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`10-K 1 valeant2016form10-k.htm 10-K
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`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`_____________________________
`
`FORM 10-K
`
`ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2016
`OR
`o 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 001-14956
`VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
`(Exact Name of Registrant as Specified in its Charter)
`
`BRITISH COLUMBIA, CANADA
`State or other jurisdiction of
`incorporation or organization
`
`98-0448205
`(I.R.S. Employer Identification No.)
`
`2150 St. Elzéar Blvd. West
`Laval, Quebec
`Canada, H7L 4A8
`(Address of principal executive offices)
`
`Registrant's telephone number, including area code (514) 744-6792
`
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class
`Common Shares, No Par Value
`Securities registered pursuant to section 12(g) of the Act:
`
`Name of each exchange on which registered
`New York Stock Exchange, Toronto Stock Exchange
`
`None
`(Title of class)
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o
`
`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 o No ý
`
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 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 ý No o
`
`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 ý No o
`
`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
`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. o
`
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
`definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
`
`Large accelerated filer ý
`
`Non-accelerated filer o
`Accelerated filer o
`(Do not check if a smaller reporting company)
`
`Smaller reporting company o
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`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1554
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`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`

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`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
`
`The aggregate market value of the common shares held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed
`second fiscal quarter was $5,979,817,000 based on the last reported sale price on the New York Stock Exchange on June 30, 2016.
`
`The number of outstanding shares of the registrant’s common stock as of February 23, 2017 was 347,839,513.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`
`Part III incorporates certain information by reference from the registrant’s proxy statement for the 2017 Annual Meeting of Shareholders. Such proxy
`statement will be filed no later than 120 days after the close of the registrant’s fiscal year ended December 31, 2016.
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`TABLE OF CONTENTS
`
`GENERAL INFORMATION
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`PART I
`
`Business
`Risk Factors
`Unresolved Staff Comments
`Properties
`Legal Proceedings
`Mine Safety Disclosures
`
`PART II
`Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
`Securities
`Selected Financial Data
`Management’s Discussion and Analysis of Financial Condition and Results of Operations
`Quantitative and Qualitative Disclosures About Market Risk
`Financial Statements and Supplementary Data
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
`Controls and Procedures
`Other Information
`
`PART III
`Directors, Executive Officers and Corporate Governance
`Executive Compensation
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
`Certain Relationships and Related Transactions, and Director Independence
`Principal Accounting Fees and Services
`
`Item 1.
`Item 1A.
`Item 1B.
`Item 2.
`Item 3.
`Item 4.
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`Item 5.
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`Item 6.
`Item 7.
`Item 7A.
`Item 8.
`Item 9.
`Item 9A.
`Item 9B.
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`Item 10.
`Item 11.
`Item 12.
`Item 13.
`Item 14.
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`Exhibits and Financial Statement Schedules
`Item 15.
`Form 10-K Summary
`Item 16.
`SIGNATURES
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`PART IV
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`Basis of Presentation
`
`General
`
`Except where the context otherwise requires, all references in this Annual Report on Form 10-K (“Form 10-K”) to the
`“Company”, “we”, “us”, “our” or similar words or phrases are to Valeant Pharmaceuticals International, Inc. and its subsidiaries,
`taken together. In this Form 10-K, references to “$” or "USD" are to United States (“U.S.”) dollars, references to “€” are to Euros,
`references to “CAD” are to Canadian dollars, and references to RUB are to Russian rubles. Unless otherwise indicated, the
`statistical and financial data contained in this Form 10-K are presented as of December 31, 2016.
