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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Ireland
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98-1032470
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Ordinary shares, nominal value $0.0001 per share
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The Nasdaq Stock Market LLC
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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Item 1.
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Business
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Xyrem
®
(sodium oxybate) oral solution
, the only product approved by the U.S. Food and Drug Administration, or FDA, and marketed in the U.S. for the treatment of both cataplexy and excessive daytime sleepiness, or EDS, in adult and pediatric patients with narcolepsy;
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•
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Erwinaze
®
(asparaginase
Erwinia chrysanthemi
)
, a treatment approved in the U.S. and in certain markets in Europe (where it is marketed as Erwinase
®
) for patients with acute lymphoblastic leukemia, or ALL, who have developed hypersensitivity to
E. coli
-derived asparaginase;
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•
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Defitelio
®
(defibrotide sodium)
, a product approved in the U.S. for the treatment of adult and pediatric patients with hepatic veno-occlusive disease, or VOD, also known as sinusoidal obstruction syndrome, or SOS, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Europe (where it is marketed as Defitelio
®
(defibrotide)) for the treatment of severe VOD in adults and children undergoing HSCT therapy; and
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Vyxeos
®
(daunorubicin and cytarabine) liposome for injection
, a product approved in the U.S. and in Europe (where it is marketed as Vyxeos
®
44 mg/100 mg powder for concentrate for solution for infusion) for the treatment of adults with newly-diagnosed therapy-related acute myeloid leukemia, or t-AML, or acute myeloid leukemia, or AML, with myelodysplasia-related changes, or AML-MRC.
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•
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Strong financial execution through growth in sales of our current lead marketed products;
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Building a diversified product portfolio and development pipeline through a combination of our internal research and development efforts and obtaining rights to clinically meaningful and differentiated on- or near-market products and early- to late-stage product candidates through acquisitions, collaborations, licensing arrangements, partnerships and venture investments; and
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Maximizing the value of our products and product candidates by continuing to implement our comprehensive global development plans, including through generating additional clinical data and seeking regulatory approval for new indications.
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ImmunoGen, Inc., or ImmunoGen, for opt-in rights to license two hematology-related antibody-drug conjugate, or ADC, product candidates granted orphan drug designation by the FDA, as well as an additional ADC product candidate;
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Codiak BioSciences, Inc., or Codiak, for an exclusive, worldwide, royalty-bearing license to develop, manufacture and commercialize potential therapeutic candidates directed at five targets to be developed using Codiak's engEx™ precision engineering platform for exosome therapeutics;
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Pfenex, Inc., or Pfenex, for rights to multiple early-stage hematology product candidates and an option to negotiate a license for a recombinant pegaspargase product candidate; and
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XL-protein GmbH, or XLp, for rights to use XLp’s PASylation
®
technology to extend the plasma half-life of selected asparaginase product candidates.
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Product Candidates
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Description
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Submitted for Regulatory Approval
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Solriamfetol U.S.
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EDS in OSA and EDS in narcolepsy
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Solriamfetol EU
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EDS in OSA and EDS in narcolepsy
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In Phase 3
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JZP-258 (oxybate; 90% sodium reduction)
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Cataplexy and EDS in narcolepsy
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JZP-258 (oxybate; 90% sodium reduction)
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IH
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In Phase 2
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Solriamfetol
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EDS in Parkinson’s disease
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Preclinical
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Oxybate once-nightly formulation
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Narcolepsy
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Product Candidates
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Description
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In Phase 3
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Defitelio
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Prevention of VOD in high-risk patients following HSCT
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Vyxeos
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AML or high-risk MDS (AML19) (cooperative group study)
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Vyxeos
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AML or high-risk MDS (AML18) (cooperative group study)
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In Phase 2
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Defitelio
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Prevention of aGvHD following allogeneic HSCT
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Defitelio
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Treatment of TA-TMA (planned pivotal study)
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Defitelio
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Prevention of chimeric antigen receptor T-cell therapy-, or CAR-T-, associated neurotoxicity (planned study)
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Vyxeos + venetoclax
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De novo or relapsed/refractory, or R/R, AML (MD Anderson collaboration study)
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Vyxeos
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MDS (planned cooperative group study)
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Vyxeos
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R/R AML (cooperative group study)
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In Phase 1
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Vyxeos + gemtuzumab
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R/R AML or hypomethylating agent failure MDS (MD Anderson collaboration study)
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Vyxeos + venetoclax
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Low intensity dosing for unfit AML (planned study)
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IMGN779
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CD33+ AML (Jazz opt-in opportunity with ImmunoGen)
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IMGN632
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CD123+ hematological malignancies (Jazz opt-in opportunity with ImmunoGen)
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Preclinical
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CombiPlex
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Solid tumors candidate I
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Product Candidates
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Description
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CombiPlex
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Hematology/oncology exploratory activities
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Asparaginase
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ALL and other hematological malignancies
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Recombinant Pegaspargase
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Hematological malignancies (Jazz opt-in opportunity with Pfenex)
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Defitelio
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Exploratory activities
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Exosome NRAS candidate
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Hematological malignancies (collaboration with Codiak)
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Exosome STAT3 candidate
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Hematological malignancies (collaboration with Codiak)
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Exosome-based candidates
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Solid tumors/hematological malignancies (collaboration with Codiak)
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Xyrem
. While Xyrem is currently the only product approved by the FDA and marketed in the U.S. for the treatment of both cataplexy and EDS in patients with narcolepsy, we and others may launch products as treatment options in cataplexy and/or EDS in narcolepsy, including other branded sodium oxybate products and other new and existing branded market entrants. In addition, Xyrem will face competition from generics and authorized generics.
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Erwinaze
. Erwinaze is a biologic product used in conjunction with chemotherapy and is indicated for patients with ALL who have developed hypersensitivity to
E. coli
-derived asparaginase. While there is currently no direct competition to Erwinaze to treat ALL patients with hypersensitivity to
E. coli
-derived asparaginase, other companies have developed or are developing new treatments for ALL. Some new asparaginase treatments could reduce the rate of hypersensitivity in patients with ALL, and new treatment protocols are being developed for ALL that may not include asparaginase-containing regimens, including some for the treatment of relapsed or refractory ALL patients. We have experienced frequent intermittent shortages of the product, as described in “Business—Manufacturing” in this Part I, Item 1, that have impacted prescribing habits for Erwinaze, including prescribers’ use of alternate methods to address hypersensitivity reactions. The development of these new treatments could negatively impact our ability to grow sales of Erwinaze in patient populations where the benefit of an asparaginase-containing regimen is not well established. As a biologic product, Erwinaze also faces potential competition from biosimilar products.
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Defitelio
.
Defitelio is the only approved treatment in the U.S. for the treatment of adult and pediatric patients with VOD, also known as SOS, with renal or pulmonary dysfunction following HSCT and the only approved treatment in the EU for severe VOD in adults and children undergoing HSCT. Various anti-clotting strategies have been tried by researchers in patients with VOD with mixed results, including Activase (alteplase), a recombinant tissue plasminogen activator marketed by Genentech, Inc., generic heparin sodium injection and Thrombate III (antithrombin III (human)) marketed by Grifols Therapeutics, Inc. While there is currently no direct competition to Defitelio to treat severe VOD, changes in the types of conditioning regimens used as part of HSCT may affect the incidence rate of VOD and demand for Defitelio.
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Vyxeos
. There are a number of alternative established and recently introduced therapies in AML. A key consideration in the treatment of AML patients is the patient’s suitability for chemotherapy. The AML patient population studied in the Vyxeos Phase 3 clinical trial supporting our NDA included fit patients, or those deemed able to tolerate intensive induction chemotherapy. The existing options for the treatment of newly-diagnosed t-AML and AML-MRC in fit patients include cytarabine in combination with an anthracycline (i.e., daunorubicin), known as 7+3. In addition, we are aware of several other products that have been recently approved by the FDA or are in development as treatment options for newly diagnosed AML patients eligible for intensive chemotherapy, such as targeted agents (e.g. midostaurin, enasidenib and ivosidenib), immunotherapies (e.g., gemtuzumab ozogamicin and CAR-T‑cell therapy), and agents disrupting leukemia cell survival (e.g., glasdegib). We are also aware of the use of venetoclax, an AML treatment recently approved by the FDA. Some of the patient populations being studied for, or treated by, these products overlap with the patient population studied in the Vyxeos Phase 3 clinical trial supporting our NDA. The existence of established treatment options and the development of competing products for the treatment of newly-diagnosed t-AML or AML-MRC could negatively impact our ability to successfully commercialize Vyxeos and achieve the level of sales we expect.
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Solriamfetol
. As discussed above, other branded and generic products used to treat EDS in patients with narcolepsy include stimulants, wake-promoting agents such as Provigil and Nuvigil, and generic versions of stimulants and wake-promoting agents. We are also aware that stimulants and wake-promoting agents are prescribed for patients who have OSA. Solriamfetol, if approved by the FDA, will likely face competition from this genericized market. In addition, we are aware of several other products in development to treat excessive sleepiness in patients with narcolepsy or OSA, including, for example, pitolisant, mazindol, modafinil combinations and Avadel’s once-nightly sodium oxybate formulation.
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Xyrem.
We currently have 16 issued patents in the U.S. relating to Xyrem that expire at various times from December 2019 to September 2033. All but four of these patents are listed in the FDA’s publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” or the Orange Book. Our patents relate to Xyrem’s stable and microbially resistant formulation, its manufacturing process, its method of use, including its restricted distribution system, its method of administration, and a drug-drug interaction, or DDI, between Xyrem and divalproex sodium. In October 2018, as a result of the FDA’s grant of pediatric exclusivity, an additional six months was added to the expiration dates of all of our Orange Book-listed patents that have not been invalidated.
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Erwinaze
. Erwinaze has no patent protection. It had been granted orphan drug exclusivity by the FDA for the treatment of ALL in the U.S. until November 2018, and we believe that it is protected by exclusivity that prevents approval of a biosimilar in the U.S. through late 2023 under the U.S. Biologics Price Competition and Innovation Act, or BPCIA.
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Defitelio
. The unique process of deriving defibrotide from porcine DNA is extensive and uses both chemical and biological processes that rely on complex characterization methods. We have U.S. and non-U.S. patents and patent applications relating to various compositions, methods of use and methods of characterization, expiring at various times between June 2019 and November 2035. None of these patents are listed in the Orange Book. Defibrotide has been granted orphan drug exclusivity by the FDA to treat and prevent VOD until March 2023. Defibrotide has also been granted orphan drug designation by the EC and the Korean Ministry of Food and Drug Safety to treat and prevent VOD, by the Commonwealth of Australia-Department of Health for the treatment of VOD and by the EC for the prevention of aGvHD.
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Vyxeos.
We have a portfolio of U.S. and non-U.S. patents and patent applications for Vyxeos and the CombiPlex technology platform relating to various compositions and methods of making and use. These include six U.S. patents covering Vyxeos compositions and methods of use expiring between April 2025 and September 2034 and two U.S. patents covering CombiPlex (which also cover Vyxeos) expiring in January 2027. These patents are listed, or in the process of being listed, in the Orange Book. Vyxeos has been granted orphan drug exclusivity by the FDA until August 2024, seven years from its FDA approval, for the treatment of adults with newly-diagnosed t-AML or AML-MRC. In addition, Vyxeos has been granted orphan drug designation by the EC until August 2028, ten years from its EC approval for the treatment of adults with newly-diagnosed t-AML or AML-MRC.
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Solriamfetol
. We acquired rights to solriamfetol from Aerial in 2014, including Aerial’s patent rights relating to solriamfetol, other than in certain jurisdictions in Asia where SK retains rights. We have a portfolio of U.S. and non-U.S. patents and patent applications for solriamfetol relating to various compositions, formulations and methods of use. Three of our U.S. patents are method of use patents covering treatment of sleep-related conditions expiring between June 2026 and August 2027. A fourth U.S. patent covers the formulation of solriamfetol and expires in September 2037. We are entitled to apply for a patent term extension for one of these patents.
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JZP-258.
We expect that certain patents and patent applications relating to Xyrem will cover our product candidate JZP-258. There are also five additional U.S. patents that will expire in January 2033 covering the formulation and method of making for JZP-258.
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conducting preclinical laboratory and animal testing and submitting the results to the FDA in an investigational new drug, or IND, application requesting approval to test the product candidate in human clinical trials;
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conducting adequate and well-controlled human clinical trials to establish the safety and efficacy of the product candidate in the desired indication;
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submitting an NDA, supplemental NDA, or sNDA, or BLA, as appropriate, to the FDA seeking approval for a specific indication; and
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completing inspections by the FDA of the facilities where the product candidate is manufactured, analyzed and stored to demonstrate compliance with cGMP and any requested FDA audits of the clinical trial sites that generated the data supporting the application.
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Item 1A.
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Risk Factors
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the introduction of new products in the U.S. market that compete with, or otherwise disrupt the market for, Xyrem in the treatment of cataplexy and/or EDS in narcolepsy;
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the introduction of a generic version of Xyrem in the U.S. market before the entry dates specified in our settlements with the abbreviated new drug application, or ANDA, filers or on terms that are different from those contemplated by the settlement agreements;
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increased pricing pressure from, changes in policies by, or restrictions on reimbursement imposed by, third party payors, including pressure to agree to discounts, rebates or other restrictive pricing terms for Xyrem;
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changes in healthcare laws and policy, including changes in requirements for patient assistance programs, rebates, reimbursement and coverage by federal healthcare programs, and changes resulting from increased scrutiny on pharmaceutical pricing and risk evaluation and mitigation strategy, or REMS, programs by government entities;
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changes to or uncertainties around our Xyrem REMS, or any failure to comply with our REMS obligations to the satisfaction of the FDA;
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challenges to our intellectual property around Xyrem, including the possibility of new ANDA or new drug application, or NDA, filers or new post-grant patent review proceedings;
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operational disruptions at the Xyrem central pharmacy;
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any supply or manufacturing problems, including any problems with our sole source Xyrem active pharmaceutical ingredient, or API, provider;
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continued acceptance of Xyrem by physicians and patients, including as a result of negative publicity that surfaces from time to time; and
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changes to our label, including new safety warnings or changes to our boxed warning, that further restrict how we market and sell Xyrem.
