States in March 2021. Evinacumab was licensed to Ultragenyx Pharmaceutical Inc in countries outside the US in January 2022. Although administered through intravenous infusion, physicians may now consider this product for HoFH patients as an alternative to lomitapide. Other competitors may succeed in developing, acquiring or licensing additional pharmaceutical products that are introduced into the market and that are more effective, have a more favorable safety profile or are less costly than our products.
 
Although Myalept is the first and only product approved in the United States for the treatment of complications of leptin deficiency in patients with GL, there are a number of therapies approved to treat these complications independently that are not specific to GL. Myalepta also faces competition in the European Union, both for the treatment of GL and PL. Our competitors are also developing products, which, if approved, and depending on the labelled indication, could potentially compete with metreleptin.
 
The acromegaly market has many established competitors, dominated by Novartis and Ipsen, who like the rest of the competition offer injectable SSA’s. Mycapssa® is the only oral SSA available on the market. Crinetics Pharmaceuticals are developing paltusotine, which if approved would be the second oral SSA to enter the market and compete directly with Mycapssa. Crinetics also have a Ph3 study to evaluate effect in treatment-naïve patients. If studies are successful, filings could take place at end of 2023 / early 2024.
 
Although there are no approved products in the United States and the European Union for the treatment of EB, our competitors are developing products, which, if approved, and depending on the labelled indication, could potentially compete with Oleogel-S10. One such competitor on the near-term horizon is a potential competitor from Krystal Biotech – B-VEC. B-VEC is gene therapy delivered through a herpes simplex viral vector with studies focused on the narrower population of DEB patients. In November 2021 Kyrstal announced that its Ph3 GEM-3 study of B-VEC, known as Vyjuvek™, met its primary endpoint of complete wound healing at six-month timepoints and its secondary endpoint of complete wound healing at three-month timepoints. Additionally, Vyjuvek™ was shown to be well-tolerated, with no drug-related serious adverse events or discontinuations. They could file a Biologics License Application in Q2 2022, with potential approval in the second half of 2022 and file for MAA in EU in the second half of 2022. Although there is overlap with Oleogel-S10, Amryt believe that this lifelong condition will require multiple therapeutic options.
 
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Other competitors may succeed in developing, acquiring or licensing additional pharmaceutical products that are introduced into the market and that are more effective, have a more favorable safety profile, or are less costly than our products. If we do not compete successfully, our operating margins, financial condition and cash flows could be adversely affected.
 
We commercialize our products through both a direct sales force and through strategic relationships with third parties for commercialization, distribution, sales and marketing in certain jurisdictions. If we are unable to adequately develop and maintain our sales, marketing and distribution capabilities or enter into business arrangements, we may not be successful in commercializing our product candidates.
 
We sell lomitapide, Mycapssa® and metreleptin directly in the United States using our own marketing and sales resources and also market and sell, or plan to market and sell, our products directly in certain key countries outside the United States where such products are, or may be, approved using country managers or local distributors to the extent rights to commercialize such products are not out-licensed. We also make our products available on a named patient basis as a result of the approval of our products in the United States or the European Union. We use third parties to provide sales, warehousing, shipping, third-party logistics, invoicing, collections and other distribution services on our behalf in connection with the sale of products globally. Metreleptin is also available in: Italy, Greece, France, Germany, Austria, Switzerland, United Kingdom, Denmark, Spain, Portugal, Serbia, Russia, Kazakhstan, Saudi Arabia, Israel, Turkey, Oman, Qatar, Bahrain, UAE, Colombia, Brazil and Argentina. Metreleptin was out-licensed to Shionogi & Co. Ltd. (“Shionogi”) in Japan. Lomitapide is also available in: the Netherlands, Germany, Austria, Spain, Greece, Italy, United Kingdom, Sweden, Norway, Denmark, France, Hungary, Czech Republic, Russia, Qatar, Kuwait, Saudi Arabia, Canada, Brazil, Colombia and Argentina. We also out-licensed lomitapide for sale by Recordati Rare Diseases Inc. (“Recordati”) in Japan. Mycapssa® is currently only sold in the United States.
 
For example, there is currently a contract with a single specialty pharmacy distributor in the United States for the distribution of lomitapide, Mycapssa® and metreleptin, a single distributor in Brazil for lomitapide and metreleptin, and single distributors, third-party logistics providers, importers and/or specialty pharmacies in certain other countries, including the European Union for lomitapide and metreleptin. We have entered into or may selectively seek to establish sales, distribution and similar forms of arrangements to grow revenue in existing territories and gain access to new territories and to reach patients in certain geographies that we do not believe can be cost-effectively addressed with our own sales and marketing capabilities. If we are unable to establish, maintain and finance the capabilities to sell, market and distribute our products, either through our own capabilities or through arrangements with third parties, and to effectively manage those third parties, or if we are unable to enter into distribution agreements in countries that we do not believe can be cost-effectively addressed with our own sales and marketing capabilities, we may not be able to successfully sell our products. We cannot guarantee that we will be able to establish, maintain and finance our own capabilities or to enter into and maintain favorable distribution agreements with third parties on acceptable terms, if at all.
 
To the extent that we enter into arrangements with third parties to perform sales, marketing or distribution services, the product revenues or the profitability of these product revenues may be lower than if we were to commercialize the products on our own. We will have limited control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market the products effectively, and may also, despite our compliance diligence reviews, audits and training, engage in non-compliant / illegal activities including U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”) violative activity that, directly or indirectly, impact the use or sales of the products or damage our relationships with relevant stakeholders. Any performance failure, inability or refusal of our specialty pharmacy distributors, or third-party service providers to perform, or any failure to renew existing agreements on favorable terms, or at all, could cause serious disruption and impair our commercial or named patient sales of the products, which may have a material adverse effect on our business, financial condition and results of operations. Adverse actions with third parties and contract manufacturing organizations we enter into arrangements with including adverse regulatory actions could negatively impact the company. Furthermore, the expenses associated with maintaining sales force and distribution capabilities may continue to be substantial compared to the revenues we generate. If we are unable to establish and effectively maintain adequate sales, marketing and distribution capabilities, whether independently or with third parties, we may not be able to generate product revenues, which may have a material adverse effect on our business, financial condition, results of operations and prospects. See “—Risks Related to our Reliance on Third Parties.”
 
The successful commercialization of our product candidates will depend in part on the extent to which governmental authorities and health insurers establish adequate coverage, reimbursement levels and pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease revenue generating ability.
 
The availability and adequacy of coverage and reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers and other third-party payers is essential for many patients to be able to afford prescription medications such as our products and potential product candidates, assuming regulatory approval is obtained. Our ability to achieve acceptable levels of coverage and reimbursement for products by governmental authorities, private health insurers and other organizations will affect the success of our approved products and product candidates. Assuming we obtain coverage for our product candidates by third-party payers, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. We cannot be sure that coverage and reimbursement in the United States, the EU Member States, or elsewhere will be available for the product candidates or any product that we may develop, and any reimbursement that may become available may be decreased or eliminated in the future.
 
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Further, it is possible that a third-party payer may consider our product candidates as substitutes and only offer to reimburse patients for a less expensive product. Even if we show improved efficiency or convenience of administration with our product candidates compared to products marketed by our competitors and the prevailing SOC, the pricing of existing therapies may still limit the amount we could charge. Third-party payers may deny or revoke the reimbursement status of any given product or establish new prices for existing marketed products that inhibit us from realizing an appropriate return on our investment in the product candidates. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our product candidates and may not be able to obtain a satisfactory financial return on them.
 
Outside the United States, the success of our products and operations is subject to extensive governmental price controls and other market regulations which may materially and adversely affect our ability to generate commercially reasonable revenue and profits.
 
Our operations are subject to extensive governmental price controls and other market regulations in the United Kingdom and other countries outside of the United States. The increasing emphasis on cost-containment initiatives in the various EU Member States and other countries can put pressure on the pricing and usage of currently marketed products and product candidates in the future. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Some EU Member States have established free-pricing systems, but regulate the pricing for drugs, inter alia, through profit control schemes. However, the UK, which has implemented the most vigorous scheme, has officially left the European Union on January 31, 2020. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our currently marketed products and our product candidates in the future may be reduced and may be insufficient to generate sufficient revenues and profits. Moreover, increasing efforts by governmental and third-party payers in the United States and abroad to control healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products, or any other product candidates we may develop in the future.
 
A number of adverse effects have been reported in clinical trials for metreleptin, lomitapide, oral octreotide and Oleogel-S10, and the prescribing information for each of lomitapide, metreleptin and oral octreotide contains significant limitations on use and other important warnings and precautions, any of which could negatively affect the market acceptance, dropout rates and marketing approval for these products, and post-marketing commitments could identify additional adverse events and safety or efficacy risks, which could further harm our business.
 
The prescribing information for lomitapide in the United States and the European Union and in other countries in which lomitapide is approved contains significant limitations on use and other important warnings and precautions, including, but not limited to, a boxed warning in the Juxtapid U.S. labeling, additional monitoring which is identified by a black inverted triangle in the product information for Lojuxta in the European Union, warnings in the prescribing information for Lojuxta citing concerns over liver toxicity associated with use of lomitapide, European Risk Management Plan (RMP) materials for physicians and patients, and a U.S. Risk Evaluation Mitigation Strategy (“REMS”) program. The prescribing information for metreleptin in the United States and European Union contains important warnings and precautions, including but not limited to, a boxed warning on the Myalept label in the United States, citing the risk of anti-metreleptin antibodies with neutralizing activity, risk of lymphoma and a U.S. REMS program. As with the U.S. label, the Myalepta Summary of Product Characteristics in the European Union notes that the consequences of neutralizing antibodies with respect to the loss of efficacy or serious or severe infections is not well characterized but could reduce how well the leptin found naturally in the body works or how well Myalepta works.
 
Patients reported various adverse reactions in the Phase 3 study of lomitapide, including reports of gastrointestinal events by 93% of patients, and in the HoFH clinical trial, including diarrhea, nausea, vomiting, dyspepsia, abdominal pain, weight loss, abdominal discomfort, abdominal distension, constipation, flatulence, increased alanine aminotransferase, chest pain, influenza, nasopharyngitis, and fatigue. Elevations in liver enzymes and hepatic (liver) fat were also observed.
 
GL patients in the Phase 3 study of metreleptin reported various adverse drug reactions, including weight loss, hypoglycemia, decreased appetite, fatigue, neutralizing antibodies and alopecia. Additionally, although none were assessed as drug related, there were four reported treatment-emergent deaths over the course of the 14-year study duration. Upon further investigation, these reports were consistent with the underlying morbidity of lipodystrophy and included renal failure, cardiac arrest (with pancreatitis and septic shock), progressive end-stage liver disease (chronic hepatic failure), and hypoxic-ischemic encephalopathy. In the open-label, long-term, investigator-sponsored study of metreleptin for the treatment of metabolic disorders associated with lipodystrophy syndromes (initiated in 2000 and conducted at the National Institutes of Health (“NIH”)), there were two cases of peripheral T-cell lymphoma and one case of a localized anaplastic lymphoma (kinase-positive anaplastic large cell lymphoma, which is a type of T-cell lymphoma). Both of the cases of peripheral T-cell lymphoma were reported in patients with acquired GL, and both had evidence of pre-existing lymphoma and/or bone marrow/hematologic abnormalities before metreleptin therapy. A third case of anaplastic large cell lymphoma occurred in the context of a specific chromosomal translocation.
 
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These adverse events, coupled with the boxed warnings and other label restrictions, could cause healthcare providers, regulators and patients or potential patients to view the risks associated with our products as outweighing the benefits. This could cause patients to discontinue use and limit the number of new patients, thereby negatively affecting our business, financial condition, results of operations and prospects. In addition, as part of the post-marketing commitment to the FDA for both lomitapide and metreleptin, we are conducting post-marketing registries to better understand their long-term safety and effectiveness. For lomitapide, we are conducting a long-term observational cohort study (product exposure registry) to better understand the long-term safety, patterns of use, compliance and long-term effectiveness of controlling LDL levels. For metreleptin, we are conducting a long-term, prospective, observational study (product exposure registry) to identify and better understand any serious risks related to the use of the product. Finally, we are conducting sequential programs to expand the understanding of metreleptin immunogenicity and manufacturing. The final program regarding the immunogenicity of metreleptin was initiated in 2018, and the final post-marketing study related to the manufacturing of metreleptin is expected to be completed by the deadlines agreed with the FDA. In addition, we are working to implement post-marketing commitments in the European Union for metreleptin, including a pediatric study in GL patients, an immunogenicity program, a post-approval study in PL and to enroll European patients in the product exposure registry. A failure to meet post-marketing commitments to the FDA, the EMA or other regulatory authorities could impact the ability to continue to market lomitapide or metreleptin, respectively, in countries where we are unable to meet such commitments. A Phase 3, randomized, multicenter, double-blind, placebo-controlled study of metreleptin in patients with partial lipodystrophy (PL) was initiated at the end of Q4 2021 with registration intent to include this population in the US label. In general, we may not be able to meet our post marketing commitments for our current approved products and those in development which could materially impact our ability to commercialize our products and therefore have a material impact on the success of our business.
 
In the course of conducting observational cohort studies, additional clinical studies (such as pursuant to a pediatric investigation plan (“PIP”) in the European Union), post-marketing surveillance, or re-evaluation of any completed clinical study data could identify, additional safety information on known or unknown side effects or new undesirable side effects caused by our products or product candidates, or the data may raise other issues with respect to the products. In such instances, a number of potentially significant negative consequences could result, including:
 

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we may experience a negative impact on market acceptance and increased 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 issue, or require us to issue additional specific communications such as safety alerts, field alerts, or “Dear Doctor” letters to healthcare professionals;
 

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regulatory authorities may require us to recall, withdraw, or stop selling a product or take other enforcement action;
 

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we may receive negative publicity;
 

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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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patients could suffer harm, and 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 program, Risk Management Plan or comparable equivalent; and
 

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our reputation may suffer.
 
Mycapssa® (oral octreotide capsules) is approved in the US for use in patients who have responded to and tolerated octreotide or lanreotide, injectable somatostatin analogues (SSAs).  Approval in the European Union is under review by the EMA with an anticipated approval date of Q3 2022.  In the US, the prescribing information does not include any boxed warnings.  The safety profile of Mycapssa® is consistent with that seen with injectable octreotide with the exception of the absence of injection site reactions.  Warnings and precautions include the risks of cholelithiasis and complications of cholelithiasis, hypoglycemia or hyperglycemia, hypothyroidism bradycardia, arrhythmia, or cardiac conduction abnormalities, decreased Vitamin B12 Levels and an abnormal Schilling's Tests.  There are no FDA post approval commitments for Mycapssa® in the treatment of Acromegaly patients but the company is conducting a 2 year observation registry study in patients with acromegaly receiving treatment with Mycapssa® as well as other drug treatments for acromegaly.
 
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Oleogel-S10 is under review by the EMA. A phase 3 study (EASE) has completed its double-blind phase and the open label extension is on-going. On April 22, 2022, the European Medicines Agency's (“EMA”) Committee for Medicinal Products for Human Use (“CHMP”) has adopted a positive opinion, recommending the approval of Filsuvez® in the European Union (EU) for the treatment of partial thickness wounds associated with dystrophic and junctional Epidermolysis Bullosa (EB) in patients six months and older. Based on this CHMP recommendation a decision by the European Commission (EC) is expected on the Filsuvez® application within 67 days. The proposed label include warnings and precaution statements on hypersensitivity reactions, use in patients with wound infections, squamous cell carcinoma, use in dominant dystrophic EB (DDEB) and junctional EB (JEB), birch pollen allergy and accidental eye exposure.
 
Any known safety concerns for our products or product candidates, or any unknown safety issues that may develop or be discovered, including drug interaction problems or an increase in the severity or frequency of known adverse events or the discovery of previously unknown adverse events, or the evaluation or reevaluation of study data, could prevent us from achieving or maintaining market acceptance of the respective product, affect our ability to obtain or retain regulatory marketing approval of the respective product in one or more countries, result in onerous restrictions on such approval or the implementation or modification of the REMS programs (if applicable) or risk management plans for our products, or any other enforcement actions, result in claims, lawsuits and increased regulatory scrutiny, and affect our ability to achieve our financial goals.
 
Enacted and future legislation and related regulations may increase the difficulty and cost for us to commercialize metreleptin, lomitapide, Mycapssa® or Oleogel-S10 or development candidates and may affect the prices we are able to obtain for our products, if and where approved.
 
In the United States, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that restrict or regulate post-approval activities, which may affect our ability to profitably sell our products. Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot predict whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes for the products may be. In addition, increased scrutiny by Congress of the FDA’s approval process may subject us to more stringent product labeling, post-marketing testing and other requirements. In May 2019, the Centers for Medicare and Medicaid Services adopted a final rule permitting Medicaid Part D plans to apply certain utilization controls on new starts of protected class drugs.
 
In the United States, most outpatient prescription drugs, including Myalept, Mycapssa, Juxtapid and Oleogel-S10, if approved, may be covered under Medicare Part D for beneficiaries over the age of 65 or with certain disabilities. Medicare Part D prescription drug plans use formularies to limit the number of drugs that will be covered in any therapeutic class and impose differential cost sharing or other utilization management techniques. The possibility that our products and product candidates will be subject to such formularies places pressure on them to contain and reduce costs, which could negatively impact our commercialization efforts. Changes to Medicare Part D, which give plans more freedom to limit coverage or manage utilization, and other cost reduction initiatives in the program could decrease patient access to any approved products, and could be detrimental to our business.
 
The Patient Protection and Affordable Care Act (“PPACA”) (as amended by the Health Care and Education Reconciliation Act of 2010) substantially changed the way healthcare is financed by both governmental and private insurers. The law contains a number of provisions that affect coverage and reimbursement of drug products and that could potentially reduce the demand for our products, such as:
 

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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 70% 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).
 
We cannot predict the ultimate content, timing or effect of any changes to the PPACA or other federal and state reform efforts. There is no assurance that federal or state healthcare reform will not adversely affect our business and financial results, and we cannot predict how future federal or state legislative, judicial or administrative changes relating to healthcare reform will affect our business.
 
Multiple rules issued by HHS under the Trump administration could impact access to and reimbursement for prescription drugs if they become effective.  A final rule that eliminated the safe harbor shielding Medicare Part D rebates to pharmacy benefit managers from the Anti-Kickback statute was finalized in November 2020.  However, The Infrastructure Investment and Jobs Act (Public Law No: 117-58), signed into law on November 15 2021, established a moratorium on implementation of rule relating to eliminating the anti-kickback statute safe harbor protection for prescription drug rebates until January 1, 2026. In addition, the Build Back Better Act (HR 5376), as passed by the House of Representatives and currently under consideration in the Senate, would permanently prevent implementation of the rule so it remains unclear whether this will take effect.
 
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In addition, the Medicaid Drug Rebate Program final rule, issued in December of 2020, finalized policies to change the way in which Medicaid rebates are calculated.  This policy would require that copay assistance provided to patients would be applied as a discount to a payer for the purposes and could set a new best price for the purposes of the Medicaid drug rebate calculation unless a manufacturer can “ensure” that the full value of the assistance is passed through to the patient. This is problematic given the rising number of copay accumulator plans in which pharmacy benefit managers block patients from taking full advantage of patient assistance programs without the knowledge of the manufacturer.  The Pharmaceutical Researchers and Manufacturers of America (PhRMA), sued to invalidate this rule in May of 2021.  The outcome of this litigation remains uncertain and could require changes to patient assistance programs.
 
In September of 2021, the Build Back Better Act was introduced in the House of Representatives and contained a number of provisions that could impact the biopharmaceutical industry.  These provisions include measures aimed at reducing patient out of pocket costs through a redesign of the Medicare Part D benefit, provisions aimed at allowing Medicare to negotiate drug prices for a subset of drugs in Medicare Part B and Part D, and provisions meant to limit drug price increases to the rate of inflation, requiring rebates to the government for price increases taken beyond inflation.  The House of Representatives passed the Build Back Better Act in November of 2021, and it has not been considered by the Senate.  If any of these measures are adopted into law, they could impact future business actions and access to medicines.
 
Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented and/or any significant taxes or fees that may be imposed, as part of any broader deficit reduction effort or legislative replacement to current laws or regulations, could have an adverse impact on our results of operations. In addition, countries outside the United States may make changes to their healthcare systems, which may in the future affect the revenue generated from sales of lomitapide, metreleptin and Oleogel-S10, if approved, or any of our future commercial products.
 
Existing legislation and federal regulations may permit reimportation of drugs from Canada into the United States where the drugs are sold at lower prices and this may adversely affect our operating results and overall financial condition.
 
The U.S. Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) contains provisions that may change importation laws and expand pharmacists’ and wholesalers’ abilities to import lower-priced versions of an approved drug and competing products from Canada, where there are government price controls.
 
In October 2020, the U.S. Department of Health and Human Services and the FDA issued a final rule and guidance concerning two new pathways for importing lower-cost drugs into the United States. The final rule allows States to set up importation schemes after receiving approval of their importation program by the Department of Health and Human Services.  These state programs could allow medicines to be imported from Canada, but would not permit the import of certain medicines, including biologics or products subject to REMS programs. The FDA guidance describes procedures for drug manufacturers to facilitate the importation of FDA approved drugs and biologics manufactured abroad and originally intended for sale in a foreign country in the United States. Ongoing litigation on this regulation makes the outcome of any importation schemes uncertain.
 
If purchasers of Myalept, Mycapssa® or Juxtapid in the United States are able to import lower-priced products from countries outside the United States that place price controls on pharmaceutical products, this may result in a negative impact on the revenues of our products.
 
The reimportation of metreleptin, Mycapssa® or lomitapide into the U.S. market from a foreign market may negatively impact our revenues and anticipated financial results.
 
Although the European Union does not permit the re-importation of medicinal products from outside the European Union, parallel trade between EU Member States is possible and can result in third party imports from EU Member States offering lower prices for a product into those reimbursing products at higher costs.
 
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We rely on named patient sales of our products in certain territories, but there are no assurances that named patient sales of our products will continue at current levels, or at all.
 
In a number of countries, where permitted based on U.S. or EU approval, metreleptin and lomitapide are available on a named patient sales or similar basis. Named patient basis means physician-requested treatment for patients in territories where marketing authorization has not yet occurred. There is no assurance that named patient sales will continue to be authorized in any particular country. Even if they are authorized, we will likely not be permitted to promote, market or otherwise engage in proactive selling activities for products sold on a named patient basis, which makes named patient sales much less predictable, and susceptible to unexpected decreases. If violations of any laws or governmental regulations are found to have occurred in connection with our products significant criminal or civil lawsuits may be filed, or investigations may be commenced. For example, in Brazil, under certain circumstances, we could be barred from sales of products to federal or state governments in Brazil due to penalties imposed by Brazilian regulatory authorities or through civil actions initiated by federal or state public prosecutors, or we could face administrative penalties imposed by Brazilian regulatory authorities and additional damages and fines. It is believed that the investigations in respect of Aegerion in Brazil have contributed to a slower turnaround between price quotation and orders, including reorders, from the federal government, and, in some cases, delays in orders and reorders from the government of the State of São Paulo after a patient has obtained access to lomitapide through the judicial process. These delays may continue, and we may experience other delays or suspensions of the ordering process. Similarly, there has been, and may continue to be, some reluctance by physicians to prescribe lomitapide, and some patients to take or stay on lomitapide, while the investigations are ongoing, particularly given that some of the investigators in Brazil made formal inquiries of certain prescribers of lomitapide, and there has been significant local media coverage of such inquiries and Aegerion’s past activities in Brazil. Further, in October 2017, a new set of regulatory requirements governing use of product candidates was published in Brazil which has added complexity to the process for the purchase, on a named patient basis, of drugs which have not received regulatory and/or pricing and reimbursement approval in Brazil, such as metreleptin and lomitapide, which has, along with the ongoing court proceeding, resulted in delays in the receipt of orders from Brazil for existing metreleptin and lomitapide patients. We believe that this led certain patients to discontinue therapy with metreleptin and lomitapide. In December 2020, we received marketing authorization approval from Agencia Nacional De Vigilancia Sanitaria, the Brazilian Health Regulatory Agency, for lomitapide.
 
We do not know the full extent of the impact that the approval of PCSK9 inhibitor products or Evinacumab in the United States, or the approval of a PCSK9 inhibitor product, will have on the named patient sales of lomitapide in other countries. We also do not know whether we will be permitted to sell metreleptin, Mycapssa® or lomitapide on a named patient basis in any additional countries. In certain countries, we may decide not to pursue named patient sales even if permitted. Even if named patient sales (or equivalent sales) are permitted in a certain country, and we elect to make metreleptin, Mycapssa® or lomitapide available on such basis, there is no guarantee that physicians in such country will prescribe the product, which they can only do if they proactively reach out to us or our distributors and also undertake the effort, time and cost of following the stringent local requirements to get their patient on therapy on a named patient basis, and that patients will be willing to start and adhere to therapy, or that the country will pay for the product at all, or at a level that is acceptable to us, without delay or imposing other hurdles on payment.
 
Further, there are countries where we choose to or are required to make our products available under an expanded access program at no cost prior to approval in such countries. There is no assurance that we will be able to obtain marketing approval or reimbursement at all or at acceptable levels or to maintain reimbursement for our products in any country where we have expanded access programs or that patients on such programs will convert to commercial product even if we do obtain requisite approvals. In certain countries where we seek reimbursement for the product during the pre-approval phase, we are able to establish the price for the product, while in other countries we need to negotiate the price. Such negotiations may not result in a price acceptable to us, in which case we may elect not to distribute the products in such country prior to approval or it may curtail distribution. Our expanded access program may result in significant expenses and may not result in expected future sales at desired levels or at all, and could negatively impact our financial results.
 
Risks Related to Clinical Development
 
If we are unable to commercialize or receive regulatory approval for Oleogel-S10, or experience significant delays in doing so, or are not granted a Priority Review Voucher, our business could be materially harmed.
 
Our Phase 3 EASE randomized double-blind placebo control study achieved its primary endpoint and forms the basis of application for regulatory approval. An NDA was submitted to FDA on March 30, 2021, and a Marketing Authorization Application (“MMA”) was submitted to the EMA on March 8, 2021, with a procedure start date of March 25, 2021. On February 28, 2022, we received a Complete Response Letter (“CRL”) from the FDA which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns. Our inability to obtain approval for and commercialize Oleogel-S10 would materially adversely affect our business, results of operations and prospects. On April 22, 2022, the European Medicines Agency's (“EMA”) Committee for Medicinal Products for Human Use (“CHMP”) has adopted a positive opinion, recommending the approval of Filsuvez® in the European Union (EU) for the treatment of partial thickness wounds associated with dystrophic and junctional Epidermolysis Bullosa (EB) in patients six months and older. Based on this CHMP recommendation a decision by the European Commission (EC) is expected on the Filsuvez® application within 67 days.
 
Amryt will seek a Priority Review Voucher (“PRV”) as part of the Oleogel-S10 NDA submission which if granted, we can sell, transfer or use to accelerate the approval of a future Amryt NDA. However, to be eligible for a PRV, Oleogel-S10 must have a Pediatric Rare Disease Designation from the FDA, be granted a priority review by FDA, and ultimately the NDA must be approved by the FDA. Amryt was granted a Pediatric Rare Disease Designation by the FDA in August 2018. When the NDA was submitted to the FDA on March 30, 2021, Amryt requested priority review. In June 2021, Amryt received confirmation from the FDA that its NDA for Oleogel-S10 had been accepted and granted priority review. Having received a CRL from the FDA we may no longer be eligible for a PRV and we intend to discuss and clarify this with the FDA.
 
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Clinical trials are expensive, time consuming and difficult to design and implement and involve uncertain outcomes and, furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinical studies or clinical trials.
 
To obtain the requisite regulatory approvals to market and sell any of our product candidates, or to obtain regulatory approvals to market and sell any of our commercial products for new indications, we must demonstrate, through extensive preclinical studies and clinical trials, that our product candidates are safe and effective in humans. Clinical testing is expensive and can take many years to complete and has inherently uncertain outcomes. Failure can occur at any time during the clinical trial process and in addition regulatory authorities may require further studies at additional cost. Furthermore, regulatory authorities may not agree on the same trial design for pivotal studies. The results of preclinical studies and earlier clinical trials, or the results from earlier stages of preclinical studies or clinical trials, may not be predictive of the results of later-stage clinical trials. For example, the results generated to date in preclinical studies or Phase 1 or Phase 2 clinical trials for product candidates do not ensure that later clinical trials will demonstrate similar results. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy outcomes despite having progressed through preclinical studies and initial clinical trials. We may suffer setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding any promising results in earlier clinical trials. As product candidates are developed from preclinical through early to late-stage clinical trials towards approval and commercialization, it is customary that various aspects of the development program, such as manufacturing and methods of administration, are altered along the way in an effort to optimize processes and results. While these types of changes are common and are intended to optimize the product candidates for late-stage clinical trials, approval and commercialization, such changes carry the risk that they will not achieve these intended objectives. In addition, we may experience delays in ongoing or future preclinical studies or clinical trials and we have no certainty as to whether future preclinical studies or clinical trials will begin on time, will need to be redesigned, will enroll an adequate number of subjects or patients on time, if at all, or will be completed on schedule, if at all. Such factors may have a material adverse effect on our business, financial condition, results of operations and prospects.
 
Our product candidates may not work as intended, may cause undesirable side effects or may have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.
 
Use of our product candidates could be associated with side effects or adverse events which can vary in severity from minor reactions to serious and/or severe adverse events, and in frequency from infrequent to prevalent. Undesirable side effects or unacceptable toxicities caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA, the EMA or comparable regulatory authorities. Results of our trials could reveal a high and unacceptable severity and prevalence of side effects.
 
If unacceptable side effects arise in the development of our product candidates, we, the FDA, competent authorities of EU Member States, ethics committees, the IRBs, the institutions in which our studies are conducted, or the DSMB could suspend or terminate our clinical trials. The FDA or comparable regulatory authorities could also order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete any of our clinical trials or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. We expect to have to train medical personnel using our product candidates to understand the side effect profiles of our product candidates in our clinical trials and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death. Any of these occurrences may harm our business, financial condition, results of operations and prospects significantly.
 
The regulatory approval processes of the EMA, the FDA and other comparable regulatory agencies may be lengthy and time consuming and the outcome is unpredictable.
 
Our future success is partly dependent upon our ability to successfully develop, obtain regulatory approval for, and commercialize one or more of our product candidates. There can be no assurance that any development product candidates will be successful in clinical trials or receive regulatory approval. We cannot predict with certainty if or when we might submit for regulatory approval of any of our product candidates currently under development. Any approvals we may obtain may not cover all of the clinical indications for which we are seeking approval. Also, an approval might contain significant limitations in the form of narrow indications, warnings, precautions, or contra-indications with respect to conditions of use. Applications for any of our product candidates could fail to receive regulatory approval for many reasons, including, but not limited to, the following:
 

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the EMA, the FDA or any other comparable regulatory agency may disagree with the design or implementation of clinical trials or interpretation of data from non-clinical trials or clinical trials;
 
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the population studied in the clinical program may not be sufficiently broad or representative to ensure that the clinical data can be relied on safely in the full population for which we are seeking approval;
 

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the data collected from clinical trials of our product candidates may not be sufficient to support a finding that has statistically significant clinical meaningfulness or support the submission of a new drug application or other submission, or to obtain regulatory approval in relevant jurisdictions, such as the European Union and the United States;
 

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we may be unable to demonstrate to the EMA, the FDA or any other comparable regulatory agency that a product candidate’s risk-benefit ratio for its proposed indication is acceptable;
 

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the EMA, the FDA or any other comparable regulatory agency may fail to approve the manufacturing processes, test procedures and specifications or facilities of Amryt or third-party manufacturers with which we contract for clinical and commercial supplies;
 

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a positive opinion from the CHMP of the EMA may not be ratified by the European Commission; and
 
 
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the approval policies or regulations of the EMA, the FDA or any other comparable regulatory agency may significantly change in a manner rendering clinical data insufficient for approval.
 
Disruptions at the FDA, the EMA and other regulatory agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, in recent years, including in 2018 and 2019, the U.S. government shut down several times and certain regulatory agencies, such as the FDA, had to furlough critical employees and stop critical activities. Separately, in response to the COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone most inspections of foreign manufacturing facilities and products except for those deemed to be “mission critical.” On March 18, 2020, the FDA announced its intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities and provided guidance regarding the conduct of clinical trials. In July 2020, FDA resumed “prioritized” domestic inspections, which generally include pre-approval and surveillance inspections based on the COVID-19 Advisory Rating System, which it followed up on with an August 2020 guidance document on inspections. Following the August 2020 guidance, FDA resumed domestic inspections, while foreign inspections remained limited to those deemed “mission critical.” In March 2021, the U.S. Government Accountability Office issued a report indicating that FDA faces an inspections backlog that may take years to clear, which could delay drug approvals. In April 2021, the FDA issued guidance related to remote inspections to further elaborate on the oversight tools which may be considered in relation to mission critical inspections. Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of such regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, in our operations as a public company, future government shutdowns or delays could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
 
Any of our current or future product candidates could take a significantly longer time to gain regulatory approval than expected or may never gain regulatory approval. This could delay or eliminate any potential product revenue by delaying or terminating the potential commercialization of product candidates. For example, any centralized marketing authorization application made to the EMA involving ‘Advanced Therapy Medicinal Products’ (such as AP103) will be subject to scientific evaluation by the Committee for Advanced Therapies, in addition to the CHMP.
 
We intend to seek regulatory approvals to commercialize the product candidates in the United States and the European Union. To obtain regulatory approval in other countries, we must comply with numerous and varying regulatory requirements of such other jurisdictions, which may include (without limitation) safety, efficacy, chemistry, manufacturing and controls, clinical trials, commercial sales, pricing and distribution of product candidates. Even if we are successful in obtaining approval in one jurisdiction, there can be no guarantee that it will obtain approval in other jurisdictions. Failure to obtain any marketing authorizations for the product candidates will result in us being unable to market and sell such products. If we fail to obtain approval in any jurisdiction, the geographic market for the product candidates could be limited. Similarly, regulatory agencies may not approve the labelling claims that are necessary or desirable for the successful commercialization of the product candidates.
 
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We may fail to obtain or maintain Orphan Drug marketing exclusivity for our products and product candidates and may face significant competitive threats to the commercialization of these compounds from other manufacturers.
 
Obtaining Orphan Drug Designation does not guarantee that we will be the first to obtain marketing approval for any particular orphan indication due to the uncertainties associated with developing pharmaceutical products, which could prevent us from marketing the product candidates if another company is able to obtain Orphan Drug exclusivity before we do. Exclusive marketing rights in the United States may be unavailable or lost if: (i) an approval is sought for an indication broader than the orphan-designated indication; (ii) the FDA later determines that the request for designation was materially defective; or (iii) the applicant is unable to secure sufficient quantities of the drug to meet the needs of patients with the rare disease or condition following approval. In the European Union, a marketing authorization granted for an Orphan Drug must only cover the therapeutic indications that meet the Orphan Drug Designation criteria. Further, even if Orphan Drug exclusivity has been obtained, and maintained that exclusivity may not effectively protect the product candidates from competition because different drugs with different active moieties may be approved for the same condition. In addition, the FDA and the EMA may subsequently approve products with the same active moiety for the same condition if the FDA or the EMA concludes that the later drug is safer, more effective, or makes a major contribution to patient care. Orphan Drug Designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.
 
We intend to seek Orphan Drug Designation for existing and future product candidates and we may never receive such designations. Despite exclusivity protections, another company nevertheless could market another version of the product if such company submits a full New Drug Application (“NDA”) in the United States or a full application for marketing authorization in the European Union with a complete human clinical trial program and obtains marketing approval of its product. Failure by us to obtain or maintain Orphan Drug marketing exclusivity for our products and product candidates may have a material and adverse effect on our business, financial condition, results of operations and prospects.
 
The FDA’s Orphan Drug exclusivity regulations may face legal challenges that could lead to changes which might adversely affect our business.
 
There have been legal challenges to aspects of the FDA’s regulations and policies concerning the exclusivity provisions of the U.S. Orphan Drug Act of 1983, and future challenges could lead to changes that affect the protections afforded to our product candidates in ways that are difficult to predict and which may have a material adverse effect on their business, financial condition, results of operations and prospects. In 2014, a U.S. district court invalidated the FDA’s denial of orphan exclusivity to an orphan designated drug, which the FDA had based on its determination that the drug was not proven to be clinically superior to a previously approved “same drug.” In response to the decision, the FDA released a policy statement stating that the court’s decision is limited to the facts of that particular case and that the FDA will continue to deny Orphan Drug exclusivity to a designated drug upon approval if the drug is the “same” as a previously approved drug, unless the drug is demonstrated to be clinically superior to that previously approved drug. Since then, similar legal challenges have been initiated against the FDA for its denial of Orphan Drug exclusivity to other designated drugs, and in 2017, Congress amended the U.S. Orphan Drug Act of 1983 to require a demonstration of clinical superiority upon approval as a condition to receiving Orphan Drug exclusivity when another “same drug” has already been approved for the same indication. In the future, there is the potential for additional legal challenges to the FDA’s Orphan Drug regulations and policies, and it is uncertain how ongoing and future challenges might affect our business.
 
We may seek and fail to obtain Fast Track or breakthrough therapy designations for our current or future product candidates. If we are successful, these programs may not lead to a faster development or regulatory review process, and they do not guarantee we will receive approval for any product candidate.
 
If a product is intended for the treatment of a serious or life-threatening condition and preclinical or clinical data demonstrate the potential to address an unmet medical need for this condition, the product sponsor may apply for Fast Track Designation. The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it. Fast Track Designation does not mean we will necessarily experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may rescind a Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.
 
Risks Related to Government Regulation and Compliance
 
The laws and regulations in the areas of sales and marketing of pharmaceutical products and interacting with healthcare professionals and patients are very complex and onerous and require a robust compliance program. Failure to comply with these laws and regulations could have a material adverse effect on our business, financial condition and results of operations.
 
Failure to comply with certain laws and regulations could lead to governmental investigations and result in financial penalties and remedial and compliance measures. For example, compliance failures by Aegerion led to a DOJ investigation and ultimately resulted in three separate settlements (Corporate Integrity Agreement, Consent Decree and Deferred Prosecution Agreement) with multiple government agencies (Office of Inspector General (“OIG”), the FDA and DOJ) and aggregate penalties of approximately $40.1 million, which include $7.2 million in restitution payable over three years beginning January 2018, a civil penalty of $4.1 million to be paid to the SEC pursuant to the SEC judgment, and $28.8 million to be paid pursuant to the settlement agreement with the DOJ. Aegerion had been making the required payments and following the acquisition we assumed responsibility for payment obligations, which were fully satisfied in the first quarter of 2021. Pursuant to the settlement, we are also required to maintain various remedial and compliance measures, which were implemented as required by the settlement. We may be unsuccessful in implementing and complying with all of the elements of the settlement in a timely or satisfactory manner, or at all. Failure to comply with any provisions of these settlements, or if we became subject to new allegations or whistleblower complaints, could result in the imposition of additional fines, penalties and obligations by the applicable government agency, and could subject us to prosecution.
 
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Furthermore, the investigation by the Brazilian authorities of Aegerion’s activities could result in the commencement of formal proceedings, and if the investigation finds any violation of any laws or governmental regulations, then our Brazilian subsidiary may be subject to civil lawsuits and administrative penalties and other potential damages and fines. Under certain circumstances, the Brazilian subsidiary and our company could be barred from further sales to federal or state governments in Brazil, including sales of Juxtapid or Myalepta, due to penalties imposed by Brazilian regulatory authorities or through civil actions initiated by federal or state public prosecutors.
 
We are subject to extensive legal and compliance obligations as a pharmaceutical company that commercializes products, as well as under Aegerion’s settlements with the DOJ, OIG, FDA, SEC and other federal and state government agencies.
 
As a pharmaceutical company that develops and commercializes pharmaceutical products, we are subject to an extensive array of broad and complex laws and regulations. These include, without limitation, regulations and laws in the United States and outside the United States related to manufacturing, clinical, quality, drug safety, commercialization, payments to and interactions with healthcare professionals and healthcare organizations, anti-kickbacks, fraud and abuse, the requirement to report payments and other transfers of value to healthcare professionals and healthcare organizations, data protection and privacy, pricing, reimbursement, price reporting, anti-corruption and anti-bribery, and a myriad of other areas and levels of regulation. Any failure by us or our key vendors, contractors, distributors, licensors or other key third-party vendors or service providers to comply with such laws and regulations could have a material adverse effect on our results of operations and financial condition, could result in product approvals being suspended, withdrawn, delayed or denied, could result in litigation or investigations which could be costly and be a significant distraction to executive management and other employees, and could result in damages or prosecution.
 
In September 2017, Aegerion entered into various settlements with the DOJ, OIG, FDA and SEC (“Aegerion Settlements”) of investigations regarding Aegerion’s U.S. commercial activities and disclosures related to Juxtapid. Under the terms of the Aegerion Settlements, Aegerion was required to pay approximately $40.1 million in penalties, which include $7.2 million in restitution payable over three years beginning January 2018, a civil penalty of $4.1 million to be paid to the SEC pursuant to the SEC judgment, and $28.8 million to be paid pursuant to the settlement agreement with the DOJ. We assumed these obligations in connection with the acquisition and have been making these penalty payments in accordance with the terms of the Aegerion Settlements with all of these payment obligations having been fully satisfied as of the end of the first fiscal quarter 2021. The Aegerion Settlements also mandates extensive remedial and compliance measures. The failure to comply with any provisions of the Aegerion Settlements, including the financial, remedial and compliance measures, or if we became subject to new allegations or whistleblower complaints, could result in the imposition of additional fines, penalties and obligations, and could subject us to prosecution or exclusion from federal healthcare programs in the United States.
 
The FDA, the EU Member States and other regulatory agencies outside the United States and the European Union enforce laws and regulations governing drug marketing and promotional activities, including prohibiting the promotion of off-label uses. Violations of these laws and regulations, and the resulting enforcement actions by these agencies, can result in significant liability.
 
The FDA, the regulatory authorities of the EU Member States and other comparable regulatory agencies outside the United States and the European Union strictly regulate the promotional claims that may be made about prescription drug products. In particular, a drug product may not be promoted in a jurisdiction prior to obtaining regulatory marketing approval or for uses that are not approved by the FDA, the European Commission (“EC”), the regulatory authorities of the EU Member States or such other regulatory agencies, as applicable, as reflected in the product’s approved prescribing information or summary of product characteristics. The European Union and the United Kingdom concluded a trade and cooperation agreement (“TCA”) that entered into force on May 1, 2021. Among other areas, the TCA includes provisions affecting the life sciences sector (including on customs and tariffs) but areas for further discussion between the EU and UK remain. In addition, there are some specific provisions concerning pharmaceuticals. These include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued. The TCA does not, however, contain wholesale mutual recognition of UK and EU pharmaceutical regulations and product standards. In the United States, marketing and promotion of drug products is regulated by the FDA and the Federal Trade Commission (“FTC”) to ensure that any claims about such products are consistent with regulatory approvals, not misleading or false in any particular way, and adequately substantiated by clinical data. In the United States and the European Union, the promotions of a drug product in a manner that is false, misleading, unsubstantiated, or for unapproved (or off-label) uses may result in enforcement letters or notices, inquiries and investigations, and civil and criminal sanctions by the FDA, FTC and regulatory authorities of the EU Member States (as applicable). Promotion of products for off-label uses in the United States can also result in false claims litigation under federal and state statutes, which can lead to consent decrees, civil monetary penalties, restitution, criminal fines and imprisonment, and exclusion from participation in Medicare, Medicaid and other federal and state healthcare programs. Aegerion was the subject of such investigations and enforcement in connection with the investigations into Juxtapid and the related Aegerion Settlements. Cooperation with such investigations and negotiation of, and compliance with, the settlement has been and will continue to be costly and burdensome on our management and other resources.
 
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Any future investigations and litigation involving us could have a material adverse effect on our business, reputation, financial condition, results of operations and prospects. It could also distract our management from operating the business and may be disruptive to employees, leading to further employee attrition. In addition, the Aegerion Settlements have impacted, and may continue to impact, our reputation and the willingness of some physicians to prescribe our licensed products.
 
If we fail to comply with UK, EU or U.S. privacy and data security laws and regulations, we may be subject to civil and criminal penalties and other liability.
 
We are also subject to laws and regulations covering data privacy and the protection of health-related and other personal information. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which may affect our business, including recently enacted laws in many jurisdictions where we operate. The collection and use of personal health data in the European Union is governed by the provisions of the General Data Protection Regulation (EU) 2016/679 (“GDPR”). The GDPR, which is wide-ranging in scope and includes extraterritoriality provisions that apply to certain entities located outside of the European Union, imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, notification of data processing obligations to the competent national data protection authorities and the security and confidentiality of the personal data, and substantial fines for breaches of the data protection rules.
 
The GDPR also imposes strict rules on the transfer of personal data out of the European Union to other countries (including the United States). Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States may result in large fines and other administrative penalties: a failure to comply could result in fines up to the greater of 4% of annual worldwide turnover for the preceding financial year or €20 million, whichever is greater, with infringements being grouped into tiers which attract different maximum fine levels. Turnover in this context may include not only the entity in breach but also other group entities. Recent enforcement actions against multinational companies have resulted in significant fines.
 
Following the UK's withdrawal from the European Union and the EEA, companies have to comply also with the UK’s data protection laws (the UK GDPR, which is based on the EU GDPR), which has the ability to separately fine up to the greater of £17.5 million or 4% of global turnover.
 
While we have taken steps to comply with the EU GDPR and the UK GDPR, we cannot assure you that our efforts to achieve and remain in compliance have been or will continue to be fully successful. The GDPR regulations may impose additional responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms ensuring compliance with these or new data protection rules. This may be onerous and adversely affect our business, financial condition, results of operations and prospects.
 
In addition, we obtain patient health information from most healthcare providers that prescribe our products and research institutions with which we collaborate, and they are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) in the United States. Although we are not directly subject to HIPAA other than with respect to providing certain employee benefits, we could potentially be subject to criminal penalties if we knowingly obtain or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.
 
Failure to comply with healthcare laws and laws and regulations covering data privacy and the protection of health-related and other personal information could result in government enforcement actions, which could include civil or criminal penalties, private litigation and adverse publicity and could negatively affect our business, financial condition, results of operations and prospects.
 
Our relationships with customers and payers in the United States are subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, any breaches of which could expose us to criminal sanctions, civil penalties, contractual damages and reputational harm, could diminish future earnings and could prevent us from achieving our expected financial results.
 
Our arrangements with third-party payers and customers in the United States expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, including the federal healthcare Anti-Kickback Statute, the False Claims Act, HIPAA and the Physician Payment Sunshine Act, and similar state and foreign laws and regulations that may regulate the business or financial arrangements and relationships through which we market, sell and distribute our products. The number and complexity of both federal and state laws continue to increase, and additional governmental resources are being used to enforce these laws and to prosecute companies and individuals who are believed to be violating them.
 
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In March 2010, the PPACA was passed, which substantially changes the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical industry. The PPACA, among other things: (i) addresses a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; (ii) increases the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations; (iii) establishes annual fees and taxes on manufacturers of certain branded prescription drugs; (iv) expands the availability of lower pricing under the 340B drug pricing program by adding new entities to the program; and (v) establishes a new Medicare Part D coverage gap discount program effective 2019, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D. The PPACA also includes a number of provisions aimed at strengthening the government’s ability to pursue anti-kickback and false claims cases against pharmaceutical manufacturers and other healthcare entities, including substantially increased funding for healthcare fraud enforcement activities, enhanced investigative powers, and amendments to the False Claims Act that make it easier for the government and whistleblowers to pursue alleged violations of the Anti-Kickback Statute, the Federal Food, Drug, and Cosmetic Act (“FDCA”), the False Claims Act and other relevant laws. While the evolving nature of this regulatory framework makes it difficult to predict what effect the framework and any recent or future changes will have on our business, we anticipate that government scrutiny of pharmaceutical sales and marketing practices will continue for the foreseeable future, and the risk of government investigations and enforcement actions will continue. For example, federal enforcement agencies recently have shown interest in, and engaged in enforcement actions against, pharmaceutical companies’ product and patient assistance programs, including manufacturer reimbursement support services and relationships with specialty pharmacies, as well as contributions by companies to third-party 501(c)(3) charitable organizations that assist patients in accessing treatment for certain diseases and conditions. This was also a part of the Juxtapid investigations, including certain contributions that were not resolved in the Aegerion Settlements. Some of these investigations have resulted in significant civil and criminal settlements. Responding to a government investigation or enforcement action would be expensive and time consuming and could have a material adverse effect on our reputation, business, financial condition, results of operations and prospects.
 
Anti-bribery rules in many jurisdictions also prohibit the offer of kick-backs and other inappropriate inducements to prescribe.
 
We are subject to the UK Bribery Act, the U.S. Foreign Corrupt Practices Act, and other anti-corruption laws, export control laws, import and customs laws, trade and economic sanctions laws and other laws which govern our operations.
 
Our operations are subject to anti-corruption laws, including the UK Bribery Act, the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”), the U.S. domestic bribery statute, the U.S. Travel Act, and other anti-corruption laws that apply in countries where we conduct business. The UK Bribery Act, the FCPA and other anti-corruption laws generally prohibit us and our employees and intermediaries from authorizing, promising, offering or providing, directly or indirectly, improper or prohibited payments, or anything else of value, to government officials or other persons to obtain or retain business or gain some other business advantage. Under the UK Bribery Act, we may also be liable for failing to prevent a person associated with us from committing a bribery offense. We and our commercial partners operate in a number of jurisdictions that pose a high risk of potential UK Bribery Act or FCPA violations, and we also participate in collaborations and relationships with third parties whose corrupt or illegal activities could potentially subject us to liability under the UK Bribery Act, FCPA or local anti-corruption laws, even if we did not explicitly authorize or have actual knowledge of such activities. In addition, we cannot predict the nature, scope or effect of future regulatory requirements on our international operations or the manner in which existing laws might be administered or interpreted.
 
We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the United Kingdom and the United States, and authorities in the European Union, including applicable export control regulations, economic sanctions and embargoes on certain countries and persons, anti-money laundering laws, import and customs requirements and currency exchange regulations (collectively, “Trade Control Laws”).
 
There is no assurance that we will be completely effective in ensuring compliance with all applicable anti-corruption laws, including the UK Bribery Act and the FCPA, or other legal requirements, including Trade Control Laws. If we are not in compliance with the UK Bribery Act, the FCPA and other anti-corruption laws or Trade Control Laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse effect on our business, financial condition, results of operations and liquidity. Likewise, any investigation of any potential violations of the UK Bribery Act, the FCPA, other anti-corruption laws or Trade Control Laws by the United Kingdom, United States, or other authorities could also have an adverse impact on our reputation, business, financial condition, results of operations and prospects.
 
If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs in the United States, we could be subject to additional reimbursement requirements, penalties, sanctions and fines which could materially and adversely affect our business, financial condition, results of operations and prospects.
 
We participate in various government programs and contracts that require us to calculate and report certain prices for our products to government agencies or provide rebates or discounted pricing on products purchased to certain purchasers or government payers. The requirements for calculating prices and rebates are complex and subject to change. Changes to such requirements may affect our business and operations. We may also have reimbursement obligations or be subject to penalties if we fail to provide timely and accurate information to the government, pay the correct rebates or offer the correct discounted pricing.
 
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To maintain coverage of products under the Medicaid Drug Rebate Program and Medicare Part B, we will be required to extend significant discounts to certain “covered entities” (defined by statute to include certain types of hospitals and other healthcare providers that receive federal grants) that purchase products under the 340B Program. The 340B Program requires participating manufacturers to agree to charge such covered entities no more than the 340B “ceiling price” for the manufacturers’ covered outpatient drugs. The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program. Orphan drugs, such as Myalept and Juxtapid, are exempt from the ceiling price requirements for drugs purchased by certain covered entities (i.e., rural referral centers, sole community hospitals, critical access hospitals and freestanding cancer hospitals). Because of our participation in the Medicaid Drug Rebate Program, we are required to pay a rebate for each unit of metreleptin or lomitapide reimbursed by a state Medicaid program as a condition to avail us of federal funds to the states for our drugs under Medicaid and Medicare Part D.
 
Pricing and rebate calculations vary among products and programs. The calculations are complex and often subject to interpretation by governmental or regulatory agencies and the courts. For example, the Medicaid rebate amount is computed each quarter based on our submission to the Centers for Medicare & Medicaid Services (“CMS”) of our average manufacturer price and best price for the quarter. If we become aware that reporting for prior quarters was incorrect or has changed as a result of recalculation of pricing data, we must resubmit the corrected data for a period not exceeding 12 quarters from the quarter in which the data was originally due. Such restatements and recalculations would serve to increase our costs for complying with the laws and regulations governing the Medicaid Drug Rebate Program. Any corrections to our rebate calculations could result in an overage or underage in our rebate liability for past quarters, depending on the nature of the correction. Price recalculations also may affect the price that we will be required to charge certain safety net providers under the Public Health Service 340B drug discount program.
 
If we fail to comply with our reporting and payment obligations under the Federal Supply Schedule pricing program, we could be subject to penalties.
 
Federal Supply Schedule (“FSS”) contracts are federal procurement contracts that include standard government terms and conditions, separate pricing for each product, and extensive disclosure and certification requirements. All federal agencies and some non-federal entities are authorized to access FSS contracts. FSS contractors are permitted to charge FSS purchasers other than the four federal agencies “negotiated pricing” for covered drugs that is not capped by the statutory Federal Ceiling Price (“FCP”); instead, such pricing is negotiated based on a mandatory disclosure of the contractor’s commercial “most favored customer” pricing. Moreover, all items on FSS contracts are subject to a standard FSS contract clause that requires FSS contract price reductions under certain circumstances where pricing to an agreed “tracking” customer is reduced.
 
In July 2016, Aegerion concluded negotiations with the Department of Veterans Affairs (“VA”), and on August 15, 2016, Aegerion secured an FSS contract for both Myalept and Juxtapid. Under this program, we are obligated to make Myalept and Juxtapid available for procurement on an FSS contract at a negotiated price and also charge a price to four federal agencies (the VA, Department of Defense, Public Health Service and Coast Guard) that is no higher than the statutory FCP, which we calculate and report to the VA on a quarterly and annual basis. If we fail to comply with our reporting and payment obligations under the FSS pricing program, we could be subject to penalties in the future, which may have a material and adverse effect on our business, financial condition and results of operations.
 
If we overcharge U.S. government payers for our products, or if we fail to correctly and timely report state drug pricing changes, we may be found liable and could be subject to penalties for errors associated with the submission of pricing data.
 
To maintain coverage of products under the Medicaid Drug Rebate Program and Medicare Part D and when purchased by the Department of Veterans Affairs, Department of Defense, Public Health Service and Coast Guard, typically a pharmaceutical company must participate in the FSS.
 
In addition to the FSS contract with the VA, we also participate in the Tricare Retail Pharmacy program, under which we pay quarterly rebates on utilization of Myalept and Juxtapid when the products are dispensed through the Tricare Retail Pharmacy network to Tricare beneficiaries.
 
If we are found to have knowingly submitted false average manufacturer price or best price information to the government, we may be liable for civil monetary penalties in the amount of $100,000 per item of false information. Failure by us to submit monthly or quarterly average manufacturer price and best price data on a timely basis could result in a civil monetary penalty of $10,000 per day for each day the submission is late beyond the due date. In the event that CMS were to terminate the rebate agreement, no federal payments would be available under Medicaid or Medicare Part D for our products. In addition, if we overcharge the government in connection with the FSS contract or under any other government program, we will be required to refund the difference to the government. Failure to make necessary disclosures or to identify contract overcharges could result in allegations against us under the federal civil False Claims Act and other laws and regulations.
 
If we fail to correctly and timely report state drug pricing changes on a State by State basis as applicable, we may be liable to pay fines which may have a material and adverse effect on our business, financial condition and results of operations.
 
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Risks Related to our Reliance on Third Parties
 
We rely on third parties to conduct clinical trials and registry studies and perform related services, and those third parties may not perform satisfactorily, including by failing to meet established deadlines for the completion of such clinical trials and compliance with post-marketing requirements.
 
We do not have the resources to independently conduct clinical trials or registry studies or perform pharmacovigilance and REMS program and other risk management plan monitoring and reporting, and we rely on third parties, such as contract research organizations, medical institutions, academic institutions, clinical investigators, specialty pharmacies and other third-party service providers, to perform these functions. Reliance on third parties for these functions reduces our control over such functions. However, if we sponsor clinical trials, we are responsible for ensuring that each of the sponsored clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Our reliance on third parties does not relieve us of these responsibilities and requirements. Furthermore, these third parties may have relationships with other entities, some of which may be our competitors.
 
If the third parties we rely upon fail to successfully carry out their contractual duties or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the data they provide is compromised or delayed due to the failure to adhere to regulatory requirements or clinical trial protocols, or for other reasons, our current marketing authorizations may be revoked, suspended, or revised to be more stringent. Further, our development programs, including any potential clinical studies, may be extended, delayed or terminated. If we were to experience an unexpected loss of supply of any of our product candidates or any of our future product candidates for any reason, whether as a result of manufacturing, supply or storage issues or otherwise, we could experience delays, disruptions, suspensions or terminations of, or be required to restart or repeat, any pending or ongoing clinical trials. Additional marketing approvals for metreleptin, Mycapssa® or lomitapide may be delayed or denied in the targeted indication or jurisdiction, and efforts to successfully commercialize Oleogel-S10 if approved, metreleptin, Mycapssa, lomitapide, or any other product for targeted indications or in the targeted jurisdiction may be delayed or unsuccessful. Should this occur, any existing approvals could be negatively impacted, which could materially and adversely affect our commercialization efforts.
 
We depend on third-party manufacturers to produce the drug substance and the drug product for lomitapide, Mycapssa® and metreleptin sold globally, as well as the drug product for commercial supply and clinical trials. We also depend on third-party manufacturers to produce the drug product for Oleogel-S10. Even though we have reserve stock, interruption in supply could materially and adversely affect sales.
 
We have limited internal manufacturing facilities for the production of the active pharmaceutical ingredient in Oleogel-S10. We employ a small number of personnel with manufacturing experience but we are currently dependent upon contract manufacturers to produce metreleptin, Mycapssa® and lomitapide and the drug product for commercial supplies and clinical trials, including for Oleogel-S10, if it is approved.
 
Aegerion entered into long-term supply agreements with a manufacturer of metreleptin drug substance and a manufacturer of metreleptin drug product. In February 2017, the original contract manufacturer for metreleptin drug product received a warning letter from the FDA citing significant violations of current Good Manufacturing Practice (“cGMP”) regulations at the manufacturing facility where metreleptin drug product was manufactured. We do not have any other agreements in place for redundant supply or a second source for drug substance or drug product for our products. Any interruption, delay or failure to supply our drug product or drug substance for our products from any of our third-party manufacturers could have a material and adverse impact on our sales, depending upon the length of interruption, which in turn may have a material adverse effect on our business, financial condition, results of operations and prospects.
 
If we are unable to maintain arrangements for third-party manufacturing, are unable to do so on commercially reasonable terms, or are unable to obtain timely regulatory approvals in connection with contract manufacturers, we may not be able to complete development of our product candidates or successfully commercialize our products. We may incur significant added costs and substantial delays in identifying and qualifying any replacement manufacturers, and in obtaining regulatory approval to use such replacement manufacturer in the manufacture of the products. Any such delays could result in significant delay in the supply of drug product for an ongoing clinical trial due to the need to replace a third-party manufacturer and could delay completion of the trial. If for any reason we are unable to obtain adequate supplies of lomitapide, Mycapssa® or metreleptin, or the drug substances used to manufacture them, it will be more difficult or impossible for us to compete effectively, generate revenues, meet expectations for financial performance and further develop our products. In addition, if we are unable to assure a sufficient quantity of the drug for patients with rare diseases or conditions, we may lose any Orphan Drug exclusivity to which our product otherwise would be entitled.
 
We are subject to minimum production levels with some of these manufacturing companies. If we cannot sell sufficient levels of metreleptin, Mycapssa® or lomitapide, this will result in excess levels of inventory being manufactured and resulting obsolescence.
 
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If our third-party manufacturers are unable to comply with applicable regulatory requirements, unable to source sufficient raw materials, experience manufacturing or distribution difficulties, or are otherwise unable to manufacture and distribute sufficient quantities to meet demand, our commercialization efforts may be materially harmed.
 
While we manufacture the drug substance for Oleogel-S10 on our own, we do not own or operate manufacturing facilities for the production of clinical or commercial supplies of our products. We have limited personnel with experience in drug manufacturing and lack the resources and the capabilities to manufacture any of our product candidates on a clinical or commercial scale. We currently rely on third parties for supply of drug substances and drug products, and our strategy is to outsource all manufacturing of our product candidates and products to third parties.
 
We rely on contract manufacturers to consistently produce drug substances and drug products to required specifications, including those imposed by the FDA, the EMA and other regulatory authorities. There can be no assurance that our contractors will consistently be able to produce commercial supplies of drug substance or drug product meeting the approved specifications. A number of factors could cause production interruptions at the facilities of the contract manufacturers, including equipment malfunctions, facility contamination, labor problems, raw material shortages or contamination, the impact of the COVID-19 pandemic, natural disasters, disruption in utility services, terrorist activities, regulatory actions resulting from failure to comply with cGMP, human error or disruptions in the operations of the suppliers. Aegerion experienced failures by third-party manufacturers to produce products that meet specifications in the past, and any future failure by third-party manufacturers to produce products that meet specifications could lead to a shortage of lomitapide, Mycapssa® or metreleptin which could have a material and adverse impact on our sales, depending upon the length of interruption delay or failure, which in turn may have a material adverse effect on our business, financial condition, results of operations and prospects.
 
The FDA, the EMA and other regulatory authorities require that drug products be manufactured according to cGMPs relating to methods, facilities and controls used in the manufacturing, processing and packaging of the product, which are intended to ensure that drug products are safe and that they consistently meet applicable requirements and specifications. Our contract manufacturers are subject to periodic announced and unannounced inspections by the FDA to assess compliance with cGMP requirements. If an FDA inspection on a manufacturer’s facilities reveals conditions that the FDA determines do not comply with applicable regulatory requirements, the FDA may issue observations through a Notice of Inspectional Observations, commonly referred to as a “Form FDA 483” report. If observations in the Form FDA 483 Report are not addressed in a timely manner and to the FDA’s satisfaction, the FDA may issue a Warning Letter or proceed directly to other forms of enforcement action. Any failure by third-party manufacturers to comply with cGMP or to provide adequate and timely corrective actions in response to deficiencies identified in a regulatory inspection could result in further enforcement action that could lead to a shortage of products and harm our business, including to withdrawal of approvals previously granted, seizure, injunction or other civil or criminal penalties. The failure of any third-party manufacturer to address any concerns raised by the FDA or foreign regulators could also lead to plant shutdown or the delay or withholding of product approval by the FDA in additional indications, or by foreign regulators in any indication. Certain countries may impose additional requirements on the manufacturing of drug products or drug substances, and on third-party manufacturers, as part of the regulatory approval process for products in such countries. The failure by us or our third-party manufacturers to satisfy such requirements could impact our ability to obtain or maintain approval of our products in such countries.
 
The manufacture of biologic pharmaceuticals, such as metreleptin, is more difficult and riskier than the manufacture of small molecule pharmaceuticals, such as lomitapide and Mycapssa. The process of manufacturing biologics is highly susceptible to product loss due to contamination, oxidation, equipment failure or improper installation or operation of equipment, or vendor or operator error. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in metreleptin or the facilities of the contract manufacturer, we may need to cease the manufacture of metreleptin for an extended period of time to investigate and remediate the contaminant. A contamination, recall, raw material shortage, or other supply disruption could adversely impact or disrupt commercial manufacturing of metreleptin or could result in a withdrawal of metreleptin from the market. Any such disruption, in turn, could adversely affect our ability to satisfy demand for metreleptin, which could materially and adversely affect our business, financial condition, results of operations and prospects.
 
We may be unable to scale up our manufacturing capability or successfully outsource manufacturing to third-party contractors.
 
We may underestimate the cost, time or complexity of installing or operating the manufacturing equipment required for our business. There also is a risk that any new equipment may not function as expected once installed. We may decide to outsource future manufacturing needs to third parties but may be unable to find sufficient supply for our manufacturing needs. Any inability to successfully scale up manufacturing capability, including that of Oleogel-S10, or meet manufacturing need through third-party contractors may materially and adversely affect our business, financial condition, results of operations and prospects.

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We rely on third parties for distribution services around the world, and a failure to manage these third parties could harm our business.
 
We use, and plan to use, third parties to provide warehousing, shipping, third-party logistics, invoicing, collections and other distribution services on our behalf in the United States and in other countries throughout the world. Our failure to establish, maintain and finance the capabilities to sell, market or distribute our products, either through our own commercial infrastructure or through arrangements with third parties, and to effectively manage such third parties, could result in us not being able to successfully sell our products and could, as a result, have a material adverse effect on business, financial condition, results of operations and prospects.
 
If our licensees do not successfully commercialize the licensed products, we will not receive anticipated royalties and other payments and our results of operations will suffer.
 
The product sales, milestone payments and royalties that we may be entitled to receive under our license arrangements with Shionogi and Recordati are dependent on such licensees’ ability to successfully develop and commercialize the licensed products for their respective indications. Our licensees may not succeed in their product development efforts. It is possible that our licensees may be unable to obtain regulatory approval of product candidates using our technologies or successfully market and commercialize any such products for which regulatory approval is obtained. We have no control over these licensees and the contractual provisions may not provide adequate remedies in the event that a licensee fails to satisfy its obligations and commitments under the licensing arrangements. In addition, we have limited experience in maintaining multiple licensing arrangements and may be unable to adequately administer or monitor, or comply with, these arrangements, especially in light of limited personnel and cash resources, and these or future license arrangements may require us to provide services, supply or other efforts to the licensee. For example, under the license agreement with Recordati, we are required to provide supply product to Recordati. Moreover, the licensees have the ability to terminate or elect not to renew their respective license agreement in certain circumstances, including if we materially breach the agreement. A decision by a licensee to terminate its relationship, or a failure by a licensee to successfully develop or commercialize the licensed products or indications, could materially and adversely affect our business, financial condition, results of operations and prospects.
 
Risks Related to our Intellectual Property
 
It may be challenging or costly for us to obtain, maintain, enforce and defend our intellectual property rights. Failure to obtain or protect these rights could adversely affect our business and our ability to compete.
 
Our success and ability to compete effectively are in large part dependent upon exploitation of proprietary technologies and product candidates that have been developed internally or have been acquired or in-licensed, our ability to protect and enforce our intellectual property rights so as to preserve our exclusive rights in respect of our technologies and product candidates, and our ability to preserve the confidentiality of our know-how. We rely primarily on exclusivity provided by a combination of Orphan Drug approval, data exclusivity, patent rights, trade secrets and confidentiality to protect our intellectual property rights. There can be no assurance that patents pending or future patent applications will be issued, or that the lack of any such patents will not have a material adverse effect on our ability to develop and market our proposed candidates, or that, if issued, we would have the resources to protect or enforce any such issued patent. Also, no assurance can be given that we will develop technologies or candidates that are patentable or that patents will be sufficient in their scope to provide protection for our products or intellectual property rights against third parties. Nor can there be any assurance as to the ownership, validity, patentability, enforceability or scope of any patents that have been, or may in the future be, issued to us or that claims with respect thereto will not be asserted by third parties. Furthermore, we may develop technology important to our businesses that we cannot successfully patent due to the existence of prior art. Lojuxta did not receive Orphan Drug approval in Europe and relies on data exclusivity and patent protection. This may make our reimbursement discussions more difficult. In addition, there can be no assurance that we will be able to obtain and/or maintain Orphan Drug Designation or Orphan Drug approval for our product candidates. For example, the EMA’s COMP reviews an orphan design of a product if it is approved for a marketing authorization; for a product to benefit from market exclusivity, it must maintain its orphan designation at the time of marketing authorization review by the EMA and approval by the EC.
 
The pharmaceutical industry is characterized by extensive litigation regarding patents and other intellectual property rights. For example, on August 28, 2015, the Coalition for Affordable Drugs VIII L.L.C. filed two separate inter partes review (“IPR”) petitions with the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office, challenging the validity of U.S. Patent Nos. 7,932,268 and 8,618,135, which are directed to methods-of-use for lomitapide. Although the PTAB ruled in our favor, third parties may obtain patents in the future and allege that our products or the use of our technologies infringe their patent claims or that we are employing their proprietary technology and other intellectual property without authorization. Likewise, third parties may infringe upon our existing or future patents.
 
We also rely on copyright, trademark and trade secret laws, as well as confidentiality procedures and agreements, non-compete and work for hire invention assignment agreements and licensing arrangements with our employees, consultants, contractors, customers and vendors, to establish and protect our rights to our technology and other developments and, to the best extent possible, control the access to and distribution of our technology, software, documentation and proprietary information. We also have procedures and policies in place against the misuse of third party rights.
 
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While we employ physical and electronic protective measures to safeguard our technology and other proprietary information, it may be possible for a third party to copy or otherwise obtain and use our technology without authorization. Once granted, a patent can be challenged both in the patent office and in the courts by third parties. Third parties can bring material and arguments, for example, that the patent office granting the patent may not have been aware of. Therefore, issued patents may be found by a court of law or by the patent office to be invalid or unenforceable or in need of further limitation.
 
In particular, our commercial success depends on our ability to obtain and maintain the following intellectual property protections:
 

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product, composition of matter, formulation and method of use patents in Europe, the United States and other key global markets for existing and future products;
 

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Orphan Drug exclusivity granted to our products because they aim to treat rare diseases and conditions, which entitles us to: exclusivity protections for a period of up to seven years after approval in the United States (although metreleptin should also qualify for a 12-year period of exclusivity from biosimilar or interchangeable products) and up to ten years in the European Union and Japan; as well as certain financial incentives. The ten-year Orphan Drug exclusivity period in the European Union can be extended a further two years upon successful completion of a PIP. Conversely, the ten-year exclusivity period may be reduced to six years, if at the end of the fifth year, it is established that a product no longer fulfills the criteria for Orphan Drug Designation;
 

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medicinal products granted a marketing authorization in the European Union entitles us to eight years’ data exclusivity after approval, and up to ten years’ market exclusivity protection which can be extended for a further year if a new indication is granted; and
 

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available extensions to the terms of our Orphan Drug exclusivity, product and methods of use patents in Europe and United States.
 
If we lose the competitive advantage provided by these intellectual property and other protections, we will not be able to generate sustainable revenues or profits from our product portfolio. If we do not adequately protect and enforce our intellectual property, competitors may erode or negate any competitive advantage we may have, which could materially harm our business and ability to achieve expected financial results.
 
We may infringe or be alleged to infringe the intellectual property rights of others, which may prevent or delay product development and commercialization efforts, requiring us to expend resources on litigation or other resolutions, which may materially and adversely affect our business.
 
Our success will depend in part on our ability to operate without infringing the intellectual property and other proprietary rights of third parties. Identification of third-party patent rights that may be relevant to our products and proprietary technology is difficult due to differences in terminology among patents, incomplete databases and the difficulty and uncertainty in assessing the meaning of patent claims. There could be issued patents of which we are or were not aware that our products infringe. There also could be patents that we believe our products do not infringe, but that our products may ultimately be found to infringe. Moreover, a patent application may be maintained in secrecy until a patent on the application is issued. The publication of discoveries in the scientific or patent literature frequently occurs later, often substantially later, than the date on which the underlying discoveries were made and patent applications were filed. Because patents can take many years to issue, there may be currently pending applications of which we are unaware that may later result in issued patents that our products will be found to infringe. For example, there may exist pending applications that provide support or can be amended to recite a claim that is granted and which our products are later found to infringe. Proceedings involving our patents or patent applications or those of others could:
 

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put one or more of our patents at risk of being invalidated, rendered unenforceable or interpreted narrowly;
 

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adversely impact our ability to obtain patent protection for our inventions relating to our products;
 

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result in monetary damages, injunctive relief or other harm to our competitive position, including by limiting marketing and selling activities, increasing the risk for generic competition, limiting development and commercialization activities or requiring us to obtain licenses to use the relevant technology (which licenses may not be available on commercially reasonable terms, if at all); and
 
otherwise negatively impact the enforceability, validity or scope of protection provided by the patents relating to the products.

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We may not have the resources to adequately defend claims by third parties in one or more such proceedings, and even if successful in any such proceedings, we would incur substantial costs and divert management’s time and attention in pursuing these proceedings, putting further strain on our resources, which could have a material adverse effect on our business, financial condition, results of operations and prospects. If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, defend an infringement action or challenge the validity of the patents in court or another venue. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion.
 
In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may:
 

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incur substantial monetary damages;
 

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encounter significant delays in expanding the market of our products; and
 

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be precluded from manufacturing or selling any products;
 
which, in each case, could have a material adverse effect on our business, financial condition, results of operations and prospects.
 
Our existing patent protections will expire and protection for these rights may not be extended.
 
We depend on patent protection to provide exclusive marketing rights for our products. Loss of patent protection for a product typically leads to a significant and rapid loss of sales for that product as lower-priced generic versions of that drug become available. The expiration of patent protection for any product that contributes significantly to our sales can have a material and adverse effect on our business, cash flow, results of operations, financial position and prospects.
 
The Oleogel-S10 patent portfolio includes two U.S. patents covering oleogel compositions and three U.S. patents covering treatment of EB. One U.S. patent covering oleogel compositions provides exclusivity in the United States into 2025 (compositions) and one U.S. patent covering oleogel compositions provides U.S. exclusivity until 2039. Two U.S. patents covering the treatment of EB provide exclusivity in the U.S. until 2030 and one U.S. patent covering the treatment of EB provides U.S. exclusivity until 2039.  The existing Orphan Drug designation for Oleogel-S10 would extend Orphan Drug exclusivity for Oleogel-S10 seven years from the approval date in the United States.
 
The non-U.S. patents for Oleogel-S10 include European patents covering the Oleogel-S10 composition and methods of healing wounds with Oleogel-S10. Supplementary protection certificates have been obtained in various EU countries, extending the expiration of the composition patents in the European Union from 2025 to 2030. The European method of use patents expire in 2030. There are pending applications covering the Oleogel S10 composition and its use in the treatment of EB in Australia, Brazil, Canada, China, Colombia, Europe, India, Israel, Japan, South Korea, Mexico, Russia, Singapore and South Africa, which if granted would expire in 2039.
 
The AP103 patent portfolio includes one granted European patent (validated in various European Patent Organisation member states including the United Kingdom, Germany, France, Italy and Spain) claiming highly branched poly β-amino ester (“HPAE”) polymers and polyplexes comprising HPAE polymers, and transfection methods using such polymers, as well as pending U.S. and European  applications. These patents and applications have been in-licensed from the University College Dublin and are expected to provide exclusivity into 2035. We have filed U.S. and European applications covering a proprietary genus of HPAEs and novel HPAE polyplexes, as well as U.S. and European applications claiming a proprietary and scalable HPAE polyplex manufacturing methods, which if granted would expire in 2039.
 
Our lomitapide patent portfolio includes eight Approved Drug Products with Therapeutic Equivalence Evaluations (“Orange Book”) listed patents licensed from the University of Pennsylvania (“UPenn”) claiming methods of treatment that provide protection from 2025 to 2027 in the United States and into 2025 in Europe, Australia, Japan, South Korea, Canada and New Zealand. Applications licensed from UPenn covering lomitapide methods of treatment are pending in the U.S. and India, which if granted would expire in 2025. Supplementary protection certificates (“SPCs”) have been granted in 26 European countries (including the United Kingdom, Germany, France, Italy and Spain) extending patent protection into 2028. Two additional SPCs applications are pending.
 
The metreleptin patent portfolio includes two issued U.S. patents claiming methods of treating lipoatrophy, two granted European patents (“EP patents”) claiming methods of treatment (validated in numerous European countries, including the United Kingdom, Germany, France, Italy and Spain), granted patents claiming methods of treatment in other jurisdictions including Australia, Canada, and Japan, all of which have been licensed to Aegerion or are owned by Aegerion. The granted patents provide protection from 2022 to 2027 in the United States and into 2022 in Europe, Aegerion received approval for marketing authorization by the EC for metreleptin in the European Union, under the brand name Myalepta, as replacement therapy to treat complications of leptin deficiency in patients with GL and PL. Metreleptin has orphan exclusivity in the European Union until July 2028. The ten-year Orphan Drug exclusivity period in the European Union can be extended a further two years upon successful completion of a PIP.
 
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Our Mycapssa® patent portfolio includes eight Approved Drug Products with Therapeutic Equivalence Evaluations (“Orange Book”) listed patents, including three formulation and one acromegaly use patents which expire in 2029, three acromegaly use patents which expire in 2036, one octreotide method of use patent expiring 2040, as well as one pending U.S. application which covers NET/VIP use which if allowed would expire in 2037. In Europe, there are two granted composition patents which expire in 2029, one pending acromegaly use application, which if allowed would expire 2036 and one NET/VIP use application which if allowed would expire in 2037.
 
The loss of patent protection could have a material adverse effect on our business, financial condition, results of operations and prospects.
 
Previously granted regulatory exclusivity will expire and we may not be entitled to such exclusivity in the future.
 
Orphan Drug Designation can confer various benefits, depending on the jurisdiction, including market exclusivity and regulatory and fiscal incentives. Because our products and product candidates treat rare diseases and conditions that affect relatively small patient populations, we depend on the financial incentives and market exclusivity provided by Orphan Drug Designation to generate revenue from our product portfolio and protect our products from competition from lower-priced generic versions of such drugs. The Orphan Drug Designation in the United States for Juxtapid for the treatment of HoFH expired on December 21, 2019, and Orphan Drug Designation for Myalept for treatment of GL expired in 2021. Aegerion also obtained Orphan Drug Designation for metreleptin for the treatment of PL in the United States, which provides seven years exclusivity after approval for this indication in the United States. In 2012, metreleptin was granted Orphan Drug Designation by the EC for the treatment of Barraquer-Simons syndrome, Berardinelli-Seip syndrome, Lawrence syndrome and familial PL, which is expected to expire ten years from approval of any marketing authorization(s) for such indication(s) by the EMA. The EC provided that at the end of the fifth year into the Orphan Drug exclusivity period it is established that metreleptin continues to fulfill the criteria for Orphan Drug Designation. If not, such exclusivity period is reduced to six years. Following approval by the EMA in July 2018, metreleptin was entitled to ten years of market and Orphan Drug exclusivity in the European Union. In the U.S. Mycapssa® may benefit from Orphan Drug exclusivity for seven years from approval in June 2020. The grant remains pending from FDA. Mycapssa® has been granted Orphan Designation in Europe for the treatment in acromegaly.  Maintenance of this orphan designation according to the relevant requirements will be assessed by COMP during the ongoing MAA procedure. Upon the expiration of the Orphan Drug exclusivity periods for our products, we may face substantial competition from generic drugs which could materially and adversely affect the price we are able to receive for the products and its business. Furthermore, the Orphan Drug Designation may not be available in the future by virtue of a number of factors, such as changes in law or regulation, increased competition in the Orphan Drug market, clinical and technological developments, among others. The designation could also result in significant payments to meet ongoing compliance obligations. The expiration or loss of Orphan Drug Designation in respect of one of our products or future products means that financial incentives by governments and non-government entities may not be available, which may have a material adverse effect on our business, financial condition, results of operations and prospects.
 
We also rely on the data and market exclusivity granted to innovative medicinal products in the European Union to protect our products from competition from lower-priced generic versions of the drugs. Innovative medicinal products authorized in the European Union on the basis of a full marketing authorization application (as opposed to an application for marketing authorization that relies on data in the marketing authorization application for another, previously approved medicinal product) are entitled to eight years’ data exclusivity from the date of notification of the marketing authorization. During this period, applicants for approval of generics of these innovative products cannot rely on data contained in the marketing authorization application submitted for the innovative medicinal product. Innovative medicinal products are also entitled to ten years’ market exclusivity. During this ten-year period, no generic medicinal product can be placed on the EU market. The ten-year period of market exclusivity can be extended to a maximum of 11 years if, during the first eight of those ten years, the marketing authorization holder for the innovative product obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
 
We currently benefit from marketing and data exclusivity periods in the European Union. Metreleptin is entitled to up to ten years of market exclusivity in the European Union from its approval in July 2018, subject to possible reductions to six years when the marketing authorization is renewed if the product no longer meets the criteria for orphan designation. The product is also entitled to eight years' data exclusivity and ten years’ marketing exclusivity in the European Union from its date of authorization. Lomitapide is entitled to eight years’ data exclusivity and ten years’ marketing exclusivity in the European Union from July 31, 2013, the date of the EC’s approval of lomitapide. If the Committee for Orphan Medicinal Products (“COMP”) adopt a positive opinion of the maintenance of the Orphan designation Mycapssa® will be entitled to up to ten years of market exclusivity in the European Union from the date of EC decision. Upon the expiration of these data and market exclusivity periods, in relation to existing and new products we may face substantial competition from generic drugs which could have a material adverse effect on the price we are able to receive for the products and business, which may have a material and adverse effect on our business, financial condition, results of operations and prospects.
 
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Our patents may be challenged, deemed unenforceable, invalidated or circumvented, and if we do not obtain or maintain patent protection for the products, our business may be materially harmed.
 
The patent positions of biotechnology and pharmaceutical companies involve complex legal and factual questions and, therefore, validity and enforceability cannot be predicted with certainty. U.S. patents and patent applications also may be subject to interference or derivation proceedings, ex parte re-examination, IPR and post-grant review proceedings and supplemental examination and may be challenged in district courts. Patents granted in certain other countries may be subjected to opposition, revocation, or the like before various authorities. These proceedings could result in either loss of a patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. In addition, such interference, derivation, re-examination, post-grant review, IPR, supplemental examination, opposition or revocation proceedings may be costly. We will be able to protect our proprietary rights against third parties only to the extent that our proprietary technologies are protected by valid and enforceable patents or are effectively maintained as trade secrets.
 
The degree of future protection for our products and proprietary rights is uncertain, and it cannot be guaranteed that:
 

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we will be able to successfully develop or commercialize our product in some countries before some or all of the relevant patents or regulatory exclusivity expire, or successfully develop or commercialize our product in countries where we do not have any such patent protection or exclusivity;
 

 •
we or our licensors were the first to make the inventions claimed by each of the pending patent applications and patents;
 

 •
we or our licensors were the first to file, or the first inventors 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 that we have licensed will result in issued patents;
 

 •
any of our patents or those we have licensed will be valid or enforceable;
 

 •
we will be able to license the patents or pending patent applications necessary or desirable to enforce or protect our patent rights on commercially reasonable terms or at all;
 

 •
any patents issued to us or to our licensors or 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 be able to develop additional proprietary technologies that are patent eligible or patentable;
 

 •
Orphan Drug exclusivity marketing rights for our products in the United States will be maintained, if, for example, the FDA determines in the future that the request for Orphan Drug Designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition. In addition, the FDA, and the EMA for the European Union, may subsequently approve products with the same active moiety for the same condition if the FDA or the EMA concludes that the later drug is safer, more effective, or makes a major contribution to patient care. Orphan Drug Designation neither shortens the development time nor regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process; or
 

 •
the patents of others will not have an adverse effect on our business.
 
We enjoy only limited geographical protection with respect to certain patents.
 
Filing and prosecuting patent applications and defending patents covering product candidates in all countries throughout the world would be prohibitively expensive. Competitors may use our and our licensors’ technologies in jurisdictions where patent protection has not yet been obtained to develop their own products or may export infringing products to territories where enforcement rights are not as strong as in the United States or Europe. These products may compete with our product candidates, and our intellectual property rights may not be effective or sufficient to prevent such products from competing with our products. Patent applications may be issued in some non-U.S. jurisdictions with different scope as compared with the corresponding U.S. patent, or they may not be granted at all in view of differences in patent law and practice in jurisdictions around the world. Proceedings to enforce our patent rights in other jurisdictions, whether or not successful, could result in substantial costs and divert efforts and attention from other aspects of the business. They could also put our patents and patent applications at risk of being invalidated, denied or interpreted narrowly, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits or have damages or other remedies awarded to us, and any such remedies, if obtained, they may not be commercially meaningful. Accordingly, our intellectual property rights as enforced may be inadequate to obtain a significant commercial advantage and our efforts to protect our intellectual property rights may be unsuccessful or inadequate, which may adversely affect our ability to successfully commercialize our product candidates, which may have a material adverse effect on our business, financial condition, results of operations and prospects. Furthermore, while we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our product candidates. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate, which may have an adverse effect on our ability to successfully commercialize our drug candidates in all of our expected, significant international markets.
 
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Some countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties or laws limiting the enforceability of patents against government agencies or government contractors. In those countries, the value of such patents may be materially diminished at least in those contexts. If we or any of our licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be adversely affected.
 
If we do not obtain protection under the Hatch-Waxman Amendments and similar non-U.S. legislation for extending the term of patents covering our product candidates, our ability to compete effectively could be impaired.
 
Depending upon the timing, duration and conditions of FDA marketing approval of our product candidates, one or more of our U.S. patents may be eligible for patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman Amendments”). The Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved product or method of use as compensation for patent term lost during product development and the FDA regulatory review process. A maximum of one patent may be extended per FDA approved product as compensation for the patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only those claims covering such approved drug product, a method for using it or a method for manufacturing it may be extended. Similar patent term extensions may be available in other jurisdictions. In the European Union, a Supplementary Protection Certificate may be applied for approval to recover some of the time lost between the patent application filing date and the date of first marketing authorization. However, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents, or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than requested. If we are unable to obtain patent term extensions or the term of any such extension is less than requested, the period during which we can enforce our patent rights for that product will be shortened and competitors may obtain approval to market competing products sooner. As a result, our revenue from applicable products could be reduced materially.
 
We applied for supplemental protection in the countries in which Lojuxta is approved, on a country-by-country basis, and have been granted SPCs in 26 European countries (including the United Kingdom, Germany, France, Italy and Spain) extending patent protection into 2028. Two additional SPCs applications are also pending.
 
If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and product portfolio could be significantly diminished.
 
We rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is adequate or obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to protect trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information. For example, the FDA has periodically considered whether to make additional information, such as clinical information, publicly available on a routine basis, and the EMA has considered amplifying its disclosure rules as well. Changes in this regard could mean that information that we may consider to be a trade secret or otherwise confidential and proprietary may have to be publicly disclosed, and it is currently unclear how FDA and the EMA disclosure policies may change in the future. Costly and time consuming litigation could be necessary to enforce and determine the scope of proprietary rights and we may not have adequate resources at the time to enforce our rights. Failure to obtain or maintain trade secret protection could adversely affect our competitive business position and have a material adverse effect on our business, financial condition, results of operations and prospects.
 
If we fail to comply with our obligations in the license agreements for our products or are alleged to have breached such agreements, we could lose license rights that are important to our business, have to make additional payments to our licensors or become involved in costly litigation, which would further reduce cash resources.
 
Our existing license agreements impose various diligence, milestone payment, royalty, insurance, reporting, audit and other obligations on us. If we fail to comply with such obligations or encounters disagreements with its license partners, we could lose license rights that are important to the business. Further, if the license partners allege that a breach of any such license agreements has occurred, defense of such allegations, even if untrue, can be costly to pursue and could lead to litigation or costly settlements, which would be burdensome on our resources. Even if we were able to successfully settle any disagreements or disputes under the license agreements, the settlement arrangements are unlikely to foreclose additional claims from the licensing party or other third parties, and the terms of such settlement could have a material adverse effect on our business, financial condition, results of operations and prospects.
 
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If we fail to comply with the obligations and restrictions under the license agreements, the applicable licensor may have the right to seek financial payments or damages and terminate the license, in which case we may not be able to market the products that are covered by the license, or the licensor might require amendments to the license agreement that are overly burdensome. Further, the terms of such license agreements are intensely negotiated, and therefore tend to be complex, which could lead to differing interpretations by the parties. Any breach or alleged breach (whether intentional or unintentional), or termination, of the license agreements applicable to our products, or any disagreements as to the application of the terms of the agreements with licensing partners, could expose us to considerable costs and expenses as such allegations, terminations or disputes can be costly to remedy or resolve (regardless of the merits), and may not be remedied or resolved in a manner favorable to us, or at all. Any breach or alleged breach of the quantitative or qualitative diligence provisions of these agreements could result in termination of the co-development agreement and loss of the program and also expose us to considerable costs and expenses and any disputes may not be remedied or resolved in a manner favorable to us, or at all. Any such difficulties with the license agreements could have a significant adverse effect on our business.
 
Risks Related to Ownership of our ADSs and our Nasdaq Listing
 
An active and liquid market for our securities may fail to develop, which could harm the market price of our ADSs.
 
Although our ADSs are listed on the Nasdaq, an active trading market for our ADSs may never be sustained. In the absence of an active trading market for our ADSs, investors may not be able to sell their ADSs at the time that they would like to sell.
 
The price and trading volume of our ADSs may be volatile, and purchasers of our ADSs could incur substantial losses.
 
The market price of our ADSs is likely to be volatile and could decline significantly. The stock market in general, and the market for biotechnology and emerging pharmaceutical companies in particular, have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. In addition, our securities have a relatively small public float and may be less liquid and more volatile than securities of companies with broader public ownership. The market price for our ADSs may be influenced by a variety of factors, including:
 

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actual or anticipated variations in our financial condition and operating results;
 

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actual or anticipated changes in our growth rate relative to our competitors;
 

 •
announcements of technological partnerships, innovations or new products by us or our competitors;
 

 •
the success of competitive products or technologies;
 

 •
changes in management and members of our Board;
 

 •
changes in financial estimates or recommendations by securities analysts;
 

 •
changes in the trading volume of our ADSs on the Nasdaq;
 

 •
sales of our ADSs or ordinary shares by executive officers or future holders of our equity securities;
 

 •
announcements or expectations of additional debt or equity financing efforts;
 

 •
unanticipated losses or gains due to unexpected events, including events related to the success of our clinical trials or regulatory approvals;
 

 •
significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors;
 

 •
changes in our accounting policies or practices;
 

 •
disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
 

 •
failure to integrate successfully the Aegerion or Chiasma businesses with ours or to realize anticipated benefits from the integration;
 
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 •
changes in government regulations, including any changes that may affect pricing or reimbursement; and
 

 •
conditions in the financial markets or changes in general economic conditions.
 
These and other market and industry factors may cause the market price and demand for our ADSs to fluctuate substantially.
 
In addition, the trading prices for common stock of other biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic and the extent to which the continuing effects of the pandemic may impact our business and the prices of our ADSs in the future will depend on future developments, which are highly uncertain and cannot be predicted with confidence.
 
The Athyrium Funds hold a significant interest in our company and may be able to influence matters relating to our business.
 
The Athyrium Funds hold approximately 14% of our share capital. The Athyrium Funds are in a position to exert influence over matters requiring approval of the holders of our equity securities and will have the ability to block certain actions requiring shareholder approval, including (but not limited to) disapplication of preemption rights. We are not required to enter and have not entered into a relationship agreement with Athyrium or the Athyrium Funds to manage the relationship between them.
 
The interests of the Athyrium Funds may be different from the interests of other shareholders and, as a result, the Athyrium Funds’ interests in our ADSs, if of sufficient individual or aggregate size, or if aggregated in any circumstances, or should the Athyrium Funds convert their convertible debentures into ADSs, may permit them to effect certain transactions without the support of other holders of our equity securities, or delay or prevent certain transactions that are in the interests of other holders of our equity securities. Decisions made by Athyrium (on behalf of the Athyrium Funds) may therefore influence our business, financial condition, results of operations and prospects. These decisions may also conflict with the interest of other holders of our equity securities and could prevent other holders of our equity securities from receiving a premium on their securities. The market price of our ADSs may decline if Athyrium uses its influence in ways that are or may be adverse to the interests of other holders of our equity securities.
 
We will incur significant increased costs as a result of operating as a U.S. listed public company, and our management will be required to devote substantial time to new compliance initiatives.
 
As a U.S. publicly traded company, and particularly after we cease to be an “emerging growth company” as defined in the JOBS Act, we will incur significant legal, accounting and other expenses that we did not incur prior to the listing of our ADSs in the United States as a result of reporting requirements under the Exchange Act. In addition, the federal securities laws, including the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), and rules subsequently implemented by the SEC and the Nasdaq Stock Market LLC have imposed various requirements on public companies, including requirements to file annual and event-driven reports with respect to our business and financial condition, and to establish and maintain effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, these regulations may make it more difficult to attract and retain qualified members of the Board and various corporate committees and obtaining director and officer liability insurance will be more expensive. We may not be able to produce reliable financial statements or file these financial statements as part of a periodic report in a timely manner with the SEC or comply with the Nasdaq listing requirements. In addition, we could make errors in our financial statements that could require us to restate our financial statements.
 
Shareholder activism, the current political environment, and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.
 
We must maintain effective internal control over financial reporting, and if we are unable to do so, the accuracy and timeliness of our financial reporting may be adversely affected, which could have a material adverse effect on our business, investor confidence and market price.
 
As a U.S. listed public company, we are required to maintain effective internal control over financial reporting in order to accurately and timely report our results of operations and financial condition. As required by Section 404 of the Sarbanes-Oxley Act, we will engage in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants, and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that neither we nor our independent registered public accounting firm will be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
 
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We disclose changes made in our internal controls and procedures and our management is required to assess the effectiveness of these controls annually. However, for as long as we are an emerging growth company, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404. We could be an emerging growth company for up to five years. An independent assessment of the effectiveness of our internal controls over financial reporting could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls over financial reporting could lead to restatements of our financial statements and require us to incur the expense of remediation.
 
If we fail to staff our accounting and finance function adequately or maintain internal control over financial reporting adequate to meet the requirements of the Sarbanes-Oxley Act, our business and reputation may be harmed. Moreover, if we are not able to comply with the applicable requirements of Section 404 in a timely manner, we may be subject to sanctions or investigations by regulatory authorities, including the SEC and the Nasdaq. Furthermore, if we are unable to conclude that our internal control over financial reporting is effective or if our independent registered public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our ADSs and ordinary shares could decline, and we could be subject to sanctions or investigations by the SEC, the Nasdaq or other regulatory authorities. Failure to implement or maintain effective internal control systems as required of public companies could also restrict our access to the capital markets. The occurrence of any of the foregoing would also require additional financial and management resources.
 
We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our ADSs less attractive to investors and, as a result, adversely affect the price of the ADSs and result in a less active trading market for the ADSs.
 
We are an emerging growth company as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:
 

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only being required to present three years of audited financials and related discussion in Management’s Discussion & Analysis;
 

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not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;
 

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not being required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
 

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reduced disclosure obligations regarding executive compensation; and
 

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exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
 
We may choose to take advantage of some, but not all, of the available exemptions. For example, in this annual report, we have elected to rely on the exemption from the auditor attestation requirement and the exemption that permits only two years of financial statements to be presented. We may avail ourselves of these disclosure exemptions until we are no longer an emerging growth company. We cannot predict whether investors will find our ADSs less attractive because of our reliance on some or all of these exemptions. If investors find our ADSs less attractive, it may adversely affect the price of the ADSs and there may be a less active trading market for the ADSs.
 
We will cease to be an emerging growth company upon the earliest of:
 

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the last day of the fiscal year during which we have total annual gross revenues of $1.07 billion (as such amount is indexed for inflation every five years by the SEC) or more;
 

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the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt;
 

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the date on which we are deemed to be a “large-accelerated filer,” as defined in Rule 12b-2 of the Exchange Act, which would occur if the market value of our ADSs that are held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter; and
 

 •
December 31, 2025.
 
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In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. If we are unable to comply timely with these accounting standards, we may be delayed in providing the disclosures required by the Exchange Act.
 
As a “foreign private issuer,” we are exempt from a number of rules under the U.S. securities laws and the Nasdaq rules, and we are permitted to file less information with the SEC than are U.S. companies. In addition, we are permitted and expect to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements applicable to domestic issuers. This may make our ADSs and ordinary shares less attractive to investors.
 
We are a “foreign private issuer,” as defined in the rules and regulations of the SEC, and, consequently, we are not subject to all of the disclosure requirements applicable to companies organized within the United States For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. Accordingly, there may be less publicly available information concerning our company than there is for U.S. public companies.
 
As a foreign private issuer we are permitted to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements. The rights of holders of ordinary shares and, therefore, certain of the rights of holders of the ADSs, are governed by English law, including the provisions of the Companies Act, and by our Articles of Association, which may provide less protection than is afforded to investors under Nasdaq rules applicable to domestic issuers.
 
In particular, we expect to follow English law instead of Nasdaq practice in the following ways:
 

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We do not intend to follow Nasdaq Rule 5620(c) regarding quorum requirements applicable to meetings of shareholders. Such quorum requirements are not required under English law. In accordance with generally accepted business practice, our Articles of Association provide alternative quorum requirements that are generally applicable to meetings of shareholders.
 

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We do not intend to follow Nasdaq Rule 5605(b)(2), which requires that independent directors regularly meet in an executive session, where only independent directors are present. The independent directors may choose to meet in an executive session at their discretion.
 
Although we may rely on certain home country corporate governance practices, we must comply with Nasdaq Rule 5625, Notification of Noncompliance and Rule 5640, Voting Rights. Further, we must have an audit committee that satisfies Rule 5605(c)(3), which addresses audit committee responsibilities and authority, and that consists of committee members who meet the independence requirements of Rule 5605(c)(2)(A)(ii).
 
We intend to take all actions necessary to maintain compliance as a foreign private issuer under the applicable corporate governance requirements of the Sarbanes-Oxley Act, the rules adopted by the SEC and the Nasdaq corporate governance rules and listing standards.
 
It is possible that we will be a passive foreign investment company for U.S. federal income tax purposes.
 
A non-U.S. corporation will be classified as a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes for any taxable year if either:
 

 •
at least 75% of its gross income is “passive income,” or
 

 •
at least 50% of the value, determined on the basis of a quarterly average, of its gross assets is attributable to assets that produce or are held for the production of “passive income.”
 
Passive income generally includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), annuities and gains from assets that produce passive income. Cash is a passive asset for PFIC purposes, even if held as working capital. In addition, a non-U.S. corporation will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, no more than 25% (by value) of the stock.
 
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Based on the composition of our income and assets, we do not believe that we were a PFIC in 2021 and do not expect to be a PFIC for U.S. federal income tax purposes for the current taxable year or any future taxable year. This conclusion is a factual determination, however, that is made annually and thus may be subject to change. Because PFIC status is determined based on the composition of our income and assets annually and generally cannot be determined until the end of the taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year.
 
If we are a PFIC for any taxable year during which you own ADSs and ordinary shares, and you are a U.S. Holder (as defined in this annual report in the section titled “Income Tax Considerations”), you will generally be subject to additional taxes and interest charges on the gain from a sale of ADSs or ordinary shares, and upon receipt of an “excess distribution” with respect to the ADSs or ordinary shares. In general, a U.S. Holder would receive an “excess distribution” if the amount of any distribution for U.S. federal income tax purposes in respect of the ADSs and ordinary shares were more than 125% of the average distributions made with respect to the ADSs and ordinary shares within the three preceding taxable years (or shorter period if such U.S. Holder held the ADSs or ordinary shares for a shorter period). A U.S. Holder of a PFIC generally may mitigate these adverse U.S. federal income tax consequences by making a “qualified electing fund” election or a “mark-to-market” election. However, there is no assurance that we would provide information that would enable a U.S. Holder to make a qualified electing fund election. In addition, as a PFIC, dividends in respect of the ADSs or ordinary shares would not be eligible for the special tax rate available to non-corporate U.S. Holders applicable to “qualified dividend income.” U.S. owners of ADSs or ordinary shares should consult their own U.S. tax advisors regarding the potential application of the PFIC rules.
 
Future sales, or the possibility of future sales, of a substantial number of our ADSs could adversely affect the price of such securities.
 
Future sales of a substantial number of our ADSs or the perception that such sales will occur, could cause a decline in the market price of ADSs. As of December 31, 2021, we had 319,814,747 ordinary shares issued and outstanding including 219,206,010 ordinary shares represented by ADSs. If holders sell substantial amounts of shares in the public markets, or if the market perceives that such sales may occur, the market price of our ADSs and our ability to raise capital through an issue of equity securities in the future could be adversely affected.
 
Holders of our ADSs have fewer rights than our ordinary shareholders and are subject to certain additional risks.
 
ADS holders do not hold ordinary shares directly and, as such, are subject to, among others, the following additional risks:
 

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As an ADS holder, we will not treat you as one of our shareholders and you will not be able to exercise shareholder rights, except through the depositary as permitted by the deposit agreement.
 

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Distributions on the ordinary shares represented by your ADSs will be paid to the depositary, and before the depositary makes a distribution to you on behalf of your ADSs, any withholding taxes that must be paid will be deducted. Additionally, if the exchange rate fluctuates during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the distribution.
 

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We and the depositary may amend or terminate the deposit agreement without the ADS holders’ consent in a manner that could prejudice ADS holders.
 
ADS holders must act through the depositary to exercise their voting rights and, as a result, may be unable to exercise their voting rights on a timely basis.
 
We will not treat holders of our ADSs (rather than the ordinary shares underlying the ADSs) as shareholders, and they will not be able to exercise shareholder rights. The depositary will be the holder of the ordinary shares underlying the ADSs, and ADS holders will be able to exercise voting rights with respect to the ordinary shares represented by the ADSs only in accordance with the deposit agreement relating to the ADSs. There are practical limitations on the ability of ADS holders to exercise their voting rights due to the additional procedural steps involved in communicating with these holders. For example, holders of our ordinary shares will receive notice of shareholders’ meetings by mail and will be able to exercise their voting rights by either attending the shareholders meeting in person or voting by proxy. ADS holders, by comparison, will not receive notice directly from us. Instead, in accordance with the deposit agreement, we will use commercially reasonable endeavors to provide at least 30 days’ notice to the depositary of any such shareholders’ meeting and details concerning the matters to be voted on in advance of the meeting date. If we so instruct, the depositary will mail to holders of ADSs the notice of the meeting and a statement as to the manner in which voting instructions may be given by holders as soon as practicable after receiving notice from us of any such meeting. To exercise their voting rights, ADS holders must then instruct the depositary as to voting the ordinary shares represented by their ADSs. Due to these procedural steps involving the depositary, the process for exercising voting rights may take longer for ADS holders than for holders of ordinary shares. The ordinary shares represented by ADSs for which the depositary fails to receive timely voting instructions will not be voted.
 
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ADS holders may have difficulty in effecting service of process on our company and certain directors or officers in the United States in enforcing U.S. judgements in the United Kingdom or in enforcing U.S. securities laws in UK courts.
 
We are incorporated and located outside the United States and certain of our directors and officers are located outside of the United States. As a result, it may not be possible for ADS holders to effect service of process within the United States upon all such persons or our company, or to obtain discovery of relevant documents and/or the testimony of witnesses. ADS holders based in the United States may also have difficulty enforcing in courts outside the United States judgments obtained in U.S. courts against our company or our directors (including actions under the civil liability provisions of the U.S. securities laws). ADS holders may also have difficulty enforcing liabilities under the U.S. securities laws in legal actions originally brought in jurisdictions located outside the United States.
 
Currency fluctuations may adversely affect the value of our ADSs.
 
Our ADSs are quoted in U.S. dollars on the Nasdaq. Movements in the U.S. dollar exchange rate may adversely affect the value of the ADSs.
 
We have never declared or paid dividends and we do not anticipate paying dividends in the foreseeable future.
 
We have never declared or paid cash dividends. For the foreseeable future, we intend to retain all available funds and any future earnings to support our operations and to finance the growth and development of our business. Any future determination to declare cash dividends will be made at the discretion of the Board, subject to compliance with applicable laws and covenants under current or future debt facilities, which may restrict or limit our ability to pay dividends, and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that the Board may deem relevant. We do not anticipate paying any cash dividends in the foreseeable future. As a result, a return on any investment will only occur if the price of our ADSs increases.
 
ADS holders may not receive distributions on the ordinary shares represented by our ADSs or any value for such distribution if it is illegal or impractical to make them available to holders of ADSs.
 
While we do not anticipate paying any dividends in the foreseeable future, if such a dividend is declared, the depositary for the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, in accordance with the limitations set forth in the deposit agreement, it may be unlawful or impractical to make a distribution available to holders of ADSs. We have no obligation to take any other action to permit the distribution of the ADSs, ordinary shares, rights or anything else to holders of our ADSs. This means that you may not receive distributions we make if it is unlawful or impractical to make them available to you. These restrictions may have a material adverse effect on the value of your ADSs.
 
ADS holders may not be able to participate in rights offerings and may experience dilution of their holdings as a result.
 
We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the deposit agreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADS holders are registered under the Securities Act or the distribution of them to ADS holders is exempt from registration under the Securities Act with respect to all holders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such a registration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute such rights and securities. Accordingly, holders of the ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.
 
ADS holders may be subject to limitations on transfer of the ADSs.
 
The ADSs are only transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.
 
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Item 4.
Information on the Company
 
A. History and Development of the Company
 
Our predecessor company was incorporated under the Companies Act 1985 and registered in England and Wales on December 20, 2004, under the name Elm Partners plc. We changed our name to Hamilton Partners plc on December 4, 2006, to Sterling Green Group plc on April 26, 2007, and to Fastnet Oil & Gas plc on June 8, 2012.
 
On April 18, 2016, we completed a reverse merger into AIM-quoted Fastnet Equity plc. Concurrently with the completion of this reverse merger, we also acquired Birken AG, which offered a range of derma-cosmetic products, including treatments for sensitive, allergy-prone and dry skin. We subsequently changed our name to Amryt Pharma plc.
 
We were incorporated under the Companies Act 2006 and registered in England and Wales on July 17, 2019, as a private company limited by shares under the name Amryt Pharma Holdings Limited. Amryt was re-registered as a public limited company, Amryt Pharma Holdings plc, on September 24, 2019.
 
On September 24, 2019, Amryt Pharma Holdings plc became the new parent company of Amryt Pharma plc pursuant to a scheme of arrangement between Amryt Pharma plc and its shareholders under Part 26 of the Companies Act 2006 (“Companies Act”).  Amryt Pharma Holdings plc changed its name to Amryt Pharma plc.
 
On May 5, 2021, Amryt announced that it had signed a definitive agreement to acquire Chiasma, Inc. in an all-stock combination. Under the terms of the transaction, each share of Chiasma common stock issued and outstanding prior to the consummation of the transaction was exchanged for 0.396 Amryt American Depositary Shares (“ADSs”), each representing five Amryt ordinary shares. The merger agreement provided that, upon the terms and subject to the conditions set forth in the merger agreement, at the effective time, Amryt Merger Sub, an indirect wholly owned subsidiary of Amryt, merged with and into Chiasma with Chiasma surviving as an indirect wholly owned subsidiary of Amryt subsequently renamed Amryt Endo, Inc. which then ceased to be a publicly traded company.

On August 5, 2021, Amryt completed the acquisition of Chiasma, Inc. and, in conjunction with the completion, Amryt allotted and issued a total of 127,733,680 ordinary shares as consideration for the acquisition. Following the completion, shareholdings in Chiasma were rounded in being converted to Amryt shares using the exchange ratio of 0.396. Roundings in converting Chiasma shareholdings to Amryt shares were finalized in August 2021 and resulted in an additional 7,015 ordinary shares being allotted and issued by Amryt as consideration for the acquisition. In total, these ordinary shares were issued to the former Chiasma Shareholders in the form of 25,548,139 ADSs at US$10.19 per share, to acquire Chiasma for a value of US$260,336,000.  On August 5, 2021, the Group repaid US$116,629,000 of Chiasma long term debt.
 
Through the acquisition of Chiasma, Inc, we acquired our third commercial product, Mycapssa® (octreotide capsules) which is approved in the US for long-term maintenance therapy in acromegaly patients who have responded to and tolerated treatment with octreotide or lanreotide.  Mycapssa® is the first and only oral somatostatin analog approved by the FDA.  Mycapssa® has also been submitted to the EMA and is not yet approved in Europe. We believe that following the acquisition the combined company will be a global leader in rare and orphan diseases with three on-market commercial products, a global commercial and operational footprint and a significant development pipeline of therapies with the financial flexibility to execute its growth plans.
 
Amryt has traded on AIM under the symbol “AMYT” from April 2016 up to January 11, 2022, at which point the Company cancelled the admission to trading of its ordinary shares on AIM. Amryt ADSs representing our ordinary shares have traded on the Nasdaq under the symbol “AMYT” since July 8, 2020. Our registered office is located at Dept 920a 196 High Road, Wood Green, London N22 8HH, United Kingdom, and our principal office is located at 45 Mespil Road, Dublin 4, Ireland. We maintain a website at www.amrytpharma.com. The reference to our website is an inactive textual reference only and the information contained in, or that can be accessed through, our website is not a part of this annual report.
 
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with the SEC.
 
B. Business Overview
 
We are a global, commercial-stage biopharmaceutical company dedicated to acquiring, developing and commercializing novel treatments for rare diseases. Our diversified portfolio is comprised of three commercial rare disease products, as well as a development-stage pipeline focused on rare skin diseases. Two of our three commercial products, lomitapide for the treatment of homozygous familial hypercholesterolemia (“HoFH”), and metreleptin for the treatment of generalized lipodystrophy (“GL”) and partial lipodystrophy (“PL”), are sold globally through our commercial infrastructure. Our third commercial product, Mycapssa® (octreotide capsules) is approved in the US for long-term maintenance therapy in acromegaly patients who have responded to and tolerated treatment with octreotide or lanreotide.  Mycapssa® is the first and only oral somatostatin analog approved by the FDA.  Mycapssa® has also been submitted to the EMA and is not yet approved in Europe. We acquired this product through the acquisition of Chiasma, Inc. (“Chiasma”) in August 2021. We are also developing our lead product candidate, Oleogel-S10, for the treatment of partial thickness wounds of severe Epidermolysis Bullosa (“EB”), a rare and devastating genetic skin disease for which there is currently no approved therapy. Filsuvez is the approved brand name for Oleogel-S10, which has not received regulatory approval by the Food and Drug Administration (“FDA”) or the European Medicines Agency (“EMA”) for the treatment of EB. We received positive topline data from the pivotal Phase 3 EASE trial of Oleogel-S10 on September 9, 2020. On February 28, 2022, we received a CRL from the FDA which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns.  A MAA for Oleogel-S10 for the treatment of Dystrophic and Junctional EB was validated by EMA March 25, 2021, the assessment process by EMA was completed on April 22, 2022, when the CHMP adopted a positive opinion. The positive opinion recommends the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days. Further details are discussed in “Business—Our Product Candidates—Oleogel-S10 for the Treatment of Severe EB—Topline Results for Oleogel-S10.” We are also developing Mycapssa® to expand the indication of Mycapssa® (octreotide capsules) beyond acromegaly into carcinoid syndrome associated with neuroendocrine tumors, further details of which are discussed in “Business—Our Product Candidates— Mycapssa® for the Treatment of Neuroendocrine Tumors (NET)—.”

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Our next product candidate, AP103, is currently in preclinical development for the treatment of patients with Dystrophic EB (“DEB”), a subset of EB. AP103 is the first gene therapy product candidate based on our novel polymer-based topical gene therapy delivery platform, which also has potential use for the treatment of other rare genetic diseases. In September 2020, the EMA’s Committee for Orphan Medicinal Products (“COMP”) adopted a positive opinion for orphan designation for the use of AP103 in EB. In December 2020, the FDA granted orphan drug designation for AP103 for the treatment of Dystrophic Epidermolysis Bullosa (“DEB”), a subset of EB. We intend to initiate clinical development of AP103 in 2023. To support this milestone, the team intend to qualify and validate the necessary analytical methods required to advance the manufacturing and characterization of our drug product and critical starting materials. We have a proven track record of obtaining rare disease assets, either through acquisition or in-license, and we intend to continue building our portfolio of rare disease programs with the goal of bringing effective treatments to patients in need.
 
The following table summarizes key information about our product portfolio and clinical development pipeline. We have retained worldwide development and commercial rights to all of our programs, excluding Japan for lomitapide and Japan, South Korea and Taiwan for metreleptin.
 
graphic

Definitions: Dystrophic EB (“DEB”); Junctional EB (‘‘JEB’’)
 
* Upcoming clinical milestones are subject to the impact of COVID-19 on our business.
 
(1) Global Phase 3 study to support US label expansion for metreleptin in the treatment of partial lipodystrophy (PL).
 
(2) We are conducting a Phase 3 study of homozygous familial hypercholesterolemia ("HoFH") in children and adolescents in Europe, the Middle East and Africa ("EMEA") as part of our European Medicines Agency (‘‘EMA’’) pediatric investigation plan (PIP) commitment.
 
(3) 505(b)(2) pathway Phase 2 not required, Phase 3 initiation anticipated in Q4 2022 for the treatment of carcinoid symptoms in NET.
 
(4) Oleogel-S10 was approved in 2016 by the EMA for the treatment of partial thickness wounds in adults but has not been commercially launched.
 
(5) This radiation-induced dermatitis Phase 2 trial is an investigator-initiated study
 
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Lomitapide is an oral therapy approved as an adjunct to a low-fat diet and other lipid-lowering treatments for adults with HoFH. It is marketed in the United States under the trade name Juxtapid and in the European Union under the trade name Lojuxta. HoFH is a rare and serious genetic condition that leads to aggressive and premature heart disease, heart attacks and strokes in patients as young as teenagers. HoFH patients are at a high risk of experiencing life-threatening cardiovascular events as a result of extremely elevated cholesterol levels in the blood and have a substantially reduced life expectancy. HoFH impairs the liver’s ability to remove low density lipoprotein (“LDL”) cholesterol, or “bad” cholesterol, from the blood, which if left untreated can cause aggressive narrowing and blocking of the blood vessels. According to a 2013 European Heart Journal article, the prevalence of HoFH is one person per million. However, according to a 2016 article published in Atherosclerosis, the number may be as high as 6.25 persons per million. Lomitapide is a small molecule microsomal triglyceride transfer protein (“MTP”) inhibitor. MTP exists in both the liver and intestines where it plays a role in the formation of cholesterol-carrying lipoproteins. As a result, inhibition of MTP is an effective cholesterol-lowering therapy in HoFH patients with limited or non-functional LDL receptors. We are conducting a Phase 3 pediatric study, in the EMA pediatric investigation plan (PIP) for the use of lomitapide in children and adolescents with HoFH, for which we expect to report data in the second half of 2022.
 
In December 2020, we received a marketing authorization approval from Agencia Nacional De Vigilancia Sanitaria, the Brazilian Health Regulatory Agency for Lojuxta.
 
In December 2021, we received a marketing authorization approval for Lojuxta from the Saudi Food and Drug Authority (SFDA).
 
Since the completion of the Brexit transition period, a separate national Marketing Authorization (MA) is required for UK and Great Britain (GB).  In 2021, we received marketing authorization approval for each of Lojuxta and Myalepta from the UK Medicines and Healthcare products Regulatory Agency (MHRA).
 
Metreleptin for injection is approved in the United States under the trade name Myalept as an adjunct to diet as replacement therapy to treat the complications of leptin deficiency in patients with congenital or acquired GL. It is approved in the European Union under the trade name Myalepta for the treatment of leptin deficiency in patients with congenital or acquired GL and familial or acquired PL for whom standard treatments have failed to achieve adequate metabolic control. GL and PL are rare diseases characterized by loss or lack of adipose tissues (fat cells), resulting in the deficiency of the hormone leptin. GL and PL patients experience severe metabolic abnormalities including severe insulin resistance, diabetes, hypertriglyceridemia and fatty liver disease. We estimate that the prevalence of GL is approximately one person per million and that of PL is approximately three persons per million. Metreleptin is a recombinant human leptin analog that binds to and activates the human leptin receptor. Metreleptin acts to stimulate fatty acid oxidation throughout the body and lower plasma, hepatic and myocellular triglyceride levels. Amryt received positive feedback from the FDA on the potential for label expansion of metreleptin in the United States to include the treatment of PL. Prior to potential approval, a pivotal Phase 3 randomized double-blind placebo controlled trial to evaluate the safety and efficacy of daily subcutaneous metreleptin treatment in patients with PL is required, which will enroll approximately 51-63 patients globally. This study was initiated in Q4 2021.
 
Mycapssa® (octreotide capsules) for long-term maintenance treatment in acromegaly patients who have responded to and tolerated treatment with octreotide or lanreotide. U.S. commercial launch of Mycapssa® commenced in September 2020. Mycapssa® is the first and only oral somatostatin analog, or SSA, approved by the FDA and the first product approved by the FDA utilizing Amryt’s proprietary Transient Permeability Enhancer (‘‘TPE®’’) technology. The FDA approval of Mycapssa® was based on the positive results of a randomized, double-blind, placebo-controlled, nine-month Phase 3 Optimal clinical trial of octreotide capsules, which met the primary endpoint and all four secondary endpoints, as well as safety data from all of its Phase 3 clinical trials of Mycapssa. Amryt is focused on the commercialization of Mycapssa® for the treatment of patients with acromegaly in the United States.  An MAA for Mycapssa® has been submitted on June 28, 2021, to EMA for long-term maintenance treatment in patients with acromegaly who have responded to and tolerated treatment with somatostatin analogues.  The assessment process is ongoing.
 
Our lead development candidate, Oleogel-S10, is being developed as a potential topical treatment for the partial thickness wounds of severe EB, a rare and devastating genetic skin disease affecting young children and adults for which there is currently no approved treatment. EB is a group of diseases of the skin, mucous membranes and internal epithelial linings characterized by extreme skin fragility that blisters and tears from minor friction or trauma. Patients with severe forms of EB, including Dystrophic EB (“DEB”) and Junctional EB (“JEB”), suffer from severe and chronic blistering, ulceration, scarring, mutilating scarring of the hands and feet, joint contractures, strictures of the esophagus and mucous membranes, a high risk of developing aggressive squamous cell carcinomas, infections and risk of premature death. Market research indicates an incidence among live births of one in 20,000, and, when accounting for life expectancy per EB sub-type, there are an estimated 30 patients per million (total EB prevalence in the general population), of which approximately 31% are DEB & JEB patients. We have completed the Double Blind Phase (DBP) of a pivotal Phase 3 clinical trial of Oleogel-S10 in severe EB, including DEB and JEB. The Open Label Phase (OLP) is ongoing.  In January 2019, we reported that the independent Data and Safety Monitoring Board (“DSMB”) performed a pre-specified unblinded interim efficacy analysis and recommended the continuation of the study with an increase in enrollment from 182 to 230 evaluable patients to maintain 80% conditional statistical power. We received positive topline results from the EASE trial on September 9, 2020. These results are outlined in more detail in “Business—Our Product Candidates—Oleogel-S10 for the Treatment of Severe EB—Topline Results for Oleogel-S10.”
 
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On February 28, 2022, we received a CRL from the FDA which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns. A MAA for Oleogel-S10 for the treatment of Dystrophic and Junctional EB was validated by EMA March 25, 2021, the assessment process by EMA was completed on April 22, 2022, when the CHMP adopted a positive opinion. The positive opinion recommends the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days.  We are also supporting an investigator-led Phase 2 study of Oleogel-S10 for the treatment of severe radiation-induced dermatitis. This trial commenced in the Q4 2021.
 
We also have a novel polymer-based topical gene therapy delivery platform for potential use in the treatment of rare genetic diseases. Our first product candidate utilizing this platform, AP103, is currently in preclinical development for the treatment of DEB. We intend to initiate clinical development for AP103 in 2023. In September 2020, the EMA’s COMP adopted a positive opinion for orphan designation for the use of AP103 in EB, and on December 23, 2020, the FDA granted orphan designation for AP103 in the treatment of DEB. During 2021, the team engaged with the EMA (Protocol Assistance) and FDA (INTERACT Meeting) to seek scientific guidance on the proposed CMC and non-clinical study plans which has been incorporated into the program.
 
We sell Mycapssa® in the US and lomitapide and metreleptin in the Americas, Europe and the Middle East through our existing rare disease commercial infrastructure. Our commercial expertise includes market access, marketing, sales managers and sales representatives and is supported by our experienced medical affairs team with medical science liaisons, patient advocates and dieticians in the field. We also have a network of third-party distributors in other key markets throughout the world.
 
We are led by a management team and board of directors with deep experience at leading biotech companies, large pharmaceutical companies and academic institutions. Our company headquarters are in Dublin, Ireland, and we have over 289 employees throughout the world. We believe the expertise of our leadership team and the strength of our relationships within the industry and medical community are critical to our strategy as we commercialize our existing products, progress our development pipeline and explore new business development opportunities.
 
Our Commercial Products
 
Lomitapide for the Treatment of HoFH
 
Overview
 
HoFH is a rare genetic disease, which impairs the body’s ability to remove LDL cholesterol, or “bad” cholesterol, typically leading to abnormally high LDL cholesterol levels in the blood. HoFH patients are at a high risk of experiencing life-threatening cardiovascular events at an early age as a result of extremely elevated cholesterol levels in the blood and have a substantially reduced life expectancy relative to unaffected individuals. According to a 2013 European Health Journal article, the prevalence of HoFH is one person per million. However, according to a 2016 article published in Atherosclerosis, the number may be as high as 6.25 persons per million. Aggressive treatment, including dietary modifications plus combination therapy with currently approved lipid lowering drugs at maximum tolerated doses, often fails to reduce LDL cholesterol levels to their recommended targets in these patients. Lomitapide is a small molecule MTP inhibitor with the potential to provide significant reductions in LDL cholesterol levels in this high-risk patient population. Lomitapide, which is marketed as Juxtapid in the United States and as Lojuxta in the EMEA, is an oral, once-a-day treatment for adult patients with HoFH, as an adjunct to a low-fat diet and other lipid-lowering medicinal products, with or without LDL apheresis.
 
In October 2007, the FDA granted lomitapide Orphan Drug Designation for the treatment of HoFH. The FDA approved Juxtapid in December 2012 and the EMA granted marketing authorization for Lojuxta in July 2013. In addition to the United States and the European Union, lomitapide has received regulatory approval in Japan, Canada, Saudi Arabia and certain Latin American countries. Lomitapide has also been made available upon physician request on a named patient sales basis in certain other jurisdictions. In 2019, we out-licensed to Recordati the rights to sell lomitapide in Japan.
 
HoFH – Background and Current Treatments
 
HoFH is a serious, rare genetic disease usually caused by defects in both alleles of the low-density lipoprotein receptor (“LDL-R”) gene, resulting in the impairment of the function of the LDL-R. The LDL-R is a protein on the surface of cells that is responsible for binding and removing LDL from the blood. Malfunction of the LDL-R results in significant elevation of blood cholesterol levels. Cholesterol naturally occurs in the body, synthesized in the liver, and also enters the bloodstream through absorption from food. Cholesterol is transported in the blood for use as a source of energy and cell structure. Excess levels of cholesterol in the blood, also known as hypercholesterolemia, can cause significant complications. HoFH is most commonly caused by genetic mutations in both alleles of the primary gene responsible for LDL-R production, the LDL-R gene, but can also be caused by mutations in other genes. To date, more than 1,600 mutations have been identified that can impair the function of the LDL-R gene, with some mutations leading to a significant reduction or a total lack of LDL-R activity. As a result of elevated levels of LDL, HoFH patients often develop premature and progressive atherosclerosis, a narrowing or blocking of the arteries, usually in combination with arterial thrombosis, and are at high risk of experiencing premature cardiovascular events, such as heart attack or stroke, often experiencing their first cardiovascular event in early adulthood, and have a significantly shortened life expectancy.
 
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Physicians in the United States and in many other countries often use clinical findings and family history to make a clinical diagnosis of HoFH. Clinical diagnosis is typically made using the following criteria: significantly elevated LDL cholesterol levels; physical signs, which may include the presence of cutaneous xanthomas, Achilles tendon thickening, xanthelasma and/or corneal arcus; limited response to statins that is not attributed to statin intolerance or to another identifiable cause (usually dependent on functional LDL receptors); evidence of premature cardiovascular disease (often in the second and third decade of life); and a positive history of high cholesterol and/or premature cardiovascular disease, consistent with having familial hypercholesterolemia on both sides of the family.
 
The clinical approach taken with HoFH patients typically involves an aggressive treatment plan to reduce lipid levels as much as possible through dietary modifications and a combination of lipid-lowering drug therapies.
 
Current drug therapies for reducing LDL levels in HoFH patients include statins, cholesterol absorption inhibitors, PCSK9 inhibitors, Evinacumab and lomitapide. Patients are also managed through LDL apheresis (lipid dialysis). Since the introduction of PCSK9 inhibitors in the United States in 2015, healthcare professionals have started most new adult HoFH patients on a PCSK9 inhibitor product before trying lomitapide and have switched some existing lomitapide patients to a PCSK9 inhibitor product because such products may have fewer side effects, are significantly less expensive and do not require that patients follow a special low-fat diet. However, because many therapies, including statins and PCSK9 inhibitor products, act by increasing the activity of LDL-R, HoFH patients often have an inadequate response due to their impaired LDL-R function. For example, high dose statin therapies that typically produce 35% to 47% reductions in LDL levels in the broad hypercholesterolemic patient population, on average, produce only a 10% to 25% reduction in HoFH patients. Also, a study published in Lancet in 2014 showed that although PCSK9 inhibitor evolocumab produced a mean LDL reduction of 23% in HoFH patients at 12 weeks, a subset of HoFH patients with very low or no LDL-R function did not respond to treatment. HoFH patients who are unable to reach their recommended target LDL levels on drug therapy are sometimes treated using LDL apheresis. However, apheresis provides only temporary reductions in LDL levels, so it must be repeated frequently to avoid rapid rebound that typically occurs within approximately four days. In addition, except in certain countries in the European Union, apheresis is often not readily available, due to the limited number of treatment centers that perform this procedure.
 
Recently Regeneron Pharmaceuticals Inc. launched Evinacumab for the treatment of HoFH in the US. In August 2019, Regeneron announced positive topline data from its ongoing Phase 3 trial in HoFH and the FDA approved Evinacumab on February 11, 2021, for adults and pediatric patients 12 years and older for treatment of HoFH.  EMA approved Evinacumab in June 2021 as an adjunct to diet and other low-density lipoprotein-cholesterol (LDL-C) lowering therapies for the treatment of adult and adolescent patients aged 12 years and older with homozygous familial hypercholesterolaemia (HoFH). Regeneron launched Evinacumab in the United States in March 2021. Evinacumab was licensed to Ultragenyx Pharmaceutical Inc in countries outside the US in January 2022. Although the drug is administered by intravenous infusion, physicians may consider use of this product in HoFH patients before initiation of lomitapide treatment or may switch patients currently treated with lomitapide to Evinacumab treatment.
 
Our Solution: Lomitapide for the Treatment of HoFH
 
We believe lomitapide has the potential to address and mitigate the root cause of HoFH. Lomitapide is a small molecule MTP inhibitor. MTP exists in both the liver and intestines where it plays a role in the formation of cholesterol-carrying lipoproteins. As a result, the inhibition of MTP is an effective cholesterol-lowering therapy in HoFH patients with limited or non-functional LDL receptors. We believe lomitapide has the potential to become the standard of care (“SOC”) for the reduction of LDL levels in HoFH patients who have not responded to other therapies.
 
Treatment and Adverse Reaction Rates
 
The recommended starting dosage of lomitapide is 5 mg once daily (up to a maximum of 60 mg, depending on patient response to treatment and goal of therapy), and the dose should be escalated gradually based on acceptable safety and tolerability. Lomitapide should be taken once daily with a glass of water, without food, at least two hours after the evening meal. Lomitapide is contraindicated in the following conditions: pregnancy, concomitant administration of lomitapide with moderate or strong CYP3A4 inhibitors, patients with moderate or severe hepatic impairment and patients with active liver disease.
 
One single-arm, open-label, 78-week trial has been conducted treating 29 patients with lomitapide for HoFH, 23 of whom completed at least one year of treatment. The initial dosage of lomitapide in such trial was 5 mg daily, with titration up to 60 mg daily during an 18-week period based on safety and tolerability. In this trial, the mean age was 30.7 years (range, 18 to 55 years), 16 (55%) patients were men, 25 (86%) patients were Caucasian, two (7%) were Asian, one (3%) was African American, and one (3%) was multi-racial. The most common adverse reactions were gastrointestinal, reported by 27 (93%) of 29 patients. Adverse reactions reported by ≥ 8 (28%) patients in the HoFH clinical trial included diarrhea, nausea, vomiting, dyspepsia and abdominal pain. Other common adverse reactions, reported by five to seven (17-24%) patients, included weight loss, abdominal discomfort, abdominal distension, constipation, flatulence, increased alanine aminotransferase (“ALT”), chest pain, influenza, nasopharyngitis and fatigue. Adverse reactions of severe intensity were reported by eight (28%) of 29 patients, with the most common being diarrhea, vomiting, increased ALT or hepatotoxicity and abdominal pain, distension, and/or discomfort.
 
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Expansion Opportunities in Pediatric HoFH and Post-Approval Obligations
 
We are conducting a Phase 3 pediatric study in the European Union for the use of lomitapide in children and adolescents with HoFH. We expect to report data from this trial in the second half of 2022.
 
Clinical Development and Post-Approval Obligations
 
In 2014, we initiated an observational cohort study in the United States and European Union to generate additional data on the long-term safety profile of lomitapide, the patterns of use and compliance and the long-term effectiveness of lomitapide in controlling LDL levels. The FDA has required target enrollment of 300 HoFH patients worldwide, and has mandated study of enrolled patients for a period of ten years. The EMA has required that all patients taking lomitapide in the European Union be encouraged to participate in the study, and that the study period be open-ended. In the study, investigators will follow each patient to track malignancies, tumors, teratogenicity, hepatic effects and gastrointestinal adverse reactions, events associated with coagulopathy, major adverse cardiovascular events and death. The EMA also required that a study be conducted to determine the impact of lomitapide on vascular endpoints. In addition, certain drug-drug interaction studies have been completed with results submitted to the EMA.
 
Metreleptin for the Treatment of GL and PL
 
Overview
 
Metreleptin is a recombinant analog of human leptin. It is marketed as Myalept in the United States as an adjunct to diet as a replacement therapy to treat the complications of leptin deficiency in patients with congenital or acquired GL. It is marketed as Myalepta in the European Union as an adjunct to diet as a replacement therapy to treat the complications of leptin deficiency in adults and children two years of age and above with congenital or acquired GL. Myalepta is also approved in the European Union for adults and children 12 years of age and above with familial or acquired PL for whom standard treatments have failed to achieve adequate metabolic control with congenital or acquired GL and also congenital or acquired PL. Leptin, which is deficient in patients with GL, is the key hormone responsible for regulating appetite and also has an important regulatory effect on energy expenditure. Leptin is a naturally occurring hormone derived from fat cells and an important regulator of energy, fat and glucose metabolism, reproductive capacity and other physiological functions. The predominant cause of metabolic complications in GL is excess triglyceride accumulation in the liver and skeletal muscle due to the inability to store triglycerides in fat cells. As a result of the deficiency of leptin associated with GL, patients experience significant fatigue as well as hyperphagia, or unregulated appetite. The loss of fat tissue caused by this disease often leads to severe metabolic abnormalities that contribute to increased morbidity and mortality.
 
Lipodystrophy – GL, PL and Current Treatments
 
Lipodystrophy is a heterogeneous group of rare syndromes characterized by selective but variable loss of fat tissue. Both the total amount and the appropriate distribution of fat deposits contribute to patients’ metabolic state. Because of the loss of fat tissue and fat cells, secreted hormone leptin is very low. Leptin circulates in blood and acts on the brain to regulate food intake and energy expenditure. When fat mass falls, plasma leptin levels fall, stimulating appetite and suppressing energy expenditure until fat mass is restored. When fat mass increases, leptin levels increase, suppressing appetite until weight is lost. This system maintains homeostatic control of fat cell mass.
 
Due to the lack of fat cells in individuals with lipodystrophy, energy can no longer be stored as fat in these cells and fat accumulates in the muscles and organs such as the heart, liver and pancreas, causing lipotoxicity and organ damage. In addition, deposition of fat in these unusual locations leads to extreme insulin resistance and its associated complications such as diabetes mellitus, hypertriglyceridemia, hepatic steatosis, polycystic ovary syndrome and high blood pressure. These severe metabolic abnormalities are typically resistant to conventional therapies. As a result of the deficiency of leptin associated with lipodystrophy, patients experience significant fatigue as well as unregulated appetite. The voracious appetite itself significantly aggravates the metabolic abnormalities and further reduces the ability to successfully treat these metabolic abnormalities with conventional therapies.
 
GL is characterized by a near complete lack of fat cells and, consequently, leads to early and significant morbidity and mortality. Classification of GL (versus PL) is made based on the anatomical distribution of fat loss, which is widespread in GL patients, as well as the younger age and greater rapidity of onset and severity of the metabolic abnormalities. The severe metabolic abnormalities associated with GL may result in premature diabetic nephropathy, retinopathy, cardiomyopathy, recurrent attacks of acute pancreatitis, enlarged liver and organ failure. These complications themselves increase morbidity and mortality due to their negative long-term impacts. The key diagnostic indicators of GL are most commonly a combination of physical appearance and severe metabolic abnormalities.
 
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PL is characterized by a less uniform loss of fat cells and with a later age of onset. There can be considerable heterogeneity in the extent of fat cell loss, levels of leptin and degree of metabolic abnormalities. In PL patients with relative or near complete leptin deficiency, the metabolic abnormalities and longer impact on disease progression can closely mirror that of patients with GL.
 
Clinical diagnosis of lipodystrophy is largely based on history and physical exam but may be informed by genetic markers and blood tests, including adiponectin and leptin levels. Patients may be diagnosed well into adulthood even after seeing multiple doctors. Treatment is usually initiated by specialists, including adult and pediatric endocrinologists and lipidologists. A multi-disciplinary approach is required for ongoing care, which can also include hepatologists, cardiologists, nephrologists and rheumatologists.
 
Just under one person per million suffers from GL and approximately three persons per million for PL. We believe that the prevalence rate of GL in countries outside the United States is likely to be consistent with the prevalence rate in the United States. However, we anticipate that physicians will use metreleptin to treat the approximately one in three PL patients who suffer from severe PL.
 
Our Solution: Metreleptin for the Treatment of GL and PL
 
Metreleptin is a recombinant human leptin analog that binds to and activates the human leptin receptor. Clinical studies show that metreleptin stimulates fatty acid oxidation throughout the body and lowers plasma, hepatic and myocellular lipid levels (especially triglycerides), resulting in increased insulin sensitivity; improves insulin suppression of glucose production by the liver and increases insulin-stimulated peripheral glucose uptake into muscle; and corrects hyperphagia secondary to leptin deficiency with concomitant reduction in caloric and fat intake. Clinical studies have demonstrated the potential for metreleptin to effectively and consistently target leptin deficiencies and related health complications and improve patient outcomes.
 
Treatment and Adverse Reaction Rates
 
Metreleptin should be injected subcutaneously once daily at the same time every day, and may be administered any time of day without regard to the timing of meals. Metreleptin should be administered to patients as prescribed by their physician. Recommended dosage is as follows: Persons with body weight 40 kg or less: starting dose 0.06 mg/kg/day, increase or decrease by 0.02 mg/kg to a maximum daily dose of 0.13 mg/kg; Men greater than 40 kg body weight: starting dose 2.5 mg/day, increase or decrease by 1.25 mg to 2.5 mg/day to a maximum dose of 10 mg/day; and women greater than 40 kg body weight: starting dose 5 mg/day, increase or decrease by 1.25 mg to 2.5 mg/day to a maximum dose of 10 mg/day. Metreleptin is contraindicated in patients with general obesity not associated with congenital leptin deficiency. The safety of metreleptin was evaluated in 48 patients with GL in a single-arm, open-label study. The median duration of exposure in this trial was 2.7 years with a range of 3.6 months to 10.9 years. Five to six patients (10-13%) experienced the most common adverse reactions: headache, hypoglycemia, decreased weight and abdominal pain.
 
Expansion Opportunities and Post-Approval Obligations
 
Amryt received positive feedback from the FDA on the potential for label expansion of metreleptin in the United States to include the treatment of PL. Prior to potential approval, a pivotal Phase 3 randomized double-blind placebo controlled trial to evaluate the safety and efficacy of daily subcutaneous metreleptin treatment in patients with PL will be required, which will enroll approximately 51-63 patients globally. This Phase 3 study was initiated in Q4 2021.
 
Clinical Development and Post-Marketing Commitments
 
A long-term, prospective, non-interventional, observational study (product exposure registry) in patients to evaluate serious risks related to the use of the product is under way. In the US, the study plans to enroll at least 100 patients treated with metreleptin and will be followed for a minimum of ten years unless they withdraw consent to participate in the registry or die.  In the EEA, the registry will offer enrolment to all patients treated with metreleptin. Patients will be followed for the duration of the lifecycle of the product unless they withdraw consent to participate in the registry or die.
 
The US registry will attempt to enroll at least 100 new patients treated with metreleptin. Enrollment will close after five years or after 100 new patients have been enrolled, whichever occurs first. The registry will continue for ten years from the date of last patient’s enrollment.
 
We set forth below the additional post-approval obligations required by the FDA for metreleptin:
 

 •
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.  An update has been provided to FDA and written feedback received in November 2021.
 

 •
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 (completed); and
 
49

 •
a prospective study to assess the immunogenicity of metreleptin in patients receiving metreleptin.
 
The presence of neutralizing antibodies will be assessed using both a validated cell-based assay and a validated ligand-binding assay in samples that are confirmed positive for binding antibodies to leptin. In addition, we are required to conduct certain studies related to the manufacture of metreleptin, including in order to validate new test methods, implement a risk-based reference standard program approach, and reassess product acceptance criteria with a larger data set from more manufactured batches. Post-approval obligations related to manufacturing metreleptin are completed or are on track for completion by their respective deadlines. Finally, we have ongoing obligations to assess spontaneous reports of serious risks related to the use of metreleptin, including the risk to exposed pregnancies and pregnancy outcomes, regardless of indication, for ten years from the date of approval of metreleptin in the United States.
 
In connection with specific obligations to the EMA to complete post-marketing measures, it has been our intention to conduct the following studies:
 

 •
Enroll patients in the non-interventional, prospective, observational study (product exposure registry) of GL and PL patients initiating treatment with metreleptin. As mentioned above, for the patients from the EEA, this study will be open to all patients treated with metreleptin and will continue to the life-span of the product;
 

 •
a post-approval efficacy study in PL patients; and
 

 •
an integrated analysis of immunogenicity that includes testing, using validated assays, on samples from historical studies, as well as the registry, the pediatric investigation plan (“PIP”) and the post-approval efficacy study in PL patients.
 
We have also committed to the EMA, as part of our PIP, to conduct a study in GL patients under six years old to further evaluate the pharmacokinetics, activity and safety of metreleptin in this pediatric sub-population. The required in vitro study to assess the binding of metreleptin to proteins in serum, and the non-clinical tissue distribution study have been completed and were approved by EMA in September 2021.
 
Mycapssa® for the Treatment of Acromegaly
 
Mycapssa® (octreotide capsules) is a combination of octreotide acetate and excipients collectively called Transient Permeability Enhancer (TPE®). TPE improves the oral bioavailability of poorly absorbed drugs such as octreotide by increasing the permeability of the intestine. The mode of action of TPE is thought to involve a transient opening of the tight junctions between epithelial cells lining the intestine.
 
Acromegaly is a rare disease most often caused by a benign pituitary tumor and characterized by an excess of growth hormone and insulin-like growth factor-1 hormone. Treatment options include surgery, medication and radiation or a combination of these. Mycapssa® (octreotide capsules) is approved in the US for long-term maintenance therapy in acromegaly patients who have responded to and tolerated treatment with octreotide or lanreotide.  Mycapssa® is the first and only oral somatostatin analog approved by the FDA.  Mycapssa® has also been submitted to the EMA and is not yet approved in Europe.
 
Imlan: Therapeutic Topical Cream
 
We acquired Imlan, a derma-cosmetic product, as part of our acquisition of Birken AG in 2016. Imlan is a topical skin cream marketed solely in Germany for the daily care of highly sensitive skin.
 
50
Our Product Candidates
 
Oleogel-S10 for the Treatment of Severe EB
 
Overview
 
Oleogel-S10 is an oil-based gel that we are developing as a potential treatment for severe EB, a rare and devastating genetic skin disease that causes the skin layers and internal body linings to separate, affecting infants, children and adults, for which there is currently no approved treatment. Patients with EB suffer from a genetic disease resulting in the inability to produce a certain type of collagen, which plays an important role in anchoring the dermal and epidermal layers of the skin. Patients with severe forms of EB, including DEB and JEB, suffer from severe and chronic blistering, ulceration, scarring, mutilating scarring of the hands and feet, joint contractures, strictures of the esophagus and mucous membranes, a high risk of developing aggressive squamous cell carcinomas, infections and risk of premature death.
 
We commenced our Phase 3 Efficacy and Safety Study of Oleogel-S10 in EB (“EASE”), a pivotal study of Oleogel-S10 in patients with severe EB, in March 2017 and enrolled the first patient in April 2017. This study is the largest Phase 3 study conducted in patients with EB. In January 2019, we reported that the DSMB performed a pre-specified unblinded interim efficacy analysis and recommended the continuation of the study with an increase in enrollment from 182 to 230 evaluable patients to maintain 80% conditional statistical power. On September 9, 2020, we received positive topline data of the global pivotal Phase 3 trial. Further information in relation to the topline data can be found in “Business—Our Product Candidates—Oleogel-S10 for the Treatment of Severe EB—Topline Results for Oleogel-S10.”
 
Oleogel-S10 has been granted Orphan Drug Designation for the treatment of EB by both the FDA and the EMA. Oleogel-S10 was granted Fast Track Designation by the FDA in September 2019. Oleogel-S10 was also granted Rare Pediatric Disease Designation by the FDA. On February 28, 2022, we received a CRL from the FDA which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns. A MAA for Oleogel-S10 for the treatment of Dystrophic and Junctional EB was validated by EMA March 25, 2021, the assessment process by EMA was completed on April 22, 2022, when the CHMP adopted a positive opinion. The positive opinion recommends the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days.
 
About EB
 
EB is a heterogeneous group of diseases of the skin, mucous membranes and internal epithelial linings characterized by extreme skin fragility that blisters and tears from minor friction or trauma. The severity and symptoms of EB can range from blistering of the hands, feet, knees and elbows in mild cases to widespread blistering that can lead to vision loss, disfigurement and serious medical problems in severe cases. There are currently no approved treatments for EB.
 
EB results from mutations in the genes responsible for the production of structural proteins essential for healthy skin function. Such genetic mutations cause impaired or absent function of the proteins that normally give the skin its mechanical strength. Market research indicates an incidence among live births of one in 20,000, and, when accounting for life expectancy per EB sub-type, there are an estimated 30 patients per million (total EB prevalence in the general population), of which approximately 31% are DEB & JEB patients. EB has been categorized as encompassing five major types (EB Simplex (“EBS”), DEB, JEB, Kindler Syndrome and Aquisita) and 31 subtypes. EBS is the most common and least severe form of EB. Approximately 70% of people with EB have EBS. Patients with EBS often heal quickly with minimal or no scarring. We are developing Oleogel-S10 to treat the cutaneous manifestations of the approximately 30% of EB patients that have either JEB, DEB and Kindler Syndrome. Patients with these more severe forms of EB may suffer from severe and chronic blistering, ulceration, scarring, mutilating scarring of the hands and feet, joint contractures, strictures of the esophagus and mucous membranes, a high risk of developing aggressive squamous cell carcinomas, infections and risk of premature death. Other manifestations of these more severe types of EB may include anemia, cardiomyopathy, syndactyly (fusion of the fingers and toes), renal insufficiency, dysphagia (difficulty swallowing), malnourishment, cancer, constipation, osteoporosis, muscular dystrophy and pyloric atresia.
 
Background on Dystrophic Epidermolysis Bullosa
 
DEB is the second most common variation of EB, occurring in approximately 25% of people with EB. DEB derives its name from the tendency of healing blisters to scar, which leads to contraction of the joints, fusion of the fingers and toes and contraction of the mouth membranes and narrowing of the esophagus. The intensity of DEB varies significantly, but the severity of this disease increases with age due to complications driven by scarring, the fusion of digits and wastage of skin tissue.
 
DEB is sub-classified into RDEB and Dominant Dystrophic EB (“DDEB”). RDEB is generally a more severe form of DEB. Infants affected by RDEB are typically born with widespread blistering and areas of missing skin, caused by trauma during birth. Most frequently, blistering occurs over the entire body and affects mucous membranes such as the lining of the mouth and digestive tract. Healing blisters result in severe scarring. Scarring in the mouth and esophagus can make it difficult to chew and swallow food, leading to chronic malnutrition and slow growth. Additional complications of progressive scarring can include fusion of the fingers and toes, loss of fingernails and toenails, joint deformities (contractures) that restrict movement and eye inflammation leading to vision loss. Persons with RDEB have reduced life expectancy and are at increased risk of developing aggressive types of skin cancer before the age of 35. DDEB is a less common and less severe form of DEB.
 
Background on Junctional Epidermolysis Bullosa
 
Approximately 5% of people living with EB have JEB, which is sub-classified into Herlitz JEB and non-Herlitz JEB. Herlitz JEB is a more severe form of JEB. From birth or early infancy, affected individuals have blistering over large regions of the body. Blistering also affects the mucous membranes, such as the moist lining of the mouth and digestive tract, which often makes consumption and digestion difficult. From birth or early infancy, affected individuals have blistering over large regions of their body. Children with Herlitz JEB often die in infancy. Non-Herlitz JEB is a less severe form of JEB. The blistering associated with non-Herlitz JEB may be limited to the hands, feet, knees and elbows, and it often improves after the conclusion of the newborn period. Persons living with non-Herlitz JEB intermediate typically experience a normal lifespan.

51
Our Solution: Oleogel-S10 for the Treatment of Severe EB
 
Oleogel-S10 is a topical product incorporating betulin and other related triterpene compounds. In in vitro studies using normal cultured keratinocytes, Oleogel-S10 has been observed to stimulate keratinocyte migration and promote differentiation into mature-epithelial skin cells, thereby ensuring more rapid wound healing. We conducted a pivotal Phase 3 clinical trial of Oleogel-S10 in severe EB, including DEB and JEB, and have communicated efficacy and safety data from the 90-day double-blind treatment period of the trial.
 
Clinical Development of Oleogel-S10
 
We have set forth below the clinical trials conducted to date for Oleogel-S10 for the treatment of severe EB.
 
Phase 2a Study
 
Our Phase 2a study of Oleogel-S10 was a prospective, case-controlled study to compare the efficacy and tolerance of Oleogel-S10 to SOC in EB wounds. Half of each wound was treated with Oleogel-S10, together with a non-adhesive wound dressing, and the other half was treated with wound dressing alone. The primary endpoint of the study was the rate of progress of re-epithelialization from baseline to either day 14 or day 28 (depending on whether the wound was acute or chronic). A blinded assessment of efficacy was conducted by two independent experts based on a chronological series of photographs taken before start of treatment, during wound dressing changes and at the end of treatment on day 14 and day 28. Safety variables of the study were incidence, severity and causality of adverse events and assessment of tolerability by the investigators and patients and/or his/her legal representative.
 
Ten patients were enrolled and 12 wounds were treated with study medication. Reviewers were asked to assess which half of the wound was healing faster. Results of this trial are set forth in the table below.
 
Results of Blinded Efficacy Evaluation by Patient and Wound
 
Patient
(wound #)
​
​
Blinded Efficacy Assessment Experts
​
​
Result
​
Reviewer 1
​
​
Reviewer 2
​
1
​
​
Non-adhesive wound dressing
​
​
Oleogel-S10
​
​
Undecided
2
​
​
Oleogel-S10
​
​
Equal
​
​
Oleogel-S10
3
​
​
Oleogel-S10
​
​
Oleogel-S10
​
​
Oleogel-S10
4
​
​
Oleogel-S10
​
​
Equal
​
​
Oleogel-S10
5
​
​
Equal
​
​
Equal
​
​
Undecided
6
​
​
Oleogel-S10
​
​
Oleogel-S10
​
​
Oleogel-S10
7
​
​
Equal
​
​
Equal
​
​
Undecided
8
​
​
Oleogel-S10
​
​
Non-adhesive wound dressing
​
​
Undecided
9 (1)
​
​
Oleogel-S10
​
​
Oleogel-S10
​
​
Oleogel-S10
9 (2)
​
​
Equal
​
​
Oleogel-S10
​
​
Oleogel-S10
10 (1)
​
​
Oleogel-S10
​
​
Oleogel-S10
​
​
Oleogel-S10
10 (2)
​
​
Oleogel-S10
​
​
Oleogel-S10
​
​
Oleogel-S10
 
52
We observed that Oleogel-S10 together with the non-adhesive wound dressing significantly accelerated healing (eight of eight decided cases; p = 0.0078, binomial test) compared to non-adhesive wound dressing only (zero of eight decided cases). Of the four undecided cases, two consisted of opposite conclusions by the two reviewers, and the other two wounds were considered to have equal healing in both halves by the two reviewers.
 
A total of 11 adverse events (“AEs”) in six patients were reported; nine of 11 AEs (81.8%) involved the skin, one AE (9.1%) was classified as a flu-like syndrome, and one AE (9.1%) was an infection of a wound. All AEs affecting the skin were erosions within or next to the study and control wounds, respectively. None of the AEs was assessed as being related to study treatment (n = 6 not related, 54.5%; n = 5 probably not related, 45.5%). All AEs were mild to moderate in severity: nine AEs affecting the skin were evaluated as being Common Terminology Criteria for Adverse Events (“CTCAE”) grade 1 (81.8%), only the flu-like syndrome and the infection of a wound were rated as CTCAE grade 2 (18.2%). Treatment with Oleogel-S10 was not adjusted or interrupted due to AEs. No serious adverse event (“SAE”) or significant AE occurred throughout the study; none of the patients died or were lost to follow-up.
 
Phase 3 Trials in Partial Thickness Wounds
 
Before we acquired Oleogel-S10, three Phase 3 studies were conducted looking at the safety and efficacy of Oleogel-S10 in other partial thickness wounds (“PTWs”). This led to the approval of Oleogel-S10 for the treatment of partial thickness wounds by adults by the EMA in 2016. Although we do not intend to commercialize Oleogel-S10 for partial thickness wounds, we do intend to rely on these Phase 3 clinical trials in our new drug application and marketing authorization application because we consider the data from these trials supportive in the assessment of safety and efficacy of Oleogel-S10 for the treatment of EB. Patients with EB also suffer from PTWs and the process that leads to wound healing involves the same cellular mechanisms as those seen in other examples of PTWs such as burns and split-thickness skin graft donor sites.
 
The observations of accelerated wound healing in the Phase 3 trials of PTWs contribute key clinical evidence of the biological activity and pharmacodynamic effect of Oleogel-S10. In addition, we expect that the FDA, EMA and other health authorities will evaluate safety data to supplement the EASE trial data due to the small size of the study, even though the data must be interpreted with caution due to differences in study design and patient population disease characteristics. Specifically, the Phase 3 trials in PTWs enrolled adult patients who were generally healthy. Each patient had a single wound that was treated for a maximum period of 28 days. Each wound was divided into two halves and each half received topical treatment with Oleogel-S10 or standard care. Their wounds healed rapidly and without long term complications. In contrast, EB patients studied in the EASE trial are predominantly adolescents, children or infants with multiple complications of their disease including anemia, malnutrition, and impaired kidney function. These disease-related complications are expected to slow the wound healing process. Furthermore, due to the underlying skin fragility caused by EB, patients may develop new wounds during the course of the study and may experience re-opening of previously healed wounds. Patients in the EASE trial are required to apply Oleogel-S10 or the control gel to multiple wounds over a significant surface area of their skin for the duration of the double-blind phase of the trial (three months), and then Oleogel-S10 during the open label phase for a further two years. As a result, the efficacy and safety data from the EASE trial will provide the primary (pivotal) evidence required for benefit-risk assessment of Oleogel-S10 in EB. Data from the Phase 3 PTW trials are expected to provide supportive evidence only.
 
We have presented pooled safety data for all three PTW Phase 3 trials. The rationale is based on the fact that the trials were almost identical in design. The enrolled patient population characteristics were very similar, and pooling safety data is always performed when possible to increase the number of exposed patients for a more precise estimation of the true incidence of any adverse events that might be expected when much larger numbers of patients are exposed. This approach has been endorsed by the EMA.
 
53
Phase 3 Trial in Grade 2a Burns
 
One of the Phase 3 trials conducted for Oleogel-S10 (known as BBW-11) was a blinded, prospective, randomized, intra-individually controlled, multicenter, Phase 3 clinical trial comparing the efficacy and safety of Oleogel-S10 with wound dressing to SOC treatment (an antiseptic gel plus wound dressing) in accelerating the healing of Grade 2a burns. The primary endpoint was the percentage of patients with earlier healing (at least 95% epithelialization) of the wound half treated with Oleogel-S10 compared to SOC, as evaluated by the majority decision of three independent, blinded experts. Assessment of efficacy was primarily based on blinded photo evaluation.
 
66 patients were enrolled at ten centers in Germany, Sweden, Switzerland and the United Kingdom. Of the 66 patients, 61 patients received treatment with both Oleogel-S10and SOC. Of the 61 patients that received treatment, 50 patients completed treatment and 11 discontinued prematurely. The primary analysis evaluated only those patients for whom a difference was observed between treated wound halves (35 patients).
 
As set forth in the table below, the percentage of patients showing earlier healing of Oleogel-S10 treated wound half compared with SOC treated half was higher than the percentage of patients showing the opposite result (85.7% versus 14.3%, intention-to-treat population).
 
Primary Endpoint: Earlier Healing of Wound Half - Majority Decision of Blinded Expert Evaluation
 
 
n (%)
​
95% CI
​
p value(1)
Patients with earlier healing of SOC treated wound half
5 (14.3)
​
4.8, 30.3
​
  
Patients with earlier healing of Oleogel-S10 treated wound half
30 (85.7)
​
69.7, 95.2
​
<  0.0001
 
(1)
Based on one-sided, exact binomial test evaluating the rate of superiority of Oleogel-S10 being > 0.5.
 
CI = confidence interval, n = number of patients with the indicated difference in wound healing.
 
A representative series of burn wound photographs from one of the studied patients is shown below:
 
graphic

Secondary endpoints supported the primary finding indicating faster healing and epithelialization of the wound with Oleogel-S10 compared to standard of care.
 
54
Two Phase 3 Trials in Patients with Split-Thickness Skin Graft Donor Sites
 
Oleogel-S10 was also studied in two blinded, prospective, randomized, intra-individually controlled, multicenter Phase 3 clinical trials (known as BSH-12 and BSG-12) comparing the efficacy and safety of Oleogel-S10 plus SOC (non-adhesive wound dressing) versus SOC alone in accelerating the wound healing of split-thickness skin graft (“STSG”) donor sites. Since the design and conduct of these studies was identical the pooled results are presented here.
 
After the STSG surgery, the wound was split into halves and the two wound halves were randomized to treatment with either Oleogel-S10 plus SOC or SOC alone. Treatment was applied until complete wound closure of both halves occurred but no longer than 28 days. Wound dressing change and medication application were performed at least every three or four days.
 
The primary endpoint of both trials was the intra-individual difference in time to wound closure (at least 95% epithelialization) between wound halves based on photo evaluation by three independent, blinded experts. 107 and 112 patients were enrolled and received treatment in the two trials respectively. However, two patients in the BSG-12 study did not provide written informed consent and are therefore removed from the analysis below.
 
As set forth in the table below, wound halves treated with Oleogel-S10 healed faster than the wound halves treated with SOC (mean 1.1 days, p < 0.0001, two-sided paired t-test, based on blinded reader evaluation).
 
Difference in Time (Days) to Wound Closure(1) (total n = 217)
 
Study
​
n
​
Median
​
Min, Max
​
Mean
​
95% CI
​
p value(2)
BSH-12
​
107
​
-0.3
​
-10.0,  2.3
​
-1.4
​
-1.8,  -0.9
​
< 0.001
BSG-12
​
110
​
0.0
​
-18.3,  12.3
​
-0.8
​
-1.5,  -0.1
​
0.0232
Pooled
​
217
​
-0.3
​
-18.3,  12.3
​
-1.1
​
-1.5,  -0.7
​
< 0.0001
 
(1)
Difference in time to wound closure was set to zero for photos rated as not evaluable. If wound closure was not observed, wound closure was set to one day after last photograph of the series (= “conservative +1 day approach”).
 
(2)
Two-sided paired t-test evaluating the mean difference as different from zero.
 
CI = confidence interval, n = number of patients in analysis, Max = maximum, Min = minimum.
 
A representative photographic series from one of the studied patients of a split-thickness skin graft donor site is shown below:

 graphic
 
Pooled Safety Data From All Three Phase 3 Studies in Partial Thickness Wounds Including EBW-11, BSH-12 and BSG-12
 
55
Safety data from the three Phase 3 studies in PTWs were pooled and included 280 patients. One or more AEs were reported for a total of 35% of patients. The system organ classes with the highest incidence were infections and infestations (11%), injury, poisoning and procedural complications (8%) and skin and subcutaneous tissue disorders (10%). Most frequent AEs (by preferred term) comprised pyrexia and wound infection, skin infection, pain of skin, and pruritus, each reported at a rate of 4% to 6%.
 
Treatment-related AEs were reported by 25 patients (9%), including pain of skin (2.9%), pruritus (1.4%) and a few patients with other AEs, e.g., wound complication and post procedural complications. Application-site AEs were reported for the Oleogel-S10 treatment half for four patients (1.4%), for the SOC treatment half for 15 patients (5.4%) and for both treatment halves (meaning that the location of the AE could not be further differentiated) for 36 patients (12.9%). In cases where the AE could be clearly ascribed to one wound half, the number of local AEs was lower in the Oleogel-S10 treated wound half compared with the SOC treated wound half.
 
The number of patients in the pooled analysis (study BSH 12, BSG 12 and BBW 11) who experienced one or more serious SAEs was low (15 or 5.4% of the patients). The most frequently reported SAEs were wound infection (four or 1.4% of patients) and condition aggravated (two or 0.7% of patients). All other SAEs occurred in only one (0.4%) patient per event. Only one SAE was considered possibly related to treatment (wound necrosis) for which causality between treatment and event was reported as “yes: unknown” by the investigator. In this patient both wound halves had changed from Grade 2a to Grade 2b and required skin grafting resulting in prolonged hospital stay. Based on clinical experience a change in burn wound depth from Grade 2a to Grade 2b was expected for up to 30% of patients in the study. Skin grafting is the standard treatment for Grade 2b burn wounds.
 
The number of patients who discontinued the study due to AEs was low (10 or 3.6% of patients) and none were considered related to treatment except for the case of wound necrosis described above.
 
No deaths were reported in the treatment phase of the studies. Two deaths in the 12 months follow-up period were considered not related to the treatment.
 
Pivotal Phase 3 Trial of Oleogel-S10 in EB (EASE)
 
In 2017, we commenced a double-blind, randomized, vehicle-controlled, Phase 3 study with a 24-month open-label period follow-up comparing the safety and efficacy of Oleogel-S10 versus a gel vehicle in the promotion of healing of PTWs in patients with severe EB (JEB, DEB and Kindler Syndrome). Qualifying target wounds were between 10 cm2 and 50 cm2 in surface area and at least 21 days old, but less than nine months old.
 
The primary endpoint is the proportion of patients with first complete closure of the EB target wound by day 45±7 days compared to control gel based on clinical assessment by the investigator (the wound will be rated as “closed” at first appearance of complete re-epithelialization without drainage).
 
Key secondary endpoints are:
 

 •
Time to first complete closure of the EB target wound as evidenced by clinical assessment until the end of the double-blind phase (day 90±7 days);
 

 •
Proportion of patients with first complete closure of the EB target wound at day 90±7 days based on clinical assessment by the investigator;
 

 •
The incidence of target wound infection between baseline and day 90±7 days as evidenced by adverse events and/or use of topical and/or systemic antibiotics (related to wound infection);
 

 •
The maximum severity of target wound infection between baseline and day 90±7 days as evidenced by adverse events and/or use of topical and/or systemic antibiotics (related to wound infection);
 

 •
Change from baseline in total body wound burden as evidenced by clinical assessment using Section I of the EB Disease Activity and Scarring Index at day 90±7 days; and
 

 •
Change from baseline in itching using the Itch Man Scale in patients ≥ 4 years and up to 13 years of age and the Leuven Itch Scale in patients ≥ 14 years of age before wound dressing changes at day 90±7 days.
 
Safety endpoints include:
 

 •
Incidence, severity and relatedness of adverse events;
 
56

 •
Local tolerability as judged by the investigator;
 

 •
Safety laboratory data; and
 

 •
Systemic exposure to betulin.
 
Following completion of the 90 day double-blind period all patients randomized to the control gel switched to open label treatment with Oleogel-S10. Patients who had been randomized to Oleogel-S10 will continue on open label treatment until the end of the study.
 
During the open label safety follow up period, patients will be monitored for safety evaluation by collection of adverse event information. The efficacy of Oleogel-S10 during this phase of the study will be evaluated by assessment of total wound burden, impact on symptoms of disease and additional endpoints reflecting severity of disease and quality of life.
 
Unblinded Interim Efficacy Analysis and Safety Analysis
 
In January 2019, we reported that the DSMB performed a pre-specified unblinded interim efficacy analysis and recommended the continuation of the study with an increase in enrollment from 182 to 230 evaluable patients to maintain 80% conditional statistical power. This increase in sample size was based upon maintenance of 80% conditional statistical power to detect a 20% difference between treatment groups with respect to the primary efficacy endpoint.
 
In February 2019, the independent DSMB performed a pre-specified unblinded interim safety analysis which included a review of safety and PK data from children enrolled in the trial. Following this review, the DSMB recommended expansion of the trial to include neonates, infants and children from ≥ 21 days of age. On September 9, 2020, we received positive topline data of the global pivotal Phase 3 trial. Further information in relation to the topline data can be found in “—Topline Results for Oleogel-S10.”
 
Topline Results for Oleogel-S10
 
Further to our announcement of September 9, 2020, we released additional results from the pivotal Phase 3 EASE trial of Oleogel-S10 on October 29, 2020.
 
Highlights of the results are:
 

 •
223 patients were randomized and included in the full analysis set (“FAS”). Of these, 109 patients were randomized to receive Oleogel S-10, and 114 patients were randomized to receive the control gel;
 

 •
156 (70%) of the FAS were children (under 18 years old), and 175 patients (78.5%) had RDEB, of which 124 (55.6%) had RDEB generalized severe sub-type. The remaining 48 patients were distributed between sub-types as follows: DDEB 20 patients, JEB 26 patients, EB simplex two patients;
 

 •
At baseline the median target wound size was 15.6 cm2, and the median wound age was 35.5 days. The baseline characteristics of the two treatment groups was similar;
 

 •
The primary endpoint (the proportion of patients with first complete closure of EB target wound within 45 days) was 41.3% in the Oleogel-S10 group and 28.9% in the control group (p value = 0.013);
 

 •
This equates to a 44% increase in the probability of target wound closure with Oleogel-S10 compared to the control gel;
 

 •
The proportion of RDEB patients with first complete closure of the EB target wound within 45 days was 44.0% in the Oleogel-S10 group and 26.2% in the control group (nominal p = 0.008);
 

 •
This represents a 72% increase in the probability of target wound closure with Oleogel-S10 compared to the control gel in RDEB patients;
 

 •
The proportion of DDEB patients with first complete closure of the EB target within 45 days was 50% in the Oleogel-S10 group and 50% in the control group (nominal p = 0.844). The proportion of JEB patients with first complete closure of the EB target within 45 days was 18.2% in the Oleogel-S10 group and 26.7% in the control group (nominal p = 0.522);
 
57

 •
A greater reduction in pain associated with dressing changes was observed in the Oleogel-S10 treatment group at each time point compared with the control group. At Day 14, this difference was nominally significant (p = 0.02);
 

 •
There was a greater reduction in total body wound burden as measured by EB Disease Activity and Scarring Index (“EBDASI”) and total body surface area of EB partial thickness wounds with Oleogel-S10 although the differences were not statistically significant; and
 

 •
Oleogel-S10 had an acceptable safety profile and was well tolerated when compared with the control gel.
 
Primary Efficacy Endpoint
 
The proportion of patients with first complete closure of EB target wound within 45 days was 41.3% in the Oleogel-S10 group and 28.9% in the control group. This difference reached statistical significance (p value = 0.013). This translates to a 44% increase in the probability of target wound closure with Oleogel-S10 compared to the control gel.
 
Proportion of patients with first complete closure of EB target wound within 45 days
 
 
​
​
Oleogel-S10 Group
N = 104
​
​
Control Group
N = 114
Primary Endpoint
​
​
41.3%
​
​
28.9%
Relative Risk
(95% CI)
​
​
1.44
(1.01, 2.05)
p value*
​
​
0.013
 
*
after pre-specified adjustment to account for IDMC (Independent Data Monitoring Committee) interim sample size re-estimation
 
The difference observed in the proportion of target wounds healed within 45 days between treatment groups for the primary endpoint was driven by the RDEB subgroup. The proportion of RDEB patients with first complete closure of EB target wound within 45 days was 44.0% in the Oleogel-S10 group and 26.2% in the control group (nominal p value = 0.008). This translates to a 72% increase in the probability of target wound closure with Oleogel-S10 compared to the control gel in RDEB patients.
 
Proportion of patients with first complete closure of target wound within 45 days by EB subtype

Subtype
​
​
Oleogel-S10 Group
​
​
Control Group
​
​
Relative
Risk
​
​
p value*
 
​
​
n
​
​
Closure
Rate
​
​
n
​
​
Closure
Rate
​
​
  
​
​
  
RDEB**
​
​
91
​
​
44.0%
​
​
84
​
​
26.2%
​
​
1.72
​
​
0.008
DDEB**
​
​
6
​
​
50.0%
​
​
14
​
​
50.0%
​
​
1.10
​
​
0.844
JEB**
​
​
11
​
​
18.2%
​
​
15
​
​
26.7%
​
​
0.61
​
​
0.522
 
*
Nominal p value
 
**
Recessive Dystrophic EB (RDEB) / Dominant Dystrophic EB (DDEB) / Junctional EB (JEB)
 
58
Secondary Efficacy Endpoints
 
In wounds that achieved complete closure over the 90-day treatment period, the mean time to first closure in the Oleogel-S10 group was 37.7 days compared to 44.5 days in the control group. During the entire 90-day double-blind treatment period separation in target wound closure occurred around Day 30 with the difference narrowing around Day 90. The proportion of first completely closed target wounds within the 90-day treatment period was 50.5% in the Oleogel-S10 group compared with 43.9% in the control group (p value = 0.296). The difference in the time to wound healing between the two treatment groups over the 90 days was not statistically significantly different (p = 0.302).
 
A greater reduction in pain associated with dressing changes was observed in the Oleogel-S10 treatment group at each time point compared with the control group. At Day 14, this difference was nominally significant (p = 0.022). At Day 90, the difference just missed nominal significance (p value = 0.051).
 
Procedural pain mean change from baseline (Wong-Baker FACES pain rating scale)
 
Patients ≥4 years of age

 
​
​
Day 14
​
​
Day 30
​
​
Day 45
​
​
Day 60
​
​
Day 90
 
​
​
n
​
​
  
​
​
n
​
​
  
​
​
n
​
​
  
​
​
n
​
​
  
​
​
n
​
​
  
Oleogel-S10 Group
​
​
90
​
​
-1.44
​
​
90
​
​
-1.04
​
​
84
​
​
-0.93
​
​
84
​
​
-1.29
​
​
76
​
​
-1.32
Control Group
​
​
95
​
​
-0.78
​
​
90
​
​
-0.27
​
​
85
​
​
-0.78
​
​
86
​
​
-0.56
​
​
78
​
​
-0.18
Nominal p value
​
​
  
​
​
0.022
​
​
  
​
​
0.152
​
​
  
​
​
0.805
​
​
  
​
​
0.095
​
​
  
​
​
0.051
 
There was a greater reduction in total body wound burden as measured by EBDASI and total body surface area of EB partial thickness wounds with Oleogel-S10 although the differences were not statistically significant.
 
Reduction in total body wound burden (EBDASI)
 
 
​
​
Day 30
​
​
Day 60
​
​
Day 90
 
​
​
n
​
​
Mean change
from baseline
​
​
n
​
​
Mean change
from baseline
​
​
n
​
​
Mean change
from baseline
Oleogel-S10 Group
​
​
99
​
​
-2.3
​
​
91
​
​
-3.1
​
​
84
​
​
-3.4
Control Group
​
​
99
​
​
-2.2
​
​
96
​
​
-2.0
​
​
85
​
​
-2.8

59
Reduction in total body surface area of EB Partial Thickness Wounds
 
(Body Surface Area Percentage)
 
 
​
​
Day 30
​
​
Day 60
​
​
Day 90
 
​
​
n
​
​
Mean change
from baseline
​
​
n
​
​
Mean change
from baseline
​
​
n
​
​
Mean change
from baseline
Oleogel-S10 Group
​
​
98
​
​
-2.56
​
​
92
​
​
-2.92
​
​
86
​
​
-4.32
Control Group
​
​
98
​
​
-2.64
​
​
96
​
​
-1.69
​
​
85
​
​
-2.53

Target wound infections occurred infrequently (seven patients in total, with two patients in the Oleogel-S10 group and five in the control group). Five patients had a target wound infection reported as an AE. Four of these occurred in the control group of which three were classified as “moderate” and one “severe.” The single target wound infection reported in the Oleogel-S10 group was classified as “mild.”
 
In patients ≥14 years of age, both treatment groups experienced an improvement in itch, however the pattern across the six assessment domains did not suggest a consistent effect in favor of either treatment group. In patients between four and 13 years of age, there was a modest improvement in itch in both treatment groups with a small difference favoring the control group (not statistically significant).
 
Safety Profile
 
The incidence of patients with AEs was similar in the treatment groups. As expected in this patient population, approximately 80% of patients experienced at least one AE. The majority of these AEs were classed as mild or moderate in severity. There were 13 patients with severe (grade 3/4) AEs in the Oleogel-S10 group compared to six in the control group. However, this imbalance was mainly due to reports of “anemia,” a very common baseline finding in this population, and one that frequently requires treatment. The incidence of patients with related AEs and patients with AEs leading to study withdrawal was similar in the two treatment groups.
 
Summary of Adverse Events during 90 day treatment period
 
Adverse Event Category
​
​
Oleogel-S10
(N = 109)
n (%)
​
​
Control
(N = 114)
n (%)
​
​
All Patients
(N = 223)
n (%)
Patients with any adverse
event
​
​
89 (81.7)
​
​
92 (80.7)
​
​
181 (81.2)
Mild AEs (grade 1)
​
​
46 (42.2)
​
​
41 (36.0)
​
​
87 (39.0)
Moderate AEs (grade 2)
​
​
30 (27.5)
​
​
45 (39.5)
​
​
75 (33.6)
Severe AEs (grade 3/4)
​
​
13 (11.9)
​
​
6 (5.3)
​
​
19 (8.5)
Any Related AEs
​
​
27 (24.8)
​
​
26 (22.8)
​
​
53 (23.8)
Any AE leading to study
withdrawal
​
​
3 (2.8)
​
​
2 (1.8)
​
​
5 (2.2)
 
60
The most frequently reported AEs (Oleogel-S10 vs Control) were wound complication (61.5% vs 53.5%), pyrexia (8.3% vs 13.2%), wound infection (7.3% vs 8.8%), pruritus (7.3% vs 5.3%) and anemia (7.3% vs 3.5%).
 
Oleogel-S10 previously received Fast Track Designation and Rare Pediatric Disease Designation from the US Food and Drug Administration (FDA).
 
As the final module in a Rolling Review a New Drug Application (NDA) was submitted to the FDA for Oloegel-S10 on March 31, 2021, for the treatment of Dystrophic and Junctional EB.  The MAA is supported by data from the EASE pivotal phase 3 trial in EB.
 
In June 2021, the NDA was accepted by the FDA and was granted Priority Review.  Priority Review is granted by the FDA to applications for medicines that, if approved, would provide significant improvements in the effectiveness or safety of the treatment, diagnosis, or prevention of serious conditions when compared to standard applications.  In general, the FDA’s Priority Review designation accelerates the review time from ten months to a goal of six months from the date of acceptance of the filing.  FDA set a Prescription Drug User Fee Act (“PDUFA”) target action date for the Oleogel-S10 NDA of November 30, 2021.  We received and responded to Information Requests (IR) from FDA during the assessment period and met with FDA at the scheduled Mid Cycle and Late Cycle Meeting.
 
In November 2021, the FDA extended the PDUFA goal date to allow time to review additional analyses of data previously submitted by Amryt. The submission of this additional information was determined by the FDA to constitute a Major Amendment to the NDA, resulting in an extension of the PDUFA goal date by three months to February 28, 2022. Three months is a standard review extension period to allow the FDA additional time to review information already submitted.
 
On February 28, 2022, we received a CRL from the FDA which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns.
 
A MAA for Oleogel-S10 for the treatment of Dystrophic and Junctional EB was validated by EMA March 25, 2021, to be reviewed according to standard timelines. The MAA is supported by Phase 3 data from the EASE trial which was the largest ever global trial conducted in patients with EB, performed across 58 sites in 28 countries..  Questions and review comments were received from the CHMP according to the procedure timetable, responses and updated documents have been submitted by us according to the required deadlines. Given the rarity of the disease without any approved therapies, the EMA proposed that an Ad-Hoc Expert Group (AHEG), comprised of both EB clinical experts and patients with EB, be consulted to provide external and independent EB specific advice. Recommendations from the AHEG were provided directly to CHMP ahead of an Oral Explanation (OE) between us and the CHMP. On April 22, 2022, the CHMP adopted a positive opinion, recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days.  
Additional Opportunity for Oleogel-S10
 
We are also supporting an investigator-led Phase 2 study of Oleogel-S10 for the treatment of severe radiation-induced dermatitis. This study commenced in Q4 2021.
 