`
`Trademarks
`
`The following words are some of the trademarks in our Company’s trademark portfolio and are the subject of either
`registration, or application for registration, in one or more of Canada, the United States of America (the “U.S.”) or certain other
`jurisdictions: ACANYA®, ACNE FREE®, ACNEFREE™, ADDYI®, AERGEL®, AKREOS®, ALDARA®, ALREX®,
`AMBI®, AMMONUL®, AMYTAL®, ANTIGRIPPIN®, APLENZIN®, APRISO®, ARESTIN®, ARTELAC®, ATIVAN®,
`ATRALIN®, B&L®, B+L®, BAUSCH & LOMB®, BAUSCH + LOMB®, BAUSCH + LOMB ULTRA®, BEDOYECTA®,
`BEPREVE®, BESIVANCE®, BIOTRUE®, BIOVAIL®, BOSTON®, CARAC®, CARDIZEM®, CERAVE®, CLEAR +
`BRILLIANT®, CLINDAGEL®, COLD-FX®, COMFORTMOIST®, CRYSTALENS®, CUPRIMINE®, EDECRIN®,
`ENVISTA®, FRAXEL®, GLUMETZA®, IBSCHEK™, IPRIVASK®, ISTALOL®, JUBLIA®, LIPOSONIX®, LOTEMAX®,
`LUMINESSE™, LUZU®, MACUGEN®, MEDICIS®, MEPHYTON®, MIGRANAL®, MINOCIN®, MOISTURESEAL®,
`OBAGI®, OCUVITE®, ONEXTON®, PEROXICLEAR®, PRESERVISION®, PROLENSA®, PROVENGE®, PUREVISION®,
`RELISTOR®, RENU®, RENU MULTIPLUS®, RETIN-A®, RETIN-A MICRO®, SECONAL®, SECONAL SODIUM®,
`SHOWER TO SHOWER®, SILIQ™, SOFLENS®, SOLODYN®, SOLTA MEDICAL®, STELLARIS®, STELLARIS ELITE™,
`STORZ®, SYNERGETICS®, SYPRINE®, TARGRETIN®, TASMAR®, THERMAGE®, THERMAGE CPT®, TRULIGN®,
`UCERIS®, VALEANT®, VALEANT V & DESIGN®, VALEANT PHARMACEUTICALS & DESIGN®, VANOS®, VICTUS®,
`VIRAZOLE®, VITESSE™, XENAZINE®, ZEGERID®, ZELAPAR®, ZIANA®, ZYCLARA® and ZYLET®.
`
`In addition to the trademarks noted above, we have filed trademark applications and/or obtained trademark registrations for
`many of our other trademarks in the U.S., Canada and in other jurisdictions and have implemented, on an ongoing basis, a
`trademark protection program for new trademarks.
`
`WELLBUTRIN®, WELLBUTRIN XL® and ZOVIRAX® are trademarks of GlaxoSmithKline LLC and are used by us
`under license. ELIDEL® and XERESE® are registered trademarks of Meda Pharma SARL and are used by us under license.
`EMERADE® is a registered trademark of Medeca Pharma AB and is used by us under license. DEFLUX® and SOLESTA® are
`registered trademarks of Nestlé Skin Health S.A. and are used by us under license. ISUPREL® and NITROPRESS® are registered
`trademarks of Hospira, Inc. and are used by us under license. XIFAXAN® is a registered trademark of Alfa Wasserman S.P.A. and
`is used by us under license. PEPCID® is a brand of McNeil Consumer Pharmaceuticals and is used by us under license.
`MOVIPREP® is a registered trademark of Velinor AG and is used by us under license. LOCOID® is a registered trademark
`of Astellas Pharma Europe B.V. and is used by us under license.
`
`Forward-Looking Statements
`
`Caution regarding forward-looking information and statements and “Safe-Harbor” statements under the U.S. Private
`Securities Litigation Reform Act of 1995:
`
`To the extent any statements made in this Form 10-K contain information that is not historical, these statements are forward-
`looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
`Exchange Act of 1934, as amended, and may be forward-looking information within the meaning defined under applicable
`Canadian securities legislation (collectively, “forward-looking statements”).
