Transforming lives, transformational growth 2014 Annual Report
`
`Lupin Exh. 1015
`
`

`
`DU EX|S®
`
`(ibuprofen and famotidine) Tablets
`800 mg/26.6 mg
`
`RAYC]S®
`mmmmmmmmmumm
`
`VllVlOVO®
`(napruxen/esumeprazule magnesium)
`
`375/20 -500/20 mg delayed-release tablets
`
`AcTIi~iMuNE*
`[Interferon gamma-1h]
`
`PENNSAh®
`
`mmmmmmmmmmm2%m
`
`
`
`

`
`To Our Shareholders:
`
`2014 was a transformational year for Horizon Pharma. As we began the year,
`we reiterated our strategy to become a profitable specialty biopharmaceutical company
`and add new commercial-stage products to our portfolio.
`
`Our results far exceeded our expectations. First, with our base business, DUEXIS®
`(ibuprofen/famotidine) net sales increased from $59.0 million to $83.2 million and RAYOS®
`(prednisone) delayed-release tablets net sales increased from $5.8 million to $19.0 million.
`Additionally, in the first quarter 2014 we successfully launched VIMOVO® (naproxen/
`esomeprazole magnesium), which we acquired in November 2013 and increased its net
`sales from $20.0 million under AstraZeneca in 2013 to $163.0 million. In September,
`we completed the acquisition of Vidara Therapeutics International plc (Vidara), providing us
`with the multi-indication biologic ACTIMMUNE® (interferon gamma-1b), and in October, we
`acquired PENNSAID® (diclofenac sodium topical solution) 2% w/w, a treatment for
`osteoarthritis of the knee(s). Our performance with our base business, the successful
`launch of VIMOVO and the addition of ACTIMMUNE and PENNSAID 2% enabled us to deliver
`record net sales and our first ever full year profit (on a non-GAAP basis). Finally, we
`increased total shareholders’ equity value to a new record high as represented by the
`six-fold increase since December 2013 in our market capitalization, which in March 2015,
`exceeded $3 billion for the first time.
`
`We are pleased to report the following specific progress we made during the year:
`
` • Net sales increased 301 percent to $297.0 million versus $74.0 million in 2013
` • Adjusted non-GAAP net income of $92.5 million or $0.95 per share on a fully diluted
`
` basis (1)
` • Adjusted EBITDA of $105.4 million (1)
` • Ended the year with $218.8 million in cash and cash equivalents
` • VIMOVO was successfully rolled out and generated $163.0 million in net sales
` • Completed the acquisition of Vidara, which brought us ACTIMMUNE and resulted in
`
` Horizon Pharma becoming an Irish public listed company with a global corporate
`
`
` structure headquartered in Dublin, Ireland
` • Acquired the U.S. rights to PENNSAID 2% from Nuvo Research
` • Our sales organization grew to 373 people (325 primary care, 40 specialty and 8
`
` orphan) and our total global staff grew to more than 500 people
`
`
`
`(1) GAAP to Non-GAAP reconciliations are located at the end of the annual report.
`
`