AP103 for the Treatment of DEB
 
In March 2018, we acquired the rights to a novel polymer-based topical gene therapy delivery platform for potential use in the treatment of rare genetic diseases. The technology involves the use of highly branched poly β-amino ester (“HPAE”) polymers as the topical delivery vehicle for gene therapy. Our first product candidate utilizing this platform, AP103, is currently in preclinical development for the treatment of patients with DEB. Patients with DEB have a defect in the COL7A1 gene resulting in the inability to produce collagen VII, which plays an important role in anchoring the dermal and epidermal layers of the skin. AP103 is the combination of this polymer technology and the COL7A1 gene. If successful, we believe this could eliminate the requirement for viruses as topical delivery vectors.
 
In preclinical studies in a human mouse xenograph model of EB, we observed that topical application of AP103 restored production of collagen VII. In separate preclinical studies, AP103 was observed to restore collagen VII to levels exceeding those produced by healthy human keratinocytes (cells that regenerate the outer layer of the skin). In addition, we did not observe evidence of cellular toxicity after repeated administration in these studies. Our preclinical development of AP103 is ongoing. To support this critical milestone, significant effort has been invested in 2021 to advance the manufacturing and characterization of the AP103 drug product and constituent components. To date, the team have generated the initial qualified batches of the HPAE polymer and DNA required to generate AP103. This advancement will facilitate the initiation of key aspects of the non-clinical safety program in 2022, which need to be completed prior to launch of first in human (FIH) studies. We intend to initiate clinical development of AP103 in 2023. In September 2020, the EMA’s COMP adopted a positive opinion for orphan designation for the use of AP103 in EB and on December 23, 2020, the FDA granted orphan designation for AP103 in the treatment of DEB.
 
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In December 2018, a consortium comprised of us (as lead partner), University College Dublin, National University of Ireland (“University College Dublin”), Curran Scientific Limited and DEBRA Ireland was awarded (subject to contract negotiation) grant funding totaling €8.4 million over three years from the Disruptive Technologies Innovation Fund, part of the Irish Government’s Department of Business, Enterprise and Innovation, to develop the AP103 gene therapy platform. The grant funding will be matched by the consortium partners at various funding levels over the three-year term of the project. The grant will fund further development of the AP103 gene therapy platform from preclinical testing to proof of concept in humans. The initial funds will be used for research and development and staff costs associated with the project and, if preclinical work is successful the funds will also support research into the development of the HPAE polymer technology for the potential treatment of other genetic diseases. In 2022, the consortium successfully designed, engineered and delivered an advanced working protype for the manufacturing of the AP103 product. This complexing system which generates the DNA and Polymer nanoparticles at the center of AP103, will be used to supply material for the non-clinical safety and FIH clinical studies. The complexing system delivers scalable and consistent AP103 product that has demonstrated to induce expression of the therapeutic gene, COL7A1, in pre-clinical models of DEB.
 
Mycapssa® for the Treatment of Neuroendocrine Tumors (NET)
 
Neuroendocrine tumors (NETs) are a heterogeneous group of cancer subtypes that arise in endocrine cells that exist in different organ systems throughout the body. Most NETs (approximately 70%) occur in the gastrointestinal (GI) tract or pancreas. Tumors arising from the GI tract are termed carcinoid tumors. NET may also occur in the respiratory tract, central nervous system, thyroid, skin, breast, and urogenital system. Up to 20% of carcinoid tumors are estimated to have carcinoid syndrome (CS). CS are mainly associated with midgut metastatic carcinoid tumors. Most commonly, CS presents with diarrhea and flushing episodes due to excessive secretion of serotonin. Injectable SRLs, such as octreotide long-acting release, subcutaneous octreotide immediate release, and lanreotide, are the first-line treatment for CS associated symptoms as they significantly improve flushing episodes and diarrhea symptoms by inhibiting the secretion of serotonin among other hormones and vasoactive substances.
 
Pharmacokinetic studies have been completed and the data supports the higher doses of Mycapssa® (octreotide capsules) required in the planned Phase 3 study in patients with carcinoid symptoms due to NET.
 
The FDA has confirmed that a single positive Phase 3 study would be sufficient for approval consistent with the 505(b)(2) regulatory pathway previously agreed. Amryt is currently finalizing the study protocol with the FDA and plans to initiate the Phase 3 study in Q4 2022.
 
Medical Affairs
 
We have a medical affairs team in the United States, the EMEA and Latin America. The medical affairs team maintains product registries, performs retrospective reviews of clinical data, and conducts post-marketing clinical trials as needed, to support the value propositions of our products. The medical affairs team also supports independent medical education programs and investigator-initiated studies, by providing financial grants in a number of medical and disease-related areas. The responsibilities of medical affairs personnel also include providing training and education to physicians through the dissemination of medical information, industry research and publications, providing support in connection with our post-approval clinical commitments, as well as assembling and managing scientific and medical advisory boards to obtain valuable input from experts and practitioners on a variety of medical topics relevant to our products and the diseases our products treat.
 
Sales, Marketing and Reimbursement
 
In the United States, our sales team promotes Myalept to healthcare professionals for the treatment of GL patients, Juxtapid for the treatment of adult HoFH patients and Mycapssa® for appropriate patients with acromegaly. The most frequent physician call points for our products are endocrinologists (including pediatric endocrinologists) with respect to Myalept and Mycapssa, and lipidologists and cardiologists with respect to Juxtapid.
 
Our sales and marketing efforts are also focused on obtaining market access for our products, which primarily represents securing pricing and reimbursement approvals at acceptable levels. In the United States, we mobilize a team supporting market access initiatives with the primary responsibility of collaborating with insurance plans, health maintenance organizations and other payers on securing reimbursement and formulary status for Myalept, Mycapssa® and Juxtapid. This team also anticipates authorization and reauthorization requirements and educating physicians and office staff regarding criteria to continue coverage for our products.
 
Outside the United States, we support this effort primarily through the work of Country Managers and local consultants. We have successfully secured market access for both lomitapide and metreleptin in certain key EU and LATAM countries. We also continue to submit market access dossiers in other EU and LATAM countries where reimbursement has not occurred to date. We intend to enter into price negotiations in such countries following approval of the relevant Health Technology Assessment (“HTA”) body. One of our primary objectives is to strengthen the value proposition for metreleptin and lomitapide for payers through the generation of market access studies to enhance patient, physician and payer knowledge of GL, HoFH, and, in the European Union, PL and the real-world burden of these diseases. We have successfully achieved coverage in the United States and reimbursement in Japan, Turkey, Saudi Arabia, Germany, Italy, the United Kingdom, France, Austria, the Netherlands and Slovenia. Individual patient funding has been obtained in Czech Republic and Hungary. Pricing and reimbursement processes are ongoing in Brazil, Spain, Denmark, Norway, Portugal , Israel, Kuwait, Belgium, Poland, Romania and Latvia. Mycapssa® has been submitted to the EMA in 2021 and is not yet approved in Europe.
 
62
Manufacturing Supply and Distribution
 
We and our contract manufacturers are subject to the FDA’s Current Good Manufacturing Practice (“cGMP”) regulations in the United States and other rules and regulations prescribed by regulatory authorities outside the United States.
 
Lomitapide is a small molecule drug that is synthesized with readily available raw materials using conventional chemical processes. Hard gelatin capsules are prepared in 5 mg, 10 mg, 20 mg and 30 mg strengths. Metreleptin is a recombinant protein biologic that is produced using conventional fermentation, isolation and purification processing techniques. The drug product is provided globally in nominal 10 mg vials that are reconstituted prior to injection. We developed and received approval from the EMA for new presentations in nominal 2.5 mg and 5 mg vials for commercial distribution in the European Union. Mycapssa is an oral presentation of octreotide acetate for acromegaly. It contains 20mg active in enteric coated hard gelatin capsules. Octreotide acetate is manufactured by solid state peptide synthesis and is compendial material. It is marketed in the US in a 28-count child-resistant DosePack wallet.
 
We rely on contract manufacturers to produce the drug substance for lomitapide, Mycapssa® and metreleptin and to produce the drug product for commercial supplies and for clinical trials. We manufacture the drug substance for Oleogel-S10 at our facility in Germany. We have long-term supply agreements with the manufacturers of lomitapide, Mycapssa® and metreleptin. We may encounter any issue with our suppliers, for example, in the event a manufacturer notifies us that it intends to terminate its arrangement or if the manufacturer is operating in violation of the cGMP regulations. Prior to appointing a new supplier, we will undertake a rigorous validation and approval process of that manufacturer.
 
We require supplies of bacteriostatic water for injection (“BWFI”), an approved diluent for reconstitution of metreleptin that allows for use of a reconstituted vial of metreleptin for up to three days when stored appropriately. BWFI is only available for sale and approved for use in the United States, and we or our contract manufacturers will purchase it for supply with named patient sales outside the United States and other expanded access distribution to reduce the number of metreleptin vials provided. BWFI is not required in Europe following the launch of appropriate vial sizes to accommodate the dosing needs of the patient population.
 
In the United States, lomitapide, metreleptin and Mycapssa® are distributed exclusively through a specialty pharmacy network. Lomitapide and metreleptin are distributed through Accredo Health Group, Inc. (“Accredo”) and Mycapssa® is distributed through AcariaHealth, Inc (“AcariaHealth”). Accredo Specialty and AcariaHealth take title of products upon delivery and have specialty pharmacy networks that provide the products directly to patients and, under limited circumstances, to other U.S. purchasers. The specialty pharmacy takes title upon delivery of products. These specialty pharmacies provide contractual patient service support on behalf of Amryt. For commercial sales outside the United States, including sales of Myalepta and Lojuxta, named patient sales and other expanded access distribution, we use our existing infrastructure and third party providers to distribute products either directly to the purchaser in the applicable country or to our local third party distributor or service provider for such country.
 
Competition
 
The industry in which we operate is highly competitive and subject to rapid and significant technological change. Our competitors and potential competitors include large pharmaceutical and biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions.
 
All of these competitors currently engage in, have engaged in or may engage in the future in the development, manufacturing, marketing and commercialization of pharmaceuticals that compete with or may in the future compete with metreleptin, lomitapide or other products or product candidates we may develop or acquire. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Academic institutions, government agencies and other public and private research organizations also are conducting research activities, seeking patent protection and may commercialize products on their own or through joint ventures. The existence of these products, or other products or treatments of which we are not aware, or products or treatments that may be developed in the future, may adversely affect the marketability of products we develop.
 

 •
Lomitapide: Competition to lomitapide is a class of drugs known as PCSK9 inhibitors, including alirocumab and Evolocumab. These are approved both in the United States and the European Union. Sales of these PCSK9 inhibitors compete with sales of the lomitapide product and we expect they will continue to compete with lomitapide. However, because many therapies, including PCSK9 inhibition products, act by increasing the activity of LDL-R, HoFH patients often have an inadequate response due to their impaired LDL-R function.
 
63
Recently Regeneron Pharmaceuticals Inc. launched Evinacumab for the treatment of HoFH in the US. In August 2019, Regeneron announced positive topline data from its ongoing Phase 3 trial in HoFH and the FDA approved Evinacumab on February 11, 2021, for adults and pediatric patients 12 years and older for treatment of HoFH. EMA approved Evinacumab in June 2021 as an adjunct to diet and other low-density lipoprotein-cholesterol (LDL-C) lowering therapies for the treatment of adult and adolescent patients aged 12 years and older with homozygous familial hypercholesterolaemia (HoFH).   Regeneron launched Evinacumab in the United States in March 2021. Evinacumab was licensed to Ultragenyx Pharmaceutical Inc in countries outside the US in January 2022. Although the drug is administered by intravenous infusion, physicians may consider use of this product in HoFH patients before initiation of lomitapide treatment or may switch patients currently treated with lomitapide to Evinacumab treatment.
 
In addition, other companies may succeed in developing, acquiring or licensing additional pharmaceutical products that are introduced into the market and that are more effective or less costly than our products.
 

 •
Metreleptin: Our competitors are also developing products, which, if approved and depending on the labelled indication, could potentially compete with metreleptin, including Regeneron Pharmaceuticals, Inc. and Akcea Therapeutics, Inc. Although Myalept is the first and only product approved in the United States for the treatment of complications of leptin deficiency in patients with GL, there are a number of therapies approved to treat these complications independently that are not specific to GL. Myalepta also faces competition in the European Union, both for the treatment of GL and PL.
 

 •
Mycapssa: The acromegaly market has many established competitors, dominated in by Novartis and Ipsen, who like the rest of the competition offer injectable SSA’s. Mycapssa® is the only oral SSA available on the market. Crinetics Pharmaceuticals are developing paltusotine, which if approved would be the second oral SSA to enter the market and compete directly with Mycapssa. Crinetics also have a Ph3 study to evaluate effect in treatment-naïve patients. If studies are successful, filings could take place at end of 2023 / early 2024.
 

 •
Oleogel-S10: Although there are no approved products in the United States or the European Union for the treatment of EB, some of our competitors are developing products which, if approved, and depending on the labelled indication, could potentially compete with Oleogel-S10. Some companies, including Krystal Biotech, Inc. and Abeona Therapeutics Inc., are developing gene therapy treatments, while other companies, including Castle Creek Pharmaceuticals Holdings, Inc. and Wings Therapeutics, Inc., are developing non-gene therapy treatments. In November 2021 Kyrstal announced that its Ph3 GEM-3 study of B-VEC, known as Vyjuvek™, met its primary endpoint of complete wound healing at six-month timepoints and its secondary endpoint of complete wound healing at three-month timepoints. Additionally, Vyjuvek™ was shown to be well-tolerated, with no drug-related serious adverse events or discontinuations. They could file a Biologics License Application in Q2 2022, with potential approval in the second half of 2022 and file for MAA in EU in the second half of 2022.
 
Intellectual Property
 
We rely on our own patents licensed from third parties, and on other means to protect our technology, inventions and improvements that are commercially important to our business.
 
Our policy is to file patent applications on a worldwide basis in those jurisdictions where it is considered beneficial to our business, depending on the subject matter and the commercialization strategy.
 
We have a portfolio of patents and pending patent applications covering various aspects of our lomitapide, metreleptin, Mycapssa, Oleogel-S10 and AP103 assets in a variety of jurisdictions. Our lomitapide patent portfolio includes eight Approved Drug Products with Therapeutic Equivalence Evaluations (“Orange Book”) listed patents licensed from the University of Pennsylvania (“UPenn”) claiming methods of treatment that provide protection from 2025 to 2027 in the United States and into 2025 in Europe, Australia, Japan, South Korea, Canada and New Zealand. Applications are pending in the U.S. and India. Supplementary protection certificates (“SPCs”) have been granted in 26 European countries (including the United Kingdom, Germany, France, Italy and Spain) extending patent protection into 2028. Two additional SPCs applications are pending.
 
The metreleptin patent portfolio includes two issued U.S. patents claiming methods of treating lipoatrophy, two granted European patents (“EP patents”) claiming methods of treatment (validated in numerous European countries, including the United Kingdom, Germany, France, Italy and Spain), granted patents claiming methods of treatment in other jurisdictions including Australia, Canada, and Japan as well a pending applications in the United States, all of which have been licensed to Amryt or are owned by Amryt. The granted patents provide protection from 2022 to 2027 in the United States and into 2022 in Europe and other jurisdictions. A US patent claiming methods of detecting anti-leptin neutralizing antibodies provides protection until 2038. Additional applications claiming methods of detecting anti-leptin neutralizing antibodies are pending in the United States, Brazil, Canada, China, Eurasia, India, Hong Kong, Japan and Mexico; if granted, patent protection would expire in 2037.
 
Our Mycapssa® patent portfolio includes eight Approved Drug Products with Therapeutic Equivalence Evaluations (“Orange Book”) listed patents, including three formulation and one acromegaly use patents which expire in 2029, three acromegaly use patents which expire in 2036, one octreotide method of use patent expiring 2040, as well as one pending U.S. application which covers NET/VIP use which if allowed would expire in 2037. In Europe, there are two granted composition patents which expire in 2029, one pending Acromegaly use Application, which if allowed would expire 2036 and one NET Use Application which if allowed would expire in 2037.
 
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We were first granted patent protection for Oleogel-S10 in Japan in 2010. Key patent grants for Oleogel-S10 in Europe and the United States followed in 2013. If Oleogel-S10 is approved in the U.S. our Oleogel-S10 patent portfolio includes one U.S. patent that will be listable on the Orange Book covering oleogel compositions providing exclusivity in the United States to 2025, two U.S. patents that will be listable on the Orange Book covering treatment of EB that provide exclusivity in the United States into 2030 and one U.S. patent that will be listable on the Orange Book covering treatment of EB into 2039. Our non-U.S. patents for Oleogel-S10, include EP patents (validated in various European countries including the United Kingdom, Germany, France, Italy and Spain) covering the Oleogel-S10 composition and methods of healing wounds with Oleogel-S10, expiring in 2025 and 2030, respectively. Supplementary protection certificates have been obtained in various EU countries, extending the expiration of the composition patents in Europe from 2025 to 2030. We have filed non U.S. patent applications directed to the clinical formulation and methods of manufacturing and treatment therewith; the term of any patents that are derived from this application would expire in 2039.
 
The AP103 patent portfolio includes one granted EP patent (validated in various countries including the United Kingdom, Germany, France, Italy and Spain) claiming HPAE polymers and polyplexes comprising HPAE polymers, and transfection methods using such polymers, as well as pending U.S. and European applications. These patents and applications have been in-licensed from the University College Dublin and are expected to provide exclusivity into 2035. We have also filed U.S. and European applications claiming a proprietary genus of HPAEs and novel HPAE polyplexes, as well as claiming a proprietary and scalable HPAE polyplex manufacturing methods; the term of any patents that are derived from these applications would expire in 2039. See “—Material Contracts—University College Dublin In-License Agreement.”
 
Juxtapid was granted Orphan Drug status in the United States for the treatment of HoFH and for the treatment of FCS. This designation provided exclusivity to December 2019 for the approved HoFH indication and can provide potentially seven years of exclusivity for the FCS indication, if that indication is approved. Lojuxta obtained Orphan Drug status in the European Union for the treatment of FCS. Upon approval of an FCS indication in the European Union, 10 years of exclusivity (plus two years on successful completion of a PIP) could be obtained.
 
Following approval by the EMA in July 2018, metreleptin is entitled to ten years of market and Orphan Drug exclusivity in the European Union (to July 2028 which can be extended a further two years upon successful completion of a PIP) for the treatment of familial partial lipodystrophy, Barraquer-Simons syndrome, Lawrence syndrome, and Berardinelli-Seip syndrome. In the United States Myalept should also qualify for a 12-year period of exclusivity from biosimilar or interchangeable products, which will expire in 2026, under the Biologics Price Competition and Innovation Act. Myalept could also receive orphan designation upon submission and approval of a PL indication in the United States which would provide seven years of exclusivity for this indication following approval in the United States.
 
In January 2020, an exclusivity justification orphan drug exclusivity for Mycapssa, for the treatment of Acromegaly in the U.S. was submitted to the Office of Orphan Products Development (OOPD) at FDA.  If awarded Mycapssa® will have 7 years orphan drug exclusivity for the treatment of Acromegaly in the U.S. If Mycapssa® is approved by EMA in the European Union and, subject a positive opinion from COMP regarding maintenance of the Orphan Designation (OD), Mycapssa® will have 10 years market exclusivity from the date of approval.
 
Oleogel-S10 has been granted Orphan Drug status for the treatment of EB in the European Union and the United States. Should Oleogel-S10 be granted approval it will be entitled to Orphan Drug exclusivity for the treatment of EB, extending protections for seven years in the United States and, subject to a positive opinion from COMP regarding maintenance of the Orphan Designation (OD), ten years in the European Union from the date of approval in the respective jurisdictions. The ten-year Orphan Drug exclusivity period in the European Union can be extended a further two years upon successful completion of a PIP.
 
Material Contracts
 
The following summary of our material contracts is not intended to be a complete description of these contracts, and it is qualified in its entirety by reference to the full text of such contracts, which are filed as exhibits to the registration statement of which this annual report forms a part. We urge you to review these exhibits in their entirety.
 
The following summary excludes contracts with our principal shareholders that we entered in connection with the acquisition of Aegerion, which are summarized under “Related Party Transactions.”
 
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Agreement and Plan of Merger Between Amryt Pharma Plc. Amryt Merger Sub and Chiasma, Inc.
 
On May 5, 2021, Amryt announced that it had signed a definitive agreement to acquire Chiasma, Inc. in an all-stock combination. Under the terms of the transaction, each share of Chiasma common stock issued and outstanding prior to the consummation of the transaction was exchanged for 0.396 Amryt American Depositary Shares (“ADSs”), each representing five Amryt ordinary shares. The merger agreement provided that, upon the terms and subject to the conditions set forth in the merger agreement, at the effective time, Amryt Merger Sub, an indirect wholly owned subsidiary of Amryt, merged with and into Chiasma with Chiasma surviving as an indirect wholly owned subsidiary of Amryt subsequently renamed Amryt Endo, Inc. which then ceased to be a publicly traded company.
 
On August 5, 2021, Amryt completed the acquisition of Chiasma, Inc. and, in conjunction with the completion, Amryt allotted and issued a total of 127,733,680 ordinary shares as consideration for the acquisition. Following the completion, shareholdings in Chiasma were rounded in being converted to Amryt shares using the exchange ratio of 0.396. Roundings in converting Chiasma shareholdings to Amryt shares were finalized in August 2021 and resulted in an additional 7,015 ordinary shares being allotted and issued by Amryt as consideration for the acquisition. In total, these ordinary shares were issued to the former Chiasma Shareholders in the form of 25,548,139 ADSs at US$10.19 per share, to acquire Chiasma for a value of US$260,336,000.  On August 5, 2021, the Group repaid US$116,629,000 of Chiasma long term debt.
 
Amryt’s $125m Debt-Refinancing
 
On February 22, 2022, Amryt announced that it secured US$125 million of senior credit facilities from funds managed by the Credit Group of Ares Management Corporation (“Ares”). Amryt used a portion of the proceeds to refinance its previous secured term debt facility, which had an outstanding balance of US$94.0, million as at February 22, 2022, an interest rate of 13.00% and a maturity date of September 2024. The new facilities will generate significant annual interest cost savings as well as provide for important strategic flexibility as Amryt looks to continue to grow its global rare disease presence.
 
Key features of the facilities include:
 

 •
Total new facilities of $125 million, consisting of:

o
$85 million Term Loan Facility with interest rate of Secured Overnight Financing Rate (“SOFR”)+6.75%, subject to a 0.90% SOFR floor

o
$40 million Revolving Credit Facility with $20 million drawn at close and interest rate of SOFR+4.00%, subject to a 0.90% SOFR floor

o
Quarterly blended cash interest rate of SOFR+5.87% (assuming fully drawn), subject to a 0.90% SOFR floor, substantially lower than Amryt’s current secured term debt facility at 13.00% interest

•
Requires interest-only payments until facility matures in February 2027

•
There are no warrants or any equity conversion features associated with the new facilities

•
The proceeds will be used to refinance existing debt, for general corporate and product development purposes; and potentially for shareholder approved share repurchase programs.
 
Charges were taken over certain assets of the company and its material entities as guarantee and collateral for the provision of the debt.
 
Share Purchase and Transfer Agreement between Software AG – Stiftung and Dr. Armin Scheffler and Amryt Pharmaceuticals DAC
 
On October 16, 2015, Amryt Pharmaceuticals DAC entered into a share purchase and transfer agreement (“Birken SPA”) with Software AG – Stiftung and Dr. Armin Scheffler in their capacity as sellers (together, “Birken Sellers”) relating to the purchase of the entire issued share capital of Birken AG (now Amryt GmbH). Under the Birken SPA, the consideration for the shares of Birken AG comprised the allotment and issue of new ordinary shares in Amryt Pharmaceuticals DAC, the sum of €1,000,000 plus additional milestone and royalty payments if/when certain milestones are met. As of the date of this annual report, we have made milestone payments of €12 million under this agreement. Remaining milestone payments are as follows:
 

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€10 million once net ex-factory sales/net revenue of Oleogel-S10 first exceed €50 million in any calendar year;
 

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€15 million once net ex-factory sales/net revenue of Oleogel-S10 first exceed €100 million in any calendar year; and
 

 •
€10 million on receipt of marketing approval by the EMA or the FDA for the treatment of EB.
 
The royalty payments payable to the Birken Sellers are as follows: (a) 9% of (i) net ex-factory sales, and (ii) net revenues in either case relating to Oleogel-S10; and (b) 6% of: (i) net ex-factory sales; and (ii) net revenues relating to other betulin products, with the relevant royalty periods essentially being ten years from first commercial sale of the relevant product (other than in respect of Imlan).
 
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University College Dublin In-License Agreement
 
On March 14, 2018, Amryt Genetics Limited entered into an agreement with University College Dublin relating to the patent rights for AP103. Under this agreement, University College Dublin granted an exclusive, worldwide license to the patent rights for the platform technology to develop one or more gene therapy products for therapeutic use in any disorder in humans and animals. University College Dublin retains an irrevocable, perpetual, royalty-free, worldwide right to use the licensed intellectual property for the purposes of academic teaching, publication and non-commercial research. The subject platform technology relates to a non-viral gene therapy, which offers a potential treatment for patients with EB. Preliminary data available to us suggests that the treatment could be potentially disease-modifying for patients with RDEB. We intend to conduct various preclinical studies in connection with the agreement.
 
In consideration of the agreement, Amryt Genetics Limited made an upfront payment of €40,000 and agreed to the following milestone payments:
 

 •
€100,000 on the successful completion of a Phase 2a proof of concept study;
 

 •
€100,000 on the successful completion of a Phase 2b study;
 

 •
€200,000 upon the first commercial sale of a gene therapy product incorporating or utilizing the licensed technology; and
 

 •
€200,000 upon the first commercial sale of each subsequent product requiring a separate marketing authorization.
 
Upon the sale of product, we are obligated to make royalty payments to University College Dublin as follows: (a) 2% on net sales in a calendar year up to €100 million, and (b) 3% on net sales in a calendar year in excess of €100 million. Under the agreement, we must also pay to University College Dublin a portion of the royalties we receive from our affiliates in connection with the product: (a) 30% of net royalties prior to the initiation of a Phase 1 study, (b) 20% of net royalties commencing upon the initiation of a Phase 1 study and before the completion of a Phase 2a proof of concept study, and (c) 10% of net royalties commencing upon the completion of a Phase 2a proof of concept study.
 
The agreement continues in full force on a product-by-product and country-by-country basis until the later of (a) the expiration of the last valid claim of patent rights, (b) the expiration of orphan drug exclusivity, or (c) 15 years after the first commercial sale of the first product by us or our affiliates or sub-licensees. University College Dublin may terminate the agreement with 30 business days’ prior written notice under the following circumstances:
 

 •
if we are in material breach of any provision of the agreement and, after receiving notice from University College Dublin identifying a material breach, we fail to cure said material breach within 60 business days, University College Dublin may issue a notice of default. If we do not cure the material breach within 60 business days from receipt of the notice of default, then University College Dublin may terminate the agreement;
 

 •
if we become insolvent, or if an interim order is applied for or made, or a voluntary arrangement approved, or a voluntary arrangement is proposed or approved or an administration order is made, or a receiver or administrative receiver is appointed for any of our assets or undertaking or a winding-up resolution or petition is passed or presented (otherwise than for the purposes of reconstruction or amalgamation), or if any circumstances arise which entitle the court or a creditor to appoint a receiver, administrative receiver or administrator or to prevent a winding-up petition or make a winding-up order, or other similar or equivalent action is taken against or by us by reason of our insolvency or in consequence of debt, or if we make any arrangement with our creditors;
 

 •
if we or our affiliates challenge the validity of the patent applications when granted, or assist any third party to commence legal proceedings to challenge such validity;
 

 •
if, according to an independent expert’s judgment, we have failed to use commercially reasonable efforts to develop, use and exploit the intellectual property licensed under the agreement, and six months after the independent expert’s judgment we have still failed to take the specific actions to develop, use and exploit the intellectual property licensed, then University College Dublin may at any time within three months after the end of that six-month period, provide at least three months’ notice to us to terminate the agreement;
 

 •
if we fail to pay any amount due under the agreement within 30 business days having received written notice from University College Dublin of our failure to pay, and such failure to pay is not subject to a good faith dispute between the parties; and
 

 •
if we dispose of all, or a substantial part of our business involving the licensing of the intellectual property under the agreement in circumstances where we do not enter into a novation agreement pursuant to us becoming insolvent or any other circumstance described above.
 
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We may terminate the agreement at any time by giving University College Dublin at least 60 business days’ prior written notice. Upon expiration or termination of the agreement, all rights and licenses granted to us under the agreement also terminate.
 
University of Pennsylvania Lomitapide License Agreement
 
On May 19, 2006, Aegerion entered into an agreement with UPenn for the in-license of lomitapide. Pursuant to the terms of the agreement Aegerion was granted an exclusive and worldwide license (including right to sublicense) to certain patents of UPenn and certain patents assigned to UPenn by Bristol-Myers Squibb (“Bristol-Myers”). The license is provided for the following field of use: (a) monotherapy or with other dyslipidemic therapies to treat patients with HoFH; and (b) monotherapy or in combination with other dyslipidemic therapies for treatment of patients with other severe forms of hypercholesterolemia unable to come within 15% of National Cholesterol Education Program’s (“NCEP”) goal on maximal tolerated oral therapy, as determined by the patient’s prescribing physician, with severe combined hyperlipidemia unable to come within 15% of NCEP’s non-high-density lipoprotein-cholesterol goal on maximal tolerated oral therapy, as determined by the patient’s prescribing physician, or with severe hypertriglyceridemia unable to reduce triglycerides less than 1,000 on maximal tolerated therapy.
 
In partial consideration of the in-license of lomitapide, we are required to pay UPenn a royalty of 2% based on patent coverage of the product and annual net sales on a country-by-country basis made pursuant to the terms of the agreement. The sub-license fees are as follows: (i) 25% of sub-licensing fees received for net sales in a country that is covered by a valid claim of the licensed patent rights and (ii) 15% of all other sub-license fees.
 
If the indication is not HoFH or severe refractory hypercholesterolemia, then additional payments are required to be made upon the initiation of a Phase 3 trial ($300,000), the filing of a U.S. NDA ($750,000) and the grant by the FDA of approval of an NDA ($1,500,000).
 
The agreement expires on a country-by-country basis upon there no longer being a valid claim of licensed patent rights. Upon the expiration in a country, the license becomes irrevocable and fully paid-up. We can also terminate the agreement at any time.
 
Japan Lomitapide License Agreement
 
On February 5, 2019, Aegerion entered into a license agreement with Recordati for the commercialization of Juxtapid in Japan. Under the terms of the License Agreement, and subject to the conditions set forth therein, Aegerion granted to Recordati an exclusive license in Japan, for the current marketed indication for HoFH. During the term of the License Agreement, Recordati also has an exclusive right of first negotiation to any new indications for Juxtapid in Japan that may be developed and the right to grant sub-licenses and to manufacture and commercialize Juxtapid, under specific circumstances.
 
Pursuant to the terms of the License Agreement, and subject to the conditions set forth therein, Recordati is required to make the following payments: (i) $25 million as a one-time upfront payment on the effective date of the agreement (which was paid in the first quarter of 2019), (ii) $5 million as a one-time payment within 45 days following the date on which the Japan marketing authorization for Juxtapid is successfully transferred to Recordati (“Completion Date”) (which was paid in the second quarter of 2019), (iii) quarterly royalty payments, during the term of the License Agreement, equal to 22.5% of all net sales of Juxtapid in Japan, and (iv) 20% of all other sublicense revenues received by Recordati or any of its affiliates.
 
In addition, pursuant to the terms of the License Agreement, we may receive from Recordati commercial milestone payments (up to a total of $80 million) for net sales in Japan, conditioned and based upon the achievement of certain net sales levels in Japan, the first $12.5 million installment of which becomes payable at the end of the first quarter in which cumulative net sales in Japan reach $70 million, and which are payable in incremental installments thereafter at the end of each quarter in which cumulative net sales in Japan increase by $70 million (in incremental payments of $12.5 million until cumulative net sales reach $280 million and then in incremental installments of $5 million for each incremental $70 million of revenues until cumulative net sales reach $700 million).
 
Further, pursuant to the current license agreement with UPenn, UPenn is entitled to receive 15% of the $25 million upfront payment, 15% of the marketing authorization transfer milestone and any subsequent sales milestone payments received from Recordati and 25% of royalty payments that we receive from Recordati under the License Agreement.
 
We have also entered into a customary supply agreement with Recordati under which we will supply Juxtapid to Recordati (or its affiliate) at cost plus an agreed upon markup for an initial term of two years with automatic renewal for successive two year terms.
 
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The initial term of the License Agreement continues until the latest of: (i) expiration of the last valid claim of the licensed patents covering Juxtapid in Japan, (ii) expiration of data or regulatory exclusivity in relation to Juxtapid in Japan, or (c) ten years from the Completion Date. Thereafter the term of the License Agreement will automatically renew for a single five-year term, and then thereafter for successive five-year terms unless either party provides written notice at least 18 months prior to the end of the then current renewal term. Either party may terminate the License Agreement for cause if the other party materially breaches or defaults in the performance of its obligations, and, if curable, such material breach remains uncured for 90 days (15 days for non-payment).
 
Metreleptin Asset Purchase Agreements
 
In November 2014, Aegerion entered into an asset purchase agreement relating to the acquisition from Amylin Pharmaceuticals, LLC (“Amylin”) and AstraZeneca Pharmaceuticals LP (“AstraZeneca”), an affiliate of Amylin, of certain assets and rights associated with the biological product metreleptin for injection. Under the terms of the agreement, Aegerion paid AstraZeneca $325 million upfront to acquire the global rights to develop, manufacture and commercialize metreleptin, subject to an existing distributor license with Shionogi covering Japan, South Korea and Taiwan, which Aegerion assumed upon closing. The transaction did not include the transfer of any AstraZeneca employees or facilities.
 
On January 9, 2015, Aegerion entered into a letter agreement with AstraZeneca and Bristol-Myers, which was subsequently amended on April 30, 2015. This agreement was entered into pursuant to Aegerion’s acquisition of metreleptin from AstraZeneca. Under the asset purchase agreement and letter agreement, Aegerion agreed to fulfill certain of AstraZeneca’s original obligations to Bristol-Myers including reporting, milestone and royalty payments and diligence obligations in relation to metreleptin.
 
Pursuant to the terms of the agreements we are required to pay 5-10% royalties to Bristol-Myers, as previously paid by AstraZeneca, on the net U.S. sales of metreleptin.
 
Amgen License Agreement
 
In connection with Aegerion’s acquisition of metreleptin in January 2015, Aegerion acquired a license agreement between Amgen and Amylin, dated February 7, 2006 (“Amgen License”) pursuant to which Aegerion obtained an exclusive worldwide license from Amgen to certain know-how and patents and patent applications covering the composition of matter and methods of use of metreleptin to develop, manufacture and commercialize a preparation containing metreleptin (“Amgen Licensed Products”).
 
As part of the Amgen License, Aegerion also obtained an exclusive sublicense of Amgen’s exclusive rights to certain metreleptin-related patents and patent applications owned by the Rockefeller University and exclusively licensed to Amgen under a license agreement dated April 14, 1995, as amended (“Rockefeller License”) and an exclusive sublicense of Amgen’s non-exclusive rights to certain metreleptin-related patents and patent applications owned by The Regents of the University of California and non-exclusively licensed to Amgen under a license agreement dated July 13, 2005 (“UCSF License”). Amgen retains rights to conduct research, development, manufacturing and commercialization activities with respect to products other than the Amgen Licensed Products.
 
We may grant sublicenses under the licenses and sublicenses granted by Amgen, subject to certain limitations, including Amgen’s right of first offer for any out-license, partnership, co-development, commercialization, co-promotion or similar agreement related to metreleptin or the Amgen Licensed Products, which expired in February 2021.
 
We are required to make royalty payments to Amgen and Rockefeller University on net sales of each Amgen Licensed Product on a country-by-country basis (i) at a royalty rate in the low double digits where the Amgen Licensed Product has patent protection or market exclusivity granted by a regulatory authority at the time of regulatory approval in the applicable country during the applicable royalty term, which runs on a country-by-country basis until the later of (a) the expiration of the last-to-expire valid claim covering an Amgen Licensed Product in the applicable country, (b) the expiration of any market exclusivity granted by a regulatory authority, and (c) ten years from the date on which an Amgen Licensed Product is first sold to a third party in a country after regulatory approval for the Amgen Licensed Product has been granted in such country (“Amgen Royalty Term”) or (ii) at a royalty rate in the mid-single digits to low double digits where the Amgen Licensed Product receives patent protection or market exclusivity following the time of regulatory approval in the applicable country, in either case subject to a variety of customary reductions.
 
Under the Amgen License, we are also required to directly meet certain payment obligations under the Rockefeller License and UCSF License. We are required to make royalty payments to Rockefeller University on net sales of each product with patent rights or know-how in the field of obesity genes, obesity gene products, and molecules that modulate or mediate their action and/or regulation on a country-by-country basis at a range of royalty rates in the low single digits depending on whether the product has an orphan product designation or not until the later to occur of expiration of (i) patent protection, (ii) any market exclusivity period granted in the applicable country, or (iii) any data exclusivity period in the applicable country (with certain limitations related to the number of units sold). Since acquiring this license agreement in January 2015, a one-time $5 million milestone payment was paid to Rockefeller University in February 2015, which was due 12 months following the receipt of marketing approval for Myalept in the United States. We will also be required to pay to Rockefeller University a percentage in the low double digits of any upfront license fees or one-time fees it receives in consideration for a sublicense of the licensed rights. There are no material payment obligations outstanding under the UCSF License.
 
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Current patent protection exists from 2022 to 2027 in the United States and into 2022 in the European Union, as well as orphan exclusivity in the European Union into 2028. A US patent application claiming methods of detecting anti-leptin neutralizing antibodies provides protection until 2038. Additional applications claiming methods of detecting anti-leptin neutralizing antibodies are pending in the United States, Brazil, Canada, China, Eurasia, India, Japan and Mexico; if granted, patent protection would expire in 2037.and 2039, if extended upon successful completion of a PIP, respectively
 
We assumed this agreement upon the acquisition of Aegerion. We have the right to terminate the agreement at any time.
 
National Institutes of Health (“NIH”) License Agreement
 
In February 2017, Aegerion entered into an in-license agreement in respect of patent rights for metreleptin with the NIH. Pursuant to the terms of the agreement Aegerion was granted an exclusive and worldwide license to (including the right to sub-license) the NIH patent rights for the use of leptin, leptin analogs and derivatives for the diagnosis, prevention and treatment of human lipodystrophy.
 
Upon the date of the first commercial sale of a licensed product in a country other than the United States, we have agreed to pay NIH a royalty percentage of 0.4% of net sales, on a country-by-country basis, in such countries in which a valid patent claim exists. No U.S. royalty is due on the sales.
 
The agreement expires upon the expiration of the last to expire licensed patent rights. We can terminate the agreement at any time and NIH has the following termination and modification rights:
 
Other than NIH having the right to immediately terminate the agreement should we become insolvent, file for bankruptcy or receive notice of a third party’s intention to file an involuntary petition in bankruptcy, NIH may terminate the agreement if we default on any material obligation under the agreement which has not been remedied within 90 days of the notice of default being provided, including the following:
 

 •
we have not achieved certain agreed performance milestones;
 

 •
we have willfully made a false statement of, or willfully omitted, a material fact in the license application or in any report required by the agreement;
 

 •
we have committed a material breach of a covenant or agreement contained in the agreement that has not been remedied within 90 days;
 

 •
we have not been keeping the licensed products or the licensed processes reasonably available to the public after commercial use commences; or
 

 •
we cannot reasonably satisfy unmet health and safety needs.
 
Accredo Agreements
 
On December 6, 2013, Aegerion entered into a distribution agreement in respect of lomitapide with Accredo.
 
Pursuant to the agreement Accredo is appointed as an authorized non-exclusive distributor of record of lomitapide. Amryt may appoint other distributors upon 60 days’ notice to Accredo (such notice must also be provided by Amryt when other specialty pharmacies are added to the distribution network). If Amryt exercises this right and such an appointment causes Accredo to no longer be one of three (or less) specialty pharmacies, Accredo may terminate the agreement. In addition, either party may terminate the agreement at any time upon 180 days’ written notice to the other party.
 
On December 6, 2013, Aegerion entered into a master services agreement in respect of metreleptin with Accredo. The agreement sets the framework of non-exclusive commercial relationship between the parties. Pursuant to the agreement, Accredo agreed to perform services on our behalf, related to metreleptin as described in one or more statements of work provided to us. Such services include, but are not limited to case management and ongoing clinical support services. In consideration for services provided, we are required to pay Accredo the fees set forth in the applicable statement of work. We have the right to terminate at any time upon 120 days’ notice and Accredo may terminate on one year’s notice.
 
The distribution agreement expires on June 30, 2022, and the Accredo master services agreement expires in December 2023.
 
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Metreleptin Contract Manufacturing Agreement
 
We currently have in place a contract manufacturing agreement with Sandoz GmbH in respect of metreleptin, effective as of September 30, 2010. Pursuant to the terms of the agreement, Sandoz GmbH is appointed as non-exclusive manufacturer of metreleptin. Sandoz GmbH is obligated to produce a majority of our metreleptin product demand and Amryt has committed to purchase such amount and is committed to a contract value for 2022 in the amount of €9.9 million. The agreement expires on December 31, 2023. Either party may terminate the agreement for any scientific, regulatory, safety or economic reason to the end of each calendar year by giving 24 months’ prior written notice.
 
TEVA Manufacture & Supply Agreement
 
On December 31, 2015, Chiasma entered into a commercial manufacture, purchase and supply agreement with TEVA API Inc for the manufacture, purchase and supply of R&D and registration quantities of API (active pharmaceutical ingredient) for further processing into Mycapssa.
 
The terms of the agreement require Chiasma to purchase minimum percentages of Chiasma’s total annual requirements of Octreotide acetate in the manufacturing of Mycapssa. The consideration payable by Chiasma to TEVA API Inc is calculated based on the annual consumption by Chiasma of the API set forth in binding purchase orders issued in a calendar year. The agreement expires on the seventh anniversary of the first commercial sale of Mycapssa® to an independent third-party in a region or any country in a region outlined in the supply agreement.
 
AcariaHealth, Inc Specialty Pharmacy Provider Dispensing and Services Master Agreement
 
On August 21, 2020, Chiasma entered into a product purchase and pharmacy services master agreement with AcariaHealth whereby Chiasma agreed to sell Mycapssa® to AcariaHealth in the United States and Puerto Rico on a non-exclusive basis. Additionally, the parties agree that AcariaHealth will perform certain services performed in the normal course of business for similarly situated pharmacies dispensing products including enhanced services for which a fair market value fee is payable by Chiasma. The agreement has an initial term of two years and automatically renews for successive one year renewal terms and can be terminated on ninety days’ notice along with other customary termination provisions.
 
AssistRx Master Services Agreement
 
On May 8, 2020, Chiasma entered into a master services agreement with AssistRx, Inc. to provide certain specialty pharmacy services for Mycapssa. The agreement is for a period of three years with automatic one year renewals unless either party terminates within ninety days of the expiration of the initial term or renewal term (as applicable). The agreement may also be terminated by either party for a material and continuing breach that remains uncured beyond thirty days following receipt of a written notice of breach from the non-breaching party along with other customary termination provisions.
 
Cardinal Health Exclusive Distribution Agreement
 
On June 23, 2020, entered into an exclusive distribution agreement with Cardinal Health 105, Inc., as its exclusive third-party logistics distribution agent for commercial sales in the United States of all pharmaceutical products manufactured and/or marketed by Chiasma as well as traditional 3PL Operating Guidelines including storage, distribution, returns, customer support, financial support, EDI and system access support.
 
The term of the agreement is for an initial period of three years following the first shipment of FDA-approved product to a commercial customer unless terminated earlier with one year automatic renewals unless terminated by either party at least ninety days prior to the end of the initial term or any renewal term. Either party has the right to immediately terminate the agreement upon other customary material termination provisions.
 
Government Regulation and Product Approval
 
Government authorities in the United States, at the federal, state and local level, the European Union, EU Member States, and in other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labelling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of the products. In the future, if we were to develop or acquire any other products, or any product candidates, they would also be subject to such regulations and oversight. Our products must be approved by the FDA through the NDA or the BLA process before they may be legally marketed in the United States and must be approved by foreign regulatory authorities via various procedures before they can be marketed in the applicable country, including the EMA or the regulatory authorities of the EU Member States before they can be placed on the market in the European Union.
 
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U.S. Regulatory Matters
 
Drug and Biologic Development Process
 
In the United States, the FDA regulates drugs under the FDCA, and regulates biologics under both the FDCA and the Public Health Service Act of 1944 (“PHSA”). The process of obtaining marketing approvals and the subsequent compliance with appropriate federal, state, local, and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject a company to administrative or judicial sanctions. These sanctions could include, among other things, the FDA’s refusal to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of enforcement-related letters, product recalls, product seizures, changes to the conditions surrounding marketing approval such as labelling changes or changes to a REMS program, total or partial suspension of production or distribution, injunctions, civil money penalties, fines, refusals of government contracts, debarment, restitution, disgorgement of profits, or civil or criminal investigations and penalties. Any agency or judicial enforcement action could have a material adverse effect on us.
 
The process required by the FDA before a drug or biologic may be marketed in the United States is extensive and generally involves the following:
 

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completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices and other applicable regulations;
 

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submission to the FDA of an investigational new drug (“IND”) application, 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 Practice 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 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 the producer is 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 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.
 
Once a pharmaceutical candidate is identified for development it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies, to assess the safety and quality of the product. Animal studies must be performed in compliance with the FDA regulations and the U.S. Department of Agriculture’s Animal Welfare Act of 1966. Human clinical trials cannot commence until an IND application is submitted and becomes effective. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND. The sponsor also will include a protocol detailing, among other things, the objectives of the first phase of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated, if the first phase lends itself to an efficacy evaluation. Preclinical testing may continue after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30 day time period, places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during studies due to safety concerns or non-compliance, or other reasons.
 
All clinical trials must be conducted under the supervision of one or more qualified investigators. The conduct of clinical trials is subject to extensive regulation, including the FDA’s bioresearch monitoring regulations and Good Clinical Practice (“GCP”) requirements, which establish standards for conducting, recording data from, and reporting the results of, clinical trials, and are intended to assure that the data and reported results are credible and accurate, and that the rights, safety, and well-being of study participants are protected. These regulations include the requirement that all research subjects provide informed consent. Further, an IRB must review and approve the plan for any clinical trial before it commences at any institution. An IRB considers, among other things, whether the risks to individuals participating in the trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the trial and the consent form that must be provided to each trial subject or his or her legal representative and continues to provide oversight of the study until it is completed. In addition, companies sponsoring the clinical trials, investigators, and IRBs also must comply with regulations and guidelines for complying with the protocol and investigational plan, adequately monitoring the clinical trial, and timely reporting of adverse events. Foreign studies conducted under an IND must meet the same requirements that apply to studies being conducted in the United States. Data from a foreign study not conducted under an IND may be submitted in support of an NDA or BLA if the study was conducted in accordance with GCP and the FDA is able to validate the data through an onsite inspection, if necessary.
 
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Each new clinical protocol must be submitted for FDA review, and to the IRBs for approval. Protocols detail, among other things, the objectives of the study, the primary and secondary endpoints of the study, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety.
 
Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:
 

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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 is 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 labelling.
 
Progress reports detailing developments associated with the clinical testing program must be submitted at least annually to the FDA, and safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events or animal test results that suggest a significant risk to human subjects. Phase 1, Phase 2 and Phase 3 testing may not be completed successfully within any specified period, if at all. The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. Further, success in either preclinical studies or early-stage clinical trials does not assure success in later-stage clinical trials. Frequently, product candidates that have shown promising results in early clinical trials have subsequently suffered significant setbacks in later clinical trials. In addition, the design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. Sponsors of certain interventional clinical trials, except for Phase 1 trials, are required to submit certain clinical trial information for inclusion in the public clinical trial registry and results data bank maintained by the NIH, which are publicly available at http://clinicaltrials.gov.
 
Concurrent with clinical trials, companies usually complete additional studies in non-human models, and must also develop additional information about the chemistry and physical characteristics of the product, and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
 
The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.
 
U.S. Review and Approval Processes
 
The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the product, proposed labelling, and other relevant information are submitted to the FDA as part of an NDA or BLA requesting approval to market the product. The submission of an NDA or BLA generally is subject to the payment of a user fee, which is currently ca. $3.1 million for FY 2022 for applications requiring clinical data, although NDAs or BLAs for designated Orphan Drugs are exempt from this fee. An approved NDA or BLA is generally subject to an annual program fee, currently $369,413, per strength up to a maximum of five user fees per NDA or BLA, for FY 2022.
 
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In addition, under the U.S. Pediatric Research Equity Act of 2007, as amended, an application or supplement to an application for a drug with certain novel features (e.g., new active ingredient, new indication, new dosage form) must contain data to assess the safety and effectiveness of the drug or biologic for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective. The FDA may grant deferrals or full or partial waivers for submission of this data. Unless otherwise required by regulation, the act does not apply to any drug or biologic for an indication for which orphan designation has been granted.
 
The FDA conducts a preliminary review of all NDAs and BLAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for filing. The FDA may request additional information rather than accept an application for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. Under the Food and Drug Administration Amendments Act of 2007, the FDA is required to refer an NDA for a new chemical entity to an advisory committee prior to approval or explain why such review is not necessary. The FDA is not bound by the recommendation of an advisory committee, but it frequently follows such recommendations. The approval or licensure process is lengthy and difficult, and the FDA may refuse to approve an NDA or BLA if the applicable regulatory criteria are not satisfied or may require additional clinical or other data and information. The FDA reviews an application to determine, among other things, whether a drug is safe and effective for its intended use, or whether a biologic is safe, pure, and potent, and whether its manufacturing is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity. Before approving an NDA or BLA, the FDA will typically inspect the facility or facilities where the product is manufactured. In addition, the FDA often will conduct a bioresearch monitoring inspection of the clinical trial sites involved in conducting pivotal studies to ensure data integrity and compliance with applicable GCP requirements.
 
Applications receive either standard review or priority review, which is reserved for a product that represents a major advance in treatment or a treatment where no adequate therapy exists. Under the U.S. Prescription Drug User Fee Act of 1992 (“PDUFA”), the FDA has ten months in which to complete its initial review of a standard new molecular entity NDA or original BLA and six months for a priority review new molecular entity NDA, BLA, or efficacy supplement. The FDA does not always meet its PDUFA goal dates and in certain circumstances the PDUFA goal date may be extended. In addition, products studied for their safety and effectiveness in treating serious or life-threatening illnesses and which provide meaningful therapeutic benefit over existing treatments, may receive accelerated approval. In that situation, the product may be approved on the basis of adequate and well-controlled clinical trials establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity. As a condition of approval, a sponsor of a drug or biologic receiving accelerated approval must perform post-marketing studies to validate the surrogate endpoint or otherwise confirm the effect of the product on a clinical endpoint, and the product may be subject to accelerated withdrawal procedures.
 
If a product receives marketing approval, the approval may be significantly limited to specific diseases, dosages or patient populations, or the indications for use may otherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may impose distribution and use restrictions and other limitations on labelling and communication activities with respect to an approved product via a REMS program, which could include medication guides, patient package inserts, physician communication plans, restricted distribution methods, and patient registries.
 
The goal of the Juxtapid REMS is to mitigate the risk of hepatotoxicity associated with the use of Juxtapid by ensuring that:
 

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prescribers are educated about the approved indication for Juxtapid, the risk of hepatotoxicity associated with the use of Juxtapid; and the need to monitor patients during treatment with Juxtapid as per product labeling,
 

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Juxtapid is dispensed only to patients with a clinical or laboratory diagnosis consistent with homozygous familial hypercholesterolemia (HoFH), and
 

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patients are informed about the risk of hepatotoxicity associated with the use of Juxtapid and the need for baseline and periodic monitoring.
 
The Juxtapid REMS includes the following Elements to Assure Safe Use: (i) certification of Healthcare Providers who prescribe Juxtapid, (ii) certification of the pharmacies that dispense Juxtapid, and (iii) Juxtapid must be dispensed only to patients with evidence or other documentation of safe-use conditions. Further information can be found at http://www.juxtapidremsprogram.com.
 
The goal of the Myalept REMS is to mitigate:
 

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the risks of serious adverse sequelae (such as severe infections, excessive weight gain, glucose intolerance, diabetes mellitus) due to the development of anti-metreleptin antibodies that neutralize endogenous leptin and/or Myalept, and
 

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the risk of lymphoma by:
 
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Educating prescribers about the development of neutralizing anti-metreleptin antibodies, the serious adverse sequelae that may result from these antibodies, and the risk for lymphoma associated with Myalept.
 

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Limiting the population exposed to Myalept by requiring prescriber certification, pharmacy certification, and prescriber attestation that each patient has a diagnosis consistent with the approved indication.
 
The Myalept REMS includes the following Elements to Assure Safe Use: (i) certification of Healthcare Providers who prescribe Myalept, (ii) certification of the pharmacies that dispense Myalept, and (iii) Myalept must be dispensed only to patients with evidence or other documentation of safe-use conditions as well as a Letter for Healthcare Providers (risk of severe infections) communication.
 
Further information can be found at http://myaleptrems.com.
 
The Hatch-Waxman Act, Marketing Exclusivity and Patent Term Restoration
 
The Hatch-Waxman Amendments established two abbreviated approval pathways for drug products that are in some way follow-on versions of already approved NDA products.
 
Generic Drugs: a generic drug is approved by means of an abbreviated NDA (“ANDA”) when its sponsor demonstrates that the proposed product is identical or bioequivalent to the approved, brand-name drug, referred to as the Reference Listed Drug (“RLD”). Generic drug applications are “abbreviated” because they are generally not required to include preclinical (animal) and clinical (human) data to establish safety and effectiveness. Instead, the applicant must show that the generic product performs in the same way as the RLD. Generally, an ANDA must contain data and information showing that the proposed generic product and RLD have the same active ingredients, in the same strength and dosage form, delivered via the same route of administration; are intended for the same uses, have the same labelling and, if applicable, are bioequivalent. An ANDA need not independently demonstrate the proposed product’s safety and effectiveness because the proposed product’s safety and effectiveness are inferred from the fact that the product is demonstrated to be the same as, and bioequivalent to, the RLD. These drugs are commonly referred to as “generic equivalents,” and, under state law, can typically be substituted by pharmacists under prescriptions written for the RLD. 505(b)(2) NDAs: if a product is similar to, but not the same as, an already approved product and thus is not eligible for submission of an ANDA, it may be submitted for approval via an NDA under section 505(b)(2) of the FDCA. Like an ANDA, a 505(b)(2) application is permitted to rely on the FDA’s finding that the RLD is safe and effective to the extent the products share similar features, but the sponsor must submit its own product-specific safety and effectiveness data to support any differences between the proposed and reference products.
 
RLD Patents: an NDA sponsor must identify to the FDA any patents that claim the drug substance, drug product or method of using the drug. These patents are among the information about the product that is listed in the FDA publication, Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the “Orange Book.” The sponsor of an ANDA or 505(b)(2) application seeking to rely on an RLD must make one of several certifications regarding each listed patent, which in turn affect the timing of approval of the application.
 
Marketing Exclusivities in the United States
 
The Hatch-Waxman Act provides periods of regulatory exclusivity for products that would serve as RLDs. If a drug is a new chemical entity (“NCE”), generally meaning that the FDA has not previously approved any other drug containing the same active moiety (the molecule or ion responsible for the action of the drug substance) there is a period of up to five years from the product’s approval during which the FDA may not accept for filing any ANDA or 505(b)(2) application for a drug with the same active moiety. Juxtapid’s NCE exclusivity expired on December 21, 2017, which means that an ANDA or 505(b)(2) NDA may be submitted for Juxtapid.
 
A product that is not an NCE may qualify for three years of marketing exclusivity following approval when the application contains new clinical investigations, other than bioavailability studies, conducted or sponsored by the applicant and deemed by the FDA to be essential to the approval of the application. Three-year exclusivity is often available for changes to a previously approved drug product, such as new indications, strengths or dosage forms. Although this exclusivity period does not preclude filing or review of an ANDA or 505(b)(2) application, the FDA cannot grant final approval to the ANDA or 505(b)(2) application until three years after approval of the RLD. In addition, this three-year exclusivity covers only the conditions of use associated with the new clinical investigations and, as a general matter, does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for generic versions of the original, unmodified drug product.
 
Pediatric exclusivity is available in the United States under section 505A of the FDCA based on the voluntary completion of pediatric trials and submission of pediatric data in response to an FDA written request. If reports are submitted to and accepted by the FDA within statutory time limits, any periods of regulatory exclusivity or Orange Book-listed patent protections that cover the drug (other than a 30 month stay) are extended by six months. Pediatric exclusivity does not extend a patent term but instead effectively extends the regulatory period during which the FDA cannot approve an ANDA or 505(b)(2) application. Pediatric exclusivity can only extend any regulatory exclusivity or patent protection if the FDA makes its determination that the pediatric studies fairly respond to the written request prior to nine months before the expiration of the exclusivity or patent protection period.
 
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Patent Term Restoration
 
The Hatch-Waxman Act established a patent restoration term of up to five years as compensation for patent term lost during product development and regulatory review. The maximum period of restoration is five years and cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA plus the time between the submission date of an NDA and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension, and the extension must be applied for prior to expiration of the patent and within 60 days of the NDA approval. The United States Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. A five-year patent term extension has been granted for the U.S. patent covering the composition of matter of lomitapide, extending the patent term to 2020 from the originally scheduled expiration of early 2015. With respect to metreleptin, the U.S. method-of-use patent directed to treating lipoatrophy has been elected for a 1,445-day patent term extension that will extend its expiration date to 2027.
 
The Biologics Price Competition and Innovation Act
 
The BPCI Act, enacted in 2010 as part of the Patient Protection and Affordable Care Act (“PPACA”) authorizes the FDA to license a biological product that is highly similar (“biosimilar”) to, and possibly interchangeable with, a PHSA-licensed reference biological product through an abbreviated pathway. The objectives of the BPCI Act are conceptually similar to those of the Hatch-Waxman Act, which established abbreviated pathways for the approval of small molecule drug products. The BPCI Act establishes criteria for determining that a product is biosimilar to an already-licensed biologic (a reference product), and establishes a process by which an abbreviated BLA for a biosimilar product is submitted, reviewed and approved. The BPCI Act provides periods of exclusivity that protect a reference product from biosimilar competition. Under the BPCI Act, innovator manufacturers of original reference products are granted 12 years of exclusive use before biosimilar versions of such products can be licensed for marketing in the United States. This means that the FDA may not approve an application for a biosimilar version of a reference product until 12 years after the date of approval of the reference product, although a biosimilar application may be submitted 4 years after the date of licensure of the reference product. In addition, the BPCI Act establishes procedures that require the biosimilar applicant to provide information about its application and product to the reference product sponsor, allow information about potentially relevant patents to be shared and permit litigation over patents in advance of approval. The BPCI Act also provides a period of exclusivity for the first biosimilar to be determined by the FDA to be interchangeable with the reference product. The Directors believe that under the BPCI Act, metreleptin has 12 years of exclusivity in the United States until February 24, 2026.
 
The FDA has issued guidance documents related to BPCI Act implementation concerning biosimilarity and interchangeability, BLA submission requirements, and exclusivity. In February 2020, the FDA issued a final rule to amend its definition of “biological product” to align with the statutory definition in the BPCIA, as amended by the Further Consolidated Appropriations Act, and to provide regulatory clarity around the term. The Directors anticipate that contours of the BPCI Act will be further defined through issuance of additional guidance documents by the FDA, proposed regulations, and decisions in the course of considering specific applications.
 
Like pediatric exclusivity for drug products approved under the FDCA, pediatric exclusivity for products approved under the BPCI Act is only available if the FDA determines the submitted pediatric study met the terms of its written request prior to 9 months before the expiration of either the 12-year reference product or the seven-year Orphan Drug exclusivity periods. The BPCI Act sets forth a complex mechanism for resolving patent disputes that involves a step-wise exchange of information prior to the initiation of a patent infringement lawsuit against a biosimilar or interchangeable product sponsor. Unlike the Hatch-Waxman Act, the BPCI Act provides no automatic stay on approval of a biosimilar or interchangeable product application based on patents.
 
Orphan Drug Designation
 
Under the U.S. Orphan Drug Act of 1983, the FDA may grant Orphan Drug Designation to a drug or biological product intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or for which there is no reasonable expectation that development and production costs will be recovered from sales of the drug for such disease or condition in the U.S. Orphan Drug Designation must be requested before submitting an NDA or BLA. After the FDA grants Orphan Drug Designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. If a product that has Orphan Drug Designation subsequently receives FDA approval and is the first drug approved for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same indication for seven years, except in limited circumstances such as a demonstration that the subsequent drug is clinically superior or the inability of the existing manufacturer to supply the market. See “—Intellectual Property” for more information regarding the Orphan Drug status of our products.
 
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Expedited Development and Review Programs
 
The FDA’s Fast Track program facilitates the development and review of drugs that are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs. Under the program, the sponsor of a new drug may request that the FDA designate the drug for a specific indication as a Fast Track product concurrent with or after the filing of the IND for the product candidate. A drug that receives Fast Track Designation may be eligible for more frequent meetings with the FDA to discuss the development; more frequent written correspondence from the FDA about the design of the proposed clinical trials; and rolling review of its NDA. Drugs with Fast Track Designation may also become eligible for Priority Review within a six month time frame from the time the complete NDA is accepted, as opposed to the ten month time frame for a standard review. The FDA grants priority review to products that demonstrate the potential to significantly improve safety or effectiveness of treatment, prevention, or diagnosis of a serious condition. We were granted Fast Track Designation by the FDA for Oleogel-S10 in September 2019 following the opening of the IND in the United States.
 
Rare Pediatric Disease Priority Review Voucher
 
Certain drugs may also be candidates for Rare Pediatric Disease designation by the FDA. In order to qualify for such designation, a sponsor must demonstrate that the proposed indication is for the treatment or prevention of a rare disease or condition that affects fewer than 200,000 individuals in the United States, or that affects more than 200,000 individuals in the United States and there is no reasonable expectation that the cost of developing and making available in the United States a drug for this type of disease or condition will be recovered from sales in the United States for that product, and is a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years. Under the FDCA, a sponsor who is granted a priority review, receives approval of an NDA for a product for the prevention or treatment of a rare pediatric disease and meets certain additional criteria, may qualify for a Rare Pediatric Disease PRV. A PRV can be redeemed to receive priority review under an expedited timeframe for a subsequent marketing application for a different product. A PRV may also be sold or transferred from the initial sponsor to another sponsor and may be further transferred any number of times before it is used. In December 2020, Congress extended the FDA’s authority to award rare pediatric disease vouchers until September 30, 2024, and until September 30, 2026, for products that receive Rare Pediatric Disease designation by September 30, 2024. We were granted a Rare Pediatric Disease Designation in August 2018. It is our intent to discuss the status our PRV is to be discussed with the FDA when we discuss the nature of the data required to address the FDA’s concerns in the CRL we received which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB.
 
Post-Approval Requirements
 
Following FDA approval of a drug product, our activities, as well as those of our third-party manufacturers, remain subject to ongoing regulation and close monitoring by the FDA. The FDA may withdraw an approval, following notice and an opportunity for a hearing, if, among other things, compliance with certain regulatory standards is not maintained or if safety or efficacy problems occur after the product reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market. If new safety issues are identified following approval, the FDA may require the NDA sponsor to take certain measures, such as revising the approved labelling to reflect the new safety information, conducting post-market studies or clinical trials to assess the new safety information, and/or implementing or changing a REMS program to mitigate newly-identified risks. These are often referred to as Phase 4 or post-marketing studies, and may involve additional clinical trials, nonclinical testing and surveillance programs to monitor the safety of approved products which have been commercialized. After approval, most changes to the approved product, such as adding new indications, manufacturing changes and additional labelling claims, require supplemental applications for FDA review and approval. Manufacturers and other entities involved in the manufacture and distribution of approved drugs or licensed biologics are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP requirements and other laws. In its approvals of Juxtapid and Myalept, the FDA required extensive post-marketing requirements and commitments. The post-marketing requirements (“PMR”) for Juxtapid and Myalept are listed below:
 

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Juxtapid:
 

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PMR1 - Juvenile Tox Study (completed in 2014);
 

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PMR2 - Enhanced Pharmacovigilance (ongoing); and
 

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PMR3 - Observational Registry (ongoing); and
 

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Myalept:
 

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PMR1 - Observational Registry (ongoing);
 

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PMR2 - Immunogenicity Assay (completed in 2016);
 
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PMR3 - Immunogenicity Analysis (completed in 2017);
 

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PMR4 - Immunogenicity study in GL patients (ongoing); and
 

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PMR5 - Enhanced Pharmacovigilance (ongoing).
 
Manufacturing, Packaging and Distribution
 
Companies engaged in manufacturing drug products or their components must comply with applicable cGMP requirements and product-specific regulations enforced by the FDA and other regulatory agencies. The FDA’s cGMPs are intended to ensure that pharmaceutical products are safe and that they consistently meet applicable requirements and specifications. Compliance with cGMP requires adherence to requirements relating to methods, facilities and controls used in the manufacturing, processing and packaging of a pharmaceutical product, including with respect to personnel, facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labelling controls, holding and distribution, laboratory controls, and records and reporting requirements. If, after receiving approval, a company makes a material change in manufacturing equipment, location, or process (all of which are, to some degree, incorporated in the NDA or BLA) additional regulatory review and approval may be required.
 
The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.
 
In addition, companies manufacturing or distributing drug products pursuant to FDA approvals are subject to record-keeping requirements; requirements on reporting of adverse experiences with the drug, and providing the FDA with updated safety and efficacy or safety, purity, and potency information for drugs and biologics, respectively; compliance within REMS program reporting obligations; drug and biologic sampling and distribution requirements; compliance with certain electronic records and signature requirements, and compliance with the FDA promotion and advertising requirements. As discussed more fully below, the FDA strictly regulates labelling, advertising, promotion and other types of information regarding marketed products that are placed on the market. Drugs and biologics may be promoted only for their approved indications and in accordance with the provisions of the approved labelling.
 
The FDA also conducts regular, periodic visits to inspect facilities following the initial approval of a product. Accordingly, manufacturers must continue to spend time, money and effort to maintain cGMP compliance. The Directors cannot be certain that our future third party manufacturers will consistently comply with cGMP and other applicable FDA regulatory requirements.
 
If an FDA investigator identifies conditions in a manufacturer’s facilities that do not comply with applicable regulatory requirements, the FDA investigator may issue observations through a Notice of Inspectional Observations, commonly referred to as a “Form FDA 483” report. If observations in the Form FDA 483 report are not addressed in a timely manner and to the FDA’s satisfaction, the FDA may issue a Warning Letter or proceed directly to other forms of enforcement action. The failure to provide adequate and timely corrective actions can result in further enforcement action, as described below.
 
Title II of the Drug Quality and Security Act (“DQSA”), known as the Drug Supply Chain Security Act, calls for the establishment of a nationwide electronic system that tracks certain prescription drugs at each point in the supply chain in order to prevent the introduction of counterfeit, adulterated, or mislabeled drugs into the market. Implementation began in 2015 and is scheduled to be completed by 2023. The FDA has issued regulations and guidance implementing the DQSA, which require manufacturers, distributors and dispensers to comply with various regulatory requirements related to product identification, product tracing, product verification, detection and response, notification and wholesaler licensing.
 
If there are problems with our products, such as adverse events of unanticipated severity or frequency, problems with the facility where the product is manufactured, or non-compliance with the FDCA or comparable laws, then there may be restrictions imposed on the product, the manufacturing facility or them, or we may be required to take other action such as recall or withdrawal of the product from the market or suspension of manufacturing. If our, our respective product candidates, or the manufacturing facilities for our respective product candidates fail to comply with applicable regulatory requirements, or undesirable side effects caused by such products are identified, a governmental authority may:
 

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issue safety alerts, “Dear Doctor” letters, press releases or other communications containing warnings about such product;
 

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mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;
 

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require that we conduct post-marketing studies;
 
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require us to enter into a consent decree, 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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seek an injunction or impose civil or criminal penalties or monetary fines;
 

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suspend marketing of, withdraw regulatory approval of or recall such product;
 

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suspend any ongoing clinical studies;
 

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refuse to approve pending applications or supplements to applications filed by us;
 

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suspend or impose restrictions on operations, including costly new manufacturing requirements; or
 

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seize or detain products, refuse to permit the import or export of products or require us to initiate a product recall.
 
The occurrence of any event or penalty described above may inhibit our ability to commercialize its products and generate revenue.
 
Promotional Activities and Interactions with Healthcare Providers and Patients
 
The FDA and other regulatory agencies strictly regulate promotional claims about prescription drug and biological products through, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities, and promotional activities involving the internet and social media. A product generally cannot be commercially promoted before it is approved. In general, after approval, a drug product may not be promoted for uses that are not approved by the FDA, the EC, and the regulatory authorities of the EU Member States or such other regulatory agencies as reflected in the product’s prescribing information. Moreover, the promotion of prescription-only medicinal products to non-healthcare professionals is prohibited in the European Union. In the United States, healthcare professionals are generally permitted to prescribe drugs and biologics for “off-label” uses (i.e., uses not described in the drug’s labelling) because the FDA does not regulate the practice of medicine. However, the FDA regulates the advertising and promotion of prescription drug and biological products to ensure that claims made with respect to such products are consistent with regulatory approvals, are adequately substantiated by reasonable data, and are neither false nor misleading in any respect. With respect to off-label uses, FDA regulations impose stringent restrictions on manufacturers’ communications regarding off-label uses. A manufacturer may not promote a drug or biologic for off-label use, but under very specific conditions, it may be permissible for a manufacturer to engage in non-promotional, truthful, non-misleading communication regarding off-label information. If a company is found to have made product claims that are false, misleading, unsubstantial or that promote off-label uses, it may become subject to adverse publicity and enforcement action by the FDA, the DOJ, or the Office of the Inspector General of the U.S. Department of Health & Human Services, as well as state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug or biological products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. For example, to resolve investigations conducted by the DOJ and SEC regarding Aegerion’s U.S. commercial activities and disclosures related to Juxtapid, in September 2017 Aegerion was required, among other things, to pay approximately $40.1 million in aggregate penalties, which includes $7.2 million in restitution payable over three years beginning January 2018, a civil penalty of $4.1 million to be paid to the SEC pursuant to the SEC judgment, and $28.8 million to be paid pursuant to the settlement agreement with the DOJ.
 
Other Laws Regulating Prescription Drug and Biological Products
 
From time to time, legislation is drafted, introduced and passed in U.S. Congress that could significantly change the statutory provisions governing the testing, approval, manufacturing and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations and guidance are often revised or interpreted by the agency in ways that may significantly affect our business and products. Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (a) changes to its manufacturing arrangements; (b) additions or modifications to product labelling; (c) the recall or discontinuation of its products; or (d) additional record-keeping requirements.
 
Manufacturing, sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in the United States in addition to the FDA, including the CMS, other divisions of the U.S. Department of Health & Human Services, the DOJ, the Drug Enforcement Administration (“DEA”), the Consumer Product Safety Commission, the FTC, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments.
 
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Under the Controlled Substances Act, manufacturers and distributors of controlled substances must maintain registration with the DEA and comply with various regulatory requirements, including with respect to maintaining records and inventory, reporting to the DEA, and meeting certain security and operational safeguards.
 
U.S. Pricing and Reimbursement Environment
 
Significant uncertainty exists regarding the coverage and reimbursement status of products approved by the FDA and other government authorities. Sales of pharmaceutical products depend in significant part on the availability and adequacy of third party reimbursement. Third party payers include government health administrative authorities, managed care providers, private health insurers and other organizations. Third party payers are increasingly challenging the prices charged for, examining the medical necessity of, and assessing the cost-effectiveness of medicinal products and services. Coverage may also be more limited than the purposes for which the product is approved by the FDA or comparable foreign regulatory authorities. Further, one payer’s determination to provide coverage for a product does not assure that other payers will also provide coverage for the product.
 
Government and private third party payers have a variety of methodologies for paying for drugs and biologics. Payers are increasingly considering new metrics as the basis for reimbursement rates, such as average sales price, average manufacturer price or actual acquisition cost.
 
Private Payers
 
Coverage of drugs and biologics by private health insurance varies. Private payers may use a variety of utilization management techniques designed to control costs, including requiring pre-approval of coverage for drug therapies before reimbursing healthcare providers or patients that use such therapies. In addition, a payer’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be provided. Coverage may not be sufficient to maintain price levels high enough to realize an appropriate return on investment in product development.
 
Medicare
 
In the United States, the Medicare program provides health insurance for people who are 65 or older, as well as certain people with disabilities and other conditions irrespective of their age. The Medicare program is funded by the federal government and administered by the CMS. The U.S. Medicare Prescription Drug, Improvement, and Modernization Act of 2003, established the Medicare Part D program to provide a voluntary prescription drug benefit to Medicare beneficiaries. Medicare Part D is a voluntary prescription drug benefit through which beneficiaries may enroll in prescription drug plans offered by private entities under contract with CMS for coverage of certain outpatient prescription drugs. Medicare Part D generally provides coverage for medically necessary self-administered drugs. Coverage and reimbursement for outpatient drugs under Part D is not standardized. Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs the plan will cover and to what extent so long as the plan includes drugs from each therapeutic category and class of covered drugs, though not necessarily all the drugs in each category or class.
 
Although the availability of coverage under Medicare Part D may increase demand for Myalept, Juxtapid and Mycapssa®, any negotiated prices for our products covered by a Part D prescription drug plan likely will be lower than the prices it might otherwise obtain. In order for Myalept, Juxtapid and Mycapssa® to remain on or be included on the formularies of Part D prescription drug plans, we may have to offer discounts on the price of those products. In addition, manufacturers, are required to provide a 70% discount on brand name prescription drugs utilized by Medicare Part D beneficiaries when those beneficiaries reach the so-called “donut hole” in their drug benefits in a particular year (i.e., a coverage gap between initial coverage and catastrophic coverage). Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-governmental payers because private payers use Medicare coverage policies and payment limitations in setting their own rates.
 
The Directors believe that investigations and enforcement actions by certain government agencies have caused a reduction in contributions to these third party patient organizations, which may prevent these organizations from providing adequate financial assistance, including assistance with co-payment obligations, to individuals who would otherwise be unable to afford our products. As a result, Medicare Part D patients may not be able to afford their out-of-pocket co-payments for our products. In 2017, for example, the Directors believe that a considerable number of Juxtapid patients who were covered by Medicare Part D ceased treatment with Juxtapid, due to reductions in contributions to patient assistance programs operated by independent charitable 501(c)(3) organizations, which resulted in prior sources of financial support for these patients being less available.
 
We may develop products that, once approved, may be administered by a physician. Under currently applicable U.S. law, certain products not usually self-administered (including injectable drugs) may be eligible for coverage under Medicare through Medicare Part B. Medicare Part B is the part of Medicare that covers outpatient services and supplies, including certain pharmaceutical products that are medically necessary to treat a beneficiary’s health condition. As a condition of receiving Medicare Part B reimbursement for a manufacturer’s eligible drugs, the manufacturer is required to participate in other government healthcare programs, including the Medicaid Drug Rebate Program and the Public Health Service 340B Drug Pricing Program, discussed below.
 
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Medicaid
 
Medicaid is a health insurance program with mandatory coverage for certain low-income children, families, pregnant women, and people with disabilities. States also have the option of expanding Medicaid coverage to low-income individuals generally and many states have done so. Medicaid is jointly funded by the federal and state governments, but administered by the states.
 
We participate in the Medicaid Drug Rebate Program. The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of the Department of Health and Human Services as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished to Medicaid patients. Under the Medicaid Drug Rebate Program, we are required to pay a rebate for each unit of our product reimbursed by a state Medicaid program as a condition of having federal funds made available to the states for our drugs under Medicaid and Medicare Part B. Those rebates are based on pricing data that we report on a monthly and quarterly basis to CMS, the federal agency that administers the Medicaid Drug Rebate Program. We may also participate in state Medicaid supplemental rebate programs which require payment of an incremental rebate to state Medicaid programs for covered utilization of our products. Price reductions as well as price increases that exceed the rate of inflation for our products may result in increasing the rebates we are required to pay under the Medicaid Drug Rebate Program or state Medicaid supplemental rebate programs and the discounts we will be required to offer under the Public Health Service 340B drug pricing discount program, known as the “340 B Program.” The American Rescue Plan Act of 2021 (Public Law No: 117-2), signed into law on March 11, 2021, ended the cap on Medicaid rebates, effective January 1, 2024.  Beginning in 2024, manufacturers may have Medicaid rebate liability greater than 100% dependent upon past price increases. As a result of the substantial price increase for Myalept in February 2015, the Directors expect a significant gross-to-net adjustment for Medicaid rebates which will offset the majority of revenues from Medicaid and negatively impact net product sales in future quarters, since Medicaid rebates directly reduce our net product sales. The degree of such impact on our overall financial performance will depend on the percentage of Myalept patients that have Medicaid as their primary insurance coverage and the quantity of units ordered per patient. To date, approximately 35% of patients prescribed Myalept have been Medicaid beneficiaries. The number of patients prescribed Myalept in the future who are Medicaid beneficiaries could be higher than historical rates.
 
To maintain coverage of our products under the Medicaid Drug Rebate Program and Medicare Part B, it will be required to extend significant discounts to certain “covered entities” (defined by statute to include certain types of hospitals and other healthcare providers that receive federal grants) that purchase products under the 340B Program. The 340B Program requires participating manufacturers to agree to charge such covered entities no more than the 340B “ceiling price” for the manufacturers’ covered outpatient drugs. The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program. Orphan drugs (those designated under section 526 of the FDCA, such as Myalept, Juxtapid and Mycapssa) are exempt from the ceiling price requirements with respect to drugs purchased by certain covered entities (i.e., rural referral centers, sole community hospitals, critical access hospitals and free-standing cancer hospitals). The PPACA also obliges the Health Resources and Services Administration, the agency which administers the 340B Program, to promulgate various regulations and implement processes to improve the integrity of the 340B Program. The status of new and pending regulations and guidance is uncertain under the new presidential administration.
 
Recent regulations have granted Medicare Part D plans authority to apply new cost control measures to steer patients toward lower-priced drug products prior to covering non-preferred, more expensive products. This could potentially have the result of reducing access to our products under Medicare Part D.
 
Drug products are subject to discounted pricing when purchased by federal agencies via the Federal Supply Schedule (“FSS”). FSS participation is required for a drug product to be covered and reimbursed by certain federal agencies and for coverage under Medicaid, Medicare Part B and the 340B Program. FSS pricing is negotiated periodically with the Department of Veterans Affairs. FSS pricing is intended not to exceed the price that a manufacturer charges its most-favored non-federal customer for its product. In addition, prices for drugs purchased by the Veterans Administration, Department of Defense (including drugs purchased by military personnel and dependents through the Tricare Retail Pharmacy program), Coast Guard and PHS are subject to a cap on pricing (known as the federal ceiling price) and may be subject to an additional discount if pricing increases more than the rate of inflation. We have had an FSS contract in place for its products since 2016. We also participate in the Tricare Retail Pharmacy program, under which we pay quarterly rebates on utilization of Myalept and Juxtapid when the products are dispensed through the Tricare Retail Pharmacy network to Tricare beneficiaries.
 
The marketability of any products for which we will receive regulatory approval for commercial sale may suffer if the government and third party payers fail to provide adequate coverage and reimbursement. An increasing emphasis on cost containment measures in the United States has increased and the Directors expect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
 
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In recent years, additional laws have resulted in direct or indirect reimbursement reductions for certain Medicare providers. These laws, and future state and federal healthcare reform measures may be adopted in the future, any of which may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.
 
Further, in the United States, the cost of pharmaceuticals continues to generate substantial governmental and third party payer interest. There have been several recent U.S. congressional inquiries and proposed federal and proposed and enacted state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products. Individual state legislatures have become increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing. Some of these measures include price or patient reimbursement constraints, discounts, restrictions on certain product access, marketing cost disclosure and transparency measures, and in some cases measures designed to encourage importation from other countries and bulk purchasing. In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.
 
Other Regulatory and Liability Matters
 
We may be subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if we contract with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of contamination or injury resulting from these materials.
 
We will maintain insurance to cover us for costs and expenses we may incur due to injuries to its employees, but this insurance may not provide adequate coverage against potential liabilities.
 
U.S. Healthcare Reform
 
Our revenues and operations could be affected by changes in healthcare spending and policy in the United States. We operate in, a highly regulated industry and new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to health care availability, the method of delivery or payment for health care products and services could negatively impact our business, operations and financial condition. As noted above, the U.S. Congress, federal agencies and state legislatures from time to time propose and adopt initiatives aimed at cost containment, which could impact our ability to sell our products profitably. For example, the PPACA substantially changed the way healthcare is financed by both governmental and private insurers. The law contains a number of provisions that affect coverage and reimbursement of drug products and/or that could potentially reduce the demand for our products such as:
 

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increasing drug rebates under state Medicaid programs for brand name prescription drugs and extending those rebates to Medicaid managed care;
 

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requiring drug manufacturers to provide a 70% 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); and
 

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expanding programs designed to test innovative payment models, service delivery models, or value-based arrangements.
 
There have been continuous legal and political challenges to certain aspects of the Affordable Care Act. Although the Supreme Court has upheld several key provisions of the Affordable Care Act against legal challenges, including in 2021, opponents of the law may continue to challenge aspects of the law and could be successful in the future.
 
The Affordable Care Act, if substantially maintained in its current form, will continue to result in downward pressure on coverage and the price that we may receive for any approved product. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payers. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products.
 
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Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. For example, in August 2011, President Barack H. Obama signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions. This committee did not achieve a targeted deficit reduction of at least $1.2 trillion for fiscal years 2012 through 2021, triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013. Section 4408 of the CARES Act temporarily suspended Medicare sequestration during the period of May 1, 2020 through December 31, 2020, while extending the Medicare sequestration sunset date through 2030. The Protecting Medicare and American Farmers from Sequester Cuts Act (Public Law No: 117-71), signed into law on December 10, 2021, extended the moratorium on the 2% Medicare sequester payment reductions through March 31, 2022. After March, the law phases in the Medicare sequester cuts by implementing a 1% cut from April 1 through June 30, 2022, and then allowing the full 2% cut to go into effect on July 1, 2022. In order to pay for this grace period, the sequester cuts are increased in 2030 to 2.25% for the first six months and 3% for the next six months of that year.
 
Multiple rules issued by HHS under the Trump administration could impact access to and reimbursement for prescription drugs if they become effective.  A final rule that eliminated the safe harbor shielding Medicare Part D rebates to pharmacy benefit managers from the Anti-Kickback statute was finalized in November 2020.  However, The Infrastructure Investment and Jobs Act (Public Law No: 117-58), signed into law on November 15, 2021, established a moratorium until January 1, 2026, on implementation of that rule as it relates to eliminating the anti-kickback statute safe harbor protection for prescription drug rebates. In addition, the Build Back Better Act (HR 5376), as passed by the House of Representatives and currently under consideration in the Senate, would permanently prevent implementation of the rule so it remains unclear whether this will take effect.
 
In addition, the Medicaid Drug Rebate Program final rule, issued in December of 2020, finalized policies to change the way in which Medicaid rebates are calculated.  This policy would require that copay assistance provided to patients would be applied as a discount to a payer for the purposes and could set a new best price for the purposes of the Medicaid drug rebate calculation unless a manufacturer can “ensure” that the full value of the assistance is passed through to the patient. This is problematic given the rising number of copay accumulator plans in which pharmacy benefit managers block patients from taking full advantage of patient assistance programs without the knowledge of the manufacturer.  The Pharmaceutical Researchers and Manufacturers of America (PhRMA) sued to invalidate this rule in May of 2021.  The outcome of this litigation remains uncertain and could require changes to patient assistance programs.
 
In September of 2021, the Build Back Better Act was introduced in the House of Representatives and contained a number of provisions that could impact the biopharmaceutical industry.  These provisions include measures aimed at reducing patient out of pocket costs through a redesign of the Medicare Part D benefit, provisions aimed at allowing Medicare to negotiate drug prices for a subset of drugs in Medicare Part B and Part D, and provisions meant to limit drug price increases to the rate of inflation, requiring rebates to the government for price increases taken beyond inflation.  The House of Representatives passed the Build Back Better Act in November of 2021 and it has not been considered by the Senate.  If any of these measures are adopted into law, they could impact future business actions and access to medicines.
 
Other Laws Affecting Us in the United States
 
Healthcare providers, physicians and third party payers will play a primary role in the recommendation and prescription of any products for which we obtain marketing approval. Our future arrangements with third party payers, healthcare providers, patients and patient advocacy organizations, teaching hospitals, other licensed prescribers and physicians may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute any drugs for which we obtain marketing approval. In the United States, these laws include, without limitation, state and federal anti-kickback, false claims, physician transparency, and patient data privacy and security laws and regulations, including but not limited to those described below.
 
The U.S. Anti-Kickback Statute makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration, directly or indirectly, in cash or in kind, that is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. Violations of this law are punishable by up to five years in prison, criminal fines, administrative civil money penalties and exclusion from participation in federal healthcare programs. The term remuneration has been interpreted broadly to include anything of value.
 
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution. The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Our practices may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor. The statutory exceptions and regulatory safe harbors are also subject to change and some safe harbors, such as the safe harbor for certain rebate arrangements, are currently under review for amendments or reversal.
 
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The intent standard under the federal Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Several courts have also interpreted the Anti-Kickback Statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated, even if there are additional, legitimate purposes for the remuneration. In addition, the Affordable Care Act also codified case law 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 False Claims Act (“FCA”).
 
The Federal False Claims Act imposes civil penalties, including through civil whistle-blower or qui tam actions, against individuals or entities (including manufacturers) for, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government. The government may deem manufacturers to have “caused” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label. Claims which include items or services resulting from a violation of the federal Anti-Kickback Statute are false or fraudulent claims for purposes of the False Claims Act. Our future marketing and activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state and third party reimbursement for our products, and the sale and marketing of its products and any future product candidates, are subject to scrutiny under this law.
 
HIPAA imposes criminal and civil liability for knowingly and willfully executing a scheme, or attempting to execute a scheme, to defraud any healthcare benefit program, including private payers, or falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services.
 
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations impose, among other things, specified requirements on covered entities and their business associates relating to the privacy and security of individually identifiable health information including mandatory contractual terms and required implementation of technical safeguards of such information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. Like the Anti-Kickback Statute, the Affordable Care Act amended the intent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
 
The Physician Payments Sunshine Act, enacted as part of the PPACA, imposes new annual reporting requirements for certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, for certain payments and “transfers of value” provided to physicians, patients, patient advocacy organization, teaching hospitals and other licensed prescribers, as well as ownership and investment interests held by physicians and their immediate family members. This information is made publicly available on a CMS website, and failure to report accurately could result in penalties.
 
Analogous state and foreign fraud and abuse laws and regulations, such as state anti-kickback and false claims laws, may be broader in scope and apply regardless of payer. Such laws are enforced by various state agencies and through private actions. Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant federal government compliance guidance, require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, and restrict marketing practices or require disclosure of marketing expenditures. State and foreign laws also govern the privacy and security of health information in some circumstances. Such data privacy and security laws may differ from each other in significant ways and often are not pre-empted by HIPAA, thus complicating compliance efforts.
 
In order to distribute products commercially companies must comply with state laws that require the registration of manufacturers and wholesale distributors of drug and biological products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers or distributors have no place of business within the state. Some states also impose requirements on manufacturers and distributors to establish the pedigree of product in the chain of distribution, including some states that require manufacturers and others to adopt new technology capable of tracking and tracing product as it moves through the distribution chain. Several states have enacted legislation requiring pharmaceutical and biotechnology companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical and biotechnology companies for use in sales and marketing, and to prohibit certain other sales and marketing practices. All of our activities are potentially subject to federal and state consumer protection and unfair competition laws.
 
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The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. If our operations are found to be in violation of any of these laws or any other related governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion of drugs from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight and reporting obligations and the curtailment or restructuring of our operations. For example, in September 2017, Aegerion entered into a settlement agreement with the DOJ (as further described under “—Legal Proceedings” in this section) to resolve investigations conducted by the DOJ and the SEC regarding Aegerion’s U.S. commercial activities and disclosures related to Juxtapid, and on January 30, 2018, a U.S. District Court judge sentenced Aegerion after the judge accepted Aegerion’s guilty criminal plea. Aegerion was required, among other things, to pay approximately $40.1 million in aggregate penalties over three years and was put on probation for three years. We are also subject to a CIA and a civil consent decree (which took effect in March 2019) with the FDA and the DOJ relating to the Juxtapid REMS program.
 
EU Regulatory Matters
 
The United Kingdom UK formally left the EU on January 31, 2020 and the transition period, during which EU laws continued to apply to the UK, expired on December 31, 2020. This means EU laws now only apply to the UK in respect of Northern Ireland as laid out in the Protocol on Ireland and Northern Ireland. Following the end of the transition period, the EU and the UK concluded a trade and cooperation agreement (“TCA”), which applied provisionally from January 1, 2021 and entered into force on May 1, 2021.
 
The TCA includes provisions affecting the life sciences sector (including on customs and tariffs) but areas for further discussion between the EU and the UK remain. In addition, there are some specific provisions concerning pharmaceuticals. These include the mutual recognition of Good Manufacturing Practice (“GMP”) and issued GMP documents. The TCA does not, however, contain wholesale mutual recognition of UK and EU pharmaceutical regulations and product standards.
 
Since January 1, 2021, the EU laws which have been transposed into UK law through secondary legislation continue to be applicable in the UK as “retained EU law”. As there is no general power to amend these regulations, the UK government has enacted the Medicines and Medical Devices Act 2021. The purpose of the act is to enable the existing regulatory frameworks in relation to human medicines, clinical trials of human medicines, veterinary medicines and medical devices to be updated. The powers under the act may only be exercised in relation to specified matters and must safeguard public health.
 
Specified provisions of the Medicines and Medical Devices Act 2021 entered into force on February 11, 2021. The remaining provisions came into effect within two months of February 11, 2021 or will otherwise come into effect as stipulated in subsequent statutory instruments. The Medicines and Medical Devices Act 2021 supplements the UK Medical Devices Regulations 2002 (“UK Regulations”), which are based on the EU Medical Devices Directive as amended to reflect the UK’s post-Brexit regulatory regime. Notably, the UK Regulations do not include any of the revisions that have been made by the EU Medical Devices Regulation (EU) 2017/745, which, since May 26, 2021, now applies in all EU Member States.
 
The UK’s Medicines and Healthcare products Regulatory Agency (“MHRA”) conducted a comprehensive consultation between September and November 2021 on proposals to develop a new UK regime for medical devices in the UK. The proposals include more closely aligning definitions for medical devices and in vitro medical devices with internationally recognised definitions and changing the classification of medical devices according to levels or risk. The proposals are intended to improve patient and public safety and increase the appeal of the UK market. The new regime is planned to come into force on July 1, 2023, which will align with the date from which the UK is due to stop accepting CE marked medical devices and require UKCA (“UK Conformity Assessed”) marking. It is envisaged that, in Northern Ireland, the amended regime could run in parallel with any existing or future EU rules in accordance with the Protocol on Ireland and Northern Ireland.
 
Drug and Biologic Development Process
 
The conduct of clinical trials in the European Union is currently governed by the EU Clinical Trials Directive 2001/20/EC, or Clinical Trials Directive, and will be replaced by the EU Clinical Trials Regulation (EU) No. 536/2014 (“CTR”) once the latter comes into effect. The CTR introduces a complete overhaul of the existing regulation of clinical trials for medicinal products in the EU. It entered into force on January 31, 2022.
 
Under the current regime, which will expire after a transition period of one or three years, respectively, as outlined below in more detail, before a clinical trial can be initiated it must be approved in each EU Member State where there is a site at which the trial is to be conducted. The approval must be obtained from two separate entities: the National Competent Authority (“NCA”) and one or more Ethics Committees. The NCA of the EU Member States in which the clinical trial will be conducted must authorize the conduct of the trial, and the independent Ethics Committee must grant a positive opinion in relation to the conduct of the clinical trial in the relevant EU Member State before the commencement of the trial. Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be submitted to or approved by the relevant NCA and Ethics Committees. Under the current regime all suspected unexpected serious adverse reactions to the investigated drug that occur during the clinical trial must be reported to the NCA and to the Ethics Committees of the EU Member State where they occur.
 
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A more unified procedure will apply under the new CTR. A sponsor will be able to submit a single application for approval of a clinical trial through a centralized EU clinical trials portal. One national regulatory authority (the reporting EU Member State proposed by the applicant) will take the lead in validating and evaluating the application consult and coordinate with the other concerned Member States. If an application is rejected, it may be amended and resubmitted through the EU clinical trials portal. If an approval is issued, the sponsor may start the clinical trial in all concerned Member States. However, a concerned EU Member State may in limited circumstances declare an “opt-out” from an approval and prevent the clinical trial from being conducted in such Member State. The CTR also aims to streamline and simplify the rules on safety reporting, and introduces enhanced transparency requirements such as mandatory submission of a summary of the clinical trial results to the EU Database. The CTR foresees a three-year transition period. Member States will work in CTIS immediately after the system has gone live. For one year, until 31 January 2023, clinical trial sponsors can still choose whether to submit an initial clinical trial application in line with the current system (Clinical Trials Directive) or via CTIS. From 31 January 2023, submission of initial clinical trial applications via CTIS becomes mandatory, and by 31 January 2025, all ongoing trials approved under the current Clinical Trials Directive will be governed by the new Regulation and have to be transitioned to CTIS. 
 
Under both the current regime and the new CTR, national laws, regulations, and the applicable Good Clinical Practice and Good Laboratory Practice standards must also be respected during the conduct of the trials, including the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use (“ICH”) guidelines on Good Clinical Practice (“GCP)” and the ethical principles that have their origin in the Declaration of Helsinki.
 
During the development of a medicinal product, the European Medical Agency (“EMA”) and national regulators within the EU provide the opportunity for dialogue and guidance on the development program. At the EMA level, this is usually done in the form of scientific advice, which is given by the Committee for Medicinal Products for Human Use (“CHMP”) on the recommendation of the Scientific Advice Working Party (“SAWP”). A fee is incurred with each scientific advice procedure, but is significantly reduced for designated orphan medicines. Advice from the EMA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical testing and clinical studies, and pharmacovigilance plans and risk-management programs. Advice is not legally binding with regard to any future Marketing Authorization Application (“MAA”) of the product concerned.The approval process for clinical trials in other countries outside the United States and the European Union varies from country to country, and the time may be longer or shorter than that required for FDA approval.
 
Drug Marketing Authorization
 
In the EU and in Iceland, Norway and Liechtenstein (together the European Economic Area or “EEA”), after completion of all required clinical testing, medicinal products may only be placed on the market after obtaining a Marketing Authorization (“MA”). To obtain an MA of a drug under European Union regulatory systems, an applicant can submit an Marketing Authorization Application (“MAA”) through, amongst others, a centralized or decentralized procedure.
 
The centralized procedure provides for the grant of a single MA by the European Commission (EC) that is valid for all EU Member States and, after respective national implementing decisions, in the three additional EEA Member States. The centralized procedure is compulsory for specific medicinal products, including for medicines developed by means of certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products (“ATMP”) and medicinal products with a new active substance indicated for the treatment of certain diseases (AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases). For medicinal products containing a new active substance not yet authorized in the EEA before May 20, 2004 and indicated for the treatment of other diseases, medicinal products that constitute significant therapeutic, scientific or technical innovations or for which the grant of a MA through the centralized procedure would be in the interest of public health at EU level, an applicant may voluntarily submit an application for a marketing authorization through the centralized procedure.
 
Under the centralized procedure, the Committee for Medicinal Products for Human Use (“CHMP”), established at the EMA, is responsible for conducting the initial assessment of a drug. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization. Under the centralized procedure, the timeframe for the evaluation of an MAA by the EMA’s CHMP is, in principle, 210 days from receipt of a valid MAA. However, this timeline excludes clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP, so the overall process typically takes a year or more, unless the application is eligible for an accelerated assessment. Accelerated assessment might be granted by the CHMP in exceptional cases when a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation. On request, the CHMP can reduce the time frame to 150 days if the applicant provides sufficient justification for an accelerated assessment. The CHMP will provide a positive opinion regarding the application only if it meets certain quality, safety and efficacy requirements. However, the EC has final authority for granting the MA within 67 days after receipt of the CHMP opinion.
 
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The decentralized procedure permits companies to file identical MA applications for a medicinal product to the competent authorities in various EU Member States simultaneously if such medicinal product has not received marketing approval in any EU Member State before. This procedure is available for medicinal products not falling within the mandatory scope of the centralized procedure. The competent authority of a single EU Member State, known as the reference EU Member State, is appointed to review the application and provide an assessment report. Under this procedure, an applicant submits an application based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference EU Member State and concerned EU Member States. The reference EU Member State prepares a draft assessment report and drafts of the related materials within 120 days after receipt of a valid application. Subsequently each concerned EU Member State must decide whether to approve the assessment report and related materials. If an EU Member State cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the EC, whose decision is binding for all EU Member States.
 
All new MAAs must include a Risk Management Plan (“RMP”), describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the MA. RMPs and Periodic Safety Update Reports (“PSURs”) are routinely available to third parties requesting access, subject to limited redactions.
 
Marketing authorizations have an initial duration of five years. After these five years, the authorization may subsequently be renewed on the basis of a re-evaluation of the risk-benefit balance. Once renewed, the marketing authorization is valid for an unlimited period unless the EC or the national competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. Applications for renewal must be made to the EMA at least nine months before the five-year period expires.
 
Episalvan was granted a marketing authorization under the centralized procedure for the treatment of partial-thickness skin wounds in adults. The outcome of the Episalvan five year renewal procedure recommended that one additional five-year renewal be required on the basis of limited safety information due to limited marketing of Episalvan. Lojuxta and Myalepta were each granted a marketing authorization under exceptional circumstances by the EC under the centralized procedure and are subject to additional monitoring (which aims to enhance reporting of suspected adverse drug reactions for drugs for which the clinical evidence base is less well developed). So-called “marketing authorizations under exceptional circumstances” are intended for medicinal products where the applicant can demonstrate that it is not possible to provide comprehensive clinical data on efficacy and safety under normal conditions of use. For instance, because the indications for which the product in question is intended are encountered so rarely that the applicant cannot reasonably be expected to provide comprehensive evidence, or in the present state of scientific knowledge, comprehensive information cannot be provided, or it would be contrary to generally accepted principles of medical ethics to collect such information. Consequently, marketing authorizations under exceptional circumstances may be granted subject to certain specific obligations.
 
In the case of Lojuxta and Myalepta:
 
The Lojuxta marketing authorization under exceptional circumstances includes a commitment to conduct a long-term observational study to collect information on the safety and effectiveness outcomes of patients treated with Lojuxta. The EMA has required that all patients taking Lojuxta in the European Union be encouraged to participate in the study, and that the study period be open-ended. In the study, physicians will follow each patient to evaluate serum lipid control, hepatic effects, tumor occurrence, teratogenicity, gastrointestinal adverse reactions, events associated with coagulopathy, major adverse cardiovascular events and death. The EMA also required that a study be conducted to determine the impact of lomitapide on vascular endpoints. In addition, an appropriate risk-management educational program to inform healthcare professionals and patients must be established prior to the product being launched in each country.
 
The Myalepta authorization under exceptional circumstances includes a commitment to establish a registry including all patients with GL or PL treated with Myalepta to further evaluate the long-term safety and effectiveness of Myalepta under normal conditions of clinical practice, along with a commitment to conduct an efficacy and safety study to further investigate the effect of Myalepta on poor metabolic control once background therapy is maximized in patients with familial or acquired PL. In order to address the potential safety concerns and/or lack of efficacy related to immunogenicity of Myalepta, the EMA also requires an integrated analysis of immunogenicity measured accordingly to validated assays, including samples from all available historical samples from previous studies with patients with GL or PL and samples obtained from patients that will be included in the efficacy and safety study in PL patients, the pediatric investigation plan (“PIP”) study and the patients registry. There have been delays in compliance and completion of some of the conditions to the Lojuxta and Myalepta marketing authorizations, but the Company is engaging with the CHMP to amend the relevant conditions, including where appropriate amendments to study protocols and extensions to deadlines.
 
The Lojuxta and Myalepta exceptional circumstances marketing authorizations both require an annual reassessment of the risk/benefit balance for each of Lojuxta and Myalepta by the CHMP. A negative assessment could potentially result in the relevant marketing authorization being suspended or revoked. The renewal of a marketing authorization of a medicinal product under exceptional circumstances, however, follows the same rules as a “normal” marketing authorization. Thus, a marketing authorization under exceptional circumstances is granted for an initial five years, after which the authorization will become valid indefinitely, unless the EMA decides that safety grounds merit one additional five-year renewal.
 
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It is anticipated that the AP103 product candidate will be regulated as an advanced therapy medicinal product (“ATMP”) under the EU Regulation (EC) No. 1394/2007 on advanced therapy medicinal products, or the ATMP Regulation. ATMPs comprise gene therapy medicinal products, somatic cell therapy medicinal products and tissue engineered products, which are cells or tissues that have undergone substantial manipulation and that are administered to human beings in order cure, diagnose or prevent diseases or to regenerate, repair or replace a human tissue. Pursuant to the ATMP Regulation, the Committee on Advanced Therapies (“CAT”) is responsible in conjunction with the CHMP for the evaluation of ATMPs. The CAT is primarily responsible for the scientific evaluation of ATMPs and prepares a draft opinion on the quality, safety and efficacy of each ATMP for which a marketing authorization application is submitted. The CAT’s opinion is then taken into account by the CHMP when giving its final recommendation regarding the authorization of a product in view of the balance of benefits and risks identified. Although the CAT’s draft opinion is submitted to the CHMP for final approval, the CHMP may depart from the draft opinion, if it provides detailed scientific justification. The CHMP and CAT are also responsible for providing guidelines on ATMPs and have published numerous guidelines, including specific guidelines on gene therapies and cell therapies. These guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs and include, among other things, the pre-clinical studies required to characterize ATMPs; the manufacturing and control information that should be submitted in a marketing authorization application; and post-approval measures required to monitor patients and evaluate the long term efficacy and potential adverse reactions of ATMPs. Although such guidelines are not legally binding, compliance with them is often necessary to gain and maintain approval for product candidates. In addition to the mandatory RMP, the holder of a MA for an ATMP must put in place and maintain a system to ensure that each individual product and its starting and raw materials, including all substances coming into contact with the cells or tissues it may contain, can be traced through the sourcing, manufacturing, packaging, storage, transport and delivery to the relevant healthcare institution where the product is used.
 
PRIME Designation
 
In March 2016, the EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist. The PRIority MEdicines, or PRIME, scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure. Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies on the basis of compelling non-clinical data and tolerability data from initial clinical trials. Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and potentially accelerated marketing authorization application assessment once a dossier has been submitted. Importantly, once a candidate medicine has been selected for the PRIME scheme, a dedicated contact point and rapporteur from the CHMP or from CAT are appointed facilitating increased understanding of the product at EMA’s Committee level. A kick-off meeting with the CHMP/CAT rapporteur initiates these relationships and includes a team of multidisciplinary experts to provide guidance on the overall development plan and regulatory strategy. PRIME eligibility does not change the standards for product approval, and there is no assurance that any such designation or eligibility will result in expedited review or approval.
 
New Chemical Entity Exclusivity
 
As in the United States, it may be possible to obtain a period of market and / or data exclusivity in the EU that would have the effect of postponing the entry into the marketplace of a competitor’s generic, hybrid or biosimilar product (even if the pharmaceutical product has already received a MA) and prohibiting another applicant from relying on the MA holder’s pharmacological, toxicological and clinical data in support of another MA for the purposes of submitting an application, obtaining MA or placing the product on the market.
 
New Chemical Entities (“NCE”) approved in the EU qualify for eight years of data exclusivity and 10 years of marketing exclusivity. An additional non-cumulative one-year period of marketing exclusivity is possible if during the data exclusivity period (the first eight years of the 10-year marketing exclusivity period), the MA holder obtains an authorization for one or more new therapeutic indications that are deemed to bring a significant clinical benefit compared to existing therapies.
 
The data exclusivity period begins on the date of the product’s first MA in the EU. After eight years, a generic product application may be submitted and generic companies may rely on the MA holder’s data. However, a generic product cannot launch until two years later (or a total of 10 years after the first MA in the EU of the innovator product), or three years later (or a total of 11 years after the first MA in the EU of the innovator product) if the MA holder obtains MA for a new indication with significant clinical benefit within the eight-year data exclusivity period. Additionally, another noncumulative one -year period of data exclusivity can be added to the eight years of data exclusivity where an application is made for a new indication for a well-established substance, provided that significant pre-clinical or clinical studies were carried out in relation to the new indication. Another year of data exclusivity may be added to the eight years, where a change of classification of a pharmaceutical product has been authorized on the basis of significant pre-trial tests or clinical trials (when examining an application by another applicant for or holder of market authorization for a change of classification of the same substance the competent authority will not refer to the results of those tests or trials for one year after the initial chance was authorized).

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Products may not be granted data exclusivity since there is no guarantee that a product will be considered by the European Union’s regulatory authorities to include a NCE. Even if a compound is considered to be a NCE and the MA applicant is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the medicinal product if such company can complete a full MAA with their own complete database of pharmaceutical tests, preclinical studies and clinical trials and obtain MA of its product.
 
Myalepta is entitled to 10 years of market exclusivity by the European Union from its approval in July 2018. On July 31, 2013 lomitapide was granted a centralized marketing authorization from the European Commission. Lomitapide has eight years’ data exclusivity and 10 years’ marketing exclusivity in the European Union from July 31, 2013.
 
Orphan Designation and Exclusivity
 
The criteria for designating an orphan medicinal product in the European Union are similar in principle to those in the United States. The EMA grants orphan drug designation if the medicinal product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting no more than five in 10,000 persons in the European Union (prevalence criterion). In addition, Orphan Drug Designation can be granted if, for economic reasons, the medicinal product would be unlikely to be developed without incentives and if there is no other satisfactory method approved in the European Union of diagnosing, preventing, or treating the condition, or if such a method exists, the proposed medicinal product is a significant benefit to patients affected by the condition. An application for orphan drug designation (which is not a marketing authorization, as not all orphan-designated medicines reach the authorization application stage) must be submitted first before an application for marketing authorization of the medicinal product is submitted. The applicant will receive a fee reduction for the marketing authorization application if the orphan drug designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted, and sponsors must submit an annual report to EMA summarizing the status of development of the medicine. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. Designated orphan medicines are eligible for conditional marketing authorization.
 
The EMA’s Committee for Orphan Medicinal Products (“COMP”) reassesses the orphan drug designation of a product in parallel with the review for a marketing authorization; for a product to benefit from market exclusivity it must maintain its orphan drug designation at the time of marketing authorization review by the EMA and approval by the EC. Additionally, any marketing authorization granted for an orphan medicinal product must only cover the therapeutic indication(s) that are covered by the orphan drug designation. Upon the grant of a marketing authorization, orphan drug designation provides up to ten years of market exclusivity in the orphan indication.
 
During the 10-year period of market exclusivity, with a limited number of exceptions, the regulatory authorities of the EU Member States and the EMA may not accept applications for marketing authorization, accept an application to extend an existing marketing authorization or grant marketing authorization for other similar medicinal products for the same therapeutic indication. A similar medicinal product is defined as a medicinal product containing a similar active substance or substances as contained in a currently authorized orphan medicinal product, and which is intended for the same therapeutic indication. An orphan medicinal product can also obtain an additional two years of market exclusivity for an orphan-designated condition when the results of specific studies are reflected in the Summary of Product Characteristics (“SmPC”), addressing the pediatric population and completed in accordance with a fully compliant Pediatric Investigation Plan (“PIP”). No extension to any supplementary protection certificate can be granted on the basis of pediatric studies for orphan indications.
 
The 10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, i.e. the condition prevalence or financial returns criteria under Article 3 of Regulation (EC) No. 141/2000 on orphan medicinal products. When the period of orphan market exclusivity for an indication ends, the orphan drug designation for that indication expires as well. Orphan exclusivity runs in parallel with normal rules on data exclusivity and market protection. Additionally, a marketing authorization may be granted to a similar medicinal product (orphan or not) for the same or overlapping indication subject to certain requirements.
 
In 2012, metreleptin was granted four Orphan Drug Designations by the European Commission for the treatment of acquired and congenital GL (Lawrence syndrome and Berardinelli-Seip syndrome respectively), and acquired and familial PL (Barraquer-Simons syndrome). Metreleptin is entitled to ten years of market exclusivity by the European Union from its approval as Myalepta in July 2018. Despite the prevalence rate, lomitapide does not have Orphan Drug exclusivity in the European Union for the treatment of HoFH because the EMA views the relevant condition, for Orphan Drug purposes, to include both HoFH and the more prevalent HeFH.  In August 2013 orphan designation was granted by the European Commission for octreotide acetate (oral use) for the treatment of acromegaly.  Mycapssa® is not approved in the EU. Maintenance of the orphan designation will be determined by COMP in parallel to the evaluation of the MAA by CHMP.
 
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In the European Union, certain patents relating to Lojuxta may qualify for a supplemental protection certificate that would extend patent protection for up to five years after patent expiration upon marketing authorization in the European Union. Grant of such supplemental protection certificate is, however, subject to strict conditions and it is not automatic. Amryt has applied for such protection in the countries in which Lojuxta is approved, on a country-by-country basis, and in some countries, supplemental protection has been granted to extend patent protection to July or August of 2028, while in other countries, the applications are still pending.
 
Pediatric Development
 
In the European Union, companies developing a new medicinal product are obligated to study their product in children and must therefore submit a PIP together with a request for agreement to the EMA. The EMA issues a decision on the PIP based on an opinion of  the EMA’s Pediatric Committee (“PDCO”). Companies must conduct pediatric clinical trials in accordance with the PIP approved by the EMA, unless a deferral (e.g. until enough information to demonstrate its effectiveness and safety in adults is available) or a waiver (e.g. because the relevant disease or condition occurs only in adults) has been granted by the EMA. The marketing authorization application for the medicinal product must include the results of all pediatric clinical trials performed and details of all information collected in compliance with the approved PIP, unless a waiver or a deferral has been granted, in which case the pediatric clinical trials may be completed at a later date. Medicinal products that are granted a marketing authorization on the basis of the pediatric clinical trials conducted in accordance with the approved PIP are eligible for a six month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the approved PIP are developed and submitted. An approved PIP is also required when a marketing-authorization holder wants to add a new indication, pharmaceutical form or route of administration for a medicine that is already authorized and covered by intellectual property rights.
 
Post-Approval Regulation
 
Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the EC and/or the competent regulatory authorities of the EU Member States. This oversight applies both before and after grant of manufacturing licenses and marketing authorizations. It includes control of compliance with EU good manufacturing practices rules, manufacturing authorizations, pharmacovigilance rules and requirements governing advertising, promotion, sale, and distribution, recordkeeping, importing and exporting of medicinal products.
 
Failure by us or by any of our third-party partners, including suppliers, manufacturers and distributors to comply with EU laws and the related national laws of individual EU Member States governing the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of MA, statutory health insurance, bribery and anti-corruption or other applicable regulatory requirements may result in administrative, civil or criminal penalties. These penalties could include delays or refusal to authorize the conduct of clinical trials or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.
 
The holder of a MA for a medicinal product must also comply with EU pharmacovigilance legislation and its related regulations and guidelines, which entail many requirements for conducting pharmacovigilance, or the assessment and monitoring of the safety of medicinal products.
 
These pharmacovigilance rules can impose on holders of MAs the obligation to conduct a labor intensive collection of data regarding the risks and benefits of marketed medicinal products and to engage in ongoing assessments of those risks and benefits, including the possible requirement to conduct additional clinical studies or post-authorization safety studies to obtain further information on a medicine’s safety, or to measure the effectiveness of risk-management measures, which may be time consuming and expensive and could impact our profitability. MA holders must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of Periodic Safety Update Reports (“PSURs”) in relation to medicinal products for which they hold MAs. The EMA reviews PSURs for medicinal products authorized through the centralized procedure. If the EMA has concerns that the risk benefit profile of a product has varied, it can adopt an opinion advising that the existing MA for the product be suspended, withdrawn or varied. The agency can advise that the MA holder be obliged to conduct post-authorization Phase IV safety studies. If the EC agrees with the opinion, it can adopt a decision varying the existing MA. Failure by the MA holder to fulfill the obligations for which the EC’s decision provides can undermine the ongoing validity of the MA.
 
More generally, non-compliance with pharmacovigilance obligations can lead to the variation, suspension or withdrawal of the MA for the product or imposition of financial penalties or other enforcement measures.
 
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The manufacturing process for medicinal products in the European Union is highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations. Manufacturing requires a manufacturing authorization, and the manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive 2003/94/EC, Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice (“GMP”). These requirements include compliance with EU GMP standards when manufacturing medicinal products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the European Union with the intention to import the active pharmaceutical ingredients into the European Union. Similarly, the distribution of medicinal products into and within the European Union is subject to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for distribution granted by the competent authorities of the EU Member States. The manufacturer or importer must have a qualified person who is responsible for certifying that each batch of product has been manufactured in accordance with GMP, before releasing the product for commercial distribution in the European Union or for use in a clinical trial. Manufacturing facilities are subject to periodic inspections by the competent authorities for compliance with GMP.
 
We and our third-party manufacturers are subject to GMP, which are extensive regulations governing manufacturing processes, stability testing, record keeping and quality standards as defined by the EMA, the European Commission, the competent authorities of EU Member States and other regulatory authorities. Companies may be subject to civil, criminal or administrative sanctions. These include suspension of manufacturing authorization in case of non-compliance with the European Union or EU Member States’ requirements governing the manufacturing of medicinal products.
 
Advertising and Promotion
 
The advertising and promotion of our products is also subject to EU laws concerning promotion of medicinal products, interactions with physicians, misleading and comparative advertising and unfair commercial practices. In addition, other national legislation of individual EU Member States may apply to the advertising and promotion of medicinal products and may differ from one country to another. These laws require that promotional materials and advertising in relation to medicinal products comply with the product’s SmPC as approved by the competent regulatory authorities. The SmPC is the document that provides information to physicians concerning the safe and effective use of the medicinal product. It forms an intrinsic and integral part of the marketing authorization granted for the medicinal product. Promotion of a medicinal product that does not comply with the SmPC is considered to constitute off-label promotion. All advertising and promotional activities for the product must be consistent with the approved SmPC and therefore all off-label promotion is prohibited. Direct-to-consumer advertising of prescription-only medicines is also prohibited in the EU. Violations of the rules governing the promotion of medicinal products in the European Union could be penalized by administrative measures, fines and imprisonment. These laws may further limit or restrict the advertising and promotion of our products to the general public and may also impose limitations on its promotional activities with healthcare professionals.
 
Pricing and Reimbursement Environment
 
Even if a medicinal product obtains a marketing authorization in the European Union, there can be no assurance that reimbursement for such product will be secured on a timely basis or at all. The EU Member States are free to restrict the range of medicinal products for which their national health insurance systems provide reimbursement, and to control the prices and reimbursement levels of medicinal products for human use. An EU Member State may approve a specific price or level of reimbursement for the medicinal product, or alternatively adopt a system of direct or indirect controls on the profitability of the company responsible for placing the medicinal product on the market, including volume-based arrangements, caps and reference pricing mechanisms.
 
Reference pricing used by various EU Member States and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. In some countries, we may be required to conduct a clinical study or other studies that compare the cost-effectiveness of our product candidates, if any, to other available therapies in order to obtain or maintain reimbursement or pricing approval. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, medicinal products launched in the European Union do not follow price structures of the United States and generally published and actual prices tend to be significantly lower. Publication of discounts by third party payers or authorities and public tenders may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries.
 
The so-called Health Technology Assessment (“HTA”) of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including France, Germany, Ireland, Italy and Sweden. The HTA process, which is governed by the national laws of these countries, is the procedure according to which the assessment of the public health impact, therapeutic impact, and the economic and societal impact of use of a given medicinal product in the national healthcare systems of the individual country is conducted. HTA generally focuses on the clinical efficacy and effectiveness, safety, cost, and cost-effectiveness of individual medicinal products as well as their potential implications for the healthcare system. Those elements of medicinal products are compared with other treatment options available on the market. The outcome of HTA regarding specific medicinal products will often influence the pricing and reimbursement status granted to medicinal products by the regulatory authorities of individual EU Member States. A negative HTA of one of our products by a leading and recognized HTA body could not only undermine our ability to obtain reimbursement for such product in the EU Member State in which such negative assessment was issued, but also in other EU Member States. For example, EU Member States that have not yet developed HTA mechanisms could rely to some extent on the HTA performed in other countries with a developed HTA framework, when adopting decisions concerning the pricing and reimbursement of a specific medicinal product.
 
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On January 31, 2018, the European Commission adopted a proposal for a regulation on health technology assessment. This legislative proposal is intended to boost EU level cooperation among EU Member States in assessing health technologies, including new medicinal products, and providing the basis for cooperation at the EU level for joint clinical assessments in these areas. The proposal provides that EU Member States will be able to use common HTA tools, methodologies and procedures across the European Union, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU Member States will continue to be responsible for assessing non-clinical (e.g., While EU Member States could choose to delay participation in the joint work until three years after the rules enter into force, it will become mandatory after six years. The European Commission has stated that the role of the HTA regulation is not to influence pricing and reimbursement decisions in the individual EU Member States, but there can be no assurance that the HTA regulation will not have effects on pricing and reimbursement decisions. The HTA entered into force on January 11, 2022 and applies as of January 2025 followed by a further three-year transitional period during which EU member states must fully adapt to the new system.
 
To obtain reimbursement or pricing approval in some countries, including the EU Member States, we may be required to conduct studies that compare the cost-effectiveness of our product candidates to other therapies that are considered the local standard of care. There can be no assurance that any country will allow favorable pricing, reimbursement and market access conditions for any of our products, or that we will be feasible to conduct additional cost-effectiveness studies, if required.
 
In certain of the EU Member States, medicinal products that are designated as orphan medicinal products may be exempted or waived from having to provide certain clinical, cost-effectiveness and other economic data in connection with their filings for pricing/reimbursement approval. As noted above, Lojuxta was not granted an Orphan Drug Designation by the EMA for the treatment of HoFH. As such, it is not eligible for benefits related to Orphan Drug Designation. As a result, we may not be able to provide all of the data required to obtain pricing/reimbursement approvals in certain EU Member States, which has and could, in the future, result in delays of pricing/reimbursement approvals for Lojuxta, Lojuxta not obtaining pricing/reimbursement approval at all, or Lojuxta obtaining approvals at less than acceptable levels or with significant restrictions on use or reimbursement.
 
Many countries outside the United States and the European Union have pricing and reimbursement approvals and regimes that are comparable to those in the key EU markets. We have successfully achieved coverage in the United States and reimbursement in Japan, Turkey, Saudi Arabia, Germany, Italy, the United Kingdom, France, Austria, the Netherlands and Slovenia. Individual patient funding has been obtained in Czech Republic and Hungary. Pricing and reimbursement processes are ongoing in Brazil, Spain, Denmark, Norway, Portugal, Israel, Kuwait, Belgium, Poland, Romania and Latvia. Mycapssa® has been submitted to the EMA in 2021 and is not yet approved in Europe.
 
European Data Laws
 
The collection and use of personal health data and other personal information in the European Union is governed by the provisions of the European General Data Protection Regulation (EU) 2016/697 (“GDPR”), which came into force in May 2018 and related implementing laws in individual EU Member States.
 
. The GDPR imposes a number of strict obligations and restrictions on the ability to process (processing includes collection, analysis and transfer of) personal data of individuals within the European Union and in the EEA, including health data from clinical trials and adverse event reporting. The GDPR also includes requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals prior to processing their personal data or personal health data, notification of data processing obligations to the national data protection authorities and the security and confidentiality of the personal data. EU Member States may also impose additional requirements in relation to health, genetic and biometric data through their national implementing legislation.
 
Under the GDPR, personal data can only be transferred within the EU Member States and the three additional European Economic Area countries (Norway, Iceland and Liechtenstein) that have adopted a national law implementing the GDPR. Appropriate safeguards are required to enable cross-border transfers of personal data from the EU and EEA Member States to a “third country” (a country outside the EU or EEA). This status has a number of significant practical consequences, in particular for international data transfers, competent supervisory authorities and enforcement of the GDPR.
 
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In conclusion, he GDPR also prohibits the transfer of personal data to countries outside of the European Union/EEA that are not considered by the European Commission to provide an adequate level of data protection (including the United States), except if the data controller meets very specific requirements such as the use of standard contractual clauses, (“SCCs”), issued by the European Commission.  In this respect recent legal developments in Europe have created complexity and compliance uncertainty regarding certain transfers of personal data from the EU/EEA. For example, following the Schrems II decision of the Court of Justice of the European Union on July 16, 2020, in which the Court invalidated the Privacy Shield under which personal data could be transferred from the EU/EEA to United States entities who had self-certified under the Privacy Shield scheme, there is uncertainty as to the general permissibility of international data transfers under the GDPR. The Court did not invalidate the then current SCCs, but ruled that data exporters relying on these SCCs are required to verify, on a case-by-case basis, if the law of the third country ensures an adequate level of data protection that is essentially equivalent to that guaranteed in the EU/EEA. In light of the implications of this decision we may face difficulties regarding the transfer of personal data from the European Union/EEA to third countries.  However, on June 4, 2021 the EU Commission issued a new set of SCCs for data transfers from controllers or processors in the EU/EEA to controllers or processors established outside the EU/EEA. These SCCs replace the old sets of SCCs that were adopted under the previous European Data Protection Directive 95/46. Since September 27, 2021, it is no longer possible to conclude contracts incorporating these previous versions of the SCCs. In addition, for contracts concluded before September 27, 2021, it is still possible to rely on the previous SCCs until the end of an additional 15 months’ transitional period (until December 27, 2022), provided that the processing operations which are the subject matter of the contract remain unchanged and reliance on previous SCCs ensures that the transfer is subject to appropriate safeguards. On November 11, 2021, the European Data Protection Board has adopted recommendations on such appropriate safeguards that supplement transfer mechanisms. These recommendations aim to assist data exporters with their duty to identify and implement appropriate supplementary measures where they are needed to ensure an essentially equivalent level of protection to the personal data they transfer to third countries.
 
On March 25, 2022, the United States and the European Commission published a joint statement on a new Trans-Atlantic Data Privacy Framework. While such an agreement may facilitate data transfers to the United States in the future, the mere announcement has no impact and so far does not provide the legal basis for transferring personal data to the United States.
 
Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States may result in significant monetary fines, for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater, other administrative penalties and a number of criminal offenses (punishable by uncapped fines) for organizations and in certain cases their directors and officers as well as civil liability claims from individuals whose personal data was processed. Data protection authorities from the different EU Member States may still implement certain variations, enforce the GDPR and national data protection laws differently, and introduce additional national regulations and guidelines, which adds to the complexity of processing personal data in the European Union. Guidance developed at both EU level and at the national level in individual EU Member States concerning implementation and compliance practices are often updated or otherwise revised.
 
There is, moreover, a growing trend towards required public disclosure of clinical trial data in the European Union which adds to the complexity of obligations relating to processing health data from clinical trials. Such public disclosure obligations are provided in the new EU CTR, EMA disclosure initiatives and voluntary commitments by industry. Failing to comply with these obligations could lead to government enforcement actions and significant penalties against us, harm to our reputation, and adversely impact our business and operating results. The uncertainty regarding the interplay between different regulatory frameworks, such as the Clinical Trials Regulation and the GDPR, further adds to the complexity that we face with regard to data protection regulation.
 
On June 28, 2021, the European Commission adopted two adequacy decisions for the United Kingdom – one under the GDPR and the other for the Law Enforcement Directive. Personal data may now freely flow from the European Union to the United Kingdom since the United Kingdom is deemed to have an adequate data protection level. Additionally, following the UK's withdrawal from the European Union and the EEA, companies have to comply also with the UK’s data protection laws (including the GDPR as incorporated into UK national law), the latter regime having the ability to separately fine up to the greater of £17.5 million or 4% of global turnover.
 
Promotional Activities
 
In the European Union, interactions between pharmaceutical companies and physicians are also governed by strict laws, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct both at EU level and in the individual EU Member States. The provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is prohibited in the European Union. The provision of benefits or advantages to physicians is also governed by the national anti-bribery laws of the EU Member States. Violation of these laws could result in substantial fines and imprisonment.
 
Payments made to physicians in certain EU Member States must be publicly disclosed. Moreover, agreements with physicians must often be the subject of prior notification and approval by the physician’s employer, his/her regulatory professional organization, and/or the competent authorities of the individual EU Member States. These requirements are provided in the national laws, industry codes, or professional codes of conduct, applicable in the individual EU Member States. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
 
93
While the UK has left the EU, as mentioned above, it should be noted that the UK still has the strictest anti-bribery regime in Europe, the UK Bribery Act 2010. The Act is applicable English law and continues to apply to any company incorporated in or “carrying on business” in the United Kingdom, irrespective of where in the world the alleged bribery activity occurs.
 
Expanded Access Outside the United States and the European Union
 
In certain countries, drug products approved in the United States or the European Union can be accessed by patients before the drug has obtained marketing approval in such country. Various forms of this access include sale of product, often to the government, on a named patient basis and provision of the product free of charge on a named patient basis or a compassionate use basis. Each country has its own laws and regulations that apply to these forms of access. Amryt has made lomitapide available in Brazil, Canada, Czech Republic, France, Germany, Greece, Israel, Italy, Turkey, Poland, Spain, South Africa, Switzerland, Taiwan and USA and plan to continue to consider access to additional countries. When Aegerion acquired metreleptin from AstraZeneca in January 2015, there were a number of patients receiving metreleptin therapy free of charge in certain countries outside the United States that allow use of a drug before marketing approval has been obtained in such country. Where permitted in accordance with applicable requirements, we have continued to make metreleptin available free of charge under such program, which has resulted in significant costs to the Company. In 2016, we began generating revenues from named patient sales of metreleptin in certain markets where named patient sales of metreleptin are possible and to the extent permitted by applicable law and local regulatory authorities. Where appropriate we have supported the transfer of patients from free of charge supply to locally approved pre-authorization funding programs.
 
Additional Laws and Regulations Governing International Operations
 
For other countries outside of the European Union and the United States, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In addition, the clinical trials must be conducted in accordance with GCP requirements and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.
 
If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
 
The UK Bribery Act, the FCPA and other anti-corruption laws generally prohibit us and our employees and intermediaries from authorizing, promising, offering or providing, directly or indirectly, improper or prohibited payments, or anything else of value, to government officials or other persons to obtain or retain business or gain some other business advantage. Under the UK Bribery Act, we may also be liable for failing to prevent a person associated with us from committing a bribery offense. We and our commercial partners operate in a number of jurisdictions that pose a high risk of potential UK Bribery Act or FCPA violations, and we also participate in collaborations and relationships with third parties whose corrupt or illegal activities could potentially subject us to liability under the UK Bribery Act, FCPA or local anti-corruption laws, even if we did not explicitly authorize or have actual knowledge of such activities. The FCPA also requires us, as a public company, to make and keep books and records that accurately and fairly reflect all of our transactions and to devise and maintain an adequate system of internal accounting controls.
 
Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, the FCPA presents particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials. Certain payments to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions against other companies.
 
Various laws, regulations and executive orders also restrict the use and dissemination outside of the United States, or the sharing with certain non-U.S. nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products. If we are successful in expanding our presence outside of the United States, such expansion may require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside of the United States, which could limit our growth potential and increase our development costs.
 
We will be subject to compliance with the anti-bribery laws of other countries, including Brazil. Our activities outside the United States or those of its employees, licensees, distributors, manufacturers, clinical research organizations, or other third parties who act on its behalf or with whom we do business could subject us to investigation or prosecution under foreign or U.S. laws. For example, federal, Brasilia and São Paulo authorities in Brazil are each conducting an investigation to determine whether there have been any violations of Brazilian laws related to the sales of Juxtapid in Brazil.
 
The failure to comply with laws governing international business practices may result in substantial civil and criminal penalties and suspension or debarment from government contracting. The SEC also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions.
 
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Our present and future business has been and will continue to be subject to various other laws and regulations. Various laws, regulations and recommendations relating to safe working conditions, laboratory practices, the experimental use of animals, and the purchase, storage, movement, import and export and use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used or that we may use in the future in connection with our development work are or may be applicable to our activities. Certain agreements we enter into involving exclusive license rights or acquisitions may be subject to national or supranational antitrust regulatory control, the effect of which cannot be predicted. The extent of government regulation, which might result from future legislation or administrative action, cannot accurately be predicted.
 
C. Organizational Structure
 
Amryt Pharma plc is a public limited company organized under the laws of the England and Wales.
 
Group Structure as of December 31, 2021
 
Subsidiary
Owner
Ownership
Percentage
Amryt Pharma Holdings Limited
Amryt Pharma Plc
100%
Amryt Pharmaceuticals Designated Activity Company
Amryt Pharma Holdings Limited
100%
Amryt Pharmaceuticals Inc.
Amryt Pharma Holdings Limited
100%
Amryt Endo Inc.
Amryt Pharmaceuticals Inc.
100%
Chiasma Securities Corp
Amryt Endo Inc.
100%
Chiasma (Israel) Limited
Amryt Endo Inc.
100%
SomPharmaceuticals SA
Amryt Pharmaceuticals Designated Activity Company
100%
Amryt Endocrinology Limited
Amryt Pharmaceuticals Designated Activity Company
100%
Amryt GmbH
Amryt Pharmaceuticals Designated Activity Company
100%
Amryt Research Limited
Amryt Pharmaceuticals Designated Activity Company
100%
Amryt Lipidology Limited
Amryt Pharmaceuticals Designated Activity Company
100%
Amryt Distribution Limited
Amryt Pharmaceuticals Designated Activity Company
100%
Amryt Pharma Italy SRL
Amryt Pharmaceuticals Designated Activity Company
100%
Amryt Pharma (UK) Limited
Amryt Pharmaceuticals Designated Activity Company
100%
Amryt Pharma Spain SL
Amryt Pharmaceuticals Designated Activity Company
100%
Amryt Genetics Limited
Amryt Pharmaceuticals Designated Activity Company
100%
Cala Medical Limited.
Amryt Pharmaceuticals Designated Activity Company
100%
Aegerion Pharmaceuticals Holdings, Inc. (DE)
Amryt Pharmaceuticals Inc. (DE)
100%
Aegerion Argentina S.R.L. (Argentina)
Amryt Pharmaceuticals Inc. (DE)
99.31%
Aegerion Pharmaceuticals Holdings, Inc. (DE)
0.69%

95
Aegerion International Limited (Bermuda)
Amryt Pharmaceuticals Inc. (DE)
100%
Aegerion Pharmaceuticals Limited (Bermuda)
Aegerion International Limited (Bermuda)
100%
Aegerion Pharmaceuticals (Canada) Limited (BC)
Aegerion Pharmaceuticals Holdings Inc. (DE)
100%
Amryt Colombia S.A.S. (Colombia)
Amryt Pharmaceuticals Inc. (DE)
100%
Aegerion Pharmaceuticals Limited (England & Wales)
Aegerion Pharmaceuticals Limited (Bermuda)
100%
Amryt Pharmaceuticals SAS (France)
Aegerion Pharmaceuticals Limited (England & Wales)
100%
Amryt Pharma GmbH (Germany)
Aegerion Pharmaceuticals Limited (England & Wales)
100%
Aegerion Pharmaceuticals Srl (Italy)
Aegerion Pharmaceuticals Limited (England & Wales)
100%
Aegerion Pharmaceuticals B.V. (Netherlands)
Aegerion Pharmaceuticals Limited (England & Wales)
100%
Aegerion Pharmaceuticals Spain, S.L. (Spain)
Aegerion Pharmaceuticals Limited (England & Wales)
100%
Aegerion Pharmaceuticals SARL (Switzerland)
Aegerion Pharmaceuticals Limited (England & Wales)
100%
Amryt Turkey İlaç Ticaret Limited Şirketi (Turkey)
Aegerion Pharmaceuticals Limited (England & Wales)
100%
Amryt Brasil Comercio E Importacao De Medicamentos LTDA (Brazil)
Amryt Pharmaceuticals Inc. (DE)
 
100%
 
 
D. Property, Plants and Equipment
 
Our principal executive office is in Dublin, Ireland, where we lease office space under leases that expire in 2040. Our U.S. headquarters are in Boston, Massachusetts, where we lease office space under a lease that expires in 2027. We also have additional offices, research facilities and manufacturing facilities in Germany. We believe these facilities are adequate for our current needs and that additional or replacement space will be available on commercially reasonable terms as needed.
 
Item 4A.
Unresolved Staff Comments
 
Not applicable.
 
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Item 5.
Operating and Financial Review and Prospects
 
A. Operating Results
 
You should read the following discussion and analysis of our financial condition and results of operations together with the information in and the Consolidated Financial Statements of Amryt, including the notes thereto. The following discussion is based on financial information prepared in accordance with IFRS as issued by the IASB. The following discussion includes forward-looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those described under “Risk Factors” and elsewhere in this annual report.
 
Overview
 
We are a global, commercial-stage biopharmaceutical company dedicated to acquiring, developing and commercializing novel treatments for rare diseases. We have built a diverse portfolio of commercial and development stage assets including:
 

 •
lomitapide, an approved treatment in the United States and the European Union for adult patients with HoFH;
 

 •
metreleptin, an approved treatment in the United States for GL and in the European Union for GL and PL;
 

 •
oral octreotide, an approved treatment in the United States for long-term maintenance therapy in acromegaly;
 

 •
Oleogel-S10, our lead development asset, which has completed its pivotal Phase 3 trial as a potential treatment for severe EB and received positive topline data on September 9, 2020. On February 28, 2022, we received a CRL from the FDA which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns. A MAA for Oleogel-S10 for the treatment of Dystrophic and Junctional EB was validated by the EMA on March 25, 2021, the assessment process by EMA was completed on April 22, 2022, when the CHMP adopted a positive opinion. The positive opinion recommends the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the European Commission (“EC”) is expected on the Filsuvez® application within 67 days;
 

 •
We are also developing Mycapssa® to expand the indication of Mycapssa® (octreotide capsules) beyond acromegaly into carcinoid syndrome associated with neuroendocrine tumors;
 

 •
AP103, our first product candidate utilizing our novel polymer-based topical gene therapy delivery platform, which is in preclinical development as a potential treatment for patients with EB and other topical indications; and
 

 •
Imlan, a range of derma-cosmetic products marketed solely in Germany as a treatment for sensitive, allergy-prone and dry skin.
 
On September 24, 2019, we completed the acquisition of Aegerion, a wholly-owned operating subsidiary of Novelion Therapeutics Inc. We believe that this acquisition has enabled the Group to advance our ambition to create a global leader in rare and orphan diseases. Prior to the Acquisition, we licensed the rights from Aegerion to sell lomitapide in Europe and the Middle East, while Aegerion retained the rights to this product in the United States and elsewhere. Following the acquisition, we sell lomitapide and metreleptin globally, excluding Japan for lomitapide and Japan, South Korea and Taiwan for metreleptin.
 
On August 5, 2021, we completed the acquisition of Chiasma, Inc. We believe that following the acquisition the combined company will be a global leader in rare and orphan diseases with three on-market commercial products, a global commercial and operational footprint and a significant development pipeline of therapies with the financial flexibility to execute its growth plans.
 
Key Factors Affecting Our Business
 
Our ability to expand approved indications and markets for lomitapide, metreleptin and Mycapssa
 
We intend to take steps necessary to seek approval for the use of lomitapide to treat pediatric HoFH and for the use of metreleptin to treat PL in the United States.  We are also developing Mycapssa® to expand the indication of Mycapssa® (octreotide capsules) beyond acromegaly into carcinoid syndrome associated with neuroendocrine tumors. In addition, we intend to seek marketing approval for metreleptin and lomitapide in certain South American countries as well as Mycapssa® in the European Union. Our ability to generate revenue from these potential new indications and markets depends on our success in completing development of and commercializing such products, which will require a significant investment of time and resources and may not ultimately prove successful.
 
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Our ability to commercialize Oleogel-S10, if approved
 
We received positive top line data from the pivotal Phase 3 EASE Trial of Oleogel-S10 in September 2020, details of which are discussed further in “Business—Our Product Candidates—Oleogel-S10 for the Treatment of Severe EB—Topline Results for Oleogel-S10,” and in 2021, we submitted applications for approval of Oleogel-S10 and, if approved, commercialize it under the name Oleogel-S10 in the United States and Europe through our existing commercial infrastructure. On February 28, 2022, we received a CRL from the FDA which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns. A MAA for Oleogel-S10 for the treatment of Dystrophic and Junctional EB was validated by EMA March 25, 2021, the assessment process by EMA was completed on April 22, 2022, when the CHMP adopted a positive opinion. The positive opinion recommends the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days. If the commercialization effort requires more than minimal additions, our financial results could suffer.
 
International operations and foreign currency exchange
 
We operate on a global basis with offices, sales and activities throughout the world. Our worldwide operations and sales have increased as a result of the acquisition of Aegerion and Chiasma and the continued expansion of our commercial organization. Our global operations subject our financial results to fluctuations in foreign currency exchange rates, changes in general economic and political conditions in countries where we operate, particularly as a result of ongoing economic instability within foreign jurisdictions, sensitivity to governmental actions relating to tariffs or trade agreements, complex and restrictive employment and labor laws and regulations, as well as union and works council restrictions, sensitivity to changes in tax laws or rulings in jurisdictions across the world, longer payment cycles from customers in certain geographies, and legal compliance costs and risks.
 
Our ability to add rare disease assets to our portfolio
 
Identifying, acquiring and developing new products and product candidates to build shareholder value is key to our goal of becoming a global leader in the treatment of rare diseases. Our future profitability and growth will depend on our ability to acquire and in-license product candidates on favorable terms. Moreover, competitors may succeed in developing, acquiring, licensing or introducing new pharmaceutical products that are more effective, have a more favorable safety profile or are less costly than our products. See “—Risk Factors” for additional information.
 
Key Components of Our Results of Operations
 
Revenues
 
We generated revenues from the sale of lomitapide globally (marketed as Juxtapid in the U.S. and as Lojuxta in the EU), metreleptin globally (marketed as Myalept in the U.S. and as Myalepta in the EU), royalties paid to us from our Juxtapid and Myalept licensees in Japan, and from the sale of Imlan. Following the acquisition of Chiasma, we also generated revenues from the sale of Mycapssa® in the U.S. (the non-EU marketing name for octreotide).
 
Cost of Sales
 
Cost of sales is comprised of the cost of producing products, royalties on sales and the cost of delivery of goods sold to customers, including the costs associated with the services provided by the distributors to import and deliver the goods. Cost of sales also includes amortization of intangible assets that we acquired as part of the acquisitions of Aegerion and Chiasma, as well as amortization of the step-up in the fair value of the inventory acquired in both acquisitions and any write-down of inventories to fair value less costs to sell recognized as an expense.
 
Selling, General and Administrative (“SG&A”) expenses
 
SG&A expenses includes payroll and payroll-related costs, insurance costs, fees payable to auditors, pension costs, marketing expenses and general corporate expenses. Following the acquisition of Aegerion and Chiasma, our SG&A expenses increased significantly with the expansion of the selling, regulatory, quality and compliance infrastructure in place for a company with a global commercial footprint.
 
We expect SG&A expenses in 2022 to increase compared to 2021, due to an increase in compensation-related expenses driven by higher headcount and other expenses related to the expansion and support of our business. We also expect an increase in expenses related to the preparation for the potential commercial launch of Oleogel-S10 and the continuation of the commercial launch of metreleptin in the European Union following its approval in July 2018.

98
Research and Development (“R&D”) expenses
 
R&D expenses include employee-related expenses, such as salaries and other benefits, for our R&D personnel; costs for production of drug product used in our clinical trials and development of our manufacturing processes; fees and other costs paid to third parties in connection with R&D, consultants and other suppliers to conduct our clinical trials, preclinical and non-clinical studies, and post approval commitment studies; and costs of facilities, materials and equipment related to our clinical trials and preclinical and non-clinical studies. We expense R&D costs as incurred, because they do not qualify to be capitalized as intangible assets under IFRS since the technical feasibility of the materials is not proven and no alternative use for them exists in the absence of marketing approval.
 
For 2022 and beyond, we expect that our R&D expenses will continue to increase from previous levels. We also anticipate that costs will increase as we prepare for anticipated regulatory submissions and data read-outs from clinical trials, initiate and undertake additional clinical trials and related development work, and potentially acquire rights to additional product candidates. Specific anticipated drivers of increases in R&D expenses are our efforts to complete clinical development and seek marketing approval for NET, initiate clinical development of AP103, and continue with life cycle development opportunities and post approval commitments for lomitapide and metreleptin. R&D expenses may vary substantially from period to period based on the timing of our research and development activities, including timing due to regulatory approval and moving from preclinical to the clinic and enrolling patients into clinical trials.
 
If Oleogel-S10 is approved within certain time frames, we will incur both significant milestone payment obligations and significant financial obligations (under our CVRs and other milestones).
 
Finance Items
 
Finance income (expense) includes interest on our realized and unrealized exchange rate gains (losses), as well as interest and fees paid on our outstanding indebtedness.
 
As part of the acquisition of Aegerion, we entered into a U.S. dollar denominated $81,021,000 Secured Credit Facility with various lenders. The Secured Credit Facility was due to mature on September 24, 2024. Interest was payable on a quarterly basis at the rate of (i) 11% per annum paid in cash on a quarterly basis or, at our option, (ii) at the rate of 6.5% paid in cash plus 6.5% paid in kind. The Secured Credit Facility could be prepaid, in whole or in part, at any time subject to payment of an exit fee, which depending on the stage of the loan term, ranges from 5.0% to 0% of the principal then outstanding. On February 18, 2022, the Secured Credit Facility was repaid in full and the Group secured a $125 million Senior Credit Facility from funds managed by Ares of which US$105 million was drawn down to facilitate the prepayment of the existing Secured Credit Facility. In repaying the Secured Credit Facility Amryt incurred an exit fee of 5.00% of the outstanding principal as at the prepayment date.
 
As part of the acquisition of Aegerion, we also issued Convertible Notes with an aggregate principal amount of $125 million to certain of Aegerion’s pre-bankruptcy creditors. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 5.0% per year, payable semi-annually in arrears on April 1 and October 1 of each year. The Convertible Notes will mature on April 1, 2025, unless earlier repurchased or converted. As a result of the conversion feature in the Convertible Notes, the notes were assessed to have both a debt and an equity component. The two components were assessed separately and classified as a financial liability and equity instrument, respectively. The financial liability component was measured at fair value based on the discounted cash flows expected over the estimated term of the notes using a discount rate based on a market interest rate that a similar debt instrument without a conversion feature would be subject to. The liability component is recorded on our Consolidated Statement of Financial Position at amortized cost, and interest is calculated by applying the estimated prevailing market interest rate at the time of issue. The equity component is recognized in equity and is not subsequently remeasured.
 
All interest-bearing loans and borrowings are recognized initially at fair value less attributable transaction costs which are subsequently carried at amortized cost using the effective interest method. Interest is charged to the Consolidated Statement of Comprehensive Income/(Loss).
 
Exchange rate adjustments recognized in the financial income or expenses reflect adjustments to the value of assets and liabilities denominated in foreign currencies, other than our functional currency, which is U.S. dollars for the year ended December 31, 2021.
 
We include the non-cash discount component of contingent consideration which is being unwound to the Consolidated Statement of Comprehensive Income/(Loss) in Finance expenses. The contingent consideration arose as part of the acquisition of Birken AG (now Amryt GmbH) in 2016 through which we acquired Oleogel-S10. The fair value of contingent consideration is determined by discounting the contingent amounts payable to their present value as of each reporting date. The discount component is being unwound as a non-cash financing charge/gain in the Consolidated Statement of Comprehensive Income/(Loss) over the life of the obligation. We review the fair value of the contingent consideration at each reporting date.
 
We include the non-cash CVR gain / (loss) which is recognized in the Consolidated Statement of Comprehensive Income/(Loss) in Finance expenses. The CVR finance gain / (loss) arises from the issuance of CVRs to the shareholders and option holders of Amryt as at September 20, 2019, prior to the acquisition of Aegerion. The value of the potential payout of the CVRs was calculated using the probability-weighted expected returns method. Using this method, the potential payment amounts were multiplied by the probability of achievement and discounted to present value. The discount component is being unwound as a non-cash financing charge in the Consolidated Statement of Comprehensive Income/(Loss) over the life of the obligation. We review the estimates and where necessary, will adjust the carrying amount of CVR to reflect the actual and revised estimated contractual cash flows. At each reporting date, we recalculate the amortized cost of the CVR as the present value of the re-estimated future contractual cash flows at the original effective interest rate.
 
99
Tax on ordinary activities
 
Our corporate tax is comprised of current tax and the adjustment of deferred taxes during the period. In any given period, the adjustment to our deferred tax position, including the reversal of valuation allowances, may partially or wholly offset current tax expense.
 
Results of Operations of Amryt
 
Financial results of Amryt for the Year Ended December 31, 2021, compared to the Year Ended December 31, 2020.
 
The following table sets forth certain consolidated statement of operations data for Amryt:
 
   
Year ended December 31,
  
   
2021
    
2020
  
   
(US$’000, except per share data)
  
Revenue
    
222,543
      
182,607
  
Cost of sales
    
(106,119
)
    
(119,029
)
Gross profit
    
116,424
      
63,578
  
Research and development expenses
    
(37,729
)
    
(27,618
)
Selling, general and administrative expenses
    
(91,995
)
    
(76,673
)
Restructuring and acquisition costs
    
(16,947
)
    
(1,017
)
Share based payment expenses
    
(8,341
)
    
(4,729
)
Operating loss before finance expense
    
(38,588
)
    
(46,459
)
Non-cash change in fair value of contingent consideration
    
18,407
      
(27,827
)
Non-cash contingent value rights gain/(loss)
    
41,525
      
(12,004
)
Net finance expense - other
    
(27,906
)
    
(19,569
)
Loss on ordinary activities before taxation
    
(6,562
)
    
(105,859
)
Tax credit on loss on ordinary activities
    
7,562
      
1,332
  
Profit/(loss) for the year attributable to the equity holders of the Company
    
1,000
      
(104,527
)
Total other comprehensive income/(loss)
    
4,423
      
(2,164
)
Total comprehensive income/(loss) for the year attributable to the equity holders of the Company
    
5,423
      
(106,691
)
Basic earnings/(loss) per share attributable to ordinary equity holders of the parent
    
0.00
      
(0.66
)
Diluted earnings/(loss) per share attributable to ordinary equity holders of the parent
    
0.00
      
(0.66
)
 
Revenues
 
The revenues for each of our significant products were as follows:
 
   
Year ended December 31,
              
Revenues:
  
2021
    
2020
    
Increase / (Decrease)
  
   
US$’000
    
US$’000
    
US$’000
    
%
  
Metreleptin
    
141,242
      
106,872
      
34,370
      
32.2
%
Lomitapide
    
73,867
      
74,750
      
(883
)
    
(1.2
%)
Mycapssa®
    
6,407
      
—
      
6,407
      
—
  
Other
    
1,027
      
985
      
42
      
4.3
%
Total revenues
    
222,543
      
182,607
      
39,936
      
21.9
%
 
100
Total product sales were $222.5 million for the year ended December 31, 2021, compared to $182.6 million for the year ended December 31, 2020. The increase in revenues was due to increased sales of metreleptin as well as our acquisition of Chiasma in August 2021. Sales of metreleptin lomitapide, and Mycapssa® comprise product sales and royalties on sales, respectively, made by our licensees.
 
Metreleptin
 
We generated revenues from product sales of metreleptin of $141.1 million and royalties of $0.1 million from Shionogi for the year ended December 31, 2021, compared to $106.8 million and $0.1 million for the year ended December 31, 2020, respectively. The increase is driven by continued EMEA launch success, regular tender orders in Brazil and US patient growth. 49.7% of product sales for metreleptin were in the United States, with the remaining 50.3% in the European Union and other international markets.
 
Future net revenues of metreleptin are highly dependent on our ability to:
 

 •
maintain existing patients on therapy;
 

 •
continue to build market acceptance for metreleptin in the United States;
 

 •
build market acceptance in the European Union following the approval by the EMA in July 2018, and continue to obtain pricing and reimbursement approvals in key markets in the European Union and other territories;
 

 •
secure regulatory approval from the FDA for the treatment of PL in the United States; and
 

 •
obtain regulatory approvals for metreleptin in new markets for the treatment of GL and PL based on the data package which secured approval in Europe.
 
In addition, we expect to continue to pay significant Medicaid rebates for metreleptin in the United States. An increase in the relative mix of patients that have Medicaid as their primary insurance coverage would have an adverse impact on our ability to increase revenues. We have successfully achieved coverage in the United States and reimbursement in Japan, Turkey, Germany, Italy, the United Kingdom, France and Austria. Price and reimbursement processes are ongoing in Spain, Denmark, Norway, Portugal, the Netherlands, Belgium, Poland, Slovenia, Romania and Latvia.
 
Lomitapide
 
We generated revenues from product sales of lomitapide of $70.5 million and Recordati royalties of $3.4 million for the year ended December 31, 2021, compared to $71.8 million and $3.0 million for the year ended December 31, 2020, respectively. The decrease is primarily due to the impact of competition in the US offsetting underlying continued growth in Europe and other territories.  44.5% of product sales for lomitapide were in the United States, with the remaining 55.5% in the European Union and other international markets.
 
Future net revenues of lomitapide are highly dependent on our ability to:
 

 •
maintain existing patients on therapy even in the face of competing pressure following the recent launch of Evinacumab in the US;
 

 •
continue to build market acceptance for lomitapide in existing markets;
 

 •
continue to support patient access programs in all territories;
 

 •
obtain pricing and reimbursement approvals in new markets in the European Union and other territories; and
 

 •
secure regulatory approval for lomitapide in key markets.
 
In addition, we expect to continue to pay significant Medicaid rebates for lomitapide in the United States. An increase in the relative mix of patients that have Medicaid as their primary insurance coverage would have an adverse impact on our ability to increase revenues. We have successfully achieved coverage in the United States and reimbursement in Japan, Turkey, Saudi Arabia, , Italy, the United Kingdom, France, Netherlands, Austria and Slovenia. Individual patient funding has been obtained in Czech Republic and Hungary. Price and reimbursement processes are ongoing in Brazil, Norway, Israel and Kuwait.

101
Mycapssa®
 
We generated revenues from product sales of Mycapssa® of $6.4 million for the period from the date of the acquisition of Chiasma on August 5, 2021, to December 31, 2021.
 
Future net revenues of Mycapssa® are highly dependent on our ability to:
 

 •
maintain existing patients on therapy even in the face of competing pressure from other products;
 

 •
continue to build market acceptance by the medical community and patients of Mycapssa® as a safe and effective product;
 

 •
continue to support patient access programs;
 

 •
secure regulatory approval for octreotide in key markets.
 
Other
 
Other revenues relate to sales from our in-house derma-cosmetic range of products, Imlan, and our early access program for Oleogel-S10. Imlan is marketed solely in Germany as a treatment for sensitive, allergy-prone skin. The increase in revenues in the year ended December 31, 2021, was mainly due to higher sales from our early access program product, Oleogel-S10. We intend to market Oleogel-S10 under the brand name of Filsuvez if it is approved for the treatment of EB.
 
Cost of Sales
 
 
  
Year ended December 31,
              
Cost of Sales:
  
2021
    
2020
    
Increase / (Decrease)
  
 
  
US$’000
    
US$’000
    
US$’000
    
%
  
Cost of product sales
    
22,029
      
21,796
      
233
      
1.1
%
Write-down of inventories
    
5,688
      
4,058
      
1,630
      
40.2
%
Reversal of write-down of inventories
    
(932
)
    
—
      
(932
)
    
(100.0
%)
Amortization of acquired intangibles
    
48,945
      
42,966
      
5,979
      
13.9
%
Amortization of inventory fair value step-up
    
4,417
      
27,617
      
(23,199
)
    
(84.0
%)
Royalty expenses
    
25,973
      
22,592
      
3,381
      
15.0
%
Total cost of sales
    
106,119
      
119,029
      
(12,910
)
    
(10.8
%)

Total cost of sales was $106.1 million for the year ended December 31, 2021, representing the cost, including royalties, of selling metreleptin, lomitapide and Mycapssa®, the cost of delivery of goods sold to customers, including the costs associated with the services provided by the distributors to import and deliver the goods, the non-cash intangible amortization, and the non-cash inventory fair value step-up expenses and write-down of inventories to fair value less costs to sell recognized as an expense. Total cost of sales was $119.0 million for the year ended December 31, 2020. The decrease is driven by a reduction in the non-cash inventory fair value step-up expenses which reduced due to the full amortization of the Aegerion related inventory fair value step-up in early 2021 and a lower amortization from the Chiasma related inventory fair value step-up from August 5, 2021. This decrease is offset by additional costs related to the cost, including royalties, of selling metreleptin, lomitapide and Mycapssa®, and non-cash intangible amortization.
 
The cost of product sales in the year ended December 31, 2021, increased by $0.9 million, and royalty expenses increased by $3.4 million in 2021 compared to the year ended December 31, 2020. The acquisition of Mycapssa® as well as increased costs for lomitapide for markets outside the EMEA and metreleptin for all markets largely drove this increase in costs. Following the acquisition of Chiasma, we are now selling three commercial products with two being sold on a global basis and one commercial product being solely sold in the United States. This results in a higher cost of producing our commercial products, higher royalties on sales, and higher costs of delivery of goods sold to customers, including the costs associated with the services provided by our distributors to import and deliver the goods.
 
Amortization of acquired intangible assets was $48.9 million in 2021 compared to $43.0 million in 2020. This relates to the amortization charge on the three commercial assets purchased as part of the Aegerion and Chiasma acquisitions. The increase is driven by amortization related to the period from the date of the Chiasma acquisition on August 5, 2021, to December 31, 2021.
 
The non-cash inventory fair value step-up expense was $4.4 million in 2021, compared to $27.6 million in 2020. This relates to the difference between the estimated fair value and the book value of inventory acquired from as part of the acquisitions of Aegerion and Chiasma which is being amortized over the estimated period that we expect to sell this inventory. The decrease in the non-cash inventory fair value step-up expense is due to the inventory step-up recognized as part of the Aegerion acquisition being fully amortized at the beginning of 2021 and the inventory fair value step-up from the Chiasma acquisition, which was lower than that from the Aegerion acquisition, being amortized from August 5, 2021.
 
102
Research and Development Expenses
 
Research and development expenses consist primarily of costs related to clinical studies and outside services, post-approval commitment studies, personnel expenses and other research and development costs. Study costs and outside services costs relate primarily to services performed by clinical research organizations, materials and supplies, and other third-party fees. Research and development expenses for the year ended December 31, 2021, were $37.7 million, representing 24.3% of our total operating expenses, compared to $27.6 million, or 25.1% of total operating expenses, for the year ended December 31, 2020. Research and development expenses in both years were primarily driven by the clinical advancement of Oleogel-S10 as we continued our global EASE study. Research expenses in 2021 comprised $15.9 million in employee compensation, $14.9 million of amounts paid to clinical research organizations, and $6.9 million of other outsourced services. Research expenses in 2020 comprised $11.7 million in employee compensation, $11.3 million of amounts paid to clinical research organizations, and $4.6 million of other outsourced services.
 
Selling, General and Administrative Expenses
 
Selling, general and administrative expenses were $92.0 million for the year ended December 31, 2021, representing 59.3% of our total operating expenses, compared to $76.7 million for the year ended December 31, 2020, representing 69.7% of our total operating expenses. The increase in selling, general and administrative expenses was primarily due to an increase in compensation-related expenses, primarily driven by higher headcount following the acquisition of Chiasma, and an increase in other expenses related to the expansion and support of our business.
 
Restructuring and Acquisition Costs
 
Restructuring and acquisition costs for the year ended December 31, 2021, were $16.9 million compared to $1.0 million for the year ended December 31, 2020. These costs primarily relate to professional fees associated with the acquisition of Chiasma, which was predominantly completed during 2021. The expenses also include severance costs following the completion of the Chiasma acquisition.
 
Share-Based Payment Expenses
 
Non-cash share-based payment expenses for the year ended December 31, 2021, were $8.3 million, compared to $4.7 million in the year ended December 31, 2020. We issue share options and restricted share units as an incentive to senior management and employees. The fair value is measured at the grant date using the Black-Scholes model and amortized over the period during which the awards vest.
 
Impairment charge
 
There was no impairment charge recorded for the years ended December 31, 2021 and December 31, 2020.
 
Non-Cash Change in Fair Value of Contingent Consideration
 
We compute the fair value of the contingent consideration arising from the acquisition of Birken AG (now Amryt GmbH).
 
The Amryt GmbH consideration relates to milestone payments of up to $35 million and royalty payments that are payable to the previous owners of Amryt GmbH, which are triggered by regulatory approvals of Oleogel-S10 for the treatment of EB from the FDA or the EMA, as well as future sales-driven milestones.
 
The finance gain for the year ended December 31, 2021, was $18.4 million compared to a charge of $27.8 million for the year ended December 31, 2020. The gain in 2021 is driven by a change in the probabilities and a decrease in discount rates used in calculating the fair value of the contingent consideration. The probability chance of success, based on management’s expertise and experience for orphan drugs and taking into account the unique circumstances applying to approval process of this product, was revised for the financial year ended December 31, 2021. The probability chance of success was updated following the receipt of a CRL from the FDA which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB, and following the positive opinion adopted by the CHMP, recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days. Additionally, the discount rate used in the calculation of the fair value of the contingent consideration was decreased which was due to the significant risk reduction in the Group over the last 12 months following the growth in commercial revenues, the positive top-line data on the Phase 3 EASE trial of Oleogel-S10, the positive CHMP opinion  recommending the approval of Filsuvez in the EU, the addition of a third commercial product in Mycapssa, and the recent refinancing of our term debt facilities with a significant reduction in the interest rate.

103
Non-Cash Contingent Value Rights Finance Expense
 
We issued CVRs pursuant to which up to $85 million may become payable to Amryt shareholders and option holders who were shareholders prior to completion of the Aegerion acquisition, if certain regulatory approval and revenue milestones are met in relation to Oleogel-S10.
 
The $41.5 million non-cash CVR gain for the year ended December 31, 2021, represents the revised estimated expected cash flows and the effective interest rate unwind on amortized cost between the carrying value of the CVRs from the initial recognition date to the reporting date of December 31, 2021. The non-cash CVR loss for the year ended December 31, 2020, was $12.0 million. The gain recognized in the 2021 Consolidated Statement of Comprehensive Income/(Loss) is mainly driven by changes in the expected timing of milestones being met and the related expected amount due as well as a change in the probability chance of success. Milestone payments related to the regulatory approval from the FDA and EMA have been updated to reflect the expecting timing of achieving regulatory approval and, in turn, the related amount due, which is based on a sliding scale on a linear basis from December 31, 2021 to zero if approved before July 1, 2022. The probability chance of success was updated based on management’s expertise and experience for orphan drugs and taking into account the unique circumstances applying to approval process of this product, following the receipt of a CRL from the FDA, which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB, and following the positive opinion adopted by the CHMP, recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days.
 
Net Finance Expense - Other
 
Other net finance expense was $27.9 million for the year ended December 31, 2021, compared to $19.6 million for the year ended December 31, 2020. Other net finance expense mainly relates to interest on loans and foreign exchange losses, which amounted to $23.2 million and $4.1 million, respectively, for the year ended December 31, 2021. Interest on loans was $22.0 million for the year ended December 31, 2020. The increase in 2021 is mainly due to the compounding of interest on the Secured Credit Facility, where interest at 6.5% is added to the principal loan balance outstanding at each quarter. In 2020 the foreign exchange gain amounted to $2.7 million and in both years the foreign exchange gain/(loss) primarily relates to the translation of euro and sterling-denominated net monetary amounts held by subsidiaries with a non-U.S. dollar functional currency.
 
Financial results of Amryt for the Year Ended December 31, 2020, compared to the Year Ended December 31, 2019
 
For information relating to the financial results of Amryt for the year ended December 31, 2020, compared to the year ended December 31, 2019, see “Item 5. Operating and Financial Review and Prospects” in our annual report on Form 20-F for the fiscal year ended December 31, 2020, filed with the SEC on April 30, 2021.
 
B. Liquidity and Capital Resources
 
We had unrestricted cash and cash equivalents of $113.0 million and $118.6 million as at December 31, 2021, and December 31, 2020, respectively. We have financed our operations primarily through sales of our commercial products, sales of our ordinary shares and debt financing. We expect to incur significant expenses for the foreseeable future as we continue commercializing our approved products and advancing the clinical development of our product candidates. We expect that our R&D and SG&A costs will increase in connection with conducting clinical trials for our product candidates and any new product candidates we acquire or develop and due to the costs of seeking marketing approval for our product candidates in Europe, the United States and other jurisdictions.
 
Financing
 
The principal debt obligations related to our $81 million Secured Credit Facility and our Convertible Notes with an aggregate principal amount of $125 million and the interest associated with these facilities. The Secured Credit Facility had a five-year term from date of draw down and matures in 2024. Interest was payable at our option at the rate of 11% per annum paid in cash on a quarterly basis or at a rate of 6.5% paid in cash plus 6.5% paid in kind that would be paid when the principal was repaid, which rolls up and is included in the principal balance outstanding, on a quarterly basis. For the purposes of the contractual obligations table above, we assume that we choose to pay interest at a rate of 6.5% paid in cash plus 6.5% paid in kind that will be paid when the principal is repaid. For more information on this indebtedness, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.” On February 18, 2022, the Secured Credit Facility was repaid in full and the Group secured a $125 million Senior Credit Facility from funds managed by the Ares of which US$105 million was drawn down to facilitate the prepayment of the existing Secured Credit Facility. In repaying the Secured Credit Facility, Amryt incurred an exit fee of 5.00% of the outstanding principal amount as at the prepayment date.
 
The Convertible Notes bear interest at a rate of 5.0% per year, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2020. The Convertible Notes will mature on April 1, 2025, unless earlier repurchased or converted. For further detail on our principal debt, see “Note 19: Long term loan” and “Note 20: Convertible notes” in our Consolidated Financial Statements.
 
104
Contingent consideration and contingent value rights
 
Contingent consideration and contingent value rights arose as part of (i) the acquisition of Amryt GmbH in 2016, through which we acquired Oleogel-S10, and (ii) the issuance of CVRs to Amryt shareholders and option holders prior to the acquisition of Aegerion. The contingent consideration and contingent value rights arising on these transactions are payable on achieving various milestones and sales royalties. For further detail, see “Note 6: Business combinations and asset acquisitions” in our Consolidated Financial Statements.
 
Other short-term obligations
 
The Group has a liability for revenue rebates due on Myalepta sales in a country in the EMEA region from agreeing a reimbursement price with the government authorities resulting in a one-off payment related to sales up to the date of approval, which occurred in March 2021. For further detail, see “Note 21: Trade and other payables” in our Consolidated Financial Statements.
 
Cash Flows
 
The table below provides selected cash flow information for the periods indicated (in thousands):
 
   
Year ended December 31,
  
   
2021
    
2020
  
   
US$’000
  
Net cash flow from operating activities
    
15,540
      
26,891
  
Net cash flow from / (used in) investing activities
    
106,402
      
(2,379
)
Net cash flow (used in) / from financing activities
    
(125,426
)
    
26,028
  
Exchange and other movements
    
(2,282
)
    
1,029
  
Net change in cash and cash equivalents
    
(5,766
)
    
51,569
  
 
Net Cash Flow From / (Used in) Operating Activities
 
Net cash from operating activities was $15.5 million for the year ended December 31, 2021, compared to net cash from operating activities of $26.9 million for the year ended December 31, 2020. The decrease of $11.4 million was primarily driven by the increased restructuring and acquisition costs related to the acquisition of Chiasma along with the increased scale of our business and working capital fluctuations.
 
Net Cash Flow From / (Used in) Investing Activities
 
Net cash from investing activities was $106.4 million for the year ended December 31, 2021, and primarily related to the Chiasma cash balance of $107.9 million, which we received in acquiring Chiasma.
 
Net cash used in investing activities was $2.4 million for the year ended December 31, 2020, and primarily related to payments for property, plant and equipment and payments for intangible assets.
 
Net Cash Flow (Used in) / From Financing Activities
 
Net cash flow used in financing activities was $125.4 million for the year ended December 31, 2021. In conjunction with the acquisition of Chiasma, we repaid US$116.6 million of debt that was outstanding on August 5, 2021. The remaining cash outflows mainly consisted of interest paid on our Secured Credit Facility of $5.8 million and on the Convertible Notes of $6.3 million.
 
Net cash flow from financing activities was $26.0 million for the year ended December 31, 2020. On December 8, 2020, we entered into a securities purchase agreement with several institutional accredited investors for the private placement of 3,200,000 ADSs, at a purchase price of $12.50 per ADS, yielding gross proceeds of $40 million and net proceeds of $37.9 million. The private placement included new and existing investors including Stonepine Capital, LP, Aquilo Capital Management, LLC, Amati Global Investors, Athyrium Capital Management, LP and Highbridge Capital Management, among others. These cash inflows were partially offset by interest paid on our Secured Credit Facility of $4.1 million and on the Convertible Notes of $6.4 million.
 
105
C. Research and Development, Patents and Licenses, etc.
 
Amryt has established a strong, positive reputation as a highly-transactional biopharmaceutical company, forging creative deals that benefit all parties. We continue to seek to identify additional products to build-out our portfolio through either in-licensing or acquiring innovative assets which improve the lives of people living with rare and orphan diseases. We are currently commercializing our approved products and progressing our product candidates through preclinical and clinical development. For further information on research and development see “Item 4. Information on the Company—Item 4.B Business overview.” For a description of the Company’s research and development expenses see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Financial Overview—Research and Development Expenses.”
 
D. Trend Information
 
Other than as disclosed in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the current financial year that are reasonably likely to have a material effect on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial conditions.
 
E. Critical Accounting Judgments and Estimates
 
Our financial statements have been prepared in accordance with IFRS as issued by the IASB. In the application of accounting policies, certain judgments, estimates and assumptions about the value of assets and liabilities for which there is no definitive third-party reference were required. The estimates and associated assumptions are based on historical experience and other factors that were considered to be relevant. Actual results may differ from these estimates. These estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revisions and future periods if the revision affects both current and future periods. For a discussion of the estimates and assumptions used by us in the preparation of our financial statements, see “Note 2: Accounting policies” in our Consolidated Financial Statements for the year ended December 31, 2021.
 
106
Item 6.
Directors, Senior Management and Employees
 
A. Directors and Senior Management
 
The following table presents information about our executive officers and directors:
 
Name
Age
Position
Executive Officers
 
 
     
Dr. Joseph A. Wiley
51
Chief Executive Officer
     
Rory P. Nealon
54
Chief Financial Officer and Chief Operating Officer
     
Non-Executive Directors
 
 
     
Raymond T. Stafford
75
Chairman of the Board
 
    
George P. Hampton, Jr.
52
Non-executive Director
 
    
Raj Kannan
58
Non-executive Director
 
    
Dr. Roni Mamluk
55
Non-executive Director
 
    
Dr. Alain H. Munoz
73
Non-executive Director
 
    
Donald K. Stern
76
Non-executive Director
 
    
Dr. Patrick V.J.J. Vink
58
Non-executive Director
 
    
Stephen T. Wills
65
Non-executive Director
 
The business address for each of our executive officers and directors is c/o Amryt Pharma plc, 45 Mespil Road, Dublin 4, Ireland.
 
The following are biographies of our executive officers and directors:
 
Dr. Joseph A. Wiley, Dr. Wiley founded Amryt and has served as Chief Executive Officer since 2015. He has over 20 years of experience in the pharmaceutical, medical and venture capital industries. Prior to Amryt, Dr. Wiley opened and led the European office of Sofinnova Ventures Inc. He was previously a medical director at Astellas Pharma Limited. Prior to joining Astellas, he held investment roles at Spirit Capital SA, Inventages Venture Capital Investment Inc. and Aberdeen Asset Managers Private Equity Limited. Dr. Wiley trained in general medicine at Trinity College Dublin, specializing in neurology. He holds a Masters of Business Administration from INSEAD and is also a Member of the Royal College of Physicians in Ireland.
 
Rory P. Nealon, Mr. Nealon founded Amryt and has served as Chief Financial Officer and Chief Operating Officer since 2015. He was previously a board member of Trinity Biotech Plc where he joined as Chief Financial Officer in January 2003 and subsequently was appointed as Chief Operations Officer in November 2007, a position he held until leaving Trinity Biotech Plc in 2014. Prior to joining Trinity Biotech Plc, Mr. Nealon served as Chief Financial Officer of Conduit Plc, an Irish directory services provider with operations in Ireland, the UK, Austria and Switzerland. Prior to joining Conduit Plc, Mr. Nealon was an associate director for AIB Capital Markets, a subsidiary of AIB Group plc, the Irish banking group. Mr. Nealon holds a Bachelor of Commerce degree from University College Dublin, is a Fellow of the Institute of Chartered Accountants in Ireland, a member of the Institute of Taxation in Ireland, and a member of the Institute of Corporate Treasurers in the UK.
 
107
Raymond T. Stafford, Mr. Stafford has been a director of Amryt since 2016. He has worked in the pharmaceutical industry for more than 30 years. He has served as Chairman, Chief Executive Officer and majority shareholder of the Tosara Group which owned, manufactured and marketed the successful international brand Sudocrem, and was ultimately integrated into the U.S.-based, NYSE-listed company Forest Laboratories, Inc. in 1988. Mr. Stafford held numerous senior positions within such corporations, including Chief Executive Officer of Forest UK and Ireland as well as Chief Executive Officer of Forest Laboratories Europe since 1999. Mr. Stafford retired in 2014 following the sale of Forest Laboratories, Inc. to Actavis Plc (now Allergan plc) in a $28 billion transaction where Mr. Stafford was Executive Vice President of Global Marketing. Separately, Mr. Stafford also founded one of Ireland’s current leading multi-channel sales, marketing and distribution service providers approved by the Irish Medicines Board (now, The Health Products Regulatory Authority) to service the wholesale and retail trade.
 
George P. Hampton, Jr., Mr. Hampton has been a director of Amryt since 2019. He joined Currax Pharmaceuticals in April of 2019 as Chief Executive Officer and serves on its board of directors. Prior to joining Currax, Mr. Hampton served as executive vice president, primary care business unit for Horizon Pharmaceuticals (HZNP), a public biopharmaceutical company. In this role he was tasked with leading the company’s forward-looking strategy, as well as establishing operational goals for the business. Previously, Mr. Hampton served as executive vice president, global orphan business unit and international operations for Horizon Pharmaceuticals. He has more than 25 years of experience as a successful executive in the pharmaceutical and biotechnology field on both a national and international scale including specific expertise in rare disease (ACTIMMUNE, RAVICTI, PROCYSBI), autoimmune (HUMIRA), primary care, orthopedic (CELEBREX), diabetes (BYETTA), anti-infectives and cardiovascular spaces. This includes roles of increasing responsibility in sales, marketing and operations at G.D. Searle, Abbott (now AbbVie), Amylin and Horizon Pharmaceuticals. Mr. Hampton earned his Bachelor of Science from Miami University in Oxford, Ohio. He previously served on the board of IMAC (Nasdaq: IMAC) regeneration medical centers.
 
Raj Kannan, Mr. Kannan was appointed Chief Executive Officer of Chiasma, Inc. in June 2019. On August 6, 2021, Mr. Kannan resigned as Chief Executive Officer of Chiasma and joined the board of Amryt as a non-executive director. Mr. Kannan is the CEO of Aerie Pharmaceuticals.  He has over 25 years of experience leading and developing companies. He has effectively led and grown organizations and supported multiple successful launches across therapeutic areas in the U.S. and globally. Prior to joining Aerie, Mr. Kannan was Chief Executive Officer and President of Chiasma, Inc., where he led the organization through the approval and the launch of the first oral therapy in over a decade for patients with acromegaly and subsequently through the acquisition by Amryt Pharma Plc. Before that, Mr. Kannan was Chief Commercial Officer at Kiniksa Pharmaceuticals, Ltd. (“Kiniksa”), where he built the commercial operations, including sales, marketing, and business analytics functions. Prior to Kiniksa, he served as the Global Head of the Neurology and Immunology business franchise at Merck KGaA, where he was responsible for transforming the largest franchise into a growth franchise with $2 billion in annual revenues through significant strategic shifts in investment to support new product introductions and through recalibration of pipeline investments. Before that, Mr. Kannan spent 10 years at Boehringer Ingelheim International GmbH in the U.S., Canada, and in Germany, including as Global Marketing Head of the Cardiovascular Franchise, where he was responsible for more than $3.5 billion in annual revenues.
 
Dr. Roni Mamluk, Dr. Mamluk, Ph.D. joined the Board of Directors of Chiasma, Inc. in June 2017. On August 6, 2021, Dr. Mamluk resigned as a non-executive director of Chiasma and joined the board of Amryt as a non-executive director. Dr. Mamluk currently serves as President and Chief Executive Officer of Ayala Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company dedicated to developing targeted cancer therapies for people living with genetically defined cancers, and serves on its board of directors. She joined Chiasma in 2006 and led the creation of its TPE technology and subsequently Mycapssa® development. Dr. Mamluk fulfilled multiple roles at Chiasma including Chief Development Officer from March 2015 to March 2017, Chief Executive Officer from April 2013 to March 2015 and held various roles in the Company from 2006 to April 2013, including Chief Operating Officer and Vice President, Research and Development. Prior to joining Chiasma, Dr. Mamluk led nonclinical research and development at Adnexus Therapeutics, Inc. Dr. Mamluk received her B.A. and Ph.D. from the Hebrew University. She completed her post-doctoral fellowship at Children’s Hospital/Harvard Medical School in the field of angiogenesis.
 
