CALDERWOOD & HARKNESS LLP ATTORNEYS AT LAW
CALDERWOOD & HARKNESS LLP
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www.calderwoodharkness.com
July 8, 2022
VIA FIRST CLASS MAIL AND SECURE E-FAX
Revenue Agent Patricia Dunleavy Internal Revenue Service Large Business & International Division Examination Team ID: LB&I-NE-TP-2022-00641
Re: Examination of Penterra Pharmaceuticals Corp. Employer Identification Number: 22-3741856 Tax Years Under Examination: 2017, 2018, 2019, 2020 Response to Information Document Request No. 1 — Corporate Structure and Organizational Charts
Dear Revenue Agent Dunleavy:
This firm represents Penterra Pharmaceuticals Corp. ("PPC" or the "Company") in connection with the above-referenced examination conducted by the Internal Revenue Service, Large Business & International Division. Our authority to represent PPC in this matter is established pursuant to IRS Form 2848 (Power of Attorney and Declaration of Representative), filed with the Service on June 8, 2022, designating the following Calderwood & Harkness LLP attorneys as PPC's authorized representatives: Leonard Cross, Sylvia Hartwell, Garrett Simmons, and Leila Nazari (C&H Matter Number 1018-00009).
We hereby acknowledge receipt of Information Document Request No. 1 ("IDR No. 1"), dated June 14, 2022, which requested the production of PPC's global corporate and organizational structure, including ownership diagrams and functional organizational charts, for the tax years under examination — taxable years ending December 31, 2017, December 31, 2018, December 31, 2019, and December 31, 2020 (the "Examination Period"). This letter constitutes PPC's complete response to IDR No. 1.
All documents, information, and representations contained herein or enclosed herewith are produced subject to the reservations of rights set forth in Section 7 below. Nothing in this response shall be construed as a waiver of any applicable privilege — including, without limitation, the attorney-client privilege and the work-product doctrine — or of any other right, objection, or defense available to PPC under applicable law, regulation, or administrative guidance.
Section 1 — Overview of the Penterra Pharmaceuticals Corp. Global Corporate Structure
The following is a narrative overview of PPC's global corporate structure as it existed during the Examination Period. This overview covers the entities that are directly relevant to the transfer pricing issues identified by the examination team in IDR No. 1 and in preliminary correspondence. A diagram of the ownership structure is enclosed as Enclosure 1, and detailed functional organizational charts are enclosed as Enclosures 2 through 4. A consolidated table of entity information is enclosed as Enclosure 5.
1.1 Parent Entity — Penterra Pharmaceuticals Corp.
Full Legal Name: Penterra Pharmaceuticals Corp.
Entity Type: Corporation organized and existing under the laws of the State of Delaware, originally incorporated on September 12, 1997.
Public Company Status: PPC is publicly traded on the Nasdaq Stock Market under the ticker symbol PPCA. The Company has been publicly listed since its initial public offering on March 28, 2003.
Headquarters: 2200 Independence Boulevard, Princeton Junction, New Jersey 08550.
Fiscal Year-End: December 31.
Employer Identification Number: 22-3741856.
Industry Classification: Specialty pharmaceuticals and biotechnology. PPC's therapeutic areas of focus are oncology, immunology, and rare-disease therapeutics. The Company engages in the discovery, development, manufacture, and commercialization of innovative pharmaceutical products across these three therapeutic verticals.
Key Marketed Products: PPC's principal marketed products during the Examination Period included the following:
• Veritaxol — An oral small-molecule kinase inhibitor approved for the treatment of certain advanced-stage solid tumors in oncology. Veritaxol received initial U.S. Food and Drug Administration ("FDA") approval in 2014 and was subsequently approved in the European Union, Japan, and numerous other jurisdictions.
• Imvara — A biologic immunomodulatory agent (monoclonal antibody) indicated for the treatment of moderate-to-severe autoimmune conditions in immunology. Imvara received FDA approval in 2016 and European Medicines Agency ("EMA") marketing authorization in 2017.
• Cerulon — An enzyme-replacement therapy approved for the treatment of a lysosomal storage disorder classified as a rare disease. Cerulon received FDA orphan drug designation and was approved in 2015.
