Table of Contents
`
`
`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`Form 10‑K
`
`(Mark One)
`☑☑
`
`☐
`
`
`ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`for the fiscal year ended December 31, 2017
`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: 001‑35299
`
`ALKERMES PUBLIC LIMITED COMPANY
`(Exact name of registrant as specified in its charter)
`
`Ireland
`(State or other jurisdiction of
`incorporation or organization)
`Connaught House
`1 Burlington Road
`Dublin 4, Ireland
`(Address of principal executive offices)
`
`98‑1007018
`(I.R.S. Employer
`Identification No.)
`
`(Zip code)
`
`+353‑1‑772‑8000
`(Registrant’s telephone number, including area code)
`Securities registered pursuant to Section 12(b) of the Act:
`
`Nasdaq Global Select Market
`Name of each exchange on which registered
`
`Ordinary shares, $0.01 par value
`Title of each class
`Securities registered pursuant to Section 12(g) of the Act: None
`Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
`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 ☐ No ☒
`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 ☒ No ☐
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
`to be submitted and posted pursuant to Rule 405 of Regulation S‑T (§ 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 ☒ No ☐
`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 the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
`Form 10‑K or any amendment to this Form 10‑K. ☒
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an
`emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth
`company” in Rule 12b‑2 of the Exchange Act. (Check one):
`Large accelerated filer ☒
`Accelerated filer ☐
`
`
`
`Non‑accelerated filer ☐
`(Do not check if a smaller reporting
`company)
`If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
`or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes ☐ No ☒
`The aggregate market value of the registrant’s ordinary shares held by non‑affiliates of the registrant (without admitting that any person whose shares are
`not included in such calculation is an affiliate) computed by reference to the price at which the ordinary shares were last sold as of the last business day of
`the registrant’s most recently completed second fiscal quarter was $8,819,125,952.
`As of February 2, 2018, 156,144,366 ordinary shares were issued and outstanding.
`DOCUMENTS INCORPORATED BY REFERENCE
`Portions of the definitive proxy statement for our 2018 Annual General Meeting of Shareholders are incorporated by reference into Part III of this report.
`
`Smaller reporting company ☐
`Emerging growth company ☐
`
`
`
`
`
`
`
`ALKERMES EXHIBIT 2021
`Amneal Pharmaceuticals LLC v. Alkermes Pharma Ireland Limited
`IPR2018-00943
`
`Page 1 of 245
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`

`

`Table of Contents
`
`ALKERMES PLC AND SUBSIDIARIES
`ANNUAL REPORT ON FORM 10‑K
`FOR THE YEAR ENDED DECEMBER 31, 2017
`INDEX
`
`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.
`
`
`
`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 Operations
` Quantitative and Qualitative Disclosures about Market Risk
`
`Financial Statements and Supplementary Data
`
`Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
`
`Controls and Procedures
` Other Information
`
`
` 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
`
`Exhibits and Financial Statement Schedules
`Form 10-K Summary
`
`Item 13.
`
`Item 14.
`
`PART IV
`
`Item 15.
`
`Item 16
`
`SIGNATURES
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`5
`31
`49
`49
`49
`49
`
`
`49
`52
`54
`72
`73
`74
`74
`75
`
`76
`76
`
`76
`76
`76
`
`76
`84
`85
`
`
`
`2
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`
`CAUTIONARY NOTE CONCERNING FORWARD‑LOOKING STATEMENTS
`
`This document contains and incorporates by reference “forward‑looking statements” within the meaning of Section 27A of
`the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as
`amended (the “Exchange Act”). In some cases, these statements can be identified by the use of forward‑looking terminology
`such as “may,” “will,” “could,” “should,” “would,” “expect,” “anticipate,” “continue,” “believe,” “plan,” “estimate,”
`“intend,” or other similar words. These statements discuss future expectations, and contain projections of results of
`operations or of financial condition, or state trends and known uncertainties or other forward‑looking information.