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the limited population of patients with ALL, and the incidence of hypersensitivity reactions to
E. coli
-derived asparaginase within that population;
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the development of new asparaginase treatments or treatment protocols for ALL that may not include asparaginase-containing regimens and prescribers’ use of alternate methods to address hypersensitivity reactions;
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the failure to obtain regulatory approval from the FDA or UK Medicines and Healthcare Products Regulatory Agency, or MHRA, to release batches of Erwinaze requiring batch-specific approval due to quality and manufacturing issues;
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difficulties with obtaining and maintaining favorable pricing and reimbursement arrangements;
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potential competition from future biosimilar products;
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PBL’s ability to meet the manufacturing post-marketing commitments imposed by the FDA in connection with its approval of our biologics license application, or BLA;
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our failure to comply with obligations under our agreement with PBL resulting in PBL claiming an uncured material breach; and
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our need to apply for and receive marketing authorizations, through the European Union’s, or EU’s, mutual recognition procedure or otherwise, in certain additional countries if we decide to launch promotional efforts in those countries.
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the continued acceptance of Defitelio in the U.S., the EU and other countries by hospital pharmacy and therapeutics committees and the continued availability of favorable pricing and adequate coverage and reimbursement by government programs and third party payors;
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the limited experience of, and need to educate, physicians in recognizing, diagnosing and treating VOD, particularly in adults;
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the possibility that physicians recognizing VOD symptoms may not initiate or may delay initiation of treatment while waiting for those symptoms to improve, or may terminate treatment before the end of the recommended dosing schedule;
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our ability to successfully maintain or grow sales of Defitelio in Europe and other non-U.S. countries, including our ability to obtain marketing approval in new countries;
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delays or problems in the supply or manufacture of the product;
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the limited size of the population of VOD patients who are indicated for treatment with Defitelio (particularly if changes in HSCT treatment protocols reduce the incidence of VOD diagnosis);
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our ability to meet the post-marketing commitments and requirements imposed by the FDA in connection with its approval of our NDA and by the European Commission, or EC, in connection with its marketing authorization granted “under exceptional circumstances”; and
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our ability to maintain favorable pricing and reimbursement approvals across Europe, particularly in countries that represent significant markets.
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our ability to differentiate Vyxeos from other liposomal chemotherapies and generically available chemotherapy combinations with which physicians and treatment centers are more familiar;
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the acceptance of Vyxeos in the U.S., the EU and other countries by hospital pharmacy and therapeutics committees and the availability of favorable pricing and adequate coverage and reimbursement by government programs and third party payors;
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delays or problems in the supply or manufacture of the product, including the ability of the third parties upon which we rely to manufacture Vyxeos and its APIs to manufacture sufficient quantities in accordance with applicable specifications;
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the increasing complexity of the AML landscape requiring changes in patient identification and treatment selection, including diagnostic tests and monitoring that clinicians may find challenging to incorporate;
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the use of new and novel compounds in AML that are either used off-label or are only approved for use in combination with other agents and that have not been tested in combination with Vyxeos;
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the limited size of the population of high-risk AML patients who may potentially be indicated for treatment with Vyxeos, particularly given the ongoing clinical trials by other companies with the same patient population; and
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our ability to meet the post-marketing commitments and requirements imposed by the FDA in connection with its approval of our NDA and by the EC in connection with its marketing authorization.
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the clinical indications for which a product is approved and any restrictions placed upon the product in connection with its approval, such as a REMS, patient registry requirements or labeling restrictions;
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the prevalence of the disease or condition for which the product is approved and its diagnosis;
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the severity of side effects;
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acceptance by physicians and patients of each product as a safe and effective treatment;
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availability of sufficient product inventory to meet demand, particularly with respect to Erwinaze;
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physicians’ decisions relating to treatment practices based on availability of product, particularly with respect to Erwinaze;
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perceived advantages over alternative treatments;
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relative convenience and ease of administration;
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with respect to Xyrem, physician and patient assessment of the burdens associated with obtaining or maintaining the certifications required under the Xyrem REMS;
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the cost of treatment in relation to alternative treatments, including generic products; and
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the availability of financial or other assistance for patients who are uninsured or underinsured.
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our ability to successfully launch and grow sales of any approved solriamfetol product in the U.S. and EU;
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potential launch delays after any approval, including due to the need for DEA scheduling review which will need to be completed after NDA approval, if any, but before commercial launch;
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the availability of adequate formulary positions and pricing and adequate coverage and reimbursement by third party payors, including government programs, including the impact of any delays in coverage decisions by payors;
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restrictions on permitted promotional activities based on limitations on the approved labeling for the product required by the FDA or the EC;
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market acceptance for an approved solriamfetol product, particularly by OSA physicians;
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delays or problems in the supply or manufacture of an approved solriamfetol product; and
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our ability to satisfy post-marketing commitments and requirements, if any, imposed by the FDA in connection with its approval of our NDA and by the EC in connection with its marketing authorization.
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we are unable to obtain and maintain adequate funding to complete the development of, obtain regulatory approval for and commercialize an acquired product candidate;
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a product candidate proves not to be safe or effective in later clinical trials;
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a product fails to reach its forecasted commercial potential as a result of pricing pressures or for any other reason;
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we experience negative publicity regarding actual or potential future price increases for that product or otherwise; or
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the integration of a product or product candidate gives rise to unforeseen difficulties and expenditures.
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high acquisition costs;
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the need to incur substantial debt or engage in dilutive issuances of equity securities to pay for acquisitions;
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the potential disruption of our historical core business;
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the strain on, and need to continue to expand, our existing operational, technical, financial and administrative infrastructure;
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the difficulties in assimilating employees and corporate cultures;
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the failure to retain key managers and other personnel;
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the challenges in controlling additional costs and expenses in connection with and as a result of any acquisition;
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the need to write down assets or recognize impairment charges;
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the diversion of our management’s attention to integration of operations and corporate and administrative infrastructures; and
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any unanticipated liabilities for activities of or related to the acquired business or its operations, products or product candidates.
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difficulty identifying or enrolling eligible patients, often based on the number of clinical trials, particularly in hematology and oncology, with enrollment criteria targeting the same patient population;
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delays or failures in obtaining regulatory authorization to commence a trial because of safety concerns of regulators relating to our product candidates or similar product candidates of our competitors or failure to follow regulatory guidelines;
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delays or failures in obtaining clinical materials and manufacturing sufficient quantities of the product candidate for use in trials;
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delays or failures in reaching agreement on acceptable terms with prospective study sites;
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delays or failures in obtaining approval of our clinical trial protocol from an institutional review board, known as an ethics committee in Europe, to conduct a clinical trial at a prospective study site;
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delays or failures in recruiting patients to participate in a clinical trial;
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failure of our clinical trials and clinical investigators to be in compliance with the FDA and other regulatory agencies’ requirements, commonly referred to as good clinical practices;
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unforeseen safety issues;
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inability to monitor patients adequately during or after treatment;
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difficulty monitoring multiple study sites;
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failure of our third party clinical trial managers to satisfactorily perform their contractual duties, comply with regulations or meet expected deadlines; or
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insufficient funds to complete the trials.
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our patent applications, or those of our licensors or partners, may not result in issued patents;
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others may independently develop similar or therapeutically equivalent products without infringing our patents, or those of our licensors, such as products that are not covered by the claims of our patents, or for which we do not have adequate exclusive rights under our license agreements;
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our issued patents, or those of our licensors or partners, may be held invalid or unenforceable as a result of legal challenges by third parties or may be vulnerable to legal challenges as a result of changes in applicable law;
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we or our licensors or partners might not have been the first to invent or file, as appropriate, subject matters covered by our issued patents or pending patent applications or those of our licensors or partners;
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competitors may manufacture products in countries where we have not applied for patent protection or that have a different scope of patent protection or that do not respect our patents; or
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others may be issued patents that prevent the sale of our products or require licensing and the payment of significant fees or royalties.
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the diverse regulatory, financial and legal requirements in the countries where we are located or do business, including those related to data security and the use of, or access to, commercial and personal information, taxation, trade laws, including tariffs, export quotas, custom duties or other trade restrictions, and any changes to those requirements;
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challenges inherent in efficiently managing employees in diverse geographies, including the need to adapt systems, policies, benefits and compliance programs to differing labor and employment law and other regulations, as well as maintaining positive interactions with our unionized employees;
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costs of, and liabilities for, our international operations, products or product candidates; and
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fluctuations in currency rates.
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limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes;
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limit our ability to use our cash flow or obtain additional financing for working capital, capital expenditures, acquisitions or other general business purposes;
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require us to use a substantial portion of our cash flow from operations to make debt service payments;
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limit our flexibility to plan for, or react to, changes in our business and industry;
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result in dilution to our existing shareholders in the event exchanges of the Exchangeable Senior Notes are settled in our ordinary shares;
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place us at a competitive disadvantage compared to our less leveraged competitors; and
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increase our vulnerability to the impact of adverse economic and industry conditions.
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incur or assume liens or additional debt or provide guarantees in respect of obligations of other persons;
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issue redeemable preferred stock;
|
•
|
pay dividends or distributions or redeem or repurchase capital stock;
|
•
|
prepay, redeem or repurchase certain debt;
|
•
|
make loans, investments, acquisitions (including acquisitions of exclusive licenses) and capital expenditures;
|
•
|
enter into agreements that restrict distributions from our subsidiaries;
|
•
|
sell assets and capital stock of our subsidiaries;
|
•
|
enter into certain transactions with affiliates; and
|
•
|
consolidate or merge with or into, or sell substantially all of our assets to, another person.
|
•
|
the revenues from our commercial products, which may be affected by many factors, including the extent of competition for Xyrem or our other products;
|
•
|
the cost of acquiring and/or in-licensing any new products and product candidates;
|
•
|
the costs of our commercial operations;
|
•
|
the scope, rate of progress, results and costs of our development and clinical activities;
|
•
|
the cost and timing of obtaining regulatory approvals and of compliance with laws and regulations;
|
•
|
the cost of preparing, filing, prosecuting, defending and enforcing patent claims and other intellectual property rights;
|
•
|
the cost of investigations, litigation and/or settlements related to regulatory oversight and third party claims;
|
•
|
the costs of integration activities related to any future strategic transactions we may engage in; and
|
•
|
the costs arising from changes in laws and regulations, including, for example, healthcare reform legislation.
|
•
|
impose advance notice requirements for shareholder proposals and nominations of directors to be considered at shareholder meetings;
|
•
|
stagger the terms of our board of directors into three classes;
|
•
|
require the approval of a supermajority of the voting power of the shares of our share capital entitled to vote generally at a meeting of shareholders to amend our articles of association; and
|
•
|
permit our board of directors to issue one or more series of preferred shares with rights and preferences, as our shareholders may determine by ordinary resolution.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
(1)
|
This section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
|
(2)
|
Information used in the graph was obtained from Research Data Group, Inc.
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share (2)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (4)
|
||||||
October 1 - October 31, 2018
|
123,399
|
|
|
$
|
159.86
|
|
|
123,000
|
|
|
$
|
86,074,483
|
|
November 1 - November 30, 2018
|
1,780,091
|
|
|
$
|
147.70
|
|
|
1,780,091
|
|
|
$
|
143,189,015
|
|
December 1 - December 31, 2018
|
1,127,314
|
|
|
$
|
145.54
|
|
|
1,127,314
|
|
|
$
|
379,137,805
|
|
Total
|
3,030,804
|
|
|
$
|
147.39
|
|
|
3,030,405
|
|
|
|
(1)
|
This column includes ordinary shares that we reacquired in satisfaction of the exercise price of employee stock options upon exercise, but does not include ordinary shares that we withheld in order to satisfy minimum tax withholding requirements in connection with the vesting of restricted stock units.
|
(2)
|
Average price paid per share includes brokerage commissions.
|
(3)
|
The ordinary shares reported in this column above were purchased pursuant to our publicly announced share repurchase program. In November 2016, we announced that our board of directors authorized the use of up to $300 million to repurchase our ordinary shares. In November and December 2018, our board of directors increased the existing share repurchase program authorization by
$320.0 million
and
$400.0 million
, respectively, thereby increasing the total amount authorized for repurchase to
$1.02 billion
. This authorization has no expiration date.
|
(4)
|
The dollar amount shown represents, as of the end of each fiscal month, the approximate dollar value of ordinary shares that may yet be purchased under our publicly announced share repurchase program, exclusive of any brokerage commissions. As indicated in footnote (3), our board of directors increased the existing share repurchase program authorization in November and December 2018, and the amounts in this column give effect to those increases in the fiscal month approved. The timing and amount of repurchases will depend on a variety of factors, including the price of our ordinary shares, alternative investment opportunities, restrictions under our credit agreement, corporate and regulatory requirements and market conditions, and may be modified, suspended or otherwise discontinued at any time without prior notice.
|
Item 6.
