UNITED THERAPEUTICS CORP
`
`FORM 10-K
`
`(Annual Report)
`
`Filed 02/22/17 for the Period Ending 12/31/16
`
`
`Address
`
`
`1040 SPRING ST
`SILVER SPRING, MD 20910
`3016089292
`Telephone
`0001082554
`CIK
`Symbol UTHR
`SIC Code
`2834 - Pharmaceutical Preparations
`Industry
`Biotechnology & Medical Research
`Sector Healthcare
`Fiscal Year
`12/31
`
`http://www.edgar-online.com
`© Copyright 2017, EDGAR Online, Inc. All Rights Reserved.
`Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
`
`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1158, p. 1 of 153
`
`

`

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`UNITED
`STATES
`
`SECURITIES
`AND
`EXCHANGE
`COMMISSION
`
`WASHINGTON,
`D.C.
`20549
`
`(Mark
`One)
`
`
`
`
`
`ý
`
`
` ANNUAL
`REPORT
`PURSUANT
`TO
`SECTION
`13
`OR
`15(d)
`OF
`THE
`SECURITIES
`EXCHANGE
`ACT
`OF
`1934.
`
`FORM
`10-K
`
`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
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
`
`
`to
`
`
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`
`
`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Commission
`file
`number
`0-26301
`United
`Therapeutics
`Corporation
`
`(Exact
`Name
`of
`Registrant
`as
`Specified
`in
`Its
`Charter)
`
`Delaware
`
`(State
`or
`Other
`Jurisdiction
`of
`
`Incorporation
`or
`Organization)
`
`1040
`Spring
`Street,
`Silver
`Spring,
`MD
`(Address
`of
`Principal
`Executive
`Offices)
`
`
`
`
`
`
`
`52-1984749
`
`(I.R.S.
`Employer
`
`Identification
`No.)
`
`20910
`
`(Zip
`Code)
`
`(301)
`608-9292
`
`Registrant's
`Telephone
`Number,
`Including
`Area
`Code
`
`
`
`
`
`
`
`
`
`
`Securities
`registered
`pursuant
`to
`Section
`12(b)
`of
`the
`Act:
`
`Title
`of
`each
`class
`Common
`Stock,
`par
`value
`$.01
`per
`share
`
`and
`associated
`preferred
`stock
`purchase
`rights
`
`
`
`
`
`
`
`Name
`of
`each
`exchange
`on
`which
`registered
`NASDAQ
`Global
`Select
`Market
`
`
`
`
`
`
`
`
`
`
`Securities
`registered
`pursuant
`to
`Section
`12(g)
`of
`the
`Act:
`
`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
`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
`Website,
`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
`
`ý
`
`
`
`
`No
`
`o
`
`
`
`
`
`
`
`
`
`
`Indicate
`by
`check
`mark
`if
`disclosure
`of
`delinquent
`filers
`pursuant
`to
`Item
`405
`of
`Regulation
`S-K
`(§229.405
`of
`this
`chapter)
`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
`
`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1158, p. 2 of 153
`
`

`

`
`
`
`
`
`
`
`
`
`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
`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
`
`
`Accelerated
`filer
`
`o
`
`
`Non-accelerated
`filer
`
`o
`
`(Do
`not
`check
`if
`a
`
`smaller
`reporting
`company)
`
`
`
`
`Smaller
`reporting
`company
`
`o
`
`
`
`
`
`
`
`
`
`
`Indicate
`by
`check
`mark
`whether
`the
`registrant
`is
`a
`shell
`company
`(as
`defined
`in
`Rule
`12b-2
`of
`the
`Act).
`Yes
`
`o
`
`
`
`
`No
`
` ý
`
`
`
`
`
`
`
`
`
`
`The
`aggregate
`market
`value
`of
`the
`Common
`Stock
`held
`by
`non-affiliates
`of
`the
`registrant,
`based
`on
`the
`closing
`price
`on
`June
`30,
`2016,
`as
`reported
`by
`the
`NASDAQ
`Global
`Select
`Market
`was
`approximately
`$4,094,026,937.
`
`
`
`
`
`
`
`
`
`
`
`The
`number
`of
`shares
`outstanding
`of
`the
`issuer's
`common
`stock,
`par
`value
`$0.01
`per
`share,
`as
`of
`February
`10,
`2017,
`was
`44,961,616.
`
`DOCUMENTS
`INCORPORATED
`BY
`REFERENCE
`
`
`
`
`
`
`
`
`
`
`Portions
`of
`the
`registrant's
`definitive
`proxy
`statement
`for
`the
`registrant's
`2017
`annual
`meeting
`of
`shareholders
`scheduled
`to
`be
`held
`on
`June
`28,
`2017,
`are
`incorporated
`by
`reference
`in
`Part
`III
`of
`this
`Form
`10-K.
`
`
`
`
`
`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1158, p. 3 of 153
`
`

`

`TABLE
`OF
`CONTENTS
`
`
`PART
`I
`Item
`1.
`Item
`1A.
`Item
`1B.
`Item
`2.
`Item
`3.
`Item
`4.
`PART
`II
`Item
`5.
`
`
`
`
`
`
` 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
`Item
`6.
`
` Selected
`Financial
`Data
`Item
`7.
`
` Management's
`Discussion
`and
`Analysis
`of
`Financial
`Condition
`and
`Results
`of
`Operations
`Item
`7A.
`
` Quantitative
`and
`Qualitative
`Disclosures
`About
`Market
`Risk
`Item
`8.
`
` Financial
`Statements
`and
`Supplementary
`Data
`Item
`9.
`
` Changes
`In
`and
`Disagreements
`With
`Accountants
`on
`Accounting
`and
`Financial
`Disclosure
`Item
`9A.
`
` Controls
`and
`Procedures
`PART
`III
`
`
`
`
`Item
`10.
`
` Directors,
`Executive
`Officers
`and
`Corporate
`Governance
`Item
`11.
`
` Executive
`Compensation
`Item
`12.
`
` Security
`Ownership
`of
`Certain
`Beneficial
`Owners
`and
`Management
`and
`Related
`Stockholder
`Matters
`Item
`13.
`
` Certain
`Relationships
`and
`Related
`Transactions,
`and
`Director
`Independence
`Item
`14.
`
` Principal
`Accounting
`Fees
`and
`Services
`PART
`IV
`
`
`
`
`Item
`15.
`
` Exhibits,
`Financial
`Statement
`Schedules
`SIGNATURES
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`3
`
`
`
`
` 33
`
`
` 48
`
`
` 48
`
`
` 48
`
`
` 48
`
`
`
`
`
`
`
`
` 49
`
`
` 51
`
`
` 51
`
`
` 66
`
`
` F-1
`
`
` 67
`
`
` 67
`
`
`
`
`
`
`
` 68
`
`
` 69
`
`
` 69
`
`
` 69
`
`
` 70
`
`
`
`
`
`
`
` 71
`
`
` 72
`
`
`2
`
`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1158, p. 4 of 153
`
`