`Forward‑looking statements in this Annual Report on Form 10‑K (“Annual Report”) include, without limitation, statements
`regarding:
`
`●
`
`●
`
`●
`●
`
`●
`●
`●
`
`●
`
`●
`
`●
`
`●
`
`●
`
`our expectations regarding our financial performance, including revenues, expenses, gross margins, liquidity,
`capital expenditures and income taxes;
`our expectations regarding our products, including the development, regulatory (including expectations about
`regulatory filing, regulatory approval and regulatory timelines), therapeutic and commercial scope and
`potential of such products and the costs and expenses related thereto;
`our expectations regarding the initiation, timing and results of clinical trials of our products;
`our expectations regarding the competitive landscape, and changes therein, related to our products, including
`our development programs, and our industry generally;
`our expectations regarding the financial impact of currency exchange rate fluctuations and valuations;
`our expectations regarding future amortization of intangible assets;
`our expectations regarding our collaborations, licensing arrangements and other significant agreements with
`third parties relating to our products, including our development programs;
`our expectations regarding the impact of new legislation and related regulations, including the Tax Cuts and
`Jobs Act of 2017, and the adoption of new accounting pronouncements;
`our expectations regarding near‑term changes in the nature of our market risk exposures or in management’s
`objectives and strategies with respect to managing such exposures;
`our ability to comply with restrictive covenants of our indebtedness and our ability to fund our debt service
`obligations;
`our expectations regarding future capital requirements and capital expenditures and our ability to finance our
`operations and capital requirements; and
`other factors discussed elsewhere in this Annual Report.
`
`Actual results might differ materially from those expressed or implied by these forward‑looking statements because these
`forward‑looking statements are subject to risks, assumptions and uncertainties. You are cautioned not to place undue reliance
`on forward‑looking statements, which speak only as of the date of this Annual Report. All subsequent written and oral
`forward‑looking statements concerning the matters addressed in this Annual Report and attributable to us or any person
`acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this
`section. Except as required by applicable law or regulation, we do not undertake any obligation to update publicly or revise
`any forward‑looking statements, whether as a result of new information, future events or otherwise. In light of these risks,
`assumptions and uncertainties, the forward‑looking events discussed in this Annual Report might not occur. For more
`information regarding the risks and uncertainties of our business, see “Item 1A—Risk Factors” in this Annual Report.
`
`This Annual Report includes data that we obtained from industry publications and third-party research, surveys and
`studies. Industry publications and third-party research, surveys and studies generally indicate that their information has been
`obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such
`information. This Annual Report also includes data based on our own internal estimates and research. Our internal estimates
`and research have not been verified by any independent source, and, while we believe the industry publications and third-
`party research, surveys and studies are reliable, we have not independently verified such data. Such third-party data and our
`internal estimates and research are necessarily subject to a high degree of uncertainty and risk due to a variety of factors,
`including those described in “Item 1A—Risk Factors” in this Annual Report. These and other factors could cause results to
`differ materially from those expressed in the estimates included in this Annual Report.
`
`NOTE REGARDING COMPANY AND PRODUCT REFERENCES
`
`Use of the terms such as “us,” “we,” “our,” “Alkermes” or the “Company” in this Annual Report is meant to refer to
`Alkermes plc and its consolidated subsidiaries. Except as otherwise suggested by the context, (a) references to
`
`
`
`3
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`
`“products” or “our products” in this Annual Report include our marketed products, marketed products using our proprietary
`technologies, our product candidates, product candidates using our proprietary technologies, development products and
`development products using our proprietary technologies, (b) references to the “biopharmaceutical industry” in this Annual
`Report are intended to include reference to the “biotechnology industry” and/or the “pharmaceutical industry” and (c)
`references to “licensees” are used interchangeably with references to “partners.”
`
`NOTE REGARDING TRADEMARKS
`
`We are the owner of various United States (“U.S.”) federal trademark registrations (“®”) and other trademarks (“TM”),
`including ALKERMES , ARISTADA , CODAS , IPDAS , LinkeRx , MXDAS , NanoCrystal , SECA™, SODAS ,
`®
`®
`®
`®
`®
`®
`®
`®
`VERELAN and VIVITROL .