Financial Overview (FY 2020): For the fiscal year ended December 31, 2020, PPC reported consolidated annual revenues of approximately $6.82 billion and consolidated pre-tax income of approximately $1.47 billion, as reported in its audited consolidated financial statements and Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission.
Global Workforce: As of December 31, 2020, PPC and its subsidiaries employed approximately 14,500 individuals worldwide, the majority of whom were based in the United States.
U.S. Tax Filing Status: PPC is the common parent and ultimate parent entity of the Penterra Pharmaceuticals affiliated group and is the U.S. taxpayer that files consolidated federal income tax returns (Forms 1120) for each of the tax years at issue. PPC is the reporting entity for purposes of IRS Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) with respect to its controlled foreign corporations.
Key Officers During the Examination Period:
• Chief Executive Officer: Catherine Falk
• Chief Financial Officer: Rajesh Iyer
• General Counsel: Deborah Staines
• Vice President, Global Tax: Marcus Whitfield
Each of these officers served in their respective capacities throughout the entirety of the Examination Period, i.e., from January 1, 2017 through December 31, 2020.
1.2 Intermediate Holding Company — Penterra Holdings Luxembourg S.à r.l.
Full Legal Name: Penterra Holdings Luxembourg S.à r.l. ("PHL").
Entity Type: Société à responsabilité limitée organized and existing under the laws of the Grand Duchy of Luxembourg.
Luxembourg Registre de Commerce et des Sociétés (RCS) Number: B 168452.
Registered Office: 14, rue Aldringen, L-1118 Luxembourg, Grand Duchy of Luxembourg.
Ownership: PHL is 100% owned by PPC. PPC holds all outstanding equity interests (parts sociales) in PHL.
Function: PHL serves as an intermediate holding entity within the PPC group corporate structure. PHL's sole function is to hold the equity interests in Penterra Biopharma International DAC ("PBI"), described in Section 1.3 below. PHL is the 100% owner of PBI. PHL holds no employees and conducts no operating activities. PHL does not maintain a physical office separate from its registered agent's address in Luxembourg, and its corporate governance is administered by a Luxembourg-domiciled corporate services provider.
U.S. Federal Income Tax Classification: PHL is treated as a disregarded entity for U.S. federal income tax purposes. Accordingly, for U.S. tax purposes, PHL's sole asset (its equity interest in PBI) and any associated items of income, deduction, gain, or loss are treated as those of PPC, PHL's regarded owner.
PHL's status as a disregarded entity was established by the filing of IRS Form 8832 (Entity Classification Election) and has been in effect continuously since PHL's formation in 2011. PHL's disregarded entity status was in effect throughout the Examination Period and remains in effect as of the date of this response.
1.3 Irish IP-Holding and Commercialization Subsidiary — Penterra Biopharma International DAC
Full Legal Name: Penterra Biopharma International DAC ("PBI").
Entity Type: Designated Activity Company organized and existing under the laws of Ireland, registered with the Companies Registration Office of Ireland.
Irish Tax Reference Number: 3218764T.
Registered Office: 4th Floor, Claremont House, Sandyford Business Park, Dublin D18 K7T4, Ireland.
Date of Incorporation: March 15, 2012. PBI was incorporated in Ireland as part of PPC's strategic initiative to establish a non-Americas operational hub to manage the commercialization, regulatory affairs, and supply-chain functions for PPC's product portfolio in markets outside the Americas.
Ownership: PBI is 100% owned by PHL. As a consequence of PHL's treatment as a disregarded entity for U.S. federal income tax purposes, PBI is treated as a wholly owned subsidiary of PPC for such purposes.
Function: PBI serves as the IP-holding company and principal entity for the commercialization of PPC's pharmaceutical products in non-Americas markets. Specifically, PBI manages and oversees all aspects of contract manufacturing, distribution, regulatory submissions, pricing, reimbursement, and market access across the Europe, Middle East, and Africa ("EMEA") region and the Asia-Pacific ("APAC") region. PBI holds the relevant marketing authorizations (or is the marketing authorization holder's delegate) in a significant number of these jurisdictions and is the commercial counterparty to third-party distributors and in-market partners.