Dr. Alain H. Munoz, Dr. Munoz has been a director of Amryt since 2019. He is an entrepreneur and independent management consultant in the pharmaceutical and biotechnology industry and has over 30 years of experience in the industry at the executive level. Dr. Munoz worked with the Fournier Group as Research and Development director and thereafter as Senior Vice President of the Pharmaceutical Division. Prior to serving at Fournier, he served at Sanofi Group, first as director in the cardiovascular and anti-thrombotic products department, and thereafter as Vice President of international development. Dr. Munoz is qualified in cardiology and anesthesiology from the University Hospital of Montpellier, France where he was head of the clinical cardiology department. He has been a member of the Scientific Committee of the French drug agency and Chairman of the Board of Hybrigenics SA and Novagali Pharma acquired by Santen Pharmaceuticals. He presently is an independent board member of Auris Medical Holding AG (Nasdaq: EARS), Zealand Pharma A/S (Nasdaq: ZEAL) and Chairman of Acticor-biotech (Euronext: ALACT.PA). Mr. Munoz received an undergraduate degree from International Institute for Management Development, a doctorate from the University of Montpellier and a graduate degree from Centre Hospitalier Universitaire Pitie-Salpetriere.Donald K. Stern, Mr. Stern has been a director of Amryt since 2019. He was previously a director of Novelion, Aegerion’s former parent company, and was a member of Aegerion’s board of directors from September 2015 to October 2016. Mr. Stern serves as Managing Director of Corporate Monitoring & Consulting Services at Affiliated Monitors, Inc., a consulting firm providing independent integrity monitoring services and compliance services across a wide range of regulated industries and professions. He is also Of Counsel to the Boston law firm of Yurko Partners, P.C.. He has had a diverse and distinguished legal career, split between private practice and public service. Prior to joining Affiliated Monitors, Inc., Mr. Stern was a partner at three major law firms: Cooley LLP, Bingham McCutchen LLP and Hale & Dorr LLP (now Wilmer Cutler Pickering Hale and Dorr LLP). Mr. Stern also served as the U.S. Attorney for the District of Massachusetts, the Chief Legal Counsel to Governor Michael S. Dukakis and the Chief of the Government Bureau in the Massachusetts Attorney General’s office. Mr. Stern holds a Masters in Laws from University of Pennsylvania Law School, a Juris Doctor degree from Georgetown University Law Center and a Bachelor of Arts from Hobart College.
 
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Dr. Patrick V.J.J. Vink, Dr. Vink has been a director of Amryt since 2019. He has significant experience as a senior executive, having worked in the pharmaceutical industry for more than 30 years. Dr. Vink serves as Chairman at BiognoSys AG, a privately held proteomics company in Switzerland. Dr. Vink also serves as Chairman of venture capital-backed NMD Pharma, a neurology biopharmaceutical company in Denmark and F2G Ltd, a rare fungal disease UK and Austria based company. In addition, Dr. Vink is a board member at Santhera AG and Spero Therapeutics, Inc. and in 2019 began working with Athyrium as a Senior Advisor. While serving in these capacities, Dr. Vink has been involved in initial public listings and geographic expansions and has contributed to the achievement of significant development and commercial milestones. Earlier in his career he held several leadership positions across the industry, including Head of Global Biopharmaceuticals for the Sandoz division of the Novartis Group, Vice President International Business for Biogen Inc., and Head of Worldwide Marketing, Cardiovascular and Thrombosis at Sanofi-Synthelabo Ltd. Dr. Vink also served as a member of the Executive Committee of the European Federation of Pharmaceutical Industries and Associations from 2013 to 2015. Dr. Vink graduated as a medical doctor from the University of Leiden, Netherlands in 1988 and obtained his Masters of Business Administration in 1992 at the University of Rochester.
 
Stephen T. Wills, Mr. Wills became a director of Amryt in 2019. He currently serves as the Chief Financial Officer (since 1997), and Chief Operating Officer (since 2011) of Palatin Technologies, Inc. (NYSE: PTN), a biopharmaceutical company developing targeted, receptor-specific peptide therapeutics for the treatment of diseases with significant unmet medical need and commercial potential. Mr. Wills serves as Chief Financial Officer of Cactus Acquisition Corp (Nasdaq: CCTS), a Special Purpose Acquisition Company (SPAC). Mr. Wills serves on the boards of directors of MediWound Ltd. (Nasdaq: MDWD), a biopharmaceutical company focused on treatment in the fields of severe burns, chronic and other hard to heal wounds, since April 2017, and as Chairman since January 2018, and of Gamida Cell Ltd. (Nasdaq: GMDA), a leading cellular and immune therapeutics company, since March 2019 (audit chair and compensation and finance committee member). Mr. Wills also has served on the board of trustees and executive committee of The Hun School of Princeton, a college preparatory day and boarding school, since 2013, and its Chairman since June 2018. Mr. Wills served on the board of directors of Caliper Corporation, a psychological assessment and talent development company, since March 2016, and as Chairman from December 2016 to December 2019, when Caliper was acquired by PSI. Mr. Wills served as Executive Chairman and Interim Principal Executive Officer of Derma Sciences, Inc., a provider of advanced wound care products, from December 2015 to February 2017, when Derma Sciences was acquired by Integra Lifesciences (Nasdaq: IART). Previously, Mr. Wills served on the board of directors of Derma Sciences as the lead director and chairman of the audit committee from June 2000 to December 2015. Mr. Wills served as the Chief Financial Officer of Derma Sciences from 1997 to 2000. Mr. Wills served as the President and Chief Operating Officer of Wills, Owens & Baker, P.C., a public accounting firm, from 1991 to 2000. Mr. Wills, a certified public accountant, earned his Bachelor of Science in accounting from West Chester University, and a Master of Science in taxation from Temple University.
 
Family Relationships
 
There are no family relationships among any of the directors or senior management.
 
B. Compensation
 
2021 Director Remuneration
 
For the fiscal year ended December 31, 2021, the aggregate compensation accrued or paid to the members of our Board and our executive officers for services in all capacities was $3.1 million. The following table sets forth the approximate remuneration paid during the year ended December 31, 2021, to our directors.
 
109
 
  
Base
Salary
and Fees
    
Bonus
    
Pension
Contributions
    
Other
Benefits
    
2021
Total
  
 
  
US$’000
  
Raymond T. Stafford
    
88
      
—
      
—
      
—
      
88
  
Dr. Joseph A. Wiley
    
747
      
728
      
71
      
174
      
1,720
  
George P. Hampton, Jr.
    
65
      
—
      
—
      
—
      
65
  
Raj Kannan
    
20
      
—
      
—
      
—
      
20
  
Dr. Roni Mamluk
    
20
      
—
      
—
      
—
      
20
  
Dr. Alain H. Munoz
    
58
      
—
      
—
      
—
      
58
  
Donald K. Stern
    
80
      
—
      
—
      
—
      
80
  
Dr. Patrick V.J.J. Vink
    
60
      
—
      
—
      
—
      
60
  
Stephen T. Wills
    
88
      
—
      
—
      
—
      
88
  
Rory P. Nealon
    
505
      
378
      
49
      
7
      
939
  
Total
    
1,731
      
1,106
      
120
      
181
      
3,138
  
 
Directors’ Service Agreements and Letters of Appointment
 
Raymond T. Stafford
 
We entered into a letter of appointment with Raymond Stafford on August 27, 2019, under which he was appointed a non-executive director with effect from September 24, 2019. Mr. Stafford was also appointed as a member of the Audit Committee from that date. The appointment is subject to our Articles of Association, and pursuant to terms of the letter of appointment may be terminated at any time upon three months’ written notice served by either party. Mr. Stafford is entitled to an annual fee of $77,500 for his role as non-executive chairman, a fee of $10,000 for his role as member of the Audit Committee, and reimbursement of reasonable expenses. Mr. Stafford is also subject to a six-month non-compete restrictive covenant.
 
George P. Hampton, Jr.
 
We entered into a letter of appointment with George Hampton on August 27, 2019, under which he was appointed a non-executive director with effect from September 24, 2019. Mr. Hampton was also appointed as a member and chair of the Remuneration Committee from that date. The appointment is subject to our Articles of Association, and pursuant to terms of the letter of appointment may be terminated at any time upon three months’ written notice served by either party. Mr. Hampton is entitled to an annual fee of $50,000 for his role as non-executive director, a fee of $15,000 for his role as chair and member of the Remuneration Committee, and reimbursement of reasonable expenses. Mr. Hampton is also subject to a six-month non-compete restrictive covenant.
 
Raj Kannan
 
We entered into a letter of appointment with Raj Kannan on August 6, 2021, under which he was appointed a non-executive director with effect from August 6, 2021. The appointment is subject to our Articles of Association, and pursuant to terms of the letter of appointment may be terminated at any time upon three months’ written notice served by either party. Mr. Kannan is entitled to an annual fee of $50,000 for his role as non-executive director and reimbursement of reasonable expenses. Mr. Kannan is also subject to a six-month non-compete restrictive covenant.
 
Dr. Roni Mamluk
 
We entered into a letter of appointment with Dr. Mamluk on August 6, 2021, under which she was appointed a non-executive director with effect from August 6, 2021. The appointment is subject to our Articles of Association, and pursuant to terms of the letter of appointment may be terminated at any time upon three months’ written notice served by either party. Dr. Mamluk is entitled to an annual fee of $50,000 for her role as non-executive director and reimbursement of reasonable expenses. Dr. Mamluk is also subject to a six-month non-compete restrictive covenant.
 
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Dr. Alain H. Munoz
 
We entered into a letter of appointment with Alain Munoz on August 27, 2019, under which he was appointed a non-executive director with effect from September 24, 2019. Dr. Munoz was also appointed as a member of the Remuneration Committee from that date. The appointment is subject to our Articles of Association, and pursuant to terms of the letter of appointment may be terminated at any time upon three months’ written notice served by either party. Dr. Munoz is entitled to an annual fee of $50,000 for his role as non-executive director, a fee of $7,500 for his role as member of the Remuneration Committee and reimbursement of reasonable expenses. Dr. Munoz is also subject to a six-month non-compete restrictive covenant.
 
Donald K. Stern
 
We entered into a letter of appointment with Donald Stern on August 27, 2019, under which he was appointed a non-executive director with effect from September 24, 2019. Mr. Stern was also appointed as a member of the Audit Committee and a member and chair of the Compliance Committee from that date. The appointment is subject to our Articles of Association, and pursuant to terms of the letter of appointment may be terminated at any time upon three months’ written notice served by either party. Mr. Stern is entitled to an annual fee of $50,000 for his role as non-executive director, a fee of $10,000 for his role as member of the Audit Committee, a fee of $20,000 for his role as the chair of the Compliance Committee and reimbursement of reasonable expenses. Mr. Stern is also subject to a six-month non-compete restrictive covenant.
 
Dr. Patrick V.J.J. Vink
 
We entered into a letter of appointment with Patrick Vink on August 27, 2019, under which he was appointed a non-executive director with effect from September 24, 2019. Dr. Vink was also appointed as a member the Compliance Committee from that date. The appointment is subject to our Articles of Association, and pursuant to terms of the letter of appointment may be terminated at any time upon three months’ written notice served by either party. Dr. Vink is entitled to an annual fee of $50,000 for his role as non-executive director, a fee of $10,000 for his role as member of the Compliance Committee and reimbursement of reasonable expenses. Dr. Vink is also subject to a six-month non-compete restrictive covenant.
 
Stephen T. Wills
 
We entered into a letter of appointment with Stephen Wills on August 27, 2019, under which he was appointed a non-executive director with effect from September 24, 2019. Mr. Wills was also appointed as a member and chair of the Audit Committee, a member of the Remuneration Committee and a member of the Compliance Committee from that date. The appointment is subject to our Articles of Association, and pursuant to terms of the letter of appointment may be terminated at any time upon three months’ written notice served by either party. Mr. Wills is entitled to an annual fee of $50,000 for his role as non-executive director, a fee of $20,000 for his role as chair of the Audit Committee, a fee of $7,500 for his role as a member of the Remuneration Committee, a fee of $10,000 for his role as member of the Compliance Committee and reimbursement of reasonable expenses. Mr. Wills is also subject to a six-month non-compete restrictive covenant.
 
A registration rights agreement to which we are a party contains provisions regarding the terms of appointment of our Board. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Principal Shareholders—Registration Rights Agreement” for further information.
 
C. Board Practices
 
Composition of Board of Directors
 
Our Board consists of nine members. The Board has determined that eight of its nine directors, Raymond Stafford, Stephen Wills, Donald Stern, George Hampton, Patrick Vink, Alain Munoz, Raj Kannan and Dr. Roni Mamluk do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of director and that each of these directors is “independent” as that term is defined under the rules of the Nasdaq. As a foreign private issuer, we are not required to meet the Nasdaq rule that our Board be comprised of a majority of independent directors. However, we voluntarily comply and intend to continue to comply with this requirement.
 
As required under the Nasdaq listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our board of directors consults with counsel to ensure that the board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in the applicable Nasdaq listing standards, as in effect from time to time. Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his or her family members, and our company, our senior management and our independent registered public accounting firm, the board of directors affirmatively determined that all of our current directors are independent directors within the meaning of the applicable Nasdaq listing standards, except that Dr. Joe Wiley, our  Chief Executive Officer, is not independent by virtue of his employment with our company. In addition, our board of directors has determined that each member of the audit committee, compensation committee and nominating and corporate governance committee meets the applicable Nasdaq and SEC rules and regulations regarding “independence” and that each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the company.
 
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In accordance with our Articles of Association and with the Companies Act, the directors shall not be fewer than two and, unless otherwise determined by special resolution of our shareholders, shall not be more than nine in number. Each of the directors is subject to compulsory retirement and at each annual general meeting which occurs after September 25, 2021, one-third of the current directors (or, if their number is not a multiple of three, the number nearest to but not greater than one-third, subject to a minimum of one) shall retire from office by rotation. A director retiring by rotation shall be eligible for re-election.
 
A registration rights agreement to which we are a party contains provisions regarding the composition of our Board. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Principal Shareholders—Registration Rights Agreement” for further information.
 
Role of the Board in Risk Oversight
 
Our Board is primarily responsible for the oversight of our risk management activities and has delegated to the audit committee the responsibility to assist our Board in this task. While our Board oversees our risk management, our management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks we face. Our Board expects our management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day activities and to effectively implement risk management strategies adopted by the Board.
 
Diversity
 
On August 6, 2021, the SEC approved the Nasdaq Stock Market’s proposal to amend its listing standards to encourage greater board diversity and to require board diversity disclosures for Nasdaq-listed companies. Pursuant to the amended listing standards, a Board diversity matrix is required to be included in the Annual Report on Form 20-F, containing certain demographic and other information regarding members of the Board. The Board diversity matrix is set out below.
 
Board Diversity Matrix for (as of March 31, 2021)
Country of Principal Executive Offices
Ireland
      
Foreign Private Issuer
Yes
      
Disclosure Prohibited Under Home Country Law
No
      
Total Number of Directors
9
      
 
Female
Male
Non-Binary
Did not Disclose Gender
Part I: Gender Identity
Directors
1
8
-
-
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction
-
1
-
-
LGBTQ+
-
-
-
-
Did Not Disclose Demographic Background
-
-
-
-
 
Corporate Governance Practices
 
As a “foreign private issuer,” as defined by the SEC, although we are permitted to follow certain governance practices of the United Kingdom instead of those otherwise required under the Nasdaq rules for domestic issuers, we intend to follow the Nasdaq corporate governance rules applicable to foreign private issuers, though we may in the future decide to use the foreign private issuer exemption with respect to some or all of the other Nasdaq corporate governance rules. While we voluntarily follow most Nasdaq corporate governance rules, we intend to take advantage of the following limited exemptions:
 

 •
Exemption from filing quarterly reports on Form 10-Q and current reports on Form 8-K disclosing significant events within four days of their occurrence.
 

 •
Exemption from Section 16 rules regarding sales of ordinary shares by insiders, which will provide less data in this regard than to shareholders of U.S. companies that are subject to the Exchange Act.
 
112

 •
Exemption from the Nasdaq rules applicable to domestic issuers requiring disclosure within four business days of any determination to grant a waiver of the code of business conduct and ethics to directors and officers. Although we will require approval from our Board of any such waiver, we may choose not to disclose the waiver in the manner set forth in the Nasdaq rules, as permitted by the foreign private issuer exemption.
 

 •
Exemption from the requirements that director nominees are selected, or recommended for selection by our Board, either by (1) independent directors constituting a majority of our Board’s independent directors in a vote in which only independent directors participate, or (2) a committee comprised solely of independent directors, and that a formal written charter or board resolution, as applicable, addressing the nominations process is adopted.
 
Furthermore, Nasdaq Rule 5615(a)(3) provides that a foreign private issuer, like our company, may rely on home country corporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with the Nasdaq’s Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3), consisting of committee members who meet the independence requirements of Rule 5605(c)(2)(A)(ii). Although we generally intend to follow Nasdaq corporate governance rules, we do not intend to follow Nasdaq Rule 5620(c) regarding quorum requirements applicable to meetings of shareholders. Such quorum requirements are not required under English law. In accordance with generally accepted business practice, our Articles of Association provide alternative quorum requirements that are generally applicable to meetings of shareholders.
 
We intend to take all actions necessary to maintain compliance as a foreign private issuer under the applicable corporate governance requirements of the Sarbanes-Oxley Act, the rules adopted by the SEC and the Nasdaq corporate governance rules and listing standards.
 
Committees of Board of Directors
 
The Board has three standing committees: an Audit Committee, a Remuneration Committee and a Compliance Committee.
 
Audit Committee
 
The Audit Committee has responsibility for, among other things, the monitoring of the financial integrity of our financial statements and the involvement of our auditors in that process. The Committee focuses in particular on compliance with accounting policies and ensuring that an effective system of internal and external audit and financial control is maintained, including oversight of the annual audit and the extent of the non-audit work undertaken by our external auditors, as well as advising on the appointment of external auditors. The Audit Committee comprises three members, who are independent non-executive directors who are financially sophisticated and experienced: Stephen Wills, Raymond Stafford and Donald Stern. The Committee is chaired by Stephen Wills. Our Board has determined that Mr. Wills qualifies as an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under applicable Nasdaq rules and regulations. The Board has determined that all of the members of the Audit Committee satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act. The Audit Committee is governed by terms of reference that comply with the Nasdaq rules for a charter of such body.
 
Among the responsibilities of the Audit Committee are:
 

 •
monitoring the integrity of our financial statements, including our annual and half-yearly reports, interim management statements, preliminary results announcements and any other formal announcement relating to our financial performance;
 

 •
advising on and recommending the appointment of the independent auditors;
 

 •
evaluating our independent auditors’ qualifications, performance and independence, and presenting its conclusions to the full Board on at least an annual basis;
 

 •
reviewing and challenging where necessary our accounting policies, methods and applications of accounting standards;
 

 •
ensuring that we maintain an effective system of internal and external audit and financial control;
 

 •
risk management; and
 

 •
reviewing and considering the scope of the annual audit and the extent of the non-audit work undertaken by our independent auditors.
 
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The Audit Committee will meet as often as one or more members of the Audit Committee deem necessary, but in any event will meet at least four times a year at the appropriate times in the financial reporting and audit cycle.
 
Remuneration Committee
 
The Remuneration Committee has responsibility for determining senior management compensation. The Remuneration Committee comprises three members, who are independent non-executive directors: George Hampton, Alain Munoz and Stephen Wills. The Committee is chaired by George Hampton. Under the SEC and Nasdaq rules, there are heightened independence standards for members of the Remuneration Committee, including a prohibition against the receipt of any compensation from us other than as a standard board member. Although foreign private issuers are not required to meet this heightened standard, we voluntarily comply and intend to continue to comply with this heightened standard. The Remuneration Committee is governed by terms of reference that comply with the Nasdaq rules for a charter of such body.
 
The responsibilities of the Remuneration Committee include:
 

 •
proposing and recommending specific remuneration packages for each of the executive directors, including pension rights and any compensation payments;
 

 •
recommending and monitoring the level and structure of remuneration for senior management, and the implementation of share option, restricted share units or other performance-related schemes;
 

 •
determining and monitoring policy on and setting levels of remuneration for executive directors and senior management;
 

 •
determining policy on termination of senior management;
 

 •
determining performance-related pay, pension arrangements, share incentive plans and reporting and disclosure;
 

 •
reviewing the Company’s arrangements for its employees to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters; and
 

 •
establishing the selection criteria for, selecting, appointing and setting the terms of reference for, any remuneration consultants who advise the Remuneration Committee.
 
The Remuneration Committee will meet as often as one or more members of the Remuneration Committee deem necessary, but in any event will meet at least two times a year at the appropriate times in the financial reporting and audit cycle.
 
Compliance Committee
 
The Compliance Committee has responsibility for overseeing our compliance with laws, regulations, internal procedures and industry standards the violation of which may cause us significant business, regulatory or reputational damage, as well as legal and business trends and public policy issues. The Compliance Committee comprises three members, who are independent non-executive directors: Donald Stern, Patrick Vink and Stephen Wills. The Committee is chaired by Donald Stern.
 
The responsibilities of the Compliance Committee include oversight of the development and implementation of compliance and ethics policies and practices.
 
The Compliance Committee will meet as often as one or more members of the Compliance Committee deem necessary, but in any event will meet at least two times a year at the appropriate times in the financial reporting and audit cycle.
 
Code of Ethics
 
We have adopted a Code of Ethics that is applicable to all of our employees, executive officers and directors. A committee of the Board will be responsible for overseeing the Code of Ethics and will be required to approve any waivers of the Code of Ethics for employees, executive officers and directors. We intend to disclose any amendments to the Code of Ethics or any waivers of its requirements on our website.
 
Conflicts of Interest
 
Our Board, in the manner set out in the Companies Act, may authorize any interest of a director that conflicts, or may conflict, with our interests as a company, provided that the conflict is not a direct transaction or arrangement between the director and us as a company. Subject to specified exceptions in our Articles of Association, a director shall not vote nor be counted in the quorum on any resolution of the Board in which that director is materially interested.
 
114
D. Employees
 
As of December 31, 2021, we had 289 employees, excluding temporary workers, 29% of whom are based in Dublin, Ireland, 32% in the United States, and 39% elsewhere globally. None of our employees has engaged in any labor strikes. We have no collective bargaining agreements with our employees, but we maintain company agreements (Betriebsvereinbarungen) with respect to certain topics at our Niefern site in Germany. Our German entity, Amryt GmbH, has a works counsel that works with the Amryt GmbH management team.
 
E. Share Ownership
 
Share Ownership
 
The total number of ordinary shares of the Company beneficially owned by our directors and executive officers including in the form of ADSs, as of the date of this annual report, was 18,316,612 (3,663,322 ADSs) (which includes shares subject to options that are currently exercisable or will be exercisable within 60 days of March 31, 2022) which represents 5.66% of the total number of ordinary shares outstanding as of March 31, 2022. See Item 7.A. below.
 
Equity Compensation Arrangements
 
The Equity Incentive Plan
 
Our Employee Equity Incentive Plan (“Equity Incentive Plan”) was adopted on September 23, 2019, and effective from September 24, 2019. Prior to such date, we granted options under a prior employee share option plan, which had the same terms and conditions as the Equity Incentive Plan. On September 24, 2019, all options held under our prior share option plan were rolled over into options to subscribe for our ordinary shares with the key terms including strike price, vesting and the expiration date of such rolled over options remaining the same as they were on the issue date of the options under the prior share option plan. The Equity Incentive Plan was approved for amendment by the Board on May 18, 2020, and provides for the granting of share options, Restricted Share Units and Performance Share Units (as defined below) (together “Equity Incentives”) to directors, employees and consultants of the Company and associated companies. The Equity Incentive Plan was approved for amendment by the Board on August 3, 2021, and November 2, 2021, to provide for a number of changes including the addition of an Israel sub-plan for Israeli employees, to address the behavior of Amryt’s Equity’s in the instance of a merger or acquisition as well as the ability to issue ADS’s under the Plan.
 
On May 18, 2020, the Board also approved the adoption of a U.S. Sub-Plan under the terms of the existing Equity Incentive Plan (“U.S. Sub-Plan”) in order to facilitate the grant of Restricted Share Units (as defined below), Incentive Stock Options (as defined below) and non-statutory stock options under the U.S. Sub-Plan (i.e., a share option granted under the U.S. Sub-Plan that does not qualify as an Incentive Stock Option and which does not benefit from any tax favored treatment (“Non-statutory Stock Option” and, together with Incentive Stock Options, “U.S. Options”)) to U.S. Participants. “U.S. Participants” are certain of our employees, directors and consultants who are either U.S. residents or U.S. taxpayers, and who shall have been nominated to participate in the U.S. Sub-Plan by the Board in compliance with U.S. tax, securities and other applicable laws.
 
All equity incentives granted are in the form of ordinary shares. Share option exercise prices below are the exercise price per ordinary share. The ADS equivalent exercise price will be the ordinary share exercise price multiplied by five and the number of ADSs will be the number of ordinary shares divided by five.
 
On November 28, 2017, a total of 343,521 share options were granted to Dr. Wiley at an exercise price of £1.2072 per share, on May 21, 2019, a total of 316,039 share options were granted to Dr. Wiley at an exercise price of £0.7584 per share, on November 5, 2019, a total of 5,777,900 share options were granted to Dr. Wiley at an exercise price of £1.215 per share, on March 8, 2021, a total of 2,031,350 share options were granted to Dr. Wiley at an exercise price of $2.804 per share, and on March 11, 2022, a total of 3,401,100 share options at an exercise price of $1.418 per share and 347,700 performance stock units were granted to Dr. Wiley. Performance conditions determine how many of these performance stock units will vest and, if performance targets are exceeded, additional performance stock units will be issued and vest in accordance with the terms of the relevant performance stock units award. The PSUs vest based on the Total Shareholder Return (TSR) of Amryt’s NASDAQ traded common stock relative to the TSRs of the constituents that comprise the NASDAQ Biotechnology Index (the Peer Group) as of January 1, 2022.  TSR for Amryt and each peer company will be measured over the period from January 1, 2022, to December 31, 2024. The payout schedule can produce payout percentages ranging from 0% to 150%. The maximum amount of performance stock units that could be issued is 521,600 and the minimum amount is nil.
 
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On November 28, 2017, a total of 137,408 share options were granted to Mr. Nealon at an exercise price of £1.2072 per share, on May 21, 2019, a total of 251,915 share options were granted to Mr. Nealon at an exercise price of £0.7584 per share, on November 5, 2019, a total of 4,437,500 share options were granted to Mr. Nealon at an exercise price of £1.215 per share, on March 8, 2021, a total of 1,400,000 share options were granted to Mr. Nealon at an exercise price of $2.804 per share and on March 11, 2022, a total of 2,346,800 share options at an exercise price of $1.418 per share and 274,700 performance stock units were granted to Mr Rory Nealon. Performance conditions determine how many of these performance stock units will vest and, if performance targets are exceeded, additional performance stock units will be issued and vest in accordance with the terms of the relevant performance stock units award. The PSUs vest based on the Total Shareholder Return (TSR) of Amryt’s NASDAQ traded common stock relative to the TSRs of the constituents that comprise the NASDAQ Biotechnology Index (the Peer Group) as of January 1, 2022.  TSR for Amryt and each peer company will be measured over the period from January 1, 2022, to December 31, 2024. The payout schedule can produce payout percentages ranging from 0% to 150%. The maximum amount of performance stock units that could be issued is 359,900 and the minimum amount is nil.
 
On July 9, 2020, a total of 220,000 share options were granted to each of the six non-executive directors at an exercise price of $2.25 per share. On August 9, 2021, a total of 110,000 share options were granted to each of the six non-executive directors and a total of 220,000 share options were granted to Raj Kannan, a new non-executive director, at an exercise price of $2.04 per share. On September 14, 2021, 2021 a total of 220,000 share options were granted to Dr. Roni Mamluk, a new non-executive director, at an exercise price of $2.14 per share.
 
The U.S. Sub-Plan
 
The U.S. Sub-Plan permits the Board, as approved by the Company shareholders at our annual general meeting on July 29, 2020, to grant tax-qualified incentive stock options (i.e., a share options granted under the U.S. Sub-Plan that is intended to be, and qualifies as, within the meaning of section 422 of the Code, an incentive stock option (“Incentive Stock Options”)) to certain U.S. Participants.
 
The Israel Sub-Plan
 
The Israel Sub-Plan, as approved by the Board on August 3, 2021, permits the Board to grant Equity Incentives, including share options, Restricted Share Units and other equity-based awards, granted under the Equity Incentive Plan to certain Israeli Participants.
 
Description of Restricted Share Units
 
A Restricted Share Unit is an unfunded, unsecured right to receive, at a future date, one ordinary share (or an amount in cash or other consideration determined by the Board to be of equal value of such shares at such future date) granted to a Participant pursuant to the terms of the Equity Incentive Plan (including, for the avoidance of doubt, restricted share units granted to U.S. Participants pursuant to the terms of the U.S. Sub-Plan (“U.S. Restricted Share Units”)) (together, “Restricted Share Units”). The Equity Incentive Plan allows the Board to grant Restricted Share Units which shall vest at such time or times, whether or not in instalments, as shall be determined by the Board at or after the date of grant. At the time of grant of a Restricted Share Unit, the Board may in its discretion attach any condition to the vesting or forfeiture of that Restricted Share Unit, including any condition relating to the future performance of the Participant, which must be satisfied before that Restricted Share Unit vests. The Board may also provide that a Participant is entitled to receive a dividend equivalent in respect of a Restricted Share Unit.
 
Eligibility, Awards and Administration of the Equity Incentive Plan
 
The Equity Incentive Plan provides for the grant of Equity Incentives (including U.S. Options and U.S. Restricted Share Units) to our directors, employees and consultants eligible to receive awards. The Board may grant Equity Incentives to our directors, employees or consultants or the directors, employees or consultants of any associated company (companies in which we hold a 20% or greater interest). The maximum number of shares over which Equity Incentives (including U.S. Options and U.S. Restricted Share Units) may be in issue at any one time pursuant to the Equity Incentive Plan cannot currently exceed 15% of our share capital from time to time (“Equity Incentives Limit”). On January 1 in each calendar year, the then Equity Incentive Limit will automatically increase by 5% of our issued share capital from time to time. The Equity Incentive Limit from time to time shall decrease by the number of our ordinary shares in relation to which Equity Incentives are exercised (such decrease to be calculated by reference to the percentage that the number of ordinary shares in relation to which Equity Incentives are exercised bears to our issued share capital immediately prior to such exercise).
 
Options granted under the Equity Incentive Plan typically contain a three-year vesting period and typically have seven years within which they must be exercised. When options are granted, the Board may at its discretion attach conditions to the exercise of the options, which must be satisfied before an option may be exercised.
 
Before the date of adoption of the Equity Incentive Plan, we had 4,308,805 options in issue to purchase ordinary shares granted to employees and consultants of which 778,363 have been exercised and 129,599 have lapsed as at March 31, 2022. On September 24, 2019, these options were rolled over into new options to subscribe for our ordinary shares. Since then, we have issued 40,834,234 additional share options as at March 31, 2022, of which 87,542 share options have been exercised and 1,524,465 share options have lapsed. Of such outstanding options of 42,623,202, as at March 31, 2022, 11,435,228 had fully vested and were exercisable and 31,187,974 were not yet exercisable.
 
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Details of Restricted Share Units granted to employees are as follows:
 
 
Date
Number of restricted share units granted
 
August 8, 2020
  
1,477,775
 
September 16, 2020
  
79,185
 
March 8, 2021
  
293,180
 
April 5, 2021
  
162,690
 
August 9, 2021
  
86,525
 
September 14, 2021
  
9,010
 
November 9, 2021
  
64,090
 
December 20, 2021
  
9,710

Of the total Restricted Share units granted in 2020 and 2021, 250,555 had lapsed at December 31, 2021 and 362,855 have vested at December 31, 2021. On March 11, 2022, the Board granted 2,388,365 Restricted Share Units and 1,851,222 Performance Share units to employees. A further 118,145 of the total Restricted Share units were exercised and 28,315 Restricted Share units lapsed in the three month period to March 31, 2022. The total Restricted Share Units outstanding at March 31, 2022 was 3,810,661.
 
Lapse of Options (including U.S. Options)
 
Options and U.S. Options lapse on the last date upon which any part thereof may be exercised under the terms of the Equity Incentive Plan, which date shall be determined by the Board and specified in the option certificate issued to a participant in connection with the grant of an option, but in no event shall such date be later than the date preceding the tenth anniversary of the date of grant of an option (“Final Option Date”).
 
To the extent then exercisable, options and U.S. Options also lapse on the occurrence of certain events unless exercised within certain specified periods (or, if earlier, by no later than the Final Option Date), subject to the exercise by the Board of its discretion, as follows:
 

 •
on death, one year from the date of death;
 

 •
on the option holder ceasing to meet the requirements of a participant in the Equity Incentive Plan due to retirement or resignation or early retirement due to disability or ill health, on the expiration of one year after having resigned or retired; or
 

 •
on resignation, retirement or dismissal for reasons other than termination summarily for serious misconduct, 90 days after such event. On termination summarily for serious misconduct, options lapse immediately on such termination.
 
If options were not already exercisable on the occurrence of the events referred to above, the options will lapse (subject to the discretion of the Board). The Board may at its discretion extend the periods set out above.
 
Options and U.S. Options shall also lapse in the event of a liquidator being appointed.
 
Certain additional restrictions apply under the U.S. Sub-Plan and the Code in relation to post-termination exercise periods relating to Incentive Stock Options.
 
Certain Transactions
 
Under the Equity Incentive Plan, on a merger, takeover or other re-organization resulting in a change of control of us (or the Board considers this is about to occur), each Equity Incentive (including U.S. Options and U.S. Restricted Share Units) issued prior to November 2, 2021 and to the extent covered by contractual commitments shall accelerate and become exercisable in full as of a date specified by the Board and subject to such conditions as the Board may at its discretion determine. A reverse takeover by us of another company will not result in an acceleration of the Equity Incentives (including U.S. Options and U.S. Restricted Share Units) vesting. If the Equity Incentives are substituted with new Equity Incentives of a public company successor entity or parent thereof in a a merger, takeover or other reorganization, or  change of control subsequently occurs of the successor entity or the Equity Incentive Plan participant is terminated or resigns for good cause either immediately or within twelve (12) months from the occurrence of the change of control of Amryt or within three (3) years of a change of control of the public company successor entity, each substituted Equity Incentive shall automatically accelerate and vest and Equity Incentive Plan participant shall be entitled to exercise any or all their Equity Incentives immediately. The Remuneration Committee may also make such other comparable arrangements to replace any Equity Incentives (including U.S. Options and U.S. Restricted Share Units) (whether exercisable or not) as it determines in its discretion.
 
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Adjustments
 
Under the Equity Incentive Plan, Israel Sub-Plan and the U.S. Sub-Plan, in the event of a consolidation, sub-division or reduction of our share capital, or any other variation in our share capital, the Board may make such adjustment to the relevant exercise price, the number, and/or the class of shares subject to each option or U.S. Option (as applicable) as it deems appropriate. If shareholders are granted rights to subscribe for further ordinary shares (such rights being related to the number of ordinary shares held by them respectively) the Board shall at its absolute discretion decide whether the granting of such rights and the subscriptions made thereunder shall result in the depletion in the value of each ordinary share and the Board may make such adjustment to the exercise price, the number and/or class of shares subject to each option as it deems appropriate.
 
Amendment and Termination
 
The Equity Incentive Plan may be terminated at any time by resolution of our Board. Subsequent to any termination of the Equity Incentive Plan, we shall not grant any further options, but no such termination shall affect or modify any subsisting rights or obligations of participants in respect of any options, and notwithstanding such termination, we shall continue to administer and manage the Equity Incentive Plan in accordance with the rules of the Equity Incentive Plan.
 
We may at any time by resolution of the Board vary, amend or revoke any of the provisions of the Equity Incentive Plan in such manner as the Board sees fit.
 
Under the U.S. Sub-Plan, the Board may grant U.S. Equity Incentives under the terms of the U.S. Sub-Plan until the earlier of: (a) ten years from May 18, 2020, being the date that the Board agreed to adopt the U.S. Sub-Plan; and (b) the termination of the Equity Incentive Plan. No U.S. Equity Incentive may be granted under the U.S. Sub-Plan later than the date of termination or expiration of the Equity Incentive Plan.
 
The Board may amend, suspend or terminate any provision of the U.S. Sub-Plan at any time and may amend, modify or terminate any U.S. Equity Incentive. The approval of shareholders is required for any amendment to the U.S. Sub-Plan that would require such approval in order to satisfy the rules relating to Incentive Stock Options under the Code or any other applicable law.
 
Chiasma Equity Incentive Plan
 
When Amryt acquired Chiasma in August 2021, the Chiasma Stock Option and Incentive Plan transferred across to Amryt. Each outstanding and unexercised Chiasma Stock Option or RSU, whether vested or not vested, ceased to represent a right to acquire shares of Chiasma common stock and were converted into an option to purchase Amryt ADSs on the same terms and conditions as were applicable under such Chiasma Stock Option and Incentive Plan immediately prior to the acquisition.
 
On August 5, 2021, a total of 18,139,060 stock options were issued by Amryt to replace Chiasma stock options. Of the total amount of Chiasma stock options, 3,320,515 stock options were exercised and 4,098,275 stock options had lapsed by December 31, 2021. A further 226,690 stock options were exercised in and a further 2,171,425 lapsed in the three month period to March 31, 2022. The number of legacy Chiasma stock options outstanding at March 31, 2022 is 8,322,005.
 
On August 5, 2021, a total of 202,145 RSUs were transferred across to Amryt. Of the total amount of Chiasma RSUs transferred across to Amryt, 39,180 RSUs were exercised, and 56,405 RSUs had lapsed by December 31, 2021. A further 49,300 RSUs were exercised and a further 4,605 lapsed in the three month period to March 31, 2022. The number of legacy Chiasma RSUs outstanding at March 31, 2022 is 52,655.
 
No new stock option or RSUs will be granted under the Chiasma stock option and incentive plan.
 
Terms and Conditions of New Grants and Grants under the Chiasma Equity Incentive Plan
 
The terms and conditions of new grants are as follows, whereby all options are settled by physical delivery of shares:
 
Vesting conditions
 
The employee share options vest following a period of service by the officer or employee. The required period of service is determined by the Remuneration Committee at the date of grant of the options (usually the date of approval by the Remuneration Committee). There are no market conditions associated with the share option vesting periods.
 
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Contractual life
 
The term of an option is determined by the Remuneration Committee provided that the term may not exceed a period of seven to ten years from the date of grant. All options will terminate 90 days after termination of the option holder’s employment, service or consultancy with the Group except where a longer period is approved by the Board of Directors. Under certain circumstances involving a change in control of the Group, some options will automatically accelerate and become exercisable in full as of a date specified by the Board of Directors.
 
Bonus Payments
 
All executive directors and senior management are eligible for a discretionary annual bonus. Annual cash bonuses are paid on the achievement of pre-set strategic objectives. The Remuneration Committee in conjunction with the Board reviews and sets the objectives at the start of each calendar year.
 
Pension, Retirement or Similar Benefits
 
We operate defined contribution schemes in various locations where employees are based. Contributions to the defined contribution schemes are recognized in our statement of comprehensive income in the period in which the related services are received from the employee. Under these schemes we have no obligation, either legal or constructive, to pay further contributions in the event that the fund does not hold sufficient assets to meet our benefit commitments.
 
As of December 31, 2021, we had accrued $463,000 in pension benefits which was paid to the pension administrators in early 2022. With the exception of Dr. Wiley and Mr. Nealon, no director or secretary has any pension or retirement benefits. In addition, no director or senior manager is entitled to any pension, retirement or related benefit upon termination of his employment.
 
Insurance and Indemnification
 
To the extent permitted by law, each of our directors, alternate directors, officers or employees is entitled to be indemnified out of our assets against all losses or liabilities which he or she may sustain or incur in or about the execution of the duties of his or her office or otherwise in relation thereto. We maintain directors’ and officers’ insurance to insure such persons against certain liabilities.
 
To the extent permitted by law, the directors have the power to purchase and maintain insurance for or for the benefit of any persons who are or were at any time:
 

 •
directors, alternate directors, officers or employees of a group company; or
 

 •
trustees of any pension fund in which our employees or employees of any other group company are interested, including in each case insurance against any liability incurred by such persons in respect of any act or omission in the actual or purported execution and/or discharge of their duties and/or in the exercise or purported exercise of their powers and/or otherwise in relation to their duties, powers or offices in relation to us or any other group company or pension fund.
 
Insofar as indemnification of liabilities arising under the Securities Act may be permitted to the Board, executive officers, or persons controlling us pursuant to the foregoing provisions, we are informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
 
Options and Warrants
 
Directors may issue options or warrants if authorized to do so by our Articles of Association or an ordinary resolution of the shareholders. We may issue shares upon the exercise of options or warrants without further shareholder authorization, up to the relevant authorized limit.
 
Options
 
As of December 31, 2021, there were options to purchase 28,502,942 ordinary shares outstanding under the Equity Incentive Plan with a weighted average exercise price of $1.994 per ordinary share (based on an exchange rate of £1.00 to $1.34898 as of December 31, 2021). The options generally lapse after seven years from the date of the grant.
 
As of December 31, 2021, there were options to purchase 10,720,120 ordinary shares outstanding under the Chiasma Stock Option and Incentive Plan with a weighted average exercise price of $2.663 per ordinary share (based on an exchange rate of £1.00 to $1.34898 as of December 31, 2021). The options generally lapse after seven years from the date of the grant. The outstanding options were issued under the Equity Incentive Plan.
 
Warrants
 
As at December 31, 2021, there was no category of warrants to purchase our ordinary shares outstanding.
 
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As of December 31, 2020, there were two categories of warrants to purchase our ordinary shares outstanding:
 

 •
Warrants issued on September 24, 2019, to purchase 345,542 ordinary shares with a weighted average exercise price of £1.44 per ordinary share. These warrants generally lapse after five years from the date of the grant. These warrants were issued to Shore Capital and Davy in exchange for warrants granted to such parties on April 19, 2016, in connection with the placement undertaken by us on that date. In March 2021, 283,389 ordinary shares were issued from treasury following the exercise of these warrants and the remaining warrants lapsed in April 2021.
 

 •
Warrants to purchase 8,966,520 ordinary shares, with an exercise price of zero. 13,976,722 warrants were issued to certain Aegerion creditors who expressed a wish to restrict their percentage share interest in our issued share capital and who elected to take warrants in lieu of ordinary shares. In addition 4,864,656 warrants were issued to certain investors in exchange for the repurchase of 4,864,656 ordinary shares by us from these investors on November 14, 2019. On December 19, 2019, certain investors elected to exercise 1,645,105 warrants in exchange for 1,645,105 ordinary shares. On July 9, 2020, certain investors elected to exercise 4,000,000 warrants in exchange for 4,000,000 ordinary shares and on September 22, 2020, Nineteen 77 Global Multi Strategy Alpha Master Limited elected to exercise 4,229,753 warrants in exchange for 4,229,753 ordinary shares. On August 5, 2021, Highbridge Tactical Credit Master Fund, L.P. elected to exercise 8,966,520 warrants in exchange for 8,966,520 ordinary shares.
 
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Item 7.
Major Shareholders and Related Party Transactions
 
A. Major Shareholders
 
The following table sets forth information relating to the beneficial ownership of our ordinary shares as of March 31, 2022, by:
 

 •
each person, or group of affiliated persons, known to us to beneficially own 5% or more of our outstanding ordinary shares;
 

 •
each member of our Board and each of our executive officers; and
 

 •
all Board members and executive officers as a group.
 
Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities as well as any ordinary shares that the individual has the right to acquire within 60 days of March 31, 2022, through the exercise of any option, warrant or other right. The percentage ownership information shown in the table below is based upon 320,699,807 ordinary shares, which are outstanding as of March 31, 2022.
 
Except as otherwise indicated, all of the shares reflected in the table are ordinary shares and all persons listed below have sole voting and investment power with respect to the ordinary shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose.
 
In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, we deemed outstanding ordinary shares subject to options and warrants held by that person that are immediately exercisable or exercisable within 60 days of March 31, 2022. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.
 
   
Beneficially Owned
  
   
ADS
    
Ordinary Shares
        
Name of beneficial owner
  
Number
    
Number
    
Percentage
  
5% or greater shareholders:
                  
Athyrium Capital Management, LP(1)
    
13,159,248
      
65,796,241
      
19.22%
Highbridge Capital Management, LLC(2)    
9,838,220
      
49,191,100
       14.50%  
Stonepine Capital Management, LLC(3)
    
6,069,775
      
30,348,875
      
9.46%
Rubric Capital Management, L.P.(4)
    
3,544,468
      
17,722,340
      
5.53%
 
(1)
Based on information known to Amryt and information contained in a Statement on Schedule 13F filed by Athyrium Capital Management, L.P. in February, 2022 and 21,509,901 ordinary shares issuable upon conversion of Convertible Notes held by the following affiliates of Athyrium Capital Management, LP: Athyrium Opportunities II Acquisition 2 LP, Athyrium Opportunities III Acquisition 2 LP, Athyrium Opportunities II Acquisition LP and Athyrium Opportunities III Acquisition LP.
 
(2)
Based on information known to Amryt and information contained in a Statement on Schedule 13F filed by Highbridge Capital Management, LLC in February, 2022 and 18,520,040 ordinary shares issuable upon conversion of Convertible Notes held by the following affiliates of Highbridge: Highbridge MSF International Ltd., Highbridge SCF Special Situations SPV, L.P. and Highbridge Tactical Credit Master Fund, L.P. Pursuant to the terms of the Convertible Notes, Highbridge may not convert any Convertible Notes that it beneficially owns to the extent that such conversions and exercises would result in Highbridge beneficially owning in excess of 9.99% of our ordinary shares. After giving effect to these blockers, as of November 30, 2020, Highbridge’s beneficial ownership is limited to 9.99%.

(3)
Based on information known to Amryt and information contained in a Statement on Schedule 13F filed by Stonepine Capital Management, LLC in February, 2022

(4)
Based on information known to Amryt and information contained in a Statement on Schedule 13F filed by Rubric Capital Management, L.P. in February, 2022.
 
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B. Related Party Transactions
 
The following is a summary of related party transactions, since January 1, 2018 to date, in which we have been a participant and in which the amount involved exceeded or will exceed $120,000, and in which any of our then directors, executive officers or holders of more than 5% of any class of our voting securities at the time of such transaction, or any members of their immediate family, had or will have a direct or indirect material interest.
 
Agreements with Principal Shareholders
 
We entered into a number of agreements with our principal shareholders in connection with the acquisition of Aegerion. The following summary of these agreements is not intended to be a complete description of these agreements, and it is qualified in its entirety by reference to the full text of such agreements, which are filed as exhibits to the registration statement of which this annual report forms a part. We urge you to review these exhibits in their entirety.
 
The Restructuring Support Agreement
 
On May 20, 2019, we entered into a Restructuring Support Agreement (as subsequently amended on June 12, 2019, “Restructuring Support Agreement”) with (i) Aegerion and Aegerion Pharmaceuticals Holdings, Inc. (together, “Debtors”), (ii) Novelion, as holder of 100% of the outstanding equity interests of Aegerion and holder of 100% by principal amount of claims under Aegerion’s Amended and Restated Loan Credit Agreement dated March 15, 2018, (iii) the holders of 100% in principal amount under Aegerion’s Bridge Loan Credit Agreement dated November 8, 2018, and (iv) holders of in excess of 67% in principal amount of Aegerion’s 2% Senior Unsecured Convertible Notes due 2019. The holders of Aegerion debt party to the Restructuring Support Agreement are collectively referred to herein as the “Consenting Lenders.”
 
Under the Restructuring Support Agreement, we shall, among other things, negotiate in good faith the documents necessary to complete the transactions in connection with the Acquisition. The Debtors agreed to, among other things, (a) use reasonable best efforts to take any actions necessary in connection with the transaction; (b) commence the Debtors’ bankruptcy cases and file and seek approval of “first day” motions; and (c) file and prosecute confirmation of the Plan of Reorganization.
 
Each of the Consenting Lenders agreed to, among other things, (a) vote to accept the Plan of Reorganization and otherwise support the transactions; (b) not object or impede confirmation or implementation of the Plan of Reorganization or the transactions, including by soliciting an alternative transaction; (c) not support any other Chapter 11 plan or other restructuring or reorganization of the Debtors other than the Plan of Reorganization; and (d) not take any action that would interfere with consummation of the transactions and take any and all necessary, appropriate, or advisable action in furtherance of the transactions.
 
Each Consenting Lender also agreed that, if the Restructuring Support Agreement was terminated pursuant to the specified provisions contained therein on or after the date Aegerion received a proposal for an alternative transaction that is still outstanding at the time of such termination, it would vote against, and use its reasonable best efforts to oppose, approval of an alternative transaction unless, following a written inquiry by the Consenting Lenders regarding whether we would be willing to complete the transactions in accordance with the definitive documents, we did not confirm within five business days following such inquiry (subject to withdrawal at any time upon five business days’ notice) that we would be willing to consummate the transactions if the documents are re-executed by the other parties thereto.
 
Plan Funding Agreement
 
On May 20, 2019, we entered into the Plan Funding Agreement with Aegerion setting forth the terms and conditions of the acquisition of Aegerion.
 
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In consideration of the acquisition, Aegerion’s former creditors received our ordinary shares (including shares represented by ADSs and zero cost warrants that may be exercised at any time), constituting approximately 61.6% of our outstanding share capital prior to our $60 million dollar equity issuance in September 2019 (“September 2019 Equity Raise”). The number of our ordinary shares that were issued as consideration was calculated by multiplying the aggregate amount of all issued and outstanding ordinary shares of Amryt immediately prior to the closing of the Acquisition by 1.59, after giving effect to the transactions, but before giving effect to equity underlying the issuance of the Convertible Notes, the September 2019 Equity Raise, our ordinary shares that may be issuable in satisfaction of the CVRs if the relevant milestones are achieved on the terms of the CVRs, and equity that was reserved for issuance under any management equity compensation plan adopted by us.
 
The Plan Funding Agreement contains reciprocal representations and warranties made by us and Aegerion relating to organization, qualification, due authorization of the parties and authority, consents and approvals, capitalization, financial statements, no undisclosed liabilities, recent events, contracts and commitments, real property, intellectual property, privacy and data security, legal compliance, permits, environmental compliance and conditions, litigation, tax matters, insurance, illegal or improper payments, related party transactions, brokers’ fees, employees and healthcare compliance matters.
 
Under the terms of the Plan Funding Agreement:
 

 •
We were not required to take any action which is prohibited or restricted by the Takeover Code in relation to any alternative transaction. Similarly, we were not required to refrain from any action which is required by the Takeover Code in relation to any alternative transaction.
 

 •
Following the approval by the U.S. Bankruptcy Court of the Plan Funding Agreement Approval Motion on June 28, 2019, Aegerion had a 55-day period to solicit an alternative transaction. Subject to the limitations of the Plan Funding Agreement¸ Aegerion was also entitled to respond to unsolicited proposals that Aegerion determined reasonably likely to result in a superior transaction.
 

 •
At any time prior to and after the completion of the 55-day period, Aegerion was entitled to receive offers from competing bidders and was able to respond to any such offer if its board deemed that the offer constituted or was likely to constitute a superior proposal.
 
The Plan Funding Agreement included termination rights for both us and Aegerion and related provisions that allocated fees and expenses among the parties if the Plan Funding Agreement was terminated prior to closing.
 
Upon termination of the Restructuring Support Agreement, we had the right to terminate the Plan Funding Agreement for any reason, so long as the termination of the Restructuring Support Agreement was not principally due to our material uncured breach. Aegerion also had a right to terminate the Plan Funding Agreement upon termination of the Restructuring Support Agreement, so long as the termination of the Restructuring Support Agreement was not principally due to Aegerion’s or the Consenting Lenders’ material uncured breach.
 
In specified circumstances, upon termination, we had the obligation to pay Aegerion a termination fee of $2,050,000. Additionally, upon a termination in other specified circumstances, Aegerion was obligated to pay us an expense reimbursement amount equal to all of our reasonable and documented fees and expenses incurred in connection with the negotiation, preparation and implementation of the documents for the transactions, up to $4,000,000. In addition, if Aegerion disclosed an alternative transaction and did not withdraw it and Aegerion entered into an agreement for an alternative transaction with a third party within one year of the date of the Plan Funding Agreement, Aegerion was liable to pay us a termination fee of $11,850,000 upon consummation of such transaction.
 
Backstop Agreement
 
On July 10, 2019, we entered into the Backstop Agreement with Highbridge MSF International Ltd., Highbridge SCF Special Situations SPV, L.P., 1992 Tactical Credit Master Fund, L.P., Athyrium Opportunities II Acquisition 2 LP, Athyrium Opportunities III Acquisition 2 LP, Whitebox Relative Value Partners, LP, Whitebox GT Fund, LP; Whitebox Multi-Strategy Partners, LP, Pandora Select Partners, LP, Nineteen77 Global Multi-Strategy Alpha Master Limited and Nineteen77 Global Convertible Bond Master Limited (each a “Backstop Party” and collectively, “Backstop Parties”), whereby each Backstop Party agreed to subscribe for a specified percentage of any unsubscribed shares in the September 2019 Equity Raise. In consideration for the Backstop Parties’ undertaking to subscribe for our ordinary shares, we agreed to pay the Backstop Parties the sum of $3 million in cash as commission.
 
The obligations of each Backstop Party were conditional on the satisfaction of, among others, the following conditions: (a) the rights attaching to our ordinary shares not having been altered at the date of execution of the Restructuring Support Agreement; (b) the approval of specified resolutions by our shareholders; and (c) a final order confirming the Plan of Reorganization having been entered (in form and substance reasonably satisfactory to the Backstop Parties and to us), the Effective Date, having occurred, and all conditions precedent to the occurrence of the Effective Date having been satisfied or waived by the Backstop Parties. The Backstop Parties, acting unanimously, had the ability to waive in whole or in part all or any of the conditions.
 
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DIP Funding Agreement
 
On June 28, 2019, Aegerion (as borrower) entered into a $20 million aggregate maximum principal amount post-petition super-priority secured debtor-in-possession credit facility (“DIP Funding Agreement”) with the Athyrium Funds and certain affiliates of Highbridge, as lenders, and Cantor Fitzgerald Securities, as administrative agent. The DIP Funding Agreement was fully and unconditionally guaranteed on a super-priority senior secured basis by Aegerion’s U.S. subsidiaries (other than Aegerion Securities Corporation) (“DIP Subsidiary Guarantors”).
 
The loans under the DIP Funding Agreement bore interest at a rate of 12.5% per annum, to be paid in cash on a monthly basis. The DIP Funding Agreement matured on the earliest to occur of: (a) the Effective Date; (b) the date that is 150 days after May 20, 2019 (being October 17, 2019), subject to a 60-day extension in accordance with the Plan Funding Agreement; and (c) the date on which the obligations under the DIP Funding Agreement are accelerated and became due and payable following the occurrence of an event of default.
 
The DIP Funding Agreement contained negative covenants restricting Aegerion and its subsidiaries, including limitations on, or related to, liens, investments, the incurrence of indebtedness, fundamental changes, dispositions, restricted payments, changes in business, transactions with affiliates, prepayments and modifications of debt, negative pledges, changes to organizational documents, use of proceeds, compliance with laws and orders of the bankruptcy court, ownership of subsidiaries, Chapter 11 claims, revisions of orders and applications to the bankruptcy court, and adequate protection.
 
The DIP Funding Agreement contained events of default, including failure to make payments when due, breach of covenants, breach of representations or warranties, cross-defaults, judgments, ERISA, invalidity of loan documents, change of control, failure of liens to be perfected, dissolution or liquidation, discontinuation of business, maintenance of independent directors, and bankruptcy matters including failure to confirm the approved Plan, non-compliance or revocation or modification of bankruptcy orders, and non-compliance with the Restructuring Support Agreement.
 
The DIP Funding Agreement was repayable from time to time and contained mandatory repayments from the proceeds of certain dispositions of assets, casualty events, and the incurrence of indebtedness. However, the DIP Funding Agreement facility was never utilized by Aegerion, therefore no repayments were required to be made.
 
Registration Rights Agreement
 
On the closing of the acquisition of Aegerion, we entered into a Registration Rights Agreement with affiliates of Athyrium (“Athyrium Parties”) and affiliates of Highbridge (“Highbridge Parties”). Pursuant to the agreement, we were to use commercially reasonable efforts to list our ordinary shares, or ADSs representing such shares, on the Nasdaq within 90 days of the closing of the Acquisition. The agreement also provided the Athyrium Parties and the Highbridge Parties with the right to demand share registration up to two times in any 12-month period and a right to participate in future registration statements filed by us. We are obligated to pay any expenses relating to such registrations and indemnify the Athyrium Parties and the Highbridge Parties (and their respective partners, members, directors, offices and professional advisers, among others) participating in such registration against specified liabilities that may arise in connection with such registration. Furthermore, each of the Athyrium Parties and the Highbridge Parties participating in such registration will indemnify us and certain other persons against specified limited liabilities that may arise in connection with such registration.
 
The agreement provided the Athyrium Parties and the Highbridge Parties with specified rights to nominate directors and designate observers to the Board. The agreement specified that, on closing of the Acquisition, the initial Board would be made up of seven members. The Board was to initially consist of Joseph Wiley, our Chief Executive Officer, one independent chairman and one independent director proposed by Amryt, one independent director proposed by the Athyrium Parties, one non-independent director proposed by the Athyrium Parties and two independent directors proposed by the Highbridge Parties. The Highbridge Parties have the right to subsequently select a non-independent director to replace one of its nominated independent directors, subject to the shareholding requirements set out below. The agreement also provided that Joseph Wiley would continue as Chief Executive Officer for no less than two years after the closing of the Acquisition, unless he: (a) resigns; (b) is removed from the position by a vote of a majority of the Board, which majority must include the vote of at least one of the directors nominated by us; or (c) is removed for cause under the terms of his employment agreement.
 
The initial Board is subject to compulsory retirement and will be put up for re-election at our first annual general meeting to be held at least 24 months after the closing of the Acquisition. For so long as each of the Athyrium Parties or the Highbridge Parties (or their respective affiliates) respectively hold at least 10% of our issued share capital, the Athyrium Parties and the Highbridge Parties (as applicable) are each entitled to nominate a replacement of the non-independent director (as applicable) selected by them on his or her resignation or retirement. Any such director shall serve on the Board until our next annual general meeting, where such director’s appointment will be subject to approval by an ordinary resolution of our shareholders.
 
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The agreement will also grant the Athyrium Parties or the Highbridge Parties the right to designate a board observer to attend Board meetings under the Secured Credit Facility (as described below), subject to restrictions on attendance when specified matters are discussed. Each of the Athyrium Parties and the Highbridge Parties have the ability to terminate this right, and this right will be terminated when the Secured Credit Facility is either refinanced or paid off in full. To date, only Athyrium has exercised this right.
 
Secured Credit Facility
 
On September 24, 2019, we entered into the Secured Credit Facility. The Secured Credit Facility is fully and unconditionally guaranteed on a senior secured basis by us and, to the extent permitted by law, each of our and Aegerion’s existing and subsequently acquired or formed direct and indirect subsidiaries (other than certain immaterial non-U.S. subsidiaries and Aegerion Securities Corporation) (“Facility Guarantors”). Proceeds from the Secured Credit Facility were used to refinance Aegerion’s existing secured bridge loan in the principal amount of approximately $50 million held by certain funds managed by Athyrium and Highbridge, respectively, and our existing €20 million (in principal) secured loan facility with the EIB.
 
The loans under the Secured Credit Facility bear interest at a rate of: (a) 11% per annum paid in cash on a quarterly basis; or (b) 6.5% per annum paid in cash plus 6.5% per annum paid in kind on a quarterly basis. The Secured Credit Facility will mature five years after issuance, unless earlier repaid.
 
The Secured Credit Facility contains the following negative covenants: (a) limitations on liens; (b) limitations on disposition of assets (including restrictions on dispositions of material assets and exclusive licensing transactions in material territories but permitting, among other things, (i) dispositions consisting of licenses of Oleogel-S10 and AP103 assets outside of the United States and European territories, (ii) dispositions of obsolete and surplus property that are immaterial, and (iii) a general basket for dispositions less than $250,000 individually and $2,500,000 in the aggregate); (c) limitations on consolidations and mergers; (d) limitations on loans and investments (with restrictions on investments and indebtedness to non-Facility Guarantor subsidiaries to be agreed); (e) limitations on indebtedness (with exceptions permitting, among other things, the indebtedness under the CVR deed poll); (f) limitations on transactions with affiliates (with exceptions permitting, among other things, certain de minimis transactions, certain transactions for the provision of inter-company services among Facility Guarantors and other transactions with non-Facility Guarantor affiliates in the ordinary course of business on an arm’s-length basis not to exceed an amount to be agreed upon, including Transactions with non-Facility Guarantor affiliates in respect of intercompany services charged on a cost plus 10% basis); (g) compliance with ERISA; (h) limitations on restricted payments (including restrictions on dividends (stock or cash), share repurchases, spin-off and split-off transactions and payments to non- Facility Guarantors); (i) limitations on changes in business, changes in structure, changes in accounting, name and jurisdiction of organization, amendments to organizational documents that are adverse to the lenders, any amendments, modifications or waivers to the CVR deed poll; (j) limitations on material changes to other indebtedness documents; (k) limitations on restricted debt payments; (l) no negative pledges or burdensome agreements; and (m) certain other customary restrictions.
 
The Secured Credit Facility contains the following events of default under the Secured Credit Facility: (a) failure to pay principal, interest or any other amount when due; (b) representations and warranties incorrect in any material respect when made or deemed made; (c) failure to comply with covenants; (d) cross-default to other indebtedness; (e) failure to satisfy or stay execution of judgments; (f) bankruptcy or insolvency; (g) actual or asserted invalidity or impairment of any part of the credit documentation (including the failure of any lien to remain perfected); (h) ERISA default; (i) failure to conduct business; (j) change of ownership or control; and (k) liquidation or dissolution.
 
Repayments of the Secured Credit Facility are subject to a prepayment premium as follows: (a) 105% of the amount repaid plus interest that would have accrued on such amount repaid through the second anniversary of the closing of the Acquisition discounted at a rate equal to the yield on U.S. Treasury notes with a maturity closest to the second anniversary of the closing of the Acquisition plus 50 basis points in years one and two; (b) 105% of the amount repaid in year three; (c) 101% of the amount repaid in year four; and (d) thereafter, 100%. Such premium will apply to repayments after acceleration, but will not apply to prepayments from insurance and condemnation proceeds.
 
The Secured Credit Facility also contains a covenant requiring the maintenance of minimum liquidity of $10 million at all times, subject to an add back with respect to cash expenditures made to French pricing authorities related to the Myalepta product. The Secured Credit Facility requires mandatory prepayments for certain specified debt issuances, asset sales or other dispositions of assets (including exclusive licensing transactions and insurance and condemnation proceeds), subject to certain exceptions and thresholds.
 
On February 18, 2022, the Secured Credit Facility was repaid in full and the Group secured a $125 million Senior Credit Facility from funds managed by Ares of which US$105 million was drawn down to facilitate the prepayment of the existing Secured Credit Facility. In repaying the Secured Credit Facility, Amryt incurred an exit fee of 5.00% of the outstanding principal amount as at the prepayment date.
 
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Convertible Notes
 
On September 24, 2019, we issued $125 million aggregate principal amount of Convertible Notes due 2025 to certain creditors of Aegerion. The Convertible Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and, to the extent permitted by law, each of our and Aegerion’s existing and subsequently acquired or formed direct and indirect subsidiaries (other than certain immaterial non-U.S. subsidiaries and Aegerion Securities Corporation) (“Notes Guarantors”). The Convertible Notes are issued pursuant to an indenture by and among Amryt Pharmaceuticals Inc and the Notes Guarantors and a trustee for the Convertible Notes.
 
The Convertible Notes bear interest at a rate of 5% per annum, payable in cash semi-annually. The Convertible Notes will mature approximately five and a half years after issuance, unless earlier repurchased, redeemed or converted.
 
The Convertible Notes and guarantees are the general senior unsecured obligations of Amryt Pharmaceuticals Inc and the Notes Guarantors, respectively, ranking equally in right of payment with all of the existing and future liabilities of such entities that are not so subordinated.
 
Convertible Note holders are entitled to convert their Convertible Notes, at their option, at any time prior to the close of business on the second scheduled trading day immediately prior to the maturity date, unless the Convertible Notes have been previously repurchased or redeemed. The Convertible Notes are initially convertible into 386.75 ordinary shares for each $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $2.59 per ordinary share or $12.95 per ADS. The conversion rate is subject to customary anti-dilution adjustments as well as adjustments following certain fundamental changes (as set out below) and adjustments to account for the final conversion share price. Upon conversion, Amryt Pharmaceuticals Inc may choose to pay or deliver, as the case may be, cash, ordinary shares or a combination of cash and our ordinary shares.
 
The Convertible Notes have the following events of default: (a) a default in the payment when due of the principal of, or the redemption price or repurchase price for, any Convertible Note; (b) a default for 30 days in the payment when due of interest on any Convertible Note; (c) the failure to deliver, when required, a repurchase notice; (d) a default in the obligation to convert a Convertible Note upon the exercise of the conversion right with respect thereto and such failure continues for five business days; (e) a default in obligations with respect to successors to us or Amryt Pharmaceuticals Inc; (f) a default in other obligations or agreements under the Convertible Notes or the indenture where such default is not cured or waived within 60 days after notice; (g) certain defaults with respect to any one or more mortgages, agreements or other instruments under which there is outstanding, or by which there is secured or evidenced, any indebtedness for money borrowed of at least $12 million (or its foreign currency equivalent) subject to a 60-day grace period; (h) one or more final judgments for the payment of at least $12 million in the aggregate, where such judgment is not timely discharged or stayed, subject to a 60-day grace period; and (i) certain events of bankruptcy, insolvency and reorganization with respect to Amryt Pharmaceuticals Inc, us or any of our or their significant subsidiaries.
 
Amryt Pharmaceuticals Inc has the right to redeem all or any portion of the Convertible Notes on or after the third anniversary of issuance, provided the per share volume-weighted average price of our ordinary shares exceeds 150% of the conversion price on: (a) each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the trading day immediately before the date Amryt Pharmaceuticals Inc sends the notice of such redemption; and (b) the trading day immediately before the date Amryt Pharmaceuticals Inc sends such notice. Amryt Pharmaceuticals Inc may also redeem the Convertible Notes upon certain changes in tax law or regulation. The redemption price will be an amount in cash equal to 100% of the principal amount of the Convertible Notes redeemed, plus any accrued and unpaid interest.
 
Upon the occurrence of events deemed a fundamental change, Convertible Note holders may require Amryt Pharmaceuticals Inc to repurchase all or a portion of their Convertible Notes at a repurchase price of 100% of the principal amount of the Convertible Notes, plus any accrued and unpaid interest. With certain exceptions, a fundamental change will occur if: (a) a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), other than us, any of our wholly owned subsidiaries or their respective employee benefit plans, has filed any report with the SEC indicating that such person or group has become the direct or indirect beneficial owner of our ordinary shares representing more than 50% of the voting power of all of our then-outstanding ordinary shares; (b) the consummation of (i) any sale, lease or other transfer, in one transaction or a series of Transactions, of all or substantially all of the assets of us and our subsidiaries, taken as a whole, to any person, other than one or more of our wholly owned subsidiaries; or (ii) any transaction or series of related transactions in connection with which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization, acquisition, liquidation or otherwise) all of our ordinary shares are exchanged for, converted into, acquired for, or constitute solely the right to receive, other securities, cash or other property (other than changes resulting solely from a subdivision or combination, or a change in par value, of our ordinary shares); (c) our shareholders approve any plan or proposal for the liquidation or dissolution of our company; or (d) our ordinary shares cease to be traded on AIM or another permitted exchange.
 
If a fundamental change occurs or if Amryt Pharmaceuticals Inc initiates a redemption of the Convertible Notes, the conversion rate will increase for any conversion occurring in connection with such fundamental change or redemption. The increase in the conversion rate will be determined based on a schedule set forth in the indenture and is subject to adjustment in accordance with the final conversion share price.
 
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Zero Cost Warrant
 
We agreed, for certain Aegerion creditors who wished to restrict their percentage share interest in our issued share capital, to issue to the relevant Aegerion creditor, as an alternative to our ordinary shares, an equivalent number of new zero cost warrants to subscribe for our ordinary shares to be constituted on the terms of the zero cost warrant. The relevant Aegerion creditor is entitled at any time to exercise the zero cost warrants, at which point in time we would issue to that Aegerion creditor the relevant number of fully paid ordinary shares in return for the exercise of the zero cost warrants.
 
In accordance with the terms of the zero cost warrant, each zero cost warrant entitles the holder thereof to subscribe for one ordinary share at any time after our admission to trade on AIM. In no event shall any holder of zero cost warrants have the right to subscribe for zero additional consideration for, nor shall we issue to such holder of zero cost warrants, ordinary shares to the extent that such subscription would result in the holder of zero cost warrants and its affiliates, including groups that include the holder of zero cost warrants and its affiliates, together beneficially owning more than their prescribed maximum percentage to be set in the zero cost warrant. Any issue of our ordinary shares in contravention of this condition will be null and void.
 
The zero cost warrants constitute our direct and unsecured obligations and rank pari passu and without any preference among themselves (save for any obligations to be preferred by law) at least equally with our other present and future unsecured and unsubordinated obligations. The zero cost warrants are not transferrable except with our prior written consent.
 
On September 24, 2019, certain of Aegerion’s creditors elected to receive 13,976,722 warrants to subscribe for our ordinary shares as consideration for the Acquisition.
 
On November 14, 2019, we repurchased a combined 4,864,656 ordinary shares from Highbridge Tactical Credit Master Fund L.P., Highbridge SCF Special Situations SPV, L.P. and Nineteen77 Global Multi Strategy Alpha Master Limited. In exchange for the ordinary shares, these institutions were issued an equivalent number of zero cost warrants. Each warrant entitles the holder to subscribe for one ordinary share at zero cost.
 
On December 19, 2019, Highbridge MSF International Ltd exercised 1,645,105 zero cost warrants in exchange for 1,645,105 ordinary shares. On July 9, 2020, Highbridge Tactical Credit Master Fund, L.P. exercised 4,000,000 zero cost warrants in exchange for 4,000,000 ordinary shares. On September 22, 2020, Nineteen 77 Global Multi Strategy Alpha Master Limited exercised 4,229,753 zero cost warrants in exchange for 4,229,753 ordinary shares. On August 5, 2021, Highbridge Tactical Credit Master Fund, L.P. exercised 8,966,520 warrants in exchange for 8,966,520 ordinary shares, 4,208,314 of which were issued from treasury shares.
 
There were no remaining warrants outstanding as at December 31, 2021.
 
Interim Subscription Agreements
 
On August 27, 2019, we entered into subscription agreements in the total amount of $8 million which included:
 

 •
a subscription agreement between Amryt, Highbridge MSF International Ltd. and Highbridge SCF Special Situations SPV, L.P. (together, “Highbridge Subscribers”) pursuant to which the Highbridge Subscribers agreed to subscribe for 907,193 ordinary shares for an aggregate subscription price of $1 million and, subject to the GM Resolutions being passed, a further 2,765,901 ordinary shares for an aggregate subscription price of $3 million;
 

 •
a subscription agreement between Amryt and Raymond Stafford pursuant to which Raymond Stafford agreed to subscribe for 918,273 Amryt ordinary shares for an aggregate subscription price of $1 million; and
 

 •
a subscription agreement between Amryt and Stonepine Capital, LP pursuant to which Stonepine Capital, LP agreed to subscribe for 459,136 Amryt ordinary shares for an aggregate subscription price of $500,000.
 
Private Placement


 •
On December 8, 2020, we entered into securities purchase agreements with several institutional accredited investors for the private placement of 3,200,000 ADSs, at a purchase price of $12.50 per ADS, yielding gross proceeds of $40 million.

•
The private placement included new and existing investors including Stonepine Capital, LP, Aquilo Capital Management, LLC, Amati Global Investors, Athyrium Capital Management, LP and Highbridge Capital Management, among others.
 
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C. Interests of Experts and Counsel
 
Not applicable.
 
Item 8.
Financial information

 
A.
Consolidated Statements and Other Financial Information
 
Please refer to “Item 18. Financial statements.”
 
 
B.
Dividend policy
 
We do not anticipate paying any dividends in the foreseeable future.
 
Legal Proceedings
 
Other than as outlined below, we are not subject to any material legal proceedings.
 
Investigations in Brazil
 
Federal prosecutors in Brazil are conducting an investigation to determine whether there have been violations of Brazilian laws related to the sales of Juxtapid in Brazil. In July 2016, the Ethics Council of Interfarma fined Aegerion’s subsidiary in Brazil (“Aegerion Brazil”) approximately $0.5 million for violations to its Code of Conduct, to which Aegerion Brazil is bound due to its affiliation with Interfarma. Also, the Board of Directors of Interfarma imposed an additional penalty of suspension of Aegerion Brazil’s membership, without suspension of Aegerion Brazil’s membership contribution, for a period of 180 days for Aegerion Brazil to demonstrate the implementation of effective measures to cease alleged irregular conduct, or exclusion of Aegerion Brazil’s membership in Interfarma if such measures are not implemented. Aegerion Brazil paid the fine of approximately $0.5 million during the third quarter of 2016. In March 2017, after the suspension period ended, Interfarma’s Board of Directors decided to reintegrate Aegerion Brazil, enabling it to participate regularly in Interfarma activities, subject to meeting certain obligations. In March 2019, the Board of Directors of Interfarma agreed that Aegerion Brazil had successfully met all of the requirements imposed by the association, and the investigation was closed.
 
In June 2017, the Federal Public Prosecutor of the City of São José dos Campos, State of São Paulo, in connection with its criminal investigation into former employees of Aegerion Brazil, requested that a Brazilian federal court provide federal investigators with access to the bank records of certain individuals and entities, including Aegerion Brazil, certain former Aegerion Brazil employees, a Brazilian patient association, and 462 Brazilian physicians. The Federal Trial Court Judge issued a decision on July 12, 2018 authorizing access to the banking records on the terms that the Federal Public Prosecutor of the City of São José dos Campos had requested. On July 16, 2018 Aegerion Brazil filed a motion for clarification of the decision that authorized the breach of the banking secrecy, which was denied by the Federal Court Judge. In 2018, a related investigation was opened by the federal investigators in the state of Brasília which focused on a number of cases that occurred in Brasília with alleged signs of irregularities. The Public Prosecutor in São José dos Campos continues to gather information in connection with this investigation.
 
At this time, the Company does not know whether the inquiry of the Public Prosecutor in São José dos Campos will result in the commencement of any formal proceeding, but if Aegerion’s activities in Brazil are found to violate any laws or governmental regulations, we may be subject to significant civil lawsuits to be filed by the Public Prosecution office, and administrative penalties imposed by Brazilian regulatory authorities and additional damages and fines. Under certain circumstances, we could be barred from further sales to federal and/or state governments in Brazil, including sales of Juxtapid and/or Myalept, due to penalties imposed by Brazilian regulatory authorities or through civil actions initiated by federal or state public prosecutors. Additionally, the SEC conducted inquiries with Aegerion concerning the investigations by Brazilian authorities and, in July 2019, the SEC concluded the investigation and no enforcement action was made against Aegerion. The Company cannot determine if a loss is probable as a result of the investigations and inquiry in Brazil and whether the outcome will have a material adverse effect on the Company’s business.
 
Claim for Refund in Italy
 
The Agenzia Italiana del Farmaco (“AIFA”), also known as the Italian Medicines Agency, is the public institution responsible for the regulation of pharmaceuticals in Italy. AIFA has claimed that Amryt Pharma Italy S.r.l. refund approximately €1.9 million related to sales of Lojuxta in Italy during 2018. AIFA alleges that it classified Lojuxta incorrectly as an “Orphan” product and thus claims the repayment of funds paid to Amryt Pharma Italy. AIFA have also made a claim regarding a refund due to them for sales of Lojuxta in 2019 of approximately €700,000 based on the same underlying misclassification of Lojuxta as an “Orphan” product as the 2018 claim. We adhere to the view that Lojuxta has all the characteristics to be considered an “Orphan” product, and we intend to defend against AIFA’s claims for a refund.
 
In April 2021, the Italian courts passed their first judgment on the issue of the 2018 refund with the courts deciding that no further payments are due by the companies involved in this judgment to AIFA. We expect that the dispute regarding Amryt will be reviewed by the Italian Courts in due course with the outcome likely to be the same as the judgment that was recently issued and that no refund for 2018 will be due by Amryt. Regarding the 2019 refund, we appealed this to the Italian courts and an initial determination to reject our appeal was made on April 22, 2022. A final court hearing is now set for October 2022 at which point a final decision will be issued.
 
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B. Significant Changes
 
No significant change, other than as otherwise described in this annual report on Form 20-F, has occurred in our operations since the date of our consolidated financial statements included in this annual report on Form 20-F.
 
Item 9.
The Offer and Listing
 
A. Offer and Listing Details
 
Our ADSs have been listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “AMYT” since July 8, 2020, where each ADS represents five Ordinary Shares.
 
B. Plan of Distribution
 
Not applicable.
 
C. Markets
 
See “—A. Offer and Listing Details.”
 
D. Selling Shareholders
 
Not applicable.
 
E. Dilution
 
Not applicable.
 
F. Expenses of the Issue
 
Not applicable.
 
Item 10.
Additional information
 
A. Share Capital
 
Not applicable.
 
B. Memorandum and Articles of Association
 
Pursuant to the instructions to Form 20-F, the information called for by this section of Item 10 is contained in our Registration Statement on Form F-1, as originally filed with the SEC on June 23, 2020, as subsequently amended, under the heading “Description of Share Capital and Certain Corporate Matters,” and is hereby incorporated by reference.
 
C. Material Contracts
 
For a description of our material contracts, please see “Item 4. Information on the Company— B. Business Overview—Material Contracts.”
 
D. Exchange Controls
 
There are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import or export of capital, including the availability of cash and cash equivalents for use by us, or that may affect the remittance of dividends, interest, or other payments by us to non-resident holders of our ordinary shares or ADSs, other than withholding tax requirements. There is no limitation imposed by English law or in the Articles on the right of non-residents to hold or vote shares. However, where a holder has a registered address within the United Kingdom and has not notified us of an address within the United Kingdom at which notices may be given to him or her, such holder shall not be entitled to receive any notice.
 
E. Taxation
 
Material U.S. Federal Income Tax Considerations
 
The following describes the material U.S. federal income tax consequences relating to the acquisition, ownership and disposition of the ADSs. This section does not purport to be a comprehensive description of all of the U.S. federal income tax considerations that may be relevant to a particular person’s decision to acquire the ADSs. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (“Code”), and U.S. Treasury regulations promulgated thereunder (“Treasury Regulations”), as well as judicial and administrative interpretations thereof as in effect as of the date of this annual report. All of the foregoing authorities are subject to change or differing interpretations that could apply retroactively and could affect the tax consequences described below, and there can be no assurance that the U.S. Internal Revenue Service (“IRS”), or U.S. courts will agree with the tax consequences described in this section.
 
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We undertake no obligation to publicly update or otherwise revise this section whether as a result of new Treasury Regulations, Code sections, judicial and administrative interpretations or otherwise. This section is also based in part upon the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms.
 
This description applies only to U.S. Holders (as defined below) that purchase ADSs representing our ordinary shares and hold such ADSs as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment). This section does not address any U.S. federal estate and gift tax, alternative minimum tax or Medicare tax on net investment income consequences, or any U.S. state or local or non-U.S. tax consequences. This section also does not address the tax considerations that may be relevant to certain types of investors subject to special treatment under U.S. federal income tax laws, such as:
 

 •
banks and other financial institutions;
 

 •
insurance companies;
 

 •
regulated investment companies or real estate investment trusts;
 

 •
dealers or traders in securities or currencies that use a mark-to-market method of accounting;
 

 •
broker-dealers;
 

 •
tax exempt organizations, retirement plans, individual retirement accounts and other tax deferred accounts;
 

 •
persons holding the ADSs as part of a straddle, hedging, conversion or integrated transaction for U.S. federal income tax purposes;
 

 •
U.S. Holders whose functional currency is not the U.S. dollar;
 

 •
any entity or arrangement classified as partnership for U.S. federal income tax purposes or investors therein;
 

 •
persons who own or are deemed to own, directly or indirectly, 10% or more of the total combined voting power of all classes of our voting stock or 10% or more of the total value of shares of all classes of our stock;
 

 •
persons subject to special tax accounting rules as a result of any item of gross income with respect to the ADSs being taken into account in an applicable financial statement; and
 

 •
persons that held, directly, indirectly or by attributions, ownership interest in us prior to the effectiveness of the registration statement of which this annual report forms a part.
 
THE DESCRIPTION OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR GENERAL INFORMATION ONLY. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE, LOCAL, NON-U.S. AND OTHER TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE ADSs.
 
As used in this discussion, the term “U.S. Holder” means a beneficial owner of the ADSs that is for U.S. federal income tax purposes:
 

 •
a citizen or individual resident of the United States;
 

 •
a corporation (or other entity treated as a corporation) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
 

 •
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
 

 •
trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions of the trust or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
 
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The U.S. federal income tax treatment of a partner in an entity or arrangement treated as a partnership for U.S. federal income tax purposes that holds ADSs generally will depend on the status of the partner and the activities of the partnership. Partnerships considering an investment in the ADSs and partners in such partnerships should consult their tax advisors regarding the specific U.S. federal income tax consequences to them of the acquisition, ownership and disposition of the ADSs.
 
The discussion below assumes that the representations contained in the deposit agreement and any related agreement are true and that the obligations in such agreements will be complied with in accordance with their terms. The discussion below also assumes that we are not treated as a U.S. domestic corporation under Section 7874 of the Code, but are treated as a surrogate foreign corporation, as a result of the acquisition of Aegerion. See “Item 3. Key Information—D. Risk Factors—Risks Related to our Business, Financial Condition and Capital Requirements.”
 
ADSs
 
Taking into account the earlier assumptions, for U.S. federal income tax purposes, U.S. Holders of ADSs generally will be treated as the beneficial owners of the underlying shares represented by the ADSs and an exchange of ADSs for our shares generally will not be subject to U.S. federal income tax.
 
The U.S. Treasury Department and the IRS have expressed concerns that U.S. Holders of ADSs may be claiming foreign tax credits in situations where an intermediary in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS has taken actions that are inconsistent with the U.S. Holder of the ADS being treated as the beneficial owner of the underlying security. Such actions (for example, a pre-release of an ADS by a depositary) also may be inconsistent with the claiming of the reduced rate of tax applicable to certain dividends received by non-corporate U.S. Holders of ADSs, including individual U.S. Holders. Accordingly, the availability of foreign tax credits or the reduced U.S. federal income tax rate for “qualified dividend income,” each discussed below, could be affected by actions taken by intermediaries in the chain of ownership between the holder of an ADS and us, if as a result of such actions the U.S. Holder of an ADS is not properly treated as the beneficial owner of the underlying share.
 
U.S. Holders should consult their own tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of acquiring, owning and disposing of ADSs in their particular circumstances.
 
Dividends and Other Distributions
 
Subject to the passive foreign investment company (“PFIC”), rules discussed below, the gross amount of any distribution made by us to a U.S. Holder with respect to the ADSs (including the amount of any taxes withheld therefrom) generally will be included in such holder’s gross income as non-U.S. source dividend income in the year actually or constructively received by the depositary, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). As a non-U.S. company, we do not maintain calculations of our earnings and profits under U.S. federal income tax principles. Therefore, it is expected that any distributions generally will be reported to U.S. Holders as dividends. Any dividends that we pay will not be eligible for the dividends-received deduction allowed to qualifying corporations under Section 243 of the Code.
 
We believe that we are treated as a surrogate foreign corporation. Accordingly, we do not believe that dividends paid in respect of the ADSs will be eligible to be taxed at favorable rates that otherwise are applicable to “qualified dividend income” received by non-corporate U.S. Holders if certain additional conditions are satisfied.
 
The amount of any distribution paid in a currency other than U.S. dollars will be included in a U.S. Holder’s income in an amount equal to the U.S. dollar value of such currency calculated by reference to the exchange rate in effect on the date the distribution is actually or constructively received by the depositary, regardless of whether the payment is in fact converted into U.S. dollars at that time. If the distribution is converted into U.S. dollars on the date of receipt, a U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the distribution. A U.S. Holder may have foreign currency gain or loss if the distribution is converted into, or exchanged for, U.S. dollars after the date of receipt.
 
Any dividends we pay to U.S. Holders generally will constitute non-U.S. source “passive category” income for U.S. foreign tax credit limitation purposes. However, if 50% or more of our stock is treated as held by U.S. persons, we will be treated as a “U.S.-owned foreign corporation.” In that case, dividends may be treated, for foreign tax credit limitation purposes, as income from sources outside the United States to the extent attributable to our non-U.S. source earnings and profits, and as income from sources within the United States to the extent attributable to our U.S. source earnings and profits. If any UK taxes are withheld with respect to dividends paid to a U.S. Holder with respect to the ADSs, subject to certain conditions and limitations provided in the Code and the applicable Treasury Regulations (including a minimum holding period requirement), such taxes may be treated as non-U.S. taxes eligible for credit against such U.S. holder’s U.S. federal income tax liability (to the extent not exceeding the withholding rate applicable to the U.S. Holder). In lieu of claiming a foreign tax credit, U.S. Holders may, at their election, deduct non-U.S. taxes, including any UK taxes withheld from dividends on the ADSs, in computing their taxable income, subject to generally applicable limitations under U.S. federal income tax law. An election to deduct non-U.S. taxes instead of claiming foreign tax credits applies to all non-U.S. taxes paid or accrued in the taxable year.
 
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If a refund of the tax withheld is available under the laws of the United Kingdom or under an applicable income tax treaty, the amount of tax withheld that is refundable will not be eligible for such credit against a U.S. Holder’s U.S. federal income tax liability (and will not be eligible for the deduction against U.S. federal taxable income).
 
The rules relating to the determination of the U.S. foreign tax credit and the deduction of non-U.S. taxes are complex, and U.S. Holders should consult their tax advisors to determine whether and to what extent a credit or deduction may be available in their particular circumstances.
 
Taxable Dispositions of the ADSs
 
Subject to the PFIC rules discussed below, a U.S. Holder generally will recognize taxable gain or loss on any sale, exchange or other taxable disposition of an ADS in an amount equal to the difference between the sum of the fair market value of any property and the amount of cash received in such disposition and the holder’s tax basis in the ADS. The U.S. Holder’s tax basis in the ADSs generally will equal the cost of the ADSs to the U.S. Holder. The gain or loss generally will be capital gain or loss, and generally will be a long term capital gain or loss if the U.S. Holder has held the ADS for more than one year at the time of disposition. For certain non-corporate taxpayers (including individuals), long term capital gains are subject to tax at reduced rates. The deductibility of capital losses is subject to limitations.
 
Any gain or loss that a U.S. Holder recognizes on a sale or other taxable disposition of an ADS generally will be treated as U.S. source income or loss for U.S. foreign tax credit limitation purposes. U.S. Holders should consult their tax advisors regarding the proper treatment of any gain or loss in their particular circumstances, including the effects of any applicable income tax treaties.
 
Passive Foreign Investment Company Considerations
 
Based on the current and anticipated value of our assets and the nature and composition of our income and assets, we do not believe we were a PFIC for the taxable year ending December 31, 2021, and we do not expect to be a PFIC in the current taxable year ending December 31, 2022, or in the foreseeable future. However, the determination of PFIC status is based on an annual determination that cannot be made until the close of a taxable year, involves extensive factual investigation, including ascertaining the fair market value of all of our assets on a quarterly basis and the active or passive character of each item of income that we earn, and is subject to uncertainty in several respects. Changes in the nature or composition of our income or assets, the structure of our operation or the value of our assets may cause us to become a PFIC. The determination of the value of our assets may depend in part upon the value of our goodwill not reflected on our balance sheet (which may depend upon the market value of the ADSs from time to time, which may be volatile). Accordingly, we cannot assure you that we will not be a PFIC for our current taxable year ending December 31, 2022, or for any future taxable year. If we are a PFIC for any year during which a U.S. Holder holds the ADSs, we generally will continue to be treated as a PFIC with respect to that U.S. Holder for all succeeding years during which the U.S. Holder holds the ADSs, even if we cease to meet the threshold requirements for PFIC status in any particular year, unless the U.S. Holder has made a “deemed sale” election under the PFIC Rules when we cease to be a PFIC.
 
A non-U.S. corporation such as us will be treated as a PFIC for U.S. federal income tax purposes for any taxable year if, applying applicable look-through rules, either:
 

 •
at least 75% of its gross income for such year is “passive income” for purposes of the PFIC rules; or
 

 •
at least 50% of the value of its assets (determined based on a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income.
 
For this purpose, passive income generally includes dividends, interest, royalties and rents other than certain royalties and rents derived in the active conduct of a trade or business and not derived from a related person. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, more than 25% by value of the stock.
 
If we were a PFIC for any taxable year during which a U.S. Holder holds ADSs, then, unless such U.S. Holder makes a “mark-to-market” election or a “qualified electing fund” election (each as discussed below), such U.S. Holder generally would be subject to special adverse tax rules with respect to any “excess distribution” that it receives from us and any gain that it recognizes from a sale or other disposition, including, in certain circumstances, a pledge, of ADSs. For this purpose, distributions that a U.S. Holder receives in a taxable year that are greater than 125% of the average annual distributions that it received during the shorter of the three preceding taxable years or your holding period for the ADSs will be treated as an excess distribution. Under these rules:
 

 •
the excess distribution or recognized gain would be allocated ratably over the U.S. Holder’s holding period for the ADSs;
 
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 •
the amount of the excess distribution or recognized gain allocated to the taxable year of distribution or gain, and to any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we were treated as a PFIC, would be treated as ordinary income; and
 

 •
the amount of the excess distribution or recognized gain allocated to each other taxable year would be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year and the resulting tax will be subject to the interest charge generally applicable to underpayments of tax.
 
If we were a PFIC for any taxable year during which a U.S. Holder holds ADSs and any of our non-U.S. subsidiaries or other corporate entities in which we own equity interests is also a PFIC, the U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of each such non-U.S. entity classified as a PFIC, each such entity referred to as a lower-tier PFIC, for purposes of the application of these rules. U.S. Holders should consult their own tax advisor regarding the application of the PFIC rules to any of our lower-tier PFICs.
 
If we were a PFIC for any taxable year during which a U.S. Holder holds ADSs, then in lieu of being subject to the tax and interest-charge rules discussed above, the U.S. Holder may make an election to include gain on the ADSs as ordinary income under a mark-to-market method, provided that our ADSs constitute “marketable stock.” Marketable stock is stock that is regularly traded on a qualified exchange or other market, as defined in applicable Treasury Regulations. Shares or ADSs generally will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded. Our ADSs, but not our shares, are listed on the Nasdaq, which is a qualified exchange or other market for these purposes.
 
Consequently, if the ADSs are regularly traded, we expect that the mark-to-market election would be available to U.S. Holders of ADSs if we were to become a PFIC, but no assurances are given in this regard.
 
Because a mark-to-market election cannot be made for any lower-tier PFICs that we may own (unless the shares in such lower-tier PFIC are themselves treated as marketable stock), if we were a PFIC for any taxable year, a U.S. Holder that makes the mark-to-market election may continue to be subject to the tax and interest charges under the general PFIC rules with respect to such U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.
 
In certain circumstances, a shareholder in a PFIC may avoid the adverse tax and interest-charge regime described above by making a “qualified electing fund” election to include in income its share of the corporation’s income on a current basis. However, a U.S. Holder may make a qualified electing fund election with respect to the ADSs only if we agree to furnish such U.S. Holder annually with a PFIC annual information statement as specified in the applicable Treasury Regulations. We do not intend to provide such information, and thus we do not expect that a U.S. Holder will be able to make a qualified electing fund election.
 
If a U.S. Holder owns ADSs during any year in which we are a PFIC, such U.S. Holder (including, potentially, indirect holders) generally will be required to file an IRS Form 8621 with such holder’s U.S. federal income tax return for that year.
 
U.S. Holders should consult their own tax advisors regarding the application of the PFIC rules to their ownership of the ADSs.
 
Information Reporting and Backup Withholding
 
Dividend payments with respect to the ADSs and proceeds from a sale, exchange, redemption or other taxable disposition of the ADSs made within the United States or through certain U.S. related financial intermediaries may be subject to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder that furnishes a correct taxpayer identification number and makes any other required certification on IRS Form W-9 or that is otherwise exempt from backup withholding. U.S. Holders of the ADSs should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
 
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against such U.S. Holder’s U.S. federal income tax liability, and such holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing an appropriate claim for refund with the IRS and furnishing any required information in a timely manner.
 
Certain U.S. Holders may be required to comply with certain reporting requirements relating to the ADSs, including filing IRS Form 8938, with respect to the holding of certain foreign financial assets, including stock of foreign issuers (such as us), either directly or through certain foreign financial institutions, if the aggregate value of all such assets exceeds $50,000 on the last day of the tax year or $75,000 at any time during the tax year. U.S. Holders who fail to report the required information could be subject to substantial penalties. U.S. Holders should consult their own tax advisors regarding the application of these rules to their ownership of the ADSs.
 
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THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE IMPORTANT TO YOU. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE, LOCAL, NON-U.S. AND OTHER TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE ADSs.
 
UK Tax Considerations
 
The following is a general summary of certain UK tax considerations relating to the ownership and disposal of the ADSs and does not address all possible tax consequences relating to an investment in the ADSs. It is based on current UK tax law and generally published HM Revenue & Customs (“HMRC”) practice as at the date of this annual report supplement, both of which are subject to change, possibly with retrospective effect.
 
Save as provided otherwise, this summary applies only to persons who are resident (and, in the case of individuals, domiciled) in the United Kingdom for tax purposes and who are not resident for tax purposes in any other jurisdiction and do not have a permanent establishment or fixed base in any other jurisdiction with which the holding of ADSs is connected (“UK Holders”). Persons (a) who are not resident (or, if resident are not domiciled) in the United Kingdom for tax purposes, including those individuals and companies who trade in the United Kingdom through a branch, agency or permanent establishment in the United Kingdom to which the ADSs are attributable, or (b) who are resident or otherwise subject to tax in a jurisdiction outside the United Kingdom, are recommended to seek the advice of professional advisers in relation to their taxation obligations.
 
This summary is for general information only and is not intended to be, nor should it be considered to be, legal or tax advice to any investor. It does not address all of the tax considerations that may be relevant to specific investors in light of their particular circumstances or to investors subject to special treatment under UK tax law. In particular, this summary:
 

 •
only applies to the absolute beneficial owners of the ADSs and any dividends paid in respect of the ordinary shares represented by the ADSs where the dividends are regarded for UK tax purposes as that person’s own income (and not the income of some other person); and
 

 •
(a) only addresses the principal UK tax consequences for investors who hold the ADSs as capital assets/investments, (b) does not address the tax consequences that may be relevant to certain special classes of investor such as dealers, brokers or traders in shares or securities and other persons who hold the ADSs otherwise than as an investment, (c) does not address the tax consequences for holders that are financial institutions, insurance companies, collective investment schemes, pension schemes, charities or tax-exempt organizations, (d) assumes that the holder is not an officer or employee of the Company (or of any related company) and has not (and is not deemed to have) acquired the ADSs by reason of an office or employment, and (e) assumes that the holder does not control or hold (and is not deemed to control or hold), either alone or together with one or more associated or connected persons, directly or indirectly (including through the holding of the ADSs), an interest of 10% or more in the issued share capital (or in any class thereof), voting power, rights to profits or capital of the Company, and is not otherwise connected with the Company.
 
This summary further assumes that a holder of ADSs will be treated as the beneficial owner of the underlying ordinary shares for UK direct tax purposes.
 
POTENTIAL INVESTORS IN THE ADSs SHOULD SATISFY THEMSELVES PRIOR TO INVESTING AS TO THE OVERALL TAX CONSEQUENCES, INCLUDING, SPECIFICALLY, THE CONSEQUENCES UNDER UK TAX LAW AND HMRC PRACTICE OF THE ACQUISITION, OWNERSHIP AND DISPOSAL OF THE ADSs (OR UNDERLYING ORDINARY SHARES), IN THEIR OWN PARTICULAR CIRCUMSTANCES BY CONSULTING THEIR OWN TAX ADVISERS.
 
Taxation of dividends
 
Withholding Tax
 
Dividend payments in respect of the ordinary shares represented by the ADSs may be made without withholding or deduction for or on account of UK tax.
 
Income Tax
 
Dividends received by individual UK Holders will be subject to UK income tax on the amount of the dividend paid.
 
The first £2,000 of dividend income received by an individual UK Holder in a tax year will be subject to a nil rate of tax regardless of the amount of the individual’s other taxable income.
 
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For the UK tax year 2021/2022, dividend income in excess of the £2,000 to which the nil rate of tax applies will be taxed at the rate of 7.5% to the extent that the dividend, when treated as the top slice of the relevant UK Holder’s income, does not exceed the basic rate income tax limit, at the rate of 32.5% to the extent that the dividend, when treated as the top slice of the relevant UK Holder’s income, exceeds the basic rate income tax limit but does not exceed the higher rate income tax limit, and at the rate of 38.1% to the extent that the dividend, when treated as the top slice of the relevant UK Holder’s income, exceeds the higher rate income tax limit.
 
An individual holder of ADSs who is not a UK Holder will not be chargeable to UK income tax on dividends paid by the Company, unless such holder carries on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency in the United Kingdom to which the ADSs (or underlying ordinary shares) are attributable. In these circumstances, such holder may, depending on his or her individual circumstances, be chargeable to UK income tax on dividends received from the Company.
 
Corporation Tax
 
A UK Holder within the charge to UK corporation tax may be entitled to exemption from UK corporation tax in respect of dividend payments. If the conditions for the exemption are not satisfied, or such UK Holder elects for an otherwise exempt dividend to be taxable, UK corporation tax will be chargeable on the gross amount of any dividends (the current rate of which is 19%). If potential investors are in any doubt as to their position, they should consult their own professional advisers.
 
A corporate holder of ADSs that is not a UK Holder will not be subject to UK corporation tax on dividends received from the Company, unless it carries on a trade in the United Kingdom through a permanent establishment to which the ADSs (or underlying ordinary shares) are attributable. In these circumstances, such holder may, depending on its individual circumstances and if the exemption from UK corporation tax discussed above does not apply, be chargeable to UK corporation tax on dividends received from the company.
 
Taxation of disposals
 
UK Holders
 
A disposal or deemed disposal of ADSs by an individual UK Holder may, depending on his or her individual circumstances, give rise to a chargeable gain or to an allowable loss for the purpose of UK capital gains tax. The principal factors that will determine the capital gains tax position on a disposal of ADSs are the extent to which the holder realizes any other capital gains in the tax year in which the disposal is made, the extent to which the holder has incurred capital losses in that or any earlier tax year and the level of the annual allowance of tax-free gains in that tax year (“annual exemption”). The annual exemption for individuals for the 2021/2022 tax year is £12,300. If, after all allowable deductions, an individual UK Holder’s total taxable income (which, for the avoidance of doubt, includes any dividend income within the £2,000 nil rate band described above) for the year exceeds the basic rate income tax limit, a taxable capital gain accruing on a disposal of ADSs will be taxed at 20%. If, after all allowable deductions, an individual UK Holder’s total taxable income for the year does not exceed the basic rate income tax limit, and assuming the individual does not have any other taxable capital gains in the tax year that would use up the remaining basic rate allowance, a taxable capital gain accruing on a disposal of ADSs will be taxed at 10% on an amount that, when treated as the top slice of the relevant UK Holder’s income/gains, does not exceed the basic rate income tax and at 20% on the remainder.
 
A disposal of ADSs by a corporate UK Holder may give rise to a chargeable gain or an allowable loss for the purposes of UK corporation tax.
 
Any gains or losses in respect of currency fluctuations over the period of holding the ADSs would also be brought into account on the disposal.
 
Non-UK Holders
 
An individual holder who is not a UK Holder will not be liable to UK capital gains tax on capital gains realized on the disposal of his or her ADSs unless such holder carries on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency in the United Kingdom to which the ADSs (or underlying ordinary shares) are attributable. In these circumstances, such holder may, depending on his or her individual circumstances, be chargeable to UK capital gains tax on chargeable gains arising from a disposal of his or her ADSs. Furthermore, an individual holder of ADSs who has ceased to be resident for tax purposes in the United Kingdom for a period of less than five years and who disposes of ADSs during that period may be liable on his or her return to the United Kingdom to UK tax on any capital gain realized (subject to any available exemption or relief).
 
A corporate holder of ADSs that is not a UK Holder will not be liable for UK corporation tax on chargeable gains realized on the disposal of its ADSs unless it carries on a trade in the United Kingdom through a permanent establishment to which the ADSs (or underlying ordinary shares) are attributable. In these circumstances, a disposal of ADSs by such holder may give rise to a chargeable gain or an allowable loss for the purposes of UK corporation tax.
 
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Stamp Duty and Stamp Duty Reserve Tax
 
Issue of Ordinary Shares
 
No UK stamp duty or stamp duty reserve tax (“SDRT”) is payable on the issue of the underlying ordinary shares in the company.
 
Transfer of Ordinary Shares
 
Stamp duty or SDRT will generally apply to transfers of, or agreements to transfer, ordinary shares. Where applicable, the purchaser normally pays the stamp duty or SDRT.
 
Shareholders who elect to deposit holdings of Ordinary Shares for delivery of Nasdaq-listed ADSs will generally incur a stamp duty, or SDRT, charge at the rate of 1.5 per cent. of the market value of the Ordinary Shares being deposited.
 
Issue and Transfer of ADSs
 
No UK stamp duty or SDRT is payable on the issuance of the ADSs. No UK stamp duty should be required to be paid on any written instrument transferring an ADS or on any written agreement to transfer an ADS, also noting that based on current HMRC published practice, a depositary receipt is not regarded as “stock” or a “marketable security” for UK stamp duty purposes.
 
No SDRT will be payable on an agreement to transfer an ADS, as a depositary receipt (and any interest in a depositary receipt) is not treated as a “chargeable security” for the purposes of SDRT.
 
F. Dividends and Paying Agents
 
Not applicable.
 
G. Statement by Experts
 
Not applicable.
 
H. Documents on Display
 
Documents concerning us that are referred to herein may be inspected at our principal executive headquarters at 45 Mespil Road, Dublin 4, Ireland. Electronic copies of these documents, including the related exhibits and schedules, and any documents we file with the SEC without charge at the SEC’s website, www.sec.gov.
 
Our internet address is www.amrytpharma.com. Investors and others should note that we announce material information to investors through the investor relations page on our website, SEC filings, press releases, public conference calls and webcasts. We encourage investors, the media and others to review the information we post from time to time on our website. The information contained on or connected to our website is not incorporated by reference into this Annual Report on Form 20-F and should not be considered part of this or any other report filed with the SEC.
 
I. Subsidiary Information
 
Not applicable.
 
Item 11.
Quantitative and Qualitative Disclosures About Market Risk
 
Our operations expose us to some financial risks arising from our use of financial instruments, the most significant ones being liquidity, market risk and credit risk. The Board is responsible for our risk management policies and while retaining responsibility for them it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to our finance function. See “Note 24: Fair value measurement and financial risk management” in our Consolidated Financial Statements for the year ended December 31, 2021.
 
Item 12.
Description of Securities Other than Equity Securities
 
A. Debt Securities
 
Not applicable.
 
B. Warrants and Rights
 
Not applicable.
 
C. Other Securities
 
Not applicable.
 
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D. American Depositary Shares
 
Citibank, N.A. (“Citibank”) acts as the depositary for our American Depository Shares (“ADSs”), each of which represents five ordinary shares, pursuant to a deposit agreement.
 
A summary description of our ADSs is contained in our Registration Statement on F-1, as originally filed with the SEC on June 23, 2020, as subsequently amended, under the heading “Description of American Depositary Shares”.
 
Fees and Charges
 
ADS holders are required to pay the following fees under the terms of the deposit agreement:
 
Service
​
Fees
Issuance of ADSs (e.g., an issuance of ADS upon a deposit of ordinary shares, upon a change in the ADS(s)-to-ordinary shares ratio or for any other reason), excluding ADS issuances as a result of distributions of ordinary shares
​
Up to U.S. 5¢ per ADS issued
     
Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited property, upon a change in the ADS(s)-to-ordinary shares ratio or for any other reason)
​
Up to U.S. 5¢ per ADS cancelled
     
Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements)
​
Up to U.S. 5¢ per ADS held
     
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs
​
Up to U.S. 5¢ per ADS held
     
Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off)
​
Up to U.S. 5¢ per ADS held
     
ADS services
​
Up to U.S. 5¢ per ADS held on the applicable record date(s) established by the depositary bank
     
Registration of ADS transfers (e.g., upon a registration of the transfer of registered ownership of ADSs, upon a transfer of ADSs into DTC and vice versa, or for any other reason)
​
Up to U.S. 5¢ per ADS (or fraction thereof) transferred
     
Conversion of ADSs of one series for ADSs of another series (e.g., upon conversion of Partial Entitlement ADSs for Full Entitlement ADSs, or upon conversion of Restricted ADSs (each as defined in the deposit agreement) into freely transferable ADSs, and vice versa).
​
Up to U.S. 5¢ per ADS (or fraction thereof) converted
 
ADS holders are also responsible to pay certain charges such as:
 

 •
taxes (including applicable interest and penalties) and other governmental charges;
 

 •
the registration fees as may from time to time be in effect for the registration of ordinary shares on the share register and applicable to transfers of ordinary shares to or from the name of the custodian, the depositary bank or any nominees upon the making of deposits and withdrawals, respectively;
 
137

 •
certain cable, telex and facsimile transmission and delivery expenses;
 

 •
the fees, expenses, spreads, taxes and other charges of the depositary bank and/or service providers (which may be a division, branch or affiliate of the depositary bank) in the conversion of foreign currency;
 

 •
the reasonable and customary out-of-pocket expenses incurred by the depositary bank in connection with compliance with exchange control regulations and other regulatory requirements applicable to ordinary shares, ADSs and ADRs; and
 

 •
the fees, charges, costs and expenses incurred by the depositary bank, the custodian, or any nominee in connection with the ADR program.
 
ADS fees and charges for (i) the issuance of ADSs and (ii) the cancellation of ADSs are charged to the person for whom the ADSs are issued (in the case of ADS issuances) and to the person for whom ADSs are cancelled (in the case of ADS cancellations). In the case of ADSs issued by the depositary into DTC, the ADS issuance and cancellation fees and charges may be deducted from distributions made through DTC, and may be charged to the DTC participant(s) receiving the ADSs being issued or the DTC participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the account of the applicable beneficial owner(s) in accordance with the procedures and practices of the DTC participants as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are charged to the holders as of the applicable ADS record date. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders as of the ADS record date will be invoiced for the amount of the ADS fees and charges and such ADS fees and charges may be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC participants in accordance with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges to the beneficial owners for whom they hold ADSs. In the case of (i) registration of ADS transfers, the ADS transfer fee will be payable by the ADS Holder whose ADSs are being transferred or by the person to whom the ADSs are transferred, and (ii) conversion of ADSs of one series for ADSs of another series, the ADS conversion fee will be payable by the Holder whose ADSs are converted or by the person to whom the converted ADSs are delivered.
 
In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder. Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the depositary. You will receive prior notice of such changes. The depositary may reimburse us for certain expenses we incur in respect of the ADR program, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary agree from time to time.
 
138
PART II
 
Item 13.
Defaults, Dividend Arrearages and Delinquencies
 
None.
 
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
 
Not applicable.
 
Item 15.
Controls and Procedures
 
A. Disclosure Controls and Procedures
 
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(d) of the Exchange Act as of December 31, 2021. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2021, our disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be included in periodic filings under the Exchange Act and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
In designing and evaluating our disclosure controls and procedures, our management, with the participation of the Chief Executive Officer and Chief Financial Officer, recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgement in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
 
B. Management’s Annual Report on Internal Control over Financial Reporting
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act.
 
Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of the financial statements in accordance with IFRS and that receipts and expenditures are being made only in accordance with the authorization of management and the directors of Amryt; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Amryt’s assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements.
 
Management has assessed the effectiveness of internal control over financial reporting based on criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management has concluded that the Group’s internal control over financial reporting was effective as of December 31, 2021.
 
C. Attestation Report of the Registered Public Accounting Firm
 
Since Amryt Pharma is an emerging growth company as defined in the JOBS Act, our auditor, Grant Thornton, an independent registered public accounting firm, is not required to issue an attestation report on our internal control over financial reporting as of December 31, 2021.
 
D. Changes in Internal Control over Financial Reporting
 
There were no changes in our internal control over financial reporting that occurred during the period covered by this annual report that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
 
Item 16A.
Audit Committee Financial Expert
 
Our Board has determined that Mr. Stephen Wills qualifies as an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under applicable Nasdaq rules and regulations. The Board has determined that Mr. Stephen Wills satisfies the “independence” requirements under the corporate governance standards of the Nasdaq listing and the audit committee independence requirements set forth in Rule 10A-3 under the Exchange Act. The Audit Committee is governed by terms of reference that comply with the Nasdaq rules for a charter of such body. For more information see “Item 6. Directors, Senior Management and Employees—C. Board Practices—Audit Committee.”
 
139
Item 16B.
Code of Ethics
 
We have adopted a Code of Ethics that is applicable to all of our employees, executive officers and directors. A Committee of the Board will be responsible for overseeing the Code of Ethics and will be required to approve any waivers of the Code of Ethics for employees, executive officers and directors. The Code of Ethics can be found on our website at www.amrytpharma.com.
 
Item 16C.
Principal Accountant Fees and Services
 
Fees Billed by Independent Public Accountants
 
The following table provides information regarding fees paid by us to Grant Thornton for all services, for the years ended December 31, 2021 and 2020:
 
   
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Audit fees
    
893
      
814
  
Audit-related fees
    
92
      
44
  
Tax fees
    
—
      
—
  
All other fees
    
—
      
—
  
Total fees
    
985
      
858
  
 
Audit services include audit of our consolidated financial statements, review of our interim financial statements and statutory audits. Audit related services are for assurance and related services performed by the independent auditor, including due diligence services and grant claim reviews.
 
Policy on Pre-approval of Audit and Non-Audit Services of Independent Auditors
 
Our Audit Committee has adopted policies and procedures for the pre-approval of audit and non-audit services rendered by our independent public accountants, Grant Thornton. The policy generally pre-approves certain specific services in the categories of audit services, audit-related services, and tax services up to specified amounts, and sets requirements for specific case-by-case pre-approval of discrete projects, those which may have a material effect on our operations or services over certain amounts.
 
Pre-approval may be given as part of the Audit Committee’s approval of the scope of the engagement of our independent auditor or on an individual basis. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be presented to the full Audit Committee at its next scheduled meeting. The policy prohibits retention of the independent public accountants to perform the prohibited non-audit functions defined in Section 201 of the Sarbanes-Oxley Act or the rules of the SEC, and also considers whether proposed services are compatible with the independence of the public accountants.
 
During the year ended December 31, 2021, all audit and non-audit services provided by our independent public accountants were pre-approved in accordance with such policies and procedures.
 
Item 16D.
Exemptions from the Listing Standards for Audit Committees
 
Not applicable.
 
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
 
Following the Company’s delisting from the AIM market of the London Stock Exchange, which became effective on January 11, 2022, the Company may only repurchase its Ordinary Shares (including Ordinary Shares represented by ADSs) in accordance with the Companies Act procedures for “off-market purchases”. As such, these repurchases may only be made pursuant to a form of share repurchase contract that was approved by Shareholders on March 2, 2022. In addition, the Company may only conduct share repurchases with counterparties which were approved by Shareholders on March 2, 2022. These approvals are valid for five years. Approval of the forms of contract and counterparties is not an approval of the amount or timing of any repurchase activity. There can be no assurance as to whether the Company will repurchase any of its Ordinary Shares or as to the amount of any such repurchases or the prices at which such repurchases may be made.
 
No such repurchases have been made to date.
 
Item 16F.
Change in Registrant’s Certifying Accountant
 
Not applicable.
 
Item 16G.
Corporate Governance
 
As Amryt Pharma is a foreign private issuer, it is not required to comply with all of the corporate governance requirements set forth in NASDAQ Rule 5600 as they apply to U.S. domestic companies. Our corporate governance measures differ in the following significant way: we have not appointed an independent nominations committee or adopted a board resolution addressing the nominations process. At present, the Board as a whole address the nominations process.
 
Item 16H.
Mine Safety Disclosure
 
Not applicable.
 
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
 
Not applicable.
 
140
PART III

Item 17.
Financial Statements
 
We have elected to provide financial statements pursuant to Item 18.
 
Item 18.
Financial Statements
 
The audited consolidated financial statements as required under Item 18 are attached hereto. The audit report of Grant Thornton, independent registered public accounting firm, is included herein preceding the audited consolidated financial statements.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 
Page
Audited Financial Statements
142
143
144
145
146
148

141
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
Board of Directors and Shareholders
 
Amryt Pharma plc
 
Opinion on the financial statements
 
We have audited the accompanying consolidated statements of financial position of Amryt Pharma plc and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income/(loss), cash flows, and changes in equity for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
 
Basis for opinion
 
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
 
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
 
/s/ Grant Thornton
 
GRANT THORNTON
Dublin, Ireland
 
We have served as the Company’s auditor since 2018.
 
April 29, 2022

142
Amryt Pharma plc
Consolidated Statement of Comprehensive Income/(Loss)

         
Year ended December 31,
  
   
Note
    
2021
    
2020
    
2019
  
         
US$’000
    
US$’000
    
US$’000
  
Revenue
    
3
      
222,543
      
182,607
      
58,124
  
Cost of sales
    
4
      
(106,119
)
    
(119,029
)
    
(38,733
)
Gross profit
            
116,424
      
63,578
      
19,391
  
Research and development expenses
            
(37,729
)
    
(27,618
)
    
(15,827
)
Selling, general and administrative expenses
            
(91,995
)
    
(76,673
)
    
(35,498
)
Restructuring and acquisition costs
    
6
      
(16,947
)
    
(1,017
)
    
(13,038
)
Share based payment expenses
    
5
      
(8,341
)
    
(4,729
)
    
(841
)
Impairment charge
    
12
      
—
      
—
      
(4,670
)
Operating loss before finance expense
    
7
      
(38,588
)
    
(46,459
)
    
(50,483
)
Non-cash change in fair value of contingent consideration
    
6
      
18,407
      
(27,827
)
    
(6,740
)
Non-cash contingent value rights gain / (loss)
    
6
      
41,525
      
(12,004
)
    
(1,511
)
Net finance expense - other
    
9
      
(27,906
)
    
(19,569
)
    
(4,759
)
Loss on ordinary activities before taxation
            
(6,562
)
    
(105,859
)
    
(63,493
)
Tax credit on loss on ordinary activities
    
10
      
7,562
      
1,332
      
495
  
Profit/loss for the year attributable to the equity holders of the Company
            
1,000
      
(104,527
)
    
(62,998
)
Exchange translation differences which may be reclassified through profit or loss
            
4,423
      
(2,164
)
    
755
  
Total other comprehensive income/(loss)
            
4,423
      
(2,164
)
    
755
  
Total comprehensive income/(loss) for the year attributable to the equity holders of the Company
            
5,423
      
(106,691
)
    
(62,243
)
                                 
Earnings/(loss) per share
                                
Basic earnings/(loss) per share attributable to ordinary equity holders of the parent (US$)
    
11
      
0.00
      
(0.66
)
    
(0.83
)
Diluted earnings/(loss) per share attributable to ordinary equity holders of the parent (US$)
     11       0.00       (0.66 )     (0.83 )

143
Amryt Pharma plc
Consolidated Statement of Financial Position

         
As at December 31,
  
   
Note
    
2021
    
2020
  
         
US$’000
    
US$’000
  
Assets
                  
Non-current assets
                  
Goodwill
    
12
      
56,688
      
19,131
  
Intangible assets
    
12
      
467,359
      
305,369
  
Property, plant and equipment
    
13
      
7,416
      
7,574
  
Other non-current assets
            
1,885
      
1,542
  
Total non-current assets
            
533,348
      
333,616
  
Current assets
                        
Trade and other receivables
    
14
      
53,908
      
43,185
  
Inventories
    
15
      
115,769
      
40,992
  
Cash and cash equivalents, including restricted cash
    
16
      
113,032
      
118,798
  
Total current assets
            
282,709
      
202,975
  
Total assets
            
816,057
      
536,591
  
                         
Equity and liabilities
                        
Equity attributable to owners of the parent
                        
Share capital
    
17
      
25,500
      
13,851
  
Share premium
    
17
      
318,153
      
51,408
  
Other reserves
    
17
      
246,303
      
236,488
  
Accumulated deficit
            
(233,295
)
    
(235,605
)
Total equity
            
356,661
      
66,142
  
Non-current liabilities
                        
Contingent consideration and contingent value rights
    
6
      
81,113
      
148,323
  
Deferred tax liability
    
18
      
17,772
      
6,612
  
Long term loan
    
19
      
93,395
      
87,302
  
Convertible notes
    
20
      
105,788
      
101,086
  
Provisions and other liabilities
    
22
      
4,049
      
25,951
  
Total non-current liabilities
            
302,117
      
369,274
  
Current liabilities
                        
Trade and other payables
    
21
      
149,734
      
90,236
  
Provisions and other liabilities
    
22
      
7,545
      
10,939
  
Total current liabilities
            
157,279
      
101,175
  
Total liabilities
            
459,396
      
470,449
  
Total equity and liabilities
            
816,057
      
536,591
  


144
Amryt Pharma plc
Consolidated Statement of Cash Flows

         
Year ended December 31,
  
   
Note
    
2021
    
2020
    
2019
  
         
US$’000
    
US$’000
    
US$’000
  
Cash flows from operating activities
                        
Profit/(loss) on ordinary activities after taxation
          
1,000
      
(104,527
)
    
(62,998
)
Net finance expense - other
    
9
      
27,906
      
19,569
      
4,759
  
Depreciation and amortization
    
12,13
      
50,744
      
44,465
      
12,281
  
Amortization of inventory fair value step-up
    
4,7
      
4,418
      
27,617
      
7,473
  
Loss on disposal of fixed assets
            
173
      
133
      
43
  
Share based payment expenses
    
5
      
8,341
      
4,729
      
841
  
Non-cash change in fair value of contingent consideration
    
6
      
(18,407
)
    
27,827
      
6,740
  
Non-cash contingent value rights(gain)/loss
    
6
      
(41,525
)
    
12,004
      
1,511
  
Impairment of intangible asset
             —
       —       4,670  
Deferred taxation credit
            
(9,268
)
    
(535
)
    
(934
)
Movements in working capital and other adjustments:
                                
Change in trade and other receivables
    
14
      
(3,543
)
    
(7,685
)
    
(4,732
)
Change in trade and other payables
    
21
      
11,758
      
8,909
      
(6,337
)
Change in provision and other liabilities
    
22
      
(3,292
)
    
4,663
      
4,928
  
Change in inventories
    
15
      
(13,288
)
    
(10,609
)
    
(5,894
)
Change in non-current assets
            
523
      
331
      
177
  
Net cash flow from / (used in) operating activities
            
15,540
      
26,891
      
(37,472
)
                                 
Cash flow from investing activities
                                
Net cash received on acquisition of subsidiary
    
6
      
107,942
      
—
      
24,985
  
Payments for property, plant and equipment
    
13
      
(729
)
    
(1,503
)
    
(578
)
Payments for intangible assets
    
12
      
(816
)
    
(963
)
    
(74
)
Deposit interest received
            
5
      
87
      
92
  
Net cash flow from / (used in) investing activities
            
106,402
      
(2,379
)
    
24,425
  
                                 
Cash flow from financing activities
                                
Proceeds from issue of equity instruments, net of expenses
    
17
      
4,701
      
37,927
      
63,009
  
Proceeds from long term debt borrowings, net of debt issue costs
    
19
      
—
      
—
      
31,176
  
Repayment of long term debt
    
19
      
(116,629
)
    
—
      
(21,990
)
Interest paid
    
19
      
(12,283
)
    
(10,780
)
    
(6,253
)
Payment of leases
            
(1,215
)
    
(1,119
)
    
—
  
Net cash flow (used in) / from financing activities
            
(125,426
)
    
26,028
      
65,942
  
                                 
Exchange differences and other movements
            
(2,282
)
    
1,029
      
3,108
  
                                 
Net change in cash and cash equivalents
            
(5,766
)
    
51,569
      
56,003
  
Cash and cash equivalents at beginning of the year
            
118,798
      
67,229
      
11,226
  
Restricted cash at end of the year
    
16
      
261
      
223
      
2,032
  
Cash at bank available on demand at end of the year
    
16
      
112,771
      
118,575
      
65,197
  
Total cash and cash equivalents at end of the year
    
16
      
113,032
      
118,798
      
67,229
  


145
Amryt Pharma plc
Consolidated Statement of Changes in Equity
For the year ended December 31, 2021, 2020 and 2019

         
Share
capital
    
Share
premium
    
Warrant
reserve
    
Treasury
shares
    
Share
based
payment
reserve
    
Merger
reserve
    
Reverse
acquisition
reserve
    
Equity
component
of
convertible
notes
    
Other
distributable
reserves
    
Currency
translation
reserve
    
Accumulated
deficit
    
Total
  
   
Note
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
  
Balance at January 1, 2019
          
25,198
      
68,233
      
—
      
—
      
6,473
      
42,627
      
(73,914
)
    
—
      
—
      
(51
)
    
(72,263
)
    
(3,697
)
Loss for the year
          
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
(62,998
)
    
(62,998
)
Foreign exchange translation reserve
          
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
755
      
—
      
755
  
Total comprehensive loss
          
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
755
      
(62,998
)
    
(62,243
)
Transactions with owners
                                                                                                      
Share consolidation
    
17
      
(21,262
)
    
21,262
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Issue of shares in equity fund raise
    
17
      
533
      
7,467
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
8,000
  
Issue costs associated with equity fund raise
    
17
      
—
      
(1,886
)
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
(1,886
)
Acquisition of subsidiary without a change of control
    
17
      
(495
)
    
(3,726
)
    
—
      
—
      
—
      
—
      
—
      
—
      
(2,969
)
    
7,190
      
—
      
—
  
Issue of shares and warrants in consideration of Aegerion Acquisition
    
17
      
5,759
      
132,392
      
14,464
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
152,615
  
Issue of shares and warrants in equity fund raise
    
17
      
2,059
      
47,338
      
10,603
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
60,000
  
Issue costs associated with equity fund raise
    
17
      
—
      
(2,575
)
    
(530
)
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
(3,105
)
Issue of convertible notes
    
20
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
29,210
      
—
      
—
      
—
      
29,210
  
Issue of contingent value rights
    
6
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
(47,902
)
    
—
      
—
      
(47,902
)
Transfer to distributable reserves
    
17
      
—
      
(268,505
)
    
—
      
—
      
—
      
—
      
—
      
—
      
268,505
      
—
      
—
      
—
  
Treasury shares acquired in consideration for additional warrants
    
17
      
—
      
—
      
7,534
      
(7,534
)
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Issue of shares in exchange for warrants
    
17
      
126
      
2,422
      
(2,548
)
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
  
Share based payment expense
    
5
      
—
      
—
      
—
      
—
      
841
      
—
      
—
      
—
      
—
      
—
      
—
      
841
  
Share based payment expense – Lapsed
            
—
      
—
      
—
      
—
      
(4,124
)
    
—
      
—
      
—
      
—
      
—
      
4,124
      
—
  
Total transactions with owners
            
(13,280
)
    
(65,811
)
    
29,523
      
(7,534
)
    
(3,283
)
    
—
      
—
      
29,210
      
217,634
      
7,190
      
4,124
      
197,773
  
Balance at December 31, 2019
            
11,918
      
2,422
      
29,523
      
(7,534
)
    
3,190
      
42,627
      
(73,914
)
    
29,210
      
217,634
      
7,894
      
(131,137
)
    
131,833
  
Balance at January 1, 2020
             11,918       2,422       29,523       (7,534 )     3,190       42,627       (73,914 )     29,210       217,634       7,894       (131,137 )     131,833  
Loss for the year
             —       —       —       —       —       —       —       —       —       —       (104,527 )     (104,527 )
Foreign exchange translation reserve
             —       —       —       —       —       —       —       —       —       (2,164 )     —       (2,164 )
Total comprehensive loss
             —       —       —       —       —       —       —       —       —       (2,164 )     (104,527 )     (106,691 )
Transactions with owners
                                                                                                        
Issue of shares in exchange for warrants
     17
      630       14,131       (14,761 )     —       —       —       —       —       —       —       —       —  
Issue of shares in equity fund raise
     17
      1,303       38,697       —       —       —       —       —       —       —       —       —       40,000  
Issue costs associated with equity fund raise
     17
      —       (3,848 )     —       —       —       —       —       —       —       —       —       (3,848 )
Issue of treasury shares for share options exercised
     17
      —       6       —       113       —       —       —       —       —       —       —       119  
Share based payment expense
     5
      —       —       —       —       4,729       —       —       —       —       —       —       4,729  
Share based payment expense – Lapsed
             —       —       —       —       (59 )     —       —       —       —       —       59       —  
Total transactions with owners
             1,933       48,986       (14,761 )     113       4,670       —       —       —       —       —       59       41,000  
Balance at December 31, 2020
             13,851       51,408       14,762       (7,421 )     7,860       42,627       (73,914 )     29,210       217,634       5,730       (235,605 )     66,142  

 
146
Amryt Pharma plc
Consolidated Statement of Changes in Equity
For the year ended December 31, 2021, 2020 and 2019 (Continued)
 
         
Share
capital
    
Share
premium
    
Warrant
reserve
    
Treasury
shares
    
Share
based
payment
reserve
    
Merger
reserve
    
Reverse
acquisition
reserve
    
Equity
component
of
convertible
notes
    
Other
distributable
reserves
    
Currency
translation
reserve
    
Accumulated
deficit
    
Total
  
   
Note
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
  
Balance at January 1, 2021
          
13,851
      
51,408
      
14,762
      
(7,421
)
    
7,860
      
42,627
      
(73,914
)
    
29,210
      
217,634
      
5,730
      
(235,605
)
    
66,142
  
Profit for the year
          
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
1,000
      
1,000
  
Foreign exchange translation reserve
          
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
4,423

   
—
      
4,423
  
Total comprehensive loss
          
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
4,423

   
1,000

   
5,423
  
Transactions with owners
                                                                                                      
Issue of treasury shares in exchange for warrants
    
17
      
23
      
99
      
—
      
439
      
—
      
—
      
—
      
—
      
—
      
—
      
—
      
561
  
Issue of treasury shares in exchange for share options exercised
    
17
      
25
      
89
      
—
      
465
      
(191
)
    
—
      
—
      
—
      
—
      
—
      
—
      
388
  
Issue of shares and treasury shares in exchange for warrants
    
     
749

      
7,496
   
(14,762
)

    
6,517

      
—

      
—

      
—

      
—

      
—

      
—

      
—

      
—

  
Issue of shares in consideration of Chiasma acquisition
    
     
10,547

      
249,789

      
—

      
—

      
—

      
—

      
—

      
—

      
—

      
—

      
—

      
260,336

  
Share based payment reserve recognized on Chiasma acquisition
     17
      
—
      
—
      
—
      
—
      
10,157
      
—
      
—
      
—
      
—
      
—
      
—
      
10,157
  
Issue of shares for share options exercised and vesting of RSUs
     17
     
305
      
9,272
      
—
      
—
      
(4,264
)
    
—
      
—
      
—
      
—
      
—
      
—
      
5,313
  
Share based payment expense
     5
     
—
      
—
      
—
      
—
      
8,341
      
—
      
—
      
—
      
—
      
—
      
—
      
8,341
  
Share based payment expense – Lapsed
             —       —       —       —       (1,310 )     —       —       —       —       —       1,310       —  
Total transactions with owners
             11,649       266,745       (14,762 )     7,421       12,733       —       —       —       —       —       1,310       285,096  
Balance at December 31, 2021
            
25,500
      
318,153
      
—
      
—
      
20,593
      
42,627
      
(73,914
)
    
29,210
      
217,634
      
10,153
      
(233,295
)
    
356,661
  

147
1. General information

Amryt is a global commercial-stage biopharmaceutical company focused on acquiring, developing and commercializing innovative treatments to help improve the lives of patients with rare and orphan diseases. Amryt comprises a strong and growing portfolio of commercial and development assets.

As used herein, references to “we,” “us,” “Amryt” or the “Group” in these consolidated financial statements shall mean Amryt Pharma plc and its global subsidiaries, collectively. References to the “Company” in these consolidated financial statements shall mean Amryt Pharma plc.

Amryt Pharma plc is a company incorporated in England and Wales. The Company is listed on Nasdaq (ticker: AMYT). The Company was also listed on the AIM market of the London Stock Exchange (ticker: AMYT) up until January 11, 2022, on which date the Company completed the cancellation its admission to AIM. The cancellation was announced by the Company on November 22, 2021, and following the AIM delisting, the Company’s American Depository Shares (“ADSs”) will remain listed, and will only be tradeable, on Nasdaq. The Company’s last day of trading on AIM was 10 January 2022.

Amryt acquired Chiasma, Inc. (“Chiasma”) in August 2021. The combined company will be a global leader in rare and orphan diseases with three on-market commercial products, a global commercial and operational footprint and a significant development pipeline of therapies with the financial flexibility to execute its growth plans. Amryt’s commercial business comprises three orphan disease products – metreleptin (Myalept®/ Myalepta®); oral octreotide (Mycapssa®); and lomitapide (Juxtapid®/ Lojuxta®).

Amryt's lead development candidate, Oleogel-S10 is a potential treatment for the cutaneous manifestations of Junctional and Dystrophic Epidermolysis Bullosa (EB), a rare and distressing genetic skin disorder affecting young children and adults for which there is currently no approved treatment. Filsuvez® has been selected as the brand name for Oleogel-S10. The product does not currently have regulatory approval to treat EB. On February 28, 2022, Amryt announced that the U.S. Food and Drug Administration (“FDA”) communicated that it had completed its review of the NDA for Oleogel-S10 and has determined that the application cannot be approved in its present form.  The FDA has asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB.  Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns. The European Medicines Agency (“EMA”) review process for Oleogel-S10 in EB is ongoing and Amryt has responded to outstanding questions.  Given the rarity of the disease without any approved therapies, the EMA proposed that an Ad-Hoc Expert Group, comprised of both EB clinical experts and patients with EB, be consulted to provide external and independent EB specific advice. On April 22, 2022, the Committee for Medicinal Products for Human Use (“CHMP”) adopted a positive opinion, recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the European Commission (“EC”) is expected on the Filsuvez® application within 67 days. The CHMP positive opinion is supported by Phase 3 data from the EASE trial which was the largest ever global trial conducted in patients with EB, performed across 58 sites in 28 countries.

The consolidated financial statements were authorized for issue by the Company’s Board of Directors on April 29, 2022.

2. Accounting policies

Basis of preparation
 
(i)
Compliance with International Financial Reporting Standards (“IFRS”)
 
The consolidated financial statements of the Company and its subsidiaries (“Group”) have been prepared in accordance with IFRS and interpretations issued by the IFRS Interpretations Committee (“IFRS IC”) applicable to companies reporting under IFRS. The consolidated financial statements comply with IFRS as issued by the International Accounting Standards Board (“IASB”).
 
148
(ii)
Historical cost convention
 
The consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

(iii)
New and amended standards adopted by the group
 
In the current year, the Group has applied a number of amendments to IFRS and Interpretations issued by the IASB that are effective for annual period beginning on or after January 1, 2021. These amendments and interpretations do not have significant impact on the disclosures or the amounts reported in these consolidated financial statements.
 

 •
COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)

•
Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS16)
 
(iv)
New standards and interpretations not yet adopted
 

There were a number of standards and interpretations which were in issue at December 31, 2021 but were not effective at December 31, 2021 and have not been adopted for these consolidated financial statements.



 •
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies effective January 1, 2023

•
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates effective January 1, 2023

•
Onerous contracts – cost of fulfilling a contract (Amendments to IAS 37), effective January 1, 2022

•
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16), effective January 1, 2022

•
Amendments to IFRS 3 Business Combinations, effective January 1, 2022

•
Annual Improvements to IFRS Standards 2018–2020, effective January 1, 2022

•
Classification of Liabilities as Current or Non-current (Amendments to IAS 1), effective January 1, 2023

•
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts, effective January 1, 2023

These amendments are not expected to have significant impact on disclosures or amounts reported in the consolidated financial statements in the period of initial application.

Basis of going concern

Having considered the Group’s current financial position and cash flow projections, the Board of Directors believes that the Group will be able to continue in operational existence for at least the next 12 months from the date of approval of these consolidated financial statements and that it is appropriate to continue to prepare the consolidated financial statements on a going concern basis.

As part of their inquiries, the Board of Directors reviewed budgets, projected cash flows, and other relevant information for a period not less than 12 months from the date of approval of the consolidated financial statements for the year ended December 31, 2021.

Key considerations in assessing the going concern assumption included, but were not limited to, the significant cash balance held by the Company along with consistent positive operating cash flows, the continued growth in existing commercial produces, the positive impact from the increase in revenues from commercial sales of product candidates and additional indications of commercial products, if approved. The potential product candidates include Oleogel S-10, on which the CHMP adopted a positive opinion on April 22, 2022, recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the European Commission (“EC”) is expected on the Filsuvez® application within 67 days. Additional indications include the development for Mycapssa® in patients with carcinoid symptoms stemming from neuroendocrine tumors (“NET”) and label expansion for metreleptin in the treatment of partial lipodystrophy metreleptin (“PL”) in the US, each of which represent significant commercial opportunities.

149
Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group for the years ended December 31, 2021, and 2020. Subsidiaries are entities controlled by the Company. Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over an investee, exposure or rights to variable returns from its involvement with the investee and the ability to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Intergroup balances and any unrealized gains or losses, income or expenses arising from intergroup transactions are eliminated in preparing the consolidated financial statements.

Presentation of balances

The consolidated financial statements are presented in U.S. dollars (“US$”), rounded to the nearest thousand, which is the functional currency of the Company and presentation currency of the Group.

The following table discloses the major exchange rates of those currencies other than the functional currency of US$ that are utilized by the Group:

Foreign currency units to 1 US$
  
€    
£
     ILS
    
NOK
    
DKK
  
Average period to December 31, 2021
    
0.8454
      
0.7271
       3.2322      
8.5975
      
6.2875
  
At December 31, 2021
    
0.8830
      
0.7413
       3.1115      
8.8074
      
6.5664
  

Foreign currency units to 1 US$
  
€    
£
    
ILS
    
NOK
    
DKK
  
Average period to December 31, 2020
    
0.8777
      
0.7799
      
3.4351
      
9.4206
      
6.5432
  
At December 31, 2020
    
0.8141
      
0.7365
      
3.2148
      
8.5671
      
6.0570
  

Foreign currency units to 1 US$
  
€
   
£
    
ILS
    
NOK
    
DKK
  
Average period to December 31, 2019
    
0.8932
      
0.7836
      
3.5646
      
8.7976
      
6.6690
  
At December 31, 2019
    
0.8929
      
0.7624
      
3.4609
      
8.8046
      
6.6698
  

(€ = Euro; £ = Pounds Sterling, ILS = Israeli Shekel, NOK = Norwegian Kroner, DKK = Danish Kroner)

Critical accounting judgements and key sources of estimation uncertainty

In preparing these consolidated financial statements in conformity with IFRS, management is required to make judgements, estimates and assumptions that affect the application of policies and amounts reported in the consolidated financial statements and accompanying notes. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The critical accounting policies which involve significant estimates, assumptions or judgements, the actual outcome of which could have a material impact on the Group’s results and financial position outlined below, are as follows:
Valuation of convertible notes

In conjunction with the accounting for financial instruments, the Group recorded compound financial instruments related to the convertible notes that were issued on September 24, 2019. In determining the classification of the convertible notes, the Group assessed the fixed-for-fixed criteria and considered that this was met and the number of shares that can be converted by holders of the notes is fixed. The compound financial instrument consists of a liability component and an equity component. The liability component is valued using an estimated discounted cash flow calculation based on the future contractual cash flows in the contract which are discounted at a rate of interest an identical financial instrument without a conversion feature would be subject to. Factors that are considered in estimating the prevailing market rate of interest include or are not limited to:
 

 •
loan term and maturity;

•
repayment profile during the loan term other than interest;

•
level of loan security; and

•
principal amount of the loan.
 
Refer to Note 20, Convertible notes, for further details.

Valuation of acquired assets

In conjunction with the accounting for business combinations, the Group recorded intangible assets such as in connection with the Chiasma acquisition and with the Aegerion acquisition, primarily related to developed technology on the commercially marketed products, and inventories which include raw material, work in progress (“WIP”) and finished goods. The identifiable intangible assets and inventories are measured at their respective fair values as of the acquisition date. When significant identifiable intangible assets and inventories are acquired, the Group determines the fair values of these assets as of the acquisition date. The models used in valuing these intangible assets and inventories require the use of significant estimates and assumptions including but not limited to:

Intangible assets
 

 •
estimates of revenues and operating profits related to the products or product candidates;

•
the probability of success for unapproved product candidates considering their stages of development;

•
the time and resources needed to complete the development and approval of product candidates;

•
projecting regulatory approvals;

•
developing appropriate discount rates and probability rates by project; and

•
tax implications, including the forecasted effective tax rate.
 
Inventories
 

 •
estimates of saleable inventory and non-saleable inventory, which was determined by a sales forecast and production timeline; and

•
expected selling price and estimated costs of disposal.
 
Valuation of contingent value rights (“CVRs”)

The Group issued CVRs for payments to its shareholders based on the occurrence of two milestones related to Oleogel-S10, its pipeline product. The CVRs have pre-determined payouts, based on the occurrence of future events. If the events do not occur, the CVRs expire as worthless. The fair value of the CVRs is estimated based on the following key assumptions:


 •
expected timing of achievement of the two milestones (FDA approval and EMA approval) related to Oleogel-S10;

•
probabilities of successful launch of Oleogel-S10;

•
revenue forecast related to Oleogel-S10.

The Group believes the carrying value of the CVRs is based upon reasonable estimates and assumptions given the facts and circumstances as of the valuation date. A detailed discussion of the methodology applied and key input assumptions used by the Group is provided in Note 6, Business combinations and asset acquisitions, to the consolidated financial statements.
Impairment of intangible assets and goodwill

The impairment assessment for intangible assets requires management to make significant judgements and estimates to determine the fair value of the assets. Management periodically evaluates and updates the estimates based on the conditions which influence these variables. A detailed discussion of the impairment methodology applied and key assumptions used by the Group in the context of long-lived assets is provided in Note 12, Intangible assets and goodwill, to the consolidated financial statements. The assumptions and conditions for determining impairment of intangible assets reflect management’s best assumptions and estimates, but these items involve inherent uncertainties described above, many of which are not under management’s control. As a result, the accounting for such items could result in different estimates or amounts if management used different assumptions or if different conditions occur in future accounting periods.

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets acquired in a business combination. Goodwill is not amortized, but instead is reviewed for impairment on an annual basis or when an event becomes known that could trigger an impairment. To perform the annual impairment test of goodwill, the Group has identified the Group cash generating units (“CGUs”). CGUs reflect the lowest level at which goodwill is monitored for internal management purposes. At least once a year, the Group compares the recoverable amount of the Group’s CGUs to the CGU’s carrying amount. The recoverable amount (value in use) of a CGU is determined using a discounted cash flow approach based upon the cash flow expected to be generated by the CGU. In case that the value in use of the CGU is less than its carrying amount, the difference is at first recorded as an impairment of the carrying amount of the goodwill. The assumptions utilized in the impairment test are dependent on management’s estimates, in particular in relation to the forecasting of future cash flows, the discount rates applied to those cash flows, the expected long-term growth rate of the applicable businesses and terminal values. As a result, the accounting for such items could result in different estimates or amounts if management used different assumptions or if different conditions occur in future accounting periods.

Valuation of contingent consideration

Contingent consideration arising as a result of business combinations is initially recognized at fair value using a probability adjusted present value model. The fair value of the contingent consideration is updated at each reporting date. The key judgements and estimates applied by management in the determination of the fair value of the contingent consideration relate to the determination of an appropriate discount rate, the assessment of market size and opportunity and probability assessments based on market data for the chance of success of the commercialization of an orphan drug. A detailed discussion of the methodology applied and key input assumptions used by the Group is provided in Note 6, Business combinations and asset acquisitions, to the consolidated financial statements. The fair value of the contingent consideration uses management’s best estimates and judgements and sensitivities have been assessed by management by considering movements in the discount rate applied and movements in revenue forecasts. The chance of success of product development is based on published orphan drug research data and statistics, where available, and management’s expertise and experience for orphan drugs and taking into account the unique circumstances applying to approval process of each product. See Note 24, Fair value measurement and financial risk management, for quantification of these sensitivities.

Research and development (“R&D”) expenses

Development costs are capitalized as an intangible asset if all of the following criteria are met:


 •
completing the asset is technically feasible so that the asset will be available for use or sale;

•
there is an intention to complete the asset and use or sell it;

•
there is an ability to use or sell the asset;

•
the asset will generate probable future economic benefits and demonstrate the existence of a market or the usefulness of the asset if it is to be used internally;

•
adequate technical, financial and other resources are available to complete the development of the asset and to use or sell it; and

•
there is an ability to measure reliably the expenditure attributable to the intangible asset.
 
In process R&D acquired as part of a business combination is capitalized at the date of acquisition. Research costs are expensed when they are incurred.

152
Factors which impact our judgement to capitalize certain research and development expenditures include the degree of regulatory approval for products and the results of any market research to determine the likely future commercial success of products being developed. Management reviews these factors each year to determine whether previous estimates as to feasibility, viability and recovery should be changed.

The assessment whether development costs can be capitalized requires management to make significant judgements. Management has reviewed the facts and circumstances of each project in relation to the above criteria and in management’s opinion, the criteria prescribed for capitalizing development costs as assets have not yet been met by the Group in relation to Oleogel-S10 or AP103. Accordingly, all of the Group’s costs related to research and development projects are recognized as expenses in the Consolidated Statement of Comprehensive Income/(Loss) in the period in which they are incurred. Management expects that the above criteria will be met on filing of a submission to the regulatory authority for final drug approval or potentially in advance of that on the receipt of information that strongly indicates that the development will be successful.

Recognition of deferred tax assets

Deferred tax assets are determined using enacted tax rates for the effects of net operating losses and temporary differences between the book and tax bases of assets and liabilities. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. While management considers the scheduled reversal of deferred tax liabilities, and projected future taxable income in making this assessment, there can be no assurance that these deferred tax assets may be realizable. As at December 31, 2021, the Group did not recognize a deferred tax asset in respect of unused tax losses as described in Note 10, Tax credit/(charge) on loss on ordinary activities.

Revenue recognition

Variable Consideration
Product sales revenues are recognized at the net sales price (“transaction price”) which includes estimated reserves for variable consideration, upon the transfer of control of the Company’s products. Variable consideration primarily includes government rebates. Estimates of variable consideration are made at contract inception and historical experience, market trends, and industry data are considered when assessing such estimates. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of revenue will not occur. The Company reassesses variable consideration at the end of each reporting period as additional information becomes available with the variance recorded to product sales revenue.

Inventory obsolescence
Inventory realizability is evaluated on a case-by-case basis and adjustments are made to inventory provisions based on estimates of expected losses. Inventory write-offs include inventory that is approaching its “expiry” date and for which no further re-processing can be performed. Trends in demand are reviewed to determine whether there are any instances where the realizable value of inventory is likely to be less than its carrying value. Refer to Note 15, Inventories, for further details.

Principal accounting policies

Principal accounting policies are summarized below. They have been consistently applied throughout the period covered by the financial statements.

153
Revenue recognition

Revenue arises from the sale of metreleptin, lomitapide, Mycapssa® and Imlan. The Group sells directly to customers and also uses third parties in the distribution of products to customers.

To determine whether to recognize revenue, the Group follows a five-step process, as required by IFRS 15:

 •
identifying the contract with a customer;

•
identifying the performance obligations;

•
determining the transaction price;

•
allocating the transaction price to the performance obligations; and

•
recognizing revenue when/as performance obligation(s) are satisfied.

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled to in exchange for those goods. The Group recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as liabilities in the Consolidated Statement of Financial Position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognizes either a contract asset or a receivable in its Consolidated Statement of Financial Position, depending on whether something other than the passage of time is required before the consideration is due.

Revenue from sale of goods

Imlan revenue is generally recognized at a point in time when control of the inventory is transferred, generally the date of shipment, consistent with typical ex-works shipment terms.

Other revenue is generally recognized at a point in time when control of the inventory is transferred to the end customer, generally on delivery of the goods.

Principal versus agent considerations

The Group enters into certain contracts for the sale of its products. This includes agreements with third parties to provide logistics, customer and commercial services, i.e. supply chain function and agreements with distributors. The Group determined that it has control over the goods before they are transferred to the customers and has the ability to direct the use or obtain benefits, hence the Group is the principal on the contracts due to the following factors:

 •
the Group is primarily responsible for fulfilling the promise to provide the promised goods;

•
the Group bears the inventory risk before or after the goods have been ordered by the customer, during shipping or on return;

•
the Group has the discretion in establishing the selling price of the goods to customers. The distributors’ consideration in these contracts is either the margin fee or commission; and

•
the Group is exposed to the credit risk for the amounts receivable from the customers.

Where the above criteria are met, the Group recognizes revenue on a gross basis. The costs associated with the delivery of such goods to customers i.e., the costs associated with the services provided by the distributors to import and deliver the goods are recognized in the cost of sales.

Variable Consideration

Product sales revenues are recognized at the net sales price (“transaction price”) which includes estimated reserves for variable consideration, upon the transfer of control of the Company’s products.

Financial instruments

Recognition and derecognition

Financial instruments are classified on initial recognition as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement. Financial instruments are initially recognized when the Group becomes party to the contractual provisions of the instrument. Financial assets are de-recognized when the contractual rights to the cash flows from the financial asset expire or when the contractual rights to those assets are transferred. Financial liabilities are de-recognized when the obligation specified in the contract is discharged, cancelled or expired.
Classification and initial measurement of financial assets

Trade receivables are measured at the transaction price in accordance with IFRS 15. All financial assets are initially measured at fair value adjusted for transaction costs, if any.

Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:

 •
amortized cost;

•
fair value through profit or loss (“FVTPL”); and

•
fair value through other comprehensive income (“FVOCI”).

The Group did not have any financial assets categorized as FVTPL or FVOCI as at December 31, 2021 and 2020. The classification is determined by both:

 •
the Group’s business model for managing the financial asset; and

•
the contractual cash flow characteristic of the financial asset.

Subsequent measurement of financial assets

Financial assets at amortized cost

Financial assets are measured at amortized cost if the assets meet the following conditions (and are not designated as FVTPL):
 

 •
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and

•
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.
 
After initial recognition, these are measured at amortized cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents and trade receivables fall into this category of financial instruments.

Cash and cash equivalents

Cash comprises cash on hand and bank balances. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a maturity of three months or less at the date of acquisition.

Restricted cash

Restricted cash comprises current cash and cash equivalents that are restricted as to withdrawal or usage. Cash held by the Group’s distribution partner for Lojuxta on behalf of the Group is treated as restricted cash in the financial statements. The Group also has restricted cash in relation to a deposits in relation to company credit card facilities, leases and importation bonds.

Trade and other receivables

Trade and other receivables represent the Group’s right to an amount of consideration that is unconditional (i.e. only the passage of time is required before payment of the consideration is due).

Impairment of financial assets

The Group recognizes an allowance for expected credit losses (“ECLs”) for all debt instruments not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

155
For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date when applicable. The Group assesses ECL based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

Financial liabilities

Financial liabilities are categorized as “fair value through profit or loss” or “other financial liabilities measured at amortized costs using the effective interest method.”

Trade and other payables

Trade and other payables are initially measured at their fair value and are subsequently measured at their amortized cost using the effective interest rate method except for short-term payables when the recognition of interest would be immaterial.

Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Interest bearing loans and borrowings

Interest-bearing loans and borrowings are recognized initially at fair value less attributable transaction costs. Loans and borrowings are subsequently carried at amortized cost using the effective interest method. Interest is charged to the Consolidated Statement of Comprehensive Income/(Loss).

Convertible notes

Convertible notes are first assessed to determine classification as a financial liability or equity instrument for the financial instrument as a whole and components thereof. The initial carrying amount of a compound financial instrument is allocated to its equity and liability components.

The two components are evaluated first by measuring the fair value of the liability component. The fair value of the liability component is assessed using a discounted cash flow calculation based on the future contractual cash flows in the contract which are discounted at an estimated market prevailing rate of interest an identical financial instrument without a conversion feature would be subject to. The equity component is measured by determining the residual of the fair value of the instrument less the estimated fair value of the liability component.

The liability component is carried at amortized cost. Interest is calculated by applying the estimated prevailing market interest rate at the time of issue. The equity component is recognized in equity and is not subsequently remeasured.
Contingent consideration

Contingent consideration arising as a result of business combinations is initially recognized at fair value using a probability adjusted present value model. Key inputs in the model include the probability of a successful launch of Oleogel-S10 and the expected timing of potential revenues. The fair value of the contingent consideration will be updated at each reporting date. Adjustments to contingent consideration are recognized in the Consolidated Statement of Comprehensive Income/(Loss).

Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated Statement of Financial Position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Inventories

Inventories, that are not acquired as part of a business combination, are valued at the lower of cost or net realizable value. Amryt uses standard cost to value its inventory which is made up of raw materials, Work in progress (“WIP”) and finished goods. It accounts for the inventory using the first-in, first-out (“FIFO”) method. Standard costs take into account normal levels of materials and supplies, labor, efficiency and capacity utilization with the Group’s vendors. WIP valuation is based on the stage of quality checks successfully performed during the production process. An inventory valuation adjustment is made if the net realizable value is lower than the book value. Net realizable value is determined as estimated selling prices less all costs of completion and costs incurred in selling and distribution.

Inventories held by third-party supply chain partners are included in inventory totals when control has deemed to be transferred to the Group under the contract terms of the distribution agreement. The cost to acquire the inventory held by the supply chain partners is recognized as a liability of the Group.

Inventories acquired as part of a business acquisition is valued at fair value as at the acquisition date. Fair value is based on estimates of saleable inventory and non-saleable inventory, which was determined by a sales forecast and production timeline and expected selling price and estimated costs of disposal. The resulting step up in the valuation of saleable inventory on acquisition is unwound over the period in which the saleable inventory is sold.

Leases

A lease is defined as a contract that conveys the right to use an underlying asset for a period of time in exchange for consideration. A contract is or contains a lease if:

 •
the underlying asset is identified in the contract; and

•
the customer has both the right to direct the identified asset’s use and to obtain substantially all the economic benefits from that use.

Under IFRS 16, the Group is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments for almost all leases.

Lease liabilities

Lease liabilities are initially recognized at the present value of the following payments, when applicable:
 

 •
fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

•
variable lease payments (linked to an index or interest rate);

•
expected payments under residual value guarantees;

•
the exercise price of purchase options, where exercise is reasonably certain;

•
lease payments in optional renewal periods, where exercise of extension options is reasonably certain; and

•
penalty payments for the termination of a lease, if the lease term reflects the exercise of the respective termination option.
 
157
Lease payments are discounted using the implicit interest rate underlying the lease if this rate can be readily determined. Otherwise, the incremental borrowing rate is used as the discount rate.

Lease liabilities are subsequently measured at amortized cost using the effective interest method. Furthermore, lease liabilities may be remeasured due to lease modifications or reassessments of the lease. A lease modification is any change in lease terms that was not part of the initial terms and conditions of the lease, including increases of the scope of the lease by adding the right to use one or more underlying assets or extending the contractual lease term, decreases of the scope of the lease by removing the right to use one or more underlying assets or shortening the contractual lease term or changes in the consideration. Reassessments are changes in estimates or changes triggered by a clause that was part of the initial lease contract, including changes in future lease payments arising from a change in an index or rate, change in the Group’s estimate of the amount expected to be payable under residual value guarantees or change in the Group’s assessment of whether it will exercise purchase, extension or termination options.

Right-of-use assets

The Group recognizes right-of-use assets at the commencement date of the respective lease. Right-of-use assets are stated at cost less accumulated depreciation. Upon initial recognition, cost comprises:
 

 •
the initial lease liability amount;

•
initial direct costs incurred when entering into the lease;

•
(lease) payments before commencement date of the respective lease;

•
an estimate of costs to dismantle and remove the underlying asset; and

•
less any lease incentives received.
 
Right-of-use assets are depreciated over the shorter of the lease term or the useful life of the underlying asset using the straight-line method. In addition, right-of-use assets are reduced by impairment losses, if any, and adjusted for certain remeasurements.

Foreign currency translation

Presentation currency

The Group translates foreign currency transactions into its presentational currency, US$, as described in “Presentation of balances” above.

Functional currency

The Company’s functional currency is US$.

Transactions in currencies other than the functional currency of the Group entities are recorded at the exchange rates prevailing at the dates of the related transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, as well as from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognized in the Consolidated Statement of Comprehensive Income/(Loss). At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are translated to the respective functional currencies of the Group’s entities at the rates prevailing on the relevant balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using exchange rates at the dates of the initial transactions.

The financial statements of the Group’s foreign subsidiaries, where the local currency is the functional currency, are translated using exchange rates in effect at the end of the year for assets and liabilities and average exchange rates during the year for results of operations. The resulting foreign currency translation adjustment is recognized in other comprehensive income.

158
Property, plant and equipment

Property, plant and equipment is comprised of property and office equipment. Items of property, plant and equipment are stated at cost less any accumulated depreciation and any impairment losses. It is not Group policy to revalue any items of property, plant and equipment.

Depreciation is charged to the Consolidated Statement of Comprehensive Income/(Loss) on a straight-line basis to write-off the cost of the assets over their expected useful lives as follows:

 
•
   Property, plant and machinery  
5 to 15 years
 
•
   Office equipment
3 to 10 years

Government grants

Grants are recognized when there is reasonable assurance that the Group will comply with the relevant conditions and the grant will be received. Grants that compensate the Group for expenses incurred such as research and development, employment and training are offset against the related expenditure in the Consolidated Statement of Comprehensive Income/(Loss) on a systematic basis as the Group recognizes as expenses the costs that the grants are intended to compensate. Grants that compensate the Group for the cost of an asset are deducted from the cost of the asset.

Business combinations

Business combinations, including the Chiasma acquisition, are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. Fair values are attributed to the identifiable assets and liabilities unless the fair value cannot be measured reliably, in which case the value is subsumed into goodwill. In the consolidated financial statements, acquisition costs incurred are expensed and included in restructuring and acquisition costs.

To the extent that settlement of all or any part of the consideration for a business combination is deferred, the fair value of the deferred component is determined through discounting the amounts payable to their present value at the date of the exchange. The discount component is unwound as an interest charge in the Consolidated Statement of Comprehensive Income/(Loss) over the life of the obligation. Any contingent consideration is recognized at fair value at the acquisition date and included in the cost of the acquisition. The fair value of contingent consideration at acquisition date is arrived at through discounting the expected payment (based on scenario modelling) to present value. In general, in order for contingent consideration to become payable, pre-defined revenues and/or milestone dates must be exceeded. Subsequent changes to the fair value of the contingent consideration will be recognized in profit or loss unless the contingent consideration is classified as equity, in which case it is not remeasured and settlement is accounted for within equity.

When the initial accounting for a business combination is determined provisionally, any adjustments to the provisional values allocated to the consideration, identifiable assets or liabilities (and contingent liabilities, if relevant) are made within the measurement period, a period of no more than one year from the acquisition date.

The acquisition of pharmaceutical patents and licenses is effected through a non-operating corporate structure. As these structures do not represent a business, it is considered that the transactions do not meet the definition of a business combination. Accordingly, the transactions are accounted for as the acquisition of an asset. The net assets acquired are recognized at cost.

Intangible assets

Acquired intangible assets

Intangible assets primarily relate to developed technology on the Company’s commercially marketed products and IPR&D. Intangible assets are recorded at fair value at the time of their acquisition and are stated in the Consolidated Statement of Financial Position, net of accumulated amortization and impairments, if applicable.

159

In connection with the acquisition of Chiasma, the Group acquired developed technology related to Mycapssa®, which is amortized over the remaining patent lives through February 2036.

In connection with the acquisition of Aegerion, the Group acquired developed technology on metreleptin and lomitapide, which are amortized over the remaining patent lives through February 2026 and August 2027, respectively.

Intangible assets acquired in 2016 as part of the acquisitions of Amryt GmbH are currently not being amortized as the assets are still under development.

Acquired intangible assets outside business combinations are stated at the lower of cost less provision for amortization and impairment or the recoverable amount. Acquired intangible assets are amortized over their expected useful economic life on a straight-line basis. In determining the useful economic life, each acquisition is reviewed separately and consideration is given to the period over which the Group expects to derive economic benefit.

The useful life of other acquired intangible assets is as follows:

 
•
   Software and hardware
3 to 10 years
 
•
   Website development
5 to 10 years



Factors which impact our judgement to capitalize certain research and development expenditures include the degree of regulatory approval for products and the results of any market research to determine the likely future commercial success of products being developed. Management reviews these factors each year to determine whether previous estimates as to feasibility, viability and recovery should be changed.

Goodwill

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets acquired in a business combination. Goodwill is not amortized, but instead is reviewed for impairment on an annual basis or when an event becomes known that could trigger an impairment.

Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Any impairment loss arising from the review is charged to the Consolidated Statement of Comprehensive Income/(Loss).

The Group assesses each asset or cash-generating unit annually to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the carrying value and an assets recoverable amount (the greater of fair value less costs to sell and value in use). These assessments require the use of estimates and assumptions such as discount rates, future capital requirements, general risks affecting the pharmaceutical industry and other risks specific to the individual asset. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. Value in use is determined as the present value of estimated future cash flows arising from the continued use of the asset, using assumptions that an independent market participant may take into account. Cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Assets are grouped into the smallest group that generates cash inflows which are independent of other assets.

Taxes

Tax comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and taking into account any adjustments stemming from prior years. Deferred tax assets or liabilities are recognized where the carrying value of an asset or liability in the Consolidated Statement of Financial Position differs to its tax base and is accounted for using the statement of financial position liability method. Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilized.

160
In connection with business combinations, deferred tax balances are recognized if related to temporary differences and loss carry-forwards at the acquisition date or if they arise as a result of the acquisition and are measured in accordance with IAS 12 Income Taxes.

Share-based payments

The Group issues equity-settled awards as an incentive to certain senior management, employees and consultants. These equity-settled awards include employee share options and restricted share units (“RSUs”).

The fair value of equity-settled awards granted is recognized as an expense with a corresponding credit to the share-based payment reserve. The fair value is measured at grant date and spread over the period during which the awards vest.

For equity-settled share-based payment transactions, the goods or services received and the corresponding increase in equity are measured directly at the fair value of the goods or services received, unless that fair value cannot be estimated reliably. If it is not possible to estimate reliably the fair value of the goods or services received, the fair value of the equity instruments granted as calculated using the Black-Scholes model is used as a proxy. Share-based compensation for RSUs awarded to employees and directors is calculated based on the market value of the Company’s shares on the date of award of the RSUs and the value of awards expected to vest is recognized as an expense over the requisite service periods. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates.

The Group may issue warrants to key consultants, advisers and suppliers in payment or part payment for services or supplies provided to the Group. The fair value of warrants granted is recognized as an expense. The corresponding credits are charged to the share-based payment reserve. The fair value is measured at grant date and spread over the period during which the warrants vest. The fair value is measured using the Black-Scholes model if the fair value of the services received cannot be measured reliably.

The estimate of the fair value of services received is measured based on the Black-Scholes model using input assumptions, including weighted average share price, expected volatility, weighted average expected life and expected yield. The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility is based on the historical volatility. The Group has considered how future experience may affect historical volatility.

Employee Benefits

Defined contribution plans

The Group operates defined contribution schemes in various locations where employees are based. Contributions to the defined contribution schemes are recognized in the Consolidated Statement of Comprehensive Income/(Loss) in the period in which the related services are received from the employee. Under these schemes, the Group has no obligation, either legal or constructive, to pay further contributions in the event that the fund does not hold sufficient assets to meet its benefit commitments.

Loss per share

Basic earnings per share

Basic earnings per share is calculated by dividing:
 

 •
the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares

•
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.
 
161
Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:


 •
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and

•
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

3. Segment information

The Group is a global, commercial-stage biopharmaceutical company dedicated to commercializing and developing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases.

The Group currently operates as one business segment, pharmaceuticals, and is focused on the development and commercialization of three commercial products and a number of development products. The Group derives its revenues primarily from one source, being the pharmaceutical sector with high unmet medical need.

The Group’s Chief Executive Officer, Joseph Wiley, is currently the Company’s chief operating decision maker (“CODM”). The Group does not operate any separate lines of business or separate business entities with respect to its products. Accordingly, the Group does not accumulate discrete financial information with respect to separate service lines and does not have separate reportable segments.

The following table summarizes total revenues from external customers by product and by geographic region, based on the location of the customer. Revenues represent the revenue from the Group for the full year. The current year revenues include Mycapssa® revenue following the acquisition of Chiasma on August 5, 2021. The 2019-year revenues include revenue from Aegerion, with acquired products and additional regions, from September 24, 2019.

   
December 31, 2021
  
   
U.S.
    
EMEA
    
Other
    
Total
  
   
US$’000
    
US$’000
    
US$’000
    
US$’000
  
Metreleptin
    
70,216
      
51,769
      
19,257
      
141,242
  
Lomitapide
    
32,901
      
28,601
      
12,365
      
73,867
  
Mycapssa®     6,407       —       —       6,407  
Other
    
—
      
766
      
261
      
1,027
  
Total revenue
    
109,524
      
81,136
      
31,883
      
222,543
  

   
December 31, 2020
  
   
U.S.
    
EMEA
    
Other
    
Total
  
   
US$’000
    
US$’000
    
US$’000
    
US$’000
  
Metreleptin
    
60,568
      
32,494
      
13,810
      
106,872
  
Lomitapide
    
37,317
      
26,144
      
11,289
      
74,750
  
Mycapssa®     —       —       —       —  
Other
    
—
      
763
      
222
      
985
  
Total revenue
    
97,885
      
59,401
      
25,321
      
182,607
  

   
December 31, 2019
  
   
U.S.
    
EMEA
    
Other
    
Total
  
   
US$’000
    
US$’000
    
US$’000
    
US$’000
  
Metreleptin
    
14,944
      
8,048
      
2,096
      
25,088
  
Lomitapide
    
10,616
      
18,985
      
2,659
      
32,260
  
Mycapssa®     —       —       —       —  
Other
    
—
      
671
      
105
      
776
  
Total revenue
    
25,560
      
27,704
      
4,860
      
58,124
  

Major Customers

For the year ended December 31, 2021, one customer accounted for 46% of the Group’s net revenues (2020: 54%; 2019: 44%) and accounted for 36% of the Group’s December 31, 2021, accounts receivable balance (2020: 42%).
4. Cost of sales

   
December 31,
  
   
2021
    
2020
    
2019
  
   
US$’000
    
US$’000
    
US$’000
  
Cost of product sales
    
22,029
      
21,796
      
11,384
  
Write-down of inventories (see Note 15)
     5,688       4,058       —  
Reversal of write-down of inventories (see Note 15)
     (932 )     —       —  
Amortization of acquired intangibles (see Note 12)
    
48,944
      
42,966
      
11,457
  
Amortization of inventory fair value step-up (see Note 15)
    
4,417
      
27,617
      
7,473
  
Royalty expenses
    
25,973
      
22,592
      
8,419
  
Total cost of sales
    
106,119
      
119,029
      
38,733
  

As a result of the acquisition of Chiasma and Aegerion in August 2021 and September 2019, respectively, the Group acquired certain inventory, which were measured at fair value on the acquisition date. Refer to Note 2, Accounting policies, for further discussion on the key assumptions utilized to estimate the fair value. Refer to Note 15, Inventories, for further discussion on the write-down of inventories. The difference between the estimated fair value and the book value of the acquired inventory was amortized, using the straight-line method, over the estimated period that the Group intends to sell this inventory.

5. Share based payments
Share-based Compensation Plans
Amryt’s Equity Incentive Plan
Amryt’s Equity Incentive Plan was adopted by a special resolution on September 23, 2019. Prior to such date, we granted options under a prior employee share option plan, which had the same terms and conditions as the Equity Incentive Plan. On September 24, 2019, all options held under our prior share option plan were rolled over into options to subscribe for our ordinary shares with the key terms including strike price, vesting and the expiration date of such rolled over options remaining the same as they were on the issue date of the options under the prior share option plan. The Equity Incentive Plan was approved for amendment by the Board on May 18, 2020, and August 3, 2021. The purpose of the Plan is to provide for the granting of Equity Incentives to Directors and Employees of, and Consultants to, the Company or any Associated Company.
On July 10, 2019, the shareholders of the Company approved a resolution to give authority to the Company to undertake a consolidation of the existing ordinary shares in the capital of the Company under which every six existing ordinary shares were consolidated into one ordinary share. In the table below, for presentational purposes, the number of share options under the Amryt’s Equity Incentive Plan outstanding at January 1, 2019 and the share options granted and lapsing during the year ended December 31, 2019 have been restated to reflect the 2019 6-for-1 share consolidation.
Chiasma Equity Incentive Plan
When Amryt acquired Chiasma in August 2021, the Chiasma Stock Option and Incentive Plan transferred across to Amryt. Each outstanding and unexercised Chiasma Stock Option or RSU, whether vested or not vested, ceased to represent a right to acquire shares of Chiasma common stock and were converted into an option to purchase Amryt ADSs on the same terms and conditions as were applicable under such Chiasma Stock Option and Incentive Plan immediately prior to the acquisition.
No new stock option or RSUs will be granted under the Chiasma stock option and incentive plan.
Terms and Conditions of New Grants and Grants Under the Chiasma Equity Incentive Plan
The terms and conditions of new grants are as follows, whereby all options are settled by physical delivery of shares:
Vesting conditions
The employee share options vest following a period of service by the officer or employee. The required period of service is determined by the Remuneration Committee at the date of grant of the options (usually the date of approval by the Remuneration Committee). There are no market conditions associated with the share option vesting periods.
Contractual life
The term of an option is determined by the Remuneration Committee provided that the term may not exceed a period of seven to ten years from the date of grant. All options will terminate 90 days after termination of the option holder’s employment, service or consultancy with the Group except where a longer period is approved by the Board of Directors. Under certain circumstances involving a change in control of the Group, some options will automatically accelerate and become exercisable in full as of a date specified by the Board of Directors.
The number and weighted average exercise price (in Sterling pence) of share options per ordinary share granted under Amryt's Equity Incentive Plan and the Chiasma stock option and incentive plan is as follows:
   
Amryt Equity
Incentive Plan
    
Chiasma Stock Option and
Incentive Plan
  
   
Units
    
Weighted
average
exercise price
(Sterling pence)
    
Units
    
Weighted
average
exercise price
(Sterling pence)
  
Balance at January 1, 2019 (pre share consolidation)
    
19,505,130
      
19.2
 p    
—
      
—
  
Balance at January 1, 2019 (restated for 6:1 share consolidation)
    
3,250,855
      
115.20
 p
   
—
      
—
  
Granted
     11,330,641       117.01 p     —       —  
Lapsed
    
(99,776
)
    
197.66
 p    
—
      
—
  
Exercised     —       —       —       —  
Outstanding at December 31, 2019
    
14,481,720
      
116.00
 p    
—
      
—
  
Exercisable at December 31, 2019
    
2,468,310
      
109.08
 p    
—
      
—
  
                                 
Balance at 1 January 2020
    
14,481,720
      
116.00
 p    
—
      
—
  
Granted
    
4,432,000
      
144.76
 p    
—
      
—
  
Lapsed
    
(87,119
)
    
113.42
 p
   
—
      
—
  
Exercised
    
(72,953
)
    
120.72
 p
   
—
      
—
  
Outstanding at December 31, 2020
    
18,753,648
      
122.79
 p    
—
      
—
  
Exercisable at December 31, 2020
    
5,866,152
      
114.24
 p
   
—
      
—
  
                                 
Balance at January 1, 2021
    
18,753,648
      
122.79
 p    
—
      
—
  
Granted
    
11,337,459
      
190.88
 p    
—
      
—
  
Transferred to Amryt on acquisition
     —      
—
      
18,139,060
      
189.07
 p
Forfeited
     (1,288,165 )     174.97 p     (4,098,425 )     226.22 p
Exercised
    
(300,000
)
    
93.00
 p    
(3,320,515
)
    
116.35
 p
Outstanding at December 31, 2021
    
28,502,942
      
147.83
 p    
10,720,120
      
197.40
p
Exercisable at December 31, 2021
    
9,347,338
      
118.87
 p    
8,005,390
      
192.35
p
 
164
The fair value of the Amryt equity award is estimated at the date of grant using the Black-Scholes pricing model, taking into account the terms and conditions attached to the grant. The fair value of the Chiasma equity awards transferred to Amryt on acquisition were measured in accordance with IFRS 2. The portion of the value of the equity transferred to Amryt attributable to pre-combination service is included in the consideration at the date of acquisition. The portion of the equity awards transferred to Amryt attributable to post combination service is estimated at the date of transfer using Black Scholes pricing model, taking into account the terms and conditions attached to the grant.
The following are the inputs to the model for the equity instruments granted during the year:

   
December 31,
2021
Options
Inputs
      
December 31,
2020
Options
Inputs
      
December 31,
2019
Options
Inputs
    
Days to Expiration
    
2,555
        
2,555
        
2,555
    
Volatility
    
32% - 49
%
      
33% - 37
%
      
27% - 48
%
  
Risk free interest rate
    
0.77% - 1.33
%
      
0.39% - 0.46
%
      
0.38% - 0.83
%
  
Share price at grant per ordinary share
    
146.87 - 201.2
  p
   
123.5p – 178.9
  p
   
75.84p – 121.5
  p
Share price at grant per ADS
    
29.37 - 40.2
  p
   
24.7p – 35.78
  p
   
15.16p – 24.3
  p

In the year ended December 31, 2021, a total of 11,337,459 share options over ordinary shares exercisable at a weighted average price of £1.91 were granted. The fair value of share options granted in the year ended December 31, 2021, was £21,641,094/US$29,818,000.

The share options outstanding under the Amryt 2021 Equity Incentive Plan as at December 31, 2021 have a weighted remaining contractual life of 5.42 years with exercise prices ranging from £0.76 to £2.012 per ordinary share.

The share options outstanding under the Chiasma Share Option and Incentive Plan transferred across to Amryt on acquisition. As at December 31, 2021 they have a weighted remaining contractual life of 4.35 years with exercise prices ranging from £0.54 to £7.41 per ordinary share. No new share options will be granted under the Chiasma Stock Option and Incentive Plan.

In the year ended December 31, 2020, a total of 4,432,000 share options exercisable at a weighted average price of £1.4476 were granted. The fair value of share options granted in the year ended December 31, 2020, was £6,416,000/US$8,230,000. In 2019, a total of 11,330,641 share options exercisable at a weighted average price of £1.17 were granted. The fair value of share options granted in 2019 were £13,258,000/US$16,919,000. There were no new share options granted in 2018.
The share options outstanding as at December 31, 2020, have a weighted remaining contractual life of 5.45 years with exercise prices ranging from £0.76 to £1.79. The share options outstanding as at December 31, 2019 had a weighted remaining contractual life of 6.19 years with exercise prices ranging from £0.76 to £1.50. The share options outstanding as at December 31, 2018 had a weighted remaining contractual life of 4.94 years with exercise prices ranging from £0.93 to £2.88.
Restricted Share Units
Under the terms of Amryt’s Equity Incentive Plan, restricted share units (“RSUs”) to purchase 1,568,755 ordinary shares were outstanding at December 31, 2021. Under the terms of this plan, RSUs are granted to officers, consultants and employees of the Group at the discretion of the Remuneration Committee. For the year ended December 31, 2021, a total of 625,205 RSUs were granted to employees of the Company. For the year ended December 31, 2020, a total of 1,556,960 RSUs were granted to employees of the Company. The fair value of the RSUs is based on the share price at the date of grant, with the expense spread over the vesting period. The fair value of RSUs granted in the year ended December 31, 2021, was US$1,636,000. At December 31, 2021, the total RSUs granted to date have a weighted remaining contractual life of 1.9 years.

Under the terms of Chiasma’s Stock Option and Incentive Plan transferred to Amryt on acquisition, restricted share units (“RSUs”) to purchase 106,560 ordinary shares were outstanding at December 31, 2021. At December 31, 2021, the total RSUs granted to date have a weighted remaining contractual life of 1.9 years. No new RSUs will be granted under the Chiasma Stock Option and Incentive Plan.

165
The following table summarizes the RSU activity per ordinary share for the year:
   
Amryt Equity
Incentive Plan
    
Chiasma Stock Option and
Incentive Plan
  
   
Units
    
Weighted
average fair
value (US$)
    
Units
    
Weighted
average fair
value (US$)
  
Balance at January 1, 2020
    
—
      
—
      
—
      
—
  
Granted
    
1,556,960
    
$
2.34
      
—
      
—
  
Lapsed
    
(7,050
)
  
$
2.32
      
—
      
—
  
Exercised
    
—
      
—
      
—
      
—
  
Outstanding at December 31, 2020
    
1,549,910
    
$
2.34
      
—
      
—
  
Balance at January 1, 2021
    
1,549,910
    
$
2.34
      
—
      
—
  
Granted
    
625,205
    
$
2.62
      
—
      
—
  
Transferred to Amryt on acquisition
    
—
      
—
      
202,145
    
$
2.75
  
Lapsed
    
(243,505
)
  
$
2.35
      
(56,405
)
  
$
2.75
  
Vested
    
(362,855
)
  
$
2.34
      
(39,180
)
  
$
2.75
  
Outstanding at December 31, 2021
    
1,568,755
    
$
2.44
      
106,560
    
$
2.75
  


Warrants
There are no outstanding warrants at December 31, 2021 (December 31, 2020: 9,312,062). In August 2021, an Amryt institutional investor exercised subscription rights relating to 8,966,520 zero cost warrants. These warrants were issued in September 2019 as part of the Company’s acquisition of Aegerion. Certain institutional investors elected to receive warrants to subscribe for new ordinary shares of £0.06 each in Amryt (“Ordinary Shares”), in place of the same number of Ordinary Shares, as consideration for the Company’s acquisition of Aegerion and their equity investments in the Company in September 2019. Each warrant entitled the holder to subscribe for one Ordinary Share for no additional consideration.

