EXHIBIT 2012
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`EXHIBIT 2012EXHIBIT 2012
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`Table of Contents
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`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`WASHINGTON, D.C. 20549
`FORM 20-F
`¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
`OR
`x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2011
`OR
`¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the transition period from to
`Commission File number: 0-16174
`OR
`¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`Date of event requiring this shell company report:
`TEVA PHARMACEUTICAL INDUSTRIES LIMITED
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`(Exact name of Registrant as specified in its charter)
`Not Applicable
`(Translation of Registrant’s name into English)
`ISRAEL
`(Jurisdiction of incorporation or organization)
`5 Basel Street
`P.O. Box 3190
`Petach Tikva 49131, Israel
`(Address of principal executive offices)
`Eyal Desheh
`Chief Financial Officer
`Teva Pharmaceutical Industries Limited
`5 Basel Street
`P.O. Box 3190
`Petach Tikva 49131, Israel
`Tel: 972-3-914-8171
`Fax: 972-3-914-8678
`(Name, telephone, e-mail and/or facsimile number and address of Company contact person)
`Securities registered or to be registered pursuant to Section 12(b) of the Act.
`Title of each class
`American Depositary Shares, each representing one Ordinary Share
`Securities registered or to be registered pursuant to Section 12(g) of the Act.
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`Name of each exchange on which registered
`The Nasdaq Stock Market LLC
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`None
`(Title of Class)
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`Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
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`None
`(Title of Class)
`Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
`941,985,166 Ordinary Shares
`699,092,829 American Depositary Shares
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨
`If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No x
`Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
`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 x No ¨
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 x No ¨
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.
`(Check one):
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`Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨
`Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
` US GAAP
`¨ International Financial Reporting Standards as issued by the International Accounting Standards Board
`¨ Other
`If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
`¨ Item 17
` Item 18
`If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
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`CEPHALON, INC. -- EXHIBIT 2012 0001
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`Table of Contents
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`INDEX
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`Introduction and Use of Certain Terms
`Forward-Looking Statements
`Part I
`Item 1:
`Item 2:
`Item 3:
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` Key Information
`Selected Financial Data
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`Operating Data
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`Balance Sheet Data
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`Dividends
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`Risk Factors
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`Information on the Company
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`Introduction
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`Strategy
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`Product Offerings
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`Generic Products
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`Branded Products
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`Consumer Healthcare Joint Venture
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`Other Revenues
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`Teva’s Markets
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`United States
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`Europe
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`Rest of the World Markets
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`Operations and R&D
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`Research and Development
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`Operations
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`Environment
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`Organizational Structure
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`Properties and Facilities
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`Regulation
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` Unresolved Staff Comments
` Operating and Financial Review and Prospects
`Introduction
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`Highlights
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`Acquisitions and Other Transactions
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`Results of Operations
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`Revenues by Geographic Area
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`Revenues by Product Line
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`Other Income Statement Line Items
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`Supplemental Non-GAAP Income Data
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`Impact of Currency Fluctuations and Inflation
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`Critical Accounting Policies
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`Recently Issued Accounting Pronouncements
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`Liquidity and Capital Resources
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`Trend Information
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`Off-Balance Sheet Arrangements
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`Aggregated Contractual Obligations
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`Item 4:
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`Item 4A:
`Item 5:
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`CEPHALON, INC. -- EXHIBIT 2012 0002
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`Table of Contents
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`Item 6:
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`Item 7:
`Item 8:
`Item 9:
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`Item 10:
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`Item 11:
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`Item 12D:
`Part II
`Item 13:
`Item 14:
`Item 15:
`Item 16:
`Item 16A:
`Item 16B:
`Item 16C:
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`Item 16D:
`Item 16E:
`Item 16F:
`Item 16G:
`Part III
`Item 17:
`Item 18:
`Item 19:
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` Directors, Senior Management and Employees