`
`These forward-looking statements relate to, among other things: our business strategy, business plans and prospects,
`forecasts and changes thereto, product pipeline, prospective products or product approvals, product development and distribution
`plans, future performance or results of current and anticipated products; our liquidity and our ability to satisfy our debt maturities
`as they become due; our ability to reduce debt levels; the impact of our distribution, fulfillment and other third party arrangements;
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`proposed pricing actions; exposure to foreign currency exchange rate changes and interest rate changes; the outcome of
`contingencies, such as litigation, subpoenas, investigations, reviews, audits and regulatory proceedings; general market
`conditions; our expectations regarding our financial performance, including revenues, expenses, gross margins and income taxes;
`our ability to meet the financial and other covenants contained in our Third Amended and Restated Credit and Guaranty
`Agreement, as
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`amended (the "Credit Agreement") and indentures; and our impairment assessments, including the assumptions used therein and
`the results thereof.
`
`Forward-looking statements can generally be identified by the use of words such as “believe”, “anticipate”, “expect”,
`“intend”, “estimate”, “plan”, “continue”, “will”, “may”, “could”, “would”, “should”, “target”, “potential”, “opportunity”,
`“tentative”, “positioning”, “designed”, “create”, “predict”, “project”, “forecast”, “seek”, “ongoing”, “increase”, or “upside”
`and variations or other similar expressions. In addition, any statements that refer to expectations, intentions, projections or other
`characterizations of future events or circumstances are forward-looking statements. These forward-looking statements may not be
`appropriate for other purposes. Although we have indicated above certain of these statements set out herein, all of the statements in
`this Form 10-K that contain forward-looking statements are qualified by these cautionary statements. These statements are based
`upon the current expectations and beliefs of management. Although we believe that the expectations reflected in such forward-
`looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on
`such statements. Certain material factors or assumptions are applied in making forward-looking statements, including, but not
`limited to, factors and assumptions regarding the items outlined above. Actual results may differ materially from those expressed or
`implied in such statements. Important factors that could cause actual results to differ materially from these expectations include,
`among other things, the following:
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`the expense, timing and outcome of legal and governmental proceedings, investigations and information requests relating
`to, among other matters, our distribution, marketing, pricing, disclosure and accounting practices (including with respect
`to our former relationship with Philidor Rx Services, LLC ("Philidor")), including pending investigations by the U.S.
`Attorney's Office for the District of Massachusetts, the U.S. Attorney's Office for the Southern District of New York and the
`State of North Carolina Department of Justice, the pending investigations by the U.S. Securities and Exchange
`Commission (the “SEC”) of the Company, pending investigations by the U.S. Senate Special Committee on Aging and the
`U.S. House Committee on Oversight and Government Reform, the request for documents and information received by the
`Company from the Autorité des marchés financiers (the “AMF”) (the Company’s principal securities regulator in
`Canada), the document subpoena from the New Jersey State Bureau of Securities, the pending investigation by the
`California Department of Insurance, a number of pending putative class action litigations in the U.S. and Canada and
`purported class actions under the federal RICO statute and other claims, investigations or proceedings that may be
`initiated or that may be asserted;
`
`our ability to manage the transition to our new management team (including our new Chairman and Chief Executive
`Officer, new Chief Financial Officer, new General Counsel, new Corporate Controller and Chief Accounting Officer and
`new Chief Quality Officer), the success of new management in assuming their new roles and the ability of new
`management to implement and achieve the strategies and goals of the Company as they develop;
`
`our ability to manage the transition to our new Board of Directors and the success of these individuals in their new roles
`as members of the Board of Directors of the Company;
`
`the impact of the changes in and reorganizations to our business structure, including changes to our operating and
`reportable segments;
`
`the effect of the misstatements identified in, and the resultant restatement of, certain of our previously issued financial
`statements and results; the material weaknesses in our internal control over financial reporting that were identified by the
`Company; and any claims, investigations or proceedings (and any costs, expenses, use of resources, diversion of
`management time and efforts, liability and damages that may result therefrom), negative publicity or reputational harm
`that has arisen or may arise as a result;
`
`the effectiveness of the measures implemented to remediate the material weaknesses in our internal control over financial
`reporting that were identified by the Company, our deficient control environment and the contributing factors leading to
`the misstatement of our results and the impact such measures may have on the Company and our businesses;
`
`potential additional litigation and regulatory investigations (and any costs, expenses, use of resources, diversion of
`management time and efforts, liability and damages that may result therefrom), negative publicity and reputational harm
`on our Company, products and business that may result from the recent public scrutiny of our distribution, marketing,
`pricing, disclosure and accounting practices and from our former relationship with Philidor, including any claims,
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`proceedings, investigations and liabilities we may face as a result of any alleged wrongdoing by Philidor and/or its
`management and/or employees;
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`•
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`the current scrutiny of our business practices including with respect to pricing (including the investigations by the U.S.