`®
`®
`
`The following are trademarks of the respective companies listed: ABILIFY and ABILIFY MAINTENA —Otsuka
`®
`®
`Pharmaceutical Co., Ltd. (“Otsuka Pharm. Co.”); AMPYRA , FAMPYRA —Acorda Therapeutics, Inc. (“Acorda”);
`®
`®
`ANTABUSE —Teva Women’s Health, Inc.; AUBAGIO and LEMTRADA —Sanofi Societe Anonyme France; AVONEX ,
`®
`®
`®
`®
`PLEGRIDY , TECFIDERA , and TYSABRI —Biogen MA Inc. (together with its affiliates, “Biogen”); BETASERON —
`®
`®
`®
`®
`Bayer Pharma AG; BUNAVAIL —BioDelivery Sciences; BYDUREON and BYETTA —Amylin Pharmaceuticals, LLC
`TM
`®
`®
`(“Amylin”); BYDUREON BCise —AstraZeneca Pharmaceuticals LP;—CAMPRAL —Merck Sante; COPAXONE —Teva
`TM
`®
`®
`Pharmaceutical Industries Ltd.; FOCALIN XR , EXTAVIA , GILENYA and RITALIN LA —Novartis AG; INVEGA
`®
`®
`®
`®
`SUSTENNA , RISPERDAL CONSTA INVEGA TRINZA , TREVICTA and XEPLION —Johnson & Johnson (or its
`®
`®
`®
`®
`®
`affiliates); NOVANTRONE and REBIF —Ares Trading S.A.; OCREVUS —Genentech, Inc. (“Genentech”); SUBOXONE ,
`®
`®
`®
`®
` SUBUTEX and SUBLOCADE —Indivior plc; TRICOR —Fournier Industrie et Sante Corporation; VICTOZA —Novo
`®
`®
`®
`®
`Nordisk A/S LLC; ZOHYDRO™—Zogenix, Inc.; ZUBSOLV —Orexo US, Inc.; and TRULICITY , ZYPREXA and
`®
`®
`®
`ZYPREXA RELPREVV —Eli Lilly and Company. Other trademarks, trade names and service marks appearing in this
`®
`®
`Annual Report are the property of their respective owners. Solely for convenience, the trademarks and trade names in this
`Annual Report are referred to without the and ™ symbols, but such references should not be construed as any indicator that
`®
`their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.
`
`
`
`4
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`

`Table of Contents
`
` Item 1.
`
`Business
`
` PART I
`
`The following discussion contains forward‑looking statements. Actual results may differ significantly from those expressed
`or implied in the forward‑looking statements. See “Cautionary Note Concerning Forward‑Looking Statements” on page 3 of
`this Annual Report. Factors that might cause future results to differ materially from those expressed or implied in the
`forward‑looking statements include, but are not limited to, those discussed in “Item 1A—Risk Factors” and elsewhere in this
`Annual Report.
`
`Overview
`
`Alkermes plc is a fully integrated, global biopharmaceutical company that applies its scientific expertise and proprietary
`technologies to research, develop and commercialize, both with partners and on its own, pharmaceutical products that are
`designed to address unmet medical needs of patients in major therapeutic areas. Alkermes has a diversified portfolio of
`marketed drug products and a clinical pipeline of products that address central nervous system (“CNS”) disorders such as
`schizophrenia, depression, addiction and multiple sclerosis (“MS”). Headquartered in Dublin, Ireland, Alkermes has a
`research and development (“R&D”) center in Waltham, Massachusetts; an R&D and manufacturing facility in Athlone,
`Ireland; and a manufacturing facility in Wilmington, Ohio.
`
`Marketed Products
`
`The key marketed products discussed below are expected to generate significant revenues for us. Refer to the “Patents and
`Proprietary Rights” section of this Annual Report for information with respect to the intellectual property protection for these
`marketed products.
`
`Summary information regarding our proprietary products:
`
`
`
`
`
`
`
`
`
`
`
`
`Product
`
`
`
`
`
`Indication(s)
`
`
`Schizophrenia
`
`Licensee
`
`
`
`
`
`
`
` None
`
`
`
`Territory
`
`
`
`
`
` Commercialized by
`Alkermes in the
`U.S.
`
`
`
` Alcohol
`dependence and
`Opioid
`dependence
`
`
`
` None
`
`
`
`Cilag GmbH
`International
`(“Cilag”)
`
`
`
` Commercialized by
`Alkermes in the
`U.S.