|
Selected Financial Data
|
|
As of December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016(1)
|
|
2015
|
|
2014(2)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and investments
|
$
|
824,622
|
|
|
$
|
601,035
|
|
|
$
|
425,963
|
|
|
$
|
988,785
|
|
|
$
|
684,042
|
|
Working capital
|
888,518
|
|
|
674,330
|
|
|
490,663
|
|
|
1,031,025
|
|
|
799,044
|
|
|||||
Total assets
|
5,203,491
|
|
|
5,123,672
|
|
|
4,800,227
|
|
|
3,332,612
|
|
|
3,308,617
|
|
|||||
Long-term debt, current and non-current (1)(2)
|
1,596,412
|
|
|
1,581,038
|
|
|
2,029,625
|
|
|
1,188,444
|
|
|
1,313,161
|
|
|||||
Retained earnings
|
841,050
|
|
|
917,956
|
|
|
528,907
|
|
|
302,686
|
|
|
34,704
|
|
|||||
Total Jazz Pharmaceuticals plc shareholders’ equity
|
2,757,422
|
|
|
2,713,097
|
|
|
1,877,339
|
|
|
1,598,646
|
|
|
1,371,144
|
|
(1)
|
On May 27, 2016, we entered into a definitive merger agreement with Celator Pharmaceuticals, Inc., or Celator, pursuant to which we made a cash tender offer of
$30.25
per share for all of the outstanding shares of Celator’s common stock. On July 12, 2016, we completed the acquisition of Celator, which acquisition we refer to in this report as the Celator Acquisition, under the terms of the merger agreement. Celator became an indirect wholly-owned subsidiary of Jazz Pharmaceuticals plc, and each share of Celator common stock then outstanding (other than shares owned by us or Celator) was converted into the right to receive
$30.25
, the same price per share offered in the tender offer. The aggregate cash consideration for the Celator Acquisition was
$1.5 billion
. The results of operations of the acquired Celator business, along with the estimated fair values of the assets acquired and liabilities assumed in the Celator Acquisition, have been included in our consolidated financial statements since the closing of the Celator Acquisition on July 12, 2016. On July 12, 2016, we entered into an amendment to our 2015 credit agreement that provided for a revolving credit facility of
$1.25 billion
, which replaced our prior revolving credit facility of
$750.0 million
, and a
$750.0 million
term loan facility. We used the proceeds of
$1.0 billion
of loans under the revolving credit facility, together with cash on hand, to fund the Celator Acquisition. In the third quarter of 2017, we completed a private placement of $575.0 million aggregate principal amount of 1.50% exchangeable senior notes due 2024, or the 2024 Notes, resulting in net proceeds to us, after debt issuance costs, of $559.4 million. We used a portion of the net proceeds from the issuance of the 2024 Notes to repay all then outstanding borrowings under the revolving credit facility. In June 2018, we entered into a second amendment of our 2015 credit agreement, which amended agreement we refer to in this report as our amended credit agreement, which increased our revolving credit facility from $1.25 billion to $1.60 billion, extended the maturity dates of our term loan facility and revolving credit facility from July 12, 2021 to June 7, 2023, and reduced the applicable margin for determining the interest rates on outstanding borrowings under the facilities.
|
2)
|
On January 23, 2014, pursuant to a tender offer, we became the indirect majority shareholder of Gentium S.r.l., or Gentium, acquiring control of Gentium on that date. In February 2014, we completed a subsequent offering period of the tender offer, resulting in total purchases pursuant to the tender offer of approximately
98%
of the fully diluted voting securities of Gentium. As of December 31, 2015, we had acquired the remaining
2%
interest in Gentium for cash consideration of
$17.9 million
, resulting in an aggregate acquisition cost to us of
$994.1 million
, comprising cash payments of
$1.0 billion
offset by proceeds from the exercise of Gentium share options of
$17.1 million
. The results of operations of the acquired Gentium business, along with the estimated fair values of the assets acquired and liabilities assumed in the transaction, have been included in our consolidated financial statements since the completion of the acquisition of Gentium on January 23, 2014, which is referred to in this report as the Gentium Acquisition. In connection with the Gentium Acquisition, on January 23, 2014, we entered into a second amendment to the credit agreement we entered into in June 2012, or the previous credit agreement. We used the proceeds from incremental term loans of $350.0 million and $300.0 million of loans under the revolving credit facility provided for under the previous credit agreement, together with cash on hand, to finance the Gentium Acquisition. In August 2014, we completed a private placement of $575.0 million aggregate principal amount of 1.875% exchangeable senior notes due 2021, or the 2021 Notes, resulting in net proceeds to us, after debt issuance costs, of $558.9 million. We used a portion of the net proceeds from the issuance of the 2021 Notes to repay all then outstanding borrowings under the revolving credit facility provided for under the previous credit agreement.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Xyrem
®
(sodium oxybate) oral solution
, the only product approved by the U.S. Food and Drug Administration, or FDA, and marketed in the U.S. for the treatment of both cataplexy and excessive daytime sleepiness, or EDS, in adult and pediatric patients with narcolepsy;
|
•
|
Erwinaze
®
(asparaginase
Erwinia chrysanthemi
)
, a treatment approved in the U.S. and in certain markets in Europe (where it is marketed as Erwinase
®
) for patients with acute lymphoblastic leukemia who have developed hypersensitivity to
E. coli
-derived asparaginase;
|
•
|
Defitelio
®
(defibrotide sodium)
, a product approved in the U.S. for the treatment of adult and pediatric patients with hepatic veno-occlusive disease, or VOD, also known as sinusoidal obstruction syndrome, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Europe (where it is marketed as Defitelio
®
(defibrotide)) for the treatment of severe VOD in adults and children undergoing HSCT therapy; and
|
•
|
Vyxeos
®
(daunorubicin and cytarabine) liposome for injection
, a product approved in the U.S. and in Europe (where it is marketed as Vyxeos
®
44 mg/100 mg powder for concentrate for solution for infusion) for the treatment of adults with newly-diagnosed therapy-related acute myeloid leukemia, or t-AML, or acute myeloid leukemia, or AML, with myelodysplasia-related changes, or AML-MRC.
|
•
|
Strong financial execution through growth in sales of our current lead marketed products;
|
•
|
Building a diversified product portfolio and development pipeline through a combination of our internal research and development efforts and obtaining rights to clinically meaningful and differentiated on- or near-market products and early- to late-stage product candidates through acquisitions, collaborations, licensing arrangements, partnerships and venture investments; and
|
•
|
Maximizing the value of our products and product candidates by continuing to implement our comprehensive global development plans, including through generating additional clinical data and seeking regulatory approval for new indications.
|
•
|
In August 2018, the European Commission, or EC, granted marketing authorization for Vyxeos for the treatment of adults with newly-diagnosed t-AML or AML-MRC, and shortly thereafter, we commenced a rolling launch of Vyxeos in the European Union, or EU.
|
•
|
In October 2018, the FDA approved our supplemental NDA to revise the labeling for Xyrem to include an indication to treat cataplexy or EDS in pediatric narcolepsy patients ages seven and older and granted Xyrem pediatric exclusivity, adding six months to any regulatory or Orange Book patent exclusivity.
|
•
|
In March 2018, the FDA accepted for filing our NDA seeking marketing approval for solriamfetol for the treatment of EDS associated with OSA or narcolepsy in adult patients; the target action date for the FDA under the Prescription Drug User Fee Act, or PDUFA, for a new molecular entity, originally December 20, 2018, was extended by the FDA to March 20, 2019.
|
•
|
In November 2018, we submitted a marketing authorization application, or MAA, to the European Medicines Agency, or EMA, for solriamfetol for the treatment of EDS associated with OSA or narcolepsy in adult patients.
|
•
|
In August 2018, we announced a five-year collaboration with The University of Texas MD Anderson Cancer Center to evaluate potential treatment options for hematologic malignancies, with a near-term focus on Vyxeos, and shortly thereafter, commenced development activities pursuant to this collaboration.
|
•
|
During 2018, we commenced and/or advanced several development programs in both sleep and hematology/oncology, including (i) completing patient enrollment in our Phase 3 clinical tri
al evaluating JZP-258 for the tre
atment of EDS and cataplexy in narcolepsy, (ii) commencing patient enrollment in our Phase 3 clinical trial evaluating JZP-258 for the treatment of idiopathic hypersomnia and (iii) commencing patient enrollment in our Phase 2 clinical trial evaluating defibrotide for the prevention of acute Graft-versus-Host Disease.
|
•
|
In April 2018, we reached an agreement in principle with the U.S. Department of Justice, or DOJ, on a proposal for a civil settlement of potential claims by the DOJ with respect to an investigation of our support of 501(c)(3) organizations that provide financial assistance to Medicare patients in the amount of $57.0 million, subject to accrual of interest on the settlement amount from the date of the agreement in principle, negotiation of a definitive settlement agreement and other contingencies, which we expect will include entry into a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services.
|
•
|
In May 2018, we purchased a rare pediatric disease priority review voucher, or PRV, from Spark Therapeutics, Inc. for $110.0 million. We may use the PRV to obtain priority review by the FDA for one of our future regulatory submissions.
|
•
|
In June 2018, we entered into a second amendment to our 2015 credit agreement, referred to as our amended credit agreement in this report. With the second amendment, we increased the amounts available under our revolving credit facility from $1.25 billion to $1.60 billion, extended the maturity dates of our term loan facility and revolving credit facility from July 12, 2021 to June 7, 2023, and reduced the applicable margin for determining the interest rates on outstanding borrowings under the facilities.
|
•
|
With entry into a settlement agreement and related agreements resolving our patent infringement litigation against Amneal Pharmaceuticals LLC in October 2018, we settled all outstanding patent infringement litigation against the nine companies that have filed abbreviated new drug applications, or ANDAs, requesting approval to market generic versions of Xyrem.
|
•
|
We announced increases in our share repurchase authorization of $320 million and $400 million in November and December 2018, respectively. During 2018, we repurchased an aggregate of $523.7 million of our ordinary shares at an average price of $148.33 per share.
|
•
|
In January 2019, we entered into a strategic collaboration agreement with Codiak BioSciences, Inc., or Codiak, focused on the research, development and commercialization of exosome therapeutics to treat cancer.
|
|
2018
|
|
Change
|
|
2017
|
|
Change
|
|
2016 (1)
|
||||||||
Product sales, net
|
$
|
1,869,473
|
|
|
17
|
%
|
|
$
|
1,601,399
|
|
|
8
|
%
|
|
$
|
1,477,261
|
|
Royalties and contract revenues
|
21,449
|
|
|
24
|
%
|
|
17,294
|
|
|
61
|
%
|
|
10,712
|
|
|||
Cost of product sales (excluding amortization of intangible assets)
|
121,544
|
|
|
10
|
%
|
|
110,188
|
|
|
5
|
%
|
|
105,386
|
|
|||
Selling, general and administrative
|
683,530
|
|
|
26
|
%
|
|
544,156
|
|
|
8
|
%
|
|
502,892
|
|
|||
Research and development
|
226,616
|
|
|
14
|
%
|
|
198,442
|
|
|
22
|
%
|
|
162,297
|
|
|||
Intangible asset amortization
|
201,498
|
|
|
33
|
%
|
|
152,065
|
|
|
49
|
%
|
|
101,994
|
|
|||
Impairment charges
|
42,896
|
|
|
N/A(2)
|
|
|
—
|
|
|
N/A(2)
|
|
|
—
|
|
|||
Acquired in-process research and development
|
—
|
|
|
N/A(2)
|
|
|
85,000
|
|
|
N/A(2)
|
|
|
23,750
|
|
|||
Interest expense, net
|
77,075
|
|
|
(1
|
)%
|
|
77,756
|
|
|
26
|
%
|
|
61,942
|
|
|||
Foreign exchange loss (gain)
|
6,875
|
|
|
(31
|
)%
|
|
9,969
|
|
|
(396
|
)%
|
|
(3,372
|
)
|
|||
Loss on extinguishment and modification of debt
|
1,425
|
|
|
N/A(2)
|
|
|
—
|
|
|
N/A(2)
|
|
|
638
|
|
|||
Income tax provision (benefit)
|
80,162
|
|
|
(269
|
)%
|
|
(47,470
|
)
|
|
(135
|
)%
|
|
135,236
|
|
|||
Equity in loss of investees
|
2,203
|
|
|
118
|
%
|
|
1,009
|
|
|
166
|
%
|
|
379
|
|
(1)
|
Our financial results include the financial results of the historical Celator business since the closing of the Celator Acquisition on July 12, 2016.
|
(2)
|
Comparison to prior period is not meaningful.
