Horizon Pharma plc 2018 Irish Statutory Accounts (“Irish Annual Report”) CONTENTS Page DIRECTORS AND OTHER INFORMATION 2 DIRECTORS' REPORT 3 – 69 INDEPENDENT AUDITOR’S REPORT 70 – 75 CONSOLIDATED PROFIT AND LOSS ACCOUNT 76 CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS 77 CONSOLIDATED BALANCE SHEET 78 – 79 CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY 80 CONSOLIDATED STATEMENT OF CASH FLOWS 81 – 82 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 83 – 142 PARENT COMPANY FINANCIAL STATEMENTS 143 – 153 DIRECTORS AND OTHER INFORMATION Board of Directors at December 31, 2018 Timothy P. Walbert Michael Grey William F. Daniel Jeff Himawan, Ph.D. Ronald Pauli Gino Santini James Shannon, M.D. H. Thomas Watkins Pascale Witz Secretary and Registered Office Anne-Marie Dempsey Connaught House 1st Floor 1 Burlington Road Dublin 4 D04 C5Y6 Ireland Registered Number: 507678 Auditor PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm One Spencer Dock North Wall Quay Dublin 1 D01 X9R7 Ireland Solicitor Matheson 70 Sir John Rogerson’s Quay Grand Canal Dock Dublin 2 D02 R296 Ireland 2 DIRECTORS’ REPORT The directors present their report and the audited financial statements of the Company (as defined below) for the financial year ended December 31, 2018. Basis of Presentation The Company is a public limited company formed under the laws of Ireland. The Company operates through a number of international and U.S. subsidiaries with principal business purposes to either perform research and development or manufacturing operations, serve as distributors of the Company’s medicines, hold intellectual property assets or provide services and financial support to the Company. The directors have elected to prepare the consolidated financial statements in accordance with Section 279 of the Companies Act 2014, which provides that a true and fair view of the state of affairs and profit or loss may be given by preparing the financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), as defined in Section 279 of the Companies Act 2014, to the extent that the use of those principles in the preparation of the financial statements does not contravene any provision of the Irish Companies Acts (collectively, the “Companies Act”) or of any regulations made thereunder. Principal Activities Unless otherwise indicated or the context otherwise requires, references to the “Company”, “Horizon”, “we”, “us” and “our” refer to Horizon Pharma plc and its consolidated subsidiaries. The Company is focused on researching, developing and commercializing innovative medicines that address unmet treatment needs for rare and rheumatic diseases. By expanding its growing pipeline of medicines in development and exploring all potential uses for currently marketed medicines, the Company strives to make a powerful difference for patients, their caregivers and physicians. The Company has two reportable segments, referred to as the “orphan and rheumatology segment” and the “primary care segment”. The Company currently markets eleven medicines in the areas of orphan diseases, rheumatology and primary care. The Company’s currently marketed medicines are: Orphan and Rheumatology KRYSTEXXA® (pegloticase injection), for intravenous infusion RAVICTI® (glycerol phenylbutyrate) oral liquid PROCYSBI® (cysteamine bitartrate) delayed-release capsules, for oral use ACTIMMUNE® (interferon gamma-1b) injection, for subcutaneous use RAYOS® (prednisone) delayed-release tablets BUPHENYL® (sodium phenylbutyrate) Tablets and Powder QUINSAIR™ (levofloxacin) solution for inhalation Primary Care PENNSAID® (diclofenac sodium topical solution) 2% w/w, (“PENNSAID 2%”), for topical use DUEXIS® (ibuprofen/famotidine) tablets, for oral use VIMOVO® (naproxen/esomeprazole magnesium) delayed-release tablets, for oral use MIGERGOT® (ergotamine tartrate & caffeine suppositories), for rectal use Acquisitions and Divestitures Since January 1, 2017, the Company completed the following acquisitions and divestitures: • Effective January 1, 2019, the Company amended its license and supply agreements with Jagotec AG and Skyepharma AG, which are affiliates of Vectura Group plc (“Vectura”). Under these amendments, the Company agreed to transfer all economic benefits of LODOTRA® in Europe to Vectura during an initial transition period, with full rights transferring to Vectura when certain transfer activities have been completed. The Company will no longer record LODOTRA revenue from January 1, 2019. • On December 28, 2018, the Company sold its rights to RAVICTI and AMMONAPS® (known as BUPHENYL in the United States) outside of North America and Japan to Medical Need Europe AB, part of the Immedica Group, (“Immedica”). The Company previously distributed RAVICTI and AMMONAPS through a commercial partner in 3 Europe and other non-U.S. markets. The Company have retained rights to RAVICTI and BUPHENYL in North America and Japan. • On June 30, 2017, the Company completed its acquisition of certain rights to interferon gamma-1b from Boehringer Ingelheim International GmbH (“Boehringer Ingelheim International”) in all territories outside of the United