`

`ITEM
`1.
`
`
`
`BUSINESS
`
`
`Overview
`
`PART
`I
`
`
`
`
`
`
`
`
`
`
`United
`Therapeutics
`Corporation
`is
`a
`biotechnology
`company
`focused
`on
`the
`development
`and
`commercialization
`of
`innovative
`products
`to
`address
`the
`unmet
`medical
`needs
`of
`patients
`with
`chronic
`and
`life-threatening
`conditions.
`We
`market
`and
`sell
`four
`commercial
`therapies
`in
`the
`United
`States
`to
`treat
`pulmonary
`arterial
`hypertension
`(PAH):
`Remodulin
`®
`(treprostinil)
`Injection;
`Tyvaso
`®
`(treprostinil)
`Inhalation
`Solution
`(Tyvaso);
`Orenitram
`®
`(treprostinil)
`Extended-
`Release
`Tablets
`(Orenitram);
`and
`Adcirca
`®
`(tadalafil)
`Tablets
`(Adcirca).
`We
`also
`market
`and
`sell
`an
`oncology
`product
`in
`the
`United
`States,
`Unituxin
`®
`(dinutuximab)
`Injection
`(Unituxin),
`which
`is
`approved
`for
`treatment
`of
`high-risk
`neuroblastoma.
`Outside
`the
`United
`States,
`our
`only
`significant
`revenues
`are
`derived
`from
`the
`sale
`of
`Remodulin,
`which
`is
`approved
`in
`Europe
`and
`various
`other
`countries.
`We
`are
`also
`engaged
`in
`research
`and
`development
`of
`new
`indications
`and
`delivery
`devices
`for
`our
`existing
`products,
`as
`well
`as
`new
`products
`to
`treat
`PAH
`and
`other
`conditions.
`Finally,
`we
`are
`engaged
`in
`early-stage
`research
`and
`development
`of
`a
`number
`of
`organ
`transplantation-related
`technologies.
`
`
`
`
`
`
`
`
`
`We
`generate
`revenues
`from
`sales
`of
`our
`five
`commercially
`approved
`products
`noted
`above.
`Remodulin
`was
`approved
`by
`the
`U.S.
`Food
`and
`Drug
`Administration
`(FDA)
`for
`subcutaneous
`and
`intravenous
`administration
`in
`2002
`and
`2004,
`respectively,
`and
`has
`been
`sold
`commercially
`in
`the
`United
`States
`since
`2002.
`Tyvaso
`and
`Adcirca
`were
`both
`approved
`by
`the
`FDA
`and
`launched
`commercially
`in
`the
`United
`States
`in
`2009.
`Orenitram
`was
`approved
`by
`the
`FDA
`in
`2013
`and
`Unituxin
`was
`approved
`by
`the
`FDA
`in
`2015.
`We
`commenced
`sales
`of
`Orenitram
`and
`Unituxin
`during
`the
`second
`quarter
`of
`2014
`and
`third
`quarter
`of
`2015,
`respectively.
`We
`expect
`sales
`of
`our
`current
`commercial
`products
`will
`continue
`to
`be
`our
`primary
`sources
`of
`revenues
`for
`the
`next
`several
`years.
`Our
`sales
`and
`marketing
`staff
`supports
`the
`availability
`of
`our
`commercial
`products
`in
`the
`United
`States,
`and
`these
`efforts
`are
`supplemented
`by
`our
`contract
`distributors.
`Outside
`the
`United
`States,
`our
`contract
`distributors
`are
`primarily
`responsible
`for
`sales
`and
`marketing
`efforts.
`
`
`
`
`
`
`
`
`
`United
`Therapeutics
`was
`incorporated
`in
`Delaware
`in
`June
`1996.
`Our
`principal
`executive
`offices
`are
`located
`at
`1040
`Spring
`Street,
`Silver
`Spring,
`Maryland
`20910
`and
`at
`55
`T.W.
`Alexander
`Drive,
`Research
`Triangle
`Park,
`North
`Carolina
`27709.
`
`
`
`
`
`
`
`
`
`Unless
`the
`context
`requires
`otherwise
`or
`unless
`otherwise
`noted,
`all
`references
`in
`this
`Annual
`Report
`on
`Form
`10-K
`(this
`Report)
`to
`"United
`Therapeutics"
`and
`to
`the
`"company",
`"we",
`"us"
`or
`"our"
`are
`to
`United
`Therapeutics
`Corporation
`and
`its
`subsidiaries.
`
`3
`
`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1158, p. 5 of 153
`
`

