2017 ANNUAL REPORT
`
`Delivering on Our Commitments
`
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`BAUSCH + LOMB
`
`Ortho I Dermatolog ics
`Salix~
`
`PHAAMACltlTIC".ALS
`
`VA LEANT
`
`Pharmaceuticals I nternationa l , I nc.
`
`Eye Therapies Exhibit 2071, 1 of 228
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`VA LEANT
`
`Pharm•c•1.ttlc ah l nt•rnatlon•I . In c .
`
`COMPANY OVERVIEW
`Va leant Pharmaceuticals International. Inc. is a global company whose mission is to improve people's lives with our
`health care products. We develop. manufacture and market a range of pharmaceutical. medical device and over-the-counter
`products. primarily in the therapeutic areas of eye health. gastroenterology and dermatology. We are delivering on our
`commitments as we build an innovative company dedicated to advancing global health. More informat ion can be found
`at www.valeant.com.
`
`OUR VISION
`To Be Your Trusted Health Care Partner
`
`l QUALITY
`
`HEALTH CARE
`OUTCOMES
`
`CUSTOMER
`FOCUSED
`
`I
`
`I
`
`,'&'\
`
`.. - ...
`. - .
`\ = I
`. - .
`INNOVATION
`
`PEOPLE
`
`EFFICIENCY
`
`CORE VALUES
`
`• Accountability • Agility • Courage • Integrity • Teamwork • Results Orientation
`
`OUR MISSION
`Improving People's Lives With Our Health Care Products
`
`Eye Therapies Exhibit 2071, 2 of 228
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`VA LEAN T PH ARMACEU T ICA L S I N TE RNA T IONAL
`
`~ VALEANT'S REPORTABLE
`BUSINESS SEGMENTS
`
`Valeant's Portfolio of Products Falls into Three Reportable Segments:
`Segments as a pe rc entage of 2017 Total Compa ny Revenue
`
`-56°/o
`
`DURAB LE
`GROWTH
`
`BAUSCH + LOMB
`/ INTERNATIONAL
`
`• Global Vision Care
`• Global Surgical
`• Global Consumer
`• Global Ophthalmology Rx
`• International
`
`This segment consists of: (ii
`sales in the U.S. of pharmaceu(cid:173)
`tical products. OTC products
`and medical device products.
`primarily comprised of Bausch
`+ Lomb products. with a focus
`on the Vision Care. Surgical .
`Consumer and Ophthalmology
`Rx products and [iii sales in
`Canada. Europe. Asia. Aust ralia
`and New Zealand. Latin America.
`Af rica and the Middle East
`of branded pharmaceutical
`products. branded gener ic
`pharmaceutical products. OTC
`products. medica l device
`products and Bausch + Lomb
`products.
`
`-28°/o
`
`GROWTH
`
`BRANDED Rx
`
`• Salix
`• Ortho Dermatologies
`• Dentistry
`• Oncology
`• Women's Health
`
`The Brande d Rx segment con(cid:173)
`sist s of sales in the U.S. of: (ii
`Salix product s [gastrointestinal
`["GI") products). Iii) Or tho
`Dermat ologies [der matological
`products) and (iiil oncology [or
`Dendreonl. dentistry and wom(cid:173)
`en's health products (or Sprout).
`As a result of the divestiture of
`the Company's equity interest in
`Dendreon Pharmaceut icals LLC
`["Dendreon") on June 28. 2017
`and Sprout Pharmaceuticals.
`Inc. ("Sprout") on December 20.
`2017. the Company has exited
`the oncology and women's
`health business. respectively.
`
`-16°/o
`
`CASH
`GEN ERATING
`
`U.S. DIVERSIFIED
`PRODUCTS
`
`• Neurology and Other
`• U.S. Solta
`• Authorized Generics
`• U.S. Obagi
`
`The U.S. Diversified Products
`segment consists of sales in the
`U.S. of: (ii phar maceutical prod(cid:173)
`ucts. OTC products and medical
`device product s in the areas of
`neurology and certain other
`therapeutic classes. including
`aesthetics which includes the
`Salta business and the Obagi
`business (the Obagi sale was
`completed on November 9. 2017)
`and (ii) generic products.
