Contract analysis

I. DESCRIPTION OF IDR NO. 25 REQUEST IDR No. 25 requests that PPC produce copies of the third-party pharmaceutical license agreements identified as comparable uncontrolled transactions ("CUTs") in PPC's benchmarking analysis. Specifically, the IDR requests copies of the license agreements that form the basis for PPC's conclusion that the 4.5% royalty rate applied to legacy compound net sales in the non-Americas terri

II. SCOPE OF PRODUCTION AND PRIVILEGE RESERVATIONS In response to IDR No. 25, PPC produces herewith redacted versions of fourteen (14) comparable uncontrolled pharmaceutical license agreements identified in the CUT analysis. These agreements have been Bates-stamped sequentially as PPC-IDR25-000001 through PPC-IDR25-000847 and are produced in PDF format on a single encrypted USB drive, transmitted concurrently with th

III. SUMMARY OF THE CUT ANALYSIS METHODOLOGY A. Background on the Legacy IP License PPC licensed certain legacy pharmaceutical compounds to PBI under an intercompany license agreement effective January 1, 2013 (the "Legacy IP License"). The compounds subject to the Legacy IP License are those developed and commercially launched by PPC prior to 2012 and which are not covered by the qualified cost-sharing arrangement (

IV. INDEX OF PRODUCED DOCUMENTS The following table identifies each of the 14 comparable uncontrolled license agreements produced herewith, together with key identifying information and comparability factors. Party names have been anonymized or redacted where required by confidentiality obligations or database access agreements; the examination team is referred to the unredacted versions of the agreements (where avai

V. COMPARABILITY ADJUSTMENTS NARRATIVE As noted in Section III.C above, adjustments for comparability differences were considered and applied to the 14 CUT agreements in accordance with Treasury Regulation § 1.482-4(c). The following narrative summarizes the principal adjustments and the rationale therefor. Development Stage. Thirteen of the 14 CUT agreements involve compounds that were approved for commercial sale a

VI. DISTINCTION FROM IRS POSITION PPC understands that the IRS examination team, through IRS Economist Dr. Alan Washburne, may be considering an alternative royalty rate of 11.0% based on a different selection of CUT comparables and a different application of comparability criteria. PPC has not been provided with the details of Dr. Washburne's analysis and therefore cannot address it in full at this time. However, PP

VII. SUPPLEMENTAL PRODUCTION NOTES The following additional notes are provided with respect to the documents produced herewith:

1. Format and Bates Numbering. Documents are produced in redacted PDF format and have been Bates-stamped sequentially as PPC-IDR25-000001 through PPC-IDR25-000847. Each document is identified by its CUT reference number (CUT-01 through CUT-14) and the corresponding Bates range, as set forth in the table in Section IV above.

2. Foreign Language Documents. One of the produced agreements (CUT-03) includes certain schedules and appendices originally drafted in German. A certified English translation of those schedules and appendices, prepared by a qualified translator, is included within the Bates-stamped production immediately following the original-language pages. All other produced agreements are in English.

3. Supplementation. PPC will supplement this production if additional comparable agreements are identified through ongoing analysis. PPC's advisors continue to monitor publicly available and commercial database sources for newly disclosed or newly identified license agreements that may be relevant to the CUT analysis. Any supplemental production will be made on a timely basis and will be accompanied by appropriate no

4. Whitmore Valuation Group Report. The detailed CUT analysis report prepared by Whitmore Valuation Group LLC, which sets forth the full search methodology, comparability analysis, adjustments, and statistical results, was prepared at the direction of counsel under the Kovel arrangement referenced herein. PPC considers this report to be protected by the attorney-client privilege and the work-product doctrine. PPC is

VIII. RESERVATION OF RIGHTS PPC expressly reserves all rights, objections, privileges, and defenses available to it under applicable law, regulation, and administrative guidance, including but not limited to the following: (a) Attorney-client privilege. PPC reserves the attorney-client privilege with respect to all communications between PPC and its counsel (Calderwood & Harkness LLP) and all materials prepared by or

IX. CONTACT INFORMATION AND AVAILABILITY All inquiries regarding this response, the produced documents, and the CUT analysis should be directed to: Garrett Simmons, Lead Associate Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 864-7244 Email: g.simmons@calderwoodharkness.com Leonard Cross, Responsible Partner Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Ph

1. Fourteen (14) redacted comparable license agreements (CUT-01 through CUT-14), Bates-stamped PPC-IDR25-000001 through PPC-IDR25-000847 (produced on encrypted USB drive)

2. Updated privilege log — supplemental entries related to IDR No. 25 Tax Year | Non-Americas Net Sales | Royalty Rate | Royalty Payment 2017 | $814,600,000 | 4.5% | $36,657,000 2018 | $762,300,000 | 4.5% | $34,303,500 2019 | $691,800,000 | 4.5% | $31,131,000 2020 | $624,100,000 | 4.5% | $28,084,500 CUT Ref. | Description | Date | Geographic Scope | Royalty Rate | Key Comparability Factors | Source | Bates Range CUT-