`

`Our
`Commercial
`Products
`
`
`
`
`
`
`
`
`
`Our
`commercial
`product
`portfolio
`consists
`of
`the
`following:
`
`Product
`Remodulin
`
`Mode
`of
`Delivery
`
`
`
` Continuous
`subcutaneous
`
`Indication
`
`
`
`
` PAH
`
`Remodulin
`
`
` Continuous
`intravenous
`
`
` PAH
`
`Tyvaso
`
`Adcirca
`
`Orenitram
`
`Unituxin
`
`
`
`
`Inhaled
`
`
` Oral
`
`
` Oral
`
`
` PAH
`
`
` PAH
`
`
` PAH
`
`
`
`
`Intravenous
`
`
` High-risk
`neuroblastoma
`
`
` Our
`Territory
`
` Worldwide
`
`
` Worldwide
`
`Current
`Status
`
`
`
` Commercial
`in
`the
`U.S.,
`most
`of
`Europe*,
`Argentina,
`Brazil,
`Canada,
`Chile,
`China,
`Israel,
`Japan,
`Mexico,
`Peru,
`Saudi
`Arabia,
`South
`Korea,
`Taiwan
`and
`Venezuela
`
`
` Commercial
`in
`the
`U.S.,
`most
`of
`Europe*,
`Argentina,
`Canada,
`China,
`Israel,
`Japan,
`Mexico,
`Peru,
`Saudi
`Arabia,
`South
`Korea
`and
`Switzerland
`
`
` Commercial
`in
`the
`U.S.
`and
`Israel
`
`
` Worldwide
`
`
` Commercial
`in
`the
`U.S.
`
`
` United
`States
`
`
` Commercial
`in
`the
`U.S.
`
`
` Worldwide
`
`
` Commercial
`in
`the
`U.S.
`
`
` Worldwide
`
`*
`
`We
`have
`obtained
`approval
`for
`subcutaneous
`and
`intravenous
`Remodulin
`in
`24
`member
`countries
`of
`the
`European
`Economic
`Area
`(EEA),
`as
`well
`as
`other
`non-EEA
`countries
`in
`Europe,
`and
`have
`received
`pricing
`approval
`in
`most
`of
`these
`countries.
`
`Products
`to
`Treat
`Cardiopulmonary
`Diseases
`
`Pulmonary
`Arterial
`Hypertension
`
`
`
`
`
`
`
`
`
`PAH
`is
`a
`life-threatening
`disease
`that
`affects
`the
`blood
`vessels
`in
`the
`lungs
`and
`is
`characterized
`by
`increased
`pressure
`in
`the
`pulmonary
`arteries,
`which
`are
`the
`blood
`vessels
`leading
`from
`the
`heart
`to
`the
`lungs.
`The
`elevated
`pressure
`in
`the
`pulmonary
`arteries
`strains
`the
`right
`side
`of
`the
`heart
`as
`it
`pumps
`blood
`to
`the
`lungs.
`This
`eventually
`leads
`to
`right
`heart
`failure
`and,
`ultimately,
`death.
`PAH
`is
`characterized
`by
`structural
`changes
`in
`blood
`vessel
`walls,
`aggregation
`of
`platelets
`and
`alteration
`of
`smooth
`muscle
`cell
`function.
`We
`believe
`that
`PAH
`affects
`about
`500,000
`individuals
`worldwide.
`We
`have
`seen
`increases
`in
`the
`number
`of
`people
`diagnosed
`with
`the
`disease,
`but
`due
`to
`the
`rarity
`of
`the
`disease
`and
`the
`complexity
`of
`diagnosing
`it,
`only
`a
`small
`fraction
`of
`patients
`with
`PAH
`are
`being
`treated.
`
`
`
`
`
`
`
`
`
`Current
`FDA-approved
`therapies
`for
`PAH
`focus
`on
`three
`distinct
`molecular
`pathways:
`the
`prostacyclin
`pathway,
`the
`nitric
`oxide
`(NO)
`pathway,
`and
`the
`endothelin
`(ET)
`pathway.
`The
`classes
`of
`drugs
`that
`target
`these
`three
`pathways
`are:
`
`•
`
`Prostacyclin
`Analogues
`and
`IP
`Prostacyclin
`Receptor
`Agonists.
`
`
`Patients
`with
`PAH
`have
`been
`shown
`to
`have
`reduced
`levels
`of
`prostacyclin,
`a
`naturally
`occurring
`substance
`that
`relaxes
`the
`pulmonary
`
`4
`
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`
`