`Attorney's Offices for the District of Massachusetts and the Southern District of New York, the U.S. Senate Special
`Committee on Aging, the U.S. House Committee on Oversight and Government Reform and the State of North Carolina
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`Department of Justice) and any pricing controls or price adjustments that may be sought or imposed on our products as a
`result thereof;
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`pricing decisions that we have implemented, or may in the future, elect to implement (whether as a result of recent scrutiny
`or otherwise, such as the decision of the Company to take no further price increases on our Nitropress® and Isuprel®
`products and to implement an enhanced rebate program for such products, the decision to take no pricing adjustments on
`our dermatology and ophthalmology products in 2016, the Patient Access and Pricing Committee’s commitment that the
`average annual price increase for our prescription pharmaceutical products will be set at no greater than single digits and
`below the 5-year weighted average of the increases within the branded biopharmaceutical industry or any future pricing
`actions we may take following review by our Patient Access and Pricing Committee (which will be responsible for the
`pricing of our drugs);
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`legislative or policy efforts, including those that may be introduced and passed by the Republican-controlled Congress,
`designed to reduce patient out-of-pocket costs for medicines, which could result in new mandatory rebates and discounts
`or other pricing restrictions, controls or regulations (including mandatory price reductions);
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`ongoing oversight and review of our products and facilities by regulatory and governmental agencies, including periodic
`audits by the U.S. Food and Drug Administration (the "FDA"), and the results thereof, such as the inspections by the FDA
`of the Company's facilities in Tampa, Florida and Rochester, New York, and the results thereof;
`
`any default under the terms of our senior notes indentures or Credit Agreement and our ability, if any, to cure or obtain
`waivers of such default;
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`any delay in the filing of any future financial statements or other filings and any default under the terms of our senior
`notes indentures or Credit Agreement as a result of such delays;
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`our substantial debt (and potential additional future indebtedness) and current and future debt service obligations, our
`ability to reduce our outstanding debt levels in accordance with our stated intention and the resulting impact on our
`financial condition, cash flows and results of operations;
`
`our ability to meet the financial and other covenants contained in our Credit Agreement, indentures and other current or
`future debt agreements and the limitations, restrictions and prohibitions such covenants impose or may impose on the way
`we conduct our business, prohibitions on incurring additional debt if certain financial covenants are not met, limitations
`on the amount of additional debt we are able to incur where not prohibited, and restrictions on our ability to make certain
`investments and other restricted payments;
`
`any further downgrade by rating agencies in our credit ratings, which may impact, among other things, our ability to raise
`debt and the cost of capital for additional debt issuances;
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`any reductions in, or changes in the assumptions used in, our forecasts for fiscal year 2017 or beyond, which could lead
`to, among other things, (i) a failure to meet the financial and/or other covenants contained in our Credit Agreement and/or
`indentures, and/or (ii) impairment in the goodwill associated with certain of our reporting units (including our Salix
`reporting unit) or impairment charges related to certain of our products (in particular, our Addyi® product) or other
`intangible assets, which impairments could be material;
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`changes in the assumptions used in connection with our impairment analyses or assessments, which would lead to a
`change in such impairment analyses and assessments and which could result in an impairment in the goodwill associated
`with any of our reporting units or impairment charges related to certain of our products (in particular, our Addyi®
`product) or other intangible assets;
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`the pending and additional divestitures of certain of our assets or businesses and our ability to successfully complete any
`such divestitures on commercially reasonable terms and on a timely basis, or at all, and the impact of any such pending or
`future divestitures on our Company, including the reduction in the size or scope of our business or market share, loss of
`revenue, any loss on sale, including any resultant write-downs of goodwill, or any adverse tax consequences suffered as a
`result of any such divestitures;
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`our shift in focus to much lower business development activity through acquisitions for the foreseeable future as we focus
`on reducing our outstanding debt levels and as a result of the restrictions imposed by our Credit Agreement that restrict us
`from, among other things, making acquisitions over an aggregate threshold (subject to certain exceptions) and from