`Directors and Senior Management
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`Executive Officers
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`Directors
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`Compensation
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`Board Practices
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`Statutory Independent Directors/Financial Experts
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`Committees of the Board
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`Employees
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`Share Ownership
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` Major Shareholders and Related Party Transactions
` Financial Information
` The Offer and Listing
`ADSs
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`Ordinary Shares
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` Additional Information
`Memorandum and Articles of Association
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`Israeli Taxation
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`Documents on Display
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` Quantitative and Qualitative Disclosures about Market Risk
`General
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`Exchange Rate Risk Management
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`Interest Rate Risk Management
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` Description of Teva American Depositary Shares
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` Defaults, Dividend Arrearages and Delinquencies
` Material Modifications to Rights of Security Holders and Use of Proceeds
` Controls and Procedures
`[Reserved]
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` Audit Committee Financial Experts
` Code of Ethics
` Principal Accountant Fees and Services
`Policy on Pre-Approval of Audit and Non-Audit Services of Independent Auditors
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`Principal Accountant Fees and Services
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` Exemptions from the Listing Standards for Audit Committees
` Purchases of Equity Securities by the Issuer and Affiliated Purchasers
` Change in Registrant’s Certifying Accountant
` Corporate Governance
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` Financial Statements
` Financial Statements
` Exhibits
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`Consolidated Financial Statements
`Financial Statement Schedule
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`F-1
`S-1
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`CEPHALON, INC. -- EXHIBIT 2012 0003
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`Table of Contents
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`INTRODUCTION AND USE OF CERTAIN TERMS
`Unless otherwise indicated, all references to the “Company,” “we,” “our” and “Teva” refer to Teva Pharmaceutical Industries Limited and its
`subsidiaries, and references to “revenues” refer to “net revenues”. References to “U.S. dollars,” “U.S.$” and “$” are to the lawful currency of the United
`States of America, and references to “NIS” are to New Israeli shekels. Market share data is based on information provided by IMS Health Inc., a provider of
`market research to the pharmaceutical industry (“IMS”), unless otherwise stated.
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`FORWARD-LOOKING STATEMENTS
`This annual report contains forward-looking statements, which express management’s current beliefs or expectations with regard to future events. You
`can identify these statements by the fact that they do not relate strictly to historical or current facts. Such statements may include words such as “anticipate,”
`“estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with any discussion of future
`operating or financial performance. In particular, these statements relate to, among other things:
` our business strategy;
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` the development and launch of our products, including product approvals and results of clinical trials;
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` projected markets and market size;
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` anticipated results of litigation;
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` our projected revenues, market share, expenses, net income margins and capital expenditures; and
` our liquidity.
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`The forward-looking statements contained herein involve a number of known and unknown risks and uncertainties that could cause our future results,
`performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements.
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`You should understand that many important factors, in addition to those discussed or incorporated by reference in this report, could cause our results to
`differ materially from those expressed in the forward-looking statements. Potential factors that could affect our results include, in addition to others not
`described in this report, those described under “Item 3—Key Information—Risk Factors.” These are factors that we think could cause our actual results to
`differ materially from expected results.
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`Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statements
`or other information contained in this report, whether as a result of new information, future events or otherwise. You are advised, however, to consult any
`additional disclosures we make in our reports on Form 6-K filed with the U.S. Securities and Exchange Commission (“SEC”). Please also see the cautionary
`discussion of risks and uncertainties under “Item 3: Key Information—Risk Factors” starting on page 5 of this report. This discussion is provided as
`permitted by the Private Securities Litigation Reform Act of 1995.
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`1
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`CEPHALON, INC. -- EXHIBIT 2012 0004
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`Table of Contents
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`PART I
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`ITEM 1:
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`ITEM 2:
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`ITEM 3:
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`NOT APPLICABLE
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`NOT APPLICABLE
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`KEY INFORMATION
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`SELECTED FINANCIAL DATA
`The Israeli Securities Law allows Israeli companies, such as Teva, whose securities are listed both on the Tel Aviv Stock Exchange and on certain stock
`exchanges in the U.S. (including NASDAQ), to report exclusively under the rules of the SEC and generally accepted accounting principles in the United
`States (“U.S. GAAP”). Except as otherwise indicated, all financial statements and other financial information included in this annual report are presented
`solely under U.S. GAAP.
