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CALDERWOOD & HARKNESS LLP Attorneys at Law

1735 Market Street, Suite 3100 Philadelphia, PA 19103

Telephone: (215) 864-7000 Facsimile: (215) 864-7001 www.calderwoodharkness.com

September 5, 2022

C&H Matter No. 1018-00009

VIA HAND DELIVERY AND SECURE FILE TRANSFER

Revenue Agent Patricia Dunleavy Internal Revenue Service Large Business & International Division 600 Arch Street, Room 6214 Philadelphia, PA 19106

Re: Examination of Penterra Pharmaceuticals Corp. EIN: 22-3741856 Exam Team ID: LB&I-NE-TP-2022-00641 Tax Years Under Examination: 2017, 2018, 2019, 2020

Response to Information Document Request No. 8 — Personnel and Headcount Data for Penterra Biopharma International DAC

Dear Revenue Agent Dunleavy:

We write on behalf of our client, Penterra Pharmaceuticals Corp. ("PPC"), in response to Information Document Request No. 8 ("IDR No. 8"), issued by the examination team on August 12, 2022. This letter is submitted by Leonard Cross, Responsible Partner, Tax Department, Calderwood & Harkness LLP ("C&H"), who, together with Sylvia Hartwell, Garrett Simmons, and Leila Nazari of this firm, is authorized to represent PPC before the Internal Revenue Service pursuant to IRS Form 2848, Power of Attorney and Declaration of Representative, filed with the examination team on June 8, 2022.

IDR No. 8 requested personnel and headcount information for Penterra Biopharma International DAC ("PBI"), an Irish Designated Activity Company and wholly owned subsidiary of PPC. PBI is held by PPC through Penterra Holdings Luxembourg S.à r.l. ("PH Lux"), a Luxembourg private limited liability company that has elected to be treated as a disregarded entity for U.S. federal income tax purposes pursuant to Treasury Regulations § 301.7701-3. PBI's registered office is located at 4th Floor, Claremont House, Sandyford Business Park, Dublin D18 K7T4, Ireland. PBI is registered with the Irish Companies Registration Office under CRO Number 504821.

As a preliminary matter, all documents and information produced herewith are subject to the reservation of rights set forth in C&H's initial response letter dated June 24, 2022, and the privilege protocol communicated to the examination team on July 1, 2022, as supplemented on August 3, 2022. Nothing in this production constitutes a waiver of any privilege, protection, or other right, and all such rights are expressly preserved, as described more fully in Section 6 below.

Set forth below is a summary of the documents produced in response to IDR No. 8, together with contextual information regarding PBI's personnel and organizational structure that we believe will be helpful to the examination team's review.

1. Summary of Documents Produced

In response to IDR No. 8, PPC is producing the following documents and exhibits, each of which is described in greater detail in the sections that follow:

All documents produced in connection with this response bear Bates numbers PPC-IDR08-000001 through PPC-IDR08-000347. These Bates numbers are sequential and correspond to the Master Document Production Index maintained by C&H, which has been updated to reflect this production. The Master Document Production Index, a copy of which was most recently provided to the examination team on August 19, 2022, catalogues all documents produced by PPC across all IDR responses in this examination and may be consulted for cross-referencing purposes.

Where documents produced herewith relate to or supplement documents previously produced in response to earlier IDRs, such cross-references are noted in the relevant sections below.

2. PBI Headcount Overview

2.1 Historical Headcount Growth (2012–2020)

PBI was incorporated under the laws of Ireland on March 15, 2012, as a Designated Activity Company within the meaning of the Companies Act 2014 (as amended). At the time of its establishment in 2012, PBI commenced operations with 52 full-time equivalent employees based at its offices at Sandyford Business Park, Dublin.

PBI's headcount grew steadily over the ensuing years as the entity assumed increasing responsibility for the non-Americas commercialization of PPC's pharmaceutical intellectual property portfolio. This assumption of responsibilities occurred pursuant to the Qualified Cost Sharing Arrangement ("QCSA") entered into between PPC and PBI, effective July 1, 2012 (the "CSA"), copies of which were previously produced to the examination team in connection with IDR No. 3. Under the CSA, PBI obtained rights to exploit PPC's pharmaceutical IP portfolio — including patents, trade secrets, know-how, regulatory dossiers, clinical data, and associated marketing intangibles — in all territories outside of the Americas (the "Non-Americas Territory").