|
|
2018
|
|
Change
|
|
2017
|
|
Change
|
|
2016
|
||||||||
Xyrem
|
$
|
1,404,866
|
|
|
18
|
%
|
|
$
|
1,186,699
|
|
|
7
|
%
|
|
$
|
1,107,616
|
|
Erwinaze/Erwinase
|
174,739
|
|
|
(11
|
)%
|
|
197,340
|
|
|
(2
|
)%
|
|
200,678
|
|
|||
Defitelio/defibrotide
|
149,448
|
|
|
12
|
%
|
|
133,650
|
|
|
23
|
%
|
|
108,952
|
|
|||
Vyxeos
|
100,835
|
|
|
198
|
%
|
|
33,790
|
|
|
N/A(1)
|
|
|
—
|
|
|||
Prialt
|
20,839
|
|
|
(24
|
)%
|
|
27,361
|
|
|
(6
|
)%
|
|
29,120
|
|
|||
Other
|
18,746
|
|
|
(17
|
)%
|
|
22,559
|
|
|
(27
|
)%
|
|
30,895
|
|
|||
Product sales, net
|
1,869,473
|
|
|
17
|
%
|
|
1,601,399
|
|
|
8
|
%
|
|
1,477,261
|
|
|||
Royalties and contract revenues
|
21,449
|
|
|
24
|
%
|
|
17,294
|
|
|
61
|
%
|
|
10,712
|
|
|||
Total revenues
|
$
|
1,890,922
|
|
|
17
|
%
|
|
$
|
1,618,693
|
|
|
9
|
%
|
|
$
|
1,487,973
|
|
(1)
|
Comparison to prior period is not meaningful.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Clinical studies and outside services
|
$
|
117,903
|
|
|
$
|
93,317
|
|
|
$
|
100,165
|
|
Personnel expenses
|
71,158
|
|
|
63,941
|
|
|
47,969
|
|
|||
Milestone expense
|
11,000
|
|
|
19,500
|
|
|
750
|
|
|||
Other
|
26,555
|
|
|
21,684
|
|
|
13,413
|
|
|||
Total
|
$
|
226,616
|
|
|
$
|
198,442
|
|
|
$
|
162,297
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by operating activities
|
$
|
798,904
|
|
|
$
|
693,087
|
|
|
$
|
592,391
|
|
Net cash used in investing activities
|
(394,487
|
)
|
|
(268,950
|
)
|
|
(1,751,155
|
)
|
|||
Net cash provided by (used in) financing activities
|
(479,130
|
)
|
|
(409,111
|
)
|
|
540,987
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
(1,700
|
)
|
|
5,046
|
|
|
(5,045
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(76,413
|
)
|
|
$
|
20,072
|
|
|
$
|
(622,822
|
)
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations (1)
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 years
|
||||||||||
Term loan - principal
|
$
|
651,041
|
|
|
$
|
33,387
|
|
|
$
|
66,774
|
|
|
$
|
550,880
|
|
|
$
|
—
|
|
Term loan - interest (2)
|
87,640
|
|
|
21,719
|
|
|
40,089
|
|
|
25,832
|
|
|
—
|
|
|||||
Exchangeable Senior Notes - principal
|
1,150,000
|
|
|
—
|
|
|
575,000
|
|
|
—
|
|
|
575,000
|
|
|||||
Exchangeable Senior Notes - interest (3)
|
84,094
|
|
|
19,406
|
|
|
38,813
|
|
|
17,250
|
|
|
8,625
|
|
|||||
Revolving credit facility - commitment fee (4)
|
17,978
|
|
|
4,056
|
|
|
8,122
|
|
|
5,800
|
|
|
—
|
|
|||||
Commitment to equity method investees
|
22,175
|
|
|
7,000
|
|
|
14,000
|
|
|
1,175
|
|
|
—
|
|
|||||
Purchase and other obligations (5)
|
146,364
|
|
|
65,075
|
|
|
45,451
|
|
|
29,168
|
|
|
6,670
|
|
|||||
Operating lease obligations (6)
|
39,794
|
|
|
8,404
|
|
|
12,040
|
|
|
10,556
|
|
|
8,794
|
|
|||||
Facility lease obligations (7)
|
189,843
|
|
|
9,881
|
|
|
29,382
|
|
|
31,171
|
|
|
119,409
|
|
|||||
Total
|
$
|
2,388,929
|
|
|
$
|
168,928
|
|
|
$
|
829,671
|
|
|
$
|
671,832
|
|
|
$
|
718,498
|
|
(1)
|
This table does not include potential future milestone payments or royalty obligations to third parties under asset purchase, product development, license and other agreements as the timing and likelihood of such milestone payments are not known, and, in the case of royalty obligations, as the amount of such obligations are not estimable. On January 2, 2019, we entered into a strategic collaboration agreement with Codiak for an exclusive, worldwide, royalty-bearing license to develop, manufacture and commercialize potential therapeutic candidates directed at five targets to be developed using Codiak’s engEx™ precision engineering platform for exosome therapeutics. We made an upfront payment of $56.0 million in January 2019. Codiak is eligible to receive up to $20 million in preclinical development milestone payments across all five programs. Codiak is also eligible to receive milestone payments totaling up to $200 million per target based on investigational new drug application acceptance, clinical and regulatory milestones, including approvals in the U.S., the EU and Japan, and certain sales milestones. Codiak is also eligible to receive tiered royalties on net sales of each approved product. In 2014, we signed a definitive agreement with Aerial BioPharma LLC, or Aerial, under which we acquired worldwide development, manufacturing and commercial rights to solriamfetol (other than in certain jurisdictions in Asia where SK Biopharmaceuticals Co., Ltd, or SK, retains rights). Aerial and SK are currently eligible to receive milestone payments up to an aggregate of $259 million based on development, regulatory and sales milestones and tiered royalties from high single digits to mid-teens based on potential future sales of solriamfetol. In July 2016, we entered into an agreement with Pfenex that granted us worldwide rights to develop and commercialize multiple early-stage hematology product candidates and an option for us to negotiate a license for a recombinant pegaspargase product candidate with Pfenex. This agreement was amended in December 2017. Under the amended agreement, Pfenex received upfront, option and development milestone payments totaling $36 million and may be eligible to receive additional payments of up to $189 million based on the achievement of development, regulatory and sales milestones. Potential future milestone payments to other third parties under other agreements could be up to an aggregate of $85 million. These would become due and payable to other third parties upon the achievement of certain developmental, clinical, regulatory and/or commercial milestones, the timing and likelihood of which are not known. We are also obligated under these agreements to pay royalties on net sales of certain products at specified rates, which royalties are dependent on future product sales and are not provided for in the table above as they are not estimable.
|
(2)
|
Estimated interest for variable rate debt was calculated based on the interest rates in effect as of
December 31, 2018
. The interest rate for our term loan borrowing was
3.90%
as of
December 31, 2018
. Interest that is fixed, associated with our interest rate swaps, is calculated based on the fixed interest swap rate as of
December 31, 2018
.
|
(3)
|
We used the fixed interest rates of 1.875% on the 2021 Notes and 1.50% on the 2024 Notes to estimate interest owed as of
December 31, 2018
until the respective final maturity dates of these notes.
|
(4)
|
Our revolving credit facility has a commitment fee payable on the undrawn amount ranging from 0.25% to 0.35% per annum based upon our secured leverage ratio. In the table above, we used a rate of 0.25% and assumed undrawn amounts of
$1.6 billion
as of
December 31, 2018
to estimate commitment fees owed.
|
(5)
|
Consists primarily of non-cancelable commitments to our third party manufacturers and to ImmunoGen under our collaboration and option agreement.
|
(6)
|
Consists primarily of the minimum lease payments for our office buildings and automobile lease payments for our sales force. Operating expenses associated with our leased office buildings are not included in table above.
|
(7)
|
This includes a lease agreement we entered into in January 2015 to lease office space located in Palo Alto, California in a building subsequently constructed by the landlord, which we occupied beginning in October 2017, and a lease agreement we entered into in September 2017 to lease additional office space located in Palo Alto, California in a second building to be constructed by the same landlord, which we expect to occupy by the end of 2019. Not included in the table above are our estimated costs of approximately $21 million associated with the design, development and construction of tenant improvements under the lease agreement entered into in September 2017, which estimate does not include a tenant improvement allowance to be provided by the landlord.
|
|
Rebates Payable
|
|
Sales Returns Reserve
|
|
Chargebacks
|
|
Discounts and Distributor Fees
|
|
Total
|
||||||||||
Balance at December 31, 2015
|
$
|
62,038
|
|
|
$
|
6,110
|
|
|
$
|
4,896
|
|
|
$
|
3,724
|
|
|
$
|
76,768
|
|
Provision, net
|
129,608
|
|
|
(537
|
)
|
|
40,430
|
|
|
40,057
|
|
|
209,558
|
|
|||||
Payments/credits
|
(123,383
|
)
|
|
(1,207
|
)
|
|
(40,577
|
)
|
|
(39,582
|
)
|
|
(204,749
|
)
|
|||||
Balance at December 31, 2016
|
68,263
|
|
|
4,366
|
|
|
4,749
|
|
|
4,199
|
|
|
81,577
|
|
|||||
Provision, net
|
144,596
|
|
|
446
|
|
|
41,941
|
|
|
36,642
|
|
|
223,625
|
|
|||||
Payments/credits
|
(135,697
|
)
|
|
(1,161
|
)
|
|
(43,027
|
)
|
|
(36,532
|
)
|
|
(216,417
|
)
|
|||||
Balance at December 31, 2017
|
77,162
|
|
|
3,651
|
|
|
3,663
|
|
|
4,309
|
|
|
88,785
|
|
|||||
Provision, net
|
160,648
|
|
|
1,203
|
|
|
41,387
|
|
|
42,956
|
|
|
246,194
|
|
|||||
Payments/credits
|
(156,696
|
)
|
|
(2,344
|
)
|
|
(44,642
|
)
|
|
(41,808
|
)
|
|
(245,490
|
)
|
|||||
Balance at December 31, 2018
|
$
|
81,114
|
|
|
$
|
2,510
|
|
|
$
|
408
|
|
|
$
|
5,457
|
|
|
$
|
89,489
|
|
•
|
estimating the timing of and expected costs to complete the in-process projects;
|
•
|
projecting regulatory approvals;
|
•
|
estimating future cash flows from product sales resulting from completed products and in-process projects; and
|
•
|
developing appropriate discount rates and probability rates by project.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
1.
|
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
|
2.
|
Our management used the Committee of Sponsoring Organizations of the Treadway Commission Internal Control - Integrated Framework (2013), or the COSO framework, to evaluate the effectiveness of internal control over financial reporting. Management believes that the COSO framework is a suitable framework for its evaluation of financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of our internal control over financial reporting, is sufficiently complete so that those relevant factors
|
3.
|
Management has assessed the effectiveness of our internal control over financial reporting as of
December 31, 2018
and has concluded that such internal control over financial reporting was effective. There were no material weaknesses in internal control over financial reporting identified by management.
|
4.
|
KPMG, our independent registered public accounting firm, has audited the consolidated financial statements of Jazz Pharmaceuticals plc as of and for the year ended
December 31, 2018
, included herein, and has issued an audit report on our internal control over financial reporting, which is included below.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
•
|
The information relating to our directors and nominees for director is to be included in the section entitled “Proposal 1—Election of Directors;”
|
•
|
The information relating to our executive officers is to be included in the section entitled “Executive Officers;”
|
•
|
The information relating to our audit committee, audit committee financial expert and procedures by which shareholders may recommend nominees to our board of directors is to be included in the section entitled “Corporate Governance and Board Matters;” and
|
•
|
The information regarding compliance with Section 16(a) of the Exchange Act is to be included in the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance.”
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
1.
|
Index to Financial Statements:
|
2.
|
Financial Statement Schedules:
|
Exhibit
Number
|
|
Description of Document
|
|
2.1
|
|
|
|
2.2
|
|
|
|
2.3
|
|
|
|
2.4
|
|
|
|
2.5
|
|
|
2.6†
|
|
|
|
2.7†
|
|
|
|
2.8
|
|
|
|
2.9
|
|
|
|
3.1
|
|
|
|
4.1
|
|
|
|
4.3A
|
|
|
|
4.3B
|
|
|
|
4.4A
|
|
|
|
4.4B
|
|
|
|
4.5A
|
|
|
|
4.5B
|
|
|
|
10.1
|
|
|
|
10.2†
|
|
|
|
10.3†
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6†
|
|
|
|
10.7†
|
|
|
|
10.8A†
|
|
|
|
10.8B†
|
|
|
|
10.9A
|
|
|
|
10.9B
|
|
|
|
10.9C
|
|
|
|
10.10A
|
|
|
|
10.10B
|
|
|
|
10.10C
|
|
|
|
10.11
|
|
|
10.12A
|
|
|
|
10.12B
|
|
|
|
10.12C
|
|
|
|
10.13A
|
|
|
|
10.13B
|
|
|
|
10.14+
|
|
|
|
10.15+
|
|
|
|
10.16+
|
|
|
|
10.17A+
|
|
|
|
10.17B+
|
|
|
|
10.17C+
|
|
|
|
10.17D+
|
|
|
|
10.18+
|
|
|
|
10.19A+
|
|
|
|
10.19B+
|
|
|
10.19C+
|
|
|
|
10.19D+
|
|
|
|
10.21+
|
|
|
|
10.22A+
|
|
|
|
10.22B+
|
|
|
|
10.22C+
|
|
|
|
10.22D+
|
|
|
|
10.22E+
|
|
|
|
10.22F+
|
|
|
|
10.22G+
|
|
|
|
10.22H+
|
|
|
|
10.23A+
|
|
|
|
10.23B+
|
|
|
|
10.23C+
|
|
|
|
10.23D+
|
|
|
10.23E+
|
|
|
|
10.23F+
|
|
|
|
10.23G+
|
|
|
|
10.23H+
|
|
|
|
10.23I+
|
|
|
|
10.23J+
|
|
|
|
10.23K+
|
|
|
|
10.23L+
|
|
|
|
10.23M+
|
|
|
|
10.23N+
|
|
|
|
10.23O+
|
|
|
|
10.23P+
|
|
|
|
10.23Q+
|
|
|
|
10.23R+
|
|
|
10.23S+
|
|
|
|
10.23T+
|
|
|
|
10.23U+
|
|
|
|
10.24+
|
|
|
|
10.24A+
|
|
|
|
10.24B+
|
|
|
|
10.24C+
|
|
|
|
10.24D+
|
|
|
|
10.24E+
|
|
|
|
10.24F+
|
|
|
|
10.24G+
|
|
|
|
10.24H+
|
|
|
|
10.24I+
|
|
|
|
10.25A+
|
|
|
10.25B+
|
|
|
|
10.26A+
|
|
|
|
10.26B+
|
|
|
|
10.26C+
|
|
|
|
10.26D+
|
|
|
|
10.27+
|
|
|
|
10.28+
|
|
|
|
10.29A+
|
|
|
|
10.29B+
|
|
|
|
10.29C+
|
|
|
|
21.1
|
|
|
|
23.1
|
|
|
|
24.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1*
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
+
|
Indicates management contract or compensatory plan.
|
†
|
Confidential treatment has been granted for portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.
|
*
|
The certifications attached as Exhibit 32.1 accompany this Annual Report on Form 10-K pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
Item 16.
|
Form 10-K Summary
|
Date: February 26, 2019
|
Jazz Pharmaceuticals public limited company
|
|
(Registrant)
|
|
/s/ B
RUCE
C. C
OZADD
|
|
Bruce C. Cozadd
Chairman and Chief Executive Officer and Director
(Principal Executive Officer)
|
|
|
|
/s/ M
ATTHEW
P. Y
OUNG
|
|
Matthew P. Young
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
/s/ K
AREN
J. W
ILSON
|
|
Karen J. Wilson
Senior Vice President, Finance
(Principal Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ B
RUCE
C. C
OZADD
|
|
Chairman, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
February 26, 2019
|
Bruce C. Cozadd
|
|
|
||
/s/ M
ATTHEW
P. Y
OUNG
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
February 26, 2019
|
Matthew P. Young
|
|
|
||
/s/ K
AREN
J. W
ILSON
|
|
Senior Vice President, Finance
(Principal Accounting Officer)
|
|
February 26, 2019
|
Karen J. Wilson
|
|
|
||
/s/ P
AUL
L. B
ERNS
|
|
Director
|
|
February 26, 2019
|
Paul L. Berns
|
|
|
||
/s/ P
ATRICK
G. E
NRIGHT
|
|
Director
|
|
February 26, 2019
|
Patrick G. Enright
|
|
|
||
/s/ P
ETER
G
RAY
|
|
Director
|
|
February 26, 2019
|
Peter Gray
|
|
|
||
/s/ H
EATHER
A
NN
M
CSHARRY
|
|
Director
|
|
February 26, 2019
|
Heather Ann McSharry
|
|
|
||
/s/ S
EAMUS
C. M
ULLIGAN
|
|
Director
|
|
February 26, 2019
|
Seamus C. Mulligan
|
|
|
||
/s/ K
ENNETH
W. O’
KEEFE
|
|
Director
|
|
February 26, 2019
|
Kenneth W. O’Keefe
|
|
|
||
/s/ A
NNE
O’
RIORDAN
|
|
Director
|
|
February 26, 2019
|
Anne O’Riordan
|
|
|
||
/s/
N
ORBERT
G
.