`
`Vidara Acquisition
`
`We completed the Vidara acquisition on September 19, which resulted in gaining the U.S.
`rights to ACTIMMUNE, a recombinant biologic approved in two orphan diseases, Chronic
`Granulomatous Disease (CGD) and Severe Malignant Osteopetrosis (SMO) and the relocation
`of our corporate headquarters to Dublin, Ireland. Re-domiciling our headquarters to Dublin
`provides us with a global structure that supports our acquisition strategy and allows us to
`compete with other ex-U.S. domiciled companies.
`
`In addition to the approved indications of CGD and SMO for ACTIMMUNE, we filed an Investi-
`gational New Drug (IND) application with the U.S. FDA in February 2015 and expect to
`begin a Phase 3 registration trial in the second quarter to study ACTIMMUNE in Friedreich’s
`Ataxia (FA), a debilitating, life-shortening, degenerative, neuro-muscular disorder that affects
`approximately 3,700 people in the United States. We estimate ACTIMMUNE, if approved,
`could generate between $500 million and $1 billion in net sales in treating FA alone.
`
`Commercial Organizational Structure
`
`The Vidara acquisition also led to the reorganization of our commercial organization into
`three business units: orphan diseases, primary care and specialty. Each of these
`organizations are led by a general manager, all reporting to our executive vice president
`and chief commercial officer, John J. Kody, who joined us in November. By creating this
`new structure, we improve our ability to grow sales of our existing products while allowing
`seamless integration of acquisitions into each business unit.
`
`Our orphan disease business currently consists of ACTIMMUNE, a bioengineered form
`of interferon gamma-1b, a protein that acts as a biologic response modifier through
`stimulation of the human immune system. We operate the COMPASSTM program for
`ACTIMMUNE, which assists patients in navigating the managed care approval process
`and offers nurse support and educational support to patients. In addition, the program
`allows patients to receive ACTIMMUNE at an affordable cost or provides treatment at no
`cost for those patients who cannot afford it.
`
`Our primary care business currently consists of DUEXIS, VIMOVO and PENNSAID 2%,
`which we acquired in late 2014 and began marketing in January 2015. We have now
`expanded our primary care organization to 325 representatives in the United States.
`PENNSAID 2% is a metered dose, pump dispensed, topical NSAID, which complements
`our oral NSAIDs, DUEXIS and VIMOVO. PENNSAID 2% has a user-friendly formulation
`and dispensing system and is used twice per day in contrast to the leading competitive
`topical NSAID, which is applied four times per day.
`
`

`
`The early PENNSAID 2% launch results have been very encouraging with physicians
`reporting positive patient experiences.
`
`Our specialty business currently consists of RAYOS, a proprietary, delayed-release
`formulation of low-dose prednisone approved for rheumatoid arthritis (RA) and a broad
`range of other diseases. When taken at night (10 p.m. in clinical trials), the delayed-
`release formulation helped improve RA symptoms and reduce morning stiffness.
`RAYOS is sold primarily to rheumatologists by 40 sales representatives.
`
`The chart below shows net sales contribution of our current products for 2014 and 2013:
`
`Net sales (in millions)
`
`ACTIMMUNE (1)
`DUEXIS
`LODOTRA
`RAYOS
`VIMOVO (2)
`Total net sales
`
`FY 2014
`
`$ 25.3
` 83.2
` 6.5
` 19.0
` 163.0
`$ 297.0
`
`FY 2013
`
` $ -
` 59.0
` 8.2
` 5.8
` 1.0
`$ 74.0
`
`% Change
`
`*
`41%
`-21%
`228%
`*
`301%
`
`(1) ACTIMMUNE was acquired September 19, 2014.
`(2) The Company began selling VIMOVO in January 2014 and 2013 sales were under a transition agreement with AstraZeneca.
`* percentage change is not meaningful
`
`Prescriptions Made Easy
`
`We believe our Prescriptions Made Easy (PME) program is unique in today’s pharmaceutical
`market. Over the last several years, we had been designing, developing, piloting and
`refining our PME program with select physicians and in select sales territories.
`The objective of PME is to ensure access to our medications as physicians prescribe them
`and to enable patients to receive our medications at a very low out-of-pocket cost.
`PME also simplifies and reduces numerous time-consuming steps doctors often encounter
`in prescribing branded pharmaceutical products in today’s marketplace. Furthermore,
`PME enables us to add new physicians to our customer base and continue to drive
`prescription growth utilizing a network of specialty pharmacies across the country that
`provide seamless service to both the prescribing physician and their patient.
`
`In the fourth quarter last year, we created a dedicated PME organization of 10 people,
`led by a general manager. Under the leadership of our PME team, we began rolling out
`a territory-by-territory “PME-activation” program beginning in December 2014, which
`will continue throughout 2015. We also initiated a retail-PME program, which enables many
`patients filling their prescriptions through a retail pharmacy to potentially receive similar
`benefits to our traditional specialty pharmacy based PME program.
`
`