Separate warrants consisting of 345,542 as at December 31, 2020, which were issued in connection with the admission to the AIM in 2016, are no longer outstanding; 283,389 warrants were exercised in March 2021 and 62,153 warrants lapsed in April 2021.

The 2016 Warrants outstanding as at December 31, 2020 have a weighted remaining contractual life of 0.3 years with an exercise price of £1.44. The 2016 Warrants outstanding as at December 31, 2019 had a weighted remaining contractual life of 1.3 years with an exercise price of £1.44. The 2016 Warrants outstanding as at December 31, 2018 had a weighted remaining contractual life of 2.3 years with an exercise price of £1.44.

On July 10, 2019, the shareholders of the Company approved a resolution to give authority to the Company to undertake a consolidation of the existing ordinary shares in the capital of the Company under which every six existing ordinary shares were consolidated into one ordinary share. In the table below, for presentational purposes, the number of warrants outstanding at January 1, 2019 and the warrants granted and lapsing during the years ended December 31, 2019 have been restated to reflect the 2019 6-for-1 share consolidation.
The number and weighted average exercise price (in Sterling pence) of warrants per ordinary share is as follows:
   
Warrants
  
   
Units
    
Weighted average
exercise price
(Sterling pence)
  
Balance at January 1, 2019 (pre share consolidation)
    
22,909,950
      
24.00
p
Balance at January 1, 2019 (restated for 6:1 share consolidation)
    
3,818,325
      
144.00
p
Granted
    
18,841,378
      
—
  
Lapsed
    
(3,472,783
)
    
144.00
p
Exercised
    
(1,645,105
)
    
—
  
Outstanding at 31 December 2019
    
17,541,815
      
0.03
p
Exercisable at 31 December 2019
    
17,541,815
      
0.03
p
                 
Balance at January 1, 2020
    
17,541,815
      
0.03
p
Granted
    
—
      
—
  
Lapsed
    
—
      
—
  
Exercised
    
(8,229,753
)
    
—
  
Outstanding at December 31, 2020
    
9,312,062
      
0.05
p
Exercisable at December 31, 2020
    
9,312,062
      
0.05
p
Balance at January 1, 2021
    
9,312,062
      
0.05
p
Granted
    
—
      
—
  
Lapsed
    
(62,153
)
    
1.44
p
Exercised
    
(9,249,909
)
    
0.05
p
Outstanding at December 31, 2021
    
—
      
0.00
p

166
The value of share options and RSU’s charged to the Consolidated Statement of Comprehensive Income/(Loss) during the year is as follows:
   
December 31,
  
   
2021
   
2020
   
2019
 
   
US$’000
    
US$’000
    
US$’000
  
Share option expense
    
6,531
      
4,134
      
841
  
RSU expense
    
1,810
      
595
      
—
  
Total share option expense
    
8,341
      
4,729
      
841
  

6. Business combinations and asset acquisitions

Acquisition of Chiasma

On May 5, 2021, Amryt announced that it had signed a definitive agreement to acquire Chiasma, Inc. (Nasdaq: CHMA) in an all-stock combination. Under the terms of the transaction, each share of Chiasma common stock issued and outstanding prior to the consummation of the transaction was exchanged for 0.396 Amryt American Depositary Shares (“ADSs”), each representing five Amryt ordinary shares.

On August 5, 2021, Amryt completed the acquisition of Chiasma, Inc. and, in conjunction with the completion, Amryt allotted and issued a total of 127,733,680 ordinary shares as consideration for the acquisition. Following the completion, shareholdings in Chiasma were rounded in being converted to Amryt shares using the exchange ratio of 0.396. Roundings in converting Chiasma shareholdings to Amryt shares were finalized in August 2021 and resulted in an additional 7,015 ordinary shares being allotted and issued by Amryt as consideration for the acquisition. In total, these ordinary shares were issued to the former Chiasma Shareholders in the form of 25,548,139 ADSs at US$10.19 per share, to acquire Chiasma for a value of US$260,336,000.

On August 5, 2021, Chiasma had outstanding equity awards that were held by Chiasma employees. The fair value of these awards transferred to Amryt on acquisition were measured in accordance with IFRS 2. The portion of the value of the equity transferred to Amryt attributable to pre-combination service is included in the consideration at the date of acquisition and this amounted to US$10,157,000.

On August 5, 2021, the Group repaid US$116,629,000 of Chiasma long term debt.

The combined company will be a global leader in rare and orphan diseases with three on-market commercial products, a global commercial and operational footprint and a significant development pipeline of therapies with the financial flexibility to execute its growth plans.

The table below reflects the fair value of the identifiable net assets acquired in respect of the acquisition completed during the period. Any amendments to fair values will be made within the twelve-month period from the date of acquisition, as permitted by IFRS 3: Business Combinations.

The acquired goodwill is attributable principally to the profit generating potential of the businesses, the assembled workforce and benefits arising from embedded infrastructure, that are expected to be achieved from integrating the acquired businesses into the Group’s existing business. No amount of goodwill is expected to be deductible for tax purposes.

167
In the post-acquisition period to December 31, 2021, the business acquired during the current year contributed revenue of US$6,407,000 and a trading loss of US$22,602,000 including restructuring and acquisition costs, to the Group’s results. The full year unaudited revenue and trading loss for the Group had the acquisitions taken place at the start of the year, would have been US$228,554,000 and US$82,532,000, respectively.

The gross contractual value of trade and other receivables as at the dates of acquisition amounted to US$7,180,000, which approximated the fair value of these accounts as the amount not expected to be collected was insignificant.

The Group incurred acquisition and restructuring related costs of US$16,947,000 for the year ended December 31, 2021, relating to external legal fees, advisory fees, due diligence costs and severance costs related to the acquisition of Chiasma. These costs have been included in operating costs in the Consolidated Statement of Comprehensive Income/(Loss).

 
 
Recognized Fair Values as at August 5, 2021
 
 
 
US$’000
 
Assets
 
 
 
Non-current assets
 
 
 
Intangible Assets
 
 
215,000
 
Property, plant and equipment
 
 
950
 
Other non-current assets
 
 
866
 
Total non-current assets
 
 
216,816
 
 
 
 
 
 
Current assets
 
 
 
 
Trade and other receivables
 
 
7,180
 
Inventories
 
 
65,907
 
Cash and cash equivalents, including restricted cash
 
 
107,942
 
Total current assets
 
 
181,029
 
Total assets
 
 
397,845
 
 
 
 
 
 
Non-current liabilities
 
 
 
 
Deferred tax liability
 
 
21,478
 
Total non-current liabilities
 
 
21,478
 
 
 
 
 
 
Current liabilities
 
 
 
 
Trade and other payable
 
 
144,482
 
Total current liabilities
 
 
144,482
 
Total liabilities
 
 
165,960
 
 
 
 
 
 
Total identifiable net assets at fair value
 
 
231,885
 
Goodwill arising on acquisition
 
 
38,608
 
Consideration
 
 
270,493
 
 
 
 
 
 
Consideration
 
 
 
 
Issue of fully paid up ordinary shares
 
 
260,336
 
Chiasma equity awards recognized as consideration transferred upon the acquisition of Chiasma
 
 
10,157
 
Total consideration
 
 
270,493
 

Any amendments to these fair values within the twelve-month timeframe from the date of acquisition will be disclosed in the 2022 consolidated financial statements, as stipulated by IFRS 3.
168

Acquisition of Aegerion Pharmaceuticals

On May 20, 2019, Amryt entered into a Restructuring Support Agreement (as subsequently amended on June 12, 2019) and Plan Funding Agreement pursuant to which, among other matters, Amryt agreed to the acquisition of Aegerion Pharmaceuticals, Inc. (‘‘Aegerion’’, subsequently renamed as Amryt Pharmaceuticals Inc.), a former wholly-owned subsidiary of Novelion Therapeutics Inc. (‘‘Novelion’’). On May 20, 2019, Aegerion and its U.S. subsidiary, Aegerion Pharmaceuticals Holdings, Inc., filed voluntary petitions under Chapter 11 of Title 11 of the U.S. Code in the Bankruptcy Court. On September 24, 2019, Amryt completed the acquisition of Aegerion. Amryt acquired Aegerion upon its emergence from bankruptcy in an exchange for ordinary shares and zero cost warrants in Amryt. Amryt issued 85,092,423 effective shares at US$1.793 per share, which is made up of 77,027,423 ordinary shares and 8,065,000 zero cost warrants, to acquire Aegerion for a value of US$152,615,000.

As part of the acquisition of Aegerion, it was agreed, for certain Aegerion creditors who wished to restrict their percentage share interest in Amryt’s issued share capital, to issue to the relevant Aegerion creditor, as an alternative to Amryt’s ordinary shares, an equivalent number of new zero cost warrants to subscribe for Amryt’s ordinary shares to be constituted on the terms of the zero cost warrant. As at December 31, 2021, no zero cost warrants were remaining.

During the year ended December 31, 2021, the Group incurred no additional acquisition and restructuring related costs relating to external legal fees, advisory fees, due diligence costs and severance costs related to the acquisition of Aegerion (2020: US$1,017,000; 2019: US$13,038,000).

Contingent Value Rights

Related to the Aegerion acquisition, Amryt issued Contingent Value Rights (“CVRs”) pursuant to which up to US$85,000,000 may become payable to Amryt’s shareholders and optionholders, who were on the register prior to the completion of the acquisition on September 20, 2019, if certain approval and revenue milestones are met in relation Oleogel-S10, Amryt’s lead product candidate. If any such milestone is achieved, Amryt may elect to pay the holders of CVRs by the issue of Amryt shares or loan notes. If Amryt elects to issue Loan Notes to holders of CVRs, it will settle such loan notes in cash 120 days after their issue. If none of the milestones are achieved, scheme shareholders and optionholders will not receive any additional consideration under the terms of the CVRs. In these circumstances, the value of each CVR would be zero.

The terms of the CVRs are as follows:
 

 •
The total CVR payable is up to US$85,000,000

•
This is divided into three milestones which are related to the success of Oleogel-S10 (the Group’s lead development asset)

•
FDA approval

o
US$35,000,000 upon FDA approval

o
100% of the amount due if approval is obtained before December 31, 2021, with a sliding scale on a linear basis to zero if before July 1, 2022
 

 •
EMA approval

o
US$15,000,000 upon EMA approval

o
100% of the amount due if approval is obtained before December 31, 2021, with a sliding scale on a linear basis to zero if before July 1, 2022

•
Revenue targets

o
US$35,000,000 upon Oleogel-S10 revenues exceeding US$75,000,000 in any 12-month period prior to June 30, 2024

•
Payment can at the Board’s discretion be in the form of either:

o
120-day loan notes (effectively cash), or

o
Shares valued using the 30 day / 45-day VWAP.
 
The CVRs were contingent on the successful completion of the acquisition of Aegerion. The CVRs have been classified as a financial liability in the Consolidated Statement of Financial Position. Given that CVRs were issued to legacy Amryt shareholders in their capacity as owners of the identified acquirer as opposed to the seller in the transaction, management concluded that the most appropriate classification would be to recognize the CVR as a distribution on consolidation instead of goodwill.

169
Measurement of CVRs

As at December 31, 2021, the carrying value of the CVRs was US$19,892,000 (December 31, 2020: US$61,417,000). The value of the potential payout was calculated using the probability-weighted expected returns method. Using this method, the potential payment amounts were multiplied by the probability of achievement and discounted to present value. The probability adjusted present values took into account published orphan drug research data and statistics which were adjusted by management to reflect the specific circumstances applicable to the type of product acquired in the Amryt GmbH transaction. The probability chance of success, based on management’s expertise and experience for orphan drugs and taking into account the unique circumstances applying to approval process of this product, was estimated at 60% for the FDA approval (2020: 89%) and 100% for the EMA approval (2020: 89%) in the year ended December 31, 2021. This estimate reflects the current facts and circumstances as of the date of issuance of the Consolidated Financial Statements. The probability chance of success was updated in 2021 following the receipt of a CRL from the FDA, which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB, and following positive opinion adopted by the CHMP, recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days. The CHMP positive opinion is supported by Phase 3 data from the EASE trial which was the largest ever global trial conducted in patients with EB, performed across 58 sites in 28 countries. Discount rates of 10% and 16.5%, as applicable, were used in the calculation of the present value of the estimated contractual cash flows for the year ended December 31, 2021, based on the applicable rates determined on the acquisition date. Management was required to make certain estimates and assumptions in relation to revenue forecasts, timing of revenues and probability of achievement of commercialization of Oleogel-S10. However, management notes that, due to issues outside their control (i.e. regulatory requirements and the commercial success of the product), the timing of when such revenue targets may occur may change. Such changes may have a material impact on the assessment of the expected cash flows of the CVRs.

Amryt reviews the expected cash flows on a regular basis as the discount on initial recognition is being unwound as financing expenses in the Consolidated Statement of Comprehensive Income/(Loss) over the life of the obligation. It is reviewed on a quarterly basis and the appropriate finance charge or gain is booked in the Consolidated Statement of Comprehensive Income/(Loss) on a quarterly basis. The Group received positive topline data from the phase 3 EASE trial of Oleogel-S10 in September 2020. The product does not currently have regulatory approval to treat EB but has been submitted to the FDA for approval and in June 2021, Amryt received confirmation from the FDA that its NDA for Oleogel-S10 had been accepted and granted priority review. On February 28, 2022, Amryt announced that the FDA communicated that it had completed its review of the NDA for Oleogel-S10 and has determined that the application cannot be approved in its present form.  The FDA has asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB.  Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns. In Europe, a MAA for Oleogel-S10 was accepted for assessment by the EMA in March 2021. The positive opinion recommends the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days.


The total non-cash gain recognized in the Consolidated Statement of Comprehensive Income/(Loss) for the year ended December 31, 2021, is US$41,525,000 (2020: US$12,004,000 charge; 2019: US$1,511,000 charge).

Acquisition of Amryt GmbH (previously “Birken”)

Amryt DAC signed a conditional share purchase agreement to acquire Amryt GmbH on October 16, 2015 (“Amryt GmbH SPA”). The Amryt GmbH SPA was completed on April 18, 2016, with Amryt DAC acquiring the entire issued share capital of Amryt GmbH. The consideration included contingent consideration comprising milestone payments and sales royalties as follows:


 •
Milestone payments of:

o
€10,000,000 on receipt of marketing approval by the EMA or FDA of a pharmaceutical product containing Betulin as its API for the treatment of EB;

o
€10,000,000 once net ex-factory sales/net revenue of Oleogel-S10 first exceed €50,000,000 in any calendar year;

o
€15,000,000 once net ex-factory sales/ net revenue of Oleogel-S10 first exceed €100,000,000 in any calendar year;

•
Royalties of 9% on sales of Oleogel-S10 products for 10 years from first commercial sale.
 
170
Fair Value Measurement of Contingent Consideration

As at December 31, 2021, the fair value of the contingent consideration was estimated to be US$61,221,000 (December 31, 2020: US$86,906,000). The fair value of the contingent consideration included milestone payments determined using probability adjusted present values and probability weighted revenue forecasts (see Note 24, Fair value measurement and financial risk management, for fair value hierarchy applied and impact of key unobservable impact data). The probability adjusted present values took into account published orphan drug research data and statistics which were adjusted by management to reflect the specific circumstances applicable to the type of product acquired in the Amryt GmbH transaction. The probability chance of success, based on management’s expertise and experience for orphan drugs and taking into account the unique circumstances applying to approval process of the product, was estimated at 60% for the FDA approval (2020: 89%) and 100% for the EMA approval (2020: 89%) in the year ended December 31, 2021. This estimate reflects the current facts and circumstances as of the date of issuance of the Consolidated Financial Statements. The probability chance of success was updated in 2021 following the receipt of a CRL from the FDA, which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB, and following the positive opinion adopted by the CHMP, recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days. The CHMP positive opinion is supported by Phase 3 data from the EASE trial which was the largest ever global trial conducted in patients with EB, performed across 58 sites in 28 countries. A discount rate of 7.9% was used in the calculation of the fair value of the contingent consideration for the year ended December 31, 2021 (December 31, 2020: 14.4%). The decrease in the discount rate is mainly driven by the change in Group over the last 12 months where the Group has significantly de-risked with growth in commercial revenues, the acquisition of new commercial assets in 2021, refinancing of long term debt which reduced the Group’s cost of debt significantly and extended the repayment of long term debt, the positive developments on product candidates and significant cash balances held during the year.

Amryt reviews the expected cash flows on a regular basis as the discount on initial recognition is being unwound as financing expense/gain in the Consolidated Statement of Comprehensive Income/(Loss) over the life of the obligation. It is reviewed on a quarterly basis and the appropriate finance charge or gain is booked in the Consolidated Statement of Comprehensive Income/(Loss) on a quarterly basis. The Group received positive topline data from the phase 3 EASE trial of Oleogel-S10 in September 2020. The product does not currently have regulatory approval to treat EB but has been submitted to the FDA for approval and in June 2021, Amryt received confirmation from the FDA that its NDA for Oleogel-S10 had been accepted and granted priority review.  On February 28, 2022, Amryt announced that the FDA communicated that it had completed its review of the NDA for Oleogel-S10 and has determined that the application cannot be approved in its present form.  The FDA has asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB.  Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns. In Europe, a MAA for Oleogel-S10 was accepted for assessment by the EMA in March 2021. The positive opinion recommends the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days.

The total non-cash finance gain recognized in the Consolidated Statement of Comprehensive Income/(Loss) for the year ended December 31, 2021, is US$18,407,000 (2020: US$27,827,000 charge; 2019: US$6,740,000 charge).

7. Operating loss for the year

Operating loss for the year is stated after charging/(crediting):

   
December 31,
  
   
2021
    
2020
    
2019
  
   
US$’000
    
US$’000
    
US$’000
  
Audit fees payable to the Group’s auditor and their associates
    
893
      
814
      
443
  
Audit-related fees payable to the Group’s auditor and their associates
     92       44       168  
Changes in inventory expensed (excluding fair value step-up)
    
26,783
      
25,854
      
11,384
  
Amortization of inventory fair value step-up
    
4,417
      
27,617
      
7,473
  
Research and development expenses
    
37,729
      
27,618
      
15,827
  
Grant income
     (1,007 )     (103 )     —  
Share based payments
    
8,341
      
4,729
      
841
  
Pension costs
    
1,763
      
1,284
      
769
  
Depreciation of property, plant and equipment
    
1,653
      
1,297
      
698
  
Amortization of intangible assets
    
49,091
      
43,168
      
11,583
  
Operating lease rentals
    
189
      
623
      
170
  
Foreign exchange loss/(gain)
    
4,141
      
(2,699
)
    
(3,750
)

171
8. Employees

Including the directors, the Group’s average number of employees during the year was 241 (2020: 174; 2019: 99).

Aggregate remuneration comprised:

   
December 31,
  
   
2021
    
2020
    
2019
  
   
US$’000
    
US$’000
    
US$’000
  
Wages and salaries
    
46,983
      
32,688
      
17,268
  
Social security costs
    
4,225
      
3,431
      
2,037
  
Pension costs - employees
    
1,643
      
1,213
      
769
  
Directors' remuneration
    
3,138
      
2,158
      
2,555
  
Shared based payments
    
8,341
      
4,729
      
841
  
Total employee costs
    
64,330
      
44,219
      
23,470
  

The directors of the Company held the following share options over shares of Amryt Pharma plc at December 31, 2021:

   
December 31, 2021
Director
  
Number
    
Exercise price
  
Expiration Date
Joseph Wiley     2,031,350
     $
 2.804
   March 7, 2028
Joseph Wiley
    
6,437,460
    
£
0.76p - £121.50
p
November 28, 2024
- November 4, 2026
Raj Kannan
     3,189,995     $ 2.04 - $4.08  
August 8, 2028 -
February 8, 2031
Dr. Roni Mamluk
     1,380,380     $ 0.68 - $5.02  
November 14, 2024 - June 10, 2030
Raymond T. Stafford
    
330,000
    
$
2.04 - $2.25
  
July 9, 2027 -
August 8, 2028
George P. Hampton, Jr.
    
330,000
    
$
2.04 - $2.25
  
July 9, 2027 -
August 8, 2028
Dr. Alain H. Munoz
    
330,000
    
$
2.04 - $2.25
  
July 9, 2027 -
August 8, 2028
Donald K. Stern
    
330,000
    
$
2.04 - $2.25
  
July 9, 2027 -
August 8, 2028
Dr. Patrick V.J.J. Vink
    
330,000
    
$
2.04 - $2.25
  
July 9, 2027 -
August 8, 2028
Stephen T. Wills
    
330,000
    
$
2.04 - $2.25
  
July 9, 2027 -
 August 8, 2028

   
December 31, 2020
Director
  
Number
    
Exercise price
  
Expiration Date
Joseph Wiley
    
6,437,460
    
£
0.76p - £121.50
p
November 28, 2024
- November 4, 2026
Raymond T. Stafford
     220,000     $
 2.25   July 9, 2027
George P. Hampton, Jr.     220,000     $ 2.25   July 9, 2027
Dr. Alain H. Munoz     220,000     $ 2.25   July 9, 2027
Donald K. Stern     220,000     $ 2.25   July 9, 2027
Dr. Patrick V.J.J. Vink     220,000     $ 2.25   July 9, 2027
Stephen T. Wills     220,000     $ 2.25   July 9, 2027

   
December 31, 2019
Director
  
Number
    
Exercise price
  
Expiration Date
Joseph Wiley
    
6,437,460
    
£
0.76p - £121.50
p
November 28, 2024
- November 4, 2026


172
During the year ended December 31, 2021, a total of 7,261,725 share options were granted to directors of the Company. Joseph Wiley was granted a total of 2,031,350 share options, a total of 220,000 share options were granted to each of Dr. Roni Mamluk and Raj Kannan and a total of 110,000 share options were granted to each of Raymond T. Stafford, George P. Hampton, Jr., Dr. Alain H. Munoz, Donald K. Stern, Dr. Patrick V.J.J. Vink and Stephen T. Wills. Additionally, a total of 1,160,380 and 2,969,995 stock options were issued by Amryt to replace Chiasma stock options held by Dr. Roni Mamluk and Raj Kannan, respectively.

During the year ended December 31, 2020, a total of 1,320,000 share options were granted to directors of the Company. A total of 220,000 share options were granted to each Raymond T. Stafford, George P. Hampton, Jr., Dr. Alain H. Munoz, Donald K. Stern, Dr. Patrick V.J.J. Vink and Stephen T. Wills.

Further information on the compensation of key management personnel is included in Note 23, Related party transactions, of these financial statements.

9. Net finance expense – other

   
December 31,
  
   
2021
    
2020
    
2019
  
   
US$’000
    
US$’000
    
US$’000
  
Interest on loans
    
22,902
      
22,003
      
8,464
  
Interest on lease liabilities
    
558
      
335
      
17
  
Charges and fees paid
    
310
      
17
      
120
  
Interest received
    
(5
)
    
(87
)
    
(92
)
Foreign exchange loss/(gain)
    
4,141
      
(2,699
)
    
(3,750
)
Total
    
27,906
      
19,569
      
4,759
  

10. Tax credit on loss on ordinary activities

A corporation tax credit of US$7,562,000 arises in the year ended December 31, 2021 (2020: credit of US$1,332,000; 2019: credit of US$495,000). A reconciliation of the expected tax benefit computed by applying the tax rate applicable in the primary jurisdiction, the Republic of Ireland, to the loss before tax to the actual tax credit is as follows:

   
December 31,
  
   
2021
    
2020
    
2019
  
   
US$’000
    
US$’000
    
US$’000
  
Loss before tax
    
(6,562
)
    
(105,859
)
    
(63,493
)
Tax credit at Irish corporation tax rate of 12.5%
    
(820
)
    
(13,232
)
    
(7,937
)
Effect of:
                        
Movement in unrecognized deferred tax assets
    
(4,418
)
    
3,624
      
3,831
  
Permanent differences
    
(1,949
)
    
11,260
      
6,474
  
Differences in overseas taxation rates
    
(375
)
    
(2,984
)
    
(2,863
)
Total tax credit on loss on ordinary activities
    
(7,562
)
    
(1,332
)
    
(495
)

At December 31, 2021, the Group had unutilized net operating losses in the following jurisdictions as follows:

   
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Ireland
    
119,854
      
108,677
  
United States
    
182,875
      
35,043
  
Germany
    
26,427
      
28,288
  
United Kingdom
    
3,034
      
42,893
  
Total
    
332,169
      
214,901
  

173
The deferred tax asset on tax losses of US$62,395,001 (2020: US$38,244,000; 2019: US$25,859,000), which was calculated at corporation tax rates ranging from 12.5% to 32%, has not been recognized due to the uncertainty of the recovery. Tax losses in Ireland, Germany and the UK can be carried forward indefinitely.

Due to historical changes in ownership of the U.S. business, the U.S. tax losses carried forward are restricted in how they can be used against future profits of the Group. U.S. losses related to tax periods prior to 2018 can be carried forward for 20 years while losses from 2018 onwards can be carried forward indefinitely. The increase in U.S. tax losses relates primarily to the acquisition of Chiasma. Inc. during the period.

All current and deferred tax related charges are recognized in the Consolidated Statement of Comprehensive Income/(Loss).

11. Earnings/(loss) per share - basic and diluted

The weighted average number of shares in the earnings/(loss) per share (“EPS/LPS”) calculation, reflects the weighted average total actual shares of Amryt Pharma plc in issue at December 31, 2021.

Issued share capital – ordinary shares of £0.06 each

   
Number of
shares
    
Weighted
average shares
  
December 31, 2021
    
319,814,747
      
235,852,023
  
December 31, 2020
    
178,801,593
      
158,591,356
  
December 31, 2019
    
154,498,887
      
75,871,562
  

The calculation of loss per share is based on the following:

   
December 31,
  
   
2021
    
2020
    
2019
  
Profit/(loss) after tax attributable to equity holders of the Company (US$’000)
    
1,000
      
(104,527
)
    
(62,998
)
Weighted average number of ordinary shares in issue
    
235,852,023
      
158,591,356
      
75,871,562
  
Fully diluted average number of ordinary shares in issue
    
246,981,405
      
158,591,356
      
75,871,562
  
Basic earnings/(loss) per share (US$)
    
0.00
      
(0.66
)
    
(0.83
)
Diluted earnings/(loss) per share (US$)     0.00       (0.66 )     (0.83 )

Where a loss has occurred, basic and diluted LPS are the same because the outstanding share options and warrants are anti-dilutive. Accordingly, diluted LPS equals the basic LPS. The share options, RSUs and warrants outstanding as at December 31, 2021, totaled 40,898,377 (December 31, 2020: 29,615,620; 2019: 32,023,535) and are potentially dilutive.

12. Intangible assets and goodwill

The following table summarizes the Group’s intangible assets and goodwill:

   
Developed
technology –
metreleptin
    
Developed
technology – lomitapide
    
Developed
technology – Mycapssa®
    
In
process
R&D
    
Other
intangible
assets
    
Total
intangible
assets
    
Goodwill
  
   
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
  
Cost
                                          
At January 1, 2020
    
176,000
      
123,000
       —      
54,261
      
701
      
353,962
      
19,131
  
Additions
    
—
      
—
       —      
—
      
372
      
372
      
—
  
Acquired assets
    
—
      
—
       —      
591
      
—
      
591
      
—
  
Disposals
    
—
      
—
       —      
—
      
(246
)
    
(246
)
    
—
  
Foreign exchange movement
    
—
      
—
       —      
5,276
      
39
      
5,315
      
—
  
At December 31, 2020
    
176,000
      
123,000
       —      
60,128
      
866
      
359,994
      
19,131
  
Additions
    
—
      
—
       —      
—
      
847
      
847
      
—
  
Acquired assets
    
—
      
—
       215,000      
—
      
—
      
215,000
      
38,608
  
Other movements
    
—
      
—
       —      
—
      
—
      
—
      
(1,051
)
Foreign exchange movement
    
—
      
—
       —      
(4,691
)
    
(61
)
    
(4,752
)
    
—
  
At December 31, 2021
    
176,000
      
123,000
       215,000      
55,437
      
1,652
      
571,089
      
56,688
  
                                                         
Accumulated amortization
                                                        
At January 1, 2020
    
7,314
      
4,143
       —      
—
      
178
      
11,635
      
—
  
Amortization charge
    
27,429
      
15,537
       —      
—
      
202
      
43,168
      
—
  
Accumulated amortization on disposals
     —       —       —       —       (246 )     (246 )     —  
Foreign exchange movement
     —       —       —       —       68       68       —  
At December 31, 2020
    
34,743
      
19,680
       —      
—
      
202
      
54,625
      
—
  
Amortization charge
    
27,428
      
15,537
       5,979      
—
      
147
      
49,091
      
—
  
Foreign exchange movement
    
—
      
—
       —      
—
      
14
      
14
      
—
  
At December 31, 2021
    
62,171
      
35,217
       5,979      
—
      
363
      
103,730
      
—
  
                                                         
Net book value
                                                        
At December 31, 2020
    
141,257
      
103,320
       —      
60,128
      
664
      
305,369
      
19,131
  
At December 31, 2021
    
113,829
      
87,783
       209,021      
55,437
      
1,289
      
467,359
      
56,688
  

174
Developed technology on commercially marketed products

In connection with the acquisition of Aegerion in September 2019, the Group acquired developed technology, metreleptin and lomitapide. These intangible assets are amortized over their estimated useful lives and the remaining useful lives for metreleptin and lomitapide are approximately 4.2 and 5.7 years, respectively, as of December 31, 2021 (December 31, 2020: 5.2 and 6.7 years, respectively).

In connection with the acquisition of Chiasma in August 2021, the Group acquired developed technology, Mycapssa®. This intangible asset is amortized over its estimated useful life and the remaining useful life is approximately 14.2 years as of December 31, 2021.

   
Metreleptin
    
Lomitapide
    
Mycapssa®
  
Years Ending December 31,
  
US$’000
    
US$’000
    
US$’000
  
2022
    
27,429
      
15,537
       14,828  
2023
    
27,429
      
15,537
       14,828  
2024
    
27,429
      
15,537
       14,828  
2025
    
27,429
      
15,537
       14,828  
2026
    
4,113
      
15,537
       14,828  
Thereafter
    
—
      
10,098
       134,881  
     
113,829
      
87,783
       209,021  

In-process R&D


As a result of the acquisition of Amryt GmbH, in 2016, the Group recognized in-process R&D costs of €48,453,000/US$54,852,000 which is related to the Group’s lead development asset, Oleogel-S10.

The remaining in-process R&D is a result of the acquisition of Cala Medical Limited in October 2020.

Goodwill

During 2019, the Group completed the acquisition of Aegerion which resulted in the recognition of goodwill that has a carrying value of US$18,080,000. On August 5, 2021, the Group completed the acquisition of Chiasma, which resulted in aggregate goodwill of US$38,608,000.

175
Impairment

The Group reviews the carrying amount of intangible assets on an annual basis or when there is a triggering event that may be an indication of possible impairment. The Group conducts an impairment review by determining recoverable amounts from value in use calculations. The recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Impairment indications include events causing significant changes in any of the underlying assumptions used in the income approach utilized in valuing intangible assets. The key assumptions are the probability of success; the discount factor; the timing of future revenue flows; market penetration and peak sales assumptions; and expenditures required to complete development.

These cash flows are projected forward using projected revenue for each asset up until the end of their relevant patents and cost growth to determine the basis for an annuity-based terminal values. The terminal values are used in the value in use calculation. The value in use represents the present value of the future cash flows, including the terminal value, discounted at a rate that is considered appropriate for the Group’s size and structure.

The key assumptions employed in arriving at the estimates of future cash flows are subjective and include projected EBITDA, an orphan drug market-based probability chance of success, net cash flows, discount rates and the duration of the discounted cash flow model. The assumptions and estimates used were derived from a combination of internal and external factors based on historical experience. The pre-tax discount rate used in 2021 and 2020 was 7.9% and 14.4%, respectively.

The value-in-use calculation is subject to significant estimation, uncertainty and accounting judgements and key sensitivities arise in the following areas:


 •
In the event that there was a variation of 10% in the assumed level of future growth in revenues, which would, in management’s view, represent a reasonably likely range of outcomes, this variation would not result in an impairment loss at December 31, 2021.


•
In the event there was a 4% increase in the discount rate used in the value in use model which would in management’s view represent a reasonably likely range of outcomes, this variation would not result in an impairment loss at December 31, 2021.

Goodwill and intangible assets not in use are subject to impairment testing on an annual basis. The recoverable amount of the Group’s CGUs are determined based on a value-in-use computation. The Group’s value-in-use calculations included the cash flow projections based on the 2022 budget which has been approved by the Board of Directors and the Group’s strategic plan for a further three years using projected revenue growth rates of between 20% and 46% and cost growth rates of between 2% and 59%. At the end of the forecasted patent exclusivity period, the terminal value, based on a long-term growth rates of between -10% and -30%, was used in the value-in-use calculations. The value-in-use represents the present value of the future cash flows, including the terminal value, discounted at a rate appropriate to the Group. The key assumptions employed in arriving at the estimates of future cash flows are subjective and include projected EBITDA, net cash flows, discount rates and the duration of the discounted cash flow model. The Group have used a discount rate of 7.9% (2020: 14.4%) which we believe is a realistic estimate for the Group as well as the Group’s risk profile.

The 2021 annual impairment testing process resulted in no impairment for the year ended December 31, 2021 (2020: nil).

13. Property, plant and equipment

   
Property
    
Plant and
Machinery
    
Office
Equipment
    
Right-of-
use assets
    
Total
  
   
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
  
Cost
                              
At January 1, 2020
    
383
      
1,432
      
547
      
2,000
      
4,362
  
Additions
    
38
      
527
      
938
      
4,420
      
5,923
  
Disposals
    
—
      
—
      
(372
)
    
(378
)
    
(750
)
Foreign exchange movement
    
38
      
93
      
165
      
140
      
436
  
At December 31, 2020
    
459
      
2,052
      
1,278
      
6,182
      
9,971
  
Additions
    
—
      
250
      
479
      
429
      
1,158
  
Acquired assets
     —       —       302       648       950  
Disposals
    
—
      
—
      
(397
)
    
—
      
(397
)
Foreign exchange movement
    
(37
)
    
(100
)
    
(33
)
    
(389
)
    
(559
)
At December 31, 2021
    
422
      
2,202
      
1,629
      
6,870
      
11,123
  
                                         
Accumulated amortization
                                        
At January 1, 2020
    
353
      
404
      
187
      
382
      
1,326
  
Depreciation charge
    
15
      
134
      
209
      
939
      
1,297
  
Depreciation charge on disposals
    
—
      
—
      
(239
)
    
(129
)
    
(368
)
Foreign exchange movement
    
35
      
37
      
11
      
59
      
142
  
At December 31, 2020
    
403
      
575
      
168
      
1,251
      
2,397
  
Depreciation charge
    
9
      
151
      
580
      
912
      
1,652
  
Depreciation charge on disposals
    
—
      
—
      
(224
)
    
—
      
(224
)
Foreign exchange movement
    
(33
)
    
(33
)
    
(9
)
    
(43
)
    
(118
)
At December 31, 2021
    
379
      
693
      
515
      
2,120
      
3,707
  
                                         
Net book value
                                        
At December 31, 2020
    
56
      
1,477
      
1,110
      
4,931
      
7,574
  
At December 31, 2021
    
43
      
1,509
      
1,114
      
4,750
      
7,416
  

176
14. Trade and other receivables

   
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Trade receivables
    
34,263
      
33,057
  
Accrued income and other debtors
    
12,201
      
8,423
  
VAT recoverable
    
7,444
      
1,705
  
Trade and other receivables
    
53,908
      
43,185
  

Trade receivables at December 31, 2021 includes US$258,000 (2019: US$1,186,000) which is due greater than 120 days. No impairment is considered necessary.

15. Inventories

   
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Raw materials
    
36,850
      
25,462
  
Work in progress
    
12,986
      
3,903
  
Finished goods
    
65,933
      
11,627
  
Inventories
    
115,769
      
40,992
  

In 2021, a total of US$26,783,000 (2020: US$25,854,000) of inventories was included in the profit or loss as an expense (excluding the fair value step-up).

The increase in inventories for the year ended December 31, 2021, reflected the fair value of inventory acquired as part of the acquisition of Chiasma on August 5, 2021. The fair value of the acquired inventory amounted to US$65,907,000. Inventory on hand at the date of acquisition was valued at the expected selling price less the sum of remaining costs of disposal, cost to complete and a reasonable profit margin for the selling effort of the acquiring entity. The costs to complete were calculated based on costs incurred on recently completed finished goods. The costs to dispose include sales and marketing expenses required to sell the product to the customer in addition to certain general and administrative expenses expected to be incurred by Amryt. This resulted in a non-cash step up at the valuation of inventory at August 5, 2021, of US$44,794,000. The non-cash step up in inventory is being unwound to the Consolidated Statement of Comprehensive Income/(Loss) over the period in which this saleable inventory is sold. At December 31, 2021, US$41,581,000 of this non-cash inventory step up is included in finished goods inventory.

As part of the Aegerion acquisition a non cash step up in valuing inventory was also recognized on acquisition and the carrying value included in finished goods inventory as at December 31, 2021, was nil (US$1,204,000).

During the year ended December 31, 2021, a provision of US$5,688,000 (2020: US$4,058,000) was recognized in the Consolidated Statement of Comprehensive Income/(Loss) relating to review of inventory to net realizable value. During the year ended December 31, 2021, US$932,000 (2020: nil) of write-down reversals were recognized due to updated demand forecasts.

177
16. Cash and cash equivalents

   
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Cash at bank available on demand
    
112,771
      
118,575
  
Restricted cash
    
261
      
223
  
Total cash and cash equivalents
    
113,032
      
118,798
  

Cash and cash equivalents include cash at bank available on demand and restricted cash.

At December 31, 2021, there was US$261,000 restricted cash (December 31, 2020: US$223,000). The restricted cash balance as at December 31, 2021, consists of a deposit on a company credit card facility for an amount of US$126,000 (December 31, 2020: US$150,000), a lease deposit for US$85,000 (December 31, 2020: nil) and a letter of credit related to US customs which was put in place for an amount of US$50,000 (December 31, 2020: nil). The restricted cash balance as at December 31, 2020, included US$73,000 held by a third-party distributor that was received in January 2021. There was no cash in transit held by a third-party distributor as at December 31, 2021.

17. Share capital and reserves

Details of the number of issued ordinary shares with a nominal value of Sterling 6 pence (2020: 6 pence) each are in the table below.

   
Ordinary shares
    
Treasury shares
    
Total
  
   
2021
    
2020
    
2021
    
2020
    
2021
    
2020
  
At 1 January
    
178,801,593
      
154,498,887
      
4,791,703
      
4,864,656
      
183,593,296
      
159,363,543
  
Issue of treasury shares in exchange for warrants
    
283,389
      
—
      
(283,389
)
    
—
      
—
      
—
  
Issue of shares in exchange for warrants
    
4,758,206
      
8,229,753
      
—
      
—
      
4,758,206
      
8,229,753
  
Issue of shares in equity fund raises
    
—
      
16,000,000
      
—
      
—
      
—
      
16,000,000
  
Issue of treasury shares in exchange for warrants
     4,208,314       —       (4,208,314 )     —       —       —  
Issue of treasury shares for share options exercised
     300,000       72,953       (300,000 )     (72,953 )     —       —  
Issue of shares in consideration of Chiasma acquisition
    
127,740,695
      
—
      
—
      
—
      
127,740,695
      
—
  
Issue of shares for share options exercised and RSUs vesting
    
3,722,550
      
—
      
—
      
—
      
3,722,550
      
—
  
At December 31
    
319,814,747
      
178,801,593
      
—
      
4,791,703
      
319,814,747
      
183,593,296
  

The components of equity are detailed in the Consolidated Statement of Changes in Equity and described in more detail below.

As at December 31, 2021 there were 319,814,747 ordinary shares issued with no treasury shares held (December 31, 2020: 183,593,296 of which 4,791,703 were treasury shares).

In December 2020, the Company issued 16,000,000 ordinary shares in the form of ADSs, as part of a US$40,000,000 private placement equity raise to existing and new shareholders. The Company issued 4,000,000 and 4,229,753 ordinary shares on July 15, 2020, and September 22, 2020, respectively, in exchange for certain warrants.

178
On March 11, 2021, the Company issued 300,000 ordinary shares from treasury shares following the exercise of share options. On March 11, 2021, the Company issued 283,389 ordinary shares from treasury shares in exchange for certain warrants. On August 5, 2021, the Company issued 127,740,695 ordinary shares, in the form of ADSs, as consideration for the acquisition of Chiasma. On August 5, 2021, the Company issued 8,966,520 ordinary shares with 4,208,314 being issued from treasury shares in exchange for warrants. During the year ended December 31, 2021, there were 3,342,680 shares issued following the exercise of share options and 379,870 shares issued following RSUs vesting.

Share Capital
Share capital represents the cumulative par value arising upon issue of ordinary shares of Sterling 6 pence each.

The ordinary shares have the right to receive notice of, attend and vote at general meetings and participate in the profits of the Company.

Share Premium
Share premium represents the consideration that has been received in excess of the nominal value on issue of share capital net of issue costs and transfers to distributable reserves.

Warrant reserve
The warrant reserve represents zero cost warrants issued as part of the equity raise on September 24, 2019, net of issue costs apportioned to warrants issued and additional warrants issued to certain shareholders on November 14, 2019. Each warrant entitles the holder to subscribe for one ordinary share at zero cost. The Company issued 4,000,000 and 4,229,753 ordinary shares on July 15, 2020, and September 22, 2020, respectively, in exchange for certain warrants. The remaining warrants were exchanged on August 5, 2021, and the Company issued 8,966,520 ordinary shares, 4,208,314 of which were issued from treasury shares. There were no remaining warrants outstanding as at December 31, 2021.

Treasury Shares
In October 2020, the Company issued 72,953 ordinary shares from treasury shares following the exercise of share options. In March 2021, the Company issued a total of 583,389 ordinary shares from treasury shares, 300,000 ordinary shares relating to the exercise of share options and 283,389 ordinary shares following the exchange of certain warrants. In August 2021, the company issued 4,208,314 ordinary shares from treasury shares in conjunction with the exchange of warrants. There were no treasury shares held as at December 31, 2021.

Share based payment reserve
Share based payment reserve relates to the charge for share based payments in accordance with IFRS 2. In March 2021, the Company issued 283,389 ordinary shares in exchange for certain warrants. In April 2021, 62,153 warrants lapsed. During the year ended December 31, 2021, the Company issued 3,722,550 ordinary shares in relation to the exercise of share options and RSUs.

As part of the acquisition of Chiasma, the Company replaced share awards that were existing at the time of the acquisition. This resulted in the recognition of a share-based payment reserve of US$10,157,000 on acquisition.

Merger reserve
The merger reserve was created on the acquisition of Amryt DAC by Amryt Pharma plc in April 2016. Ordinary shares in Amryt Pharma plc were issued to acquire the entire issued share capital of Amryt DAC. Under section 612 of the UK Companies Act 2006, the premium on these shares has been included in a merger reserve.

Reverse acquisition reserve
The reverse acquisition reserve arose during the period ended December 31, 2016, in respect of the reverse acquisition of Amryt Pharma plc by Amryt DAC. Since the shareholders of Amryt DAC became the majority shareholders of the enlarged Group, the acquisition is accounted for as though there is a continuation of Amryt DAC’s financial statements. The reverse acquisition reserve is created to maintain the equity structure of Amryt Pharma plc in compliance with UK company law.

179
Equity component of convertible notes
The equity component of convertible notes represents the equity component of the US$125,000,000 convertible debt and is measured by determining the residual of the fair value of the instrument less the estimated fair value of the liability component. The equity component is recognized in equity and is not subsequently remeasured.

Other distributable reserves
Other distributable reserves comprise the following:
 

 •
Distribution of the share premium amount on November 6, 2019, of US$268,505,000. By special resolution of the Company duly passed on September 23, 2019, in accordance with section 283 of the UK Companies Act 2006, it was resolved that the entire amount outstanding to the credit of the share premium account and capital redemption reserve of the Company be cancelled. The reduction in capital, amounting to US$268,505,000, representing the entire amount of share premium at that time, was approved by the High Court of Justice of England and Wales on November 5, 2019.
 

 •
A deemed distribution of US$47,902,000 arising from the issuance of CVRs in September 2019.


•
A deemed distribution of US$2,969,000 arising from the scheme of arrangement in September 2019 whereby Amryt Pharma plc, which was incorporated in July 2019, became a 100% shareholder of Amryt Pharma Holdings Limited (formerly named Amryt Pharma plc) (the “Acquisition of subsidiary without a change of control”).
 
Currency translation reserve
The currency translation reserve arises on the retranslation of non-U.S. dollar denominated foreign subsidiaries.

Accumulated deficit
Accumulated deficit represents losses accumulated in previous periods and the current year.

18. Deferred tax liability

   
Total
  
   
US$’000
  
At January 1, 2020
    
7,147
  
Net movement during the year
    
(535
)
At December 31, 2020
    
6,612
  
Net movement during the year
    
11,160
  
At December 31, 2021
    
17,772
  

A deferred tax liability arose in 2016 on the acquisition of Amryt GmbH. An intangible asset was recognized in relation to in process R&D. As the intangible asset only arises on consolidation and there may not be tax deductions available on sale, its tax base is nil.

When the intangible asset is amortized or impaired the tax difference will be reduced and the movement in the deferred tax liability will be recognized in profit or loss. The in-process R&D is currently not being amortized. As this is a euro denominated liability, there are FX movements on the deferred tax liability each year. During the year ended December 31, 2021, there was an increase in the deferred tax liability of US$246,000.

A deferred tax liability was recognized in 2019 in connection with the acquisition of Aegerion Pharmaceuticals, Inc. and in 2021 in connection with the acquisition of Chiasma, Inc. (see Note 6, Business combinations and asset acquisitions). The intangible assets have been recognized at their fair value. As the transactions did not result in the intangible assets being re-based to fair value from a tax perspective this results in a deferred tax liability being recognized on acquisition. These intangibles are being amortized and the resulting reduction in the deferred tax liability will be recognized in profit or loss. The acquisition of Chiasma, Inc. during the year ended December 31, 2021, has increased the group’s deferred tax liability by US$10,912,000.

19. Long term loan

   
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Long term loan principal
    
93,988
      
88,037
  
Unamortized debt issuance costs
    
(593
)
    
(735
)
Long term loan
    
93,395
      
87,302
  

180
As part of the acquisition of Aegerion on September 24, 2019, Aegerion entered into a new U.S. dollar denominated US$81,021,000 secured term loan debt facility (“Term Loan”) with various lenders. The Term Loan was made up of a US$54,469,000 loan that was in place prior to the acquisition, which was refinanced as part of the acquisition, and a US$26,552,000 additional loan that was drawn down on September 24, 2019. The Term Loan had a five-year term from the date of the draw down, September 24, 2019, and a maturity date of September 24, 2024. Under the Term Loan, interest was payable at the option of the Group at the rate of 11% per annum paid in cash on a quarterly basis or at a rate of 6.5% paid in cash plus 6.5% paid in kind, which rolls up and is included in the principal balance outstanding, on a quarterly basis. Unpaid accrued interest of US$1,536,000 as at December 31, 2021 is recognized in current liabilities within trade and other payables (December 31, 2020: $1,439,000). The Term Loan agreement includes an option to prepay the loan in whole or in part at any time subject to payment of an exit fee, which depending on the stage of the loan term, ranges from 5.00% to 0.00% of the principal then outstanding on the Term Loan. On February 18, 2022, the Term Loan was repaid in full and the Group secured a $125,000,000 senior credit facility of which US$105,000,000 was drawn down to facilitate the prepayment of the existing Term Loan. See further details on the $125,000,000 senior credit facility entered into by Amryt in Note 27, Events after the reporting period..

In connection with the Term Loan, the Group incurred approximately US$870,000 of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees. These costs are amortized over the expected life of the loan using the effective interest method.

The Term Loan was guaranteed by Amryt and certain subsidiaries of the Group. In connection with the loan agreement, fixed and floating charges have been placed on property and undertakings of Amryt and certain subsidiaries of the Group.

The Term Loan agreement included affirmative and negative covenants, including prohibitions on the incurrence of additional indebtedness, granting of liens, certain asset dispositions, investments, and restricted payments, in each case, subject to certain exceptions set forth in the Loan Agreement. The Term Loan agreement also includes customary events of default for a transaction of this type and includes (i) a cross-default to the occurrence of any event of default under material indebtedness of Amryt and certain subsidiaries of the Group and Amryt, including the convertible notes, and (ii) Amryt or any of its subsidiaries being subject to bankruptcy or other insolvency proceedings. Upon the occurrence of an event of default, the lenders may declare all of the outstanding Term Loan and other obligations under the Term Loan agreement to be immediately due and payable and exercise all rights and remedies available to the lenders under the Term Loan agreement and related documentation. There were no events of default or breaches of the covenants occurring for the year ended December 31, 2021 (December 31, 2020: no events).

   
Total
  
   
US$’000
  
Changes in long term loans from financing activities:
      
At January 1, 2021
    
88,741
  
Cash-flows
        
Proceeds from loans and borrowings
    
—
  
Acquired loans and borrowings
     116,629  
Repayment of loans and borrowings
    
(116,629
)
Liability related
        
Paid in kind interest
    
5,947
  
Amortization of debt costs
    
146
  
Change in accrued interest
    
97
  
At December 31, 2021
    
94,931
  

20. Convertible notes

   
Total
  
   
US$’000
  
At January 1, 2020
    
96,856
  
Accreted interest
    
4,230
  
At December 31, 2020
    
101,086
  
Accreted interest
    
4,702
  
At December 31, 2021
    
105,788
  

181
As part of the Aegerion acquisition, Aegerion issued convertible notes with an aggregate principal amount of US$125,000,000 to Aegerion creditors.

The convertible notes are senior unsecured obligations and bear interest at a rate of 5.0% per year, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2020. The convertible notes will mature on April 1, 2025, unless earlier repurchased or converted.

The convertible notes are convertible into Amryt’s ordinary shares at a conversion rate of 386.75 ordinary shares per US$1,000 principal amount of the convertible notes. If the holders elect to convert the convertible notes, Amryt can settle the conversion of the convertible notes through payment or delivery of cash, common shares, or a combination of cash and common shares, at its discretion. As a result of the conversion feature in the convertible notes, the convertible notes were assessed to have both a debt and an equity component. The two components were assessed separately and classified as a financial liability and equity instrument. The financial liability component was measured at fair value based on the discounted cash flows expected over the expected term of the notes using a discount rate based on a market interest rate that a similar debt instrument without a conversion feature would be subject to. Refer to Note 17, Share capital and reserves, for further details on the equity component of the convertible notes.

From September 24, 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 US$1,000 principal amount, at the option of the holder.

The indenture does not contain any financial covenants or restrict the Group’s ability to repurchase securities, pay dividends or make restricted payments in the event of a transaction that substantially increases the Group’s level of indebtedness in certain circumstances.

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, Amryt and certain subsidiaries of the Group) occurs and is continuing, the trustee by notice to Amryt, or the holders of at least 25% in principal amount of the outstanding convertible notes by written notice to Amryt 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 Amryt, 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 Amryt’s election, and for up to 180 days, the sole remedy for an event of default relating to certain failures by Amryt to comply with certain reporting covenants in the indenture consists exclusively of the right to receive additional interest on the convertible notes. There have been no events of default or breaches of the covenants occurring for the year ended December 31, 2021 (2020: no events).

21. Trade and other payables

   
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Trade payables
    
41,057
      
23,595
  
Accrued expenses
    
107,194
      
65,705
  
Social security costs and other taxes
    
1,483
      
936
  
Trade and other payables
    
149,734
      
90,236
  

The Group has a liability, included in accrued expenses above, for revenue rebates due on Myalepta sales in a country in the EMEA region from agreeing a reimbursement price with the government authorities resulting in a one-off payment related to sales up to the date of approval, which occurred in March 2021. The Group has recognized a liability of US$21,348,000 as at December 31, 2021. At December 31, 2020, the liability was included in provisions as the underlying agreement was not finalized and it was recognized as a non-current liability for an amount of US$21,382,000 as payment was agreed to be made in July 2022. Other accruals mainly consist of costs related to government revenue rebates due within one year, convertible note interest, term loan interest, royalty expenses, restructuring costs, clinical and R&D activities.

182
22. Provisions and other liabilities

   
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Non-current liabilities
            
Provisions and other liabilities
    
—
      
21,382
  
Leases due greater than 1 year
    
4,049
      
4,569
  
     
4,049
      
25,951
  
Current liabilities
                
Provisions and other liabilities
    
6,000
      
9,976
  
Leases due less than 1 year
    
1,545
      
963
  
     
7,545
      
10,939
  
Total provisions and other liabilities
    
11,594
      
36,890
  

Refer to Note 25, Commitments and contingencies for further details on provisions.
The Group leases various offices, equipment, vehicles and a production facility. Refer to Note 7, Operating loss for the year, for the lease expense on leases not recognized as a lease liability (short term leases, leases with an expected term of 12 months or less, or for leases of low value assets) and Note 24, Fair value measurement and financial risk management, for further details on lease commitments.


 
2021
    
2020
  
   
US$’000
    
US$’000
  
Changes in lease liabilities from financing activities:
            
At January 1
    
5,532
      
1,624
  
Adoption of IFRS 16
    
—
      
—
  
Cash-flows
                
Payment of leases
    
(1,215
)
    
(1,119
)
Non-cash
                
Acquired lease assets
    
—
      
—
  
New leases
    
1,077
      
4,420
  
Interest expense
    
558
      
335
  
Foreign exchange movement
    
(358
)
    
272
  
At December 31
    
5,594
      
5,532
  

23. Related party transactions

Compensation of key management personnel of the Group

In 2021, the key management personnel of the Group consisted of the executive director Joe Wiley, Chief Executive Officer, non-executive directors, and the Chief Financial Officer and Chief Operating Officer, Rory Nealon.

Compensation for the years ended December 31, 2021, and December 31, 2020, of these personnel is detailed below:

   
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Short-term employee benefits
    
1,912
      
1,848
  
Performance related bonus
    
1,106
      
1,122
  
Post-employment benefits
    
120
      
119
  
Share-based compensation benefits
    
3,713
      
3,079
  
Total compensation
    
6,851
      
6,168
  

183
Shares purchased by directors

The following ordinary shares were purchased by directors of the Company.


Director
  
Number
  
Date
Joseph Wiley
    
16,000
  
March 2022
George P. Hampton, Jr.
    
100,000
  
March 2022
Stephen T. Wills
    
37,500
  
March 2022
Dr. Alain H. Munoz
    
22,500
  
March 2022
Dr. Patrick V.J.J. Vink
    
25,000
  
March 2022
Raymond T. Stafford
    
50,000
  
March 2022
Raymond T. Stafford
    250,000
  November 2021
Raymond T. Stafford
    
300,100
  
March 2021

Agreements with principal shareholders

Long term loan

On September 24, 2019, the Group entered into a long term loan. Proceeds from the long term loan were used to refinance Aegerion’s existing secured bridge loan in the principal amount of approximately US$50,000,000 (in principal) held by certain funds managed by Athyrium Capital Management, LP and Highbridge Capital Management, LLC, respectively. Further information on the terms of the long term loan is included in Note 19, Long term loan, of these financial statements.

Convertible notes

On September 24, 2019, the Company issued US$125,000,000 aggregate principal amount of convertible notes due 2025 to certain creditors of Aegerion. The convertible notes bear interest at a rate of 5% per annum, payable in cash semi-annually. The convertible notes will mature approximately five and a half years after issuance, unless earlier repurchased, redeemed or converted. Further information on the terms of the convertible notes is included in Note 20, Convertible notes, of these financial statements.

Zero Cost Warrants

The Company agreed, for certain Aegerion creditors who wished to restrict their percentage share interest in Amryt’s issued share capital, to issue to the relevant Aegerion creditor, as an alternative to Amryt ordinary shares, an equivalent number of new zero cost warrants to subscribe for Amryt ordinary shares to be constituted on the terms of the zero cost warrant. The relevant Aegerion creditors are entitled at any time to exercise the zero cost warrants, at which point in time the Company would issue to that Aegerion creditor the relevant number of fully paid ordinary shares in return for the exercise of the zero cost warrants.

On September 24, 2019, certain of Aegerion’s creditors elected to receive 8,065,000 zero cost warrants to subscribe for Amryt ordinary shares as consideration for the acquisition. Separately 5,911,722 warrants were issued to investors in connection with the US$60,000,000 equity raise.

On November 14, 2019, the Company repurchased a combined 4,864,656 ordinary shares from Highbridge Tactical Master Fund L.P., Highbridge SCF Special Situations SPV, L.P. and Nineteen77 Global Multi Strategy Alpha Master Limited. In exchange for the ordinary shares, these institutions were issued an equivalent number of zero cost warrants. Each warrant entitles the holder to subscribe for one ordinary share at zero cost. On December 19, 2019, Highbridge MSF International Ltd exercised 1,645,105 zero cost warrants in exchange for 1,645,105 ordinary shares.

In July 2020, Highbridge Tactical Master Fund L.P. exercised 4,000,000 zero cost warrants in exchange for 4,000,000 ordinary shares. In September 2020, Nineteen77 Global Multi Strategy Alpha Master Limited exercised 4,229,753 zero cost warrants in exchange for 4,229,753 ordinary shares.

184

The remaining warrants were exchanged on August 5, 2021, and the Company issued 8,966,520 ordinary shares, 4,208,314 of which were issued from treasury shares. There were no remaining warrants outstanding as at December 31, 2021.

24. Fair value measurement and financial risk management

Categories of financial instruments


  
December 31,
  
   
2021
    
2020
  
   
US$’000
    
US$’000
  
Financial assets (all at amortized cost):
            
Cash and cash equivalents
    
113,032
      
118,798
  
Trade receivables
    
34,263
      
33,057
  
Total financial assets
    
147,295
      
151,855
  
                 
Financial liabilities:
                
At amortized cost
                
Trade payables and accrued expenses
    
148,251
      
89,300
  
Lease liabilities
    
5,594
      
5,532
  
Other liabilities
    
—
      
25,358
  
Convertible notes
    
105,788
      
101,086
  
Long term loan
    
93,395
      
87,302
  
Contingent value rights
    
19,892
      
61,417
  
At fair value
                
Contingent consideration
    
61,221
      
86,906
  
Total financial liabilities
    
434,141
      
456,901
  
Net
    
(286,846
)
    
(305,046
)

Financial instruments evaluated at fair value can be classified according to the following valuation hierarchy, which reflects the extent to which the fair value is observable:

 •
Level 1: fair value evaluations using prices listed on active markets (not adjusted) of identical assets or liabilities.

•
Level 2: fair value evaluations using input data for the asset or liability that are either directly observable (as prices) or indirectly observable (derived from prices), but which do not constitute listed prices pursuant to Level 1.

•
Level 3: fair value evaluations using input data for the asset or liability that are not based on observable market data (unobservable input data).

The contingent consideration has been valued using Level 3. The contingent consideration comprises:

 •
Contingent consideration relating to the acquisition of Amryt GmbH (see Note 6, Business combinations and asset acquisitions) that was measured at US$61,221,000 as at December 31, 2021 (December 31, 2020: US$86,906,000). The fair value comprises royalty payments which was determined using probability weighted revenue forecasts and the fair value of the milestones payments which was determined using probability adjusted present values. It also included a revision to the discount rate used, and revenue and costs forecasts have been amended to reflect management’s current expectations.

Impact of key unobservable input data

 •
An increase of 10% in estimated revenue forecasts would result in an increase to the fair value of US$3,746,000. A decrease would have the opposite effect.

•
A 5% increase in the discount factor used would result in a decrease to the fair value of US$9,740,000. A decrease of 5% would result in an increase to the fair value of US$12,923,000.

•
A six-month delay in the launch date for Oleogel-S10 would result in a decrease to the fair value of US$5,421,000.

•
A 20% decrease in the probability of success used would result in a decrease to the fair value of US$17,491,000. An increase of 20% in the probability of success with the FDA approval would result in a decrease to the fair value of US$13,120,000.

185
Policies and Objectives

The Group’s operations expose it to some financial risks arising from its use of financial instruments, the most significant ones being liquidity, market risk and credit risk. The Board of Directors is responsible for the Group and Company’s risk management policies and whilst retaining responsibility for them it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group’s finance function. The main policies for managing these risks are as follows:

Liquidity risk

The Group is not subject to any externally imposed capital requirement. Accordingly, the Group’s objectives are to safeguard the ability to continue as a going concern in order to provide returns for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Working capital forecasts are prepared to ensure the Group has sufficient funds to complete contracted work commitments.

The following table shows the maturity profile of financial liabilities of the Group:

   
December 31, 2021
  
   
Carrying
amount
    
Contractual
cash flows
    
6 months
or less
    
6 months -
12 months
    
1-2
years
    
2-5
years
    
> 5
years
    
Total
  
   
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
  
Trade payables and accrued expenses
    
149,734
      
149,734
      
149,734
      
—
      
—
      
—
      
—
      
149,734
  
Lease liabilities
    
5,594
      
7,882
      
757
      
757
      
885
      
2,556
      
2,927
      
7,882
  
Long term loan
    
93,395
      
130,776
      
3,097
      
3,252
      
6,778
      
117,649
      
—
      
130,776
  
Convertible notes
    
105,788
      
146,875
      
3,125
      
3,125
      
6,250
      
134,375
      
—
      
146,875
  
Contingent consideration and contingent value rights*
    
81,113
      
80,355
      
17,043
      
—
      
—
      
63,312
      
—
      
80,355
  
     
435,624
      
515,622
      
173,756
      
7,134
      
13,913
      
317,892
      
2,927
      
515,622
  

* Contingent consideration contractual cash flows do not include royalty payments due to be paid by Amryt, which are dependent on sales of Oleogel-S10 products. The carrying amount of contingent consideration is recorded at fair value, which incorporates the estimated royalty payments on sales of Oleogel-S10 products.

   
December 31, 2020
  
   
Carrying
amount
    
Contractual
cash flows
    
6 months
or less
    
6 months -
12 months
    
1-2
years
    
2-5
years
    
> 5
years
    
Total
  
   
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
    
US$’000
  
Trade payables and accrued expenses
    
89,300
      
89,300
      
89,300
      
—
      
—
      
—
      
—
      
89,300
  
Lease liabilities
    
5,532
      
8,820
      
525
      
525
      
1,096
      
2,676
      
3,998
      
8,820
  
Other liabilities
    
25,358
      
25,375
      
3,993
      
—
      
21,382
      
—
      
—
      
25,375
  
Long term loan
    
87,302
      
136,723
      
2,901
      
3,046
      
6,349
      
124,427
      
—
      
136,723
  
Convertible notes
    
101,086
      
153,125
      
3,125
      
3,125
      
6,250
      
140,625
      
—
      
153,125
  
Contingent consideration and contingent value rights*
    
148,323
      
127,991
      
—
      
62,283
      
—
      
65,708
      
—
      
127,991
  
     
456,901
      
541,334
      
99,844
      
68,979
      
35,077
      
333,436
      
3,998
      
541,334
  

* Contingent consideration contractual cash flows do not include royalty payments due to be paid by Amryt, which are dependent on sales of Oleogel-S10 products. The carrying amount of contingent consideration is recorded at fair value, which incorporates the estimated royalty payments on sales of Oleogel-S10 products.

Capital management

The Group considers its capital to be its ordinary share capital, share premium, other reserves and accumulated deficit. The Group manages its capital to ensure that entities within the Group will be able to continue individually as going concerns, while maximizing the return to shareholders through the optimization of debt and equity balances. The Group manages its capital structure and makes adjustments to it, in the light of changes in economic conditions. To maintain or adjust its capital structure, the Group may adjust or issue new shares or raise debt. On a regular basis, management receives financial and operational performance reports that enable continuous management of assets, liabilities and liquidity. No changes were made in the objectives, policies or processes during the years ended December 31, 2021 and December 31, 2020.

186
Market risk

Market risk arises from the use of interest-bearing financial instruments and represents the risk that future cash flows of a financial instrument will fluctuate as a result of changes in interest rates. It is the Group’s policy to ensure that significant contracts are entered into in its functional currency whenever possible and to maintain the majority of cash balances in the functional currency of the Company. The Group considers this policy minimizes any unnecessary foreign exchange exposure. In order to monitor the continuing effectiveness of this policy, the Board of Directors reviews the currency profile of cash balances and managements accounts.

It is the Group’s policy to enter into long term borrowings at fixed rates of interest where possible to reduce the Group’s exposure to cash flow interest rate risk. During the years ended December 31, 2021 and December 31, 2020, the long term borrowings of the Group were subject to fixed rates of interest.

During the year 2021, the Group earned interest on its interest-bearing financial assets at rates between 0% and 1%. The effect of a 1% change in interest rates obtainable during the year on cash and on short-term deposits would be to increase or decrease the Group loss before tax by US$578,000 (2020: US$174,000).

In addition to cash balances maintained in US$, the Group had balances in £ and € amongst others at year-end. A theoretical 10% adverse movement in the year end €:US$ exchange rate would lead to an increase in the Group loss before tax by US$4,005,000 with a corresponding reduction in the Group loss before tax with a 10% favorable movement. A theoretical 10% adverse movement in £:US$ exchange rates would lead to an increase in the Group loss before tax by US$114,000 with a corresponding reduction in the Group loss before tax with a 10% favorable movement.

Credit risk

The Group has no significant concentrations of credit risk. Exposure to credit risk is monitored on an ongoing basis. If necessary, the Group maintains specific provisions for potential credit losses. As at December 31, 2021, there has been no requirement for such provisions. The Group maintains cash and cash equivalents with various financial institutions. The Group performs regular and detailed evaluations of these financial institutions to assess their relative credit standing. The carrying amount reported in the balance sheet for cash and cash equivalents approximate their fair value. Credit risk is the risk that the counterparty will default on its contractual obligations resulting in financial loss. Credit risk arises from cash and cash equivalents and from exposure via deposits with the Group’s bankers. For cash and cash equivalents, the Group only uses recognized banks with high credit ratings.

Credit risk related to customers is managed through risk assessment procedures, through assessment of credit quality, taking into account the financial position of the customer, past experience and other factors. The compliance with credit terms is monitored on a regular basis by management. Credit terms may vary from one month to several months depending on the region and customer. The major customers contribute to 36% of the total trade receivables of the group outstanding as at December 31, 2021 (2020: 42%).

For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group assesses ECL based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.


25. Commitments and contingencies

Contingent consideration and contingent value rights

See Note 6, Business combinations and asset acquisitions, in relation to contingent consideration and contingent value rights as a result of the acquisition of Amryt GmbH and Aegerion.

License Agreements

In connection with metreleptin, the Group has license agreements for the exclusive license and patents for the use of metreleptin to develop, manufacture and commercialize a preparation containing metreleptin. Under the license agreements the Group is required to make royalty payments on net sales on a country-by-country basis. During the year ended December 31, 2021, following the Aegerion acquisition on September 24, 2019, the Group recorded aggregate royalty expenses to third parties of US$23,905,000 (2020: US$20,492,000: 2019: US$5,104,000).

187
The Group holds a license agreement for the exclusive, worldwide license of certain know-how and a range of patent rights applicable to lomitapide. The Group is obligated to use commercially reasonable efforts to develop, commercialize, market and sell at least one product covered by the licensed patent right, such as lomitapide. Additionally, the Group is required to make royalty payments on net sales of products. During the year ended December 31, 2021, following the Aegerion acquisition on September 24, 2019, the Group recorded aggregate royalty expenses to third parties of US$1,992,000 (2020: US$2,026,000: 2019: US$803,000).

As part of consideration for the acquisition of Amryt GmbH, royalty payments payable to the sellers are as follows: (a) 9% of (i) net ex-factory sales, and (ii) net revenues in either case relating to Oleogel-S10; and (b) 6% of: (i) net ex-factory sales; and (ii) net revenues relating to other betulin products, with the relevant royalty periods essentially being ten years from first commercial sale of the relevant product (other than in respect of Imlan).
 
The Group entered into a license agreement for the exclusive, worldwide license to the patent rights for a novel polymer-based topical gene therapy delivery platform for potential use in the treatment of rare genetic diseases. The first product candidate utilizing this platform, AP103, is currently in preclinical development for the treatment of recessive dystrophic EB, a subset of severe EB. Under the license agreement Amryt is required to pay milestone payments and, upon the sale of product, royalty payments on net sales of products.

The Group entered into a license agreement for the non-exclusive, worldwide license to the patent rights for the design and development of gene coded therapy vectors and methods for making such vectors, in order for Amryt to develop and commercialize its genetic encoded therapies relating to AP103. Under this agreement Amryt is required to make milestone payments and royalty payments on net sales of products.

The Group is party to a license agreement for the exclusive license of certain know-how and a range of patent rights in order for Amryt to develop and commercialize its genetic encoded therapies relating to AP104. Under this agreement Amryt is required to make royalty payments on net sales of products.

Legal matters

Prior to the acquisition of Aegerion by Amryt, Aegerion entered into settlement agreements with governmental entities including the Department of Justice (‘‘DOJ’’) and the FDA in connection with Juxtapid investigations. The settlement agreements require Aegerion to pay specified fines and engage in regulatory compliance efforts. Subsequent to the acquisition, Aegerion made US$23,036,000 of settlement payments, including interest. The settlements have been paid in full with the last payment completed in Q1 2021. As at December 31, 2021, there is no DOJ liability outstanding. The remaining liability outstanding as at December 31, 2020, of US$3,976,000 was included in current provisions and other liabilities.
 
Other matters

The Group recognizes a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Group reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and the Group’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Group’s liability accrual would be recorded in the period in which such determination is made. At December 31, 2021, the Group had recognized liabilities of US$6,000,000 in relation to ongoing legal matters (2020: US$6,000,000). At December 31, 2020, the Group also had recognized a non-current liability of US$21,382,000 for revenue rebates due on metreleptin sales in a country in the EMEA region following on from agreeing a reimbursement price with the government authorities. The reimbursement agreement, which was agreed in March 2021, results in a one-off revenue rebate payment on sales up to the date of approval. The one-off payment is due to be paid to the authorities in July 2022 and this is included within accrued expenses, see Note 21, Trade and other payables.

188
Lease commitments
 
The Group had no finance lease commitments in 2021 (2020: nil). See Note 24, Fair value measurement and financial risk management for details on operating lease commitments.

26. Investment in subsidiaries

List of subsidiary companies:

Subsidiary
Ownership
Activities
  
Company number
  
Incorporation
  
2021 % holding
    
2020 % holding
  
Amryt Pharma Holdings Limited
Direct
Holding company and management services
    
5316808
  
UK
    
100
      
100
  
Amryt Pharmaceuticals Designated Activity Company
Indirect
Product Sales and management services
    
566448
  
Ireland
    
100
      
100
  
Amryt Research Limited
Indirect
Pharmaceuticals R&D
    
571411
  
Ireland
    
100
      
100
  
Amryt Endocrinology Limited
Indirect
Pharmaceuticals R&D
    
572984
  
Ireland
    
100
      
100
  
Amryt Lipidology Limited
Indirect
Licensee for Lojuxta
    
593833
  
Ireland
    
100
      
100
  
Amryt Genetics Limited
Indirect
Pharmaceutical R&D
    
622577
  
Ireland
    
100
      
100
  
Amryt Pharma (UK) Limited
Indirect
Management services
    
10463152
  
UK
    
100
      
100
  
Amryt Pharma Italy SRL
Indirect
Management services
    
2109476
  
Italy
    
100
      
100
  
Amryt Pharma Spain S.L.
Indirect
Management services
    
B67130567
  
Spain
    
100
      
100
  
Amryt GmbH
Indirect
Product Sales and Pharmaceuticals R&D
  
HRB 711487
  
Germany
    
100
      
100
  
SomPharmaceuticals SA
Indirect
Pharmaceuticals R&D and management services
  
CHE-435.396.568
  
Switzerland
    
100
      
100
  
Cala Medical Limited
Indirect
Pharmaceuticals R&D
    
598486
  
Ireland
    
100
      
100
  
Amryt Distribution Limited
Indirect
Dormant
    
667507
  
Ireland
    
100
      
100
  
Amryt Pharmaceuticals Inc.
Indirect
Product Sales Management services
    
3922075
  
USA
    
100
      
100
  
Amryt Endo, Inc. (formerly Chiasma, Inc.)
Indirect
Product Sales Management services
    
3380352
  
USA
    
100
      
—
  
Chiasma Securities Corp
Indirect
Holding company
    
001194998
  
USA
    
100
      
—
  
Chiasma (Israel) Limited
Indirect
Management services
    
513104026
  
Israel
    
100
      
—
  
Aegerion International Limited
Indirect
Holding company
    
52048
  
Bermuda
    
100
      
100
  
Aegerion Pharmaceuticals Holdings, Inc.
Indirect
Holding company
    
5213687
  
USA
    
100
      
100
  
Aegerion Argentina S.R.L.
Indirect
Management services
    
901-709682-0
  
Argentina
    
100
      
100
  
Aegerion Pharmaceuticals (Canada) Limited
Indirect
Management services
  
85134 5132 RT0001
  
Canada
    
100
      
100
  
Amryt Colombia S.A.S.
Indirect
Management services
    
R048196625
  
Colombia
    
100
      
100
  
Amryt Brasil Comercio E Importacao De Medicamentos LTDA (formerly Aegerion Brasil Comercio E Importacao De Medicamentos LTDA)
Indirect
Management services
    
3522602510-1
  
Brazil
    
100
      
100
  
Aegerion Pharmaceuticals Limited
Indirect
Management services
    
46134
  
Bermuda
    
100
      
100
  
Aegerion Pharmaceuticals Limited
Indirect
Management services
    
8114919
  
UK
    
100
      
100
  
Amryt Pharmaceuticals SAS
Indirect
Management services
    
534 195 59900012
  
France
    
100
      
100
  
Aegerion Pharmaceuticals Srl
Indirect
Management services
    
1166250
  
Italy
    
100
      
100
  
Amryt Pharma GmbH
Indirect
Management services
  
HRB 95895
  
Germany
    
100
      
100
  
Amryt Turkey İlaç Ticaret Limited Şirketi (formerly Aegerion İlaç Ticaret Limited Şirketi)
Indirect
Management services
    
907292
  
Turkey
    
100
      
100
  
Aegerion Pharmaceuticals SARL
Indirect
Management services
  
CHE-497.494.599
  
Switzerland
    
100
      
100
  
Aegerion Pharmaceuticals B.V.
Indirect
Management services
    
69859647
  
Netherlands
    
100
      
100
  
Aegerion Pharmaceuticals Spain, S.L.
Indirect
Management services
    
B88019161
  
Spain
    
100
      
100

189
List of registered offices:

Company
Registered Office Address
Amryt Pharma Holdings Limited
C/O Corporation Service Company (Uk) Limited, 5 Churchill Place, 10th Floor, London, United Kingdom, E14 5HU
Amryt Pharmaceuticals Designated Activity Company
45 Mespil road, Dublin 4
Amryt Research Limited
45 Mespil road, Dublin 4
Amryt Endocrinology Limited
45 Mespil road, Dublin 4
Amryt Lipidology Limited
45 Mespil road, Dublin 4
Amryt Genetics Limited
45 Mespil road, Dublin 4
Amryt Pharma (UK) Limited
C/O Corporation Service Company (Uk) Limited, 5 Churchill Place, 10th Floor, London, United Kingdom, E14 5HU
Amryt Pharma Italy SRL
Milano (MI)-Via Dell'Annunciata 23/4
Amryt Pharma Spain S.L.
Barcelona, calle Diputacio, number 260
Amryt GmbH
Streiflingsweg 11, 75223 Niefern-Öschelbronn
SomPharmaceuticals SA
Bahnofstrasse 21, 6300 Zug
Cala Medical Limited
45 Mespil road, Dublin 4
Amryt Distribution Limited
45 Mespil road, Dublin 4
Amryt Pharmaceuticals Inc.
2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808
Amryt Endo Inc. (formerly Chiasma, Inc.)
1209 Orange Street, Wilmington, New Castle County, Delaware 19801
Chiasma Securities Corp
155 Federal Street, Suite 700, Boston, MA 02110
Chiasma (Israel) Limited
5 Golda Meir Street, Nes Ziona 7403649 Israel
Aegerion International Limited
Clarendon House, 2 Church Street, Hamilton, HM11
Aegerion Pharmaceuticals Holdings, Inc.
2711 Centerville Road, Suite 400, City of Wilmington, County of New Castle, Delaware 19808
Aegerion Argentina S.R.L.
Avda. Camacua 421, Suite 102, Olivos, Vicente Lopez, 1636
Aegerion Pharmaceuticals (Canada) Limited
5300 Commerce Court West, 199 Bay Street, Toronto, ON M5L 1B9
Amryt Colombia S.A.S.
CR 12 89 33 P 5, Bogota DC, Bogota 110111
Amryt Brasil Comercio E Importacao De Medicamentos LTDA (formerly Aegerion Brasil Comercio E Importacao De Medicamentos LTDA)
Rua Joseefina, 200-Guarulhos City, Sao Paulo
Aegerion Pharmaceuticals Limited
Clarendon House, 2 Church Street, Hamilton, HM11
Aegerion Pharmaceuticals Limited
C/O Corporation Service Company (Uk) Limited, 5 Churchill Place, 10th Floor, London, United Kingdom, E14 5HU
Amryt Pharmaceuticals SAS
235, Avenue Le Jour se Leve, Boulogne-Billancourt, 92 100
Aegerion Pharmaceuticals Srl.
Viale Abruzzi n. 94, Milano, 20131
Amryt Pharma GmbH
Streiflingsweg 4, 75223 NiefernÖschelbronn, Germany.
Amryt Turkey İlaç Ticaret Limited Şirketi (formerly Aegerion İlaç Ticaret Limited Şirketi)
Orjin Maslak, Eski Buyukdere Caddesi No: 27 K:11, Maslak, Istanbul, 34485
Aegerion Pharmaceuticals SARL
Rue de Pontets 6, Lavigny, Switzerland 1175
Aegerion Pharmaceuticals B.V.
Atrium Building, 8th Floor, Strawinskylaan 3127, 8e verdieping, Amsterdam
Aegerion Pharmaceuticals Spain, S.L.
Calle Josep Coroleu, 83 2-2, Vilanova I la Geltru, Barcelona 08800

190
27. Events after the reporting period

Development Pipeline
On February 28, 2022, Amryt received a Complete Response Letter from the (FDA) regarding its (NDA) for Oleogel-S10, for the treatment of the cutaneous manifestations of EB, a rare, genetic skin disease characterized by extremely fragile skin that blisters and tears from minor friction or trauma for which there are no approved treatment options.

The FDA communicated that it had completed its review of the application and has determined that the application cannot be approved in its present form. The FDA has asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns.

On March 8, 2022, Amryt announced the completion of a successful pharmacokinetic (PK) study for Mycapssa® (oral octreotide). The data supports a planned Phase 3 study of Mycapssa® in the treatment of patients with carcinoid symptoms due to Neuroendocrine Tumors (NET).

On April 22, 2022, the CHMP has adopted a positive opinion, recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days. The CHMP positive opinion is supported by Phase 3 data from the EASE trial which was the largest ever global trial conducted in patients with EB, performed across 58 sites in 28 countries.

Debt refinancing
On February 22, 2022, Amryt announced that it secured US$125,000,000 of senior credit facilities from funds managed by the Credit Group of Ares Management Corporation (“Ares”). Amryt used a portion of the proceeds to refinance its previous secured term debt facility, which had an outstanding balance of US$93,988,000 as at February 22, 2022, an interest rate of 13.00% and a maturity date of September 2024. The new facilities will generate significant annual interest cost savings as well as provide for important strategic flexibility as Amryt looks to continue to grow its global rare disease presence.

Key features of the new facilities include:

 		•
Total new facilities of $125 million, consisting of:

o
$85 million Term Loan Facility with interest rate of Secured Overnight Financing Rate (“SOFR”)+6.75%, subject to a 0.90% SOFR floor

o
$40 million Revolving Credit Facility with $20 million drawn at close and interest rate of SOFR+4.00%, subject to a 0.90% SOFR floor

o
Quarterly blended cash interest rate of SOFR+5.87% (assuming fully drawn), subject to a 0.90% SOFR floor, substantially lower than Amryt’s previous secured term debt facility at 13.00% interest

•
Requires interest-only payments until facility matures in February 2027

•
There are no warrants or any equity conversion features associated with the new facilities

•
The proceeds will be used to refinance existing debt, for general corporate and product development purposes; and potentially for shareholder approved share repurchase programs.

Charges were taken over certain assets of the company and its material entities as guarantee and collateral for the provision of the debt.
 
191
Table of Contents

Item 19.
Exhibits
 
We have filled the following documents as exhibits to this annual report.
 
Exhibit
Number
Exhibit Description
   
Articles of Association of Amryt Pharma plc, adopted by special resolution passed on July 29, 2021
   
Articles of Association of Amryt Pharma plc, adopted by special resolution passed on July 29, 2021, as amended by special resolution passed on July 28, 2021
   
Amended and Restated Deposit Agreement, dated July 8, 2020, by and among Amryt Pharma plc, Citibank, N.A., as depositary, and the holders and beneficial owners of American Depositary Shares issued thereunder
   
Form of American Depositary Receipt (included in Exhibit 2.1)
   
Form of Zero Cost Warrant, filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
2.4†
Registration Rights Agreement, dated September 25, 2019, among Amryt Pharma Holdings plc, Highbridge MSF International Ltd., Highbridge Tactical Credit Master Fund, L.P., Highbridge SCF Special Situations SPV, L.P., Athyrium Opportunities II Acquisition 2 LP and Athyrium Opportunities III Acquisition 2 LP, filed as Exhibit 10.4 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Securities Purchase Agreement, dated December 7, 2020, by and among Amryt Pharma plc and the Investors named therein, filed as Exhibit 10.1 to the Registrant’s Report on Form 6-K filed with the Commission on December 9, 2020 (File No. 001-39365)
   
Registration Rights Agreement, dated December 7, 2020, by and among Amryt Pharma plc and the Investors named therein, filed as Exhibit 10.2 to the Registrant’s Report on Form 6-K filed with the Commission on December 9, 2020 (File No. 001-39365)
   
Description of Securities
   
Plan Funding Agreement, dated May 20, 2019, between Amryt Pharma plc and Aegerion Pharmaceuticals, Inc., filed as Exhibit 2.1 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Share Purchase and Transfer Agreement, dated October 16, 2015, among Amryt Pharmaceuticals DAC, Software AG – Stiftung, Dr. Armin Schiffler and Birken AG, filed as Exhibit 2.2 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Debtor’s Modified First Amended Joint Chapter 11 Plan, dated August 29, 2019, of Aegerion Pharmaceuticals, Inc., et al., filed as Exhibit 10.1 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Restructuring Support Agreement, dated May 20, 2019, among Aegerion Pharmaceuticals, Inc. and each of its subsidiaries party thereto, Amryt Pharma plc, as plan investor, and Athyrium Opportunities II Acquisition LP, Athyrium Opportunities III Acquisition LP, Highbridge MSF International Ltd., 1992 Tactical Credit Master Fund, L.P., Highbridge SCF Special Situations SPV, L.P., Highbridge SCF Loan SPV, L.P., Whitebox Relative Value Partners, LP, Whitebox GT Fund, LP, Whitebox Multi-Strategy Partners, LP, Pandora Select Partners, LP, Nineteen77 Global Multi-Strategy Alpha Master Limited and Nineteen77 Global Convertible Bond Master Limited, as consenting lenders, filed as Exhibit 10.2 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)

192
Backstop Agreement, dated July 10, 2019, among Amryt Pharma plc and Highbridge MSF International Ltd., Highbridge SCF Special Situations SPV, L.P., 1992 Tactical Credit Master Fund, L.P., Athyrium Opportunities II Acquisition, 2 LP, Athyrium Opportunities III Acquisition 2 LP, Whitebox Relative Value Partners, LP, Whitebox GT Fund, LP, Whitebox Multi-Strategy Partners, LP, Pandora Select Partners, LP, Nineteen77 Global Multi-Strategy Alpha Master Limited and Nineteen77 Global Convertible Bond Master Limited, as backstop parties, filed as Exhibit 10.3 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
4.6†
Credit Agreement, dated September 24, 2019, among Aegerion Pharmaceuticals, Inc., as borrower, Amryt Pharma Holdings plc, the lenders party thereto and Cantor Fitzgerald Securities, as administrative agent and collateral agent for the lenders, filed as Exhibit 10.5 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
4.7†
Indenture, dated September 24, 2019, among Aegerion Pharmaceuticals, Inc., as issuer, Amryt Pharma Holdings plc, Amryt Pharma plc and the additional guarantors party thereto and GLAS Trust Company LLC, as the trustee, relating to the issuer’s 5.00% Convertible Senior Notes due 2025, filed as Exhibit 10.6 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
4.8†
License Agreement, effective as of March 14, 2018, between Amryt Genetics Limited and University College Dublin, National University of Ireland, filed as Exhibit 10.7 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Patent License Agreement, effective as of May 19, 2006, between Aegerion Pharmaceuticals, Inc. and The Trustees of the University of Pennsylvania. filed as Exhibit 10.6 to Aegerion Pharmaceutical Inc.’s Registration Statement on Form S-1, as amended, filed with the Commission on August 10, 2010 (File No. 333-168721)
   
First Amendment to Patent License Agreement, effective as of September 27, 2006, between Aegerion Pharmaceuticals, Inc. and The Trustees of the University of Pennsylvania (included in Exhibit 4.9)
   
Asset Purchase Agreement, dated November 5, 2014, by and among Aegerion Pharmaceuticals, Inc., Amylin Pharmaceuticals, LLC and AstraZeneca Pharmaceuticals LP, filed as Exhibit 10.29 to Aegerion Pharmaceuticals, Inc.’s Amendment No. 1 to the Annual Report on Form 10-K, filed with the Commission on July 7, 2015 (File No. 001-34921)
   
First Amendment to Asset Purchase Agreement, dated January 9, 2015, by and among Aegerion Pharmaceuticals, Inc., Amylin Pharmaceuticals, LLC and AstraZeneca Pharmaceuticals LP, filed as Exhibit 10.30 to Aegerion Pharmaceuticals, Inc.’s Annual Report on Form 10-K, filed with the Commission on March 2, 2015 (File No. 001-34921)
   
License Agreement, dated February 7, 2006, by and between Amgen Inc. and Amylin Pharmaceuticals, Inc., filed as Exhibit 10.32 to Aegerion Pharmaceuticals, Inc.’s Annual Report on Form 10-K, filed with the Commission on March 2, 2015 (File No. 001-34921)
   
Contract Manufacturing Agreement, dated September 30, 2010, by and between Amylin Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.1 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
First Amendment, dated September 1, 2011, to Contract Manufacturing Agreement, dated September 30, 2010, by and between Amylin Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.2 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)

193
Amendment No. 2, dated December 18, 2012, to Contract Manufacturing Agreement, dated September 30, 2010, by and between Amylin Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.3 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Amendment No. 3, dated July 8, 2013, to Contract Manufacturing Agreement, dated September 30, 2010, by and between Amylin Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.4 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Amendment No. 4, dated June 23, 2014, to Contract Manufacturing Agreement, dated September 30, 2010, by and between Amylin Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.5 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Amendment No. 5, dated October 13, 2014, to Contract Manufacturing Agreement, dated September 30, 2010, by and between Amylin Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.6 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
6th Amendment, dated June 1, 2017, to Contract Manufacturing Agreement, dated September 30, 2010, by and between Aegerion Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.7 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
7th Amendment, dated August 1, 2017, to Contract Manufacturing Agreement, dated September 30, 2010, by and between Aegerion Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.8 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
8th Amendment, dated April 30, 2019, to Contract Manufacturing Agreement, dated September 30, 2010, by and between Aegerion Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.9 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
9th Amendment, dated February 11, 2020, to Contract Manufacturing Agreement, dated September 30, 2010, by and between Aegerion Pharmaceuticals, Inc. and Sandoz GmbH, filed as Exhibit 10.11.10 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Master Services Agreement, dated as of December 6, 2013 between Bristol-Meyers Squibb Company and Accredo Health Group, Inc., filed as Exhibit 10.12.1 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
1st Amendment, dated January 9, 2014, to Master Services Agreement, dated as of December 6, 2013, between Bristol-Meyers Squibb Company and Accredo Health Group, Inc., filed as Exhibit 10.12.2 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Second Amendment, dated June 1, 2014, to Master Services Agreement, dated as of December 6, 2013, between AstraZeneca Pharmaceuticals LP and Accredo Health Group, Inc., filed as Exhibit 10.12.3 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Third Amendment, dated June 20, 2016, to Master Services Agreement, dated as of December 6, 2013, between Aegerion Pharmaceuticals, Inc. and Accredo Health Group, Inc., filed as Exhibit 10.12.4 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Fourth Amendment, dated October 19, 2017, to Master Services Agreement, dated as of December 6, 2013, between Aegerion Pharmaceuticals, Inc. and Accredo Health Group, Inc., filed as Exhibit 10.12.5 to the Registrant’s Registration Statement on Form F-1 filed with the Commission on June 23, 2020 (File No. 333-239395)
   
Amended Amryt Pharma plc Equity Incentive Plan, filed as Exhibit 10.13 to the Registrant’s Registration Statement on Form F-1/A filed with the Commission on July 6, 2020 (File No. 333-239395)
   
Amryt Pharma plc Equity Incentive Plan Sub-Plan for U.S. Participants, filed as Exhibit 10.14 to the Registrant’s Registration Statement on Form F-1/A filed with the Commission on July 6, 2020 (File No. 333-239395)

194
Supply Agreement, dated as of December 31, 2015, by and between Teva API, Inc. and Chiasma, Inc.
   
First Amending Agreement, dated as of June 22, 2020, by and between Teva API, Inc. and Chiasma, Inc.
   
Master Services Agreement, dated as of May 8, 2020, by and between AssistRx, Inc. and Chiasma, Inc.
   
Exclusive Distribution Agreement, dated as of June 23, 2020, between Chiasma, Inc. and Cardinal Health 105, Inc.
   
Product Purchase and Pharmacy Services Master Agreement, dated as of August 21, 2020, by and between Chiasma, Inc. and AcariaHealth, Inc.
   
Agreement and Plan of Merger, dated as of May 4, 2021, by and among Amryt Pharma plc, Acorn Merger Sub, Inc. and Chiasma, Inc., filed as Exhibit 99.1 to the Registrant’s Report on Form 6-K filed with the Commission on May 5, 2021 (File No. 001-39365)
   
Voting and Transaction Support Agreement for Company Securityholders, dated as of May 4, 2021, by and among Amryt Pharma plc, Acorn Merger Sub, Inc., MPM Asset Management Investors BV4, LLC, MPM BioVentures IV GmbH & Co. Beteiligungs KG, MPM BioVentures IV-QP, L.P. and MPM Bio IV NVS Strategic Fund, L.P., filed as Exhibit 99.2 to the Registrant’s Report on Form 6-K filed with the Commission on May 5, 2021 (File No. 001-39365)
   
Voting and Transaction Support Agreement for Parent Securityholders, dated as of May 4, 2021, by and among Chiasma, Inc., Athyrium Opportunities II Acquisition 2 LP and Athyrium Opportunities III Acquisition 2 LP., filed as Exhibit 99.3 to the Registrant’s Report on Form 6-K filed with the Commission on May 5, 2021 (File No. 001-39365)
   
Voting and Transaction Support Agreement for Parent Securityholders, dated as of May 4, 2021, by and among Chiasma, Inc., Highbridge Tactical Credit Master Fund, L.P., Highbridge Convertible Dislocation Fund, L.P. and Highbridge SCF Special Situations SPV, L.P., filed as Exhibit 99.4 to the Registrant’s Report on Form 6-K filed with the Commission on May 5, 2021 (File No. 001-39365)
   
List of Subsidiaries
   
Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
   
Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
   
Principal Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
   
Principal Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
   
Consent of Grant Thornton with respect to financial statements of Amryt Pharma plc
   
101.INS
Inline XBRL Instance Document.
   
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
   
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
   
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
   
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
   
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
   
104
Cover Page Interactive Data File.
 

†
Portions of this exhibit (indicated by asterisks) have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv).
 
#
Indicates senior management contract or compensatory plan.
 
195
SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
 
 
AMRYT PHARMA PLC
 
  
 
By:
/s/ Rory P. Nealon
  

   
Name:
Rory P. Nealon
       
   
Title:
Chief Financial Officer and Chief Operating Officer
       
Date: April 29, 2022      
 

196
Exhibit 1.1

Company Number:  12107859
 
THE COMPANIES ACT 2006
 
PUBLIC COMPANY LIMITED BY SHARES
 
ARTICLES OF ASSOCIATION
 
OF
 
AMRYT PHARMA PLC
 
(adopted by special resolution passed on 29 July 2020)

CONTENTS
 
REGULATIONS AND INTERPRETATION
1
1.
Interpretation
1
2.
Model Articles not to apply and application of contractual agreements with members
5
SHARE CAPITAL
5
3.
Share Capital
5
COMPANY BUSINESS
5
4.
Business
5
VARIATION OF CLASS RIGHTS
6
5.
Sanction to variation
6
6.
Deemed variation
6
SHARES
6
7.
Allotment of shares
6
8.
Purchase of own shares
7
9.
Commission and brokerage
7
10.
Trusts not to be recognised
7
SHARE CERTIFICATES
8
11.
Share certificates
8
12.
Replacement of share certificate
8
ISSUE OF SHARES
8
13.
Uncertificated shares
8
14.
Relevant Class
9
CALLS ON SHARES
10
15.
Calls
10
16.
Payment
10
17.
Interest on calls
10
18.
Sums treated as calls
10
19.
Power to differentiate
11
20.
Payment in advance of calls
11
FORFEITURE, SURRENDER, LIEN AND UNTRACED MEMBERS
11
21.
Notice if call not paid
11
22.
Forfeiture for non-compliance
11
23.
Disposal of forfeited shares
11
24.
Effect of forfeiture
12
25.
Lien
12
26.
Enforcement of lien by sale
12

i
27.
Application of proceeds of sale
12
28.
Untraced members
13
29.
Evidence of forfeiture
14
TRANSFER OF SHARES
14
30.
Transfer of title and interest
14
31.
Transfer of shares
14
32.
Right to refuse registration
15
33.
Notice of refusal
15
34.
Closing of register
15
35.
Fees on registration
15
36.
Retention
15
37.
Transfer by renunciation
16
TRANSMISSION OF SHARES
16
38.
On death
16
39.
Election of person entitled by transmission
16
40.
Transfer notice
16
41.
Rights on transmission
16
INCREASE OF CAPITAL
17
42.
Increase of Capital
17
43.
New Shares
17
ALTERATION OF CAPITAL
17
44.
Alteration
17
GENERAL MEETINGS
18
45.
Annual general meetings
18
46.
General meetings
18
47.
Notice of general meetings
18
48.
Statement
19
49.
Omission of notice
19
PROCEEDINGS AT GENERAL MEETINGS
19
50.
Business of meetings
19
51.
Notice of resolution
20
52.
Satellite meetings
20
53.
Combined physical and electronic meetings
21
54.
Attendance at and participation in general meetings
22
55.
Quorum
23
56.
Quorum not present
23
57.
Chairman
23
58.
Power to adjourn
24
59.
Postponement
24
60.
Directors may attend and speak
24
61.
Amendment
24

ii
VOTES OF MEMBERS
25
62.
Votes
25
63.
Joint holders
25
64.
Vote by proxy
25
65.
Restriction on voting rights
25
66.
Objection to error in voting
25
67.
Votes on a poll
26
POLLS
26
68.
Method of voting
26
69.
Proxy
26
70.
Error
27
71.
Procedure on a poll
27
72.
Poll to be taken forthwith
27
73.
Casting vote
27
74.
Demand for poll
27
75.
Withdrawal
27
PROXY
28
76.
Form of Proxy
28
77.
Appointment of proxy
28
78.
Deposit of proxy
28
79.
Validity
29
80.
Supply of proxy cards
29
81.
Corporate representative
29
DISCLOSURE OF INTERESTS
30
82.
Section 793
30
83.
Default
30
84.
Restrictions
31
85.
Arms length transfer
31
86.
Relevant period
31
87.
Interest in shares
31
APPOINTMENT OF DIRECTORS
32
88.
Power of Company to appoint Directors
32
89.
Power of Board to appoint Directors
32
90.
Number of Directors
32
91.
Additional remuneration
32
ALTERNATE DIRECTORS
33
92.
Appointment
33
93.
Remuneration
33
INTERESTS OF DIRECTORS
33
94.
Other office of Director
33
95.
Disqualification
33

iii
96.
Declaration of interest
34
97.
Material interest
34
98.
Voting
34
99.
Two Directors
35
100.
Directors interests
35
101.
Interest of connected person
36
102.
Suspension of provisions
36
103.
Directors’ conflict of interest
36
104.
Benefits
38
105.
Exercise of power
38
GENERAL POWERS OF DIRECTORS
38
106.
Management
38
107.
Delegation of Authority
39
108.
Power of Attorney
39
109.
Overseas registers
39
110.
Uncalled capital
39
DIRECTORS HOLDING EXECUTIVE OFFICE
39
111.
Office
39
112.
Remuneration
40
113.
Powers
40
RETIREMENT OF DIRECTORS
40
114.
Retirement
40
115.
Vacation of office
40
116.
Resolution as to a vacancy conclusive
41
ROTATION OF DIRECTORS
41
117.
Retirement by rotation
41
118.
Retirement in every year
41
119.
Vacated office
42
120.
Appointment
42
121.
Motion
42
PROCEEDINGS OF DIRECTORS
42
122.
Meetings
42
123.
Authorisation to vote
43
124.
Quorum
43
125.
Minimum number of directors
43
126.
Chairman
44
127.
Resolutions
44
128.
Committees
44
129.
Validity
44
BORROWING POWERS
45
130.
Powers
45

iv
OTHER DIRECTORS
45
131.
Appointment
45
MINUTES AND BOOKS
45
132.
Minutes
45
133.
Records
46
SECRETARY
46
134.
Appointment
46
135.
Office
46
THE SEAL
46
136.
Safe custody
46
137.
Application
46
138.
Seal for use abroad
47
139.
Issue
47
140.
Seal
47
AUTHENTICATION OF DOCUMENTS
47
141.
Authentication
47
DIVIDENDS
48
142.
Declaration of dividends
48
143.
Dividends payable
48
144.
Payment of dividends
48
145.
Interim dividends
48
146.
Profits and losses
49
147.
Calls or debts deducted from dividends
49
148.
Retention of dividends
49
149.
Unclaimed dividends
49
150.
Payment of dividends
49
151.
Receipts for dividends
50
152.
Scrip dividends
50
153.
General meeting to declare dividend
51
154.
Reserves
52
155.
Capitalisation
52
156.
Authority
52
157.
Record Dates
53
ACCOUNTS
53
158.
Accounting records
53
159.
Preparation of accounts
53
160.
Accounts to members
53
161.
Electronic means
54
AUDITORS
54
162.
Appointment
54

v
163.
Correctness
54
164.
Auditors to attend meetings
54
165.
Change of auditors
54
SERVICE OF NOTICE ON MEMBERS
54
166.
Notices to be in writing
54
167.
Service of notice on members
55
168.
Notice in case of death, bankruptcy or mental disorder
56
169.
Evidence of service
56
170.
Notice binding on transferees
56
171.
Notice by advertisement
57
172.
Suspension of the postal services
57
173.
Service of notices on the Company
57
ELECTRONIC COMMUNICATION
57
174.
Electronic Communication
57
DESTRUCTION OF DOCUMENTS
58
175.
Destruction
58
176.
Correct entries
58
WINDING UP
59
177.
Authority to divide assets
59
INDEMNITY
59
178.
Right to indemnity
59
179.
Power to Insure
59
 
vi
Company Number:  12107859
 
THE COMPANIES ACT 2006
 
PUBLIC COMPANY LIMITED BY SHARES
 
ARTICLES OF ASSOCIATION
 
OF
 
AMRYT PHARMA PLC
 
(the “Company”)
 
(adopted by special resolution passed on 29 July 2020)
 
REGULATIONS AND INTERPRETATION
 
1.
Interpretation
 
1.1
In these Articles, unless the context otherwise requires, the following words and expressions shall have the following meanings:
 
“Act” means the Companies Act 2006 (as amended);
 
“Articles” means the articles of association of the Company as contained in this document or as amended from time to time;
 
“Bank” means the bank with which the Company has its main current account from time to time;
 
“Directors” or “Board” means the directors of the Company from time to time or a quorum of such directors present at a board meeting and “Director” shall mean any one of them;
 
“dividend” includes bonus;
 
“combined physical and electronic meeting” means any general meeting convened and held in accordance with these Articles and which allows any person entitled to be present to attend and participate in person or by means of an electronic platform;
 
“communication” and “electronic communication” shall have the same meaning as in the Electronic Communications Act 2000;
 
“electronic form” and “electronic means” shall, where the context so admits, have the same meaning as in the Act;
 
“electronic platform” means any form of electronic platform or facility, including any website address and conference call system and any device, system, procedure, method or other facility providing electronic means of attendance at and/or participation in a meeting determined by the Board pursuant to these Articles and specified in the notice of that meeting;
 
“executed” includes any mode of execution;
 
“holder” means, in relation to shares, means a member whose name is entered in the register of members as the holder of the shares;
 
“Office” means the registered office for the time being of the Company;
 
“Operator” means the person from time to time who in respect of the Company’s securities carries out the functions of the operation of a relevant system for the purposes of the Regulations;
 
“Ordinary Shares” means ordinary shares with a nominal value of £0.06 each in the share capital of the Company;
 
“paid up” means paid up or credited as paid up;
 
“Panel” means the Panel on Takeovers and Mergers in the United Kingdom;
 
“physical meeting” means any general meeting convened and held in accordance with these Articles and which allows any person entitled to be present to attend and participate in person at the location(s) specified in the notice of such meeting;
 
“present” means:
 

 (a)
in respect of a physical meeting, physically present in person; or
 

 (b)
in respect of a combined physical and electronic meeting, physically present either in person or by attendance by means of an electronic platform;
 
“Privileged Relation” means in relation to a shareholder who is an individual shareholder (or a deceased or former individual shareholder) means a spouse, civil partner, (as defined in the Civil Partnerships Act 2004) child or grandchild (including step or adopted or illegitimate child and their issue);
 
“Regulations” means the Uncertificated Securities Regulations 2001 (SI 2001 no. 3755) including any modification thereof or any regulations in substitution thereof and for the time being in force;
 
2
“Relevant Liability” means any cost, charge, loss, damage, expense or liability which any person may suffer or incur:
 

 (a)
as a result of anything he does, or does not do, in carrying out or trying to carry out his duties, or using or trying to use his powers in relation to the Company, or in relation to any of the other bodies corporate which are referred to in the definition of “Relevant Person” or, in the case of any current or past trustee of any pension fund, in relation to that pension fund; or
 

 (b)
in any other way in connection with his duties, powers or posts in relation to the Company or in relation to any of the other bodies corporate which are referred to in the definition of “Relevant Person” or, in the case of any current or past trustee of any pension fund, in relation to that pension fund including (without prejudice to the generality of the foregoing) any liability incurred in connection with defending any proceedings (whether civil or criminal) which relate to any of the matters referred to in this definition of “Relevant Liability”;
 
“Relevant Person” means any person who is or was at the time a Director, alternate director, officer or employee of:
 

 (a)
the Company, or any body corporate which is or was at any time a holding company of the Company;
 

 (b)
any body corporate in which the Company, or any body corporate which is or was at any time a holding company of the Company, has any kind of direct or indirect interest;
 

 (c)
any body corporate in which any of the predecessors of the Company, or of any body corporate which is or was at any time a holding company of the Company, has any kind of direct or indirect interest;
 

 (d)
any body corporate with which the Company is or was at any time allied, or associated; or
 

 (e)
any body corporate which is or was at any time a subsidiary undertaking of any body corporate referred to in this definition;
 
“relevant system” means a relevant system as defined by regulation 2(1) of the Regulations;
 
“Seal” means the common seal of the Company or if appropriate any official seal which the Company may have pursuant to Section 50 of the Act (the “Securities Seal”);
 
“Secretary” means the secretary of the Company and (subject to the provisions of the Act) any other person appointed by the Directors to perform any of the duties of the secretary of the Company, including a joint assistant or deputy secretary;
 
3
“Statutes” means the Act, and every other statute (and any regulations subordinate thereto) for the time being in force concerning companies and affecting the Company; and
 
“United Kingdom” means the United Kingdom of Great Britain and Northern Ireland.
 
1.2
In these Articles, unless the context otherwise requires:
 

 (a)
words importing the singular number only shall include the plural, and vice versa;
 

 (b)
words importing the masculine gender only shall include the feminine gender;
 

 (c)
words importing individuals and words importing persons shall include bodies corporate and unincorporated associations;
 

 (d)
“in writing” and “written” includes printing, lithography, typewriting, photography and other modes of representing or reproducing words in visible form, whether sent or supplied in electronic form, made available on a website or otherwise;
 

 (e)
any reference to a “meeting” refers to a general meeting convened and held in any manner permitted by these Articles, including a general meeting held as a physical meeting or a combined physical and electronic meeting, and such persons entitled to be present attending and participating in such meeting shall be deemed to be present at such meeting for the purposes of the Act, and these Articles shall be construed accordingly;
 

 (f)
references to any statute or provision of a statute shall include any orders, regulations or other subordinate legislation made under it and shall, unless the context otherwise requires, include any statutory modification or re-enactment of it for the time being in force;
 

 (g)
save as aforesaid, words or expressions contained in these Articles shall bear the same meaning as in the Act and words and expressions used in the Regulations have the same meanings when used in these Articles;
 

 (h)
the words and phrases “other”, “including” and “in particular” do not limit the generality of any preceding words and any words which follow them shall not be construed as being limited in scope to the same class as the preceding words where a wider construction is possible;
 

 (i)
subject to the provisions of Article 51, where for any purpose an ordinary resolution of the Company is required a special resolution shall also be effective;
 

 (j)
references to Articles are references to these Articles and references to paragraphs and sub-paragraphs are, unless otherwise stated, references to paragraphs of the Article or references to sub-paragraphs of the paragraph in which the reference appears; and
 
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 (k)
the headings are inserted for convenience only and shall not affect the construction of these Articles.
 
2.
Model Articles not to apply and application of contractual agreements with members
 
2.1
No regulations set out in any statute or in any statutory instrument or other subordinate legislation concerning companies shall apply to the Company except insofar as they are repeated or contained in these Articles.  This document constitutes the Articles of the Company.
 
2.2
Subject to the Statutes, the Articles shall be subject to any contractual agreement entered into by the Company and any of its members (in their capacity as shareholders of the Company only).
 
SHARE CAPITAL
 
3.
Share Capital
 
3.1
The Ordinary Shares shall confer the following rights and restrictions on their holders:
 

 (a)
the right to receive notice of, attend and vote at any general meeting;
 

 (b)
the right to participate in the profits of the Company; and
 

 (c)
the right on a winding up or return of capital or otherwise to repayment of the amounts paid up or credited as paid up on them in respect of each Ordinary Share with the Ordinary Shares conferring a right to participate in any surplus assets of the Company in proportion to the number of shares held.
 
3.2
Without prejudice to any special rights previously conferred on the holders of any shares or class of shares already issued (which special rights shall not be modified or abrogated except with such consent or sanction as is provided in Articles 5 or 6), a share (whether forming part of the original capital or not) may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, return of capital, voting or otherwise, as the Company by ordinary resolution determines.
 
COMPANY BUSINESS
 
4.
Business
 
Any branch or kind of business which the Company is either expressly or by implication authorised to undertake may be undertaken by the Directors at such times as they think fit, and may be permitted by them to be in abeyance, whether the branch or kind of business commenced or not, so long as the Directors deem it expedient not to commence or proceed with it.
 
5
VARIATION OF CLASS RIGHTS
 
5.
Sanction to variation
 
5.1
Subject to the provisions of the Act if at any time the capital of the Company is divided into different classes of shares or groups, the rights attached to any class or group may be varied or abrogated, whether or not the Company is being wound up, either:
 

 (a)
in such manner (if any) as may be provided by such rights; or
 

 (b)
in the absence of any such provisions with the consent in writing of the holders of three-quarters in nominal value of the issued shares of that class or group, or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class or group, but not otherwise.
 
5.2
To every such separate general meeting of the holders of a class or group of shares all the provisions of these Articles relating to general meetings of the Company or to the proceedings at such general meetings shall, so far as applicable and with the necessary modifications, apply, except that:
 

 (a)
the necessary quorum at any such meeting other than an adjourned meeting shall be two persons holding or representing by proxy at least one-third in nominal value of the issued shares of the class or group in question and at an adjourned meeting one person holding shares of the class or group in question or his proxy;
 

 (b)
any holder of shares of the class or group in question present in person or by proxy may demand a poll; and
 

 (c)
the holders of shares of the class or group in question shall, on a poll, have one vote in respect of every share of the class or group held by them respectively.
 
6.
Deemed variation
 
The special rights conferred upon the holders of any class or group of shares issued with preferred or other special rights shall not (unless otherwise expressly provided by these Articles or by the conditions of issue of such shares) be deemed to be varied by the creation or issue of further shares ranking in some or all respects pari passu with them.
 
SHARES
 
7.
Allotment of shares
 
7.1
Subject to Article 7.2 and to any direction to the contrary given by the Company in general meeting, the shares and any right to subscribe for, or to convert any security into, shares in the Company for the time being (other than shares shown in the memorandum of association of the Company to have been taken by the subscribers or shares allotted in pursuance of an employee’s share scheme) may be allotted to such persons, at such times, in such proportions, upon such terms (other than at a discount) and with such rights or restrictions, including but without limit as to differentiation between members of calls, as the Directors, subject to the Articles and to the provisions of the Act shall think fit.
 
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7.2
The Company may in accordance with and subject to sections 684 to 689 of the Act and all other relevant provisions (if any) in force for the time being:
 

 (a)
issue shares which are to be redeemed or are liable to be redeemed at the option of the Company or the holder thereof;
 

 (b)
make a payment in respect of the redemption or purchase of any of its own paid-up shares out of the distributable profits of the Company or the proceeds of a fresh issue of shares and as to redemption on such date or dates (to be fixed prior to the issue of such shares) and terms and in such manner as may be determined at any time or times by the Directors, provided nevertheless that the amount to be paid on redemption shall be fixed on, and by the terms of, the issue of the shares;
 
provided always that any shares purchased or redeemed by the Company shall be treated as cancelled and that within one month of the redemption of any redeemable shares the Company gives notice to the registrar specifying the shares redeemed.
 
8.
Purchase of own shares
 
Subject to the provisions of the Act and, if applicable, subject to any approval by means of a special resolution at a separate class meeting of the holders of any class of convertible shares, the Company shall have power to purchase its own shares, including any redeemable shares.
 
9.
Commission and brokerage
 
In addition to all other powers of paying commission, the Company may exercise the powers conferred by the Act in paying commission to persons subscribing or procuring subscriptions for shares in the Company, or agreeing so to do, whether absolutely or conditionally; provided that the rate or the amount of the commission paid or agreed to be paid shall be disclosed in the manner required by the Act and shall not exceed ten per cent of the price which the shares in respect of which the commission is paid are issued or an amount equivalent thereto.  Subject to the provisions of the Act any such commission may be satisfied by the payment of cash or by the allotment or fully or partly paid shares or partly in one way and partly in the other.  The Company may also, on any issue of shares, pay such brokerage as is lawful.
 
10.
Trusts not to be recognised
 
Except as required by law (including, without limitation, the Regulations), no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or compelled in any way to recognise (even when having notice) any equitable, contingent, future or partial interest in any share, or (except only as provided by these Articles or as required by law) any interest in any fractional part of a share or any other right in respect of any share, except an absolute right to the entirety of it in the registered holder.
 
7
SHARE CERTIFICATES
 
11.
Share certificates
 
11.1
Every person whose name is entered as a member in the register of members (except a recognised clearing house or a nominee thereof or other person in respect of whom the Company is not by law required to complete and have ready for delivery a certificate) shall be entitled without payment to one certificate for all his shares of each class.  Every certificate shall be issued within two months after allotment or the lodgement with the Company of the transfer of the shares, not being a transfer which the Company is for any reason entitled to refuse to register and does not register (unless the conditions of issue of such shares otherwise provide), and shall specify the number and class and distinguishing numbers (if any) of the shares to which it relates and the amount paid up thereon.  The Company shall not be bound to register more than four persons as the joint holders of any share or shares and, in the case of a share held jointly by several persons, the Company shall not be bound to issue more than one certificate therefor, and delivery of a certificate for shares to the first named joint holders shall be sufficient delivery to all.  Where a member transfers part of the shares comprised in his holding he shall be entitled to a certificate for the balance of his holding without charge.
 
11.2
Any share certificate and any certificate for debentures of the Company which has been approved for sealing by the Directors or a committee of the Directors need not (save to the extent that the terms and conditions for the time being relating to any debentures of the Company otherwise require) be signed or countersigned by any person.  Subject as aforesaid, any such certificate may, if the Directors so determine, bear signatures affixed by some mechanical system or process or printed on them or the names of the Company’s issuing agents and need not be signed by any person.
 
12.
Replacement of share certificate
 
If a share certificate is defaced, worn out, lost or destroyed, it may be replaced on such terms (if any) as to evidence and indemnity and the payment of any exceptional out of pocket expenses incurred by the Company in investigating evidence as the Directors think fit but otherwise free of charge and (in case of defacement or wearing out) on delivery up of the old certificate.
 
ISSUE OF SHARES
 
13.
Uncertificated shares
 
13.1
In these Articles references to a share (or to holding of shares) being in uncertificated form or in certificated form are references, respectively, to that share being an uncertificated unit of a security or a certificated unit of a security.
 
8
13.2
The Directors shall have power to implement such arrangements as they may, in their absolute discretion, think fit in order for any class of shares to be a participating security (subject always to the Regulations and the facilities and requirements of the relevant system concerned).  Where they do so the following Article shall commence to have effect immediately prior to the time at which the Operator concerned permits the class of shares concerned to be a participating security.
 
13.3
In relation to any class of shares which is, for the time being, a participating security, and for so long as such class remains a participating security, no provision of these Articles shall apply or have effect to the extent that it is in any respect inconsistent with:
 

 (a)
the holding of shares of that class in uncertificated form;
 

 (b)
the transfer of title to shares of that class by means of a relevant system; or
 

 (c)
the Regulations.
 
14.
Relevant Class
 
14.1
Without prejudice to the generality of the preceding Article and notwithstanding anything contained in these Articles, where any class of shares is, for the time being, a participating security (such class being referred to hereinafter as the “Relevant Class”):
 

 (a)
the register relating to the Relevant Class shall be maintained at all times in the United Kingdom;
 

 (b)
shares of the Relevant Class may be issued in uncertificated form in accordance with and subject as provided in the Regulations;
 

 (c)
unless the Directors otherwise determine, shares of the Relevant Class held by the same holder or joint holder in certificated form and uncertificated form shall be treated as separate holdings;
 

 (d)
shares of the Relevant Class may be changed from uncertificated to certificated form, and from certificated to uncertificated form, in accordance with and subject as provided in the Regulations;
 

 (e)
title to shares of the Relevant Class which are recorded on the register as being held in uncertificated form may be transferred by means of the relevant system concerned and accordingly none of the provisions of these Articles shall apply in respect of such shares to the extent that any provision requires or contemplates the effecting of a transfer by an instrument in writing and the production of a certificate for the share to be transferred;
 

 (f)
the Company shall comply with the provisions of Regulations 27 and 28 in relation to the Relevant Class and all provisions in these Articles shall be read as subject to Regulation 28;
 
9

 (g)
the provisions of these Articles with respect to meetings of or including holders of the Relevant Class, including notices of such meetings, shall have effect subject to the provisions of Regulation 41; and
 

 (h)
no provision of these Articles shall apply so as to require the Company to issue a certificate to any person holding shares of the Relevant Class in uncertificated form.
 
CALLS ON SHARES
 
15.
Calls
 
The Directors may, subject to the provisions of these Articles and to any conditions of allotment, from time to time make calls upon the members in respect of any monies unpaid on their shares (whether on account of the nominal amount of the shares or by way of premium) and each member shall (subject to being given at least 14 days’ notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares.
 
16.
Payment
 
A call may be made payable by instalments.  A call may be postponed and a call may be wholly or in part revoked as the Directors may determine.  A call shall be deemed to have been made at the time when the resolution of the Directors authorising the call was passed.  The joint holders of a share shall be jointly and severally liable to pay all calls in respect of it.  A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the shares in respect of which the call was made.
 
17.
Interest on calls
 
If a sum called in respect of a share is not paid before or on the day appointed for its payment, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment to the time of actual payment at the rate fixed by the terms of allotment of the share or in the notice of the call or, if no rate is so fixed, at the base rate from time to time of the Bank or at such lower rate as the Directors may agree to accept, but the Directors shall be at liberty to waive payment of such interest wholly or in part.
 
18.
Sums treated as calls
 
Any sum which by the terms of issue of a share becomes payable upon allotment or at any fixed date, whether on account of the nominal amount of the share or by way of premium or as an instalment of a call, shall, for all the purposes of these Articles, be deemed to be a call duly made and payable on the date on which by the terms of issue the same becomes payable, and, in case of non-payment, all the relevant provisions of these Articles as to payment of interest, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.
 
10
19.
Power to differentiate
 
Subject to the terms of allotment, the Directors may, on the issue of shares, differentiate between the holders in the amount of calls to be paid and in the times of payment.
 
20.
Payment in advance of calls
 
The Directors may, if they think fit, receive from any member willing to advance the same all or any part of the money unpaid upon the shares held by him beyond the sums actually called upon as a payment in advance of calls, and any such payment in advance of calls shall extinguish, so far as the same shall extend but subject as in these Articles provided, the liability upon the shares in respect of which it is advanced; and upon the money so received, or so much of it as from time to time exceeds the amount of the calls then made upon the shares in respect of which it has been received, the Company may pay interest at such rate not exceeding the base rate from time to time of the Bank as the member paying such sum and the Directors agree.
 
FORFEITURE, SURRENDER, LIEN AND UNTRACED MEMBERS
 
21.
Notice if call not paid
 
If a member fails to pay any call or instalment of a call on the day appointed for its payment, the Directors may at any time after such date, during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.  The notice shall name a further day (not earlier than 7 days from the date of service of such notice) on or before which and the place where the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time and at the place appointed the shares on which the call was made will be liable to be forfeited.
 
22.
Forfeiture for non-compliance
 
If the requirements of any such notice as referred to are not complied with, any share in respect of which such notice has been given may at any time after service of such notice, before payment of all calls and interest due has been made, be forfeited by a resolution of the Directors to that effect, and such forfeiture shall include all dividends which shall have been declared on the forfeited shares and not actually paid before the forfeiture.  The Directors may accept a surrender of any shares liable to be forfeited under this Article.
 
23.
Disposal of forfeited shares
 
Subject to the provisions of the Act, a share so forfeited or surrendered shall become the property of the Company and may be sold, re-allotted or otherwise disposed of either to the person who was before such forfeiture or surrender the holder or entitled to such shares, or to any other person, upon such terms and in such manner as the Directors shall think fit.  At any time before a sale, re-allotment or disposal, the forfeiture or surrender may be cancelled on such terms as the Directors think fit.  The Directors may, if they think fit, authorise some person to execute an instrument or transfer of a forfeited or surrendered share to such any other person.
 
11
24.
Effect of forfeiture
 
A member whose shares have been forfeited or surrendered shall cease to be a member in respect of the forfeited or surrendered shares and shall surrender to the Company for cancellation the certificate for the share forfeited, but shall notwithstanding such forfeiture or surrender remain liable to pay to the Company all monies which at the date of forfeiture or surrender were presently payable by him to the Company in respect of the shares, with interest, unless and to the extent that the Directors resolve to waive interest, at the rate at which interest was payable on those monies before the forfeiture or, if no interest was so payable, at the base rate from time to time of the Bank or at such lower rate as the Directors may agree to accept from the date of forfeiture or surrender until payment, and the Directors may enforce payment without any allowance for the value of the shares at the time of forfeiture or surrender or for any consideration received on their disposal.
 
25.
Lien
 
Subject to the provisions of Section 670 of the Act the Company shall have a first and paramount lien on every share (not being a fully paid share) for all monies, whether presently payable or not, called or payable at a fixed time in respect of such share.  The Company’s lien (if any) on a share shall extend to all dividends or other monies payable on or in respect of such shares together with any interest or expenses which may have accrued.  The Directors may resolve that any share shall for some specified period be wholly or in part exempt from the provisions of this Article.
 
26.
Enforcement of lien by sale
 
The Company may sell, in such manner as the Directors think fit, any shares on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable, nor until the expiration of 14 days after a notice in writing, stating and demanding payment of the sum presently payable, and giving notice of intention to sell in default, shall have been served on the holder for the time being of the shares or the person entitled by reason of his death or bankruptcy to the shares.
 
27.
Application of proceeds of sale
 
The net proceeds of such sale, after payment of the relevant costs, shall be applied in or towards payment or satisfaction of the debt or liability in respect of which the lien exists, so far as the same is presently payable, and any residue shall (upon surrender to the Company for cancellation of the certificate for the shares sold and subject to a like lien for debts or liabilities not presently payable as existed upon the shares prior to the sale) be paid to the person entitled to the shares at the time of the sale.  For giving effect to any such sale, the Directors may authorise some person to execute an instrument of transfer of the shares sold to, or in accordance with, the directions of the purchaser of such shares.  The purchaser shall be registered as the holder of the shares and he shall not be bound to see the application of the purchase money and his title to the shares shall not be affected by any irregularity or invalidity in the proceedings in reference to the sale.
 
12
28.
Untraced members
 
28.1
The Company shall be entitled to sell at the best price reasonably obtainable in such manner and for such price as the Directors think fit any share of a member, or any share to which a person is entitled by transmission on death or bankruptcy, if and provided that:
 

 (a)
during the period of 12 years prior to the date of the publication of the advertisements referred to in Article 28.1(b) (or, if published on different dates, the earlier or earliest date) no cheque, order or warrant in respect of such share sent by the Company through the post in a pre-paid envelope addressed to the member or to the person entitled by transmission to the share, at his address on the register or other last known address given by the member or person to which cheques, orders or warrants in respect of such share are to be sent has been cashed and the Company has received no communications in respect of such share from such member or person, provided that during such period of 12 years the Company has paid at least three cash dividends (whether interim or final) and no such dividend has been claimed by the person entitled to it;
 

 (b)
on or after expiry of the said period of 12 years the Company has given notice of its intention to sell such share by advertisements in two newspapers of which one shall be a national newspaper published in the United Kingdom and the other shall be a newspaper circulating in the area of the address on the register or other last known address of the member or the person entitled by transmission to the share or the address for the service of notices otherwise notified by a member or transferee to the Company;
 

 (c)
the said advertisements, if not published on the same day, shall have been published within thirty days of each other; and
 

 (d)
during the further period of three months following the date of publication of the said advertisements (or, if published on different dates, the later or latest date) and prior to the exercise of the power of sale the Company has not received any communication in respect of such share from the member or person entitled by transmission.
 
28.2
To give effect to any sale of shares pursuant to this Article, the Directors may authorise some person to transfer the shares in question and may enter the name of the transferee in respect of the transferred shares in the register notwithstanding the absence of any share certificate being lodged in respect thereof and may issue a new certificate to the transferee.  An instrument of transfer executed by (or a dematerialised instruction given by) that person shall be as effective as if it had been executed or effected by the holder of, or the person entitled by transmission to, the shares.  The purchaser shall not be bound to see to the application of the purchase monies, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.
 
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28.3
If during the period of 12 years referred to in Article 28.1, or during any period ending on the date when all the requirements of Articles 28.1(a) to 28.1(d) have been satisfied, any additional shares have been issued in respect of those held at the beginning of, or previously so issued during, any such period and all the requirements of Articles 28.1(a) to 28.1(d) have been satisfied in regard to such additional shares, the Company shall also be entitled to sell the additional shares.
 
28.4
The Company shall account to the member or other person entitled to such share for the net proceeds of such sale by carrying all monies in respect of such sale to a separate account.  The Company shall be deemed to be a debtor to, and not a trustee for, such member or other person in respect of such monies.  Monies carried to such separate account may either be employed in the business of the Company or invested in such investments as the Directors may from time to time think fit.  No interest shall be payable to such member or other person in respect of such monies and the Company shall not be required to account for any money earned on them.
 
29.
Evidence of forfeiture
 
A statutory declaration in writing that the declarant is a Director or the Secretary and that a share has been duly forfeited, surrendered or sold, whether to satisfy a lien of the Company or otherwise on a date stated in the declaration, shall be conclusive evidence of the facts stated in such declaration as against all persons claiming to be entitled to the share.  Such declaration and the receipt of the Company for the consideration (if any) given for the share on its sale, re-allotment or disposal, together with the share certificate delivered to the relevant purchaser or allottee, shall (subject to the execution of an instrument of transfer if the same be required) constitute a good title to the share and the person to whom the share is sold, re-allotted or disposed of shall be registered as the holder of the share and shall not be bound to see to the application of the consideration (if any) nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, surrender, sale, re-allotment or disposal of the share.
 
TRANSFER OF SHARES
 
30.
Transfer of title and interest
 
Title to and interest in shares may be transferred without a written instrument in accordance with statutory regulations from time to time made under the Act.
 
31.
Transfer of shares
 
Transfer of shares may be effected by transfer in writing in any usual or common form or in any other form acceptable to the Directors or as required by any rules from time to time made by the Operator.  The instrument of transfer shall be signed by or on behalf of the transferor and (except in the case of fully paid shares) by or on behalf of the transferee.  The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered on the register of members in respect of it.
 
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32.
Right to refuse registration
 
32.1
The Directors may decline to recognise any instrument of transfer, unless:
 

 (a)
the instrument of transfer duly stamped is deposited at the Office or such other place as the Directors may appoint, accompanied by the certificate for the shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer, provided that, in the case of a transfer by a nominee of a recognised clearing house or of a recognised investment exchange, the lodgement of a share certificate will only be necessary if a certificate has been issued in respect of the share in question;
 

 (b)
the instrument of transfer is in respect of only one class of share;
 

 (c)
the instrument of transfer is in favour of not more than four transferees; and
 

 (d)
the instrument of transfer is in respect of a share in respect of which all sums presently payable to the Company have been paid; provided that the Directors shall not refuse to register any transfer or renunciation of partly paid shares in breach of the AIM Rules for Companies published by the London Stock Exchange plc from time to time (if applicable).
 
33.
Notice of refusal
 
If the Directors refuse to register a transfer of any shares, they shall, within 2 months after the date on which the transfer was lodged with the Company or the Operator as the case may be, send to the transferor and the transferee notice of the refusal.
 
34.
Closing of register
 
The registration of transfers of shares or of any class of shares may be suspended at such time and for such periods as the Directors may from time to time determine, provided always that the register of members shall not be closed for more than 30 days in any year.
 
35.
Fees on registration
 
No fee will be charged by the Company in respect of the registration of any instrument of transfer, probate, letters of administration, certificate of marriage or death, stop notice or power of attorney or other document relating to or affecting the title to any shares or otherwise for making any entry in the register of members relating to or affecting the title to any shares.
 
36.
Retention
 
All instruments of transfer which shall be registered may be retained by the Company, but any instrument of transfer which the Directors refuse to register shall (except in any case of fraud) be returned to the person depositing the same.
 
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37.
Transfer by renunciation
 
Nothing in these Articles shall preclude the Directors from recognising a renunciation of the allotment of any share by the allottee in favour of some other persons.
 
TRANSMISSION OF SHARES
 
38.
On death
 
In the case of the death of a member the survivors or survivor where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole or only surviving holder, shall be the only persons recognised by the Company as having any title to his interest in the shares, but nothing in this Article shall release the estate of a deceased holder (whether sole or joint) from any liability in respect of any share held by him.
 
39.
Election of person entitled by transmission
 
Any person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such evidence as to his title being produced as may from time to time be required by the Directors and subject as provided in these Articles, elect either to be registered himself as a holder of the share or to have some person nominated by him registered as the transferee.
 
40.
Transfer notice
 
If the person so becoming entitled shall elect to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects.  If he shall elect to have another person registered, he shall testify his election by executing a transfer of the share in favour of that person.  All the limitations, restrictions and provisions of these Articles relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as if the death or bankruptcy of the member had not occurred and the notice or transfer were a transfer signed by such member.
 
41.
Rights on transmission
 
Save as otherwise provided by or in accordance with these Articles, a person becoming entitled to a share in consequence of the death or bankruptcy of a member shall (upon supplying to the Company such evidence as the Directors may reasonably require as to his title to the share) be entitled to receive and may give a discharge for all benefits arising or accruing on or in respect of the share, but he shall not be entitled in respect of that share to receive notices of or to attend or vote at general meetings of the Company or at any separate meeting of the holders of any class of shares in the Company nor to any of the rights or privileges of a member, until he shall have become a member in respect of the share provided always that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and if within 60 days the notice is not complied with such person shall (but only in the case of a share which is fully paid up) be deemed to have elected to be registered as a member in respect of such share and may be registered accordingly.
 
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INCREASE OF CAPITAL
 
42.
Increase of Capital
 
The Company may from time to time by ordinary resolution increase its capital by such sum to be divided into shares of such amounts and carrying such rights as the resolution may prescribe.
 
43.
New Shares
 
All new shares shall (unless the Company shall in general meeting otherwise determine) be subject to the provisions of these Articles with reference to payment of calls, forfeiture, surrender, lien, transfer, transmission and otherwise, and unless otherwise provided by or pursuant to these Articles or by the conditions of issue the new shares shall upon issue be ordinary shares.
 
ALTERATION OF CAPITAL
 
44.
Alteration
 
44.1
The Company may by ordinary resolution:
 

 (a)
consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; whenever as a result of any consolidation of shares any member would become entitled to a fraction of a share, the Directors may for the purpose of eliminating such fractions sell the shares representing the fractions for the best price reasonably obtainable to any person including, subject to the provisions of the Act, the Company and distribute the proceeds of sale in due proportion among the members who would have been entitled to the fractions of shares, or retain such proceeds for the benefit of the Company and for the purpose of any such sale the Directors may authorise some person to transfer the shares representing the fractions to the purchaser thereof whose name shall then be entered in the register of members as the holder of the shares, and who shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale;
 

 (b)
cancel any shares which, at the date of the passing of the resolution, have not been taken, or agreed to be taken, by any person, and diminish the amount of share capital by the amount of the shares so cancelled;
 

 (c)
sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the Memorandum of Association (subject nevertheless to the provisions of the Act) and so that the resolution by which any share is subdivided may determine that, as regards each share so subdivided, one or more of the shares resulting from such subdivision may have any such preferred or other special rights over, or may have such deferred rights, or be subject to any such restrictions as compared with the others, as the Company has power to attach to unissued or new shares.
 
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44.2
The Company may by special resolution reduce its share capital and any capital redemption reserve and any share premium account in any manner subject to the provisions of the Act.
 
GENERAL MEETINGS
 
45.
Annual general meetings
 
The Company shall in each year hold a general meeting as its annual general meeting in addition to any other meeting in that year and within six months of the end of any financial period provided that not more than 15 months shall elapse between the date of one annual general meeting of the Company and that of the next.  Subject as aforesaid and to the provisions of the Act, the annual general meeting shall be held at such time and place (or places) as the Directors may determine.
 
46.
General meetings
 
46.1
The Directors may whenever they think fit, and shall on requisition in accordance with the Act, proceed to convene a general meeting.
 
46.2
The Directors may determine in relation to each general meeting (including an annual general meeting) the means of attendance and participation in the meeting, including if the persons entitled to attend and participate in the meeting shall be enabled to do so:
 

 (a)
by means of a physical meeting;
 

 (b)
by means of a combined physical and electronic meeting pursuant to Article 53 (provided that there shall be no obligation to offer or provide a combined physical and electronic meeting); or
 

 (c)
by simultaneous attendance and participation at a satellite meeting place or places pursuant to Article 52.
 
47.
Notice of general meetings
 
47.1
Subject to the provisions of the Act, an annual general meeting shall be called by 21 days’ notice at the least, and all other general meetings shall be called by 14 days’ notice at the least (exclusive, in each case, of the day on which the notice is served or deemed to be served and of the day for which the notice is given).
 
47.2
Every notice shall be in writing and shall specify:
 

 (a)
the place (or places), the day and the time of the meeting;
 

 (b)
the general nature of business of the meeting;
 
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 (c)
in the case of an annual general meeting, that the meeting is an annual general meeting;
 

 (d)
if the meeting is convened to consider a special resolution, the intention to propose the resolution as such; and
 

 (e)
in the case of a combined physical and electronic meeting, the information set out in Article 53.1.
 
47.3
Notice in writing includes notices given by electronic communication to an address notified for that purpose to the Company and/or making such notices available on the Company’s website subject to notifying the address of such website to members who have agreed that notices of meetings may be accessed by them on a website and then in accordance with the manner agreed by such members and the Company as to such notification.
 
47.4
Notices shall be given in accordance with these Articles to all the members, other than those who under the provisions of these Articles or the conditions of issue of the shares held by them are not entitled to receive the notice, to the Directors (including any alternate director) and to the auditors for the time being and (where required by the Act) former auditors of the Company.
 
48.
Statement
 
In every notice calling a meeting of the Company there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him and that a proxy need not also be a member.
 
49.
Omission of notice
 
The accidental omission to give notice of a meeting to (or to send a form of proxy with such notice where required), or the non-receipt of notice or form of proxy by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.
 
PROCEEDINGS AT GENERAL MEETINGS
 
50.
Business of meetings
 
All business shall be deemed special that is transacted at a general meeting, and also all business that is transacted at an annual general meeting, with the exception of the declaration of dividends, the consideration of accounts and of the reports of the Directors and of the auditors and other documents annexed to the accounts, the appointment or reappointment of directors in the place of those retiring by rotation or otherwise, the reappointment of the auditors (save where special notice of such reappointment is required by the Act) and the fixing of the remuneration of the auditors or of the manner in which such remuneration is to be fixed and the giving, varying, revoking or renewing of any authority or person for the purposes of sections 549, 551 and 559 of the Act.
 
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51.
Notice of resolution
 
Where, by any provision contained in the Act, special notice is required of a resolution, the resolution shall not be effective unless notice of the intention to move it has been given to the Company not less than 28 days (or such shorter period as the Act permits) before the meeting at which it is moved, and the Company shall give to the members notice of any such resolution as required by, and in accordance with the provisions of, the Act.
 
52.
Satellite meetings
 
52.1
Without prejudice to Article 53, to facilitate the organisation and administration of any general meeting, the Directors may determine that the meeting shall be held at two or more locations.
 
52.2
For the purposes of these Articles any general meeting taking place at two or more locations shall be treated as taking place where the chairman of the meeting presides (the “principal meeting place”) and any other location where that meeting takes place is referred to in these Articles as a “satellite meeting”).
 
52.3
A member present in person or by proxy at a satellite meeting may be counted in the quorum and may exercise all rights that they would have been able to exercise if they were present at the principal meeting place.
 
52.4
The Directors may make and change from time to time such arrangements as they shall in their absolute discretion consider appropriate to:
 

 (a)
ensure that all members and proxies for members wishing to attend the meeting can do so;
 

 (b)
ensure that all persons attending the meeting are able to participate in the business of the meeting and to see and hear anyone else addressing the meeting;
 

 (c)
ensure the safety of persons attending the meeting and the orderly conduct of the meeting; and
 

 (d)
restrict the numbers of members and proxies at any one location to such number as can safely and conveniently be accommodated there.
 
52.5
The entitlement of any member or proxy to attend a satellite meeting shall be subject to any such arrangements then in force and stated by the notice of meeting or adjourned meeting to apply to the meeting.
 
52.6
If there is a failure of communication equipment or any other failure in the arrangements for participation in the meeting at more than one place, the chairman may adjourn the meeting in accordance with Article 58.  Such an adjournment will not affect the validity of such meeting, or any business conducted at such meeting up to the point of adjournment, or any action taken pursuant to such meeting.
 
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52.7
A person (a “satellite chairman”) appointed by the Directors shall preside at each satellite meeting.  Every satellite chairman shall carry out all requests made of him by the chairman of the general meeting, may take such action as he thinks necessary to maintain the proper and orderly conduct of the satellite meeting and shall have all powers necessary or desirable for such purposes.
 
53.
Combined physical and electronic meetings
 
53.1
Without prejudice to Article 52, the Directors may determine to hold a general meeting as a combined physical and electronic meeting and, in such case, shall specify in the notice of the meeting to be served pursuant to Article 47:
 

 (a)
that the meeting is being held as such;
 

 (b)
details of the means for members to attend and participate in the meeting, including the physical place or places of the meeting and the electronic platform to be used; and
 

 (c)
any access, identification or security arrangements determined pursuant to Article 53.2 and any other arrangement as has at the time been made for the purposes of the meeting.
 
53.2
The Directors and the chairman of a combined physical and electronic meeting may make any arrangement and impose any requirement or restriction as is:
 

 (a)
necessary to ensure the identification of those taking part and the security of the electronic platform; and
 

 (b)
proportionate to achieving these objectives.
 
53.3
The members present in person or by proxy at the combined physical and electronic meeting by means of an electronic platform (as so determined by the Directors) shall be counted in the quorum for, and be entitled to participate in, the general meeting in question.
 
53.4
All resolutions put to members at a combined physical and electronic meeting shall be voted on by a poll in accordance with Article 68.3 and such poll votes may be cast by such means as the Directors in their absolute discretion consider appropriate for the purposes of the meeting.
 
53.5
Any general meeting at which an electronic platform is being made available will be duly constituted and its proceedings valid if (in addition to the other provisions of these Articles relating to general meetings being satisfied) the chairman is satisfied that the platform is available throughout the meeting to enable all person attending the meeting by whatever means to:
 

 (a)
participate in the business for which the meeting has been called;
 
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 (b)
hear all the people who speak at the meeting and at any combined physical and electronic meeting; and
 

 (c)
be heard by all other people attending and participating in that meeting.
 
53.6
Persons seeking to attend or participate in a combined physical and electronic meeting by means of an electronic platform shall be responsible for ensuring that they have access to the facilities (including systems, equipment and connectivity) which are necessary to enable them to do so.  Unless the meeting is adjourned by the chairman in accordance with the provisions of Article 58, any inability of any person to attend or participate in a combined physical and electronic meeting by means an electronic platform will not affect the validity of such meeting, or any business conducted at such meeting up to the point of adjournment, or any action taken pursuant to such meeting.
 
53.7
Nothing in these Articles authorises or allows a general meeting to be held exclusively by means of an electronic platform or basis.
 
53.8
Any combined physical and electronic meeting shall be deemed to take place at the place at which the chairman of the meeting is present.
 
53.9
If persons are entitled to attend and participate at a general meeting by means of an electronic platform, any document required to be on display or to be available for inspection (whether prior to or for the duration of the meeting, or both) will be made available in electronic form to those persons entitled to inspect it for the not less than the required period and this will be deemed satisfy any such requirement.
 
54.
Attendance at and participation in general meetings
 
54.1
In determining whether persons are attending or participating in a general meeting, it is immaterial whether any two or more members attending it are in the same place as each other or how they are able to communicate with each other.
 
54.2
Two or more persons who are not in the same place as each other attend a general meeting if their circumstances are such that if they have (or were to have) rights to speak or vote at that meeting, they are (or would be) able to exercise them.
 
54.3
The Directors may make whatever arrangements they consider appropriate to enable those attending a general meeting to exercise their rights to speak or vote at it.
 
54.4
The Directors may put in place such arrangements or restrictions as they think fit to ensure the safety and security of attendees at a general meeting and the orderly conduct of the meeting.  The Directors may refuse entry to, or remove from, a general meeting any member, proxy or other person who fails to comply with such arrangements or restrictions.  The chairman of a general meeting may take such action as he thinks fit to maintain the proper and orderly conduct of the meeting.
 
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54.5
A person is able to exercise the right to vote at a general meeting when:
 

 (a)
that person is able to vote, during the meeting, on resolutions put to the vote at the meeting; and
 

 (b)
that person’s vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting.
 
55.
Quorum
 
No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business.  Save as otherwise provided in these Articles, two members present in person or by proxy and entitled to vote at the meeting shall be a quorum for all purposes.
 
56.
Quorum not present
 
If within 30 minutes from the time appointed for the meeting a quorum is not present, the meeting, if convened on the requisition of or by members, shall be dissolved.  In any other case it shall stand adjourned to the same day in the next week at the same time and place or places (including, for a combined physical and electronic meeting, by means of an electronic platform) or to such other day, and at such time and place or places (including, for a combined physical and electronic meeting, by means of an electronic platform), as the Directors may determine, and if at such adjourned meeting a quorum is not present within 30 minutes from the time appointed for holding the meeting, the meeting shall be dissolved.
 
57.
Chairman
 
The chairman (if any) of the Board, or in his absence the deputy chairman (to be chosen, if there be more than one, by agreement amongst them or, failing agreement, by lot) or in the absence of any deputy chairman the vice-chairman (to be chosen, if there be more than one, by agreement amongst them or, failing agreement, by lot) shall preside as chairman at every general meeting of the Company, but if at any meeting neither such chairman nor such deputy chairman nor such vice-chairman be present within five minutes after the time appointed for holding the meeting, or if none of them be willing to act as chairman, the Directors present shall choose some Director present to be chairman, or if no Director be present, or if all the Directors present decline to take the chair, the members present shall choose some other member present to be chairman.

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58.
Power to adjourn
 
The chairman of any meeting at which a quorum is present may, with the consent of such meeting (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place.  However, without prejudice to any other power which the chairman may have under these Articles or at common law, he may, without the need for the consent of the meeting, interrupt or adjourn any meeting from time to time and from place to place or for an indefinite period if he is of the opinion that it has become necessary to do so in order to secure the comfort, safety and security of those attending and the proper and orderly conduct of the meeting or to give all persons entitled to do so a reasonable opportunity of attending, speaking and voting at the meeting.  When a meeting is adjourned for 30 days or more, notice of the adjourned meeting shall be given as in the case of an original meeting, but it shall not be necessary to specify in such notice the nature of the business to be transacted at the adjourned meeting.  Save as set out in this Article it shall not be necessary to give any notice of an adjournment.
 
59.
Postponement
 
59.1
If the Board, in its absolute discretion, considers that it is impractical or undesirable for any reason to hold a general meeting on the date or at the time or place (or places) specified in the notice calling the general meeting and/or, in the case of a combined physical and electronic meeting, by means of the electronic platform stated in that notice, it may postpone or move the general meeting to another date, time and/or place (or places) and/or change the electronic platform (or do any of these things).
 
59.2
The Board shall take reasonable steps to ensure that notice of the date, time and place (or places) of the rearranged meeting and/or, in the case of a combined physical and electronic meeting, details of the revised electronic platform is given to any member trying to attend the meeting at the original time and place.
 
59.3
Notice of the date, time and place (or places) of the rearranged meeting and/or, in the case of a combined physical and electronic meeting, details of the revised electronic platform shall, if practicable, also be placed on the Company’s website and notified to a regulatory information service.
 
59.4
Notice of the business to be transacted at such rearranged meeting shall not be required.
 
59.5
If a meeting is rearranged in this way, the appointment of a proxy will be valid if it is received as required by these Articles not less than 48 hours before the time appointed for holding the rearranged meeting.
 
60.
Directors may attend and speak
 
A Director and an alternate director shall, notwithstanding that he is not a member, be entitled to attend and speak at any general meeting and at any separate meeting of the holders of any class or group of shares of the Company.
 
61.
Amendment
 
If an amendment shall be proposed to any resolution under consideration but shall in good faith be ruled out of order by the chairman of the meeting the proceedings on any substantive resolution shall not be invalidated by any error in such ruling.
 
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VOTES OF MEMBERS
 
62.
Votes
 
Subject to any special rights or restrictions as to voting attached to any share by or in accordance with these Articles, on a show of hands every member who (being an individual) is present in person or by proxy not being himself a member or (being a corporation) is present by a representative or by proxy not being himself a member shall have one vote and on a poll every member who is present in person or by proxy shall have one vote for every share of which he is the holder.
 
63.
Joint holders
 
In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the share.
 
64.
Vote by proxy
 
A member suffering from mental disorder in respect of whom an order has been made or a direction or authority given by a court of competent jurisdiction may vote, whether on a show of hands or on a poll, by his receiver, curator bonis or other person authorised in that behalf appointed by such court and such receiver, curator bonis or other person may on a poll vote by proxy, provided that such evidence as the Directors may require of the authority of the person claiming to vote shall have been deposited at the place at which proxies for the meeting in question are to be deposited under Article 78 not less than 48 hours before the time for holding the meeting or adjourned meeting at which such person claims to vote and in default the right to vote shall not be exercisable.
 
65.
Restriction on voting rights
 
No member shall, unless the Directors otherwise determine, be entitled to vote at any general meeting or at any separate meeting of the holders of any class of shares in the Company either personally or by proxy, or to exercise any privilege as a member, unless all calls or, other sums presently payable by him in respect of shares in the Company have been paid.
 
66.
Objection to error in voting
 
No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes.  Any such objection made in due time shall be referred to the chairman of the meeting whose decision shall be final and conclusive.
 
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67.
Votes on a poll
 
On a poll, votes may be given either personally or by proxy.  On a poll, a member entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.
 
POLLS
 
68.
Method of voting
 
68.1
Subject to Article 68.3, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless before or upon the declaration of the result of the show of hands a poll is demanded:
 

 (a)
by the chairman of the meeting;
 

 (b)
by not less than 5 members having the right to vote at the meeting;
 

 (c)
by a member or members representing not less than one tenth of the total voting rights of all the members having the right to vote at the meeting; or
 

 (d)
by a member or members holding shares in the Company conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all the shares conferring that right.
 
68.2
Unless a poll be so demanded a declaration by the chairman of the meeting that a resolution has been carried, or carried unanimously, or by a particular majority, or lost, or not carried by a particular majority, and an entry to that effect in the book containing the minutes of the proceedings of general meetings of the Company, shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.
 
68.3
At a general meeting which is held as a combined physical and electronic meeting, a resolution put to the vote of the meeting shall be decided on a poll, which poll votes may be cast by means of the electronic platform and any such poll will be deemed to have been validly demanded at the time fixed for holding the meeting to which it relates.
 
69.
Proxy
 
The instrument appointing a proxy to vote at a meeting shall be deemed also to confer authority to demand or join in demanding a poll, and for the purposes of Article 68 a demand by a person as proxy for a member shall be the same as a demand by the member.
 
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70.
Error
 
If any votes shall be counted which ought not to have been counted, or might have been rejected, or if any votes shall not be counted which ought to have been counted, or might have been allowed, the error shall not vitiate the result of the voting unless it be pointed out at the same meeting, or at any adjournment thereof, and not in that case unless it shall in the opinion of the chairman of the meeting be of sufficient magnitude to vitiate the result of the voting.
 
71.
Procedure on a poll
 
If a poll is duly demanded, it shall be taken in such manner as the chairman of the meeting may direct (including the use of ballot or voting papers or forms), and the result of a poll shall be deemed to be the resolution of the meeting at which the poll was demanded.  The chairman of the meeting may, in the event of a poll, appoint scrutineers (who need not be members) and may fix some place and time for the purpose of declaring the result of the poll.
 
72.
Poll to be taken forthwith
 
A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith.  A poll demanded on any other question shall be taken at such time and place as the chairman of the meeting shall direct not being more than 30 days from the date of the meeting or the adjourned meeting at which the poll was demanded.  No notice need be given of a poll not taken forthwith if the time and place at which it is to be taken are announced at the meeting at which it is demanded.  In any other case at least seven days’ notice shall be given specifying the time and place at which the poll is to be taken.
 
73.
Casting vote
 
In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded shall be entitled to a casting vote in addition to any other vote he may have.
 
74.
Demand for poll
 
The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded.
 
75.
Withdrawal
 
A demand for a poll may, before the poll is taken, be withdrawn but only with the consent of the chairman and a demand so withdrawn shall not be taken to have invalidated the result of a show of hands declared before the demand was made.  If a poll is demanded before the declaration of the result of a show of hands and the demand is duly withdrawn with the consent of the chairman, the meeting shall continue as if the demand had not been made.
 
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PROXY
 
76.
Form of Proxy
 
Any person (whether a member or not) may be appointed to act as a proxy.  A member may appoint more than one proxy to attend on the same occasion.  When two or more valid but differing instruments of proxy are delivered in respect of the same share for use at the same meeting and in respect of the same matter, the one which is last validly delivered (regardless of its date or the date of its execution) shall be treated as replacing and revoking the other or others as regards that share.  If the Company is unable to determine which instrument was last validly delivered, none of them shall be treated as valid in respect of that share.
 
77.
Appointment of proxy
 
The appointment of a proxy shall be in writing in the usual common form, or such other form as may be approved by the Directors, and shall be signed by the appointor or by his attorney duly authorised in writing, or if the appointor is a corporation, shall be either under its common seal or under the hand of a duly authorised officer or attorney of the corporation.  The Directors may, but shall not be bound to, require evidence of authority of such officer or attorney.  An instrument of proxy need not be witnessed.
 
78.
Deposit of proxy
 
78.1
The appointment of a proxy together with (unless the Directors waive such requirement) the power of attorney or other authority (if any) under which it is signed, or a notarially certified or office copy of such power or authority, shall:
 

 (a)
in the case of an instrument in writing be deposited at the Office, or at such other place in the United Kingdom as is specified for that purpose in the notice calling the meeting, or in any instrument of proxy sent out by the Company in relation to the meeting, not less than 48 hours (excluding weekends and bank holidays) before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or
 

 (b)
in the case of an appointment contained in an electronic communication, where an address has been specified for the purpose of receiving electronic communications, in the notice convening the meeting, or in any instrument of proxy sent out by the Company in relation to the meeting, or in any invitation contained in an electronic communication to appoint a proxy issued by the Company in relation to the meeting, to be received at such address not less than 48 hours (excluding weekends and bank holidays) before the time for holding the meeting or adjourned meeting at which the person named in the appointment proposes to vote, and in default, the appointment shall not be treated as valid.  An appointment of proxy to vote at any meeting and deposited, delivered or received as set out in this Article shall be valid to empower the proxy so appointed to vote on any poll taken or demanded at such meeting or at any adjournment of such meeting.
 
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78.2
No appointment of a proxy shall be valid after the expiration of 12 months from the date named in it as the date of its execution, except on a poll demanded at a meeting or an adjourned meeting in cases where the meeting was originally held within 12 months from such date.  In this Article and the next, “address” in relation to electronic communications, includes any number or address used for the purposes of such communications.
 
79.
Validity
 
A vote given in accordance with the terms of an instrument of proxy or by the duly authorised representative of a corporate member or poll demanded by proxy or by the duly authorised representative of a corporate member shall be valid notwithstanding (in the case of a proxy) the previous death or mental disorder of the principal or the revocation of the instrument of proxy or of the authority under which the instrument of proxy was executed or (in the case of a duly authorised representative of a corporate member) the revocation of his appointment, provided that no intimation in writing of such death, mental disorder or revocation shall have been received by the Company at the Office or (in the case of an instrument of proxy) such other place or address at which it was required to be deposited or received under Article 78 at least 48 hours (excluding weekends and bank holidays) before the commencement of the meeting or adjourned meeting at which the vote is given or the poll demanded or (in the case of a poll taken otherwise than on the same day as the meeting or adjourned meeting) the time appointed for taking the poll.
 
80.
Supply of proxy cards
 
The Directors may at the expense of the Company send, by post or otherwise, to the members instruments of proxy (with or without provision for their return prepaid) for use at any general meeting or at any meeting of any class of members of the Company either in blank or nominating in the alternative any one or more of the Directors or the chairman of the meeting or any other person or persons.  If for the purpose of any meeting invitations to appoint as proxy a person, or one of a number of persons, specified in the invitations are issued at the Company’s expense they shall be issued to all (and not to some only) of the members entitled to be sent a notice of the meeting and to vote at such meeting by proxy.
 
81.
Corporate representative
 
Any corporation which is a member of the Company may, by resolution of its Directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company, or at any meeting of any class of members of the Company, and on presentation of a certified copy of such resolution the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual member of the Company and such corporation shall, for the purpose of these Articles, be deemed to be present in person at such meeting if a person so authorised is present at it.
 
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DISCLOSURE OF INTERESTS
 
82.
Section 793
 
Section 793 of the Act (“Section 793”) shall be deemed to be incorporated into these Articles and accordingly to apply as between the Company and each member.  If a notice is given under Section 793 (“a Section 793 notice”) to a person who appears to be interested in any shares a copy shall at the same time be given to the holder of those shares but the accidental omission to do so or the non-receipt by the member shall not prejudice the operation or the following provisions of Articles 83 to 87.  The following provisions of Articles 83 to 87 shall be without prejudice to the provisions of Sections 793 and 796 of the Act, and in particular, the Company shall be entitled to apply to the court under Section 794 of the Act whether or not these provisions apply or have been applied.
 
83.
Default
 
83.1
If a member or any person appearing to be interested in any shares held by a member has been duly served with a Section 793 notice and is in default for the relevant period (as defined in Article 86) from such service in supplying to the Company the information thereby required, the following provisions shall apply:
 

 (a)
if a member has a holding of less than 0.25% of any class of shares, then, subject to Article 84 and unless the Directors otherwise determine, a member shall not be entitled in respect of those shares held by him (whether or not referred to in the Section 793 Notice) to vote at a general meeting either personally or by proxy, or to exercise any other right conferred by membership in relation to meetings of the Company; or
 

 (b)
if a member has a holding of at least 0.25% of any class of shares, then, subject to Article 84 and unless the Directors otherwise determine, the member shall not be entitled in respect of the shares held by him (whether or not referred to in the Section 793 notice):
 

 (i)
to vote at a general meeting either personally or by proxy, or to exercise any other right conferred by membership in relation to meetings of the Company; or
 

 (ii)
to receive any dividend payable in respect of such shares; or
 

 (iii)
to transfer or agree to transfer any of such shares, or any rights therein.
 
83.2
The restrictions imposed by Article 83.1 in relation to any shares shall continue until a relevant event occurs in relation to those shares and shall lapse when it does so.  For this purpose, a “relevant event” is either of the following:
 

 (a)
the default is remedied; and
 
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 (b)
the shares are registered in the name of the purchaser or offeror (or that of his nominee) pursuant to an arm’s length transfer (as defined in Article 85).
 
83.3
Any dividends withheld pursuant to Article 83 shall be paid to the member as soon as practicable after the restrictions contained in Article 83.1(b) lapse.
 
84.
Restrictions
 
The restrictions in Article 83 shall be without prejudice to the right of either the member holding the shares concerned or, if different, the beneficial owner of those shares to effect or agree to sell under an arm’s length transfer of those shares.
 
85.
Arms length transfer
 
85.1
For the purposes of Articles 82 to 87, an “arm’s length” transfer in relation to any shares is a transfer pursuant to:
 

 (a)
a sale of those shares on a recognised investment exchange (as defined in the Financial Services and Markets Act 2000) or on any stock exchange outside the United Kingdom on which the shares are normally traded; or
 

 (b)
a sale to an offeror following acceptance of an offer made to all the holders (or all the holders other than the person making the offer and his nominees) of shares of the same class as those shares to acquire all the shares of that class or a specified proportion of them.
 
86.
Relevant period
 
For the purposes of Articles 82 to 87, the “relevant period” shall, in a case falling within Article 83.1(a), be 28 days and, in a case falling within Article 83.1(b), be 14 days.
 
87.
Interest in shares
 
87.1
For the purposes of Articles 82 to 87, the Company shall be entitled to treat any person as appearing to be interested in any shares if:
 

 (a)
the member holding such shares or any person who is or may be interested in such shares either fails to respond to a section 793 notice or has given to the Company a notification pursuant to a Section 793 notice which in the opinion of the Directors fails to establish the identities of those interested in the shares and if (after taking into account the said notification and any other relevant notification pursuant to a Section 793 notice) the Company knows or has reasonable cause to believe that the person in question is or may be interested in the shares; or
 

 (b)
that person (not being the member) is interested in those shares for the purposes of Section 793.
 
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APPOINTMENT OF DIRECTORS
 
88.
Power of Company to appoint Directors
 
Subject to the provisions of these Articles, the Company may by ordinary resolution appoint a person who is willing to act to be a Director, either to fill a vacancy or as an addition to the existing Directors, but the total number of Directors shall not exceed the maximum number fixed in accordance with these Articles (if any).
 
89.
Power of Board to appoint Directors
 
89.1
Without prejudice to the power of the Company to appoint any person to be a Director pursuant to these Articles, the Directors shall have power at any time to appoint any person who is willing to act as a Director, either to fill a vacancy or as an addition to the existing Directors but so that the total number of Directors shall not exceed at any time the maximum number (if any) fixed by or in accordance with these Articles.
 
89.2
Any Director so appointed shall retire at the conclusion of the annual general meeting of the Company next following such appointment and shall be eligible for reappointment at that meeting.  If not reappointed at such annual general meeting, such Director shall vacate office at the conclusion of such annual general meeting.
 
90.
Number of Directors
 
Subject as provided in these Articles, the Directors shall be not less than two in number and no more than seven in number but the Company may by special resolution from time to time vary the minimum and maximum number of directors.
 
91.
Additional remuneration
 
91.1
Any Director who serves on any committee or who devotes special attention to the business of the Company, or who otherwise performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, may be paid such remuneration by way of salary, lump sum, percentage of profits or otherwise as the Directors may determine.
 
91.2
The Directors shall also be entitled to be paid all travelling, hotel and other expenses properly incurred by them in connection with the business of the Company, or in attending and returning from meetings of the Directors or of committees of the Directors or general meetings or separate meetings of the holders of any class of shares or of debentures of the Company or otherwise in connection with the discharge of their duties.
 
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ALTERNATE DIRECTORS
 
92.
Appointment
 
Each Director (other than an alternate director) may at any time appoint another Director or (subject to the approval of a majority of the Directors for the time being) any other person to be an alternate director, and may at any time remove any alternate director so appointed by him from office and, subject to such requisite approval, appoint another person in his place.  An alternate director shall (subject to his giving to the Company an address within the United Kingdom at which notices may be served upon him) be entitled to receive notices of all meetings of the Directors and of all meetings of committees of the Directors of which his appointor is a member and to attend and vote as a Director at any such meeting at which the Director appointing him is not personally present, and generally to perform all the functions of his appointor as a Director in the absence of such appointor.  An alternate director shall ipso facto cease to be an alternate director if his appointor ceases for any reason to be a Director; provided that if any Director retires, whether by rotation or otherwise, but is re-appointed or is deemed to have been re-appointed by the meeting at which such retirement took effect, any appointment made by him pursuant to this Article which was in force immediately prior to his retirement shall continue to operate after his reappointment as if he had not so retired.  All appointments and removals of alternate directors shall be effected by instrument in writing signed by the appointor Director and authenticated in such manner as the other Directors may accept.  The appointor Director shall deposit the original signed instrument at the office as soon as reasonably practicable, but failure or delay in doing so shall not prejudice the validity of the appointment.
 
93.
Remuneration
 
Save as otherwise provided in these Articles, an alternate director shall be deemed for all purposes to be a Director of the Company and shall alone be responsible to the Company for his own acts and defaults, and he shall not be deemed to be the agent of or for the Director appointing him.  An alternate director shall not be entitled to receive any remuneration from the Company for his services as an alternate director but his remuneration shall be payable out of the remuneration payable to the Director appointing him, and shall consist of such part (if any) of the latter’s remuneration as shall be agreed between them.
 
INTERESTS OF DIRECTORS
 
94.
Other office of Director
 
A Director, including an alternate director, may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director on such terms as to tenure of office, remuneration and otherwise as the Directors may determine.  Any Director may act by himself or his firm in a professional capacity (other than that of auditor) for the Company and he or his firm shall be entitled to remuneration for such professional services.
 
95.
Disqualification
 
95.1
No Director or proposed Director, including an alternate director, shall be disqualified by his office from contracting with the Company either with regard to his tenure of any other office or place of profit, or as vendor, purchaser or otherwise, nor shall any such contract, or any contract or arrangement entered into by or on behalf of the Company in which any Director is in any way, whether directly or indirectly, interested, be liable to be avoided, nor shall any Director so contracting or being so interested, be liable to account to the Company for any profit realised by any such contract or arrangement, by reason of such Director holding that office or of the fiduciary relationship thereby established.
 
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95.2
Any Director, including an alternate director, may continue to be or become a director or other officer or member of or otherwise interested in any other company promoted by the Company or any subsidiary of the Company or in which the Company or any subsidiary of the Company may be interested, as a member or otherwise, or in which the Company or any subsidiary of the Company thereof has decided not to take any shareholding or other interest whatsoever, and no such Director shall be accountable for any remuneration or other benefits whatsoever received by him or as a director or other officer or member of or from his interest in any such other company.  The Directors may exercise the voting power conferred by the shares of any other company held or owned by the Company, or exercisable by them as directors of such other company, in such manner in all respects as they think fit but subject to the restrictions contained in these Articles.
 
96.
Declaration of interest
 
A Director who is in any way, whether directly or indirectly, interested or deemed by the Act to be interested in a contract, transaction or arrangement or a proposed contract, transaction or arrangement with the Company shall declare the nature of his interest at a meeting of the Directors in accordance with Section 177 of the Act.
 
97.
Material interest
 
Save as provided in these Articles, a Director (including an alternate director) shall not vote in respect of any contract or arrangement or any other proposal in which he has any material interest otherwise than by virtue of his interests in shares or debentures or other securities or rights of the Company.  However a Director shall be entitled to vote in respect of any contract or arrangement or any other proposal in which he has any interest which is not material.  A Director shall not be counted in the quorum at a meeting in relation to any resolution on which he is debarred from voting.
 
98.
Voting
 
98.1
A Director (including an alternate director) shall (in the absence of some material interest other than as indicated below) be entitled to vote (and be counted in the quorum) in respect of any resolution concerning any of the following matters, namely:
 

 (a)
the giving of any security, guarantee or indemnity to him in respect of money lent or obligations incurred by him at the request of or for the benefit of the Company or any of its subsidiaries;
 

 (b)
the giving of any security, guarantee or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which he himself has assumed responsibility in whole or in part by the giving of security or under a guarantee of indemnity;
 
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 (c)
any proposal concerning an offer for subscription or purchase of shares or debentures or other securities or rights of or by the Company or any of its subsidiaries or of any company which the Company may promote or in which it may be interested in which offer he is or is to be interested directly or as a participant in the underwriting or associated sub-underwriting;
 

 (d)
any proposal concerning any other company in which he is interested directly or indirectly and whether in any one or more of the capacities of officer, creditor, employee or holder of shares, debentures, securities or rights of that other company, but where he is not the holder (otherwise than as a nominee for the Company or any of its subsidiaries) of or beneficially interested in one per cent or more of the issued shares of any class of such company or of any third company through which his interest is derived or of the voting rights available to members of the relevant company (any such interest being deemed for the purpose of this Article to be a material interest in all circumstances);
 

 (e)
any proposal concerning the adoption, modification or operation of a superannuation fund, retirement benefits scheme, share option scheme or share incentive scheme under which he may benefit; or
 

 (f)
any proposal concerning the purchase and/or maintenance of any insurance policy under which he may benefit.
 
99.
Two Directors
 
Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more Directors to offices or employment with the Company or any company in which the Company is interested, such proposals may be divided and considered in relation to each Director separately and in such case each of the Directors concerned (if not otherwise debarred from voting by the terms of these Articles) shall be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning his own appointment.
 
100.
Directors interests
 
If any question shall arise at any meeting as to the materiality of the entitlement of any Director to vote and such question is not resolved by his involuntary agreeing to abstain from voting, such question shall (subject to the Act) be referred to the chairman of the meeting (or, where such question shall arise concerning such chairman, to such other Director present at the meeting as the Directors present, other than such chairman, shall by majority vote appoint) and his ruling in relation to any other Director shall be final and conclusive except in a case where the nature or extent of the interests of the Director concerned have not been fairly disclosed.
 
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101.
Interest of connected person
 
For the purposes of these Articles, the interest of any person who is connected with a Director (within the meaning of Section 252 of the Act) shall be taken to be the interest of that Director.
 
102.
Suspension of provisions
 
The Company may by ordinary resolution suspend or relax the provisions of Articles 97 to 101 to any extent either generally or in respect of any particular matter, or ratify any transaction not duly authorised by reason of a contravention of those Articles.
 
103.
Directors’ conflict of interest
 
103.1
The Board may, in accordance with the requirements set out in this Article, authorise any matter or situation proposed to them by any Director which would, if not authorised, involve a Director (an “Interested Director”) breaching his duty under the Act to avoid conflicts of interest (“Conflict”).
 
103.2
A Director seeking authorisation in respect of a Conflict shall declare to the Board the nature and extent of his interest in a Conflict as soon as is reasonably practicable.  The Director shall provide the Board with such details of the matter as are reasonably necessary for the Board to decide how to address the Conflict together with such additional information as may be reasonably requested by the Board and provided that such additional information is requested no less than five business days before the consideration of the relevant matter at a meeting of the Board.
 
103.3
Any authorisation under this Article will be effective only if:
 

 (a)
any requirement as to the quorum for consideration of the relevant matter is met without counting the Interested Director and any other Interested Director; and
 

 (b)
the matter is agreed to without the Interested Director voting or would be agreed to if the Interested Director’s and any other Interested Director’s vote is not counted.
 
103.4
Any authorisation of Conflict under this Article will be effective if given at the same meeting of the Board as that at which the relevant matter is considered or any other meeting of the Board.
 
103.5
Any authorisation of a Conflict under this Article must be recorded in writing (but the authority shall be effective whether or not the terms are so recorded) and may (whether at the time of giving the authorisation or subsequently):
 

 (a)
extend to any actual or potential Conflict of interest which may reasonably be expected to arise out of the matter or situation so authorised;
 
36

 (b)
provide that the Interested Director be excluded from the receipt of documents and information and the participation in discussions (whether at meetings of the Directors or otherwise) related to the Conflict;
 

 (c)
impose upon the Interested Director such other reasonable terms for the purposes of dealing with the Conflict as the Directors think fit;
 

 (d)
permit the Interested Director to absent himself from the discussion of matters relating to the Conflict at any meeting of the Directors and be excused from reviewing papers prepared by, or for, the Directors to the extent they relate to such matters.
 
103.6
Where a Director obtains, or has obtained whether through his involvement in a Conflict, through his position as a Director or howsoever otherwise, information that is confidential to a third party, he may, at his sole discretion, decide whether or not to disclose that information to the Company, or to use it in relation to the Company’s affairs and shall not be under any obligation to disclose such information to the Company.
 
103.7
Where the Directors authorise a Conflict, the Interested Director will be obliged to conduct himself in accordance with any reasonable terms and conditions imposed by the Directors in relation to the Conflict.
 
103.8
Subject to Article 103.3, where the Directors authorise a Conflict, the Interested Director shall be entitled to vote at any meeting of the Board at which the relevant matter related to the Conflict is considered and/or approved.
 
103.9
The Directors may revoke or vary such authorisation by written notice to the Interested Director, but this will not affect anything done by the Interested Director, prior to such revocation or variation, in accordance with the terms of such authorisation.
 
103.10
A Director is not required, by reason of being a Director (or because of the fiduciary relationship established by reason of being a director), to account to the Company for any remuneration, profit or other benefit which he derives from or in connection with a relationship involving a Conflict which has been authorised by the Directors or by the Company in general meeting (subject in each case to any terms, limits or conditions attaching to that authorisation) and no contract shall be liable to be avoided on such grounds.
 
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104.
Benefits
 
The Directors may establish, maintain, participate in or contribute to or procure the establishment and maintenance of, participation in or contribution to any pension, annuities, superannuation, benevolent or life assurance fund, scheme or arrangement (whether contributory or otherwise) for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances, benefits and emoluments to, any persons who are or were at any time in the employment or service of the Company, or any of its predecessors in business, or of any company which is a subsidiary of the Company or is allied to or associated with the Company, or with any such subsidiary, or who may be or have been Directors or officers of the Company, or of any such other company, and the spouses, widows/widowers, families and dependants of any such persons, and also establish, subsidise and subscribe to any institutions, associations, societies, clubs, trusts or firms calculated to be for the benefit of or to advance the interests and well-being of the Company or of such other company, or of any such persons, and make payments for or award the insurance of any such persons as aforesaid, and (subject to the provisions of the Act) establish and contribute to any scheme for the acquisition of shares in the Company or its holding company (whether or not an employee share scheme within the meaning of the Act) and (subject as set out in this Article) lend money to the Company’s employees to enable them to acquire such shares, and subscribe or guarantee money for charitable or benevolent objects, or for any exhibition or for any public, general or useful object, and do any of such matters either alone or in conjunction with others.  Subject always, if the Act shall so require, to particulars with respect to the proposed payment being disclosed to the members of the Company and to the proposal being approved by the Company by an ordinary resolution, any Director shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension, allowance, benefit or emolument.
 
105.
Exercise of power
 
The Company shall exercise the power conferred upon it by Section 247 of the Act to make provision for the benefit of persons employed or formerly employed by the Company or any of its subsidiaries, in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the Company or any subsidiary only with the prior sanction of a special resolution.  However the Directors are entitled to exercise the power contained in Section 247 of the Act by means of a resolution of the Directors but this shall be limited to a maximum payment to any individual employee of fifty per cent of the employee’s gross annual salary.
 
GENERAL POWERS OF DIRECTORS
 
106.
Management
 
The business of the Company shall be managed by the Directors, who may exercise all such powers of the Company as are not by the Act or by these Articles required to be exercised by the Company in general meeting, subject nevertheless to any provisions of these Articles, to the provisions of the Act and to such regulations (being not inconsistent with the aforesaid regulations or provisions) as may be prescribed by the Company by special resolution but no regulation made by the Company by special resolution shall invalidate any prior act of the Directors which would have been valid if such regulation had not been made.  The general powers given to the Directors by this Article shall not be limited or restricted by any special authority or power given to the Directors by any other Article.
 
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107.
Delegation of Authority
 
The Directors may establish any local boards or agencies for managing any of the affairs of the Company, either in the United Kingdom or elsewhere, and may appoint any persons to be members of such local boards, or any managers or agents, and may fix their remuneration, and may delegate to any local board, manager or agent any of the powers, authorities and discretions vested in the Directors (other than the power of making calls), with power to sub-delegate, and may authorise the members of any local board, or any of them, to fill any vacancies in such local board, and to act notwithstanding filling vacancies, and any such appointment or delegation may be made upon such terms and subject to such conditions as the Directors may think fit, and the Directors may remove any person so appointed, and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected by it.
 
108.
Power of Attorney
 
The Directors may, by power of attorney, appoint any person or persons to be the agent of the Company and may delegate to any such person or persons any of the powers, authorities and discretions of the Directors (with power to sub-delegate), in each case for such purposes and for such time, on such terms (including as to remuneration) and subject to such conditions as the Directors think fit.  The Directors may confer such powers either collaterally with, or to the exclusion of and in substitution for, all or any of the powers of the Directors in that respect and may from time to time revoke, withdraw, alter or vary any of such powers.
 
109.
Overseas registers
 
Subject to the provisions of the Statutes, the Directors may exercise the powers conferred on the Company with regard to the keeping of an overseas branch, local or other register and may make and vary such regulations as they think fit as regards the keeping of any such register.
 
110.
Uncalled capital
 
If any uncalled capital of the Company is included in or charged by any mortgage or other security, the Directors may delegate to the person in whose favour such mortgage or security is executed, or to any other person in trust for him, the power to make calls on the members in respect of such uncalled capital, and to sue in the name of the Company or otherwise for the recovery of monies becoming due in respect of calls so made and to give valid receipts for such monies, and the power so delegated shall subsist during the continuance of the mortgage or security, notwithstanding any change of Directors, and shall be assignable if expressed so to be.
 
DIRECTORS HOLDING EXECUTIVE OFFICE
 
111.
Office
 
The Directors may from time to time appoint any one or more of their body to be holder of any executive office for such period and on such terms and with or without such title or titles (including but not limited to chairman, deputy chairman, vice chairman, managing director, chief executive and joint, deputy or assistant managing director or chief executive) as they think fit.  A Director holding any such office (whether appointed by the Directors or otherwise) shall, whilst holding such office, be subject to retirement by rotation, and shall (subject to the terms of any contract between him and the Company) be subject to the same provisions as to resignation and removal as the other Directors of the Company and if he shall vacate the office of Director or (subject as aforesaid) if the Directors resolve that his term of office as holder of such executive office as aforesaid be determined, his appointment as such shall ipso facto determine.
 
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112.
Remuneration
 
A Director appointed to any executive office as referred to in Article 111 shall receive such remuneration (whether specifically by way of salary, bonus, commission, participation in profits, provision for retirement or insurance benefit, or partly in one way and partly in another, or otherwise) as may be determined by the Board who may delegate their authority.
 
113.
Powers
 
113.1
The Directors may from time to time:
 

 (a)
delegate or entrust to and confer on any Director holding executive office (including a chief executive or managing director) such of the powers, authorities and discretions of the Directors (with power to sub-delegate) for such time, on such terms and subject to such conditions as the Directors think fit; and
 

 (b)
revoke, withdraw, alter or vary all or any of such powers.
 
RETIREMENT OF DIRECTORS
 
114.
Retirement
 
Any provision of the Statutes which, subject to the provisions of these Articles, would have the effect of rendering any person ineligible for appointment or election as a Director or liable to vacate office as a Director on account of such person having reached any specified age or of requiring special notice or any other special formality in connection with the appointment or election of any Director over a specified age, shall not apply to the Company.
 