Cost-Sharing Arrangement Participation: PBI is a participant in a qualified cost-sharing arrangement ("CSA") with PPC, effective as of July 1, 2012, governed by Treasury Regulation § 1.482-7. Under the CSA, PBI co-funds qualified research and development costs incurred by the PPC group in exchange for the right to exploit certain pharmaceutical intellectual property outside the Americas. For purposes of the CSA, the "Americas" territory is defined as North America, Central America, South America, and the Caribbean. In connection with the formation of the CSA, PBI made a platform contribution transaction ("PCT") payment of $312 million to PPC on July 1, 2012, reflecting the value of pre-existing intangible property contributed by PPC to the CSA. The CSA remained in effect and without material amendment throughout the Examination Period.
Legacy IP License: In addition to its CSA participation, PBI is the licensee under a separate intercompany license agreement with PPC (the "Legacy IP License Agreement") covering certain pre-2012 vintage pharmaceutical compounds that were not included within the scope of the CSA. Under the Legacy IP License Agreement, PBI pays PPC a royalty of 4.5% of net sales generated in non-Americas territories from the exploitation of these legacy compounds.
Employees and Operations: PBI's workforce grew from 52 employees at the time of its establishment in 2012 to approximately 120 employees as of January 1, 2017, and reached 185 employees by December 31, 2020. PBI's personnel include individuals performing functions in the following areas:
• Regulatory Affairs: Responsible for preparing, submitting, and maintaining marketing authorization applications and post-approval regulatory commitments across 68 country markets in EMEA and APAC.
• Medical Affairs: Responsible for medical information, pharmacovigilance support, medical education, and key opinion leader engagement in non-Americas territories.
• Commercial Strategy: Responsible for pricing and reimbursement strategy, market entry planning, competitive intelligence, and distribution partner selection and management.
• Supply Chain Management: Responsible for demand planning, inventory management, cold-chain logistics, and coordination with PMI (contract manufacturer, described in Section 1.4 below) and third-party logistics providers.
PBI's personnel exercised decision-making authority over all material aspects of non-Americas commercialization throughout the Examination Period, including but not limited to pricing determinations, market entry strategy, distribution partner selection and contract negotiation, and regulatory submissions in each of the 68 country markets served by PBI.
Managing Director: Aidan Naughton served as PBI's Managing Director throughout the Examination Period. Mr. Naughton reported to PPC's corporate leadership, including directly to the Chief Executive Officer and Chief Financial Officer, on matters relating to PBI's operations and financial performance.
Office Facilities: PBI maintained approximately 18,000 square feet of office space at Sandyford Business Park, Dublin, Ireland, which served as its operational headquarters throughout the Examination Period.
Corporate Governance: PBI held quarterly board of directors meetings in Dublin, Ireland, throughout the Examination Period. A total of 42 board meetings were conducted during the four-year Examination Period (2017–2020). Minutes of these board meetings reflect deliberation and decision-making on matters including annual budgets, strategic planning, significant commercial agreements, regulatory strategy, and capital expenditure approvals.
Banking Relationship: PBI's principal Irish banking relationship during the Examination Period was with Glenmore Bank Ireland plc, through which PBI maintained its operating accounts and executed intercompany treasury transactions.
Financial Overview (FY 2020): For the fiscal year ended December 31, 2020, PBI reported revenues of approximately €2.14 billion and pre-tax income of approximately €1.06 billion, as reflected in PBI's Irish statutory financial statements prepared in accordance with Irish Generally Accepted Accounting Principles ("Irish GAAP") and filed with the Companies Registration Office of Ireland.
Irish Tax Advisors: PBI's Irish tax compliance and advisory services during the Examination Period were provided by Thornbury & Keogh, Chartered Tax Advisors, 22 Fitzwilliam Square, Dublin 2, D02 YH68, Ireland. The lead engagement partner at Thornbury & Keogh was Ciarán Thornbury.