`
`Our PME program also allows us to potentially mitigate the impact of specific managed
`care plans or pharmacy benefit managers’ (PBMs) attempts to deny patients access
`to our medicines as their physicians have prescribed them. Two PBMs placed DUEXIS and
`VIMOVO on exclusion lists beginning in January 2015. While we are disappointed these
`PBMs have attempted to deny patients access to DUEXIS and VIMOVO, we believe our
`PME program is well positioned to ensure continued access for patients who prescribe our
`products by their physicians at a low out-of-pocket cost. With the continued acceleration of
`our PME program throughout our sales territories, increased prescriptions and incremental
`product price increases, we believe we can substantially offset the impact of being placed
`on these exclusion lists and meet or exceed the net sales guidance we provided for 2015.
`
`Intellectual Property
`
`Protecting our intellectual property is core to our business success. In 2014, we continued
`to aggressively file new patents, expand existing patents and maintain vigorous defense
`of our patents against generic filers. During 2014, we made significant progress on each
`of these fronts. We were awarded multiple additional patents for VIMOVO and RAYOS, we
`filed a patent infringement suit against Watson Laboratories for filing an ANDA against
`PENNSAID 2% and made progress in court cases involving RAYOS and VIMOVO, including
`a favorable Markman Ruling in our ongoing RAYOS litigation. We were especially pleased
`to announce the Patent and Trademark Office has issued a new patent for VIMOVO which
`extends patent protection out to 2031, versus prior patents expiring in 2023.
`
`Acquisitions
`
`We plan to aggressively pursue near-term acquisitions of additional products and/or
`companies. We view our ability to continuously identify, evaluate and acquire attractive
`products and companies as a core strength of the Company and have put in place an
`experienced business development organization to achieve our objectives. Our target
`acquisition criteria currently include:
`
` • U.S. commercially marketed products, or companies with marketed products, which
`
`
`further leverage our core commercial strengths (orphan, primary care and specialty).
` • Products with differentiated features and clinical benefits.
` • Products and companies with existing annual revenues of $20 million to $200 million
`
` or more.
` • Potential for attractive financial returns – immediate/near-term accretion and
`
`
`long-life assets.
`
`

`
`Executive Management and Board of Directors
`
`During 2014, we focused on expanding our executive leadership team with experienced
`executives with specific industry and technical skills as our organization has grown to
`more than 500 employees and our market value has grown to more than $3 billion for the
`first time in March 2015. Our current executive leadership team includes:
`
` • Timothy P. Walbert, chairman, president and chief executive officer.
` • Robert F. Carey, executive vice president, chief business officer, who joined us in
`
` March 2014.
` • Paul W. Hoelscher, executive vice president, chief financial officer, who joined us
`
` as executive vice president, finance in June 2014 and became our CFO on October 1.
` • Barry J. Moze, executive vice president, corporate development, who joined us
`
`
`in May 2014.
` • David G. Kelly, executive vice president, company secretary and managing director,
`
`
`Ireland, who joined us from Vidara in September 2014.
` • John J. Kody, executive vice president, chief commercial officer, who joined us
`
`
`in November 2014.
` • Jeffrey W. Sherman, M.D., FACP, executive vice president, research and
`
` development and chief medical officer.
`
`Each brings 25 plus years of experience to the Company and greatly enhance Horizon’s
`executive leadership team.
`
`I would also like to welcome our new board members. H. Thomas Watkins, formerly
`director, president and chief executive officer of Human Genome Sciences joined our
`board in April 2014. Liam Daniel, formerly executive vice president and company
`secretary of Elan Corporation plc, and Virinder Nohria, M.D., Ph.D., co-founder, president
`and chief medical officer of Vidara both joined our board in September 2014 when we
`closed the Vidara acquisition.
`
`

