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`10-K 1 a2213162z10-k.htm 10-K
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`TABLE OF CONTENTS
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`Table of Contents
`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
`FORM 10-K
`
`(Mark
`One)
`
`(cid:1)
`
`(cid:2)
`
`Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
`For the fiscal year ended December 31, 2012
`
`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: 000-21699
`
`VIROPHARMA INCORPORATED
`(Exact name of registrant as specified in its charter)
`
`Delaware
`(State or other jurisdiction of
`incorporation or organization)
`
`730 Stockton Drive,
`Exton, Pennsylvania
`(Address of principal executive offices)
`
`23-2789550
`(I.R.S. Employer
`Identification No.)
`
`19341
`(Zip Code)
`
`Registrant's telephone number, including area code: 610-458-7300
`
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class:
`Common Stock, par value $0.002
`
`Name of each exchange on which registered:
`The NASDAQ Stock Market LLC
`
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`Securities registered pursuant to Section 12(g) of the Act:
`Title of each class: None
`
` Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities
`Act. Yes (cid:1) No (cid:2)
`
` Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
`Exchange Act. Yes (cid:2) No (cid:1)
`
` 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 (cid:1) No (cid:2)
`
` 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 (§232.405 of this
`chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
`files). Yes (cid:1) No (cid:2)
`
` 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. (cid:1)
`
` Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
`See the definitions of "large accelerated filer", "accelerated filer", "non-accelerated filer" and "smaller reporting company" in
`Rule 12b-2 of the Exchange Act. (Check one):
`
`Large Accelerated Filer (cid:1)
`
`Accelerated Filer (cid:2)
`
`Non-accelerated filer (cid:2)
`
`Smaller Reporting Company (cid:2)
`
` Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
`Act). Yes (cid:2) No (cid:1)
`
` The approximate aggregate market value of the voting stock held by non-affiliates of the registrant was approximately
`$1.3 billion as of June 30, 2012, based upon the closing sale price per share of the Common Stock as quoted on the Global
`Market segment of the NASDAQ Stock Market on that date.
`
` The number of shares of the registrant's Common Stock outstanding as of February 15, 2013 was 65,208,957 shares.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`
` As stated in Part III of this Annual Report on Form 10-K, portions of the registrant's definitive proxy statement for the
`registrant's 2013 Annual Meeting of Stockholders scheduled to be held on May 23, 2013 are incorporated by reference in
`Part III of this Annual Report on Form 10-K.
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`VIROPHARMA INCORPORATED
`
`FORM 10-K ANNUAL REPORT
`For Fiscal Year Ended December 31, 2012
`TABLE OF CONTENTS
`
`Business
`Risk Factors
`Unresolved Staff Comments
`Properties
`Legal Proceedings
`Mine Safety Disclosures
`
`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
`Operation
`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
`
`Directors, Executive Officers and Corporate Governance
`Executive Compensation
`Security ownership of certain beneficial owners and management and related
`stockholder matter
`Certain Relationships and Related Transactions, and Director Independence
`Principal Accounting Fees and Services
`
`PART I
`Item 1.
`Item 1A.
`Item 1B.
`Item 2.
`Item 3.
`Item 4.
`
`PART II
`Item 5.
`
`Item 6.
`Item 7.
`
`Item 7A.
`Item 8.
`Item 9.
`
`Item 9A.
`Item 9B.
`
`PART III
`Item 10.
`Item 11.
`Item 12.
`
`Item 13.
`Item 14.
`
`PART IV
`Item 15.
`Signatures
`Index to Financial Statements and Schedules
`
`Exhibits and Financial Statement Schedules
`
`Page
`
`1
`34
`61
`61
`61
`62
`
`63
`65
`
`66
`100
`101
`
`101
`102
`105
`
`105
`105
`
`105
`107
`107
`
`108
`114
`116
`
`"ViroPharma," "ViroPharma" plus the design, "Cinryze", CinryzeSolutions and"Vancocin" are trademarks and service
`marks of ViroPharma or its licensors. We have obtained trademark registration in the United States for the marks in
`connection with certain products and services. All other brand names or trademarks appearing in this Annual Report on
`Form 10-K are the property of others.
`
`Unless the context requires otherwise, references in this report to "we," "our," "us," "Company" and "ViroPharma"
`refer to ViroPharma Incorporated and its subsidiaries.