1.4 Contract Manufacturer — Penterra Manufacturing Ireland Ltd.
Full Legal Name: Penterra Manufacturing Ireland Ltd. ("PMI").
Entity Type: Irish private company limited by shares, registered with the Companies Registration Office of Ireland.
Irish CRO Number: 512347.
Registered Office: Unit 7, Ringaskiddy Industrial Estate, Co. Cork T12 PX29, Ireland.
Ownership: PMI is 100% owned by PBI. Accordingly, PMI is an indirect subsidiary of PPC through the ownership chain of PPC → PHL → PBI → PMI.
Function: PMI operates as a contract manufacturer of PPC's oncology and immunology biologics destined for non-Americas markets. PMI's manufacturing operations are conducted at its facility in Ringaskiddy Industrial Estate, County Cork, Ireland. PMI manufactures finished pharmaceutical products — including both drug substance and drug product for biologic therapies — under Good Manufacturing Practice ("GMP") conditions for distribution by PBI in EMEA and APAC territories.
Intercompany Arrangement: PMI operates under a cost-plus intercompany contract manufacturing agreement with PBI. Under this agreement, PMI is compensated for its manufacturing services on a fully loaded cost-plus basis at a markup of 8% over total costs incurred. The contract manufacturing agreement was in effect throughout the Examination Period and was not materially amended during that time.
Employees: As of December 31, 2020, PMI employed approximately 620 individuals. PMI's workforce is principally composed of manufacturing, quality assurance, quality control, engineering, and site operations personnel.
Section 2 — Ownership Structure Diagram
The global corporate ownership structure of PPC and its relevant subsidiaries during the Examination Period is depicted in the ownership structure diagram enclosed as Enclosure 1 to this response.
The diagram illustrates the following ownership chain, which reflects the corporate structure in place during each of the four tax years at issue (2017, 2018, 2019, and 2020):
Penterra Pharmaceuticals Corp. (Delaware Corporation; Nasdaq: PPCA; EIN: 22-3741856) U.S. Parent — Ultimate Parent Entity of the Affiliated Group
↓ 100% ownership
Penterra Holdings Luxembourg S.à r.l. (Luxembourg S.à r.l.; RCS No. B 168452) Intermediate Holding Entity — Disregarded Entity for U.S. Federal Income Tax Purposes
↓ 100% ownership
Penterra Biopharma International DAC (Irish DAC; Tax Ref. No. 3218764T) IP-Holding Company — CSA Participant — Non-Americas Commercialization Principal
↓ 100% ownership
Penterra Manufacturing Ireland Ltd. (Irish Private Limited Company; CRO No. 512347) Contract Manufacturer — Cost + 8% Markup
The ownership structure depicted above and in Enclosure 1 remained unchanged throughout the Examination Period. This structure has been in place since PBI's incorporation on March 15, 2012, and PMI's subsequent acquisition by PBI. No restructurings, reorganizations, or changes in ownership occurred with respect to these entities during the Examination Period.
As noted in Section 5 below, PPC has additional domestic and foreign subsidiaries that are depicted on the global organizational chart in Enclosure 1 for completeness. However, the entities described above — PPC, PHL, PBI, and PMI — are the entities directly relevant to the transfer pricing issues under examination.
Section 3 — Functional Organizational Charts
In addition to the ownership structure diagram (Enclosure 1), PPC has prepared and enclosed functional organizational charts for PPC (U.S. operations), PBI (Dublin operations), and PMI (Cork manufacturing operations). These charts are described below.
3.1 PPC U.S. Functional Organizational Chart (Enclosure 2)
The PPC U.S. functional organizational chart is enclosed as Enclosure 2 to this response. This chart depicts the corporate leadership structure and key functional departments of PPC's U.S.-based operations during the Examination Period.
The organizational chart reflects the following corporate leadership positions:
• Chief Executive Officer: Catherine Falk
• Chief Financial Officer: Rajesh Iyer
• General Counsel: Deborah Staines
• Vice President, Global Tax: Marcus Whitfield
The chart further depicts PPC's principal U.S.-based functional departments, including:
• Research & Development: PPC's R&D function is headquartered in Princeton Junction, New Jersey, with additional research facilities in Cambridge, Massachusetts and San Diego, California. The R&D organization encompasses discovery research, preclinical development, clinical development, and regulatory sciences for PPC's global product pipeline.