`
`Russia and
`Commonwealth of
`Independent States
`(“CIS”)
`
`
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`
`Summary information regarding products that use our proprietary technologies:
`
`
`Product
`
`
`
`Indication(s)
`
`RISPERDAL CONSTA
`
`
`
`Schizophrenia
`and Bipolar I
`disorder
`
`INVEGA SUSTENNA
`
`XEPLION
`
`
`
`
`INVEGA TRINZA
`
`TREVICTA
`
`AMPYRA
`
`FAMPYRA
`
`
`Schizophrenia
`and
`Schizoaffective
`disorder
`
`Schizophrenia
`
`
`
`Schizophrenia
`
`
`Treatment to
`improve walking
`in patients with
`MS, as
`demonstrated by
`an increase in
`walking speed
`
`BYDUREON and BYDUREON BCise
`
`
`
`
`
`Type 2 diabetes
`
`6
`
`Schizophrenia
`
`
`Janssen
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Licensee
`
`
`Janssen
`Pharmaceutica Inc.
`(“Janssen, Inc.”)
`and Janssen
`Pharmaceutica
`International, a
`division of Cilag
`International AG
`(“Janssen
`International”)
`
`
`Janssen
`Pharmaceutica N.V.
`(together with
`Janssen, Inc.,
`Janssen
`International and
`their affiliates
`“Janssen”)
`
`Janssen
`
`
`
`Janssen
`
`
`Acorda
`
`
`
`Biogen, under
`sublicense from
`Acorda
`
`
`
` AstraZeneca plc
`(“AstraZeneca”)
`
`
`Territory
`
`
`
`
` Worldwide
`
`
`U.S.
`
`
`
`All countries
`outside of the U.S.
`(“ROW”)
`
`
`U.S.
`
`
`ROW
`
`
`U.S.
`
`
`
`ROW
`
`
`
` Worldwide
`
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`
`Proprietary Products
`
`We develop and commercialize products designed to address the unmet needs of patients suffering from addiction and
`schizophrenia.
`
`ARISTADA
`
`ARISTADA (aripiprazole lauroxil) is an extended-release intramuscular injectable suspension approved in the U.S. for
`the treatment of schizophrenia. ARISTADA is the first of our products to utilize our proprietary LinkeRx technology.
`ARISTADA is a prodrug; once in the body, ARISTADA is likely converted by enzyme-mediated hydrolysis to N-
`hydroxymethyl aripiprazole, which is then hydrolyzed to aripiprazole. ARISTADA is the first atypical antipsychotic with
`once-monthly, once-every-six-weeks and once-every-two-months dosing options to deliver and maintain therapeutic
`levels of medication in the body. ARISTADA has four dosing options (441 mg, 662 mg, 882 mg and 1064 mg) and is
`packaged in a ready-to-use, pre-filled product format. ARISTADA 1064 mg, our two-month dosing option, was approved
`by the U.S. Food and Drug Administration (the “FDA”) in June 2017. We developed ARISTADA and manufacture and
`commercialize it in the U.S.
`
`What is schizophrenia?
`
`Schizophrenia is a chronic, severe and disabling brain disorder. The disease is marked by positive symptoms
`(hallucinations and delusions) and negative symptoms (depression, blunted emotions and social withdrawal), as well as by
`disorganized thinking. An estimated 2.4 million Americans over the age of 18 have schizophrenia in a given year, with
`men and women affected equally. Worldwide, it is estimated that one person in every 100 develops schizophrenia. Studies
`have demonstrated that as many as 75% of patients with schizophrenia have difficulty taking their oral medication on a
`regular basis, which can lead to worsening of symptoms.
`
`VIVITROL
`
`VIVITROL (naltrexone for extended-release injectable suspension) is a once-monthly, non-narcotic, injectable
`medication approved in the U.S., Russia and certain countries of the CIS for the treatment of alcohol dependence and for
`the prevention of relapse to opioid dependence, following opioid detoxification. VIVITROL uses our polymer-based
`microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body
`through one intramuscular injection every four weeks. We developed and exclusively manufacture VIVITROL. We
`commercialize VIVITROL in the U.S., and Cilag commercializes VIVITROL in Russia and certain countries of the CIS.
`
`What are opioid dependence and alcohol dependence?
`
`Opioid dependence is a serious and chronic brain disease characterized by compulsive, prolonged self-administration of
`opioid substances that are not used for a medical purpose. According to the 2016 U.S. National Survey on Drug Use and
`Health, nearly 2 million people aged 18 or older in the U.S. had an opioid use disorder.