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`FORWARD-LOOKING STATEMENTS
`
` Statements contained or incorporated by reference in this document contain information that includes or is based on
`"forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities
`Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements, including
`expected future revenue growth drivers; clinical development timelines; expected future cost estimates; expected tax rates and
`expected sources and uses of liquidity, are subject to risks and uncertainties. Forward-looking statements include the
`information concerning our possible or assumed results of operations. We have tried, whenever possible, to identify such
`statements by words such as "believes," "expects," "anticipates," "intends," "estimates," "plan," "projected," "forecast," "will,"
`"may" or similar expressions. We have based these forward-looking statements on our current expectations and projections
`about the growth of our business, our financial performance and the development of our industry. Because these statements
`reflect our current views concerning future events, these forward-looking statements involve risks and uncertainties. Investors
`should note that many factors, as more fully described in Item 1A under the caption "Risk Factors" in this document,
`supplement, and as otherwise enumerated herein, could affect our future financial results and could cause our actual results to
`differ materially from those expressed in forward-looking statements contained or incorporated by reference in this document.
`
` We do not undertake any obligation to update our forward-looking statements after the date of this document for any
`reason, even if new information becomes available or other events occur in the future. You are advised to consult any further
`disclosures we make on related subjects in our reports filed with the Securities and Exchange Commission (SEC). Also note
`that, in Item 1A, we provide a cautionary discussion of the risks, uncertainties and possibly inaccurate assumptions relevant to
`our business. These are factors that, individually or in the aggregate, we think could cause our actual results to differ
`materially from expected and historical results. We note these factors for investors as permitted by Section 27A of the
`Securities Act and Section 21E of the Exchange Act. You should understand that it is not possible to predict or identify all
`such factors. Consequently, you should not consider this to be a complete discussion of all potential risks or uncertainties.
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`ITEM 1. BUSINESS
`
`Overview
`
`PART I
`
` ViroPharma Incorporated is an international biotechnology company dedicated to the development and
`commercialization of novel solutions for physician specialists to address unmet medical needs of patients living with diseases
`that have few if any clinical therapeutic options including therapeutics for rare and orphan diseases. We intend to grow
`through sales of our marketed products, through continued development of our product pipeline, through expansion of sales
`into additional territories outside the United States, through potential acquisition or licensing of products and product
`candidates and the acquisition of companies. We expect future growth to be driven by sales of Cinryze for hereditary
`angioedema (HAE), both domestically and internationally, sales of Plenadren for treatment of adrenal insufficiency (AI) and
`Buccolam in Europe for treatment of paediatric seizures, and by our development programs, including C1 esterase inhibitor
`[human], maribavir for cytomegalovirus (CMV) infection, VP20621 for the prevention of recurrent C. difficile-associated
`diarrhea (CDAD) and VP20629 for the treatment of Friedreich's Ataxia (FA).
`
` The following chart generally describes our approved products:
`
`Product
`Cinryze—IV
`Cinryze—IV
`
`Marketplace
`US
`EU
`
`Disease
`HAE
`HAE
`
`Buccolam
`Plenadren
`Vancocin
`
`EU
`EU
`US
`
`Pediatric Epilepsy
`AI
`CDAD
`
`Program Indication
`Prophylaxis
`Prophylaxis, pre-
`procedural and acute
`Treatment
`Treatment
`Treatment
`
`Product Status
`Marketed
`Marketed
`
`Marketed
`Marketed
`Marketed
`
` We market and sell Cinryze in the United States for routine prophylaxis against angioedema attacks in adolescent and
`adult patients with HAE. Cinryze is a C1 esterase inhibitor therapy for routine prophylaxis against HAE, also known as C1
`inhibitor (C1-INH) deficiency, a rare, severely debilitating, life-threatening genetic disorder. We acquired rights to Cinryze
`for the United States in October 2008 and in January 2010, we acquired expanded rights to commercialize Cinryze and future
`C1-INH derived products in certain European countries and other territories throughout the world as well as rights to develop
`future C1-INH derived products for additional indications and new formulations. In June 2011, the European Commission
`(EC) granted us Centralized Marketing Authorization for Cinryze® in adults and adolescents with HAE for routine
`prevention, pre-procedure prevention and acute treatment of angioedema attacks. The approval also includes a self
`administration option for appropriately trained patients. We have begun to commercialize Cinryze in Europe and continue to
`evaluate our commercialization opportunities in countries where we have distribution rights.