115.
Vacation of office
 
115.1
The office of a Director shall be vacated in any of the following events, namely:
 

 (a)
if (but in the case of a Director holding any executive office subject to the terms of any contract between him and the Company) he resigns his office by instrument in writing signed by the resigning Director and authenticated in such manner as the other Directors or Director may accept (provided that the resigning Director shall deposit the original signed instrument at the office as soon as reasonably practicable but failure or delay in his doing so shall not prejudice the validity of the resignation);
 
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 (b)
if he becomes bankrupt or has a receiving order made against him or makes any arrangement or composition with his creditors generally;
 

 (c)
if, in the opinion of the majority of Directors other than the Director vacating office and in the written opinion of a suitably qualified medical expert, he becomes of unsound mind;
 

 (d)
if he is absent from meetings of the Directors for six successive months without leave, and his alternate director (if any) shall not during such period have attended in his stead, and the Directors resolve that his office be vacated;
 

 (e)
if he ceases to be a Director by virtue of any provision of the Statutes or becomes prohibited by law from being a director;
 

 (f)
he is removed from office by notice in writing signed by all of the other Directors (without prejudice to any claim for damages which he may have for breach of any contract between him and the Company) and, for this purpose, a set of like notices each signed by, one or more of the Directors shall be as effective as a single notice signed by the requisite number of Directors;
 

 (g)
he ceases to hold the number of shares required to qualify him for office (if any) or does not acquire the same within two months after election or appointment; or
 

 (h)
he is removed as a Director by ordinary resolution of the members provided that such removal shall be without prejudice to any claim he may have for breach of contract between him and the Company.
 
116.
Resolution as to a vacancy conclusive
 
A resolution of the Directors declaring a Director to have vacated office under the terms of Article 115 shall be conclusive as to the fact and grounds of vacation stated in the resolution.
 
ROTATION OF DIRECTORS
 
117.
Retirement by rotation
 
At each annual general meeting of the Company that occurs after 25 September 2021, one-third of the Directors (or, if they are not a multiple of three, the number nearest to but not greater than one third subject to a minimum of one) shall retire from office by rotation provided always that any Director retiring pursuant to Article 115 shall not be taken into account in determining the Directors who are to retire by rotation at that meeting.  A Director retiring by rotation shall be eligible for re-election.
 
118.
Retirement in every year
 
Subject to the provisions of the Act and of these Articles, the Directors to retire in every year shall include (so far as necessary to obtain the number required) any Director who wishes to retire and not to offer himself for re-election.  Any further Directors so to retire shall be those who have been longest in office since their last appointment or reappointment.  Subject as aforesaid, a retiring Director shall be eligible for reappointment.
 
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119.
Vacated office
 
The Company at the meeting at which a Director retires in accordance with these Articles may fill the vacated office by appointing a person to fill such vacancy, and in default the retiring Director, if willing to act, shall be deemed to have been re-appointed, unless at such meeting it is expressly resolved not to fill the vacancy, or a resolution for the reappointment of such Director shall have been put to the meeting and lost.
 
120.
Appointment
 
No person other than a Director retiring at the meeting shall, unless recommended by the Directors for appointment, be eligible for appointment to the office of director at any general meeting unless, not less than seven nor more than 28 days before the day appointed for the meeting, there shall have been given to the Company notice in writing by some member duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for appointment stating the particulars which would, if he were so appointed, be required to be included in the Company’s register of directors, and also notice in writing signed by the person to be proposed of his willingness to be appointed.
 
121.
Motion
 
At a general meeting a motion for the appointment of two or more persons as Directors by a single resolution shall not be made unless a resolution that it shall be so made has been first agreed to by the meeting without any vote being given against it, and for the purposes of this Article a motion for approving a person’s appointment or for nominating a person for appointment shall be treated as a motion for his appointment.
 
PROCEEDINGS OF DIRECTORS
 
122.
Meetings
 
122.1
Subject to the provisions of these Articles, the Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit.  Questions arising at any meeting shall be determined by a majority of votes.  In case of an equality of votes the chairman of the meeting shall have a second or casting vote.  A Director who is also an alternate director shall be entitled in the absence of his appointor to a separate vote on behalf of the Director he is representing in addition to his own vote.  A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors.  Notices in respect of such meetings may be sent by facsimile or by electronic communication sent to an address notified to the Company for that purpose or by word of mouth including to any Director for the time being absent from the United Kingdom to such address (whether inside or outside the United Kingdom) notified by him to the Directors for this purpose.  A Director may waive the requirement that notices of meetings of the Directors must be given to him either prospectively or retrospectively.
 
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122.2
A meeting of the Directors may be validly held notwithstanding that all of the Directors are not present at the same place provided that:
 

 (a)
the Directors at the time of the meeting are in direct communication with each other whether by way of telephone, audio link or other form of telecommunications (and such a meeting shall be deemed to take place where the largest group of those participating is assembled or, if there is no such group, where the chairman of the meeting then is); and
 

 (b)
all of the Directors entitled to notice of a meeting of the Directors agree to the holding of the meeting in the manner described in this Article.
 
123.
Authorisation to vote
 
A Director who is unable to attend any meeting of the Directors and has not appointed an alternate director may authorise any other Director to vote for him at the meeting, and in that event the Director so authorised shall have a vote for each Director by whom he is so authorised in addition to his own vote.  Any such authority must be by instrument signed by the authorising Director and authenticated in such manner as the other Directors may accept.  The authorising Director shall deposit the original signed instrument at the office as soon as reasonably practicable but failure or delay in his doing so shall not prejudice the validity of the authorisation.
 
124.
Quorum
 
The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors, and unless otherwise determined shall be two.  For the purposes of this Article a person who holds office only as an alternate director shall, if his appointor is not present, be counted in a quorum, but so that not less than two individuals shall constitute the quorum.  Any Director or alternate director who attends a meeting of Directors by telephone or other conference facility shall be deemed to be personally present at such meeting for all purposes of these Articles and shall be counted in the quorum accordingly.  A meeting of the Directors for the time being at which a quorum is present shall be competent to exercise all powers and discretions for the time being exercisable by the Directors.
 
125.
Minimum number of directors
 
The continuing Directors or a sole continuing Director may act notwithstanding any vacancies in their body, but if and so long as the number of Directors is reduced below the minimum number fixed by or in accordance with these Articles, or below the number fixed by or pursuant to these Articles as the quorum of Directors, the continuing Directors or Director may act for the purpose of filling vacancies in their body or of summoning general meetings of the Company, but not for any other purpose.  If there be no Directors or Director able or willing to act, then any two members may summon a general meeting for the purpose of appointing Directors.
 
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126.
Chairman
 
The Directors may, from their number, from time to time elect and remove a chairman and, if thought fit, one or more deputy chairmen or vice-chairmen and determine the period for which they are to hold office.  The chairman, or in his absence the deputy chairman (to be chosen, if there be more than one, by agreement amongst themselves or, failing agreement, by lot), or in the absence of any deputy chairman the vice chairman (to be chosen, if there be more than one, by agreement amongst themselves or, failing agreement, by lot), shall preside at all meetings of the Directors, but if no such chairman, deputy chairman or vice chairman be elected, or if at any meeting neither the chairman nor deputy chairman or vice chairman be willing to preside or none of them be present within five minutes after the time appointed for holding the same, the Directors present may choose one of their number to be chairman of the meeting.
 
127.
Resolutions
 
A resolution in writing, signed by all the Directors for the time being entitled to receive notice of a meeting of Directors or of a committee of Directors, shall be as effective as a resolution passed at a meeting of the Directors or (as the case may be) a committee of Directors duly convened and held, and may consist of several documents in the like form each signed by one or more of the Directors and so that any such resolution or document signed by an alternate director shall be deemed to have been signed by the Director who appointed such alternate director and, if it is signed by a Director who has appointed an alternate director, it need not be signed by the alternate director in that capacity.
 
128.
Committees
 
The Directors may delegate any of their powers to committees consisting of or including at least one member of their body as they think fit, provided that at least a majority of the members of any such committee shall be Directors of the Company and no resolution of a committee may be effective unless a majority of those present either in person or by proxy when the resolution was passed are Directors or alternate directors.  Any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.  The meetings and proceedings of any such committee consisting of two or more Directors shall be governed by the provisions of these Articles regulating the meetings and proceedings of the Directors, so far as the same are applicable and are not superseded by any regulations imposed by the Directors under this Article.
 
129.
Validity
 
All acts done by any meeting of Directors, or of a committee of Directors, or by any person acting as a Director, shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director, or person acting as a Director, or that they or any of them were disqualified from holding office, or had vacated office, or were not entitled to vote, be as valid as if every such person had been duly appointed, and was qualified and had  continued to be a Director and had been entitled to vote.
 
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BORROWING POWERS
 
130.
Powers
 
The Directors may exercise all the powers of the Company to borrow money, to guarantee and to mortgage or charge its undertaking, property, assets and uncalled capital, and (subject to the Act) to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.
 
OTHER DIRECTORS
 
131.
Appointment
 
Subject to the provisions of the Act the Directors may from time to time, and at any time pursuant to this Article appoint any other persons to any post with such descriptive title including that of director (whether as executive, group, divisional, departmental, deputy, assistance, local, advisory director or otherwise) as the Directors may determine and may define, limit, vary and restrict the powers, authorities and discretions of persons so appointed and may fix and determine their remuneration and duties and, subject to any contract between him and the Company, may remove from such post any person so appointed.  A person so appointed shall not be a Director of the Company for any of the purposes of these Articles or of the Act and accordingly shall not be a member of the board of Directors or any committee of the Directors, nor shall he be entitled to be present at any meeting of the Directors or of any such committee, except at the request of the Directors or of such committee, and if present at such request he shall not be entitled to vote at such meeting.
 
MINUTES AND BOOKS
 
132.
Minutes
 
132.1
The Directors shall cause minutes to be made:
 

 (a)
of all appointments of officers made by the Directors;
 

 (b)
of the names of the Directors present at each meeting of Directors and of any committee of Directors;
 

 (c)
of all resolutions and proceedings at all meetings of the Company and of any class of members of the Company and of the Directors and of committees of Directors.
 
132.2
Any such minutes if purporting to be signed by the chairman of the meeting at which the proceedings took place, or by the chairman of the next following meeting, shall be evidence of the proceedings.
 
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133.
Records
 
Subject as required by law, any register, index, minute book or accounting records required by these Articles or by law to be kept by or on behalf of the Company may be kept either by making entries in bound books or by recording them in any other manner.  In any case in which bound books are not used, the Directors shall take adequate precautions for guarding against, and for facilitating the discovery of, falsification.
 
SECRETARY
 
134.
Appointment
 
Subject to the Act the Secretary shall be appointed by the Directors on such terms and for such period as they may think fit and the Directors may also appoint one or more assistant or deputy secretaries.  Any Secretary or assistant or deputy secretary so appointed may at any time be removed from office by the Directors without prejudice to any claim for damages for breach of any contract of service between him and the Company.
 
135.
Office
 
Anything by the Act required or authorised to be done by or to the Secretary may, if the office is vacant or such Secretary is absent or there is for any other reason no such Secretary capable of acting, be done by or to any assistant or deputy secretary or, if there is no assistant or deputy secretary, or if such assistant or deputy secretary is absent or for any other reason not capable of acting by or to any officer of the Company authorised generally or specially in that behalf by the Directors provided that any provision of the Act or of these Articles required or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in place of, the Secretary.
 
THE SEAL
 
136.
Safe custody
 
The Directors shall provide for the safe custody of the Seal and the Securities Seal and neither shall be used except by the authority of a resolution of the Directors or of a committee of the Directors authorised in that behalf by the Directors.
 
137.
Application
 
The Directors may from time to time make such regulations as they see fit (subject to the provisions of these Articles in relation to share certificates and debenture certificates) determining the persons and the number of such persons who shall sign every instrument to which the Seal or the Securities Seal is affixed, and until otherwise so determined (and subject to the provisions of this Article) every such instrument shall be signed by one Director and shall be countersigned by the Secretary or by a second Director.
 
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138.
Seal for use abroad
 
The Company may have an official seal for use abroad under the provisions of the Act where and as the Directors shall determine, and the Company may by writing under the Seal appoint any agent or committee abroad to be the duly authorised agent of the Company for the purpose of affixing and using such official seal, and may impose such restrictions on its use as shall be thought fit.  Wherever in these Articles reference is made to the Seal, the reference shall, when and so far as may be applicable, be deemed to include any such official seal as aforesaid.
 
139.
Issue
 
139.1
Every certificate or share warrant shall be issued either:
 

 (a)
by affixing the Securities Seal to it, by mechanical, electronic or other means;
 

 (b)
by printing a representation of the Securities Seal on it, by mechanical, electronic or other means, including laser printing; or
 

 (c)
in such other manner as the Board, having regard to the Statutes and any regulations which may apply to the Company from time to time.
 
140.
Seal
 
The Company need not have a company seal and pursuant to the Act may execute and deliver any document as a deed under the signature of any two Directors or of one Director and the Secretary or any Director in the presence of a witness who attests his signature.  A certificate in respect of any shares or other securities in the Company shall be validly issued if it is executed as a deed in accordance with this Article.
 
AUTHENTICATION OF DOCUMENTS
 
141.
Authentication
 
Any Director or the Secretary or any person appointed by the Directors for the purpose shall have power to authenticate any documents affecting the constitution of the Company and any resolutions passed by the Company or the Directors or any committee of the Directors, and any books, records, documents and accounts relating to the business of the Company, and to certify copies of such documents or extracts from them as true copies or extracts.  A document purporting to be a copy of a resolution, or a copy of or an extract from the minutes of a meeting of the Company or of the Directors or any committee of the Directors, which is so certified shall be conclusive evidence in favour of all persons dealing with the Company that such resolution has been duly passed or, as the case may be, that such copy or extract is a true and accurate record of proceedings at a duly constituted meeting.
 
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DIVIDENDS
 
142.
Declaration of dividends
 
The profits of the Company available for distribution and resolved to be distributed shall be applied in the payment of dividends to the members in accordance with their respective rights and priorities.  The Company in general meeting may declare dividends accordingly.
 
143.
Dividends payable
 
No dividends shall be payable otherwise than in accordance with the Act and out of the profits of the Company available for that purpose and no dividend shall exceed the amount recommended by the Directors.
 
144.
Payment of dividends
 
Subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends shall be declared and paid according to the amounts paid-up on the shares in respect whereof the dividend is paid, but no amount paid up on a share in advance of calls shall be treated for the purposes of this Article as paid up on the share.  All dividends shall be apportioned and paid pro rata according to the amount paid up on the shares during any portion or portions of the period in respect of which the dividend is paid, except that if any share is issued on terms providing that it shall carry any particular rights as to dividend, such share shall rank for dividend accordingly.
 
145.
Interim dividends
 
The Directors may if they think fit from time to time pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company and are permitted by the Act.  If at any time the share capital of the Company is divided into different classes, the Directors may (subject to the provisions of the Act) pay such interim dividends in respect of those shares in the capital of the Company which confer on their holders deferred or non preferred rights as well as in respect of those shares which confer on their holders preferential rights with regard to divided but no interim dividend shall be paid on shares carrying deferred or non preferred rights if, at any time of payment, any preferential dividend is in arrears.  The Directors may also pay half yearly, or at other suitable intervals to be settled by them, any dividend which may be payable at a fixed rate if they are of the opinion that the profits justify the payment and if and to the extent that such payment is permitted by the Act.  Provided the Directors act bona fide they shall not incur any responsibility to the holders of shares conferring a preference for any damage that they may suffer by reason of the payment of any interim dividend on any shares having deferred or non preferred rights.
 
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146.
Profits and losses
 
Subject to the provisions of the Act or as otherwise required by law, where any asset, business or property is bought by the Company as from a past date, whether such date be before or after the incorporation of the Company, the profits and losses thereof as from such date may at the discretion of the Directors in whole or in part be carried to a revenue account and treated for all purposes as profits or losses of the Company.  Subject to that, if any shares or securities are purchased cum dividend or interest, such dividend or interest may at the discretion of the Directors be treated as revenue and it shall not be obligatory to capitalise the same or any part of the same.
 
147.
Calls or debts deducted from dividends
 
The Directors may deduct from any dividend or other monies payable to any member on or in respect of a share all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in relation to shares of the Company.
 
148.
Retention of dividends
 
The Directors may retain the dividends payable upon shares in respect of which any person is, under the provisions as to the transmission of shares contained in these Articles, entitled to become a member, or which any person is under those provisions entitled to transfer, until such person shall become a member in respect of such shares or shall transfer the same.
 
149.
Unclaimed dividends
 
All unclaimed dividends may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed and the payment of any such dividend into a separate account or the investment of such dividend shall not constitute the Company a trustee in respect of such dividend.  No dividend or other monies payable in respect of a share shall bear interest as against the Company unless otherwise provided by the rights attached to the share.  Any dividend which has remained unclaimed for a period of 12 years from the date of its declaration shall at the expiration of that period be forfeited and cease to remain owing by the Company and shall then belong to the Company absolutely.
 
150.
Payment of dividends
 
150.1
Any dividend or other monies payable on or in respect of a share may be paid by cheque or warrant sent through the post to the registered address of the member or person entitled to it and in the case of joint holders to the first named of such joint holders, or to such person and such address as the holder or joint holders may in writing direct.  Every such cheque or warrant shall be made payable to the order of the person to whom it is sent or to such other person as the holder or joint holders may in writing direct, and payment of the cheque or warrant shall be a good discharge to the Company.  Every such cheque or warrant shall be sent at the risk of the person entitled to the money represented by such cheque or warrant.
 
150.2
The Company may cease to send any cheque or warrant through the post for any dividend payable on any shares in the Company which is normally paid in that manner on those shares if in respect of at least two consecutive dividends payable on those shares the cheques or warrants have been returned undelivered or remain uncashed but, subject to the provisions of these Articles, shall recommence sending cheques or warrants in respect of dividends payable on those shares if the holder or person entitled by transmission claims the arrears of dividend and does not instruct the Company to pay future dividends in some other way.
 
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151.
Receipts for dividends
 
If several persons are registered as joint holder of any share, any one of them may give effectual receipts for any dividend or other monies payable on or in respect of the share.
 
152.
Scrip dividends
 
152.1
The Directors may subject as provided in these Articles declare that each Ordinary Shareholder may elect to forego his right to participate in such dividend (or such part of it as the Directors may determine) and to receive instead an allotment of Ordinary Shares to the extent and within the limits and on the terms and conditions set out below.  The Directors shall announce any such decision in conjunction with any announcement of the relevant dividend and shall send to the relevant Ordinary Shareholders notices of election as soon as practicable.
 
152.2
If the Directors make a declaration pursuant to Article 152.1 each holder of Ordinary Shares may (by notice in writing to the Company given in such form and within such period as the Directors may from time to time determine) elect to forego the dividend which otherwise would have been paid on all or so many of his Ordinary Shares as he shall specify in notice of election and to receive in lieu such number of Ordinary Shares to be allotted to him credited as fully paid as is equal to the number resulting from resolving the following fraction (but ignoring any fraction of an additional Ordinary Share):


where:
 

 (a)
A equals the number of Ordinary Shares in respect of which such election has been made;
 

 (b)
B equals the amount of the dividend per share foregone (expressed in terms of pence and fractions of a penny); and
 

 (c)
C equals the price at which each Ordinary Share in respect of which such election has been made is to be allotted as determined by the Directors.
 
152.3
Following the receipt of a notice or notices of election the Directors shall appropriate out of the undistributed profits or reserves of the Company an amount equal to the aggregate nominal value of the number of Ordinary Shares required to be allotted to the holders of Ordinary Shares who have given notice of election and shall apply such amount in paying up in full such number of Ordinary Shares.
 
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152.4
The Ordinary Shares so allotted credited as fully paid shall not be entitled to participate in the dividend then being declared or paid but shall in all other respects rank pari passu with the existing Ordinary Shares of the Company.
 
152.5
The Directors shall not make any such decision under this Article unless the Company has sufficient unissued Ordinary Shares and undistributed profits or reserves to give effect to any elections which could be made as a consequence of such decision.
 
152.6
The Directors shall not make any such decision under this Article unless the Company shall by ordinary resolution approve the exercise by the Directors of their powers so to do in respect of the dividend in question or in respect of any dividends declare or paid in respect of each specified financial year or period of the Company which dividends include the dividend in question.
 
152.7
The Directors may do all acts and things considered necessary or expedient to give effect to any such capitalisation, with full power to the Directors to make such provisions as they think fit for the case of shares becoming distributable in fractions (including provisions whereby, in whole or in part, fractional entitlements are disregarded or rounded up or the benefit of fractional entitlements accrue to the Company rather than to the members concerned).  The Directors may authorise any person to enter, on behalf of all the members interested, into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.
 
152.8
This Article shall have effect without prejudice to the provisions of Article 150 any other provisions of these Articles and such provisions shall also have effect without prejudice to the provisions of this Article.
 
153.
General meeting to declare dividend
 
A general meeting declaring a dividend may, upon the recommendation of the Directors, direct payment of such dividend wholly or in part by the distribution of specific assets, and in particular of paid up shares, debentures or other securities or rights of any other Company, and the Directors shall give effect to such resolution and where any difficulty arises in regard to the distribution the Directors may settle the same as they think expedient, and in particular may issue fractional certificates, and may fix the value for distribution of such specific assets, or any part of them, and may determine that cash payments shall be made to any members upon the footing of the value so fixed in order to adjust the rights of members, and may vest any specific assets in trustees upon trusts for the persons entitled to the dividend as may seem expedient to the Directors, and generally may make such arrangements for the allotment, acceptance and sale of such specific assets or fractional certificates or any part of them and otherwise as they think fit.
 
51
154.
Reserves
 
The Directors may before recommending any dividend, whether preferential or otherwise, carry to reserve out of the profits of the Company, (including any premiums received upon the issue of debentures or other securities or rights of the Company) such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose to which the profits of the Company may properly be applied and pending such applications may at the like discretion either be employed in the business of the Company or be invested in such investments (including, but subject to the provisions of the Act shares of the Company or its holding company, if any) as the Directors may from time to time think fit.  The Directors may also without placing the same to reserve carry forward any profits which they may think it prudent not to divide.
 
155.
Capitalisation
 
155.1
The Company in general meeting may upon the recommendation of the Directors resolve that it is desirable to capitalise any undivided profits of the Company standing to the credit of the profit and loss account or otherwise and available for distribution (not being required for the payment of fixed dividends on any shares entitled to fixed preferential dividends with or without further participation in profits) and accordingly that the Directors be authorised and directed to appropriate the profits resolved to be capitalised to the members who would have been entitled to such profits if distributed by way of dividend and in the same proportions on condition that the same be not paid in cash but be applied either in or towards paying up any amounts for the time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures of the Company to be allotted and distributed credited as fully paid up to and amongst such members in the same proportions, or partly in the one way and partly in the other, and the Directors shall give effect to such resolution.
 
155.2
The Company in general meeting may, subject to the provisions of the Act upon the recommendation of the Directors, resolve that it is desirable to capitalise any part of the amount for the time being standing to the credit of any reserve account of the Company (including its share premium account and capital redemption reserve) of its profit and loss account and whether or not available for distribution by applying such sum in paying up in full unissued shares to be allotted as fully paid to those members of the Company who would have been entitled to that sum if it were distributed by way of dividend (and in the same proportions), and the Directors shall give effect to such resolution.
 
156.
Authority
 
Whenever such a resolution as referred to in Article 155 shall have been passed, the Directors shall make all appropriations and applications of the profits or sum so resolved to be capitalised, and (subject to the provisions of the Act) all allotments and issues of fully paid shares or debentures, if any, and generally shall do all acts and things required to give effect to such capitalisation with full power to the Directors to make such provision by the issue of fractional certificates or by payment in cash or otherwise as they think fit for the case of shares or debentures becoming distributable in fractions, or to make provision whereby the benefit of fractional entitlements accrues to the Company rather than to the members concerned, and also to authorise any person to enter on behalf of all the members entitled to the benefit of such appropriations and applications into an agreement with the Company providing for the allotment to them respectively, credited as fully paid up, of any further shares to which they may be entitled upon such capitalisation, and any agreement made under such authority shall be effective and binding on all such members.
 
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157.
Record Dates
 
Notwithstanding any other provision of these Articles but without prejudice to the rights attached to any shares and subject always to the Statutes, the Company or the Directors may by resolution specify any date (the “record date”) as the date at the close of business (or such other time as the Directors may determine) on which persons registered as the holders of shares or other securities shall be entitled to receipt of any dividend, distribution, interest, allotment, issue, notice, information, document or circular and such record date may be on or at any time before the date on which the same is paid, made, given or served or (in the case of any dividend, distribution, interest, allotment or issue) at any time after the same is recommended, resolved, declared or announced, but without prejudice to the rights inter se in respect of the same of transferors and transferees of any such shares or other securities.  No change in the register of such holders after the record date shall invalidate the same.
 
ACCOUNTS
 
158.
Accounting records
 
The Directors shall cause true accounting records to be kept and preserved in accordance with the Act.  The accounting records shall be kept at the Office, or (subject to the provisions of the Act) at such other place as the Directors think fit, and shall always be open to inspection by the officers of the Company.  No member (other than an officer of the Company) shall have any right of inspecting any account or book or document of the Company except as conferred by Statutes or authorised by the Directors or by the Company in general meeting.
 
159.
Preparation of accounts
 
The Directors shall from time to time, in accordance with the provisions of the Act, cause to be prepared and to be laid before the Company in general meeting such profit and loss accounts, balance sheets, group accounts (if any) and reports as are specified in the Act.
 
160.
Accounts to members
 
160.1
A copy of every balance sheet and profit and loss account (including every document required by law to be annexed to them) which is to be laid before the Company in general meeting and of the directors’ and auditors’ reports shall not less than 21 days before the date of the meeting be sent to every member and to every holder of debentures of the Company, provided that:
 

 (a)
this Article shall not require copies of such documents to be sent to any person to whom, by virtue of section 423(2) of the Act, the Company is not required to send the same, nor to any person of whose address the Company is not aware nor to more than one of the joint holders of any shares or debentures; and
 
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 (b)
instead of these documents there may be sent a copy of such summary financial statement as may be permitted, in such form as may be specified and subject to such conditions as may be required, by law to be sent to the members of, and holders of debentures of, the Company.
 
161.
Electronic means
 
In accordance with Article 167.1, if and to the extent permitted by the Statutes, the summary financial statement as referred to in Article 160.1(b) may be delivered by means of electronic mail and/or through making it available on a website.
 
AUDITORS
 
162.
Appointment
 
Auditors shall be appointed and their duties, rights and remuneration regulated in accordance with the provisions of the Act.  Subject to the provisions of the Act, all acts done by any person acting as an auditor shall, as regards all persons dealing in good faith with the Company, be valid, notwithstanding that there was some defect in his appointment or that he was at the time of his appointment not qualified for appointment.
 
163.
Correctness
 
In respect of each financial year of the Company the accounts of the Company shall be examined and the correctness of the balance sheet, profit and loss account and group accounts (if any) ascertained by an auditor or auditors.
 
164.
Auditors to attend meetings
 
The auditor or auditors shall be entitled to attend any general meeting and to receive notices of and other communications relating to any general meeting which a member is entitled to receive, and to be heard at any general meeting on any part of the business of the meeting which concerns him or them as auditor or auditors.
 
165.
Change of auditors
 
The Company shall comply with the provisions of the Act relating to the sending of copies of special notices of certain resolutions concerning changes of auditors and to the giving notice of, and circulating to members, representations made by auditors retiring or proposed to be removed.
 
SERVICE OF NOTICE ON MEMBERS
 
166.
Notices to be in writing
 
Any notice to be given to or by any person pursuant to these Articles shall be in writing, except that a notice convening a Directors’ or Directors’ committee meetings need not be in writing.
 
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167.
Service of notice on members
 
167.1
The Company may give any notice or document (including a share certificate, annual report, annual financial statements and/or a summary of financial statements) to a member either:
 

 (a)
personally; or
 

 (b)
by sending it by post or other delivery service in a prepaid envelope addressed to the member at his registered address; or
 

 (c)
by leaving it at that address; or
 

 (d)
by sending it in electronic form to such address (if any) as may for the time being be notified to the Company by or on behalf of the member for that purpose; or
 

 (e)
by making it available on a website and notifying the member of its availability in accordance with the Act.  A member shall be deemed to have agreed that the Company may send or supply a document or information by means of a website if the conditions set out in the Act have been satisfied; or
 

 (f)
by any other means authorised in writing by the member concerned.
 
167.2
In the case of a member registered on an overseas branch register any such notice or document which is posted may be posted either in the United Kingdom or in the territory in which such branch register is maintained.
 
167.3
In the case of joint holders of a share, all notices or documents shall be given to the joint holder whose name stands first in the register in respect of the joint holding.  Notice so given shall be sufficient notice to all the joint holders.
 
167.4
Where a member (or, in the case of joint holders, the person first named in the register) has a registered address outside the United Kingdom but has notified the Company of an address within the United Kingdom at which notices or other documents may be given to him, he shall be entitled to have notices given to him at that address, but otherwise, no such member shall be entitled to receive any notice or document from the Company.
 
167.5
If on three consecutive occasions, notices or other documents have been sent through the post to any member at his registered address or his address for the service of notices but have been returned undelivered, such member shall not thereafter be entitled to receive notices or other documents from the Company until he shall have communicated with the Company and supplied in writing a new registered address or address within the United Kingdom for the service of notices.
 
167.6
The Directors may from time to time make such arrangements or regulations (if any) as they may from time to time in their absolute discretion think fit in relation to the giving of notices or other documents or information by electronic means by or to the Company and otherwise for the purpose of implementing and/or supplementing the provisions of these Articles and the Statutes in relation to electronic means; and such arrangements and regulations (as the case may be) shall have the same effect as if set out in this Article.
 
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167.7
Nothing in this Article shall affect any provision of any of the Statutes requiring notices or documents to be delivered in a particular way.
 
168.
Notice in case of death, bankruptcy or mental disorder
 
The Company may give notice to the person entitled to a share in consequence of the death or bankruptcy of a member or otherwise by operation of law, by sending or delivering it in any manner authorised by these Articles for the giving of notice to a member, addressed to that person by name, or by the title of representative of the deceased or trustee of the bankrupt or representative by operation of law or by any like description, at the address (if any) within the United Kingdom supplied for the purpose by the person claiming to be so entitled.  Until such an address has been so supplied, a notice may be given in any manner in which it might have been given if the death or bankruptcy or operation of law had not occurred.
 
169.
Evidence of service
 
169.1
Any member present, in person or by proxy, at any meeting of the Company or of the holders of any class of shares of the Company shall be deemed to have received due notice of such meeting, and, where requisite, of the purposes for which such meeting was called.
 
169.2
Any notice, certificate or other document addressed to a member at his registered address or address for service in the United Kingdom shall, if sent by post, be deemed to have been served or delivered on the day after the day when it was put in the post (or, where second-class mail is employed, on the second day after the day when it was put in the post).  Proof that an envelope containing the notice or document was properly addressed and put into the post as a prepaid letter shall be conclusive evidence that the notice was given.  Any notice, certificate or other document not sent by post, but delivered or left at a registered address or address for service in the United Kingdom shall be deemed to have been served or delivered on the day on which it was so delivered or left.  Any notice, certificate or other document sent by electronic communication shall, subject to the Statutes and these Articles, be deemed to have been served or delivered at the expiration of 24 hours from the time at which it was sent.  Any notice or other document sent by a website shall, subject to the Statutes and these Articles, be deemed to have been served or delivered when first made available on the website or, if later, when the recipient received (or is deemed to have received) notice of the fact that such notice or document was available on the website.
 
170.
Notice binding on transferees
 
Every person who, by operation of law, transfers or by any other means becomes entitled to a share shall be bound by a notice in respect of that share (other than a notice given by the Company under Section 793 of the Act) which, before his name is entered in the register, has been duly given to a person from whom he derives his title.
 
56
171.
Notice by advertisement
 
Any notice to be given by the Company to the members or any of them, and not otherwise provided for by these Articles, shall be sufficiently given if given by advertisement in at least one national newspaper published in the United Kingdom and, where the Company keeps an overseas branch register, in at least one daily newspaper published in the territory in which such register is maintained.  Any notice given by advertisement shall be deemed to have been served at noon on the day on which the advertisement first appears.
 
172.
Suspension of the postal services
 
If, at any time by reason of the general suspension, interruption or curtailment of postal services or electronic communication or threat of such suspension, interruption or curtailment within the United Kingdom the Company is or would be unable effectively to convene a general meeting by notices sent through the post or by electronic communication, a general meeting may be convened by a notice advertised in at least one national newspaper published in the United Kingdom and, where the Company keeps an overseas branch register, in at least one daily newspaper published in the territory in which such register is maintained.  Such notice shall be deemed to have been duly served on all members entitled thereto at noon on the day on which the first of such advertisement appears.  In any such case the Company shall send confirmatory copies of the notice by post or by electronic communication if, at least seven days prior to the meeting, the posting of notices to addresses throughout the United Kingdom or, as the case may be, the sending of such notices by electronic communication, again becomes practicable.
 
173.
Service of notices on the Company
 
Subject to the Statutes, Article 167.1 shall apply mutatis mutandis to the service by members of notices and documents on the Company, save that any notice, certificate (but not a share certificate) or document sent by electronic communication to the Company shall be deemed to have been served or delivered at the time it is received by the Company.
 
ELECTRONIC COMMUNICATION
 
174.
Electronic Communication
 
174.1
Notwithstanding anything in these Articles to the contrary, any document or information to be given, sent, supplied, delivered or provided to any person by the Company, whether pursuant to these Articles, the Statutes or otherwise, is also to be treated as given, sent, supplied, delivered or provided where it is made available on a website, or is sent in electronic form, in the manner provided by the 2006 Act for the purposes of the Act (subject to the provisions of these Articles).
 
For the purposes of paragraph 10(2)(b) of schedule 5 to the Act, the Company may give, send, supply, deliver or provide documents or information to Members by making them available on a website.
 
57
For the purposes of paragraph 6.1.8R(1) of the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the Company may use electronic means (as defined therein) to convey information or documents to members or holders of debt securities (as defined therein).
 
174.2
Notwithstanding anything in these Articles to the contrary, the Directors may from time to time make such arrangements or regulations (if any) as they may from time to time in their absolute discretion think fit in relation to the giving of notices or other documents or information by electronic means by or to the Company and otherwise for the purpose of implementing and/or supplementing the provisions of these Articles and the Statutes in relation to electronic means; and such arrangements and regulations (as the case may be) shall have the same effect as if set out in this Article.
 
DESTRUCTION OF DOCUMENTS
 
175.
Destruction
 
175.1
The Company may destroy:
 

 (a)
any instrument of transfer, after six years from the date on which it is registered;
 

 (b)
any dividend mandate or any variation or cancellation of it or any notification of change of name or address, after two years from the date on which it is recorded;
 

 (c)
any share certificate, after one year from the date on which it is cancelled;
 

 (d)
any proxy form which has been used for a poll, after one year from the date of use;
 

 (e)
any proxy form which has not been used for a poll, after one month from the general meeting to which it relates and at which the poll was demanded; and
 

 (f)
any other document on the basis of which any entry in the register is made, after six years from the date on which an entry was first made in the register in respect of it, provided that the Company may destroy any such type of document at a date earlier than that authorised by this Article if a copy of such document is retained on microfilm or by other similar means on which such copy is retained until the expiration of the period applicable to the destruction of the original of such document.
 
176.
Correct entries
 
176.1
It shall be conclusively presumed in favour of the Company that every entry in the register purporting to have been made on the basis of a document so destroyed was duly and properly made, that every instrument of transfer so destroyed was duly registered, that every share certificate so destroyed was duly cancelled, that every other document so destroyed had been properly dealt with in accordance with its terms and was valid and effective in accordance with the particulars in the records of the Company, provided that:
 
58

 (a)
this Article shall apply only to the destruction of a document in good faith and without notice of any claim (regardless of the parties to it) to which the document might be relevant;
 

 (b)
nothing in this Article shall be construed as imposing on the Company any liability in respect of the destruction of any such document otherwise than as provided for in this Article which would not attach to the Company in the absence of this Article; and
 

 (c)
references in this Article to the destruction of any document include references to the disposal of it in any manner.
 
WINDING UP
 
177.
Authority to divide assets
 
If the Company shall be wound up (whether the liquidation is altogether voluntary, under supervision or by the court) the liquidator may, with the authority of a special resolution and any other sanction required by the Act, divide among the members in specie the whole or any part of the assets of the Company, and whether or not the assets shall consist of property of one kind or shall consist of properties of different kinds, and may for such purposes set such value as he deems fair upon any one or more class or classes of property, and may determine how such divisions shall be carried out as between the members or different classes of members.  The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator, with the like authority, shall think fit, and the liquidation of the Company may be closed and the Company dissolved, but so that no member shall be compelled to accept any shares in respect of which there is a liability.
 
INDEMNITY
 
178.
Right to indemnity
 
So far as the law allows, but without prejudice to any indemnity to which he may otherwise be entitled, any person who is or was at any time a Director, alternate director, officer or employee of the Company shall be entitled to be indemnified and, if the directors so determine, any other Relevant Person shall be entitled to be indemnified, out of the assets of the Company against any Relevant Liability.
 
179.
Power to Insure
 
So far as the law allows, the Directors may take out, maintain, renew, establish, participate in and/or contribute to the cost of, insurance for, or for the benefit of any Relevant Person or any person who is or was at any time a trustee of any pension fund in which any employee or former employee of the Company or any of the other bodies corporate which are referred to in the definition of “Relevant Person” are interested, including insurance against any Relevant Liability and, so far as the law allows, may indemnify or exempt any such person from or against any such Relevant Liability.
 

59
Exhibit 1.2

Company Number:  12107859
 
THE COMPANIES ACT 2006
 
PUBLIC COMPANY LIMITED BY SHARES
 
ARTICLES OF ASSOCIATION OF
 
AMRYT PHARMA PLC
 
(adopted by special resolution passed on 29 July 2020),
as amended by special resolution passed on 28 July 2021)

CONTENTS
 
REGULATIONS AND INTERPRETATION
1
1.
Interpretation
1
2.
Model Articles not to apply and application of contractual agreements with members
5
SHARE CAPITAL
5
3.
Share Capital
5
COMPANY BUSINESS
5
4.
Business
5
VARIATION OF CLASS RIGHTS
6
5.
Sanction to variation
6
6.
Deemed variation
6
SHARES
6
7.
Allotment of shares
6
8.
Purchase of own shares
7
9.
Commission and brokerage
7
10.
Trusts not to be recognised
7
SHARE CERTIFICATES
8
11.
Share certificates
8
12.
Replacement of share certificate
8
ISSUE OF SHARES
8
13.
Uncertificated shares
8
14.
Relevant Class
9
CALLS ON SHARES
10
15.
Calls
10
16.
Payment
10
17.
Interest on calls
10
18.
Sums treated as calls
10
19.
Power to differentiate
11
20.
Payment in advance of calls
11
FORFEITURE, SURRENDER, LIEN AND UNTRACED MEMBERS
11
21.
Notice if call not paid
11
22.
Forfeiture for non-compliance
11
23.
Disposal of forfeited shares
11
24.
Effect of forfeiture
12
25.
Lien
12
26.
Enforcement of lien by sale
12

i
27.
Application of proceeds of sale
12
28.
Untraced members
13
29.
Evidence of forfeiture
14
TRANSFER OF SHARES
14
30.
Transfer of title and interest
14
31.
Transfer of shares
14
32.
Right to refuse registration
15
33.
Notice of refusal
15
34.
Closing of register
15
35.
Fees on registration
15
36.
Retention
15
37.
Transfer by renunciation
16
TRANSMISSION OF SHARES
16
38.
On death
16
39.
Election of person entitled by transmission
16
40.
Transfer notice
16
41.
Rights on transmission
16
INCREASE OF CAPITAL
17
42.
Increase of Capital
17
43.
New Shares
17
ALTERATION OF CAPITAL
17
44.
Alteration
17
GENERAL MEETINGS
18
45.
Annual general meetings
18
46.
General meetings
18
47.
Notice of general meetings
18
48.
Statement
19
49.
Omission of notice
19
PROCEEDINGS AT GENERAL MEETINGS
19
50.
Business of meetings
19
51.
Notice of resolution
20
52.
Satellite meetings
20
53.
Combined physical and electronic meetings
21
54.
Attendance at and participation in general meetings
22
55.
Quorum
23
56.
Quorum not present
23
57.
Chairman
23
58.
Power to adjourn
23
59.
Postponement
24
60.
Directors may attend and speak
24
61.
Amendment
24

ii
VOTES OF MEMBERS
25
62.
Votes
25
63.
Joint holders
25
64.
Vote by proxy
25
65.
Restriction on voting rights
25
66.
Objection to error in voting
25
67.
Votes on a poll
26
POLLS
26
68.
Method of voting
26
69.
Proxy
26
70.
Error
27
71.
Procedure on a poll
27
72.
Poll to be taken forthwith
27
73.
Casting vote
27
74.
Demand for poll
27
75.
Withdrawal
27
PROXY
28
76.
Form of Proxy
28
77.
Appointment of proxy
28
78.
Deposit of proxy
28
79.
Validity
29
80.
Supply of proxy cards
29
81.
Corporate representative
29
DISCLOSURE OF INTERESTS
30
82.
Section 793
30
83.
Default
30
84.
Restrictions
31
85.
Arms length transfer
31
86.
Relevant period
31
87.
Interest in shares
31
APPOINTMENT OF DIRECTORS
32
88.
Power of Company to appoint Directors
32
89.
Power of Board to appoint Directors
32
90.
Number of Directors
32
91.
Additional remuneration
32
ALTERNATE DIRECTORS
33
92.
Appointment
33
93.
Remuneration
33
INTERESTS OF DIRECTORS
33
94.
Other office of Director
33
95.
Disqualification
33

iii
96.
Declaration of interest
34
97.
Material interest
34
98.
Voting
34
99.
Two Directors
35
100.
Directors interests
35
101.
Interest of connected person
36
102.
Suspension of provisions
36
103.
Directors’ conflict of interest
36
104.
Benefits
38
105.
Exercise of power
38
GENERAL POWERS OF DIRECTORS
38
106.
Management
38
107.
Delegation of Authority
39
108.
Power of Attorney
39
109.
Overseas registers
39
110.
Uncalled capital
39
DIRECTORS HOLDING EXECUTIVE OFFICE
39
111.
Office
39
112.
Remuneration
40
113.
Powers
40
RETIREMENT OF DIRECTORS
40
114.
Retirement
40
115.
Vacation of office
40
116.
Resolution as to a vacancy conclusive
41
ROTATION OF DIRECTORS
41
117.
Retirement by rotation
41
118.
Retirement in every year
42
119.
Vacated office
42
120.
Appointment
42
121.
Motion
42
PROCEEDINGS OF DIRECTORS
42
122.
Meetings
42
123.
Authorisation to vote
43
124.
Quorum
43
125.
Minimum number of directors
43
126.
Chairman
44
127.
Resolutions
44
128.
Committees
44
129.
Validity
44
BORROWING POWERS
45
130.
Powers
45

iv
OTHER DIRECTORS
45
131.
Appointment
45
MINUTES AND BOOKS
45
132.
Minutes
45
133.
Records
46
SECRETARY
46
134.
Appointment
46
135.
Office
46
THE SEAL
46
136.
Safe custody
46
137.
Application
46
138.
Seal for use abroad
47
139.
Issue
47
140.
Seal
47
AUTHENTICATION OF DOCUMENTS
47
141.
Authentication
47
DIVIDENDS
48
142.
Declaration of dividends
48
143.
Dividends payable
48
144.
Payment of dividends
48
145.
Interim dividends
48
146.
Profits and losses
49
147.
Calls or debts deducted from dividends
49
148.
Retention of dividends
49
149.
Unclaimed dividends
49
150.
Payment of dividends
49
151.
Receipts for dividends
50
152.
Scrip dividends
50
153.
General meeting to declare dividend
51
154.
Reserves
52
155.
Capitalisation
52
156.
Authority
52
157.
Record Dates
53
ACCOUNTS
53
158.
Accounting records
53
159.
Preparation of accounts
53
160.
Accounts to members
53
161.
Electronic means
54
AUDITORS
54
162.
Appointment
54

v
163.
Correctness
54
164.
Auditors to attend meetings
54
165.
Change of auditors
54
SERVICE OF NOTICE ON MEMBERS
54
166.
Notices to be in writing
54
167.
Service of notice on members
55
168.
Notice in case of death, bankruptcy or mental disorder
56
169.
Evidence of service
56
170.
Notice binding on transferees
56
171.
Notice by advertisement
57
172.
Suspension of the postal services
57
173.
Service of notices on the Company
57
ELECTRONIC COMMUNICATION
57
174.
Electronic Communication
57
DESTRUCTION OF DOCUMENTS
58
175.
Destruction
58
176.
Correct entries
58
WINDING UP
59
177.
Authority to divide assets
59
INDEMNITY
59
178.
Right to indemnity
59
179.
Power to Insure
59
 
vi
Company Number:  12107859
 
THE COMPANIES ACT 2006
 
PUBLIC COMPANY LIMITED BY SHARES
 
ARTICLES OF ASSOCIATION OF
 
AMRYT PHARMA PLC
 
(the “Company”)
 
(adopted by special resolution passed on 29 July 2020,
as amended by special resolution passed on 28 July 2021)
 
REGULATIONS AND INTERPRETATION
 
1.
Interpretation
 
1.1
In these Articles, unless the context otherwise requires, the following words and expressions shall have the following meanings:
 
“Act” means the Companies Act 2006 (as amended);
 
“Articles” means the articles of association of the Company as contained in this document or as amended from time to time;
 
“Bank” means the bank with which the Company has its main current account from time to time;
 
“Directors” or “Board” means the directors of the Company from time to time or a quorum of such directors present at a board meeting and “Director” shall mean any one of them;
 
“dividend” includes bonus;
 
“combined physical and electronic meeting” means any general meeting convened and held in accordance with these Articles and which allows any person entitled to be present to attend and participate in person or by means of an electronic platform;
 
“communication” and “electronic communication” shall have the same meaning as in the Electronic Communications Act 2000;
 
“electronic form” and “electronic means” shall, where the context so admits, have the same meaning as in the Act;

“electronic platform” means any form of electronic platform or facility, including any website address and conference call system and any device, system, procedure, method or other facility providing electronic means of attendance at and/or participation in a meeting determined by the Board pursuant to these Articles and specified in the notice of that meeting;
 
“executed” includes any mode of execution;
 
“holder” means, in relation to shares, means a member whose name is entered in the register of members as the holder of the shares;
 
“Office” means the registered office for the time being of the Company;
 
“Operator” means the person from time to time who in respect of the Company’s securities carries out the functions of the operation of a relevant system for the purposes of the Regulations;
 
“Ordinary Shares” means ordinary shares with a nominal value of £0.06 each in the share capital of the Company;
 
“paid up” means paid up or credited as paid up;
 
“Panel” means the Panel on Takeovers and Mergers in the United Kingdom;
 
“physical meeting” means any general meeting convened and held in accordance with these Articles and which allows any person entitled to be present to attend and participate in person at the location(s) specified in the notice of such meeting;
 
“present” means:
 

 (a)
in respect of a physical meeting, physically present in person; or
 

 (b)
in respect of a combined physical and electronic meeting, physically present either in person or by attendance by means of an electronic platform;
 
“Privileged Relation” means in relation to a shareholder who is an individual shareholder (or a deceased or former individual shareholder) means a spouse, civil partner, (as defined in the Civil Partnerships Act 2004) child or grandchild (including step or adopted or illegitimate child and their issue);
 
“Regulations” means the Uncertificated Securities Regulations 2001 (SI 2001 no. 3755) including any modification thereof or any regulations in substitution thereof and for the time being in force;
 
“Relevant Liability” means any cost, charge, loss, damage, expense or liability which any person may suffer or incur:
 

 (a)
as a result of anything he does, or does not do, in carrying out or trying to carry out his duties, or using or trying to use his powers in relation to the Company, or in relation to any of the other bodies corporate which are referred to in the definition of “Relevant Person” or, in the case of any current or past trustee of any pension fund, in relation to that pension fund; or

2

 (b)
in any other way in connection with his duties, powers or posts in relation to the Company or in relation to any of the other bodies corporate which are referred to in the definition of “Relevant Person” or, in the case of any current or past trustee of any pension fund, in relation to that pension fund including (without prejudice to the generality of the foregoing) any liability incurred in connection with defending any proceedings (whether civil or criminal) which relate to any of the matters referred to in this definition of “Relevant Liability”;
 
“Relevant Person” means any person who is or was at the time a Director, alternate director, officer or employee of:
 

 (a)
the Company, or any body corporate which is or was at any time a holding company of the Company;
 

 (b)
any body corporate in which the Company, or any body corporate which is or was at any time a holding company of the Company, has any kind of direct or indirect interest;
 

 (c)
any body corporate in which any of the predecessors of the Company, or of any body corporate which is or was at any time a holding company of the Company, has any kind of direct or indirect interest;
 

 (d)
any body corporate with which the Company is or was at any time allied, or associated; or
 

 (e)
any body corporate which is or was at any time a subsidiary undertaking of any body corporate referred to in this definition;
 
“relevant system” means a relevant system as defined by regulation 2(1) of the Regulations;
 
“Seal” means the common seal of the Company or if appropriate any official seal which the Company may have pursuant to Section 50 of the Act (the “Securities Seal”);
 
“Secretary” means the secretary of the Company and (subject to the provisions of the Act) any other person appointed by the Directors to perform any of the duties of the secretary of the Company, including a joint assistant or deputy secretary;
 
“Statutes” means the Act, and every other statute (and any regulations subordinate thereto) for the time being in force concerning companies and affecting the Company; and
 
“United Kingdom” means the United Kingdom of Great Britain and Northern Ireland.
 
3
1.2
In these Articles, unless the context otherwise requires:


(a)
words importing the singular number only shall include the plural, and vice versa;
 

 (b)
words importing the masculine gender only shall include the feminine gender;
 

 (c)
words importing individuals and words importing persons shall include bodies corporate and unincorporated associations;
 

 (d)
“in writing” and “written” includes printing, lithography, typewriting, photography and other modes of representing or reproducing words in visible form, whether sent or supplied in electronic form, made available on a website or otherwise;
 

 (e)
any reference to a “meeting” refers to a general meeting convened and held in any manner permitted by these Articles, including a general meeting held as a physical meeting or a combined physical and electronic meeting, and such persons entitled to be present attending and participating in such meeting shall be deemed to be present at such meeting for the purposes of the Act, and these Articles shall be construed accordingly;
 

 (f)
references to any statute or provision of a statute shall include any orders, regulations or other subordinate legislation made under it and shall, unless the context otherwise requires, include any statutory modification or re-enactment of it for the time being in force;
 

 (g)
save as aforesaid, words or expressions contained in these Articles shall bear the same meaning as in the Act and words and expressions used in the Regulations have the same meanings when used in these Articles;
 

 (h)
the words and phrases “other”, “including” and “in particular” do not limit the generality of any preceding words and any words which follow them shall not be construed as being limited in scope to the same class as the preceding words where a wider construction is possible;
 

 (i)
subject to the provisions of Article 51, where for any purpose an ordinary resolution of the Company is required a special resolution shall also be effective;
 

 (j)
references to Articles are references to these Articles and references to paragraphs and sub-paragraphs are, unless otherwise stated, references to paragraphs of the Article or references to sub-paragraphs of the paragraph in which the reference appears; and
 

 (k)
the headings are inserted for convenience only and shall not affect the construction of these Articles.

4
2.
Model Articles not to apply and application of contractual agreements with members
 
2.1
No regulations set out in any statute or in any statutory instrument or other subordinate legislation concerning companies shall apply to the Company except insofar as they are repeated or contained in these Articles.  This document constitutes the Articles of the Company.
 
2.2
Subject to the Statutes, the Articles shall be subject to any contractual agreement entered into by the Company and any of its members (in their capacity as shareholders of the Company only).
 
SHARE CAPITAL
 
3.
Share Capital
 
3.1
The Ordinary Shares shall confer the following rights and restrictions on their holders:
 

 (a)
the right to receive notice of, attend and vote at any general meeting;
 

 (b)
the right to participate in the profits of the Company; and
 

 (c)
the right on a winding up or return of capital or otherwise to repayment of the amounts paid up or credited as paid up on them in respect of each Ordinary Share with the Ordinary Shares conferring a right to participate in any surplus assets of the Company in proportion to the number of shares held.
 
3.2
Without prejudice to any special rights previously conferred on the holders of any shares or class of shares already issued (which special rights shall not be modified or abrogated except with such consent or sanction as is provided in Articles 5 or 6), a share (whether forming part of the original capital or not) may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, return of capital, voting or otherwise, as the Company by ordinary resolution determines.
 
COMPANY BUSINESS
 
4.
Business
 
Any branch or kind of business which the Company is either expressly or by implication authorised to undertake may be undertaken by the Directors at such times as they think fit, and may be permitted by them to be in abeyance, whether the branch or kind of business commenced or not, so long as the Directors deem it expedient not to commence or proceed with it.

5
VARIATION OF CLASS RIGHTS
 
5.
Sanction to variation
 
5.1
Subject to the provisions of the Act if at any time the capital of the Company is divided into different classes of shares or groups, the rights attached to any class or group may be varied or abrogated, whether or not the Company is being wound up, either:
 

 (a)
in such manner (if any) as may be provided by such rights; or
 

 (b)
in the absence of any such provisions with the consent in writing of the holders of three- quarters in nominal value of the issued shares of that class or group, or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class or group, but not otherwise.
 
5.2
To every such separate general meeting of the holders of a class or group of shares all the provisions of these Articles relating to general meetings of the Company or to the proceedings at such general meetings shall, so far as applicable and with the necessary modifications, apply, except that:
 

 (a)
the necessary quorum at any such meeting other than an adjourned meeting shall be two persons holding or representing by proxy at least one-third in nominal value of the issued shares of the class or group in question and at an adjourned meeting one person holding shares of the class or group in question or his proxy;
 

 (b)
any holder of shares of the class or group in question present in person or by proxy may demand a poll; and
 

 (c)
the holders of shares of the class or group in question shall, on a poll, have one vote in respect of every share of the class or group held by them respectively.
 
6.
Deemed variation
 
The special rights conferred upon the holders of any class or group of shares issued with preferred or other special rights shall not (unless otherwise expressly provided by these Articles or by the conditions of issue of such shares) be deemed to be varied by the creation or issue of further shares ranking in some or all respects pari passu with them.
 
SHARES
 
7.
Allotment of shares
 
7.1
Subject to Article 7.2 and to any direction to the contrary given by the Company in general meeting, the shares and any right to subscribe for, or to convert any security into, shares in the Company for the time being (other than shares shown in the memorandum of association of the Company to have been taken by the subscribers or shares allotted in pursuance of an employee’s share scheme) may be allotted to such persons, at such times, in such proportions, upon such terms (other than at a discount) and with such rights or restrictions, including but without limit as to differentiation between members of calls, as the Directors, subject to the Articles and to the provisions of the Act shall think fit.

6
7.2
The Company may in accordance with and subject to sections 684 to 689 of the Act and all other relevant provisions (if any) in force for the time being:
 

 (a)
issue shares which are to be redeemed or are liable to be redeemed at the option of the Company or the holder thereof;
 

 (b)
make a payment in respect of the redemption or purchase of any of its own paid-up shares out of the distributable profits of the Company or the proceeds of a fresh issue of shares and as to redemption on such date or dates (to be fixed prior to the issue of such shares) and terms and in such manner as may be determined at any time or times by the Directors, provided nevertheless that the amount to be paid on redemption shall be fixed on, and by the terms of, the issue of the shares;
 
provided always that any shares purchased or redeemed by the Company shall be treated as cancelled and that within one month of the redemption of any redeemable shares the Company gives notice to the registrar specifying the shares redeemed.
 
8.
Purchase of own shares
 
Subject to the provisions of the Act and, if applicable, subject to any approval by means of a special resolution at a separate class meeting of the holders of any class of convertible shares, the Company shall have power to purchase its own shares, including any redeemable shares.
 
9.
Commission and brokerage
 
In addition to all other powers of paying commission, the Company may exercise the powers conferred by the Act in paying commission to persons subscribing or procuring subscriptions for shares in the Company, or agreeing so to do, whether absolutely or conditionally; provided that the rate or the amount of the commission paid or agreed to be paid shall be disclosed in the manner required by the Act and shall not exceed ten per cent of the price which the shares in respect of which the commission is paid are issued or an amount equivalent thereto.  Subject to the provisions of the Act any such commission may be satisfied by the payment of cash or by the allotment or fully or partly paid shares or partly in one way and partly in the other.  The Company may also, on any issue of shares, pay such brokerage as is lawful.
 
10.
Trusts not to be recognised
 
Except as required by law (including, without limitation, the Regulations), no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or compelled in any way to recognise (even when having notice) any equitable, contingent, future or partial interest in any share, or (except only as provided by these Articles or as required by law) any interest in any fractional part of a share or any other right in respect of any share, except an absolute right to the entirety of it in the registered holder.

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SHARE CERTIFICATES
 
11.
Share certificates
 
11.1
Every person whose name is entered as a member in the register of members (except a recognised clearing house or a nominee thereof or other person in respect of whom the Company is not by law required to complete and have ready for delivery a certificate) shall be entitled without payment to one certificate for all his shares of each class.  Every certificate shall be issued within two months after allotment or the lodgement with the Company of the transfer of the shares, not being a transfer which the Company is for any reason entitled to refuse to register and does not register (unless the conditions of issue of such shares otherwise provide), and shall specify the number and class and distinguishing numbers (if any) of the shares to which it relates and the amount paid up thereon.  The Company shall not be bound to register more than four persons as the joint holders of any share or shares and, in the case of a share held jointly by several persons, the Company shall not be bound to issue more than one certificate therefor, and delivery of a certificate for shares to the first named joint holders shall be sufficient delivery to all.  Where a member transfers part of the shares comprised in his holding he shall be entitled to a certificate for the balance of his holding without charge.
 
11.2
Any share certificate and any certificate for debentures of the Company which has been approved for sealing by the Directors or a committee of the Directors need not (save to the extent that the terms and conditions for the time being relating to any debentures of the Company otherwise require) be signed or countersigned by any person.  Subject as aforesaid, any such certificate may, if the Directors so determine, bear signatures affixed by some mechanical system or process or printed on them or the names of the Company’s issuing agents and need not be signed by any person.
 
12.
Replacement of share certificate
 
If a share certificate is defaced, worn out, lost or destroyed, it may be replaced on such terms (if any) as to evidence and indemnity and the payment of any exceptional out of pocket expenses incurred by the Company in investigating evidence as the Directors think fit but otherwise free of charge and (in case of defacement or wearing out) on delivery up of the old certificate.
 
ISSUE OF SHARES
 
13.
Uncertificated shares
 
13.1
In these Articles references to a share (or to holding of shares) being in uncertificated form or in certificated form are references, respectively, to that share being an uncertificated unit of a security or a certificated unit of a security.

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13.2
The Directors shall have power to implement such arrangements as they may, in their absolute discretion, think fit in order for any class of shares to be a participating security (subject always to the Regulations and the facilities and requirements of the relevant system concerned).  Where they do so the following Article shall commence to have effect immediately prior to the time at which the Operator concerned permits the class of shares concerned to be a participating security.
 
13.3
In relation to any class of shares which is, for the time being, a participating security, and for so long as such class remains a participating security, no provision of these Articles shall apply or have effect to the extent that it is in any respect inconsistent with:
 

 (a)
the holding of shares of that class in uncertificated form;
 

 (b)
the transfer of title to shares of that class by means of a relevant system; or
 

 (c)
the Regulations.
 
14.
Relevant Class
 
14.1
Without prejudice to the generality of the preceding Article and notwithstanding anything contained in these Articles, where any class of shares is, for the time being, a participating security (such class being referred to hereinafter as the “Relevant Class”):
 

 (a)
the register relating to the Relevant Class shall be maintained at all times in the United Kingdom;
 

 (b)
shares of the Relevant Class may be issued in uncertificated form in accordance with and subject as provided in the Regulations;
 

 (c)
unless the Directors otherwise determine, shares of the Relevant Class held by the same holder or joint holder in certificated form and uncertificated form shall be treated as separate holdings;
 

 (d)
shares of the Relevant Class may be changed from uncertificated to certificated form, and from certificated to uncertificated form, in accordance with and subject as provided in the Regulations;
 

 (e)
title to shares of the Relevant Class which are recorded on the register as being held in uncertificated form may be transferred by means of the relevant system concerned and accordingly none of the provisions of these Articles shall apply in respect of such shares to the extent that any provision requires or contemplates the effecting of a transfer by an instrument in writing and the production of a certificate for the share to be transferred;
 

 (f)
the Company shall comply with the provisions of Regulations 27 and 28 in relation to the Relevant Class and all provisions in these Articles shall be read as subject to Regulation 28;

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 (g)
the provisions of these Articles with respect to meetings of or including holders of the Relevant Class, including notices of such meetings, shall have effect subject to the provisions of Regulation 41; and
 

 (h)
no provision of these Articles shall apply so as to require the Company to issue a certificate to any person holding shares of the Relevant Class in uncertificated form.
 
CALLS ON SHARES
 
15.
Calls
 
The Directors may, subject to the provisions of these Articles and to any conditions of allotment, from time to time make calls upon the members in respect of any monies unpaid on their shares (whether on account of the nominal amount of the shares or by way of premium) and each member shall (subject to being given at least 14 days’ notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares.
 
16.
Payment
 
A call may be made payable by instalments.  A call may be postponed and a call may be wholly or in part revoked as the Directors may determine.  A call shall be deemed to have been made at the time when the resolution of the Directors authorising the call was passed.  The joint holders of a share shall be jointly and severally liable to pay all calls in respect of it.  A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the shares in respect of which the call was made.
 
17.
Interest on calls
 
If a sum called in respect of a share is not paid before or on the day appointed for its payment, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment to the time of actual payment at the rate fixed by the terms of allotment of the share or in the notice of the call or, if no rate is so fixed, at the base rate from time to time of the Bank or at such lower rate as the Directors may agree to accept, but the Directors shall be at liberty to waive payment of such interest wholly or in part.
 
18.
Sums treated as calls
 
Any sum which by the terms of issue of a share becomes payable upon allotment or at any fixed date, whether on account of the nominal amount of the share or by way of premium or as an instalment of a call, shall, for all the purposes of these Articles, be deemed to be a call duly made and payable on the date on which by the terms of issue the same becomes payable, and, in case of non-payment, all the relevant provisions of these Articles as to payment of interest, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

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19.
Power to differentiate
 
Subject to the terms of allotment, the Directors may, on the issue of shares, differentiate between the holders in the amount of calls to be paid and in the times of payment.
 
20.
Payment in advance of calls
 
The Directors may, if they think fit, receive from any member willing to advance the same all or any part of the money unpaid upon the shares held by him beyond the sums actually called upon as a payment in advance of calls, and any such payment in advance of calls shall extinguish, so far as the same shall extend but subject as in these Articles provided, the liability upon the shares in respect of which it is advanced; and upon the money so received, or so much of it as from time to time exceeds the amount of the calls then made upon the shares in respect of which it has been received, the Company may pay interest at such rate not exceeding the base rate from time to time of the Bank as the member paying such sum and the Directors agree.
 
FORFEITURE, SURRENDER, LIEN AND UNTRACED MEMBERS
 
21.
Notice if call not paid
 
If a member fails to pay any call or instalment of a call on the day appointed for its payment, the Directors may at any time after such date, during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.  The notice shall name a further day (not earlier than 7 days from the date of service of such notice) on or before which and the place where the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time and at the place appointed the shares on which the call was made will be liable to be forfeited.
 
22.
Forfeiture for non-compliance
 
If the requirements of any such notice as referred to are not complied with, any share in respect of which such notice has been given may at any time after service of such notice, before payment of all calls and interest due has been made, be forfeited by a resolution of the Directors to that effect, and such forfeiture shall include all dividends which shall have been declared on the forfeited shares and not actually paid before the forfeiture.  The Directors may accept a surrender of any shares liable to be forfeited under this Article.
 
23.
Disposal of forfeited shares
 
Subject to the provisions of the Act, a share so forfeited or surrendered shall become the property of the Company and may be sold, re-allotted or otherwise disposed of either to the person who was before such forfeiture or surrender the holder or entitled to such shares, or to any other person, upon such terms and in such manner as the Directors shall think fit.  At any time before a sale, re-allotment or disposal, the forfeiture or surrender may be cancelled on such terms as the Directors think fit.  The Directors may, if they think fit, authorise some person to execute an instrument or transfer of a forfeited or surrendered share to such any other person.

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24.
Effect of forfeiture
 
A member whose shares have been forfeited or surrendered shall cease to be a member in respect of the forfeited or surrendered shares and shall surrender to the Company for cancellation the certificate for the share forfeited, but shall notwithstanding such forfeiture or surrender remain liable to pay to the Company all monies which at the date of forfeiture or surrender were presently payable by him to the Company in respect of the shares, with interest, unless and to the extent that the Directors resolve to waive interest, at the rate at which interest was payable on those monies before the forfeiture or, if no interest was so payable, at the base rate from time to time of the Bank or at such lower rate as the Directors may agree to accept from the date of forfeiture or surrender until payment, and the Directors may enforce payment without any allowance for the value of the shares at the time of forfeiture or surrender or for any consideration received on their disposal.
 
25.
Lien
 
Subject to the provisions of Section 670 of the Act the Company shall have a first and paramount lien on every share (not being a fully paid share) for all monies, whether presently payable or not, called or payable at a fixed time in respect of such share.  The Company’s lien (if any) on a share shall extend to all dividends or other monies payable on or in respect of such shares together with any interest or expenses which may have accrued.  The Directors may resolve that any share shall for some specified period be wholly or in part exempt from the provisions of this Article.
 
26.
Enforcement of lien by sale
 
The Company may sell, in such manner as the Directors think fit, any shares on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable, nor until the expiration of 14 days after a notice in writing, stating and demanding payment of the sum presently payable, and giving notice of intention to sell in default, shall have been served on the holder for the time being of the shares or the person entitled by reason of his death or bankruptcy to the shares.
 
27.
Application of proceeds of sale
 
The net proceeds of such sale, after payment of the relevant costs, shall be applied in or towards payment or satisfaction of the debt or liability in respect of which the lien exists, so far as the same is presently payable, and any residue shall (upon surrender to the Company for cancellation of the certificate for the shares sold and subject to a like lien for debts or liabilities not presently payable as existed upon the shares prior to the sale) be paid to the person entitled to the shares at the time of the sale.  For giving effect to any such sale, the Directors may authorise some person to execute an instrument of transfer of the shares sold to, or in accordance with, the directions of the purchaser of such shares.  The purchaser shall be registered as the holder of the shares and he shall not be bound to see the application of the purchase money and his title to the shares shall not be affected by any irregularity or invalidity in the proceedings in reference to the sale.

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28.
Untraced members
 
28.1
The Company shall be entitled to sell at the best price reasonably obtainable in such manner and for such price as the Directors think fit any share of a member, or any share to which a person is entitled by transmission on death or bankruptcy, if and provided that:
 

 (a)
during the period of 12 years prior to the date of the publication of the advertisements referred to in Article 28.1(b) (or, if published on different dates, the earlier or earliest date) no cheque, order or warrant in respect of such share sent by the Company through the post in a pre-paid envelope addressed to the member or to the person entitled by transmission to the share, at his address on the register or other last known address given by the member or person to which cheques, orders or warrants in respect of such share are to be sent has been cashed and the Company has received no communications in respect of such share from such member or person, provided that during such period of 12 years the Company has paid at least three cash dividends (whether interim or final) and no such dividend has been claimed by the person entitled to it;
 

 (b)
on or after expiry of the said period of 12 years the Company has given notice of its intention to sell such share by advertisements in two newspapers of which one shall be a national newspaper published in the United Kingdom and the other shall be a newspaper circulating in the area of the address on the register or other last known address of the member or the person entitled by transmission to the share or the address for the service of notices otherwise notified by a member or transferee to the Company;
 

 (c)
the said advertisements, if not published on the same day, shall have been published within thirty days of each other; and
 

 (d)
during the further period of three months following the date of publication of the said advertisements (or, if published on different dates, the later or latest date) and prior to the exercise of the power of sale the Company has not received any communication in respect of such share from the member or person entitled by transmission.
 
28.2
To give effect to any sale of shares pursuant to this Article, the Directors may authorise some person to transfer the shares in question and may enter the name of the transferee in respect of the transferred shares in the register notwithstanding the absence of any share certificate being lodged in respect thereof and may issue a new certificate to the transferee.  An instrument of transfer executed by (or a dematerialised instruction given by) that person shall be as effective as if it had been executed or effected by the holder of, or the person entitled by transmission to, the shares.  The purchaser shall not be bound to see to the application of the purchase monies, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

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28.3
If during the period of 12 years referred to in Article 28.1, or during any period ending on the date when all the requirements of Articles 28.1(a) to 28.1(d) have been satisfied, any additional shares have been issued in respect of those held at the beginning of, or previously so issued during, any such period and all the requirements of Articles 28.1(a) to 28.1(d) have been satisfied in regard to such additional shares, the Company shall also be entitled to sell the additional shares.
 
28.4
The Company shall account to the member or other person entitled to such share for the net proceeds of such sale by carrying all monies in respect of such sale to a separate account.  The Company shall be deemed to be a debtor to, and not a trustee for, such member or other person in respect of such monies.  Monies carried to such separate account may either be employed in the business of the Company or invested in such investments as the Directors may from time to time think fit.  No interest shall be payable to such member or other person in respect of such monies and the Company shall not be required to account for any money earned on them.
 
29.
Evidence of forfeiture
 
A statutory declaration in writing that the declarant is a Director or the Secretary and that a share has been duly forfeited, surrendered or sold, whether to satisfy a lien of the Company or otherwise on a date stated in the declaration, shall be conclusive evidence of the facts stated in such declaration as against all persons claiming to be entitled to the share.  Such declaration and the receipt of the Company for the consideration (if any) given for the share on its sale, re- allotment or disposal, together with the share certificate delivered to the relevant purchaser or allottee, shall (subject to the execution of an instrument of transfer if the same be required) constitute a good title to the share and the person to whom the share is sold, re-allotted or disposed of shall be registered as the holder of the share and shall not be bound to see to the application of the consideration (if any) nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, surrender, sale, re- allotment or disposal of the share.
 
TRANSFER OF SHARES
 
30.
Transfer of title and interest
 
Title to and interest in shares may be transferred without a written instrument in accordance with statutory regulations from time to time made under the Act.
 
31.
Transfer of shares
 
Transfer of shares may be effected by transfer in writing in any usual or common form or in any other form acceptable to the Directors or as required by any rules from time to time made by the Operator.  The instrument of transfer shall be signed by or on behalf of the transferor and (except in the case of fully paid shares) by or on behalf of the transferee.  The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered on the register of members in respect of it.

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32.
Right to refuse registration
 
32.1
The Directors may decline to recognise any instrument of transfer, unless:
 

 (a)
the instrument of transfer duly stamped is deposited at the Office or such other place as the Directors may appoint, accompanied by the certificate for the shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer, provided that, in the case of a transfer by a nominee of a recognised clearing house or of a recognised investment exchange, the lodgement of a share certificate will only be necessary if a certificate has been issued in respect of the share in question;
 

 (b)
the instrument of transfer is in respect of only one class of share;
 

 (c)
the instrument of transfer is in favour of not more than four transferees; and
 

 (d)
the instrument of transfer is in respect of a share in respect of which all sums presently payable to the Company have been paid;
 
provided that the Directors shall not refuse to register any transfer or renunciation of partly paid shares in breach of the AIM Rules for Companies published by the London Stock Exchange plc from time to time (if applicable).
 
33.
Notice of refusal
 
If the Directors refuse to register a transfer of any shares, they shall, within 2 months after the date on which the transfer was lodged with the Company or the Operator as the case may be, send to the transferor and the transferee notice of the refusal.
 
34.
Closing of register
 
The registration of transfers of shares or of any class of shares may be suspended at such time and for such periods as the Directors may from time to time determine, provided always that the register of members shall not be closed for more than 30 days in any year.
 
35.
Fees on registration
 
No fee will be charged by the Company in respect of the registration of any instrument of transfer, probate, letters of administration, certificate of marriage or death, stop notice or power of attorney or other document relating to or affecting the title to any shares or otherwise for making any entry in the register of members relating to or affecting the title to any shares.
 
36.
Retention
 
All instruments of transfer which shall be registered may be retained by the Company, but any instrument of transfer which the Directors refuse to register shall (except in any case of fraud) be returned to the person depositing the same.

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37.
Transfer by renunciation
 
Nothing in these Articles shall preclude the Directors from recognising a renunciation of the allotment of any share by the allottee in favour of some other persons.
 
TRANSMISSION OF SHARES
 
38.
On death
 
In the case of the death of a member the survivors or survivor where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole or only surviving holder, shall be the only persons recognised by the Company as having any title to his interest in the shares, but nothing in this Article shall release the estate of a deceased holder (whether sole or joint) from any liability in respect of any share held by him.
 
39.
Election of person entitled by transmission
 
Any person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such evidence as to his title being produced as may from time to time be required by the Directors and subject as provided in these Articles, elect either to be registered himself as a holder of the share or to have some person nominated by him registered as the transferee.
 
40.
Transfer notice
 
If the person so becoming entitled shall elect to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects.  If he shall elect to have another person registered, he shall testify his election by executing a transfer of the share in favour of that person.  All the limitations, restrictions and provisions of these Articles relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as if the death or bankruptcy of the member had not occurred and the notice or transfer were a transfer signed by such member.
 
41.
Rights on transmission
 
Save as otherwise provided by or in accordance with these Articles, a person becoming entitled to a share in consequence of the death or bankruptcy of a member shall (upon supplying to the Company such evidence as the Directors may reasonably require as to his title to the share) be entitled to receive and may give a discharge for all benefits arising or accruing on or in respect of the share, but he shall not be entitled in respect of that share to receive notices of or to attend or vote at general meetings of the Company or at any separate meeting of the holders of any class of shares in the Company nor to any of the rights or privileges of a member, until he shall have become a member in respect of the share provided always that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and if within 60 days the notice is not complied with such person shall (but only in the case of a share which is fully paid up) be deemed to have elected to be registered as a member in respect of such share and may be registered accordingly.

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INCREASE OF CAPITAL
 
42.
Increase of Capital
 
The Company may from time to time by ordinary resolution increase its capital by such sum to be divided into shares of such amounts and carrying such rights as the resolution may prescribe.
 
43.
New Shares
 
All new shares shall (unless the Company shall in general meeting otherwise determine) be subject to the provisions of these Articles with reference to payment of calls, forfeiture, surrender, lien, transfer, transmission and otherwise, and unless otherwise provided by or pursuant to these Articles or by the conditions of issue the new shares shall upon issue be ordinary shares.
 
ALTERATION OF CAPITAL
 
44.
Alteration
 
44.1
The Company may by ordinary resolution:
 

 (a)
consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; whenever as a result of any consolidation of shares any member would become entitled to a fraction of a share, the Directors may for the purpose of eliminating such fractions sell the shares representing the fractions for the best price reasonably obtainable to any person including, subject to the provisions of the Act, the Company and distribute the proceeds of sale in due proportion among the members who would have been entitled to the fractions of shares, or retain such proceeds for the benefit of the Company and for the purpose of any such sale the Directors may authorise some person to transfer the shares representing the fractions to the purchaser thereof whose name shall then be entered in the register of members as the holder of the shares, and who shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale;
 

 (b)
cancel any shares which, at the date of the passing of the resolution, have not been taken, or agreed to be taken, by any person, and diminish the amount of share capital by the amount of the shares so cancelled;
 

 (c)
sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the Memorandum of Association (subject nevertheless to the provisions of the Act) and so that the resolution by which any share is subdivided may determine that, as regards each share so subdivided, one or more of the shares resulting from such subdivision may have any such preferred or other special rights over, or may have such deferred rights, or be subject to any such restrictions as compared with the others, as the Company has power to attach to unissued or new shares.

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44.2
The Company may by special resolution reduce its share capital and any capital redemption reserve and any share premium account in any manner subject to the provisions of the Act.
 
GENERAL MEETINGS
 
45.
Annual general meetings
 
The Company shall in each year hold a general meeting as its annual general meeting in addition to any other meeting in that year and within six months of the end of any financial period provided that not more than 15 months shall elapse between the date of one annual general meeting of the Company and that of the next.  Subject as aforesaid and to the provisions of the Act, the annual general meeting shall be held at such time and place (or places) as the Directors may determine.
 
46.
General meetings
 
46.1
The Directors may whenever they think fit, and shall on requisition in accordance with the Act, proceed to convene a general meeting.
 
46.2
The Directors may determine in relation to each general meeting (including an annual general meeting) the means of attendance and participation in the meeting, including if the persons entitled to attend and participate in the meeting shall be enabled to do so:
 

 (a)
by means of a physical meeting;
 

 (b)
by means of a combined physical and electronic meeting pursuant to Article 53 (provided that there shall be no obligation to offer or provide a combined physical and electronic meeting); or
 

 (c)
by simultaneous attendance and participation at a satellite meeting place or places pursuant to Article 52.
 
47.
Notice of general meetings
 
47.1
Subject to the provisions of the Act, an annual general meeting shall be called by 21 days’ notice at the least, and all other general meetings shall be called by 14 days’ notice at the least (exclusive, in each case, of the day on which the notice is served or deemed to be served and of the day for which the notice is given).
 
47.2
Every notice shall be in writing and shall specify:
 

 (a)
the place (or places), the day and the time of the meeting;

 

 (b)
the general nature of business of the meeting;
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 (c)
in the case of an annual general meeting, that the meeting is an annual general meeting;
 

 (d)
if the meeting is convened to consider a special resolution, the intention to propose the resolution as such; and
 

 (e)
in the case of a combined physical and electronic meeting, the information set out in Article 53.1.
 
47.3
Notice in writing includes notices given by electronic communication to an address notified for that purpose to the Company and/or making such notices available on the Company’s website subject to notifying the address of such website to members who have agreed that notices of meetings may be accessed by them on a website and then in accordance with the manner agreed by such members and the Company as to such notification.
 
47.4
Notices shall be given in accordance with these Articles to all the members, other than those who under the provisions of these Articles or the conditions of issue of the shares held by them are not entitled to receive the notice, to the Directors (including any alternate director) and to the auditors for the time being and (where required by the Act) former auditors of the Company.
 
48.
Statement
 
In every notice calling a meeting of the Company there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him and that a proxy need not also be a member.
 
49.
Omission of notice
 
The accidental omission to give notice of a meeting to (or to send a form of proxy with such notice where required), or the non-receipt of notice or form of proxy by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.
 
PROCEEDINGS AT GENERAL MEETINGS
 
50.
Business of meetings
 
All business shall be deemed special that is transacted at a general meeting, and also all business that is transacted at an annual general meeting, with the exception of the declaration of dividends, the consideration of accounts and of the reports of the Directors and of the auditors and other documents annexed to the accounts, the appointment or reappointment of directors in the place of those retiring by rotation or otherwise, the reappointment of the auditors (save where special notice of such reappointment is required by the Act) and the fixing of the remuneration of the auditors or of the manner in which such remuneration is to be fixed and the giving, varying, revoking or renewing of any authority or person for the purposes of sections 549, 551 and 559 of the Act.

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51.
Notice of resolution
 
Where, by any provision contained in the Act, special notice is required of a resolution, the resolution shall not be effective unless notice of the intention to move it has been given to the Company not less than 28 days (or such shorter period as the Act permits) before the meeting at which it is moved, and the Company shall give to the members notice of any such resolution as required by, and in accordance with the provisions of, the Act.
 
52.
Satellite meetings
 
52.1
Without prejudice to Article 53, to facilitate the organisation and administration of any general meeting, the Directors may determine that the meeting shall be held at two or more locations.
 
52.2
For the purposes of these Articles any general meeting taking place at two or more locations shall be treated as taking place where the chairman of the meeting presides (the “principal meeting place”) and any other location where that meeting takes place is referred to in these Articles as a “satellite meeting”).
 
52.3
A member present in person or by proxy at a satellite meeting may be counted in the quorum and may exercise all rights that they would have been able to exercise if they were present at the principal meeting place.
 
52.4
The Directors may make and change from time to time such arrangements as they shall in their absolute discretion consider appropriate to:
 

 (a)
ensure that all members and proxies for members wishing to attend the meeting can do so;
 

 (b)
ensure that all persons attending the meeting are able to participate in the business of the meeting and to see and hear anyone else addressing the meeting;
 

 (c)
ensure the safety of persons attending the meeting and the orderly conduct of the meeting; and
 

 (d)
restrict the numbers of members and proxies at any one location to such number as can safely and conveniently be accommodated there.
 
52.5
The entitlement of any member or proxy to attend a satellite meeting shall be subject to any such arrangements then in force and stated by the notice of meeting or adjourned meeting to apply to the meeting.
 
52.6
If there is a failure of communication equipment or any other failure in the arrangements for participation in the meeting at more than one place, the chairman may adjourn the meeting in accordance with Article 58.  Such an adjournment will not affect the validity of such meeting, or any business conducted at such meeting up to the point of adjournment, or any action taken pursuant to such meeting.

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52.7
A person (a “satellite chairman”) appointed by the Directors shall preside at each satellite meeting.  Every satellite chairman shall carry out all requests made of him by the chairman of the general meeting, may take such action as he thinks necessary to maintain the proper and orderly conduct of the satellite meeting and shall have all powers necessary or desirable for such purposes.
 
53.
Combined physical and electronic meetings
 
53.1
Without prejudice to Article 52, the Directors may determine to hold a general meeting as a combined physical and electronic meeting and, in such case, shall specify in the notice of the meeting to be served pursuant to Article 47:
 

 (a)
that the meeting is being held as such;
 

 (b)
details of the means for members to attend and participate in the meeting, including the physical place or places of the meeting and the electronic platform to be used; and
 

 (c)
any access, identification or security arrangements determined pursuant to Article 53.2 and any other arrangement as has at the time been made for the purposes of the meeting.
 
53.2
The Directors and the chairman of a combined physical and electronic meeting may make any arrangement and impose any requirement or restriction as is:
 

 (a)
necessary to ensure the identification of those taking part and the security of the electronic platform; and
 

 (b)
proportionate to achieving these objectives.
 
53.3
The members present in person or by proxy at the combined physical and electronic meeting by means of an electronic platform (as so determined by the Directors) shall be counted in the quorum for, and be entitled to participate in, the general meeting in question.
 
53.4
All resolutions put to members at a combined physical and electronic meeting shall be voted on by a poll in accordance with Article 68.3 and such poll votes may be cast by such means as the Directors in their absolute discretion consider appropriate for the purposes of the meeting.
 
53.5
Any general meeting at which an electronic platform is being made available will be duly constituted and its proceedings valid if (in addition to the other provisions of these Articles relating to general meetings being satisfied) the chairman is satisfied that the platform is available throughout the meeting to enable all person attending the meeting by whatever means to:
 

 (a)
participate in the business for which the meeting has been called;

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 (b)
hear all the people who speak at the meeting and at any combined physical and electronic meeting; and
 

 (c)
be heard by all other people attending and participating in that meeting.
 
53.6
Persons seeking to attend or participate in a combined physical and electronic meeting by means of an electronic platform shall be responsible for ensuring that they have access to the facilities (including systems, equipment and connectivity) which are necessary to enable them to do so.  Unless the meeting is adjourned by the chairman in accordance with the provisions of Article 58, any inability of any person to attend or participate in a combined physical and electronic meeting by means an electronic platform will not affect the validity of such meeting, or any business conducted at such meeting up to the point of adjournment, or any action taken pursuant to such meeting.
 
53.7
Nothing in these Articles authorises or allows a general meeting to be held exclusively by means of an electronic platform or basis.
 
53.8
Any combined physical and electronic meeting shall be deemed to take place at the place at which the chairman of the meeting is present.
 
53.9
If persons are entitled to attend and participate at a general meeting by means of an electronic platform, any document required to be on display or to be available for inspection (whether prior to or for the duration of the meeting, or both) will be made available in electronic form to those persons entitled to inspect it for the not less than the required period and this will be deemed satisfy any such requirement.
 
54.
Attendance at and participation in general meetings
 
54.1
In determining whether persons are attending or participating in a general meeting, it is immaterial whether any two or more members attending it are in the same place as each other or how they are able to communicate with each other.
 
54.2
Two or more persons who are not in the same place as each other attend a general meeting if their circumstances are such that if they have (or were to have) rights to speak or vote at that meeting, they are (or would be) able to exercise them.
 
54.3
The Directors may make whatever arrangements they consider appropriate to enable those attending a general meeting to exercise their rights to speak or vote at it.
 
54.4
The Directors may put in place such arrangements or restrictions as they think fit to ensure the safety and security of attendees at a general meeting and the orderly conduct of the meeting.  The Directors may refuse entry to, or remove from, a general meeting any member, proxy or other person who fails to comply with such arrangements or restrictions.  The chairman of a general meeting may take such action as he thinks fit to maintain the proper and orderly conduct of the meeting.
 
54.5
A person is able to exercise the right to vote at a general meeting when:

22

 (a)
that person is able to vote, during the meeting, on resolutions put to the vote at the meeting; and
 

 (b)
that person’s vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting.
 
55.
Quorum
 
No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business.  Save as otherwise provided in these Articles, two members present in person or by proxy and entitled to vote at the meeting shall be a quorum for all purposes.
 
56.
Quorum not present
 
If within 30 minutes from the time appointed for the meeting a quorum is not present, the meeting, if convened on the requisition of or by members, shall be dissolved.  In any other case it shall stand adjourned to the same day in the next week at the same time and place or places (including, for a combined physical and electronic meeting, by means of an electronic platform) or to such other day, and at such time and place or places (including, for a combined physical and electronic meeting, by means of an electronic platform), as the Directors may determine, and if at such adjourned meeting a quorum is not present within 30 minutes from the time appointed for holding the meeting, the meeting shall be dissolved.
 
57.
Chairman
 
The chairman (if any) of the Board, or in his absence the deputy chairman (to be chosen, if there be more than one, by agreement amongst them or, failing agreement, by lot) or in the absence of any deputy chairman the vice-chairman (to be chosen, if there be more than one, by agreement amongst them or, failing agreement, by lot) shall preside as chairman at every general meeting of the Company, but if at any meeting neither such chairman nor such deputy chairman nor such vice-chairman be present within five minutes after the time appointed for holding the meeting, or if none of them be willing to act as chairman, the Directors present shall choose some Director present to be chairman, or if no Director be present, or if all the Directors present decline to take the chair, the members present shall choose some other member present to be chairman.
 
58.
Power to adjourn
 
The chairman of any meeting at which a quorum is present may, with the consent of such meeting (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place.  However, without prejudice to any other power which the chairman may have under these Articles or at common law, he may, without the need for the consent of the meeting, interrupt or adjourn any meeting from time to time and from place to place or for an indefinite period if he is of the opinion that it has become necessary to do so in order to secure the comfort, safety and security of those attending and the proper and orderly conduct of the meeting or to give all persons entitled to do so a reasonable opportunity of attending, speaking and voting at the meeting.  When a meeting is adjourned for 30 days or more, notice of the adjourned meeting shall be given as in the case of an original meeting, but it shall not be necessary to specify in such notice the nature of the business to be transacted at the adjourned meeting.  Save as set out in this Article it shall not be necessary to give any notice of an adjournment.

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59.
Postponement
 
59.1
If the Board, in its absolute discretion, considers that it is impractical or undesirable for any reason to hold a general meeting on the date or at the time or place (or places) specified in the notice calling the general meeting and/or, in the case of a combined physical and electronic meeting, by means of the electronic platform stated in that notice, it may postpone or move the general meeting to another date, time and/or place (or places) and/or change the electronic platform (or do any of these things).
 
59.2
The Board shall take reasonable steps to ensure that notice of the date, time and place (or places) of the rearranged meeting and/or, in the case of a combined physical and electronic meeting, details of the revised electronic platform is given to any member trying to attend the meeting at the original time and place.
 
59.3
Notice of the date, time and place (or places) of the rearranged meeting and/or, in the case of a combined physical and electronic meeting, details of the revised electronic platform shall, if practicable, also be placed on the Company’s website and notified to a regulatory information service.
 
59.4
Notice of the business to be transacted at such rearranged meeting shall not be required.
 
59.5
If a meeting is rearranged in this way, the appointment of a proxy will be valid if it is received as required by these Articles not less than 48 hours before the time appointed for holding the rearranged meeting.
 
60.
Directors may attend and speak
 
A Director and an alternate director shall, notwithstanding that he is not a member, be entitled to attend and speak at any general meeting and at any separate meeting of the holders of any class or group of shares of the Company.
 
61.
Amendment
 
If an amendment shall be proposed to any resolution under consideration but shall in good faith be ruled out of order by the chairman of the meeting the proceedings on any substantive resolution shall not be invalidated by any error in such ruling.

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VOTES OF MEMBERS
 
62.
Votes
 
Subject to any special rights or restrictions as to voting attached to any share by or in accordance with these Articles, on a show of hands every member who (being an individual) is present in person or by proxy not being himself a member or (being a corporation) is present by a representative or by proxy not being himself a member shall have one vote and on a poll every member who is present in person or by proxy shall have one vote for every share of which he is the holder.
 
63.
Joint holders
 
In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the share.
 
64.
Vote by proxy
 
A member suffering from mental disorder in respect of whom an order has been made or a direction or authority given by a court of competent jurisdiction may vote, whether on a show of hands or on a poll, by his receiver, curator bonis or other person authorised in that behalf appointed by such court and such receiver, curator bonis or other person may on a poll vote by proxy, provided that such evidence as the Directors may require of the authority of the person claiming to vote shall have been deposited at the place at which proxies for the meeting in question are to be deposited under Article 78 not less than 48 hours before the time for holding the meeting or adjourned meeting at which such person claims to vote and in default the right to vote shall not be exercisable.
 
65.
Restriction on voting rights
 
No member shall, unless the Directors otherwise determine, be entitled to vote at any general meeting or at any separate meeting of the holders of any class of shares in the Company either personally or by proxy, or to exercise any privilege as a member, unless all calls or, other sums presently payable by him in respect of shares in the Company have been paid.
 
66.
Objection to error in voting
 
No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes.  Any such objection made in due time shall be referred to the chairman of the meeting whose decision shall be final and conclusive.

25
67.
Votes on a poll
 
On a poll, votes may be given either personally or by proxy.  On a poll, a member entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.
 
POLLS
 
68.
Method of voting
 
68.1
Subject to Article 68.3, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless before or upon the declaration of the result of the show of hands a poll is demanded:
 

 (a)
by the chairman of the meeting;
 

 (b)
by not less than 5 members having the right to vote at the meeting;
 

 (c)
by a member or members representing not less than one tenth of the total voting rights of all the members having the right to vote at the meeting; or
 

 (d)
by a member or members holding shares in the Company conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all the shares conferring that right.
 
68.2
Unless a poll be so demanded a declaration by the chairman of the meeting that a resolution has been carried, or carried unanimously, or by a particular majority, or lost, or not carried by a particular majority, and an entry to that effect in the book containing the minutes of the proceedings of general meetings of the Company, shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.
 
68.3
At a general meeting which is held as a combined physical and electronic meeting, a resolution put to the vote of the meeting shall be decided on a poll, which poll votes may be cast by means of the electronic platform and any such poll will be deemed to have been validly demanded at the time fixed for holding the meeting to which it relates.
 
69.
Proxy
 
The instrument appointing a proxy to vote at a meeting shall be deemed also to confer authority to demand or join in demanding a poll, and for the purposes of Article 68 a demand by a person as proxy for a member shall be the same as a demand by the member.

26
70.
Error
 
If any votes shall be counted which ought not to have been counted, or might have been rejected, or if any votes shall not be counted which ought to have been counted, or might have been allowed, the error shall not vitiate the result of the voting unless it be pointed out at the same meeting, or at any adjournment thereof, and not in that case unless it shall in the opinion of the chairman of the meeting be of sufficient magnitude to vitiate the result of the voting.
 
71.
Procedure on a poll
 
If a poll is duly demanded, it shall be taken in such manner as the chairman of the meeting may direct (including the use of ballot or voting papers or forms), and the result of a poll shall be deemed to be the resolution of the meeting at which the poll was demanded.  The chairman of the meeting may, in the event of a poll, appoint scrutineers (who need not be members) and may fix some place and time for the purpose of declaring the result of the poll.
 
72.
Poll to be taken forthwith
 
A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith.  A poll demanded on any other question shall be taken at such time and place as the chairman of the meeting shall direct not being more than 30 days from the date of the meeting or the adjourned meeting at which the poll was demanded.  No notice need be given of a poll not taken forthwith if the time and place at which it is to be taken are announced at the meeting at which it is demanded.  In any other case at least seven days’ notice shall be given specifying the time and place at which the poll is to be taken.
 
73.
Casting vote
 
In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded shall be entitled to a casting vote in addition to any other vote he may have.
 
74.
Demand for poll
 
The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded.
 
75.
Withdrawal
 
A demand for a poll may, before the poll is taken, be withdrawn but only with the consent of the chairman and a demand so withdrawn shall not be taken to have invalidated the result of a show of hands declared before the demand was made.  If a poll is demanded before the declaration of the result of a show of hands and the demand is duly withdrawn with the consent of the chairman, the meeting shall continue as if the demand had not been made.

27
PROXY
 
76.
Form of Proxy
 
Any person (whether a member or not) may be appointed to act as a proxy.  A member may appoint more than one proxy to attend on the same occasion.  When two or more valid but differing instruments of proxy are delivered in respect of the same share for use at the same meeting and in respect of the same matter, the one which is last validly delivered (regardless of its date or the date of its execution) shall be treated as replacing and revoking the other or others as regards that share.  If the Company is unable to determine which instrument was last validly delivered, none of them shall be treated as valid in respect of that share.
 
77.
Appointment of proxy
 
The appointment of a proxy shall be in writing in the usual common form, or such other form as may be approved by the Directors, and shall be signed by the appointor or by his attorney duly authorised in writing, or if the appointor is a corporation, shall be either under its common seal or under the hand of a duly authorised officer or attorney of the corporation.  The Directors may, but shall not be bound to, require evidence of authority of such officer or attorney.  An instrument of proxy need not be witnessed.
 
78.
Deposit of proxy
 
78.1
The appointment of a proxy together with (unless the Directors waive such requirement) the power of attorney or other authority (if any) under which it is signed, or a notarially certified or office copy of such power or authority, shall:
 

 (a)
in the case of an instrument in writing be deposited at the Office, or at such other place in the United Kingdom as is specified for that purpose in the notice calling the meeting, or in any instrument of proxy sent out by the Company in relation to the meeting, not less than 48 hours (excluding weekends and bank holidays) before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or
 

 (b)
in the case of an appointment contained in an electronic communication, where an address has been specified for the purpose of receiving electronic communications, in the notice convening the meeting, or in any instrument of proxy sent out by the Company in relation to the meeting, or in any invitation contained in an electronic communication to appoint a proxy issued by the Company in relation to the meeting, to be received at such address not less than 48 hours (excluding weekends and bank holidays) before the time for holding the meeting or adjourned meeting at which the person named in the appointment proposes to vote,
 
and in default, the appointment shall not be treated as valid.  An appointment of proxy to vote at any meeting and deposited, delivered or received as set out in this Article shall be valid to empower the proxy so appointed to vote on any poll taken or demanded at such meeting or at any adjournment of such meeting.

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78.2
No appointment of a proxy shall be valid after the expiration of 12 months from the date named in it as the date of its execution, except on a poll demanded at a meeting or an adjourned meeting in cases where the meeting was originally held within 12 months from such date.  In this Article and the next, “address” in relation to electronic communications, includes any number or address used for the purposes of such communications.
 
79.
Validity
 
A vote given in accordance with the terms of an instrument of proxy or by the duly authorised representative of a corporate member or poll demanded by proxy or by the duly authorised representative of a corporate member shall be valid notwithstanding (in the case of a proxy) the previous death or mental disorder of the principal or the revocation of the instrument of proxy or of the authority under which the instrument of proxy was executed or (in the case of a duly authorised representative of a corporate member) the revocation of his appointment, provided that no intimation in writing of such death, mental disorder or revocation shall have been received by the Company at the Office or (in the case of an instrument of proxy) such other place or address at which it was required to be deposited or received under Article 78 at least 48 hours (excluding weekends and bank holidays) before the commencement of the meeting or adjourned meeting at which the vote is given or the poll demanded or (in the case of a poll taken otherwise than on the same day as the meeting or adjourned meeting) the time appointed for taking the poll.
 
80.
Supply of proxy cards
 
The Directors may at the expense of the Company send, by post or otherwise, to the members instruments of proxy (with or without provision for their return prepaid) for use at any general meeting or at any meeting of any class of members of the Company either in blank or nominating in the alternative any one or more of the Directors or the chairman of the meeting or any other person or persons.  If for the purpose of any meeting invitations to appoint as proxy a person, or one of a number of persons, specified in the invitations are issued at the Company’s expense they shall be issued to all (and not to some only) of the members entitled to be sent a notice of the meeting and to vote at such meeting by proxy.
 
81.
Corporate representative
 
Any corporation which is a member of the Company may, by resolution of its Directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company, or at any meeting of any class of members of the Company, and on presentation of a certified copy of such resolution the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual member of the Company and such corporation shall, for the purpose of these Articles, be deemed to be present in person at such meeting if a person so authorised is present at it.

29
DISCLOSURE OF INTERESTS
 
82.
Section 793
 
Section 793 of the Act (“Section 793”) shall be deemed to be incorporated into these Articles and accordingly to apply as between the Company and each member.  If a notice is given under Section 793 (“a Section 793 notice”) to a person who appears to be interested in any shares a copy shall at the same time be given to the holder of those shares but the accidental omission to do so or the non-receipt by the member shall not prejudice the operation or the following provisions of Articles 83 to 87.  The following provisions of Articles 83 to 87 shall be without prejudice to the provisions of Sections 793 and 796 of the Act, and in particular, the Company shall be entitled to apply to the court under Section 794 of the Act whether or not these provisions apply or have been applied.
 
83.
Default
 
83.1
If a member or any person appearing to be interested in any shares held by a member has been duly served with a Section 793 notice and is in default for the relevant period (as defined in Article 86) from such service in supplying to the Company the information thereby required, the following provisions shall apply:
 

 (a)
if a member has a holding of less than 0.25% of any class of shares, then, subject to Article 84 and unless the Directors otherwise determine, a member shall not be entitled in respect of those shares held by him (whether or not referred to in the Section 793 Notice) to vote at a general meeting either personally or by proxy, or to exercise any other right conferred by membership in relation to meetings of the Company; or
 

 (b)
if a member has a holding of at least 0.25% of any class of shares, then, subject to Article 84 and unless the Directors otherwise determine, the member shall not be entitled in respect of the shares held by him (whether or not referred to in the Section 793 notice):
 

 (i)
to vote at a general meeting either personally or by proxy, or to exercise any other right conferred by membership in relation to meetings of the Company; or
 

 (ii)
to receive any dividend payable in respect of such shares; or
 

 (iii)
to transfer or agree to transfer any of such shares, or any rights therein.
 
83.2
The restrictions imposed by Article 83.1 in relation to any shares shall continue until a relevant event occurs in relation to those shares and shall lapse when it does so.  For this purpose, a “relevant event” is either of the following:
 

 (a)
the default is remedied; and

30

 (b)
the shares are registered in the name of the purchaser or offeror (or that of his nominee) pursuant to an arm’s length transfer (as defined in Article 85).
 
83.3
Any dividends withheld pursuant to Article 83 shall be paid to the member as soon as practicable after the restrictions contained in Article 83.1(b) lapse.
 
84.
Restrictions
 
The restrictions in Article 83 shall be without prejudice to the right of either the member holding the shares concerned or, if different, the beneficial owner of those shares to effect or agree to sell under an arm’s length transfer of those shares.
 
85.
Arms length transfer
 
85.1
For the purposes of Articles 82 to 87, an “arm’s length” transfer in relation to any shares is a transfer pursuant to:
 

 (a)
a sale of those shares on a recognised investment exchange (as defined in the Financial Services and Markets Act 2000) or on any stock exchange outside the United Kingdom on which the shares are normally traded; or
 

 (b)
a sale to an offeror following acceptance of an offer made to all the holders (or all the holders other than the person making the offer and his nominees) of shares of the same class as those shares to acquire all the shares of that class or a specified proportion of them.
 
86.
Relevant period
 
For the purposes of Articles 82 to 87, the “relevant period” shall, in a case falling within Article 83.1(a), be 28 days and, in a case falling within Article 83.1(b), be 14 days.
 
87.
Interest in shares
 
87.1
For the purposes of Articles 82 to 87, the Company shall be entitled to treat any person as appearing to be interested in any shares if:
 

 (a)
the member holding such shares or any person who is or may be interested in such shares either fails to respond to a section 793 notice or has given to the Company a notification pursuant to a Section 793 notice which in the opinion of the Directors fails to establish the identities of those interested in the shares and if (after taking into account the said notification and any other relevant notification pursuant to a Section 793 notice) the Company knows or has reasonable cause to believe that the person in question is or may be interested in the shares; or
 

 (b)
that person (not being the member) is interested in those shares for the purposes of Section 793.

31
APPOINTMENT OF DIRECTORS
 
88.
Power of Company to appoint Directors
 
Subject to the provisions of these Articles, the Company may by ordinary resolution appoint a person who is willing to act to be a Director, either to fill a vacancy or as an addition to the existing Directors, but the total number of Directors shall not exceed the maximum number fixed in accordance with these Articles (if any).
 
89.
Power of Board to appoint Directors
 
89.1
Without prejudice to the power of the Company to appoint any person to be a Director pursuant to these Articles, the Directors shall have power at any time to appoint any person who is willing to act as a Director, either to fill a vacancy or as an addition to the existing Directors but so that the total number of Directors shall not exceed at any time the maximum number (if any) fixed by or in accordance with these Articles.
 
89.2
Any Director so appointed shall retire at the conclusion of the annual general meeting of the Company next following such appointment and shall be eligible for reappointment at that meeting.  If not reappointed at such annual general meeting, such Director shall vacate office at the conclusion of such annual general meeting.
 
90.
Number of Directors
 
Subject as provided in these Articles, the Directors shall be not less than two in number and no more than sevennine in number but the Company may by special resolution from time to time vary the minimum and maximum number of directersDirectors.
 
91.
Additional remuneration
 
91.1
Any Director who serves on any committee or who devotes special attention to the business of the Company, or who otherwise performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, may be paid such remuneration by way of salary, lump sum, percentage of profits or otherwise as the Directors may determine.
 
91.2
The Directors shall also be entitled to be paid all travelling, hotel and other expenses properly incurred by them in connection with the business of the Company, or in attending and returning from meetings of the Directors or of committees of the Directors or general meetings or separate meetings of the holders of any class of shares or of debentures of the Company or otherwise in connection with the discharge of their duties.

32
ALTERNATE DIRECTORS
 
92.
Appointment
 
Each Director (other than an alternate director) may at any time appoint another Director or (subject to the approval of a majority of the Directors for the time being) any other person to be an alternate director, and may at any time remove any alternate director so appointed by him from office and, subject to such requisite approval, appoint another person in his place.  An alternate director shall (subject to his giving to the Company an address within the United Kingdom at which notices may be served upon him) be entitled to receive notices of all meetings of the Directors and of all meetings of committees of the Directors of which his appointor is a member and to attend and vote as a Director at any such meeting at which the Director appointing him is not personally present, and generally to perform all the functions of his appointor as a Director in the absence of such appointor.  An alternate director shall ipso facto cease to be an alternate director if his appointor ceases for any reason to be a Director; provided that if any Director retires, whether by rotation or otherwise, but is re-appointed or is deemed to have been re-appointed by the meeting at which such retirement took effect, any appointment made by him pursuant to this Article which was in force immediately prior to his retirement shall continue to operate after his reappointment as if he had not so retired.  All appointments and removals of alternate directors shall be effected by instrument in writing signed by the appointor Director and authenticated in such manner as the other Directors may accept.  The appointor Director shall deposit the original signed instrument at the office as soon as reasonably practicable, but failure or delay in doing so shall not prejudice the validity of the appointment.
 
93.
Remuneration
 
Save as otherwise provided in these Articles, an alternate director shall be deemed for all purposes to be a Director of the Company and shall alone be responsible to the Company for his own acts and defaults, and he shall not be deemed to be the agent of or for the Director appointing him.  An alternate director shall not be entitled to receive any remuneration from the Company for his services as an alternate director but his remuneration shall be payable out of the remuneration payable to the Director appointing him, and shall consist of such part (if any) of the latter’s remuneration as shall be agreed between them.
 
INTERESTS OF DIRECTORS
 
94.
Other office of Director
 
A Director, including an alternate director, may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director on such terms as to tenure of office, remuneration and otherwise as the Directors may determine.  Any Director may act by himself or his firm in a professional capacity (other than that of auditor) for the Company and he or his firm shall be entitled to remuneration for such professional services.
 
95.
Disqualification
 
95.1
No Director or proposed Director, including an alternate director, shall be disqualified by his office from contracting with the Company either with regard to his tenure of any other office or place of profit, or as vendor, purchaser or otherwise, nor shall any such contract, or any contract or arrangement entered into by or on behalf of the Company in which any Director is in any way, whether directly or indirectly, interested, be liable to be avoided, nor shall any Director so contracting or being so interested, be liable to account to the Company for any profit realised by any such contract or arrangement, by reason of such Director holding that office or of the fiduciary relationship thereby established.

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95.2
Any Director, including an alternate director, may continue to be or become a director or other officer or member of or otherwise interested in any other company promoted by the Company or any subsidiary of the Company or in which the Company or any subsidiary of the Company may be interested, as a member or otherwise, or in which the Company or any subsidiary of the Company thereof has decided not to take any shareholding or other interest whatsoever, and no such Director shall be accountable for any remuneration or other benefits whatsoever received by him or as a director or other officer or member of or from his interest in any such other company.  The Directors may exercise the voting power conferred by the shares of any other company held or owned by the Company, or exercisable by them as directors of such other company, in such manner in all respects as they think fit but subject to the restrictions contained in these Articles.
 
96.
Declaration of interest
 
A Director who is in any way, whether directly or indirectly, interested or deemed by the Act to be interested in a contract, transaction or arrangement or a proposed contract, transaction or arrangement with the Company shall declare the nature of his interest at a meeting of the Directors in accordance with Section 177 of the Act.
 
97.
Material interest
 
Save as provided in these Articles, a Director (including an alternate director) shall not vote in respect of any contract or arrangement or any other proposal in which he has any material interest otherwise than by virtue of his interests in shares or debentures or other securities or rights of the Company.  However a Director shall be entitled to vote in respect of any contract or arrangement or any other proposal in which he has any interest which is not material.  A Director shall not be counted in the quorum at a meeting in relation to any resolution on which he is debarred from voting.
 
98.
Voting
 
98.1
A Director (including an alternate director) shall (in the absence of some material interest other than as indicated below) be entitled to vote (and be counted in the quorum) in respect of any resolution concerning any of the following matters, namely:
 

 (a)
the giving of any security, guarantee or indemnity to him in respect of money lent or obligations incurred by him at the request of or for the benefit of the Company or any of its subsidiaries;
 

 (b)
the giving of any security, guarantee or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which he himself has assumed responsibility in whole or in part by the giving of security or under a guarantee of indemnity;

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 (c)
any proposal concerning an offer for subscription or purchase of shares or debentures or other securities or rights of or by the Company or any of its subsidiaries or of any company which the Company may promote or in which it may be interested in which offer he is or is to be interested directly or as a participant in the underwriting or associated sub-underwriting;
 

 (d)
any proposal concerning any other company in which he is interested directly or indirectly and whether in any one or more of the capacities of officer, creditor, employee or holder of shares, debentures, securities or rights of that other company, but where he is not the holder (otherwise than as a nominee for the Company or any of its subsidiaries) of or beneficially interested in one per cent or more of the issued shares of any class of such company or of any third company through which his interest is derived or of the voting rights available to members of the relevant company (any such interest being deemed for the purpose of this Article to be a material interest in all circumstances);
 

 (e)
any proposal concerning the adoption, modification or operation of a superannuation fund, retirement benefits scheme, share option scheme or share incentive scheme under which he may benefit; or
 

 (f)
any proposal concerning the purchase and/or maintenance of any insurance policy under which he may benefit.
 
99.
Two Directors
 
Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more Directors to offices or employment with the Company or any company in which the Company is interested, such proposals may be divided and considered in relation to each Director separately and in such case each of the Directors concerned (if not otherwise debarred from voting by the terms of these Articles) shall be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning his own appointment.
 
100.
Directors interests
 
If any question shall arise at any meeting as to the materiality of the entitlement of any Director to vote and such question is not resolved by his involuntary agreeing to abstain from voting, such question shall (subject to the Act) be referred to the chairman of the meeting (or, where such question shall arise concerning such chairman, to such other Director present at the meeting as the Directors present, other than such chairman, shall by majority vote appoint) and his ruling in relation to any other Director shall be final and conclusive except in a case where the nature or extent of the interests of the Director concerned have not been fairly disclosed.

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101.
Interest of connected person
 
For the purposes of these Articles, the interest of any person who is connected with a Director (within the meaning of Section 252 of the Act) shall be taken to be the interest of that Director.
 
102.
Suspension of provisions
 
The Company may by ordinary resolution suspend or relax the provisions of Articles 97 to 101 to any extent either generally or in respect of any particular matter, or ratify any transaction not duly authorised by reason of a contravention of those Articles.
 
103.
Directors’ conflict of interest
 
103.1
The Board may, in accordance with the requirements set out in this Article, authorise any matter or situation proposed to them by any Director which would, if not authorised, involve a Director (an “Interested Director”) breaching his duty under the Act to avoid conflicts of interest (“Conflict”).
 
103.2
A Director seeking authorisation in respect of a Conflict shall declare to the Board the nature and extent of his interest in a Conflict as soon as is reasonably practicable.  The Director shall provide the Board with such details of the matter as are reasonably necessary for the Board to decide how to address the Conflict together with such additional information as may be reasonably requested by the Board and provided that such additional information is requested no less than five business days before the consideration of the relevant matter at a meeting of the Board.
 
103.3
Any authorisation under this Article will be effective only if:
 

 (a)
any requirement as to the quorum for consideration of the relevant matter is met without counting the Interested Director and any other Interested Director; and
 

 (b)
the matter is agreed to without the Interested Director voting or would be agreed to if the Interested Director’s and any other Interested Director’s vote is not counted.
 
103.4
Any authorisation of Conflict under this Article will be effective if given at the same meeting of the Board as that at which the relevant matter is considered or any other meeting of the Board.
 
103.5
Any authorisation of a Conflict under this Article must be recorded in writing (but the authority shall be effective whether or not the terms are so recorded) and may (whether at the time of giving the authorisation or subsequently):
 

 (a)
extend to any actual or potential Conflict of interest which may reasonably be expected to arise out of the matter or situation so authorised;

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 (b)
provide that the Interested Director be excluded from the receipt of documents and information and the participation in discussions (whether at meetings of the Directors or otherwise) related to the Conflict;
 

 (c)
impose upon the Interested Director such other reasonable terms for the purposes of dealing with the Conflict as the Directors think fit;
 

 (d)
permit the Interested Director to absent himself from the discussion of matters relating to the Conflict at any meeting of the Directors and be excused from reviewing papers prepared by, or for, the Directors to the extent they relate to such matters.
 
103.6
Where a Director obtains, or has obtained whether through his involvement in a Conflict, through his position as a Director or howsoever otherwise, information that is confidential to a third party, he may, at his sole discretion, decide whether or not to disclose that information to the Company, or to use it in relation to the Company’s affairs and shall not be under any obligation to disclose such information to the Company.
 
103.7
Where the Directors authorise a Conflict, the Interested Director will be obliged to conduct himself in accordance with any reasonable terms and conditions imposed by the Directors in relation to the Conflict.
 
103.8
Subject to Article 103.3, where the Directors authorise a Conflict, the Interested Director shall be entitled to vote at any meeting of the Board at which the relevant matter related to the Conflict is considered and/or approved.
 
103.9
The Directors may revoke or vary such authorisation by written notice to the Interested Director, but this will not affect anything done by the Interested Director, prior to such revocation or variation, in accordance with the terms of such authorisation.

103.10
A Director is not required, by reason of being a Director (or because of the fiduciary relationship established by reason of being a director), to account to the Company for any remuneration, profit or other benefit which he derives from or in connection with a relationship involving a Conflict which has been authorised by the Directors or by the Company in general meeting (subject in each case to any terms, limits or conditions attaching to that authorisation) and no contract shall be liable to be avoided on such grounds.

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104.
Benefits
 
The Directors may establish, maintain, participate in or contribute to or procure the establishment and maintenance of, participation in or contribution to any pension, annuities, superannuation, benevolent or life assurance fund, scheme or arrangement (whether contributory or otherwise) for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances, benefits and emoluments to, any persons who are or were at any time in the employment or service of the Company, or any of its predecessors in business, or of any company which is a subsidiary of the Company or is allied to or associated with the Company, or with any such subsidiary, or who may be or have been Directors or officers of the Company, or of any such other company, and the spouses, widows/widowers, families and dependants of any such persons, and also establish, subsidise and subscribe to any institutions, associations, societies, clubs, trusts or firms calculated to be for the benefit of or to advance the interests and well-being of the Company or of such other company, or of any such persons, and make payments for or award the insurance of any such persons as aforesaid, and (subject to the provisions of the Act) establish and contribute to any scheme for the acquisition of shares in the Company or its holding company (whether or not an employee share scheme within the meaning of the Act) and (subject as set out in this Article) lend money to the Company’s employees to enable them to acquire such shares, and subscribe or guarantee money for charitable or benevolent objects, or for any exhibition or for any public, general or useful object, and do any of such matters either alone or in conjunction with others.  Subject always, if the Act shall so require, to particulars with respect to the proposed payment being disclosed to the members of the Company and to the proposal being approved by the Company by an ordinary resolution, any Director shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension, allowance, benefit or emolument.
 
105.
Exercise of power
 
The Company shall exercise the power conferred upon it by Section 247 of the Act to make provision for the benefit of persons employed or formerly employed by the Company or any of its subsidiaries, in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the Company or any subsidiary only with the prior sanction of a special resolution.  However the Directors are entitled to exercise the power contained in Section 247 of the Act by means of a resolution of the Directors but this shall be limited to a maximum payment to any individual employee of fifty per cent of the employee’s gross annual salary.
 
GENERAL POWERS OF DIRECTORS
 
106.
Management
 
The business of the Company shall be managed by the Directors, who may exercise all such powers of the Company as are not by the Act or by these Articles required to be exercised by the Company in general meeting, subject nevertheless to any provisions of these Articles, to the provisions of the Act and to such regulations (being not inconsistent with the aforesaid regulations or provisions) as may be prescribed by the Company by special resolution but no regulation made by the Company by special resolution shall invalidate any prior act of the Directors which would have been valid if such regulation had not been made.  The general powers given to the Directors by this Article shall not be limited or restricted by any special authority or power given to the Directors by any other Article.

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107.
Delegation of Authority
 
The Directors may establish any local boards or agencies for managing any of the affairs of the Company, either in the United Kingdom or elsewhere, and may appoint any persons to be members of such local boards, or any managers or agents, and may fix their remuneration, and may delegate to any local board, manager or agent any of the powers, authorities and discretions vested in the Directors (other than the power of making calls), with power to sub-delegate, and may authorise the members of any local board, or any of them, to fill any vacancies in such local board, and to act notwithstanding filling vacancies, and any such appointment or delegation may be made upon such terms and subject to such conditions as the Directors may think fit, and the Directors may remove any person so appointed, and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected by it.
 
108.
Power of Attorney
 
The Directors may, by power of attorney, appoint any person or persons to be the agent of the Company and may delegate to any such person or persons any of the powers, authorities and discretions of the Directors (with power to sub-delegate), in each case for such purposes and for such time, on such terms (including as to remuneration) and subject to such conditions as the Directors think fit.  The Directors may confer such powers either collaterally with, or to the exclusion of and in substitution for, all or any of the powers of the Directors in that respect and may from time to time revoke, withdraw, alter or vary any of such powers.
 
109.
Overseas registers
 
Subject to the provisions of the Statutes, the Directors may exercise the powers conferred on the Company with regard to the keeping of an overseas branch, local or other register and may make and vary such regulations as they think fit as regards the keeping of any such register.
 
110.
Uncalled capital
 
If any uncalled capital of the Company is included in or charged by any mortgage or other security, the Directors may delegate to the person in whose favour such mortgage or security is executed, or to any other person in trust for him, the power to make calls on the members in respect of such uncalled capital, and to sue in the name of the Company or otherwise for the recovery of monies becoming due in respect of calls so made and to give valid receipts for such monies, and the power so delegated shall subsist during the continuance of the mortgage or security, notwithstanding any change of Directors, and shall be assignable if expressed so to be.
 
DIRECTORS HOLDING EXECUTIVE OFFICE
 
111.
Office
 
The Directors may from time to time appoint any one or more of their body to be holder of any executive office for such period and on such terms and with or without such title or titles (including but not limited to chairman, deputy chairman, vice chairman, managing director, chief executive and joint, deputy or assistant managing director or chief executive) as they think fit.  A Director holding any such office (whether appointed by the Directors or otherwise) shall, whilst holding such office, be subject to retirement by rotation, and shall (subject to the terms of any contract between him and the Company) be subject to the same provisions as to resignation and removal as the other Directors of the Company and if he shall vacate the office of Director or (subject as aforesaid) if the Directors resolve that his term of office as holder of such executive office as aforesaid be determined, his appointment as such shall ipso facto determine.

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112.
Remuneration
 
A Director appointed to any executive office as referred to in Article 111 shall receive such remuneration (whether specifically by way of salary, bonus, commission, participation in profits, provision for retirement or insurance benefit, or partly in one way and partly in another, or otherwise) as may be determined by the Board who may delegate their authority.
 
113.
Powers
 
113.1
The Directors may from time to time:
 

 (a)
delegate or entrust to and confer on any Director holding executive office (including a chief executive or managing director) such of the powers, authorities and discretions of the Directors (with power to sub-delegate) for such time, on such terms and subject to such conditions as the Directors think fit; and
 

 (b)
revoke, withdraw, alter or vary all or any of such powers.
 
RETIREMENT OF DIRECTORS
 
114.
Retirement
 
Any provision of the Statutes which, subject to the provisions of these Articles, would have the effect of rendering any person ineligible for appointment or election as a Director or liable to vacate office as a Director on account of such person having reached any specified age or of requiring special notice or any other special formality in connection with the appointment or election of any Director over a specified age, shall not apply to the Company.
 
115.
Vacation of office
 
115.1
The office of a Director shall be vacated in any of the following events, namely:
 

 (a)
if (but in the case of a Director holding any executive office subject to the terms of any contract between him and the Company) he resigns his office by instrument in writing signed by the resigning Director and authenticated in such manner as the other Directors or Director may accept (provided that the resigning Director shall deposit the original signed instrument at the office as soon as reasonably practicable but failure or delay in his doing so shall not prejudice the validity of the resignation);

40

 (b)
if he becomes bankrupt or has a receiving order made against him or makes any arrangement or composition with his creditors generally;
 

 (c)
if, in the opinion of the majority of Directors other than the Director vacating office and in the written opinion of a suitably qualified medical expert, he becomes of unsound mind;
 

 (d)
if he is absent from meetings of the Directors for six successive months without leave, and his alternate director (if any) shall not during such period have attended in his stead, and the Directors resolve that his office be vacated;
 

 (e)
if he ceases to be a Director by virtue of any provision of the Statutes or becomes prohibited by law from being a director;
 

 (f)
he is removed from office by notice in writing signed by all of the other Directors (without prejudice to any claim for damages which he may have for breach of any contract between him and the Company) and, for this purpose, a set of like notices each signed by, one or more of the Directors shall be as effective as a single notice signed by the requisite number of Directors;
 

 (g)
he ceases to hold the number of shares required to qualify him for office (if any) or does not acquire the same within two months after election or appointment; or
 

 (h)
he is removed as a Director by ordinary resolution of the members provided that such removal shall be without prejudice to any claim he may have for breach of contract between him and the Company.
 
116.
Resolution as to a vacancy conclusive
 
A resolution of the Directors declaring a Director to have vacated office under the terms of Article 115 shall be conclusive as to the fact and grounds of vacation stated in the resolution.
 
ROTATION OF DIRECTORS
 
117.
Retirement by rotation
 
At each annual general meeting of the Company that occurs after 25 September 2021, one-third of the Directors (or, if they are not a multiple of three, the number nearest to but not greater than one third subject to a minimum of one) shall retire from office by rotation provided always that any Director retiring pursuant to Article 115 shall not be taken into account in determining the Directors who are to retire by rotation at that meeting.  A Director retiring by rotation shall be eligible for re-election.

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118.
Retirement in every year
 
Subject to the provisions of the Act and of these Articles, the Directors to retire in every year shall include (so far as necessary to obtain the number required) any Director who wishes to retire and not to offer himself for re-election.  Any further Directors so to retire shall be those who have been longest in office since their last appointment or reappointment.  Subject as aforesaid, a retiring Director shall be eligible for reappointment.
 
119.
Vacated office
 
The Company at the meeting at which a Director retires in accordance with these Articles may fill the vacated office by appointing a person to fill such vacancy, and in default the retiring Director, if willing to act, shall be deemed to have been re-appointed, unless at such meeting it is expressly resolved not to fill the vacancy, or a resolution for the reappointment of such Director shall have been put to the meeting and lost.
 
120.
Appointment
 
No person other than a Director retiring at the meeting shall, unless recommended by the Directors for appointment, be eligible for appointment to the office of director at any general meeting unless, not less than seven nor more than 28 days before the day appointed for the meeting, there shall have been given to the Company notice in writing by some member duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for appointment stating the particulars which would, if he were so appointed, be required to be included in the Company’s register of directors, and also notice in writing signed by the person to be proposed of his willingness to be appointed.
 
121.
Motion
 
At a general meeting a motion for the appointment of two or more persons as Directors by a single resolution shall not be made unless a resolution that it shall be so made has been first agreed to by the meeting without any vote being given against it, and for the purposes of this Article a motion for approving a person’s appointment or for nominating a person for appointment shall be treated as a motion for his appointment.
 
PROCEEDINGS OF DIRECTORS
 
122.
Meetings
 
122.1
Subject to the provisions of these Articles, the Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit.  Questions arising at any meeting shall be determined by a majority of votes.  In case of an equality of votes the chairman of the meeting shall have a second or casting vote.  A Director who is also an alternate director shall be entitled in the absence of his appointor to a separate vote on behalf of the Director he is representing in addition to his own vote.  A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors.  Notices in respect of such meetings may be sent by facsimile or by electronic communication sent to an address notified to the Company for that purpose or by word of mouth including to any Director for the time being absent from the United Kingdom to such address (whether inside or outside the United Kingdom) notified by him to the Directors for this purpose.  A Director may waive the requirement that notices of meetings of the Directors must be given to him either prospectively or retrospectively.

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122.2
A meeting of the Directors may be validly held notwithstanding that all of the Directors are not present at the same place provided that:
 

 (a)
the Directors at the time of the meeting are in direct communication with each other whether by way of telephone, audio link or other form of telecommunications (and such a meeting shall be deemed to take place where the largest group of those participating is assembled or, if there is no such group, where the chairman of the meeting then is); and
 

 (b)
all of the Directors entitled to notice of a meeting of the Directors agree to the holding of the meeting in the manner described in this Article.
 
123.
Authorisation to vote
 
A Director who is unable to attend any meeting of the Directors and has not appointed an alternate director may authorise any other Director to vote for him at the meeting, and in that event the Director so authorised shall have a vote for each Director by whom he is so authorised in addition to his own vote.  Any such authority must be by instrument signed by the authorising Director and authenticated in such manner as the other Directors may accept.  The authorising Director shall deposit the original signed instrument at the office as soon as reasonably practicable but failure or delay in his doing so shall not prejudice the validity of the authorisation.
 
124.
Quorum
 
The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors, and unless otherwise determined shall be two.  For the purposes of this Article a person who holds office only as an alternate director shall, if his appointor is not present, be counted in a quorum, but so that not less than two individuals shall constitute the quorum.  Any Director or alternate director who attends a meeting of Directors by telephone or other conference facility shall be deemed to be personally present at such meeting for all purposes of these Articles and shall be counted in the quorum accordingly.  A meeting of the Directors for the time being at which a quorum is present shall be competent to exercise all powers and discretions for the time being exercisable by the Directors.
 
125.
Minimum number of directors
 
The continuing Directors or a sole continuing Director may act notwithstanding any vacancies in their body, but if and so long as the number of Directors is reduced below the minimum number fixed by or in accordance with these Articles, or below the number fixed by or pursuant to these Articles as the quorum of Directors, the continuing Directors or Director may act for the purpose of filling vacancies in their body or of summoning general meetings of the Company, but not for any other purpose.  If there be no Directors or Director able or willing to act, then any two members may summon a general meeting for the purpose of appointing Directors.

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126.
Chairman
 
The Directors may, from their number, from time to time elect and remove a chairman and, if thought fit, one or more deputy chairmen or vice-chairmen and determine the period for which they are to hold office.  The chairman, or in his absence the deputy chairman (to be chosen, if there be more than one, by agreement amongst themselves or, failing agreement, by lot), or in the absence of any deputy chairman the vice chairman (to be chosen, if there be more than one, by agreement amongst themselves or, failing agreement, by lot), shall preside at all meetings of the Directors, but if no such chairman, deputy chairman or vice chairman be elected, or if at any meeting neither the chairman nor deputy chairman or vice chairman be willing to preside or none of them be present within five minutes after the time appointed for holding the same, the Directors present may choose one of their number to be chairman of the meeting.
 
127.
Resolutions
 
A resolution in writing, signed by all the Directors for the time being entitled to receive notice of a meeting of Directors or of a committee of Directors, shall be as effective as a resolution passed at a meeting of the Directors or (as the case may be) a committee of Directors duly convened and held, and may consist of several documents in the like form each signed by one or more of the Directors and so that any such resolution or document signed by an alternate director shall be deemed to have been signed by the Director who appointed such alternate director and, if it is signed by a Director who has appointed an alternate director, it need not be signed by the alternate director in that capacity.
 
128.
Committees
 
The Directors may delegate any of their powers to committees consisting of or including at least one member of their body as they think fit, provided that at least a majority of the members of any such committee shall be Directors of the Company and no resolution of a committee may be effective unless a majority of those present either in person or by proxy when the resolution was passed are Directors or alternate directors.  Any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.  The meetings and proceedings of any such committee consisting of two or more Directors shall be governed by the provisions of these Articles regulating the meetings and proceedings of the Directors, so far as the same are applicable and are not superseded by any regulations imposed by the Directors under this Article.
 
129.
Validity
 
All acts done by any meeting of Directors, or of a committee of Directors, or by any person acting as a Director, shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director, or person acting as a Director, or that they or any of them were disqualified from holding office, or had vacated office, or were not entitled to vote, be as valid as if every such person had been duly appointed, and was qualified and had continued to be a Director and had been entitled to vote.

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BORROWING POWERS
 
130.
Powers
 
The Directors may exercise all the powers of the Company to borrow money, to guarantee and to mortgage or charge its undertaking, property, assets and uncalled capital, and (subject to the Act) to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.
 
OTHER DIRECTORS
 
131.
Appointment
 
Subject to the provisions of the Act the Directors may from time to time, and at any time pursuant to this Article appoint any other persons to any post with such descriptive title including that of director (whether as executive, group, divisional, departmental, deputy, assistance, local, advisory director or otherwise) as the Directors may determine and may define, limit, vary and restrict the powers, authorities and discretions of persons so appointed and may fix and determine their remuneration and duties and, subject to any contract between him and the Company, may remove from such post any person so appointed.  A person so appointed shall not be a Director of the Company for any of the purposes of these Articles or of the Act and accordingly shall not be a member of the board of Directors or any committee of the Directors, nor shall he be entitled to be present at any meeting of the Directors or of any such committee, except at the request of the Directors or of such committee, and if present at such request he shall not be entitled to vote at such meeting.
 
MINUTES AND BOOKS
 
132.
Minutes
 
132.1
The Directors shall cause minutes to be made:
 

 (a)
of all appointments of officers made by the Directors;
 

 (b)
of the names of the Directors present at each meeting of Directors and of any committee of Directors;
 

 (c)
of all resolutions and proceedings at all meetings of the Company and of any class of members of the Company and of the Directors and of committees of Directors.
 
132.2
Any such minutes if purporting to be signed by the chairman of the meeting at which the proceedings took place, or by the chairman of the next following meeting, shall be evidence of the proceedings.

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133.
Records
 
Subject as required by law, any register, index, minute book or accounting records required by these Articles or by law to be kept by or on behalf of the Company may be kept either by making entries in bound books or by recording them in any other manner.  In any case in which bound books are not used, the Directors shall take adequate precautions for guarding against, and for facilitating the discovery of, falsification.
 
SECRETARY
 
134.
Appointment
 
Subject to the Act the Secretary shall be appointed by the Directors on such terms and for such period as they may think fit and the Directors may also appoint one or more assistant or deputy secretaries.  Any Secretary or assistant or deputy secretary so appointed may at any time be removed from office by the Directors without prejudice to any claim for damages for breach of any contract of service between him and the Company.
 
135.
Office
 
Anything by the Act required or authorised to be done by or to the Secretary may, if the office is vacant or such Secretary is absent or there is for any other reason no such Secretary capable of acting, be done by or to any assistant or deputy secretary or, if there is no assistant or deputy secretary, or if such assistant or deputy secretary is absent or for any other reason not capable of acting by or to any officer of the Company authorised generally or specially in that behalf by the Directors provided that any provision of the Act or of these Articles required or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in place of, the Secretary.
 
THE SEAL
 
136.
Safe custody
 
The Directors shall provide for the safe custody of the Seal and the Securities Seal and neither shall be used except by the authority of a resolution of the Directors or of a committee of the Directors authorised in that behalf by the Directors.
 
137.
Application
 
The Directors may from time to time make such regulations as they see fit (subject to the provisions of these Articles in relation to share certificates and debenture certificates) determining the persons and the number of such persons who shall sign every instrument to which the Seal or the Securities Seal is affixed, and until otherwise so determined (and subject to the provisions of this Article) every such instrument shall be signed by one Director and shall be countersigned by the Secretary or by a second Director.

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138.
Seal for use abroad
 
The Company may have an official seal for use abroad under the provisions of the Act where and as the Directors shall determine, and the Company may by writing under the Seal appoint any agent or committee abroad to be the duly authorised agent of the Company for the purpose of affixing and using such official seal, and may impose such restrictions on its use as shall be thought fit.  Wherever in these Articles reference is made to the Seal, the reference shall, when and so far as may be applicable, be deemed to include any such official seal as aforesaid.
 
139.
Issue
 
139.1
Every certificate or share warrant shall be issued either:
 

 (a)
by affixing the Securities Seal to it, by mechanical, electronic or other means;
 

 (b)
by printing a representation of the Securities Seal on it, by mechanical, electronic or other means, including laser printing; or
 

 (c)
in such other manner as the Board, having regard to the Statutes and any regulations which may apply to the Company from time to time.
 
140.
Seal
 
The Company need not have a company seal and pursuant to the Act may execute and deliver any document as a deed under the signature of any two Directors or of one Director and the Secretary or any Director in the presence of a witness who attests his signature.  A certificate in respect of any shares or other securities in the Company shall be validly issued if it is executed as a deed in accordance with this Article.
 
AUTHENTICATION OF DOCUMENTS
 
141.
Authentication
 
Any Director or the Secretary or any person appointed by the Directors for the purpose shall have power to authenticate any documents affecting the constitution of the Company and any resolutions passed by the Company or the Directors or any committee of the Directors, and any books, records, documents and accounts relating to the business of the Company, and to certify copies of such documents or extracts from them as true copies or extracts.  A document purporting to be a copy of a resolution, or a copy of or an extract from the minutes of a meeting of the Company or of the Directors or any committee of the Directors, which is so certified shall be conclusive evidence in favour of all persons dealing with the Company that such resolution has been duly passed or, as the case may be, that such copy or extract is a true and accurate record of proceedings at a duly constituted meeting.

47
DIVIDENDS
 
142.
Declaration of dividends
 
The profits of the Company available for distribution and resolved to be distributed shall be applied in the payment of dividends to the members in accordance with their respective rights and priorities.  The Company in general meeting may declare dividends accordingly.
 
143.
Dividends payable
 
No dividends shall be payable otherwise than in accordance with the Act and out of the profits of the Company available for that purpose and no dividend shall exceed the amount recommended by the Directors.
 
144.
Payment of dividends
 
Subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends shall be declared and paid according to the amounts paid-up on the shares in respect whereof the dividend is paid, but no amount paid up on a share in advance of calls shall be treated for the purposes of this Article as paid up on the share.  All dividends shall be apportioned and paid pro rata according to the amount paid up on the shares during any portion or portions of the period in respect of which the dividend is paid, except that if any share is issued on terms providing that it shall carry any particular rights as to dividend, such share shall rank for dividend accordingly.
 
145.
Interim dividends
 
The Directors may if they think fit from time to time pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company and are permitted by the Act.  If at any time the share capital of the Company is divided into different classes, the Directors may (subject to the provisions of the Act) pay such interim dividends in respect of those shares in the capital of the Company which confer on their holders deferred or non preferred rights as well as in respect of those shares which confer on their holders preferential rights with regard to divided but no interim dividend shall be paid on shares carrying deferred or non preferred rights if, at any time of payment, any preferential dividend is in arrears.  The Directors may also pay half yearly, or at other suitable intervals to be settled by them, any dividend which may be payable at a fixed rate if they are of the opinion that the profits justify the payment and if and to the extent that such payment is permitted by the Act.  Provided the Directors act bona fide they shall not incur any responsibility to the holders of shares conferring a preference for any damage that they may suffer by reason of the payment of any interim dividend on any shares having deferred or non preferred rights.

48
146.
Profits and losses
 
Subject to the provisions of the Act or as otherwise required by law, where any asset, business or property is bought by the Company as from a past date, whether such date be before or after the incorporation of the Company, the profits and losses thereof as from such date may at the discretion of the Directors in whole or in part be carried to a revenue account and treated for all purposes as profits or losses of the Company.  Subject to that, if any shares or securities are purchased cum dividend or interest, such dividend or interest may at the discretion of the Directors be treated as revenue and it shall not be obligatory to capitalise the same or any part of the same.
 
147.
Calls or debts deducted from dividends
 
The Directors may deduct from any dividend or other monies payable to any member on or in respect of a share all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in relation to shares of the Company.
 
148.
Retention of dividends
 
The Directors may retain the dividends payable upon shares in respect of which any person is, under the provisions as to the transmission of shares contained in these Articles, entitled to become a member, or which any person is under those provisions entitled to transfer, until such person shall become a member in respect of such shares or shall transfer the same.
 
149.
Unclaimed dividends
 
All unclaimed dividends may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed and the payment of any such dividend into a separate account or the investment of such dividend shall not constitute the Company a trustee in respect of such dividend.  No dividend or other monies payable in respect of a share shall bear interest as against the Company unless otherwise provided by the rights attached to the share.  Any dividend which has remained unclaimed for a period of 12 years from the date of its declaration shall at the expiration of that period be forfeited and cease to remain owing by the Company and shall then belong to the Company absolutely.
 
150.
Payment of dividends
 
150.1
Any dividend or other monies payable on or in respect of a share may be paid by cheque or warrant sent through the post to the registered address of the member or person entitled to it and in the case of joint holders to the first named of such joint holders, or to such person and such address as the holder or joint holders may in writing direct.  Every such cheque or warrant shall be made payable to the order of the person to whom it is sent or to such other person as the holder or joint holders may in writing direct, and payment of the cheque or warrant shall be a good discharge to the Company.  Every such cheque or warrant shall be sent at the risk of the person entitled to the money represented by such cheque or warrant.
 
150.2
The Company may cease to send any cheque or warrant through the post for any dividend payable on any shares in the Company which is normally paid in that manner on those shares if in respect of at least two consecutive dividends payable on those shares the cheques or warrants have been returned undelivered or remain uncashed but, subject to the provisions of these Articles, shall recommence sending cheques or warrants in respect of dividends payable on those shares if the holder or person entitled by transmission claims the arrears of dividend and does not instruct the Company to pay future dividends in some other way.

49
151.
Receipts for dividends
 
If several persons are registered as joint holder of any share, any one of them may give effectual receipts for any dividend or other monies payable on or in respect of the share.
 
152.
Scrip dividends
 
152.1
The Directors may subject as provided in these Articles declare that each Ordinary Shareholder may elect to forego his right to participate in such dividend (or such part of it as the Directors may determine) and to receive instead an allotment of Ordinary Shares to the extent and within the limits and on the terms and conditions set out below.  The Directors shall announce any such decision in conjunction with any announcement of the relevant dividend and shall send to the relevant Ordinary Shareholders notices of election as soon as practicable.
 
152.2
If the Directors make a declaration pursuant to Article 152.1 each holder of Ordinary Shares may (by notice in writing to the Company given in such form and within such period as the Directors may from time to time determine) elect to forego the dividend which otherwise would have been paid on all or so many of his Ordinary Shares as he shall specify in notice of election and to receive in lieu such number of Ordinary Shares to be allotted to him credited as fully paid as is equal to the number resulting from resolving the following fraction (but ignoring any fraction of an additional Ordinary Share):
 
AxB
C

where:
 

 (a)
A equals the number of Ordinary Shares in respect of which such election has been made;
 

 (b)
B equals the amount of the dividend per share foregone (expressed in terms of pence and fractions of a penny); and
 

 (c)
C equals the price at which each Ordinary Share in respect of which such election has been made is to be allotted as determined by the Directors.
 
152.3
Following the receipt of a notice or notices of election the Directors shall appropriate out of the undistributed profits or reserves of the Company an amount equal to the aggregate nominal value of the number of Ordinary Shares required to be allotted to the holders of Ordinary Shares who have given notice of election and shall apply such amount in paying up in full such number of Ordinary Shares.

50
152.4
The Ordinary Shares so allotted credited as fully paid shall not be entitled to participate in the dividend then being declared or paid but shall in all other respects rank pari passu with the existing Ordinary Shares of the Company.
 
152.5
The Directors shall not make any such decision under this Article unless the Company has sufficient unissued Ordinary Shares and undistributed profits or reserves to give effect to any elections which could be made as a consequence of such decision.
 
152.6
The Directors shall not make any such decision under this Article unless the Company shall by ordinary resolution approve the exercise by the Directors of their powers so to do in respect of the dividend in question or in respect of any dividends declare or paid in respect of each specified financial year or period of the Company which dividends include the dividend in question.
 
152.7
The Directors may do all acts and things considered necessary or expedient to give effect to any such capitalisation, with full power to the Directors to make such provisions as they think fit for the case of shares becoming distributable in fractions (including provisions whereby, in whole or in part, fractional entitlements are disregarded or rounded up or the benefit of fractional entitlements accrue to the Company rather than to the members concerned).  The Directors may authorise any person to enter, on behalf of all the members interested, into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.
 
152.8
This Article shall have effect without prejudice to the provisions of Article 150 any other provisions of these Articles and such provisions shall also have effect without prejudice to the provisions of this Article.
 
153.
General meeting to declare dividend
 
A general meeting declaring a dividend may, upon the recommendation of the Directors, direct payment of such dividend wholly or in part by the distribution of specific assets, and in particular of paid up shares, debentures or other securities or rights of any other Company, and the Directors shall give effect to such resolution and where any difficulty arises in regard to the distribution the Directors may settle the same as they think expedient, and in particular may issue fractional certificates, and may fix the value for distribution of such specific assets, or any part of them, and may determine that cash payments shall be made to any members upon the footing of the value so fixed in order to adjust the rights of members, and may vest any specific assets in trustees upon trusts for the persons entitled to the dividend as may seem expedient to the Directors, and generally may make such arrangements for the allotment, acceptance and sale of such specific assets or fractional certificates or any part of them and otherwise as they think fit.

51
154.
Reserves
 
The Directors may before recommending any dividend, whether preferential or otherwise, carry to reserve out of the profits of the Company, (including any premiums received upon the issue of debentures or other securities or rights of the Company) such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose to which the profits of the Company may properly be applied and pending such applications may at the like discretion either be employed in the business of the Company or be invested in such investments (including, but subject to the provisions of the Act shares of the Company or its holding company, if any) as the Directors may from time to time think fit.  The Directors may also without placing the same to reserve carry forward any profits which they may think it prudent not to divide.
 
155.
Capitalisation
 
155.1
The Company in general meeting may upon the recommendation of the Directors resolve that it is desirable to capitalise any undivided profits of the Company standing to the credit of the profit and loss account or otherwise and available for distribution (not being required for the payment of fixed dividends on any shares entitled to fixed preferential dividends with or without further participation in profits) and accordingly that the Directors be authorised and directed to appropriate the profits resolved to be capitalised to the members who would have been entitled to such profits if distributed by way of dividend and in the same proportions on condition that the same be not paid in cash but be applied either in or towards paying up any amounts for the time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures of the Company to be allotted and distributed credited as fully paid up to and amongst such members in the same proportions, or partly in the one way and partly in the other, and the Directors shall give effect to such resolution.
 
155.2
The Company in general meeting may, subject to the provisions of the Act upon the recommendation of the Directors, resolve that it is desirable to capitalise any part of the amount for the time being standing to the credit of any reserve account of the Company (including its share premium account and capital redemption reserve) of its profit and loss account and whether or not available for distribution by applying such sum in paying up in full unissued shares to be allotted as fully paid to those members of the Company who would have been entitled to that sum if it were distributed by way of dividend (and in the same proportions), and the Directors shall give effect to such resolution.
 
156.
Authority
 
Whenever such a resolution as referred to in Article 155 shall have been passed, the Directors shall make all appropriations and applications of the profits or sum so resolved to be capitalised, and (subject to the provisions of the Act) all allotments and issues of fully paid shares or debentures, if any, and generally shall do all acts and things required to give effect to such capitalisation with full power to the Directors to make such provision by the issue of fractional certificates or by payment in cash or otherwise as they think fit for the case of shares or debentures becoming distributable in fractions, or to make provision whereby the benefit of fractional entitlements accrues to the Company rather than to the members concerned, and also to authorise any person to enter on behalf of all the members entitled to the benefit of such appropriations and applications into an agreement with the Company providing for the allotment to them respectively, credited as fully paid up, of any further shares to which they may be entitled upon such capitalisation, and any agreement made under such authority shall be effective and binding on all such members.

52
157.
Record Dates
 
Notwithstanding any other provision of these Articles but without prejudice to the rights attached to any shares and subject always to the Statutes, the Company or the Directors may by resolution specify any date (the “record date”) as the date at the close of business (or such other time as the Directors may determine) on which persons registered as the holders of shares or other securities shall be entitled to receipt of any dividend, distribution, interest, allotment, issue, notice, information, document or circular and such record date may be on or at any time before the date on which the same is paid, made, given or served or (in the case of any dividend, distribution, interest, allotment or issue) at any time after the same is recommended, resolved, declared or announced, but without prejudice to the rights inter se in respect of the same of transferors and transferees of any such shares or other securities.  No change in the register of such holders after the record date shall invalidate the same.
 
ACCOUNTS
 
158.
Accounting records
 
The Directors shall cause true accounting records to be kept and preserved in accordance with the Act.  The accounting records shall be kept at the Office, or (subject to the provisions of the Act) at such other place as the Directors think fit, and shall always be open to inspection by the officers of the Company.  No member (other than an officer of the Company) shall have any right of inspecting any account or book or document of the Company except as conferred by Statutes or authorised by the Directors or by the Company in general meeting.
 
159.
Preparation of accounts
 
The Directors shall from time to time, in accordance with the provisions of the Act, cause to be prepared and to be laid before the Company in general meeting such profit and loss accounts, balance sheets, group accounts (if any) and reports as are specified in the Act.
 
160.
Accounts to members
 
160.1
A copy of every balance sheet and profit and loss account (including every document required by law to be annexed to them) which is to be laid before the Company in general meeting and of the directors’ and auditors’ reports shall not less than 21 days before the date of the meeting be sent to every member and to every holder of debentures of the Company, provided that:
 

 (a)
this Article shall not require copies of such documents to be sent to any person to whom, by virtue of section 423(2) of the Act, the Company is not required to send the same, nor to any person of whose address the Company is not aware nor to more than one of the joint holders of any shares or debentures; and

53

 (b)
instead of these documents there may be sent a copy of such summary financial statement as may be permitted, in such form as may be specified and subject to such conditions as may be required, by law to be sent to the members of, and holders of debentures of, the Company.
 
161.
Electronic means
 
In accordance with Article 167.1, if and to the extent permitted by the Statutes, the summary financial statement as referred to in Article 160.1(b) may be delivered by means of electronic mail and/or through making it available on a website.
 
AUDITORS
 
162.
Appointment
 
Auditors shall be appointed and their duties, rights and remuneration regulated in accordance with the provisions of the Act.  Subject to the provisions of the Act, all acts done by any person acting as an auditor shall, as regards all persons dealing in good faith with the Company, be valid, notwithstanding that there was some defect in his appointment or that he was at the time of his appointment not qualified for appointment.
 
163.
Correctness
 
In respect of each financial year of the Company the accounts of the Company shall be examined and the correctness of the balance sheet, profit and loss account and group accounts (if any) ascertained by an auditor or auditors.
 
164.
Auditors to attend meetings
 
The auditor or auditors shall be entitled to attend any general meeting and to receive notices of and other communications relating to any general meeting which a member is entitled to receive, and to be heard at any general meeting on any part of the business of the meeting which concerns him or them as auditor or auditors.
 
165.
Change of auditors
 
The Company shall comply with the provisions of the Act relating to the sending of copies of special notices of certain resolutions concerning changes of auditors and to the giving notice of, and circulating to members, representations made by auditors retiring or proposed to be removed.
 
SERVICE OF NOTICE ON MEMBERS
 
166.
Notices to be in writing
 
Any notice to be given to or by any person pursuant to these Articles shall be in writing, except that a notice convening a Directors’ or Directors’ committee meetings need not be in writing.

54
167.
Service of notice on members
 
167.1
The Company may give any notice or document (including a share certificate, annual report, annual financial statements and/or a summary of financial statements) to a member either:
 

 (a)
personally; or
 

 (b)
by sending it by post or other delivery service in a prepaid envelope addressed to the member at his registered address; or
 

 (c)
by leaving it at that address; or
 

 (d)
by sending it in electronic form to such address (if any) as may for the time being be notified to the Company by or on behalf of the member for that purpose; or
 

 (e)
by making it available on a website and notifying the member of its availability in accordance with the Act.  A member shall be deemed to have agreed that the Company may send or supply a document or information by means of a website if the conditions set out in the Act have been satisfied; or
 

 (f)
by any other means authorised in writing by the member concerned.
 
167.2
In the case of a member registered on an overseas branch register any such notice or document which is posted may be posted either in the United Kingdom or in the territory in which such branch register is maintained.
 
167.3
In the case of joint holders of a share, all notices or documents shall be given to the joint holder whose name stands first in the register in respect of the joint holding.  Notice so given shall be sufficient notice to all the joint holders.
 
167.4
Where a member (or, in the case of joint holders, the person first named in the register) has a registered address outside the United Kingdom but has notified the Company of an address within the United Kingdom at which notices or other documents may be given to him, he shall be entitled to have notices given to him at that address, but otherwise, no such member shall be entitled to receive any notice or document from the Company.
 
167.5
If on three consecutive occasions, notices or other documents have been sent through the post to any member at his registered address or his address for the service of notices but have been returned undelivered, such member shall not thereafter be entitled to receive notices or other documents from the Company until he shall have communicated with the Company and supplied in writing a new registered address or address within the United Kingdom for the service of notices.
 
167.6
The Directors may from time to time make such arrangements or regulations (if any) as they may from time to time in their absolute discretion think fit in relation to the giving of notices or other documents or information by electronic means by or to the Company and otherwise for the purpose of implementing and/or supplementing the provisions of these Articles and the Statutes in relation to electronic means; and such arrangements and regulations (as the case may be) shall have the same effect as if set out in this Article.

55
167.7
Nothing in this Article shall affect any provision of any of the Statutes requiring notices or documents to be delivered in a particular way.
 
168.
Notice in case of death, bankruptcy or mental disorder
 
The Company may give notice to the person entitled to a share in consequence of the death or bankruptcy of a member or otherwise by operation of law, by sending or delivering it in any manner authorised by these Articles for the giving of notice to a member, addressed to that person by name, or by the title of representative of the deceased or trustee of the bankrupt or representative by operation of law or by any like description, at the address (if any) within the United Kingdom supplied for the purpose by the person claiming to be so entitled.  Until such an address has been so supplied, a notice may be given in any manner in which it might have been given if the death or bankruptcy or operation of law had not occurred.
 
169.
Evidence of service
 
169.1
Any member present, in person or by proxy, at any meeting of the Company or of the holders of any class of shares of the Company shall be deemed to have received due notice of such meeting, and, where requisite, of the purposes for which such meeting was called.
 
169.2
Any notice, certificate or other document addressed to a member at his registered address or address for service in the United Kingdom shall, if sent by post, be deemed to have been served or delivered on the day after the day when it was put in the post (or, where second-class mail is employed, on the second day after the day when it was put in the post).  Proof that an envelope containing the notice or document was properly addressed and put into the post as a prepaid letter shall be conclusive evidence that the notice was given.  Any notice, certificate or other document not sent by post, but delivered or left at a registered address or address for service in the United Kingdom shall be deemed to have been served or delivered on the day on which it was so delivered or left.  Any notice, certificate or other document sent by electronic communication shall, subject to the Statutes and these Articles, be deemed to have been served or delivered at the expiration of 24 hours from the time at which it was sent.  Any notice or other document sent by a website shall, subject to the Statutes and these Articles, be deemed to have been served or delivered when first made available on the website or, if later, when the recipient received (or is deemed to have received) notice of the fact that such notice or document was available on the website.
 
170.
Notice binding on transferees
 
Every person who, by operation of law, transfers or by any other means becomes entitled to a share shall be bound by a notice in respect of that share (other than a notice given by the Company under Section 793 of the Act) which, before his name is entered in the register, has been duly given to a person from whom he derives his title.

56
171.
Notice by advertisement
 
Any notice to be given by the Company to the members or any of them, and not otherwise provided for by these Articles, shall be sufficiently given if given by advertisement in at least one national newspaper published in the United Kingdom and, where the Company keeps an overseas branch register, in at least one daily newspaper published in the territory in which such register is maintained.  Any notice given by advertisement shall be deemed to have been served at noon on the day on which the advertisement first appears.
 
172.
Suspension of the postal services
 
If, at any time by reason of the general suspension, interruption or curtailment of postal services or electronic communication or threat of such suspension, interruption or curtailment within the United Kingdom the Company is or would be unable effectively to convene a general meeting by notices sent through the post or by electronic communication, a general meeting may be convened by a notice advertised in at least one national newspaper published in the United Kingdom and, where the Company keeps an overseas branch register, in at least one daily newspaper published in the territory in which such register is maintained.  Such notice shall be deemed to have been duly served on all members entitled thereto at noon on the day on which the first of such advertisement appears.  In any such case the Company shall send confirmatory copies of the notice by post or by electronic communication if, at least seven days prior to the meeting, the posting of notices to addresses throughout the United Kingdom or, as the case may be, the sending of such notices by electronic communication, again becomes practicable.
 
173.
Service of notices on the Company
 
Subject to the Statutes, Article 167.1 shall apply mutatis mutandis to the service by members of notices and documents on the Company, save that any notice, certificate (but not a share certificate) or document sent by electronic communication to the Company shall be deemed to have been served or delivered at the time it is received by the Company.
 
ELECTRONIC COMMUNICATION
 
174.
Electronic Communication
 
174.1
Notwithstanding anything in these Articles to the contrary, any document or information to be given, sent, supplied, delivered or provided to any person by the Company, whether pursuant to these Articles, the Statutes or otherwise, is also to be treated as given, sent, supplied, delivered or provided where it is made available on a website, or is sent in electronic form, in the manner provided by the 2006 Act for the purposes of the Act (subject to the provisions of these Articles).
 
For the purposes of paragraph 10(2)(b) of schedule 5 to the Act, the Company may give, send, supply, deliver or provide documents or information to Members by making them available on a website.

57
For the purposes of paragraph 6.1.8R(1) of the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the Company may use electronic means (as defined therein) to convey information or documents to members or holders of debt securities (as defined therein).
 
174.2
Notwithstanding anything in these Articles to the contrary, the Directors may from time to time make such arrangements or regulations (if any) as they may from time to time in their absolute discretion think fit in relation to the giving of notices or other documents or information by electronic means by or to the Company and otherwise for the purpose of implementing and/or supplementing the provisions of these Articles and the Statutes in relation to electronic means; and such arrangements and regulations (as the case may be) shall have the same effect as if set out in this Article.
 
DESTRUCTION OF DOCUMENTS
 
175.
Destruction
 
175.1
The Company may destroy:
 

 (a)
any instrument of transfer, after six years from the date on which it is registered;
 

 (b)
any dividend mandate or any variation or cancellation of it or any notification of change of name or address, after two years from the date on which it is recorded;
 

 (c)
any share certificate, after one year from the date on which it is cancelled;
 

 (d)
any proxy form which has been used for a poll, after one year from the date of use;
 

 (e)
any proxy form which has not been used for a poll, after one month from the general meeting to which it relates and at which the poll was demanded; and
 

 (f)
any other document on the basis of which any entry in the register is made, after six years from the date on which an entry was first made in the register in respect of it,
 
provided that the Company may destroy any such type of document at a date earlier than that authorised by this Article if a copy of such document is retained on microfilm or by other similar means on which such copy is retained until the expiration of the period applicable to the destruction of the original of such document.
 
176.
Correct entries
 
176.1
It shall be conclusively presumed in favour of the Company that every entry in the register purporting to have been made on the basis of a document so destroyed was duly and properly made, that every instrument of transfer so destroyed was duly registered, that every share certificate so destroyed was duly cancelled, that every other document so destroyed had been properly dealt with in accordance with its terms and was valid and effective in accordance with the particulars in the records of the Company, provided that:

58

 (a)
this Article shall apply only to the destruction of a document in good faith and without notice of any claim (regardless of the parties to it) to which the document might be relevant;
 

 (b)
nothing in this Article shall be construed as imposing on the Company any liability in respect of the destruction of any such document otherwise than as provided for in this Article which would not attach to the Company in the absence of this Article; and
 

 (c)
references in this Article to the destruction of any document include references to the disposal of it in any manner.
 
WINDING UP
 
177.
Authority to divide assets
 
If the Company shall be wound up (whether the liquidation is altogether voluntary, under supervision or by the court) the liquidator may, with the authority of a special resolution and any other sanction required by the Act, divide among the members in specie the whole or any part of the assets of the Company, and whether or not the assets shall consist of property of one kind or shall consist of properties of different kinds, and may for such purposes set such value as he deems fair upon any one or more class or classes of property, and may determine how such divisions shall be carried out as between the members or different classes of members.  The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator, with the like authority, shall think fit, and the liquidation of the Company may be closed and the Company dissolved, but so that no member shall be compelled to accept any shares in respect of which there is a liability.
 
INDEMNITY
 
178.
Right to indemnity
 
So far as the law allows, but without prejudice to any indemnity to which he may otherwise be entitled, any person who is or was at any time a Director, alternate director, officer or employee of the Company shall be entitled to be indemnified and, if the directors so determine, any other Relevant Person shall be entitled to be indemnified, out of the assets of the Company against any Relevant Liability.
 
179.
Power to Insure
 
So far as the law allows, the Directors may take out, maintain, renew, establish, participate in and/or contribute to the cost of, insurance for, or for the benefit of any Relevant Person or any person who is or was at any time a trustee of any pension fund in which any employee or former employee of the Company or any of the other bodies corporate which are referred to in the definition of “Relevant Person” are interested, including insurance against any Relevant Liability and, so far as the law allows, may indemnify or exempt any such person from or against any such Relevant Liability.
 

59
Exhibit 2.1

EXECUTION VERSION
 

AMENDED AND RESTATED DEPOSIT AGREEMENT
 

by and among
 
AMRYT PHARMA PLC
 
and
 
CITIBANK, N.A.,
as Depositary,
 
and
 
THE HOLDERS AND BENEFICIAL OWNERS OF
AMERICAN DEPOSITARY SHARES
ISSUED HEREUNDER
 

Dated as of July 8, 2020

EXECUTION VERSION
 
TABLE OF CONTENTS

ARTICLE I DEFINITIONS
2
   
Section 1.1
“ADS Record Date”
2
Section 1.2
“Affiliate”
2
Section 1.3
“American Depositary Receipt(s)”, “ADR(s)” and “Receipt(s)”
2
Section 1.4
“American Depositary Share(s)” and “ADS(s)”
2
Section 1.5
“Articles of Association”
3
Section 1.6
“Beneficial Owner”
3
Section 1.7
“Certificated ADS(s)”
4
Section 1.8
“Citibank”
4
Section 1.9
“Commission”
4
Section 1.10
“Company”
4
Section 1.11
“CREST”
4
Section 1.12
“Custodian”
4
Section 1.13
“Deliver” and “Delivery”
4
Section 1.14
“Deposit Agreement”
4
Section 1.15
“Depositary”
4
Section 1.16
“Deposited Property”
4
Section 1.17
“Deposited Securities”
5
Section 1.18
“Dollars” and “S”
5
Section 1.19
“DTC”
5
Section 1.20
“DTC Participant”
5
Section 1.21
“Exchange Act”
5
Section 1.22
“Foreign Currency”
5
Section 1.23
“Full Entitlement ADR(s)”, “Full Entitlement ADS(s)” and “Full Entitlement Share(s)”
5
Section 1.24
“Holder(s)”
5
Section 1.25
“Original Deposit Agreement”
6
Section 1.26
“Partial Entitlement ADR(s)”, “Partial Entitlement ADS(s)” and “Partial Entitlement Share(s)”
6
Section 1.27
“Principal Office”
6
Section 1.28
“Registrar”
6
Section 1.29
“Restricted Securities”
6
Section 1.30
“Restricted ADR(s)”, “Restricted ADS(s)” and “Restricted Shares”
6
Section 1.31
“Securities Act”
6
Section 1.32
“Share Registrar”
6
Section 1.33
“Shares”
7
Section 1.34
“Uncertificated ADS(s)”
7
Section 1.35
“United States” and “U.S.”
7

i
ARTICLE II APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS;  DEPOSIT OF SHARES; EXECUTION AND DELIVERY,  TRANSFER AND SURRENDER OF RECEIPTS
7
   
Section 2.1
Appointment of Depositary.
7
Section 2.2
Form and Transferability of ADSs.
8
Section 2.3
Deposit of Shares
9
Section 2.4
Registration and Safekeeping of Deposited Securities
11
Section 2.5
Issuance of ADSs
11
Section 2.6
Transfer, Combination and Split-up of ADRs.
12
Section 2.7
Surrender of ADSs and Withdrawal of Deposited Securities.
12
Section 2.8
Limitations on Execution and Delivery, Transfer, etc. of ADSs;  Suspension of Delivery, Transfer, etc.
14
Section 2.9
Lost ADRs, etc
15
Section 2.10
Cancellation and Destruction of Surrendered ADRs; Maintenance of Records
15
Section 2.11
Escheatment
15
Section 2.12
Partial Entitlement ADSs
15
Section 2.13
Certificated/Uncertificated ADSs
16
Section 2.14
Restricted ADSs
17
   
ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS AND  BENEFICIAL OWNERS OF ADSs
18
   
Section 3.1
Proofs, Certificates and Other Information
18
Section 3.2
Liability for Taxes and Other Charges
18
Section 3.3
Representations and Warranties on Deposit of Shares
19
Section 3.4
Compliance with Information Requests
19
Section 3.5
Ownership Restrictions.
20
Section 3.6
Reporting Obligations and Regulatory Approvals.
20
   
ARTICLE IV THE DEPOSITED SECURITIES
21
   
Section 4.1
Cash Distributions.
21
Section 4.2
Distribution in Shares.
21
Section 4.3
Elective Distributions in Cash or Shares.
22
Section 4.4
Distribution of Rights to Purchase Additional ADSs.
23
Section 4.5
Distributions Other Than Cash, Shares or Rights to Purchase Shares.
24
Section 4.6
Distributions with Respect to Deposited Securities in Bearer Form.
25
Section 4.7
Redemption.
26
Section 4.8
Conversion of Foreign Currency.
26
Section 4.9
Fixing of ADS Record Date.
27
Section 4.10
Voting of Deposited Securities.
27
Section 4.11
Changes Affecting Deposited Securities.
30
Section 4.12
Available Information.
31
Section 4.13
Reports.
31
Section 4.14
List of Holders.
31
Section 4.15
Taxation.
31

ii
ARTICLE V THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
32
   
Section 5.1
Maintenance of Office and Transfer Books by the Registrar.
32
Section 5.2
Exoneration.
33
Section 5.3
Standard of Care.
34
Section 5.4
Resignation and Removal of the Depositary; Appointment of Successor Depositary.
34
Section 5.5
The Custodian.
35
Section 5.6
Notices and Reports.
36
Section 5.7
Issuance of Additional Shares, ADSs etc.
37
Section 5.8
Indemnification.
37
Section 5.9
ADS Fees and Charges.
38
Section 5.10
Restricted Securities Owners.
39
   
ARTICLE VI AMENDMENT AND TERMINATION
40
   
Section 6.1
Amendment/Supplement.
40
Section 6.2
Termination.
41
   
ARTICLE VII MISCELLANEOUS
42
   
Section 7.1
Counterparts.
42
Section 7.2
No Third-Party Beneficiaries/Acknowledgments.
42
Section 7.3
Severability.
42
Section 7.4
Holders and Beneficial Owners as Parties; Binding Effect.
42
Section 7.5
Notices.
43
Section 7.6
Governing Law and Jurisdiction.
44
Section 7.7
Assignment.
45
Section 7.8
Compliance with, and No Disclaimer under, U.S. Securities Laws.
45
Section 7.9
English Law References.
46
Section 7.10
Titles and References.
46
Section 7.11
Amendment and Restatement.
47
 
EXHIBITS
 

 Form of ADR
A-1

Fee Schedule
B-1

iii
EXECUTION VERSION
 
AMENDED AND RESTATED DEPOSIT AGREEMENT
 
AMENDED AND RESTATED DEPOSIT AGREEMENT, dated as of July 8, 2020, by and among (i) Amryt Pharma plc, a public limited company incorporated under the laws of England and Wales, and its successors (the “Company”), (ii) CITIBANK, N.A., a national banking association organized under the laws of the United States of America, and its successors (“Citibank”) acting in its capacity as depositary under the terms of this Deposit Agreement, and any successor depositary hereunder (Citibank in such capacity, the “Depositary”), and (iii) all Holders and Beneficial Owners of American Depositary Shares issued hereunder (all such capitalized terms as hereinafter defined).
 
W I T N E S S E T H T H A T:
 
WHEREAS, the Company and the Depositary previously entered into that certain Deposit Agreement, dated as of September 24, 2019 (the “Original Deposit Agreement”); and
 
WHEREAS, the Company and the Depositary now desire to amend and restate the terms and conditions of the Original Deposit Agreement; and
 
WHEREAS, the Company desires to amend and restated the Original Deposit Agreement and establish with the Depositary an ADR facility to provide inter alia for the deposit of the Shares (as hereinafter defined) and the creation of American Depositary Shares representing the Shares so deposited and for the execution and Delivery (as hereinafter defined) of American Depositary Receipts (as hereinafter defined) evidencing such American Depositary Shares; and
 
WHEREAS, the Depositary is willing to act as the Depositary for such ADR facility upon the terms set forth in the Deposit Agreement (as hereinafter defined); and
 
WHEREAS, any American Depositary Receipts issued pursuant to the terms of the Deposit Agreement are to be substantially in the form of Exhibit A attached hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in the Deposit Agreement; and
 
WHEREAS, the board of directors of the Company (or an authorized committee thereof) has duly approved the establishment of such ADR facility on the terms set forth in the Deposit Agreement, the execution and delivery of the Deposit Agreement on behalf of the Company, and the actions of the Company and the transactions contemplated herein.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1
ARTICLE I
 
DEFINITIONS
 
All capitalized terms used, but not otherwise defined, herein shall have the meanings set forth below, unless otherwise clearly indicated:

Section 1.1          “ADS Record Date” shall have the meaning given to such term in Section 4.9.

Section 1.2          “Affiliate” shall have the meaning assigned to such term by the Commission (as hereinafter defined) under Regulation C promulgated under the Securities Act (as hereinafter defined), or under any successor regulation thereto.

Section 1.3          “American Depositary Receipt(s)”, “ADR(s)” and “Receipt(s)” shall mean the certificate(s) issued by the Depositary to evidence the American Depositary Shares issued under the terms of the Deposit Agreement in the form of Certificated ADS(s) (as hereinafter defined), as such ADRs may be amended from time to time in accordance with the provisions of the Deposit Agreement.  An ADR may evidence any number of ADSs and may, in the case of ADSs held through a central depository such as DTC, be in the form of a “Balance Certificate.” Notwithstanding anything else contained herein or therein to the contrary, the American depositary receipts issued and outstanding under the terms of the Original Deposit Agreement shall, from and after the date hereof, be treated as ADRs issued hereunder and shall, from and after the date hereof, be subject to the terms hereof in all respects.

Section 1.4          “American Depositary Share(s)” and “ADS(s)” shall mean the rights and interests in the Deposited Property (as hereinafter defined) granted to the Holders and Beneficial Owners pursuant to the terms and conditions of the Deposit Agreement and, if issued as Certificated ADS(s) (as hereinafter defined), the ADR(s) issued to evidence such ADSs. ADS(s) may be issued under the terms of the Deposit Agreement in the form of (a) Certificated ADS(s) (as hereinafter defined), in which case the ADS(s) are evidenced by ADR(s), or (b) Uncertificated ADS(s) (as hereinafter defined), in which case the ADS(s) are not evidenced by ADR(s) but are reflected on the direct registration system maintained by the Depositary for such purposes under the terms of Section 2.13.  Unless otherwise specified in the Deposit Agreement or in any ADR, or unless the context otherwise requires, any reference to ADS(s) shall include Certificated ADS(s) and Uncertificated ADS(s), individually or collectively, as the context may require. Each ADS shall represent the right to receive, and to exercise the beneficial ownership interests in, the number of Shares specified in the form of ADR attached hereto as Exhibit A (as amended from time to time) that are on deposit with the Depositary and/or the Custodian, subject, in each case, to the terms and conditions of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS), until there shall occur a distribution upon Deposited Securities referred to in Section 4.2 or a change in Deposited Securities referred to in Section 4.11 with respect to which additional ADSs are not issued, and thereafter each ADS shall represent the right to receive, and to exercise the beneficial ownership interests in, the applicable Deposited Property on deposit with the Depositary and the Custodian determined in accordance with the terms of such Sections, subject, in each case, to the terms and conditions of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS).  In addition, the ADS(s)-to-Share(s) ratio is subject to amendment as provided in Articles IV and VI of the Deposit Agreement (which may give rise to Depositary fees).  American depositary shares outstanding under the Original Deposit Agreement as of the date hereof shall, from and after the date hereof, for all purposes be treated as American Depositary Shares issued and outstanding hereunder and shall, from and after the date hereof, be subject to the terms and conditions of the Deposit Agreement in all respects, except that any amendment of the Original Deposit Agreement effected under the terms of the Deposit Agreement which prejudices any substantial existing right of “Holders” or “Owners” or “Beneficial Owners” (each as defined in the Original Deposit Agreement) shall not become effective as to “Owners” and “Beneficial Owners” of American depositary shares until the expiration of thirty (30) days after notice of the amendments effected by the Deposit Agreement shall have been given to the “Holders” or “Beneficial Owners” of American depositary shares outstanding under the Original Deposit Agreement as of the date hereof

2
Section 1.5          “Articles of Association” shall mean the Articles of Association of the Company, as amended and restated from time to time.

Section 1.6          “Beneficial Owner” shall mean, as to any ADS, any person or entity having a beneficial interest deriving from the ownership of such ADS. Notwithstanding anything to the contrary contained in the Deposit Agreement, any ADR(s) or any other instruments or agreements relating to the ADSs and the corresponding Deposited Property, the Depositary, the Custodian and their respective nominees are intended to be, and shall at all times during the term of the Deposit Agreement be, the record holders only of the Deposited Property represented by the ADSs for the benefit of the Holders and Beneficial Owners of the corresponding ADSs.  The Depositary, on its own behalf and on behalf of the Custodian and their respective nominees, disclaims any beneficial ownership interest in the Deposited Property held on behalf of the Holders and Beneficial Owners of ADSs. The beneficial ownership interests in the Deposited Property are intended to be, and shall at all times during the term of the Deposit Agreement continue to be, vested in the Beneficial Owners of the ADSs representing the Deposited Property.  The beneficial ownership interests in the Deposited Property shall, unless otherwise agreed by the Depositary, be exercisable by the Beneficial Owners of the ADSs only through the Holders of such ADSs, by the Holders of the ADSs (on behalf of the applicable Beneficial Owners) only through the Depositary, and by the Depositary (on behalf of the Holders and Beneficial Owners of the corresponding ADSs) directly, or indirectly through the Custodian or their respective nominees, in each case upon the terms of the Deposit Agreement and, if applicable, the terms of the ADR(s) evidencing the ADSs.  A Beneficial Owner of ADSs may or may not be the Holder of such ADSs. A Beneficial Owner shall be able to exercise any right or receive any benefit hereunder solely through the person who is the Holder of the ADSs owned by such Beneficial Owner.  Unless otherwise identified to the Depositary, a Holder shall be deemed to be the Beneficial Owner of all the ADSs registered in his/her/its name. The manner in which a Beneficial Owner holds ADSs (e.g., in a brokerage account vs. as registered holder) may affect the rights and obligations of, the manner in which, and the extent to which, services are made available to, Beneficial Owners pursuant to the terms of the Deposit Agreement.  Persons who own beneficial interests in the American depositary shares issued under the terms of the Original Deposit Agreement and outstanding as of the date hereof shall, from and after the date hereof, be treated as Beneficial Owners of ADS(s) under the terms hereof.

3
Section 1.7          “Certificated ADS(s)” shall have the meaning set forth in Section 2.13.

Section 1.8          “Citibank” shall have the meaning set forth in the preamble.

Section 1.9          “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency thereto in the United States.

Section 1.10          “Company” shall have the meaning set forth in the preamble.

Section 1.11          “CREST” shall mean the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by CREST Limited in accordance with the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended from time to time, or any successor thereto.

Section 1.12          “Custodian” shall mean (i) as of the date hereof, Citibank, N.A. (London), having its principal office at Citigroup Centre, Canary Wharf, London, E14 5LB, United Kingdom, as the custodian of Deposited Property for the purposes of the Deposit Agreement, (ii) Citibank, N.A., acting as custodian of Deposited Property pursuant to the Deposit Agreement, and (iii) any other entity that may be appointed by the Depositary pursuant to the terms of Section 5.5 as successor, substitute or additional custodian hereunder.  The term “Custodian” shall mean any Custodian individually or all Custodians collectively, as the context requires.

Section 1.13          “Deliver” and “Delivery” shall mean (x) when used in respect of Shares and other Deposited Securities, either (i) the physical delivery of the certificate(s) representing such securities, or (ii) the book-entry transfer and recordation of such securities on the books of the Share Registrar (as hereinafter defined), in the book-entry settlement of CREST or in any other applicable book-entry settlement system, if available, and (y) when used in respect of ADSs, either (i) the physical delivery of ADR(s) evidencing the ADSs, or (ii) the book-entry transfer and recordation of ADSs on the books of the Depositary or any book-entry settlement system in which the ADSs are settlement-eligible.

Section 1.14          “Deposit Agreement” shall mean this Amended and Restated Deposit Agreement and all exhibits hereto, as the same may from time to time be amended and supplemented from time to time in accordance with the terms of the Deposit Agreement.

Section 1.15          “Depositary” shall have the meaning set forth in the preamble.

Section 1.16          “Deposited Property” shall mean the Deposited Securities and any cash and other property held on deposit by the Depositary and the Custodian in respect of the ADSs under the terms of the Deposit Agreement, subject, in the case of cash, to the provisions of Section 4.8. All Deposited Property shall be held by the Custodian, the Depositary and their respective nominees for the benefit of the Holders and Beneficial Owners of the ADSs representing the Deposited Property. The Deposited Property is not intended to, and shall not, constitute proprietary assets of the Depositary, the Custodian or their nominees. Beneficial ownership in the Deposited Property is intended to be, and shall at all times during the term of the Deposit Agreement continue to be, vested in the Beneficial Owners of the ADSs representing the Deposited Property.

4
Notwithstanding anything else contained herein, the securities, cash and other property delivered to the Custodian and the Depositary in respect of American depositary shares outstanding as of the date hereof under the Original Deposit Agreement and defined as “Deposited Securities” thereunder shall, for all purposes from and after the date hereof, be considered to be, and treated as, Deposited Property hereunder in all respects.

Section 1.17          “Deposited Securities” shall mean the Shares and any other securities held on deposit by the Custodian from time to time in respect of the ADSs under the Deposit Agreement and constituting Deposited Property.

Section 1.18          “Dollars” and “$” shall refer to the lawful currency of the United States.

Section 1.19          “DTC” shall mean The Depository Trust Company, a national clearinghouse and the central book-entry settlement system for securities traded in the United States and, as such, the custodian for the securities of DTC Participants (as hereinafter defined) maintained in DTC, and any successor thereto.

Section 1.20          “DTC Participant” shall mean any financial institution (or any nominee of such institution) having one or more participant accounts with DTC for receiving, holding and delivering the securities and cash held in DTC.  A DTC Participant may or may not be a Beneficial Owner. If a DTC Participant is not the Beneficial Owner of the ADSs credited to its account at DTC, or of the ADSs in respect of which the DTC Participant is otherwise acting, such DTC Participant shall be deemed, for all purposes hereunder, to have all requisite authority to act on behalf of the Beneficial Owner(s) of the ADSs credited to its account at DTC or in respect of which the DTC Participant is so acting.  A DTC Participant, upon acceptance in any one of its DTC accounts of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall (notwithstanding any explicit or implicit disclosure that it may be acting on behalf of another party) be deemed for all purposes to be a party to, and bound by, the terms of the Deposit Agreement and the applicable ADR(s) to the same extent as, and as if the DTC Participant were, the Holder of such ADSs.