The year-by-year trajectory of PBI's headcount growth from inception through the final year of the examination period is set forth in Exhibit A and is summarized below:

This sustained growth in headcount reflects PBI's expanding operational functions across multiple areas critical to the commercialization and ongoing development of PPC's product portfolio in the Non-Americas Territory. Specifically, PBI built out substantial capabilities in regulatory affairs, medical affairs, commercial strategy, supply-chain management, market access, and related support functions to serve 68 non-Americas country markets spanning the EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific) regions. The personnel growth was driven by the increasing complexity and geographic reach of PBI's commercial operations, including new product launches, expansion into additional country markets, and the assumption of additional Development, Enhancement, Maintenance, Protection, and Exploitation ("DEMPE") functions with respect to PPC's IP portfolio in the Non-Americas Territory.

By 2020, PBI maintained approximately 18,000 square feet of dedicated office space at Sandyford Business Park, Dublin, Ireland, comprising the entirety of the 4th floor and a substantial portion of the 3rd floor of Claremont House. PBI's Dublin office includes dedicated work areas for each of its principal departments, conference facilities, secure document storage, and information technology infrastructure supporting its global operations.

2.2 Headcount by Year for Examination Period (2017–2020)

For the specific tax years under examination, PBI's year-end headcount of full-time equivalent employees on PBI's Irish payroll was as follows:

These figures represent full-time equivalent employees ("FTEs") as reported on PBI's Irish payroll and as reflected in PBI's annual returns filed with the Irish Revenue Commissioners and the Companies Registration Office. The FTE counts include all permanent and fixed-term contract employees on PBI's payroll as of December 31 of the applicable year. Independent contractors, temporary agency workers, and secondees from other Penterra group entities (of whom there were none during the 2017–2020 period) are excluded from these figures.

All PBI employees included in the headcount figures set forth above work from PBI's Dublin office at Sandyford Business Park. PBI does not maintain satellite offices, branch locations, or remote work hubs outside of its Dublin headquarters. To the extent that individual PBI employees traveled to non-Americas country markets in connection with regulatory meetings, medical conferences, commercial negotiations, or distributor oversight, such travel was conducted on a temporary basis and did not alter the employees' primary place of work in Dublin.

2.3 Distinction from Penterra Manufacturing Ireland Ltd. (PMI)

To avoid any potential confusion, PPC wishes to clarify that PBI's headcount figures are separate and distinct from the headcount of Penterra Manufacturing Ireland Ltd. ("PMI"), a separate Irish private limited company registered with the Irish Companies Registration Office under CRO Number 512347. PMI is located at Unit 7, Ringaskiddy Industrial Estate, Co. Cork T12 PX29, Ireland, and operates a large-scale biopharmaceutical manufacturing facility at that location.

PMI has approximately 620 employees, substantially all of whom are engaged in the contract manufacturing of oncology and immunology biologics for the Non-Americas Territory. PMI performs these manufacturing services under a Contract Manufacturing Agreement with PBI, pursuant to which PMI is compensated on a cost-plus basis at a markup of 8% of total manufacturing costs (i.e., cost + 8%). This arrangement was previously documented in PPC's response to IDR No. 5, and copies of the Contract Manufacturing Agreement were produced under Bates numbers PPC-IDR05-000089 through PPC-IDR05-000142.

PMI employees are not included in PBI's headcount figures set forth in this response. PMI and PBI are separately organized, separately managed, and separately staffed Irish entities with distinct functions, facilities, and reporting structures. PMI's employees report to PMI's own management team and are on PMI's separate Irish payroll.

3. PBI Organizational Structure

3.1 Overview of Organizational Charts (Exhibit B)

Exhibit B contains PBI's organizational charts as of year-end for each of the four tax years under examination (2017, 2018, 2019, and 2020). These charts were prepared by PBI's Human Resources function in the ordinary course of business and have been updated and maintained on a regular basis.