`

`blood
`vessels,
`prevents
`platelet
`aggregation
`and
`inhibits
`the
`proliferation
`of
`smooth
`muscle
`cells
`in
`the
`pulmonary
`vessels.
`Therefore,
`drugs
`that
`mimic
`the
`action
`of
`prostacyclin,
`known
`as
`prostacyclin
`analogues,
`are
`established
`PAH
`treatments.
`Another
`class
`of
`therapy,
`called
`IP
`prostacyclin
`receptor
`agonists,
`has
`recently
`been
`developed
`to
`address
`PAH
`through
`the
`prostacyclin
`pathway.
`As
`compared
`with
`prostacyclin
`analogues,
`which
`broadly
`mimic
`the
`effect
`of
`prostacyclin,
`IP
`prostacyclin
`receptor
`agonists
`bind
`selectively
`to
`the
`IP
`receptor,
`one
`of
`several
`prostacyclin
`receptors.
`
`Phosphodiesterase
`Type
`5
`(PDE-5)
`Inhibitors
`and
`Guanylate
`Cyclase
`(sGC)
`Stimulators.
`
`
`Patients
`with
`PAH
`have
`also
`been
`shown
`to
`have
`reduced
`levels
`of
`the
`enzyme
`responsible
`for
`producing
`NO,
`a
`naturally
`occurring
`substance
`in
`the
`body
`that
`causes
`relaxation
`of
`the
`pulmonary
`blood
`vessels.
`NO
`produces
`this
`effect
`by
`increasing
`intracellular
`levels
`of
`cyclic
`guanosine
`monophosphate
`GMP
`(cyclic
`GMP).
`Therefore,
`another
`established
`therapeutic
`approach
`has
`been
`to
`inhibit
`the
`degradation
`of
`cyclic
`GMP
`using
`drugs
`known
`as
`PDE-5
`inhibitors.
`In
`addition,
`sGC
`is
`an
`enzyme
`found
`in
`the
`endothelial
`cells
`and
`the
`receptor
`for
`NO.
`When
`NO
`binds
`to
`sGC,
`the
`enzyme
`enhances
`production
`of
`cyclic
`GMP.
`As
`a
`result,
`sGC
`stimulators
`are
`also
`approved
`to
`treat
`PAH.
`
`
`Endothelin
`Receptor
`Antagonists.
`
`
`PAH
`patients
`have
`also
`been
`shown
`to
`have
`elevated
`levels
`of
`endothelin-1,
`a
`naturally
`occurring
`substance
`in
`the
`body
`that
`causes
`constriction
`of,
`and
`structural
`changes
`to,
`the
`pulmonary
`blood
`vessels.
`Therefore,
`another
`established
`therapeutic
`approach
`has
`been
`to
`block
`the
`action
`of
`endothelin
`with
`drugs
`that
`are
`known
`as
`endothelin
`receptor
`antagonists
`(ETRAs).
`
`•
`
`•
`
`
`
`
`
`
`
`
`
`Because
`any
`or
`all
`of
`the
`three
`pathways
`may
`be
`therapeutic
`targets
`in
`a
`patient,
`these
`classes
`of
`drugs
`are
`used
`alone
`or
`in
`combination
`to
`treat
`patients
`with
`PAH.
`We
`currently
`market
`drugs
`in
`two
`of
`these
`classes.
`Remodulin,
`Tyvaso
`and
`Orenitram
`are
`prostacyclin
`analogues,
`and
`Adcirca
`is
`a
`PDE-5
`inhibitor.
`
`
`
`
`
`
`
`
`
`The
`clinical
`severity
`of
`PAH
`is
`classified
`according
`to
`a
`system
`originally
`developed
`for
`heart
`failure
`by
`the
`New
`York
`Heart
`Association
`and
`then
`modified
`by
`the
`World
`Health
`Organization
`(WHO)
`for
`patients
`with
`PAH,
`ranging
`from
`functional
`class
`I
`(no
`symptoms)
`through
`functional
`class
`IV
`(severe
`symptoms).
`Labeled
`indications
`for
`PAH
`therapies
`often
`note
`that
`clinical
`studies
`for
`the
`drug
`predominantly
`included
`patients
`in
`one
`or
`more
`functional
`classes.
`
`
`
`
`
`
`
`
`
`PAH
`is
`a
`subset
`of
`the
`condition
`more
`broadly
`known
`as
`pulmonary
`hypertension.
`The
`WHO
`has
`classified
`pulmonary
`hypertension
`into
`five
`groups,
`with
`PAH
`being
`designated
`WHO
`Group
`1,
`which
`includes
`multiple
`etiologies
`such
`as
`idiopathic
`(meaning
`the
`cause
`is
`unknown)
`and
`heritable
`PAH,
`as
`well
`as
`PAH
`associated
`with
`connective
`tissue
`diseases.
`While
`our
`PAH
`therapies'
`labeling
`is
`limited
`to
`the
`treatment
`of
`WHO
`Group
`1
`PAH,
`we
`are
`engaged
`in
`research
`and
`development
`efforts
`to
`expand
`the
`use
`of
`Orenitram
`to
`treat
`pulmonary
`hypertension
`in
`certain
`categories
`of
`WHO
`Groups
`2
`and
`5,
`and
`Tyvaso
`to
`treat
`pulmonary
`hypertension
`in
`certain
`categories
`of
`WHO
`Group
`3.
`For
`further
`details,
`see
`Research
`and
`Development
`below.
`
`Remodulin
`
`
`
`
`
`
`
`
`
`One
`of
`our
`lead
`products
`for
`treating
`PAH
`is
`Remodulin,
`the
`active
`pharmaceutical
`ingredient
`of
`which
`is
`a
`prostacyclin
`analogue
`known
`as
`treprostinil.
`We
`sell
`Remodulin
`to
`specialty
`pharmaceutical
`distributors
`in
`the
`United
`States
`and
`to
`pharmaceutical
`distributors
`internationally.
`We
`recognized
`approximately
`$602.3
`million,
`$572.8
`million
`and
`$553.7
`million
`in
`Remodulin
`net
`product
`sales,
`representing
`38
`percent,
`39
`percent
`and
`43
`percent
`of
`our
`total
`revenues
`for
`the
`years
`ended
`December
`31,
`2016,
`2015
`and
`2014,
`respectively.
`The
`FDA
`approved
`Remodulin
`as
`a
`continuous
`subcutaneous
`infusion
`therapy
`in
`2002,
`and
`as
`a
`continuous
`intravenous
`infusion
`therapy
`in
`2004.
`Remodulin
`is
`indicated
`to
`treat
`patients
`with
`PAH,
`to
`diminish
`symptoms
`associated
`with
`exercise.
`
`5
`
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`
`