Section 1.21          “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended from time to time.

Section 1.22          “Foreign Currency” shall mean any currency other than Dollars.

Section 1.23          “Full Entitlement ADR(s)”, “Full Entitlement ADS(s)” and “Full Entitlement Share(s)” shall have the respective meanings set forth in Section 2.12.

Section 1.24          “Holder(s)” shall mean the person(s) in whose name the ADSs are registered on the books of the Depositary (or the Registrar, if any) maintained for such purpose. A Holder may or may not be a Beneficial Owner.  If a Holder is not the Beneficial Owner of the ADS(s) registered in its name, such person shall be deemed, for all purposes hereunder, to have all requisite authority to act on behalf of the Beneficial Owners of the ADSs registered in its name. The manner in which a Holder holds ADSs (e.g., in certificated vs. uncertificated form) may affect the rights and obligations of, and the manner in which, and the extent to which, the services are made available to, Holders pursuant to the terms of the Deposit Agreement.  The “Holders” or “Beneficial Owners” (as defined in the Original Deposit Agreement) of American depositary shares issued under the terms of the Original Deposit Agreement and outstanding as of the date hereof shall from and after the date hereof, become Holders under the terms of the Deposit Agreement.

5
Section 1.25          “Original Deposit Agreement” shall mean the deposit agreement, dated as of September 24, 2019, by and among the Company, the Depositary, and the Holders and Beneficial Owners (as defined therein) of American depositary shares issued thereunder.

Section 1.26          “Partial Entitlement ADR(s)”, “Partial Entitlement ADS(s)” and “Partial Entitlement Share(s)” shall have the respective meanings set forth in Section 2.12.

Section 1.27          “Principal Office” shall mean, when used with respect to the Depositary, the principal office of the Depositary at which at any particular time its depositary receipts business shall be administered, which, at the date of the Deposit Agreement, is located at 388 Greenwich Street, New York, New York 10013, U.S.A.

Section 1.28          “Registrar” shall mean the Depositary or any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed by the Depositary to register issuances, transfers and cancellations of ADSs as herein provided, and shall include any co-registrar appointed by the Depositary for such purposes.  Registrars (other than the Depositary) may be removed and substitutes appointed by the Depositary in accordance with Section 5.1 hereof Each Registrar (other than the Depositary) appointed pursuant to the Deposit Agreement shall be required to give notice in writing to the Depositary accepting such appointment and agreeing to be bound by the applicable terms of the Deposit Agreement.

Section 1.29          “Restricted Securities” shall mean Shares, Deposited Securities or ADSs which (i) have been acquired directly or indirectly from the Company or any of its Affiliates in a transaction or chain of transactions not involving any public offering and are subject to resale limitations under the Securities Act or the rules issued thereunder, or (ii) are held by an executive officer or director (or persons performing similar functions) or other Affiliate of the Company, or (iii) are subject to other restrictions on sale or deposit under the laws of the United States, England and Wales, or under a shareholder agreement or the Articles of Association or under the regulations of an applicable securities exchange unless, in each case, such Shares, Deposited Securities or ADSs are being transferred or sold to persons other than an Affiliate of the Company in a transaction (a) covered by an effective resale registration statement, or (b) exempt from the registration requirements of the Securities Act (as hereinafter defined), and the Shares, Deposited Securities or ADSs are not, when held by such person(s), Restricted Securities.

Section 1.30          “Restricted ADR(s)”, “Restricted ADS(s)” and “Restricted Shares” shall have the respective meanings set forth in Section 2.14.

Section 1.31          “Securities Act” shall mean the United States Securities Act of 1933, as amended from time to time.

Section 1.32          “Share Registrar” shall mean Link Asset Services, a company registered in England and Wales, or any other institution organized under the laws of England and Wales appointed by the Company from time to time to carry out the duties of registrar for the Shares, and any successor thereto as the Company appoints from time to time.

6
Section 1.33          “Shares” shall mean the Company’s ordinary shares, having a par value of £0.06 per share, validly issued and outstanding and fully paid and may, if the Depositary so agrees after consultation with the Company, include evidence of the right to receive Shares; provided that in no event shall Shares include evidence of the right to receive Shares with respect to which the full purchase price has not been paid or Shares as to which preemptive rights have theretofore not been validly waived or exercised; provided further, however, that, if there shall occur any change in par value, split-up, consolidation, reclassification, exchange, conversion or any other event described in Section 4.11 in respect of the Shares of the Company, the term “Shares” shall thereafter, to the maximum extent permitted by law, represent the successor securities resulting from such event.

Section 1.34          “Uncertificated ADS(s)” shall have the meaning set forth in Section 2.13.

Section 1.35          “United States” and “U.S.” shall have the meaning assigned to it in Regulation S as promulgated by the Commission under the Securities Act.
 
ARTICLE II
 
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS;
DEPOSIT OF SHARES; EXECUTION AND DELIVERY,
TRANSFER AND SURRENDER OF RECEIPTS

Section 2.1          Appointment of Depositary.  The Company hereby appoints the Depositary as depositary for the Deposited Property and hereby authorizes and directs the Depositary to act in accordance with the terms and conditions set forth in the Deposit Agreement and the applicable ADRs.  Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement or by continuing to hold, from and after the date hereof any American depositary shares issued and outstanding under the Original Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

7
Section 2.2          Form and Transferability of ADSs.
 
(a)          Form.  Certificated ADSs shall be evidenced by definitive ADRs which shall be engraved, printed, lithographed or produced in such other manner as may be agreed upon by the Company and the Depositary.  ADRs may be issued under the Deposit Agreement in denominations of any whole number of ADSs.  The ADRs shall be substantially in the form set forth in Exhibit A to the Deposit Agreement, with any appropriate insertions, modifications and omissions, in each case as otherwise contemplated in the Deposit Agreement or required by law.  ADRs shall be (i) dated, (ii) signed by the manual or facsimile signature of a duly authorized signatory of the Depositary, (iii) countersigned by the manual or facsimile signature of a duly authorized signatory of the Registrar, and (iv) registered in the books maintained by the Registrar for the registration of issuances and transfers of ADSs. No ADR and no Certificated ADS evidenced thereby shall be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company, unless such ADR shall have been so dated, signed, countersigned and registered (other than an American depositary receipt issued and outstanding as of the date hereof under the terms of the Original Deposit Agreement which from and after the date hereof becomes subject to the terms of the Deposit Agreement in all respects). ADRs bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly-authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be so authorized prior to the Delivery of such ADR by the Depositary.  The ADRs shall bear a CUSIP number that is different from any CUSIP number that was, is or may be assigned to any depositary receipts previously or subsequently issued pursuant to any other arrangement between the Depositary (or any other depositary) and the Company and which are not ADRs outstanding hereunder.
 
(b)          Legends.  The ADRs may be endorsed with, or have incorporated in the text thereof, such legends or recitals not inconsistent with the provisions of the Deposit Agreement as may be (i) necessary to enable the Depositary and the Company to perform their respective obligations hereunder, (ii) required to comply with any applicable laws or regulations, or with the rules and regulations of any securities exchange or market upon which ADSs may be traded, listed or quoted, or to conform with any usage with respect thereto, (iii) necessary to indicate any special limitations or restrictions to which any particular ADRs or ADSs are subject by reason of the date of issuance of the Deposited Securities or otherwise, or (iv) required by any book-entry system in which the ADSs are held.  Holders and Beneficial Owners shall be deemed, for all purposes, to have notice of, and to be bound by, the terms and conditions of the legends set forth, in the case of Holders, on the ADR registered in the name of the applicable Holders or, in the case of Beneficial Owners, on the ADR representing the ADSs owned by such Beneficial Owners.
 
(c)          Title.  Subject to the limitations contained herein and in the ADR, title to an ADR (and to each Certificated ADS evidenced thereby) shall be transferable upon the same terms as a certificated security under the laws of the State of New York, provided that, in the case of Certificated ADSs, such ADR has been properly endorsed or is accompanied by proper instruments of transfer.  Notwithstanding any notice to the contrary, the Depositary and the Company may deem and treat the Holder of an ADS (that is, the person in whose name an ADS is registered on the books of the Depositary) as the absolute owner thereof for all purposes.  Neither the Depositary nor the Company shall have any obligation nor be subject to any liability under the Deposit Agreement or any ADR to any holder or any Beneficial Owner unless, in the case of a holder of ADSs, such holder is the Holder registered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner, or the Beneficial Owner’s representative, is the Holder registered on the books of the Depositary.
 
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(d)          Book-Entry Systems.  The Depositary shall make arrangements for the acceptance of the ADSs into DTC.  All ADSs held through DTC will be registered in the name of the nominee for DTC (currently “Cede & Co.”).  As such, the nominee for DTC will be the only “Holder” of all ADSs held through DTC. Unless issued by the Depositary as Uncertificated ADSs, the ADSs registered in the name of Cede & Co. will be evidenced by one or more ADR(s) in the form of a “Balance Certificate,” which will provide that it represents the aggregate number of ADSs from time to time indicated in the records of the Depositary as being issued hereunder and that the aggregate number of ADSs represented thereby may from time to time be increased or decreased by making adjustments on such records of the Depositary and of DTC or its nominee as hereinafter provided. Citibank, N.A. (or such other entity as is appointed by DTC or its nominee) may hold the “Balance Certificate” as custodian for DTC. Each Beneficial Owner of ADSs held through DTC must rely upon the procedures of DTC and the DTC Participants to exercise or be entitled to any rights attributable to such ADSs.  The DTC Participants shall for all purposes be deemed to have all requisite power and authority to act on behalf of the Beneficial Owners of the ADSs held in the DTC Participants’ respective accounts in DTC and the Depositary shall for all purposes be authorized to rely upon any instructions and information given to it by DTC Participants. So long as ADSs are held through DTC or unless otherwise required by law, ownership of beneficial interests in the ADSs registered in the name of the nominee for DTC will be shown on, and transfers of such ownership will be effected only through, records maintained by (i) DTC or its nominee (with respect to the interests of DTC Participants), or (ii) DTC Participants or their nominees (with respect to the interests of clients of DTC Participants).  Any distributions made, and any notices given, by the Depositary to DTC under the terms of the Deposit Agreement shall (unless otherwise specified by the Depositary) satisfy the Depositary’s obligations under the Deposit Agreement to make such distributions, and give such notices, in respect of the ADSs held in DTC (including, for avoidance of doubt, to the DTC Participants holding the ADSs in their DTC accounts and to the Beneficial Owners of such ADSs).

Section 2.3          Deposit of Shares.  Subject to the terms and conditions of the Deposit Agreement and applicable law, Shares or evidence of rights to receive Shares (other than Restricted Securities) may be deposited by any person (including the Depositary in its individual capacity but subject, however, in the case of the Company or any Affiliate of the Company, to Section 5.7) at any time, whether or not the transfer books of the Company or the Share Registrar, if any, are closed, by Delivery of the Shares to the Custodian. Every deposit of Shares shall be accompanied by the following: (A) (i) in the case of Shares represented by certificates issued in registered form, appropriate instruments of transfer or endorsement, in a form satisfactory to the Custodian, (ii) in the case of Shares represented by certificates in bearer form, the requisite coupons and talons pertaining thereto, and (iii) in the case of Shares delivered by book-entry transfer and recordation, confirmation of such book-entry transfer and recordation in the books of the Share Registrar or of CREST or any other book-entry settlement system, as applicable, to the Custodian or that irrevocable instructions have been given to cause such Shares to be so transferred and recorded, (B) such certifications and payments (including, without limitation, the Depositary’s fees and related charges) and evidence of such payments (including, without limitation, stamping or otherwise marking such Shares by way of receipt) as may be required by the Depositary or the Custodian in accordance with the provisions of the Deposit Agreement and applicable law, (C) if the Depositary so requires, a written order directing the Depositary to issue and deliver to, or upon the written order of, the person(s) stated in such order the number of ADSs representing the Shares so deposited, (D) evidence reasonably satisfactory to the Depositary (which may be an opinion of counsel; provided that, if the Company is not the depositor, it shall not be obligated to pay the costs of obtaining any such opinion) that all necessary approvals have been granted by, or there has been compliance with the rules and regulations of, any applicable governmental agency of England and Wales, and (E) if the Depositary so requires, (i) an agreement, assignment or instrument satisfactory to the Depositary or the Custodian which provides for the prompt transfer by any person in whose name the Shares are or have been recorded to the Custodian of any distribution, or right to subscribe for additional Shares or to receive other property in respect of any such deposited Shares or, in lieu thereof, such indemnity or other agreement as shall be satisfactory to the Depositary or the Custodian and (ii) if the Shares are registered in the name of the person on whose behalf they are presented for deposit, a proxy or proxies entitling the Custodian to exercise voting rights in respect of the Shares for any and all purposes until the Shares so deposited are registered in the name of the Depositary, the Custodian or any nominee.

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Without limiting any other provision of the Deposit Agreement, the Depositary shall instruct the Custodian not to, and the Depositary shall not knowingly, accept for deposit (a) any Restricted Securities (except as contemplated by Section 2.14) nor (b) any fractional Shares or fractional Deposited Securities nor (c) a number of Shares or Deposited Securities which upon application of the ADS to Shares ratio would give rise to fractional ADSs. No Shares shall be accepted for deposit unless accompanied by evidence, if any is required by the Depositary, that is reasonably satisfactory to the Depositary or the Custodian that all conditions to such deposit have been satisfied by the person depositing such Shares under the laws and regulations of England and Wales and any necessary approval has been granted by any applicable governmental body in England and Wales, if any.  The Depositary may issue ADSs against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares. Such evidence of rights shall consist of written blanket or specific guarantees of ownership of Shares furnished by the Company or any such custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares.
 
Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under the Deposit Agreement (A) any Shares or other securities required to be registered under the provisions of the Securities Act, unless (i) a registration statement is in effect as to such Shares or other securities or (ii) the deposit is made upon terms contemplated in Section 2.14, or (B) any Shares or other securities the deposit of which would violate any provisions of the Articles of Association or any applicable laws. For purposes of the foregoing sentence, the Depositary shall be entitled to rely upon representations and warranties made or deemed made pursuant to the Deposit Agreement and shall not be required to make any further investigation. The Depositary will comply with written instructions of the Company (received by the Depositary reasonably in advance) not to accept for deposit hereunder any Shares identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company’s compliance with the securities laws of the United States.

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Section 2.4          Registration and Safekeeping of Deposited Securities.  The Depositary shall instruct the Custodian upon each Delivery of registered Shares being deposited hereunder with the Custodian (or other Deposited Securities pursuant to Article IV hereof), together with the other documents above specified, to present such Shares, together with the appropriate instrument(s) of transfer or endorsement, duly stamped (if applicable), to the Share Registrar for transfer and registration of the Shares or, to the extent applicable, other Deposited Securities (as soon as transfer and registration can be accomplished and at the expense of the person for whom the deposit is made) in the name of the Depositary, the Custodian or a nominee of either. Deposited Securities shall be held by the Depositary, or by a Custodian for the account and to the order of the Depositary or a nominee of the Depositary, in each case, on behalf of the Holders and Beneficial Owners, at such place(s) as the Depositary or the Custodian shall determine. Notwithstanding anything to the contrary contained in the Deposit Agreement, any ADR(s), or any other instruments or agreements relating to the ADSs and the corresponding Deposited Property, the registration of the Deposited Securities in the name of the Depositary, the Custodian or any of their respective nominees, shall, to the maximum extent permitted by applicable law, vest in the Depositary, the Custodian or the applicable nominee the record ownership in the applicable Deposited Securities with the beneficial ownership rights and interests in such Deposited Securities being at all times vested with the Beneficial Owners of the ADSs representing the Deposited Securities.  Notwithstanding the foregoing, the Depositary, the Custodian and the applicable nominee shall at all times be entitled to exercise the beneficial ownership rights in all Deposited Property, in each case only on behalf of the Holders and Beneficial Owners of the ADSs representing the Deposited Property, upon the terms set forth in the Deposit Agreement and, if applicable, the ADR(s) representing the ADSs.  The Depositary, the Custodian and their respective nominees shall for all purposes be deemed to have all requisite power and authority to act in respect of Deposited Property on behalf of the Holders and Beneficial Owners of ADSs representing the Deposited Property, and upon making payments to, or acting upon instructions from, or information provided by, the Depositary, the Custodian or their respective nominees all persons shall be authorized to rely upon such power and authority.

Section 2.5          Issuance of ADSs.  The Depositary has made arrangements with the Custodian for the Custodian to confirm to the Depositary upon receipt of a deposit of Shares (i) that a deposit of Shares has been made pursuant to Section 2.3, (ii) that such Deposited Securities have been recorded in the name of the Depositary, the Custodian or a nominee of either on the shareholders’ register maintained by or on behalf of the Company by the Share Registrar, on the books of CREST or any other applicable book-entry settlement entity, if available, (iii) that all required documents have been received, and (iv) the person(s) to whom or upon whose order ADSs are deliverable in respect thereof and the number of ADSs to be so delivered.  Such notification may be made by letter, cable, telex, SWIFT message or, at the risk and expense of the person making the deposit, by facsimile or other means of electronic transmission. Upon receiving such notice from the Custodian, the Depositary, subject to the terms and conditions of the Deposit Agreement and applicable law, shall issue the ADSs representing the Shares so deposited to or upon the order of the person(s) named in the notice delivered to the Depositary and, if applicable, shall execute and deliver at its Principal Office Receipt(s) registered in the name(s) requested by such person(s) and evidencing the aggregate number of ADSs to which such person(s) are entitled, but, in each case, only upon payment to the Depositary of the charges of the Depositary for accepting a deposit of Shares and issuing ADSs (as set forth in Section 5.9 and Exhibit B hereto) and all taxes and governmental charges and fees payable in connection with such deposit and the transfer of the Shares and the issuance of the ADS(s).  The Depositary shall only issue ADSs in whole numbers and deliver, if applicable, ADR(s) evidencing whole numbers of ADSs.

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Section 2.6          Transfer, Combination and Split-up of ADRs.
 
(a)          Transfer.  The Registrar shall register the transfer of ADRs (and of the ADSs represented thereby) on the books maintained for such purpose and the Depositary shall (x) cancel such ADRs and execute new ADRs evidencing the same aggregate number of ADSs as those evidenced by the ADRs canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs and (z) Deliver such new ADRs to or upon the order of the person entitled thereto, if each of the following conditions has been satisfied: (i) the ADRs have been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a transfer thereof, (ii) the surrendered ADRs have been properly endorsed or are accompanied by proper instruments of transfer (including signature guarantees in accordance with standard securities industry practice), (iii) the surrendered ADRs have been duly stamped (if required by the laws of the State of New York or of the United States), and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject, however, in each case, to the terms and conditions of the applicable ADRs, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.
 
(b)          Combination & Split-Up.  The Registrar shall register the split-up or combination of ADRs (and of the ADSs represented thereby) on the books maintained for such purpose and the Depositary shall (x) cancel such ADRs and execute new ADRs for the number of ADSs requested, but in the aggregate not exceeding the number of ADSs evidenced by the ADRs canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs and (z) Deliver such new ADRs to or upon the order of the Holder thereof, if each of the following conditions has been satisfied: (i) the ADRs have been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a split-up or combination thereof, and (ii) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject, however, in each case, to the terms and conditions of the applicable ADRs, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.

Section 2.7          Surrender of ADSs and Withdrawal of Deposited Securities.  The Holder of ADSs shall be entitled to Delivery (at the Custodian’s designated office) of the Deposited Securities at the time represented by the ADSs upon satisfaction of each of the following conditions: (i) the Holder (or a duly-authorized attorney of the Holder) has duly Delivered ADSs to the Depositary at its Principal Office (and if applicable, the ADRs evidencing such ADSs) for the purpose of withdrawal of the Deposited Securities represented thereby, (ii) if applicable and so required by the Depositary, the ADRs Delivered to the Depositary for such purpose have been properly endorsed in blank or are accompanied by proper instruments of transfer in blank (including signature guarantees in accordance with standard securities industry practice), (iii) if so required by the Depositary, the Holder of the ADSs has executed and delivered to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of the person(s) designated in such order, and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B) have been paid, subject, however, in each case, to the terms and conditions of the ADRs evidencing the surrendered ADSs, of the Deposit Agreement, of the Company’s Articles of Association and of any applicable laws and the rules of CREST or any other applicable book-entry settlement system, if available, and to any provisions of or governing the Deposited Securities , in each case as in effect at the time thereof.

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Upon satisfaction of each of the conditions specified above, the Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the ADR(s) evidencing the ADSs so Delivered), (ii) shall direct the Registrar to record the cancellation of the ADSs so Delivered on the books maintained for such purpose, and (iii) shall direct the Custodian to Deliver, or cause the Delivery of, in each case, without unreasonable delay, the Deposited Securities represented by the ADSs so canceled together with any certificate or other document of title for the Deposited Securities, or evidence of the electronic transfer thereof (if available), as the case may be, to or upon the written order of the person(s) designated in the order delivered to the Depositary for such purpose, subject however, in each case, to the terms and conditions of the Deposit Agreement, of the ADRs evidencing the ADSs so canceled, of the Articles of Association, of any applicable laws and of the rules of CREST or any other applicable book-entry settlement system, if available, and to the terms and conditions of or governing the Deposited Securities, in each case as in effect at the time thereof
 
The Depositary shall not accept for surrender ADSs representing less than one (1) Share. In the case of Delivery to it of ADSs representing a number other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) return to the person surrendering such ADSs the number of ADSs representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Share represented by the ADSs so surrendered and remit the proceeds of such sale (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes withheld) to the person surrendering the ADSs.
 
Notwithstanding anything to the contrary contained in any ADR or the Deposit Agreement, the Depositary may make delivery at the Principal Office of the Depositary of Deposited Property consisting of (i) any cash dividends or cash distributions, or (ii) any proceeds from the sale of any non-cash distributions, which are at the time held by the Depositary in respect of the Deposited Securities represented by the ADSs surrendered for cancellation and withdrawal.  At the request, risk and expense of any Holder so surrendering ADSs, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any Deposited Property (other than Deposited Securities) held by the Custodian in respect of such ADSs to the Depositary for delivery at the Principal Office of the Depositary.  Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission.

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Section 2.8          Limitations on Execution and Delivery, Transfer, etc. of ADSs;  Suspension of Delivery, Transfer, etc.
 
(a)          Additional Requirements.  As a condition precedent to the execution and Delivery, the registration of issuance, transfer, split-up, combination or surrender, of any ADS, the delivery of any distribution thereon, or the withdrawal of any Deposited Property, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of ADSs or of an ADR of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in Section 5.9 and Exhibit B, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter contemplated by Section 3.1, and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of ADRs or ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations as the Depositary and the Company may establish consistent with the provisions of the representative ADR, if applicable, the Deposit Agreement and applicable law.
 
(b)          Additional Limitations.  The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the deposit of particular Shares may be refused, or the registration of transfer of ADSs in particular instances may be refused, or the registration of transfers of ADSs generally may be suspended, during any period when the transfer books of the Company, the Depositary, a Registrar or the Share Registrar are closed or if any such action is deemed necessary or advisable by the Depositary (whereupon the Depositary shall notify the Company) or the Company, in good faith, at any time or from time to time because of any requirement of law or regulation, any government or governmental body or commission or any securities exchange on which the ADSs or Shares are listed, or under any provision of the Deposit Agreement or the representative ADR(s), if applicable, or under any provision of, or governing, the Deposited Securities, or because of a meeting of shareholders of the Company or for any other reason, subject, in all cases, to Section 7.8.
 
(c)          Regulatory Restrictions.  Notwithstanding any provision of the Deposit Agreement or any ADR(s) to the contrary, Holders are entitled to surrender outstanding ADSs to withdraw the Deposited Securities associated herewith at any time subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Shares in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to the withdrawal of the Deposited Securities, and (iv) other circumstances specifically contemplated by Instruction I.A.(1) of the General Instructions to Form F-6 (as such General Instructions may be amended from time to time) under the Securities Act.
 
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Section 2.9          Lost ADRs, etc.  In case any ADR shall be mutilated, destroyed, lost, or stolen, the Depositary shall execute and deliver a new ADR of like tenor at the expense of the Holder (a) in the case of a mutilated ADR, in exchange of and substitution for such mutilated ADR upon cancellation thereof, or (b) in the case of a destroyed, lost or stolen ADR, in lieu of and in substitution for such destroyed, lost, or stolen ADR, after the Holder thereof (i) has submitted to the Depositary a written request for such exchange and substitution before the Depositary has notice that the ADR has been acquired by a bona fide purchaser, (ii) has provided such security or indemnity (including an indemnity bond) as may be required by the Depositary to save it and any of its agents harmless, and (iii) has satisfied any other reasonable requirements imposed by the Depositary, including, without limitation, evidence satisfactory to the Depositary of such destruction, loss or theft of such ADR, the authenticity thereof and the Holder’s ownership thereof.

Section 2.10          Cancellation and Destruction of Surrendered ADRs; Maintenance of Records.  All ADRs surrendered to the Depositary shall be canceled by the Depositary. Canceled ADRs shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable against the Depositary or the Company for any purpose.  The Depositary is authorized to destroy ADRs so canceled, provided the Depositary maintains a record of all destroyed ADRs. Any ADSs held in book-entry form (e.g., through accounts at DTC) shall be deemed canceled when the Depositary causes the number of ADSs evidenced by the Balance Certificate to be reduced by the number of ADSs surrendered (without the need to physically destroy the Balance Certificate).  The Depositary agrees to maintain records of all ADRs surrendered and the Shares withdrawn, substitute ADRs, delivered and cancelled or destroyed ADRs as required by the regulations governing the stock transfer industry. Upon the request of the Company, the Depositary shall provide a copy of such records to the Company.

Section 2.11          Escheatment.  In the event any unclaimed property relating to the ADSs, for any reason, is in the possession of Depositary and has not been claimed by the Holder thereof or cannot be delivered to the Holder thereof through usual channels, the Depositary shall, upon expiration of any applicable statutory period relating to abandoned property laws, escheat such unclaimed property to the relevant authorities in accordance with the laws of each of the relevant States of the United States.

Section 2.12          Partial Entitlement ADSs.  In the event any Shares are deposited which (i) entitle the holders thereof to receive a per-share distribution or other entitlement in an amount different from the Shares then on deposit or (ii) are not fully fungible (including, without limitation, as to settlement or trading) with the Shares then on deposit (the Shares then on deposit collectively, “Full Entitlement Shares” and the Shares with different entitlement, “Partial Entitlement Shares”), the Depositary shall (i) cause the Custodian to hold Partial Entitlement Shares separate and distinct from Full Entitlement Shares, and (ii) subject to the terms of the Deposit Agreement, issue ADSs representing Partial Entitlement Shares which are separate and distinct from the ADSs representing Full Entitlement Shares, by means of separate CUSIP numbering and legending (if necessary) and, if applicable, by issuing ADRs evidencing such ADSs with applicable notations thereon (“Partial Entitlement ADSs/ADRs” and “Full Entitlement ADSs/ADRs”, respectively).  If and when Partial Entitlement Shares become Full Entitlement Shares, the Depositary shall (a) give notice thereof to Holders of Partial Entitlement ADSs and give Holders of Partial Entitlement ADRs the opportunity to exchange such Partial Entitlement ADRs for Full Entitlement ADRs, (b) cause the Custodian to transfer the Partial Entitlement Shares into the account of the Full Entitlement Shares, and (c) take such actions as are necessary to remove the distinctions between (i) the Partial Entitlement ADRs and ADSs, on the one hand, and (ii) the Full Entitlement ADRs and ADSs on the other. Holders and Beneficial Owners of Partial Entitlement ADSs shall only be entitled to the entitlements of Partial Entitlement Shares.  Holders and Beneficial Owners of Full Entitlement ADSs shall be entitled only to the entitlements of Full Entitlement Shares.  All provisions and conditions of the Deposit Agreement shall apply to Partial Entitlement ADRs and ADSs to the same extent as Full Entitlement ADRs and ADSs, except as contemplated by this Section 2.12.  The Depositary is authorized to take any and all other actions as may be necessary (including, without limitation, making the necessary notations on ADRs) to give effect to the terms of this Section 2.12.  The Company agrees to give timely written notice to the Depositary if any Shares issued or to be issued are Partial Entitlement Shares and shall provide reasonable assistance to the Depositary with the establishment of procedures enabling the identification of Partial Entitlement Shares upon Delivery to the Custodian.

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Section 2.13          Certificated/Uncertificated ADSs.  Notwithstanding any other provision of the Deposit Agreement, the Depositary may, at any time and from time to time, issue ADSs that are not evidenced by ADRs (such ADSs, the “Uncertificated ADS(s)” and the ADS(s) evidenced by ADR(s), the “Certificated ADS(s)”).  When issuing and maintaining Uncertificated ADS(s) under the Deposit Agreement, the Depositary shall at all times be subject to (i) the standards applicable to registrars and transfer agents maintaining direct registration systems for equity securities in New York and issuing uncertificated securities under New York law, and (ii) the terms of New York law applicable to uncertificated equity securities.  Uncertificated ADSs shall not be represented by any instruments but shall be evidenced by registration in the books of the Depositary maintained for such purpose.  Holders of Uncertificated ADSs, that are not subject to any registered pledges, liens, restrictions or adverse claims of which the Depositary has notice at such time, shall at all times have the right to exchange the Uncertificated ADS(s) for Certificated ADS(s) of the same type and class, subject in each case to (x) applicable laws and any rules and regulations the Depositary may have established in respect of the Uncertificated ADSs, and (y) the continued availability of Certificated ADSs in the U.S. Holders of Certificated ADSs shall, if the Depositary maintains a direct registration system for the ADSs, have the right to exchange the Certificated ADSs for Uncertificated ADSs upon (i) the due surrender of the Certificated ADS(s) to the Depositary for such purpose and (ii) the presentation of a written request to that effect to the Depositary, subject in each case to (a) all liens and restrictions noted on the ADR evidencing the Certificated ADS(s) and all adverse claims of which the Depositary then has notice, (b) the terms of the Deposit Agreement and the rules and regulations that the Depositary may establish for such purposes hereunder, (c) applicable law, and (d) payment of the Depositary fees and expenses applicable to such exchange of Certificated ADS(s) for Uncertificated ADS(s). Uncertificated ADSs shall in all material respects be identical to Certificated ADS(s) of the same type and class, except that (i) no ADR(s) shall be, or shall need to be, issued to evidence Uncertificated ADS(s), (ii) Uncertificated ADS(s) shall, subject to the terms of the Deposit Agreement, be transferable upon the same terms and conditions as uncertificated securities under New York law, (iii) the ownership of Uncertificated ADS(s) shall be recorded on the books of the Depositary maintained for such purpose and evidence of such ownership shall be reflected in periodic statements provided by the Depositary to the Holder(s) in accordance with applicable New York law, (iv) the Depositary may from time to time, upon notice to the Holders of Uncertificated ADSs affected thereby, establish rules and regulations, and amend or supplement existing rules and regulations, as may be deemed reasonably necessary to maintain Uncertificated ADS(s) on behalf of Holders, provided that (a) such rules and regulations do not conflict with the terms of the Deposit Agreement and applicable law, and (b) the terms of such rules and regulations are readily available to Holders upon request, (v) the Uncertificated ADS(s) shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company unless such Uncertificated ADS(s) is/are registered on the books of the Depositary maintained for such purpose, (vi) the Depositary may, in connection with any deposit of Shares resulting in the issuance of Uncertificated ADSs and with any transfer, pledge, release and cancellation of Uncertificated ADSs, require the prior receipt of such documentation as the Depositary may deem reasonably appropriate, and (vii) upon termination of the Deposit Agreement, the Depositary shall not require Holders of Uncertificated ADSs to affirmatively instruct the Depositary before remitting proceeds from the sale of the Deposited Property represented by such Holders’ Uncertificated ADSs under the terms of Section 6.2 hereof. When issuing ADSs under the terms of the Deposit Agreement, including, without limitation, issuances pursuant to Sections 2.5, 4.2, 4.3, 4.4, 4.5 and 4.11 hereof, the Depositary may in its discretion determine to issue Uncertificated ADSs rather than Certificated ADSs, unless otherwise specifically instructed by the applicable Holder to issue Certificated ADSs.  All provisions and conditions of the Deposit Agreement shall apply to Uncertificated ADSs to the same extent as to Certificated ADSs, except as contemplated by this Section 2.13.  The Depositary is authorized and directed to take any and all actions and establish any and all procedures deemed reasonably necessary to give effect to the terms of this Section 2.13.  Any references in the Deposit Agreement or any ADR(s) to the terms “American Depositary Share(s)” or “ADS(s)” shall, unless the context otherwise requires, include Certificated ADS(s) and Uncertificated ADS(s).  Except as set forth in this Section 2.13 and except as required by applicable law, the Uncertificated ADSs shall be treated as ADSs issued and outstanding under the terms of the Deposit Agreement.  In the event that, in determining the rights and obligations of parties hereto with respect to any Uncertificated ADSs, any conflict arises between (a) the terms of the Deposit Agreement (other than this Section 2.13) and (b) the terms of this Section 2.13, the terms and conditions set forth in this Section 2.13 shall be controlling and shall govern the rights and obligations of the parties to the Deposit Agreement pertaining to the Uncertificated ADSs.

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Section 2.14          Restricted ADSs.  The Depositary shall, at the request and expense of the Company, establish procedures enabling the deposit hereunder of Shares that are Restricted Securities in order to enable the holder of such Shares to hold its ownership interests in such Restricted Securities in the form of ADSs issued under the terms hereof (such Shares, “Restricted Shares”). Upon receipt of a written request from the Company to accept Restricted Shares for deposit hereunder, the Depositary agrees to establish procedures permitting the deposit of such Restricted Shares and the issuance of ADSs representing the right to receive, subject to the terms of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS), such deposited Restricted Shares (such ADSs, the “Restricted ADSs,” and the ADRs evidencing such Restricted ADSs, the “Restricted ADRs”). Notwithstanding anything contained in this Section 2.14, the Depositary and the Company may, to the extent not prohibited by law, agree to issue the Restricted ADSs in uncertificated form (“Uncertificated Restricted ADSs”) upon such terms and conditions as the Company and the Depositary may deem necessary and appropriate.  The Company shall assist the Depositary in the establishment of such procedures and agrees that it shall take all steps necessary and satisfactory to the Depositary to ensure that the establishment of such procedures does not violate the provisions of the Securities Act or any other applicable laws.  The depositors of such Restricted Shares and the Holders of the Restricted ADSs may be required prior to the deposit of such Restricted Shares, the transfer of the Restricted ADRs and the Restricted ADSs evidenced thereby, or the withdrawal of the Restricted Shares represented by Restricted ADSs to provide such written certifications or agreements as the Depositary or the Company may require.  The Company shall provide to the Depositary in writing the legend(s) to be affixed to the Restricted ADRs (if the Restricted ADSs are to be issued as Certificated ADSs), or to be included in the statements issued from time to time to Holders of Uncertificated ADSs (if issued as Uncertificated Restricted ADSs), which legends shall (i) be in a form reasonably satisfactory to the Depositary and (ii) contain the specific circumstances under which the Restricted ADSs, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, may be transferred or the Restricted Shares withdrawn.  The Restricted ADSs issued upon the deposit of Restricted Shares shall be separately identified on the books of the Depositary and the Restricted Shares so deposited shall, to the extent required by law, be held separate and distinct from the other Deposited Securities held hereunder.  The Restricted ADSs shall not be eligible for inclusion in any book-entry settlement system, including, without limitation, DTC, and shall not in any way be fungible with the ADSs issued under the terms hereof that are not Restricted ADSs.  The Restricted ADSs, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, shall be transferable only by the Holder thereof upon delivery to the Depositary of (i) all documentation otherwise contemplated by the Deposit Agreement and (ii) an opinion of counsel reasonably satisfactory to the Depositary setting forth, inter alia, the conditions upon which the Restricted ADSs presented, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, are transferable by the Holder thereof under applicable securities laws and the transfer restrictions contained in the legend applicable to the Restricted ADSs presented for transfer.  Except as set forth in this Section 2.14 and except as required by applicable law, the Restricted ADSs and the Restricted ADRs evidencing Restricted ADSs shall be treated as ADSs and ADRs issued and outstanding under the terms of the Deposit Agreement.  In the event that, in determining the rights and obligations of parties hereto with respect to any Restricted ADSs, any conflict arises between (a) the terms of the Deposit Agreement (other than this Section 2.14) and (b) the terms of (i) this Section 2.14 or (ii) the applicable Restricted ADR, the terms and conditions set forth in this Section 2.14 and of the Restricted ADR shall be controlling and shall govern the rights and obligations of the parties to the Deposit Agreement pertaining to the deposited Restricted Shares, the Restricted ADSs and Restricted ADRs.

If the Restricted ADRs, the Restricted ADSs and the Restricted Shares cease to be Restricted Securities, the Depositary, upon receipt of (x) an opinion of counsel reasonably satisfactory to the Depositary setting forth, inter alia, that the Restricted ADRs, the Restricted ADSs and the Restricted Shares are not as of such time Restricted Securities, and (y) instructions from the Company to remove the restrictions applicable to the Restricted ADRs, the Restricted ADSs and the Restricted Shares, shall (i) eliminate the distinctions and separations that may have been established between the applicable Restricted Shares held on deposit under this Section 2.14 and the other Shares held on deposit under the terms of the Deposit Agreement that are not Restricted Shares, (ii) treat the newly unrestricted ADRs and ADSs on the same terms as, and fully fungible with, the other ADRs and ADSs issued and outstanding under the terms of the Deposit Agreement that are not Restricted ADRs or Restricted ADSs, and (iii) take all actions necessary to remove any distinctions, limitations and restrictions previously existing under this Section 2.14 between the applicable Restricted ADRs and Restricted ADSs, respectively, on the one hand, and the other ADRs and ADSs that are not Restricted ADRs or Restricted ADSs, respectively, on the other hand, including, without limitation, by making the newly-unrestricted ADSs eligible for inclusion in the applicable book-entry settlement systems.

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ARTICLE III
 
CERTAIN OBLIGATIONS OF HOLDERS AND
BENEFICIAL OWNERS OF ADSs

Section 3.1          Proofs, Certificates and Other Information.  Any person presenting Shares for deposit, any Holder and any Beneficial Owner may be required, and every Holder and Beneficial Owner agrees, from time to time to provide to the Company, the Depositary and the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Property, compliance with applicable laws, the terms of the Deposit Agreement or the ADR(s) evidencing the ADSs and the provisions of, or governing, the Deposited Property, to execute such certifications and to make such representations and warranties, and to provide such other information and documentation (or, in the case of Shares in registered form presented for deposit, such information relating to the registration on the books of the Company or of the Share Registrar) as the Depositary or the Custodian may deem necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement and the applicable ADR(s).  The Depositary and the Registrar, as applicable, and at the reasonable request of the Company, shall, to the extent practicable, may withhold the execution or delivery or registration of transfer of any ADR or ADS or the distribution or sale of any dividend or distribution of rights or of the proceeds thereof or, to the extent not limited by the terms of Section 7.8, the delivery of any Deposited Property until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information is provided, in each case to the Depositary’s, the Registrar’s and the Company’s satisfaction.  The Depositary shall provide the Company, in a timely manner, with copies or originals if necessary and appropriate of (i) any such proofs of citizenship or residence, taxpayer status, or exchange control approval or copies of written representations and warranties which it receives from Holders and Beneficial Owners, and (ii) any other information or documents which the Company may reasonably request and which the Depositary shall request and receive from any Holder or Beneficial Owner or any person presenting Shares for deposit or ADSs for cancellation, transfer or withdrawal.  Nothing herein shall obligate the Depositary to (i) obtain any information for the Company if not provided by the Holders or Beneficial Owners, or (ii) verify or vouch for the accuracy of the information so provided by the Holders or Beneficial Owners.

Section 3.2          Liability for Taxes and Other Charges.  Any tax or other governmental charge payable by the Custodian or by the Depositary with respect to any Deposited Property, ADSs or ADRs shall be payable by the Holders and Beneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Property held on behalf of such Holder and/or Beneficial Owner, and may sell for the account of a Holder and/or Beneficial Owner any or all of such Deposited Property and apply such distributions and sale proceeds in payment of, any taxes (including applicable interest and penalties) or charges that are or may be payable by Holders or Beneficial Owners in respect of the ADSs, Deposited Property and ADRs, the Holder and the Beneficial Owner remaining liable for any deficiency.  The Custodian may refuse the deposit of Shares and the Depositary may refuse to issue ADSs, to deliver ADRs, register the transfer of ADSs, register the split-up or combination of ADRs and (subject to Section 7.8) the withdrawal of Deposited Property until payment in full of such tax, charge, penalty or interest is received. Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, and any of their respective agents, officers, employees and Affiliates for, and to hold each of them harmless from, any claims (including, without limitation, by any governmental authority or other person or entity) with respect to taxes (including applicable interest and penalties thereon) arising from any tax benefit obtained for such Holder and/or Beneficial Owner. Notwithstanding anything to the contrary contained in the Deposit Agreement or any ADR, the obligations of Holders and Beneficial Owners under this Section 3.2 shall survive any transfer of ADSs, any cancellation of ADSs and withdrawal of Deposited Securities, and the termination of the Deposit Agreement.

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Section 3.3          Representations and Warranties on Deposit of Shares.  Each person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized, validly allotted and issued, fully paid, not subject to any call for the payment of further capital and legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived, disapplied or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, (v) the Shares presented for deposit are not, and the ADSs issuable upon such deposit will not be, Restricted Securities (except as contemplated in Section 2.14), (vi) the Shares presented for deposit have not been stripped of any rights or entitlements, and (vii) the deposit of the Shares does not violate any applicable provisions of English law. Such representations and warranties shall survive the deposit and withdrawal of Shares, the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs.  If any such representations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.

Section 3.4          Compliance with Information Requests.  Notwithstanding any other provision of the Deposit Agreement or any ADR(s), each Holder and Beneficial Owner agrees to comply with requests from the Company pursuant to applicable law, the rules and requirements of any stock exchange on which the Shares or ADSs are, or will be, registered, traded or listed or the Articles of Association, which are made to provide information, inter alia, as to the capacity in which such Holder or Beneficial Owner owns ADSs (and Shares as the case may be) and regarding the identity of any other person(s) interested in such ADSs and the nature of such interest and various other matters, whether or not they are Holders and/or Beneficial Owners at the time of such request.  The Depositary agrees to use its reasonable efforts to assist the Company in obtaining such information, including agreeing to forward, upon the request of the Company and at the Company’s expense, any such request from the Company to the Holders and to forward to the Company any such responses to such requests received by the Depositary.

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Section 3.5          Ownership Restrictions.  Notwithstanding any other provision contained in the Deposit Agreement or any ADR(s) to the contrary, the Company may restrict transfers of the Shares where such transfer might result in ownership of Shares exceeding limits imposed by applicable law or the Articles of Association.  The Company may also restrict, in such manner as it deems appropriate, transfers of the ADSs where such transfer may result in the total number of Shares represented by the ADSs owned by a single Holder or Beneficial Owner to exceed any such limits.  The Company may, in its sole discretion but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any Holder or Beneficial Owner in excess of the limits set forth in the preceding sentence, including, but not limited to, the imposition of restrictions on the transfer of ADSs, the removal or limitation of voting rights or mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADSs held by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Articles of Association. Nothing herein shall be interpreted as obligating the Depositary or the Company to ensure compliance with the ownership restrictions described in this Section 3.5.

Section 3.6          Reporting Obligations and Regulatory Approvals.  Applicable laws and regulations may require holders and beneficial owners of Shares, including the Holders and Beneficial Owners of ADSs, to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. Holders and Beneficial Owners of ADSs are solely responsible for determining and complying with such reporting requirements and obtaining such approvals.  Each Holder and each Beneficial Owner hereby agrees to make such determination, file such reports, and obtain such approvals to the extent and in the form required by applicable laws and regulations as in effect from time to time. Neither the Depositary, the Custodian, the Company or any of their respective agents or affiliates shall be required to take any actions whatsoever on behalf of Holders or Beneficial Owners to determine or satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.

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ARTICLE IV
 
THE DEPOSITED SECURITIES

Section 4.1          Cash Distributions.  Whenever the Company intends to make a distribution of a cash dividend or other cash distribution in respect of any Deposited Securities, the Company shall give timely notice thereof to the Depositary at least twenty (20) days prior to the proposed distribution specifying, inter alia, the record date applicable for determining the holders of Deposited Securities entitled to receive such distribution. Upon the timely receipt of such notice, the Depositary shall establish an ADS Record Date upon the terms described in Section 4.9 hereof. Upon receipt of confirmation from the Custodian of the receipt of (x) any cash dividend or other cash distribution on any Deposited Securities, or (y) proceeds from the sale of any Deposited Property held in respect of the ADSs under the terms hereof, the Depositary will (i) if any amounts are received in a Foreign Currency, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars (subject to the terms and on the conditions of Section 4.8), (ii) if applicable and unless previously established, establish the ADS Record Date upon the terms described in Section 4.9, and (iii) distribute promptly the amount thus received from such conversion (net of (a) the applicable fees and charges set forth in the Fee Schedule attached hereto as Exhibit B, and (b) applicable taxes withheld) to the Holders entitled thereto as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent, and any balance not so distributed shall be held by the Depositary (without liability for interest thereon) and shall be added to and become part of the next sum received by the Depositary for distribution to Holders of ADSs outstanding at the time of the next distribution.  If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities, or from any cash proceeds from the sales of Deposited Property, an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request.  The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable Holders and Beneficial Owners of ADSs until the distribution can be effected or the funds that the Depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.1, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.1, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.1 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section 4.2          Distribution in Shares.  Whenever the Company intends to make a distribution that consists of a dividend in, or free distribution of, Shares, the Company shall give timely notice thereof to the Depositary at least twenty (20) days prior to the proposed distribution, specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such distribution. Upon the timely receipt of such notice from the Company, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9. Upon receipt of confirmation from the Custodian of the receipt of the Shares so distributed by the Company, the Depositary shall either (i) subject to Section 5.9, distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Shares received as such dividend, or free distribution, subject to the other terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes), or (ii) if additional ADSs are not so distributed, take all actions necessary so that each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional integral number of Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares or ADSs, as the case may be, represented by the aggregate of such fractions and distribute the net proceeds upon the terms described in Section 4.1. In the event that the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, if the Company in the fulfillment of its obligation under Section 5.7, has furnished an opinion of U.S. counsel determining that Shares must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of (a) taxes and (b) fees and charges of, and expenses incurred by, the Depositary) to Holders entitled thereto upon the terms described in Section 4.1.  The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.2, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.2, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.2 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

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Section 4.3          Elective Distributions in Cash or Shares.  Whenever the Company intends to make a distribution payable at the election of the holders of Deposited Securities in cash or in additional Shares, the Company shall give timely notice thereof to the Depositary at least sixty (60) days prior to the proposed distribution specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such elective distribution and whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon the timely receipt of a notice indicating that the Company wishes such elective distribution to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such elective distribution available to the Holders of ADSs. The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution be made available to Holders, (ii) the Depositary shall have determined, upon consultation with the Company, that such distribution is reasonably practicable and (iii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7.  If the above conditions are not satisfied or if the Company requests such elective distribution not to be made available to Holders of ADSs, the Depositary shall establish an ADS Record Date on the terms described in Section 4.9 and, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is made in England and Wales in respect of the Shares for which no election is made, either (X) cash upon the terms described in Section 4.1 or (Y) additional ADSs representing such additional Shares upon the terms described in Section 4.2. If the above conditions are satisfied, the Depositary shall establish an ADS Record Date on the terms described in Section 4.9 and establish procedures to enable Holders to elect the receipt of the proposed distribution in cash or in additional ADSs.  The Company shall assist the Depositary in establishing such procedures to the extent necessary. If a Holder elects to receive the proposed distribution (X) in cash, the distribution shall be made upon the terms described in Section 4.1, or (Y) in ADSs, the distribution shall be made upon the terms described in Section 4.2. Nothing herein shall obligate the Depositary to make available to Holders a method to receive the elective distribution in Shares (rather than ADSs).  There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.3, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.3, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.3 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

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Section 4.4          Distribution of Rights to Purchase Additional ADSs.
 
(a)          Distribution to ADS Holders.  Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give timely notice thereof to the Depositary at least sixty (60) days prior to the proposed distribution specifying, inter alia, the record date applicable to holders of Deposited Securities entitled to receive such distribution and whether or not it wishes such rights to be made available to Holders of ADSs. Upon the timely receipt of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to Holders only if (i) the Company shall have timely requested that such rights be made available to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7, and (iii) the Depositary shall have determined that such distribution of rights is reasonably practicable. In the event any of the conditions set forth above are not satisfied or if the Company requests that the rights not be made available to Holders of ADSs, the Depositary shall proceed with the sale of the rights as contemplated in Section 4.4(b) below. In the event all conditions set forth above are satisfied, the Depositary shall establish an ADS Record Date (upon the terms described in Section 4.9) and establish procedures to (x) distribute rights to purchase additional ADSs (by means of warrants or otherwise), (y) enable the Holders to exercise such rights (upon payment of the subscription price and of the applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes), and (z) deliver ADSs upon the valid exercise of such rights.  The Company shall assist the Depositary to the extent necessary in establishing such procedures. Nothing herein shall obligate the Depositary to make available to the Holders a method to exercise rights to subscribe for Shares (rather than ADSs).
 
(b)          Sale of Rights.  If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5.7, or determines, upon consultation with the Company, it is not reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall, upon consultation with the Company, determine whether it is lawful and reasonably practicable to sell such rights, in a riskless principal capacity, at such place and upon such terms (including public or private sale) as it may deem practicable.  The Company shall assist the Depositary to the extent necessary to determine such legality and practicability.  The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) upon the terms set forth in Section 4.1.
 
(c)          Lapse of Rights.  If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) or to arrange for the sale of the rights upon the terms described in Section 4.4(b), the Depositary shall allow such rights to lapse.

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The Depositary shall not be liable for (i) any failure to accurately determine whether it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.
 
Notwithstanding anything to the contrary in this Section 4.4, if registration (under the Securities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act (or other applicable law) covering such offering is in effect or (ii) unless the Company furnishes the Depositary opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case reasonably satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws.
 
In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of Deposited Property (including rights) an amount on account of taxes or other governmental charges, the amount distributed to the Holders of ADSs representing such Deposited Property shall be reduced accordingly. In the event that the Depositary determines that any distribution of Deposited Property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such Deposited Property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes or charges.
 
There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive or exercise rights on the same terms and conditions as the holders of Shares or be able to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights.
 
Section 4.5          Distributions Other Than Cash, Shares or Rights to Purchase Shares.
 
(a)          Whenever the Company intends to distribute to the holders of Deposited Securities property other than cash, Shares or rights to purchase additional Shares, the Company shall give timely notice thereof to the Depositary and shall indicate whether or not it wishes such distribution to be made to Holders of ADSs. Upon receipt of a notice indicating that the Company wishes such distribution to be made to Holders of ADSs, the Depositary shall consult with the Company, and the Company shall assist the Depositary, to determine whether such distribution to Holders is lawful and reasonably practicable.  The Depositary shall not make such distribution unless (i) the Company shall have requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7, and (iii) the Depositary shall have determined, after consultation with the Company, that such distribution is reasonably practicable.

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(b)          Upon receipt of reasonably satisfactory documentation and the request of the Company to distribute property to Holders of ADSs and after making the requisite determinations set forth in (a) above, the Depositary shall distribute the property so received to the Holders of record, as of the ADS Record Date, in proportion to the number of ADSs held by them respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes withheld.  The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.
 
(c)          If (i) the Company does not request the Depositary to make such distribution to Holders or requests the Depositary not to make such distribution to Holders, (ii) the Depositary does not receive reasonably satisfactory documentation within the terms of Section 5.7, or (iii) the Depositary determines that all or a portion of such distribution is not reasonably practicable, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem practicable and shall (i) cause the proceeds of such sale, if any, to be converted into Dollars and (ii) distribute the proceeds of such conversion received by the Depositary (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) to the Holders as of the ADS Record Date upon the terms of Section 4.1. If the Depositary is unable to sell such property, the Depositary may dispose of such property for the account of the Holders in any way it deems reasonably practicable under the circumstances.
 
(d)          Neither the Depositary nor the Company shall be liable for (i) any failure to accurately determine whether it is lawful or practicable to make the property described in this Section 4.5 available to Holders in general or any Holders in particular, nor (ii) any loss incurred in connection with the sale or disposal of such property.

Section 4.6          Distributions with Respect to Deposited Securities in Bearer Form.  Subject to the terms of this Article IV, distributions in respect of Deposited Securities that are held by the Depositary or the Custodian in bearer form shall be made to the Depositary for the account of the respective Holders of ADS(s) with respect to which any such distribution is made upon due presentation by the Depositary or the Custodian to the Company of any relevant coupons, talons, or certificates.  The Company shall promptly notify the Depositary of such distributions.  The Depositary or the Custodian shall promptly present such coupons, talons or certificates, as the case may be, in connection with any such distribution.

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Section 4.7          Redemption.  If the Company intends to exercise any right of redemption in respect of any of the Deposited Securities, the Company shall give timely notice thereof to the Depositary at least sixty (60) days prior to the intended date of redemption which notice shall set forth the particulars of the proposed redemption. Upon timely receipt of (i) such notice and (ii) satisfactory documentation given by the Company to the Depositary within the terms of Section 5.7, and only if, after consultation with the Company, the Depositary shall have determined that such proposed redemption is practicable, the Depositary shall provide to each Holder a notice setting forth the intended exercise by the Company of the redemption rights and any other particulars set forth in the Company’s notice to the Depositary.  The Depositary shall instruct the Custodian to present to the Company the Deposited Securities in respect of which redemption rights are being exercised against payment of the applicable redemption price. Upon receipt of confirmation from the Custodian that the redemption has taken place and that funds representing the redemption price have been received, the Depositary shall convert, transfer, and distribute the proceeds (net of applicable (a) fees and charges of, and the expenses incurred by, the Depositary, and (b) taxes), retire ADSs and cancel ADRs, if applicable, upon delivery of such ADSs by Holders thereof and the terms set forth in Sections 4.1 and 6.2. If less than all outstanding Deposited Securities are redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as may be determined by the Depositary, after consultation with the Company.  The redemption price per ADS shall be the dollar equivalent of the per share amount received by the Depositary (adjusted to reflect the ratio of ADS(s) to Share(s)) upon the redemption of the Deposited Securities represented by ADSs (subject to the terms of Section 4.8 and the applicable fees and charges of, and expenses incurred by, the Depositary, and taxes) multiplied by the number of Deposited Securities represented by each ADS redeemed.
 
Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed redemption provided for in this Section 4.7, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.7, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.7 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section 4.8          Conversion of Foreign Currency.  Whenever the Depositary or the Custodian shall receive Foreign Currency, by way of dividends or other distributions or the net proceeds from the sale of Deposited Property, which in the judgment of the Depositary can at such time be converted on a practicable basis, by sale or in any other manner that it may determine in accordance with applicable law, into Dollars transferable to the United States and distributable to the Holders entitled thereto, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may reasonably determine, such Foreign Currency into Dollars, and shall distribute such Dollars (net of the fees and charges set forth in the Fee Schedule attached hereto as Exhibit B, and applicable taxes withheld) in accordance with the terms of the applicable sections of the Deposit Agreement.  The Depositary and/or its agent (which may be a division, branch or Affiliate of the Depositary) may act as principal for any conversion of Foreign Currency. If the Depositary shall have distributed warrants or other instruments that entitle the holders thereof to such Dollars, the Depositary shall distribute such Dollars to the holders of such warrants and/or instruments upon surrender thereof for cancellation, in either case without liability for interest thereon. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Holders on account of any application of exchange restrictions or otherwise.

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If such conversion or distribution generally or with regard to a particular Holder can be effected only with the approval or license of any government or agency thereof, the Depositary shall have authority to file such application for approval or license, if any, as it may deem desirable. In no event, however, shall the Depositary be obligated to make such a filing.
 
If at any time the Depositary shall determine that in its judgment the conversion of any Foreign Currency and the transfer and distribution of proceeds of such conversion received by the Depositary is not practicable or lawful, or if any approval or license of any governmental authority or agency thereof that is required for such conversion, transfer and distribution is denied or, in the opinion of the Depositary, not obtainable at a reasonable cost or within a reasonable period, the Depositary may, in its discretion, (i) make such conversion and distribution in Dollars to the Holders for whom such conversion, transfer and distribution is lawful and practicable, (ii) distribute the Foreign Currency (or an appropriate document evidencing the right to receive such Foreign Currency) to Holders for whom this is lawful and practicable, or (iii) hold (or cause the Custodian to hold) such Foreign Currency (without liability for interest thereon) for the respective accounts of the Holders entitled to receive the same.

Section 4.9          Fixing of ADS Record Date.  Whenever (a) the Depositary shall receive notice of the fixing of a record date by the Company for the determination of holders of Deposited Securities entitled to receive any distribution (whether in cash, Shares, rights, or other distribution), (b) for any reason the Depositary causes a change in the number of Shares that are represented by each ADS, (c) the Depositary shall receive notice of any meeting of, or solicitation of consents or proxies of, holders of Shares or other Deposited Securities, or (d) the Depositary shall find it necessary or convenient in connection with the giving of any notice, solicitation of any consent or any other matter, the Depositary shall fix the record date (the “ADS Record Date”) for the determination of the Holders of ADS(s) who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Shares represented by each ADS.  The Depositary shall make reasonable efforts to establish the ADS Record Date as closely as possible to the applicable record date for the Deposited Securities (if any) set by the Company in England and Wales and shall not announce the establishment of any ADS Record Date prior to the relevant corporate action having been made public by the Company (if such corporate action affects the Deposited Securities). Subject to applicable law and the provisions of Section 4.1 through 4.8 and to the other terms and conditions of the Deposit Agreement, only the Holders of ADSs at the close of business in New York on such ADS Record Date shall be entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.

Section 4.10          Voting of Deposited Securities.  As soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or solicitation of consent or proxy in accordance with Section 4.9. The Depositary shall, if requested by the Company in writing in a timely manner (except as otherwise contemplated in this Section 4.10, the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least thirty (30) days (or such lesser number of days as mutually agreed to in writing by the Company and the Depositary) prior to the date of such vote or meeting), at the Company’s expense and provided no U.S. legal prohibitions exist, distribute as soon as practicable after receipt thereof to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy, (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Articles of Association and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s ADSs, and (c) a brief statement as to the manner in which such voting instructions may be given or deemed to have been given in accordance with this Section 4.10, it being acknowledged that if no instructions are received prior to the deadline set for such purposes to the Depositary to give a discretionary proxy to a person designated by the Company.

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The Company shall use its reasonable endeavors to notify the Depositary in writing of its intention to convene a meeting where the holders of Deposited Securities are entitled to vote, at least thirty (30) days (or such lesser number of days as mutually agreed to in writing by the Company and the Depositary) prior to the date of the proposed meeting.
 
Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to timely request that the Depositary distribute the information as provided for in this Section 4.10, if the Depositary so agrees after consultation with the Company, the Depositary will use commercially reasonable efforts to perform the actions contemplated in this Section 4.10, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.10, where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.
 
Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary may, to the extent not prohibited by law or regulations, or by the requirements of the stock exchange on which the ADSs are listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of, or solicitation of consents or proxies from, holders of Deposited Securities, distribute to the Holders a notice that provides Holders with, or otherwise publicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request (e.g., by reference to a website containing the materials for retrieval or a contact for requesting copies of the materials).
 
The Depositary has been advised by the Company that under the Articles of Association as in effect on the date of the Deposit Agreement, voting at any meeting of shareholders of the Company is by show of hands unless (before or on the declaration of the result of the show of hands) a poll is demanded.  The Depositary will not join in demanding a poll, whether or not requested to do so by Holders of ADSs. Under the Articles of Association as in effect on the date of the Deposit Agreement, at any meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless before or upon the declaration of the result of the show of hands a poll is demanded by: (a) the chairman of the meeting; (b) not less than five (5) members of the Company having the right to vote at the meeting; (c) a member or members of the Company representing not less than one tenth of the total voting rights of all the members of the Company having the right to vote at the meeting; or (d) a member or members of the Company holding shares in the Company conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all the shares conferring that right..

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Voting instructions may be given only in respect of a number of ADSs representing an integral number of Deposited Securities. Upon the timely receipt from a Holder of ADSs as of the ADS Record Date of voting instructions in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of the Deposit Agreement, Articles of Association and the provisions of the Deposited Securities, to vote, or cause the Custodian to vote, the Deposited Securities (in person or by proxy) represented by such Holder’s ADSs as follows: (a) in the event voting takes place at a shareholders’ meeting by a show of hands, the Depositary will instruct the Custodian to vote all Deposited Securities in accordance with the voting instructions received timely from a majority of Holders of ADSs who provided voting instructions, and (b) in the event voting takes place at a shareholders’ meeting by poll, the Depositary will instruct the Custodian to vote the Deposited Securities in accordance with the voting instructions timely received from the Holders of ADSs. If voting is by poll and the Depositary does not receive voting instructions from a Holder as of the ADS Record Date on or before the date established by the Depositary for such purpose, such Holder shall be deemed, and the Depositary shall (unless otherwise specified in the notice distributed to Holders) deem such Holder, to have instructed the Depositary to give a discretionary proxy to a person designated by the Company to vote the Deposited Securities; provided, however, that no such discretionary proxy shall be given by the Depositary with respect to any matter to be voted upon as to which the Company informs the Depositary that (a) the Company does not wish such proxy to be given, (b) substantial opposition exists, or (c) the rights of holders of Deposited Securities may be materially adversely affected.
 
Deposited Securities represented by ADSs for which no timely voting instructions are received by the Depositary from the Holder shall not be voted (except (a) in the case voting is by show of hands, in which case the Depositary will instruct the Custodian to vote all Deposited Securities in accordance with the voting instructions received from a majority of Holders of ADSs who provided timely voting instructions, and (b) as contemplated in this Section 4.10). Neither the Depositary nor the Custodian shall under any circumstances exercise any discretion as to voting and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of, for purposes of establishing a quorum or otherwise, the Deposited Securities represented by ADSs, except pursuant to and in accordance with the voting instructions timely received from Holders or as otherwise contemplated herein. If the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, the Depositary will deem such Holder (unless otherwise specified in the notice distributed to Holders) to have instructed the Depositary to vote in favor of the items set forth in such voting instructions.
 
Notwithstanding anything to the contrary contained herein, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the sole purpose of establishing quorum at a meeting of shareholders.

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Notwithstanding anything to the contrary contained in the Deposit Agreement or any ADR, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of Deposited Securities if the taking of such action would violate U.S. or English laws. The Company agrees to take any and all actions reasonably necessary and as permitted by any applicable law to enable Holders and Beneficial Owners to exercise the voting rights accruing to the Deposited Securities and to deliver to the Depositary an opinion of U.S. counsel addressing any actions requested to be taken if so requested by the Depositary.
 
There can be no assurance that Holders generally or any Holder in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.

Section 4.11          Changes Affecting Deposited Securities.  Upon any change in nominal or par value, split-up, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, consolidation or sale of assets affecting the Company or to which it is a party, any property which shall be received by the Depositary or the Custodian in exchange for, or in conversion of, or replacement of, or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Property under the Deposit Agreement, and the ADSs shall, subject to the provisions of the Deposit Agreement, any ADR(s) evidencing such ADSs and applicable law, represent the right to receive such additional or replacement Deposited Property. In giving effect to such change, split-up, cancellation, consolidation or other reclassification of Deposited Securities, recapitalization, reorganization, merger, consolidation or sale of assets, the Depositary may, with the Company’s approval, and shall, if the Company shall so request, subject to the terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary, and (b) taxes) and receipt of an opinion of counsel to the Company reasonably satisfactory to the Depositary that such actions are not in violation of any applicable laws or regulations, (i) issue and deliver additional ADSs as in the case of a stock dividend on the Shares, (ii) amend the Deposit Agreement and the applicable ADRs, (iii) amend the applicable Registration Statement(s) on Form F-6 as filed with the Commission in respect of the ADSs, (iv) call for the surrender of outstanding ADRs to be exchanged for new ADRs, and (v) take such other actions as the Depositary, in consultation with the Company, considers appropriate to reflect the transaction with respect to the ADSs.  The Company agrees to, jointly with the Depositary, amend the Registration Statement on Form F-6 as filed with the Commission to permit the issuance of such new form of ADRs. Notwithstanding the foregoing, in the event that any Deposited Property so received may not be, upon consultation with the Company, lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall, if the Company requests, subject to receipt of an opinion of Company’s counsel reasonably satisfactory to the Depositary that such action is not in violation of any applicable laws or regulations, sell such Deposited Property at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) for the account of the Holders otherwise entitled to such Deposited Property upon an averaged or other practicable basis without regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to Section 4.1. The Depositary shall not be responsible for (i) any failure to determine whether it may be lawful or practicable to make such Deposited Property available to Holders in general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or (iii) any liability to the purchaser of such Deposited Property.

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Section 4.12          Available Information.  The Company is subject to the periodic reporting requirements of the Exchange Act and, accordingly, is required to file or furnish certain reports with the Commission. These reports can be retrieved from the Commission’s website (www.sec.gov) and can be inspected and copied at the public reference facilities maintained by the Commission located (as of the date of the Deposit Agreement) at 100 F Street, N.E., Washington D.C. 20549.

Section 4.13          Reports.  The Depositary shall make available for inspection by Holders at its Principal Office, this Deposit Agreement, the provisions of or governing Deposited Securities and any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Property and (b) made generally available to the holders of such Deposited Property by the Company.  The Depositary shall also provide or make available to Holders copies of such reports when furnished by the Company pursuant to Section 5.6.

Section 4.14          List of Holders.  Promptly upon written request by the Company, the Depositary shall furnish to the Company a list, as of a recent date, of the names, addresses and holdings of ADSs of all Holders. Upon the written request of the Company, the Depositary shall, to the extent practicable, obtain and deliver to the Company a list of non-objecting Beneficial Owners.

Section 4.15          Taxation.  The Depositary will, and will instruct the Custodian to, forward to the Company or its agents such information from its records as the Company may reasonably request to enable the Company or its agents to file the necessary tax reports with governmental authorities or agencies. The Depositary, the Custodian or the Company and its agents may file such reports as are necessary to reduce or eliminate applicable taxes on dividends and on other distributions in respect of Deposited Property under applicable tax treaties or laws for the Holders and Beneficial Owners. In accordance with instructions from the Company and to the extent practicable, the Depositary or the Custodian will take reasonable administrative actions to obtain tax refunds, reduced withholding of tax at source on dividends and other benefits under applicable tax treaties or laws with respect to dividends and other distributions on the Deposited Property. As a condition to receiving such benefits, Holders and Beneficial Owners of ADSs may be required from time to time, and in a timely manner, to file such proof of taxpayer status, residence and beneficial ownership (as applicable), to execute such certificates and to make such representations and warranties, or to provide any other information or documents, as the Company, the Depositary or the Custodian may deem necessary or proper to fulfill the Depositary’s or the Custodian’s obligations under applicable law.  The Depositary, the Custodian and the Company shall not have any obligation or liability to any person if any Holder or Beneficial Owner fails to provide such information or if such information does not reach the relevant tax authorities in time for any Holder or Beneficial Owner to obtain the benefits of any tax treatment. The Holders and Beneficial Owners shall indemnify the Depositary, the Company, the Custodian and any of their respective directors, employees, agents and Affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained.

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If the Company (or any of its agents) withholds from any distribution any amount on account of taxes or governmental charges, or pays any other tax in respect of such distribution (e.g., stamp duty tax, capital gains or other similar tax), the Company shall (and shall cause such agent to) remit promptly to the Depositary information about such taxes or governmental charges withheld or paid, and, if so requested, the tax receipt (or other proof of payment to the applicable governmental authority) therefor, in each case, in a form satisfactory to the Depositary.  The Depositary shall, to the extent required by U.S. law, report to Holders any taxes withheld by it or the Custodian, and, if such information is provided to it by the Company, any taxes withheld by the Company.  The Depositary and the Custodian shall not be required to provide the Holders with any evidence of the remittance by the Company (or its agents) of any taxes withheld, or of the payment of taxes by the Company, except to the extent the evidence is provided by the Company to the Depositary or the Custodian, as applicable. Neither the Depositary or the Custodian shall be liable for the failure by any Holder or Beneficial Owner to obtain the benefits of credits on the basis of non-U.S. tax paid against such Holder’s or Beneficial Owner’s income tax liability.  The Depositary is under no obligation to provide the Holders and Beneficial Owners with any information about the tax status of the Company. The Depositary shall not incur any liability for any tax consequences that may be incurred by Holders and Beneficial Owners on account of their ownership of the ADSs, including without limitation, tax consequences resulting from the Company (or any of its subsidiaries) being treated as a “Passive Foreign Investment Company” (in each case as defined in the U.S. Internal Revenue Code of 1986, as amended, and the regulations issued thereunder) or otherwise.
 
ARTICLE V
 
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY

Section 5.1          Maintenance of Office and Transfer Books by the Registrar.  Until termination of the Deposit Agreement in accordance with its terms, the Registrar shall maintain in the Borough of Manhattan, the City of New York, an office and facilities for the issuance and delivery of ADSs, the acceptance for surrender of ADS(s) for the purpose of withdrawal of Deposited Securities, the registration of issuances, cancellations, transfers, combinations and split-ups of ADS(s) and, if applicable, to countersign ADRs evidencing the ADSs so issued, transferred, combined or split-up, in each case in accordance with the provisions of the Deposit Agreement.
 
The Registrar shall keep books for the registration of ADSs which at all reasonable times shall be open for inspection by the Company and by the Holders of such ADSs, provided that such inspection shall not be, to the Registrar’s knowledge, for the purpose of communicating with Holders of such ADSs in the interest of a business or object other than the business of the Company or other than a matter related to the Deposit Agreement or the ADSs.  The Company shall have the right to examine and copy the transfer and registration records of the Depositary or its agent, take copies thereof and require the Depositary or its agent, the Registrar and any co-transfer agents or co-registrars to supply copies of such portions of such records, to the extent practicable, as the Company may request from time to time.

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The Registrar may close the transfer books with respect to the ADSs, at any time or from time to time, when deemed necessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable written request of the Company subject, in all cases, to Section 7.8.
 
If any ADSs are listed on one or more stock exchanges or automated quotation systems in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registration of issuances, cancellations, transfers, combinations and split-ups of ADSs and, if applicable, to countersign ADRs evidencing the ADSs so issued, transferred, combined or split-up, in accordance with any requirements of such exchanges or systems. Such Registrar or co-registrars may, with notice to the Company as promptly as practicable, be removed and a substitute or substitutes appointed by the Depositary.

Section 5.2          Exoneration.  Notwithstanding any other provision of the Deposit Agreement or any ADR(s) to the contrary, neither the Depositary nor the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or incur any liability (to the extent not limited by Section 7.8(b)) (i) if the Depositary, the Custodian, the Company or their respective agents shall be prevented or forbidden from, or delayed in, doing or performing any act or thing required or contemplated by the terms of the Deposit Agreement, by reason of any provision of any present or future law or regulation of the United States, England and Wales, or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of the potential criminal or civil penalties or restraint, or by reason of any provision, present or future, of the Articles of Association or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Articles of Association or provisions of or governing Deposited Securities, (iii) for any action or inaction in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADSs, (v) for any action or inaction of any clearing or settlement system (and any participant thereof) for the Deposited Property or the ADSs, or (vi) for any consequential or punitive damages (including lost profits) for any breach of the terms of the Deposit Agreement.
 
The Depositary, its controlling persons, its agents, any Custodian and the Company, its Affiliates, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.
 
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Section 5.3          Standard of Care.  The Company and the Depositary and their respective Affiliates, directors, officers, employees and agents assume no obligation and shall not be subject to any liability under the Deposit Agreement or any ADRs to any Holder(s) or Beneficial Owner(s), except that the Company and the Depositary agree to perform their respective obligations specifically set forth in the Deposit Agreement or the applicable ADRs without negligence or bad faith.
 
Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective Affiliates, directors, officers, controlling persons, employees or agents, shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Property or in respect of the ADSs, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required (and no Custodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary).
 
The Depositary and its agents shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any vote is cast or the effect of any vote, provided that any such action or omission is in good faith and without negligence and in accordance with the terms of the Deposit Agreement.  The Depositary shall not incur any liability for any failure to accurately determine whether any distribution or action may be lawful or reasonably practicable, for any investment risk associated with acquiring an interest in the Deposited Property, for the validity or worth of the Deposited Property, for the value of any Deposited Property or any distribution thereon, for any interest on Deposited Property, for any tax consequences that may result from the ownership of ADSs, Shares or other Deposited Property, for the credit-worthiness of any third party.  The Depositary shall not incur any liability for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for allowing any rights to lapse upon the terms of the Deposit Agreement, for the failure or timeliness of any notice from the Company, or for any action of or failure to act by, or any information provided or not provided by, DTC or any DTC Participant.
 
The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

Section 5.4          Resignation and Removal of the Depositary; Appointment of Successor Depositary.  The Depositary may at any time resign as Depositary hereunder by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2), or (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided.

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The Depositary, in such capacity, may at any time be removed by the Company by written notice of such removal, which removal shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2), or (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided.
 
In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor (other than as contemplated in Sections 5.8 and 5.9).  The predecessor depositary, upon payment of all sums due it and on the written request of the Company, shall, (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9), (ii) duly assign, transfer and deliver all of the Depositary’s right, title and interest to the Deposited Property to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADSs and such other information relating to ADSs and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly provide notice of its appointment to such Holders.
 
Any entity into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

Section 5.5          The Custodian.  The Depositary has initially appointed Citibank, N.A. (London) as Custodian for the purpose of the Deposit Agreement.  The Custodian or its successors in acting hereunder shall be authorized to act as custodian in England and Wales and shall be subject at all times and in all respects to the direction of the Depositary for the Deposited Property for which the Custodian acts as custodian and shall be responsible solely to it. If any Custodian resigns or is discharged from its duties hereunder with respect to any Deposited Property and no other Custodian has previously been appointed hereunder, the Depositary shall, with notice to the Company as soon as practicable, promptly appoint a substitute custodian.  The Depositary shall require such resigning or discharged Custodian to Deliver, or cause the Delivery of, the Deposited Property held by it, together with all such records maintained by it as Custodian with respect to such Deposited Property as the Depositary may request, to the Custodian designated by the Depositary.  Whenever the Depositary determines, in its discretion, that it is appropriate to do so, it may appoint an additional custodian with respect to any Deposited Property, or discharge the Custodian with respect to any Deposited Property and appoint a substitute custodian, which shall thereafter be Custodian hereunder with respect to the Deposited Property. Immediately upon any such change, the Depositary shall give notice thereof in writing to all Holders of ADSs, each other Custodian and the Company.
 
Citibank may at any time act as Custodian of the Deposited Property pursuant to the Deposit Agreement, in which case any reference to Custodian shall mean Citibank solely in its capacity as Custodian pursuant to the Deposit Agreement. Notwithstanding anything contained in the Deposit Agreement or any ADR to the contrary, the Depositary shall not be obligated to give notice to the Company, any Holders of ADSs or any other Custodian of its acting as Custodian pursuant to the Deposit Agreement.

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Upon the appointment of any successor depositary, any Custodian then acting hereunder shall, unless otherwise instructed by the Depositary, continue to be the Custodian of the Deposited Property without any further act or writing, and shall be subject to the direction of the successor depositary.  The successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete power and authority to act on the direction of such successor depositary.

Section 5.6          Notices and Reports.  On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action by such holders other than at a meeting, or of the taking of any action in respect of any cash or other distributions or the offering of any rights in respect of Deposited Securities, the Company shall transmit to the Depositary and the Custodian a copy of the notice thereof in the English language but otherwise in the form given or to be given to holders of Shares or other Deposited Securities. The Company shall also furnish to the Custodian and the Depositary a summary, in English, of any applicable provisions or proposed provisions of the Articles of Association that may be relevant or pertain to such notice of meeting or be the subject of a vote thereat.
 
The Company will also transmit to the Depositary (a) an English language version of the other notices, reports and communications which are made generally available by the Company to holders of its Shares or other Deposited Securities and (b) the English-language versions of the Company’s annual and semi-annual reports prepared in accordance with the applicable requirements of the Commission.  The Depositary shall arrange, at the request of the Company and at the Company’s expense, to provide copies thereof to all Holders or make such notices, reports and other communications available to all Holders on a basis similar to that for holders of Shares or other Deposited Securities or on such other basis as the Company may advise the Depositary or as may be required by any applicable law, regulation or stock exchange requirement.  The Company has delivered to the Depositary and the Custodian a copy of the Company’s Articles of Association along with the provisions of or governing the Shares and any other Deposited Securities issued by the Company in connection with such Shares, and promptly upon any amendment thereto or change therein, the Company shall deliver to the Depositary and the Custodian a copy of such amendment thereto or change therein.  The Depositary may rely upon such copy for all purposes of the Deposit Agreement.
 
The Depositary will, at the expense of the Company, make available a copy of any such notices, reports or communications issued by the Company and delivered to the Depositary for inspection by the Holders of the ADSs at the Depositary’s Principal Office, at the office of the Custodian and at any other designated transfer office.

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Section 5.7          Issuance of Additional Shares, ADSs etc.  The Company agrees that in the event it or any of its Affiliates proposes (i) an issuance, sale or distribution of additional Shares, (ii) an offering of rights to subscribe for Shares or other Deposited Securities, (iii) an issuance or assumption of securities convertible into or exchangeable for Shares, (iv) an issuance of rights to subscribe for securities convertible into or exchangeable for Shares, (v) an elective dividend of cash or Shares, (vi) a redemption of Deposited Securities, (vii) a meeting of holders of Deposited Securities, or solicitation of consents or proxies, relating to any reclassification of securities, merger or consolidation or transfer of assets, (viii) any assumption, reclassification, recapitalization, reorganization, merger, consolidation or sale of assets which affects the Deposited Securities, or (ix) a distribution of securities other than Shares, it will obtain U.S. legal advice and take all steps necessary to ensure that the application of the proposed transaction to Holders and Beneficial Owners does not violate the registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act and the securities laws of the states of the U.S.). In support of the foregoing and in connection with any such transactions, the Company will furnish to the Depositary, if applicable, (a) a written opinion of U.S. counsel (reasonably satisfactory to the Depositary) stating whether such transaction (1) requires a registration statement under the Securities Act to be in effect or (2) is exempt from the registration requirements of the Securities Act and (b) an opinion of English counsel stating that (1) making the transaction available to Holders and Beneficial Owners does not violate the laws or regulations of England and Wales and (2) all requisite regulatory consents and approvals, if any, have been obtained in England and Wales.  If the filing of a registration statement is required, the Depositary shall not have any obligation to proceed with the transaction unless it shall have received evidence reasonably satisfactory to it that such registration statement has been declared, or has otherwise become, effective. If, being advised by counsel, the Company determines that a transaction is required to be registered under the Securities Act, the Company will either (i) register such transaction to the extent necessary, (ii) alter the terms of the transaction to avoid the registration requirements of the Securities Act or (iii) direct the Depositary to take specific measures, in each case as contemplated in the Deposit Agreement, to prevent such transaction from violating the registration requirements of the Securities Act.  The Company agrees with the Depositary that neither the Company nor any of its Affiliates will at any time (i) deposit any Shares or other Deposited Securities, either upon original issuance or upon a sale of Shares or other Deposited Securities previously issued and reacquired by the Company or by any such Affiliate, or (ii) issue additional Shares, rights to subscribe for such Shares, securities convertible into or exchangeable for Shares or rights to subscribe for such securities or distribute securities other than Shares, unless such transaction and the securities issuable in such transaction do not violate the registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act and the securities laws of the states of the U.S.).
 
Notwithstanding anything to the contrary contained in the Deposit Agreement, nothing in the Deposit Agreement shall be deemed to obligate the Company to file any registration statement in respect of any proposed transaction.

Section 5.8          Indemnification.  The Depositary agrees to indemnify the Company and its directors, officers, employees, agents and Affiliates against, and hold each of them harmless from, any direct loss, liability, tax, charge or expense of any kind whatsoever (including, but not limited to, the reasonable fees and expenses of counsel) which may arise out of acts performed or omitted by the Depositary or the Custodian (for so long as the Custodian is a branch of Citibank N.A.) under the terms hereof due to the negligence or bad faith of the Depositary or the Custodian (for so long as the Custodian is a branch of Citibank N.A.), as applicable.

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The Company agrees to indemnify the Depositary, the Custodian and any of their respective directors, officers, employees, agents and Affiliates against, and hold each of them harmless from, any direct loss, liability, tax, charge or expense of any kind whatsoever (including, but not limited to, the reasonable fees and expenses of counsel) that may arise (a) out of, or in connection with, any offer, issuance, sale, resale, transfer, deposit or withdrawal of ADRs, ADSs, the Shares, or other Deposited Securities, as the case may be, (b) out of, or as a result of, any offering documents in respect thereof or (c) out of acts performed or omitted, including, but not limited to, any delivery by the Depositary on behalf of the Company of information regarding the Company, in connection with the Deposit Agreement, any ancillary or supplemental agreement entered into between the Company and the Depositary, the ADRs, the ADSs, the Shares, or any Deposited Property, in any such case (i) by the Depositary, the Custodian or any of their respective directors, officers, employees, agents and Affiliates, except to the extent such loss, liability, tax, charge or expense is due to the negligence or bad faith of any of them, or (ii) by the Company or any of its directors, officers, employees, agents and Affiliates.  The Company shall not indemnify the Depositary, the Custodian and any of their respective directors, officers, employees, agents and Affiliates against any liability or expense arising out of information relating to the Depositary or such Custodian, as the case may be, furnished to the Company by the Depositary or such Custodian for use in any registration statement, prospectus or preliminary prospectus relating to any Deposited Securities represented by the ADSs.
 
The obligations set forth in this Section shall survive the termination of the Deposit Agreement and the succession or substitution of any party hereto.
 
Any person seeking indemnification hereunder (an “indemnified person”) shall notify the person from whom it is seeking indemnification (the “indemnifying person”) of the commencement of any indemnifiable action or claim promptly after such indemnified person becomes aware of such commencement (provided that the failure to make such notification shall not affect such indemnified person’s rights to seek indemnification except to the extent the indemnifying person is materially prejudiced by such failure) and shall consult in good faith with the indemnifying person as to the conduct of the defense of such action or claim that may give rise to an indemnity hereunder, which defense shall be reasonable in the circumstances. No indemnified person shall compromise or settle any action or claim that may give rise to an indemnity hereunder without the consent of the indemnifying person, which consent shall not be unreasonably withheld.

Section 5.9          ADS Fees and Charges.  The Company, the Holders, the Beneficial Owners, persons depositing Shares or withdrawing Deposited Securities in connection with the issuance and cancellation of ADSs, and persons receiving ADSs upon issuance or whose ADSs are being cancelled shall be required to pay to the Depositary the Depositary’s fees and related charges identified as payable by them respectively in the Fee Schedule attached hereto as Exhibit B. All ADS fees and charges so payable may be deducted from distributions or must be remitted to the Depositary, or its designee, and may, at any time and from time to time, be changed by agreement between the Depositary and the Company, but, in the case of ADS fees and charges payable by Holders and Beneficial Owners, only in the manner contemplated in Section 6.1.  The Depositary shall provide, without charge, a copy of its latest ADS fee schedule to anyone upon request.

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ADS fees and charges for (i) the issuance of ADSs and (ii) the cancellation of ADSs will be payable by the person for whom the ADSs are so issued by the Depositary (in the case of ADS issuances) and by the person for whom ADSs are being cancelled (in the case of ADS cancellations). In the case of ADSs issued by the Depositary into DTC or presented to the Depositary via DTC, the ADS issuance and cancellation fees and charges will be payable by the DTC Participant(s) receiving the ADSs from the Depositary or the DTC Participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the Beneficial Owner(s) and will be charged by the DTC Participant(s) to the account(s) of the applicable Beneficial Owner(s) in accordance with the procedures and practices of the DTC participant(s) as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are payable by Holders as of the applicable ADS Record Date established by the Depositary. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, the applicable Holders as of the ADS Record Date established by the Depositary will be invoiced for the amount of the ADS fees and charges and such ADS fees may be deducted from distributions made to Holders. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC Participants in accordance with the procedures and practices prescribed by DTC from time to time and the DTC Participants in turn charge the amount of such ADS fees and charges to the Beneficial Owners for whom they hold ADSs. In the case of (i) registration of ADS transfers, the ADS transfer fee will be payable by the ADS Holder whose ADSs are being transferred or by the person to whom the ADSs are transferred, and (ii) conversion of ADSs of one series for ADSs of another series, the ADS conversion fee will be payable by the Holder whose ADSs are converted or by the person to whom the converted ADSs are delivered.
 
The Depositary may reimburse the Company for certain expenses incurred by the Company in respect of the ADR program established pursuant to the Deposit Agreement, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as the Company and the Depositary agree from time to time.  The Company shall pay to the Depositary such fees and charges, and reimburse the Depositary for such out-of-pocket expenses, as the Depositary and the Company may agree from time to time. Responsibility for payment of such fees, charges and reimbursements may from time to time be changed by agreement between the Company and the Depositary. Unless otherwise agreed, the Depositary shall present its statement for such fees, charges and reimbursements to the Company once every three months.  The charges and expenses of the Custodian are for the sole account of the Depositary.
 
The obligation of Holders and Beneficial Owners to pay ADS fees and charges shall survive the termination of the Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4, the right to collect ADS fees and charges shall extend for those ADS fees and charges incurred prior to the effectiveness of such resignation or removal.

Section 5.10          Restricted Securities Owners.  The Company agrees to advise in writing each of the persons or entities who, to the knowledge of the Company, holds Restricted Securities that such Restricted Securities are ineligible for deposit hereunder (except under the circumstances contemplated in Section 2.14) and, to the extent practicable, shall require each of such persons to represent in writing that such person will not deposit Restricted Securities hereunder (except under the circumstances contemplated in Section 2.14).

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ARTICLE VI
 
AMENDMENT AND TERMINATION

Section 6.1          Amendment/Supplement.  Subject to the terms and conditions of this Section 6.1 and applicable law, the ADRs outstanding at any time, the provisions of the Deposit Agreement and the form of ADR attached hereto and to be issued under the terms hereof may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the prior written consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and other governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding ADSs until the expiration of thirty (30) days after notice of such amendment or supplement shall have been given to the Holders of outstanding ADSs. Notice of any amendment to the Deposit Agreement or any ADR shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (e.g., upon retrieval from the Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary).  The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs to be settled solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial existing rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such ADSs, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement and the ADR, if applicable, as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such ADS and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require an amendment of, or supplement to, the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and any ADRs at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement and any ADRs in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, rules or regulations.

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Section 6.2          Termination.  The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination.  If (i) ninety (90) days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) ninety (90) days shall have expired after the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and, in either case, a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4 of the Deposit Agreement, the Depositary may terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination.  The date so fixed for termination of the Deposit Agreement in any termination notice so distributed by the Depositary to the Holders of ADSs is referred to as the “Termination Date”. Until the Termination Date, the Depositary shall continue to perform all of its obligations under the Deposit Agreement, and the Holders and Beneficial Owners will be entitled to all of their rights under the Deposit Agreement.
 
If any ADSs shall remain outstanding after the Termination Date, the Registrar and the Depositary shall not, after the Termination Date, have any obligation to perform any further acts under the Deposit Agreement, except that the Depositary shall, subject, in each case, to the terms and conditions of the Deposit Agreement, continue to (i) collect dividends and other distributions pertaining to Deposited Securities, (ii) sell Deposited Property received in respect of Deposited Securities, (iii) deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any other Deposited Property, in exchange for ADSs surrendered to the Depositary (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (iv) take such actions as may be required under applicable law in connection with its role as Depositary under the Deposit Agreement.
 
At any time after the Termination Date, the Depositary may sell the Deposited Property then held under the Deposit Agreement and shall after such sale hold un-invested the net proceeds of such sale, together with any other cash then held by it under the Deposit Agreement, in an un-segregated account and without liability for interest, for the pro rata benefit of the Holders whose ADSs have not theretofore been surrendered.  After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement except (i) to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (ii) as may be required at law in connection with the termination of the Deposit Agreement. After the Termination Date, the Company shall be discharged from all obligations under the Deposit Agreement, except for its obligations to the Depositary under Sections 5.8, 5.9 and 7.6 of the Deposit Agreement.  The obligations under the terms of the Deposit Agreement of Holders and Beneficial Owners of ADSs outstanding as of the Termination Date shall survive the Termination Date and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement (except as specifically provided in the Deposit Agreement).

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ARTICLE VII
 
MISCELLANEOUS

Section 7.1          Counterparts.  The Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts together shall constitute one and the same agreement. Copies of the Deposit Agreement shall be maintained with the Depositary and shall be open to inspection by any Holder during business hours.

Section 7.2          No Third-Party Beneficiaries/Acknowledgments.  The Deposit Agreement is for the exclusive benefit of the parties hereto (and their successors) and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person, except to the extent specifically set forth in the Deposit Agreement. Nothing in the Deposit Agreement shall be deemed to give rise to a partnership or joint venture among the parties nor establish a fiduciary or similar relationship among the parties.  The parties hereto acknowledge and agree that (i) Citibank and its Affiliates may at any time have multiple banking relationships with the Company, the Holders, the Beneficial Owners, and their respective Affiliates, (ii) Citibank and its Affiliates may own and deal in any class of securities of the Company and its Affiliates and in ADSs, and may be engaged at any time in transactions in which parties adverse to the Company, the Holders, the Beneficial Owners or their respective Affiliates may have interests, (iii) the Depositary and its Affiliates may from time to time have in their possession non-public information about the Company, the Holders, the Beneficial Owners, and their respective Affiliates, (iv) nothing contained in the Deposit Agreement shall (a) preclude Citibank or any of its Affiliates from engaging in such transactions or establishing or maintaining such relationships, or (b) obligate Citibank or any of its Affiliates to disclose such information, transactions or relationships, or to account for any profit made or payment received in such transactions or relationships, (v) the Depositary shall not be deemed to have knowledge of any information any other division of Citibank or any of its Affiliates may have about the Company, the Holders, the Beneficial Owners, or any of their respective Affiliates, and (vi) the Company, the Depositary, the Custodian and their respective agents and controlling persons may be subject to the laws and regulations of jurisdictions other than the U.S. and England and Wales, and the authority of courts and regulatory authorities of such other jurisdictions, and, consequently, the requirements and the limitations of such other laws and regulations, and the decisions and orders of such other courts and regulatory authorities, may affect the rights and obligations of the parties to the Deposit Agreement.

Section 7.3          Severability.  In case any one or more of the provisions contained in the Deposit Agreement or in the ADRs should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

Section 7.4          Holders and Beneficial Owners as Parties; Binding Effect.  The Holders and Beneficial Owners from time to time of ADSs issued hereunder shall be parties to the Deposit Agreement and shall be bound by all of the terms and conditions hereof and of any ADR evidencing their ADSs by acceptance thereof or any beneficial interest therein.

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Section 7.5          Notices.  Any and all notices to be given to the Company shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, air courier or email as follows:
 
Address:
90 Harcourt Street, Dublin 2,
   
Ireland Attention:
Chief Financial Officer
   
Email:
rory.nealon@amrytpharma.com,
 
or to any other address which the Company may specify in writing to the Depositary.
 
Any and all notices to be given to the Depositary shall be in writing and deemed to have been duly given if personally delivered or sent by mail, air courier or cable, telex or facsimile transmission, confirmed by letter personally delivered or sent by mail or air courier, addressed to Citibank, N.A., 388 Greenwich Street, New York, New York 10013, U.S.A., Attention: Depositary Receipts Department, or to any other address which the Depositary may specify in writing to the Company.
 
Any and all notices to be given to any Holder shall be deemed to have been duly given
 
(a)          if personally delivered or sent by mail or cable, telex or facsimile transmission, confirmed by letter, addressed to such Holder at the address of such Holder as it appears on the books of the Depositary or, if such Holder shall have filed with the Depositary a request that notices intended for such Holder be mailed to some other address, at the address specified in such request, or
 
(b)          if a Holder shall have designated such means of notification as an acceptable means of notification under the terms of the Deposit Agreement, by means of electronic messaging addressed for delivery to the e-mail address designated by the Holder for such purpose. Notice to Holders shall be deemed to be notice to Beneficial Owners for all purposes of the Deposit Agreement. Failure to notify a Holder or any defect in the notification to a Holder shall not affect the sufficiency of notification to other Holders or to the Beneficial Owners of ADSs held by such other Holders. Any notices given to DTC under the terms of the Deposit Agreement shall (unless otherwise specified by the Depositary) constitute notice to the DTC Participants who hold the ADSs in their DTC accounts and to the Beneficial Owners of such ADSs.
 
Delivery of a notice sent by mail, air courier or cable, telex or facsimile transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box or delivered to an air courier service, without regard for the actual receipt or time of actual receipt thereof by a Holder.  The Depositary or the Company may, however, act upon any cable, telex or facsimile transmission received by it from any Holder, the Custodian, the Depositary, or the Company, notwithstanding that such cable, telex or facsimile transmission shall not be subsequently confirmed by letter.

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Delivery of a notice by means of email or electronic messaging shall be deemed to be effective at the time of the initiation of the transmission by the sender (as shown on the sender’s records), notwithstanding that the intended recipient retrieves the message at a later date, fails to retrieve such message, or fails to receive such notice on account of its failure to maintain the designated e-mail address, its failure to designate a substitute e-mail address or for any other reason.

Section 7.6          Governing Law and Jurisdiction.  The Deposit Agreement, the ADRs and the ADSs shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York without reference to the principles of choice of law thereof. Notwithstanding any other provision of the Deposit Agreement to the contrary, any ADR or any present or future provisions of the laws of the State of New York, the rights of holders of Shares and of any other Deposited Securities and the obligations and duties of the Company in respect of the holders of Shares and other Deposited Securities, as such, shall be governed by the laws of England and Wales (or, if applicable, such other laws as may govern the Deposited Securities).
 
Except as set forth in the following paragraph of this Section 7.6, the Company and the Depositary agree that the federal or state courts in the City of New York shall have jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute between them that may arise out of or in connection with the Deposit Agreement and, for such purposes, each irrevocably submits to the non-exclusive jurisdiction of such courts.  The Company hereby irrevocably designates, appoints and empowers Aegerion Pharmaceuticals, Inc. (the “Agent”) now at 53 State Street, Suite 500, Boston, MA 02109 as its authorized agent to receive and accept for and on its behalf, and on behalf of its properties, assets and revenues, service by mail of any and all legal process, summons, notices and documents that may be served in any suit, action or proceeding brought against the Company in any federal or state court as described in the preceding sentence or in the next paragraph of this Section 7.6. If for any reason the Agent shall cease to be available to act as such, the Company agrees to designate a new agent in New York on the terms and for the purposes of this Section 7.6 reasonably satisfactory to the Depositary.  The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding against the Company, by service by mail of a copy thereof upon the Agent (whether or not the appointment of such Agent shall for any reason prove to be ineffective or such Agent shall fail to accept or acknowledge such service), with a copy mailed to the Company by registered or certified air mail, postage prepaid, to its address provided in Section 7.5.  The Company agrees that the failure of the Agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon.
 
Notwithstanding the foregoing, the Depositary and the Company unconditionally agree that in the event of any suit, action or proceeding against (a) the Company, (b) the Depositary in its capacity as Depositary under the Deposit Agreement, or (c) against both the Company and the Depositary, in any such case, in any state or federal court of the United States, and the Depositary or the Company have any claim, for indemnification or otherwise, against each other arising out of the subject matter of such suit, action or proceeding, then the Company and the Depositary may pursue such claim against each other in the state or federal court in the United States in which such suit, action, or proceeding is pending and, for such purposes, the Company and the Depositary irrevocably submit to the non-exclusive jurisdiction of such courts.  The Company agrees that service of process upon the Agent in the manner set forth in the preceding paragraph shall be effective service upon it for any suit, action or proceeding brought against it as described in this paragraph.

44
The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any actions, suits or proceedings brought in any court as provided in this Section 7.6, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
 
The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, and agrees not to plead or claim, any right of immunity from legal action, suit or proceeding, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, from execution of judgment, or from any other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, and consents to such relief and enforcement against it, its assets and its revenues in any jurisdiction, in each case with respect to any matter arising out of, or in connection with, the Deposit Agreement, any ADR or the Deposited Property.
 
EACH OF THE PARTIES TO THE DEPOSIT AGREEMENT (INCLUDING, WITHOUT LIMITATION, EACH HOLDER AND BENEFICIAL OWNER) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY ARISING OUT OF, OR RELATING TO, THE DEPOSIT AGREEMENT, ANY ADR AND ANY TRANSACTIONS CONTEMPLATED THEREIN (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR OTHERWISE).
 
The provisions of this Section 7.6 shall survive any termination of the Deposit Agreement, in whole or in part.

Section 7.7          Assignment.  Subject to the provisions of Section 5.4, the Deposit Agreement may not be assigned by either the Company or the Depositary.
 
Section 7.8          Compliance with, and No Disclaimer under, U.S. Securities Laws.
 
(a)          Notwithstanding anything in the Deposit Agreement to the contrary, the withdrawal or delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act.
 
(b)          Each of the parties to the Deposit Agreement (including, without limitation, each Holder and Beneficial Owner) acknowledges and agrees that no provision of the Deposit Agreement or any ADR shall, or shall be deemed to, disclaim any liability under the Securities Act or the Exchange Act, in each case to the extent established under applicable U.S. laws.

45
Section 7.9          English Law References.  Any summary of English laws and regulations and of the terms of the Company’s Articles of Association set forth in the Deposit Agreement have been provided by the Company solely for the convenience of Holders, Beneficial Owners and the Depositary. While such summaries are believed by the Company to be accurate as of the date of the Deposit Agreement, (i) they are summaries and as such may not include all aspects of the materials summarized applicable to a Holder or Beneficial Owner, and (ii) these laws and regulations and the Company’s Articles of Association may change after the date of the Deposit Agreement. Neither the Depositary nor the Company has any obligation under the terms of the Deposit Agreement to update any such summaries.
 
Section 7.10          Titles and References.
 
(a)          Deposit Agreement.  All references in the Deposit Agreement to exhibits, articles, sections, subsections, and other subdivisions refer to the exhibits, articles, sections, subsections and other subdivisions of the Deposit Agreement unless expressly provided otherwise.  The words “the Deposit Agreement”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar import refer to the Deposit Agreement as a whole as in effect at the relevant time between the Company, the Depositary and the Holders and Beneficial Owners of ADSs and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to sections of the Deposit Agreement are included for convenience only and shall be disregarded in construing the language contained in the Deposit Agreement. References to “applicable laws and regulations” shall refer to laws and regulations applicable to ADRs, ADSs or Deposited Property as in effect at the relevant time of determination, unless otherwise required by law or regulation.
 
(b)          ADRs.  All references in any ADR(s) to paragraphs, exhibits, articles, sections, subsections, and other subdivisions refer to the paragraphs, exhibits, articles, sections, subsections and other subdivisions of the ADR(s) in question unless expressly provided otherwise. The words “the Receipt”, “the ADR”, “herein”, “hereof’, “hereby”, “hereunder”, and words of similar import used in any ADR refer to the ADR as a whole and as in effect at the relevant time, and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender in any ADR shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to paragraphs of any ADR are included for convenience only and shall be disregarded in construing the language contained in the ADR. References to “applicable laws and regulations” shall refer to laws and regulations applicable to the Company, the Depositary, the Custodian, their agents and controlling persons, the ADRs, the ADSs and the Deposited Property as in effect at the relevant time of determination, unless otherwise required by law or regulation.

46
Section 7.11          Amendment and Restatement.  The Depositary shall arrange to have new ADRs printed that reflect the form of ADR attached to the Deposit Agreement. All ADRs issued hereunder after the date hereof, whether upon the deposit of Shares or other Deposited Securities or upon the transfer, combination or split-up of existing ADRs, shall be substantially in the form of the specimen ADR attached as Exhibit A hereto. However, American depositary receipts issued prior to the date hereof under the terms of the Original Deposit Agreement and outstanding as of the date hereof, which do not reflect the form of ADR attached hereto as Exhibit A, do not need to be called in for exchange and may remain outstanding until such time as the Holders thereof choose to surrender them for any reason under the Deposit Agreement. The Depositary is authorized and directed to take any and all actions deemed necessary to effect the foregoing.
 
The Company hereby instructs the Depositary to (i) promptly send notice of the execution of the Deposit Agreement to all holders of American depositary shares outstanding under the Original Deposit Agreement as of the date hereof and (ii) inform holders of American depositary shares issued as “certificated American depositary shares” and outstanding under the Original Deposit Agreement as of the date hereof that they have the opportunity, but are not required, to exchange their American depositary receipts for one or more ADR(s) issued pursuant to the Deposit Agreement.
 
Holders and Beneficial Owners of American depositary shares issued pursuant to the Original Deposit Agreement and outstanding as of the date hereof, shall, from and after the date hereof, be deemed Holders and Beneficial Owners of ADSs issued pursuant and be subject to all of the terms and conditions of the Deposit Agreement in all respects, provided, however, that any term of the Deposit Agreement that prejudices any substantial existing right of holders or beneficial owners of American depositary shares issued under the Original Deposit Agreement shall not become effective as to Holders and Beneficial Owners until thirty (30) days after notice of the amendments effectuated by the Deposit Agreement shall have been given to holders of ADSs outstanding as of the date hereof.
 
47
IN WITNESS WHEREOF, Amryt Pharma plc and CITIBANK, N.A. have duly executed the Deposit Agreement as of the day and year first above set forth and all Holders and Beneficial Owners shall become parties hereto upon acceptance by them of ADSs issued in accordance with the terms hereof, or upon acquisition of any beneficial interest therein.
 
 
AMRYT PHARMA PLC
   
 
By:
/s/ Rory Nealon
  
 

Name:
 Rory Nealon
 

Title:
Chief Financial Officer

 
CITIBANK, N.A.
   
 
By:
/s/ Leslie DeLuca
  
 

Name:
 Leslie DeLuca
 

Title:
 Attorney-in-Fact

[Signature Page to the Amended and Restated Deposit Agreement]

EXHIBIT A
 
[FORM OF ADR]
 
Number
  
CUSIP NUMBER:
 
     
    American Depositary Shares (each American Depositary Share representing
the right to receive five (5) fully paid ordinary shares)
   
 
AMERICAN DEPOSITARY RECEIPT
 
for
 
AMERICAN DEPOSITARY SHARES
 
representing
 
DEPOSITED ORDINARY SHARES
 
of
 
AMRYT PHARMA PLC

(Incorporated under the laws of England and Wales)
 
CITIBANK, N.A., a national banking association organized and existing under the laws of the United States of America, as depositary (the “Depositary”), hereby certifies that ______________is the owner of_______________ American Depositary Shares (hereinafter “ADS”) representing deposited ordinary shares, including evidence of rights to receive such ordinary shares (the “Shares”), of Amryt Pharma plc, a public limited company incorporated under the laws of England and Wales, and its successors (the “Company”).  As of the date of issuance of this ADR, each ADS represents the right to receive five (5) Shares deposited under the Deposit Agreement (as hereinafter defined) with the Custodian, which at the date of issuance of this ADR is Citibank, N.A. (London) (the “Custodian”).  The ADS(s)-to-Share(s) ratio is subject to amendment as provided in Articles IV and VI of the Deposit Agreement.  The Depositary’s Principal Office is located at 388 Greenwich Street, New York, New York 10013, U.S.A.

A-1
(1)          The Deposit Agreement.  This American Depositary Receipt is one of an issue of American Depositary Receipts (“ADRs”), all issued and to be issued upon the terms and conditions set forth in the Amended and Restated Deposit Agreement, dated as of July 8, 2020 (as amended and supplemented from time to time, the “Deposit Agreement”), by and among the Company, the Depositary, and all Holders and Beneficial Owners from time to time of ADSs issued thereunder.  The Deposit Agreement sets forth the rights and obligations of Holders and Beneficial Owners of ADSs and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other Deposited Property (as defined in the Deposit Agreement) from time to time received and held on deposit in respect of the ADSs. Copies of the Deposit Agreement are on file at the Principal Office of the Depositary and with the Custodian. Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, or by continuing to hold, from and after the date hereof any American depositary shares issued and outstanding under the Original Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof. The manner in which a Beneficial Owner holds ADSs (e.g., in a brokerage account vs. as registered holder) may affect the rights and obligations of, the manner in which, and the extent to which, services are made available to, Beneficial Owners pursuant to the terms of the Deposit Agreement.
 
The statements made on the face and reverse of this ADR are summaries of certain provisions of the Deposit Agreement and the Articles of Association (as in effect on the date of the signing of the Deposit Agreement) and are qualified by and subject to the detailed provisions of the Deposit Agreement and the Articles of Association, to which reference is hereby made.
 
All capitalized terms not defined herein shall have the meanings ascribed thereto in the Deposit Agreement.
 
The Depositary makes no representation or warranty as to the validity or worth of the Deposited Property.  The Depositary has made arrangements for the acceptance of the ADSs into DTC. Each Beneficial Owner of ADSs held through DTC must rely on the procedures of DTC and the DTC Participants to exercise and be entitled to any rights attributable to such ADSs.  The Depositary may issue Uncertificated ADSs subject, however, to the terms and conditions of Section 2.13 of the Deposit Agreement.
 
(2)          Surrender of ADSs and Withdrawal of Deposited Securities.  The Holder of this ADR (and of the ADSs evidenced hereby) shall be entitled to Delivery (at the Custodian’s designated office) of the Deposited Securities at the time represented by the ADSs evidenced hereby upon satisfaction of each of the following conditions: (i) the Holder (or a duly-authorized attorney of the Holder) has duly Delivered ADSs to the Depositary at its Principal Office the ADSs evidenced hereby (and, if applicable, this ADR evidencing such ADSs) for the purpose of withdrawal of the Deposited Securities represented thereby, (ii) if applicable and so required by the Depositary, this ADR Delivered to the Depositary for such purpose has been properly endorsed in blank or is accompanied by proper instruments of transfer in blank (including signature guarantees in accordance with standard securities industry practice), (iii) if so required by the Depositary, the Holder of the ADSs has executed and delivered to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of the person(s) designated in such order, and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case, to the terms and conditions of this ADR evidencing the surrendered ADSs, of the Deposit Agreement, of the Company’s Articles of Association and of any applicable laws and the rules of CREST or any other applicable book-entry settlement system, if available, and to any provisions of or governing the Deposited Securities, in each case as in effect at the time thereof.

A-2
Upon satisfaction of each of the conditions specified above, the Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, this ADR(s) evidencing the ADSs so Delivered), (ii) shall direct the Registrar to record the cancellation of the ADSs so Delivered on the books maintained for such purpose, and (iii) shall direct the Custodian to Deliver, or cause the Delivery of, in each case, without unreasonable delay, the Deposited Securities represented by the ADSs so canceled together with any certificate or other document of title for the Deposited Securities, or evidence of the electronic transfer thereof (if available), as the case may be, to or upon the written order of the person(s) designated in the order delivered to the Depositary for such purpose, subject however, in each case, to the terms and conditions of the Deposit Agreement, of this ADR evidencing the ADS so canceled, of the Articles of Association, of any applicable laws and of the rules of CREST or any other applicable book-entry settlement system, if available, and to the terms and conditions of or governing the Deposited Securities, in each case as in effect at the time thereof.
 
The Depositary shall not accept for surrender ADSs representing less than one (1) Share. In the case of Delivery to it of ADSs representing a number other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) return to the person surrendering such ADSs the number of ADSs representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Share represented by the ADSs so surrendered and remit the proceeds of such sale (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes withheld) to the person surrendering the ADSs.
 
Notwithstanding anything to the contrary contained in this ADR or the Deposit Agreement, the Depositary may make delivery at the Principal Office of the Depositary of Deposited Property consisting of (i) any cash dividends or cash distributions, or (ii) any proceeds from the sale of any non-cash distributions, which are at the time held by the Depositary in respect of the Deposited Securities represented by the ADSs surrendered for cancellation and withdrawal. At the request, risk and expense of any Holder so surrendering ADSs represented by this ADR, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any Deposited Property (other than Deposited Securities) held by the Custodian in respect of such ADSs to the Depositary for delivery at the Principal Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission.

A-3
(3)          Transfer, Combination and Split-up of ADRs.  The Registrar shall register the transfer of this ADR (and of the ADSs represented hereby) on the books maintained for such purpose and the Depositary shall (x) cancel this ADR and execute new ADRs evidencing the same aggregate number of ADSs as those evidenced by this ADR canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs, and (z) Deliver such new ADRs to or upon the order of the person entitled thereto, if each of the following conditions has been satisfied: (i) this ADR has been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a transfer thereof, (ii) this surrendered ADR has been properly endorsed or is accompanied by proper instruments of transfer (including signature guarantees in accordance with standard securities industry practice), (iii) this surrendered ADR has been duly stamped (if required by the laws of the State of New York or of the United States), and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case, to the terms and conditions of this ADR, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.
 
The Registrar shall register the split-up or combination of this ADR (and of the ADSs represented hereby) on the books maintained for such purpose and the Depositary shall (x) cancel this ADR and execute new ADRs for the number of ADSs requested, but in the aggregate not exceeding the number of ADSs evidenced by this ADR canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs, and (z) Deliver such new ADRs to or upon the order of the Holder thereof, if each of the following conditions has been satisfied: (i) this ADR has been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a split-up or combination hereof, and (ii) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case, to the terms and conditions of this ADR, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.
 
(4)          Pre-Conditions to Registration, Transfer, Etc.  As a condition precedent to the execution and Delivery, the registration of issuance, transfer, split-up, combination or surrender, of any ADS, the delivery of any distribution thereon, or the withdrawal of any Deposited Property, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of ADSs or of this ADR of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in Section 5.9 and Exhibit B to the Deposit Agreement and in this ADR, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter contemplated by Section 3.1 of the Deposit Agreement, and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of this ADR or ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations as the Depositary and the Company may establish consistent with the provisions of this ADR, if applicable, the Deposit Agreement and applicable law.

A-4
The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the deposit of particular Shares may be refused, or the registration of transfer of ADSs in particular instances may be refused, or the registration of transfer of ADSs generally may be suspended, during any period when the transfer books of the Company, the Depositary, a Registrar or the Share Registrar are closed or if any such action is deemed necessary or advisable by the Depositary (whereupon the Depositary shall notify the Company) or the Company, in good faith, at any time or from time to time because of any requirement of law or regulation, any government or governmental body or commission or any securities exchange on which the ADSs or Shares are listed, or under any provision of the Deposit Agreement or this ADR, if applicable, or under any provision of, or governing, the Deposited Securities, or because of a meeting of shareholders of the Company or for any other reason, subject, in all cases to Section 7.8 of the Deposit Agreement and paragraph (25) of this ADR. Notwithstanding any provision of the Deposit Agreement or this ADR to the contrary, Holders are entitled to surrender outstanding ADSs to withdraw the Deposited Securities associated therewith at any time subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Shares in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to the withdrawal of the Deposited Securities, and (iv) other circumstances specifically contemplated by Instruction I.A.(1) of the General Instructions to Form F-6 (as such General Instructions may be amended from time to time) under the Securities Act.
 
(5)          Compliance with Information Requests.  Notwithstanding any other provision of the Deposit Agreement or this ADR, each Holder and Beneficial Owner of the ADSs represented hereby agrees to comply with requests from the Company pursuant to applicable law, the rules and requirements of any stock exchange on which the Shares or ADSs are, or will be, registered, traded or listed, or the Articles of Association, which are made to provide information, inter alia, as to the capacity in which such Holder or Beneficial Owner owns ADSs (and the Shares represented by such ADSs, as the case may be) and regarding the identity of any other person(s) interested in such ADSs (and the Shares represented by such ADSs, as the case may be) and the nature of such interest and various other matters, whether or not they are Holders and/or Beneficial Owners at the time of such request.
 
(6)          Ownership Restrictions.  Notwithstanding any other provision contained in this ADR or of the Deposit Agreement to the contrary, the Company may restrict transfers of the Shares where such transfer might result in ownership of Shares exceeding limits imposed by applicable law or the Articles of Association. The Company may also restrict, in such manner as it deems appropriate, transfers of the ADSs where such transfer may result in the total number of Shares represented by the ADSs owned by a single Holder or Beneficial Owner to exceed any such limits.  The Company may, in its sole discretion but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any Holder or Beneficial Owner in excess of the limits set forth in the preceding sentence, including but not limited to, the imposition of restrictions on the transfer of ADSs, the removal or limitation of voting rights or the mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADSs held by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Articles of Association. Nothing herein or in the Deposit Agreement shall be interpreted as obligating the Depositary or the Company to ensure compliance with the ownership restrictions described herein or in Section 3.5 of the Deposit Agreement.

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(7)          Reporting Obligations and Regulatory Approvals.  Applicable laws and regulations may require holders and beneficial owners of Shares, including the Holders and Beneficial Owners of ADSs, to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. Holders and Beneficial Owners of ADSs are solely responsible for determining and complying with such reporting requirements and obtaining such approvals. Each Holder and each Beneficial Owner hereby agrees to make such determination, file such reports, and obtain such approvals to the extent and in the form required by applicable laws and regulations as in effect from time to time. Neither the Depositary, the Custodian, the Company or any of their respective agents or affiliates shall be required to take any actions whatsoever on behalf of Holders or Beneficial Owners to determine or satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.
 
(8)          Liability for Taxes and Other Charges.  Any tax or other governmental charge payable by the Custodian or by the Depositary with respect to any Deposited Property, ADSs or this ADR shall be payable by the Holders and Beneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Property held on behalf of such Holder and/or Beneficial Owner, and may sell for the account of a Holder and/or Beneficial Owner any or all of such Deposited Property and apply such distributions and sale proceeds in payment of, any taxes (including applicable interest and penalties) or charges that are or may be payable by Holders or Beneficial Owners in respect of the ADSs, Deposited Property and this ADR, the Holder and the Beneficial Owner hereof remaining liable for any deficiency.  The Custodian may refuse the deposit of Shares and the Depositary may refuse to issue ADSs, to deliver ADRs, register the transfer of ADSs, register the split-up or combination of ADRs and (subject to paragraph (25) of this ADR and Section 7.8 of the Deposit Agreement) the withdrawal of Deposited Property until payment in full of such tax, charge, penalty or interest is received.  Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, and any of their respective agents, officers, employees and Affiliates for, and to hold each of them harmless from, any claims (including, without limitation, by any governmental authority or other person or entity) with respect to taxes (including applicable interest and penalties thereon) arising from any tax benefit obtained for such Holder and/or Beneficial Owner. Notwithstanding anything to the contrary contained in the Deposit Agreement or this ADR, the obligations of Holders and Beneficial Owners under Section 3.2 of the Deposit Agreement shall survive any transfer of ADSs, any cancellation of ADSs and withdrawal of Deposited Securities, and the termination of the Deposit Agreement.

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(9)          Representations and Warranties on Deposit of Shares.  Each person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized, validly allotted and issued, fully paid, not subject to any call for the payment of further capital and legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived, disapplied or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, (v) the Shares presented for deposit are not, and the ADSs issuable upon such deposit will not be, Restricted Securities (except as contemplated in Section 2.14 of the Deposit Agreement), (vi) the Shares presented for deposit have not been stripped of any rights or entitlements and (vii) the deposit of the Shares does not violate any applicable provisions of English law.  Such representations and warranties shall survive the deposit and withdrawal of Shares, the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs. If any such representations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof
 
(10)          Proofs, Certificates and Other Information.  Any person presenting Shares for deposit, any Holder and any Beneficial Owner may be required, and every Holder and Beneficial Owner agrees, from time to time to provide to the Company, the Depositary and the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Property, compliance with applicable laws, the terms of the Deposit Agreement or this ADR evidencing the ADSs and the provisions of, or governing, the Deposited Property, to execute such certifications and to make such representations and warranties, and to provide such other information and documentation (or, in the case of Shares in registered form presented for deposit, such information relating to the registration on the books of the Company or of the Share Registrar) as the Depositary or the Custodian may deem necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement and this ADR.  The Depositary and the Registrar, as applicable, and at the reasonable request of the Company, shall, to the extent practicable, may withhold the execution or delivery or registration of transfer of any ADR or ADS or the distribution or sale of any dividend or distribution of rights or of the proceeds thereof or, to the extent not limited by paragraph (25) and Section 7.8 of the Deposit Agreement, the delivery of any Deposited Property until such proof or other information is filed or such certifications are executed, or such representations and warranties are made or such other documentation or information is provided, in each case to the Depositary’s, the Registrar’s and the Company’s satisfaction.
 
(11)          ADS Fees and Charges.  The following ADS fees are payable under the terms of the Deposit Agreement:
 

 (i)
ADS Issuance Fee: by any person for whom ADSs are issued (e.g., an issuance upon a deposit of Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason), excluding issuances as a result of distributions described in paragraph (iv) below, a fee not in excess of U.S.$5.00 per 100 ADSs (or fraction thereof) issued under the terms of the Deposit Agreement;
 

 (ii)
ADS Cancellation Fee: by any person for whom ADSs are being cancelled (e.g., a cancellation of ADSs for Delivery of deposited Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) cancelled;

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 (iii)
Cash Distribution Fee: by any Holder of ADSs, a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) held for the distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements);
 

 (iv)
Stock Distribution /Rights Exercise Fee: by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) held for the distribution of ADSs pursuant to (a) stock dividends or other free stock distributions, or (b) an exercise of rights to purchase additional ADSs;
 

 (v)
Other Distribution Fee: by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) held for the distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., spin-off shares);
 

 (vi)
Depositary Services Fee: by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the Depositary;
 

 (vii)
Registration of ADS Transfer Fee: by any Holder of ADS(s) being transferred or by any person to whom ADSs are transferred, a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) transferred (e.g., upon a registration of the transfer of registered ownership of ADSs, upon a transfer of ADSs into DTC and vice versa, or for any other reason); and
 

 (viii)
ADS Conversion Fee: by any Holder of ADS(s) being converted or by any person to whom the converted ADSs are delivered, a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) converted from one ADS series to another ADS series (e.g., upon conversion of Partial Entitlement ADSs for Full Entitlement ADSs, or upon conversion of Restricted ADSs into freely transferrable ADSs, and vice versa).
 
The Company, Holders, Beneficial Owners, persons depositing Shares or withdrawing Deposited Securities in connection with ADS issuances and cancellations, and persons for whom ADSs are issued or cancelled shall be responsible for the following ADS charges under the terms of the Deposit Agreement:
 

 (a)
taxes (including applicable interest and penalties) and other governmental charges;
 

 (b)
such registration fees as may from time to time be in effect for the registration of Shares or other Deposited Securities on the share register and applicable to transfers of Shares or other Deposited Securities to or from the name of the Custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;

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 (c)
such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at the expense of the person depositing Shares or withdrawing Deposited Securities or of the Holders and Beneficial Owners of ADSs;
 

 (d)
in connection with the conversion of Foreign Currency, the fees, expenses, spreads, taxes and other charges of the Depositary and/or conversion service providers (which may be a division, branch or Affiliate of the Depositary).  Such fees, expenses, spreads, taxes and other charges shall be deducted from the Foreign Currency;
 

 (e)
any reasonable and customary out-of-pocket expenses incurred in such conversion and/or on behalf of the Holders and Beneficial Owners in complying with currency exchange control or other governmental requirements; and
 

 (f)
the fees, charges, costs and expenses incurred by the Depositary, the Custodian, or any nominee in connection with the ADR program.
 
All ADS fees and charges so payable may be deducted from distributions or must be remitted to the Depositary, or its designee, and may, at any time and from time to time, be changed by agreement between the Depositary and Company but, in the case of ADS fees and charges payable by Holders and Beneficial Owners, only in the manner contemplated by paragraph (23) of this ADR and as contemplated in Section 6.1 of the Deposit Agreement. The Depositary shall provide, without charge, a copy of its latest ADS fee schedule to anyone upon request.
 
ADS fees and charges for (i) the issuance of ADSs and (ii) the cancellation of ADSs will be payable by the person for whom the ADSs are so issued by the Depositary (in the case of ADS issuances) and by the person for whom ADSs are being cancelled (in the case of ADS cancellations).  In the case of ADSs issued by the Depositary into DTC or presented to the Depositary via DTC, the ADS issuance and cancellation fees and charges will be payable by the DTC Participant(s) receiving the ADSs from the Depositary or the DTC Participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the Beneficial Owner(s) and will be charged by the DTC Participant(s) to the account(s) of the applicable Beneficial Owner(s) in accordance with the procedures and practices of the DTC Participant(s) as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are payable by Holders as of the applicable ADS Record Date established by the Depositary.  In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, the applicable Holders as of the ADS Record Date established by the Depositary will be invoiced for the amount of the ADS fees and charges and such ADS fees may be deducted from distributions made to Holders. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC Participants in accordance with the procedures and practices prescribed by DTC from time to time and the DTC Participants in turn charge the amount of such ADS fees and charges to the Beneficial Owners for whom they hold ADSs.  In the case of (i) registration of ADS transfers, the ADS transfer fee will be payable by the ADS Holder whose ADSs are being transferred or by the person to whom the ADSs are transferred, and (ii) conversion of ADSs of one series for ADSs of another series, the ADS conversion fee will be payable by the Holder whose ADSs are converted or by the person to whom the converted ADSs are delivered.

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The Depositary may reimburse the Company for certain expenses incurred by the Company in respect of the ADR program established pursuant to the Deposit Agreement, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as the Company and the Depositary agree from time to time. The Company shall pay to the Depositary such fees and charges, and reimburse the Depositary for such out-of-pocket expenses, as the Depositary and the Company may agree from time to time. Responsibility for payment of such fees, charges and reimbursements may from time to time be changed by agreement between the Company and the Depositary.  Unless otherwise agreed, the Depositary shall present its statement for such fees, charges and reimbursements to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.
 
The obligation of Holders and Beneficial Owners to pay ADS fees and charges shall survive the termination of the Deposit Agreement.  As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4 of the Deposit Agreement, the right to collect ADS fees and charges shall extend for those ADS fees and charges incurred prior to the effectiveness of such resignation or removal.
 
(12)          Title to ADRs.  Subject to the limitations contained in the Deposit Agreement and in this ADR, it is a condition of this ADR, and every successive Holder of this ADR by accepting or holding the same consents and agrees, that title to this ADR (and to each Certificated ADS evidenced hereby) shall be transferable upon the same terms as a certificated security under the laws of the State of New York, provided that, in the case of Certificated ADSs, this ADR has been properly endorsed or is accompanied by proper instruments of transfer. Notwithstanding any notice to the contrary, the Depositary and the Company may deem and treat the Holder of this ADR (that is, the person in whose name this ADR is registered on the books of the Depositary) as the absolute owner thereof for all purposes. Neither the Depositary nor the Company shall have any obligation nor be subject to any liability under the Deposit Agreement or this ADR to any holder of this ADR or any Beneficial Owner unless, in the case of a holder of ADSs, such holder is the Holder of this ADR registered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner, or the Beneficial Owner’s representative, is the Holder registered on the books of the Depositary.
 
(13)          Validity of ADR.  The Holder(s) of this ADR (and the ADSs represented hereby) shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company unless this ADR has been (i) dated, (ii) signed by the manual or facsimile signature of a duly-authorized signatory of the Depositary, (iii) countersigned by the manual or facsimile signature of a duly-authorized signatory of the Registrar, and (iv) registered in the books maintained by the Registrar for the registration of issuances and transfers of ADRs. An ADR bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be so authorized prior to the delivery of such ADR by the Depositary.

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(14)          Available Information; Reports; Inspection of Transfer Books.
 
The Company is subject to the periodic reporting requirements of the Exchange Act and, accordingly, is required to file or furnish certain reports with the Commission.  These reports can be retrieved from the Commission’s website (www.sec.gov) and can be inspected and copied at the public reference facilities maintained by the Commission located (as of the date of the Deposit Agreement) at 100 F Street, N.E., Washington D.C. 20549. The Depositary shall make available for inspection by Holders at its Principal Office, the Deposit Agreement, the provisions of or governing Deposited Securities and any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Property and (b) made generally available to the holders of such Deposited Property by the Company.
 
The Registrar shall keep books for the registration of ADSs which at all reasonable times shall be open for inspection by the Company and by the Holders of such ADSs, provided that such inspection shall not be, to the Registrar’s knowledge, for the purpose of communicating with Holders of such ADSs in the interest of a business or object other than the business of the Company or other than a matter related to the Deposit Agreement or the ADSs.
 
The Registrar may close the transfer books with respect to the ADSs, at any time or from time to time, when deemed necessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable written request of the Company subject, in all cases, to paragraph (25) and Section 7.8 of the Deposit Agreement.
 
Dated:
  
   
CITIBANK, N.A.
Transfer Agent and Registrar
CITIBANK, N.A.
as Depositary
   
By:
 
By:
 
Authorized Signatory Authorized Signatory
 
The address of the Principal Office of the Depositary is 388 Greenwich Street, New York, New York 10013, U.S.A.

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[FORM OF REVERSE OF ADR]
 
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
 
OF THE DEPOSIT AGREEMENT
 
(15)          Dividends and Distributions in Cash, Shares, etc.  (a) Cash Distributions: Upon the timely receipt by the Depositary of a notice from the Company that it intends to make a distribution of a cash dividend or other cash distribution, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement. Upon receipt of confirmation from the Custodian of receipt of (x) any cash dividend or other cash distribution on any Deposited Securities, or (y) proceeds from the sale of any Deposited Property held in respect of the ADSs under the terms of the Deposit Agreement, the Depositary will (i) if any amounts are received in a Foreign Currency, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars (subject to the terms and on the conditions of Section 4.8 of the Deposit Agreement), (ii) if applicable and unless previously established, establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement, and (iii) distribute promptly the amount thus received from such conversion (net of (a) the applicable fees and charges described in the Fee Schedule attached as Exhibit B to the Deposit Agreement and (b) applicable taxes withheld) to the Holders entitled thereto as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date.  The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent, and any balance not so distributed shall be held by the Depositary (without liability for interest thereon) and shall be added to and become part of the next sum received by the Depositary for distribution to Holders of ADSs outstanding at the time of the next distribution.  If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities, or from any cash proceeds from the sales of Deposited Property, an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs shall be reduced accordingly.  Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority.  Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request.  The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable Holders and Beneficial Owners of ADSs until the distribution can be effected or the funds that the Depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.1 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.1 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

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(b)          Share Distributions: Upon the timely receipt by the Depositary of a notice from the Company that it intends to make a distribution that consists of a dividend in, or free distribution of Shares, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement. Upon receipt of confirmation from the Custodian of the receipt of the Shares so distributed by the Company, the Depositary shall either (i) subject to Section 5.9 of the Deposit Agreement, distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Shares received as such dividend, or free distribution, subject to the other terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes), or (ii) if additional ADSs are not so distributed, take all actions necessary so that each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional integral number of Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary, and (b) taxes).  In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares or ADSs, as the case may be, represented by the aggregate of such fractions and distribute the net proceeds upon the terms described in Section 4.1 of the Deposit Agreement.
 
In the event that the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, if the Company in the fulfillment of its obligations under Section 5.7 of the Deposit Agreement, has furnished an opinion of U.S. counsel determining that Shares must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of (a) taxes and (b) fees and charges of, and the expenses incurred by, the Depositary) to Holders entitled thereto upon the terms of Section 4.1 of the Deposit Agreement.  The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement.  Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.2 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.2 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

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(c)          Elective Distributions in Cash or Shares: Upon the timely receipt of a notice indicating that the Company wishes an elective distribution in cash or Shares to be made available to Holders of ADSs upon the terms described in the Deposit Agreement, the Company and the Depositary shall determine in accordance with the Deposit Agreement whether such distribution is lawful and reasonably practicable.  The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution be made available to Holders, (ii) the Depositary shall have determined, upon consultation with the Company, that such distribution is reasonably practicable and (iii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 of the Deposit Agreement.  If the above conditions are satisfied, the Depositary shall, subject to the terms and conditions of the Deposit Agreement, establish an ADS Record Date according to paragraph (17) and Section 4.9 of the Deposit Agreement and establish procedures to enable the Holder hereof to elect to receive the proposed distribution in cash or in additional ADSs.  If a Holder elects to receive the distribution in cash, the distribution shall be made as in the case of a distribution in cash.  If the Holder hereof elects to receive the distribution in additional ADSs, the distribution shall be made as in the case of a distribution in Shares upon the terms described in the Deposit Agreement.  If such elective distribution is not reasonably practicable or if the Depositary did not receive satisfactory documentation set forth in the Deposit Agreement, the Depositary shall establish an ADS Record Date upon the terms of Section 4.9 of the Deposit Agreement and, to the extent permitted by law, distribute to Holders, on the basis of the same determination as is made in England and Wales in respect of the Shares for which no election is made, either (x) cash, upon the terms described in Section 4.1 of the Deposit Agreement or (y) additional ADSs representing such additional Shares, in each case, upon the terms described in Section 4.2 of the Deposit Agreement.  Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to the Holder hereof a method to receive the elective distribution in Shares (rather than ADSs).  There can be no assurance that the Holder hereof will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.  Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.3 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.3 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.
 
(d)          Distribution of Rights to Purchase Additional ADSs: Upon the timely receipt by the Depositary of a notice indicating that the Company wishes rights to subscribe for additional Shares to be made available to Holders of ADSs, the Depositary upon consultation with the Company, shall determine, whether it is lawful and reasonably practicable to make such rights available to the Holders.  The Depositary shall make such rights available to any Holders only if (i) the Company shall have timely requested that such rights be made available to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 of the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution of rights is reasonably practicable.  If such conditions are not satisfied or if the Company requests that the rights not be made available to Holders of ADSs, the Depositary shall sell the rights as described below.  In the event all conditions set forth above are satisfied, the Depositary shall establish an ADS Record Date (upon the terms described in Section 4.9 of the Deposit Agreement) and establish procedures to (x) distribute rights to purchase additional ADSs (by means of warrants or otherwise), (y) enable the Holders to exercise such rights (upon payment of the subscription price and of the applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes), and (z) deliver ADSs upon the valid exercise of such rights.  Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to the Holders a method to exercise rights to subscribe for Shares (rather than ADSs).  If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5,7 of the Deposit Agreement or determines, upon consultation with the Company, it is not reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall, upon consultation with the Company, determine whether it is lawful and reasonably practicable to sell such rights, in a riskless principal capacity, at such place and upon such terms (including public and private sale) as it may deem practicable.  The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) upon the terms hereof and of Section 4.1 of the Deposit Agreement.  If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) of the Deposit Agreement or to arrange for the sale of the rights upon the terms described in Section 4.4(b) of the Deposit Agreement, the Depositary shall allow such rights to lapse.  The Depositary shall not be liable for (i) any failure to accurately determine whether it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.

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Notwithstanding anything herein or in Section 4.4 of the Deposit Agreement to the contrary, if registration (under the Securities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act (or other applicable law) covering such offering is in effect or (ii) unless the Company furnishes the Depositary opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case reasonably satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws.  In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of Deposited Property (including rights) an amount on account of taxes or other governmental charges, the amount distributed to the Holders of ADSs representing such Deposited Property shall be reduced accordingly.  In the event that the Depositary determines that any distribution of Deposited Property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such Deposited Property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes or charges.
 
There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive or exercise rights on the same terms and conditions as the holders of Shares or be able to exercise such rights.  Nothing herein or in the Deposit Agreement shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights.

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(e)          Distributions other than Cash, Shares or Rights to Purchase Shares: Upon receipt of a notice indicating that the Company wishes property other than cash, Shares or rights to purchase additional Shares to be made to Holders of ADSs, the Depositary shall determine whether such distribution to Holders is lawful and reasonably practicable.  The Depositary shall not make such distribution unless (i) the Company shall have requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received satisfactory documentation contemplated in Section 5.7 of the Deposit Agreement, and (iii) the Depositary shall have determined, after consultation with the Company, that such distribution is reasonably practicable. Upon satisfaction of such conditions, the Depositary shall distribute the property so received to the Holders of record, as of the ADS Record Date, in proportion to the number of ADSs held by them respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes withheld.  The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.
 
If the conditions above are not satisfied, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem practicable and shall (i) cause the proceeds of such sale, if any, to be converted into Dollars and (ii) distribute the proceeds of such conversion received by the Depositary (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) to the Holders as of the ADS Record Date upon the terms hereof and of Section 4.1 of the Deposit Agreement.  If the Depositary is unable to sell such property, the Depositary may dispose of such property for the account of the Holders in any way it deems reasonably practicable under the circumstances.
 
Neither the Depositary nor the Company shall be responsible for (i) any failure to determine whether it is lawful or practicable to make the property described in Section 4.5 of the Deposit Agreement available to Holders in general or any Holders in particular, nor (ii) any loss incurred in connection with the sale or disposal of such property.
 
(16)          Redemption.  Upon timely receipt of notice from the Company that it intends to exercise its right of redemption in respect of any of the Deposited Securities, and satisfactory documentation, and only if, after consultation with the Company, the Depositary shall have determined that such proposed redemption is practicable, the Depositary shall (to the extent practicable) provide to each Holder a notice setting forth the Company’s intention to exercise the redemption rights and any other particulars set forth in the Company’s notice to the Depositary. The Depositary shall instruct the Custodian to present to the Company the Deposited Securities in respect of which redemption rights are being exercised against payment of the applicable redemption price.  Upon receipt of confirmation from the Custodian that the redemption has taken place and that funds representing the redemption price have been received, the Depositary shall convert, transfer, and distribute the proceeds (net of applicable (a) fees and charges of, and the expenses incurred by, the Depositary, and (b) taxes), retire ADSs and cancel ADRs, if applicable, upon delivery of such ADSs by Holders thereof and the terms set forth in Sections 4.1 and 6.2 of the Deposit Agreement.  If less than all outstanding Deposited Securities are redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as may be determined by the Depositary after consultation with the Company.  The redemption price per ADS shall be the dollar equivalent of the per share amount received by the Depositary (adjusted to reflect the ratio of ADS(s) to Share(s)) upon the redemption of the Deposited Securities represented by ADSs (subject to the terms of Section 4.8 of the Deposit Agreement and the applicable fees and charges of, and expenses incurred by, the Depositary, and taxes) multiplied by the number of Deposited Securities represented by each ADS redeemed. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed redemption provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.7 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.7 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

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(17)          Fixing of ADS Record Date.  Whenever the Depositary shall receive notice of the fixing of a record date by the Company for the determination of holders of Deposited Securities entitled to receive any distribution (whether in cash, Shares, rights or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each ADS, or whenever the Depositary shall receive notice of any meeting of, or solicitation of consents or proxies of, holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient in connection with the giving of any notice, solicitation of any consent or any other matter, the Depositary shall fix the record date (the “ADS Record Date”) for the determination of the Holders of ADS(s) who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Shares represented by each ADS. Subject to applicable law, the terms and conditions of this ADR and Sections 4.1 through 4.8 of the Deposit Agreement, only the Holders of ADSs at the close of business in New York on such ADS Record Date shall be entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.
 
(18)          Voting of Deposited Securities.  As soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or solicitation of consent or proxy in accordance with Section 4.9 of the Deposit Agreement.  The Depositary shall, if requested by the Company in writing in a timely manner (except as otherwise contemplated in Section 4.10 of the Deposit Agreement, the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least thirty (30) days (or such lesser number of days as mutually agreed to in writing by the Company and the Depositary) prior to the date of such vote or meeting), at the Company’s expense and provided no U.S. legal prohibitions exist, distribute as soon as practicable after receipt thereof to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy, (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Articles of Association and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s ADSs, and (c) a brief statement as to the manner in which such voting instructions may be given or deemed to have been given in accordance with Section 4.10 of the Deposit Agreement, it being acknowledged that if no instructions are received prior to the deadline set for such purposes to the Depositary to give a discretionary proxy to a person designated by the Company.

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The Company shall use its reasonable endeavors to notify the Depositary in writing of its intention to convene a meeting where the holders of Deposited Securities are entitled to vote, at least thirty (30) days (or such lesser number of days as mutually agreed to in writing by the Company and the Depositary) prior to the date of the proposed meeting.
 
Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to timely request that the Depositary distribute the information as provided for in this Section 4.10 of the Deposit Agreement, if the Depositary so agrees after consultation with the Company, the Depositary will use commercially reasonable efforts to perform the actions contemplated in this Section 4.10 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.10 of the Deposit Agreement, where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.
 
Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary may, to the extent not prohibited by law or regulations, or by the requirements of the stock exchange on which the ADSs are listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of, or solicitation of consents or proxies from, holders of Deposited Securities, distribute to the Holders a notice that provides Holders with, or otherwise publicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request (e.g., by reference to a website containing the materials for retrieval or a contact for requesting copies of the materials).
 
The Depositary has been advised by the Company that under the Articles of Association as in effect on the date of the Deposit Agreement, voting at any meeting of shareholders of the Company is by show of hands unless (before or on the declaration of the result of the show of hands) a poll is demanded.  The Depositary will not join in demanding a poll, whether or not requested to do so by Holders of ADSs. Under the Articles of Association as in effect on the date of the Deposit Agreement, at any meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless before or upon the declaration of the result of the show of hands a poll is demanded by: (a) the chairman of the meeting; (b) not less than five (5) members of the Company having the right to vote at the meeting; (c) a member or members of the Company representing not less than one tenth of the total voting rights of all the members of the Company having the right to vote at the meeting; or (d) a member or members of the Company holding shares in the Company conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all the shares conferring that right.

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Voting instructions may be given only in respect of a number of ADSs representing an integral number of Deposited Securities. Upon the timely receipt from a Holder of ADSs as of the ADS Record Date of voting instructions in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of the Deposit Agreement, Articles of Association and the provisions of the Deposited Securities, to vote, or cause the Custodian to vote, the Deposited Securities (in person or by proxy) represented by such Holder’s ADSs as follows: (a) in the event voting takes place at a shareholders’ meeting by a show of hands, the Depositary will instruct the Custodian to vote all Deposited Securities in accordance with the voting instructions received timely from a majority of Holders of ADSs who provided voting instructions, and (b) in the event voting takes place at a shareholders’ meeting by poll, the Depositary will instruct the Custodian to vote the Deposited Securities in accordance with the voting instructions timely received from the Holders of ADSs.  If voting is by poll and the Depositary does not receive voting instructions from a Holder as of the ADS Record Date on or before the date established by the Depositary for such purpose, such Holder shall be deemed, and the Depositary shall (unless otherwise specified in the notice distributed to Holders) deem such Holder, to have instructed the Depositary to give a discretionary proxy to a person designated by the Company to vote the Deposited Securities; provided, however, that no such discretionary proxy shall be given by the Depositary with respect to any matter to be voted upon as to which the Company informs the Depositary that (a) the Company does not wish such proxy to be given, (b) substantial opposition exists, or (c) the rights of holders of Deposited Securities may be adversely affected.
 
Deposited Securities represented by ADSs for which no timely voting instructions are received by the Depositary from the Holder shall not be voted (except (a) in the case voting is by show of hands, in which case the Depositary will instruct the Custodian to vote all Deposited Securities in accordance with the voting instructions received from a majority of Holders of ADSs who provided timely voting instructions, and (b) as contemplated in this Section 4.10). Neither the Depositary nor the Custodian shall under any circumstances exercise any discretion as to voting and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of, for purposes of establishing a quorum or otherwise, the Deposited Securities represented by ADSs, except pursuant to and in accordance with the voting instructions timely received from Holders or as otherwise contemplated herein.  If the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, the Depositary will deem such Holder (unless otherwise specified in the notice distributed to Holders) to have instructed the Depositary to vote in favor of the items set forth in such voting instructions.
 
Notwithstanding anything to the contrary contained herein, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the sole purpose of establishing quorum at a meeting of shareholders.
 
Notwithstanding anything to the contrary contained in the Deposit Agreement or any ADR, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of Deposited Securities if the taking of such action would violate U.S. or English laws. The Company agrees to take any and all actions reasonably necessary and as permitted by any applicable law to enable Holders and Beneficial Owners to exercise the voting rights accruing to the Deposited Securities and to deliver to the Depositary an opinion of U.S. counsel addressing any actions requested to be taken if so requested by the Depositary.

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There can be no assurance that Holders generally or any Holder in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.
 
(19)          Changes Affecting Deposited Securities.  Upon any change in nominal or par value, split-up, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, consolidation or sale of assets affecting the Company or to which it is a party, any property which shall be received by the Depositary or the Custodian in exchange for, or in conversion of, or replacement of, or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Property under the Deposit Agreement, and this ADR shall, subject to the provisions of the Deposit Agreement, this ADR evidencing such ADSs and applicable law, represent the right to receive such additional or replacement Deposited Property. In giving effect to such change, split-up, cancellation, consolidation or other reclassification of Deposited Securities, recapitalization, reorganization, merger, consolidation or sale of assets, the Depositary may, with the Company’s approval, and shall, if the Company shall so request, subject to the terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary, and (b) taxes) and receipt of an opinion of counsel to the Company reasonably satisfactory to the Depositary that such actions are not in violation of any applicable laws or regulations, (i) issue and deliver additional ADSs as in the case of a stock dividend on the Shares, (ii) amend the Deposit Agreement and the applicable ADRs, (iii) amend the applicable Registration Statement(s) on Form F-6 as filed with the Commission in respect of the ADSs, (iv) call for the surrender of outstanding ADRs to be exchanged for new ADRs, and (v) take such other actions as the Depositary, in consultation with the Company, considers appropriate to reflect the transaction with respect to the ADSs. Notwithstanding the foregoing, in the event that any Deposited Property so received may not be, upon consultation with the Company, lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall, if the Company requests, subject to receipt of an opinion of Company’s counsel reasonably satisfactory to the Depositary that such action is not in violation of any applicable laws or regulations, sell such Deposited Property at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) for the account of the Holders otherwise entitled to such Deposited Property upon an averaged or other practicable basis without regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to Section 4.1 of the Deposit Agreement.  The Depositary shall not be responsible for (i) any failure to determine whether it may be lawful or practicable to make such Deposited Property available to Holders in general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or (iii) any liability to the purchaser of such Deposited Property.

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(20)          Exoneration.  Notwithstanding anything contained in the Deposit Agreement or this ADR to the contrary, neither the Depositary nor the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or incur any liability (to the extent not limited by paragraph (25) hereof and Section 7.9 (b) of the Deposit Agreement) (i) if the Depositary, the Custodian, the Company or their respective agents shall be prevented or forbidden from, or delayed in, doing or performing any act or thing required or contemplated by the terms of the Deposit Agreement and this ADR, by reason of any provision of any present or future law or regulation of the United States, England and Wales or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of the potential criminal or civil penalties or restraint, or by reason of any provision, present or future, of the Articles of Association or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Articles of Association or provisions of or governing Deposited Securities, (iii) for any action or inaction in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADSs, (v) for any action or inaction of any clearing or settlement system (any participant thereof) for the Deposited Property or the ADSs, or (vi) for any consequential or punitive damages (including lost profits) for any breach of the terms of the Deposit Agreement.  The Depositary, its controlling persons, its agents, any Custodian and the Company, its Affiliates, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.
 
(21)          Standard of Care.  The Company and the Depositary and their respective Affiliates, directors, officers, employees and agents assume no obligation and shall not be subject to any liability under the Deposit Agreement or this ADR to any Holder(s) or Beneficial Owner(s), except that the Company and the Depositary agree to perform their respective obligations specifically set forth in the Deposit Agreement or this ADR without negligence or bad faith. Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective Affiliates, directors, officers, controlling persons, employees or agents, shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Property or in respect of the ADSs, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required (and no Custodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary).

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The Depositary and its agents shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any vote is cast or the effect of any vote, provided that any such action or omission is in good faith and without negligence and in accordance with the terms of the Deposit Agreement.  The Depositary shall not incur any liability for any failure to accurately determine whether any distribution or action may be lawful or reasonably practicable, for any investment risk associated with acquiring an interest in the Deposited Property, for the validity or worth of the Deposited Property, for the value of any Deposited Property or any distribution thereon, for any interest on Deposited Property, for any tax consequences that may result from the ownership of ADSs, Shares or other Deposited Property, for the credit-worthiness of any third party.  The Depositary shall not incur any liability for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for allowing any rights to lapse upon the terms of the Deposit Agreement, for the failure or timeliness of any notice from the Company, or for any action of or failure to act by, or any information provided or not provided by, DTC or any DTC Participant.
 
The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.
 
(22)          Resignation and Removal of the Depositary; Appointment of Successor   Depositary.  The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2 of the Deposit Agreement), or (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary, in such capacity, may at any time be removed by the Company by written notice of such removal, which removal shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2 of the Deposit Agreement), or (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor (other than as contemplated in Sections 5.8 and 5.9 of the Deposit Agreement).  The predecessor depositary, upon payment of all sums due it and on the written request of the Company shall (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9 of the Deposit Agreement), (ii) duly assign, transfer and deliver all of the Depositary’s right, title and interest to the Deposited Property to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADSs and such other information relating to ADSs and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly provide notice of its appointment to such Holders. Any entity into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

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(23)          Amendment/Supplement.  Subject to the terms and conditions of this paragraph 23, and Section 6.1 of the Deposit Agreement and applicable law, this ADR and any provisions of the Deposit Agreement may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the prior written consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and other governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding ADSs until the expiration of thirty (30) days after notice of such amendment or supplement shall have been given to the Holders of outstanding ADSs. Notice of any amendment to the Deposit Agreement or any ADR shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (e.g., upon retrieval from the Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs to be settled solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial existing rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such ADSs, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement and this ADR, if applicable, as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such ADS and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require an amendment of, or supplement to, the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and this ADR at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement and this ADR in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, rules or regulations.

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(24)          Termination.  The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination. If (i) ninety (90) days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) ninety (90) days shall have expired after the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and, in either case, a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4 of the Deposit Agreement, the Depositary may terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination.  The date so fixed for termination of the Deposit Agreement in any termination notice so distributed by the Depositary to the Holders of ADSs is referred to as the “Termination Date”. Until the Termination Date, the Depositary shall continue to perform all of its obligations under the Deposit Agreement, and the Holders and Beneficial Owners will be entitled to all of their rights under the Deposit Agreement. If any ADSs shall remain outstanding after the Termination Date, the Registrar and the Depositary shall not, after the Termination Date, have any obligation to perform any further acts under the Deposit Agreement, except that the Depositary shall, subject, in each case, to the terms and conditions of the Deposit Agreement, continue to (i) collect dividends and other distributions pertaining to Deposited Securities, (ii) sell Deposited Property received in respect of Deposited Securities, (iii) deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any other Deposited Property, in exchange for ADSs surrendered to the Depositary (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (iv) take such actions as may be required under applicable law in connection with its role as Depositary under the Deposit Agreement. At any time after the Termination Date, the Depositary may sell the Deposited Property then held under the Deposit Agreement and shall after such sale hold un-invested the net proceeds of such sale, together with any other cash then held by it under the Deposit Agreement, in an un-segregated account and without liability for interest, for the pro rata benefit of the Holders whose ADSs have not theretofore been surrendered.  After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement except (i) to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (ii) as may be required at law in connection with the termination of the Deposit Agreement.  After the Termination Date, the Company shall be discharged from all obligations under the Deposit Agreement, except for its obligations to the Depositary under Sections 5.8, 5.9 and 7.6 of the Deposit Agreement. The obligations under the terms of the Deposit Agreement of Holders and Beneficial Owners of ADSs outstanding as of the Termination Date shall survive the Termination Date and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement (except as specifically provided in the Deposit Agreement).
 
(25)          Compliance with, and No Disclaimer under, U.S. Securities Laws.  (a) Notwithstanding any provisions in this ADR or the Deposit Agreement to the contrary, the withdrawal or delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to the Form F-6 Registration Statement, as amended from time to time, under the Securities Act.
 
(b)          Each of the parties to the Deposit Agreement (including, without limitation, each Holder and Beneficial Owner) acknowledges and agrees that no provision of the Deposit Agreement or any ADR shall, or shall be deemed to, disclaim any liability under the Securities Act or the Exchange Act, in each case to the extent established under applicable U.S. laws.

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(26)          No Third Party Beneficiaries/Acknowledgements.  The Deposit Agreement is for the exclusive benefit of the parties hereto (and their successors) and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person, except to the extent specifically set forth in the Deposit Agreement. Nothing in the Deposit Agreement shall be deemed to give rise to a partnership or joint venture among the parties nor establish a fiduciary or similar relationship among the parties. The parties hereto acknowledge and agree that (i) Citibank and its Affiliates may at any time have multiple banking relationships with the Company, the Holders, the Beneficial Owners, and their respective Affiliates, (ii) Citibank and its Affiliates may own and deal in any class of securities of the Company and its Affiliates and in ADSs, and may be engaged at any time in transactions in which parties adverse to the Company, the Holders, the Beneficial Owners or their respective Affiliates may have interests, (iii) the Depositary and its Affiliates may from time to time have in their possession non-public information about the Company, the Holders, the Beneficial Owners, and their respective Affiliates, (iv) nothing contained in the Deposit Agreement shall (a) preclude Citibank or any of its Affiliates from engaging in such transactions or establishing or maintaining such relationships, or (b) obligate Citibank or any of its Affiliates to disclose such information, transactions or relationships, or to account for any profit made or payment received in such transactions or relationships, (v) the Depositary shall not be deemed to have knowledge of any information any other division of Citibank or any of its Affiliates may have about the Company, the Holders, the Beneficial Owners, or any of their respective Affiliates, and (vi) the Company, the Depositary, the Custodian and their respective agents and controlling persons may be subject to the laws and regulations of jurisdictions other than the U.S. and England and Wales, and the authority of courts and regulatory authorities of such other jurisdictions, and, consequently, the requirements and the limitations of such other laws and regulations, and the decisions and orders of such other courts and regulatory authorities, may affect the rights and obligations of the parties to the Deposit Agreement.
 
(27)          Governing Law / Waiver of Jury Trial.  The Deposit Agreement, the ADRs and the ADSs shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York without reference to the principles of choice of law thereof. Notwithstanding anything contained in the Deposit Agreement to the contrary, any ADR or any present or future provisions of the laws of the State of New York, the rights of holders of Shares and of any other Deposited Securities and the obligations and duties of the Company in respect of the holders of Shares and other Deposited Securities, as such, shall be governed by the laws of England and Wales (or, if applicable, such other laws as may govern the Deposited Securities).
 
EACH OF THE PARTIES TO THE DEPOSIT AGREEMENT (INCLUDING, WITHOUT LIMITATION, EACH HOLDER AND BENEFICIAL OWNER) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY ARISING OUT OF, OR RELATING TO, THE DEPOSIT AGREEMENT, ANY ADR AND ANY TRANSACTIONS CONTEMPLATED THEREIN (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR OTHERWISE).

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(ASSIGNMENT AND TRANSFER SIGNATURE LINES)
 
FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfer(s) unto ______________________________whose taxpayer identification number is ____________________________and whose address including postal zip code is _________, the within ADR and all rights thereunder, hereby irrevocably constituting and appointing ______________________attorney-in-fact to transfer said ADR on the books of the Depositary with full power of substitution in the premises.
 
Dated:  

 
Name:

 

By:
 

Title:
 
 
NOTICE: The signature of the Holder to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatsoever.
   
  If the endorsement be executed by an attorney, executor, administrator, trustee or guardian, the person executing the endorsement must give his/her full title in such capacity and proper evidence of authority to act in such capacity, if not on file with the Depositary, must be forwarded with this ADR.
   
     
SIGNATURE GUARANTEED  
   
  All endorsements or assignments of ADRs must be guaranteed by a member of a Medallion Signature Program approved by the Securities Transfer Association, Inc.
   
  Legends

[The ADRs issued in respect of Partial Entitlement American Depositary Shares shall bear the following legend on the face of the ADR: “This ADR evidences ADSs representing ‘partial entitlement’ Shares of the Company and as such do not entitle the holders thereof to the same per-share entitlement as other Shares (which are ‘full entitlement’ Shares) issued and outstanding at such time. The ADSs represented by this ADR shall entitle holders to distributions and entitlements identical to other ADSs when the Shares represented by such ADSs become ‘full entitlement’ Shares.”]

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EXHIBIT B
 
FEE SCHEDULE
 
ADS FEES AND RELATED CHARGES
 
All capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Deposit Agreement.  Except as otherwise specified herein, any reference to ADSs herein includes Partial Entitlement ADSs, Full Entitlement ADSs, Certificated ADSs, Uncertificated ADSs, and Restricted ADSs.
 
I.            ADS Fees
 
The following ADS fees are payable under the terms of the Deposit Agreement:
 
Service
Rate
By Whom Paid
(1)         Issuance of ADSs (e.g., an issuance upon a deposit of Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason), excluding issuances as a result of distributions described in paragraph (4) below.
Up to U.S. $5.00 per 100 ADSs (or fraction thereof) issued.
Person for whom ADSs are issued.
(2)         Cancellation of ADSs (e.g., a cancellation of ADSs for Delivery of deposited Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason).
Up to U.S. $5.00 per 100 ADSs (or fraction thereof) cancelled.
Person for whom ADSs are being cancelled.
(3)         Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements).
Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held.
Person to whom the distribution is made.
(4)         Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) an exercise of rights to purchase additional ADSs.
Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held.
Person to whom the distribution is made.
(5)         Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., spin-off shares).
Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held.
Person to whom the distribution is made.


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(6)         ADS Services.
Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the Depositary.
Person holding ADSs on the applicable record date(s) established by the Depositary.
(7)         Registration of ADS Transfers (e.g., upon a registration of the transfer of registered ownership of ADSs, upon a transfer of ADSs into DTC and vice versa, or for any other reason).
Up to U.S. $5.00 per 100 ADSs (or fraction thereof) transferred.
Person for whom or to whom ADSs are transferred.
(8)         Conversion of ADSs of one series for ADSs of another series (e.g., upon conversion of Partial Entitlement ADSs for Full Entitlement ADSs, or upon conversion of Restricted ADSs into freely transferable ADSs, and vice versa).
Up to U.S. $5.00 per 100 ADSs (or fraction thereof) converted.
Person for whom ADSs are converted or to whom the converted ADSs are delivered.

II.          Charges
 
The Company, Holders, Beneficial Owners, persons depositing Shares or withdrawing Deposited Securities in connection with ADS issuances and cancellations, and persons for whom ADSs are issued or cancelled shall be responsible for the following ADS charges under the terms of the Deposit Agreement:
 
(i)           taxes (including applicable interest and penalties) and other governmental charges;
 
(ii)          such registration fees as may from time to time be in effect for the registration of Shares or other Deposited Securities on the share register and applicable to transfers of Shares or other Deposited Securities to or from the name of the Custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;
 
(iii)         such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at the expense of the person depositing Shares or withdrawing Deposited Property or of the Holders and Beneficial Owners of ADSs;
 
(iv)         in connection with the conversion of Foreign Currency, the fees, expenses, spreads, taxes and other charges of the Depositary and/or conversion service providers (which may be a division, branch or Affiliate of the Depositary). Such fees, expenses, spreads, taxes, and other charges shall be deducted from the Foreign Currency;

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(v)          any reasonable and customary out-of-pocket expenses incurred in such conversion and/or on behalf of the Holders and Beneficial Owners in complying with currency exchange control or other governmental requirements; and.
 
(vi)         the fees, charges, costs and expenses incurred by the Depositary, the Custodian, or any nominee in connection with the ADR program.
 
The above fees and charges may at any time and from time to time be changed by agreement between the Company and the Depositary.


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Exhibit 2.7
 

DESCRIPTION OF SHARE CAPITAL
 
The following information is a summary of the material terms of share capital of Amryt Pharma plc, consisting of ordinary shares with a nominal (i.e., par) value of £0.06 each, as specified in our articles of association (“Articles”). We are incorporated as a public company with limited liability and our affairs are governed by our Articles and the laws of England and Wales. Unless the context otherwise requires, references to the “Company,” “Amryt,” “we,” “us” and “our” refer to Amryt Pharma plc and not its subsidiaries.
 
The following description summarizes the most important rights attached to our share capital that are currently in effect. Because it is only a summary, it does not contain all of the information that may be important to you. For a complete description of the rights attaching to our share capital, you should refer to the Articles, a copy of which is included as an exhibit to our annual report on Form 20-F, and to the applicable provisions of the Companies Act.
 
We are not permitted under English law to hold our own shares unless they are repurchased by us and held in treasury.
 
General
 
We were incorporated under the Companies Act on July 17, 2019 as a private company limited by shares under the name Amryt Pharma Holdings Limited, with company number 12107859.
 
We were re-registered as a public limited company on September 13, 2019 under the name Amryt Pharma Holdings plc. On September 24, 2019, in connection with the scheme of arrangement under which we acquired Aegerion, we became the parent company of our legacy businesses and changed our name to Amryt Pharma plc. The principal legislation under which we operate, and under which the share capital has been (and will be) created, is the Companies Act and regulations made thereunder.
 
Share Capital
 
As of December 31, 2021, our issued share capital consisted of 319,814,747 fully paid ordinary shares with no treasury shares held. Accordingly, the total number of voting rights is 319,814,747. This figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, our shares (see “—Other UK Law Considerations—Notification of Voting Rights” below).
 
Rights of Holders
 
The following summarizes the rights of holders of our ordinary shares:
 

 •
subject to any special rights or restrictions as to voting attached to any shares, on a show of hands every holder who (being an individual) is present in person or by proxy not being himself or herself a holder or (being a corporation) is present by a representative or by proxy not being himself or herself a holder shall have one vote and on a poll every holder who is present in person or by proxy shall have one vote for every share of which he or she is the holder (and at a general meeting which is held as a combined physical and electronic meeting, where a resolution put to a vote of the meeting is to be decided on a poll, the holder may cast his or her poll vote by means of the electronic platform); and

•
holders have the right to receive notice of, attend and vote at general meetings; the right to participate in our profits and receive such dividends as are recommended by the directors, pro rata according to the amount paid up on the shares during the period in respect of which the dividend is paid; and, on a winding up or return of capital or otherwise, the right to repayment of the amounts paid up or credited as paid up on the shares and the right to participate pro rata in any excess assets.
 
Share Registration
 
We are required by the Companies Act to keep a register of shareholders. Under English law, shares are taken to be allotted when a person acquires the unconditional right to be included in the company’s register of holders in respect of the shares and the shares are deemed to be issued when the name of the holder is entered into the company’s register of holders. The register of holders therefore is prima facie evidence of the identity of our holders and the shares that they hold. The register of holders generally provides limited, or no, information regarding the ultimate beneficial owners of our ordinary shares. The register of holders is maintained by our registrar, Link Asset Services Limited.
 
Holders of our ADSs will not be treated as shareholders and their names will therefore not be entered in our register of holders. The depositary, the custodian or their nominees will be the holder of the ordinary shares underlying our ADSs. Holders of our ADSs have a right to receive the ordinary shares underlying their ADSs. Each ADS represents the right to receive, and to exercise the beneficial ownership interests in, five ordinary shares that are on deposit with the depositary and/or custodian.
 
Under the Companies Act, we must enter an allotment of any shares in our register of holders as soon as practicable and in any event within two months of the allotment. We are also required under the Companies Act to register a transfer of any shares (or give the transferee notice of and reasons for refusal) as soon as practicable and in any event within two months after the date on which the transfer is lodged with us.
 
We, any of our holders and any other aggrieved person may apply to court for rectification of the register of holders if:
 

 •
the name of any person, without sufficient cause, is entered in or omitted from our register of holders; or

•
there is a default or unnecessary delay in entering on the register the fact of any person having ceased to be a holder.
 
Preemptive Rights
 
English law generally provides holders with preemptive rights when new shares are issued for cash; however, it is possible for the articles of association, or holders in a general meeting by way of a special resolution, to exclude preemptive rights. Such an exclusion of preemptive rights may be for a maximum period of up to five years from the date of adoption of the articles of association, if the exclusion is contained in the articles of association, or from the date of the holder resolution, if the exclusion is by holder resolution. In either case, this exclusion would need to be renewed by our holders upon its expiration (i.e., at least every five years). Typically UK public companies seek the disapplication of preemption rights (in relation to a specified aggregate nominal amount) on an annual basis at their annual general meeting. There are no provisions in the Articles which prescribe any right of preemption in relation to offers for subscription of securities in the same class. We are subject to the statutory preemption rights set out in the Companies Act.
 
Contingent Value Rights
 
On September 24, 2019, we issued CVRs with a potential value of $85 million if all three triggering events under the CVRs occur to holders of shares and options pursuant to the terms of the scheme of arrangement and the Acquisition. The following CVRs were issued by resolution of the Board, as authorized pursuant to a resolution passed by our shareholders at the general meeting held on September 23, 2019:
 

 •
57,457,870 EMA CVRs, which entitle their holders to a payment of up to $15 million in the aggregate (in satisfaction of which we may elect to issue loan notes or ordinary shares) upon the EMA issuing a qualifying approval (i.e., an approval or marketing authorization issued by the EMA in relation to the sale by us of Oleogel-S10 to consumers for medical purposes which satisfies a certain criteria in respect of Oleogel-S10) if such qualifying approval is obtained by December 31, 2021. The amount payable reduces on a straight-line basis if the qualifying approval is obtained after December 31, 2021 but prior to July 1, 2022;

•
57,457,870 FDA CVRs, which entitle their holders to a payment of up to $35 million in the aggregate (in satisfaction of which we may elect to issue loan notes or ordinary shares) upon the FDA issuing a qualifying approval (i.e., an approval or marketing authorization issued by the FDA in relation to the sale by us of Oleogel-S10 to consumers for medical purposes which satisfies a certain criteria in respect of Oleogel-S10) if qualifying approval is obtained by December 31, 2021. The amount payable reduces on a straight-line basis if the qualifying approval is obtained after December 31, 2021 but prior to July 1, 2022; and
 

 •
57,457,870 Revenue CVRs, which entitle their holders to a payment of up to $35 million in the aggregate (in satisfaction of which we may elect to issue loan notes or ordinary shares) upon the generation of certain revenues from sales of Oleogel-S10 in trailing 12-month revenues in any period prior to June 30, 2024.
 
Articles of Association
 
Our Articles were adopted on July 29, 2020 and amended on July 28, 2021.
 
The following is a description of our Articles as currently in effect. Unless noted otherwise, references to the Articles refer to the Articles as currently in effect.
 
Application of Contractual Agreements with Holders
 
The Articles are subject to any contractual agreement we entered into with any of the holders of our shares (in their capacity as our shareholders only).
 
Shares and Rights Attaching to Them
 
Holders of our ordinary shares have the right to receive notice of, attend and vote at general meetings, the right to participate in our profits and, on a winding up or return of capital or otherwise, the right to the amounts paid up or credited as paid up to the shares and the right to participate pro rata in any excess assets.
 
Variation of Share Rights
 
The rights attached to any class may, subject to the provisions of the Companies Act, be varied in such manner (if any) as may be provided by such rights or in the absence of such variation rights either with the consent in writing of the holders of not less than three-quarters in nominal value of the issued shares of the class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class.
 
Increase in Share Capital
 
We may from time to time by ordinary resolution increase our capital by such sum to be divided into shares of such amounts and carrying such rights as the resolution may prescribe.
 
Consolidation, Cancellation and Subdivision
 
Subject to the provisions of the Companies Act, we may, by ordinary resolution:
 

 •
consolidate and divide all or any of our share capital into shares of larger nominal value than our existing shares;

•
cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken; and

•
sub-divide our shares into shares of smaller nominal value than our existing shares.
 
Reduction
 
Subject to the provisions of the Companies Act, we may by special resolution reduce our share capital or any capital revaluation reserve or share premium account in any manner. We completed a capital reduction of our share premium account effected by a resolution passed by our shareholders at the general meeting held on September 23, 2019, and which was formally approved at the UK High Court of Justice on November 5, 2019.
 
Votes of Members
 
Votes Attaching to Shares
 
Subject to any special rights or restrictions as to voting attached to any shares, on a show of hands every holder who (being an individual) is present in person or by proxy not being himself or herself a holder or (being a corporation) is present by a representative or by proxy not being himself or herself a holder shall have one vote and on a poll every holder who is present in person or by proxy shall have one vote for every share of which he or she is the holder.
 
Votes on a Poll
 
At a general meeting, a resolution put to a vote of the meeting shall be decided on a show of hands, unless before or upon the declaration of the result of the show of hands a poll is demanded by (i) the chairperson of the meeting, (ii) not less than five holders having the right to vote at the meeting, (iii) holder(s) representing not less than one tenth of the total voting rights of all the holders having the right to vote at the meeting; or (iv) holder(s) of shares conferring a right to vote, being shares on which an aggregate sum has been paid up to not less than one tenth of the total sum paid up on all the shares conferring that right. On a poll, votes may be given either personally or by proxy. On a poll, a holder entitled to more than one vote need not cast all the votes in the same way.
 
At a general meeting which is held as a combined physical and electronic meeting, a resolution put to a vote of the meeting is to be decided on by a poll, and poll votes may be cast by means of the electronic platform.
 
Restrictions on Voting
 
No holder shall, unless determined otherwise by the directors, be entitled to vote at any general meeting in respect of any share held by him or her, either personally or by proxy, or to exercise any privilege as a member, if:
 

 •
any call or other sum presently payable by him or her to us in respect of the shares remains unpaid; or

•
the holder has been served with a notice under section 793 of the Companies Act and he or she has failed to provide us with information concerning interests in those shares required to be provided under the Companies Act.
 
Dividends
 
We may by ordinary resolution at a general meeting declare dividends out of profits available for distribution in accordance with the respective rights of holders but no such dividend shall be payable other than in accordance with the Companies Act or exceed the amount recommended by the directors. There is no fixed date on which entitlement to dividends arises.
 
All dividends shall be declared and paid according to the amounts paid-up on the shares in respect of which the dividend is paid. All dividends shall be apportioned and paid pro rata according to the amount paid up on the shares during any portion or portions of the period in respect of which the dividend is paid.
 
Insofar as, in the opinion of the directors, our profits justify such payments, the directors may pay interim dividends on shares of any class. Subject to their judgment, the directors may also pay half yearly or at other suitable intervals, any dividend which may be payable at a fixed rate.
 
The directors may deduct from any dividend or other monies payable on or in respect of a share all sums of money (if any) presently payable by the holder to us on account of calls or otherwise in relation to our shares. The directors may withhold dividends payable on shares after there has been failure to provide us with information concerning interests in those shares required to be provided under the Articles or the Companies Act until such failure has been remedied.
 
No dividend or other monies payable in respect of a share shall bear interest as against us unless otherwise provided by the rights attached to the share. Any dividend unclaimed after a period of 12 years from the date of its declaration shall be forfeited and cease to remain owing by us and shall then belong to us absolutely.
 
We may upon the recommendation of the directors by ordinary resolution at a general meeting direct payment of a dividend in whole or in part by the distribution of specific assets (and in particular of paid up shares or debentures of any other company) and the directors shall give effect to such resolution.
 
There are no dividend restrictions or procedures for non-resident holders.
 
Uncertificated Shares
 
Subject to the Companies Act, the directors may permit title to shares of any class to be issued or held otherwise than by a certificate and to be transferred by means of a “relevant system” (i.e., the CREST System) without a certificate. The directors have power to implement such arrangements as they think fit in order for any class of shares to be a participating security (subject always to the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended (“CREST Regulations”)).
 
Change of Control
 
There are no provisions in the Articles which set out any ownership threshold above which share ownership must be disclosed. See, however, “—Other UK Law Considerations” below.
 
Forfeiture or Lien
 
Notice on Failure to Pay a Call
 
If a holder fails to pay any call or “installment” of a call on the due date of payment, the directors may, at any time after the failure, serve a notice on him or her requiring payment and shall state that in the event of non-payment in accordance with such notice the shares on which the call was made will be liable to be forfeited.
 
Lien on Partly-Paid Shares
 
We shall have a first and paramount lien on every share (not being a fully paid share) for all monies (whether presently payable or not) called or payable at a fixed time in respect of such share.
 
Sale of Shares Subject to Lien
 
We may sell in such manner as the directors think fit any share on which we have a lien 14 days after a notice in writing stating and demanding payment of the sum presently payable and giving notice of intention to sell in default.
 
Distributions on Winding Up
 
If we shall be wound up, the liquidator may, with the authority of a special resolution and subject to any sanction required by the Companies Act, divide among the holders in specie the whole or any part of our assets and whether or not the assets shall consist of property of one kind or shall consist of property of different kinds, and may for such purpose set such value as he or she deems fair upon any one or more class or classes or property and may determine how such divisions shall be carried out as between the holders or different classes of holders. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of holders as the liquidator shall think fit but so that no holder shall be compelled to accept any shares in respect of which there is a liability.
 
Capitalization of Profits and Reserves
 
The directors may, with the authority of an ordinary resolution at a general meeting, capitalize any sum standing to the credit of any of our reserve accounts (including our share premium account and capital redemption reserve) or any sum standing to the credit of our profit and loss account.
 
Such capitalization shall be effected by appropriating such sum to the holders of ordinary shares in proportion to their holdings of ordinary shares and applying such sum on their behalf in paying up in full unissued shares to be allotted as fully paid to those holders who would have been entitled to that sum if it were distributed by way of dividend.
 
Transfer of Shares
 
Transfers of shares may be effected by transfer in writing in any usual or common form or in any other form acceptable by the directors or as required by any rules from time to time made by any operator of a relevant system as defined by the CREST Regulations. The instrument of transfer shall be signed by or on behalf of the transferor and (except in the case of fully paid shares) by or on behalf of the transferee. The transferor shall be deemed to remain the holder of the shares until the name of the transferee is entered in the register in respect of such shares. All instruments of transfer which are registered may be retained by us.
 
The directors may refuse to register any transfer of any share which is not a fully paid share provided that the directors shall not refuse to register any transfer or renunciation of partly paid shares in breach of AIM Rules. The directors may also decline to register a transfer of shares (except for certain types of transfer) after there has been a failure to provide us with information concerning interests in those shares required to be provided under the Articles or the Companies Act until such failure has been remedied.
 
Conversion
 
There are no provisions in the Articles which prescribe any rights of conversion in relation to any class of shares.
 
Holder Meetings
 
In accordance with the Companies Act, we are required in each year to hold an annual general meeting in addition to any other meeting held in that year and within six months of the end of any financial period provided that not more than 15 months has elapsed between the date of one annual general meeting and the next. The annual general meeting shall be convened whenever and wherever the Board sees fit, subject to the requirements of the Companies Act, as described in “—Differences in Corporate Law—Annual General Meeting” and “—Differences in Corporate Law—Notice of General Meetings”.
 
The directors may, whenever they think fit, and shall on requisition in accordance with the Companies Act, proceed to convene a general meeting.
 
Notices
 
An annual general meeting shall be called by at least 21 days’ notice and all other general meetings shall be called by at least 14 days’ notice in each case (exclusive of the day on which the notice is served (or deemed served) and the day for which the notice is given).
 
The notice must be in writing and must specify the place, day and time of the meeting; the general nature of the business; in the case of an annual general meeting that the meeting is an annual general meeting; if the meeting is convened to consider a special resolution, the intention to propose the resolution as such; and in the case of a combined physical and electronic meeting, details of the means for members to attend and participate in the meeting and any applicable access, identification or security arrangements. We may give notice by electronic communication and/or by making it available on our website.
 
Directors
 
Number of Directors
 
Unless otherwise determined by special resolution of the shareholders, the directors shall not be fewer than two or more than nine in number.
 
Directors’ Remuneration
 
The ordinary remuneration of the executive directors shall from time to time be determined by the directors who may delegate their authority.
 
Directors’ Expenses
 
The directors are entitled to be paid all expenses properly incurred in attending meetings of the Board or of any committee of the Board or holders’ meetings or otherwise in connection with our business.
 
Retirement by Rotation
 
At each of our annual general meetings that occurs after September 25, 2021, one-third of the directors for the time being (or, if their number is not a multiple of three, the number nearest to but not greater than one-third, subject to a minimum of one) shall retire from office by rotation. A director retiring by rotation shall be eligible for re-election.
 
Restrictions on Voting
 
A director shall not vote (save as provided in the Articles) in respect of any contract or arrangement or any other proposal in which he or she has a material interest. A director shall not be counted in the quorum at a meeting in relation to any resolution on which he or she is not entitled to vote. A director shall (in the absence of some other material interest than is indicated above) be entitled to vote (and be counted in the quorum) in respect of any resolution:
 

 •
relating to the giving of any security, guarantee or indemnity:

•
to him or her in relation to money lent or obligations incurred by him or her at the request of or for the benefit of us or any of our subsidiaries; or

•
to a third party in relation to our or any of our subsidiaries’ debt or obligation for which he himself or she herself has assumed responsibility in whole or part by the giving of security under a guarantee or indemnity;

•
where we or any of our subsidiaries is offering securities in which offer the director is or is to be interested directly or as a participant in the underwriting or sub-underwriting;

•
relating to another company in which he or she does not hold an interest in shares representing 1% or more of either class of the equity share capital, or the voting rights in such company;

•
relating to a superannuation fund, retirement benefits scheme, share option scheme or share incentive scheme under which he or she may benefit; or

•
concerning the purchase and/or maintenance of any insurance policy under which he or she may benefit.
 
Indemnities
 
To the extent permitted by law, each of our directors, alternate directors, officers or employees is entitled to be indemnified out of our assets against all losses or liabilities which he or she may sustain or incur in or about the execution of the duties of his or her office or otherwise in relation thereto. To the extent permitted by law, the directors have the power to purchase and maintain insurance for or for the benefit of any persons who are or were at any time:
 

 •
directors, alternate directors, officers or employees of a group company; or

•
trustees of any pension fund in which our employees or employees of any other group company are interested, including in each case insurance against any liability incurred by such persons in respect of any act or omission in the actual or purported execution and/or discharge of their duties and/or in the exercise or purported exercise of their powers and/or otherwise in relation to their duties, powers or offices in relation to us or any other group company or pension fund.
 