States, Canada and Japan. Interferon gamma-1b is known as IMUKIN® outside of the United States, Canada and Japan. On July 24, 2018, the Company sold the rights to IMUKIN in all territories outside of the United States, Canada and Japan to Clinigen Group plc, (“Clinigen”), for an upfront payment and a potential additional contingent consideration payment (“the IMUKIN sale”). • On June 23, 2017, the Company completed the sale of its European subsidiary that owned the marketing rights to PROCYSBI (cysteamine bitartrate) delayed-release capsules and QUINSAIR (levofloxacin inhalation solution) in Europe, the Middle East and Africa (“EMEA”) regions (the “Chiesi divestiture”) to Chiesi Farmaceutici S.p.A. (“Chiesi”). • On May 8, 2017, the Company completed its acquisition of River Vision Development Corp. (“River Vision”), which added the late development-stage rare disease biologic medicine candidate teprotumumab to the Company’s research and development pipeline. Business Review Key Performance Indicators During the course of preparing the consolidated financial statements for the year ended December 31, 2018, we identified an immaterial error in the measurement of the contingent royalty liability calculation pertaining to the royalty end date for one of our medicines. In accordance with U.S. GAAP, this was corrected as a revision within the consolidated financial statements for the year ended December 31, 2018. The revision resulted in certain adjustments to the consolidated financial statements as of and for the years ended December 31, 2017, and the revised amounts are presented below. See Note 1 of the Notes to consolidated financial statements for further details of this error and the related revisions. These revisions had no impact on adjusted EBITDA, non-GAAP net income or non-GAAP earnings per share that are presented in our Non-GAAP Financial Measures. Our consolidated results of operations for the financial years ended December 31, 2018 and 2017 were as follows (in thousands): For the Years Ended December 31, 2018 2017 Change (in thousands) Turnover $ 1,207,570 $ 1,056,231 $ 151,339 Cost of sales 422,317 537,334 (115,017 ) Gross profit 785,253 518,897 266,356 Operating expenses: Research and development 82,762 224,962 (142,200 ) Selling, general and administrative 692,485 655,093 37,392 Impairment of long-lived assets 50,302 22,270 28,032 Gain on sale of assets (42,688 ) — (42,688 ) Total operating expenses 782,861 902,325 (119,464 ) Operating income (loss) 2,392 (383,428 ) 385,820 Other expense, net: Interest expense, net (1) (121,692 ) (126,523 ) 4,831 Foreign exchange loss (2) (192 ) (260 ) 68 Gain on divestiture (3) — 6,267 (6,267 ) Loss on debt extinguishment (1) — (978 ) 978 Other income (expense), net (2) 346 588 (242 ) Total other expense, net (121,538 ) (120,906 ) (632 ) Loss before taxation (119,146 ) (504,334 ) 385,188 Benefit for income taxes (9,066 ) (138,642 ) 129,576 Loss for the financial year $ (110,080 ) $ (365,692 ) $ 255,612 4 (1) These items are grouped together as “Interest payable and similar expenses” under the required Irish Companies Acts format in the consolidated profit and loss account. (2) “Foreign exchange loss” and “other expense” are grouped together as “other expense” under the required Irish Companies Acts format in the consolidated profit and loss account. (3) “Gain on divestiture” is included as “other income” under the required Irish Companies Acts format in the consolidated profit and loss account. Turnover. Turnover increased $151.3 million, or 14.3%, to $1,207.6 million during the year ended December 31, 2018, from $1,056.2 million during the year ended December 31, 2017. The increase in turnover during the year ended December 31, 2018, was primarily due to higher turnover in our orphan and rheumatology segment. The following table presents a summary of total turnover attributed to geographic sources for the years ended December 31, 2018 and 2017 (in thousands): Year Ended December 31, 2018 Year Ended December 31, 2017 % of Total % of Total Amount Turnover Amount Turnover United States $ 1,186,519 98 % $ 1,026,527 97 % Rest of world 21,051 2 % 29,704 3 % Total turnover $ 1,207,570 $ 1,056,231 The following table reflects the components of turnover for the years ended December 31, 2018 and 2017 (in thousands): Year Ended December 31, Change Change 2018 2017 $ % KRYSTEXXA $ 258,920 $ 156,483 $ 102,437 65 % RAVICTI 226,650 193,918 32,732 17 % PROCYSBI 154,895 137,740 17,155 12 % ACTIMMUNE 105,563 110,993 (5,430 ) (5 )% RAYOS 61,067 52,125 8,942 17 % BUPHENYL 21,810 20,792 1,018 5 % LODOTRA 2,067 5,393 (3,326 ) (62 )% QUINSAIR 504 3,442 (2,938 ) (85 )% Orphan and Rheumatology turnover $ 831,476 $ 680,886 $ 150,590 22 % PENNSAID 2% 190,206 191,050 (844 ) (0 )% DUEXIS 114,672 121,161 (6,489 ) (5 )% VIMOVO 67,646 57,666 9,980 17 % MIGERGOT 3,570 5,468 (1,898 ) (35 )% Primary care turnover $ 376,094 $ 375,345 $ 749 0 % Total turnover $ 1,207,570 $ 1,056,231 $ 151,339 14 % Orphan and Rheumatology KRYSTEXXA.
Details
-
File Typepdf
-
Upload Time-
-
Content LanguagesEnglish
-
Upload UserAnonymous/Not logged-in
-
File Pages154 Page
-
File Size-