`incurring debt to finance such acquisitions, until we achieve a specified leverage ratio;
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`the uncertainties associated with the acquisition and launch of new products (such as our Addyi® product and our
`recently approved Siliq™ product (brodalumab)), including, but not limited to, our ability to provide the time, resources,
`expertise
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`and costs required for the commercial launch of new products, the acceptance and demand for new pharmaceutical
`products, and the impact of competitive products and pricing, which could lead to material impairment charges;
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`our ability to retain, motivate and recruit executives and other key employees, including subsequent to retention payments
`being paid out and as a result of the reputational challenges we face and may continue to face;
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`our ability to implement effective succession planning for our executives and key employees;
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`the challenges and difficulties associated with managing a large complex business, which has, in the past, grown rapidly;
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`our ability to compete against companies that are larger and have greater financial, technical and human resources than
`we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products
`introduced by our competitors;
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`our ability to effectively operate, stabilize and grow our businesses in light of the challenges that the Company currently
`faces, including with respect to its substantial debt, pending investigations and legal proceedings, scrutiny of our pricing,
`distribution and other practices, reputational harm and limitations on the way we conduct business imposed by the
`covenants in our Credit Agreement, indentures and the agreements governing our other indebtedness;
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`the success of our recent and future fulfillment and other arrangements with Walgreen Co. ("Walgreens"), including
`market acceptance of, or market reaction to, such arrangements (including by customers, doctors, patients, pharmacy
`benefit managers ("PBMs"), third party payors and governmental agencies), the continued compliance of such
`arrangements with applicable laws, and our ability to successfully negotiate any improvements to our arrangements with
`Walgreens;
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`the extent to which our products are reimbursed by government authorities, PBMs and other third party payors; the
`impact our distribution, pricing and other practices (including as it relates to our former relationship with Philidor, any
`alleged wrongdoing by Philidor and our current relationship with Walgreens) may have on the decisions of such
`government authorities, PBMs and other third party payors to reimburse our products; and the impact of obtaining or
`maintaining such reimbursement on the price and sales of our products;
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`the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on
`the price and sales of our products in connection therewith;
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`our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits
`of certain of our subsidiaries, including the impact on such matters of the proposals published by the Organization for
`Economic Co-operation and Development ("OECD") respecting base erosion and profit shifting ("BEPS") and various
`corporate tax reform proposals being considered in the U.S.;
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`the actions of our third party partners or service providers of research, development, manufacturing, marketing,
`distribution or other services, including their compliance with applicable laws and contracts, which actions may be
`beyond our control or influence, and the impact of such actions on our Company, including the impact to the Company of
`our former relationship with Philidor and any alleged legal or contractual non-compliance by Philidor;
`
`the risks associated with the international scope of our operations, including our presence in emerging markets and the
`challenges we face when entering and operating in new and different geographic markets (including the challenges
`created by new and different regulatory regimes in such countries and the need to comply with applicable anti-bribery and
`economic sanctions laws and regulations);
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`adverse global economic conditions and credit markets and foreign currency exchange uncertainty and volatility in the
`countries in which we do business (such as the current or recent instability in Brazil, Russia, Ukraine, Argentina, Egypt,
`certain other countries in Africa and the Middle East, the devaluation of the Egyptian pound, and the adverse economic
`impact and related uncertainty caused by the United Kingdom's decision to leave the European Union (Brexit));
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`our ability to reduce or maintain wholesaler inventory levels in certain countries, such as Russia and Poland, in-line with
`our targeted levels for such markets;
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`our ability to obtain, maintain and license sufficient intellectual property rights over our products and enforce and defend