Borrowing Powers
 
The directors may exercise all of our powers to borrow money, to guarantee and to mortgage or charge our undertaking, property, assets and uncalled capital and, subject to the Companies Act, to issue debentures and other securities, whether outright or as collateral security, for any of our or any third party’s debt, liability or obligation.
 
Disclosure of Interest in Shares
 
We may give notice pursuant to article 78 of the Articles and section 793 of the Companies Act to any person whom we know or have reasonable cause to believe:
 

 •
to be interested in our shares; or

•
to have been so interested at any time in the three years immediately preceding the date on which the notice is to be issued.
 
The notice may require the person to:
 

 •
confirm that fact or (as the case may be) to state whether or not it is the case; and

•
if he or she holds, or has during that time held, any such interest, to give such further information as may be required in accordance with section 793 of the Companies Act (including particulars of the interest (past or present) and the identity of the persons interested in the shares in question).
 
If we have served a disclosure notice on a person appearing to be interested in specified shares and we have not received the information required in the disclosure notice within the relevant period (as defined below) after service of the disclosure notice, subject to the other provisions of the Articles, the holder holding the specified shares shall not be entitled to vote at general meetings and, in addition, if the holder holds 0.25% or more of any class of shares, such holder shall not be entitled to receive any dividend in respect of such shares or to transfer or agree to transfer such shares or rights therein. For the purposes of this paragraph, “relevant period” shall be: (i) 28 days, if a holder holds less than 0.25% of any class of shares; or (ii) 14 days, if a holder holds 0.25% or more of any class of shares.
 
Other UK Law Considerations
 
Notification of Voting Rights
 
A holder of our shares, as a holder in a public company incorporated in the United Kingdom whose shares are admitted to trading on AIM is required pursuant to Chapter 5 of the Disclosure Guidance and Transparency Rules of the UK Financial Conduct Authority to notify us of the percentage of his or her voting rights if the percentage of voting rights which he or she holds as a holder or through his or her direct or indirect holding of financial instruments (or a combination of such holdings) reaches, exceeds or falls below 3%, 4%, 5%, and each 1% threshold thereafter up to 100%, as a result of an acquisition or disposal of shares or financial instruments or as a result of events changing the breakdown of the voting rights.
 
Mandatory Purchases and Acquisitions
 
Pursuant to Sections 979 to 991 of the Companies Act, where a takeover offer has been made for us and the offeror has acquired or unconditionally contracted to acquire not less than 90% in value of the shares to which the offer relates and, where the shares to which the offer relates are voting shares, not less than 90% of the voting rights carried by those shares, the offeror may give notice to the holder of any shares to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he or she wishes to acquire, and is entitled to so acquire, those shares on the same terms as the general offer. Such notice must be sent within three months of the last day on which the offer can be accepted in the prescribed manner. The squeeze-out of the minority holders can be completed at the end of six weeks from the date the notice has been given, subject to the minority holders failing to successfully lodge an application to the court to prevent such squeeze-out any time prior to the end of those six weeks, following which the offeror can execute a transfer of the outstanding shares in its favor and pay the consideration to us, which we would then hold on trust for the outstanding minority holders. The consideration offered to the outstanding minority holders whose shares are compulsorily acquired under the Companies Act must, in general, be the same as the consideration that was available under the takeover offer.
 
Sell Out
 
The Companies Act also gives our minority holders a right to be bought out in certain circumstances by an offeror who has made a takeover offer for all of our shares. The holder of shares to which the offer relates, and who has not otherwise accepted the offer, may require the offeror to acquire his or her shares if, prior to the expiration of the acceptance period for such offer, the offeror has acquired or unconditionally agreed to acquire (i) not less than 90% in value of the voting shares, and (ii) not less than 90% of the voting rights carried by those shares. The offeror may impose a time limit on the rights of minority holders to be bought out that is not less than three months after the end of the acceptance period. If a holder exercises his or her rights to be bought out, the offeror is required to acquire those shares on the terms of the offer or on such other terms as may be agreed.
 
Purchase of Own Shares
 
Under English law, a limited company may only purchase its own shares out of the distributable profits of the company or the proceeds of a fresh issue of shares made for the purpose of financing the purchase, provided that they are not restricted from doing so by their articles. A limited company may not purchase its own shares if, as a result of the purchase, there would no longer be any issued shares of the company other than redeemable shares or shares held as treasury shares. Shares must be fully paid in order to be repurchased. Subject to the foregoing, we may purchase or may enter into any contract under which we will or may purchase, any of our own shares, including any redeemable shares. We completed a capital reduction of our share premium account which was formally approved at the UK High Court of Justice on November 5, 2019 following which we now have positive distributable reserves. Further, pursuant to an authority conferred by our shareholders at a general meeting on September 23, 2019, we agreed to repurchase 4,864,656 ordinary shares from Highbridge Tactical Credit Master Fund L.P., Highbridge SCF Special Situations SPV, L.P. and Nineteen77 Global Multi Strategy Alpha Master Limited. In exchange for the ordinary shares, these institutions were issued an equivalent number of zero cost warrants. Each warrant entitles the holder to subscribe for one ordinary share at zero cost. As of August 5, 2021, these zero cost warrants have all been exercised in exchange for ordinary shares.
 
Distributions and Dividends
 
Under the Companies Act, before a company can lawfully make a distribution or dividend, it must ensure that it has sufficient distributable reserves (on a non-consolidated basis). A company’s profits available for the purpose of making a distribution are its accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital. The requirement to have sufficient distributable reserves before a distribution or dividend can be paid applies to us and to each of our subsidiaries that has been incorporated under English law.
 
It is not sufficient that we have distributable profits available for the purpose of making a distribution. As a public company, an additional capital maintenance requirement is imposed on us to ensure that the net worth of the company is at least equal to the amount of its capital. A public company can only make a distribution:
 

 •
if, at the time that the distribution is made, the amount of its net assets (that is, the aggregate of the company’s assets less the aggregate of its liabilities) is no less than the aggregate of its called up share capital and undistributable reserves; and

•
if, and to the extent that, the distribution itself, at the time that it is made, does not reduce the amount of the net assets to less than that total.
 
City Code on Takeovers and Mergers
 
As a public company incorporated in England and Wales with our registered office in England and Wales which has shares admitted to AIM, we are subject to the UK City Code on Takeovers and Mergers (“City Code”), which is issued and administered by the UK Panel on Takeovers and Mergers (“Panel”). The City Code provides a framework within which takeovers of companies subject to it are conducted. In particular, the City Code contains certain rules in respect of mandatory offers. Under Rule 9 of the City Code, if a person:
 

 •
acquires an interest in our shares which, when taken together with shares in which he or she or persons acting in concert with him or her are interested, carries 30% or more of the voting rights of our shares; or

•
who, together with persons acting in concert with him or her, is interested in shares that in the aggregate carry not less than 30% and not more than 50% of the voting rights of our shares, and such persons, or any person acting in concert with him or her, acquires additional interests in shares that increase the percentage of shares carrying voting rights in which that person is interested,
 
the acquirer and depending on the circumstances, its concert parties, would be required (except with the consent of the Panel) to make a cash offer for our outstanding shares at a price not less than the highest price paid for any interests in the shares by the acquirer or its concert parties during the previous 12 months.
 
Exchange Controls
 
There are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import or export of capital, including the availability of cash and cash equivalents for use by us, or that may affect the remittance of dividends, interest, or other payments by us to non-resident holders of our ordinary shares or ADSs, other than withholding tax requirements. There is no limitation imposed by English law or in the Articles on the right of non-residents to hold or vote shares. However, where a holder has a registered address within the United Kingdom and has not notified us of an address within the United Kingdom at which notices may be given to him or her, such holder shall not be entitled to receive any notice.
 
Differences in Corporate Law
 
The applicable provisions of the Companies Act and other laws applicable to English public limited companies and their shareholders differ from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain differences between the provisions of the Companies Act applicable to us and the General Corporation Law of the State of Delaware relating to shareholders’ rights and protections. This summary is not intended to be a complete discussion of the respective rights and it is qualified in its entirety by reference to Delaware law and English law.
 
   
England and Wales
  
Delaware
         
Number of
Directors
  
Under the Companies Act, a public limited company must have at least two directors and the number of directors may otherwise be fixed by or in the manner provided in the company’s articles of association.
  
Under Delaware law, a corporation must have at least one director and the number of directors shall otherwise be fixed by or in the manner provided in the bylaws.

   
England and Wales
  
Delaware
         
Removal of
Directors
  
Under the Companies Act, shareholders may remove a director without cause by an ordinary resolution (which is passed by a simple majority of those voting in person or by proxy at a general meeting) irrespective of any provisions of any service contract the director has with the company, provided 28 clear days’ notice of the resolution has been given to the company and the company must, where practicable, give its shareholders notice of such resolution in the same manner and at the same time as it gives notice of the meeting. Where that is not practicable, the company must give its shareholders notice at least 14 clear days before the meeting. On receipt of notice of an intended resolution to remove a director, the company must forthwith send a copy of the notice to the director concerned. Certain other procedural requirements under the Companies Act must also be followed such as allowing the director to make representations against his or her removal either at the meeting or in writing.
  
Under Delaware law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except (a) unless the certificate of incorporation provides otherwise, in the case of a corporation whose board of directors is classified, shareholders may effect such removal only for cause, or (b) in the case of a corporation having cumulative voting, if less than the entire board of directors is to be removed, no director may be removed without cause if the votes cast against his or her removal would be sufficient to elect him or her if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he or she is a part.
         
Vacancies on
the Board of
Directors
  
Under English law, the procedure by which directors, other than a company’s initial directors, are appointed is generally set out in the company’s articles of association, provided that where two or more persons are appointed as directors of a public limited company by resolution of the shareholders, resolutions appointing each director must be voted on individually.
  
Under Delaware law, vacancies and newly created directorships may be filled by a majority of the directors then in office (even though less than a quorum) or by a sole remaining director unless (a) otherwise provided in the certificate of incorporation or by-laws of the corporation or (b) the certificate of incorporation directs that a particular class of stock is to elect such director, in which case a majority of the other directors elected by such class, or a sole remaining director elected by such class, will fill such vacancy.
         
Annual General
Meeting
  
Under the Companies Act, a public limited company must hold an annual general meeting in each six-month period beginning with the day following the company’s annual accounting reference date.
  
Under Delaware law, the annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from time to time by the board of directors or as provided in the certificate of incorporation or by the bylaws.
 
   
England and Wales
  
Delaware
         
General
Meeting
  
Under the Companies Act, a general meeting of the shareholders of a public limited company may be called by the directors.
 
In addition, shareholders holding at least 5% of the paid-up capital of the company carrying voting rights at general meetings (excluding any paid-up capital held as treasury shares) can require the directors to call a general meeting and, if the directors fail to do so within a certain period, the requisitionists (or any of them representing more than one-half of the total voting rights of all of them) may convene a general meeting.
  
Under Delaware law, special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.
         
Notice of
General
Meetings
  
Under the Companies Act, at least 21 clear days’ notice must be given for an annual general meeting and any resolutions to be proposed at the meeting, subject to a company’s articles of association providing for a longer period. Subject to a company’s articles of association providing for a longer period, at least 14 clear days’ notice is required for any other general meeting. In addition, certain matters, such as the removal of directors or auditors, require special notice, which is 28 clear days’ notice. The shareholders of a company may in all cases consent to a shorter notice period, the proportion of shareholders’ consent required being 100% of those entitled to attend and vote in the case of an annual general meeting and, in the case of any other general meeting, a majority in number of the members having a right to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving a right to attend and vote at the meeting (excluding any shares held in the company as treasury shares).
  
Under Delaware law, unless otherwise provided in the certificate of incorporation or bylaws, written notice of any meeting of the stockholders must be given to each stockholder entitled to vote at the meeting not less than ten nor more than 60 days before the date of the meeting and shall specify the place, date, hour and purpose or purposes of the meeting.
         

Quorum
  
Subject to the provisions of a company’s articles of association, the Companies Act provides that two “qualifying persons” present at a meeting (in person, by proxy or authorized representative under the Companies Act (provided that the proxies and/or authorized representatives, represent different shareholders) shall constitute a quorum for companies with more than one shareholder.
  
The certificate of incorporation or bylaws may specify the number of shares, the holders of which shall be present or represented by proxy at any meeting in order to constitute a quorum, but in no event shall a quorum consist of less than one-third of the shares entitled to vote at the meeting. In the absence of such specification in the certificate of incorporation or bylaws, a majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at a meeting of stockholders.
 
   
England and Wales
  
Delaware
         
Proxy
  
Under the Companies Act, a shareholder may appoint another person to attend, speak and vote at any general meeting on their behalf by proxy.
  
Under Delaware law, at any meeting of stockholders, a stockholder may designate another person to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A director of a Delaware corporation may not issue a proxy representing the director’s voting rights as a director.
         
Preemptive
Rights
  
Under the Companies Act, “equity securities,” being (i) shares in the company other than shares that, with respect to dividends and capital, carry a right to participate only up to a specified amount in a distribution, referred to as ordinary shares, or (ii) rights to subscribe for, or to convert securities into, ordinary shares, proposed to be allotted for cash must be offered first to the existing holders of ordinary shares in the company in proportion to the respective nominal value of their holdings, unless an exception applies or a special resolution disapplying such preemptive rights has been passed by shareholders in a general meeting or the articles of association provide for the disapplication of such preemptive rights in each case in accordance with the provisions of the Companies Act.
  
Under Delaware law, shareholders have no preemptive rights to subscribe to additional issues of stock or to any security convertible into such stock unless, and except to the extent that, such rights are expressly provided for in the certificate of incorporation.
         
Authority to
Allot
  
Under the Companies Act, the directors of a public limited company must not allot shares or grant rights to subscribe for or to convert any security into shares unless an exception applies or an ordinary resolution has been passed by shareholders in a general meeting authorizing such allotment or the articles of association provide for such authorization, in each case subject to a specified maximum nominal value and in accordance with the provisions of the Companies Act.
  
Under Delaware law, if the corporation’s charter or certificate of incorporation so provides, the board of directors has the power to authorize the issuance of stock. The board of directors may authorize capital stock to be issued for consideration consisting of cash, any tangible or intangible property or any benefit to the corporation or any combination thereof. It may determine the amount of such consideration by approving a formula. In the absence of actual fraud in the transaction, the judgment of the directors as to the value of such consideration is conclusive.
         
Liability of
Directors and
Officers
  
Under the Companies Act, any provision, whether contained in a company’s articles of association or any contract or otherwise, that purports to exempt a director of a company, to any extent, from any liability that would otherwise attach to him or her in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.
  
Under Delaware law, a corporation’s certificate of incorporation may include a provision eliminating or limiting the personal liability of a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a director. However, no provision can limit the liability of a director for:
 
   
England and Wales
  
Delaware
         
           
   
In addition, any provision by which a company directly or indirectly provides an indemnity, to any extent, for a director of the company or of an associated company against any liability attaching to him or her in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he or she is a director is also void except as permitted by the Companies Act, which provides exceptions for the company to (a) purchase and maintain insurance against such liability; (b) provide a “qualifying third party indemnity” (being an indemnity against liability incurred by the director to a person other than the company or an associated company or criminal proceedings in which he or she is convicted); and (c) provide a “qualifying pension scheme indemnity” (being an indemnity against liability incurred in connection with the company’s activities as trustee of an occupational pension plan).
  
•
any breach of the director’s duty of loyalty to the corporation or its stockholders;
 
 
  
 
•
acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
 
 
  
 
•
intentional or negligent payment of unlawful dividends or stock purchases or redemptions; or
 
 
  
 
•
any transaction from which the director derives an improper personal benefit.
 
   
England and Wales
  
Delaware
         
Voting Rights
  
For an English company it is usual for the articles of association to provide that, unless a poll is demanded by the shareholders of a company or is required by the chairman of the meeting or the company’s articles of association, shareholders shall vote on all resolutions on a show of hands. On a show of hands every shareholder has one vote (regardless of the number of ordinary shares held) and, subject to the company's articles of association, every proxy appointed by more than one shareholder has one vote unless they have been instructed by different shareholders to vote in different ways (in which case they will have one vote for and one vote against a resolution). Under the Companies Act, a provision of a company's articles is void if it has the effect of making ineffective a demand for a poll by (a) not fewer than five shareholders having the right to vote on the resolution; (b) any shareholder(s) representing not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding any voting rights attaching to treasury shares); or (c) any shareholder(s) holding shares in the company conferring a right to vote on the resolution (excluding any voting rights attaching to treasury shares) being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all the shares conferring that right. A company’s articles of association may provide more extensive rights for shareholders to call a poll.
 
Under English law, ordinary resolutions require the affirmative vote of a simple majority (more than 50%) of the votes cast by shareholders present, in person or by proxy, at the meeting. Special resolutions require the affirmative vote of not less than 75% of the votes cast by shareholders present, in person or by proxy, at the meeting.
  
Delaware law provides that, unless otherwise provided in the certificate of incorporation, each stockholder is entitled to one vote for each share of capital stock held by such stockholder.
         
Shareholder
Vote on Certain
Transactions
  
The Companies Act provides for schemes of arrangement, which are arrangements or compromises between a company and any class of shareholders or creditors and used in certain types of reconstructions, amalgamations, capital reorganizations or takeovers. These arrangements require:
  
Generally, under Delaware law, unless the certificate of incorporation provides for the vote of a larger portion of the stock, completion of a merger, consolidation, sale, lease or exchange of all or substantially all of a corporation’s assets or dissolution requires:
 
   
England and Wales
  
Delaware
         
   
•
the approval at a shareholders’ or creditors’ meeting convened by order of the court, of a majority in number of shareholders or creditors or a class thereof representing 75% in value of the capital held by, or debt owed to, the class of shareholders or creditors, or class thereof present and voting, either in person or by proxy; and
  
•
the approval of the board of directors; and
     
 
•
approval by the vote of the holders of a majority of the outstanding stock or, if the certificate of incorporation provides for more or less than one vote per share, a majority of the votes of the outstanding stock of the corporation entitled to vote on the matter.
 
            
   
•
the approval of the court.
      
             
Standard of
Conduct for
Directors
  
Under English law, a director owes various statutory and fiduciary duties to the company, including:
  
Delaware law does not contain specific provisions setting forth the standard of conduct of a director. The scope of the fiduciary duties of directors is generally determined by the courts of the State of Delaware. In general, directors have a duty to act without self-interest, on a well-informed basis and in a manner they reasonably believe to be in the best interest of the stockholders.
 
Directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and to its shareholders. The duty of care generally requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself or herself of all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his corporate position for personal gain or advantage. In general, but subject to certain exceptions, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Delaware courts have also imposed a heightened standard of conduct upon directors of a Delaware corporation who take any action designed to defeat a threatened change in control of the corporation.
 
 
 
    
 
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to act in the way he or she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (and in doing so have regard (amongst other matters) to: (i) the likely consequences of any decision in the long-term, (ii) the interests of the company’s employees, (iii) the need to foster the company’s business relationships with suppliers, customers and others, (iv) the impact of the company’s operations on the community and the environment, (v) the desirability to maintain a reputation for high standards of business conduct and (vi) the need to act fairly as between members of the company);
  
 
 
    
 
•
to avoid a situation in which he or she has, or can have, a direct or indirect interest that conflicts, or possibly conflicts, with the interests of the company;
  
 
 
    
 
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to act in accordance with the company’s constitution and only exercise his or her powers for the purposes for which they are conferred;
  
 
 
    
 
•
to exercise independent judgment;
  
 
 
    
 
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to exercise reasonable care, skill and diligence;
  

   
 
      
 
•
not to accept benefits from a third party conferred by reason of his or her being a director or doing, or not doing, anything as a director; and
   In addition, under Delaware law, when the board of directors of a Delaware corporation approves the sale or break-up of a corporation, the board of directors may, in certain circumstances, have a duty to obtain the highest value reasonably available to the shareholders.  
 
 
    
 
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a duty to declare any interest that he or she has, whether directly or indirectly, in a proposed or existing transaction or arrangement with the company.
  
 
   
England and Wales
  
Delaware
         
Stockholder
Suits
  
Under English law, generally, the company, rather than its shareholders, is the proper claimant in an action in respect of a wrong done to the company or where there is an irregularity in the company’s internal management. Notwithstanding this general position, the Companies Act provides that (i) a court may allow a shareholder to bring a derivative claim (that is, an action in respect of and on behalf of the company) in respect of a cause of action arising from a director’s negligence, default, breach of duty or breach of trust and (ii) a shareholder may bring a claim for a court order where the company’s affairs have been or are being conducted in a manner that is unfairly prejudicial to some of its shareholders.
  
Under Delaware law, a stockholder may initiate a derivative action to enforce a right of a corporation if the corporation fails to enforce the right itself. The complaint must:
 
  
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state that the plaintiff was a stockholder at the time of the transaction of which the plaintiff complains or that the plaintiffs shares thereafter devolved on the plaintiff by operation of law; and
 
  
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allege with particularity the efforts made by the plaintiff to obtain the action the plaintiff desires from the directors and the reasons for the plaintiff’s failure to obtain the action; or
 
  
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state the reasons for not making the effort.
           
       
Additionally, the plaintiff must remain a stockholder through the duration of the derivative suit. The action will not be dismissed or compromised without the approval of the Delaware Court of Chancery.
 
American Depositary Shares
 
Citibank, N.A. (“Citibank”) has agreed to act as the depositary for the ADSs. Citibank’s depositary offices are located at 388 Greenwich Street, New York, New York 10013. The ADSs represent ownership interests in securities that are on deposit with the depositary. The ADSs may be represented by certificates that are commonly known as American Depositary Receipts (“ADRs”). The depositary typically appoints a custodian to safekeep the securities on deposit. In this case, the custodian is Citibank, N.A. (London), located at Citigroup Centre, Canary Wharf, London E14 5LB, United Kingdom.
 
Citibank has been appointed as depositary bank pursuant to a deposit agreement. A copy of the deposit agreement is on file with the SEC under cover of a registration statement on Form F-6. You may obtain a copy of the deposit agreement from the SEC’s website (https://www.sec.gov). Please refer to registration number 333-233844 when retrieving such copy.
 
This section contains a summary description of the material terms of the ADSs and of your material rights as an owner of ADSs. Please remember that summaries by their nature lack the precision of the information summarized and that the rights and obligations of an owner of ADSs will be determined by reference to the terms of the deposit agreement and not by this summary. We urge you to review the deposit agreement in its entirety.
 
Each ADS represents the right to receive, and to exercise the beneficial ownership interests in, five ordinary shares that is on deposit with the depositary and/or custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in, any other property received by the depositary or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs because of legal restrictions or practical considerations. We and the depositary may agree to change the ADS-to-ordinary share ratio by amending the deposit agreement. This amendment may give rise to, or change, the depositary fees payable by ADS owners. The custodian, the depositary and their respective nominees will hold all deposited property for the benefit of the holders and beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the depositary, the custodian or their nominees. Beneficial ownership in the deposited property will under the terms of the deposit agreement be vested in the beneficial owners of the ADSs. The depositary, the custodian and their respective nominees will be the record holders of the deposited property represented by the ADSs for the benefit of the holders and beneficial owners of the corresponding ADSs. A beneficial owner of ADSs may or may not be the holder of ADSs. Beneficial owners of ADSs will be able to receive, and to exercise beneficial ownership interests in, the deposited property only through the registered holders of the ADSs, the registered holders of the ADSs (on behalf of the applicable ADS owners) only through the depositary, and the depositary (on behalf of the owners of the corresponding ADSs) directly, or indirectly, through the custodian or their respective nominees, in each case upon the terms of the deposit agreement.
 
If you become an owner of ADSs, you will become a party to the deposit agreement and therefore will be bound to its terms and to the terms of any ADR that represents your ADSs. The deposit agreement and the ADR specify our rights and obligations as well as your rights and obligations as owner of ADSs and those of the depositary. As an ADS holder you appoint the depositary to act on your behalf in certain circumstances. The deposit agreement and the ADRs are governed by New York law. However, our obligations to the holders of ordinary shares will continue to be governed by the laws of England and Wales, which may be different from the laws in the United States.
 
In addition, applicable laws and regulations may require you to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. You are solely responsible for complying with such reporting requirements and obtaining such approvals. Neither the depositary, the custodian, we or any of their or our respective agents or affiliates shall be required to take any actions whatsoever on your behalf to satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.
 
As an owner of ADSs, you will not be treated as a shareholder and you will not have direct shareholder rights. The depositary will hold on your behalf the shareholder rights attached to the ordinary shares underlying your ADSs. As an owner of ADSs, you will be able to exercise the shareholders rights for the ordinary shares represented by your ADSs through the depositary only to the extent contemplated in the deposit agreement. To exercise any shareholder rights not contemplated in the deposit agreement you will, as an ADS owner, need to arrange for the cancellation of your ADSs and become a direct shareholder.
 
The manner in which you own the ADSs (e.g., in a brokerage account vs. as registered holder, or as holder of certificated vs. uncertificated ADSs) may affect your rights and obligations, and the manner in which, and extent to which, the depositary’s services are made available to you. As an owner of ADSs, you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping account, or through an account established by the depositary in your name reflecting the registration of uncertificated ADSs directly on the books of the depositary (commonly referred to as the “direct registration system” or “DRS”). The direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by the depositary. Under the direct registration system, ownership of ADSs is evidenced by periodic statements issued by the depositary to the holders of the ADSs. The direct registration system includes automated transfers between the depositary and The Depositary Trust Company (“DTC”), the central book-entry clearing and settlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically hold securities such as the ADSs through clearing and settlement systems such as DTC. The procedures of such clearing and settlement systems may limit your ability to exercise your rights as an owner of ADSs. Please consult with your broker or bank if you have any questions concerning these limitations and procedures. All ADSs held through DTC will be registered in the name of a nominee of DTC. This summary description assumes you have opted to own the ADSs directly by means of an ADS registered in your name and, as such, refers to you as the “holder.” When “you” is used, it is assumed that the reader owns ADSs and will own ADSs at the relevant time.
 
The registration of the ordinary shares in the name of the depositary or the custodian shall, to the maximum extent permitted by applicable law, vest in the depositary or the custodian the record ownership in the applicable ordinary shares with the beneficial ownership rights and interests in such ordinary shares being at all times vested with the beneficial owners of the ADSs representing the ordinary shares. The depositary or the custodian shall at all times be entitled to exercise the beneficial ownership rights in all deposited property, in each case only on behalf of the holders and beneficial owners of the ADSs representing the deposited property.
 
Dividends and Distributions
 
As a holder of ADSs, you generally have the right to receive the distributions made on the securities deposited with the custodian. Your receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive such distributions under the terms of the deposit agreement in proportion to the number of ADSs held as of the specified record date, after deduction the applicable fees, taxes and expenses.
 
Distributions of Cash
 
If any cash distributions for the securities on deposit with the custodian are made, the funds will be deposited with the custodian. Upon receipt of confirmation of the deposit of the requisite funds, the depositary will arrange for the funds received in a currency other than U.S. dollars to be converted into U.S. dollars and for the distribution of the U.S. dollars to the holders, subject to the laws and regulations of England and Wales. The conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The depositary will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect of securities on deposit.
 
The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. The depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the funds that the depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.
 
Distributions of Shares
 
Whenever a free distribution of ordinary shares for the securities on deposit with the custodian is made, the applicable number of ordinary shares will be deposited with the custodian. Upon receipt of confirmation of such deposit, the depositary will either distribute to holders new ADSs representing the ordinary shares deposited or modify the ADS-to-ordinary shares ratio, in which case each ADS you hold will represent rights and interests in the additional ordinary shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.
 
The distribution of new ADSs or the modification of the ADS-to-ordinary share ratio upon a distribution of ordinary shares will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes or governmental charges, the depositary may sell all or a portion of the new ordinary shares so distributed.
 
No such distribution of new ADSs will be made if it would violate a law (e.g., the U.S. securities laws) or if it is not operationally practicable. If the depositary does not distribute new ADSs as described above, it may sell the ordinary shares received upon the terms described in the deposit agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.
 
Distributions of Rights
 
Whenever we intend to distribute rights to subscribe for additional ordinary shares, we will give notice to the depositary and will assist the depositary in determining whether it is lawful and reasonably practicable to distribute rights to subscribe for additional ADSs to holders.
 
The depositary will establish procedures to distribute rights to subscribe for additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the deposit agreement (such as opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your rights. The depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to purchase new ordinary shares other than in the form of ADSs. The depositary will not distribute the rights to you if:
 

 •
no timely request that the rights be distributed to you is received or if we request that the rights not be distributed to you;

•
we fail to deliver satisfactory documents to the depositary; or

•
it is not reasonably practicable to distribute the rights.
 
The depositary will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the depositary is unable to sell the rights, it will allow the rights to lapse.
 
Elective Distributions
 
Whenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional shares, we will give prior notice thereof to the depositary and will indicate whether it wishes the elective distribution to be made available to you. In such case, we will assist the depositary in determining whether such distribution is lawful and reasonably practicable.
 
The depositary will make the election available to you only if it is reasonably practicable and if it has received all of the documentation contemplated in the deposit agreement. In such case, the depositary will establish procedures to enable you to elect to receive either cash or additional ADSs, in each case as described in the deposit agreement.
 
If the election is not made available to you, you will receive either cash or additional ADSs, depending on what a shareholder in England and Wales would receive upon failing to make an election, as more fully described in the deposit agreement.
 
Other Distributions
 
Whenever we intend to distribute property other than cash, ordinary shares or rights to purchase additional ordinary shares, we will notify the depositary in advance and will indicate whether we wish such distribution to be made to you. In such case, we will assist the depositary in determining whether such distribution is lawful and reasonably practicable.
 
If it is reasonably practicable to distribute such property to you and if we provide to the depositary all of the documentation contemplated in the deposit agreement, the depositary will distribute the property to the holders in a manner it deems practicable.
 
The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes and governmental charges, the depositary may sell all or a portion of the property received.
 
The depositary will not distribute the property to you and will sell the property if:
 

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we do not timely request that the property be distributed to you or if we request that the property not be distributed to you;

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we do not deliver satisfactory documents; or

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the depositary determines that all or portion of the distribution to you is not reasonably practicable.
 
The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.
 
Redemption
 
Whenever we decide to redeem any of the ordinary shares on deposit with the custodian, we will notify the depositary in advance. If it is practicable and if we provide all of the documentation contemplated in the deposit agreement, the depositary will provide notice of the redemption to the holders.
 
The custodian will be instructed to surrender the ordinary shares being redeemed against payment of the applicable redemption price. The depositary will convert the redemption funds received into U.S. dollars upon the terms of the deposit agreement and will establish procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the depositary. You may have to pay fees, expenses, taxes and other governmental charges upon the redemption of your ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as the depositary may determine.
 
Changes Affecting Ordinary Shares
 
The ordinary shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value, split-up, cancellation, consolidation or any other reclassification of such ordinary shares or a recapitalization, reorganization, merger, consolidation or sale of assets of our company.
 
If any such change were to occur, your ADSs would, to the extent permitted by law and the deposit agreement, represent the right to receive the property received or exchanged in respect of the ordinary shares held on deposit. The depositary may in such circumstances deliver new ADSs to you, amend the deposit agreement, the ADRs and the applicable Registration Statement(s) on Form F-6, call for the exchange of your existing ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the change affecting the ordinary shares. If the depositary may not lawfully distribute such property to you, the depositary may sell such property and distribute the net proceeds to you as in the case of a cash distribution.
 
Issuance of ADSs Upon Deposit of Ordinary Shares
 
The depositary may create ADSs on your behalf if you or your broker deposit ordinary shares with the custodian. The depositary will deliver these ADSs to the person you indicate only after you pay any applicable issuance fees and any charges and taxes payable for the transfer of the ordinary shares to the custodian. Your ability to deposit ordinary shares and receive ADSs may be limited by the legal considerations in the United States and England and Wales applicable at the time of deposit.
 
The issuance of ADSs may be delayed until the depositary or the custodian receives confirmation that all required approvals have been given and that the ordinary shares have been duly transferred to the custodian. The depositary will only issue ADSs in whole numbers.
 
When you make a deposit of ordinary shares, you will be responsible for transferring good and valid title to the depositary. As such, you will be deemed to represent and warrant that:
 

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the ordinary shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained;

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all preemptive (and similar) rights, if any, with respect to such ordinary shares have been validly waived or exercised;

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you are duly authorized to deposit the ordinary shares;

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the ordinary shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, and are not, and the ADSs issuable upon such deposit will not be, “restricted securities” (as defined in the deposit agreement);

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the ordinary shares presented for deposit have not been stripped of any rights or entitlements; and

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the deposit of shares does not violate any applicable provision of English law.
 
If any of the representations or warranties are incorrect in any way, we and the depositary may, at your cost and expense, take any and all actions necessary to correct the consequences of the misrepresentations.
 
Transfer, Combination and Split Up of ADRs
 
As an ADR holder, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you will have to surrender the ADRs to be transferred to the depositary and also must:
 

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ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer;

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provide such proof of identity and genuineness of signatures as the depositary deems appropriate;

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provide any transfer stamps required by the State of New York or the United States; and

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pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the deposit agreement, upon the transfer of ADRs.
 
To have your ADRs either combined or split up, you must surrender the ADRs in question to the depositary with your request to have them combined or split up, and you must pay all applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the deposit agreement, upon a combination or split up of ADRs.
 
Withdrawal of Ordinary Shares Upon Cancellation of ADSs
 
As a holder, you will be entitled to present your ADSs to the depositary for cancellation and then receive the corresponding number of underlying ordinary shares at the custodian’s offices. Your ability to withdraw the ordinary shares held in respect of the ADSs may be limited by the legal considerations in the United States and England and Wales applicable at the time of withdrawal. In order to withdraw the ordinary shares represented by your ADSs, you will be required to pay to the depositary the fees for cancellation of ADSs and any charges and taxes payable upon the transfer of the ordinary shares. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the deposit agreement.
 
If you hold ADSs registered in your name, the depositary may ask you to provide proof of identity and genuineness of any signature and such other documents as the depositary may deem appropriate before it will cancel your ADSs. The withdrawal of the ordinary shares represented by your ADSs may be delayed until the depositary receives satisfactory evidence of compliance with all applicable laws and regulations. Please keep in mind that the depositary will only accept ADSs for cancellation that represent a whole number of securities on deposit.
 
You will have the right to withdraw the securities represented by your ADSs at any time except as a result of:
 

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temporary delays that may arise because (i) the transfer books for the ordinary shares or ADSs are closed, or (ii) ordinary shares are immobilized on account of a shareholders’ meeting or a payment of dividends;

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obligations to pay fees, taxes and similar charges;

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restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit; and

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other circumstances specifically contemplated by Section I.A.(I) of the General Instructions to Form F-6 (as such General Instructions may be amended from time to time).
 
The deposit agreement may not be modified to impair your right to withdraw the ordinary shares represented by your ADSs except to comply with mandatory provisions of law.
 
Voting Rights
 
As a holder, you generally have the right under the deposit agreement to instruct the depositary to exercise the voting rights for the ordinary shares represented by your ADSs. The voting rights of holders of ordinary shares are described above. At our request, the depositary will distribute to you any notice of shareholders’ meeting received from us together with information explaining how to instruct the depositary to exercise the voting rights of the ordinary shares represented by ADSs. In lieu of distributing such materials, the depositary bank may distribute to holders of ADSs instructions on how to retrieve such materials upon request.
 
If the depositary timely receives voting instructions from a holder of ADSs, it will endeavor to vote (or cause the custodian to vote) the securities (in person or by proxy) represented by the holder’s ADSs as follows:
 

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If voting at the shareholders’ meeting by show of hands: The depositary will vote (or cause the custodian to vote) all the securities represented by ADSs in accordance with the voting instructions received from a majority of the ADS holders who provided voting instructions.

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If voting at the shareholders’ meeting by poll: The depositary will vote (or cause the custodian to vote) the securities represented by ADSs in accordance with the voting instructions received from the holders of ADSs.
 
Securities for which no voting instructions have been received will not be voted (except as otherwise contemplated in the deposit agreement). Please note that the ability of the depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the securities on deposit. It cannot be assured you that you will receive voting materials in time to enable you to return voting instructions to the depositary in a timely manner.
 
Amendments and Termination
 
We may agree with the depositary to modify the deposit agreement at any time without your consent. We will undertake to give holders 30 days’ prior notice of any modifications that would materially prejudice any of their substantial rights under the deposit agreement. We will not consider to be materially prejudicial to your substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges you are required to pay. In addition, we may not be able to provide you with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law.
 
You will be bound by the modifications to the deposit agreement if you continue to hold your ADSs after the modifications to the deposit agreement become effective. The deposit agreement cannot be amended to prevent you from withdrawing the ordinary shares represented by your ADSs (except as permitted by law). We have the right to direct the depositary to terminate the deposit agreement. Similarly, the depositary may in certain circumstances on its own initiative terminate the deposit agreement. In either case, the depositary must give notice to the holders at least 30 days before termination. Until termination, your rights under the deposit agreement will be unaffected.
 
Termination
 
After termination, the depositary will continue to collect distributions received (but will not distribute any such property until you request the cancellation of your ADSs) and may sell the securities held on deposit. After the sale, the depositary will hold the proceeds from such sale and any other funds then held for the holders of ADSs in a non-interest-bearing account. At that point, the depositary will have no further obligations to holders other than to account for the funds then held for the holders of ADSs still outstanding (after deduction of applicable fees, taxes and expenses).
 
Books of Depositary
 
The depositary will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the deposit agreement.
 
The depositary will maintain in New York facilities to record and process the issuance, cancellation, combination, split-up and transfer of ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.
 
Transmission of Notices, Reports and Proxy Soliciting Material
 
The depositary will make available for your inspection at its office all communications that it receives from us as a holder of deposited securities that are generally made available to holders of deposited securities. Subject to the terms of the deposit agreement, the depositary will send you copies of those communications or otherwise make those communications available to you upon a request from us.
 
Limitations on Obligations and Liabilities
 
The deposit agreement limits our obligations and the depositary’s obligations to you. Please note the following:
 

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We and the depositary are obligated only to take the actions specifically stated in the deposit agreement without negligence or bad faith.

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The depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the deposit agreement.

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The depositary disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in ordinary shares, for the validity or worth of the ordinary shares, for any tax consequences that result from the ownership of ADSs, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the deposit agreement, for the timeliness of any of our notices or for our failure to give notice.

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We and the depositary will not be obligated to perform any act that is inconsistent with the terms of the deposit agreement.

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We and the depositary disclaim any liability if we or the depositary are prevented or forbidden from or subject to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit agreement, by reason of any provision, present or future of any law or regulation, or by reason of present or future provision of any provision of our Articles of Association, or any provision of or governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond our control.

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We and the depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the deposit agreement or in our Articles of Association or in any provisions of or governing the securities on deposit.

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We and the depositary further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting ordinary shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by us in good faith to be competent to give such advice or information.

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We and the depositary also disclaim liability for the inability by a holder to benefit from any distribution, offering, right or other benefit that is made available to holders of ordinary shares but is not, under the terms of the deposit agreement, made available to you.

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We and the depositary may rely without any liability upon any written notice, request or other document believed to be genuine and to have been signed or presented by the proper parties.

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We and the depositary also disclaim liability for any consequential or punitive damages for any breach of the terms of the deposit agreement.

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No disclaimer of any Securities Act liability is intended by any provision of the deposit agreement.

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Nothing in the deposit agreement gives rise to a partnership or joint venture, or establishes a fiduciary relationship, among us, the depositary bank and you as ADS holder.

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Nothing in the deposit agreement precludes Citibank (or its affiliates) from engaging in transactions in which parties adverse to us or the ADS owners have interests, and nothing in the deposit agreement obligates Citibank to disclose those transactions, or any information obtained in the course of those transactions, to us or to the ADS owners, or to account for any payment received as part of those transactions.
 
Taxes
 
You will be responsible for the taxes and other governmental charges payable on the ADSs and the ordinary shares represented by the ADSs. We, the depositary and the custodian may deduct from any distribution the taxes and other governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and governmental charges payable by holders. You will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.
 
The depositary may refuse to issue ADSs; to deliver, transfer, split and combine ADRs; or to release securities on deposit until all taxes and charges are paid by the applicable holder. The depositary and the custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be required to provide to the depositary and to the custodian proof of taxpayer status and residence and such other information as the depositary and the custodian may require to fulfill legal obligations. You are required to indemnify us, the depositary and the custodian for any claims with respect to taxes based on any tax benefit obtained for you.
 
Foreign Currency Conversion
 
The depositary will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical, and it will distribute the U.S. dollars in accordance with the terms of the deposit agreement. You may have to pay fees and expenses incurred in converting foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other governmental requirements.
 
If the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable period, the depositary may take the following actions in its discretion:
 

 •
Convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the holders for whom the conversion and distribution is lawful and practical.

•
Distribute the foreign currency to holders for whom the distribution is lawful and practical.

•
Hold the foreign currency (without liability for interest) for the applicable holders.
 
Governing Law and Waiver of Jury Trial
 
The deposit agreement, the ADRs and the ADSs will be interpreted in accordance with the laws of the State of New York. The rights of holders of ordinary shares (including ordinary shares represented by ADSs) are governed by the laws of England and Wales.
 
AS A PARTY TO THE DEPOSIT AGREEMENT, YOU IRREVOCABLY WAIVE YOUR RIGHT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THE DEPOSIT AGREEMENT OR THE ADRs AGAINST US AND/OR THE DEPOSITARY.
 
The deposit agreement provides that, to the extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our shares, the ADSs or the deposit agreement, including any claim under U.S. federal securities laws. If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable in the facts and circumstances of that case in accordance with applicable case law. However, you will not be deemed, by agreeing to the terms of the deposit agreement, to have waived our or the depositary's compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder.
 
Exhibit 4.16
 
Pursuant to 17 CFR 229.601(b)(10)(iv), confidential information (indicated by [***]) has been omitted from this exhibit because it is both not material and would likely cause competitive harm to the registrant if publicly disclosed.
 
SUPPLY AGREEMENT
 
(COMMERCIAL PHASE)
 
This supply Agreement (“Agreement”) is effective as of December 31, 2015 (the “Effective Date”), by and between Teva API, Inc., a company duly incorporated under the laws New Jersey, with its principal offices located at 400 Chestnut Ridge Rd.  Woodcliff, NJ 07677, USA (“TAPI”), and Chiasma, Inc., a company duly incorporated under the laws of the State of Delaware, U.S.A., with its principal offices located at 60 Wells Ave.  Suite #102, Newton, MA 02459, U.S.A.  (“Chiasma, Inc.”) on its own behalf and on behalf of its Affiliates, as defined below, (collectively, “Chiasma”) (collectively, the “Parties” and each a “Party”).
 
Whereas,
TAPI through its Affiliates, including Novetide Ltd. of P.O. Box 10140 Haifa 26111, Israel, (“Novetide”) are engaged in the business of manufacturing active pharmaceutical ingredients, drug substances and other pharmaceutical products; and
 
Whereas,
Chiasma is engaged in the business of developing drug delivery technology, and has developed certain products using such drug delivery technology; and
 
Whereas,
Chiasma, Inc. and Novetide have entered into a Manufacturing and Supply Agreement (Clinical Phase) dated December 26, 2012 (the “Clinical Phase Agreement”) for the manufacture and supply by Manufacturer of R&D and registration quantities of API (as defined below), which Clinical Phase Agreement is superseded, canceled and replaced by this Agreement (except for any provisions that survive any termination thereof, as expressly provided therein); and
 
Whereas,
Chiasma desires to engage TAPI hereunder, and TAPI wishes to be so engaged, to have commercial quantities of the API manufactured through any TAPI Affiliate (each and all such Affiliate(s), individually and collectively, the “Manufacturer”) and supply for use by Chiasma for further processing and/or incorporation into Finished Product (as defined below), subject to and in accordance with the terms and conditions of this Agreement; and
 
Whereas,
in order to meet Chiasma’s requirements of API, TAPI has agreed to invest in increasing the manufacturing capacity of the Manufacturing Facility during the Scale-Up Period (as defined below) to support Chiasma’s requirements for API, based on Chiasma’s forecasts in accordance with this Agreement, up to a maximum of [***] per year;
 
Now, Therefore, the Parties hereby agree as follows:

1.
PREAMBLE, EXHIBITS, DEFINITIONS
 
1.1
the preamble and the exhibits hereto form an integral part of this agreement.
 
1.2
in addition to the various capitalized terms defined elsewhere in this agreement, the following terms shall have the respective meanings ascribed to them below:
 

 1.2.1
“API” means the active pharmaceutical ingredient specified in Exhibit A hereto.
 

 1.2.2
“Affiliate” means, with respect to any Party, any person or entity who, directly or indirectly controls, is controlled by, or is under common control with, such Party.  A person or entity shall be deemed to control another entity if it owns, directly or indirectly, 50% (fifty percent) or more of the voting shares, or has the power to elect 50% (fifty percent) or more of the directors, of such other entity.
 

 1.2.3
“Alternative Material” means Octreotide acetate manufactured by a third party holding a drug master file for such material, the supply of which to Chiasma will not infringe the intellectual property rights of Manufacturer.
 

 1.2.4
“Applicable Law” means the applicable laws and regulations, rules and guidelines of any applicable Governmental Authority in a given jurisdiction (whether federal, state, municipal or other) pertaining to the manufacture, packaging, labeling, release, storage, import, export, distribution, marketing, sale and/or intended use of the API.
 

 1.2.5
“Approved Subcontractor” shall have the meaning ascribed to such term in Section 2.6 below.
 

 1.2.6
“Batch” means a specific quantity of API that is intended to be of uniform character and quality and is produced during the same cycle of manufacture as defined by the applicable Batch Records.
 

 1.2.7
“Batch Records” means all of the documentation associated with the manufacture and testing of a given Batch, including production records, sampling documentation, test results, deviation reports, and all applicable manufacture data (including any pertinent output from instrumentation).
 

 1.2.8
“Binding Annual Forecast” shall have the meaning ascribed to such term in Section 2.11.2(b) below.
 

 1.2.9
“Binding Purchase Order” shall have the meaning ascribed to such term in Section 2.12.3 below.
 

 1.2.10
“Business Day” means any day, other than a Friday, Saturday or Sunday, on which commercial banks are generally open for business in Israel and in New York, U.S.A.


1.2.11
“CDA” means the Mutual Confidentiality and Non-Disclosure Agreement between Novetide and Chiasma (Israel) Ltd., an Affiliate of Chiasma, Inc.  (which applies also to Chiasma), dated 1 April 2008 and attached hereto as Exhibit B.
 

 1.2.12
“Certificate of Analysis” means a document prepared and signed by Manufacturer describing the Specifications of and testing methods applied to the API and performed by Manufacturer or its Approved Subcontractors and the results thereof.  For each Batch of API, Manufacturer shall issue a “Certificate of Analysis”.
 

 1.2.13
“Certificate of Compliance” means a document, prepared and signed by Manufacturer, attesting that a particular Batch of API was manufactured in accordance with cGMP, Applicable Law and the Specifications.  The Certificate of Compliance may be included within the Certificate of Analysis, or separately, if required by Chiasma for regulatory purposes or Applicable Law.  The Parties shall from time to time agree upon a format or formats for the Certificate of Compliance to be used under this Agreement.
 

 1.2.14
“cGMP” means current good manufacturing practices for pharmaceutical substances or products as set forth by the FDA, the EMA or any of their respective successor agencies, as applicable.
 

 1.2.15
“Change Order” means a document mutually approved in writing by both Parties in accordance with the procedures set forth in Section 3.2 below that describes in reasonable detail an amendment or modification to the tasks and Deliverables under this Agreement, and/or to a Binding Purchase Order, and/or additional new tasks, services, deliverables and/or activities to be performed.
 

 1.2.16
“Chiasma Property” means all Confidential Information and Intellectual Property of Chiasma provided and/or delivered by or on behalf of Chiasma to Manufacturer for use by Manufacturer solely in connection with the performance of its obligations under this Agreement.
 

 1.2.17
“Confidential Information” shall have the meaning ascribed thereto in the NDA.
 

 1.2.18
“Deliverables” means the API and other deliverables to be provided and/or delivered by Manufacturer as described in this Agreement (including, in Exhibit A hereto).
 

 1.2.19
“Drug Master File” or “DMF” means the drug master file covering the analysis and manufacture of the API, including analytical methods, stability and pharmaceutical data, impurities and manufacturing processes with respect thereto.  The DMF shall comply with the requirements of the competent Regulatory Authorities in each relevant jurisdiction, suitable for supporting drug applications in such jurisdiction.
 

 1.2.20
“EMA” means the European Medicines Agency, or any successor agency.

Page 3 of 44

 1.2.21
“FDA” means the United States Food and Drug Administration, or any successor agency.
 

 1.2.22
“Finished Product” means the finished commercial dosage form(s) using or incorporating Octreotide acetate, to be marketed and sold by or on behalf of Chiasma and/or its Affiliates and/or licensees.
 

 1.2.23
“First Binding [***] Month Forecast” shall have the meaning ascribed to such term in Section 2.11.2(a) below.
 

 1.2.24
“Force Majeure” means strikes (except of the personnel of the Party claiming Force Majeure), riots, war, act of God, invasion, acts of terrorism, fire, explosion, floods, interruption of or delay in transportation, shortage or failure in the supply of materials, acts of government or governmental agencies or instrumentalities, and any other contingencies beyond the Party’s reasonable control, and without fault of such Party.
 

 1.2.25
“Governmental Authority” means any national, state, local, municipal or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch, ministry, department, Regulatory Authority, court or other tribunal).
 

 1.2.26
“Intellectual Property” means any and all intellectual property including trademarks, service marks, trade dress, logos, copyrights, rights of authorship, inventions, know-how, patents, including all applications and registrations with respect thereto, rights of inventorship, moral rights, trade secrets, industrial design rights, and all other intellectual and industrial property rights related thereto, or otherwise, whether registered, unregistered, statutory, common law, or pending, throughout the world.
 

 1.2.27
“Launch” means with respect to each Region, the first commercial sale of Finished Product by or on behalf of Chiasma to an independent third party in any country in such Region; and “Launch Date” means the date of said Launch.
 

 1.2.28
“Manufacturing Facility” means the facility in which Manufacturer shall manufacture the API in accordance with the terms of this Agreement, located at Neot Chovav, Israel (currently known as “TevaTech”), and/or Netanya, Israel (currently known as “Plantex”) or any other or additional location pre-approved by Chiasma in writing pursuant to Section 2.5 below.
 

 1.2.29
“Manufacturing Process” means the production process and methods for the manufacture of the API, as such process may be changed from time to time in accordance with this Agreement and/or the Quality Agreement.
 

 1.2.30
“Marketing Authorizations” means the required permits, authorizations and approvals to be granted by Governmental Authorities in their respective jurisdictions for the marketing, use, sale and/or distribution therein of the Finished Product.

Page 4 of 44

 1.2.31
“Minimum Annual Purchase Requirements” shall have the meaning ascribed thereto in Section 2.1 below.
 

 1.2.32
“Non-Complying Product” means any Batch of API that does not conform, in whole or in part, with the Drug Master File and the Specifications.
 

 1.2.33
“Purchase Orders” shall have the meaning ascribed thereto in Section 2.12.1 below.
 

 1.2.34
“Quality Agreement” means the Quality Agreement between Chiasma, Inc. and Novetide and Assia Chemical Industries Ltd. dated December 26, 2012, a copy of which is attached hereto as Exhibit E, containing quality assurance provisions for the manufacture of the API, as may be amended by mutual agreement of the Parties.
 

 1.2.35
“Quarter” means any of the traditional fiscal quarters of the calendar year; i.e., each of the three-month periods ending March 31, June 30, September 30 and December 31; and the terms, “Q1”, “Q2”, “Q3” and “Q4” mean the first, second, third and fourth Quarter, respectively, of a given calendar year.
 

 1.2.36
“Raw Materials” means the ingredients, solvents and other components required to manufacture the API in accordance with this Agreement.
 

 1.2.37
“Region” means each of (i) the U.S.A.; and (ii) the European Economic Area and Switzerland (“EEA”), as applicable, it being agreed that the Region in which the first Launch occurs shall be referred to as the “Lead Region” and the other Region in which a subsequent Launch occurs shall be referred to as the “Other Region”.  Additional regions and/or countries may be added by mutual written agreement of the Parties and subject to the Parties reaching agreement on the commercial and other terms applicable thereto.
 

 1.2.38
“Regulatory Authority” means the FDA, EMA or any other federal, state, local or other regulatory agency, authority, or regulatory body having jurisdiction in the relevant Region over TAPI or Manufacturer or its operations, facilities, or performance by TAPI of its obligations hereunder.
 

 1.2.39
“Re-Test Period” means a period of [***] years from the date of manufacture of the relevant Batch of API.
 

 1.2.40
“Rolling Forecast” shall have the meaning ascribed to such term in Section 2.11.2(a) below.
 

 1.2.41
“Scale-Up Period” shall have the meaning ascribed to such term in Section 2.3 below.

Page 5 of 44

 1.2.42
“Shipping Guidelines” means the shipping guidelines and procedures provided by Manufacturer in writing, that describe the methods of packaging, preserving, monitoring and shipping the API to be shipped by Manufacturer, a copy of which is attached to this Agreement as Exhibit F.
 

 1.2.43
“Specifications” means the test parameters, test methods, acceptance criteria and requirements of the API as set forth in Exhibit A.
 

 1.2.44
“Term” means the term of this Agreement, as defined in Section 7.1 below.
 
1.3
In this Agreement (including the Exhibits hereto), unless the context otherwise requires:
 

 1.3.1
“including”, “includes” means including, without limiting the generality of any description preceding such terms;
 

 1.3.2
“writing” includes facsimile transmission, electronic transmission, email transmission and comparable means of communication; and
 

 1.3.3
any references to the “law” or any provision of a statute shall be construed as a reference to that law or provision as amended, re-enacted, consolidated or extended at the relevant time.
 
2.
PERFORMANCE OBLIGATIONS
 
2.1
Engagement.  Chiasma hereby retains TAPI to have the API manufactured by TAPI through its Manufacturer and to supply the API to Chiasma, directly or through its Affiliates, all subject to and in accordance with the terms and conditions of this Agreement.  TAPI shall have the API manufactured at the Manufacturing Facility and will supply the API to Chiasma, in accordance with orders for API placed by Chiasma from time to time pursuant to this Agreement, for the consideration set out in this Agreement.  Commencing with effect from the Effective Date and thereafter during the Term, and subject to the terms of this Agreement, Chiasma will purchase, at the minimum, the percentage of Chiasma’s total annual requirements of Octreotide acetate, for Chiasma’s consumption in manufacturing of the Finished Product for each Region, as set forth below (the “Minimum Annual Purchase Requirements:
 
Year of Term
Percentage of API
Annual
Requirements
Up to end of Year [***] from Launch Date in the Lead Region (the “First Launch Date”)
[***]%
Year [***] from First Launch Date
[***]%
Year [***] from First Launch Date
[***]%
Year [***] from First Launch Date
[***]%
Year [***] from First Launch Date until end of Term*
[***]%

Page 6 of 44

 ∗
only applicable to the Other Region
 
As an illustration, by way of example, the following table sets forth the Minimum Annual Purchase Requirements in the case that the first Launch occurs in the U.S.A. (in which case it will be the Lead Region) and [***] years thereafter there is a first Launch in the EEA (the Other Region):
 
Year of Term
Percentage of
API
Annual
Requirements
Active Regions
Year [***] from First Launch Date
[***]%
[***]
Year [***] from First Launch Date
[***]%
[***]
Year [***] from First Launch Date
[***]%
[***]
Year [***] from First Launch Date
[***]%
[***]
Year [***] from First Launch Date
[***]%
[***]
Year [***] from First Launch Date
[***]%
[***]
 
Notwithstanding anything in the Agreement to the contrary, as far as terms and conditions of this Agreement apply to a Manufacturer undertaking any activities under this Agreement, TAPI is and shall remain responsible for the Manufacturer’s actions and inactions under this Agreement and for its compliance with such applicable terms of this Agreement.
 
2.2
Manufacturing Facility.  Subject to Sections 2.5 and 2.6 below, the API shall be manufactured by Manufacturer at the Manufacturing Facility, it being agreed, that in addition to the manufacture of API at TevaTech at Neot Chovav, TAPI agrees to take reasonably commercial steps to expedite the commencement of manufacturing of the API at Plantex in Netanya, as a backup manufacturing site.  Manufacturer shall be solely responsible for (i) all scheduling related to the Manufacturing Facility; (ii) the operation of the Manufacturing Facility; and (iii) that the Manufacturing Facility and all equipment used in the Manufacturing Process shall be operated and maintained in such manner and condition as to enable Manufacturer to manufacture the API in compliance with cGMP, Applicable Law and in conformance with the Drug Master File.
 
2.3
Scale Up.
 

 2.3.1
TAPI shall use reasonable efforts to ensure the scale up of the Manufacturing Facility at TevaTech at TAPI’s own expense, in order to increase its API output capacity to enable TAPI to meet Chiasma’s requirements in accordance with the Rolling Forecasts provided by Chiasma pursuant to this Agreement, up to a maximum capacity of [***] kg (two hundred kilograms) of API per annum, in lots of approximately [***] kg each but not less than [***]kg each, during a period of [***] commencing on 1 January 2016 (the “Scale Up Period”).

Page 7 of 44

 2.3.2
TAPI shall keep Chiasma reasonably informed and updated on a monthly basis regarding the progress of the said scale up.  Without derogating from the foregoing, the relevant representatives of TAPI and Chiasma shall hold regular meetings (whether by teleconference or in person), at least every [***] weeks or as otherwise requested by Chiasma, to discuss the progress of such scale up and the supply of API during the Scale Up Period and thereafter.
 

 2.3.3
If notwithstanding such reasonable efforts by TAPI, TAPI is unable to complete the scale up of the said Manufacturing Facility within the Scale Up Period as stated above, then TAPI shall be entitled to complete such scale up during an additional period of up to [***] months thereafter (the “Buffer Period”).  During the Buffer Period, TAPI shall ensure that API is supplied to Chiasma pursuant to Binding Purchase Orders placed by Chiasma in accordance with the First Rolling Forecast, provided that the quantities of API ordered by Chiasma do not exceed the manufacturing capacity of the said Manufacturing Facility at the relevant time (without the full scale up pursuant to this Section).
 

 2.3.4
Without derogating from Section 2.14.2 below, during the Buffer Period and/or prior thereto if it becomes apparent that TAPI will not complete such scale up by the end of the Buffer Period, Chiasma shall be entitled to order Alternative Material (as set forth in Section 2.14.2 below) from any third party to the extent that the quantities of API required by Chiasma exceed the manufacturing capacity of the Manufacturing Facility as aforesaid and/or to the extent of the shortfall in the supply of API by TAPI as provided in Section 2.14.2 below, and the Minimum Annual Purchase Requirements shall be reduced accordingly.  Notwithstanding the foregoing, Chiasma agrees to purchase all quantities of API manufactured by the Manufacturer during the Scale up Period and Buffer Period pursuant to Chiasma’s purchase orders.
 

 2.3.5
In the event that TAPI fails to complete such scale up (in lots of at least [***] each) by the end of the Buffer Period, the Minimum Annual Purchase Requirements shall terminate automatically with effect from the date of expiry of the Buffer Period and Chiasma shall be free to order API from TAPI in whatever quantities it decides, in its sole discretion, within the then current manufacturing capacity of the Manufacturing Facility.  The foregoing shall not affect the First Rolling Forecast and Chiasma’s purchase commitment pursuant to Binding Purchase Orders and the Binding Annual Forecast as of the date of termination.
 
2.4
TAPI confirms that the scale up pursuant to Section 2.3 above is designed and planned in a manner that shall enable a subsequent further scale up of the Manufacturing Facility in Tevatech, whereby the API output capacity shall be increased to an annual capacity of [***] of API, in lots of approximately [***] each, which may involve an additional investment by TAPI.  Such subsequent scale up and increase of the API output capacity of the Manufacturing Facility shall be implemented pursuant and subject to terms and conditions to be mutually agreed by the Parties in writing.
 
Page 8 of 44
2.5
Change Of Location Of Manufacturing Facility Or Use Of Additional Facility.
 
TAPI shall not change the location of the Manufacturing Facility or use any additional facility for the manufacture of the API supplied to Chiasma under this Agreement, unless (i) TAPI shall have completed all the necessary activities for the operation and validation and approval (if such approval is required by the relevant Regulatory Authorities) of such new location or additional facility (as applicable); (ii) TAPI has provided Chiasma at least [***] days prior written notice from the date of completion of the activities referred to in (i) above, in order to enable Chiasma to undertake the necessary activities and procedures for obtaining the required approvals for Finished Product manufactured with API from the new location or additional facility, as applicable, and (iii) TAPI shall ensure that during such [***] day period API is manufactured at the current (approved) Manufacturing Facility and delivered to Chiasma in accordance with the Purchase Orders placed by Chiasma in accordance with the applicable Binding Annual Forecast.  Prior to the end of such [***] day period, Chiasma shall notify TAPI in writing of any quantities of API to be manufactured at the current Manufacturing Facility in excess of the Binding Annual Forecast and which are reasonably required by Chiasma to ensure that there is no interruption in the API supply from TAPI to Chiasma until the necessary approvals of the new location or additional facility are obtained by Chiasma.  Chiasma shall be obligated to perform reasonably commercial efforts to obtain such approvals as soon as possible.
 
TAPI shall co-operate with and assist Chiasma in connection with the said approval process.  Without derogating from the foregoing, TAPI shall facilitate, and co-operate with Chiasma with respect to any quality assurance and/or regulatory impact assessment of the new location or additional facility, as the case may be, to be conducted by or on behalf of Chiasma.
 
2.6
Subcontracting.  Except as specified in the DMF, TAPI shall not subcontract or otherwise delegate any of its obligations under this Agreement to any subcontractor or other third party, without the prior written notification to Chiasma.  TAPI shall ensure that all subcontractors approved by Chiasma as aforesaid (each, an “Approved Subcontractor”):  shall (a) be subject to a written nondisclosure agreement containing terms substantially similar to the terms of the NDA (which may be entered into directly between the Approved Subcontractor and Chiasma, should Chiasma so request); (b) uphold all Applicable Law; and (c) grant Chiasma rights with respect to such Approved Subcontractors that are substantially similar to the access, inspection and audit rights granted to Chiasma under this Agreement, subject to coordination with TAPI.  TAPI shall be responsible for such Approved Subcontractors.
 
2.7
Hazardous Materials.  The generation, collection, storage, handling, transportation, movement and release of hazardous materials and waste (if any) generated in connection with the manufacture of the API shall be the responsibility of Manufacturer.  Without limiting other legally applicable requirements, Manufacturer shall prepare, execute and maintain, as the generator of waste, all licenses, registrations, approvals, authorizations, notices, shipping documents and waste manifests required under Applicable Law.
 
Page 9 of 44
2.8
Health And Safety Procedures.  Manufacturer shall be solely responsible for implementing and maintaining health and safety procedures for the manufacture of the API and for the handling of any materials or waste used in or generated in the manufacture of the API.
 
2.9
Materials And Equipment.
 

 2.9.1
Raw Materials Inventory.  Unless the Parties otherwise agree, Manufacturer shall purchase all Raw Materials to be used by Manufacturer in the manufacture of the API, in accordance with the relevant Raw Materials specifications.  Manufacturer shall be responsible for performing all necessary tests, in accordance with the applicable Regulatory Authority’s standards and regulations and Applicable Law, in order to verify that the Raw Materials are suitable and fit for the manufacture of the API in accordance with this Agreement.  Manufacturer shall ensure that at all times throughout the Term, it shall maintain adequate stocks of Raw Materials so as to enable it to fulfill all orders placed by Chiasma in accordance with its forecasting obligations under Section 2.11 below.
 

 2.9.2
Protection Of Api, Work In Progress.  Manufacturer shall at all times take such measures as are reasonably required in accordance with industry standards to protect the API and any work in process from risk of loss or damage at all stages of the Manufacturing Process and until delivery to Chiasma pursuant to this Agreement.  TAPI shall ensure that the API is free and clear of any liens or encumbrances.
 

 2.9.3
Equipment.  Manufacturer shall have all equipment necessary to manufacture the API under this Agreement and shall maintain such equipment in a state of repair and operating efficiency consistent with the requirements of cGMP and Applicable Law.
 
2.10
Quality Assurance; Quality Control; Regulatory Matters; Audits.
 

 2.10.1
Quality Agreement.  Responsibility for quality assurance and quality control of the API shall be governed by the terms of the Quality Agreement.
 

 2.10.2
Regulatory Authorities; Assistance.  Chiasma shall be responsible for handling all complaints and communications with Regulatory Authorities with respect to the Finished Product containing API supplied by TAPI pursuant to this Agreement.  TAPI shall provide Chiasma with any assistance required by Chiasma which would be considered appropriate in view of the relevant Regulatory Authority standards in connection with adverse events or effects and complaints relating to the API supplied by TAPI pursuant to this Agreement.

Page 10 of 44

 2.10.3
Permits.  TAPI shall obtain and maintain and/or shall ensure that the Manufacturer obtains and maintains in good order and shall remain in compliance with, at its sole cost and expense, all current regulatory and governmental permits (including health, safety and environmental permits), approvals, licenses and registrations required by Regulatory Authorities for the Manufacturing Facility, the manufacture of the API and in order for it to perform its other obligations hereunder.  TAPI shall promptly provide Chiasma upon its request with copies of the open or accessible parts of the DMF for the API and all changes thereto and a letter of authorization permitting Chiasma to refer to the DMF in applications to applicable Regulatory Authorities and Chiasma shall have the right to use any and all information contained in such parts of the DMF as aforesaid (and any changes thereto, if applicable).
 

 2.10.4
Marketing Authorizations.  Chiasma will be responsible for obtaining, at its own expense, all Marketing Authorizations, and Chiasma shall be the sole owner thereof.  TAPI will assist Chiasma in obtaining such approvals and permits by providing documentation and additional data and information to the extent requested and available, without any additional charge to Chiasma.  Without derogating from any obligations of Chiasma under this Agreement (including under Section 13.5 below regarding Chiasma’s sale of all rights and title in and to the Finished Product), Chiasma shall be entitled to sell or otherwise transfer in any manner the Marketing Authorizations directly or indirectly to an entity at its sole discretion.
 

 2.10.5
Access Rights.  Chiasma and its licensees (as applicable) shall be permitted to send its or their representatives or agents to inspect the Manufacturing Facility, in accordance with the Quality Agreement, without the need to have additional confidentiality agreements signed by such representative or agents, provided that Chiasma shall ensure such representatives or agents adhere to the confidentiality obligations pursuant to this Agreement, and shall be liable for any breach thereof.  Such inspections shall be limited to [***] per calendar year other than any audits for cause, and [***] participants in each visit.  Manufacturer shall make Manufacturer’s employees and other personnel involved in the performance of Manufacturer’s duties hereunder reasonably available to Chiasma and/or its licensees (as applicable) for such audit purposes.
 

 2.10.6
Inspections And Audits By Regulatory Authority.  Manufacturer will permit a Regulatory Authority to perform inspections and audits at the Manufacturing Facility to ensure compliance with cGMP standards and any other Applicable Law.  TAPI will inform Chiasma of the results of any such inspection and provide Chiasma with a copy of any report, document or other written communication received from or provided to such Regulatory Authority, if applicable to the API, or the facilities used to manufacture, test or warehouse the API supplied to Chiasma.  In the event that any Regulatory Authority shall determine, as a result of an audit or inspection, that Manufacturer is not in compliance with cGMP and/or any Applicable Law with respect to the manufacture of the API, Manufacturer shall, at its expense, use its best efforts to cure such non-compliance promptly.  In the event that Manufacturer is unable to manufacture and supply API as aforesaid for a period of [***] days due to the action of a Regulatory Authority, then, without limiting any rights or remedies to which Chiasma may be entitled under this Agreement or by Applicable Law, Chiasma may terminate any pending Purchase Orders under this Agreement immediately upon written notice to TAPI.  During the first such [***] days of inability to manufacture and supply API, the provisions of section 2.14 will apply, mutatis mutandis.

Page 11 of 44
2.11
Forecasts
 

 2.11.1
[***]-Year Forecast.  A non-binding forecast of Chiasma’s API requirements over the first [***] years from 1 January 2016 in the Lead Region is specified in Exhibit G attached hereto (the “Long Term Forecast”).
 

 2.11.2
Rolling Forecasts.
 

 (a)
The first [***] months (specified on a quarterly basis) of the Long Term Forecast shall be the “First Rolling Forecast”, the first [***] months of which shall be binding on the Parties (such first [***]-month binding forecast, the “First Binding [***] Month Forecast”).  The last [***] months of the First Rolling Forecast are not binding.  By the end of March 2016 and during the last month of each calendar quarter thereafter throughout the Term, Chiasma shall provide TAPI with a [***] month rolling forecast (on a Quarterly basis) of its API requirements for the [***] months period starting at the beginning of the Quarter following the Quarter in which the forecast is provided (each, a “Rolling Forecast”).  For example, the second Rolling Forecast specifying Chiasma’s API requirements for the [***] months period starting 1 April 2016 will be provided in March of 2016 and so forth.  In no event shall a Rolling Forecast require the manufacture of and/or delivery of API by TAPI in excess of the Quarterly quantity of [***], Should Chiasma require more than [***]kg of API in a calendar quarter, the Parties shall discuss in good faith the required measures to be taken.
 
Within [***] business days of receipt of each Rolling Forecast (other than the First Rolling Forecast), TAPI shall provide Chiasma with written confirmation of receipt of such Rolling Forecast and TAPI shall notify Chiasma in writing of its acceptance or rejection of such Rolling Forecast no later than [***] days of receipt thereof.  In the case of a rejection, TAPI’s notice of rejection shall be accompanied by a proposal by TAPI with respect to changes to such Rolling Forecast which would be acceptable to TAPI and the Parties shall endeavor, in good faith, to reach agreement with respect thereto.  The failure by TAPI to respond to such Rolling Forecast as stated above (i.e. acceptance or rejection) shall be deemed acceptance thereof by TAPI, provided that TAPI shall have notified Chiasma of receipt of the Rolling Forecast as aforesaid.

Page 12 of 44

 (b)
The first [***] months covered by each Rolling Forecast (provided that the First Binding [***] Month Forecast shall remain binding) shall be binding on the Parties (each, a “Binding Annual Forecast”).  The last [***] months of each Rolling Forecast are non-binding, provided, however, that the quantities in months [***] of a Rolling Forecast shall not deviate (whether increase or decrease) by more than [***] in the applicable period of the following Rolling Forecasts.  For example (the numbers in red represent allowed changes):
 
[***]
 
2.12
Orders.
 

 2.12.1
Chiasma shall be obligated to place firm purchase orders (“Purchase Orders”) for the quantities of API set forth in the First Binding [***] Month Forecast and all subsequent Binding Annual Forecasts, as applicable, provided to TAPI.  Purchase Orders shall reference this Agreement and specify the API, quantities, prices, delivery destination and required delivery dates, which shall in each case be at least [***] days from the date of placing the Purchase Order, except as otherwise specifically and expressly agreed to in writing by TAPI (“Lead Time”).  Deviations (whether increases or decreases) of up to [***] shall be permitted between the quantities of API set forth in any particular Quarter of the Binding Annual Forecast (excluding the first Quarter of any Rolling Forecast submitted) and the quantities set forth in the Purchase Order applicable to such quarter (“Permitted Variations”).  No deviations shall be permitted after submission of the Purchase Orders.
 

 2.12.2
Purchase Orders shall be subject to confirmation and acceptance by TAPI, to be provided in writing within [***] business days after the receipt by TAPI of such Purchase Order.  TAPI shall be obligated to accept all Purchase Orders for quantities of API which are in accordance with the quantities set forth in the First Binding [***] Month Forecast and the relevant Binding Annual Forecast and the Permitted Variations (which, for clarification do not apply to the First Binding [***] Month Forecast), as applicable.  Rejection by TAPI of such Purchase Orders without providing an alternative schedule of supply acceptable to Chiasma shall be considered to be Supply Failure (as defined in Section 2.14.2 below) and the provisions of Section 2.14 below shall apply mutatis mutandis.  Without derogating from the foregoing, TAPI shall use commercially reasonable efforts to accept and fulfill Purchase Orders for quantities of API which exceed the quantities set forth in the in the First Binding [***] Month Forecast and Binding Annual Forecast and the Permitted Variations, as applicable, provided such additional supply shall not affect TAPI’s ability to fulfill subsequent supplies according to the Rolling Forecasts.

Page 13 of 44

 2.12.3
TAPI shall supply the quantities set forth in every Purchase Order placed by Chiasma pursuant to this Agreement that has been accepted (“Binding Purchase Order”), within the specified delivery date (subject to the Lead Time) set forth therein.
 
2.13
Delivery, title and risk of loss.
 
TAPI shall deliver the API to Chiasma or its designee(s), in accordance with the Binding Purchase Orders placed by Chiasma, the Shipping Guidelines and Applicable Law.  All API shall be packaged and stored in such a manner as to ensure that such API is maintained at specified environmental conditions in accordance with the Specifications.  Each delivery of API shall be made DAP (Incoterms® 2010) the location designated by Chiasma in US, Israel or EU, unless otherwise agreed by the Parties in writing.  Chiasma shall receive title to the API, and the risk of loss shall pass to Chiasma at the time of delivery of the API in accordance with the DAP (Incoterms ® 2010) terms.  In the event that Chiasma orders quantities of less than [***] of API per shipment, such shipment will incur an additional shipping cost of $[***].
 
2.14
Delays; Failure To Perform.
 

 2.14.1
TAPI shall promptly inform Chiasma in writing if it has reason to believe that it will be unable to deliver any API ordered by Chiasma hereunder (in whole or in part) by the confirmed delivery date or any other Deliverables, and/or of any delay in meeting the confirmed delivery dates by more than [***] days (as the case may be) together with an estimate of actual delivery dates of the particular Deliverables.  In the event of TAPI’s inability to deliver at least [***]% of the API ordered by Chiasma under Binding Purchase Orders or a delay in delivering any API or other Deliverables under Binding Purchase Orders by more than [***] days (including due to Force Majeure), the Parties shall determine a reasonable course of action, including revised timelines, to be taken by TAPI to rectify the matter as soon as possible.  Notwithstanding the above, TAPI shall use reasonable efforts to make up as soon as possible for any shortfall (of more than [***]%) of the ordered quantity under a Binding Purchase Order.
 

 2.14.2
Should TAPI fail to remedy such inability or delay within such revised timelines, then, to the extent of TAPI’s shortfall, and unless such inability or delay either is excused by Force Majeure pursuant to Section 12 below, or has been caused solely by Chiasma (such uncured inability to supply or delay by TAPI as aforesaid, a “Supply Failure”):  (a) Chiasma shall be entitled, at its sole discretion, to cancel the applicable Binding Purchase Order(s) for API placed by it hereunder with respect to the quantities that TAPI could not deliver; and (b) for so long as TAPI’s inability persists, Chiasma shall be entitled, notwithstanding the provisions of Section 2.1 above, to purchase Alternative Material, for the quantities that TAPI could not deliver from any third party, until such time as TAPI is able to resume supply of the API, which shall be notified by TAPI to Chiasma in writing.  The foregoing shall not affect any orders for API placed by Chiasma with any such third party, which have not as yet been delivered prior to receipt by Chiasma of such written notification by TAPI.

Page 14 of 44

 2.14.3
Any quantities of Alternative Material purchased by Chiasma pursuant to this Section 2.14 above (including all orders for API placed by Chiasma as referred to in 2.14.2 above) shall be deemed to have been purchased from TAPI for the purpose of determining compliance by Chiasma with its Annual Binding Forecasts or, with the First Binding [***] Month Forecast- if occurring during the Scale Up Period.
 

 2.14.4
If in any calendar year during the Term, TAPI has not fulfilled 100% of the ordered quantities under the Binding Purchase Order issued in that calendar year, then, Chiasma shall be entitled, notwithstanding the provisions of Section 2.1 above, to purchase from any third party Alternative Material, for such quantities that TAPI could not deliver and such quantities shall, in addition to and without limiting from Section 2.14.3 above, be deemed to have been purchased from TAPI for the purpose of determining compliance by Chiasma with its Annual Binding Forecasts for that same calendar year.
 

 2.14.5
In the event that a Supply Failure occurs on [***] occasions in any period of [***] starting from 1 April 2018, in each case as a result of a different root causes, then, without derogating from the provisions of Section 2.14.2 above, the Minimum Annual Purchase Requirements shall be reduced by [***] for the remainder of the Term of this Agreement.
 

 2.14.6
Without derogating from the foregoing, in the event that a Supply Failure occurs on [***] (occasions) starting from 1 April 2018 in any period of [***], in each case as a result of a different root causes, then such Supply Failure shall constitute a material breach of this Agreement, Chiasma shall be entitled to terminate this Agreement in accordance with Section 7.2 below.
 
2.15
Acceptance Of Shipments; Non-Conformance.
 

 2.15.1
Unless otherwise instructed by Chiasma in writing, TAPI will in all cases provide to Chiasma a Certificate of Analysis, Certificate of Compliance (if not included within the Certificate of Analysis), and all other documents reasonably required for effecting the shipment on or before the delivery time for each Batch of API ordered hereunder.

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 2.15.2
Within [***] days following actual receipt of any Batch of API by or on behalf of Chiasma, at the location nominated by Chiasma, Chiasma shall visually inspect or have visually inspected each Batch of API for damage, defects or shortage, and shall have the right to give TAPI notice of rejection of any Non-Complying Product according to such visual inspection.  Chiasma may also, at any time within [***] days following actual receipt of any Batch of API by or on behalf of Chiasma, give TAPI notice of rejection of any Non-Complying Product according to any further analysis or inspection for conformance with Specifications performed on samples of the API by or on behalf of Chiasma.
 

 2.15.3
Upon receipt of any notice of rejection from Chiasma as aforesaid, TAPI shall conduct an internal investigation.  Failure by Chiasma to give notice of rejection within the timelines set forth in Section 2.15.2 above shall constitute acceptance by it of the shipment to which the notice of rejection would have otherwise applied, except in the event of latent defects which are not detectable by means of either of the above inspections, which render the API not conforming as provided herein (“Latent Defects”), which shall be notified to TAPI within a reasonable time after Chiasma becomes aware that such API is a Non-Complying Product, but in no event later than the end of Retest Period of the API.
 

 2.15.4
In the event of any disagreement between TAPI and Chiasma as to whether any API is a Non-Complying Product, the Parties shall use good faith efforts to reach an amicable resolution of such disagreement.  In the event that a resolution cannot be reached, and upon the request of either Party, an independent third party laboratory or expert with expertise and experience in the relevant field (the “Expert”) shall be appointed by the Parties to resolve the disagreement.  The Expert shall act as an expert and not as an arbitrator.  The Parties shall assist each other and provide all reasonably required information and execute documents reasonably required by such Expert to enable it to determine whether the API is conforming.  The decision of the Expert shall be binding on the Parties and non-appealable, and the costs of such Expert shall be borne by the Party hereunder determined by the Expert to be the non-prevailing Party in such disagreement.
 

 2.15.5
Any API determined to be a Non-Complying Product pursuant to this Section 2.15 above shall be returned by Chiasma to TAPI or discarded (at TAPI’s election), at TAPI’s expense, and shall be replaced by TAPI and delivered to the facility of Chiasma or its designee at no extra charge to Chiasma.
 

 2.15.6
In the event TAPI cannot replace such returned API, it shall refund to Chiasma the amount paid therefor.  TAPI will not be entitled to any fees or costs for any API determined to be a Non-Complying Product in accordance with this Section 2.15, it being agreed that Chiasma shall only be obligated to make payment for replacement API that is conforming under this Agreement.
 

 2.15.7
Moreover, in the event that any API is a Non-Complying Product, the Parties shall meet to discuss, evaluate and analyze the reasons for and implications of any failure by TAPI to deliver conforming API and shall decide upon an appropriate course of action.  Without derogating from the aforegoing, Chiasma may at any time prior to the Expert’s decision, request that TAPI provide it with API in place of the Non-Complying Product.  TAPI shall fulfill such request for the replacement API as soon as practicable, subject to Chiasma issuing an applicable Purchase Order for such replacement.

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 2.15.8
In the event that TAPI delivers Non-Complying Products (excluding if such Non-Complying Products is a result of Latent Defects) on [***] occasions in any period of [***], in each case as a result of a different root cause, such delivery of Non-Complying Products shall constitute a material breach of this Agreement by TAPI and Chiasma shall be entitled to terminate this Agreement in accordance with Section 7.2 below.
 

 2.15.9
Without derogating from Chiasma’s rights pursuant to Section 2.14.2 and Section 2.15.8 above, TAPI’s obligation to replace Non-Complying Products, shall be Chiasma’s sole remedies for Non-Complying Products.
 
2.16
Recalls.
 
In the event Chiasma shall be required to recall any Finished Product because such Finished Product may violate Applicable Law or the applicable specifications (including the Specifications), or in the event that Chiasma elects to institute a voluntary recall, Chiasma shall be responsible for coordinating such recall.  Chiasma promptly shall notify TAPI if any Finished Product is the subject of a recall and provide TAPI with a copy of all documents relating to such recall.  TAPI shall cooperate with Chiasma in connection with any recall and Chiasma shall be responsible for all of the costs and expenses of such recall.
 
2.17
Delay or failure to obtain marketing authorization.
 
In the event that Chiasma does not obtain a Marketing Authorization from the FDA by 30 April 2016, Chiasma shall promptly notify TAPI thereof in writing.  Within [***] days after such notification, Chiasma shall be entitled, in its sole discretion, by written notice to TAPI (the “Suspension Notice”), to require the suspension of all obligations of the Parties under this Agreement with respect to the purchase, manufacture and supply (as applicable) of API (including TAPI’s obligations under Section 2.3 herein) until written notification by Chiasma to TAPI that it has received Marketing Authorization from the FDA or the EMA (the “Marketing Authorization Approval Notice”).  In such event of providing a Suspension Notice, the following shall apply:
 

 2.17.1
subject to Section 2.17.2 below, with effect from the date of delivery of the Suspension Notice to TAPI as aforesaid (the “Suspension Date”) (i) the First Rolling Forecast (including, the First Binding [***] Month Forecast) shall be cancelled; and (ii) all purchase and supply obligations of the Parties (including the Minimum Annual Purchase Requirements and all obligations of Chiasma to deliver Rolling Forecasts) shall be suspended until delivery to TAPI of the Marketing Authorization Approval Notice;
Page 17 of 44

 2.17.2
all pending Binding Purchase Orders as of the date of the Suspension Notice, including the Purchase Orders attached hereto as Exhibit H, shall remain binding on the Parties;
 

 2.17.3
Chiasma shall make payment to TAPI as follows:
 

 (a)
Chiasma shall pay TAPI for the API supplied by TAPI to Chiasma pursuant to the Purchase Orders specified in Section 2.17.2 above in accordance with Section 4 below at the price that would have been applicable had the Marketing Authorization been granted by the FDA by 30 April 2016;
 

 (b)
within [***] days from the Suspension Date, Chiasma shall pay TAPI a one-time payment in an amount equal to US$ [***], as consideration for the services and costs incurred by TAPI.
 

 (c)
Subject to payment by Chiasma to TAPI pursuant to Subsections 2.17.3 (a) and (b) above, and in the event that Chiasma shall provide TAPI a Marketing Authorization Approval Notice, then Chiasma shall resume purchase of the API from TAPI and the prices for future quantities of the API purchased by Chiasma shall be the prices set forth in Exhibit C under the column titled “Discounted API Price”.  The Discounted API Price will apply for all quantities of API ordered by Chiasma until the total discount value (calculated by subtracting the amount that would have been paid by Chiasma per the “API Price Post Scale Up Period”, as provided in Exhibit C and the amount paid by Chiasma per the “Discounted API Price”) will equal an amount of US$ [***].  Thereafter, the API price will be the price set forth in Exhibit C under the column titled “API Price Post Scale Up Period”.
 
The above payments by Chiasma shall be made against a valid tax invoice from TAPI.  Such payments by Chiasma shall constitute TAPI’s sole remedy in the event that Chiasma does not obtain a Marketing Authorization from the FDA and Chiasma exercises its rights under this Section 2.17 above.
 
2.18
API Resale
 
Chaisma and its Affiliates are prohibited from reselling or otherwise transferring all or any portion of API that is not used in the manufacture of Finished Products to any other person or entity, either directly or indirectly, including through its contract manufacturers or other third parties, without prior written permission of TAPI.
 
2.19
Chiasma’s Reporting Requirements
 
No later than [***] days from the end of each calendar year, Chiasma will provide TAPI a report of its annual consumption in manufacturing of the Finished Product for each Region for the previous calendar year, the Minimum Annual Purchase Requirements for that year and the quantities ordered from TAPI for that year

Page 18 of 44
3.
RETENTION OF SAMPLES; CHANGE ORDER
 
3.1
Retention of Samples.  TAPI shall submit samples of API to Chiasma in accordance with Exhibit D hereto, upon Chiasma’s written request, at no additional cost to Chiasma, except as otherwise provided in Exhibit D.
 
3.2
Change Order.  If Chiasma wishes to change the scope of a Binding Purchase Order prior to its delivery, or to have TAPI modify the Specifications or perform other tasks or activities not initially covered by this Agreement, Chiasma shall notify TAPI to such effect and TAPI shall submit to Chiasma a written cost estimate (including, in the case of a reduction in scope - for Raw Materials already used) or a new delivery timeline (including, in the case of an increase of scope).  No such request shall be binding unless and until it has been agreed to in a Change Order signed by both Chiasma and TAPI.  In addition, any modifications required by any Regulatory Authority and/or requested by TAPI shall be made in accordance with the above procedure, subject to Chiasma’s agreement as to such modifications, including the timelines and terms under which such modifications shall be implemented, which agreement shall not be withheld unreasonably.  Without derogating from any right or remedy to which Chiasma may be entitled, if any such modifications, additional services, deliverables, tasks, activities or repeat work are required due to Manufacturer’s fault, negligence or breach of its obligations hereunder, TAPI shall promptly perform same in accordance with the terms of this Agreement and subject to Chiasma’s prior written consent, at TAPI’s full cost, risk and expense.
 
4.
CONSIDERATION; PAYMENT; TAPI AUDIT RIGHTS
 
4.1
Fees and Costs.
 
In consideration for delivery of the API and the other Deliverables provided by TAPI hereunder, Chiasma shall pay TAPI the fees and prices set forth in the Exhibit C attached hereto.  All amounts payable to TAPI as aforesaid are inclusive of all taxes, excluding value added tax (if applicable).
 
The consideration as set forth herein constitutes the only consideration payable to TAPI by Chiasma for performance by TAPI of its obligations under this Agreement, and Chiasma shall not be liable for any additional payments without Chiasma’s prior written consent thereto.

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4.2
Invoices; Payment.
 
TAPI shall provide Chiasma with a detailed invoice in accordance with each Binding Purchase Order, which invoice shall set forth the API delivered.  Except as otherwise provided in this Agreement and unless otherwise agreed by the Parties in writing, each TAPI invoice shall be payable within [***] days after the end of the month in which the invoice is received by Chiasma.  The fees and charges due hereunder shall be payable in U.S. Dollars unless otherwise agreed by Parties.  All payments due from Chiasma hereunder shall be paid by wire transfer to TAPI’s bank account, the details of which are notified to Chiasma.  Should Chiasma notify TAPI that it disputes or challenges any or all amounts in an invoice, the Parties shall enter into discussions in good faith in order to reach an amicable resolution of the dispute.  Any disputes that cannot be resolved amicably shall be resolved in accordance with the provisions of Section 10 below.  Amounts not paid after a grace period of [***] days from due date of payment shall accrue interest calculated from the due date of payment until the date of actual payment thereof at the rate of [***] plus the U.S. prime rate (but in no event greater than the maximum rate permitted by law) in effect on the date that the payment should have been made, as published in The Wall Street Journal, Eastern U.S. Edition, calculated on a daily basis.  Subject to Section 13.4, no deductions of any kind from any payment becoming due to TAPI may be made in the absence of an official credit memorandum from TAPI authorizing the deduction.
 
4.3
TAPI Audit Rights
 
Chiasma shall keep full and true books of account and other records in accordance with generally accepted accounting principles in the Region so that details of Chiasma’s total annual requirements of Octreotide acetate may be properly ascertained.
 
Chiasma agrees, on not less than a [***] day written notice from TAPI and not more than once in each calendar year during the term of this Agreement, to permit an independent certified public accounting firm or other financial industry expert selected by TAPI, at TAPI’s expense to have access, at a time convenient to Chiasma, to such books of account and other pertinent records as may be reasonably necessary to verify compliance of Chiasma’s Minimum Annual Purchase Requirements pursuant to this Agreement.  Such records shall include, but not be limited to Chiasma’s total purchases from all sources of API for the manufacture of the Finished Product during the reviewed period.  This right shall survive termination of this Agreement for [***] years.  The accounting firm shall disclose to TAPI only whether the Minimum Annual Purchase Requirements have been met, and if not met, the amount of any discrepancy.  In the event that a discrepancy of more than [***] will be ascertained by the auditing firm, Chiasma shall bear the costs of the audit, shall immediately place Orders for the shortfall quantities, and the Price of such quantities shall be the price of the API as invoiced in the applicable year + [***].  No other information shall be provided to TAPI.  TAPI shall treat all information subject to review under this Section 4.3 in accordance with the confidentiality and non-use provisions of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with Chiasma obligating it to retain all such information in confidence pursuant to such confidentiality agreement.
 
5.
OWNERSHIP OF INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS
 
5.1
Pre-Existing IP.  Each Party shall continue to own or to retain the rights in the Intellectual Property and Confidential Information owned or licensed by such Party prior to and as of the Effective Date, or acquired by such Party or developed by such Party independently of this Agreement during the Term.
 
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5.2
Ownership by Chiasma - Chiasma Inventions; License to Manufacturer.
 
Without derogating from Section 5.1 above, the Parties agree that all inventions, discoveries, designs, procedures, methods, processes, know-how, and any improvements relating thereto, whether patentable or not, (collectively, “Inventions”):  (i) relating directly to Confidential Information or Intellectual Property of Chiasma, which are made, developed, or discovered by or on behalf of TAPI and/or the Manufacturer (including, by any Approved Sub-contractor), as a result of the performance of its obligations under this Agreement, and/or (ii) that TAPI and/or the Manufacturer (including, by any Approved Sub-contractor) was specifically required by Chiasma to design or develop for Chiasma under a separate agreement (collectively, “Chiasma Inventions”); and all related Intellectual Property, shall be and remain the exclusive property of Chiasma and all works of authorship, if applicable, shall be deemed “works-made-for-hire”.
 
TAPI shall promptly disclose in writing to Chiasma any Chiasma Inventions.  TAPI shall assign and shall cause its Affiliates, employees, subcontractors, agents or anyone acting on its behalf to assign any and all right, title and interest in any Chiasma Inventions and related Intellectual Property to Chiasma, at no cost to Chiasma, including by executing any documents or instruments that may be required by Chiasma.
 
Chiasma shall be free to use any Chiasma Invention and related Intellectual Property as it sees fit.
 
Chiasma hereby grants to Manufacturer during the term of this Agreement, a fully paid, non-exclusive, limited license to use any and all Chiasma Inventions owned by Chiasma as aforesaid, to the extent necessary and solely for the limited purpose of enabling Manufacturer to perform its obligations under this Agreement.  All Chiasma Inventions owned by Chiasma as aforesaid shall be deemed to be Confidential Information of Chiasma for the purposes of this Agreement and the NDA.
 
5.3
Ownership by Manufacturer — Records, Inventions; License to Chiasma.
 
All Records developed or generated by or on behalf of Manufacturer in the performance of this Agreement shall be and remain the exclusive property of Manufacturer.
 
Without derogating from Section 5.1 above, the Parties agree that any Inventions (other than Chiasma Inventions) (i) made, developed or discovered solely by or on behalf of Manufacturer (including, by an Approved Subcontractor) that relate to Manufacturer’s activities and/or its products (including the API), formulation, analysis and/or the manufacturing process of active pharmaceutical ingredients (including the Manufacturing Process), or (ii) relating directly to Confidential Information or Intellectual Property of Manufacturer, which are made, developed, or discovered by or on behalf of Chiasma (collectively, “Manufacturer Inventions”) and all related Intellectual Property, shall be and remain the exclusive property of Manufacturer.  All Manufacturer Inventions shall be deemed to be Confidential Information of Manufacturer for the purposes of this Agreement and the NDA.

Page 21 of 44
Chiasma shall promptly disclose in writing to TAPI any Manufacturer Inventions created under (ii) above.  Chiasma shall assign and shall cause its employees, subcontractors, agents or anyone acting on its behalf to assign any and all right, title and interest in any such Manufacturer Inventions and related Intellectual Property to Manufacturer, at no cost to Manufacturer, including by executing any documents or instruments that may be required by Manufacturer.
 
Each of TAPI and Manufacturer hereby grants to Chiasma, a non-exclusive, perpetual, irrevocable, worldwide, royalty-free, fully paid-up, sublicensable license to use any and all such Records and Manufacturer Inventions owned by TAPI and/or Manufacturer as aforesaid, solely in connection with the use by Chiasma of the API supplied to Chiasma under this Agreement and/or the development, manufacture, use, marketing, sale, and distribution of the Finished Product.
 
5.4
No Other Licenses.  Except as otherwise expressly provided in this Agreement, nothing contained in this Agreement shall be construed as:  (i) granting Manufacturer any ownership, license or other rights, express or implied, in or to any Confidential Information and Intellectual Property of Chiasma and/or any Chiasma Inventions; or (ii) granting Chiasma any ownership, license or other rights, express or implied, in or to any Confidential Information and Intellectual Property of Manufacturer and/or any Manufacturer Inventions.
 
6.
CONFIDENTIALITY
 
The Parties agree that any confidential and/or proprietary information of a Party or its Affiliates disclosed to the other Party or its Affiliates and/or their employees hereunder in any form, whether oral, written or otherwise, and the terms and conditions of this Agreement will be deemed to be “Confidential Information” for the purpose of the CDA and the terms and conditions of the CDA shall apply thereto as if the relevant disclosing party and receiving party have been an original parties of the CDA, provided that in the case of any oral disclosures, a written summary thereof is provided to the receiving Party within [***] days of such disclosure.  For the avoidance of doubt, the terms and conditions of the CDA shall continue to be of full force and effect during the term of and shall survive the termination of this Agreement for any reason for a period of [***] years.
 
Without derogating from the provisions of the CDA, it is agreed that either Party shall be entitled to disclose Confidential Information of the other Party for the purposes of obtaining approvals from any Regulatory Authority as contemplated in this Agreement subject to the provision of prior notice to the other Party, in the fulfillment of the requirements of applicable securities laws and/or any stock exchange, for the implementation of this Agreement and/or the exercise of any rights or obligations of such Party hereunder, subject to the provisions of the CDA.  In addition, Chiasma shall be entitled to disclose the terms of this Agreement to potential investors, acquirers, licensees and/or collaborators under appropriate non-disclosure agreements.

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7.
TERM; TERMINATION
 
7.1
Term.  This Agreement shall enter into effect on the Effective Date and shall continue with respect to each Region, respectively, until the [***] anniversary of the first Launch Date in such Region (the “Region Term”), and shall expire and have no further force or effect upon the expiry of the last Region Term, unless terminated earlier pursuant to this Section 7 below (the “Term”).
 
7.2
Termination by Chiasma.
 
In the event that a Supply Failure occurs as provided in Section 2.14.5 above or TAPI delivers Non-Complying Products as provided in Section 2.15.8 above, respectively, then Chiasma shall be entitled to terminate this Agreement by providing [***] days prior written notice to TAPI.
 
7.3
Termination by Either Party; Termination by Manufacturer.
 
Termination by either Party for Cause.  Either Party may terminate this Agreement by serving a written notice to that effect on the other Party:  (i) in accordance with Section 12 below; (ii) if the other Party commits a material breach of this Agreement, and such breach is not cured within [***] days after receipt by the breaching Party of a written notice from the non-breaching Party in respect of such breach, or such additional time reasonably necessary to cure such breach, which in no event shall be more than [***] days after receipt by the breaching Party of written notice of breach, provided that the breaching Party can demonstrate that it is making commercially reasonable efforts to cure such breach; or (iii) if a Party shall become bankrupt or insolvent, or file a petition for winding-up or liquidation or for the appointment of a receiver over its assets, or a substantial part thereof, or shall make an assignment for the benefit of creditors, provided that such petition or appointment shall not be withdrawn, dismissed or vacated, as the case may be, within [***] days after the filing or appointment, if applicable.
 
7.4
Payment Upon Termination.
 
Upon termination of this Agreement in accordance with Section 7.2 or 7.3 above, Chiasma shall pay TAPI any outstanding undisputed fees and charges for the API and other Deliverables delivered in accordance with this Agreement, until the effective date of termination, against an invoice provided to Chiasma in accordance with Section 4.2 above, or as otherwise agreed to in writing by the Parties, and shall pay TAPI for all Purchase Orders placed by Chiasma in accordance with the relevant Binding Annual Forecast for the period of [***] months following the effective date of termination and supplied by TAPI pursuant to Section 7.5 below, against an invoice provided to Chiasma in accordance with Section 4.2 above.

Page 23 of 44
7.5
Tapi’s Duties Upon Termination.
 
TAPI shall, upon receipt of a termination notice from Chiasma pursuant to this Section 7, promptly cease performance of its obligations under this Agreement, except as expressly provided in this Section 7.5 below.
 
TAPI shall complete the preparation of any Batch that is in the process of being prepared or runs in process and manufacture and supply API to Chiasma pursuant to all Purchase Orders placed by Chiasma in accordance with the relevant Binding Annual Forecast for the period of [***] months following the effective date of termination, in which event the Agreement shall continue in full force and effect with respect to such Purchase Orders.
 
7.6
Return of Materials; Confidential Information.  Upon termination of this Agreement, and subject to any obligations of Manufacturer to retain any documents pursuant to this Agreement, and following a Party’s written request, the other Party shall promptly deliver to the requesting Party all Confidential Information of the requesting Party, and all copies or other manifestations thereof, regardless of the method of storage or retrieval, or, at requesting Party’s election, shall destroy any of the aforegoing as instructed in writing, and shall provide requesting Party with written certification of its compliance with such instructions, at requesting Party’s cost.
 
7.7
Termination of Licenses.  Except where otherwise necessary pursuant to Section 7.5 above, all licenses granted hereunder shall immediately terminate and be of no further force and effect upon termination of this Agreement for any reason.
 
7.8
Survival.  The termination of this Agreement for any reason shall not relieve a Party of any of its respective obligations which shall have accrued prior to such termination.  Without derogating from the aforegoing, the provisions of Sections 2.10.2, 2.10.5, 2.10.6, 4, 5, 6, 7.4 through this 7.8, 9, 10, 11, and 13 to this Agreement, as well as the provisions of the Quality Agreement and the CDA, shall survive termination of this Agreement.
 
8.
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES
 
8.1
Mutual Representations and Warranties.  Each Party represents, warrants and covenants to the other Party that:
 

 8.1.1
it has the full right and authority to enter into this Agreement and to perform its obligations hereunder; and
 

 8.1.2
neither the execution nor the performance of this Agreement, will result in the violation of statute, regulation or judicial decree, or cause such Party to breach any contractual commitment by which it is bound; and
 

 8.1.3
this Agreement constitutes its valid and binding obligation, enforceable against it in accordance with its terms.

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8.2
Tapi Representations and Warranties.
 

 8.2.1
TAPI represents and warrants to Chiasma that:
 

 (a)
all API shall (i) be manufactured in compliance with cGMP, the Specifications, the Drug Master File and Applicable Law; (ii) be packaged and stored in accordance with the Specifications, Applicable Law and other requirements set out in the Quality Agreement; (iii) be shipped in accordance with the Shipping Guidelines and Quality Agreement; (iv) upon delivery be free from defects in material and workmanship; and the API is not adulterated or misbranded under the U.S. Federal Food, Drug and Cosmetic Act; and
 

 (b)
TAPI has not received any notice or claim alleging that the manufacture of the API infringes or misappropriates any intellectual property right of any third party.  TAPI shall promptly notify Chiasma upon becoming aware of any such notice or claim; and
 

 (c)
it owns (directly or indirectly, or its Affiliates own) and/or controls the Manufacturing Facility, it has all the necessary permits and licenses to operate the Manufacturing Facility and that the Manufacturing Facility shall be maintained in accordance with cGMP and in such condition as will allow Manufacturer to manufacture the API in compliance with cGMP and the other requirements set out in Section 8.2.1(a) above; and
 

 (d)
it has the experience, capability, qualifications, equipment, resources, registrations, approvals and appropriately qualified personnel necessary for the performance of its obligations under this Agreement (including, the technical requirements and timelines set out therein); and
 

 (e)
to the best of TAPI’s knowledge, the performance of its obligations under this Agreement does not and shall not conflict with any applicable law or regulation which apply to Manufacturer and/or its employees.
 

 8.2.2
Except as specifically set forth in this Agreement, TAPI makes no express or implied warranties, statutory or otherwise, concerning the deliverables or the API.  Without limiting the generality of the foregoing, TAPI makes no implied warranty of merchantability or fitness for a particular purpose regarding the API and/or other deliverables.
 
8.3
Tapi covenants.
 
TAPI covenants to Chiasma as follows:
 

 8.3.1
it will perform its obligations under this Agreement in accordance with Applicable Law; and

Page 25 of 44

 8.3.2
it will perform its obligations hereunder in a professional manner and in accordance with high standards of care and diligence consistent with industry practices; and
 

 8.3.3
it shall exercise due care with respect to safety as is necessary in connection with the performance of its obligations hereunder and as is otherwise reasonable and customary for companies engaged in operations similar to those of Manufacturer; and
 

 8.3.4
Chiasma Confidential Information and Intellectual Property of Chiasma will be used solely to perform the Manufacturer’s obligations under this Agreement, and that neither it nor its Approved Subcontractors will use any of the aforegoing for any other purpose.
 
8.4
Chiasma Representations and Warranties.
 
Except to the extent that any of the following are the obligations of Manufacturer, Chiasma represents and warrants to TAPI that (a) Chiasma has the right, power and authority to grant Manufacturer the license set forth in Section 5.2 above; (b) it or its Affiliates directly or indirectly owns and/or controls all necessary Marketing Authorizations and title to all Intellectual Property related to the Finished Product and the Chiasma Property; and (c) it has the capability, expertise and resources to perform its obligations under this Agreement.
 
Except as specifically set forth in this Section 8.4, Chiasma makes no other warranties express or implied or representations with respect to the API or otherwise.
 
8.5
Chiasma Covenants.
 
Chiasma covenants to TAPI that it shall comply with Applicable Law in the performance of its obligations hereunder and in handling, marketing and selling of Finished Product.
 
9.
INDEMNIFICATION; INSURANCE; LIMITATION ON LIABILITY
 
9.1
Indemnification by Chiasma.
 
Chiasma shall indemnify, defend and hold harmless Manufacturer, and Manufacturer’s directors, officers, employees and agents from and against any and all claims, losses, liabilities, lawsuits, proceedings, costs and expenses, including reasonable attorneys’ fees, asserted or filed by a third party, (collectively, “Liabilities”) to the extent arising out of or in connection with:
 

 9.1.1
any breach by Chiasma of any covenant, representation, warranty or obligation hereunder; or
 

 9.1.2
the violation by Chiasma of Applicable Law; or

Page 26 of 44

 9.1.3
Chiasma’s negligence or willful misconduct in the performance of this Agreement; or
 

 9.1.4
Personal or bodily injury (including death) or property damage arising out of any use, distribution or sale by or on behalf of Chiasma of the API and/or the Finished Product;
 

 9.1.5
the storage, handling, manufacture, license, use, marketing, advertising, promotion, distribution or sale of the Finished Product by Chiasma or its Affiliates, sublicensees, distributors or agents in the Regions, including, but not limited to, liabilities for product liability and returned goods.
 

 9.1.6
any actual or alleged infringement (whether direct, contributory or induced) or violation of any patent, trade secret or proprietary rights of any third party, arising out of Chiasma’s or its Affiliates’ and each of their respective officers, directors, agents and employees’ manufacturing, importing, registering, storing, distributing, marketing or selling the Finished Product and/or the API, and in respect of the API, excluding Liabilities caused by TAPI’s gross negligence or willful misconduct.
 
9.2
Indemnification by Tapi.
 
TAPI shall indemnify, defend and hold harmless Chiasma and Chiasma’s Affiliates, and its and their directors, officers, employees and agents from and against any and all Liabilities to the extent arising out of or in connection with:
 

 9.2.1
any breach by Manufacturer or any party acting on its behalf (including any Approved Subcontractor) of any covenant, representation, warranty or obligation hereunder; or
 

 9.2.2
the violation by Manufacturer of Applicable Law; or
 

 9.2.3
any negligence or willful misconduct of Manufacturer, or any party acting on its behalf (including any Approved Subcontractor), in performing any obligations of Manufacturer hereunder.  provided such Liabilities are not related, directly or indirectly, to the use of the API manufactured and delivered in accordance with this Agreement.
 
9.3
Indemnification Procedures.
 

 9.3.1
In the event that a Party seeks indemnification (an “Indemnified Party”) under the terms of this Section 9, it shall provide written notice (the “Claim Notice”) to the indemnifying Party (an “Indemnifying Party”) of the claim, lawsuit or other action (a “Claim”) against the Indemnified Party as soon as reasonably practicable after it receives notice thereof, and shall permit the Indemnifying Party, at the Indemnifying Party’s election and cost, to assume the direction and control of the defense of the Claim.

Page 27 of 44

 9.3.2
The Indemnified Party’s failure to notify the Indemnifying Party as set out in Section 9.3.1 above or to take all action reasonably requested by the Indemnifying Party, will not relieve the Indemnifying Party of its obligations under this Section 9, unless and to the extent the Indemnifying Party is prejudiced thereby.
 

 9.3.3
After delivery of such Claim Notice, if the Indemnifying Party acknowledges in writing to the Indemnified Party that the Indemnifying Party shall be obligated under the terms of its indemnity hereunder in connection with such Claim, then the Indemnifying Party shall be entitled, if it so elects:  (a) to take control of the defense and investigation of such Claim; (b) to employ and engage attorneys of its own choice to handle and defend the Claim, at the Indemnifying Party’s cost, risk and expense, unless the named parties to such action or proceeding include both the Indemnifying Party and the Indemnified Party and the Indemnified Party has been advised in writing by counsel that there may be one or more legal defenses available to the Indemnified Party that are different from or additional to those available to the Indemnifying Party (in such an event, the Indemnified Party shall bear all costs and expenses incurred by it in connection with the defense of such a Claim); and (c) to compromise or settle such Claim, which compromise or settlement shall not adversely affect the Indemnified Party’s rights under this Agreement or impose any obligations on the Indemnified Party in addition to those set forth herein, or require an admission of liability or wrongdoing by the Indemnified Party without obtaining the prior written consent of such Indemnified Party.  If the Indemnifying Party assumes the defense of a Claim, then it shall not have indemnification obligations with respect to any settlement of any Claim by the Indemnified Party without the prior written consent of the Indemnifying Party.  In addition, the Indemnified Party shall cooperate fully with the Indemnifying Party and its legal representatives in the investigation and defense of any Claim covered by this indemnification, including upon reasonable notice, by having any of its employees, officers, directors, agents and other representatives testify when necessary, and on reasonable notice making available to the Indemnifying Party as necessary all relevant records, specimens, samples and other information in its possession.  The Indemnifying Party shall keep the Indemnified Party reasonably informed of the progress of the defense, compromise or settlement of the Claim.  If the Indemnifying Party assumes the defense of the Indemnified Party as set forth above, the Indemnified Party shall have the right, but not the obligation, to be represented by independent counsel of its own selection, provided that such independent counsel and the cost thereof shall be at Indemnified Party’s sole expense.

Page 28 of 44

 9.3.4
If the Indemnifying Party fails to assume the defense of such Claim within [***] calendar days after receipt of the Claim Notice, the Indemnified Party shall (upon delivering notice to such effect to the Indemnifying Party) have the right to undertake, at the Indemnifying Party’s cost and expense, the defense, compromise or settlement of such Claim on behalf of and for the account and risk of the Indemnifying Party, provided that any settlement or consent judgment shall be subject to the prior written consent of the Indemnifying Party, which shall not be withheld or delayed unreasonably.  In the event the Indemnified Party assumes the defense of the Claim, the Indemnified Party shall keep the Indemnifying Party reasonably informed of the progress of any such defense, compromise or settlement.  Subject to the terms herein, the Indemnifying Party shall be liable for any settlement of any Claim, for any final judgment (subject to any right of appeal), and the Indemnifying Party agrees to indemnify and hold harmless an Indemnified Party from and against any Liabilities by reason of such settlement or judgment, subject to the terms of this Section 9 above.
 
9.4
Insurance.
 

 9.4.1
During the term of this Agreement and an extended reporting period of [***] years thereafter, Chiasma shall obtain and maintain the following insurance coverage:
 
Type of Coverage          Amount (US Dollars)
 

 (a)
Commercial General Liability Insurance
 
(excluding products liability coverage)          $[***] per occurrence
 

 (b)
Umbrella Coverage
 
(excluding products liability coverage)          $[***] per occurrence
 

 (c)
Clinical Trial Insurance, as per the requirements of the local law, covering personal injury to a research subject arising out of the clinical trial which is the subject of this Agreement, with limits of liability of not less than US$[***] per occurrence and in the aggregate for the trial.  TAPI shall be included as Additional Insured under the said policy as well as all other parties who involves in the performance of the Trial.  This policy shall be in force until the trial ends and should include an extended reporting period as required by local law or per requirement of local Ethics Committee approving the clinical trial, but not less than [***] years thereafter (unless such insurance is not commercially available).  The policy shall apply retroactively from the beginning of the Trial.
 

 9.4.2
Notwithstanding the foregoing, in the event that the API is used for any purpose other than for clinical trials, Chiasma shall, obtain and maintain an appropriate insurance coverage for products liability (for the commercial use, sale or distribution of the Finished Product) for the Agreement Period and if this policy is written on a Claims Made Basis - for additional period of at least [***] years from its termination date, with a minimum limit of liability of $[***] per occurrence and in the aggregate per annual period of $[***], or higher as shall be reasonable and customary in the biopharmaceutical industry for its activities.

Page 29 of 44

 9.4.3
Chiasma shall name TAPI as an additional insured on the insurance specified above with respect to claims arising in connection the clinical trial or marketing covered under the relevant policies.  Chiasma will provide evidence to TAPI of such insurance.  Chiasma will provide written notice of non-renewal, material modification or cancellation of the above insurance policies.
 

 9.4.4
“TAPI” for the purpose of the above policies should include Teva API Inc., Teva API By, Teva Pharmaceutical Industries Ltd., Assia Chemical Industries Ltd., Plantex Ltd., Novetide Ltd. and any other TAPI Affiliate which shall be notified in writing to Chiasma.
 

 9.4.5
All the above insurance policies shall be primary to any Insurance carried by TAPI.  For clarity, none of the above insurance obligations will reduce TAPI’s obligations, in accordance with this Agreement and in accordance with any law.
 
All the above insurance policies shall be neither cancelled nor restricted unless [***] days’ prior written notice is delivered to TAPI by registered mail.
 
9.5
Limitation of Liability
 
SAVE FOR ANY LIABILITY FOR BREACH OF SECTIONS 5 (Ownership of Intellectual Property and Proprietary Rights), 6 (Confidentiality), AND 8.3.4 (TAPI’s covenants) ABOVE, AND EXCEPT FOR ANY LIABILITY UNDER SECTIONS 9.1 (Indemnification By Chiasma) OR 9.2 (Indemnification by TAPI) ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY (WHETHER UNDER CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE), FOR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ANY LOSS OR DAMAGE TO BUSINESS EARNINGS, LOST PROFITS OR GOODWILL, SUFFERED BY ANY PERSON OR ENTITY, ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT, EVEN IF SUCH PARTY IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
 
10.
DISPUTES; ARBITRATION
 
10.1
Except as provided in Section 10.5 below, or in Section 2.15 above with respect to disputes regarding Non-Complying Products, all disputes, controversies or claims arising out of or relating to the operation or interpretation of this Agreement shall be resolved by arbitration in accordance with the International Rules of the American Arbitration Association before an arbitrator appointed by mutual agreement of the Parties, and failing such agreement within [***] days, the arbitration shall be appointed by the American Arbitration Association.  Any award rendered by the arbitrator shall be in writing, final and binding upon the Parties and judgment upon any such award may be entered in any court having jurisdiction in respect thereof.  The arbitration shall be conducted in the English language in New York, NY, U.S.A.
 
Page 30 of 44
10.2
The arbitrator shall not be bound by the rules of evidence, but be bound to apply the substantive law of the State of New York, U.S.A., and shall be required to give reasons for his/her decision, and except for the purposes of judicial enforcement of an award, the arbitration shall be confidential.
 
10.3
The arbitrator shall be empowered to grant any and all relief that he or she may deem appropriate, including injunctive, interlocutory or other interim relief.
 
10.4
The arbitrator shall award attorneys’ fees and other costs of the arbitration, including the fees and expenses of the arbitrator, to the prevailing Party, as determined by the arbitrator.
 
10.5
Notwithstanding the aforegoing, each of the Parties shall be entitled to apply, pending arbitration, to the competent state and/or federal courts located in New York, NY, U.S.A, or the competent courts located in Tel Aviv-Jaffa, Israel for orders and preliminary or permanent injunctive relief, without bond, to restrain any actual or threatened conduct in violation of this Agreement.
 
11.
GOVERNING LAW
 
This Agreement shall be governed by the laws of the New York, NY, U.S.A., without regard to the principles of conflicts of laws that may direct that the laws of another jurisdiction apply.
 
12.
FORCE MAJEURE
 
Notwithstanding anything to the contrary contained herein, neither Party shall be liable for any failure or delay on its part in performing any of its obligations under this Agreement, or for any loss, damage, costs, charges and expenses incurred or suffered by the other Party by reason thereof, if such failure or delay results from and/or arises out of Force Majeure conditions and provided that the Party claiming Force Majeure shall:  (i) use its commercially reasonable efforts to avoid or remove such cause of non-performance and shall fulfill and continue performance hereunder with the utmost dispatch whenever and to the extent such cause or causes are removed or cease to exist; and (ii) shall give notice in writing to the other Party without undue delay after such circumstance has occurred.  Upon such notification, the Parties shall agree upon a reasonable extension of the time for performance, not to exceed an extension equal to the period the Force Majeure condition continues to exist.  If an event or condition constituting Force Majeure shall continue for more than [***] days, the Parties shall meet to negotiate a mutually satisfactory solution to the problem, if practicable, including, if applicable, the implementation of an agreed upon action plan to transfer the manufacture of the API to a manufacturing facility of one of TAPI’s Affiliates or another manufacturing plan.

Page 31 of 44
13.
MISCELLANEOUS
 
13.1
Use of Name.  Neither Party shall use the other Party’s name in any marketing, advertising, press release or other promotional literature or any other publicity without the other Party’s prior written consent which shall not be withheld unreasonably, all except for any mention in any applications to any Governmental Authority for regulatory approval, or in the fulfillment of any duty owed to any competent authority (including a duty to make regulatory filings and/or reports) or, in the case of Chiasma, in the presentation of its activities to potential investors, potential business partners and/or collaborators, subject to applicable confidentiality agreements.
 
13.2
Debarment.  Manufacturer has not been debarred under the provisions of the Generic Drug Enforcement Act of 1992, including 21 U.S.C.  Section 335a, or under any other Applicable Law or by any other Regulatory Authority.  If at any time during the term of this Agreement Manufacturer:  (a) becomes debarred as aforesaid; or (b) receives notice of action or threat of action with respect to its debarment, Manufacturer shall notify Chiasma thereof in writing immediately.  In the event that Manufacturer becomes debarred as set forth above, this Agreement shall automatically terminate upon receipt of such notice without any further action or notice.  In the event that Manufacturer receives notice of action as set forth in subsection (b) above, Chiasma shall have the right to terminate this Agreement with immediate effect.
 
13.3
Non-Solicitation.  During the term of this Agreement and for a period of [***] thereafter, regardless of the reason for such termination, neither Party shall, directly or indirectly, without the prior written consent of the other Party, solicit or hire, as an employee any person employed by the other Party.
 
13.4
Taxes.  Each Party shall have the sole responsibility for the payment of all taxes and duties imposed upon it by all Governmental Authorities, as they pertain to its duties, obligations and performance under this Agreement.  Without derogating from the aforegoing, if Chiasma is required by Applicable Law to make any tax deduction, tax withholding or similar payment from any amount paid or payable by Chiasma on account of income tax, tax on profit or any other taxes of a similar nature imposed on TAPI, then Chiasma shall deduct the said withholding tax from the payments referred to above, as prescribed by applicable law or at the reduced rate specified in any certificate (if any) furnished to Chiasma by TAPI under any applicable double taxation treaty, and pay such tax to the proper taxation authority, unless TAPI provides Chiasma with evidence of an exemption from the payment of such withholding tax.  Chiasma will deliver to TAPI a statement including the amount of tax withheld and justification therefor, and such other information as may reasonably be necessary for tax credit purposes, and will take all reasonable steps reasonably requested by TAPI and reasonably co-operate with TAPI to assist TAPI in seeking repayment or refund of such withheld taxes.  In such event, the Parties shall discuss in good faith and agree upon the required adjustment of the Fees to reflect the sharing of any additional tax burden between them and if the Parties fail to reach an agreement as aforesaid, TAPI shall be entitled to terminate this Agreement by giving Chiasma [***] months’ written notice of termination, during which [***] month period, TAPI shall continue to supply Chiasma with API in accordance with orders by Chiasma and the additional tax burden shall be shared between the Parties equally, provided that during the last [***] months of such period the Minimum Annual Purchase Requirements shall not apply.
 
Page 32 of 44
13.5
Assignment.  Neither Party may assign this Agreement and the rights and obligations hereunder, without the prior written consent of the other Party, which shall not be unreasonably withheld.  Notwithstanding the aforesaid, either Party may assign this Agreement, upon written notice to the other Party, at its sole discretion and without the prior written consent of the other Party, (i) to an entity that consolidates or merges with or buys all or substantially all of its assets; (ii) to an entity that is an Affiliate; or (iii) with respect to an assignment by Chiasma, to an entity that (a) has received an exclusive license from Chiasma to commercialize the Finished Product; or (b) has acquired from Chiasma all rights and title in and to the Finished Product; or (iv) with respect to an assignment by TAPI, to an entity that has acquired from TAPI all rights and title in and to the API - provided in all cases specified above, that the assignee assumes all responsibilities and obligations of the assigning Party under this Agreement vis-a-vis the other Party.
 
13.6
Waivers.  No waiver by any Party, whether express or implied, of its rights under any provision of this Agreement shall constitute a waiver of such Party’s rights under such provisions at any other time or a waiver of such Party’s rights under any other provision of this Agreement.  No failure by any Party to take any action against any breach of this Agreement or default by another Party shall constitute a waiver of the former Party’s rights to enforce any provision of this Agreement or to take action against such breach or default or any subsequent breach or default by such other Party.
 
13.7
Entire Agreement; Integration.  This Agreement (including the Exhibits hereto) sets forth the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior discussions, agreements and understandings between the Parties relating to the subject matter hereof including the Agreement dated 26 December 2012 between the Parties.  In the event of any conflict, discrepancy or inconsistency between the terms set forth herein or the terms set forth or referred to in the Quality Agreement, the terms set forth in this Agreement shall control absent a clear indication to the contrary in writing by the Parties, and except with respect to quality issues, which shall be governed by the Quality Agreement.
 
13.8
Modification.  No modification or amendment to this Agreement (including the Exhibits hereto) shall be effective unless set out in a written document signed by the Parties.  Each purchase order for API shall be governed exclusively by the terms and conditions contained herein.
 
13.9
Construction.  Whenever the context may require, the singular form of names and pronouns shall include the plural and vice-versa.  The section and subsection headings are included solely for the convenience of the Parties and shall not be used in the interpretation of this Agreement.  No rule of construction shall apply to this Agreement that construes any language, whether ambiguous, unclear or otherwise, in favor of or against any Party based on the Party that drafted such language.
 
Page 33 of 44
13.10
Severability.  The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction determines that any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement; but such provision shall be modified as set out below and the balance of this Agreement shall be interpreted as if such provision were so modified.  The Parties shall negotiate in good faith in order to agree on the terms of an alternative provision which complies with applicable law and achieves, to the greatest extent possible, the same effect as would have been achieved by the invalid, illegal or unenforceable provision.
 
13.11
Counterparts.  This Agreement may be executed in any number of counterparts (including counterparts transmitted by mail, facsimile or by electronic mail in PDF format) and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.
 
13.12
Relationship Between Parties.  Manufacturer’s relationship with Chiasma shall be that of an independent contractor.  No persons engaged by Manufacturer shall be considered under the provisions of this Agreement or otherwise as an employee of Chiasma.  Nothing contained in this Agreement shall create or imply the creation of a partnership or joint venture between Chiasma and Manufacturer and neither Party shall have any authority (actual or apparent) to bind the other.
 
13.13
Notices.  All notices, requests, consents and other communications (“Notices”) hereunder to either Party shall be made in writing (whether or not specifically required herein) and deemed to be sufficient if contained in a written instrument delivered:  (i) in person or by courier; (ii) duly sent by first class registered or certified mail, postage prepaid; or (iii) by facsimile or e-mail transmission (with written confirmation of receipt, provided that in the event that any notice of termination is sent by electronic mail, such notice shall also be sent in any other manner set out herein).  All Notices shall be addressed to such Party at the address set forth below or such other address as may hereafter be designated in accordance with the provisions of this Section 13.13.  All Notices shall be deemed to have been received on:  (a) the day of delivery, if delivered in person or by courier; (b) [***] days after being mailed by certified or registered mail (for the purposes of proving such service, it being sufficient to prove that such Notice was properly addressed and posted); or (c) the next Business Day after receipt of confirmation of transmission, if sent by facsimile or e-mail transmission.
 
If to Chiasma:

Chiasma Inc.
Attention:  General Counsel
60 Wells Ave.
Suite#102
Newton
MA 02459, USA

Page 34 of 44
Facsimile:  +972 2 571 58 86
Email:  tara.mccarthy@chiasmapharma.com
 
Copy to:  Chiasma (Israel) Ltd
Attn:  Chaime Orlev
10 Hartom St
Jerusalem 91450
POB 45182,
Israel
Fax:  +972 2 571 58 86
Email:  Chaime@chiasmapharma.com

Page 35 of 44
If to TAPI:
 
Teva API, Inc.
Attention TAPI Inc. President,
400 Chestnut Ridge Rd.
Woodcliff, NJ 07677 USA
Facsimile:  201-307-6909
Email:  kerri.McCullough@tevapharma.com
 
Copy to:  Teva Pharmaceutical Industries Ltd. API Division
Attn:  Nir Koyfman
5 Basel St
Petach Tikva
POB 3190
Israel
 
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed effective of the date first set forth above.

TEVA API, INC.
  
CHIASMA, INC.
  
       
/s/ Kerri Wood
  
/s/ Mark Leuchtenberger 
 
SIGNATURE   SIGNATURE  
       
Kerri Wood
  Mark Leuchtenberger
  
NAME   NAME  
       
VP, Head of Global TAPI Sales & President, Teva API Inc.
   President & CEO
  
TITLE   TITLE  
       
January 6, 2015   December 31, 2015
  
DATE   DATE  
       
 /s/ Kirk Tsahalis
  

 
SIGNATURE  
SIGNATURE
  
 
  
 
  
Kirk Tsahalis
      
NAME
  
NAME
  
 
  

 
Associate Director, Sales & Marketing
  
 
TITLE   TITLE  
       
January 7, 2016      
DATE
  
DATE
  

Page 36 of 44
List of Exhibits
Exhibit A:
API description
Exhibit B: 
CDA
Exhibit C:
API price
Exhibit D:
Samples of API
Exhibit E:
Quality Agreement
Exhibit F:
Shipping Guidelines
Exhibit G:
Long Term Forecast
Exhibit H:
Purchase Orders – 2016

Page 37 of 44
EXHIBIT A
 
API Description
 
Octreotide acetate, as per the following specifications:

Page 38 of 44
EXHIBIT B
 
CDA

Page 39 of 44
MUTUAL CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
 
Made and entered on this 01 day of April. 2008, by and between Chiasma (Israel) Ltd., 9 company registered under the laws of the State of Israel (and any subsidiaries or parent or affiliated companies thereof) of 5 Ha’Marpe St., Har Hotzvim, Jerusalem, Israel
 
and
 
Novetide Lid., a company registered under the laws or the State of Israel of P.O. Box 10140 Haifa Bay, Israel
 
Whereas the Parties wish to investigate each other’s business and/or products and or technology solely for the purpose of evaluating potential cooperation and or a business relationship between the Parties (the “Permitted Purpose”):  and
 
Whereas each the Parties will need to be exposed to Confidential Information (as defined below) of the other Party.
 
NOW THEREFORE. each of the Parties hereby declares, represents. warrants and undertakes towards the other Part as follows.
 
As used herein the term “Disclosing Pam” shall refer to each of the Parties respectively, and any parent or subsidiaries thereof with respect to any Confidential Information, us defined helms, which such party has disclosed, and the term “Receiving Party”, shall refer to each of the Parties respectively. with respect to any Confidential Information, as defined below.  Which has been disclosed thereto.  The Disclosing Party and the Receiving Party shall be referred to collectively as the “Parties” and each a “Party”.
 
1.
Confidential information.  The term “Confidential Information” shall mean any and all information and/or knowledge and/or data, including without limitation, technical, technological, scientific, commercial and/or financial information, whether written, oral, visual, electronic or otherwise in any medium of expression, whether or not marked “Confidential”, regarding or which is related to the Disclosing party, its business, products, technology, operations and/or activities, including without limitation:
 
(a)
inventions, discoveries, developments, improvements, patents, trademarks, copyrights, know-how, design rights, or other forms of protection of industrial and/or intellectual property, whether registered, non-registered or in the process of application, designs, drawings, photographs, models, computer programs, computer codes, specifications, research and development plans, formulae, formulations, methods, experimental works, prototypes, samples, processes, procedures, techniques, protocols and data; and

2
(b)
actual or planned business, development, production, marketing and sale methods, plans and strategies, trade secrets, professional secrets, actual or planned transactions and/or negotiations, business opportunities, prices and pricing methods, employee and managerial training methods and instruction, salaries and employment conditions, details and lists of suppliers, customers, distributors, agents, employees, strategic or business partners and/or services providers, sources, costs, quality control methods, private, municipal and governmental leases, contracts and relationships with business partners or collaborators, licensing and concession agreements, legal and other claims or suits, records, accounting and financial data; and
 
(c)
any other private, confidential and proprietary information relating to any line of business of the Disclosing Party and/or any related entity, whether in Israel or abroad, and any confidential and/or proprietary information of third parties in the possession of the Disclosing Party.
 
The term, “Confidential Information” shall also include all copies, summaries, notes, memoranda, analyses, compilations, studies and other documents and records prepared by or for the Receiving Party, to the extent they contain, reflect or are generated by, or based upon, in whole or in part, any Confidential Information.
 
The obligation of confidentiality hereunder shall not apply in any portion of Confidential Information which the Receiving Party can prove:  (i) is now, or hereafter becomes, generally known to the public, through no act or omission of the Receiving Party, anyone acting on its behalf or of any third party owing an obligation of confidentiality and/or non-use towards the Disclosing Party; provided, however, that the information shall not be regarded as generally known if:  (1) the general principle is generally known to the public, but the particular idea is not itself public knowledge, in the public domain or so known, or (2) individual components of the information relating to the idea are generally known to the public, but the particular compilation of information is not generally known to the public; or (ii) was lawfully and rightfully received by the Receiving Party without restriction as to its use or disclosure, from a third parry having a legal right to transmit the same and that is not bound in a confidential relationship with the Disclosing Party or any third party; or (iii) was already in the Receiving Party’s lawful possession without restrictions as to its use or disclosure, at the time such information was disclosed by the Disclosing Party to the Receiving Party.
 
2.
The Receiving Party’s Obligations
 
The Receiving Party hereby undertakes towards the Disclosing Party as follows:
 
2.1
The Receiving Party shall maintain the Confidential Information in strict and absolute confidence at all times.  The Receiving Party shall not, directly or indirectly, in writing or otherwise, disclose, expose, transfer, use, communicate, disseminate, publish, make available or in any manner reveal, divulge or describe the Confidential Informer ion, in whole or in part, to any person or entity, except as may be expressly authorized in advance in writing by the Disclosing Party or except as may be required to any of the Receiving Party’s employees, officers, directors, advisors, all strictly on a “need-to-know” basis for the Permitted Purpose, and without derogating from the Receiving Party’s responsibility for its employees, representatives and anyone acting on its behalf, only after (i) the Receiving Parry has advised each such employee or anyone acting on its behalf, before s/he receives access to Confidential information of the confidential nature of the Confidential Information and of his/her obligations under this Agreement; and (ii) any such party to whom the Confidential Information is intended to be disclosed has executed a confidentiality undertaking in writing on substantially equivalent terms to this Agreement, eliminating however further disclosures.

3
The Receiving Party shall take all necessary measures and precautions to safeguard the Confidential Information including. at least those steps that it takes to protect its own information of a proprietary and or confidential nature, but no less than a reasonable degree of care. In the event of loss of the Confidential Information or the disclosure of any part thereof by the Receiving Party or anyone acting on its behalf, or its coming to the knowledge of any other party, the Receiving Party undertakes, immediately upon becoming aware of the foregoing, to give immediate written notice thereof to the Disclosing Party.
 
2.2
The Receiving Party shall use the Confidential Information only and safety to the Permitted Purpose and shall not, directly or indirectly, use the Confidential Information for any other purpose whatsoever, nor derive any benefit therefrom.  Any, benefit derived from or relating to the Confidential Information shall belong solely to the Disclosing Party.
 
2.3
The Receiving Party shall not, nor suffer or permit any third party to, analyze, decompile, disassemble, reverse engineer (or the like), any tangible product, material or media which constitutes, contains, records or in any way documents or embodies Confidential Information, and shall not remove, overprint or deface any notice of confidentiality, copyright, trademark, logo, legend or other notices of ownership or confidentiality from any material that contains or embodies Confidential Information.
 
2.4
The Receiving Party shall be responsible towards the Disclosing Party for any disclosure or misuse of Confidential information which results from a failure to comply with this Agreement of it, its employees (including, without limitation, employees, who subsequent to the disclosure of Confidential Information hereunder, become former employees), officers, directors, owners, or any other persons acting on behalf of the Receiving Party.
 
2.5
Notwithstanding the above, the Receiving Party may disclose Confidential Information pursuant to an order of a court of competent jurisdiction or as required by law; provided, however, that (i) the Receiving Party provides the Disclosing Party with adequate prior written notice of such legal requirement and with the opportunity to oppose or limit the disclosure of any such Confidential Information or to seek such protective order(s) or the like as may be available in order to protect the confidentiality of the Confidential Information; and (ii) such disclosure is made only to the limited extent and solely to the recipient legally required.

4
3.
No license.  The Receiving party acknowledges and recognizes that all Confidential Information made available to, received by, or generated by the Receiving Party, and all right, title and interest therein and thereto, is and shall remain, at all times, the sole and exclusive property of the Disclosing Party, and the Disclosing Party is the sole and exclusive owner and proprietor or the Confidential Information.  This agreement and the furnishing of any Confidential Information hereunder does not constitute and shall not be construed or deemed as granting the Receiving Party, by implication or otherwise, any license, benefit or other right to such Confidential Information and/or to any invention, patent or patent application or trade secrets, now or hereafter owned or controlled by the Disclosing Party.
 
4.
Return of Material.  The Receiving Party shall, upon first written demand by the Disclosing Party, or immediately-upon the termination of the Permitted Purpose, the earlier to occur (i) immediately cease examining and/or using the Confidential Information; and (ii) within [***] days return to the Disclosing Party all documents, materials and samples containing, comprising or embodying the Confidential Information without retaining any copies or samples thereof such that no Confidential Information shall remain with the Receiving Party; and (iii) upon request of the Disclosing Party, certify in writing that it has complied with the obligations set forth in this Section 4.  The delivery to the Disclosing Party of Confidential Information pursuant to this Section 4 shall not derogate from the confidentiality obligations under this Agreement.
 
5.
Disclaimers
 
5.1
The Receiving Party acknowledges that the Disclosing Party makes no express or implied representation or warranty as to the accuracy, completeness or performance of the Confidential Information, which is provided “AS IS”.  The Receiving Party acknowledges that the Confidential Information may still be under development or me be incomplete, and that such information may relate to products or technologies which are under development or are planned for development.  Furthermore, the Receiving Party acknowledges and confirms that the Disclosing Party makes no representation, warranty, assurance, guarantee and/or inducement, express or implied, regarding the merchantability or fitness for a particular purpose, or that the use of the Confidential Information will not infringe any trademarks, patents, copyrights, or any other third party rights.  Neither the Disclosing Party nor any of its officers, directors or employees shall have any liability whatsoever with respect to the use of or reliance upon the Confidential Information by the Receiving Party.
 
5.2
This Agreement does not create an agency, employment, partnership or other business relationship between the Parties, and imposes no obligation on either Party to enter into any business relationship whatsoever with the other Puny.
 
5.3
This Agreement does not create an obligation on the part of the Disclosing Party to disclose any information or Confidential Information.
 
6.
Term and survival.  The obligations and undertakings set forth herein are not limited in time and shall survive the termination or abandonment of any discussions or negotiations and/or cooperation and/or any relationship (all if any) between the Parties, or any other event, and shall remain in full force and effect.

5
For the avoidance of any doubt, the Receiving Party shall in any event be subject to any patent and or trademark rights and/or any other industrial or intellectual property rights of the Disclosing Party.
 
7.
Equitable Relief.  The Receiving Party acknowledges that the Confidential Information is of a highly secret and confidential nature and that the provisions of this Agreement are necessary for the protection of the business and goodwill of the Disclosing Party and are considered by the Parties to be reasonable for such purpose.  The Receiving Party agrees and acknowledges that any violation or threatened violation of any of its obligations and undertakings contained in this Agreement will result in irreparable and continuing damage or harm to the Disclosing Party for which there will be no adequate remedy at law and that, in addition to any other remedies that may be available in law, in equity or otherwise, the Disclosing Party shall be entitled to obtain injunctive relief against the breach or threatened breach by the Receiving Party of this Agreement, without the necessity of proving actual damages and without derogating from the Disclosing Party’s right to additional remedies, including monetary damages.
 
8.
General
 
8.1
In the event a provision of this Agreement shall be determined to be invalid or unenforceable, the validity of the remaining provisions shall not be affected and the rights and obligations of the Parties shall be construed and enforced, as if the Agreement did not contain the particular provision(s) held to be unenforceable.  In the event the scope and/or duration of one or more of the obligations hereunder exceeds and/or extends the scope and/or duration allowed by law, such obligation shall he deemed to be the maximum scope or duration allowed by law.
 
8.2
The failure by the Disclosing Party to require performance or to enforce any right shall in no manner affect the Disclosing Party’s right at a later time to enforce the same and in no way be construed in be a waiver of such right by the Disclosing Party.
 
8.3
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and may not be amended except in writing and duly executed by both Parties and supersedes all other understandings or agreements, whether written or oral, between the Parties, with respect to such subject matter.
 
8.4
Neither Party may assign or otherwise transfer this Agreement (or any of its rights or obligations hereunder) to any third party without the prior written consent of the other Party; however, either Party may assign or transfer this Agreement in connection with a merger, acquisition, sale of substantially all its assets or other such corporate reorganization.  Subject to the foregoing, this Agreement shall bind and inure to the benefit of the Parties and their successors and permitted assigns.

6
8.5
This Agreement, including without limitation, is validity, performance and breach, shall be governed by, and construed in accordance with, the laws of the State of Israel (other than its choice of law rules), and shall be subject to the sole and exclusive jurisdiction of the appropriate courts of competent jurisdiction of Tel Aviv, Israel, to the exclusion or any other courts and jurisdictions and any dispute or claim with respect herein shall be exclusively brought before the appropriate courts of Tel Aviv, Haifa, Israel.  Notwithstanding the foregoing, the Disclosing Party retains the right to institute proceedings including interlocutory and/or injunctive relief in any relevant territory.
 
8.6
This Agreement may be signed by the Parties in counterparts which may be by facsimile signature or scanned signature, each of which when executed and delivered by facsimile transmission, by electronic mail or by mail delivery, will be an original and all of which together will constitute one and the same agreement.
 
8.7
Each Party acknowledges that the other Party’s agreement to furnish it with Confidential Information is based on and is a result of its execution hereof.
 
IN WITNESS WHEREOF the Parties have entered into this Confidentiality and Non-Disclosure Agreement as of the dates written below:

/s/ Martin Burg
  
/s/ Avi Tovi
  
Chiasma (Israel) Ltd.   Novetide Ltd.  
       
Name:
  Martin Burg  
Name:
 Avi Tovi
  
           
Title:
  VP Operations  
Title:
  CEO
  
           
Date:
  April 2, 2008  
Date:
  April 2, 2008  
 
 
EXHIBIT C
 
API Price
 
Page 39 of 44
EXHIBIT D
 
SAMPLES OF API, Prices and Minimum Purchase Obligations

Page 40 of 44
EXHIBIT E
 
Quality Agreement

Page 41 of 44
API QUALITY AGREEMENT
 
This API Quality Agreement (“Quality Agreement”) is entered into this 26th day of December 2012 (“Effective Date”)
 
by and between
 
Novetide Ltd., a company, having offices at Deshanim Road, Kyriat Ata Israel and, Assia Chemical Industries Ltd., a company, having offices at 5 Basel Street, Petach-Tikva 49131 Israel, and manufacturing site at Ramat Hovav, Emek sara, Beer Sheva 84874 Israel.
(defined together as “Manufacturer”)
 
and
 
Chiasma Inc., a company having offices at 831 Beacon St. Suite #313, Newton Center, MA 02459, U.S.A. (“Customer”)
 
Manufacturer and Customer shall each be referred herein as a “Party” and when referred to jointly as the “Parties”.
 
WHEREAS, Manufacturer produces active pharmaceutical ingredients at its facilities;
 
WHEREAS, Manufacturer supplies to Customer, directly or through Manufacturer’s Affiliates, the active pharmaceutical ingredient/s defined in Appendix A attached hereto (“Product”) pursuant to purchase orders issued from time to time by Customer and accepted by Manufacturer subject to the terms and conditions of the Manufacturing and Supply Agreement between the Parties dated December 26, 2012 (“the Supply Agreement”);
 
WHEREAS, Manufacturer and Customer wish to define the individual responsibilities of the Parties as to the quality aspects of manufacturing and release of Product to ensure compliance with the approved Product application and/or Customer requirements.
 
WHEREAS, In order to do so, this Quality Agreement takes the form, in part, of a detailed listing of activities associated with manufacture, supply, production, analysis, and release of Product.  Unless otherwise indicated, responsibility for each activity is assigned to either Customer, Manufacturer, or is assigned to both Manufacturer and Customer, as indicated in the listing.
 
NOW, THEREFORE, in consideration of the Parties’ agreement to perform the activities provided in this Quality Agreement and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, Manufacturer and Customer agree as provided in this Quality Agreement as follows:

Page 1 of 44
1.
Effective Date
The Effective Date of this Quality Agreement shall be the date at first written above, provided that the Quality Agreement has been duly executed by both Parties (the “Effective Date”).
 
2.
Scope:
This Quality Agreement outlines the responsibilities of Manufacturer and Customer with respect to the quality assurance of the Product manufactured and/or supplied by Manufacturer to Customer (as specified in the Preamble of this Quality Agreement).
 
3.
Interpretation And Definitions
 

 3.1
The preamble to this Quality Agreement forms an integral part hereof.
 

 3.2
Clause headings in this Quality Agreement are intended solely for convenience of reference and shall be given no effect in the interpretation of this Quality Agreement.
 

 3.3
All appendices to this Quality Agreement are attached hereto and incorporated herein by reference.
 

 3.4
In this Quality Agreement, unless the contrary intention appears:  (a) the words “including” and “include” mean “including, but not limited to”:  (b) the singular includes the plural and vice versa; (c) a reference to a person or entity (including Manufacturer or Customer) includes a reference to the person’s executors, administrators, successors, substitutes and assigns;
 

 3.5
In this Quality Agreement, the following expressions shall bear the meanings assigned to them below and cognate expressions shall bear corresponding meanings:
 

 3.5.1
“Affiliates” − with regard to either Party, any person, corporation, company, partnership, joint venture or other entity controlling, controlled by or under common control with such Party.  For such purpose the term “control” means the holding at least filly percent (50%) of the common voting stock or ordinary shares in, or the right to appoint more than fifty percent (50%) of the directors of, or the right to share more than fifty percent (50%) of the profits of, the said corporation, company, partnership, joint venture or entity.
 
4.
Other Agreements
 
This Quality Agreement shall be attached to the Supply Agreement and shall form an integral part thereof.  If there are any direct conflicts between the terms of this Quality Agreement and the Supply Agreement with respect to the quality assurance of the Product, this Quality Agreement shall prevail.

5.
Quality Responsibilities Table
 
The detailed listing of activities associated with manufacture, supply, production, analysis, and release of Product, specifying the binding respective individual responsibilities of the Parties is attached hereto as Appendix B.
 
6.
Product Specifications
 

 6.1
Product specifications are listed in Appendix C.
 

 6.2
Changes to the agreed upon specifications must be mutually agreed upon and communicated in writing between the Parties to this Quality Agreement, it being agreed that the approval of the relevant Party to any changes as aforesaid should not be withheld unreasonably.
 
7.
Amendments To The Quality Agreement
 

 7.1
This Quality Agreement may be amended only by the written consent of both Parties.
 

 7.2
The Parties agree to amend terms of this Quality Agreement that must be amended in order that the Product continues to meet regulatory requirements of applicable regulatory agencies, as may exist from time to time.
 

 7.3
If an amendment to this Quality Agreement is proposed, the proposing Party will circulate the proposed amendment to the appropriate contact person at Manufacturer and Customer for review and internal approval.  The appropriate contact person at Manufacturer and Customer is listed in Appendix D (Contacts and Responsibilities).
 
8.
Term Of Quality Agreement
 

 8.1
This Quality Agreement shall commence on the Effective Date and shall remain in effect for as long as the Manufacturer supplies Product to Customer unless the Quality Agreement is terminated earlier in accordance with the terms of this Quality Agreement.
 

 8.2
This Quality Agreement shall terminate automatically upon the termination of the Supply Agreement.
 
9.
Use Of Third Parties
 
Manufacturer shall not allow a third party to manufacture, package, label, inspect, test and release Product unless Manufacturer has disclosed in writing to Customer the Manufacturer’s use of a third party and in what capacity to which the third party is used and such third party (other than an Affiliate of Manufacturer) has been pre-approved by Customer in writing.  If Manufacturer employs a third party to perform any or part of the manufacturing, packaging, labeling, inspection, testing, release and/or handling of Product that is supplied to Customer, Manufacturer shall assure that the third party has been fully qualified via the Manufacturer’s third party qualification process prior to performing such activity(ies).  Manufacturer shall, however, retain all obligations under this Quality Agreement whether or not a third party manufactures, packages, labels, inspects, tests, releases and/or handles Product.  If a third party is used by Manufacturer to manufacture, package, label, inspect, test, release and/or handle Products, Customer may, upon request, review records and documentation with respect to the services provided by such third party during an on-site visit and/or audit pursuant to the Right To Audit section of this Quality Agreement.  Customer agrees to treat such information as Confidential Information of Manufacturer and agrees not to contact any such Parties in connection with this Quality Agreement or the product without Manufacturer’s prior written consent.
 
10.
Reporting
 

 10.1
Without derogating from the provisions of Appendix B and section 10.2 below, any material issues or unexpected events relating to the Project or the API, including the manufacture thereof, shall be reported by Manufacturer to Chiasma by telephone or e-mail, as promptly as possible.
 

 10.2
Each Party shall use all reasonable efforts, within the timelines set out below, to inform the other Party of:  (i) any pending or threatened litigation, investigation, proceeding or action by any Regulatory Authority or other Governmental Authority, involving the API supplied to Chiasma, of which that Party becomes aware - within [***] Business Days of becoming aware thereof; and (ii) any API which was shipped to Chiasma, or or any component of such API is or may be defective or adulterated or otherwise deviates from the Specifications, within [***] Business Days of becoming aware thereof; and (iii) any safety problem, adverse event, or health care provider complaint, or any other event that would be considered significant by the normal operating standards of the industry and its governing bodies regarding the API, if applicable to the API supplied to Chiasma, within [***] Business Days of becoming aware thereof.
 
11.
Survival Of Regulatory Obligations
 
All regulatory obligations contained herein that are required of either Party or both Parties by an applicable Regulatory Authority shall survive termination of this Quality Agreement.

12.
Assignment
 

 12.1
This Quality Agreement may not be assigned in whole or in part by either of the Parties hereto without the prior written consent of the non-assigning party hereto, which may not be unreasonably withheld.  Such consent may be conditioned upon the agreement of the assigning Party to remain primarily liable for performance of all obligations of the assignee.  Notwithstanding the above, (i) Manufacturer shall be entitled to assign, delegate, and/or subcontract its rights and obligations under this Quality Agreement, in whole or in part, to one or more of its Affiliates on prior written notice to Customer to the appropriate contact person indicated in Appendix D (Contacts and Responsibilities) provided that in the event of an assignment, such Affiliate/s assume/s the responsibilities and obligations of Manufacturer hereunder; and (ii) Customer shall be entitled to assign its rights and obligations under this Agreement, upon written notice to Manufacturer, at its sole discretion and without the prior written consent of Manufacturer, to an entity that:  (i) consolidates or merges with or buys all or substantially all of its assets; or (ii) is an Affiliate of Customer; and (iii) assumes the responsibilities and obligations of Customer hereunder.
 

 12.2
In the event of an assignment, the assigning party shall continue to be bound by all preexisting obligations under this Quality Agreement, including all obligations of confidentiality and non-disclosure.
 
13.
Resolution Of Quality Issues
 
Quality related disagreements between Manufacturer and Customer that are not resolved in the normal course of business shall be brought to the attention of the appropriate contact person for notices at the Manufacturer and Customer, in writing, as listed in Appendix D (Contacts and Responsibilities).  If both Parties agree that a resolution of the disagreement is reasonably possible, then both Manufacturer and Customer shall agree to work jointly to develop a strategy for such resolution.  Manufacturer and Customer further agree to record such resolution in writing.
 
14.
Debarment
 
Manufacturer warrants and represents that it is not debarred under the Generic Drug Enforcement Act of 1992, 21 U.S.C. 335[a] (the -Generic Drug Enforcement Act”) or under any other applicable law or by any other Regulatory Authority, and that it has not been convicted of a crime for which it could be debarred under the Generic Drug Enforcement Act or under any other applicable law or by any other Regulatory Authority.  In connection with the Product, the Manufacturer further warrants and represents, in that it shall not use in any capacity the services of any person debarred under the Generic Drug Enforcement Act or under any other applicable law or by any other Regulatory Authority, or convicted of a crime for which a person can be debarred under the Generic Drug Enforcement Act or under any other applicable law or by any other Regulatory Authority.
 
15.
Choice Of Law:  Jurisdiction/ Miscellaneous
 
This Quality Agreement shall be construed and the relationship between the Parties determined in accordance with the laws in the state of Israel without regard to the conflicts of law principals thereof.  Any and all disputes between the Parties arising out of or related to this Quality Agreement shall be heard in the competent courts located in Tel-Aviv Israel, and the Parties hereby consent and submit to the exclusive jurisdiction of such courts.

16.
Regulatory Authorities; Approvals
 
Product will be manufactured and tested as registered and approved in the Drug Master File (“DMF”).  Manufacturer shall provide Customer with copies of the open or accessible parts of the DMF and all changes thereto as well as copies of all approvals and submissions to Regulatory Authorities, changes thereto and a letter of authorization permitting CHIASMA to refer to the DMF in applications to applicable Regulatory Authorities.  CHIASMA shall have the right to use any and all information contained in such approvals, submissions and such parts of the DMF as aforesaid (and any changes thereto, if applicable).
 
17.
Counterparts
 
This Quality Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.  Each counterpart transmitted by mail, facsimile or electronic mail shall constitute an original.
 
IN WITNESS WHEREOF, the undersigned authorized representatives of the respective Parties hereto have entered into and executed this Quality Agreement as of the date set forth above.
MANUFACTURER
CUSTOMER
   
ASSIA CHEMICAL INDUSTRIES LTD.
  
   
signature:         
 /s/ Mariela Betesh  
signature:          
  /s/ Shoshie Katz  
name:          
 Mariela Betesh
name:          
  Shoshie Katz
designation:
Director of QA, RA
designation:
 VP QA & RA
       
signature:          
 /s/ Evgeney Valdman  
signature:          
  /s/ Roni Mamluk  
name:          
 Evgeney Valdman
name:          
  Roni Mamluk
designation:
VP, Teva API Division,
TAPI Israel Manager
designation:
 COO
   
NOVETIDE LTD.
  
   
signature:          
  /s/ Avi Tovi    
name:          
  Avi Tovi  
designation:
 President & CEO, Novetide  
   
Date:   December 26, 2012
Date:  January 2, 2013

APPENDIX A:  Definition of Product
 
“Product” shall mean the following Products:  Octreotide Acetate
 
Exhibit 4.16.1
 
Pursuant to 17 CFR 229.601(b)(10)(iv), confidential information (indicated by [***]) has been omitted from this exhibit because it is both not material and would likely cause competitive harm to the registrant if publicly disclosed.
 
21 June 2020
 
FIRST AMENDING AGREEMENT
 
To Supply Agreement (Commercial Phase)
 
This First Amending Agreement (“Agreement”) is effective as of June 22, 2020 (the “First Amending Agreement Effective Date”), by and between TEVA API, INC., a company duly incorporated under the laws of New Jersey, with its principal offices located at 400 Interpace Parkway, Building A, Parsippany, NJ 07054 USA (“Teva api”), and Chiasma, Inc., a company duly incorporated under the laws of the State of Delaware, U.S.A., with its principal offices located at 140 Kendrick Street, Building C East, Needham MA 02494, U.S.A.  (“Chiasma, Inc.”) on its own behalf and on behalf of its Affiliates, as defined below, (collectively, “Chiasma”) (collectively, the “Parties” and each a “Party”).
 
Whereas,
Chiasma, Inc. and Teva api have entered into a Supply Agreement (Commercial Phase) effective as of December 31, 2015 (the “Supply Agreement”) for the manufacture and supply by Teva api of commercial quantities of API (as defined therein); and
 
Whereas,
Chiasma, in its Suspension Notice to Teva api dated May 26, 2016, has suspended the Parties obligations under the Supply Agreement pursuant to Section 2.17 of the Supply Agreement; and
 
Whereas,
notwithstanding the suspension of the Supply Agreement, Chiasma has continued its efforts to obtain Marketing Authorizations for its Finished Product, and Teva api has continued to support such efforts; and, in anticipation of receiving Marketing Authorization in the United States on June 26, 2020, and due to the lead time of manufacturing the API, Chiasma issued to Teva api purchase orders (“POs”) for an aggregate quantity of [***] KG of API to be manufactured and delivered in 2020 (the “2019 POs”); and
 
Whereas,
the Parties wish to set forth certain terms related to the 2019 POs and amend the Supply Agreement as set out below.
 
Now, Therefore, the Parties hereby agree as follows:
 
 
1.
Capitalized terms used herein shall have the meaning ascribed to such terms in the Supply Agreement, or shall be defined in this Agreement, as the case may be.
 
1
 
2.
The Parties hereby agree and confirm that on the First Amending Agreement Effective Date, notwithstanding that Chiasma has not provided a Marketing Authorization Approval Notice pursuant to Section 2.17 of the Supply Agreement, the suspension of the obligations of the Parties under the Supply Agreement by Chiasma’s Suspension Notice of May 26, 2016 will terminate, and all of the terms of the Supply Agreement shall be in full force and effect, subject to and as amended in this Agreement.

 
3.
Within [***] days of Chiasma receiving a Marketing Authorization in the United States, Chiasma will submit to the FDA a Prior Approval Supplement or such other form as may be required by the FDA (“PAS”) seeking the approval by the FDA of Teva api (or its Affiliates) as a supplier of API manufactured at the TevaTech Manufacturing Facility (“TevaTech Site”), in Chiasma’s new drug application to the FDA for Finished Product (the “Mycapssa NDA”).  Chiasma will use commercially reasonable efforts to support such filing in order to have Teva api approved by FDA as a supplier of API during 2020.  Chiasma shall promptly notify Teva API upon submission of the PAS to the FDA and upon receiving the FDA’s approval or other related notices.

 
4.
The Parties hereby agree that the price table set forth below shall replace the price table in Exhibit C of the Supply Agreement:

ANNUAL
CONSUMPTION
EQUALS OR
ABOVE* (KG.)
API PRICE DURING
2020
($US/GR)
API PRICE FROM
JANUARY 1, 2021
($US/GR)
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]100.00

 
5.
On the First Amending Agreement Effective Date Chiasma shall issue new POs and cancel all of the 2019 POs, specifying the same quantities and required 2020 delivery dates as the 2019 POs, at a price of US $[***]/gram, and Teva api will accept the new POs as Binding Purchase Orders pursuant to the Supply Agreement.

2
6.
Chiasma agrees to waive the contractual Discounted API Price reflecting the aggregate discount of US$ [***] set forth in Section 2.17.3(c) of the Supply Agreement.  Section 2.17.3(c) of the Supply Agreement is hereby deleted in its entirety.


7.
Assuming the successful completion of the MPOWERED Phase 3 clinical trial and following Chiasma’s submission of an application for Marketing Authorization to the EMA (expected in the first half of 2021), the Parties agree to work together in good faith to determine if and to what extent reductions of the API prices are needed to separately support Chiasma’s potential sale of Finished Product in the Other Region.


8.
The Minimum Purchase Requirement for the Lead Region under Section 2.1 of the Supply Agreement shall be reduced only for the calendar year 2020 from [***]% to [***]% (representing a quantity of [***] kg. of API purchased from Teva api for delivery in 2020.  Notwithstanding the delivery dates specified in the POs, Teva api shall use commercially reasonable efforts to deliver the [***] kg of API in 2020 in the following quantities and requested respective delivery dates:  June 2020 ([***]kg.), August 2020 ([***]kg.), September 2020 ([***]kg.) and November 2020 ([***]kg).


9.
Under Section 2.3 of the Supply Agreement, the Manufacturing Facility to be scaled up will be changed to the Plantex Site, instead of the TevaTech Site and all references in Section 2.3 to TevaTech shall be replaced by references to Plantex.  The Plantex Site will serve as the new scale up site for Teva api Octreotide.  The date of commencement of the Scale Up Period as defined in Section 2.3.1 of the Supply Agreement shall be changed to the date upon which Chiasma receives the Marketing Authorization in the United States (expected on June 26, 2020).  There will be no Buffer Period or any other additional grace period for the completion of the scale up after the Scale Up Period (i.e., if Marketing Authorization in the U.S. occurs on June 26, 2020, the Scale Up Period shall be completed on December 26, 2021) and Section 2.3.3 shall be deleted in its entirety.  It is hereby clarified that scale up activities do not include the obligation to manufacture scaled up quantities of Teva api Octreotide unless such quantities are pursuant to Binding Purchase Orders pursuant to Binding Annual Forecasts or POs issued by Chiasma and accepted by Teva api under the Supply Agreement.  The Parties agree to use commercially reasonable efforts to obtain the FDA approval of the Plantex Site as a supplier of API in the Mycapssa NDA by December 31, 2021.


10.
In addition, Sections 2.3.4 and Section 2.3.5 shall be deleted in their entirety and replaced by the following:
 
3
“2.3.4 Without derogating from Section 2.14.2 below, if during the Scale Up Period it becomes apparent that TAPI will not complete such scale up by the end of the Scale Up Period, Chiasma shall be entitled to order Alternative Material (as set forth in Section 2.14.2 below) from any third party to the extent that the quantities of API required by Chiasma exceed the manufacturing capacity of the Manufacturing Facility as aforesaid and/or to the extent of the shortfall in the supply of API by TAPI as provided in Section 2.14.2 below, and the Minimum Annual Purchase Requirements shall be reduced accordingly.  Notwithstanding the foregoing, Chiasma agrees to purchase all quantities of API manufactured by the Manufacturer during the Scale up Period pursuant to Chiasma’s purchase orders.
 
2.3.5 In the event that TAPI fails to complete such scale up (in lots of at least [***] kg. ([***] kilograms) each) no later than [***] months after the end of the Scale Up Period, the Minimum Annual Purchase Requirements shall terminate automatically with effect from the date of expiry of the Scale Up Period and Chiasma shall be free to order API from TAPI in whatever quantities it decides, in its sole discretion, within the then current manufacturing capacity of the Manufacturing Facility.  The foregoing shall not affect the First Rolling Forecast and Chiasma’s purchase commitment pursuant to Binding Purchase Orders and the Binding Annual Forecast as of the date of termination.”
 
11.
At the time of the delivery of the Marketing Authorization Approval Notice (but in any event no later than July 1, 2020), Chiasma will place a PO for [***]kg of API from the Plantex Site for Teva api delivery to Chiasma at a fixed discounted price of US $[***]/gram, with a due date for payment on January 31, 2021, and Teva API will commit commercially reasonable efforts to complete the production and delivery thereof in August 2020, and in no case delivery later than the end of the third calendar quarter of 2020.  Teva api will use commercially reasonable efforts to submit to the FDA an amended DMF which includes the Plantex Site as soon as possible, but not later than March 31, 2021.  Chiasma will then submit a PAS to FDA for approving the Plantex Site as an additional site as soon as possible (Chiasma target for submitting the request:  September 30, 2021 assuming August 2020 API delivery).  Notwithstanding anything to the contrary contained in Section 2.2 of the Supply Agreement, Teva api will start supplying Chiasma from the Plantex Site from January 1, 2022 and the TevaTech Site shall be the backup manufacturing site (instead of the Plantex Site).


12.
With respect to forecasting and notwithstanding anything to the contrary in Sections 2.11.1 and 2.11.2 of the Supply Agreement, the following shall apply:

 
(a)
Upon the First Amending Agreement Effective Date and not later than June 29th 2020, Chiasma shall submit to Teva api a non-binding forecast of Chiasma’s API requirements over the period of [***] years starting from the First Amending Agreement Effective Date, which shall be considered as the Long Term Forecast under Section 2.11.1 of the Supply Agreement.


(b)
The first [***] months (specified on a quarterly basis) of the Long Term Forecast shall be the First Rolling Forecast, the first [***] months of which shall be binding on the Parties and shall be considered as the First Binding [***] Month Forecast under the Supply Agreement.
 
4
(c)
In the event that Chiasma does not receive a Marketing Authorization from the FDA by December 31, 2020 (a “Suspension Event”), Chiasma shall promptly notify Teva api thereof in writing.  Within [***] days after such notification, Chiasma shall be entitled, in its sole discretion, by written notice to Teva api to suspend the First Rolling Forecast (including the First Binding [***] Month Forecast) (the “Second Suspension Notice”).  In the event that the Second Suspension Notice is provided hereunder, the following shall apply:  (1) the Prices specified in Section 4 above shall no longer be valid (except with respect to Binding Purchase Orders placed prior to delivery of the Suspension Notice), and the prices shall revert to the prices set forth in the column titled “API Prices During 2020” in the table set forth in Section 4 above and (2) all obligations of Chiasma to deliver Rolling Forecasts under the Supply Agreement shall be suspended and the provisions of subsection (f) below shall be cancelled.  In any event, Binding Purchase Orders outstanding at the time of providing a Second Suspension Notice and the Minimum Annual Purchase Requirements under the Supply Agreement shall not be suspended or cancelled.  For clarity, it is hereby acknowledged and agreed that since Sections 2.17.3(a) and 2.17.3(b) of the Supply Agreement have already been implemented, they are no longer applicable.


(d)
In the event that the FDA does not approve the PAS submission specified in Section 3 above by December 31, 2020 (unless the period for approval of such PAS submission is extended by, or as a result of any action or requirements of the FDA (including, due to the coronavirus (COVID-19) pandemic)) - but in any event no later than March 31, 2021, and such PAS submission is not approved due to no fault of Chiasma, then Chiasma shall be entitled to order Alternative Material from any third party, until the FDA approves the PAS submission, and the Minimum Annual Purchase Requirements will be adjusted accordingly.


(e)
By the end of September 2020 or the end of the first calendar quarter following the date of Marketing Authorization approval by the FDA, whichever comes first, and during the last month of each calendar quarter thereafter throughout the Term, Chiasma shall provide Teva api with an updated Rolling Forecast in accordance with Section 2.11.2 of the Supply Agreement, mutatis mutandis.


(f)
In any event (except if a Second Suspension Notice was issued pursuant to subsection (c) above or in the event that the FDA does not approve the PAS as specified in subsection (d) above), Chiasma is obligated to place POs (at least [***] days prior to the required delivery date) for delivery of at least the following minimum quantities per year.  This obligation with respect to 2022 and H12023 is subject to the following conditions being met:  (i) the MPOWERED Phase 3 trial data (expected in November 2020) is positive supporting a viable Marketing Authorization Application submission to the EMA in the first half of 2021, and (ii) the minimum quantities below do not exceed [***]% of Chiasma’s actual requirements of Octreotide acetate, for Chiasma’s consumption in manufacturing of the Finished Product for each time period.  The minimum quantities in H12023 are further subject to timely and acceptable Finished Product reimbursement levels in the EU4 (i.e., Germany, France, Spain and Italy), which Chiasma agrees to use commercially reasonable efforts to obtain:
 
5
2020 — [***] kg (pursuant to the 2019 POs) and [***] kg (from Plantex site).
 
2021— [***] kg — provided that in the event that (i) the final FDA approved indication statement in the label under Mycapssa NDA is restrictive such that it limits Chiasma’s US market opportunity, or (ii) Chiasma does not receive a Marketing Authorization from the FDA by October 1st 2020, then the parties shall discuss in good faith a suitable adjustment of this commitment such that it does not exceed [***]% of Chiasma’s actual requirements of Octreotide acetate for Chiasma’s consumption in manufacturing of the Finished Product for 2021.
 
2022 — [***] kg.
 
H12023 — [***] kg.
 
13.
The references to 1 April 2018 in Sections 2.14.5 and 2.14.6 (Supply Failure) of the Supply Agreement shall be amended to the first anniversary of the date of receipt by Chiasma of the Marketing Authorization.


14.
The Parties agree that the definition of “Force Majeure” in Section 1.2.24 of the Supply Agreement is hereby amended to include any epidemic and pandemic.  The Parties further acknowledge that the current ongoing coronavirus (COVID-19) has been declared as a pandemic.  The Parties acknowledge that as of the First Amending Agreement Effective Date the COVID-19 pandemic has not affected their ability to fulfil their obligations under the Supply Agreement as amended herein, however, due to the uncertain circumstances, the COVID 19 pandemic may in the future constitute a Force Majeure and be subject to Section 12 of the Supply Agreement.


15.
Chiasma’s address for the purposes of Notices to Chiasma under Section 13.13 of the Supply Agreement shall be amended as set forth below:

To Chiasma
Chiasma, Inc. 140 Kendrick St. Bldg. C East
Needham, MA 02494, U.S.A.
Attn.:  General Counsel
Email:  lee.giguere@chiasmapharma.com
   
With a copy to:
Chiasma (Israel) Ltd
5 Golda Meir St., 5th Floor
Ness Ziona, 7403635
POB 4086,
Israel
Attn:  Asaf Aloni
Email:  asaf.aloni@chiasmapharma.com
 
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16.
MUTUAL WAIVER AND RELEASE.  Each of Teva api and Chiasma (also each on behalf of its Affiliates) hereby waives (i) all and any claims it has or may have as of the First Amending Agreement Effective Date against the other Party with respect to the suspension of obligations due to Chiasma’s Suspension Notice of May 26, 2016 and with respect to the purchase and supply obligations of the Parties under the Supply Agreement (including, the prices of the API); and (ii) all and any claims made by a Party against the other Party as of the First Amending Effective Date with respect to meeting its obligations under the Supply Agreement (collectively, “Claims”), and forever releases and discharges the other Party and its directors, officers, employees, agents and Affiliates from all such Claims, save for what is provided for in this Agreement.


17.
Miscellaneous.  This Agreement shall be read together with the Supply Agreement, and save for the changes contained herein, all the terms and conditions contained in the Supply Agreement remain unchanged, and in full force and effect.  This Agreement together with the Supply Agreement (as amended hereby) sets forth the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior discussions, letters, disputes, prior claims, agreements and understandings between the Parties relating to the subject matter hereof and this Agreement may be amended only pursuant to Section 13.8 of the Supply Agreement.
 
[Signature page follows]
 
7
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed effective of the date first set forth above.

TEVA API, INC.
CHIASMA, INC.

/s/ Sandra Cernick
  
/s/ Mark Fitzpatrick
  
Signature
  
Signature
     
Sandra Cernick
  
Mark Fitzpatrick
  
Name
  
Name
     
Teva api Head of Sales, the Americas          
  
President
  
Title
  
Title
     
June 23, 2020
  
June 22, 2020
  
Date
  
Date

/s/ Kerri Wood
  
 
Signature
  
Signature
     
Kerri Wood
  
 
Name
  
Name
     
SVP, Head of Teva api Commercial and Medis
  
 
Title
  
Title
     
June 23, 2020
  
 
Date
  
Date
 

8
Exhibit 4.17

Pursuant to 17 CFR 229.601(b)(10)(iv), confidential information (indicated by [***]) has been omitted from this exhibit because it is both not material and would likely cause competitive harm to the registrant if publicly disclosed.
 
MASTER SERVICES AGREEMENT
 
This Master Services Agreement is entered into as of this 8 day of May, 2020 (“Effective Date”), by and between AssistRx, Inc., a Delaware corporation, with an address at 4700 Millenia Boulevard, Suite 500, Orlando, Florida 32839, on behalf of itself and its affiliates, subsidiaries and divisions (“ARX”) and Chiasma, Inc., a Delaware corporation, with an address at 140 Kendrick St. Needham, MA 02494 (“Client”) (collectively, the “Parties” and individually a “Party”).  This Master Services Agreement (including all exhibits, schedules, and attachments hereto, the “Agreement”) sets forth the terms and conditions under which ARX will provide services to Client:
 
1.
Services.
(A)         During the term of this Agreement, ARX agrees to provide services and deliverables as more specifically set forth in one or more Statements of Work (collectively, the “Services”).  Each Statement of Work will specify the Client’s products (collectively the “Products”) to which the Services pertain.  Each Statement of Work will be subject to all of the terms and conditions of this Agreement, in addition to the specific terms and provisions set forth in the subject Statement of Work.  To the extent any terms or provisions of a Statement of Work conflict with the terms and provisions of this Agreement, the terms and provisions of this Agreement will prevail, except to the extent that the applicable Statement of Work expressly and specifically states an intent to supersede this Agreement on a specific matter.  ARX will not begin providing any Services until the applicable Statement of Work has been executed by both Parties.  The Statements of Work are an integral part of this Agreement and are hereby incorporated into this Agreement by reference.  The Services may be changed only by written amendments to the Statements of Work as agreed to and signed by the Parties.  ARX represents and covenants that in the provision of Services it shall (i) use qualified individuals who possess the requisite training, education, experience and skill to perform its obligations, (ii) exercise judgment in a manner consistent with high-quality professional standards, and (iii) perform the Services in accordance with the terms and subject to the conditions set forth in the applicable Statement of Work and this Agreement.
 
(B)         In the event Client requires new or additional services during the term of this Agreement, Client shall inform ARX in writing of the requested new or additional services.  Following such request, the Parties will work together in good faith using agreed upon financial rates for work hours and methods to prepare a mutually acceptable new Statement of Work.  Unless and until the Parties have executed a new Statement of Work, neither Party will have any obligations with respect to any requested new or additional services.
 
(C)          All terms, provisions, and conditions of any purchase order issued by Client shall be considered null and void and of no force and effect as to the Parties, and the terms and conditions of this Agreement shall govern all purchase orders.
 
(D)        ARX will utilize its standard operating procedures in providing the Services.  Upon request by Client, ARX will provide copies of such standard operating procedures to Client.  Client may request that ARX reasonably accommodate Client requested modifications to ARX’s standard operating procedures, which shall be reflected in a Client-specific work instructions (“WIs”).  Where no such standard operating procedure exists, the Parties agree to develop, at Client’s cost, mutually agreeable WIs to support the delivery of Services.
 
2.
Term.
This Agreement shall commence on the Effective Date and shall continue for [***] years hereafter unless terminated sooner as provided in Section 9 (“Initial Term”).  This Agreement shall automatically renew upon expiration of the Initial Term for successive additional one (1) year terms (each a “Renewal Term”) unless a Party advises the other Party in writing within [***] calendar days of the expiration of the Initial Term or Renewal Term of its intention not to renew this Agreement.  In the event the performance of obligations set forth in a Statement of Work issued hereunder has not been completed at such time as this Agreement is scheduled to expire, this Agreement shall continue in force until such time as all such obligations have been satisfied.

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3.
Fees.
(A)        ARX shall be paid in accordance with the pricing set forth in each Statement of Work.  All undisputed payments shall be paid to ARX within [***] calendar days from receipt by Client of an invoice from ARX.  Client shall notify ARX within [***] calendar days from receipt of an invoice of a dispute with any charges set forth in an invoice.  The Parties agree to work in good faith to resolve any such disputes.  Payment on disputed invoices is due within [***] calendar days of dispute resolution.  All payments not made when due shall be subject to late charges of the lesser of (i) [***] per month of the overdue amount, or (ii) the maximum amount permitted under applicable law.  Client shall reimburse ARX for all fees and expenses, including reasonable attorneys’ fees, ARX incurs to collect, or attempt to collect, amounts owed by Client to ARX.
 
(B)         All fees are exclusive of all sales, use or excise taxes, and other similar duties and charges of any kind imposed by any federal, state or local governmental entity on any amounts payable by Client under this Agreement.  Any such taxes, duties and charges currently accessed, or which may be accessed in the future, that are applicable to the sales or services under this Agreement are for Client’s account, and Client agrees to pay such taxes.  ARX will collect and remit such taxes to the respective tax authority.
 
(C)         By entering into this Agreement, the Parties specifically intend that no part of any consideration or obligations hereunder is a prohibited act intended for the recommending or arranging for the referral of business or the ordering of items or services; nor are the payments intended to induce illegal referrals of business.  The Parties agree that the compensation provided herein has been determined in arm’s length bargaining and is consistent with fair market value in arm’s-length transactions.  The Parties shall comply with the Federal Anti-Kickback Statute (42 USC §1320a-7b(b)).  Client shall comply with the Federal Stark Law (42 USC § 1395nn) and agrees that no consideration or obligation under this Agreement shall involve the formation of a financial relationship with a physician that refers designated health services to Client.
 
4.
Expenses.
In addition to the applicable fees set forth in a Statement of Work, Client shall reimburse ARX for travel and other out-of-pocket expenses reasonably incurred in connection with the Services, which have the prior written approval of Client.  Upon request by Client, ARX shall provide to Client copies of receipts and supporting documentation for expenses invoiced in the amount of [***] or more, which expenses will be reimbursed in accordance with Client’s standard expense reimbursement policy.  All expenses not pre-approved by Client or not otherwise meeting the requirements of this Agreement or the Statement of Work to which it applies shall be the sole responsibility of ARX.
 
5.
Confidentiality.
(A)       General Confidentiality.  Each Party, as a “Receiving Party”, agrees to maintain in confidence and not to disclose to any third-party (whether by publication or otherwise), or use for its own benefit or for the benefit of any third-party without the prior written consent of the other Party (the “Disclosing Party”), any information, data, or other material, in any form whatsoever, received from the Disclosing Party which the Receiving Party knows or should know is of a confidential and/or proprietary nature, including, without limitation, know-how; technology; intellectual property; strategies, including, without limitation, business strategies.  pricing strategies, sales strategies, marketing strategies and trade and distribution strategies; product specifications; product information; information regarding products in development; research and development information; customer information; information regarding rebates, pre-bates, concessions and discounts; sales and marketing information; pricing information; business plans; customer information; inventions; reporting packages; system information; proprietary software and related user documentation; pharmacy records; operating procedures; technical information; specifications and protocols; product pricing or government pricing; pricing negotiations; financial information, and information and documents concerning a Disclosing Party’s systems, business planning and business and financial forecasting which have been disclosed to the Receiving Party by or on behalf of the Disclosing Party, or obtained or developed by the Receiving Party in connection with this Agreement, and including information contained in reports produced by ARX pursuant to this Agreement (collectively, “Confidential Information”).  For the avoidance of doubt, Confidential Information will not include patient and prescription records that ARX or its affiliates or subcontractors are required by applicable laws to maintain.  The Receiving Party agrees to maintain the Confidential Information of the Disclosing Party in confidence and to protect such information from unauthorized use, access or disclosure in the same manner as the Receiving Party protects its own confidential information and with no less than commercially reasonable care.  Notwithstanding any other provision of this Agreement, the foregoing obligations shall remain in effect, with respect to each Party, for a period of [***] years following termination of this Agreement.  The Parties shall not divulge to each other or use any information that is the proprietary property of a third-party without such third-party’s prior approval and without providing the Receiving Party notice that such information is owned by a third-party prior to its disclosure to the Receiving Party.  Notwithstanding the foregoing, the Receiving Party may disclose the Confidential Information of the Disclosing Party to its officers, agents, employees, and subcontractors who have a need to know such Confidential Information and who are involved in the performance of this Agreement and Statements of Work hereunder, provided that such persons and entities are bound by obligations of nondisclosure and non-use substantially the same in scope as those contained in this Section 5(A).  The Receiving Party will only use the Confidential Information of the Disclosing Party to the extent necessary to perform its obligations, or exercise its rights, hereunder.
 