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`The following selected operating data for each of the years in the three-year period ended December 31, 2011 and selected balance sheet data at
`December 31, 2011 and 2010 are derived from our audited consolidated financial statements set forth elsewhere in this report, which have been prepared in
`accordance with U.S. GAAP. The selected operating data for each of the years in the two-year period ended December 31, 2008 and selected balance sheet data
`at December 31, 2009, 2008 and 2007 are derived from our audited financial statements not appearing in this report, which have also been prepared in
`accordance with U.S. GAAP.
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`The selected financial data should be read in conjunction with the financial statements, related notes and other financial information included in this
`report.
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`The currency of the primary economic environment in which our operations in Israel and the United States are conducted is the U.S. dollar. The
`functional currency of most of our other subsidiaries and associated companies in most cases is their local currency.
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`CEPHALON, INC. -- EXHIBIT 2012 0005
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`For the year ended December 31,
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`2011
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`2010
`2009
`2008
`2007
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`U.S. dollars in millions (except per share amounts)
` 18,312 16,121 13,899 11,085 9,408
` 8,797 7,056 6,532 5,117 4,531
` 9,515 9,065 7,367 5,968 4,877
` 1,080
`933
`802
`786 581
` 3,478 2,968 2,676 1,842 1,264
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`932
`865
`823
`669 637
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`901
`410
`638
`124 —
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`15
`18
`23 1,402 —
` 3,109 3,871 2,405 1,145 2,395
`91
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`153
`225
`202
`345
` 2,956 3,646 2,203
`800 2,304
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`127
`283
`166
`184 386
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`61
`24
`33
`3
`1
` 2,768 3,339 2,004
`615 1,915
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`9
`8
`4
`1
`6
` 2,759 3,331 2,000
`609 1,914
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`3.10
`3.72
`2.29
`0.78 2.49
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`3.09
`3.67
`2.23
`0.75 2.36
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`890
`896
`872
`780 768
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`893
`921
`896
`830
`820
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`As at December 31,
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`2011
`2010
`2009
`2008
`2007
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`(U.S. dollars in millions)
` 1,748 1,549 2,465 2,065 2,875
` 3,766 3,835 3,592 3,944 3,454
` 50,142 38,152 33,210 32,520 23,423
` 4,280 2,771 1,301 2,906 1,837
` 10,236 4,110 4,311 5,475 3,259
` 14,516 6,881 5,612 8,381 5,096
` 22,343 22,002 19,259 16,438 13,864
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`Table of Contents
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`Operating Data
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`Net revenues
`Cost of sales
`Gross profit
`Research and development expenses—net
`Selling and marketing expenses
`General and administrative expenses
`Legal settlements, acquisition, restructuring and other expenses and impairment
`Purchase of research and development in process
`Operating income
`Financial expenses—net
`Income before income taxes
`Provision for income taxes
`Share in losses of associated companies—net
`Net income
`Net income attributable to non-controlling interests
`Net income attributable to Teva
`Earnings per share attributable to Teva:
`Basic ($)
`Diluted ($)
`Weighted average number of shares (in millions):
`Basic
`Diluted
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`3
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`Balance Sheet Data
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`Financial assets (cash, cash equivalents and marketable securities)
`Working capital (operating assets and liabilities)
`Total assets
`Short-term debt, including current maturities
`Long-term debt, net of current maturities
`Total debt
`Total equity
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`CEPHALON, INC. -- EXHIBIT 2012 0006
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`Table of Contents
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`Dividends
`We have paid dividends on a regular quarterly basis since 1986. Future dividend policy will be reviewed by the Board of Directors based upon
`conditions then existing, including our earnings, financial condition, capital requirements and other factors. Our ability to pay cash dividends may be
`restricted by instruments governing our debt obligations. Dividends are declared and paid in NIS. Dividends are converted into U.S. dollars and paid by the
`depositary of our American Depositary Shares (“ADSs”) for the benefit of owners of ADSs, and are subject to exchange rate fluctuations between the NIS and
`the U.S. dollar between the declaration date and the date of actual payment.
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`Dividends paid by an Israeli company to shareholders residing outside Israel from 2012 and on are generally subject to withholding of Israeli income tax
`at a rate of up to 25%. Such tax rates apply unless a lower rate is provided in a treaty between Israel and the shareholder’s country of residence. In our case,
`the applicable withholding tax rate will depend on the particular Israeli production facilities that have generated the earnings that are the source of the specific
`dividend and, accordingly, the applicable rate may change from time to time. A 25% tax will be withheld on the dividend declared for the fourth quarter of
`2011.