`
`Outlook and Financial Position
`
`The acquisition of Vidara resulted in the issuance of 31.35 million ordinary shares.
`In addition, during the fourth quarter 2014 we induced conversion of a portion of our 5%
`Senior Convertible Notes for an aggregate principal amount of about $89 million, bringing
`our aggregate principal amount outstanding down to $61 million. As of today, our total
`outstanding share count is approximately 132 million and our fully diluted share count
`is approximately 166 million.
`
`Our fi nancial guidance for 2015, which we increased on February 27, 2015, is $450 to
`$475 million in net sales and $170 to $190 million in adjusted EBITDA. We have
`a strong cash position and substantial fi nancial leverage.
`
`Closing
`
`At Horizon Pharma, we operate with the following guiding principles and beliefs:
`
` • We are committed to ensuring patients have access to our treatments through a
`
` variety of support programs and services and to guaranteeing commercial patients
`
` access with a low out-of-pocket cost.
` • The protection of intellectual property and sustainable pricing are essential to our
`
` ability to acquire, develop and market our medicines and bring them to patients
`
`
`in need.
` • The price of Horizon products is intended to cover the signifi cant costs to develop,
`
` manufacture and bring the products to the patients Horizon serves at the lowest
`
` possible cost.
`
`We are excited about our future opportunities and look forward to continuing to report our
`progress to our shareholders throughout the year.
`
`Best regards,
`
`Timothy P. Walbert
`Chairman, President and Chief Executive Offi cer
`
`

`
`HORIZON PHARMA PLC
`HORIZON PHARMA PLC
`FORM 10-K
`FORM 10—K
`
`

`
`

`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`FORM 10-K
`
`(Mark One)
`È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934
`
`For the fiscal year ended December 31, 2014
`or
`‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
`OF 1934
`
`to
`For the transition period from
`Commission File Number 001-35238
`
`HORIZON PHARMA PUBLIC LIMITED
`COMPANY
`
`(Exact name of Registrant as specified in its charter)
`
`Ireland
`(State or other jurisdiction of
`incorporation or organization)
`Connaught House, 1st Floor
`1 Burlington Road, Dublin 4, Ireland
`(Address of principal executive offices)
`
`Not Applicable
`(I.R.S. Employer
`Identification No.)
`
`Not Applicable
`(zip code)
`
`011 353 1 772 2100
`(Registrant’s telephone number, including area code)
`Securities registered pursuant to Section 12(b) of the Act:
`Title of Each Class
`Name of Each Exchange on Which Registered
`
`The NASDAQ Global Market
`Ordinary shares, nominal value $0.0001 per share
`Securities registered pursuant to Section 12(g) of the Act:
`None
`
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘.
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No È.
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
`during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
`requirements for the past 90 days. Yes È No ‘
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File
`required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was
`required to submit and post such files). Yes È No ‘
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the
`best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
`this Form 10-K. ‘
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
`‘
`Large accelerated filer È
`Accelerated filer
`Non-accelerated filer ‘ (Do not check if a smaller reporting company)
`Smaller reporting company ‘
`Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ‘ No È
`The aggregate market value of the registrant’s voting ordinary shares held by non-affiliates of the registrant, based upon the $15.82 per share closing sale
`price of the registrant’s ordinary shares on June 30, 2014 (the last business day of the registrant’s most recently completed second quarter), was approximately
`$1.0 billion. Solely for purposes of this calculation, the registrant’s directors and executive officers and holders of 10% or more of the registrant’s outstanding
`ordinary shares have been assumed to be affiliates and an aggregate of 9,164,811 shares of the registrant’s voting ordinary shares held by such persons on
`June 30, 2014 are not included in this calculation.
`As of February 20, 2015, the registrant had outstanding 125,100,210 ordinary shares.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`Portions of the registrant’s definitive Proxy Statement for the registrant’s 2015 Annual Meeting of Shareholders are incorporated by reference into
`Part III of Annual Report on this Form 10-K.
`
`

`
`

`
`HORIZON PHARMA PLC
`FORM 10-K — ANNUAL REPORT
`For the Fiscal Year Ended December 31, 2014
`
`TABLE OF CONTENTS
`
`PART I
`
`Item 1. Business
`
`Item 1A. Risk Factors
`
`Item 1B. Unresolved Staff Comments
`
`Item 2. Properties
`
`Item 3. Legal Proceedings
`
`Item 4. Mine Safety Disclosures
`
`PART II
`
`Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
`Equity Securities
`
`Item 6. Selected Financial Data
`
`Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
`
`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
`
`Item 9B. Other Information
`
`PART III
`
`Item 10. Directors, Executive Officers and Corporate Governance
`
`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 Accounting Fees and Services
`
`PART IV
`
`Item 15. Exhibits, Financial Statement Schedules
`
`Page
`
`1
`
`39
`
`85
`
`85
`
`85
`
`87
`
`87
`
`92
`
`93
`
`113
`
`114
`
`114
`
`115
`
`116
`
`117
`
`117
`
`117
`
`117
`
`117
`
`117
`
`