PBI is headed by Managing Director Aidan Naughton, who has served in that capacity since PBI's incorporation in 2012. Mr. Naughton reports directly to the PBI Board of Directors, which is composed of a combination of independent non-executive directors and PPC-nominated directors. The composition of the PBI Board of Directors during the examination period was previously provided to the examination team in connection with IDR No. 4.

The organizational charts for each year during the examination period depict the following principal departments and functions within PBI:

1. Office of the Managing Director — Including the Managing Director, his executive assistant, and a small strategic planning team responsible for coordinating cross-functional initiatives and supporting PBI Board activities.

2. Regulatory Affairs — Responsible for managing regulatory submissions, marketing authorization applications, and post-marketing regulatory compliance across 68 non-Americas country markets, including interactions with the European Medicines Agency ("EMA"), national competent authorities, and regulatory bodies in APAC jurisdictions.

3. Medical Affairs — Responsible for medical evidence generation, medical information services, pharmacovigilance coordination, and key opinion leader ("KOL") engagement throughout the Non-Americas Territory.

4. Commercial Strategy and Market Access — Responsible for pricing strategy, market entry analysis, reimbursement and health technology assessment submissions, distribution partner selection and management, and overall commercial planning across all 68 non-Americas country markets.

5. Supply Chain and Distribution Management — Responsible for managing the contract manufacturing relationship with PMI, overseeing finished goods inventory, coordinating logistics and distribution through third-party distribution partners, and ensuring security of supply across the Non-Americas Territory.

6. Finance and Administration — Responsible for PBI's financial operations, including treasury management (PBI maintains its principal banking relationship with Glenmore Bank Ireland plc), financial reporting under both Irish GAAP and U.S. GAAP, tax compliance (Irish corporation tax and transfer pricing), budgeting, and general administrative support.

7. Legal and Compliance — Responsible for in-house legal support relating to intellectual property protection and enforcement in the Non-Americas Territory, regulatory compliance, contract management, data privacy, and anti-bribery and anti-corruption compliance.

The organizational charts show the reporting lines within each department and identify the department heads for each year. The charts also reflect changes in organizational structure over the examination period, including the creation of a dedicated Market Access sub-function within the Commercial Strategy department in 2018 and the expansion of the Regulatory Affairs department to include a dedicated APAC regulatory team in 2019.

The organizational structure reflected in Exhibit B is consistent with PBI's role as the IP-holding company and commercial principal for the non-Americas commercialization of PPC's pharmaceutical product portfolio across the EMEA and APAC territories. Each of PBI's departments performs substantive operational functions that are integral to the commercialization, regulatory maintenance, and ongoing development of PPC's products in the Non-Americas Territory.

3.2 Department-Level Staffing (Exhibit E)

Exhibit E provides a detailed breakdown of PBI's employee headcount by department for each year of the examination period (2017–2020). The following table summarizes the department-level staffing data contained in Exhibit E:

A brief description of each department's principal functions and staffing rationale is set forth below:

Regulatory Affairs. PBI's Regulatory Affairs department is the largest single function within PBI and is responsible for managing regulatory submissions, marketing authorization applications, variations, renewals, and post-marketing commitments across 68 country markets in the Non-Americas Territory. The department grew from 28 employees in 2017 to 44 employees in 2020, reflecting the increasing regulatory complexity associated with PBI's expanding product portfolio and geographic footprint. During the 2017–2020 period, PBI's cumulative regulatory expenditure (including personnel costs, external regulatory consultant fees, and regulatory agency fees) totaled approximately €47.2 million. This figure is documented in PBI's financial records and is consistent with data previously produced in response to IDR No. 6.

Medical Affairs. PBI's Medical Affairs department manages clinical evidence generation, medical information services, pharmacovigilance activities, and KOL engagement programs throughout the Non-Americas Territory. The department's staff of 32 employees (as of year-end 2020) includes medical directors, medical science liaisons, pharmacovigilance specialists, and medical information professionals. These personnel are responsible for maintaining and enhancing the clinical evidence base supporting PBI's marketed products and for ensuring that PBI's medical communications and KOL engagement activities comply with applicable regulatory requirements in each country market.