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`The following table sets forth the amounts of the dividends declared in respect of each period indicated prior to deductions for applicable Israeli
`withholding taxes (in cents per share).
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`2011
` 23.2
` 23.5
` 21.9
` 26.8
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`2009
`2010
`In cents per share
` 18.8
` 14.5
` 18.1
` 15.1
` 19.3
` 15.9
` 21.8
` 18.7
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`2008
` 13.1
` 12.9
` 11.8
` 14.7
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`2007
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` 9.9
` 9.2
` 10.0
` 12.4
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`4
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`1st interim
`2nd interim
`3rd interim
`4th interim
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`CEPHALON, INC. -- EXHIBIT 2012 0007
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`Table of Contents
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`RISK FACTORS
`Our business faces significant risks. You should carefully consider all of the information set forth in this annual report and in our other filings
`with the SEC, including the following risk factors which we face and which are faced by our industry. Our business, financial condition and results of
`operations could be materially adversely affected by any of these risks. This report also contains forward-looking statements that involve risks and
`uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the
`risks described below and elsewhere in this report and our other SEC filings. See “Forward-Looking Statements” on page 1.
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`Our success depends on our ability to develop and commercialize additional pharmaceutical products.
`Our financial results depend upon our ability to commercialize additional generic and innovative pharmaceutical products. Commercialization requires
`that we successfully develop, test and manufacture both generic and innovative products. All of our products must receive regulatory approval and meet (and
`continue to comply with) regulatory and safety standards; if health or safety concerns arise with respect to a product, we may be forced to withdraw it from
`the market.
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`The development and commercialization process, particularly with respect to innovative products, is both time-consuming and costly and involves a
`high degree of business risk. Our products currently under development, if and when fully developed and tested, may not perform as we expect. Necessary
`regulatory approvals may not be obtained in a timely manner, if at all, and we may not be able to produce and market such products successfully and
`profitably. Delays in any part of the process or our inability to obtain regulatory approval of our products could adversely affect our operating results by
`restricting or delaying our introduction of new products.
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`Our ability to introduce new generic products also depends upon our success in challenging patent rights held by third parties or in developing non-
`infringing products. Due to the emergence and development of competing products over time, our overall profitability depends on, among other things, our
`ability to introduce new products in a timely manner, to continue to manufacture products cost-effectively and to manage the life cycle of our product portfolio.
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`Sales of our innovative products, especially Copaxone , face increasing competition, including new orally-administered therapies and
`®
`potential generic versions.
`Any substantial decrease in the revenues derived from our innovative products would have an adverse effect on our results of operations. Several of our
`innovative products currently face, or will soon face, intense competition.
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`For example, Copaxone , our leading innovative product, was responsible for a very significant contribution to our profits and cash flow from
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`operations in 2011. To date, we have been successful in our efforts to establish Copaxone as the leading therapy for multiple sclerosis and have increased our
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`global market share among the currently available major therapies for multiple sclerosis. However, Copaxone faces intense competition from existing
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`injectable products, such as Avonex , Betaseron , Rebif , Extavia and Tysabri . In addition, competition from the rapidly developing market segment of oral
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`treatments, such as Gilenya , which was introduced in 2010 by Novartis, and Biogen’s BG-12, which is currently near commercialization, is expected to be
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`especially intense in light of the substantial convenience afforded by oral products in comparison to injectables such as Copaxone . Also, as discussed below,
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`our patents on Copaxone have been challenged, and we may face generic competition prior to 2014, when the U.S. Orange Book patents covering Copaxone
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`would otherwise expire.
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`CEPHALON, INC. -- EXHIBIT 2012 0008
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`Table of Contents
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`Our revenues and profits from generic pharmaceutical products typically decline as a result of competition, both from other pharmaceutical
`companies and as a result of increased governmental pricing pressure.
`Our generic drugs face intense competition. Prices of generic drugs typically decline, often dramatically, especially as additional generic pharmaceutical
`companies (including low-cost generic producers based in China and India) receive approvals and enter the market for a given product and competition
`intensifies. Consequently, our ability to sustain our sales and profitability on any given product over time is affected by the number of new companies selling
`such product and the timing of their approvals.