`against challenges to such intellectual property;
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`the introduction of generic, biosimilar or other competitors of our branded products and other products, including the
`introduction of products that compete against our products that do not have patent or data exclusivity rights;
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`once the additional limitations in our Credit Agreement restricting our ability to make acquisitions are no longer
`applicable, and to the extent we elect to resume business development activities through acquisitions, our ability to
`identify, finance, acquire, close and integrate acquisition targets successfully and on a timely basis;
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`factors relating to the acquisition and integration of the companies, businesses and products that have been acquired by
`the Company and that may in the future be acquired by the Company (once the additional limitations in our Credit
`Agreement restricting our ability to make acquisitions are no longer applicable and to the extent we elect to resume
`business development activities through acquisitions), such as the time and resources required to integrate such
`companies, businesses and products, the difficulties associated with such integrations (including potential disruptions in
`sales activities and potential challenges with information technology systems integrations), the difficulties and challenges
`associated with entering into new business areas and new geographic markets, the difficulties, challenges and costs
`associated with managing and integrating new facilities, equipment and other assets, the risks associated with the
`acquired companies, businesses and products and our ability to achieve the anticipated benefits and synergies from such
`acquisitions and integrations, including as a result of cost-rationalization and integration initiatives. Factors impacting
`the achievement of anticipated benefits and synergies may include greater than expected operating costs, the difficulty in
`eliminating certain duplicative costs, facilities and functions, and the outcome of many operational and strategic
`decisions;
`
`the expense, timing and outcome of pending or future legal and governmental proceedings, arbitrations, investigations,
`subpoenas, tax and other regulatory audits, reviews and regulatory proceedings against us or relating to us and
`settlements thereof;
`
`our ability to obtain components, raw materials or finished products supplied by third parties (some of which may be
`single-sourced) and other manufacturing and related supply difficulties, interruptions and delays;
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`the disruption of delivery of our products and the routine flow of manufactured goods;
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`economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency
`rates, and the potential effect of such factors on revenues, expenses and resulting margins;
`
`interest rate risks associated with our floating rate debt borrowings;
`
`our ability to effectively distribute our products and the effectiveness and success of our distribution arrangements,
`including the impact of our recent arrangements with Walgreens;
`
`our ability to secure and maintain third party research, development, manufacturing, marketing or distribution
`arrangements;
`
`the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential
`lawsuits, product liability claims and damages and/or recalls or withdrawals of products from the market;
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`the mandatory or voluntary recall or withdrawal of our products from the market and the costs associated therewith;
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`the availability of, and our ability to obtain and maintain, adequate insurance coverage and/or our ability to cover or
`insure against the total amount of the claims and liabilities we face, whether through third party insurance or self-
`insurance;
`
`the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with
`respect to approvals by the FDA, Health Canada and similar agencies in other countries, legal and regulatory
`proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary
`property, successful generic challenges to our products and infringement or alleged infringement of the intellectual
`property of others;
`
`•
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`the results of continuing safety and efficacy studies by industry and government agencies;
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`the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely
`impact the timely commercialization of our pipeline products, as well as other factors impacting the commercial success of
`our products (such as our Addyi® product and our recently approved Siliq™ product (brodalumab)), which could lead to
`material impairment charges;
`
`the results of management reviews of our research and development portfolio (including following the receipt of clinical
`results or feedback from the FDA or other regulatory authorities), which could result in terminations of specific projects
`which, in turn, could lead to material impairment charges;
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`the seasonality of sales of certain of our products;
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`vi
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