`
`2 0 17 A NN UA L REPORT
`
`/ 1
`
`Eye Therapies Exhibit 2071, 3 of 228
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`VA LEANT
`
`P harm•c•1.ttlc ah
`
`l nt•r natlon•I. In c .
`
`FELLOW SHAREHOLDERS,
`
`When I wrote to you a year ago. we were at the early
`stages of a multi-year plan to transform Valeant. The
`fir st phase of that plan. stabil izing the company and
`laying the foundation for t he fu t ure. is complete. Today.
`we are making remar kable progress in our turnaround
`phase. and I'd like to out line t he steps we are taking to
`ensure we w ill be successful in our transformation.
`
`While many factor s are contributing to our turnaround.
`there are several areas we are primarily focused on:
`
`• Investing in our core franchises w ith attractive growth.
`
`• Launching new products with meani ngful opportuni(cid:173)
`ties. and
`
`• Resolving legacy issues and de- r isking our
`balance sheet.
`
`Investing in core franchises with attractive growth
`We current ly have strong competitive positions in
`three attractive markets: eye health (Bausch + Lomb].
`gastroent erology (Salix) and dermatology (Ortho
`Dermatologies). Each of these markets affords us
`w ith opportunities for growth. and each represents
`a therapeutic area where the collective knowledge.
`experience and expertise of our employees can make
`the greatest impact on improving people's lives.
`
`Within the eye health category. we maintain a large
`global footpri nt w ith a significant presence in rapidly
`growing mar ket s. including China where Bausch + Lomb
`is the number one eye care brand . In the United States.
`we have experienced steady gains in market share for
`soft contact lenses. and the Biotrue® (multi-purpose
`lens solution) and PreserVision® (eye vitamins) brands
`remained the top product s in their categories.
`
`Growth in our Salix business was dri ven by several key
`brands. Investment s in XIFAXAN®. most notably build(cid:173)
`ing and launching a primary care sales team in early
`20 17. have resulted in strong i ncreases in both total
`prescriptions and new prescriptions for the brand . We
`are al so investing for the fu t ure through the initiation
`of st udies for new ind ications and for mulations for
`XIFAXAN®. which is currently indicated to treat travel(cid:173)
`er's diarrhea and IBS- D and to reduce the risk of overt
`hepatic encephalopathy r ecur rence.
`
`The RELISTOR® franchise of products that treat
`opioid- induced constipation saw steady gains in total
`prescriptions in 20 17 due to uptake in the ora l formu (cid:173)
`lation. based on a shift in physician and patient prefer(cid:173)
`ences. The U.S. Food and Drug Administration (FDA)
`also accepted the New Drug Applicati on (NOA) for
`PLENVU®. an investigational bowel-cleansing prepara(cid:173)
`tion for patient s prior to a colonoscopy. Our Prescr iption
`Drug User Fee Act (PDUFA) action date for PLENVU®
`is May 13. 2018.
`
`Last year. we rebranded our dermatology business as
`Ortho Der matologies and took a number of actions to
`stabilize the business and prepare for new product
`launches. which included recr uiting an experienced
`leadership team and strenghteni ng our relationshi ps
`w ith dermatologists.
`
`Our expectation is that new. innovative products wil l
`drive the turnaround of Ortho Dermatologies. We
`launched the first of these new products. SILIQ™ w hich
`is an injectable biologic for the t reatment of moderate(cid:173)
`to- severe psoriasis. in mid-20 17. SILIQ™ has thus far
`shown positive patient adherence data and a modest.
`but consistent increase in patients on the medicine.
`
`A growing demand for effective psoriasis treatments
`has led us to make a number of key investments. The
`FDA has accepted t he NOA for DUOB Rll™1. an inves(cid:173)
`tigational topical treatment for moder ate-to-sever e
`plaq ue psor iasis that has a PDUFA action date of
`June 18. 2018. Another promising psoriasis t reatment.
`JEMDEL™1. has a PD UFA action date of October 5. 2018.
`We also have entered into an exclusive l icense agree(cid:173)
`ment with Kaken Pharmaceutical Co. to develop and
`commercialize products containing a new chemical
`entity KP- 470. an investigational compound for the
`t reatment of psoriasis.