`

`Studies
`establishing
`effectiveness
`included
`patients
`with
`functional
`class
`II-IV
`(moderate
`to
`severe)
`symptoms.
`
`
`
`
`
`
`
`
`
`Outside
`of
`the
`United
`States,
`Remodulin
`is
`approved
`for
`the
`treatment
`of
`PAH
`in
`39
`countries
`by
`continuous
`subcutaneous
`administration
`and
`in
`35
`countries
`by
`continuous
`intravenous
`administration,
`and
`is
`sold
`commercially
`in
`most
`of
`these
`countries.
`Applications
`for
`approval
`of
`both
`subcutaneous
`and
`intravenous
`Remodulin
`are
`under
`review
`in
`other
`countries.
`
`
`
`
`
`
`
`
`
`We
`believe
`Remodulin
`has
`many
`qualities
`that
`make
`it
`an
`appealing
`alternative
`to
`competitive
`therapies.
`Remodulin
`is
`stable
`at
`room
`temperature,
`so
`it
`does
`not
`need
`to
`be
`cooled
`during
`infusion
`and
`patients
`do
`not
`need
`to
`use
`cooling
`packs
`or
`refrigeration
`to
`keep
`it
`stable.
`Treprostinil
`is
`highly
`soluble
`and
`highly
`potent,
`which
`enables
`us
`to
`manufacture
`Remodulin
`in
`concentrated
`solutions.
`This
`allows
`therapeutic
`concentrations
`of
`Remodulin
`to
`be
`delivered
`at
`very
`low
`flow
`rates
`via
`miniaturized
`infusion
`pumps
`for
`both
`subcutaneous
`and
`intravenous
`infusion.
`Remodulin
`can
`be
`continuously
`infused
`for
`up
`to
`48
`hours
`intravenously
`or
`72
`hours
`subcutaneously
`before
`refilling
`the
`external
`infusion
`pump,
`and
`is
`packaged
`as
`an
`aqueous
`solution
`so
`patients
`do
`not
`have
`to
`reconstitute
`the
`drug
`before
`refilling
`their
`pumps.
`This
`profile
`contrasts
`favorably
`with
`the
`other
`continuously
`infused
`prostacyclins
`in
`the
`market—Flolan
`®
`,
`Veletri
`®
`and
`generic
`epoprostenol.
`
`
`
`
`
`
`
`
`
`Flolan
`and
`generic
`epoprostenol
`are
`not
`stable
`at
`room
`temperature
`(and
`therefore
`require
`refrigeration
`or
`the
`use
`of
`cooling
`packs),
`but
`Veletri
`may
`be
`stable
`at
`room
`temperature
`depending
`on
`its
`concentration.
`Flolan,
`generic
`epoprostenol,
`and
`Veletri
`have
`shorter
`half-lives
`than
`Remodulin,
`requiring
`mixing
`prior
`to
`pump
`refills.
`None
`of
`these
`competitive
`products
`may
`be
`administered
`via
`subcutaneous
`infusion,
`and
`therefore
`may
`only
`be
`delivered
`intravenously.
`
`
`
`
`
`
`
`
`
`We
`have
`settled
`patent
`litigation
`with
`three
`generic
`drug
`companies
`that
`filed
`abbreviated
`new
`drug
`applications
`(ANDAs)
`with
`the
`FDA
`to
`market
`generic
`versions
`of
`Remodulin
`in
`the
`United
`States.
`The
`first
`such
`settlement
`permits
`Sandoz
`Inc.
`(Sandoz)
`to
`launch
`its
`generic
`version
`of
`Remodulin
`in
`the
`United
`States
`in
`June
`2018
`(or
`earlier
`in
`certain
`circumstances).
`The
`second
`and
`third
`settlements
`permit
`Teva
`Pharmaceuticals
`USA,
`Inc.
`(Teva)
`and
`Par
`Sterile
`Products,
`LLC
`(Par)
`to
`launch
`their
`generic
`versions
`of
`Remodulin
`in
`the
`United
`States
`in
`December
`2018
`(or
`earlier
`in
`certain
`circumstances).
`For
`further
`detail,
`see
`the
`section
`below
`entitled
`Patents
`and
`Other
`Proprietary
`Rights,
`Strategic
`Licenses
`and
`Market
`Exclusivity—Generic
`Competition
`.
`
`
`
`
`
`
`
`
`
`There
`are
`serious
`adverse
`events
`associated
`with
`Remodulin.
`For
`example,
`when
`infused
`subcutaneously,
`Remodulin
`causes
`varying
`degrees
`of
`infusion
`site
`pain
`and
`reaction
`(redness
`and
`swelling)
`in
`most
`patients.
`Patients
`who
`cannot
`tolerate
`the
`infusion
`site
`pain
`related
`to
`the
`use
`of
`subcutaneous
`Remodulin
`may
`instead
`use
`intravenous
`Remodulin.
`Intravenous
`Remodulin
`is
`delivered
`continuously
`through
`a
`surgically
`implanted
`central
`venous
`catheter,
`similar
`to
`Flolan,
`Veletri
`and
`generic
`epoprostenol.
`Patients
`who
`receive
`therapy
`through
`implanted
`venous
`catheters
`have
`a
`risk
`of
`developing
`blood
`stream
`infections
`and
`a
`serious
`systemic
`infection
`known
`as
`sepsis.
`Other
`common
`side
`effects
`associated
`with
`both
`subcutaneous
`and
`intravenous
`Remodulin
`include
`headache,
`diarrhea,
`nausea,
`jaw
`pain,
`vasodilation
`and
`edema.
`
`Tyvaso
`
`
`
`
`
`
`
`
`
`We
`commenced
`commercial
`sales
`of
`Tyvaso,
`our
`inhaled
`treprostinil
`product,
`in
`the
`United
`States
`in
`2009.
`We
`sell
`Tyvaso
`to
`the
`same
`specialty
`pharmaceutical
`distributors
`in
`the
`United
`States
`that
`distribute
`Remodulin.
`For
`the
`years
`ended
`December
`31,
`2016,
`2015
`and
`2014,
`we
`recognized
`approximately
`$404.6
`million,
`$470.1
`million
`and
`$463.1
`million
`in
`Tyvaso
`net
`product
`sales,
`representing
`25
`percent,
`32
`percent
`and
`36
`percent,
`respectively,
`of
`our
`total
`revenues.
`
`
`
`
`
`
`
`
`
`Tyvaso
`is
`administered
`four
`times
`a
`day
`by
`inhaling
`up
`to
`nine
`breaths
`during
`each
`treatment
`session,
`which
`takes
`approximately
`three
`minutes.
`Tyvaso
`is
`required
`to
`be
`administered
`using
`our
`
`6
`
`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1158, p. 8 of 153
`
`