Commercial Strategy and Market Access. PBI's Commercial Strategy and Market Access department is co-equal in size with Regulatory Affairs and is responsible for making independent pricing, market entry, and distribution partner selection decisions across 68 non-Americas country markets. The department's personnel exercise decision-making authority over commercial terms, pricing submissions to governmental and quasi-governmental payers, health technology assessment dossier preparation, and the negotiation and management of distribution agreements with third-party distributors. The growth of this department from 30 employees in 2017 to 44 employees in 2020 reflects the expansion of PBI's commercial operations into additional markets and the increasing complexity of market access and reimbursement environments in the EMEA and APAC regions.

Supply Chain and Distribution Management. PBI's Supply Chain department manages the contract manufacturing relationship with PMI as well as the logistics and distribution of finished pharmaceutical products to end markets. The department's responsibilities include demand forecasting, production planning coordination with PMI, quality assurance oversight, cold-chain logistics management, and the selection and oversight of third-party distribution partners. As of 2020, this department comprised 22 employees.

Finance and Administration. PBI's Finance and Administration department oversees the entity's financial operations, including treasury management through PBI's banking relationship with Glenmore Bank Ireland plc, financial reporting under both Irish GAAP and U.S. GAAP for consolidation purposes, tax compliance (including Irish corporation tax filings and transfer pricing documentation), budgeting and forecasting, and general administrative functions such as human resources, facilities management, and information technology. The department grew from 17 employees in 2017 to 23 employees in 2020.

Legal and Compliance. PBI's in-house Legal and Compliance team supports IP protection and enforcement activities in the Non-Americas Territory, manages contractual relationships with distribution partners and service providers, oversees data privacy compliance (including GDPR compliance), and administers PBI's anti-bribery and anti-corruption compliance program. The department grew from 10 employees in 2017 to 15 employees in 2020, reflecting the increasing regulatory and compliance requirements applicable to PBI's operations.

4. Key Personnel — Role Descriptions (Exhibit C)

Exhibit C contains detailed role descriptions for key PBI personnel during the 2017–2020 period. Each role description sets forth the employee's title, reporting line, key responsibilities, decision-making authority, and geographic scope of activity. A summary of the most senior positions is provided below for the examination team's convenience.

4.1 Managing Director — Aidan Naughton (Exhibit D)

Exhibit D provides a detailed profile of PBI's Managing Director, Aidan Naughton, whose role is central to PBI's operations and governance. The key elements of Mr. Naughton's role are summarized as follows:

Title: Managing Director, Penterra Biopharma International DAC

Location: Dublin, Ireland (Sandyford Business Park offices)

Tenure: March 2012 to present (appointed Managing Director at PBI's incorporation)

Reporting Line: Reports to the PBI Board of Directors

Overview: Mr. Naughton is responsible for the overall strategic direction and day-to-day management of PBI. He serves as the most senior executive of PBI and exercises authority over all aspects of PBI's operations in the Non-Americas Territory.

Mr. Naughton's key responsibilities include the following:

• Management Committee. Mr. Naughton chairs PBI's management committee, which meets bi-weekly and includes all department heads. The management committee reviews and approves operational plans, budgets, major commercial initiatives, and cross-functional projects.

• Commercialization Oversight. Mr. Naughton has direct oversight of all non-Americas commercialization activities for PPC's product portfolio, including PBI's three principal marketed products:

• Veritaxol (oncology), which generated non-Americas net sales of $1.34 billion in 2020;

• Imvara (immunology), which generated non-Americas net sales of $790 million in 2020; and

• Cerulon (rare disease), which generated non-Americas net sales of $280 million in 2020.

• Pricing Authority. Mr. Naughton exercises final decision-making authority on pricing strategy across PBI's 68 non-Americas country markets. This authority includes the approval of pricing submissions to governmental and quasi-governmental payers, the setting of ex-manufacturer prices, and the negotiation of pricing terms with distribution partners. Pricing decisions are made by Mr. Naughton and his Commercial Strategy team based on market-specific analyses conducted by PBI's Dublin-based personnel, taking into account local competitive dynamics, regulatory requirements, health technology assessments, and payer willingness-to-pay in each jurisdiction.