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`In addition, intense pressure from government healthcare authorities, particularly in highly regulated European markets, to reduce their expenditures on
`prescription drugs has resulted in lower pharmaceutical pricing, causing decreases in revenues and profits.
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`Furthermore, brand pharmaceutical companies continue to defend their products vigorously. For example, brand companies often sell or license their
`own generic versions of their products, either directly or through other generic pharmaceutical companies (so-called “authorized generics”). No significant
`regulatory approvals are required for authorized generics, and brand companies do not face any other significant barriers to entry into such market. Brand
`companies may also seek to delay introductions of generic equivalents, by:
`•
` obtaining and enforcing new patents on drugs whose original patent protection is about to expire;
`•
` filing patent infringement suits that automatically delay the approval of generic versions by the U.S. Food and Drug Administration (“FDA”);
`•
` filing citizens’ petitions with the FDA contesting generic approvals on alleged health and safety grounds;
`•
` questioning the quality and bioequivalence of generic pharmaceuticals;
`•
` developing controlled-release or other slightly modified versions, which often reduce demand for the generic version of the existing product for
`which we are seeking approval;
` making arrangements with managed care companies and insurers to reduce economic incentives to purchase generic versions;
` changing product claims and product labeling; and
` developing and marketing over-the-counter versions of brand products that are about to face generic competition.
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`•
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`•
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`These actions may increase the costs and risks of our efforts to introduce generic products and may delay or prevent such introduction altogether.
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`Our specialty pharmaceuticals business faces intense competition from companies that have greater resources and capabilities.
`We face intense competition in our specialty pharmaceutical business. Many of our competitors have substantially greater experience in the development
`and marketing of branded, innovative and consumer-oriented products. They may be able to respond more quickly to new or emerging market preferences or
`to devote greater resources to the development and marketing of new products and/or technologies than we can. As a result, any products and/or innovations
`that we develop may become obsolete or noncompetitive before we can recover the expenses incurred in connection with their development. In addition, for these
`product categories we must demonstrate to physicians, patients and third-party payors the benefits of our products relative to competing products that are often
`more familiar or otherwise more well-established. If competitors introduce new products or new variations on their existing products, our marketed products,
`even those protected by patents, may be replaced in the marketplace or we may be required to lower our prices.
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`In addition, our increased focus on innovative and specialty pharmaceuticals requires much greater use of a direct sales force than does our core generic
`business. Our ability to realize significant revenues from direct marketing and sales activities depends on our ability to attract and retain qualified sales
`personnel. Competition
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`6
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`CEPHALON, INC. -- EXHIBIT 2012 0009
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`Table of Contents
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`for qualified sales personnel is intense. We may also need to enter into co-promotion, contract sales force or other such arrangements with third parties, for
`example, where our own direct sales force is not large enough or sufficiently well-aligned to achieve maximum penetration in the market. Any failure to attract
`or retain qualified sales personnel or to enter into third-party arrangements on favorable terms could prevent us from successfully maintaining current sales
`levels or commercializing new innovative and specialty products.
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`Research and development efforts invested in our innovative pipeline may not achieve expected results.
`We invest increasingly significant resources to develop innovative pharmaceuticals (which, following the Cephalon acquisition, is now a much larger
`component of our business), both through our own efforts and through collaborations, in-licensing and acquisition of products from or with third parties. The
`development of innovative drugs involves processes and expertise different from those used in the development of generic drugs, which increases the risks of
`failure that we face. For example, the time from discovery to commercial launch of an innovative product can be 15 years or even longer, and involves
`multiple stages: not only intensive preclinical and clinical testing, but also highly complex, lengthy and expensive approval processes which can vary from
`country to country. The longer it takes to develop a product, the less time there will be for us to recover our development costs and generate profits.