R
IEDEL,
P
H.
D
.
|
|
Director
|
|
February 26, 2019
|
Norbert G. Riedel, Ph.D.
|
|
|
||
/s/ E
LMAR
S
CHNEE
|
|
Director
|
|
February 26, 2019
|
Elmar Schnee
|
|
|
||
/s/ C
ATHERINE
A. S
OHN,
P
HARM
.D.
|
|
Director
|
|
February 26, 2019
|
Catherine A. Sohn, Pharm.D.
|
|
|
||
/s/ R
ICK
E W
INNINGHAM
|
|
Director
|
|
February 26, 2019
|
Rick E Winningham
|
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
309,622
|
|
|
$
|
386,035
|
|
Investments
|
515,000
|
|
|
215,000
|
|
||
Accounts receivable, net of allowances of $534 and $4,162 at December 31, 2018 and 2017, respectively
|
263,838
|
|
|
224,129
|
|
||
Inventories
|
52,956
|
|
|
43,245
|
|
||
Prepaid expenses
|
25,017
|
|
|
23,182
|
|
||
Other current assets
|
67,572
|
|
|
76,686
|
|
||
Total current assets
|
1,234,005
|
|
|
968,277
|
|
||
Property, plant and equipment, net
|
200,358
|
|
|
170,080
|
|
||
Intangible assets, net
|
2,731,334
|
|
|
2,979,127
|
|
||
Goodwill
|
927,630
|
|
|
947,537
|
|
||
Deferred tax assets, net
|
57,879
|
|
|
34,559
|
|
||
Deferred financing costs
|
9,589
|
|
|
7,673
|
|
||
Other non-current assets
|
42,696
|
|
|
16,419
|
|
||
Total assets
|
$
|
5,203,491
|
|
|
$
|
5,123,672
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
40,602
|
|
|
$
|
24,368
|
|
Accrued liabilities
|
264,887
|
|
|
198,779
|
|
||
Current portion of long-term debt
|
33,387
|
|
|
40,605
|
|
||
Income taxes payable
|
1,197
|
|
|
21,577
|
|
||
Deferred revenue
|
5,414
|
|
|
8,618
|
|
||
Total current liabilities
|
345,487
|
|
|
293,947
|
|
||
Deferred revenue, non-current
|
9,581
|
|
|
16,115
|
|
||
Long-term debt, less current portion
|
1,563,025
|
|
|
1,540,433
|
|
||
Deferred tax liabilities, net
|
309,097
|
|
|
383,472
|
|
||
Other non-current liabilities
|
218,879
|
|
|
176,608
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Ordinary shares, nominal value $0.0001 per share; 300,000 shares authorized; 57,504 and 59,898 shares issued and outstanding at December 31, 2018 and 2017, respectively
|
6
|
|
|
6
|
|
||
Non-voting euro deferred shares, €0.01 par value per share; 4,000 shares authorized, issued and outstanding at both December 31, 2018 and 2017
|
55
|
|
|
55
|
|
||
Capital redemption reserve
|
472
|
|
|
472
|
|
||
Additional paid-in capital
|
2,113,630
|
|
|
1,935,486
|
|
||
Accumulated other comprehensive loss
|
(197,791
|
)
|
|
(140,878
|
)
|
||
Retained earnings
|
841,050
|
|
|
917,956
|
|
||
Total shareholders’ equity
|
2,757,422
|
|
|
2,713,097
|
|
||
Total liabilities and shareholders’ equity
|
$
|
5,203,491
|
|
|
$
|
5,123,672
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Product sales, net
|
$
|
1,869,473
|
|
|
$
|
1,601,399
|
|
|
$
|
1,477,261
|
|
Royalties and contract revenues
|
21,449
|
|
|
17,294
|
|
|
10,712
|
|
|||
Total revenues
|
1,890,922
|
|
|
1,618,693
|
|
|
1,487,973
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Cost of product sales (excluding amortization of intangible assets)
|
121,544
|
|
|
110,188
|
|
|
105,386
|
|
|||
Selling, general and administrative
|
683,530
|
|
|
544,156
|
|
|
502,892
|
|
|||
Research and development
|
226,616
|
|
|
198,442
|
|
|
162,297
|
|
|||
Intangible asset amortization
|
201,498
|
|
|
152,065
|
|
|
101,994
|
|
|||
Impairment charges
|
42,896
|
|
|
—
|
|
|
—
|
|
|||
Acquired in-process research and development
|
—
|
|
|
85,000
|
|
|
23,750
|
|
|||
Total operating expenses
|
1,276,084
|
|
|
1,089,851
|
|
|
896,319
|
|
|||
Income from operations
|
614,838
|
|
|
528,842
|
|
|
591,654
|
|
|||
Interest expense, net
|
(77,075
|
)
|
|
(77,756
|
)
|
|
(61,942
|
)
|
|||
Foreign exchange gain (loss)
|
(6,875
|
)
|
|
(9,969
|
)
|
|
3,372
|
|
|||
Loss on extinguishment and modification of debt
|
(1,425
|
)
|
|
—
|
|
|
(638
|
)
|
|||
Income before income tax provision (benefit) and equity in loss of investees
|
529,463
|
|
|
441,117
|
|
|
532,446
|
|
|||
Income tax provision (benefit)
|
80,162
|
|
|
(47,740
|
)
|
|
135,236
|
|
|||
Equity in loss of investees
|
2,203
|
|
|
1,009
|
|
|
379
|
|
|||
Net income
|
$
|
447,098
|
|
|
$
|
487,848
|
|
|
$
|
396,831
|
|
|
|
|
|
|
|
||||||
Net income per ordinary share:
|
|
|
|
|
|
||||||
Basic
|
$
|
7.45
|
|
|
$
|
8.13
|
|
|
$
|
6.56
|
|
Diluted
|
$
|
7.30
|
|
|
$
|
7.96
|
|
|
$
|
6.41
|
|
Weighted-average ordinary shares used in per share calculations - basic
|
59,976
|
|
|
60,018
|
|
|
60,500
|
|
|||
Weighted-average ordinary shares used in per share calculations - diluted
|
61,221
|
|
|
61,317
|
|
|
61,870
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
447,098
|
|
|
$
|
487,848
|
|
|
$
|
396,831
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(58,988
|
)
|
|
174,973
|
|
|
(49,861
|
)
|
|||
Unrealized gain on hedging activities, net of income tax provision of $289, $212 and $0, respectively
|
2,022
|
|
|
1,482
|
|
|
—
|
|
|||
Other comprehensive income (loss)
|
(56,966
|
)
|
|
176,455
|
|
|
(49,861
|
)
|
|||
Total comprehensive income
|
$
|
390,132
|
|
|
$
|
664,303
|
|
|
$
|
346,970
|
|
|
Ordinary Shares
|
|
Non-voting Euro Deferred
|
|
Capital Redemption Reserve
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained Earnings
|
|
Total
Equity
|
||||||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||||||||||
Balance at December 31, 2015
|
61,305
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
471
|
|
|
$
|
1,562,900
|
|
|
$
|
(267,472
|
)
|
|
$
|
302,686
|
|
|
$
|
1,598,646
|
|
Cumulative effect adjustment from adoption of ASU No. 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107,687
|
|
|
107,687
|
|
|||||||
Issuance of ordinary shares in conjunction with exercise of share options
|
399
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,880
|
|
|
—
|
|
|
—
|
|
|
16,880
|
|
|||||||
Issuance of ordinary shares under employee stock purchase plan
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,294
|
|
|
—
|
|
|
—
|
|
|
7,294
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,234
|
)
|
|
—
|
|
|
—
|
|
|
(21,234
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99,392
|
|
|
—
|
|
|
—
|
|
|
99,392
|
|
|||||||
Shares repurchased
|
(2,243
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(278,297
|
)
|
|
(278,296
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49,861
|
)
|
|
—
|
|
|
(49,861
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
396,831
|
|
|
396,831
|
|
|||||||
Balance at December 31, 2016
|
59,820
|
|
|
6
|
|
|
4,000
|
|
|
55
|
|
|
472
|
|
|
1,665,232
|
|
|
(317,333
|
)
|
|
528,907
|
|
|
1,877,339
|
|
|||||||
Issuance of Exchangeable Senior Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149,767
|
|
|
—
|
|
|
—
|
|
|
149,767
|
|
|||||||
Issuance of ordinary shares in conjunction with exercise of share options
|
428
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,683
|
|
|
—
|
|
|
—
|
|
|
22,683
|
|
|||||||
Issuance of ordinary shares under employee stock purchase plan
|
104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,141
|
|
|
—
|
|
|
—
|
|
|
9,141
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,589
|
)
|
|
—
|
|
|
—
|
|
|
(18,589
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107,252
|
|
|
—
|
|
|
—
|
|
|
107,252
|
|
|||||||
Shares repurchased
|
(704
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98,799
|
)
|
|
(98,799
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176,455
|
|
|
—
|
|
|
176,455
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
487,848
|
|
|
487,848
|
|
|||||||
Balance at December 31, 2017
|
59,898
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
1,935,486
|
|
|
$
|
(140,878
|
)
|
|
$
|
917,956
|
|
|
$
|
2,713,097
|
|
|
Ordinary Shares
|
|
Non-voting Euro Deferred
|
|
Capital Redemption Reserve
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained Earnings
|
|
Total
Equity
|
||||||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||||||||||
Balance at December 31, 2017
|
59,898
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
1,935,486
|
|
|
$
|
(140,878
|
)
|
|
$
|
917,956
|
|
|
$
|
2,713,097
|
|
Cumulative effect adjustment from adoption of new accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
(332
|
)
|
|
(279
|
)
|
|||||||
Issuance of ordinary shares in conjunction with exercise of share options
|
772
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,918
|
|
|
—
|
|
|
—
|
|
|
82,918
|
|
|||||||
Issuance of ordinary shares under employee stock purchase plan
|
111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,419
|
|
|
—
|
|
|
—
|
|
|
10,419
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
253
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,925
|
)
|
|
—
|
|
|
—
|
|
|
(17,925
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,732
|
|
|
—
|
|
|
—
|
|
|
102,732
|
|
|||||||
Shares repurchased
|
(3,530
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(523,672
|
)
|
|
(523,672
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,966
|
)
|
|
—
|
|
|
(56,966
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
447,098
|
|
|
447,098
|
|
|||||||
Balance at December 31, 2018
|
57,504
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,113,630
|
|
|
$
|
(197,791
|
)
|
|
$
|
841,050
|
|
|
$
|
2,757,422
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
447,098
|
|
|
$
|
487,848
|
|
|
$
|
396,831
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Intangible asset amortization
|
201,498
|
|
|
152,065
|
|
|
101,994
|
|
|||
Share-based compensation
|
102,441
|
|
|
106,900
|
|
|
98,771
|
|
|||
Impairment charges
|
42,896
|
|
|
—
|
|
|
—
|
|
|||
Depreciation
|
15,233
|
|
|
13,089
|
|
|
11,786
|
|
|||
Acquired in-process research and development
|
—
|
|
|
85,000
|
|
|
23,750
|
|
|||
Loss on disposal of assets
|
655
|
|
|
473
|
|
|
47
|
|
|||
Deferred tax benefit
|
(88,815
|
)
|
|
(225,591
|
)
|
|
(41,163
|
)
|
|||
Provision for losses on accounts receivable and inventory
|
4,728
|
|
|
2,190
|
|
|
2,209
|
|
|||
Loss on extinguishment and modification of debt
|
1,425
|
|
|
—
|
|
|
638
|
|
|||
Amortization of debt discount and deferred financing costs
|
43,960
|
|
|
30,026
|
|
|
22,133
|
|
|||
Other non-cash transactions
|
4,499
|
|
|
14,321
|
|
|
(3,741
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(40,132
|
)
|
|
12,278
|
|
|
(25,603
|
)
|
|||
Inventories
|
(18,512
|
)
|
|
(8,667
|
)
|
|
(17,024
|
)
|
|||
Prepaid expenses and other current assets
|
6,697
|
|
|
(26,874
|
)
|
|
(15,700
|
)
|
|||
Other non-current assets
|
(320
|
)
|
|
119
|
|
|
267
|
|
|||
Accounts payable
|
17,040
|
|
|
214
|
|
|
361
|
|
|||
Accrued liabilities
|
71,208
|
|
|
(6,578
|
)
|
|
11,989
|
|
|||
Income taxes payable
|
(19,735
|
)
|
|
16,331
|
|
|
2,962
|
|
|||
Deferred revenue
|
(7,497
|
)
|
|
21,009
|
|
|
(1,315
|
)
|
|||
Other non-current liabilities
|
14,537
|
|
|
18,934
|
|
|
23,199
|
|
|||
Net cash provided by operating activities
|
798,904
|
|
|
693,087
|
|
|
592,391
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Acquisition of investments
|
(1,165,915
|
)
|
|
(385,000
|
)
|
|
(132,181
|
)
|
|||
Proceeds from maturity of investments
|
855,000
|
|
|
230,000
|
|
|
66,906
|
|
|||
Acquired in-process research and development
|
—
|
|
|
(85,000
|
)
|
|
(23,750
|
)
|
|||
Purchases of property, plant and equipment
|
(20,370
|
)
|
|
(28,950
|
)
|
|
(9,687
|
)
|
|||
Acquisitions, net of cash acquired
|
—
|
|
|
—
|
|
|
(1,502,443
|
)
|
|||
Acquisition of intangible assets
|
(111,100
|
)
|
|
—
|
|
|
(150,000
|
)
|
|||
Net proceeds from sale of assets
|
47,898
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(394,487
|
)
|
|
(268,950
|
)
|
|
(1,751,155
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Net proceeds from issuance of debt
|
—
|
|
|
559,393
|
|
|
994,647
|
|
|||
Proceeds from employee equity incentive and purchase plans
|
93,337
|
|
|
31,824
|
|
|
24,174
|
|
|||
Share repurchases
|
(523,672
|
)
|
|
(98,799
|
)
|
|
(278,296
|
)
|
|||
Payment of employee withholding taxes related to share-based awards
|
(17,925
|
)
|
|
(18,589
|
)
|
|
(21,234
|
)
|
|||
Repayments of long-term debt
|
(25,717
|
)
|
|
(36,094
|
)
|
|
(28,304
|
)
|
|||
Payment of debt modification costs
|
(6,406
|
)
|
|
—
|
|
|
—
|
|
|||
Repayments under revolving credit facility
|
—
|
|
|
(850,000
|
)
|
|
(150,000
|
)
|
|||
Proceeds from tenant improvement allowance on build-to-suit lease
|
1,253
|
|
|
3,154
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
(479,130
|
)
|
|
(409,111
|
)
|
|
540,987
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
(1,700
|
)
|
|
5,046
|
|
|
(5,045
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(76,413
|
)
|
|
20,072
|
|
|
(622,822
|
)
|
|||
Cash and cash equivalents, at beginning of period
|
386,035
|
|
|
365,963
|
|
|
988,785
|
|
|||
Cash and cash equivalents, at end of period
|
$
|
309,622
|
|
|
$
|
386,035
|
|
|
$
|
365,963
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
42,706
|
|
|
$
|
44,609
|
|
|
$
|
39,898
|
|
Cash paid for income taxes
|
164,217
|
|
|
174,124
|
|
|
160,306
|
|
|||
Non-cash investing activities:
|
|
|
|
|
|
||||||
Amounts capitalized in connection with facility lease obligations
|
27,747
|
|
|
40,970
|
|
|
23,799
|
|
•
|
Xyrem
®
(sodium oxybate) oral solution
, the only product approved by the U.S. Food and Drug Administration, or FDA, and marketed in the U.S. for the treatment of both cataplexy and excessive daytime sleepiness, or EDS, in adult and pediatric patients with narcolepsy;
|
•
|
Erwinaze
®
(asparaginase
Erwinia chrysanthemi
)
, a treatment approved in the U.S. and in certain markets in Europe (where it is marketed as Erwinase
®
) for patients with acute lymphoblastic leukemia who have developed hypersensitivity to
E. coli
-derived asparaginase;
|
•
|
Defitelio
®
(defibrotide sodium)
, a product approved in the U.S. for the treatment of adult and pediatric patients with hepatic veno-occlusive disease, or VOD, also known as sinusoidal obstruction syndrome, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Europe (where it is marketed as Defitelio
®
(defibrotide)) for the treatment of severe VOD in adults and children undergoing HSCT therapy; and
|
•
|
Vyxeos
®
(daunorubicin and cytarabine) liposome for injection
, a product approved in the U.S. and in Europe (where it is marketed as Vyxeos
®
44 mg/100 mg powder for concentrate for solution for infusion) for the treatment of adults with newly-diagnosed therapy-related acute myeloid leukemia or acute myeloid leukemia with myelodysplasia-related changes.