`
`THIS PAGE INTENTIONALLY LEFT BLANK
`THIS PAGE INTENTIONALLY LEFT BLANK
`
`

`
`PART I
`
`Special Note Regarding Forward-Looking Statements
`
`This Annual Report on Form 10-K contains “forward-looking statements” — that is, statements related to
`future, not past, events — as defined in Section 21E of the Securities Exchange Act of 1934, as amended, that
`reflect our current expectations regarding our future growth, results of operations, financial condition, cash flows,
`performance, business prospects, and opportunities, as well as assumptions made by, and information currently
`available to, our management. Forward-looking statements include any statement that does not directly relate to a
`current or historical fact. We have tried to identify forward-looking statements by using words such as “believe,”
`“may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,” “should,” or
`“would.” Among the factors that could cause actual results to differ materially from those indicated in the
`forward-looking statements are risks and uncertainties inherent in our business including, without limitation: our
`ability to successfully execute our sales and marketing strategy, including continuing to successfully recruit and
`retain sales and marketing personnel in the United States and to successfully build the market for our products in
`the United States; whether we will be able to realize the expected benefits of strategic transactions, such as our
`merger with Vidara Therapeutics International Public Limited Company and our acquisition of the U.S. rights to
`PENNSAID 2%, including whether and when such transactions will be accretive to our net income; the rate and
`degree of market acceptance of, and our ability and our distribution and marketing partners’ ability to obtain
`coverage and adequate reimbursement for, any approved products; our ability to maintain regulatory approvals
`for our products; our need for and ability to obtain additional financing; the accuracy of our estimates regarding
`expenses, future revenues and time to profitability; our ability to successfully execute our strategy to develop,
`acquire or in-license additional products or acquire companies; our ability to manage our anticipated future
`growth; the ability of our products to compete with generic products, especially those representing the active
`pharmaceutical ingredients in our products as well as new products that may be developed by our competitors;
`our ability and our distribution and marketing partners’ ability to comply with regulatory requirements regarding
`the sales, marketing and manufacturing of our products and product candidates; the performance of our third-
`party distribution partners, licensees and manufacturers over which we have limited control; our ability to obtain
`and maintain intellectual property protection for our products; our ability to defend our intellectual property
`rights with respect to our products; our ability to operate our business without infringing the intellectual property
`rights of others; the loss of key commercial or management personnel; regulatory developments in the United
`States and other countries; and other risks detailed below in Part I — Item 1A. “Risk Factors.”
`
`Although we believe that the expectations reflected in our forward-looking statements are reasonable, we
`cannot guarantee future results, events, levels of activity, performance or achievement. We undertake no
`obligation to publicly update or revise any forward-looking statements, whether as a result of new information,
`future events or otherwise, unless required by law.
`
`Item 1. Business
`
`Merger with Vidara
`
`On September 19, 2014, the businesses of Horizon Pharma, Inc., or HPI, and Vidara Therapeutics
`International Public Limited Company, or Vidara, were combined in a merger transaction, or the Merger,
`accounted for as a reverse acquisition under the acquisition method of accounting for business combinations,
`with HPI treated as the acquiring company in the Merger for accounting purposes. As part of the Merger, a
`wholly-owned subsidiary of Vidara merged with and into HPI, with HPI surviving the Merger as a wholly-owned
`subsidiary of Vidara and Vidara changed its name to Horizon Pharma plc, or New Horizon. Upon the
`consummation of the Merger, the historical financial statements of HPI became our historical financial
`statements. As a result of the Merger, we are organized under the laws of Ireland.
`
`Unless otherwise indicated or the context otherwise requires, references to the “Company”, “New Horizon”,
`“we”, “us” and “our” refer to Horizon Pharma plc and its consolidated subsidiaries, including its predecessor,
`
`1
`
`