`

`proprietary
`Tyvaso
`Inhalation
`System,
`which
`consists
`of
`an
`ultra-sonic
`nebulizer
`that
`provides
`a
`dose
`of
`Tyvaso
`on
`a
`breath-by-breath
`basis.
`A
`single
`ampule
`containing
`Tyvaso
`is
`emptied
`into
`the
`Tyvaso
`Inhalation
`System
`once
`per
`day,
`so
`the
`Tyvaso
`Inhalation
`System
`only
`needs
`to
`be
`cleaned
`once
`daily.
`
`
`
`
`
`
`
`
`
`Ventavis
`®
`(iloprost)
`is
`the
`only
`other
`FDA-approved
`inhaled
`prostacyclin
`analogue.
`Patients
`need
`to
`inhale
`Ventavis
`six
`to
`nine
`times
`per
`day
`via
`a
`nebulizer.
`According
`to
`its
`package
`insert,
`each
`Ventavis
`inhalation
`consists
`of
`four
`to
`ten
`minutes
`of
`continuous
`inhalation
`via
`the
`nebulizer.
`We
`completed
`an
`open-label
`study
`in
`the
`United
`States
`to
`investigate
`the
`clinical
`effects
`of
`switching
`patients
`from
`Ventavis
`to
`Tyvaso.
`Patients
`in
`this
`study
`saved
`an
`average
`of
`approximately
`1.4
`hours
`per
`day
`when
`administering
`Tyvaso
`compared
`to
`Ventavis.
`
`
`
`
`
`
`
`
`
`In
`2009,
`the
`FDA
`approved
`Tyvaso
`for
`the
`treatment
`of
`PAH
`patients
`to
`improve
`exercise
`capacity
`using
`the
`Tyvaso
`Inhalation
`System.
`Studies
`establishing
`effectiveness
`included
`predominately
`patients
`with
`functional
`class
`III
`symptoms
`(may
`not
`have
`symptoms
`at
`rest
`but
`activities
`are
`greatly
`limited
`by
`shortness
`of
`breath,
`fatigue,
`or
`near
`fainting).
`Tyvaso
`was
`generally
`well
`tolerated
`in
`our
`trials.
`The
`most
`common
`adverse
`events
`were
`transient
`cough,
`headache,
`nausea,
`dizziness
`and
`flushing.
`Tyvaso
`is
`also
`approved
`in
`Israel,
`where
`we
`commenced
`commercial
`sales
`during
`the
`second
`quarter
`of
`2015.
`
`
`
`
`
`
`
`
`
`We
`filed
`a
`Marketing
`Authorization
`Application
`(MAA)
`in
`December
`2008
`for
`Tyvaso
`with
`the
`European
`Medicines
`Agency
`(EMA)
`using
`the
`centralized
`filing
`process,
`but
`withdrew
`our
`MAA
`from
`consideration
`by
`the
`EMA
`due
`to
`the
`EMA's
`major
`objection
`related
`to
`findings
`of
`non-compliance
`with
`good
`clinical
`practices
`at
`two
`clinical
`sites.
`We
`are
`evaluating
`the
`resubmission
`of
`Tyvaso
`for
`EMA
`approval
`based
`on
`experience
`with
`the
`drug
`since
`it
`was
`approved
`by
`the
`FDA.
`
`Orenitram
`
`
`
`
`
`
`
`
`
`Orenitram
`is
`an
`extended-release,
`oral
`tablet
`form
`of
`treprostinil,
`which
`we
`launched
`commercially
`in
`the
`United
`States
`during
`the
`second
`quarter
`of
`2014.
`Orenitram
`is
`the
`only
`FDA
`approved,
`orally
`administered
`prostacyclin
`analogue,
`and
`is
`the
`only
`oral
`PAH
`prostacyclin
`class
`therapy
`approved
`in
`the
`United
`States
`that
`is
`titratable
`to
`a
`maximum
`tolerated
`dose,
`without
`a
`dose
`ceiling.
`We
`sell
`Orenitram
`to
`the
`same
`specialty
`pharmaceutical
`distributors
`in
`the
`United
`States
`that
`distribute
`Remodulin
`and
`Tyvaso.
`For
`the
`years
`ended
`December
`31,
`2016,
`2015
`and
`2014,
`we
`recognized
`approximately
`$157.2
`million,
`$118.4
`million
`and
`$41.2
`million
`in
`Orenitram
`net
`product
`sales,
`representing
`ten
`percent,
`eight
`percent
`and
`three
`percent,
`respectively,
`of
`our
`total
`revenues.
`Orenitram
`was
`approved
`by
`the
`FDA
`in
`December
`2013
`for
`treatment
`of
`PAH
`patients
`to
`improve
`exercise
`capacity.
`The
`primary
`study
`that
`established
`efficacy
`included
`predominately
`patients
`with
`functional
`class
`II-III
`symptoms
`and
`etiologies
`of
`idiopathic
`or
`heritable
`PAH
`(75%)
`or
`PAH
`associated
`with
`connective
`tissue
`disease
`(19%).
`The
`most
`common
`side
`effects
`observed
`in
`our
`clinical
`studies
`were
`headache,
`nausea
`and
`diarrhea.
`We
`have
`not
`submitted
`Orenitram
`for
`approval
`in
`major
`markets
`outside
`the
`United
`States.
`
`Adcirca
`
`
`
`
`
`
`
`
`
`We
`began
`selling
`Adcirca
`in
`2009.
`Adcirca
`is
`a
`PDE-5
`inhibitor,
`the
`active
`pharmaceutical
`ingredient
`of
`which
`is
`tadalafil.
`Tadalafil
`is
`also
`the
`active
`pharmaceutical
`ingredient
`in
`Cialis
`®
`,
`which
`is
`marketed
`by
`Eli
`Lilly
`and
`Company
`(Lilly)
`for
`the
`treatment
`of
`erectile
`dysfunction.
`We
`acquired
`the
`commercial
`rights
`to
`Adcirca
`for
`the
`treatment
`of
`PAH
`in
`the
`United
`States
`from
`Lilly
`in
`2008.
`We
`sell
`Adcirca
`at
`prices
`established
`by
`Lilly,
`which
`are
`at
`parity
`with
`Cialis
`pricing.
`For
`the
`years
`ended
`December
`31,
`2016,
`2015
`and
`2014,
`we
`recognized
`approximately
`$372.2
`million,
`$278.8
`million
`and
`$221.5
`million
`in
`Adcirca
`net
`product
`sales,
`representing
`23
`percent,
`19
`percent
`and
`17
`percent,
`respectively,
`of
`our
`total
`revenues.
`
`
`
`
`
`
`
`
`
`In
`2009,
`the
`FDA
`approved
`Adcirca
`with
`a
`recommended
`dose
`of
`40
`mg,
`making
`it
`the
`only
`once-daily
`PDE-5
`inhibitor
`for
`the
`treatment
`of
`PAH.
`Adcirca
`is
`indicated
`to
`improve
`exercise
`ability
`in
`
`7
`
`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1158, p. 9 of 153
`
`