• Commercial (Americas): PPC's commercial operations for the Americas territory, including the United States, Canada, and Latin American markets, are managed from the Princeton Junction headquarters.
• Manufacturing (U.S.): PPC operates manufacturing facilities in the United States for the production of pharmaceutical products distributed in the Americas territory.
• Regulatory Affairs (U.S.): PPC maintains a U.S. regulatory affairs function responsible for FDA submissions, post-approval commitments, and regulatory strategy for the Americas territory.
• Corporate Functions: Including finance, legal, human resources, information technology, investor relations, corporate communications, and internal audit.
As of December 31, 2020, PPC and its consolidated subsidiaries employed approximately 14,500 individuals worldwide, the majority of whom were based at PPC's U.S. operations.
Independent Auditor and Tax Return Preparer: PPC's independent registered public accounting firm and its tax return preparer for the Examination Period was Crestfield & Associates LLP, 1200 Avenue of the Americas, New York, New York 10036. The audit engagement partner was Martin Ogilvy, CPA, and the transfer pricing engagement partner was Susan Lam, CPA.
3.2 PBI Dublin Functional Organizational Chart (Enclosure 3)
The PBI functional organizational chart is enclosed as Enclosure 3 to this response. This chart depicts the organizational structure of PBI's Dublin-based operations during the Examination Period.
The organizational chart shows PBI's Managing Director, Aidan Naughton, at the top of the PBI organizational hierarchy, reporting to PPC's corporate leadership (CEO Catherine Falk and CFO Rajesh Iyer). Below the Managing Director, the chart identifies the following functional departments, each headed by a department director or senior manager based in Dublin:
• Regulatory Affairs
• Medical Affairs
• Commercial Strategy
• Supply Chain Management
The organizational chart includes headcount detail reflecting the growth of PBI's workforce over time:
As noted in Section 1.3 above, PBI's personnel exercised decision-making authority over all material aspects of non-Americas commercialization during the Examination Period. This included pricing and reimbursement determinations, market entry strategy, distribution partner selection and contract negotiation, and regulatory submissions across 68 country markets in the EMEA and APAC regions.
3.3 PMI Ringaskiddy Functional Organizational Chart (Enclosure 4)
The PMI functional organizational chart is enclosed as Enclosure 4 to this response. This chart depicts the organizational structure of PMI's manufacturing operations at Ringaskiddy Industrial Estate, County Cork, Ireland, during the Examination Period.
The organizational chart reflects PMI's 620-person workforce, which is principally engaged in the manufacture of biologic pharmaceutical products (including drug substance and drug product) for non-Americas markets. PMI's operations are organized into the following functional areas:
• Manufacturing operations (drug substance and drug product)
• Quality assurance
• Quality control and laboratory services
• Engineering and site maintenance
• Supply chain and warehouse operations
• Site administration
PMI reports operationally to PBI under the terms of the intercompany contract manufacturing agreement described in Section 1.4 and Section 4 of this response. PMI's site director reports to PBI's Managing Director, Aidan Naughton, on operational matters, and to PBI's Supply Chain Management function on production scheduling and demand planning.
Section 4 — Key Intercompany Relationships and Agreements (Summary)
For the convenience of the examination team, PPC provides below a brief summary of the principal intercompany arrangements among the entities described in this response that are relevant to the transfer pricing issues under examination. PPC notes that this summary is provided for informational context only; copies of the underlying agreements are not being produced with this response but will be produced in response to subsequent IDRs as applicable and as may be requested by the examination team.