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(B)         Exceptions.  The restrictions in this Section 5 shall not apply to Confidential Information that the Receiving Party can demonstrate (i) was known to the Receiving Party prior to receipt hereunder as demonstrated in contemporaneously generated written records; (ii) at the time of disclosure was generally available to the public, or which after disclosure hereunder, becomes generally available to the public, through no fault of the Receiving Party; (iii) is hereafter made available to the Receiving Party from any third-party having a right to do so on a non-confidential basis; (iv) results from research and development by the Receiving Party independent of any disclosure of Confidential Information by or on behalf of Disclosing Party, as shown by contemporaneously generated written records, or (v) with respect to ARX, is hereafter made available to ARX from commercial health plans, health insurance carriers, health maintenance organizations, third-party administrators, union- or employer-sponsored health benefit programs, and/or government-sponsored health programs, health care providers (including, without limitation, physicians, physician assistants, nurse practitioners, and other licensed health care professionals), health care facilities (including, without limitation, hospitals, skilled nursing facilities, rehabilitation facilities, and other licensed and non-licensed facilities which provide health care to patients), prescribers, healthcare professionals, pharmacies, healthcare facilities, insurers, having a right to do so as a result of the services provided by ARX hereunder and to such third-party (collectively the “Unrestricted Data”).
 
(C)         Disclosures Required by Law.  In the event that disclosure of Confidential Information is required by law, regulations, subpoena, government order or judicial order, the Receiving Party shall promptly notify the Disclosing Party upon such request for disclosure and prior to such disclosure to permit the Disclosing Party to oppose same by appropriate legal action, and in the absence of a protective order, the Receiving Party shall disclose only that portion of the Confidential Information that the Receiving Party is legally compelled to disclose based on advice of counsel.  Disclosure(s) made in a manner consistent with the provisions of this Section 5(C) shall not be deemed to constitute violation(s) of this Agreement.
 
(D)         Duties upon Termination or Expiration.  Upon termination or expiration of this Agreement, the Receiving Party will cease using the Disclosing Party’s Confidential Information, and all such information provided to the Receiving Party shall be returned to the Disclosing Party or destroyed immediately upon Disclosing Party’s request, and the Receiving Party shall provide a certification of destruction, unless the Receiving Party is required to maintain such information by any applicable laws, or to comply with auditing requirements or to ensure compliance with this Agreement.  Notwithstanding the foregoing, the Receiving Party shall not be required to destroy electronic files containing Confidential Information of the Disclosing Party that are made in the ordinary course of its business information back-up procedures pursuant to its electronic record retention and destruction practices that apply to its own general electronic files and information.
 
(E)       Subpoenas and Requests for Information.  Client will reimburse ARX for its reasonable costs and expenses associated with ARX’s production of information and documents, including without limitation, Client’s Confidential Information, in response to subpoenas issued by, or requests for information from, a regulatory, administrative and/or governmental body or entity which subpoena or request arises from or relates to the Products, this Agreement, the Services and/or Client’s publication, promotion, discussions, and/or use of any data derived from the provision of the Services.
 
6.
Intellectual Property.
(A)          Materials.  All program specific materials (but not the Deliverables and ARX Technology), WIs, documentation, and biological, chemical or other materials controlled by Client and furnished to ARX by or on behalf of Client (collectively, with all associated intellectual property rights, the “Client Materials”) will remain the property of Client.  ARX will use Client Materials only as necessary to perform Services.  Client grants to ARX and its subcontractors, a non-exclusive, non-transferable (except in connection with a Permitted Assignment as defined in Section 16(D)), irrevocable license to use the Client Materials, and Client Works during the term of this Agreement.
 
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(B)         Ownership.  As between Client and ARX, ARX shall own any and all Deliverables, as specifically identified within each applicable Statement(s) of Work (the “Deliverables”), as well as all of the technology properties, source code and derivatives, algorithms, data, methods, data analytics (but not Client Data (as hereinafter defined) Client Materials, or Client Works), software development, work product, tools, methodologies, and processes, and rights to use, market, develop, and provide integrated technology solutions incorporated into all technology and software that ARX utilizes in performing the Services hereunder and to which ARX thereafter gives Client access in the course of the performing the Services including, without limitation, the iAssist suite of technology properties including, but not limited to the AssistRx CRM (Salesforce Customization/Configuration), ePrescribe, elnformatix, eHIPAA, eSignature, eCase, eNurse, eRxEligibility, eMedical, eClaims, eComply, eCopay, ePA, ePAP, eSecure Chat, eMessaging, iAssist, Caret, Management Analytics Dashboard, and other technologies supporting reimbursement and patient assistance services which are incorporated into the iAssist suite of technology properties, and any and all standard software or service products utilized by ARX (the “ARX Technology”).  The Parties acknowledge and agree that all Deliverables and ARX Technology are not deemed a “work made for hire” under this Agreement or any Statement of Work.
 
Notwithstanding the foregoing, ARX hereby acknowledges and agrees that, excluding any and all Deliverables and ARX Technology, that any program specific customer-facing materials that are developed specifically for the benefit of the Client’s program, including, the so-called, “program training materials,” “FAQ documents,” “quick reference guides,” “scripts,” “business requirements documents,” and “telephony routing” developed specifically for the program services, together with any associated copyrights, are works made for hire and the exclusive property of Client (collectively, the “Client Works”).  To the extent that any Client Works may not, by operation of law, be works made for hire, this Agreement shall constitute an irrevocable assignment by ARX to Client of the ownership of and all rights of copyright in, such items, and Client shall have the right to obtain and hold in its own name, rights of copyright, copyright registrations, and similar protections which may be available in the works.  ARX shall give Client or its designees all assistance reasonably required to perfect such rights.  For the avoidance of doubt, each of the items listed in Exhibit A hereto shall be deemed Client Works hereunder.  Client grants to ARX an irrevocable license and right to utilize the Client Works as described in this paragraph, for its own internal business purposes.
 
(C)         Retained Rights.  For the avoidance of doubt, ARX shall retain all rights to perform custom application development for the iAssist suite of technology properties, including, but not limited to, portals and mobile web for Client, incorporating healthcare platforms using iAssist Technology properties serving multiple stakeholders and other clinical interoperability solutions.  Client acknowledges ARX’s proprietary rights in the Services, ARX Technology and ARX Property (as hereinafter defined).  If Client suggests any new features, functionality or performance for the Services or ARX Technology that ARX subsequently incorporates, Client hereby acknowledges that (i) ARX shall own, and has all rights to use and incorporate, such suggestions and the Services and ARX Technology incorporating such new features, functionality, or performance shall be the sole and exclusive property of ARX, and (ii) all such suggestions shall be free from any confidentiality restrictions that might otherwise be imposed upon ARX.
 
(D)          ARX Property.  Notwithstanding the foregoing, ARX will retain full ownership rights in and to all pre-existing templates, programs, procedures, formulas, practices and know-how, methodologies, processes, technologies and other materials developed or licensed by ARX prior to or apart from performing its obligations under this Agreement or which have general application or use for ARX’s business (collectively, with all associated intellectual property rights, the “ARX Property”), regardless of whether such ARX Property is used in connection with ARX’s performance of its obligations under this Agreement.  ARX will grant and does grant to Client a non-exclusive, non-transferable (except in connection with a Permitted Assignment as defined in Section 16(D)), irrevocable, non-sublicensable license to use ARX Property as required for Client to use the Deliverables.
 
(E)          No Work for Hire.  Except as expressly set forth in Section 6(B) above concerning Client Works, Client acknowledges and agrees that the Services shall not be considered a “work made for hire” and no work product, Deliverables, or improvements, modification or derivatives of any ARX Property and ARX Technology shall be assigned by ARX to Client, and ARX shall remain the owner of such work product, Deliverables, ARX Property and ARX Technology and all improvements, modification and derivatives thereof Client shall retain ownership of its Products, Client Materials and all improvements thereto and all Client Works.  ARX’s Services are non-exclusive and ARX retains the right to provide the same or similar services to others.
 
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(F)        Anti-Reverse Engineering.  Client shall not copy, decompile, reverse engineer, disassemble, attempt to deprive the source code, modify or create derivative works or commercially exploit, other than for its own internal use (collectively “Reverse Engineering”) the ARX Technology.  ARX may consider any violation of Reverse Engineering a material breach of this Agreement.  ARX may take whatever remedial action it determines in its sole discretion is appropriate if Client violates these restrictions, including, but not limited to, immediate suspension or cancellation of this Agreement.
 
7.
Data.
(A)         Ownership of Data.  All data which is entered by Client, Client’s vendors (but specifically excluding the Unrestricted Data referenced in Section 5(B)) into any one or more of the iAssist suite of technology properties (or any other software systems provided by ARX to Client hereunder) (collectively, “Client Data”) shall be owned solely by Client.  Client grants to ARX and its subcontractors a non-exclusive, non-transferable (except in connection with a Permitted Assignment as defined in Section 16(D)), irrevocable, license to use the Client Data within the United States, its territories and possessions, during the term of this Agreement, subject to terms of this Agreement, for only the limited purpose of fulfilling ARX’s obligations pursuant to this Agreement.  ARX may use or process any and all Client Data, Unrestricted Data and any and all information, including PHI (as hereinafter defined), that it obtains from Client, patients, prescribers or other third-parties during the course of providing services under this Agreement for any and all secondary uses, to the extent permitted by applicable law.  Notwithstanding anything contained herein to the contrary, all information, records and data that ARX (or any of its affiliates or subcontractors) is required to maintain by applicable law, including but not limited to patient records, prescription records and pharmacy records shall be considered the property of ARX (or such affiliate or subcontractor, as applicable).
 
(B)           Blind Data.  Notwithstanding anything herein to the contrary, except as otherwise approved by Client, ARX shall have the right to utilize data capture, syndication and analysis tools, and other similar tools, to extract, compile, synthesize, and analyze any non-personally identifiable data or information resulting from Client’s access and use of the Services and ARX Technology (“Blind Data”) solely in connection with improvements to the Services, quality assurance and reporting purposes.
 
(C)          Transition Services.  Provided that no undisputed invoices are outstanding and overdue, ARX agrees to assist Client, upon Client’s written request, with the decommissioning and transition of any of the Services to Client or Client’s agent to ensure a smooth transition and uninterrupted service.  Such assistance (the “Exit Services”) shall be described in a new Statement of Work executed by the Parties.  Client shall pay ARX’s fees for the Exit Services actually performed by ARX in accordance with the rates negotiated by the Parties and set forth in the applicable Statement of Work and any and all costs and expenses authorized by Client in accordance with the Statement of Work and actually incurred by ARX in connection with the Exit Services.
 
8.
Indemnification.
(A)        ARX Indemnification.  ARX shall indemnify and hold Client and its officers, directors, stockholders, employees, and all of its successors, assigns harmless from and against any and all liability, losses, damages, claims, demands, fines, causes of action, suits or proceedings and expenses connected therewith (including reasonable attorneys’ fees, as incurred) (collectively “Losses”) arising from (i) third-party claims that the Services infringe such third-party’s intellectual property rights registered within the United States, (ii) ARX’s violation of applicable law in the performance of the Services hereunder; or (iii) ARX’s gross negligence, or willful misconduct,.  Notwithstanding the foregoing, ARX shall not have any obligation to indemnify Client from any claim of infringement to the extent that such claim arises out of (i) any Client Data or Client Materials; (ii) ARX’s compliance with Client’s required specifications; (iii) any modification of the Services other than by ARX, or (iii) the combination of the Services with any other service or component not provided by ARX.
 
(B)        Client Indemnification.  Client shall indemnify and hold harmless ARX, and its officers, directors, stockholders, employees, and all of its successors, assigns from and against any and all Losses arising from (i) third-party claims that (a) the Client Data or Client Materials infringe such third-party’s intellectual property rights, or (b) Client did not have all necessary rights and/or consents to provide ARX access to the Client Data or Client Materials; (ii) any violation of applicable law by Client or its employees or contractors; (iii) any act or omission by any ARX employee or contractor undertaken at the express written direction of Client; (iv) product liability relating to Products; and/or (v) any claims, enforcement actions, fines, costs, or recalls or retrievals of Products.
 
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(C)         Indemnification Procedure.  If either Party seeks indemnification hereunder (the “Indemnified Party”) from the other Party (the “Indemnifying Party”) with respect to a third-party claim, the Indemnified Party will notify the Indemnifying Party as promptly as practicable and give the Indemnifying Party an opportunity to defend the claim.  The Indemnified Party will provide reasonable cooperation in connection with such defense.  If the Indemnifying Party fails to defend the claim within a reasonable time, the Indemnified Party may, upon written notice to the Indemnifying Party, assume the defense thereof, and the Indemnifying Party will repay the Indemnified Party for all reasonable expenses incurred in connection with such defense (including reasonable attorneys’ fees, as incurred, but excluding in-house counsel fees, settlement payments, and payments of judgments) until the Indemnifying Party assumes such defense.  The foregoing indemnity and reimbursement obligations will extend only to the Losses actually incurred by the Indemnified Party, reduced by any offsetting assets, payments or services relating to such Loss received from any third-party including any insurer.  Subject to the provisions of Section 15, the Indemnifying Party will be subrogated to all rights of the Indemnified Party against any third-party with respect to any claim for which indemnity was paid.
 
(D)         Settlement.  No compromise or settlement of any third-party claim may be effected by the Indemnifying Party without the Indemnified Party’s written consent (which consent will not be unreasonably withheld or delayed), unless: (a) there is no finding or admission of any violation of applicable laws or any violation of the rights of any person and no effect on any other claims that may be made against the Indemnified Party; (b) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party, and (c) the Indemnified Party’s rights under this Agreement are not adversely affected.  The Indemnified Party will have no right to settle any such third-party claim without the prior written consent of the Indemnifying Party (and any such settlement without the prior written consent of the Indemnifying Party will relieve the Indemnifying Party of its obligations under this Section 8(D) with respect to such settlement) unless: either the Indemnifying Party refuses or fails to assume the defense of the Indemnified Party as required in Section 8(C), or (x) there is no finding or admission of any violation of applicable laws or any violation of the rights of any person and no effect on any other claims that may be made against the Indemnifying Party; (y) the sole relief provided is monetary damages that are paid in full by the Indemnified Party, in which case the Indemnified Party waives all rights to recover the such paid damages from the Indemnifying Party, and (z) the Indemnifying Party’s rights under this Agreement are not adversely affected.
 
(E)         Nature of Payments of Indemnified Claims.  All payments made by a Party in respect of claims that are indemnified pursuant to this Agreement will be considered direct damages, not consequential, indirect, incidental, special, or punitive damages, without regard to the nature of the claim which gave rise to such obligation to indemnify.
 
(F)          SOLE REMEDY.  THIS SECTION 8 SETS FORTH CLIENT’S SOLE REMEDIES AND ARX’S SOLE LIABILITY AND OBLIGATION FOR ANY ACTUAL, THREATENED, OR ALLEGED CLAIMS THAT THE ARX TECHNOLOGY, THE DELIVERABLES AND /OR ANY ARX PROVIDED MATERIALS INFRINGES, MISAPPROPRIATES, OR OTHERWISE VIOLATES ANY INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD-PARTY.
 
9.
Termination.
(A)         Breach or Default.  This Agreement may be terminated by either Party for a material and continuing breach that remains uncured beyond [***] calendar days following receipt of a written notice of breach from the non-breaching Party provided, however, if the nature of the breach is such that more than [***] calendar days are required for its cure, then the breaching-Party shall not be in default if the breaching-Party commences to cure within said [***] calendar days and thereafter cures said breach within an additional [***] calendar days.
 
(B)          Termination for Government Investigation or Conviction.  Either Party may terminate this Agreement immediately upon written notice to the other Party in the event that the other Party is convicted of engaging in fraudulent or criminal conduct in connection with the Services or the applicable Product.
 
(C)         Termination upon Insolvency.  This Agreement may be terminated by a Party immediately and without notice in the event the other Party: (i) admits in writing its inability to pay its debts generally as they become due; (ii) makes a general assignment for the benefit of creditors; (iii) institutes proceedings to be adjudicated a voluntary bankrupt, or consents to the filing of a petition of bankruptcy against it; (iv) is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent; (v) seeks reorganization under any bankruptcy act, or consents to the filing of a petition seeking such reorganization, or (vi) ceases to do business itself or through a successor.
 
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(D)          Termination of a Statement of Work.

 1.
Termination for Breach.  Either Party may give the other written notice of a material breach of a Statement of Work.  If the breaching Party has not cured said breach within [***] calendar days from the date such notice was sent, the subject Statement of Work may be terminated at the option of the non-breaching Party, provided, however, if the nature of the breach is such that more than [***] calendar days are required for its cure, then the Party shall not be in default if the Party commences to cure within said [***] calendar days and thereafter cures said breach within an additional [***] calendar days.
 

 2.
Termination of the Agreement.  The termination of this Agreement by either Party pursuant to Sections 9(A)-(C) shall automatically terminate any and all Statements of Work, unless otherwise agreed.
 

 3.
Termination Rights in a Statement of Work.  A Statement of Work may be terminated in accordance with the termination provisions, if any, set forth in the applicable Statement of Work without terminating this Agreement.
 
(E)          Termination Upon Acquisition.  In the event of (i) the sale of all or substantially all of the assets of ARX to an independent third party; (ii) a sale resulting in more than [***] of the share of stock in ARX being held by an independent third party; or (iii) a merger, consolidation, recapitalization or reorganization of ARX with or into an independent third party that results in the inability of the current shareholders (as of the Effective Date) to designate or elect a majority of the board of directors (or its equivalent) of the resulting entity or its parent company), this Agreement may be terminated by Client after [***] following the closing of such transaction upon [***] days notice to ARX, which termination shall be without prejudice or penalty; provided that Client shall comply with Section 9(F) below.
 
(F)         Effect of Termination.  Upon termination or expiration of this Agreement for any reason, Client’s right to access and use the Services and any ARX Technology or ARX Property shall immediately cease.  Any termination or expiration of this Agreement will not relieve either Party of any obligation, including without limitation the obligation to make payment, incurred hereunder prior to such termination or expiration.  Further, upon termination or expiration of this Agreement or a Statement of Work relating to Products, provided that no undisputed invoices are outstanding and overdue, ARX will transfer or dispose of any Products in its possession as directed by Client and at Client’s expense.
 
(G)        Exit Services.  Upon termination or expiration of this Agreement or a Statement of Work, provided that no undisputed invoices are outstanding and overdue, ARX agrees to assist Client, upon Client’s written request, with the decommissioning and transition of any Services to Client or Client’s agent to ensure a smooth transition and uninterrupted service.  Such assistance (the “Exit Services”) shall be described in a new Statement of Work executed by the Parties.  Client shall pay ARX’s fees for the Exit Services actually performed by ARX in accordance with the rates negotiated by the Parties and set forth in the applicable Statement of Work and any and all costs and expenses authorized by Client in accordance with the Statement of Work and actually incurred by ARX in connection with the Exit Services.
 
10.
Covenants, Representations and Warranties.
(A)          ARX

 1.
ARX represents and warrants that it and the ARX Technology complies, and shall comply throughout the term hereof, with applicable federal, state and local laws and regulations relating to the privacy and security of any “protected health information” (“PHI”), as defined in 45 C.F.R. §160.103, including, but not limited to, the Standards for Privacy of Individually Identifiable Health Information and the Security Standards for the Protection of Electronic Protected Health Information and other applicable requirements of 45 C.F.R. §160, 162, and 164 (the “HIPAA Privacy and Security Regulations”) promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996.
 
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2.
ARX represents and warrants to Client that after due inquiry:

a.
Neither ARX nor any employee of ARX has been debarred, as of the Effective Date, by the United States Food and Drug Administration (“FDA”) pursuant to its authority under Sections 306(a) and (b) of the U.S. Food, Drug and Cosmetic Act (21 U.S.C. §335(a) and (b)), or is, as of the Effective Date, the subject of any investigation or proceeding which may result in debarment by the FDA; and

b.
Neither ARX nor any employee of ARX is, as of the Effective Date, included, in the List of Excluded Individuals/Entities (maintained by the U.S. Department of Health and Human Services Office of Inspector General) or the List of Parties Excluded from Federal Procurement and Non-Procurement maintained by the U.S. General Services Administration or, as of the Effective Date, is the subject of any investigation or proceeding which may result in inclusion in any such list.
 

 3.
ARX represents and warrants that its Services shall substantially conform to specifications set forth in the Statement(s) of Work in all material respects.  In the event of a breach of this warranty, ARX’s sole responsibility and Client’s sole remedy shall be for ARX to use commercially reasonable efforts to correct such flaw in a timely manner, but only to the extent that such flaw is due to the malfunction of ARX’s computer operating systems or programs.  This warranty does not apply to any media or documentation which has been subjected to damage or abuse or to any claim resulting, in whole or in part, from changes in the operating characteristics of computer hardware or computer operating systems made after the release of the applicable hardware or systems, or which result from problems in the interaction of the hardware or systems with non-ARX software or equipment, or from a breach by Client of any of its obligations hereunder.
 
EXCEPT FOR THE WARRANTIES CONTAINED IN THIS SECTION 10(A) THERE ARE NO OTHER EXPRESSED OR IMPLIED OR STATUTORY WARRANTIES OF ANY KIND BY ARX, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, INFRINGEMENT OR THAT ARX SERVICES, ARX TECHNOLOGY, OR THE DELIVERABLES WILL OPERATE UNINTERRUPTED OR ERROR-FREE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY ARX.
 
(B)          Both Parties

 1.
Compliance with Laws and Industry Guidelines.  ARX and Client each agree that it shall comply with all applicable federal, state and local laws and regulations in performance of its respective obligations pursuant to this Agreement, including, without limitation, laws related to fraud, abuse, privacy, discrimination, confidentiality, false claims and prohibitions of kickbacks, the marketing, sale, distribution, and promotion of prescription drugs, and patient confidentiality and/or privacy, as such laws are applicable to the Parties under this Agreement.  Each Party represents and warrants that it has received, as of the Effective Date, and that it will diligently maintain in good standing all necessary licenses, approvals and authorizations required by applicable laws to distribute and dispense Products in the United States and to conduct all other activities required under this Agreement (including the performance of Services).
 

 2.
Authority.  ARX and Client each warrant and represent that it has the full right and authority to enter into this Agreement.
 
(C)          By Client

 1.
Products.  Client warrants and represents that:

a.
The Products have received, as of the Effective Date, or are exempt from, marketing clearances, licenses, approvals, or authorizations (“Marketing Authorizations”) required by any applicable laws, including but not limited to the Federal Food, Drug, and Cosmetic Act (“FD&C Act”), the Federal Public Health Service Act (“PHS Act”) and the regulations promulgated under both the FD&C Act and PHS Act, and therefore, may be legally marketed and distributed in accordance with such Marketing Authorizations, clearances, licenses, or approvals, or under a legally recognized exemption from such Marketing Authorizations, clearances, licenses, or approvals.  Furthermore, Client represents and warrants that the Products’ labeling and any promotional materials Client provides to ARX in connection with this Agreement are and shall be accurate, complete, and in compliance with FDA labeling (21 C.F.R. part 801) requirements and other applicable laws.
 
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b.
The Products comprising each shipment or other delivery hereafter made by Client to ARX at any of ARX’s facilities are, as of the date of such shipment or delivery, to be, on such date, not adulterated or misbranded within the meaning of the FD&C Act, and not an article precluded from introduction into interstate commerce by section 404, 505, or 512 of the FD&C Act.  Client will manufacture the Products in accordance with the Products’ specifications and applicable FDA current Good Manufacturing Practices, and in accordance with all applicable laws.
 

 c.
The Products are free from defect in design, material and workmanship, and are marketed in compliance with applicable laws; are manufactured in accordance with FDA current FDA Good Manufacturing Practices as required by 21 C.F.R. §§ 210 and 820, and are fit for the ordinary purposes for which such products are intended.
 
11.
Limitation of Liability.
(A)         NEITHER CLIENT’S NOR ARX’S CUMULATIVE AGGREGATE LIABILITY TO THE OTHER PARTY UNDER THIS AGREEMENT (WHETHER UNDER CONTRACT, TORT, OR ANY OTHER THEORY OF LAW OR EQUITY), INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES, OTHER THAN LIABILITY FOR INFRINGEMENT OF A THIRD PARTY’S INTELLECTUAL PROPERTY RIGHTS, AND FOR THE BREACH OF THE OBLIGATIONS OF CONFIDENTIALITY AS SET FORTH IN THIS AGREEMENT, SHALL NOT EXCEED, UNDER ANY CIRCUMSTANCES, THE AMOUNTS PAID BY CLIENT FOR THE SERVICES UNDER THE APPLICABLE STATEMENT OF WORK, BUT EXCLUDING PASS-THROUGH COSTS, FOR THE [***] MONTH PERIOD IMMEDIATELY PRECEDING THE MONTH IN WHICH THE EVENT GIVING RISE TO THE LIABILITY OCCURRED; PROVIDED, HOWEVER, THAT NEITHER PARTY’S CUMULATIVE AGGREGATE LIABILITY TO THE OTHER PARTY UNDER THIS AGREEMENT (WHETHER UNDER CONTRACT, TORT, OR ANY OTHER THEORY OF LAW OR EQUITY), INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES, FOR THIRD-PARTY CLAIMS THAT ARE SUBJECT TO A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 8 OF THIS AGREEMENT, WILL EXCEED THE AMOUNTS PAID BY CLIENT FOR THE SERVICES UNDER THE APPLICABLE STATEMENT OF WORK, BUT EXCLUDING PASS-THROUGH COSTS, FOR THE [***] MONTH PERIOD IMMEDIATELY PRECEDING THE MONTH IN WHICH THE EVENT GIVING RISE TO THE LIABILITY OCCURRED MULTIPLIED BY A FACTOR OF [***].  THE FOREGOING LIMITATION OF LIABILITY REPRESENTS THE ALLOCATION OF RISK OF FAILURE BETWEEN THE PARTIES AS REFLECTED IN THE PRICING SET FORTH IN ANY STATEMENT OF WORK AND IS AN ESSENTIAL ELEMENT OF THE BASIS OF THE BARGAIN BETWEEN THE PARTIES.
 
(B)          EXCEPT FOR DAMAGES ARISING OUT OF A PARTY’S BREACH OF THE OBLIGATIONS OF CONFIDENTIALITY AS SET FORTH IN THIS AGREEMENT OR IN CONNECTION WITH A PARTY’S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OR AWARDED TO, OR RECOVERABLE BY (INCLUDING AS THE RESULT OF A SETTLEMENT), A THIRD-PARTY FOR THIRD-PARTY CLAIMS THAT ARE SUBJECT TO A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 8 OF THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL CONSEQUENTIAL, INCIDENTAL, EXEMPLARY, INDIRECT OR PUNITIVE DAMAGES, LOST PROFITS OR SAVINGS, LOSS OF INCOME, LOSS OF PRODUCTION, PUNITIVE DAMAGES, INJURY TO REPUTATION, LOSS OF CUSTOMERS OR BUSINESS, OR OTHERWISE, WHETHER ARISING OUT OF SAID PARTY’S PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT, TORT (INCLUDING NEGLIGENCE BUT EXCLUDING GROSS NEGLIGENCE), WARRANTY, OR OTHERWISE, EVEN IF THE EXCLUSIVE REMEDIES PROVIDED HEREIN FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN IF A PARTY IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
 
(C)        THE PROVISIONS OF THIS SECTION 8 SHALL NOT OPERATE TO LIMIT THE PARTIES’ ABILITY TO OBTAIN EQUITABLE RELIEF UNDER THIS AGREEMENT.
 
12.
Access and Accommodations.
Client acknowledges and agrees that the timely provision of and access to office accommodations, facilities, equipment and assistance, cooperation, complete and accurate information and data from its officers, agents, and employees, and suitably configured computer software, hardware and networks identified in the applicable Statement of Work are essential to the performance of any Services and that ARX’s ability to complete any Services may be dependent upon same.  If any of the aforementioned items are not provided or provided in such a way that impairs ARX’s ability to perform the Services, ARX shall so inform Client in writing, including the relevant specifics and details and applicable scheduling, milestone, and other accommodations shall be made under the applicable SOW.
 
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13.
Responsibility for Internal Controls.
Client is solely responsible for establishing and maintaining its own effective internal control system, record keeping, management decision-making and other management functions.  Client shall be fully and solely responsible for (a) applying independent business judgment with respect to the Services and the Deliverables; (b) making any implementation decision related thereto, and (c) determining further courses of action with respect to any matters addressed in any Deliverable or Service.
 
14.
Third Party Services.
Client agrees that ARX may utilize external third-party sources (“Third Party Vendors”) to provide certain services to Client.  Such services (“Third Party Services”) and the associated prices to be initially paid by Client therefore shall be listed in the applicable Statement of Work.  To the extent any Third Party Services are provided directly by the Third Party Vendor to Client hereunder, Client agrees that such services are confidential and proprietary trade secrets of the respective Third Party Vendors.  Accordingly, Client agrees to honor requests by ARX and Third Party Vendors to protect their proprietary rights in such data, including requests that Client place copyright notices or other proprietary legends on printed matter, print-outs, tapes, disks, film or any other medium of dissemination.  Client further agrees that all Third Party Services are provided by the Third Party Vendors on an “AS IS WITH ALL FAULTS” basis for Client’s internal use.  Client may use Third Party Services as normally required for statements, reports, and other documents necessary to support Client’s clients, however Client shall not engage any Third Party Vendor to provide any Third Party Services to other third-parties.  The Third Party Vendors MAKE NO WARRANTIES, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY, FITNESS, OR ANY OTHER MATTER with respect to any of the Third Party Services or any such products.  ARX MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY, FITNESS, OR ANY OTHER MATTER with respect to any of the Third Party Services or any such products.  Neither ARX nor the Third Party Vendors shall be liable for any damages suffered by Client in the use of any of the Third Party Services, including liability for any incidental, consequential or similar damages.  ARX DOES NOT MAKE ANY WARRANTY OR REPRESENTATION REGARDING THE AVAILABILITY, RELIABILITY, SECURITY OR OPERATION OF THE INTERNET.  IN ADDITION, ARX IS NOT RESPONSIBLE FOR ANY FAILURE OF ANY ARX PRODUCTS, TECHNOLOGY OR SERVICES ACCESSED VIA THE INTERNET DUE TO THE AVAILABILITY, RELIABILITY, SECURITY OR OPERATION OF THE INTERNET.
 
15.
Insurance.
(A)          ARX’s Insurance.  During the term of this Agreement, ARX will maintain (i) commercial general liability insurance with limits of [***] combined single limit, per occurrence, or a combination of Commercial General Liability and Umbrella Liability, and (ii) Workers Compensation insurance as required by any Applicable Laws and Employer’s Liability insurance with a minimum of [***].  ARX shall provide Client with no less than [***] calendar days’ prior written notice of any cancellation of any such insurance coverage of ARX and with immediate written notice of any notice of cancellation received from the insurance company(ies) issuing the policies.  ARX shall name Client as an additional insured under its insurance coverage.  All insurance required to be maintained by ARX hereunder shall: (a) be written to insure losses on an “occurrence basis”;
 
(B)          Client’s Insurance.  Client will insure through a commercial policy the Products for general liability, completed operations, and products liability.  Client shall also maintain commercial general liability insurance.  Client’s general liability and products liability coverage shall be in an amount equal or greater than [***] per occurrence and [***] in the aggregate.  Client shall also maintain Workers’ Compensation insurance with limits as required by applicable laws and employer’s liability insurance with limits being no less than [***] per occurrence.  Client shall provide ARX with no less than [***] calendar days’ prior written notice of any cancellation of any such insurance coverage of Client and with immediate written notice of any notice of cancellation received from the insurance company(ies) issuing the policies.  Client shall name ARX as an additional insured under its insurance coverage.  All insurance required to be maintained by Client hereunder, except for Workers’ Compensation insurance shall: (a) be written to insure losses on a claims made basis; (b) provide that the coverage is “primary coverage” for the protection of Client and ARX notwithstanding any other coverage carried by Client or ARX protecting against similar risks, and any insurance policy of ARX shall be non-contributory.
 
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(C)          Certificates of Insurance.  Terms of all insurance coverage will be evidenced by certificates of insurance issued by recognized insurers to be furnished to the other Party at the place for notices provided under this Agreement.  All insurance required under this Section 15 will be rated by A.M. Best’s Rating Service as [***], and a class size of [***] or better.  Upon request, each Party will furnish certificates or memorandums of insurance to the other Party evidencing the insurance required by this Agreement.  Insurers will be licensed to do business in the state where operations are maintained.  ARX will not commence any Services until all of the insurance coverage required herein has been obtained by each Party.
 
16.
Miscellaneous.
(A)          Relationship of Parties.  The Parties are deemed independent for all purposes.  No provision of this Agreement is intended to create or will be construed to create any relationship between Client and ARX, other than that of independent entities contracting with each other solely for the purpose of effecting the provisions of this Agreement.  Neither Party, nor any of their respective representatives or employees, will be construed to be the partner, agent, employee, or representative of the other.  Neither Party shall have the authority to enter into agreements or make representations on behalf of, or otherwise bind, the other Party.  Each Party shall be responsible for the acts and omissions of its employees and subcontractors.  Neither Party’s employees, subcontractors, nor employees of a subcontractor shall be eligible to participate in any employee benefit program of the other Party by reason of this Agreement or by reason of the relationship between the Parties created by this Agreement.
 
(B)         Governing Law.  This Agreement and the relationship of the Parties hereunder will be governed by and interpreted in accordance with the laws of the State of Delaware without regard to rules of conflicts of laws.
 
(C)          Force Majeure.  Neither Party shall be in default or otherwise liable for any delay in or failure of its performance under this Agreement where such delay or failure arises by reason of any Act of God, or any government or any governmental body, war, insurrection, acts of terrorism, the elements, strikes or labor disputes, or other similar or dissimilar cause beyond the control of such party.  Client acknowledges that the performance of certain of ARX’s obligations may require the cooperation of third-parties designated by Client and outside the control of ARX, and in the event such third-parties fail to cooperate with ARX in a manner that reasonably permits ARX to perform its obligations, such failures shall be considered as causes beyond the control of ARX for the purposes of this Section and shall not be the basis for a determination that ARX is in breach of any of its obligations under this Agreement or is otherwise liable.  This provision shall not relieve Client of its obligation to pay ARX for Services already rendered or to pay for any storage fees required under a Statement of Work, to the extent applicable, during the period of Force Majeure.  Furthermore, the affected Party must give notice, without undue delay, and will use its commercially reasonable efforts to avoid or remove such causes of non-performance.  Notwithstanding the foregoing, in the event that the affected Party’s failure or delay remains uncured for a period of [***] days following written notice given by it under this Section 16(C), either Party may thereafter terminate this Agreement upon [***] days’ written notice.
 
(D)          Assignment.  The rights and obligations under this Agreement may not be transferred or assigned to a third-party by Client without prior written consent of ARX.  Notwithstanding, Client may without consent make such an assignment to (i) any affiliate, or (ii) any successor in connection with a merger, acquisition, or sale or transfer of all or substantially all of the Client’s assets or business (together, “Permitted Assignments”); provided that the successor entity agrees in writing to assume all of the obligations of this Agreement.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective legal representatives, successors and assigns.  ARX may not assign this agreement or any of its obligations or liabilities hereunder without Client’s prior written consent, and any attempted assignment or delegation without such consent shall be null and void.  Any permitted assignee shall assume all obligations of ARX under this Agreement, provided, however, that Company shall remain primarily liable for such obligations, and provided that, Client shall have a period of [***] months after the close of any permitted assignment to provide notice to vacate all obligations under this Agreement without penalty.
 
(E)          Subcontracting.  ARX shall have the right to subcontract performance of its hosting services, in which event the service terms provided by any third-party hosting provider (including, without limitation, any service levels) will be incorporated herein by reference.  Further ARX may subcontract delivery/postage services, IT services, translation services, electronic benefit verification services and electronic document execution services.  ARX shall be responsible for the work and activities of each of its subcontractors, including compliance with the terms of this Agreement and any Statement of Work.  Unless otherwise stated in an applicable SOW as a pass through cost, then ARX shall be responsible for all payments due to its subcontractors.
 
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(F)          Severability.  The provisions of this Agreement are severable, and any judicial determination by a court of competent jurisdiction that any provision(s) is invalid or unenforceable shall not affect the validity of enforceability of any other provision, but rather shall cause this Agreement first to be construed in all respects as if such invalid or unenforceable provision(s) were modified to terms which are valid and enforceable.
 
(G)        Survivability.  Any provisions of this Agreement creating obligations that by their terms extend beyond the term of this Agreement will survive the termination of this Agreement, regardless of the reason for the termination.  Without limiting the generality of the foregoing, the following provisions will survive any termination hereof: Sections 3, 4, 5, 6, 7, 8, 9(E), 9(F), 10(C), 11, 14, and 16, and all subsections and definitional provisions corresponding to the foregoing.
 
(H)         Use of Marks.  During the term of this Agreement, Client consents and agrees that ARX (and its affiliates and subcontractors) may use Client’s logo, trademarks and/or tradename, in ARX’s marketing materials.
 
(I)          Marketing and Promotional Materials; Press Releases.  Client is responsible for the marketing and promotion of Products in accordance with applicable laws.  Client must review and approve all written materials used by ARX in conjunction with the Services, prior to such materials being used.  The timing and content of any press releases relating to the relationship between the Parties will be subject to the mutual agreement of the Parties; provided that each Party may make reference to the existence of this Agreement and describe in general terms the relationship between the Parties in connection with any required securities filings without seeking prior consent.
 
(J)         Notices.  All notices required or permitted by this Agreement shall be in writing and shall be deemed given to a Party when (i) delivered to the appropriate address by hand, email or by nationally recognized overnight courier services (costs prepaid), or (ii) received or rejected by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses, and marked to the attention of the person (by name or title) designated below (or to such other address, or person as Party may designate by notice to the other Parties):
 

 If to Client to:
Attn: Vice President & General Counsel
140 Kendrick Street, BLDG C East
Needham, MA 02494


If to ARX to:
Attn: Edward Hensley
Chief Commercial Officer, AssistRx, Inc.
4700 Millenia Boulevard, Suite 500
Orlando, Florida 32839

(K)         Solicitation and Hire of Employees.  The Parties agree that during the term of this Agreement, and for a period of [***] thereafter, neither Party will directly solicit for purposes of employment, or employ, any person presently employed by the other Party without the prior written consent of the current employing Party.  For purposes of this Agreement, “directly solicit” means to initially call or to initiate contact in any other manner with an employee of the other Party for the purpose of inducing such employee to leave his or her present position, but such term shall not include as wrongful any contact with, interview or hiring of those employees who (a) have answered standard advertisements, (b) have already resigned their positions without inducement by the other Party, or (c) initiate the contact with the other Party regarding employment with that Party.
 
(L)          Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of the Agreement, and all of which, when taken together, will be deemed to constitute one and the same Agreement.  Signatures to this Agreement transmitted by fax, by electronic mail in “portable document format” (“.pdf”), or by any other electronic means intended to preserve the original graphic and pictorial appearance of the Agreement, will have the same effect as physical delivery of the paper document bearing the original signature.
 
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(M)        Interpretation.  The descriptive headings used herein are for convenience and reference only and do not limit the contents of this Agreement.  The headings do not interpret, modify, or in any way limit the meaning of this Agreement.  All pronouns and all variations thereof will be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the identity of the person, persons, or entity may require.  Furthermore: (i) the word “or” is used in the inclusive sense; and (ii) the word “including” means “including without limitation”.
 
(N)         Currency.  All payments, costs, expenses, charges and/or assessments that are due under or are to be made in accordance with this Agreement or any Statement of Work shall be in U.S. dollars.  Any reference to currency or dollars in this Agreement or any Statement of Work shall be to U.S. dollars.
 
(O)          Conflicts.  In cases of any conflicts between the terms of this Agreement and the terms of any Appendix or Exhibit to this Agreement, the terms of this Agreement will control.
 
(P)          No Rule of Strict Construction.  The Parties chose the language used in this Agreement to express their mutual intent.  No rule of strict construction will apply where evidence of intent otherwise is applicable.
 
(Q)        Third-Party Beneficiary Exclusion.  This Agreement is not a third-party beneficiary contract, nor will this Agreement create any rights on behalf of patients or any other third-parties as against ARX or Client.  Client and ARX reserve the right to amend, cancel, or terminate this Agreement without notice to, or consent of, any patient or other third-party.
 
(R)          Integration; Amendments.  This Agreement, and any other documents incorporated herein by reference, constitutes the entire understanding of the Parties hereto and supersedes any prior oral or written agreement or communication between the Parties with respect to the subject matter hereof.  No modification, alteration, or waiver of any term, covenant, or condition of this Agreement will be valid unless in writing and signed by both Parties.
 
(S)          Waiver.  No waiver of breach of any covenant or condition will be construed to be a waiver of any subsequent breach.  No act, delay, or omission done, suffered, or permitted by the Parties will be deemed to exhaust or impair any right, remedy, or power of the Parties hereunder.
 
(T)          Audit. ARX hereby accepts that Client or the representative of Client, may carry out an audit, at Client’s sole cost, no more than once annually for the sole purpose of verifying ARX’s compliance with its obligations under this Agreement and any SOW.
 
[SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the Parties by their duly authorized representatives have caused this Agreement to be executed as of the Effective Date.
 
Chiasma, Inc.
ASSISTRX, INC.
BY:
  /s/ Raj Kannan  
BY:
 /s/ Edward H. Hensley  
Name: 
 Raj Kannan
Edward H. Hensley
Title: 
 CEO
Chief Commercial Officer
May 8, 2020
May 8, 2020


AssistRx & Chiasma MSA
 14
Exhibit 4.18
 
Pursuant to 17 CFR 229.601(b)(10)(iv), confidential information (indicated by [***]) has been omitted from this exhibit because it is both not material and would likely cause competitive harm to the registrant if publicly disclosed.
 
EXCLUSIVE DISTRIBUTION AGREEMENT
 
This Exclusive Distribution Agreement (the “Agreement”) is made as of this 23rd day of June, 2020 (the “Effective Date”), between Chiasma, Inc., a Delaware corporation, with an address of 140 Kendrick Street, Building C East, Needham, Massachusetts 02494 (“Client”), and Cardinal Health 105, Inc., an Ohio corporation, with a place of business at 501 Mason Road, Suite 200, La Vergne, Tennessee, 37086 (“Cardinal Health”) each individually a (“Party”) and collectively (the “Parties”).
 
RECITALS
 
A.         Client is, among other things, in the business of developing and marketing pharmaceutical products in the United States, its territories, possessions and commonwealths (“Territory”).
 
B.            Cardinal Health is, among other things, in the business of distributing pharmaceutical products to wholesalers, specialty distributors, physicians, clinics, hospitals, pharmacies, and other health care providers in the Territory, and of providing information systems and other services that support its clients’ use of its distribution capabilities.
 
C.         Client desires to engage Cardinal Health as its exclusive third-party logistics distribution agent for commercial sales in the Territory of all pharmaceutical Products manufactured and/or marketed by Client in all formulations (collectively, “Product”), and to perform certain other services described in this Agreement, all upon the terms and conditions set forth in this Agreement.
 
THEREFORE, in consideration of the mutual covenants, terms and conditions set forth below, the Parties agree as follows:
 
ARTICLE 1
APPOINTMENT/AUTHORIZATION
 
1.1         Appointment.  Subject to the terms and conditions set forth in this Agreement, during the term of this Agreement, Client appoints Cardinal Health as its exclusive third-party logistics distribution agent and as an authorized distributor of record of Product in the Territory to Client’s Customers, including, but not limited to, wholesalers, specialty distributors, physicians, clinics, hospitals, pharmacies and other health care providers in the Territory (collectively, “Customers”).
 
1.2         Acceptance of Appointment.  Subject to the terms and conditions set forth in this Agreement, Cardinal Health accepts the appointment to represent Client as its exclusive third-party logistics distribution agent and as an authorized distributor of record of Product to Customers in the Territory.
 
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ARTICLE 2
SERVICES
 
2.1        Services.   Cardinal Health shall provide the services set forth in the Traditional 3PL Operating Guidelines (“OPG”), which include, without limitation, storage, distribution, returns, customer support, financial support, EDI and system access support (“Services”).  The OPG shall be finalized and mutually agreed upon prior to the commercial launch of Product.  Once finalized, a copy of the OPG shall be attached hereto as Exhibit A and incorporated by reference.
 
2.2        Traditional 3PL Operating Guidelines.  The OPG may be amended from time to time upon the mutual written agreement of the Parties; provided, however, that any change, modification or amendment to the OPG may result in an increase in the Fees (as defined in Article 5).
 
2.3         Compliance to Traditional 3PL Operating Guidelines.  Cardinal Health’s services shall comply with the OPG for up to [***] of Client’s Forecast (defined below).  If (i) Client’s shipments of Product to Cardinal Health or (ii) Client’s Customers’ Product orders exceed Client’s Forecast by more than [***], Cardinal Health shall use commercially reasonable efforts to meet the requirements of the OPG, provided however, that Client acknowledges that Cardinal Health may not be able to meet all guidelines relating to response and shipping times for those excess shipments and orders.
 
2.4         Product Returns.  All Product returns shall be processed and handled by Cardinal Health in accordance with the OPG; and any customization or additional return services requested by Client shall be performed at an additional fee as agreed by the Parties.
 
2.5        Product Recalls.  Client is solely responsible for all Product recalls, provided however that Cardinal Health shall be responsible for Product recalls to the extent arising from Cardinal Health’s gross negligence or willful misconduct, subject to the terms of this Agreement.  In the event Product is subject to recall, or Client, on its own initiative, recalls any Product, Cardinal Health shall provide assistance to Client as set forth in the OPG and as mutually agreed upon, provided that Client shall pay to Cardinal Health an amount equal to Cardinal Health’s actual costs incurred with any such recall services, except to the extent arising from Cardinal Health’s gross negligence or willful misconduct.  Such cost shall be in addition to the Fees described in Article 5 below.
 
ARTICLE 3
PRODUCT SUPPLY/CLIENT RESPONSIBILITIES
 
3.1        Facility.  Client shall deliver Product to Cardinal Health at Cardinal Health’s facility located at 15 Ingram Boulevard, La Vergne, Tennessee 37086 and/or 501 Mason Road, Suite 200, La Vergne, Tennessee 37086, or to such other distribution facility as may be designated by Cardinal Health to Client in writing (“3PL Facility”).
 
3.2        Delivery and Title.  Client shall be responsible for delivery of Product to and from the 3PL Facility, including all costs, expenses and risk of loss associated with such delivery.  Title to Product shall remain with Client at all times, even when Product is stored or warehoused at the 3PL Facility.  Client shall at all times insure the Product for damage, loss, destruction, theft or any such other property damage (“Loss”) as further set forth in Article 13 below.  Except for Loss resulting solely from the gross negligence or willful misconduct of Cardinal Health, Client shall bear all risk of loss or damage with respect to the Product; provided that Cardinal Health shall use the same degree of care to protect any Product stored or warehoused at the 3PL Facility as it uses to protect its own assets and properties, but no less than a reasonable degree of care.
 
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3.3         Forecast and Price List.
 
A.           Forecast.  Client shall provide Cardinal Health with a forecast of the volume of Product to be handled by Cardinal Health under this Agreement, not less often than [***] (“Forecast”).  All forecasts, including the Forecast, are used for the express purpose of operational planning.  In the event of a significant variance from the Forecast or a change in core business that could reasonably be expected to have a material effect upon the obligations of either Party hereunder, the Party so affected may notify the other Party that it wishes to negotiate an appropriate adjustment to the Fees.  The Parties must meet within [***] days of such notification to discuss the merits and implementation of any such adjustment and during such meeting, the Parties shall negotiate in good faith.  If the Parties are unable to come to a resolution regarding any such adjustment, the Party originally proposing the adjustment may terminate this Agreement upon [***] prior written notice to the other Party.
 
B.          Price List.  Upon execution of this Agreement, Client shall deliver to Cardinal Health a customer list, which sets forth the Product prices (the “Customer Price List”).  Client shall notify Cardinal Health of any change in the Customer Price List not less than [***] hours prior to the effective date of any such change.  Cardinal Health shall use commercially reasonably efforts to implement such price change in accordance with Client’s instruction.
 
3.4        Shipment Inspection.  Cardinal Health shall visually inspect each shipment of Product for external damage or loss in transit and promptly (but in any event within [***] business days) notify Client of any such evident damage or loss as provided in the OPG.
 
ARTICLE 4
INFORMATION SYSTEM ACCESS
 
4.1        Access.  During the Term of this Agreement and subject to the terms herein, Client may use password(s) and identification number(s) provided by Cardinal Health to remotely access Client’s data maintained on Cardinal Health’s web enabled Operating System Base and certain support services associated therewith, as further set forth in the OPG (collectively, the “System”) provided that such access is used solely by Client’s employees and independent contractors and for Client’s own internal business purposes.  Client shall use that access solely to access Client’s data and shall not access or attempt to access any other data, systems or software.  Client shall be responsible for all use of the passwords and identification elements by Client’s employees and independent contractors and shall ensure that they are used solely to effect the limited access authorized herein.  The limited license to access the System granted herein does not include the right to copy, download or otherwise use any software or non-Client data maintained on the System.
 
4.2      Fees.  The System shall be made available to Client at the fees set forth in the Fee Schedule.  If Cardinal Health agrees to perform any custom enhancements to the System requested by Client, such customization services shall be billed separately based on an hourly rate set forth in the Fee Schedule (as defined in Article 5) and prior to such performance, Cardinal Health and Client shall agree upon any related increase in the periodic Fees hereunder relative to the ongoing support of the customizations.
 
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4.3        Security.   During the term of this Agreement and for so long thereafter as Client’s data resides on the System, Cardinal Health shall employ reasonable security measures and policies designed to safeguard the integrity, accessibility, and confidentiality of Client’s data resident on the System and establish and maintain reasonable disaster and emergency recovery plans designed to minimize disruption from System operation interruptions.  Such measures shall be no less secure than those utilized by Cardinal Health to protect its own confidential information but shall reflect no less than a reasonable degree of care.
 
4.4        Client Obligations.  Client shall not reverse engineer, reverse assemble, decompile, create derivative works, modify, or otherwise attempt to derive the source code of any software on the System or copy, download, modify, or create derivative works of such software.  Also, Client shall not permit access to the System or related documentation to any other person or entity other than its employees and independent contractors.  The System and all parts thereof, in all of their tangible and intangible manifestations, all existing or new enhancements, developments, derivative works, and other modifications to the System (or any part thereof), and all related proprietary rights, are and shall remain the exclusive property of Cardinal Health.
 
4.5        Disclaimer.  THE SYSTEM, THE SOFTWARE THEREON AND ANY RESULTS OBTAINED THEREFROM ARE PROVIDED ON AN “AS IS” BASIS, WITHOUT WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, CARDINAL HEALTH MAKES NO REPRESENTATIONS OR WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, RELATING DIRECTLY OR INDIRECTLY TO THE SYSTEM OR ANY PART THEREOF INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.
 
4.6         System Availability.   Cardinal Health shall use reasonable efforts to make the System available for access twenty-four (24) hours a day, seven (7) days a week absent scheduled and emergency maintenance periods as set forth in the OPG.
 
4.7         Suspension of Access.  Notwithstanding anything to the contrary, in the event of a material breach of any term of this Agreement or a threatened breach of the System, Cardinal Health may revoke or suspend any or all passwords and identification numbers provided to Client hereunder, for the period of time reasonably necessary for Cardinal Health to resolve the matter, provided that Cardinal Health shall otherwise provide access to Client’s data to Client during such period of revocation or suspension by promptly responding to Client’s request for such data by e-mail or facsimile.
 
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ARTICLE 5
PRICING AND PAYMENT TERMS
 
5.1        Fees.  As compensation for the Services, Client shall pay to Cardinal Health the fees (“Fees”) set forth on Exhibit B (“Fee Schedule”) attached hereto and incorporated by reference.
 
5.2        Invoices.  Cardinal Health shall issue an invoice to Client for the Services rendered under this Agreement or for any other amounts due on a [***] basis.  Payment is due within [***] days of the invoice date via electronic funds transfer (EFT) or Automated Clearing House (ACH).  If the invoice is not paid within such [***] day period, Cardinal Health may, at its option elect to (i) impose a service charge on the unpaid amount calculated at the rate of [***] per month (or the maximum rate permitted by law if such rate is less than [***] per month) until such amount is paid in full and/or (ii) suspend any further Services until such invoice is paid in full; provided, however, that this provision shall not apply in the event any unpaid portion of the invoice is the subject of an unresolved good faith dispute.  In the event of any good faith dispute with regard to an invoice, Client shall notify Cardinal Health of such dispute within [***] days of the invoice date, and any undisputed portion of the invoice shall be paid as provided herein.  The Parties will work together in good faith to resolve any dispute with respect to an invoice.  Any amounts owed to Cardinal Health shall be paid within [***] days of resolution of such dispute.
 
5.3         Fee Adjustment.
 
A.          The Fees shall be held firm for [***].  Thereafter, Cardinal Health will evaluate the fee schedule and may adjust the Fees not more often than [***] per contract year by not more than [***] over the Fees for the prior contract year.
 
B.         Notwithstanding the terms set forth above in Section 5.3(A), if Cardinal Health can reasonably demonstrate that the costs for providing the Services have materially increased, or are likely to materially increase in the coming year due to the adoption of any applicable law or regulation (or any material change in the interpretation or administration thereof), or due to unforeseen circumstances beyond Cardinal Health’s reasonable control, then upon notice from Cardinal Health not more often than [***] per contract year, the Parties agree to meet in good faith and negotiate a mutually acceptable adjustment to the Fees.
 
5.4        Taxes.  Client shall pay when due to the appropriate taxing authority all sales, use, gross receipts, excise and personal property taxes associated with the Product (excluding any personal property tax associated with Cardinal Health’s equipment used in connection with the Services), and other taxes now or hereafter imposed as a result of the transactions contemplated by this Agreement, none of which have been included in the fees payable to Cardinal Health under this Agreement; provided that the amounts payable by Client under this section shall not include taxes based on the net income of Cardinal Health.
 
ARTICLE 6
TERM AND TERMINATION
 
6.1        Term.  The Initial Term of this Agreement shall begin on the Effective Date and shall continue for a period of [***] years following the first shipment of FDA-approved Product to a commercial customer (“Initial Term”), unless terminated earlier pursuant to this Agreement.  Thereafter, this Agreement shall automatically renew for additional terms of one (1) year each (each, a “Renewal Term,” and together with the Initial Term, the “Term”), unless written notice of termination is given by either Party at least [***] days prior to the end of the Initial Term or any Renewal Term.
 
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6.2         Termination.  Either Party shall have the right to immediately terminate this Agreement upon written notice to the other if:
 
(A)         the other Party files a petition in bankruptcy, or enters into an agreement with its creditors, or applies for or consents to the appointment of a receiver or trustee, or makes an assignment for the benefit of creditors, or suffers or permits the entry of any order adjudicating it to be bankrupt or insolvent and such order is not discharged within [***] days;
 
(B)         the other Party materially breaches any of the provisions of this Agreement, and such breach is not cured within [***] days after the giving of written notice; provided, however, that (i) in the case of a breach that cannot be cured within [***] days, the Parties agree to meet in good faith and within [***] days after the giving of written notice, formulate a mutually agreeable plan to cure such breach within a reasonable period of time; provided further that the non-breaching party may nonetheless terminate this Agreement if such breach is not cured within [***] days after the giving of written notice, or if the breaching party fails at any point to diligently implement the agreed-upon plan to cure such breach; and (ii) in the case of a failure of Client to make payments in accordance with the terms of this Agreement, Cardinal Health may terminate this Agreement if such payment breach is not cured within [***] days following Cardinal Health’s delivery of a written notice of non-payment to Client; or
 
(C)          as and when permitted to do so pursuant to the terms of Section 15.15 (Force Maj cure).
 
In addition, Client shall have the right to terminate this Agreement upon written notice to Cardinal Health in the event of (x) Cardinal Health’s material breach of the OPG in respect of safe handling instructions that is not cured within [***] days of the notice, or (y) any Product recall arising from Cardinal Health’s gross negligence or willful misconduct.
 
6.3        Effect of Termination.  Expiration or termination of this Agreement shall be without prejudice to any rights or obligations that accrued to the benefit of either Party prior to such expiration or termination.  Client shall pay Cardinal Health for all Services performed up to the date of termination and shall reimburse Cardinal Health for all costs and expenses incurred, and all non-cancelable commitments made, in the performance of Services.  Upon termination or expiration of this Agreement, all Product and all Client funds not otherwise applied to outstanding Fees, costs and expenses otherwise payable to Cardinal Health shall be promptly returned to Client or a designee of Client, at Client’s sole cost and expense.
 
ARTICLE 7
REGULATORY
 
7.1        Audits.  No more than [***] per calendar year, Client or its designee has the right during normal business hours [i.e., 8:00 a.m. to 5:00 p.m. local 3PL Facility time and not to exceed a total of eight (8) business hours], to conduct a complete quality audit upon [***] business days prior written notice to Cardinal Health.  If the timing of such audit falls during “quarter-end” or “year-end” then Cardinal Health will use best efforts to accommodate Client’s request.  Client shall have the right to conduct for cause audits immediately if necessary, to ensure Product safety or if otherwise necessary to implement or support a Product recall.
 
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7.2        Compliance with Laws.  Each Party shall conduct its activities in connection with this Agreement in compliance with all applicable United States laws, rules, regulations and guidelines.
 
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
 
8.1         Cardinal Health.  Cardinal Health represents and warrants to Client that, unless otherwise agreed to by the Parties, Cardinal Health shall perform Services in accordance with this Agreement, the OPG, and applicable United States laws, rules, regulations and guidelines.
 
8.2         Client.  Client represents, warrants and covenants to Cardinal Health that:
 
A.            Product.  The Product shall not be adulterated or misbranded as provided in the Food, Drug and Cosmetic Act, as amended from time to time;
 
B.          Promotion.  Client’s activities relating to the promotion, sale and distribution of the Product shall comply with all applicable laws, rules, regulations and guidelines;
 
C.           No Infringement.  It has all necessary authority and right, title and interest in and to any intellectual property related to each Product or that is otherwise provided by Client under this Agreement; and
 
D.           Safe Handling Instructions.  It has provided all safe handling instruction, health and environmental information and material safety data sheets deemed by Client to be applicable to the Product or to any materials supplied by Client in writing or in electronic or digital media or format in sufficient time for review and training by Cardinal Health prior to delivery.
 
8.3         Mutual.  Each Party represents and warrants to the other Party that:
 
A.           Existence and Power.  Such Party (i) is duly organized, validly existing and in good standing under the laws of the state in which it is organized, (ii) has the power and authority and the legal right to own and operate its property and assets, and to carry on its business as it is now being conducted, and (iii) is in compliance with all requirements of applicable laws, except to the extent that any noncompliance would not materially adversely affect such Party’s ability to perform its obligations under the Agreement;
 
B.            Authorization and Enforcement of Obligations.  Such Party (i) has the power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder and (ii) has taken all necessary action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;
 
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C.           Execution and Delivery.  This Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, binding obligation, enforceable against such Party in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity);
 
D.           No Consents.  All necessary consents, approvals and authorizations of all regulatory authorities and other persons required to be obtained by such Party in connection with the Agreement have been obtained; and
 
E.            No Conflict.  The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (i) do not conflict with or violate any requirement of applicable laws; and (ii) do not materially conflict with or constitute a material default or require any consent under, any contractual obligation of such Party.
 
8.4     Limitations.  THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE 8 ARE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY EACH PARTY TO THE OTHER AND NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS, WARRANTIES OR GUARANTEES OF ANY KIND WHATSOEVER, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.
 
ARTICLE 9
TRADEMARKS
 
Neither Party shall have the right to use the name of the other Party or any Affiliate of the other Party, or the other Party’s or such Affiliates’ trademarks, service marks, logos, or other similar marks (the “Marks”) in any manner except with the prior written approval of that Party; provided that the foregoing shall not prohibit Cardinal Health’s use of Client’s Marks in connection with the performance of the Services in a manner consistent with this Agreement; provided further that (i) neither Cardinal Health nor any of its Affiliates shall remove or deface any Client Marks appearing on the Products or on any documentation provided by Client hereunder, (ii) upon termination for any reason or expiration of this Agreement, the license set forth in this Section in respect of Client’s Marks shall immediately terminate, (iii) at no time during or after the term of this Agreement shall Cardinal Health or any of its Affiliates challenge or assist others to challenge Client’s Marks or use or attempt to register any trademarks, service marks or trade names confusingly similar to those of Client’s Marks in any jurisdiction or country, (iv) all representations of Client’s Marks and visual branding that Client authorizes for Cardinal Health or any of its Affiliates to use shall be used only in accordance with Client’s instructions, and (v) neither Cardinal Health nor any of its Affiliates shall gain any right or interest in or to the Client Marks other than for the limited license expressly granted in this Section, and all Client Marks shall remain the sole and exclusive property of the Client.  “Affiliate,” as used in this Agreement, means any legal entity which, during the Term hereof, controls, is controlled by, or is under common control with, such Party.  For purposes of this definition, an entity shall be deemed to control another entity if it owns or controls, directly or indirectly, at least fifty percent (50%) of the voting interest of all equity interests of the other entity (or other such comparable ownership interest for an entity other than a corporation).
 
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ARTICLE 10
CONFIDENTIALITY AND NON-USE
 
10.1      Mutual Obligation.  Cardinal Health and Client agree that they shall not use the other Party’s Confidential Information (defined below) except as necessary for the receiving Party to perform its obligations under this Agreement or disclose the other Party’s Confidential Information to any third party without the prior written consent of the other Party except as required by law, regulation or court or administrative order; provided, however, that prior to making any such legally required disclosure, the Party making such disclosure shall give the other Party as much prior notice of the requirement for and contents of such disclosure as is practicable under the circumstances so that the other Party may seek, prior to disclosure, and at the other Party’s sole expense, a protective order or other appropriate remedy.  If, failing the entry of a protective order hereunder, the Party making such disclosure is, in the advice of its legal counsel, legally compelled to disclose Confidential Information of the other Party, only that portion of such Confidential Information that is legally required to be disclosed shall be so disclosed; provided, that the Party making such disclosure shall exercise its commercially reasonable efforts to seek confidential treatment of such Confidential Information.  Notwithstanding the foregoing, each Party may disclose the other Party’s Confidential Information to any of its Affiliates that (A) need to know such Confidential Information for the purpose of performing under this Agreement, (B) are advised of the contents of this article, and (C) agree to be bound by the terms of this article; provided that such Party shall remain primarily liable for such Affiliate’s breach of such terms.  The receiving Party shall use the same degree of care to protect Confidential Information of the other Party as it uses to protect its own Confidential Information, but no less than a reasonable degree of care.
 
10.2       Definition.  As used in this Agreement, the term “Confidential Information” includes all such information furnished by Cardinal Health or Client, or any of their respective representatives or Affiliates, to the other or its representatives or Affiliates in connection with the services or performance of this Agreement, whether furnished before, on or after the date of this Agreement and furnished in any form, including but not limited to written, verbal, visual, electronic or in any other media or manner.  Confidential Information includes all proprietary technologies, know-how, trade secrets, discoveries, inventions and any other intellectual property (whether or not patented), analyses, compilations, business or technical information and other materials prepared by either Party, or any of their respective representatives, containing or based in whole or in part on any such information furnished by the other Party or its representatives.  Confidential Information also includes the existence of this Agreement and its terms.
 
10.3       Exclusions.  Notwithstanding Section 10.2, Confidential Information does not include information that (A) is or becomes generally available to the public other than as a result of a breach of this Agreement, or (B) is already known by the receiving Party at the time of disclosure as evidenced by the receiving Party’s written records, or (C) becomes available to the receiving Party on a non-confidential basis from a source that is entitled to disclose it on a non-confidential basis, or (D) was or is independently developed by or for the receiving Party without reference to the Confidential Information, as evidenced by the receiving Party’s written records.
 
10.4       No Implied License.  The receiving Party shall obtain no right of any kind or license under any patent application or patent by reason of this Agreement.  All Confidential Information shall remain the sole property of the Party disclosing such information or data.
 
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10.5      Return of Confidential Information.   Upon termination or expiration of this Agreement, the receiving Party shall, upon request, promptly return within [***] days all such information, including any copies thereof, and cease its use or, at the request of the disclosing Party, shall promptly destroy the same and certify such destruction to the disclosing Party; except for a single copy thereof, which may be retained for the sole purpose of determining the scope of the obligations incurred under this Agreement.
 
10.6       Survival.  The Parties intend for this Article 10 to supersede that certain Confidentiality Agreement between the parties dated the 10th day of September, 2019.  The obligations of this Article 10 shall terminate [***] years from the expiration of this Agreement.
 
ARTICLE 11
INDEMNIFICATION
 
11.1     Indemnification by Cardinal Health.  Cardinal Health shall indemnify and hold harmless Client, its Affiliates, and their respective directors, officers, employees and agents (“Client Indemnitees”) from and against any and all suits, claims, losses, demands, liabilities, damages, costs and expenses (including reasonable attorney’ fees) in connection with any suit, demand or action by any third party (“Liabilities”) arising out of or resulting from (A) any breach of its representations, warranties or obligations set forth in this Agreement or (B) any negligence or willful misconduct by Cardinal Health, except to the extent that any of the foregoing arises out of or results from any Client Indemnitee’s negligence, willful misconduct or breach of this Agreement.
 
11.2       Indemnification by Client.  Client shall indemnify and hold harmless Cardinal Health, its Affiliates, and their respective directors, officers, employees and agents (“Cardinal Health Indemnitees”) from and against all Liabilities arising out of or resulting from (A) any breach of its representations, warranties or obligations set forth in this Agreement; (B) any manufacture, sale, promotion, distribution, or shipping or the use of or exposure to the Product or any materials supplied by Client, including, without limitation, product liability or strict liability; (C) Client’s exercise of control over the Services to the extent that Client’s instructions or directions violate applicable law; (D) any actual or alleged infringement or violation of any patent, trade secret, copyright, trademark or other proprietary rights concerning the Product or any materials provided by Client; or (E) any negligence or willful misconduct by Client, except to the extent that any of the foregoing arises out of or results from any Cardinal Health Indemnitee’s negligence, willful misconduct or breach of this Agreement.
 
11.3      Indemnification Procedures.  All indemnification obligations in this Agreement are conditioned upon the Party seeking indemnification:  (A) promptly notifying the indemnifying Party of any claim or liability of which the Party seeking indemnification becomes aware (including a copy of any related complaint, summons, notice or other instrument); provided, however, that failure to provide such notice within a reasonable period of time shall not relieve the indemnifying Party of any of its obligations hereunder except to the extent the indemnifying Party is prejudiced by such failure; (B) reasonably cooperating with the indemnifying Party in the defense of any such claim or liability (at the indemnifying Party’s expense); and (C) not compromising or settling any claim or liability without prior written consent of the indemnifying Party.
 
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ARTICLE 12
LIMITATIONS OF LIABILITY
 
12.1      OTHER THAN N RESPECT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, CARDINAL HEALTH’S TOTAL LIABILITY UNDER THIS AGREEMENT, FOR ANY AND ALL ACTS, OMISSIONS, BREACH OR NEGLIGENCE (EACH, AN “ACT”) OF CARDINAL HEALTH ARISING IN ANY CONTRACT YEAR, WHETHER IN CONTRACT OR TORT, INCLUDING, WITHOUT LIMITATION, ANY OF CARDINAL HEALTH’S INDEMNITY OR OTHER FINANCIAL OBLIGATIONS UNDER ARTICLE 11, SHALL NOT EXCEED THE TOTAL FEES PAID BY CLIENT TO CARDINAL HEALTH DURING THE CONTRACT YEAR (EXCLUDING PASS THROUGH EXPENSES)
.  FOR PURPOSES OF THIS SECTION, (I) ALL LOSSES, LIABILITIES AND EXPENSES RELATING TO AN ACT (COLLECTIVELY, “LIABILITIES”) SHALL BE DEEMED TO ARISE IN THE CONTRACT YEAR IN WHICH CARDINAL HEALTH’S ACT THAT GAVE RISE TO THE LIABILITIES OCCURRED AND NOT WHEN THE LIABILITIES ARE ACTUALLY INCURRED BY CLIENT, AND (II) THE TERM “CONTRACT YEAR” MEANS EACH CONSECUTIVE TWELVE MONTH PERIOD BEGINNING ON THE EFFECTIVE DATE OF THIS AGREEMENT.
 
12.2      NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF PERFORMANCE UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, LOSS OF REVENUES, PROFITS OR DATA, WHETHER IN CONTRACT OR TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
 
12.3      NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THE LIMITATIONS IN THIS ARTICLE 12 SHALL NOT LIMIT CLIENT’S LIABILITY OR RESPONSIBILITY RELATING TO A BREACH OF ITS OBLIGATIONS UNDER SECTIONS 4.1, 4.3, AND 4.4.
 
ARTICLE 13
INSURANCE
 
13.1      Insurance Policies.  During the term of this Agreement, Client shall obtain and maintain the following insurance with limits not less than those specified below:
 
A.           Products and Completed Operations Liability Insurance covering the Products included in this Agreement with a limit of not less than $[***] per occurrence;
 
B.            All-Risk Property Insurance, including transit coverage, in an amount equal to full replacement value covering Client’s property while it is at the 3PL Facility or in transit to or from the 3PL Facility.  Client’s all-risk property insurance shall apply to all losses and be primary (with respect both to any insurance issued to Cardinal Health and to any deductible amount or self-insured amount retained by Cardinal Health) except for losses resulting solely from the gross negligence or willful misconduct of Cardinal Health.
 
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In the event that any of the required policies of insurance are written on a claims-made basis, then such policies shall be maintained during the entire term of this Agreement and for a period of not less than [***] years following the termination or expiration of this Agreement.
 
13.2     Waiver.  Client shall obtain a waiver from any insurance carrier with whom Client carries Property Insurance releasing its subrogation rights against Cardinal Health except for losses resulting solely from the gross negligence or willful misconduct of Cardinal Health.  Client shall not seek reimbursement for any property claim, or portion thereof that is not fully recovered from Client’s property insurance except for losses resulting solely from the gross negligence or willful misconduct of Cardinal Health.
 
13.3      Additional Insured Status.  Cardinal Health, Inc., and its Affiliates shall be named as additional insureds under the Products and Completed Operations Liability insurance policies as respects the Products and completed operations outlined in this Agreement.  Such insurance shall be primary (with respect both to any insurance issued to Cardinal Health and to any self-insured amount retained by Cardinal Health) with regard to Cardinal Health’s liability for damage arising out of those products for which they have been added as additional insureds.  Such additional insurance status shall continue during the term and, if the policies are written on a claims-made basis, shall continue for not less than [***] years following termination or expiration of this Agreement.
 
13.4      Certificates.  Client shall furnish certificates of insurance to Cardinal Health evidencing the required insurance and additional insured status as soon as practicable after the Effective Date and within [***] days after renewal of such policies.  Such certificates shall state that Client’s insurers will endeavor to provide [***] days written notice of any cancellation prior to the policy(ies) expiration date(s).  Each insurance policy that is required under this article shall be obtained from an insurance carrier with an A.M. Best rating of at least [***].
 
ARTICLE 14
NOTICES
 
All notices and other communications hereunder shall be in writing and shall be deemed given:  (A) when delivered personally; (B) when delivered by facsimile transmission (receipt verified); (C) when received or refused, if mailed by registered or certified mail (return receipt requested), postage prepaid; or (D) when delivered if sent by express courier service, to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice; provided, that notices of a change of address shall be effective only upon receipt thereof):
 
To Client:
Chiasma, Inc.
140 Kendrick Street
Building C East
Needham, Massachusetts 02494
Attn:  VP, Finance

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With a copy to:
Chiasma, Inc
140 Kendrick Street
Building C East|
Needham, Massachusetts 02494|
Atm:  General Counsel
   
To Cardinal Health:
Cardinal Health 105, Inc.
Third-Party Logistics Services
501 Mason Road, Suite 200
La Vergne, TN 37086
Atm:  VP, Operations
   
With a copy to:
Cardinal Health, Inc.
7000 Cardinal Place
Dublin, Ohio 43017
Attn: Associate General Counsel
Facsimile:  (624) 757-8919
 
ARTICLE 15
MISCELLANEOUS
 
15.1      Entire Agreement; Amendments.  This Agreement, the attachments and any amendments thereto constitute the entire understanding between the Parties and supersede any contracts, agreements or understanding (oral or written) of the Parties with respect to the subject matter hereof.  No term of this Agreement may be amended except upon written agreement of both Parties, unless otherwise provided in this Agreement.
 
15.2       Captions.  The captions in this Agreement are for convenience only and are not to be interpreted or construed as a substantive part of this Agreement.
 
15.3       Further Assurances.  The Parties agree to execute, acknowledge and deliver such further instruments and to take all such other incidental acts as may be reasonably necessary or appropriate to carry out the purpose and intent of this Agreement.
 
15.4       No Waiver.  Failure by either Party to insist upon strict compliance with any term of this Agreement in any one or more instances shall not be deemed to be a waiver of its rights to insist upon such strict compliance with respect to any subsequent failure.
 
15.5       Severability.  If any term of this Agreement is declared invalid or unenforceable by a court or other body of competent jurisdiction, the remaining terms of this Agreement shall continue in full force and effect.
 
15.6     Independent Contractors.  The relationship of the Parties is that of independent contractors, and neither Party shall incur any debts or make any commitments for the other Party except to the extent expressly provided in this Agreement.  Nothing in this Agreement is intended to create or shall be construed as creating between the Parties the relationship of joint venturers, co-partners, employer/employee or principal and agent.
 
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15.7      Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties, their successors and permitted assigns.  Neither Party may assign this Agreement, in whole or in part, without the prior written consent of the other Party, except that either Party may, without the other Party’s consent, assign this Agreement to an Affiliate or to a successor to substantially all of the business or assets of the assigning company to which this Agreement relates.
 
15.8       Governing Law.  This Agreement shall be governed by and construed under the laws of the State of New York, excluding its conflicts of law provisions.  The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.
 
15.9       Dispute Resolution.  If any dispute, controversy or disagreement arises between the Parties (“Dispute”), such Dispute shall be presented to the respective presidents or senior executives of Cardinal Health and Client for their consideration and resolution.  If such Parties cannot reach a resolution of the Dispute within [***] days, either Party may submit the Dispute to a court of appropriate jurisdiction.
 
15.10     Prevailing Party.  In any dispute resolution proceeding between the Parties in connection with this Agreement, the prevailing Party shall be entitled to its reasonable attorney’s fees and costs in such proceeding
 
15.11    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  Any photocopy, facsimile or electronic reproduction of the executed Agreement shall constitute an original.
 
15.12     Publicity.  Neither Party shall make any press release or other public disclosure regarding this Agreement or the transactions contemplated hereby without the other Party’s express prior written consent, except as required under applicable law or by any governmental agency, in which case the Party required to make the press release or public disclosure shall use commercially reasonable efforts to obtain the approval of the other Party as to the form, nature and extent of the press release or public disclosure prior to issuing the press release or making the public disclosure.
 
15.13    Setoff.  Without limiting Cardinal Health’s rights under law or in equity, Cardinal Health and its Affiliates, parent or related entities, collectively or individually, may exercise a right of setoff against any and all amounts due to Cardinal Health from Client.  For purposes of this section, Cardinal Health, its Affiliates, parent or related entities shall be deemed to be a single creditor.
 
15.14     Survival.  The rights and obligations of the Parties shall continue under Articles 9 (Trademarks), 10 (Confidentiality and Non-Use), to the extent expressly stated therein, 11 (Indemnification), 12 (Limitations of Liability), 13 (Insurance), 14 (Notice) 15 (Miscellaneous), 4.3 (Security) and Section 6.4 (Effect of Termination), notwithstanding expiration or termination of this Agreement.

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15.15     Force Majeure.  Except as to payments required under this Agreement, neither Party shall be liable in damages for, nor shall this Agreement be terminable or cancelable by reason of, any delay or default in such Party’s performance hereunder if such default or delay is caused by events beyond such Party’s reasonable control including, but not limited to, acts of God, regulation or law or other action or failure to act of any government or agency thereof, war or insurrection, civil commotion, destruction of production facilities or materials by earthquake, fire, flood or storm, labor disturbances, epidemic, or failure of suppliers, public utilities or common carriers; provided however, that the Party seeking relief hereunder shall immediately notify the other Party of such cause(s) beyond such Party’s reasonable control.  The Party that may invoke this section shall use all reasonable endeavors to promptly reinstate its ongoing obligations to the other.  If the cause(s) shall continue unabated for [***] days, then either Party may, upon written notice to the other, immediately terminate this Agreement.
 
IN WITNESS WHEREOF, the undersigned have caused their duly authorized representative to execute this Agreement effective as of the date first written above.
 
CARDINAL HEALTH 105, INC,
  
CHIASMA, INC.
         
By:
/s/ Joel Wayment          
  
By:
/s/ Mark Fitzpatrick
  

Joel Wayment
Print Name:
 Mark Fitzpatrick

VP, Operations
Title:
 President
     
Date:
 Jun 23, 2020
Date:
 Jun 23, 2020
 
< Signature Page to Exclusive Distribution Agreement >
 
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EXHIBIT A
 
TRADITIONAL 3PL OPERATING GUIDELINES
 
The OPG shall be finalized and mutually agreed upon between the Parties prior to the commercial launch of Product.  Once finalized, a copy of the OPG shall be attached hereto as Exhibit A and incorporated by reference.
 

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Exhibit 4.19
 
Pursuant to 17 CFR 229.601(b)(10)(iv), confidential information (indicated by [***]) has been omitted from this exhibit because it is both not material and would likely cause competitive harm to the registrant if publicly disclosed.
 
SPECIALTY PHARMACY PROVIDER DISPENSING AND SERVICES MASTER AGREEMENT
 
THIS PRODUCT PURCHASE AND PHARMACY SERVICES MASTER AGREEMENT (“Agreement”) dated as of August _21_, 2020 (“Effective Date”) is made and entered in to by and between Chiasma, Inc., a Delaware corporation, with its principal place of business located at 140 Kendrick Street, Bldg C East, Needham, MA 02494 (“Manufacturer”), and AcariaHealth, Inc., a Delaware corporation with its principal place of business at 8427 Southpark Circle, Bldg. 300, Suite 400, Orlando, FL 32819 (individually, and together with its Approved Facilities as defined herein (“Pharmacy”)).  Each of Manufacturer and Pharmacy may be referred to herein individually as a “Party,” and collectively as the “Parties.”
 
RECITALS
 
WHEREAS, , Manufacturer has obtained approval for its new drug application (“NDA”) from the Food and Drug Administration (“FDA”) for the Product (as defined below);
 
WHEREAS, , Manufacturer will administer a distribution program under which it will sell Product directly to certain contracted specialty pharmacies (“SPs”), which SPs will dispense the Product in the Territory (as defined below) subject to the terms and conditions substantially similar to those contained in this Agreement;
 
WHEREAS, Pharmacy owns and operates one or more licensed SPs that dispenses to patients certain biopharmaceutical products within the Territory;
 
WHEREAS, Pharmacy shall purchase and dispense the Product to patients pursuant to a valid prescription subject to the terms of this Agreement;
 
WHEREAS, Pharmacy has the experience, qualified and trained staff, and data and technology systems to provide services necessary for the safe and effective distribution of the Product to patients pursuant to a valid prescription, subject to the terms and conditions of this Agreement;
 
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the Parties hereby agree as follows:
 
AGREEMENT
 
1.
Pharmacy Product Purchasing Obligations.
 
(a)           Purchase and Sale of Product.  Subject to the terms and conditions of this Agreement, for the Term (defined below), Pharmacy shall purchase from Manufacturer, and Manufacturer shall sell to Pharmacy, the novel biopharmaceutical product as set forth on attached Exhibit A (“Product”) pursuant to the Terms and Conditions of Sale (the “Sales Terms”) as attached as Exhibit B hereto.  Manufacturer reserves the right to add any new FDA-approved strength or package size of Product to this Agreement at Manufacturer’s sole discretion and with [***] days’ prior written notice to Pharmacy, and at the same terms and conditions as the existing Product(s) in this Agreement.  Manufacturer shall provide Pharmacy written notice of any such addition by providing Pharmacy with a revised version of Exhibit A, pursuant to the terms hereof The Parties intend for the express terms and conditions contained in this Agreement and the Sales Terms to exclusively govern and control each of the Parties’ respective rights and obligations regarding the purchase and sale of the Product.  In the event of a conflict between this Agreement and the Sale Terms, the terms of this Agreement shall prevail.
 
(b)         Distribution.   Subject to the terms and conditions of this Agreement, for the Term, Manufacturer appoints Pharmacy as a non-exclusive pharmacy of the Product to patients in the Territory.  As used herein, the term “Territory” shall mean the United States of America and Puerto Rico.  Further, Pharmacy may only sell and dispense the Product to patients, and shall not, during the Term or thereafter sell or distribute, or offer to sell or distribute, the Product to any other person or entity including, but not limited to, other distributors, wholesalers, pharmacies, or SPs, or otherwise outside of the Territory.  Pharmacy shall not:  (i) appoint any subdistributor or other person or entity to market, sell or distribute the Product; or (ii) sell the Product to any person or entity who Pharmacy knows or has reason to believe is purchasing Product for distribution to persons other than patients or outside the Territory.
 
(c)          Relationship between Parties.  The Parties to this Agreement are independent contractors and nothing in this Agreement shall be deemed or constructed as creating a joint venture, partnership, agency relationship, franchise, or business opportunity between Manufacturer and Pharmacy.  Neither Party, by virtue of this Agreement, will have any right, power or authority to act or create an obligation, express or implied, on behalf of the other Party.  Each Party assumes responsibility for the actions of their personnel and representatives under this Agreement and will be solely responsible for their supervision, daily direction and control, wage rates, withholding income taxes, disability benefits, or the manner and means through which the work under this Agreement will be accomplished.  Except as provided otherwise in this Agreement, Pharmacy has the sole discretion to determine Pharmacy’s methods of operation, Pharmacy’s accounting practices, the types and amounts of insurance Pharmacy carries, Pharmacy’s personnel practices, Pharmacy’s advertising and promotion, and Pharmacy’s customers.  The relationship created hereby between the Parties is solely that of seller and distributor.  If any provision of this Agreement is deemed to create a franchise relationship between the Parties, then the Parties shall negotiate in good faith to modify this Agreement so as to effect the Parties’ original intent as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as a pharmacy agreement and not a franchise agreement.
 
2.
Product Sourcing and Purchase Orders.
 
(a)          Sourcing.  Pharmacy shall not purchase Product from any other person or entity other than the Manufacturer or a distributor designated in writing by the Manufacturer.  Pharmacy shall not market, sell, distribute, or trade any Product other than pursuant to the terms of this Agreement or as directed by Manufacturer, unless Manufacturer consents in writing, which consent may be withheld in Manufacturer’s sole discretion.
 
(b)          Order Requirements.  Each purchase order submitted by Pharmacy hereunder is subject to minimum/multiple order quantity requirements as determined by Manufacturer in its reasonable discretion, and Manufacturer reserves the right to reject, fully or partially, any purchase order submitted by Pharmacy hereunder.  In the event of a shortage in the supply of Product, Manufacturer may allocate sales of such Product among its customers in its sole discretion.
 
(c)          Purchase Orders.  Subject to the terms of this Agreement, and from time to time during the Term, Pharmacy may issue a purchase order to Manufacturer or its designee, in written or electronic form via EDI/facsimile (preferred) or e-mail, using Manufacturer’s standard purchase order form.  Any variations made to the terms and conditions of this Agreement or the Sales Terms by Pharmacy or any other person or entity in any purchase order or any other document are void and have no effect.  Each purchase order submitted by Pharmacy shall specify at least (i) the quantity of Product ordered; (ii) desired delivery date; and (iii) delivery point.  Manufacturer or its designee shall confirm to Pharmacy the receipt of each purchase order issued hereunder (each, a “Confirmation”) within [***] days following Manufacturer’s or it’s designee’s receipt thereof in written form via EDI/facsimile.  Each Confirmation will reference the purchase order submitted by Pharmacy, confirm acceptance of the purchase order or advise Pharmacy of Manufacturer’s rejection of such purchase order, the date of acceptance or rejection and the basis for rejection.  If Manufacturer or its designee fails to issue a Confirmation within the time set forth herein Manufacturer will be deemed to have rejected the purchase order.  Pharmacy has no right to cancel or amend any purchase order submitted by it.
 
(d)          Shipment and Delivery.  All Product ordered by Pharmacy hereunder will be shipped by Manufacturer or its designee to the delivery point, which shall be an Approved Facility (defined below) as identified in the relevant purchase order.  The delivery terms shall be “Free On Board” (FOB) Pharmacy’s destination.  For purposes of this Agreement, the term “Free On Board, Pharmacy’s destination” means that Manufacturer shall:  (i) bear all costs associated with shipping Product to Pharmacy’s designated facility (which may be Pharmacy or an Approved Facility); (ii) retain title to the Product and bear the risk of loss of same until Pharmacy or the Approved Facility takes possession of the Product; and (iii) be responsible for insuring Product while in transit.  Pharmacy shall be entitled to designate more than one of its Approved Facilities for receipt of the Product, on the relevant purchase order.  Each shipment shall be made by means of transportation determined by Manufacturer or its designee to best ensure the safety and efficacy of the Product.  Should Pharmacy request expedited shipments, Manufacturer may charge, in its sole discretion, Pharmacy additional shipping and handling charges incurred by each such expedited order, and Pharmacy shall pay such additional costs pursuant to the terms herein.  As used in this Agreement, “Approved Facility” shall mean those pharmacies listed in Exhibit C.  No location or facility, regardless of whether it is owned or controlled by Pharmacy shall be deemed an Approved Facility unless approved in writing by Manufacturer, which approval shall be in the sole discretion of Manufacturer.
 
3.
Payment Terms.
 
(a)          Price and Payment.  Subject to the terms of this Agreement, the price (the “Price”) for Product purchased hereunder shall be the wholesale acquisition price (“WAC”), as modified from time to time by Manufacturer, in its sole discretion, upon written notice to Pharmacy.  For each Product shipment, Manufacturer shall invoice Pharmacy for the Price and any applicable taxes or other charges.  Each Manufacturer invoice for Product shall be due and payable by Pharmacy within [***] days after the date of invoice.  If Pharmacy pays such invoice within [***] days of Pharmacy’s receipt of such invoice, Pharmacy shall be entitled to [***] discount off the relevant invoice amount.  Pharmacy may deduct such discount from the invoiced amount payable to Manufacturer, but only as to the specific invoice that is discounted hereunder.  All of Manufacturer’s invoices for Product shall reflect the payment terms and dating set forth hereunder, including the actual calendar date of payment expected for each invoice.
 
(b)            Late Payment.  Pharmacy shall pay interest on all late payments, calculated daily and compounded monthly, at the lesser of the rate of [***] per month or the highest rate permissible under applicable Law.  Pharmacy shall also reimburse Manufacturer for all costs reasonably incurred in collecting any late payments, including, without limitation, attorneys’ fees.  In addition to all other remedies available under this Agreement or at law, Manufacturer may (i) suspend the delivery of any Product if Pharmacy fails to pay any amounts when due under this Agreement; or (ii) terminate this Agreement.
 
(c)           No Setoff.  Pharmacy shall perform its obligations, including payment obligation, under this Agreement without setoff, deduction, recoupment or withholding of any kind for amounts owed or payable by Manufacturer to Pharmacy.
 
4.
Recall. Pharmacy shall notify Manufacturer no later than [***] of becoming aware of any incident necessitating any corrective action affecting any Product, whether or not initiated by Pharmacy, or mandated by relevant regulatory authorities in the Territory. In the event of a market withdrawal, recall, return, or quarantine of the Product, Manufacturer shall notify the Pharmacy in writing within [***] days of such event and provide written instructions on how Pharmacy is to assist in implementing the return or quarantine of the Product.  Manufacturer will, at its sole discretion, determine, what, if any assistance is needed and do so on a case-by-case basis.  Pharmacy will assist and perform all reasonable activities, and Manufacturer will reimburse Pharmacy for its reasonable documented costs associated with such actions.  Pharmacy shall submit invoice for such expenses including supporting documentation within [***] days of incurring such expense.

5.
Returns.  Any Product returns to be made by the Pharmacy to the Manufacturer will be subject to the Manufacturer Return Goods Policy (current version attached in Exhibit H).  The Manufacturer’s return goods policy is subject to change at any point in Manufacturer’s sole discretion.  Any changes to such policy shall be effective on Manufacturer’s dispatch of such revised policy.

6.
No Disadvantage.  Pharmacy shall not take any action to disadvantage or otherwise adversely impact the Product, including internal compensation practices; provided, that this Section 6 shall not be deemed to preclude Pharmacy from:  (i) recommending use of a competitive product to an individual patient where use of the Product is clinically inappropriate for such patient (including, but not limited to, where Pharmacy’s pharmacist or the patient’s physician has concerns with drug interactions with other prescription or over-the-counter drug products or with contraindications for the Product), or otherwise answering individual patients’ questions and counseling individual patients with respect to the Product and competitive products, in accordance with Pharmacy’s pharmacists’ professional responsibilities and judgment; (ii) selling or dispensing competitive products; or (iii) communicating to patients or prescribers information on coverage of Product and competitive products by the third party payer for an individual patient, including third party payer formulary information and information on competitive product(s) covered alternatives.

7.
Storage and Handling.  Pharmacy shall keep Product inventory in good and safe condition so to prevent adulteration and changes in efficacy of the Product, and shall permit inspection of Product inventory and existing inventory records by Manufacturer or its designee during normal business hours upon [***] days’ advance written notice by Manufacturer.  Pharmacy shall comply with the information and recommendations set forth on Product labeling or inserts or otherwise communicated by Manufacturer in writing with respect to storage, handling, and shipment of Product.  Pharmacy shall be responsible for all costs associated with storage and handling of Product at an Approved Facility.  Pharmacy shall store Product at 36° to 46°F (2° to 8°C), shall keep Product refrigerated and not frozen, and shall monitor the Product’s storage environment on a continuous basis.  Pharmacy shall maintain temperature monitoring records for its storage of the Product, and shall keep such records pursuant to the terms of this Agreement.  In case of any deviation from the required storage temperature range or the storage, handling or shipment information and recommendations set forth on Product labeling, inserts or otherwise communicated by Manufacturer, the Pharmacy shall, within [***] of such event, notify the Manufacturer in writing of such deviation.

8.
Own Use.  Pharmacy agrees that the Product purchased by Pharmacy hereunder will be sold or dispensed solely by Pharmacy to patients who obtain the Product directly from the Pharmacy pursuant to a valid prescription.  Pharmacy shall not wholesale the Product nor shall it sell or transfer Product to any person or entity other than a patient or to Pharmacy’s Approved Facilities.
 
9.
Pharmacy Distribution of Product.  Pharmacy shall ship initial prescriptions of Product to patient within agreed-upon Key Performance Indicators (“KPIs”) as provided on attached Exhibit I, however, it is ultimately patient’s decision that will determine when Product shipment to such patient will be made.  Pharmacy shall use commercially reasonable efforts to ship the Product such that the Product having the earliest expiration date is shipped first from available inventory.  Pharmacy shall ship Product to patients via an industry-recognized overnight delivery carrier capable of order delivery tracking and in accordance with a valid prescription, Product label or insert requirements, relevant terms of this Agreement, applicable laws and regulations, guidelines and standards applicable to Manufacturer and Pharmacy.  Pharmacy’s distribution records shall be traceable and include as a minimum:  (a) date of distribution; (b) identification of distributed Product including quantities, patient details, prescription detail, labelling records (if applicable); and (c) shipping configuration.  Pharmacy will ship the Product in qualified shippers using cold chain shipping in accordance with the storage and shipping requirements on the Product label, and shall take all necessary measures to prevent the Product from adulteration, damage, spoilage or deterioration during the shipment to the patient.  Prior to using any shipper, Pharmacy shall provide to Manufacturer relevant information about such shipper to ensure that it is qualified and appropriate for the Product and will prevent storage temperature deviation while the Product is in transit to the patient.  Manufacturer may reject any shipper in its reasonable discretion, and Pharmacy shall not use any shipper rejected by Manufacturer.
 
10.
Inventory.  Pharmacy shall maintain all licenses, registrations, certifications, and other qualifications required by applicable federal, state, and local law for Pharmacy to purchase, store, sell, distribute, handle, ship, and dispense Product and otherwise be able to perform its obligations hereunder, including, but not limited to qualifications required by the Federal Food, Drug, and Cosmetic Act, the Drug Supply Chain Security Act, the FDA’s implanting regulations, and the Drug Enforcement Administration’s regulations.  Pharmacy shall provide documentation of all such qualifications to Manufacturer within [***] days of Manufacturer’s written request.  Pharmacy shall provide standard and recognized pharmacy functions including adequate and customary warehousing facilities to store Product under appropriate conditions as provided herein, and in accordance with Manufacturer instructions, Product requirements, Product labels, and shall maintain an adequately trained and appropriately licensed staff to fulfill patient orders.  Pharmacy shall use commercially reasonable and good faith efforts to ensure it maintains sufficient Product inventory.  Pharmacy shall not forward buy, speculate or take any other action that would cause it to stock Product in an amount that exceeds Pharmacy’s customers’ usual or reasonable demand.  Pharmacy shall dispense Product by National Drug Code number and shall utilize a First Expiry First Out (FEFO), when feasible within its rotation management system and a First In First Out (FIFO) if unable to do so.  At all times during the Term, Pharmacy shall maintain a combined minimum and maximum Days on Hand (as defined below) of no less than [***] and no more than [***] days’ inventory.  For such purposes, “Days on Hand” shall mean the Approved Facility’s inventory on the date measured, divided by the Approved Facility’s average daily sales of the Product over the most recent [***] week period, rounded up to the nearest whole number.  Pharmacy may adjust its calculation of Days on Hand at an Approved Site upon Manufacturer’s written approval (which approval is subject to Manufacturer’s reasonable discretion), in the event Pharmacy requires more or fewer Days on Hand than Manufacturer’s recommendation hereunder.  Upon Manufacturer’s written consent, which consent shall not be unreasonably withheld, delayed or conditioned, Pharmacy may transfer Product from one Approved Site to another as it deems reasonably necessary for normal course of business.

11.
Pharmacy Services.
 
(a)           Core Services.  Pharmacy will perform the core pharmacy activities (the Core Services”) in accordance with this Agreement and as outlined in in the Statement of Work (“SOW”) attached hereto as Exhibit F.  The Parties shall, in accordance with Exhibit F, mutually agree upon pharmacy activities, business rules, detailed procedures, and KPIs that will be part of the SOW.  Pharmacy acknowledges that the Core Services under the SOW require oversight of a designated Pharmacy staff member, and Pharmacy will designate a supervisory (or equivalent) individual to ensure the Core Services are carried out as subject to this Agreement and the SOW.  Such designated individual should ensure that the Pharmacy’s Standard Operating Procedures that relate to the Product are consistent with Product requirements as outlined in this Agreement and the SOW.
 
(b)         Enhanced Pharmacy Services.  Pharmacy and Manufacturer may execute, from time to time, additional statements of work for enhanced pharmacy services (the “Enhanced Services”), in addition to the Core Services.  The Parties agree and acknowledge that all Enhanced Services will (i) be legitimate, commercially reasonable, and necessary services; (ii) not be intended to serve, either directly or indirectly, as a means of marketing the Product; (iii) not diminish the objectivity or professional judgment of Pharmacy or its personnel; (iv) not involve the counseling or promotion of any off-label use of the Product; and (v) not involve the counseling or promotion of a business arrangement or other activity that violates any applicable Law (defined below).  Each statement of work for Enhanced Services shall be in writing and signed by both Parties.  Unless otherwise agreed by the Parties, each such statement of work shall include, without limitation, the following with regard to the Enhanced Services covered therein:  (i) a detailed description of the Enhanced Services; (ii) the schedule or term for performance of the Enhanced Services; and (iii) the fees, reimbursable expenses and other compensation payable by Manufacturer to Pharmacy for the Enhanced Services.  Pharmacy shall use commercially reasonable efforts to perform the Enhanced Services in accordance with any schedule set forth in the applicable statement of work for the Enhanced Services.  Any change in the Enhanced Services shall be subject to agreement of the Parties.  If any agreed-upon change in the Enhanced Services causes an increase or decrease in the time required for the performance of any Enhanced Services or in Pharmacy’s costs to perform any Enhanced Services, then the schedules for performance of such Enhanced Services and the compensation payable to Pharmacy shall be equitably adjusted by the Parties.  If the Parties agree upon any such change and related adjustments, the Parties shall prepare, agree upon and sign an amendment to the applicable statement of work for such Enhanced Services.
 
12.
Term and Termination.
 
(a)           Term.  This Agreement shall have an initial term of [***] years from the Effective Date and shall automatically renew for successive one (1) year renewal terms unless either Party sends a written notice of non-renewal to the other Party at least [***] days prior to the expiration of the initial term or applicable renewal term (the initial term and each renewal term is the “Term”).
 
(b)            Termination without Cause.  Either Party may terminate this Agreement without cause with [***] days prior written notice to the other Party.
 
(c)         Termination for Cause.  Either Party may terminate this Agreement upon the occurrence of a material breach by the other Party.  The non-breaching Party must give written notice to the breaching Party of the nature and occurrence of such breach.  If the breach is not cured within [***] days of such written notice, or if the breach cannot reasonably be cured within such [***] day period (in the reasonable discretion of the non-breaching Party), then the non-breaching Party may provide written notice to the breaching Party that this Agreement will be terminated with immediate effect.  Notwithstanding the forgoing, either Party may effect an immediate termination of this Agreement upon written notice to the other Party if the other Party (i) shall be dissolved or apply for or consent to the appointment of a receiver, trustee or liquidator of all or a substantial part of its assets; (ii) file a voluntary petition in bankruptcy; (iii) admit in writing its inability to pay its debts as they become due; (iv) make a general assignment for the benefit of creditors; (v) file a petition or an answer seeking reorganization or arrangement with creditors or taking advantage of any insolvency law; or (vi) if an order judgment or decree shall be entered by a court of competent jurisdiction, on the application of a creditor, adjudicating such Party as bankrupt or insolvent or approving a petition seeking reorganization of such Party or appointing a receiver, trustee or liquidator of such Party of all or a substantial part of its assets.
 
(d)           Effect of Expiration or Termination.  Expiration or termination of this Agreement does not affect any rights or obligations that:  (i) are to survive the termination of this Agreement pursuant to the terms hereof; or (ii) were incurred by the Parties before the termination; provided, that, all indebtedness of Pharmacy to Manufacturer of any kind is due and payable as of the effective date of the Term’s expiration or termination, without further written notice to Pharmacy.  Further, expiration or termination of this Agreement shall be effective to terminate all then-active but unfilled purchase orders and SOWs for Core Services and Enhanced Services, as applicable.  On the expiration or earlier termination of this Agreement, Pharmacy shall, as of the date of expiration or termination:  (i) cease to represent itself as a distributor or dispenser of Product, and shall otherwise desist from all conduct or representations that might lead the public to believe that Pharmacy is authorized by Manufacturer to dispense or sell the Product; (ii) return to Manufacturer all documents and tangible materials (and any copies) containing, reflecting, incorporating, or based on Manufacturer’s Confidential Information (defined below); (iii) permanently erase all of Manufacturer’s Confidential Information from its computer systems; and (iv) certify in writing to Manufacturer that it has complied with the requirements of this Section 12(d).  The Party terminating this Agreement, or in the case of the expiration of this Agreement, each Party, shall not be liable to the other Party for any damage of any kind (whether direct or indirect) incurred by the other Party solely by reason of the expiration or earlier termination of this Agreement.
 
13.
Adverse Event and Product Complaint Reporting.  Pharmacy shall make adverse event and product complaint reports in accordance with Manufacturer process as outlined in attached Exhibit G.

14.
Mutual Representations, Warranties, and Covenants.
 
(a)          Mutual Compliance with Law.  The Parties will comply with all applicable federal, state, and local laws and regulations connected with or related to the purchase, warehousing, distribution, sale or destruction of Product purchased under, and services provided pursuant to, this Agreement or a SOW, including, but not limited to, the Federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b), the Federal Food, Drug, and Cosmetic Act (21 USC §§ 301 et seq) (“FDCA”), the Public Contracts Anti-Kickback Act (41 U.S.C. § 51 et seq.), the Stark Law (42 U.S.C. § 1395nn), the provisions of the Health Insurance Portability and Accountability Act of 1996 related to the privacy and security of protected health information (“HIPAA”), board of pharmacy regulations, and any and all laws, regulations or rules relating to the terms of this Agreement or SOW, as required (each, and collectively, and with any and all other applicable laws and regulations, the “Laws”).  The Parties shall comply fully with the provisions of all applicable federal, state, and local laws and regulations and shall obtain and maintain all federal, state and local approvals, licenses, permits, and certifications required for their respective operations.  Neither Party shall undertake any activities which contravene this Section 14(a) in the performance of this Agreement or a SOW.  Each Party shall notify the other in writing, within [***] Business Days (as used herein “Business Day” means any day that is not a Saturday, Sunday or U.S. Federal holiday) of any suspension, revocation, condition, limitation, qualification or other restriction on any such approval, license, permit, or certification which would impede that Party in the performance of its obligations under this Agreement or SOW.
 
(b)           Authority.  Each Party represents and warrants to the other Party that:  (i) it has the authority to enter into this Agreement; (ii) it has taken all action necessary to authorize the execution and delivery of this Agreement; (iii) this Agreement constitutes the legal, valid and binding obligation of it, enforceable against it in accordance with its terms; and (iv) its execution of this Agreement and its performance of its obligations hereunder do not conflict with and are not prohibited by or inconsistent with any other agreement to which it is a party.  Each Party further represents and warrants that the performance of its other obligations under this Agreement are neither (i) inconsistent with its obligations to any third party, including without limitation its customers; nor (ii) in any manner inconsistent with any Laws.
 
(c)          Independent Judgment.  The Parties acknowledge that any discount offered under this Agreement is not intended to usurp the independent professional or clinical decision-making of any Pharmacy employee or health care professional, or interfere with the formulary plan benefit design of payers.  Any such discount shall be offered, provided, and received in a manner that satisfies the Anti-Kickback safe-harbor requirements set forth at 42 C.F.R. § 1001.952(h) and the terms of this Agreement.
 
(d)            Exclusion.  Each Party represents and warrants that neither it nor any of its employees or representatives has been or is debarred pursuant to the FDCA or has been or is excluded from participating in a federal or state health care program, including without limitation the Medicare and Medicaid programs.  Each Party further covenants that in the event it or any of its employees or representatives are debarred under the FDCA or excluded from a federal or state health care program during the term hereof, it shall notify the other in writing within [***] days of becoming aware of such debarment or exclusion.  Notwithstanding anything to the contrary in this Agreement, debarment or exclusion of a Party shall be cause for immediate termination of this Agreement.
 
15.
Manufacturer Representations and Warranties.  Manufacturer represents and warrants to Pharmacy that (i) Pharmacy will have good title to the Product, free and clear of all security interests, liens or other encumbrances of any kind or character, when delivered to Pharmacy under this Agreement; (ii) Manufacturer has, and at all times during the Term shall maintain, all relevant governmental licenses, permits, and approvals required to market, promote, offer for sale and sell Product in the Territory and to conduct all other activities required under this Agreement; (iii) Manufacturer will comply with all Laws applicable to the promoting and distributing of the Product; and (iv) Product supplied will be in conformity with Product specifications set forth in the approved Product labeling and with applicable Laws.  Manufacturer further represents that each shipment of Product delivered pursuant to this Agreement may, as of the date of delivery, be introduced or delivered into interstate commerce pursuant to applicable federal, state and local laws, including applicable provisions of the FDCA, the Federal Public Health Service Act, and their implementing regulations, each as amended and in effect from time to time and will not, on the date of shipment by Manufacturer, be adulterated, misbranded or otherwise prohibited under applicable Laws in effect at the time of shipment of such Product.  THE WARRANTIES CONTAINED IN THIS SECTION 15 ARE THE SOLE AND EXCLUSIVE WARRANTIES GIVEN BY MANUFACTURER WITH RESPECT TO THE PRODUCT, AND PHARMACY’S SOLE AND EXCLUSIVE REMEDY FOR MANUFACTURER’S BREACH OF THIS WARRANTY IS THE REFUND OF THE PURCHASE PRICE OR REPLACEMENT OF ANY PRODUCT THAT DOES NOT CONFORM TO THIS WARRANTY, IN MANUFACTURER’S REASONABLE DISCRETION.  EXCEPT AS PROVIDED HEREIN, MANUFACTURER EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE PRODUCT AND ANY OTHER MATERIALS, INFORMATION, TECHNICAL INFORMATION, OR KNOW-HOW, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, LOST PROFIT OR PUNITIVE DAMAGES OF ANY KIND IN CONNECTION WITH THIS AGREEMENT OR ANY SALE OF PRODUCT HEREUNDER.  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE WARRANTIES PROVIDED IN THIS SECTION 15 SHALL TERMINATE AS TO EACH SPECIFIC DELIVERED PRODUCT UPON THE EARLIER OF DELIVERY OF THE PRODUCT TO A PATIENT BY PHARMACY OR THE EXPIRATION DATE STATED ON THE PACKAGING FOR SUCH PRODUCT.  NO REPRESENTATIVE OR OTHER PERSON ASSOCIATED WITH MANUFACTURER IS AUTHORIZED TO MODIFY ANY PART OF THIS SECTION 15 OR TO MAKE ANY WARRANTY REGARDING THE PRODUCTS.

16.
Pharmacy Representations, Warranties and Covenants.
 
(a)          Pharmacy Discount Reporting Obligations.  Pharmacy acknowledges that any discounts offered under this Agreement and reflected on a relevant invoice are discounts within the meaning of the Federal Anti-Kickback Statute (Section 1128(b) of the Social Security Act (42 U.S.C. §1320a-7(b)), and within the meaning of its implementing safe harbor regulation for discounts (42 C.F.R. §1001.952(h)).  Pharmacy further acknowledges its responsibility under applicable federal law and state laws to properly and accurately account for and report such discounts in accordance with the requirements of such laws and applicable safe harbor regulations.  Pharmacy agrees that, upon the request of the U.S. Department of Health and Human Services or a state healthcare agency, it will fully disclose any discounts offered pursuant to this Agreement.
 
(b)          Limitation of Discount.  Regardless of any other provision of this Agreement, the total of any rebates, discounts or other reductions to any invoice rendered to Pharmacy for purchases of Product hereunder shall not in any [***] day period of the Term result in the establishment of a selling price for the Product that either (i) increases Manufacturer’s statutorily-mandated rebates for the Product over what they would otherwise be but for this Agreement; or (ii) triggers any statutory or regulatory obligation of Manufacturer to offer a similar price for the Product to any other party.  If necessary to avoid the establishment of any such price, the total of any rebates, discounts or other reductions in price for the Product(s) shall automatically be reduced to the highest level that avoids the establishment of such a reduced price set forth above.  Notwithstanding anything to the contrary in this Agreement, Manufacturer may terminate this Agreement with respect to the affected Product(s) or in total within [***] days after written notification to Pharmacy that such a reduced price has been established hereunder.
 
(c)          Compliance with Law.  Pharmacy shall comply with all Laws connected with or related to the purchase, warehousing, distribution, sale or destruction of Product purchased under this Agreement.  Pharmacy shall advise Manufacturer in writing within [***] Business Days of the relevant event, of (i) changes in status with the FDA or other relevant local, state or federal agencies; (ii) changes to any registration number(s) assigned to Pharmacy by the Drug Enforcement Administration (“DEA”); (iii) any denial, revocation, or suspension of registration by the DEA or similar agencies that may govern Pharmacy’s ability to legally do business; or (iv) any audit or investigation of its facilities (whether Approved Facilities or otherwise) or operations by any relevant federal or state agency with findings related to the Product.
 
(d)         Quality and Regulatory Requirements.   Pharmacy shall establish and maintain a quality system in accordance with the Laws and this Agreement.  Pharmacy shall notify, within [***] Business Days of the event, Manufacturer in writing in case of any change in its regulatory or certification status under any Laws.  Pharmacy will notify, [***] Business Days of the event, the Manufacturer in writing in case of any negative outcome of a regulatory inspection which impacts Pharmacy’s ability to perform its obligations under this Agreement or otherwise impact the Product.  Pharmacy shall establish or participate in an established quality assurance program consistent with the Laws and this Agreement to include the documentation and assessment of any medication or quality error and effectively determine cause and appropriate response.  The quality assurance program shall be managed in accordance with written policies and procedures maintained by Pharmacy in an immediately retrievable form, which shall be provided to Manufacturer upon request.
 
(e)          Quality Documentation.  Notwithstanding anything to the contrary in this Agreement, Pharmacy will retain all records related to the Product (e.g.  distribution, labeling, temperature records) for a minimum of [***] years after expiry date of Product.  Pharmacy shall not destroy any documentation related to Product without prior written consent from the Manufacturer, which consent may be withheld in Manufacturer’s sole discretion.
 
(f)            Quality Audits.  Notwithstanding anything to the contrary in this Agreement, Manufacturer will have the right to periodically, but not more than once per calendar year of the Term, audit Pharmacy’s premises for quality and pharmacovigilance purposes.  Such audits will be conducted on mutually agreed dates and scope of audit, during normal business hours, but not during the months of January or December, unless requested by a government agency.  Manufacturer will provide Pharmacy with a copy of its audit report within [***] days following a quality audit and Pharmacy will provide a formal written response to the Manufacturer’s audit report within [***] days.
 
(g)           Product Promotion.  Pharmacy shall not promote the Product, but Pharmacy will promote its own services to its customers in accordance with Pharmacy’s standard business practices, which typically include (but are not necessarily limited to) informing its customers of pricing available for products (including the Product) distributed by Pharmacy.  Accordingly, Pharmacy shall not distribute or generate any promotional material containing claims relating to the Product.  Pharmacy may, however, provide its customers with educational information concerning the Product when expressly approved in writing by Manufacturer, which approval may be withheld in Manufacturer’s sole discretion.  Notwithstanding the foregoing, Pharmacy shall not engage in promotional activities with respect to Product unless expressly approved in writing by Manufacturer, which approval may be withheld in Manufacturer’s sole discretion.
 
(h)          Patient Privacy.  Pharmacy shall take all steps required under applicable federal, state and local privacy laws and regulations to protect and safeguard Protected Health Information (“PHI”) as defined by HIPAA and the confidentiality of any patient or patient’s health and medical information to which it has access.  Pharmacy and Manufacturer acknowledge that:  (i) Manufacturer is not a Business Associate (as defined in HIPAA); (ii) Pharmacy may not send PHI to Manufacturer, unless permitted under HIPAA Regulations and any applicable state or federal law; and (iii) Pharmacy shall use appropriate safeguards to prevent the improper use or disclosure of any PHI to Manufacturer.
 
17.
Program Management.  Pharmacy shall designate a dedicated employee to act as the primary point of contact for the Manufacturer account with regard to troubleshooting, overall support, and Pharmacy performance pursuant to the Agreement.  Such point of contact will work with the Manufacturer to determine an agreed upon cadence for meetings and performance reviews (including in-person meetings).

18.
Data Ownership & Services.  Pharmacy will provide the data report(s) defined and in accordance with in Exhibit D, as modified from time to time.  With respect to any data collected pursuant to this Agreement, Pharmacy shall own all right, title, and interest in such data.  Subject to the terms of this Agreement, Pharmacy hereby grants to Manufacturer an exclusive (but only as to third parties), transferable, royalty-free, worldwide, perpetual and irrevocable license to use all such data for all lawful business purposes, and to share the data with third party vendors on a confidential basis for all lawful purposes.  Such license may be transferred pursuant to the prior written consent of Pharmacy, which shall not be unreasonably withheld, delayed or conditioned unless such proposed transfer could reasonably be expect to cause a material competitive harm to Pharmacy.  Without prior written approval of Manufacturer, which consent may be withheld in Manufacturer’s sole discretion, Pharmacy shall not disclose any data related to Product sales and Product utilization to any third party data reporting services provider, including, but not limited to IQVIA or Symphony, or any pharmaceutical or biopharmaceutical Manufacturer.  For the avoidance of doubt, before Pharmacy discloses any Product sales and Product utilization data to any of its affiliates, consultants, agents, contractors (including without limitation Pharmacy “switches,” such as Relay Health and Experian, that transfer data between pharmacies and payers), Pharmacy shall make reasonable effort to obtain in writing that such a party shall not disclose or permit to be disclosed such data to any third party, including without limitation to any healthcare data vendors.  If Manufacturer requires the data to be disclosed to third party data reporting services, Manufacturer will notify Pharmacy in writing.  Pharmacy will send transactional update data files (i.e statuses/dispense) daily to Manufacturer; the specific technical details (including naming convention, file layout, interface, structure) will be defined in the relevant SOW substantially in the form as Exhibit F.  For any data submissions that are late, inaccurate, incomplete or otherwise do not comply with the data services requirements set forth in this Agreement or in the relevant SOW, Pharmacy shall resolve the issue and identify its cause to prevent future substantially similar issues, within [***] of the identification of the initial event.  The Parties acknowledge and agree that Manufacturer is not requesting Pharmacy to provide, and Pharmacy shall not provide, any data or information, including any de-identified data or information, to the Manufacturer in any report in the event the transfer, use, license, sale or disclosure of such data or information by Manufacturer or Pharmacy is prohibited by applicable Laws, including, but not limited to, federal or state laws and regulations that prohibit or restrict the transfer, use, license, sale or other disclosure of prescriber data.  Pharmacy shall not receive any fees under this Agreement or the relevant SOW solely for providing any report that contains data or other information that is not de-identified or that the Parties do not have the legal right to transfer, sell, license, use or disclose under applicable Laws.  In the event any applicable Law requires the consent or authorization of a prescriber or other individual prior to the transfer, use, license, sale or disclosure of that person’s data in any report, Pharmacy shall acknowledge to Manufacturer, in a commercially reasonable manner specified by the Manufacturer, that appropriate written consent or authorization from such individual has been obtained by Pharmacy.

19.
Confidentiality.
 
(a)            Definition of Confidential Information.  From time to time during the Term, either Party (as “Disclosing Party”) may disclose or make available to the other Party (as “Receiving Party”) non-public information about its business affairs, goods, and services, confidential information, and materials comprising or relating to intellectual property rights, the Product, trade secrets, third-party confidential information, and other sensitive or proprietary information; such information, as well as the terms of this Agreement, whether orally or in written, electronic or other form or media, and whether or not marked, designated, or otherwise identified as “confidential” constitutes “Confidential Information” hereunder.  Confidential Information excludes information that, at the time of disclosure:  (i) is or becomes generally available to and known by the public other than as a result of, directly or indirectly, any breach of this Section 19 by Receiving Party or any of its employees; (ii) is or becomes available to Receiving Party on a non-confidential basis from a third-party source, provided that such third party is not and was not prohibited from disclosing such Confidential Information; (iii) was known by or in the possession of Receiving Party or its employees before being disclosed by or on behalf of Disclosing Party; (iv) was or is independently developed by Receiving Party without reference to or use of, in whole or in part, any of Disclosing Party’s Confidential Information; or (v) must be disclosed under applicable Law.
 
(b)         Non-disclosure of Confidential Information.  The Receiving Party shall, for the Term and a period of [***] years from the expiration of termination of the Term:  (i) protect and safeguard the confidentiality of the Disclosing Party’s Confidential Information with at least the same degree of care as the Receiving Party would protect its own Confidential Information, but in no event with less than a commercially reasonable degree of care; (ii) not use the Disclosing Party’s Confidential Information, or permit it to be accessed or used, for any purpose other than to exercise its rights or perform its obligations under this Agreement; and (iii) not disclose any such Confidential Information to any party, except to the Receiving Party’s employees who need to know the Confidential Information to assist Receiving Party to exercise its rights or perform its obligations under this Agreement.  Should the Confidential Information be a trade secret, then the Receiving Party shall safeguard and protect such information until it no longer is secret.  The Receiving Party shall be responsible for any breach of this Section 21 caused by any of its employees or representatives.
 
(c)         Effect of Termination.  Upon the expiration or termination of this Agreement, the Receiving Party shall cease use of and shall destroy all Confidential Information received from the Disclosing Party, subject to the last sentence of this Section 19.  Upon destruction of such Confidential Information, Receiving Party shall issue to Disclosing Party a certificate of destruction as proof of compliance with this Section 19.  Receiving Party further agrees not to retain any copies, notes or compilations of any Confidential Information received from Disclosing Party, save that Receiving Party may retain one (1) copy for record keeping purposes, or as required by Laws or pursuant to a court order.
 
20.
Use of Trademarks.  Subject to the terms of this Agreement, Manufacturer grants Pharmacy a limited, non-transferrable, non-sublicensable license to use the Trademarks (defined below) solely in connection with the Permitted Uses (defined below).  As used herein, “Permitted Uses” means use of the Trademarks (i) to the extent contained in the Product’s literature provided by Manufacturer; (ii) on Product labels or as otherwise approved by Manufacturer in writing; (iii) for use of the Product and Manufacturer names in contacts with licensed medical professional and licensed healthcare institutions or other clients interested in the Product; (iv) in filings with relevant government agencies; and (v) in Product informational communications.  Pharmacy acknowledges and agrees that Manufacturer retains exclusive right, title, interest, and ownership in and to any trademark associated with the Product and any registrations that have issued or may issue thereon (the “Trademarks”).  Manufacturer does not transfer to Pharmacy any of its rights in any Trademark, and Pharmacy may not use any of Manufacturer’s Trademarks other than for a Permitted Use.  Pharmacy shall not at any time do or cause to be done any act or thing contesting or in any way impairing or tending to impair any part of such right, title, interest or ownership.  Pharmacy shall not (i) challenge any right, title or interest of Manufacturer in any Trademark; (ii) make any claim or take any action adverse to Manufacturer’s ownership of the Trademarks; (iii) register or apply for registrations, anywhere in the world, on Manufacturer’s Trademarks or any other Trademark that is similar to Manufacturer’s or that incorporates such Trademarks in whole or in confusingly similar part; (iv) use any mark, anywhere, that is confusingly similar to Manufacturer’s Trademarks; (v) misappropriate any of Manufacturer’s Trademarks for use as a domain name without Manufacturer’s prior written consent; or (vi) alter, obscure or remove any of Manufacturer’s Trademarks or trademark or copyright notices or any other proprietary rights notices placed on or in the Product purchased under this Agreement, marketing materials or other materials.  Pharmacy also acknowledges the value of Manufacturer’s goodwill in the Trademarks, and Pharmacy’s use of the Trademarks shall inure to the benefit of Manufacturer.  On expiration or termination of this Agreement in any manner provided herein, the license granted in this Section 20 shall terminate automatically and Pharmacy will cease and desist from all use of the Trademarks.

21.
Audit.  Throughout the Term, Pharmacy shall keep complete and accurate books and records, including electronic data, relating to the Product purchases, transactions, and services identified herein or in the relevant SOW, and shall maintain such records for the longer of (a) [***] years from creation thereof; or (b) as required by applicable Law.  Upon [***] days’ advance written notice, at Manufacturer’s sole expense, during Pharmacy’s regular business hours, Manufacturer (or its designee) shall have the right, during the Term of this Agreement, and for a period of [***] after the termination or expiration of the Term, to inspect and audit the books and records of Pharmacy for the purposes of (a) verifying compliance with this Agreement, the relevant SOW or Law; and (ii) satisfying Manufacturer’s obligations to FDA or any other regulatory body to inspect and audit pharmacies that dispense the Product (including obligations articulated in written or verbal instructions or requests received by Manufacturer from FDA or other relevant regulatory body).  Unless an audit is requested by a governmental agency, the Parties agree that no audits will be conducted during the months of January and December.

22.
Notice of Investigations.  Unless otherwise prohibited by law, regulation or an order from a government authority from doing so, Pharmacy shall, no later than [***] Business Days after Pharmacy receives such correspondence, provide Manufacturer with a copy of any correspondence, notices or other communications related to any inquiry, investigation or inspection by any federal, state or local regulatory representatives directed to Pharmacy concerning the Product or the terms of this Agreement or any applicable SOW.  Pharmacy shall provide such notice to Manufacturer no case later than [***] Business Days after Pharmacy becomes aware of such inquiry, investigation or inspection.  Manufacturer may attend or participate in any meeting with regulatory representatives to resolve any outstanding issues.  Unless otherwise prohibited from doing so by law, regulation or an order from a government authority, Pharmacy shall provide Manufacturer with copies of any inspectional findings or observations relating to the Product within [***] days of receipt by Pharmacy.  Such notice shall also be provided if the investigation or inquiry could delay distribution of Product or disrupt Pharmacy’s or Manufacturer’s operations.  Pharmacy shall provide Manufacturer with a copy of and an opportunity to review and provide input relevant to any written response to any inspectional findings or observations or any other federal or state governmental inquiry, notice or communication that relates directly to the Product prior to Pharmacy’s submission of such response(s), to the extent permitted by Law.  Pharmacy will consider in good faith any input provided by Manufacturer in formulating its response to the applicable governmental entity.  The Manufacturer shall notify Pharmacy in writing and, if applicable, provide Pharmacy with a copy of any inquiries, correspondence, notices or other communications it receives from the investigating agency specifically relating to the Product or terms of the Agreement or relevant SOW to the extent it would impact the services of Pharmacy whether such violation resulted from an act or omission by the Manufacturer or by Pharmacy, no later than [***] Business Days following such receipt.

23.
Indemnification.
 
(a)          Manufacturer’s Indemnification Obligation.  Manufacturer will defend, indemnify, and hold harmless Pharmacy and its Affiliates, directors, officers, employees and representatives from and against any and all claims, liabilities, losses, damages, costs, and expenses (including without limitation reasonable attorneys’ fees) arising directly or indirectly out of:  (i) personal injury or damage arising out of the use of the Product, provided the claim for such loss, liability and expense is based upon product liability or negligence of Manufacturer, its affiliates, subsidiaries, designees or licensees; (ii) its breach of any material representation or warranty set forth in this Agreement; (iii) any claim that the Product infringes on the patent or trademark of any third party; or (iv) the fraud, intentional misconduct, omission, negligence of Manufacturer or Manufacturer’s violation of applicable Law.  In no event shall Manufacturer have any liability (whether direct or indirect, in contract or tort or otherwise) to Pharmacy or any other person asserting claims on behalf of or in right of Pharmacy hereunder which have resulted primarily from the negligence or willful misconduct of Pharmacy or its employees representatives, or for any claims resulting from Pharmacy’s handling, storage, changes or use of the Product.  As used in this Agreement, the term “Affiliate” means, with respect to any entity, any other natural person or entity that, directly or indirectly, controls, is controlled by or is under common control with such entity.  For purposes of this definition, “control” of an entity means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of securities entitled to elect the board of directors or management board, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative to the foregoing.
 
(b)          Pharmacy’s Indemnification Obligation.   Pharmacy will defend, indemnify, and hold harmless Manufacturer and its Affiliates, directors, officers, employees and representatives from and against any and all claims, liabilities, losses, damages, costs, and expenses (including without limitation reasonable attorneys’ fees) arising directly or indirectly out of allegations of:  (i) its breach of any material representation or warranty set forth in this Agreement; or (ii) the fraud, intentional misconduct, omission, negligence of Pharmacy or Pharmacy’s violation of applicable Law.
 
(c)            Indemnification Procedure.  A Party seeking indemnification under this Section 23 (“Indemnified Party”) shall give written notice of the claim to the other Party, within [***] days of learning of the claim, and, provided that the indemnifying party (“Indemnifying Party”) is not contesting the indemnity obligation, shall permit the Indemnifying Party to control any litigation relating to such claim and disposition of any such claim, provided that the Indemnifying Party shall act reasonably and in good faith with respect to all matters relating to the settlement or disposition of any such claim(s).  The Indemnified Party shall reasonably cooperate with the Indemnifying Party in its defense of any claim for which indemnification is sought hereunder.  Neither Party shall be obligated to indemnify the other Party (or any other persons or entities) with respect to any settlement that is not mutually agreed upon in writing by both Parties, with such consent not to be unreasonably withheld by either Party.
 
(d)         Limitations.  Notwithstanding anything to the contrary in this Agreement, Indemnifying Party is not obligated to indemnify or defend an Indemnified Party against any claim (whether direct or indirect) if the claim or corresponding losses arise out of or result from, in whole or in part, the Indemnified Party’s or its personnel’s:  (i) gross negligence or reckless act or omission; (ii) bad faith failure to materially comply with any of its material obligations set out in this Agreement; or (iii) use of the Product in any manner that does not conform with the then-current usage specifications or otherwise pursuant to this Agreement.
 
(e)       Limitation of Liability.  EXCEPT FOR OBLIGATIONS TO MAKE PAYMENT UNDER THIS AGREEMENT, LIABILITY FOR INDEMNIFICATION, LIABILITY FOR BREACH OF CONFIDENTIALITY, OR LIABILITY FOR INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS, , IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, LOST PROFIT OR PUNITIVE DAMAGES OF ANY KIND IN CONNECTION WITH THIS AGREEMENT.  EXCEPT FOR LIABILITY FOR INDEMNIFICATION, LIABILITY FOR BREACH OF CONFIDENTIALITY OR LIABILITY FOR INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY, IN NO EVENT SHALL EITHER PARTY’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED [***].  THE FOREGOING LIMITATIONS APPLY EVEN IF REMEDIES UNDER THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE.
 
24.
Insurance.  Pharmacy shall maintain in effect during the term of this Agreement a commercial general liability policy, and Pharmacy shall promptly after the execution of this Agreement designate Manufacturer as an additional insured on such policy.  The policy shall be underwritten by an insurance company that carries an [***] or better rating from A.M. Best.  This policy shall be in an amount not less than [***] per occurrence.  Upon any cancellation of any insurance policy required under this Agreement, Pharmacy will use commercially reasonable efforts to deliver replacement certificates to Manufacturer certifying the required types and amounts of insurance coverage set forth herein have been obtained.  Pharmacy shall provide Manufacturer with a certificate of insurance evidencing compliance with this Section upon request.  The amount of required insurance coverage under this Section shall not limit Pharmacy’s obligations under this Agreement.

25.
Miscellaneous.
 
(a)            Assignment.  Neither Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other Party; provided, that, either Party may assign this Agreement to any affiliate or to party that acquires the business or division of a Party to which this Agreement relates upon written notice to (but not requiring the consent of) the other Party.  The rights and obligations described in this Agreement shall inure to the benefit and be binding upon all permitted successors and assignees of the Parties.
 
(b)           Amendment; Waiver.  This Agreement may only be amended, modified or supplemented by a writing signed by each Party hereto.  No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving.  Any waiver authorized on one occasion is effective only in that instance and only for the purpose stated, and does not operate as a waiver on any future occasion.  Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
 
(c)         Force Majeure.  Except for payment obligations hereunder, the performance by either Party hereunder shall be excused to the extent of circumstances beyond such Party’s reasonable control, such as hurricane, tropical storm or depression, extended power outages, flood, tornado, earthquake, or other natural disaster, epidemic, pandemic, war, acts of terrorism, material destruction of facilities, fire, acts of God, etc.  In such event, the Parties agree to use commercially reasonable efforts to resume performance as soon as reasonably possible under the circumstances giving rise to the Party’s failure to perform, provided, however, if performance is not restored within [***] days, either Party may terminate this Agreement.
 
(d)          Notices.  Any notices to be given by either Party to the other shall be in writing and may be transmitted either by electronic mail, courier, personal delivery or by registered or certified mail (postage prepaid with return receipt requested).  Mailed notices shall be addressed to the Parties at the addresses appearing in this paragraph.  Each Party may change its address by written notice in accordance with this paragraph.  Notices shall be deemed communicated as of the date of actual receipt (which in the case of mailed notices shall be evidenced by a receipt evidencing delivery).

Manufacturer:
140 Kendirick Street, Bldg C East, Needham, MA 02494
   
Pharmacy:
8427 Southpark Circle, Bldg. 300, Suite 400, Orlando, FL 32819
 
(e)            Governing Law; Forum.  This Agreement shall be governed by, construed and interpreted under and in accordance with the laws of the State of New York, excluding its conflicts of laws principles.  Each Party irrevocably and unconditionally agrees that it will not commence any action, litigation, or proceeding of any kind whatsoever against the other Party in any way arising from or relating to this Agreement, in any forum other than the relevant US District Court having subject matter jurisdiction.  Each Party agrees that a final judgment in any such action, litigation, or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
 
(f)            Equitable Remedies.  Each Party acknowledges and agrees that (i) a breach or threatened breach by such Party of any of its obligations under Section 19 or Section 20 would give rise to irreparable harm to the other Party for which monetary damages would not be an adequate remedy; and (ii) in the event of a breach or a threatened breach by such Party of any of these obligations, the other Party shall, in addition to any and all other rights and remedies that may be available to such Party at law, at equity, or otherwise in respect of this breach, be entitled to seek equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction, without any requirement to post a bond or other security, and without any requirement to prove actual damages or that monetary damages do not afford an adequate remedy.  Each Party agrees that it will not oppose or otherwise challenge the appropriateness of equitable relief, or the entry by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent with the terms of this Section 25(f).
 
(g)           Complete Agreement.  This Agreement, including and together with any related exhibits, schedules, attachments, and appendices, constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, regarding such subject matter.
 
(h)            Survival.  Unless otherwise expressly provided herein, only Sections 12, 18, 19, 20, 21, 23, and 25 shall survive the termination or expiration of this Agreement.
 
(i)             Counterparts.  This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together is deemed to be one and the same agreement.
 
(j)            Third Party Beneficiaries.  This Agreement benefits solely the Parties to this Agreement and their respective permitted successors and permitted assigns and nothing in this Agreement, express or implied, confers on any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
 
(k)          Severability.  If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability does not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
 
(l)             Schedules and Exhibits.  The schedules and exhibits attached hereto are incorporated herein by reference.
 
(m)           Cumulative Remedies.  All rights and remedies provided in this Agreement are cumulative and not exclusive, and the exercise by either Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or later be available at law, in equity, by statute, in any other agreement between the Parties or otherwise.
 
(n)            Headings.  The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement.
 
(o)          Further Assurances.  On a Party’s reasonable request, the other Party shall, at its sole cost and expense, execute and deliver all such further documents and instruments, and take all such further acts, reasonably necessary to give full effect to this Agreement.
 
IN WITNESS THEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written.
Chiasma, Inc.
AcariaHealth, Inc.
   
Date:  08/21/2020
Date:  08/21/2020
   
Name:  Mark J. Fitzpatrick
Name:  Stephen Jensen
   
Title:  President
Title:  President
 
Exhibit Key
 
Exhibit A:  Product/s and storage and shipping requirements
Exhibit B:  Terms of Sale
Exhibit C:  Approved list of Pharmacy Fulfillment Centers
Exhibit D:  Data reporting Requirements
Exhibit F:  Pharmacy Services Statement of Work
Exhibit G:  Adverse Event/Product Complaint Reporting
Exhibit H:  Returned Goods Policy

Exhibit A
Product
 
Exhibit B
Sale Terms
 
1.              Applicability.
 
(a)          These terms and conditions of sale (these “Terms”) are the only terms which govern the purchase and sale of biopharmaceutical products (“Goods”) by Chiasma, Inc. (“Manufacturer”) to you (“Pharmacy”).  Notwithstanding anything herein to the contrary, if a written contract signed by both parties is in existence covering the sale of the Goods covered hereby, including but not limited to a Product Purchase and Pharmacy Services Master Agreement (“MSA”), the terms and conditions of said contract shall prevail.
 
(b)            Except as provided in Section 1(a), these Terms comprise the entire agreement between the parties, and supersede all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral.  These Terms prevail over any of Pharmacy’s general terms and conditions of purchase regardless whether or when Pharmacy has submitted its purchase order or such terms.  Fulfillment of Pharmacy’s order does not constitute acceptance of any of Pharmacy’s terms and conditions and does not serve to modify or amend these Terms.
 
2.              Shipment and Delivery.
 
(a)         The goods will be delivered within a reasonable time after the issuance by Manufacturer or its designee of a conformation of receipt of Pharmacy’s purchase order, and in no case later than [***] days after the issuance of such confirmation (“Delivery Date”).  Manufacturer shall not be liable for any delays, loss or damage in transit.
 
(b)           Unless otherwise agreed in writing by the parties, Manufacturer shall deliver, or cause to be delivered, the Goods to the locations listed in the applicable order, provided that such location is listed on Exhibit C to the MSA (the “Delivery Point”) using Manufacturer’s standard methods for packaging such Goods.  Pharmacy shall take delivery of the Goods upon Manufacturer’s written notice that the Goods have been delivered to the Delivery Point.  Pharmacy shall be responsible for all loading and unloading costs and provide equipment and labor reasonably suited for receipt of the Goods at the Delivery Point.
 
(c)          Pharmacy shall not alter the Goods’ packaging without Manufacturer’s consent (except to remove the Goods from the shipping containers), which consent may be withheld in Manufacturer’s sole discretion, and shall not alter the Goods’ labeling, except to add a prescription label to the Good, as permitted by applicable law.
 
(d)           Manufacturer may, in its sole discretion, without liability or penalty, make partial shipments of Goods to Pharmacy.  Each such shipment will constitute a separate sale, and Pharmacy shall pay for the units shipped whether such shipment is in whole or partial fulfillment of Pharmacy’s purchase order.  Partially filling an order does not obligate Manufacturer to fill the remainder of any order.  Orders that cannot be filled by Manufacturer will be cancelled by it and may be resubmitted by Pharmacy at a future date.  Manufacturer shall not be required to ship Goods more than once in any [***] day period, excluding federal holidays; provided, however, Manufacturer, may in its sole discretion, ship Goods at more frequent intervals upon Pharmacy’s request.
 
(e)            If, for any reason, Pharmacy fails to accept delivery of any of the Goods on the delivery date at the Delivery Point, or if Manufacturer is unable to deliver the Goods at the Delivery Point on such date because Pharmacy has not provided appropriate instructions, documents, licenses or authorizations:  (i) risk of loss to the Goods shall pass to Pharmacy; (ii) the Goods shall be deemed to have been delivered; and (iii) Manufacturer, at its option, may store, directly or indirectly, the Goods until Pharmacy picks them up, whereupon Pharmacy shall be liable for all related costs and expenses (including, without limitation, handling, storage, and insurance).
 
(f)          The quantity of any shipment of Goods as recorded by Manufacturer or its designee shall be conclusive evidence of the quantity received by Pharmacy on delivery, unless Pharmacy provides conclusive written evidence to the contrary within [***] Business Days of its receipt of such shipment.  Manufacturer shall not be liable for any non-delivery of Goods (even if caused by Manufacturer’s negligence) unless Pharmacy gives written notice to Manufacturer of the non-delivery within [***] Business Days of the Delivery Date stated in the conformation of receipt of Pharmacy’s purchase order issued by Manufacturer or its designee.  Any liability of Manufacturer for an incorrect quantity or non-delivery of Goods shall be limited to replacing the Goods within a reasonable time or adjusting the invoice respecting such Goods to reflect the actual quantity delivered, in Manufacturer’s reasonable discretion.  Pharmacy acknowledges and agrees that the remedies set forth in this Section are Pharmacy’s exclusive remedies for the delivery of an incorrect quantity or non-delivery of Goods.
 
3.              Inspection and Rejection of Nonconforming Goods.
 
(a)            Pharmacy shall inspect the Goods within [***] business days of receipt (“Inspection Period”).  Pharmacy shall be deemed to have accepted the Goods unless it notifies Manufacturer in writing of any Nonconforming Goods during the Inspection Period and furnishes such written evidence or other documentation as required by Manufacturer.  “Nonconforming Goods” means only the following:  (i) goods shipped is different than identified in Pharmacy’s purchase order; (ii) the goods’ label or packaging incorrectly identifies its contents; or (iii) a defect in any of the Goods that is reasonably discoverable upon visual inspection of the Goods.  If Pharmacy does not provide the written notice in accordance with the terms of this Section, the relevant shipment of the Goods shall be deemed to have been delivered and accepted by Pharmacy as complete and in satisfactory condition.
 
(b)         If Pharmacy timely notifies Manufacturer of any Nonconforming Goods, Manufacturer will, in its reasonable discretion, (i) replace such Nonconforming Goods with conforming Goods, or (ii) credit or refund the Price for such Nonconforming Goods, together with any reasonable shipping and handling expenses incurred by Pharmacy in connection therewith.  Pharmacy shall ship, at Manufacturer’s expense and risk of loss, the Nonconforming Goods to Manufacturer or its designee as indicated in writing by Manufacturer.  If Manufacturer replaces Nonconforming Goods, Manufacturer shall, after receiving Pharmacy’s shipment of Nonconforming Goods, ship the replacement Goods to Pharmacy, subject to these terms.
 
(c)         Pharmacy acknowledges and agrees that, with the exception of recalls and concealed shortages, the remedies set forth in Section 3(b) are Pharmacy’s exclusive remedies for the delivery of Nonconforming Goods.  Except as provided under Section 3(b), all sales of Goods to Pharmacy are made on a one-way basis and Pharmacy has no right to return Goods purchased under this Terms to Manufacturer.
 
(d)         EXCEPT FOR THE WARRANTIES SET FORTH IN THAT CERTAIN MSA BETWEEN THE PARTIES, MANUFACTURER MAKES NO WARRANTY WHATSOEVER WITH RESPECT TO THE GOODS, WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE.
 
(e)         Products manufactured by a third party (“Third Party Product”) may constitute, contain, be contained in, incorporated into, attached to or packaged together with, the Goods.  Third Party Products are not covered by any warranty in these Terms or in that certain MSA between the Parties.  For the avoidance of doubt, MANUFACTURER MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO ANY THIRD PARTY PRODUCT, INCLUDING ANY (a) WARRANTY OF MERCHANTABILITY; (b) WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; (c) WARRANTY OF TITLE; OR (d) WARRANTY AGAINST INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY; WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE.
 
(f)            The Manufacturer shall not be liable for a breach of any warranty set forth in these Terms or in that certain MSA between the Parties unless:  (i) Pharmacy gives written notice of the defect, reasonably described, to Manufacturer within [***] business days of the time when Pharmacy discovers or should have discovered the defect; (ii) Manufacturer is given a reasonable opportunity after receiving the written notice to examine such Goods and Pharmacy (if requested to do so by Manufacturer) returns such Goods to Manufacturer’s place of business at Manufacturer’s cost for the examination to take place there; and (iii) Manufacturer reasonably verifies Pharmacy’s claim that the Goods are defective.  The Manufacturer shall not be liable for a breach of the warranty set forth in these Terms or in that certain MSA between the Parties:  (i) Pharmacy makes any use of such Goods after giving such written notice; (ii) the defect arises because Pharmacy failed to follow Manufacturer’s oral or written instructions as to the storage, installation, commissioning, use or maintenance of the Goods; or (iii) Pharmacy alters or repairs such Goods without the prior written consent of Manufacturer.
 
(g)          Subject to these Terms and that certain MSA between the Parties, with respect to any such Goods during the Warranty Period, Manufacturer shall, in its sole discretion, repair or replace such Goods (or the defective part).  THE REMEDIES SET FORTH IN THIS SECTION SHALL BE THE PHARMACY’S SOLE AND EXCLUSIVE REMEDY AND MANUFACTURER’S ENTIRE LIABILITY FOR ANY BREACH OF THE LIMITED WARRANTY SET FORTH IN THESE TERMS OR IN THAT CERTAIN MSA BETWEEN THE PARTIES.
 
4.            Limitation of Liability.  EXCEPT FOR OBLIGATIONS TO MAKE PAYMENT UNDER THESE TERMS OR THE MSA, LIABILITY FOR INDEMNIFICATION UNDER THE MSA, LIABILITY FOR BREACH OF CONFIDENTIALITY UNDER THE MSA, OR LIABILITY FOR INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS UNDER THE MSA, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, LOST PROFIT OR PUNITIVE DAMAGES OF ANY KIND IN CONNECTION WITH THE MSA. EXCEPT FOR LIABILITY FOR INDEMNIFICATION, LIABILITY FOR BREACH OF CONFIDENTIALITY OR LIABILITY FOR INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY, HEREUNDER OR UNDER THE MSA, IN NO EVENT SHALL EITHER PARTY’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THESE TERMS OR THE MSA, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED [***].  THE FOREGOING LIMITATIONS APPLY EVEN IF REMEDIES UNDER THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE.
 
5.            Termination.  In addition to any remedies that may be provided under these Terms, Manufacturer may terminate these Terms with immediate effect upon written notice to Pharmacy, if Pharmacy:  (i) fails to pay any amount when due under this Terms and such failure continues for [***] days after Pharmacy’s receipt of written notice of nonpayment; (ii) has not otherwise performed or complied with any of these Terms, in whole or in part; or (iii) becomes insolvent, files a petition for bankruptcy or commences or has commenced against it proceedings relating to bankruptcy, receivership, reorganization or assignment for the benefit of creditors.
 
6.           Waiver.  No waiver by Manufacturer of any of the provisions of these Terms is effective unless explicitly set forth in writing and signed by Manufacturer.  No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Terms operates, or may be construed, as a waiver thereof.  No single or partial exercise of any right, remedy, power or privilege hereunder precludes any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
 
7.             Amendment and Modification.  These Terms may only be amended or modified in a writing which specifically states that it amends these Terms and is signed by an authorized representative of each party.
 
8.             Force Majeure.  The Manufacturer shall not be liable or responsible to Pharmacy, nor be deemed to have defaulted or breached this Terms, for any failure or delay in fulfilling or performing any term of this Terms when and to the extent such failure or delay is caused by or results from acts or circumstances beyond the reasonable control of Manufacturer including, without limitation, acts of God, flood, fire, earthquake, explosion, governmental actions, war, invasion or hostilities (whether war is declared or not), terrorist threats or acts, riot, or other civil unrest, national emergency, revolution, insurrection, epidemic, pandemic, lockouts, strikes or other labor disputes (whether or not relating to either party’s workforce), or restraints or delays affecting carriers or inability or delay in obtaining supplies of adequate or suitable materials, materials or telecommunication breakdown or power outages.
 
9.             Assignment.  Pharmacy shall not assign any of its rights or delegate any of its obligations under these Terms without the prior written consent of Manufacturer.  Any purported assignment or delegation in violation of this Section is null and void.  No assignment or delegation relieves Pharmacy of any of its obligations under these Terms.
 
10.           No Third-Party Beneficiaries .These Terms are for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of these Terms.
 
11.           Governing Law.  All matters arising out of or relating to this Terms shall be governed by, construed and interpreted under and in accordance with the laws of the State of New York, excluding its conflicts of laws principles.
 
12.            Forum Selection.  Each Party irrevocably and unconditionally agrees that it will not commence any action, litigation, or proceeding of any kind whatsoever against the other Party in any way arising from or relating to this Agreement, in any forum other than the relevant US District Court having subject matter jurisdiction.  Each Party agrees that a final judgment in any such action, litigation, or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
 
13.           Notices.  All notices, request, consents, claims, demands, waivers and other communications hereunder (each, a “Notice”) shall be in writing and addressed to the parties at the addresses set forth in Section 25(d) of the MSA.  All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), or certified or registered mail (in each case, return receipt requested, postage prepaid).  Except as otherwise provided in this Terms, a Notice is effective only (a) upon receipt of the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section.
 
14.        Severability.  If any term or provision of this Terms is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Terms or invalidate or render unenforceable such term or provision in any other jurisdiction.
 
15.         Survival.  Provisions of these Terms which by their nature should apply beyond their terms will remain in force after any termination or expiration these Terms including, but not limited to, the following provisions:  Limitation of Liability, Governing Law, Submission to Jurisdiction, Notices, and Survival.

Exhibit C
Approved List of Pharmacy Fulfillment Centers

Exhibit D
DATA REPORT
DATA SPECIFICATIONS AND REPORTS TO MANUFACTURER

Exhibit F
Statement of Work
 
This Statement of Work (“SOW”) is entered into as of [DATE] (“SOW Effective Date”) by and between Chiasma, Inc., (“Manufacturer”) and AcariaHealth, Inc.  (“Pharmacy”) pursuant to the terms of the Product Purchase and Pharmacy Services Master Agreement (“Agreement”) effective as of [DATE].  Capitalized but undefined terms shall have the meanings first ascribed to them in the Agreement.
 
1.
Services.
 

 1.1.
Core Services.  Pharmacy, at each of its Approved Facilities, will perform the standard services performed in the normal course of business for similarly situated pharmacies dispensing products of similar complexity as Products (hereinafter referred to as the “Core Services”).  No compensation or Fees (defined below) shall be paid by Manufacturer for Core Services.  Pharmacy represents and warrants that as part of its normal operations and Core Services it, without compensation from any third-party, (i) possesses the necessary capabilities, facilities, technology, personnel, and expertise to enable it to perform the Core Services; (ii) provides prescription receipt, data entry services, dispensing, reimbursement services, financial services, shipping, and inventory management services; (iii) provides disease state and product education to patients; (iv) provides 24-hour access to clinical support through qualified nurses, case managers, pharmacists or other personnel who are adequately trained and experienced in educating patients and providers on administering prescription in an appropriate manner consistent with all applicable laws, including state licensing laws and pharmacy board laws; (iv) provides Adverse Event, and Product Quality Complaints reporting as required under law or regulation; (v) provides education; and (vi) has appropriate compliance and persistency management programs in place to ensure clinically appropriate and relevant follow-up to all patients regarding patients’ care and status and refill scheduling.
 

 1.2.
Enhanced Services.  As requested by Manufacturer, Pharmacy will perform enhanced services beyond the Core Services on behalf of the Manufacturer (“Enhanced Services”).  Manufacturer represents and warrants that:  (i) the Enhanced Services will be bona fide, legitimate, commercially reasonable, and necessary for the business of Manufacturer; (ii) the Enhanced Services are not intended to serve, either directly or indirectly, as a means of marketing the Product; (iii) the Enhanced Services are not intended to diminish the objectivity or professional judgment of Pharmacy; (iv) the Enhanced Services do not involve the counseling or promotion of any off-label use of the Products; and (v) the Enhanced Services do not involve the counseling or promotion of a business arrangement or other activity that violates any state or federal law.  Enhanced Services are not otherwise provided by Pharmacy except where compensated by a third party requesting such services and are not required or compensated, in whole or in part, by any third party payer or other entity, including under any dispensing fee paid under any commercial, Medicare or Medicaid programs.
 

 1.3.
Mandatory HUB Coordination.  All patient services will be coordinated through Manufacturer’s mandatory in-house patient services program, including referral triage.  In order to minimize access barriers and create a hassle-free experience for patients, the Pharmacy will engage in a high level of real-time communication with Manufacturer.  Response time to calls and emails received by Pharmacy from Manufacturer will be no more than [***].  As used herein “Business Day” means any day that is not a Saturday, Sunday or U.S. Federal holiday.
 
2.
Service Fees.  In consideration for Pharmacy’s performance of the Enhanced Services, Manufacturer shall pay Pharmacy a fair market value service Fee as set forth herein (“Fees”).  The Pharmacy shall invoice Manufacturer for all Fees and approved pass through expenses no later than the [***] of each month and Manufacturer shall pay Pharmacy such undisputed invoiced Fees and approved pass-through expenses within [***] days of the invoice date.  The Parties acknowledge that (i) unless otherwise agreed in writing the Fees provided hereunder will be Pharmacy’s sole, full and complete form of compensation provided by the Manufacturer for the Enhanced Services; (ii) the Fees represent the fair market value of the Enhanced Services, unless otherwise adjusted to comply with the “Refill Reminder Exception” to the definition of “Marketing” under HIPAA and have been negotiated at arms-length, in good faith by the Parties; (iii) the Fees are not intended in any way as a payment related to a drug formulary or drug formulary activities and has not been negotiated or discussed between the Parties in connection with any such drug formulary or formulary activities; (iv) the Fees are “Bona Fide Services Fees,” which do not constitute a discount or other form of compensation that must be included in best price, AMP, or ASP reporting; and (v) the Fees are not intended in any way as remuneration for referrals or for other business generated for the benefit of Manufacturer.  The Fees for the Enhanced Services will be pro-rated as appropriate for any partial periods during the term of this SOW.  After termination or expiration of this SOW, the Pharmacy shall calculate any final payment due, and Manufacturer shall pay any remaining amount owed within [***] days after receipt of the required data supporting the amount owed.  If there is a dispute over the amount of any final payment due hereunder, the parties agree to work cooperatively to resolve the dispute within [***] days of written notice of such dispute, and any undisputed amounts shall be paid within [***] days of such resolution.  Except as otherwise set forth herein, Pharmacy shall be responsible for all costs and expenses associated with fulfilling its obligations and performing the Enhanced Services.
 
3.
Term and Termination.
 

 3.1.
SOW Term.  This SOW shall have a term of [***] years from the Effective Date, and shall automatically renew for successive one (1) year terms unless either Party sends a written notice of non-renewal to the other Party at least [***] days prior to the expiration of the term then in effect (“Term”).  Notwithstanding anything to the contrary contained herein, this SOW shall terminate automatically upon the termination or expiration of the Agreement.
 

 3.2.
Termination without Cause.  Either Party may terminate this SOW without cause with [***] days prior written notice to the other Party.
 

 3.3.
Termination for Cause.  Either Party may terminate this SOW upon the occurrence of a material breach by the other Party.  The non-breaching Party must give written notice to the breaching Party of the nature and occurrence of such breach.  If the breach is not cured within [***] days of such written notice, or if the breach cannot reasonably be cured within such [***] day period, then the non-breaching Party may provide written notice to the breaching Party that this SOW will be terminated with immediate effect upon receipt of such written notice.  Termination shall have no effect upon the rights or obligations of the Parties arising out of any transactions occurring prior to the effective date of such termination.
 

 3.4.
Effect of Termination.  Termination of this SOW shall not terminate the Agreement or any other Statement of Work executed by the Parties.  In the event of termination, provided, that, no undisputed Pharmacy invoices are outstanding and overdue, Pharmacy shall assist Manufacturer, upon its request, by performing all reasonably required tasks and provide reasonable access to records specifically relating to the Enhanced Services for a period of [***] following the termination of this SOW, at Manufacturer’s expense, in the decommissioning or transition of the Enhanced Services to Manufacturer’s agent to ensure a smooth transition and uninterrupted service, at a mutually agreed upon fair market value rate.  Upon termination or expiration of this SOW, Manufacturer shall pay to Pharmacy an amount corresponding to the work actually performed by Pharmacy until the date of termination of the Enhanced Services and any and all costs and expenses associated with the termination and transition (if any) of the Enhanced Services, less any amounts which have been paid by Manufacturer to Pharmacy in advance for the work that will not be undertaken as a result of the termination of the Services.
 

 3.5.
Service Failure and Continuous Quality Improvement.  In addition to other procedures and remedies outlined in this Agreement, failure by Pharmacy to perform services and or adhere to business rules and Manufacturer requirements as expressed in this SOW or other operating guidelines applicable to Pharmacy as part of the provision of Enhanced Services may result in written notification by Manufacturer for corrective action.  If corrective action is not completed by Pharmacy within [***] days of notification, Manufacturer may terminate this SOW.  Both parties agree to communicate, track, and document service requirements (e.g., completion, timeliness, accuracy, frequency/receipt, issue resolution, and customer service).  Manufacturer will have the right to periodically audit Pharmacy facilities.  Such audits will be conducted on mutually agreed dates and during the normal working hours.
 
4.
Core Services detail listed below:
 

 4.1.
Patient Intake and Case Management to be Performed By Manufacturer
 
Manufacturer has a centralized patient intake and case management system (the HUB) managed internally and supported by external partners.  For Mycapssa patients, Manufacturer’s patient services team (and the HUB partner) will perform a variety of services including but not limited to the following:
 

 •
Collect patient referrals from physicians

•
Perform patient enrollment in Manufacturer’s support program and secure appropriate HIPAA-compliant authorizations which are adequate to support Pharmacy data reporting to Manufacturer

•
Patient case management, including patient education, access assistance, and compliance activities

•
Perform benefits investigations and other insurance services

•
Triage patient referrals to Mycapssa Pharmacy Distribution Network specialty pharmacies
 

 4.2.
Pharmacy Features, Services, and Business Rules Specific features, services, and business rules required by Manufacturer from the Pharmacy for patients receiving Mycapssa:
 
 
(a)
Referrals and reimbursement:

•
Pharmacy to implement a standard operating procedure that ensures patient referrals received via a mutually agreed upon method are transferred to Pharmacy staff responsible for Mycapssa and will be enrolled into the Pharmacy process within [***].

•
Pharmacy will obtain an actionable patient referral exclusively from HUB via a mutually agreed upon method dedicated for Mycapssa.  Should Pharmacy receive a referral directly from a referring physician, the HCP will be informed by Pharmacy of a mandatory HUB structure within [***].  The subsequent referral triage to the Mycapssa Specialty Pharmacy Network will be on a rotating basis based on objective criteria established by Manufacturer, and the criteria may be based on performance metrics tied to adherence/compliance programs or patient refills.  Criteria may also be based on other key performance indicators including but not limited to turnaround and response times.

•
Referrals from HUB to Pharmacy will contain the following elements:

o
Fax cover sheet with instructions

o
A HUB-generated case ID

o
Valid prescription

o
Patient executed HIPAA Authorization

o
Benefits Investigation and Prior Authorization details

o
Copay Program billing information

•
Pharmacy to implement an SOP for outside referrals received directly from a referring physician: Pharmacy will contact and advise the referring physician office within [***] that access to Mycapssa is through HUB.  Pharmacy to provide referring physician with HUB contact information for Mycapssa.

•
Pharmacy to route patient referral back to HUB within [***] for case management when a patient loses or is denied insurance coverage.  Pharmacy to communicate the HUB-generated case ID to HUB by phone, fax, or secure e-mail.

•
Pharmacy must notify the HUB in writing within [***] for case management if determined that Pharmacy cannot service the patient.  Pharmacy to communicate the HUB-generated case ID to HUB by phone, fax, or secure e-mail.  If by phone, redundant documentation via fax or secure email required.

•
Pharmacy may route the patient referral to another pharmacy only if directed by the HUB to the extent consistent with the professional judgment of the pharmacist.
 
(b)
Patient Education

•
Consults will occur with every patient before their first shipment and will include talking points to address patient education needs including but not limited to food effects, side effect and side effect management, dose titration and lab test expectations.  Pharmacy personnel will use their independent, professional judgement to educate and counsel the patient.
 
(c)
Key Performance Indicators:

•
Pharmacy will provide a monthly report of key performance indicators outlined in Exhibit I.
 

 4.3.
Dispensing and delivery:

•
Pharmacy will make an attempt to contact patient within [***] of receipt of referral from HUB and pharmacy will attempt to ship initial prescription to patient within [***] Business Days of receiving insurance and co-pay verification and acceptance.  However, it is ultimately patient’s availability that will determine when shipment will be shipped.


•
Pharmacy will ship Product to any location in the continental US as requested by the patient.

•
Should Pharmacy be aware of starter product on hand with the patient (i.e.  via starter product supply) Pharmacy will not ship Product if patient has more than [***] days of starter product/quick start product in their possession.

•
Pharmacy will ship the Product in accordance with shipping instructions provided by Manufacturer, including but not limited to obtaining a patient signature.
 

 4.4.
Compliance and customer services:

•
Pharmacy to proactively monitor each patient’s anticipated prescription refill dates for Product scheduling and administration.

•
Pharmacy to offer industry standard pharmacy education and counseling services to customers receiving Product for consultation and drug education.

•
Pharmacy to offer patients industry standard access to clinicians via the dedicated toll free telephone number.
 

 4.5.
Other requirements:

•
Pharmacy to provide a single point of contact and phone number with whom HUB can conduct ongoing operations and communications.

•
Pharmacy to notify HUB as soon as practicable if and when the single point of contact changes.  Pharmacy to specify a backup contact person.

•
Pharmacy will respond to inquiries from the HUB (phone, fax, email, other) within [***] of receipt of inquiry.
 
5.
Enhanced Services detail listed below:
 

 5.1.
Dedicated Phone/Fax for YYYYY.

•
Pharmacy shall provide a phone and fax line dedicated for Product patient referrals from the Hub.  In the event this SOW is terminated, the number shall be transferred, upon request, to Manufacturer.

•
Pharmacy to provide same fax number dedicated for Mycapssa for receipt of prescriptions, Dr.  Order’s or other pertinent documentation related to Mycapssa patients.

•
Pharmacy to provide same toll free phone number dedicated for Mycapssa for patients to call to refill prescriptions, inquire on orders, billing questions, contact specialty pharmacy or for any other related inquires.
 

 5.2.
Program Manager and Contact.  Pharmacy shall appoint an employee to be dedicated for at least [***] hours per week to serve as program manager and Manufacturer’s point of contact for the program.  Such employee shall be trained in all program Services, competent and adequately skilled and licensed to serve as Program Manager under all applicable laws.  Pharmacy shall provide Manufacturer with a single point of contact, and one (1) back up contact, and phone number with whom Manufacturer and Hub can conduct ongoing operations and communications.  Pharmacy shall notify Manufacturer written within [***] Business Days of any change to its single point of contact hereunder.
 

 5.2.1.
The Program Manager will be responsible for the following, with additional duties as mutually agreed upon by the parties.

•
Single point of contact for; issue resolution; quarterly business reviews or as needed; process validation; and monitoring all aspects and areas of the Programs

•
Weekly conference calls to review program and operations; [***] to [***] post launch, frequency of calls can be re-evaluated

•
Upon reasonable request and frequency, attend meetings with the Manufacturer’s team to provide an overview of the business model/ program and demonstrate success of the Programs

•
Monitor internal performance to insure contract compliance

•
Monitor Payer coverage and gaps.  Work with Manufacturer and Payer/Channel account management team in an effort to ensure coverage and Product access processes are in place


•
Monitor data reporting and follow-up with third-party data integrator and Manufacturer Lead and Payer/Channel account team on outstanding data issues

•
Hold quarterly business reviews (or as needed) to discuss Program performance, service metrics and Program improvements on a timely basis

•
Monitor the training and introduction of staff new to the Programs (pharmacists, benefit investigators, operational personnel, etc.)

•
Serve as a point of contact regarding implementation and day-to-day operational issues internally and to Manufacturer

•
Coordinate and lead regular meetings with the team to review status of the services

•
Manage and resolves escalated situations

•
Manage and monitor internal Program process flows

•
Ensures back-up for Account Manager during vacation or time away from the Program due to illness, training or meetings
 

 5.3.
Data Feeds.  Pharmacy shall provide daily data feeds, in the form of Addendum 1 to Manufacturer or designated data aggregator which Manufacturer shall appoint in its sole discretion.
 

 5.3.1.
Data Delivery.  Pharmacy shall provide all data by [***] the day in which they are due.
 

 5.3.2.
Accuracy of Data.  Pharmacy shall ensure (through appropriate monitoring and auditing) that all data and other documentation that it is required to provide to Manufacturer hereunder are complete and accurate.  Pharmacy represents that it is currently able to generate all defined feeds in an electronic format.  Pharmacy shall cooperate with the Manufacturer to resolve any discrepancies in the data or reports in the manner and otherwise in accordance with the requirements herein.  Pharmacy shall acknowledge receipt of Manufacturer’s written notice of such data discrepancies within [***] of Pharmacy’s receipt of such written notice and provide an issue resolution plan for the discrepancies within [***] Business Days of such notice.
 

 5.3.3.
De-Identification.  Pharmacy will only disclose PHI for any patient as allowed per patient consent obtained by Manufacturer.  In instances where a consent has not been obtained, or the consent would not allow a specific disclosure, Pharmacy shall de-identify all data provided hereunder in accordance with the de-identification standards prescribed in 45 C.F.R.  § 164.514(b) of HIPAA.  Manufacturer shall not attempt to re-identify any de-identified information provided to it by Pharmacy.
 

 5.3.4.
Data Compliance.  Manufacturer shall not pay Pharmacy any Fee for any data report not submitted timely in accordance with Addendum 1.  Manufacturer shall not pay Pharmacy for any Product Data Report in which less than [***] of the required data fields are provided.
 
6.
Fees.  Manufacturer shall pay Pharmacy the fair market value Fees as set forth herein.  The Parties agree and acknowledge that in accordance with the “Refill Reminder Exception” to the definition of “Marketing” under HIPAA, in order for Pharmacy to receive full compensation for certain Enhanced Services that involve the use or disclosure of PHI, Pharmacy must obtain a valid HIPAA authorization from the patient permitting such Marketing use/disclosure and acknowledging Pharmacy’s receipt of payment for the Enhanced Services.  If Pharmacy does not receive such authorization, the relevant Fees shall be reduced to no more than the reasonable direct and indirect cost of providing the applicable Enhanced Service(s).

Management and costs of product line who have a product purchase agreement.  listed here:
 
 
Bona Fide Service
  
Bona Fide Service Fee- once time,
monthly, or transactional
  
Detailed Explanation of Services
 
Start-Up Fee
  
$[***] — one time
  
Fee covers all pre-launch start up costs to Pharmacy including Data build fees, training of internal stakeholders, and meetings with Manufacturer 3rd parties as needed to ensure appropriate launch readiness
 
Data Reporting Fee
  
$[***] — per month
  
Exhibit D is a customized Data set, sent at intervals as described in the Exhibit
 
Account Management Fee
  
$[***] — per month
  
Accounts for the semi-dedicated Account Management work with all relevant stakeholders at regular weekly or daily intervals as needed to support Mycapssa volume at Pharmacy
 
IN WITNESS THEREOF, the Parties have caused this Statement of Work to be executed by their duly authorized representatives as of the day and year first above written.

Manufacturer
AcariaHealth, Inc.
   
Date:  08/21/2020
Date:  08/21/2020
Name:  Mark Fitzpatrick
Name:  Stephen Jensen
Title:  President
Title:  President
Signature:  /s/ Mark Fitzpatrick
Signature:  /s/ Stephen Jensen

Exhibit G
Adverse Event, Product Complaints, or Medical Information Requests Policy
 
Adverse Event, Significant Adverse Event, Product Complaints, or Medical Information Requests Policy
 
ADVERSE EVENT REPORTING.  Manufacturer acknowledges and agrees that it is solely responsible for reporting of adverse events to the United States Food and Drug Administration (“FDA”) and that Pharmacy has no direct adverse event reporting obligations.  Notwithstanding the foregoing, as part of its core services as described in Section 1.1 to that certain SOW by and between the Parties, Pharmacy shall report through MedWatch any Product adverse event complaint from a third party being reported to Pharmacy that meets the definition of a serious adverse event for purposes of FDA MedWatch reporting.

EXHIBIT H
RETURNED GOODS POLICY
 
Chiasma, Inc. (“Chiasma”) will accept returns of its biopharmaceutical products (“Products”) solely in accordance with the terms and conditions of this Return Goods Policy (“Policy”) and the terms and conditions of sale in effect on the date the Products were shipped to the purchaser.  In the event of a conflict between this Policy and the terms of sale, this Policy will control.  Returns will only be accepted from purchasers who purchased Products directly from Chiasma.  If you purchased Products through an authorized distributor Products, you should direct any inquiry about returns to that authorized distributor.  Chiasma will not accept any return of Products from persons or entities who purchased Products from any person or entity, including specialty pharmacies, other than Chiasma or otherwise in contravention of this Policy.
 
A Return Authorization Number (“RAN”) is required to return Products pursuant to this Policy, and may be obtained by faxing your return request to 614-652-0271 or emailing your return request to GMB-SPS-ReturnRequests@cordlogistics.com.  RANs shall expire [***] calendar days from the issuance date.
 
Returnable Product.
 
Subject to the terms and conditions of this Policy, only the following Products may be returned to Chiasma for credit or replacement (as determined by Chiasma in its reasonable discretion pursuant to the relevant terms and conditions of sale):

 •
Products determined to be Nonconforming or Defective pursuant to the terms and conditions of sale in force when Products were shipped to purchaser.

•
Products that, as of the date of delivery to purchaser, have [***] months or less of remaining shelf life, as listed on the Product’s original packaging.

•
Nonconforming Products (defined in the relevant terms and conditions of sale in force when the Products were shipped to purchaser) must be reported to Chiasma Customer Service in writing within [***] hours of receipt of the Products.  Customer Service will issue specific instructions on returning such Nonconforming Product.

•
Products with concealed damage must be reported to Chiasma Customer Service within [***] days of the time when purchaser discovers or should have discovered such damage.  Such claims must be made in writing, must specifically describe the concealed damage, and sent to Chiasma’s Customer Service Department fax at 614-652-4336 or email at GMB-SPS-Damages@cordlogistics.com.

•
Products damaged in shipment, but not concealed damage as discussed above, shall be reported to Chiasma Customer Service within [***] hours of purchaser’s receipt of Products.  Such claims must be accompanied by a signed Bill of Lading noting such damage.  Customer Service will issue specific instruction on returning such damaged Product.
 
Product(s) must be returned to Chiasma in order to be considered for credit or replacement pursuant to the terms and conditions of sale in force when Products were shipped to purchaser.
 
Non-Returnable Product.
 
All sales of Products shall be on a one-way basis, without any right to return Products except as provided in this Policy.  Therefore, Chiasma shall not accept returns of Products, or process any credit related thereto, in situations including, but not limited to, the following:

 •
Products that, as of the date of delivery to a purchaser, has more than [***] months of remaining shelf life, as listed on the Product’s original packaging.

•
Products without a valid RAN.

•
Products with stickers, marked, coded, dated, damaged, soiled or adulterated in any way or missing RFID tags, 2D bar codes or other tracking elements as defined by relevant State and Federal legislation for pedigree tracking.

•
Products sold on a non-returnable basis, such as Products labelled as “NOT FOR SALE.”

•
Products damaged or deteriorated due to conditions beyond Chiasma’s control, including but not limited due to improper storage or handling by any party other than Chiasma.

•
Products not in the original sealed package or otherwise repackaged.

•
Products that, as of the date of receipt by the purchaser, is more than [***] past the expiration date noted on package/container.


•
Products returned to Chiasma due to a purchaser’s distressed, sacrifice, fire or bankruptcy sale, or similar transaction.

•
Products with a concealed damage claim that was not reported to Chiasma within [***] days of the time when purchaser discovers or should have discovered such damage.

•
Products received in error or damaged in shipping; a) if not reported within [***] hours of receipt; b) reported within this period but not returned within [***] days; or c) not accompanied by a signed Bill of Lading noting the damage.

•
Products damaged or destroyed prior to return to Chiasma or Products not returned to Chiasma.
 
Chiasma shall not accept returns sent by any third-party processor or other designee on behalf of a purchaser, without Chiasma’s prior consent, which consent may be withheld in Chiasma’s sole discretion.
 
Procedure For Returning Merchandise And Receiving Credit
 
Returning Merchandise.  RANs may be obtained by faxing your request to 614-652-0271 or emailing your request to GMB-SPS-ReturnRequests@cordlogistics.com.  The RAN and specific return instructions, will be provided by Chiasma Customer Service after the request is properly made by a direct purchaser.  Purchaser shall follow these instructions in order to return Product, and shall provide the following information on the returned Products packing list:

 •
Chiasma NDC Number;

•
Product Name;

•
Strength;

•
Lot Number;

•
Expiration Date;

•
GTIN Identification Number;

•
Quantity;

•
Reason for return;

•
Debit Memo Number;

•
Return Authorization number;.

•
Name, address, and phone number of purchaser returning product; and

•
DEA number.
 
In is sole discretion, Chiasma will destroy Product returns that do not have the required information and no credit or replacement will be issued for such Product..
 
Procedure for Shipping Returned Goods
 
Eligible products shall be shipped to:
Chiasma, Inc.
Returned Goods Dept.
15 Ingram Blvd.  Dock 43
LaVergne, TN 37086
 
Eligible Products shall be shipped in a safe, secure, and reliable manner, and in compliance with all applicable federal, state and local laws, regulations and statutes, and label/package instructions.
 
Return freight fees are the responsibility of, and shall be paid by purchaser.  Chiasma shall not pay any charges incurred by purchaser in connection with processing any returned Products.  Any shipments sent COD (collect on delivery) will be refused.
 
Broken Product containers without Product present, shall NOT be shipped to Chiasma.  If any such broken Product containers are shipped to Chiasma, they will be disposed of will not be reported as a return pursuant to this Policy.  If Chiasma receives broken Product containers that broke during shipment to Chiasma, Chiasma will accept damaged, broken, wet and/or leaking shipping containers.  Such returns will be processed, but no credit or replacement will be issued.  Chiasma’s credit memo to Customer will indicate no credit due to damaged containers.
 
Conditions required to receive credits or replacement:
 
A RAN must accompany all returns for proper credit or replacement.  Chiasma shall not reimburse any fees or costs incurred by purchaser due to processing, third party returns, destruction charges, shipping costs or processing fees associated with, or caused by, any returns.
 
All returns are subject to review by Chiasma.  Issuance of a RAN does not guarantee credit or replacement.  Credit issuance or replacement shipment is dependent on confirmed receipt of the return and review of returned Products by Chiasma or the Chiasma contracted return facilitator.  Partial Product returns shall not receive any credit.
 
RANs expire [***] calendar days from the issuance date.  Expired RANs shall be considered invalid and neither credit nor replacement will be issued.
 
Unauthorized returned Products will be destroyed by Chiasma in its sole discretion without notification to purchaser.  Products returned must match active RAN and Product lot number in order to be eligible for credit or replacement.  Credit/replacement will not be issued if the Product lot number or expiration date for the retuned Product is missing, covered or illegible.  Products destroyed by customer or agent of customer shall not receive credit/replacement.
 
Credit for returned Product, if such return conforms to the terms of this Policy, will be based on the Product’s wholesale acquisition cost at the time of purchase by the relevant purchaser.  Original invoicing by Chiasma.  Any credit issues hereunder shall expire [***] days from date issued.
 
Product Returns by the Federal Government:
 
Return Goods pricing for products returned by the Federal Government (under PHS or FSS pricing) when returned either through a wholesaler or directly, is the amount equal to the PHS or FSS price in effect for such product on the day it is received at Chiasma or approved third party processor.
 
Exhibit 8.1

Amryt Pharma Holdings Limited
England and Wales
Amryt Pharmaceuticals Designated Activity Company
Ireland
SomPharmaceuticals SA
Switzerland
Amryt Endocrinology Limited
Ireland
Amryt GmbH
Germany
Amryt Research Limited
Ireland
Amryt Lipidology Limited
Ireland
Amryt Distribution Limited
Ireland
Cala Medical Limited
Ireland
Amryt Pharma Italy SRL
Italy
Amryt Pharma (UK) Limited
England and Wales
Amryt Pharma Spain S.L.
Spain
Amryt Genetics Limited
Ireland
Amryt Pharmaceuticals Inc.
Delaware
Amryt Endo Inc.
Delaware
Chiasma Securities Corp
Delaware
Chiasma (Israel) Limited
Israel
Aegerion International Limited
Bermuda
Amryt Brasil Comercio E Importacao De Medicamentos LTDA
Brazil
Aegerion Pharmaceuticals Holdings, Inc.
Delaware
Aegerion Argentina S.R.L.
Argentina
Aegerion Pharmaceuticals (Canada) Limited
British Columbia
Amryt Colombia S.A.S.
Colombia
Aegerion Pharmaceuticals Limited
Bermuda
Aegerion Pharmaceuticals Limited
England and Wales
Amryt Pharmaceuticals SAS
France
Aegerion Pharmaceuticals Srl
Italy
Amryt Pharma GmbH
Germany
Amryt Turkey İlaç Ticaret Limited Şirketi
Turkey
Aegerion Pharmaceuticals SARL
Switzerland
Aegerion Pharmaceuticals B.V.
The Netherlands
Aegerion Pharmaceuticals Spain, S.L.
Spain


Exhibit 12.1

I, Dr. Joseph A. Wiley, certify that:
 
1.
I have reviewed this annual report on Form 20-F of Amryt Pharma plc;
 
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 company as of, and for, the periods presented in this report;
 
4.
The company’s other certifying officer 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 company and have:
 

 (a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 

 (b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 

 (c)
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 

 (d)
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
 
5.
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
 

 (a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
 

 (b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
 
Date:
April 29, 2022
  
By:
/s/ Dr. Joseph A. Wiley
  
Name:
Dr. Joseph A. Wiley
  
Title:
Chief Executive Officer
(principal executive officer)
  


Exhibit 12.2

I, Rory P. Nealon, certify that:
 
1.
I have reviewed this annual report on Form 20-F of Amryt Pharma plc;
 
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 company as of, and for, the periods presented in this report;
 
4.
The company’s other certifying officer 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 company and have:
 

 (a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 

 (b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 

 (c)
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 

 (d)
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
 
5.
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
 

 (a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
 

 (b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
 
Date:
April 29, 2022
  
By:
/s/ Rory P. Nealon
  
Name:
Rory P. Nealon
  
Title:
Chief Financial Officer and Chief Operating Officer
(principal financial officer)
  


Exhibit 13.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES OXLEY ACT OF 2002
 
In connection with the Annual Report of Amryt Pharma plc (the “Company”) on Form 20-F for the fiscal year ended December 31, 2021 (the “Annual Report”) as filed with the Securities and Exchange Commission on the date hereof, I, Dr. Joseph A. Wiley, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
1.
the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
 
2.
the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Date:
April 29, 2022
  
By:
/s/ Dr. Joseph A. Wiley
  
Name:
Dr. Joseph A. Wiley
  
Title:
Chief Executive Officer
(principal executive officer)
  


Exhibit 13.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES OXLEY ACT OF 2002
 
In connection with the Annual Report of Amryt Pharma plc (the “Company”) on Form 20-F for the fiscal year ended December 31, 2021 (the “Annual Report”) as filed with the Securities and Exchange Commission on the date hereof, I, Rory P. Nealon, Chief Financial Officer and Chief Operating Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
1.
the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
 
2.
the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Date:
April 29, 2022
  
By:
/s/ Rory P. Nealon
  
Name:
Rory P. Nealon
  
Title:
Chief Financial Officer and Chief Operating Officer
(principal financial officer)
  


Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
We have issued our report dated April 29, 2022, with respect to the consolidated financial statements included in the Annual Report of Amryt Pharma plc on Form 20-F for the year ended December 31, 2021. We consent to the incorporation by reference of said reports in the following Registration Statement of Amryt Pharma plc on Form S-8 (File No. 333-239763).
 
/s/ GRANT THORNTON
 
Dublin, Ireland
 
April 29, 2022