`
`Alcohol dependence is a serious and chronic brain disease characterized by cravings for alcohol, loss of control over
`drinking, withdrawal symptoms and an increased tolerance for alcohol. According to the 2016 U.S. National Survey on
`Drug Use and Health, an estimated 8 million people aged 12 or older had alcohol dependence. Adherence to medication is
`particularly challenging with this patient population.
`
`Products Using Our Proprietary Technologies
`
`We have granted licenses under our proprietary technologies to enable third parties to develop, commercialize and, in
`some cases, manufacture products for which we receive royalties and/or manufacturing revenues. Such arrangements include
`the following:
`
`INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and RISPERDAL CONSTA
`
`INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA (paliperidone palmitate)/TREVICTA
`(paliperidone palmitate 3-monthly injection) and RISPERDAL CONSTA (risperidone long-acting injection) are long-
`acting atypical antipsychotics owned and commercialized worldwide by Janssen that incorporate our proprietary
`technologies.
`
`
`
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`
`INVEGA SUSTENNA is approved in the U.S. for the treatment of schizophrenia and for the treatment of schizoaffective
`disorder as either a monotherapy or adjunctive therapy. Paliperidone palmitate extended-release injectable suspension is
`approved in the European Union (“EU”) and other countries outside of the U.S. for the treatment of schizophrenia and is
`marketed and sold under the trade name XEPLION. INVEGA SUSTENNA/XEPLION uses our nanoparticle injectable
`extended-release technology to increase the rate of dissolution and enable the formulation of an aqueous suspension for
`once-monthly intramuscular administration. INVEGA SUSTENNA/XEPLION is manufactured by Janssen.
`
`In January 2018, Janssen Pharmaceuticals NV and Janssen Pharmaceuticals, Inc. initiated a patent infringement lawsuit
`in the United States District Court for the District of New Jersey against Teva Pharmaceuticals USA, Inc. (“Teva”), who
`filed an ANDA seeking approval to market a generic version of INVEGA SUSTENNA before the expiration of United States
`Patent No. 9,439,906. The Company is not a party to these proceedings. For further discussion of the legal proceedings
`related to the patents covering INVEGA SUSTENNA, see Note 16, Commitments and Contingencies in the “Notes to
`Condensed Consolidated Statements” and “Item 3—Legal Proceedings” in this Annual Report and for information about
`risks relating to the INVEGA SUSTENNA Paragraph IV litigation, see “Part I, Item 1A—Risk Factors” in this Annual
`Report and specifically the section entitled “—We or our licensees may face claims against intellectual property rights
`covering our products and competition from generic drug manufacturers.”
`
`INVEGA TRINZA is an atypical antipsychotic injection for the treatment of schizophrenia used in people who have
`been treated with INVEGA SUSTENNA for at least four months. INVEGA TRINZA is the first schizophrenia treatment to be
`taken once every three months. TREVICTA is approved in the EU for the maintenance treatment of schizophrenia in adult
`patients who are clinically stable on XEPLION. INVEGA TRINZA/TREVICTA uses our proprietary technology and is
`manufactured by Janssen.
`
`RISPERDAL CONSTA is approved in the U.S. for the treatment of schizophrenia and as both monotherapy and
`adjunctive therapy to lithium or valproate in the maintenance treatment of bipolar I disorder. RISPERDAL CONSTA is
`approved in numerous countries outside of the U.S. for the treatment of schizophrenia and the maintenance treatment of
`bipolar I disorder. RISPERDAL CONSTA uses our polymer-based microsphere injectable extended-release technology to
`deliver and maintain therapeutic medication levels in the body through just one intramuscular injection every two weeks.
`RISPERDAL CONSTA microspheres are exclusively manufactured by us.
`
`Revenues from Janssen accounted for approximately 33%, 36% and 40% of our consolidated revenues for the years
`ended December 31, 2017, 2016 and 2015, respectively. See “Collaborative Arrangements” in Part I of this Annual Report
`for information about our relationship with Janssen.
`
`What is bipolar I disorder?
`
`Bipolar I disorder is a brain disorder that causes unusual shifts in a person’s mood, energy and ability to function. It is
`often characterized by debilitating mood swings, from extreme highs (mania) to extreme lows (depression). Bipolar I
`disorder is characterized based on the occurrence of at least one manic episode, with or without the occurrence of a major
`depressive episode. Bipolar disorder is believed to affect approximately 5.7 million American adults, or about 2.6% of the
`U.S. population aged 18 and older in a given year. The median age of onset for bipolar disorder is 25 years.