1. Cost-Sharing Arrangement ("CSA"): PPC and PBI are parties to a qualified cost-sharing arrangement, effective July 1, 2012, governed by the provisions of Treasury Regulation § 1.482-7. Under the CSA, PBI co-funds qualified research and development costs incurred by the PPC group in proportion to its reasonably anticipated benefits from the exploitation of the intangible property developed under the CSA. In exchange for its cost-sharing contributions, PBI receives the right to exploit certain pharmaceutical intellectual property (including patents, know-how, trade secrets, regulatory data, and marketing intangibles) in territories outside the Americas (i.e., EMEA and APAC). In connection with the formation of the CSA, PBI made a platform contribution transaction ("PCT") payment of $312 million to PPC on July 1, 2012, which reflected the arm's-length value of pre-existing intangible property contributed by PPC to the arrangement as of the CSA's effective date. The CSA remained in effect and without material amendment throughout the Examination Period. PBI's cost-sharing contributions and the PCT payment were determined using methodologies and analyses that PPC believes to be consistent with the arm's-length standard and the requirements of Treasury Regulation § 1.482-7.
2. Legacy IP License Agreement: PPC (as licensor) and PBI (as licensee) are parties to an intercompany license agreement for the exploitation of certain pharmaceutical compounds that were developed and commercialized prior to the formation of the CSA on July 1, 2012, and which are not included within the scope of the CSA (the "Legacy Compounds"). Under the Legacy IP License Agreement, PBI pays PPC a royalty of 4.5% of net sales generated by PBI from the exploitation of the Legacy Compounds in non-Americas territories. The royalty rate was established based on a benchmarking analysis prepared at the time the agreement was executed and has remained unchanged throughout the Examination Period.
3. Contract Manufacturing Agreement: PBI (as principal) and PMI (as contract manufacturer) are parties to an intercompany contract manufacturing agreement under which PMI manufactures biologic pharmaceutical products for PBI on a fully loaded cost-plus basis. PMI is compensated at a markup of 8% over its total costs incurred in performing manufacturing services. The cost-plus markup was established based on a benchmarking analysis and has remained unchanged throughout the Examination Period.
PPC anticipates that the examination team may request copies of these agreements, along with supporting economic analyses and transfer pricing documentation, in subsequent IDRs. PPC will produce such documents in response to those requests as appropriate, subject to applicable privileges and reservations of rights.
Section 5 — Additional Entities and Contextual Information
PPC notes that its global corporate structure includes a number of additional domestic and foreign subsidiaries beyond the four entities described in detail in Sections 1 through 4 of this response. These additional entities are shown on the global corporate ownership structure diagram (Enclosure 1) for completeness. However, these additional entities are not participants in the cost-sharing arrangement, the Legacy IP License Agreement, or the intercompany contract manufacturing agreement at issue in this examination, and they are not otherwise directly relevant to the transfer pricing issues identified by the examination team. PPC reserves the right to provide additional information regarding these entities if requested by the examination team in subsequent IDRs.
For the further context of the examination team, PPC provides the following additional information:
Primary Lending Relationship: PPC maintains a $1.5 billion revolving credit facility with Hargrove National Bank, N.A., 100 Federal Street, Boston, Massachusetts 02110. The relationship manager for this facility is Christine Bellucci, Senior Vice President. PPC notes this lending relationship for context only, as the credit agreement governing the revolving credit facility contains certain tax-related covenants and representations that may be relevant to the examination team's review. PPC does not produce the credit agreement with this response but will do so if requested.
Largest Institutional Shareholder: Ridgeview Capital Management LP, 400 Park Avenue, 18th Floor, New York, New York 10022 (Managing Partner: Douglas Everett), is PPC's largest institutional shareholder, holding approximately 8.3% of PPC's outstanding shares of common stock as of the most recently available public filings during the Examination Period. This information is noted for completeness in the context of PPC's ownership profile and is derived from publicly available Schedule 13G filings with the Securities and Exchange Commission.
IRS Compliance Assurance Process: PPC was not a participant in the IRS Compliance Assurance Process ("CAP") for any of the tax years at issue in this examination.
Section 6 — List of Enclosures
The following enclosures are attached to and incorporated by reference into this response:
Enclosure 1: Global Corporate Ownership Structure Diagram — depicting the ownership chain from PPC (Delaware) → PHL (Luxembourg) → PBI (Ireland) → PMI (Ireland), reflecting the corporate structure as in effect during each of the tax years 2017, 2018, 2019, and 2020.