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`During each stage, we may encounter obstacles that delay the development process and increase expenses, leading to significant risks that we will not
`achieve our goals and may be forced to abandon a potential product in which we have invested substantial amounts of time and money. These obstacles may
`include: preclinical failures; difficulty enrolling patients in clinical trials; delays in completing formulation and other work needed to support an application
`for approval; adverse reactions or other safety concerns arising during clinical testing; insufficient clinical trial data to support the safety or efficacy of the
`product candidate; and failure to obtain, or delays in obtaining, the required regulatory approvals for the product candidate or the facilities in which it is
`manufactured.
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`Because of the amounts required to be invested in augmenting our innovative pipeline, we are reliant on partnerships and joint ventures with third
`parties, and consequently face the risk that some of these third parties may fail to perform their obligations, or fail to reach the levels of success that we are
`relying on to meet our revenue and profit goals. There is a trend in the innovative pharmaceutical industry of seeking to “outsource” drug development by
`acquiring companies with promising drug candidates, and we face substantial competition from historically innovative companies for such acquisition
`targets. Accordingly, our investment in research and development of innovative products can involve significant costs with no assurances of future revenues or
`profits.
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`The success of our innovative products depends on the effectiveness of our patents, confidentiality agreements and other measures to protect
`our intellectual property rights.
`The success of our innovative products depends substantially on our ability to obtain patents and to defend our intellectual property rights. If we fail to
`protect our intellectual property adequately, competitors may manufacture and market products identical or similar to ours. We have been issued numerous
`patents covering our innovative products, and have filed, and expect to continue to file, patent applications seeking to protect newly developed technologies and
`products in various countries, including the United States. Any existing or future patents issued to or licensed by us may not provide us with any competitive
`advantages for our products or may be challenged or circumvented by competitors.
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`We are currently engaged in lawsuits with respect to generic company challenges to the validity and/or enforceability of the patents covering Copaxone ,
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`our leading innovative product, Azilect , Amrix , Fentora , Provigil and Nuvigil . While we intend to defend the validity of these patents vigorously, and
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`will seek to use all appropriate methods to prevent their infringement, such efforts are expensive and time consuming. Due to the nature of litigation, there can
`be no assurance that such efforts will be successful. The loss of patent protection or
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`CEPHALON, INC. -- EXHIBIT 2012 0010
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`Table of Contents
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`regulatory exclusivity on these or other innovative products could materially impact our business, results of operations, financial conditions or prospects.
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`We also rely on trade secrets, unpatented proprietary know-how, trademarks, data exclusivity and continuing technological innovation that we seek to
`protect, in part by confidentiality agreements with licensees, suppliers, employees and consultants. If these agreements are breached, it is possible that we will
`not have adequate remedies. Disputes may arise concerning the ownership of intellectual property or the applicability of confidentiality agreements.
`Furthermore, our trade secrets and proprietary technology may otherwise become known or be independently developed by our competitors or we may not be
`able to maintain the confidentiality of information relating to such products.
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`Decreasing opportunities to obtain U.S. market exclusivity for generic versions of significant products may adversely affect our revenues
`and profits.
`Our ability to achieve continued growth and profitability through sales of generic pharmaceuticals is dependent on our success in challenging patents,
`developing non-infringing products or developing products with increased complexity to provide launch opportunities with U.S. market exclusivity or limited
`competition. The failure to continue to develop such opportunities could adversely affect our sales and profitability.
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`To the extent that we succeed in being the first to market a generic version of a significant product, and particularly if we are the only company
`authorized to sell during the 180-day period of exclusivity in the U.S. market, as provided under the Hatch-Waxman Act, our sales, profits and profitability
`can be substantially increased in the period following the introduction of such product and prior to a competitor’s introduction of an equivalent product. Even
`after the exclusivity period ends, there is often continuing benefit from being the first generic product in the market.
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`The number of significant new generic products for which Hatch-Waxman exclusivity is available, and the size of those product opportunities, vary
`significantly over time and are expected to decrease over the next several years in comparison to those available in the past. Patent challenges have become more
`difficult in recent years. Additionally, we increasingly share the 180-day exclusivity period with other generic competitors, which diminishes the commercial
`value of the exclusivity.
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`The 180-day market exclusivity period is triggered by commercial marketing of the generic product or, in certain cases, can be triggered by a final court
`decision that is no longer subject to appeal holding the applicable patents to be invalid, unenforceable or not infringed. However, the exclusivity period c