|
•
|
Strong financial execution through growth in sales of our current lead marketed products;
|
•
|
Building a diversified product portfolio and development pipeline through a combination of our internal research and development efforts and obtaining rights to clinically meaningful and differentiated on- or near-market products and early- to late-stage product candidates through acquisitions, collaborations, licensing arrangements, partnerships and venture investments; and
|
•
|
Maximizing the value of our products and product candidates by continuing to implement our comprehensive global development plans, including through generating additional clinical data and seeking regulatory approval for new indications.
|
|
Balance at December 31, 2017
|
|
Transition Adjustments
|
|
Balance at January 1,
2018 |
||||||
Assets:
|
|
|
|
|
|
||||||
Deferred tax assets, net
|
$
|
34,559
|
|
|
$
|
595
|
|
|
$
|
35,154
|
|
Liabilities:
|
|
|
|
|
|
||||||
Deferred revenue
|
8,618
|
|
|
(1,120
|
)
|
|
7,498
|
|
|||
Deferred revenue, non-current
|
16,115
|
|
|
(1,120
|
)
|
|
14,995
|
|
|||
Deferred tax liabilities, net
|
383,472
|
|
|
3,114
|
|
|
386,586
|
|
|||
Shareholders' Equity:
|
|
|
|
|
|
||||||
Accumulated other comprehensive loss
|
(140,878
|
)
|
|
53
|
|
|
(140,825
|
)
|
|||
Retained earnings
|
917,956
|
|
|
(332
|
)
|
|
917,624
|
|
Buildings
|
40 years
|
Manufacturing equipment and machinery
|
5-10 years
|
Computer software and equipment
|
3 years
|
Furniture and fixtures
|
5 years
|
Cash and cash equivalents
|
$
|
26,137
|
|
Other receivables
|
386
|
|
|
Prepaid expenses and deposits
|
151
|
|
|
Property, plant and equipment
|
767
|
|
|
Intangible assets
|
1,811,250
|
|
|
Goodwill
|
252,825
|
|
|
Other non-current assets
|
43
|
|
|
Accrued liabilities
|
(19,076
|
)
|
|
Deferred tax liability, net, non-current
|
(542,901
|
)
|
|
Other non-current liabilities
|
(1,002
|
)
|
|
Total acquisition consideration - cash paid
|
$
|
1,528,580
|
|
•
|
The exclusion of acquisition-related and integration expenses of
$13.6 million
in 2016.
|
•
|
An increase in interest expense of
$13.7 million
in 2016 incurred on additional borrowings made to partially fund the Celator Acquisition as if the borrowings had occurred on January 1, 2015.
|
|
Year Ended December 31, 2016
|
||
Revenues
|
$
|
1,488,118
|
|
Net income attributable to Jazz Pharmaceuticals plc
|
$
|
386,342
|
|
Net income attributable to Jazz Pharmaceuticals plc per ordinary share - basic
|
$
|
6.39
|
|
Net income attributable to Jazz Pharmaceuticals plc per ordinary share - diluted
|
$
|
6.24
|
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
|
Cash and Cash Equivalents
|
|
Investments
|
||||||||||||
Cash
|
$
|
215,606
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
215,606
|
|
|
$
|
215,606
|
|
|
$
|
—
|
|
Time deposits
|
515,000
|
|
|
—
|
|
|
—
|
|
|
515,000
|
|
|
—
|
|
|
515,000
|
|
||||||
Money market funds
|
94,016
|
|
|
—
|
|
|
—
|
|
|
94,016
|
|
|
94,016
|
|
|
—
|
|
||||||
Totals
|
$
|
824,622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
824,622
|
|
|
$
|
309,622
|
|
|
$
|
515,000
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
|
Cash and Cash
Equivalents |
|
Investments
|
||||||||||||
Cash
|
$
|
225,235
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
225,235
|
|
|
$
|
225,235
|
|
|
$
|
—
|
|
Time deposits
|
235,000
|
|
|
—
|
|
|
—
|
|
|
235,000
|
|
|
20,000
|
|
|
215,000
|
|
||||||
Money market funds
|
140,800
|
|
|
—
|
|
|
—
|
|
|
140,800
|
|
|
140,800
|
|
|
—
|
|
||||||
Totals
|
$
|
601,035
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
601,035
|
|
|
$
|
386,035
|
|
|
$
|
215,000
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Quoted
Prices in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Total
Estimated Fair Value |
|
Quoted
Prices in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Total
Estimated Fair Value |
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Time deposits
|
$
|
—
|
|
|
$
|
515,000
|
|
|
$
|
515,000
|
|
|
$
|
—
|
|
|
$
|
235,000
|
|
|
$
|
235,000
|
|
Money market funds
|
94,016
|
|
|
—
|
|
|
94,016
|
|
|
140,800
|
|
|
—
|
|
|
140,800
|
|
||||||
Interest rate contracts
|
—
|
|
|
4,070
|
|
|
4,070
|
|
|
—
|
|
|
2,138
|
|
|
2,138
|
|
||||||
Foreign exchange forward contracts
|
—
|
|
|
1,194
|
|
|
1,194
|
|
|
—
|
|
|
15,495
|
|
|
15,495
|
|
||||||
Totals
|
$
|
94,016
|
|
|
$
|
520,264
|
|
|
$
|
614,280
|
|
|
$
|
140,800
|
|
|
$
|
252,633
|
|
|
$
|
393,433
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
392
|
|
|
$
|
392
|
|
Foreign exchange forward contracts
|
—
|
|
|
1,460
|
|
|
1,460
|
|
|
—
|
|
|
5,017
|
|
|
5,017
|
|
||||||
Totals
|
$
|
—
|
|
|
$
|
1,460
|
|
|
$
|
1,460
|
|
|
$
|
—
|
|
|
$
|
5,409
|
|
|
$
|
5,409
|
|
|
Year Ended December 31,
|
||||||
Interest Rate Contracts:
|
2018
|
|
2017
|
||||
Gain (loss) recognized in accumulated other comprehensive loss, net of tax
|
$
|
2,274
|
|
|
$
|
(213
|
)
|
Loss (gain) reclassified from accumulated other comprehensive loss to interest expense, net of tax
|
$
|
(252
|
)
|
|
$
|
1,695
|
|
|
Year Ended December 31,
|
||||||
Foreign Exchange Forward Contracts:
|
2018
|
|
2017
|
||||
Gain (loss) recognized in foreign exchange gain (loss)
|
$
|
(14,648
|
)
|
|
$
|
17,902
|
|
|
December 31, 2018
|
||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Interest rate contracts
|
Other current assets
|
|
$
|
1,929
|
|
|
Accrued liabilities
|
|
$
|
—
|
|
|
Other non-current assets
|
|
2,141
|
|
|
|
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Other current assets
|
|
1,194
|
|
|
Accrued liabilities
|
|
1,460
|
|
||
Total fair value of derivative instruments
|
|
|
$
|
5,264
|
|
|
|
|
$
|
1,460
|
|
|
December 31, 2017
|
||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Interest rate contracts
|
Other non-current assets
|
|
$
|
2,138
|
|
|
Accrued liabilities
|
|
$
|
392
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Other current assets
|
|
15,495
|
|
|
Accrued liabilities
|
|
5,017
|
|
||
Total fair value of derivative instruments
|
|
|
$
|
17,633
|
|
|
|
|
$
|
5,409
|
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Gross Amounts of Recognized Assets/ Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheet
|
|
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheet
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheet
|
||||||||||||||||
Description
|
|
|
|
Derivative Financial Instruments
|
|
Cash Collateral Received (Pledged)
|
|
Net Amount
|
|||||||||||||||
Derivative assets
|
$
|
5,264
|
|
|
$
|
—
|
|
|
$
|
5,264
|
|
|
$
|
(935
|
)
|
|
$
|
—
|
|
|
$
|
4,329
|
|
Derivative liabilities
|
$
|
(1,460
|
)
|
|
$
|
—
|
|
|
$
|
(1,460
|
)
|
|
$
|
935
|
|
|
$
|
—
|
|
|
$
|
(525
|
)
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Gross Amounts of Recognized Assets/ Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheet
|
|
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheet
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheet
|
||||||||||||||||
Description
|
|
|
|
Derivative Financial Instruments
|
|
Cash Collateral Received (Pledged)
|
|
Net Amount
|
|||||||||||||||
Derivative assets
|
$
|
17,633
|
|
|
$
|
—
|
|
|
$
|
17,633
|
|
|
$
|
(5,409
|
)
|
|
$
|
—
|
|
|
$
|
12,224
|
|
Derivative liabilities
|
$
|
(5,409
|
)
|
|
$
|
—
|
|
|
$
|
(5,409
|
)
|
|
$
|
5,409
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Build-to-suit facility
|
$
|
52,067
|
|
|
$
|
51,721
|
|
Construction-in-progress
|
51,243
|
|
|
21,738
|
|
||
Land and buildings
|
46,650
|
|
|
46,729
|
|
||
Leasehold improvements
|
33,273
|
|
|
28,779
|
|
||
Manufacturing equipment and machinery
|
25,837
|
|
|
23,586
|
|
||
Computer software
|
19,062
|
|
|
19,969
|
|
||
Computer equipment
|
13,679
|
|
|
12,814
|
|
||
Furniture and fixtures
|
8,155
|
|
|
5,947
|
|
||
Subtotal
|
249,966
|
|
|
211,283
|
|
||
Less accumulated depreciation and amortization
|
(49,608
|
)
|
|
(41,203
|
)
|
||
Property, plant and equipment, net
|
$
|
200,358
|
|
|
$
|
170,080
|
|
Balance at December 31, 2017
|
$
|
947,537
|
|
Foreign exchange
|
(19,907
|
)
|
|
Balance at December 31, 2018
|
$
|
927,630
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Remaining
Weighted- Average Useful Life (In years) |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
||||||||||||
Acquired developed technologies
|
13.9
|
|
$
|
3,110,641
|
|
|
$
|
(632,413
|
)
|
|
$
|
2,478,228
|
|
|
$
|
3,392,832
|
|
|
$
|
(562,473
|
)
|
|
$
|
2,830,359
|
|
Priority review voucher
|
|
|
111,101
|
|
|
—
|
|
|
111,101
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Manufacturing contracts
|
—
|
|
12,256
|
|
|
(12,256
|
)
|
|
—
|
|
|
12,824
|
|
|
(12,634
|
)
|
|
190
|
|
||||||
Trademarks
|
—
|
|
2,896
|
|
|
(2,896
|
)
|
|
—
|
|
|
2,910
|
|
|
(2,910
|
)
|
|
—
|
|
||||||
Total finite-lived intangible assets
|
|
|
3,236,894
|
|
|
(647,565
|
)
|
|
2,589,329
|
|
|
3,408,566
|
|
|
(578,017
|
)
|
|
2,830,549
|
|
||||||
Acquired IPR&D assets
|
|
|
142,005
|
|
|
—
|
|
|
142,005
|
|
|
148,578
|
|
|
—
|
|
|
148,578
|
|
||||||
Total intangible assets
|
|
|
$
|
3,378,899
|
|
|
$
|
(647,565
|
)
|
|
$
|
2,731,334
|
|
|
$
|
3,557,144
|
|
|
$
|
(578,017
|
)
|
|
$
|
2,979,127
|
|
Year Ending December 31,
|
Estimated Amortization Expense
|
||
2019
|
242,953
|
|
|
2020
|
246,870
|
|
|
2021
|
198,956
|
|
|
2022
|
153,105
|
|
|
2023
|
153,105
|
|
|
Thereafter
|
1,483,239
|
|
|
Total
|
$
|
2,478,228
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Rebates and other sales deductions
|
$
|
86,495
|
|
|
$
|
81,368
|
|
Employee compensation and benefits
|
58,543
|
|
|
54,930
|
|
||
Estimated loss contingency
|
58,154
|
|
|
—
|
|
||
Inventory-related accruals
|
8,753
|
|
|
3,002
|
|
||
Accrued interest
|
7,407
|
|
|
7,297
|
|
||
Selling and marketing accruals
|
6,780
|
|
|
3,189
|
|
||
Clinical trial accruals
|
5,904
|
|
|
2,181
|
|
||
Royalties
|
2,679
|
|
|
8,058
|
|
||
Sales returns reserve
|
2,510
|
|
|
3,651
|
|
||
Professional fees
|
2,333
|
|
|
3,213
|
|
||
Derivative instrument liabilities
|
1,460
|
|
|
5,409
|
|
||
Other
|
23,869
|
|
|
26,481
|
|
||
Total accrued liabilities
|
$
|
264,887
|
|
|
$
|
198,779
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
2021 Notes
|
$
|
575,000
|
|
|
$
|
575,000
|
|
Unamortized discount and debt issuance costs on 2021 Notes
|
(60,910
|
)
|
|
(81,627
|
)
|
||
2021 Notes, net
|
514,090
|
|
|
493,373
|
|
||
|
|
|
|
||||
2024 Notes
|
575,000
|
|
|
575,000
|
|
||
Unamortized discount and debt issuance costs on 2024 Notes
|
(138,914
|
)
|
|
(158,680
|
)
|
||
2024 Notes, net
|
436,086
|
|
|
416,320
|
|
||
|
|
|
|
||||
Term loan
|
646,236
|
|
|
671,345
|
|
||
Total debt
|
1,596,412
|
|
|
1,581,038
|
|
||
Less current portion