`
`Along with the new strength of RETI N-A® MICRO.
`which we launched in January 2018. and the late- stage
`acne treatment ALTRENO™1. which has a PDUFA action
`date of August 27. 2018. col lectively we believe that
`these products great ly improve our prospects for dou(cid:173)
`bling this business over the next five years. To support
`these new product launches. we increased the size of
`
`2 I
`
`Eye Therapies Exhibit 2071, 4 of 228
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`VA LEAN T PHARMACE U T ICA L S IN TE RNA T IONAL
`
`the dermatology sa les force by more than 25% in
`January 2018.
`
`Launching new products with meaningful
`opportunities
`Quality. innovation and new product launches remain
`critical to our future. Our investment in R&D reflects
`our commitment to drive growth through the interna l
`development of new products. In the United States
`alone. we have 71 projects in our R&D pipeline focused
`
`skincare brands. Dendreon Pharmaceuticals . iNova
`Pharmaceuticals. Obagi Medical Products a nd Sprout
`Pharmaceuticals - which in tota l generated gross
`proceeds of approximately $3.8 billion [including future
`expected milestones).
`
`In addition to dramatically reducing the amount of our
`debt. we also improved our flexibility under our financial
`covenants. eliminated all mandatory a mortization
`requirements and. importantly. eliminated all long-term
`debt matu rities until 2020. This stability enables us
`
`Quality, innovation and new product launches remain critical to
`our future. Our investment in R&D reflects our commitment to
`drive growth through the internal development of new products.
`
`on our core businesses. and we a nticipate submitting
`more than 60% of those projects for FDA a pproval in
`201 8 and 2019. We also a nticipate increas ing R&D
`spend by more than 15 percent in 2018 as compared
`to 20 17.
`
`Among the products with the potential to be important
`catalysts for our future - what we are collectively call(cid:173)
`ing .. The Significa nt Seven··- include:
`
`• VYZU LTA™. which we launched in December 2017
`and is a pproved for the reduction of intraocular
`pressure in patients with open-angle glaucoma or
`ocu lar hypertension;
`
`• LUMIFY™. an over-the-counter eye drop fo r the
`treatment of ocular redness. which is expected to
`launch in the second quarter of 2018;
`
`• Ba usch + Lomb ULTRA® product lines; a nd
`
`• SILIQ™. DUOBRll™1. J EMDEL™ 1 and RELISTOR™.
`which were described in more detail a bove.
`
`Resolving legacy issues and de-risking our
`balance sheet
`We have reduced our tota l debt by more than $6.7 billion
`since the end of the first quarter of 2016. As pa rt of a
`concerted effort to streamline opera tions we have
`completed 13 divestitures- including sales of certain
`
`'Provisional name
`
`to focus on driving the fundamen ta ls of ou r core
`businesses.
`
`Our lega l team has done a n outstanding job reducing
`the volume of legacy legal liabilities facing the company.
`From the beginning of 2017. we achieved dismissals.
`settlements or other positive outcomes in more tha n
`80 litigations and investigations. all of which related to
`historica l matters. Importantly. we settled the Allergan
`securities litigation. which is subject to court a pproval.
`
`In closing. this past year was one of steady. measurable
`progress as we continue to focus on improvements
`that will lead us to orga nizational transformation and
`create shareholder value. Critical to that progress is our
`global team of more than 20.000 talented and dedicated
`employees who rema in committed to our mission of
`improving people·s lives with our health ca re products.
`
`As we look forward to the coming year of opportunities.
`on beha lf of the entire mana gement tea m a nd a ll
`Va leant employees. thank you for your confidence
`and support.