`
`HPI. All references to “Vidara” are references to Horizon Pharma plc (formerly known as Vidara Therapeutics
`International Public Limited Company) and its consolidated subsidiaries prior to the effective time of the Merger
`on September 19, 2014. The disclosures in this report relating to the pre-Merger business of Horizon Pharma plc,
`unless noted as being the business of Vidara prior to the Merger, pertain to the business of HPI prior to the
`Merger.
`
`Overview
`
`We are a specialty biopharmaceutical company focused on improving patients’ lives by identifying,
`developing, acquiring or in-licensing and commercializing differentiated products that address unmet medical
`needs. We market a portfolio of products in arthritis, inflammation and orphan diseases. Our U.S. marketed
`products are ACTIMMUNE® (interferon gamma-1b), DUEXIS® (ibuprofen/famotidine), PENNSAID®
`(diclofenac sodium topical solution) 2% w/w, RAYOS® (prednisone) delayed-release tablets and VIMOVO®
`(naproxen/esomeprazole magnesium). We developed DUEXIS and RAYOS, acquired the U.S. rights to
`VIMOVO from AstraZeneca AB, or AstraZeneca, in November 2013, acquired the U.S. rights to ACTIMMUNE
`as a result of the Merger and acquired the U.S. rights to PENNSAID 2% from Nuvo Research Inc., or Nuvo, in
`October 2014. We market our products in the United States through our field sales force of approximately 375
`representatives. Our strategy is to utilize the commercial strength and infrastructure we have established in
`creating a fully-integrated U.S.-focused specialty biopharmaceutical company to continue the successful
`commercialization of our existing product portfolio while also expanding and leveraging these capabilities
`further.
`
`On April 23, 2011, the U.S. Food and Drug Administration, or FDA, approved DUEXIS, a proprietary tablet
`formulation containing a fixed-dose combination of ibuprofen and famotidine in a single pill. DUEXIS is
`indicated for the relief of signs and symptoms of rheumatoid arthritis, or RA, osteoarthritis, or OA, and to
`decrease the risk of developing upper gastrointestinal, or GI, ulcers in patients who are taking ibuprofen for these
`indications. We began marketing DUEXIS to physicians in December 2011. In June 2012, we licensed DUEXIS
`rights in Latin America to Grünenthal S.A., a private company focused on the marketing of pain products.
`
`Our second approved product in the United States, RAYOS, known as LODOTRA® outside the United
`States, is a proprietary delayed-release formulation of low-dose prednisone approved originally in Europe for the
`treatment of moderate to severe, active RA in adults, particularly when accompanied by morning stiffness. On
`July 26, 2012, the FDA approved RAYOS for the treatment of RA, polymyalgia rheumatica, or PMR, psoriatic
`arthritis, or PsA, ankylosing spondylitis, or AS, asthma and chronic obstructive pulmonary disease, or COPD,
`and a number of other conditions. We have been focusing our promotion of RAYOS in the United States on
`rheumatology indications, including RA and PMR, and currently are broadening the marketing efforts for
`RAYOS into multiple other indications. We began marketing RAYOS to a subset of U.S. rheumatologists in
`December 2012 and began the full launch in late January 2013 to the majority of U.S. rheumatologists and key
`primary care physicians. LODOTRA is currently marketed outside the United States, excluding Japan and
`Canada, by our distribution partner, Mundipharma International Corporation Limited, or Mundipharma.
`
`On November 18, 2013, we entered into agreements with AstraZeneca pursuant to which we acquired from
`AstraZeneca and its affiliates certain intellectual property and other assets, and assumed from AstraZeneca and
`its affiliates certain liabilities, each with respect to VIMOVO, and obtained rights to develop other
`pharmaceutical products that contain gastroprotective agents in a single fixed combination oral solid dosage form
`with nonsteroidal anti-inflammatory drugs, or NSAIDs, in the United States. VIMOVO is a proprietary, fixed-
`dose, multi-layer, delayed-release tablet combining an enteric-coated naproxen, an NSAID, core and an
`immediate-release esomeprazole, a proton pump inhibitor, or PPI, layer surrounding the core. VIMOVO was
`originally developed by Pozen Inc., or Pozen, together with AstraZeneca pursuant to an exclusive global
`collaboration and license agreement. On April 30, 2010, the FDA approved VIMOVO for the relief of the signs
`and symptoms of OA, RA and AS and to decrease the risk of developing gastric ulcers in patients at risk of
`developing NSAID associated gastric ulcers.
`
`2
`
`