`
` We acquired Buccolam® (Oromucosal Solution, Midazolam [as hydrochloride]) in May 2010. In September 2011, the
`EC granted a Centralized Paediatric Use Marketing Authorization (PUMA) for Buccolam, for treatment of prolonged, acute,
`convulsive seizures in infants, toddlers, children and adolescents, from 3 months to less than 18 years of age. With the grant
`of the PUMA, we began to commercialize Buccolam in Europe.
`
` On November 15, 2011, we acquired worldwide rights to Plenadren® (hydrocortisone, modified release tablet) for
`treatment of AI. The acquisition of Plenadren further expanded our orphan disease commercial product portfolio. On
`November 3, 2011, the EC granted European Marketing Authorization for Plenadren, an orphan drug for treatment of adrenal
`insufficiency in adults, which will bring these patients their first pharmaceutical innovation in over 50 years. We are in the
`process of launching Plenadren in various countries in Europe and a named patient program is available to
`
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`patients in countries in which we have not launched Plenadren commercially. We are currently conducting an open label trial
`with Plenadren in Sweden and have initiated a registry study that was required as a condition of approval in Europe. We also
`are currently exploring commercialization opportunities in additional geographies including the United States.
`
` We also sell branded and authorized generic Vancocin HCl capsules, the oral capsule formulation of vancomycin
`hydrochloride, in the U.S. and its territories. Vancocin is indicated for the treatment of CDAD. Vancocin capsules are also
`used for the treatment of enterocolitis caused by Staphylococcus aureus, including methicillin-resistant strains.
`
` Our product development portfolio is primarily focused on the following programs: C1 esterase inhibitor [human],
`maribavir for cytomegalovirus (CMV) infection, VP20621 (prevention of recurrent CDAD) and VP20629 (treatment of
`Friedreich's Ataxia).
`
` The following chart generally describes our investigational products:
`
`Product
`C1 esterase inhibitor [human]—IV
`
`Marketplace
`ROW*
`
`Disease
`HAE
`
`Proposed Indication
`Prophylaxis, pre-procedural
`and acute
`
`Product Status
`Filing/Pre-
`filing
`
`C1 esterase inhibitor [human]
`—subcutaneous administration
`
`C1 esterase inhibitor [human]—antibody-
`mediated rejection
`
`Worldwide
`
`HAE
`
`Prophylaxis
`
`Phase 2
`
`Worldwide
`
`AMR
`
`Treatment
`
`Phase 2
`
`C1 esterase inhibitor [human]—IV
`
`Worldwide
`
`Additional indications under
`evaluation
`
`Preclinical
`
`maribavir
`
`Worldwide (other
`than Japan)
`
`CMV
`
`Treatment
`
`Phase 2
`
`Non-toxigenic strain of C. difficile
`(VP20621)
`
`Worldwide
`
`CDAD
`
`Prevention
`
`Phase 2
`
`VP20629
`
`Worldwide
`
`FA
`
`Treatment
`
`Phase 1
`
`*
`
`ROW is defined in the Business Development and Strategic Relationships section of this document.
`
` We are currently undertaking studies on the viability of subcutaneous administration of Cinryze. In May 2011,
`Halozyme Therapeutics Inc. (Halozyme) granted us an exclusive worldwide license to use Halozyme's proprietary Enhanze™
`technology, a proprietary drug delivery platform using Halozyme's recombinant human hyaluronidase enzyme (rHuPH20)
`technology, in combination with a C1 esterase inhibitor which we intend to apply initially to develop a subcutaneous
`formulation of Cinryze for routine prophylaxis against attacks of HAE. In the first quarter of 2012, we completed a Phase 2
`study to evaluate the safety, and pharmacokinetics and pharmacodynamics of subcutaneous administration of Cinryze in
`combination with rHuPH20 and announced the presentation of positive data. In December 2012, we initiated a Phase 2b
`double blind, multicenter, dose ranging study to evaluate the safety and efficacy of subcutaneous administration of Cinryze®
`(C1 esterase inhibitor [human]) in combination with PH20 in adolescents and adults with HAE for prevention of HAE attacks.
`We will continue to evaluate the subcutaneous administration of Cinryze as a standalone therapy. We are also investigating a
`recombinant forms of C1-INH.
`
` Additionally, we are working on developing our C1 esterase inhibitor in further therapeutic uses and potential additional
`indications in other C1 mediated diseases. We intend to support Investigator Initiated Studies (IIS) to identify further
`therapeutic uses for Cinryze. An IIS evaluating C1 INH as a
`
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`treatment for Autoimmunie Hemolytic Anemia (AIHA) and Neuromyelitis Optica (NMO) were initiated in 2012. We are also
`sponsoring a clinical trial in Antibody-Mediated Rejection (AMR) and are evaluating, the potential effect of C1-INH in
`Refractory Parozysmal Nocturnal Hemoglobinuria and may conduct clinical and non-clinical studies to evaluate additional
`therapeutic uses in the future.