`
`if J oseph C. Papa
`
`Chairman of the Board and Chief Executive Officer
`
`2017 ANNUAL REPORT
`
`/ 3
`
`Eye Therapies Exhibit 2071, 5 of 228
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`VA LEANT
`
`ACHIEVING TANGIBLE PROGRESS
`
`OUR MISSION
`Improving People's Lives With Ou r Health Care Products
`
`TURN(cid:173)
`AROUND
`2017-2018
`
`2018+
`
`✓ Resolving legacy issues and de-risking the balance sheet
`
`✓ Investing in core franchises with attractive growth
`
`✓ Launching new products with meaningful opportunities
`
`FORWAR D LOO KING STATEMENTS
`This annual report contai ns forward- looking information and statements, within the meaning of applicable securities laws (collectively, "forwa rd- look ing statements") ,
`including, but not limited to, statements r egarding Valeant's future pr ospects and per formance. the turnaround and transformation of the Company and the progr ess
`thereof, the pr ospects for and the anticipated impacts of our core businesses, the anticipated submission, approval and launch dates for certain of our pipeline prod(cid:173)
`ucts and R&O programs, our ability to restore the dermatology business, the amount of anti cipated R&O spend, anticipated revenue and other benefits from our
`Significant Seven products, and the Company's plans and expectations for 2018 and beyond. Forwa rd- looking statements may generally be identified by the use of the
`words "anticipates," "expects," "goals", "intends," "plan s," "should," "could," ·would," "may," "will," "believes," ·estimates," "potential," ta rget," · commit," or ·continue·
`an d va riations or similar expressions. These forwa rd- looking statements are based upon the current expectations and beliefs of management and are provided for the
`purpose of provid ing additiona l information about such expectations and beliefs and readers are cautioned that these statements may not be appr opriate for other
`purposes. These forward- looking statements are subject to certain risks and uncertai nties that could cause actual results and events to differ mater ially from those
`described in these forward- looki ng statements. These risks and uncertainties inclu de, but are not limited to, the r isks and uncertainties discussed in the Company's
`most r ecent annua l and quarterly reports an d detailed from time to time in the Company's other filings with the Securities and Exchange Commission and the Canadian
`Securities Administrators, which r isks and uncertai nties are incor porated herein by r efer ence. In addition, certain material factors and assumptions have been applied
`in maki ng these forward- looking statements, including that the r isks and uncertainties outlined above will not cause actual results or events to differ materially from
`those described in these forward- looking statements, an d add itional information r egar ding certain of these material factor s and assumptions may also be found in the
`Company's filings descr ibed above. The Company believes that the mater ial factors and assumptions r eflected in these forward- looking statements are r easonable, but
`readers ar e cautioned not to place undue rel iance on any of these forward- looki ng statements. These forward- looki ng statements speak only as of the date hereof.
`Valea nt und ertakes no obligation to update any of these forward- looking statements to reflect events or circumstances after the date of this presentation or to reflect
`actual outcomes, unless r eq uired by law.
`
`t,_ I
`
`Eye Therapies Exhibit 2071, 6 of 228
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`. . . . . . . . . . . . . . . .
`: : : . : •· . : : . : .· .... • ....... ,..
`.:.-:.•- .. .
`. .
`
`. .
`
`.•.· .. •• •• . . .. . . .
`. . . .. . . ....
`
`VALEANT PHARMACEUTICALS
`INTERNATIONAL, INC.
`
`2017 FORM 10-K
`
`VA LEANT
`
`Pharmaceuticals International, Inc.
`
`Eye Therapies Exhibit 2071, 7 of 228
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`
`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`_____________________________
`
`FORM 10-K
`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 001-14956
`VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
`(Exact Name of Registrant as Specified in its Charter)
`
`BRITISH COLUMBIA, CANADA
`State or other jurisdiction of
`incorporation or organization
`
`98-0448205
`(I.R.S. Employer Identification No.)
`
`2150 St. Elzéar Blvd. West
`Laval, Québec
`Canada, H7L 4A8
`(Address of principal executive offices)
`
`Registrant's telephone number, including area code (514) 744-6792
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class
`Common Shares, No Par Value
`Securities registered pursuant to section 12(g) of the Act:
`
`
`
`
`Name of each exchange on which registered
`New York Stock Exchange, Toronto Stock Exchange
`
`None
`(Title of class)
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
` No
`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
` No
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during
`the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
`90 days. Yes
` No
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
`and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
`files). Yes
` No
`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.
`□
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
`of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
`
`Large accelerated filer
`
`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.