`
`We announced the availability of Horizon-labeled VIMOVO on January 2, 2014, at which time we also
`began marketing VIMOVO with our primary care sales force.
`
`On September 19, 2014, as a result of the Merger, we began marketing ACTIMMUNE, a bioengineered
`form of interferon gamma-1b, a protein that acts as a biologic response modifier. In the United States
`ACTIMMUNE is approved by the FDA for use in children and adults with chronic granulomatous disease, or
`CGD, and severe, malignant osteopetrosis, or SMO. ACTIMMUNE is indicated for reducing the frequency and
`severity of serious infections associated with CGD and for delaying time to disease progression in patients with
`SMO. We also plan to study ACTIMMUNE for potential additional indications, and the FDA has agreed to the
`primary endpoint for a Phase 3 study that will evaluate ACTIMMUNE in the treatment of Friedreich’s Ataxia, or
`FA. In February 2015, we submitted an IND application and anticipate the Phase 3 clinical study related to FA
`will begin enrolling patients in the second quarter of 2015.
`
`On October 17, 2014, we acquired the U.S. rights to PENNSAID 2% from Nuvo for $45.0 million in
`cash. PENNSAID 2% is approved in the United States for the treatment of the pain of OA of the knee(s). As part
`of the acquisition, we entered into an exclusive eight-year supply agreement with Nuvo under which Nuvo will
`supply us product. We began marketing PENNSAID 2% in January 2015. In connection with our PENNSAID
`2% acquisition, we expanded our primary care sales force by 75 additional representatives. Our primary care
`representatives are now marketing DUEXIS, PENNSAID 2% and VIMOVO.
`
`Another key part of our commercial strategy is to encourage physicians to have their patients agree to fill
`prescriptions through our Prescriptions-Made-Easy, or PME, specialty pharmacy program, which enables
`uninsured or commercially insured patients’ enhanced access to our products by providing financial assistance to
`reduce eligible patients’ out of pocket costs for prescriptions filled via a PME-participating mail order pharmacy.
`Through PME, prescriptions for our products are filled by designated mail order specialty pharamacies, with the
`product shipped directly to the patient. Because the patient out of pocket cost for our products when dispensed
`through the PME program may be significantly lower than such costs when our products are dispensed outside of
`the PME program, prescriptions filled through our PME program are therefore less likely to be subject to the
`efforts of traditional pharmacies to switch a physician’s intended prescription of our products to a generic or over
`the counter brand. We expect that continued adoption of our PME program by physicians will be important to our
`ability to gain market share for our products as pressure from healthcare payors and PBMs, to use less expensive
`generic or over the counter brands instead of branded products increases. We believe the continued expansion of
`our PME program will allow us to largely mitigate the potential impact of our products being placed on the
`exclusion lists implemented by PBMs.
`
`Our principal executive offices are located at Connaught House, 1st Floor, 1 Burlington Road, Dublin 4,
`Ireland and our telephone number is +011 353 1 772 2100. Our website address is www.horizonpharma.com. The
`information contained in or that can be accessed through our website is not part of this report.
`
`“Horizon Pharma,” “Horizon Therapeutics,” a stylized letter “H,” “ACTIMMUNE,” “DUEXIS,”
`“LODOTRA,” “PENNSAID 2%,” “RAYOS,” and “VIMOVO” are registered trademarks in the United States
`and/or certain other countries. This report also includes references to trademarks and service marks of other
`entities and those trademarks and service marks are the property of their respective owners.
`
`Our Strategy
`
`Our strategy is to utilize the commercial strength and infrastructure we have established in creating a
`fully-integrated U.S.-focused specialty biopharmaceutical company to continue the successful commercialization
`of our existing product portfolio while also expanding and leveraging these capabilities by identifying,
`developing, acquiring or in-licensing and commercializing additional differentiated products that address unmet
`medical needs. We have entered