`
` During the second quarter of 2012, we announced the initiation of a Phase 2 program to evaluate maribavir for the
`treatment of CMV infections in transplant recipients. The program consists of two independent Phase 2 clinical studies that
`include subjects who have asymptomatic CMV, and those who have failed therapy with other anti-CMV agents
`(resistant/refractory study). During the third quarter of 2012 and first quarter of 2013, we presented interim data from the
`Phase 2 open label clinical study being conducted in Europe evaluating maribavir as a treatment for patients with
`asymptomatic cases of CMV. Results from this study, as well as data from a second Phase 2 open label study of maribavir as
`a treatment for patients with resistant or refractory cases of CMV, will periodically be evaluated.
`
` We are also developing VP20621 for the prevention of recurrent CDAD. In May 2011, we initiated a Phase 2 dose-
`ranging clinical study to evaluate the safety, tolerability, and efficacy of VP20621 for prevention of recurrence of CDAD in
`adults previously treated for CDAD. We presented interim data from this study during the third quarter of 2012. We closed
`enrollment of patients in December 2012 and anticipate having the complete dataset in 2013.
`
` On September 30, 2011, we entered into a license agreement with Intellect Neurosciences, Inc. (INS) for the worldwide
`rights to its clinical stage drug candidate, VP20629, which we expect to develop for the treatment of Friedreich's Ataxia (FA),
`a rare, hereditary, progressive neurodegenerative disease. VP20629, or indole-3-propionic acid, is a naturally occurring, small
`molecule that has potent anti-oxidant properties that can protect against neurodegenerative disease. In a Phase 1 safety and
`tolerability study conducted in the Netherlands, VP20629 was demonstrated to be safe and well tolerated at all dose levels
`tested. We expect to initiate a single and repeat dose phase 1 study in patients in 2013 and expect to initiate a subsequent
`phase 2 study after completion of the phase1 study. Following completion of the phase 2 study, a phase 3 study is planned.
`We intend to file for Orphan Drug Designation upon review of the Phase 2 proof of concept data.
`
` On December 22, 2011, we entered into an exclusive development and option agreement with Meritage Pharma, Inc.
`(Meritage) , a private company based in San Diego, CA focused on developing oral budesonide suspension (OBS) as a
`treatment for eosinophilic esophagitis (EoE). EoE is a newly recognized chronic disease that is increasingly being diagnosed
`in children and adults. It is characterized by inflammation and accumulation of a specific type of immune cell, called an
`eosinophil, in the esophagus. EoE patients may have persistent or relapsing symptoms, which include dysphagia (difficulty in
`swallowing), nausea, stomach pain, chest pain, heartburn, loss of weight and food impaction.
`
` We intend to continue to evaluate in-licensing or other opportunities to acquire products in development, or those that
`are currently on the market. We plan to seek products that treat serious or life threatening illnesses with a high unmet medical
`need, require limited commercial infrastructure to market, and which we believe will provide both revenue and earnings
`growth over time.
`
` We were incorporated in Delaware in September 1994 and commenced operations in December 1994. Our executive
` and our
`offices are located at 730 Stockton Drive, Exton, Pennsylvania 19341, our telephone number is 610-458-7300
`
`website address is www.viropharma.com. Information contained on our website is not incorporated into this Annual Report
`on Form 10-K or any other filings we make with the SEC.
`
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`Marketed Products
`
`Cinryze
`
` The FDA granted approval for Cinryze in October 2008 for routine prophylaxis against attacks in adolescent and adult
`patients with HAE. In June 2011, the EC granted us Centralized Marketing Authorization for Cinryze in adults and
`adolescents with HAE for routine prevention, pre-procedure prevention and acute treatment of angioedema attacks. HAE is a
`genetic disorder characterized by episodes of edema (swelling) in the extremities, face, abdomen, and airway passages. The
`majority of patients have episodes of severe abdominal pain, nausea and vomiting that is caused by swelling in the intestinal
`wall. Attacks that involve the face and throat must be taken seriously and medical treatment should be sought without delay.