• Regulatory Strategy. Mr. Naughton approves regulatory submission strategies and associated budgets for all non-Americas markets. This includes the sequencing and prioritization of marketing authorization applications across jurisdictions, the allocation of regulatory resources, and the approval of significant regulatory commitments.

• Distribution Partner Management. Mr. Naughton is responsible for the selection and management of distribution partners in the Non-Americas Territory. PBI contracts with approximately 40 distribution partners across 68 country markets, and Mr. Naughton has approval authority over the selection of new partners, the termination of existing relationships, and the negotiation of key commercial terms.

• Board Reporting. Mr. Naughton reports to the PBI Board of Directors, which met 42 times during the 2017–2020 examination period. These meetings consisted of regularly scheduled quarterly board meetings as well as special sessions convened to address significant strategic matters, including new product launches, major regulatory developments, and material commercial transactions. All 42 board meetings during the 2017–2020 period were held in Dublin, Ireland.

4.2 Additional Key Personnel

In addition to Mr. Naughton, Exhibit C contains role descriptions for the following key PBI personnel, each of whom held a senior leadership position during all or a significant portion of the 2017–2020 examination period:

1. Orla Brennan — Head of Regulatory Affairs. Ms. Brennan oversees all regulatory submissions and approvals across the 68 non-Americas jurisdictions in which PBI operates. She reports directly to Mr. Naughton and manages a team that grew from 28 to 44 employees during the examination period. Ms. Brennan is responsible for the strategic planning and execution of regulatory submissions, including marketing authorization applications, Type II variations, periodic safety update reports, and pediatric investigation plans. Under her leadership, PBI's Regulatory Affairs department managed cumulative regulatory expenditures of approximately €47.2 million during the 2017–2020 period. Ms. Brennan exercises independent decision-making authority with respect to the timing, content, and strategy of regulatory filings, subject to budgetary approval by Mr. Naughton.

2. Declan Farrell — Head of Commercial Strategy. Mr. Farrell leads PBI's pricing, market entry, and market access functions across all 68 non-Americas country markets. He reports directly to Mr. Naughton and manages a team that grew from 30 to 44 employees during the examination period. Mr. Farrell exercises independent authority over commercial terms, including the development of country-specific pricing strategies, the preparation and submission of health technology assessment dossiers, and the negotiation of distribution agreements. His team conducts market analyses, competitive intelligence assessments, and payer engagement activities that inform PBI's commercial decision-making. Mr. Farrell's decision-making authority extends to the approval of commercial terms in individual country markets, subject to Mr. Naughton's final review for pricing decisions exceeding defined thresholds.

3. Siobhan Kelly — Head of Medical Affairs. Dr. Kelly directs PBI's medical evidence generation programs, medical information services, pharmacovigilance coordination, and KOL engagement activities throughout the Non-Americas Territory. She reports to Mr. Naughton and oversees a team of 32 employees (as of year-end 2020), including medical directors, medical science liaisons, and pharmacovigilance specialists. Dr. Kelly is responsible for ensuring that PBI's medical communications are scientifically accurate, balanced, and compliant with applicable regulatory requirements across all jurisdictions in which PBI operates.

4. Ciarán Walsh — Head of Supply Chain. Mr. Walsh manages PBI's contract manufacturing relationship with PMI and oversees the logistics and distribution of finished pharmaceutical products across the Non-Americas Territory. He reports to Mr. Naughton and manages a team of 22 employees (as of year-end 2020). Mr. Walsh's responsibilities include demand forecasting, production planning coordination with PMI, quality assurance oversight, cold-chain management, and the selection and oversight of third-party distribution and logistics partners. Mr. Walsh exercises decision-making authority over supply chain matters, including inventory management, distribution network design, and supplier selection.