`
`What is schizoaffective disorder?
`
`Schizoaffective disorder is a condition in which a person experiences a combination of schizophrenia symptoms, such as
`delusions, hallucinations or other symptoms characteristic of schizophrenia, and mood disorder symptoms, such as mania
`or depression. Schizoaffective disorder is a serious mental illness that affects about one in 100 people.
`
`AMPYRA/FAMPYRA
`
`AMPYRA (dalfampridine)/FAMPYRA (fampridine) is believed to be the first treatment approved in the U.S. and in over
`50 countries across Europe, Asia and the Americas to improve walking in adults with MS who have walking disability, as
`demonstrated by an increase in walking speed. Extended-release dalfampridine tablets are marketed and sold by Acorda in
`the U.S. under the trade name AMPYRA and by Biogen outside the U.S. under the trade name FAMPYRA. In July 2011,
`the European Medicines Agency (“EMA”) conditionally approved FAMPYRA in the EU, and in May 2017, the EMA
`granted FAMPYRA a standard marketing authorization in the EU for the improvement of
`
`
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`Table of Contents
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`walking in adults with MS. AMPYRA and FAMPYRA incorporate our oral controlled-release technology. AMPYRA and
`FAMPYRA are manufactured by us.
`
`We and/or Acorda have received notices of ANDA filings for AMPYRA asserting that a generic form of AMPYRA would
`not infringe AMPYRA’s Orange Book-listed patents and/or those patents are invalid. In response, we and/or Acorda filed
`lawsuits against certain of the ANDA filers in the U.S. District Court for the District of Delaware (the “Delaware Court”)
`asserting infringement of U.S. Patent No. 5,540,938 (the “‘938 Patent”) , which we own, and U.S. Patent Nos. 8,007,826;
`8,354,437; 8,440,703; and 8,663,685, which are owned by Acorda. On March 31, 2017, the Delaware Court upheld the
`‘938 Patent, which pertains to the formulation of AMPYRA and is set to expire in July 2018, and invalidated U.S. Patent
`Nos. 8,007,826; 8,354,437; 8,440,703; and 8,663,685, which pertain to AMPYRA (the “Delaware Court Decision”). In
`May 2017, Acorda filed its appeal of the Delaware Court Decision with the U.S. Court of Appeals for the Federal Circuit
`(the “Federal Circuit”) with respect to the findings on U.S. Patent Nos. 8,007,826; 8,354,437; 8,440,703; and 8,663,685. In
`June 2017, certain of the ANDA filers filed a cross-appeal of the Delaware Court Decision with the Federal Circuit with
`respect to the validity of the ‘938 Patent. We and Acorda filed an opening brief in August 2017 and the ANDA filers
`responded in October 2017. Each side subsequently filed a response and reply brief in November 2017. A date for oral
`argument before the Federal Circuit has not yet been set. For further discussion of the legal proceedings related to the
`patents covering AMPYRA, see Note 16, Commitments and Contingencies in the “Notes to Condensed Consolidated
`Statements” and “Item 3—Legal Proceedings” in this Annual Report and for information about risks relating to the
`AMPYRA Paragraph IV litigation, see “Part I, Item 1A—Risk Factors” in this Annual Report and specifically the section
`entitled “—We or our licensees may face claims against intellectual property rights covering our products and competition
`from generic drug manufacturers.”
`
`The legal proceedings in the Delaware Court related to the patents covering AMPYRA do not involve the patents
`covering FAMPYRA, and the latest of the patents covering FAMPYRA expires in April 2025 in the EU.
`
`What is multiple sclerosis?
`
`Multiple sclerosis, or MS, is a chronic, usually progressive, disease in which the immune system attacks and degrades the
`function of nerve fibers in the brain and spinal cord. These nerve fibers consist of long, thin fibers, or axons, surrounded by
`a myelin sheath, which facilitates the transmission of electrical impulses. In MS, the myelin sheath is damaged by the
`body’s own immune system, causing areas of myelin sheath loss, also known as demyelination. This damage, which can
`occur at multiple sites in the CNS, blocks or diminishes conduction of electrical impulses. People with MS may suffer
`impairments in any number of neurological functions. These impairments vary from individual to individual and over the
`course of time, depending on which parts of the brain and spinal cord are affected, and often include difficulty walking.