`Swelling of the throat can close the air passage and cause death by suffocation. The mortality rate from untreated airway
`obstruction has been reported to be over 40% with death most frequently caused by asphyxiation due to airway closure. The
`course of the disease is diverse and unpredictable, even within a single patient over his or her lifetime. Swelling caused by
`HAE usually lasts for 24-72 hours, but the length of an attack can range from four hours to four days. On average, patients
`experience approximately one attack per month, but the frequency is highly variable.
`
` HAE is caused by a defective gene for C1 inhibitor (C1-INH), and this defect is passed on in families, such that a child
`has a 50% chance of inheriting this disease if one parent is affected. The absence of family history, however, does not rule out
`HAE diagnosis, and as many as 20% of HAE cases involve patients who appear to have had a spontaneous mutation of the
`C1-INH gene. This genetic defect results in the production of either inadequate levels or poorly functioning C1-INH protein.
`
` C1-INH is a normal constituent of human blood and primarily regulates activation of key inflammatory and coagulation
`biochemical pathways, specifically the contact and complement pathways in addition to the fibrinolytic system. Regulation of
`these systems is performed through the formation of complexes between pathway proteinase enzyme and C1-INH, resulting
`in inactivation of both and consumption of C1-INH. HAE patients have low levels of endogenous or functional C1-INH.
`Although the events that induce angioedema attacks in HAE patients are not well defined, it is thought that increased blood
`vessel permeability leading to swelling and the clinical manifestations of HAE attacks are mediated primarily through contact
`system activation. Administration of Cinryze increases plasma levels of C1-INH activity. Increased levels of functional C1-
`INH are thought to suppress contact system activation through the inactivation of plasma kallikrein and factor XIIa,
`preventing the generation of bradykinin, a natural peptide thought to be responsible for modulation of blood vessel
`permeability.
`
` Because HAE is rare and has a wide variability in disease expression, it is not uncommon for patients to remain
`undiagnosed or misdiagnosed for many years. Many patients report that their frequent and severe abdominal pain was
`inappropriately diagnosed as psychosomatic. Although rare, HAE is a disease with potentially catastrophic consequences for
`those affected. Aside from the potentially fatal acute respiratory compromise, unnecessary exploratory surgery has been
`performed on patients experiencing gastrointestinal edema because abdominal HAE attacks mimic conditions requiring
`surgery.
`
` Traditionally, HAE has been classified into two types (I and II). The most common form of the disease, Type I, is
`characterized by low levels of C1-INH and affects about 85% of patients, whereas Type II HAE affects 15% of patients and is
`characterized by poorly functioning C1-INH. A third type of HAE has been identified in which the abnormal C1-INH protein
`binds to albumin, effectively reducing the amount of functional C1-INH.
`
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`Therapeutic Approaches of HAE
`
` Treatment of HAE can be categorized as: (i) mitigation or acute treatments to remedy the symptoms of infrequent
`episodic acute attacks; and (ii) preventive or prophylactic treatments for patients severely affected by HAE. Current therapies
`primarily focus upon treating the symptoms of an acute attack. Two therapeutic agents that can be used for treatment of acute
`attacks were approved by the FDA in 2009, a kallikrein inhibitor and a C1-INH. Additionally, in August 2011, the FDA
`approved a self-administered icatibant for treatment of acute attacks of HAE in adults 18 years of age and older. For swelling
`of the intestinal wall, which can cause debilitating pain, narcotics such as morphine and antiemetics for nausea are often
`given. In January 2012, the FDA approved a label expansion for the self administration of a competitor's C1-INH for facial
`and abdominal attacks and also indicates it to treat life-threatening laryngeal HAE attacks. For severe laryngeal swelling,
`which can be life threatening, rescue therapy such as intubation or tracheotomy may be required. The use of fresh frozen
`plasma, which contains C1-INH but which also contains a wide variety of other factors that may activate multiple
`inflammatory pathways and exacerbate an attack, is also used in some instances.
`
` Cinryze is the only FDA approved C1-INH product for prevention of HAE attacks. Prior to the approval of Cinryze,
`patients who experience more than one attack per month have historically been treated with anabolic steroids that reduce the
`frequency of attacks of edema. The most commonly used steroids are alpha-alkylated androgens. Use of such anabolic
`steroids can have numerous side effects ranging from hepatotoxicity (liver toxicity), virilization (development of male sexual
`characteristics in a female), weight gain, acne and hirsutism (unwanted hair growth).
`
` The FDA granted Cinryze seven years of marketing exclusivity for routine prophylaxis of HAE upon FDA approval in
`October 2008 pursuant to the Orphan Drug Act.