5. Eoin Murray — Finance Director. Mr. Murray oversees PBI's financial operations, including treasury management, financial reporting, tax compliance, budgeting, and forecasting. He reports to Mr. Naughton and manages a team of 23 employees (as of year-end 2020). Mr. Murray is responsible for managing PBI's banking relationship with Glenmore Bank Ireland plc, through which PBI maintains its principal operating accounts and conducts treasury operations. Mr. Murray coordinates with PPC's corporate finance function on matters related to U.S. GAAP consolidation and intercompany transactions, but exercises independent authority over PBI's day-to-day financial operations and Irish tax compliance.

6. Fiona Maguire — Head of Legal and Compliance. Ms. Maguire manages PBI's in-house legal function, which supports IP protection and enforcement, contract management, regulatory compliance, data privacy (including GDPR compliance), and anti-bribery and anti-corruption compliance. She reports to Mr. Naughton and manages a team of 15 employees (as of year-end 2020). Ms. Maguire exercises decision-making authority on legal matters affecting PBI's operations in the Non-Americas Territory, including the initiation of IP enforcement actions, the negotiation of commercial agreements, and the management of litigation and regulatory proceedings.

7. Additional Department Heads and Senior Managers. Exhibit C also contains role descriptions for six additional senior managers within PBI, including the Deputy Head of Regulatory Affairs (APAC), the Senior Director of Market Access (EMEA), the Senior Director of Pharmacovigilance, the Head of Human Resources, the Head of Information Technology, and the Senior Manager of Strategic Planning. Each of these individuals holds a management-level position within PBI, reports to the relevant department head, and exercises responsibilities and decision-making authority within his or her respective functional area. The role descriptions for these additional personnel follow the same format as those described above, setting forth each individual's title, reporting line, key responsibilities, decision-making authority, and geographic scope of activity.

5. PBI's Functional Role and Economic Substance

The personnel and organizational data produced herewith — including the headcount figures, organizational charts, role descriptions, and department-level staffing breakdowns — demonstrate that PBI maintains a substantive operational presence in Ireland with the personnel, facilities, and organizational infrastructure necessary to perform the functions, assume the risks, and manage the assets associated with its role as the commercial principal for the Non-Americas Territory.

PBI bears market risk for the Non-Americas Territory and makes key commercial decisions — including pricing, market entry, regulatory strategy, and distribution partner selection — through its Dublin-based personnel. These decisions are made by PBI's management team under the leadership of Managing Director Aidan Naughton, exercising independent judgment based on market-specific analyses and operational expertise developed by PBI's personnel in Dublin. PBI's decision-making processes are conducted through regular management committee meetings, department-level review processes, and governance structures that are documented in PBI's corporate records.

PBI's headcount growth from 52 employees at its inception in 2012 to 185 employees at the end of 2020 reflects the entity's increasing assumption of DEMPE functions with respect to PPC's pharmaceutical IP portfolio in the Non-Americas Territory. This growth has been consistent and organic, driven by the expansion of PBI's commercial operations, the launch of additional products, and the entry into new country markets. The staffing trajectory is consistent with the economic substance of PBI's role as the entity that bears the costs, manages the risks, and exercises the decision-making authority associated with the commercialization of PPC's pharmaceutical products in 68 non-Americas country markets.

During the 2017–2020 examination period, PBI's Board of Directors held 42 meetings, all of which took place in Dublin, Ireland. These meetings addressed key strategic and operational decisions, including the approval of annual budgets, the authorization of major commercial initiatives, the review of product launch strategies, and the oversight of PBI's financial performance. The frequency and Dublin-based location of these board meetings are consistent with the exercise of substantive governance and oversight functions by PBI's directors.

PPC respectfully notes that the personnel and organizational data produced in response to IDR No. 8 should be considered in conjunction with the comprehensive functional analysis currently being prepared in coordination with Whitmore Valuation Group LLC ("WVG"), an independent economic consulting firm retained by C&H under a Kovel arrangement (C&H Reference 1018-00009-KV). WVG's functional analysis will provide a detailed documentation of PBI's functions, assets, and risks, and will include an economic analysis of the arm's-length nature of the intercompany transactions between PPC and PBI, consistent with the requirements of Section 482 of the Internal Revenue Code and the regulations thereunder. PPC anticipates producing the WVG functional analysis to the examination team upon its completion and will advise the examination team of the expected timeline for that production.

