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For Us, It's a Responsibility

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For Us, It's a Responsibility ANNUAL REPORT 2018 FOR US, IT’S A RESPONSIBILITY At Horizon Pharma, we are personally invested in the lives of people our medicines help wherever they are in their journey, from diagnosis through ongoing care. By fostering a growing pipeline of medicines and exploring all potential uses for currently marketed medicines, we can make a powerful difference for our patients, their caregivers and physicians. TO OUR SHAREHOLDERS 2018 marked our 10-year anniversary and a year in which we made further progress defining our identity — both as a group of individuals and more importantly, as a company. We have more than 1,000 dedicated people across the globe growing our successful company, while at the same time, tirelessly working to help as many people as possible. Horizon had a record year financially, generating net sales of $1.21 billion, an increase of 14 percent over 2017, and adjusted EBITDA of $451.4 million, an increase of 16 percent. But that’s not enough for us. Despite our strong fiscal performance, we continue to define success by a different set of numbers — the number of lives touched, the number of lives changed, the number of lives saved. Last year, we were able to provide critical therapies to more patients than ever before: approximately 3,000 patients received treatment with KRYSTEXXA®, more than 1,000 patients received treatment with RAVICTI®, PROCYSBI® and ACTIMMUNE® combined, and more than 450,000 patients received treatment with our primary care medicines. A PIPELINE BUILT WITH PURPOSE We have made tremendous progress executing our strategy to develop a robust and differentiated pipeline. We are building our pipeline with purpose, as it takes scientific courage to address diseases many won’t, with the goal of making the world a healthier place. Teprotumumab Teprotumumab is a fully human monoclonal antibody (mAb) insulin-like growth factor 1-receptor (IGF-1R), being investigated for the treatment of active thyroid eye disease (TED), a sight-threatening rare eye disease with no approved treatment. In 2018, we completed enrollment in the Phase 3 confirmatory OPTIC trial ahead of schedule and in the first quarter of 2019 announced that the trial had met its primary endpoint with 82.9 percent of patients treated with teprotumumab achieving a 2 mm or greater reduction in proptosis compared to 9.5 percent of patients receiving placebo (p<0.001). In addition, the study met all secondary endpoints. We are very excited about the potential for teprotumumab for the many patients suffering from the painful, debilitating effects of TED. We anticipate filing a Biologics Licensing Application with the U.S. Food and Drug Administration (FDA) in mid-2019. If approved, teprotumumab would be the first and only approved treatment for active TED. KRYSTEXXA KRYSTEXXA is entering its ninth year on the market and we continue to explore ways to maximize its use in order to help more patients with uncontrolled gout. During the last five years, more than 100,000 gout patients underwent amputations. For patients to consider amputation as a way to alleviate pain illustrates the severity of uncontrolled gout. It also illustrates that there are patients still in desperate need of treatment. In addition to continuing to educate physicians and patients about the benefits of KRYSTEXXA, through our various clinical programs, we hope to reduce immunogenicity and improve the response rate so more patients can benefit from KRYSTEXXA. Based on the impressive results of an abstract presented at the 2018 American College of Rheuma- tology meeting where nine out of nine patients demonstrated a complete response when treated with KRYSTEXXA and methotrexate, we are adapting our MIRROR trial, which is studying KRYSTEXXA plus methotrexate, to support the potential for registration with the FDA. We expect to start that adapted trial in the second quarter of 2019. Early-Stage Programs In addition to the ongoing clinical work with KRYSTEXXA, we have three exciting preclinical programs: HZN-003, PASylated uricase and a gout discovery program with HemoShear. These programs are designed to continue to build on our leadership position in uncontrolled gout, as well as potentially improve response rates, provide better duration of treatment and provide more convenient administration through subcutaneous dosing. 