`

`patients
`with
`PAH.
`Studies
`establishing
`effectiveness
`included
`predominately
`patients
`with
`functional
`class
`II-III
`symptoms.
`Headaches
`were
`the
`most
`commonly
`reported
`side
`effect.
`
`
`
`
`
`
`
`
`
`Prior
`to
`the
`approval
`of
`Adcirca,
`Revatio
`®
`,
`which
`is
`marketed
`by
`Pfizer
`Inc.
`(Pfizer),
`was
`the
`only
`PDE-5
`inhibitor
`approved
`for
`the
`treatment
`of
`PAH.
`Sildenafil
`citrate,
`the
`active
`ingredient
`in
`Revatio,
`is
`also
`the
`active
`ingredient
`in
`Viagra
`®
`,
`which
`is
`marketed
`by
`Pfizer
`for
`the
`treatment
`of
`erectile
`dysfunction.
`In
`2012,
`several
`companies
`launched
`generic
`formulations
`of
`sildenafil
`citrate.
`Revatio
`and
`generic
`sildenafil
`citrate
`are
`dosed
`three
`times
`daily.
`
`
`
`
`
`
`
`
`
`In
`September
`2014,
`Gilead
`Sciences,
`Inc.
`(Gilead)
`announced
`the
`results
`of
`a
`study
`of
`ambrisentan
`(an
`ETRA)
`and
`tadalafil
`in
`PAH
`patients
`as
`a
`first-line
`combination
`treatment,
`compared
`to
`treating
`PAH
`patients
`with
`only
`ambrisentan
`or
`tadalafil.
`In
`the
`study,
`first-line
`treatment
`with
`both
`therapies
`reduced
`the
`risk
`of
`clinical
`failure
`(a
`composite
`endpoint
`that
`incorporates
`clinical
`worsening
`events—death,
`hospitalization
`and
`disease
`worsening—and
`a
`component
`of
`unsatisfactory
`long-term
`clinical
`response)
`compared
`to
`a
`monotherapy
`treatment
`by
`50
`percent.
`Based
`on
`these
`results,
`in
`October
`2015,
`the
`FDA
`approved
`an
`update
`to
`the
`NDA
`for
`Letairis
`®
`(ambrisentan),
`permitting
`the
`use
`of
`Letairis
`in
`combination
`with
`tadalafil
`for
`PAH
`to
`reduce
`the
`risks
`of
`disease
`progression
`and
`hospitalization
`for
`worsening
`PAH,
`and
`to
`improve
`exercise
`ability.
`
`Products
`to
`Treat
`Cancer
`
`Unituxin
`
`
`
`
`
`
`
`
`
`In
`March
`2015,
`the
`FDA
`approved
`our
`Biologics
`License
`Application
`(BLA)
`for
`Unituxin,
`in
`combination
`with
`granulocyte-macrophage
`colony-stimulating
`factor
`(GM-CSF),
`interleukin-2
`(IL-2),
`and
`13-cis-retinoic
`acid
`(RA),
`for
`the
`treatment
`of
`patients
`with
`high-risk
`neuroblastoma
`(a
`rare
`form
`of
`pediatric
`cancer)
`who
`achieve
`at
`least
`a
`partial
`response
`to
`prior
`first-line
`multiagent,
`multimodality
`therapy.
`Unituxin
`is
`a
`chimeric,
`composed
`of
`a
`combination
`of
`mouse
`and
`human
`DNA,
`monoclonal
`antibody
`that
`induces
`antibody-dependent
`cell-mediated
`cytotoxicity,
`a
`mechanism
`of
`cell-mediated
`immunity
`whereby
`the
`immune
`system
`actively
`targets
`a
`cell
`that
`has
`been
`bound
`by
`specific
`antibodies.
`Unituxin
`therapy
`is
`associated
`with
`severe
`side
`effects,
`including
`infections,
`infusion
`reactions,
`hypokalemia,
`hypotension,
`pain,
`fever,
`and
`capillary
`leak
`syndrome.
`
`
`
`
`
`
`
`
`
`We
`commenced
`U.S.
`sales
`of
`Unituxin
`in
`the
`third
`quarter
`of
`2015.
`For
`the
`years
`ended
`December
`31,
`2016
`and
`2015,
`we
`recognized
`approximately
`$62.5
`million
`and
`$20.5
`million
`in
`Unituxin
`net
`product
`sales,
`representing
`four
`percent
`and
`one
`percent,
`respectively,
`of
`our
`total
`revenues.
`
`8
`
`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1158, p. 10 of 153
`
`

`

`Research
`and
`Development
`
`
`
`
`
`
`
`
`
`We
`focus
`most
`of
`our
`research
`and
`development
`efforts
`on
`the
`following
`pipeline
`programs:
`
`
` Product
`
` RemoSynch™
`
`(Implantable
`System
`for
`Remodulin)
`
`Mode
`of
`Delivery
`
`
`
` Continuous
`intravenous
`via
`implantable
`pump
`
`
`
`
` PAH
`
`Indication
`
`Continuous
`subcutaneous
`via
`pre-filled,
`semi-disposable
`pump
`
`Injection
`or
`infusion
`
`Oral
`
`
`
`
`
`
`
`
`
`
`RemUnity™
`
`(treprostinil)
`
`Dinutuximab
`
`OreniPlus™
`
`(Orenitram
`in
`combination
`with
`approved
`background
`therapy)
`
`
`
`Tysuberprost™
`
`(esuberaprost
`in
`combination
`with
`Tyvaso)
`
`Oral
`
`(esuberaprost)
`Inhaled
`(Tyvaso)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`PAH
`
`Multiple
`GD2
`expressing
`cancers
`
`PAH
`
`(decrease
`morbidity
`and
`mortality)
`
`PAH
`
`(decrease
`morbidity
`and
`mortality)
`
`Target
`FDA
`
`Approval
`
`Date
`
`
`
`
` 2017
`
`Current
`Status
`
`STUDY
`NAME
`CAPS
`
`
`
` Medtronic
`PMA
`pending
`(FDA
`action
`anticipated
`April
`2017).
`UT
`NDA
`pending
`(FDA
`action
`anticipated
`June
`2017).
`
`Our
`Territory
`
`
`
` United
`States,
`United
`Kingdom,
`Canada,
`France,
`Germany,
`Italy
`and
`Japan
`
`
`
`
`
`
`
`Target
`U.S.
`Patient
`
`Population
`
`Size
`6,000
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Pre-NDA
`
`Phase
`II/III
`
`Phase
`IV
`
`FREEDOM-EV
`
`Phase
`III
`
`BEAT
`
`
`
`
`
`
`
`
`
`
`
`
`
`2018
`
`2019-2023
`for
`accelerated
`approval
`and
`other
`regulatory
`pathways
`
`2019
`
`2019
`
`
`
`
`
`
`
`
`
`
`
`
`
`Worldwide
`
`
`
`
`
`
`
`6,000
`
`Worldwide
`
`
`
`
`
`
`
`12,000
`
`Worldwide
`
`
`
`
`
`
`
`15,000
`
`
`
`
`
`
`
`10,000
`
`North
`America,
`Europe,
`Mexico,
`South
`America,
`Egypt,
`India,
`South
`Africa
`and
`Australia
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Tyvaso-ILD™
`
`(treprostinil)
`
`
`
`
`
`
`
`
`
`
`Aurora-GT™
`
`(eNOS
`gene
`therapy)
`
`OreniLeft™
`
`(treprostinil)
`
`OreniCell™
`
`(treprostinil)
`
`Manufactured
`Organs
`
`
`
`
`Inhaled
`
`Intravenous
`injection
`
`Oral
`
`Oral
`
`Transplant
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Pulmonary
`hypertension
`associated
`with
`idiopathic
`pulmonary
`fibrosis
`
`(WHO
`Group
`3)
`
`PAH
`
`Pulmonary
`hypertension
`associated
`with
`left
`ventricular
`diastolic
`dysfunction
`
`(WHO
`Group
`2)
`
`Reduce
`morbidity
`and
`mortality
`in
`patients
`with
`pulmonary
`hypertension
`associated
`with
`sickle
`cell
`disease
`(WHO
`Group
`5)
`
`End-stage
`organ
`failure
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Phase
`III
`
`INCREASE
`
`Phase
`II/III
`
`SAPPHIRE
`
`Phase
`III
`
`SOUTHPAW
`
`Phase
`II/III
`
`IRONS
`
`Pre-clinical
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`2020
`
`2020*
`
`2021
`
`2022
`
`2023
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Worldwide
`
`27,500
`
`United
`States**
`
`Worldwide
`
`Worldwide
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`10,000
`
`50,000
`
`25,000
`
`Worldwide
`
`
`
`
`
`
`
`>
`30,000
`
`
`
`
`
`
`
`
`
`
`
`
`
`*
`
`Reflects
`anticipated
`Canadian
`approval
`date.
`FDA
`filing
`and
`approval
`will
`follow
`Canadian
`approval.
`
`
`**
`RemoSynch
`(Implantable
`System
`for
`Remodulin)
`
`Canadian
`rights
`are
`held
`by
`an
`affiliated
`Canadian
`entity,
`of
`which
`we
`hold
`a
`majority
`financial
`stake.
`
`
`
`
`
`
`
`
`
`We
`are
`working
`with
`Medtronic,
`Inc.
`(Medtronic)
`on
`a
`program
`to
`develop
`Medtronic's
`proprietary
`intravascular
`infusion
`catheter
`to
`be
`used
`with
`its
`SynchroMed
`®
`II
`implantable
`infusion
`pump
`and
`related
`infusion
`system
`components
`(together
`referred
`to
`as
`the
`Implantable
`System
`for
`Remodulin,
`or
`RemoSynch)
`in
`order
`to
`deliver
`Remodulin
`for
`the
`treatment
`of
`PAH.
`The
`SynchroMed
`
`9
`
`WATSON LABORATORIES, INC. , IPR2017-01621, Ex. 1158, p. 11 of 153
`
`