6. Privilege Reservation and Limitations

PPC expressly reserves all objections, claims of privilege (including attorney-client privilege and the work-product doctrine), and all other rights, defenses, and protections with respect to the documents and information produced in connection with this response to IDR No. 8. The production of documents and information herein is made solely in response to IDR No. 8 and does not constitute a waiver of any privilege, protection, or other right, whether or not expressly asserted herein.

With respect to Exhibit F (Summary of PBI Employee Compensation and Benefits Structure), PPC has provided certain individual compensation data in redacted or aggregate form in order to protect the privacy interests of PBI's employees. This approach is consistent with the Internal Revenue Manual's guidance on taxpayer privacy in the context of IDR responses. PPC is prepared to discuss with the examination team any additional specific data needs relating to PBI employee compensation, and will endeavor to accommodate reasonable requests for additional detail to the extent consistent with applicable privacy protections.

To the extent that any documents responsive to IDR No. 8 have been withheld on the basis of attorney-client privilege, the work-product doctrine, or any other applicable privilege or protection, such documents are identified on the privilege log previously provided to the examination team on July 15, 2022, as updated and supplemented on August 19, 2022. PPC will continue to update its privilege log as necessary to reflect any additional responsive documents identified during the course of the examination.

The production of documents and information in this response is without prejudice to PPC's right to assert additional objections, claims of privilege, or other rights in connection with future IDRs or other requests from the examination team.

7. Offer to Discuss and Contact Information

PPC and C&H remain available to discuss the materials produced herewith or to respond to any follow-up questions that the examination team may have regarding PBI's personnel, organizational structure, or related matters. We welcome the opportunity to meet with the examination team, whether in person or by teleconference, to review the produced documents and to address any questions that may arise.

All communications regarding this IDR response, including any requests for additional information or follow-up inquiries, should be directed to the following members of the C&H engagement team:

Leonard Cross, Partner Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 864-7112

Email: lcross@calderwoodharkness.com

Garrett Simmons, Counsel Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 864-7238

Email: gsimmons@calderwoodharkness.com

Leila Nazari, Associate Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 864-7345

Email: lnazari@calderwoodharkness.com

We trust that the foregoing response and the accompanying exhibits are responsive to IDR No. 8. We look forward to continuing to work cooperatively with the examination team throughout this process.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Leonard Cross Partner, Tax Department Calderwood & Harkness LLP 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, Partner, Calderwood & Harkness LLP Garrett Simmons, Counsel, Calderwood & Harkness LLP Leila Nazari, Associate, Calderwood & Harkness LLP

Enclosures:

Exhibit A — PBI Annual Headcount Summary (2012–2020) Exhibit B — PBI Organizational Charts (Year-End 2017, 2018, 2019, 2020) Exhibit C — Role Descriptions for Key PBI Personnel (2017–2020) Exhibit D — PBI Managing Director Profile — Aidan Naughton Exhibit E — PBI Department-Level Staffing Breakdowns (2017–2020) Exhibit F — Summary of PBI Employee Compensation and Benefits Structure (Redacted/Aggregate)

Exhibit	Description
Exhibit A	PBI Annual Headcount Summary (2012–2020)
Exhibit B	PBI Organizational Charts (as of year-end for each of 2017, 2018, 2019, and 2020)
Exhibit C	Role Descriptions for Key PBI Personnel (2017–2020)
Exhibit D	PBI Managing Director Profile — Aidan Naughton
Exhibit E	PBI Department-Level Staffing Breakdowns (2017–2020)
Exhibit F	Summary of PBI Employee Compensation and Benefits Structure (redacted for individual privacy; aggregate data provided)
Year	Year-End FTE Headcount
2012	52
2013	64
2014	78
2015	91
2016	108
2017	127
2018	143
2019	162
2020	185
Tax Year	Year-End FTE Headcount
2017	127
2018	143
2019	162
2020	185
Department	2017	2018	2019	2020
Office of the Managing Director	4	4	5	5
Regulatory Affairs	28	33	38	44