2 2018 ANNUAL REPORT While these programs are in very early stages, I am excited about the potential opportunities to further our commitment to help as many patients as possible. As we continue to grow, we will continue to look to build our pipeline through in-licensing or by acquiring medicines or companies. We will also explore further use of our current medicines with the goal of benefiting more patients. COMMUNITY BUILDING, COMMUNITY CHANGING As we’ve built our identity, one key to our success has been our ability to be both community builders and community changers. We make a difference in the communities we touch and work hard to foster that commitment. Whether it is the more than 50 large global and regional umbrella advocacy organizations, the small, local disease-specific patient advocacy organizations, or the more than 30 community partners representing our four pillars of giving — STEAM, children’s healthcare, innovation and our disease-specific communities — our investment extends beyond our medicines. In 2018, we entered into a unique partnership with the Sing Me a Story Foundation (SMAS) and Global Genes, which allows children living with rare diseases to write their own stories with award-winning songwriters who then turn them into original songs. The SMAS partnership is a component of our RAREis™ initiative and continues to elevate the faces, voices and experiences of those living with rare disease. Our work with Perspectives Math and Science Academy (MSA), our partner school in Chicago, grew significantly in 2018. MSA serves more than 600 students from underserved communities. Students are often deprived of food, live in violent neighborhoods, or are homeless. Despite its commitment to deliver a quality education to its students while also addressing their social and emotional needs, the school lacks the necessary resources to fully accomplish its mission. We know that bolstering MSA with support not only fills the funding gaps to educate the whole child, but also fosters an authentic connection for our employees through opportunities for direct engagement. Our intention is for students to understand that they are part of a community that extends beyond the confines of their residential communities. To that end, this year, among many other areas of focus, we helped build a peace and meditation room at the school to provide a safe space for students to go when in need of support. Because our employees go to incredible lengths to show up for their communities and for our partners, we also became one of the first biopharma companies to commit to Pledge 1%, joining more than 6,000 companies in over 100 countries. We have pledged, and are already giving, 1% of company profit, product, and time, and have established an innovative mechanism for employees to participate in giving 1% of company equity. In addition, we joined the Business Council of the United Nations and now actively align our corporate social responsibility and sustainability programming with 11 of the 17 United Nations Sustainable Development Goals (UNSDG). The UNSDGs encourage and mobilize international gov- ernments, nongovernment organizations, and the private sector to achieve ambitious goals, focused on ending poverty and tackling climate change by 2030. We are using the UNSDGs as a framework for responsible business, measuring our impact against UNSDG targets, and seeking opportunities to further our engagement. HORIZON PHARMA 3 FOSTERING AN INCLUSIVE CULTURE We are a company of dedicated, engaged people making a difference every day — whether in the results we achieve, the commitments we make or the recognition we receive. I am a big believer in the strength of the company’s culture and building a culture that will enable everyone to be successful. For us, we understand that what we do ultimately leads to nurturing a company dynamic that recognizes and values the employee and patient experience. In 2018, PEOPLE Magazine honored Horizon as one of its “50 Companies That Care,” and Fortune Magazine named us the number one Best Workplace in BioPharma, in addition to several other workplace awards. We also received recognition for the value we place on inclusion, with Crain’s Chicago Business recognizing us as one of the 10 Best Places to Work for Women in Chicago. Our employees come from different backgrounds and life experiences, which we believe greatly contribute to our success, as well as to the patients and diverse communities we serve. To that end, this past year, I signed the CEOAction for Diversity and Inclusion pledge, a CEO-driven business commitment to advance diversity and inclusion within the workplace. We also started an internal Inclusion Leadership Council comprised of senior leaders across our business that champion new ideas and initiatives around inclusion, aligning to our business strategy. Our board of directors also recognizes the importance and value of diversity as well, formally instituting a policy on diversity and sharing it publicly. In addition, we formed several business resource groups — Hispanics@, Women@ and HAAN, the Horizon African American Network, as well as a resource group for members and allies of our LGBTQ+ community. We are also working with several associations to enhance diversity recruiting for broader corporate impact. For some, what they do is just business. For us, it’s a responsibility. Our goal is to invest the successes of our today, into the promise of patients’ tomorrows. Our mission is to unite the best and the brightest, follow the data wherever it goes, and streamline the discovery process, until there are no more under- served communities.
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