Enclosure 2: PPC U.S. Functional Organizational Chart — depicting PPC's corporate leadership (CEO, CFO, General Counsel, VP Global Tax) and key U.S.-based functional departments (R&D, Commercial — Americas, Manufacturing, Regulatory, Corporate Functions).
Enclosure 3: PBI Dublin Functional Organizational Chart — depicting PBI's organizational structure under Managing Director Aidan Naughton, including functional departments (Regulatory Affairs, Medical Affairs, Commercial Strategy, Supply Chain Management) and employee headcount detail by year (2012–2020).
Enclosure 4: PMI Ringaskiddy Functional Organizational Chart — depicting PMI's manufacturing operations at Ringaskiddy Industrial Estate, County Cork, Ireland, including functional areas and workforce composition.
Enclosure 5: Table of Entity Information — a summary table providing the following information for each of PPC, PHL, PBI, and PMI: full legal name, entity type, jurisdiction of organization, registration or identification number(s), registered office address, primary function within the PPC group, and U.S. federal income tax classification (where applicable).
Section 7 — Privilege and Rights Reservation
This response is made without prejudice to PPC's right to supplement, clarify, correct, or amend any of the information or documents provided herein or enclosed herewith, whether in response to subsequent IDRs or otherwise, as additional information becomes available or as PPC deems appropriate.
PPC reserves all rights, objections, and defenses available to it under applicable law, regulation, treaty, and administrative guidance, including but not limited to the right to challenge any proposed adjustments, assert any available defenses, and pursue any available administrative or judicial remedies.
The production of documents and information in this response does not constitute, and shall not be construed as constituting, a waiver of the attorney-client privilege, the work-product doctrine, or any other applicable privilege, immunity, or protection. PPC expressly reserves all such privileges with respect to documents and communications not produced herein.
In particular, PPC advises the examination team that certain internal memoranda, legal analyses, and communications between PPC (including its officers, employees, and agents) and its counsel, Calderwood & Harkness LLP, or consultants engaged under the direction of counsel, are being withheld from production as privileged. These withheld materials include, without limitation, documents and communications involving Whitmore Valuation Group LLC, which has been retained by PPC under a Kovel arrangement pursuant to the direction and supervision of Calderwood & Harkness LLP (Kovel Reference No. 1018-00009-KV, effective June 20, 2022). Whitmore Valuation Group LLC's work product has been prepared at the direction of counsel in anticipation of this examination and is protected by the attorney-client privilege and the work-product doctrine. To the extent the examination team requests production of any documents that PPC contends are privileged, PPC will prepare and provide a privilege log identifying such documents.
Closing
Should Revenue Agent Dunleavy, Supervisory Revenue Agent Gerald Meskill, or any other member of the examination team have any questions regarding this response or require any clarifications, PPC's authorized representatives are available to discuss such matters at your convenience. PPC is prepared to provide additional information as may be reasonably requested by the examination team, subject to applicable privileges and the reservations of rights stated herein.
All future correspondence and communications regarding this examination should be directed to Calderwood & Harkness LLP as PPC's authorized representatives at the contact information set forth below:
Leonard Cross, Partner Direct Dial: (215) 864-7215
Email: lcross@calderwoodharkness.com
Garrett Simmons, Senior Associate Direct Dial: (215) 864-7288
Email: gsimmons@calderwoodharkness.com
Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Leonard Cross, Partner 1735 Market Street, Suite 3100 Philadelphia, PA 19103
cc: (via email)
Marcus Whitfield, Vice President, Global Tax, Penterra Pharmaceuticals Corp.
Deborah Staines, General Counsel, Penterra Pharmaceuticals Corp.
Sylvia Hartwell, Calderwood & Harkness LLP
Garrett Simmons, Calderwood & Harkness LLP
Leila Nazari, Calderwood & Harkness LLP
Enclosures (5)
| Year | Approximate Headcount |
| 2012 (establishment) | 52 |
| 2017 (beginning of Examination Period) | 120 |
| 2018 | 138 |
| 2019 | 162 |
| 2020 (end of Examination Period) | 185 |