`□
`
`□
`
`Smaller reporting
`company
`
`□
`
`Emerging growth
`company
`
`□
`
` No
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
`□ IEI
`The aggregate market value of the common shares held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second
`fiscal quarter was $5,331,597,000 based on the last reported sale price on the New York Stock Exchange on June 30, 2017.
`The number of outstanding shares of the registrant’s common stock as of February 22, 2018 was 348,837,730.
`DOCUMENTS INCORPORATED BY REFERENCE
`Part III incorporates certain information by reference from the registrant’s proxy statement for the 2018 Annual Meeting of Shareholders. Such proxy statement
`will be filed no later than 120 days after the close of the registrant’s fiscal year ended December 31, 2017.
`
`
`
`Eye Therapies Exhibit 2071, 8 of 228
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

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`TABLE OF CONTENTS
`
`GENERAL INFORMATION
`
`PART I
`
`Item 1.
`Item 1A.
`Item 1B.
`Item 2.
`Item 3.
`Item 4.
`
`Item 5.
`
`Item 6.
`Item 7.
`Item 7A.
`Item 8.
`Item 9.
`Item 9A.
`Item 9B.
`
`Item 10.
`Item 11.
`Item 12.
`Item 13.
`Item 14.
`
` Business
` Risk Factors
` Unresolved Staff Comments
` Properties
` Legal Proceedings
` Mine Safety Disclosures
`
`PART II
` Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
`Securities
` Selected Financial Data
` Management’s Discussion and Analysis of Financial Condition and Results of Operations
` Quantitative and Qualitative Disclosures About Market Risk
` Financial Statements and Supplementary Data
` Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
` Controls and Procedures
` Other Information
`
`PART III
` Directors, Executive Officers and Corporate Governance
` Executive Compensation
` Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
` Certain Relationships and Related Transactions, and Director Independence
` Principal Accounting Fees and Services
`
` Exhibits and Financial Statement Schedules
`Item 15.
` Form 10-K Summary
`Item 16.
`SIGNATURES
`
`PART IV
`
`i
`
`Eye Therapies Exhibit 2071, 9 of 228
`Slayback v. Eye Therapies - IPR2022-00142
`
`

`

`Basis of Presentation
`
`General
`
`Except where the context otherwise requires, all references in this Annual Report on Form 10-K (“Form 10-K”) to the
`“Company”, “we”, “us”, “our” or similar words or phrases are to Valeant Pharmaceuticals International, Inc. and its subsidiaries,
`taken together. In this Form 10-K, references to “$” or “USD” are to United States dollars, references to “€” are to Euros, and
`references to “CAD” are to Canadian dollars. Unless otherwise indicated, the statistical and financial data contained in this Form 10-
`K are presented as of December 31, 2017.
`
`Trademarks
`
`The following words are some of the trademarks in our Company’s trademark portfolio and are the subject of either
`registration, or application for registration, in one or more of Canada, the United States of America (the “U.S.”) or certain other
`jurisdictions: ACANYA®, AERGEL®, AKREOS®, ALDARA®, ALREX®, ALTRENO™, AMMONUL®, AMYTAL®,
`ANTIGRIPPIN®, APLENZIN®, APRISO®, AQUALOX®, ARESTIN®, ARTELAC®, ATIVAN®, ATRALIN®, B&L®, B+L®,
`BAUSCH & LOMB®, BAUSCH + LOMB®, BAUSCH + LOMB ULTRA®, BEPREVE®, BESIVANCE®, BIOTRUE®, BIOVAIL®,
`BOSTON®, CARAC®, CARDIZEM®, CLEAR + BRILLIANT®, CLINDAGEL®, COLD-FX®, COMFORTMOIST®,
`CRYSTALENS®, CUPRIMINE®, DUOBRII™, EDECRIN®, ENVISTA®, GLUMETZA®, IPRIVASK®, ISTALOL®, JEMDEL™,
`JUBLIA®, LIPOSONIX®, LOTEMAX®, LUMIFY™, LUZU®, MEDICIS®, MEPHYTON®, MESTINON®, MIGRANAL®,
`MINOCIN®, MOISTURESEAL®, MYSOLINE®, OCUVITE®, ONEXTON®, OPTICALIGN™, PRESERVISION®,
`PROLENSA®, PUREVISION®, RELISTOR®, RENU®, RENU MULTIPLUS®, RETIN-A®, RETIN-A MICRO®, SCLERAFIL®,
`SECONAL®, SECONAL SODIUM®, SHOWER TO SHOWER®, SILIQ™, SOFLENS®, SOLODYN®, SOLTA MEDICAL®,
`STELLARIS®, STELLARIS ELITE™, STORZ®, SUBLINOX®, SYNERGETICS®, SYPRINE®, TARGRETIN®, TASMAR®,
`THERMAGE®, THERMAGE CPT®, TRASER™, TRULIGN®, UCERIS®, VALEANT®, VALEANT V & DESIGN®, VALEANT
`PHARMACEUTICALS & DESIGN®, VANOS®, VICTUS®, VIRAZOLE®, VITESSE™, VYZULTA™, XENAZINE®,
`ZEGERID®, ZELAPAR®, ZIANA®, and ZYLET®.