|
33,387
|
|
|
40,605
|
|
||
Total long-term debt
|
$
|
1,563,025
|
|
|
$
|
1,540,433
|
|
Year Ending December 31,
|
Scheduled Long-Term Debt Maturities
|
||
2019
|
$
|
33,387
|
|
2020
|
33,387
|
|
|
2021
|
608,387
|
|
|
2022
|
33,387
|
|
|
2023
|
517,493
|
|
|
Thereafter
|
575,000
|
|
|
Total
|
$
|
1,801,041
|
|
Year Ending December 31,
|
Lease Payments
|
||
2019
|
$
|
9,881
|
|
2020
|
14,474
|
|
|
2021
|
14,908
|
|
|
2022
|
15,355
|
|
|
2023
|
15,816
|
|
|
Thereafter
|
119,409
|
|
|
Total
|
$
|
189,843
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Lease expense
|
$
|
11,519
|
|
|
$
|
14,982
|
|
|
$
|
11,600
|
|
Year ending December 31,
|
Lease Payments
|
||
2019
|
$
|
8,404
|
|
2020
|
6,269
|
|
|
2021
|
5,771
|
|
|
2022
|
5,388
|
|
|
2023
|
5,168
|
|
|
Thereafter
|
8,794
|
|
|
Total
|
$
|
39,794
|
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||
2011 Equity Incentive Plan
|
17,729
|
|
|
16,026
|
|
2007 Employee Stock Purchase Plan
|
1,126
|
|
|
339
|
|
Amended and Restated 2007 Non-Employee Directors Stock Award Plan
|
453
|
|
|
481
|
|
Amended and Restated Directors Deferred Compensation Plan
|
178
|
|
|
178
|
|
2007 Equity Incentive Plan
|
13
|
|
|
17
|
|
Total
|
19,499
|
|
|
17,041
|
|
|
Net Unrealized
Gain From Hedging Activities |
|
Foreign
Currency Translation Adjustments |
|
Total
Accumulated Other Comprehensive Loss |
||||||
Balance at December 31, 2017
|
$
|
1,482
|
|
|
$
|
(142,360
|
)
|
|
$
|
(140,878
|
)
|
Effect of adoption of ASU No. 2017-12
|
53
|
|
|
—
|
|
|
53
|
|
|||
Balance at January 1, 2018
|
1,535
|
|
|
(142,360
|
)
|
|
(140,825
|
)
|
|||
Other comprehensive income (loss) before reclassifications
|
2,274
|
|
|
(58,988
|
)
|
|
(56,714
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
(252
|
)
|
|
—
|
|
|
(252
|
)
|
|||
Other comprehensive income (loss), net
|
2,022
|
|
|
(58,988
|
)
|
|
(56,966
|
)
|
|||
Balance at December 31, 2018
|
$
|
3,557
|
|
|
$
|
(201,348
|
)
|
|
$
|
(197,791
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
447,098
|
|
|
$
|
487,848
|
|
|
$
|
396,831
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average ordinary shares used in per share calculations - basic
|
59,976
|
|
|
60,018
|
|
|
60,500
|
|
|||
Dilutive effect of employee equity incentive and purchase plans
|
1,245
|
|
|
1,299
|
|
|
1,370
|
|
|||
Weighted-average ordinary shares used in per share calculations - diluted
|
61,221
|
|
|
61,317
|
|
|
61,870
|
|
|||
|
|
|
|
|
|
||||||
Net income per ordinary share :
|
|
|
|
|
|
||||||
Basic
|
$
|
7.45
|
|
|
$
|
8.13
|
|
|
$
|
6.56
|
|
Diluted
|
$
|
7.30
|
|
|
$
|
7.96
|
|
|
$
|
6.41
|
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Exchangeable Senior Notes
|
5,504
|
|
|
3,805
|
|
|
2,878
|
|
Options to purchase ordinary shares and RSUs
|
3,101
|
|
|
3,319
|
|
|
3,010
|
|
Ordinary shares under ESPP
|
12
|
|
|
14
|
|
|
93
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
United States
|
$
|
126,941
|
|
|
$
|
95,570
|
|
Ireland
|
61,290
|
|
|
64,343
|
|
||
Italy
|
8,760
|
|
|
8,220
|
|
||
Other
|
3,367
|
|
|
1,947
|
|
||
Total long-lived assets (1)
|
$
|
200,358
|
|
|
$
|
170,080
|
|
(1)
|
Long-lived assets consist of property, plant and equipment.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Xyrem
|
$
|
1,404,866
|
|
|
$
|
1,186,699
|
|
|
$
|
1,107,616
|
|
Erwinaze/Erwinase
|
174,739
|
|
|
197,340
|
|
|
200,678
|
|
|||
Defitelio/defibrotide
|
149,448
|
|
|
133,650
|
|
|
108,952
|
|
|||
Vyxeos
|
100,835
|
|
|
33,790
|
|
|
—
|
|
|||
Prialt
|
20,839
|
|
|
27,361
|
|
|
29,120
|
|
|||
Other
|
18,746
|
|
|
22,559
|
|
|
30,895
|
|
|||
Product sales, net
|
1,869,473
|
|
|
1,601,399
|
|
|
1,477,261
|
|
|||
Royalties and contract revenues
|
21,449
|
|
|
17,294
|
|
|
10,712
|
|
|||
Total revenues
|
$
|
1,890,922
|
|
|
$
|
1,618,693
|
|
|
$
|
1,487,973
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
$
|
1,727,576
|
|
|
$
|
1,463,457
|
|
|
$
|
1,355,921
|
|
Europe
|
125,911
|
|
|
125,624
|
|
|
108,301
|
|
|||
All other
|
37,435
|
|
|
29,612
|
|
|
23,751
|
|
|||
Total revenues
|
$
|
1,890,922
|
|
|
$
|
1,618,693
|
|
|
$
|
1,487,973
|
|
|
Contract Liabilities
|
||
Balance as of December 31, 2017
|
$
|
24,733
|
|
Effect of adoption of ASU 2014-09
|
(2,240
|
)
|
|
Amount recognized within royalties and contract revenues
|
(7,498
|
)
|
|
Balance as of December 31, 2018
|
$
|
14,995
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Grant date fair value
|
$
|
47.17
|
|
|
$
|
42.72
|
|
|
$
|
40.45
|
|
Volatility
|
35
|
%
|
|
35
|
%
|
|
39
|
%
|
|||
Expected term (years)
|
4.5
|
|
|
4.3
|
|
|
4.2
|
|
|||
Range of risk-free rates
|
2.2-3.0%
|
|
|
1.6-2.1%
|
|
|
0.8-1.6%
|
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Selling, general and administrative
|
$
|
76,770
|
|
|
$
|
83,218
|
|
|
$
|
79,037
|
|
Research and development
|
19,037
|
|
|
17,870
|
|
|
15,296
|
|
|||
Cost of product sales
|
6,634
|
|
|
5,812
|
|
|
4,438
|
|
|||
Total share-based compensation expense, pre-tax
|
102,441
|
|
|
106,900
|
|
|
98,771
|
|
|||
Income tax benefit from share-based compensation expense
|
(17,230
|
)
|
|
(21,792
|
)
|
|
(30,022
|
)
|
|||
Total share-based compensation expense, net of tax
|
$
|
85,211
|
|
|
$
|
85,108
|
|
|
$
|
68,749
|
|
|
Shares
Subject to
Outstanding
Options
(In thousands)
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
(In thousands)
|
|||||
Outstanding at January 1, 2018
|
5,145
|
|
|
$
|
121.06
|
|
|
|
|
|
||
Options granted
|
1,449
|
|
|
145.03
|
|
|
|
|
|
|||
Options exercised
|
(772
|
)
|
|
107.45
|
|
|
|
|
|
|||
Options forfeited
|
(424
|
)
|
|
139.36
|
|
|
|
|
|
|||
Options expired
|
(118
|
)
|
|
169.18
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
5,280
|
|
|
127.08
|
|
|
6.8
|
|
$
|
78,389
|
|
|
Vested and expected to vest at December 31, 2018
|
5,027
|
|
|
126.32
|
|
|
6.7
|
|
78,332
|
|
||
Exercisable at December 31, 2018
|
3,070
|
|
|
117.08
|
|
|
5.5
|
|
77,725
|
|
|
Number of RSUs (in thousands)
|
|
Weighted-
Average Grant-Date Fair Value |
|
Weighted-
Average Remaining Contractual Term (Years) |
|
Aggregate
Intrinsic Value (In thousands) |
|||||
Outstanding at January 1, 2018
|
1,063
|
|
|
$
|
140.46
|
|
|
|
|
|
||
RSUs granted
|
606
|
|
|
146.36
|
|
|
|
|
|
|||
RSUs released
|
(374
|
)
|
|
145.31
|
|
|
|
|
|
|||
RSUs forfeited
|
(193
|
)
|
|
140.10
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
1,102
|
|
|
142.13
|
|
|
1.4
|
|
$
|
136,614
|
|
|
Termination Benefits
|
||
Balance at December 31, 2015
|
$
|
1,105
|
|
Expense
|
1,516
|
|
|
Payments
|
(2,590
|
)
|
|
Balance at December 31, 2016
|
31
|
|
|
Expense
|
14
|
|
|
Payments
|
(45
|
)
|
|
Balance at December 31, 2017
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Current
|
|
|
|
|
|
||||||
Ireland
|
$
|
33,431
|
|
|
$
|
28,045
|
|
|
$
|
26,420
|
|
United States
|
95,143
|
|
|
135,608
|
|
|
140,061
|
|
|||
Other
|
40,403
|
|
|
14,198
|
|
|
9,918
|
|
|||
Total current tax expense
|
168,977
|
|
|
177,851
|
|
|
176,399
|
|
|||
Deferred, exclusive of other components below
|
|
|
|
|
|
||||||
Ireland
|
(12,408
|
)
|
|
(19,709
|
)
|
|
(7,776
|
)
|
|||
United States
|
(41,337
|
)
|
|
(27,559
|
)
|
|
(9,120
|
)
|
|||
Other
|
(34,545
|
)
|
|
(19,108
|
)
|
|
(13,720
|
)
|
|||
Total deferred, exclusive of other components
|
(88,290
|
)
|
|
(66,376
|
)
|
|
(30,616
|
)
|
|||
Deferred, change in tax rates
|
|
|
|
|
|
||||||
United States
|
(538
|
)
|
|
(155,679
|
)
|
|
109
|
|
|||
Other
|
13
|
|
|
(3,536
|
)
|
|
(10,656
|
)
|
|||
Total deferred, change in tax rates
|
(525
|
)
|
|
(159,215
|
)
|
|
(10,547
|
)
|
|||
Total deferred tax benefit
|
(88,815
|
)
|
|
(225,591
|
)
|
|
(41,163
|
)
|
|||
Total income tax provision (benefit)
|
$
|
80,162
|
|
|
$
|
(47,740
|
)
|
|
$
|
135,236
|
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Statutory income tax rate
|
12.5
|
%
|
|
12.5
|
%
|
|
12.5
|
%
|
Foreign income tax rate differential
|
11.9
|
%
|
|
20.3
|
%
|
|
16.7
|
%
|
Investment in subsidiaries
|
(5.3
|
)%
|
|
(0.7
|
)%
|
|
(2.4
|
)%
|
Financing costs
|
(4.3
|
)%
|
|
(5.6
|
)%
|
|
(2.9
|
)%
|
Research and other tax credits
|
(3.9
|
)%
|
|
(2.6
|
)%
|
|
(2.8
|
)%
|
Change in valuation allowance
|
3.2
|
%
|
|
(2.8
|
)%
|
|
(0.1
|
)%
|
Impact of U.S. Tax Act
|
(1.4
|
)%
|
|
(33.7
|
)%
|
|
—
|
%
|
Non-deductible compensation
|
1.2
|
%
|
|
2.6
|
%
|
|
1.8
|
%
|
Change in unrecognized tax benefits
|
1.1
|
%
|
|
2.8
|
%
|
|
3.3
|
%
|
Change in estimates
|
(1.1
|
)%
|
|
(2.1
|
)%
|
|
—
|
%
|
Non-deductible loss contingency
|
0.8
|
%
|
|
—
|
%
|
|
—
|
%
|
Excess tax benefits from share-based compensation
|
(0.4
|
)%
|
|
(1.5
|
)%
|
|
(1.5
|
)%
|
Change in tax rate
|
(0.1
|
)%
|
|
(0.4
|
)%
|
|
(1.8
|
)%
|
Acquisition-related costs
|
—
|
%
|
|
—
|
%
|
|
2.1
|
%
|
Other
|
0.9
|
%
|
|
0.4
|
%
|
|
0.5
|
%
|
Effective income tax rate
|
15.1
|
%
|
|
(10.8
|
)%
|
|
25.4
|
%
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
106,128
|
|
|
$
|
125,966
|
|
Tax credit carryforwards
|
156,242
|
|
|
130,782
|
|
||
Intangible assets
|
23,469
|
|
|
23,536
|
|
||
Share-based compensation
|
24,592
|
|
|
23,128
|
|
||
Accruals
|
57,575
|
|
|
45,088
|
|
||
Indirect effects of unrecognized tax benefits
|
34,349
|
|
|
29,733
|
|
||
Investment in subsidiaries
|
25,585
|
|
|
—
|
|
||
Other
|
51,175
|
|
|
63,235
|
|
||
Total deferred tax assets
|
479,115
|
|
|
441,468
|
|
||
Valuation allowance
|
(61,237
|
)
|
|
(52,144
|
)
|
||
Net deferred tax assets
|
417,878
|
|
|
389,324
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
(595,746
|
)
|
|
(655,347
|
)
|
||
Other
|
(73,350
|
)
|
|
(82,890
|
)
|
||
Total deferred tax liabilities
|
(669,096
|
)
|
|
(738,237
|
)
|
||
Net deferred tax liabilities
|
$
|
(251,218
|
)
|
|
$
|
(348,913
|
)
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets
|
$
|
57,879
|
|
|
$
|
34,559
|
|
Deferred tax liabilities
|
(309,097
|
)
|
|
(383,472
|
)
|
||
Net deferred tax liabilities
|
$
|
(251,218
|
)
|
|
$
|
(348,913
|
)
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at the beginning of the year
|
$
|
106,162
|
|
|
$
|
90,910
|
|
|
$
|
66,385
|
|
Increases related to current year tax positions
|
22,649
|
|
|
27,875
|
|
|
26,873
|
|
|||
Increases related to prior year tax positions
|
7,584
|
|
|
1,620
|
|
|
1,191
|
|
|||
Decreases related to prior year tax positions
|
—
|
|
|
(1,075
|
)
|
|
(255
|
)
|
|||
Lapse of the applicable statute of limitations
|
(18,182
|
)
|
|
(13,168
|
)
|
|
(3,284
|
)
|
|||
Balance at the end of the year
|
$
|
118,213
|
|
|
$
|
106,162
|
|
|
$
|
90,910
|
|
|
2018
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenues
|
$
|
444,613
|
|
|
$
|
500,479
|
|
|
$
|
469,373
|
|
|
$
|
476,457
|
|
Gross margin (1)
|
406,928
|
|
|
461,381
|
|