`Individuals vary in the severity of the impairments they suffer on a day‑to‑day basis, with impairments becoming better or
`worse depending on the activity of the disease on a given day.
`
`BYDUREON and BYDUREON BCise
`
`BYDUREON (exenatide extended-release for injectable suspension) is approved in the U.S. and the EU for the treatment
`of type 2 diabetes. AstraZeneca is responsible for the development and commercialization of BYDUREON worldwide.
`BYDUREON, a once-weekly formulation of exenatide, uses our polymer-based microsphere injectable extended-release
`technology. BYDUREON is manufactured by AstraZeneca. BYDUREON Pen 2 mg, a pre-filled, single-use pen injector that
`contains the same formulation and dose as the original BYDUREON single-dose tray, is available in the U.S., certain
`countries in the EU and Japan.
`
`In October 2017, AstraZeneca announced FDA approval of BYDUREON BCise, a new formulation of BYDUREON in a
`once-weekly, single-dose autoinjector device for adults with type 2 diabetes. AstraZeneca announced the U.S. launch of
`BYDUREON BCise in January 2018. A regulatory application for the new autoinjector device has also been accepted by
`the EMA.
`
`What is type 2 diabetes?
`
`Diabetes is a disease in which the body does not produce or properly use insulin. Diabetes can result in serious health
`complications, including cardiovascular, kidney and nerve disease. Diabetes is believed to affect nearly 26 million people
`in the U.S. and an estimated 382 million adults worldwide. Approximately 90‑95% of those affected have type 2 diabetes.
`An estimated 80% of people with type 2 diabetes are overweight or obese. Data indicate that weight loss (even a modest
`amount) supports patients in their efforts to achieve and sustain glycemic control.
`
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`Table of Contents
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`Key Development Programs
`
`Our R&D is focused on leveraging our formulation expertise and proprietary product platforms to develop novel,
`competitively advantaged medications designed to enhance patient outcomes in major CNS disorders, such as schizophrenia,
`addiction, depression and MS. As part of our ongoing R&D efforts, we have devoted, and will continue to devote, significant
`resources to conducting pre-clinical work and clinical studies to advance the development of new pharmaceutical products.
`The discussion below highlights our current key R&D programs. Drug development involves a high degree of risk and
`investment, and the status, timing and scope of our development programs are subject to change. Important factors that could
`adversely affect our drug development efforts are discussed in “Part I, Item 1A—Risk Factors” of this Annual Report. Refer to
`the “Patents and Proprietary Rights” section in “Part I, Item 1— Business” of this Annual Report for information with respect
`to the intellectual property protection for our development candidates.
`
`The following graphic summarizes the status of our key development programs:
`
`P reclin ical P h ase 1 P h ase 2
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`P h ase 3 N D A
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`S u b m issio n
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`A rip ip razo le L au ro x il
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`N an o C ry stal
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`D isp ersio n
`
`S ch izo p h ren ia
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`A L K S 5 4 6 1
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`Majo r D ep ressiv e D iso rd er
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`A L K S 3 8 3 1
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`S ch izo p h ren ia
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`B IIB 0 9 8 (fo rm erly )
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`A L K S 8 7 0 0
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`Mu ltip le S clero sis
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`A L K S 4 2 3 0
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`C an cer
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`Im m u n o th erap y
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`Aripiprazole Lauroxil NanoCrystal Dispersion
`
`Aripiprazole Lauroxil NanoCrystal Dispersion (“ALNCD”) is a novel, investigational product designed to enable
`initiation onto any dose or duration of ARISTADA (aripiprazole lauroxil) extended-release injectable suspension for the
`treatment of schizophrenia. ALNCD uses our proprietary NanoCrystal technology and provides an extended-release
`aripiprazole lauroxil formulation having a smaller particle size than ARISTADA, thereby enabling faster dissolution and
`leading to more rapid achievement of therapeutic levels of aripiprazole. We have submitted a new drug application
`(“NDA”) to the FDA for ALNCD to be used as an initiation dose for ARISTADA for the treatment of schizophrenia. The
`FDA has issued a target action date for the ALNCD NDA of June 30, 2018 under