`In addition to the trademarks previously noted, we have filed trademark applications and/or obtained trademark registrations
`for many of our other trademarks in the U.S., Canada and in other jurisdictions and have implemented, on an ongoing basis, a
`trademark protection program for new trademarks.
`WELLBUTRIN®, WELLBUTRIN XL® and ZOVIRAX® are trademarks of GlaxoSmithKline LLC and are used by us under
`license. ELIDEL® and XERESE® are registered trademarks of Meda Pharma SARL and are used by us under license. EMERADE®
`is a registered trademark of Medeca Pharma AB and is used by us under license. DEFLUX® and SOLESTA® are registered
`trademarks of Nestlé Skin Health S.A. and are used by us under license. ISUPREL® and NITROPRESS® are registered trademarks
`of Hospira, Inc. and are used by us under license. XIFAXAN® is a registered trademark of Alfa Wasserman S.P.A. and is used by
`us under license. PEPCID® is a brand of McNeil Consumer Pharmaceuticals and is used by us under license. MOVIPREP® and
`PLENVU® are registered trademarks of Velinor AG and are used by us under license. LOCOID® is a registered trademark of Leo
`Pharma A/S and is used by us under license.
`
`Forward-Looking Statements
`
`Caution regarding forward-looking information and statements and “Safe-Harbor” statements under the U.S. Private
`Securities Litigation Reform Act of 1995:
`
`To the extent any statements made in this Form 10-K contain information that is not historical, these statements are forward-
`looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
`Exchange Act of 1934, as amended, and may be forward-looking information within the meaning defined under applicable Canadian
`securities legislation (collectively, “forward-looking statements”).
`
`These forward-looking statements relate to, among other things: our business strategy, business plans and prospects, forecasts
`and changes thereto, product pipeline, prospective products or product approvals, product development and distribution plans,
`future performance or results of current and anticipated products; anticipated revenues for our products, including the Significant
`Seven; anticipated compounding growth in our Ortho Dermatologics business; expected R&D and marketing spend; our liquidity
`and our ability to satisfy our debt maturities as they become due; our ability to reduce debt levels; the impact of our distribution,
`fulfillment and other third party arrangements; proposed pricing actions; exposure to foreign currency exchange rate changes
`and interest rate changes; the outcome of contingencies, such as litigation, subpoenas, investigations, reviews, audits and regulatory
`proceedings; general market conditions; our expectations regarding our financial performance, including revenues, expenses,
`gross margins and income taxes; our ability to meet the financial and other covenants contained in our Third Amended and Restated
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`ii
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`Eye Therapies Exhibit 2071, 10 of 228
`Slayback v. Eye Therapies - IPR2022-00142
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`Credit and Guaranty Agreement, as amended (the "Credit Agreement") and indentures; and our impairment assessments, including
`the assumptions used therein and the results thereof.