|
438,623
|
|
|
440,997
|
|
||||
Net income
|
45,991
|
|
|
92,321
|
|
|
149,316
|
|
|
159,470
|
|
||||
Net income per ordinary share, basic
|
0.77
|
|
|
1.53
|
|
|
2.47
|
|
|
2.69
|
|
||||
Net income per ordinary share, diluted
|
0.75
|
|
|
1.50
|
|
|
2.41
|
|
|
2.64
|
|
|
2017
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenues
|
$
|
376,053
|
|
|
$
|
394,386
|
|
|
$
|
411,855
|
|
|
$
|
436,399
|
|
Gross margin (1)
|
348,613
|
|
|
360,983
|
|
|
376,768
|
|
|
404,847
|
|
||||
Net income
|
86,511
|
|
|
105,604
|
|
|
63,526
|
|
|
232,207
|
|
||||
Net income per ordinary share, basic
|
1.44
|
|
|
1.76
|
|
|
1.06
|
|
|
3.87
|
|
||||
Net income per ordinary share, diluted
|
1.41
|
|
|
1.72
|
|
|
1.03
|
|
|
3.79
|
|
(1)
|
Gross margin is computed by subtracting cost of product sales (excluding amortization of intangible assets) from product sales, net.
|
•
|
Estimated loss contingency of
$57.0 million
in the first quarter of 2018;
|
•
|
Impairment charges and disposal costs of
$44.0 million
in the second quarter of 2018;
|
•
|
Upfront and milestone payments of
$11.0 million
in the first quarter of 2018 and
$75.0 million
and
$26.5 million
in the third and fourth quarters of 2017, respectively;
|
•
|
Expenses related to certain legal proceedings and restructuring of
$6.0 million
in the first quarter of 2017; and
|
•
|
A net expense of
$2.9 million
and a net benefit of
$10.3 million
in the third and fourth quarters of 2018, respectively, and a net benefit of
$148.8 million
in the fourth quarter of 2017 in respect of the impact of the U.S. Tax Act.
|
|
|
|
Balance at
beginning
of period
|
|
Additions
charged to
costs and
expenses
|
|
Other Additions
|
|
Deductions
|
|
Balance at
end of
period
|
||||||||||
For the year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
(1)
|
|
$
|
396
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
(366
|
)
|
|
$
|
50
|
|
Allowance for sales discounts
|
(1)
|
|
103
|
|
|
811
|
|
|
—
|
|
|
(838
|
)
|
|
76
|
|
|||||
Allowance for chargebacks
|
(1)
|
|
3,663
|
|
|
41,387
|
|
|
—
|
|
|
(44,642
|
)
|
|
408
|
|
|||||
Deferred tax asset valuation allowance
|
(2)(3)
|
|
52,144
|
|
|
35,500
|
|
|
—
|
|
|
(26,407
|
)
|
|
61,237
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
(1)
|
|
$
|
287
|
|
|
$
|
231
|
|
|
$
|
—
|
|
|
$
|
(122
|
)
|
|
$
|
396
|
|
Allowance for sales discounts
|
(1)
|
|
118
|
|
|
1,087
|
|
|
—
|
|
|
(1,102
|
)
|
|
103
|
|
|||||
Allowance for chargebacks
|
(1)
|
|
4,749
|
|
|
41,941
|
|
|
—
|
|
|
(43,027
|
)
|
|
3,663
|
|
|||||
Deferred tax asset valuation allowance
|
(2)(3)(4)
|
|
53,184
|
|
|
7,509
|
|
|
5,581
|
|
|
(14,130
|
)
|
|
52,144
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
(1)
|
|
$
|
489
|
|
|
$
|
168
|
|
|
$
|
—
|
|
|
$
|
(370
|
)
|
|
$
|
287
|
|
Allowance for sales discounts
|
(1)
|
|
181
|
|
|
1,334
|
|
|
—
|
|
|
(1,397
|
)
|
|
118
|
|
|||||
Allowance for chargebacks
|
(1)
|
|
3,023
|
|
|
41,991
|
|
|
—
|
|
|
(40,265
|
)
|
|
4,749
|
|
|||||
Deferred tax asset valuation allowance
|
(2)(3)(4)
|
|
33,949
|
|
|
19,328
|
|
|
5,544
|
|
|
(5,637
|
)
|
|
53,184
|
|
(1)
|
Shown as a reduction of accounts receivable. Charges related to sales discounts and chargebacks are reflected as a reduction of revenue.
|
(2)
|
Additions to the deferred tax asset valuation allowance relate to movements on certain Irish, U.S. (federal and state) and other foreign deferred tax assets where we continue to maintain a valuation allowance until sufficient positive evidence exists to support reversal.
|
(3)
|
Deductions to the deferred tax asset valuation allowance include movements relating to utilization of NOLs and tax credit carryforwards, release in valuation allowance and other movements including adjustments following finalization of tax returns.
|
(4)
|
Other additions to the deferred tax asset valuation allowance relate to currency translation adjustments recorded directly in other comprehensive income and a valuation allowance recognized in 2016 on purchase accounting.
|
1)
|
PORTON BIOPHARMA LIMITED
of Porton Down, Salisbury, Wiltshire SP4 OPG
,
United Kingdom (
"PBL"
); and
|
2)
|
JAZZ PHARMACEUTICALS FRANCE SAS
of City One, 84 Quai Charles de Gaulle, 69006 Lyon, France ("
Jazz"
)
|
A)
|
PBL and Jazz are parties, through succession and assignment, to a Royalty Bearing Licence Agreement dated 22 July 2005 as further amended on 22 December 2009, 23 March 2012 and 8 August 2012 (the
"RBLA"
);
|
B)
|
PBL and Jazz wish to amend the RBLA such that the term of the RBLA will not automatically renew with effect from 31 December 2018;
|
C)
|
Any capitalised term used but not defined herein shall have the same meaning given to such term in the RBLA.
|
1.
|
Clause 13.1 of the RBLA is deleted and replaced by the following:
|
2.
|
Clause 16.4 of the RBLA shall have the words
"or email'
inserted after the words
"fax or registered letter'
|
3.
|
A new Sub-Clause 16.5.3 shall be added as follows:
|
4.
|
A new Sub-Clause 16.6.3 shall be added as follows
:
|
5.
|
This Variation is made in accordance with Clause 16.2 of the RBLA. Other than as set out in this Variation, the RBLA (as amended on 22 December 2009, 23 March 2012 and 8 August 2012) shall continue to be binding upon each Party.
|
1.
|
Purpose of the Plan.
|
2.
|
Eligibility.
|
3.
|
Target Bonus.
|
Position
|
|
Target Bonus (Percent of Base Salary)
|
Chairman of the Board, Chief Executive Officer
|
|
100%
|
President/Executive Vice President
|
|
55%
|
Senior Vice President who is an Executive Committee Member or is a Section 16 Officer
|
|
45%
|
Senior Vice President who is not an Executive Committee Member or a Section 16 Officer
|
|
40%
|
Vice President
|
|
35%
|
Executive Director
|
|
30%
|
Senior Director
|
|
25%
|
Director
|
|
22%
|
Associate Director
|
|
20%
|
Senior Manager
|
|
18%
|
Manager
|
|
15%
|
Analyst/Senior Analyst
|
|
12%
|
Support/Senior Support
|
|
8%
|
4.
|
Bonus Pool and Bonuses.
|
5.
|
Bonus.
|
6.
|
Termination of Employment; Death; Retirement; Permanent Disability.
|
7.
|
Payment of Bonuses.
|
8.
|
Withholding of Taxes.
|
9.
|
Plan Amendments.
|
10.
|
No Employment Rights.
|
11.
|
Plan Administration.
|
12.
|
Definitions.
|
1.
|
Purpose of the Plan.
|
2.
|
Eligibility.
|
3.
|
Target Bonus.
|
Position
|
|
Target Bonus (Percent of Base Salary)
|
Chairman of the Board, Chief Executive Officer
|
|
100%
|
President/Executive Vice President
|
|
55%
|
Senior Vice President who is an Executive Committee Member or is a Section 16 Officer
|
|
45%
|
Senior Vice President who is not an Executive Committee Member or a Section 16 Officer
|
|
40%
|
Vice President
|
|
35%
|
Executive Director
|
|
30%
|
Senior Director
|
|
25%
|
Director
|
|
22%
|
Associate Director
|
|
20%
|
Senior Manager
|
|
18%
|
Manager
|
|
15%
|
Analyst/Senior Analyst
|
|
12%
|
Support/Senior Support
|
|
8%
|
4.
|
Bonus Pool and Bonuses.
|
5.
|
Bonus.
|
6.
|
Termination of Employment; Death; Retirement; Permanent Disability.
|
7.
|
Payment of Bonuses.
|
8.
|
Withholding of Taxes and Mandatory Contributions.
|
9.
|
Plan Amendments.
|
10.
|
No Employment Rights; No Acquired Rights.
|
11.
|
Plan Administration.
|
12.
|
Definitions.
|
Name
|
State/Jurisdiction of Incorporation
|
|
|
Jazz Pharmaceuticals Ireland Limited
|
Ireland
|
Jazz Financing I DAC
|
Ireland
|
Jazz Capital Ltd
|
Ireland
|
Jazz Pharmaceuticals, Inc.
|
Delaware
|
Celator Pharmaceuticals Inc
|
Delaware
|
Jazz Pharmaceuticals Europe Holdings Limited
|
Gibraltar
|
Jazz Pharmaceuticals France SAS
|
France
|
Jazz Pharmaceuticals Lux S.à r.l.
|
Luxembourg
|
Gentium S.r.L.
|
Italy
|
Jazz Investments I Limited
|
Bermuda
|
1.
|
I have reviewed this Annual Report on Form 10-K of Jazz Pharmaceuticals public limited company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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 registrant, 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 registrant’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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
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 registrant’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 registrant’s internal control over financial reporting.
|
Date: February 26, 2019
|
By:
|
/s/ Bruce C. Cozadd
|
|
|
Bruce C. Cozadd
Chairman and Chief Executive Officer and Director
|
1.
|
I have reviewed this Annual Report on Form 10-K of Jazz Pharmaceuticals public limited company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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 registrant, 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;
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c)
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Evaluated the effectiveness of the registrant’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
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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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 registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 26, 2019
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By:
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/s/ Matthew P. Young
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Matthew P. Young
Executive Vice President and Chief Financial Officer
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1.
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The Company’s Annual Report on Form 10-K for the year ended
December 31, 2018
, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
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2.
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The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Bruce C. Cozadd
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Bruce C. Cozadd
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Chairman and Chief Executive Officer and Director
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/s/ Matthew P. Young
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Matthew P. Young
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Executive Vice President and Chief Financial Officer
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(1)
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This certification accompanies the Annual Report on Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Jazz Pharmaceuticals public limited company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Jazz Pharmaceuticals public limited company and will be retained by Jazz Pharmaceuticals public limited company and furnished to the Securities and Exchange Commission or its staff upon request.
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