`
` C1-INH concentrate has been marketed to HAE patients for acute treatment in Europe for more than 25 years. Our
`ability to compete in this marketplace is contingent upon our success in differentiating Cinryze IV over existing CI-INH
`products.
`
`Buccolam
`
` In May 2010, we acquired Buccolam® (Oromucosal Solution, Midazolam [as hydrochloride]). In September 2011, the
`European Commission granted a Centralized Pediatric Use Marketing Authorization (PUMA) for Buccolam, for treatment of
`prolonged, acute, convulsive seizures in infants, toddlers, children and adolescents, from three months to less than 18 years of
`age. With the grant of the PUMA we began to commercialize Buccolam in Europe.
`
` Seizures occur because of sudden and abnormal electrical activity in the brain. There are many causes of seizures
`affecting pediatric patients; many are the result of epilepsy, but other triggers can include medicines, head injuries, certain
`diseases, and high fevers (called 'febrile seizures'). Febrile seizures are the most common type of seizure in children;
`approximately one in every 25 children will have at least one febrile seizure, and more than one-third of these children will
`have additional febrile seizures before they outgrow the tendency to have them. Epilepsy is among the most common
`childhood neurological disorders in developed countries, affecting nearly one percent of the population. There are
`approximately six million people affected by epilepsy in Europe; nearly one million European children and adolescents have
`active epilepsy. Epilepsy commonly causes physical manifestations including neurological and muscle destruction and
`degradation of renal function, as well as numerous negative cognitive, behavioral and neurological effects. Seizures can last
`from a few seconds to several minutes or longer in some cases. If left untreated, seizures can lead to status epilepticus (SE)
`and patients may require hospitalization and intensive care.
`
` Buccolam is oromucosal midazolam provided in an individual dose formulation for buccal delivery. It is provided as a
`convenient, portable, ready to use, pre-filled oral syringe containing an age-specific
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`dose. Buccolam is approved throughout the European Union and the EEA for treatment of prolonged, acute, convulsive
`seizures in infants, toddlers, children and adolescents, from three months to less than 18 years of age. Buccolam must only be
`used by parents/carers where the patient has been diagnosed to have epilepsy.
`
`Plenadren
`
` On November 15, 2011, we acquired the worldwide rights to Plenadren® (hydrocortisone, modified release tablet) for
`treatment of adrenal insufficiency (AI). The acquisition of Plenadren further expanded our orphan disease commercial
`product portfolio. On November 3, 2011, the EC granted European Marketing Authorization for Plenadren, an orphan drug
`for treatment of adrenal insufficiency in adults, which will bring these patients their first pharmaceutical innovation in over
`50 years. We are in the process of launching Plenadren in various countries in Europe and a named patient program is
`available to patients in countries in which we have not launched Plenadren commercially. We are currently conducting an
`open label trial with Plenadren in Sweden and have initiate a registry study as a condition of approval in Europe. We also are
`currently exploring commercialization opportunities in additional geographies including the United States.
`
` Plenadren is a dual release hydrocortisone replacement therapy designed to better mimic the normal physiological
`cortisol profile in order to improve outcomes for patients suffering from adrenal insufficiency. Plenadren is given as an oral
`tablet once daily. It has an outer layer releasing hydrocortisone immediately and an inner core releasing the rest of the drug
`more slowly during the day.
`
` AI is a disorder caused by dysfunction of the adrenal gland resulting in low levels of the hormone cortisol, which
`normally follows a circadian rhythm and regulates many critical body functions. To survive, AI patients need replacement
`therapy with glucocorticoids (usually hydrocortisone). Primary AI is referred to as Addison's disease, which affects up to 15
`in every 100,000 people. Common symptoms of Addison's disease include fatigue, muscle weakness, fever, weight loss,
`difficulty in standing up, changes in personality, and gastrointestinal involvement. Severe adrenal insufficiency, which can
`manifest as shock (very low blood pressure with loss of consciousness), dehydration, and imbalance of sodium and potassium
`levels, can be life threatening. These cases of adrenal crisis (sometimes called 'Addisonian crisis') can occur after a significant
`stress such as infection or trauma, and can be fatal if not promptly diagnosed and treated with glucocorticoid therapy. To
`maintain a reasonable quality of life, these patients rely on cortisol replacement therapy. Because it is a chronic condition,
`these patients require this therapy throughout their entire lives.
`
`Vancocin
`
` In November 2004, we acquired all rights in the U.S. and its territories to manufacture, market and sell Vancocin, as well
`as rights to certain related vancomycin products, from