`
`Forward-looking statements can generally be identified by the use of words such as “believe”, “anticipate”, “expect”,
`“intend”, “estimate”, “plan”, “continue”, “will”, “may”, “could”, “would”, “should”, “target”, “potential”, “opportunity”,
`“tentative”, “positioning”, “designed”, “create”, “predict”, “project”, “forecast”, “seek”, “ongoing”, “increase”, or “upside”
`and variations or other similar expressions. In addition, any statements that refer to expectations, intentions, projections or other
`characterizations of future events or circumstances are forward-looking statements. These forward-looking statements may not
`be appropriate for other purposes. Although we have previously indicated certain of these statements set out herein, all of the
`statements in this Form 10-K that contain forward-looking statements are qualified by these cautionary statements. These statements
`are based upon the current expectations and beliefs of management. Although we believe that the expectations reflected in such
`forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be
`placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, including,
`but not limited to, factors and assumptions regarding the items previously outlined. Actual results may differ materially from those
`expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations
`include, among other things, the following:
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`the expense, timing and outcome of legal and governmental proceedings, investigations and information requests relating
`to, among other matters, our distribution, marketing, pricing, disclosure and accounting practices (including with respect
`to our former relationship with Philidor Rx Services, LLC ("Philidor")), including pending investigations by the U.S.
`Attorney's Office for the District of Massachusetts, the U.S. Attorney's Office for the Southern District of New York and
`the State of North Carolina Department of Justice, the pending investigations by the U.S. Securities and Exchange
`Commission (the “SEC”) of the Company, the request for documents and information received by the Company from the
`Autorité des marchés financiers (the “AMF”) (the Company’s principal securities regulator in Canada), the pending
`investigation by the California Department of Insurance, a number of pending putative securities class action litigations
`in the U.S. (including related opt-out actions) and Canada and purported class actions under the federal RICO statute
`and other claims, investigations or proceedings that may be initiated or that may be asserted;
`
`potential additional litigation and regulatory investigations (and any costs, expenses, use of resources, diversion of
`management time and efforts, liability and damages that may result therefrom), negative publicity and reputational harm
`on our Company, products and business that may result from the ongoing public scrutiny of our distribution, marketing,
`pricing, disclosure and accounting practices and from our former relationship with Philidor, including any claims,
`proceedings, investigations and liabilities we may face as a result of any alleged wrongdoing by Philidor and/or its
`management and/or employees;
`
`the current scrutiny of our business practices including with respect to pricing (including the investigations by the U.S.
`Attorney's Offices for the District of Massachusetts and the Southern District of New York, and the State of North Carolina
`Department of Justice) and any pricing controls or price adjustments that may be sought or imposed on our products as
`a result thereof;
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`pricing decisions that we have implemented, or may in the future elect to implement, whether as a result of recent scrutiny
`or otherwise, such as the decision of the Company to take no further price increases on our Nitropress® and Isuprel®
`products and to implement an enhanced rebate program for such products, our decision on the price of our Siliq™ product,
`the Patient Access and Pricing Committee’s commitment that the average annual price increase for our branded
`prescription pharmaceutical products will be set at no greater than single digits and below the 5-year weighted average
`of the increases within the branded biopharmaceutical industry or any future pricing actions we may take following
`review by our Patient Access and Pricing Committee (which is responsible for the pricing of our drugs);
`
`legislative or policy efforts, including those that may be introduced and passed by the U.S. Congress, designed to reduce
`patient out-of-pocket costs for medicines, which could result in new mandatory rebates and discounts or other pricing
`restrictions, controls or regulations (including mandatory price reductions);
`
`ongoing oversight and review of our products and facilities by regulatory and governmental agencies, including periodic
`audits by the U.S. Food and Drug Administration (the "FDA") and the results thereof;
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`actions by the FDA or other regulatory authorities with respect to our products or facilities;
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`our substantial debt (and potential additional future indebtedness) and current and future debt service obligations, our
`ability to reduce our outstanding debt levels and the resulting impact on our financial condition, cash flows and results
`of operations;
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`iii
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`Eye Therapies Exhibit 2071, 11 of 228
`Slayback v. Eye Therapies - IPR2022-00142
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`our ability to meet the financial and other covenants contained in our Credit Agreement, indentures and other current or
`future debt agreements and the limitations, restrictions and prohibitions such covenants impose or may impose on the
`way we conduct our business, prohibitions on incurring additional debt if certain financial covenants are not met,
`limitations on the amount of additional debt we are able to incur where not prohibited, and restrictions on our ability to
`make certain investments and other restricted payments;
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`any default under the terms of o