`

`II
`device
`is
`already
`approved
`for
`delivery
`of
`medication
`to
`treat
`neuropathic
`pain.
`With
`our
`funding,
`Medtronic
`completed
`the
`DelIVery
`clinical
`trial,
`which
`studied
`the
`safety
`of
`the
`Implantable
`System
`for
`Remodulin.
`The
`primary
`objective
`was
`to
`demonstrate
`a
`rate
`of
`catheter-related
`complications
`below
`2.5
`per
`1,000
`patient-
`days
`while
`using
`the
`Implantable
`System
`for
`Remodulin.
`In
`September
`2013,
`Medtronic
`informed
`us
`that
`this
`primary
`objective
`was
`met.
`If
`the
`Implantable
`System
`for
`Remodulin
`is
`approved,
`the
`technology
`has
`the
`potential
`to
`reduce
`many
`of
`the
`patient
`burdens
`and
`other
`complications
`associated
`with
`the
`use
`of
`external
`pumps
`to
`administer
`prostacyclin
`analogues.
`In
`order
`to
`launch
`RemoSynch
`in
`the
`United
`States,
`Medtronic
`and
`we
`are
`pursuing
`parallel
`regulatory
`filings
`relating
`to
`the
`device
`and
`the
`drug,
`respectively.
`Medtronic's
`PMA
`relating
`to
`the
`device
`is
`pending
`review,
`with
`FDA
`action
`anticipated
`in
`April
`2017.
`We
`have
`resubmitted
`our
`NDA
`requesting
`FDA
`approval
`to
`allow
`the
`use
`of
`Remodulin
`with
`the
`Implantable
`System
`for
`Remodulin,
`and
`anticipate
`FDA
`action
`in
`June
`2017.
`
`
`
`
`
`
`
`
`
`Medtronic
`is
`entirely
`responsible
`for
`regulatory
`approvals
`and
`all
`manufacturing
`and
`quality
`systems
`related
`to
`its
`infusion
`pump
`and
`related
`components.
`Medtronic
`has
`received
`a
`consent
`decree
`citing
`violations
`of
`the
`quality
`system
`regulation
`for
`medical
`devices
`and
`requiring
`it
`to
`stop
`manufacturing,
`designing
`and
`distributing
`SynchroMed
`II
`implantable
`infusion
`pump
`systems,
`except
`in
`limited
`circumstances,
`until
`the
`FDA
`determines
`that
`Medtronic
`has
`met
`all
`the
`provisions
`listed
`in
`the
`consent
`decree.
`It
`is
`unclear
`how
`this
`consent
`decree
`will
`impact
`our
`ability
`to
`obtain
`FDA
`approval
`for
`RemoSynch,
`or
`its
`commercial
`prospects
`if
`approved.
`
`RemUnity
`
`
`
`
`
`
`
`
`
`In
`December
`2014,
`we
`entered
`into
`an
`exclusive
`agreement
`with
`DEKA
`Research
`&
`Development
`Corp.
`(DEKA)
`to
`develop
`a
`pre-filled,
`semi-disposable
`pump
`system
`for
`subcutaneous
`delivery
`of
`treprostinil,
`which
`we
`call
`the
`RemUnity
`system.
`Under
`the
`terms
`of
`the
`agreement,
`we
`are
`funding
`the
`development
`costs
`related
`to
`the
`RemUnity
`system
`and
`will
`pay
`product
`fees
`and
`a
`single-digit
`royalty
`to
`DEKA
`based
`on
`commercial
`sales
`of
`the
`system
`and
`the
`treprostinil
`drug
`product
`sold
`for
`use
`with
`the
`system.
`Currently,
`we
`are
`engaged
`in
`engineering,
`design
`and
`development
`efforts
`to
`optimize
`the
`RemUnity
`pump
`to
`deliver
`treprostinil
`in
`pre-filled
`reservoirs,
`and
`intend
`to
`complete
`human
`factor
`studies
`in
`healthy
`volunteers
`and
`functionality
`testing
`in
`patients
`before
`submitting
`an
`application
`to
`the
`FDA
`to
`approve
`the
`pre-filled
`RemUnity
`pump.
`
`Tyvaso
`and
`Tyvaso-ILD
`
`
`
`
`
`
`
`
`
`We
`are
`developing
`further
`enhancements
`intended
`to
`mak