Medical Affairs	22	25	28	32
Commercial Strategy and Market Access	30	34	39	44
Supply Chain and Distribution Management	16	18	20	22
Finance and Administration	17	18	20	23
Legal and Compliance	10	11	12	15
Total	127	143	162	185

CALDERWOOD & HARKNESS LLP Attorneys at Law
1735 Market Street, Suite 3100 Philadelphia, PA 19103
Telephone: (215) 864-7000 Facsimile: (215) 864-7001 www.calderwoodharkness.com
September 5, 2022
C&H Matter No. 1018-00009
VIA HAND DELIVERY AND SECURE FILE TRANSFER
Revenue Agent Patricia Dunleavy Internal Revenue Service Large Business & International Division 600 Arch Street, Room 6214 Philadelphia, PA 19106
Re: Examination of Penterra Pharmaceuticals Corp. EIN: 22-3741856 Exam Team ID: LB&I-NE-TP-2022-00641 Tax Years Under Examination: 2017, 2018, 2019, 2020
Response to Information Document Request No. 8 — Personnel and Headcount Data for Penterra Biopharma International DAC
Dear Revenue Agent Dunleavy:
We write on behalf of our client, Penterra Pharmaceuticals Corp. ("PPC"), in response to Information Document Request No. 8 ("IDR No. 8"), issued by the examination team on August 12, 2022. This letter is submitted by Leonard Cross, Responsible Partner, Tax Department, Calderwood & Harkness LLP ("C&H"), who, together with Sylvia Hartwell, Garrett Simmons, and Leila Nazari of this firm, is authorized to represent PPC before the Internal Revenue Service pursuant to IRS Form 2848, Power of Attorney and Declaration of Representative, filed with the examination team on June 8, 2022.
IDR No. 8 requested personnel and headcount information for Penterra Biopharma International DAC ("PBI"), an Irish Designated Activity Company and wholly owned subsidiary of PPC. PBI is held by PPC through Penterra Holdings Luxembourg S.à r.l. ("PH Lux"), a Luxembourg private limited liability company that has elected to be treated as a disregarded entity for U.S. federal income tax purposes pursuant to Treasury Regulations § 301.7701-3. PBI's registered office is located at 4th Floor, Claremont House, Sandyford Business Park, Dublin D18 K7T4, Ireland. PBI is registered with the Irish Companies Registration Office under CRO Number 504821.
As a preliminary matter, all documents and information produced herewith are subject to the reservation of rights set forth in C&H's initial response letter dated June 24, 2022, and the privilege protocol communicated to the examination team on July 1, 2022, as supplemented on August 3, 2022. Nothing in this production constitutes a waiver of any privilege, protection, or other right, and all such rights are expressly preserved, as described more fully in Section 6 below.
Set forth below is a summary of the documents produced in response to IDR No. 8, together with contextual information regarding PBI's personnel and organizational structure that we believe will be helpful to the examination team's review.
1. Summary of Documents Produced
In response to IDR No. 8, PPC is producing the following documents and exhibits, each of which is described in greater detail in the sections that follow:
All documents produced in connection with this response bear Bates numbers PPC-IDR08-000001 through PPC-IDR08-000347. These Bates numbers are sequential and correspond to the Master Document Production Index maintained by C&H, which has been updated to reflect this production. The Master Document Production Index, a copy of which was most recently provided to the examination team on August 19, 2022, catalogues all documents produced by PPC across all IDR responses in this examination and may be consulted for cross-referencing purposes.
Where documents produced herewith relate to or supplement documents previously produced in response to earlier IDRs, such cross-references are noted in the relevant sections below.
2. PBI Headcount Overview
2.1 Historical Headcount Growth (2012–2020)
PBI was incorporated under the laws of Ireland on March 15, 2012, as a Designated Activity Company within the meaning of the Companies Act 2014 (as amended). At the time of its establishment in 2012, PBI commenced operations with 52 full-time equivalent employees based at its offices at Sandyford Business Park, Dublin.
PBI's headcount grew steadily over the ensuing years as the entity assumed increasing responsibility for the non-Americas commercialization of PPC's pharmaceutical intellectual property portfolio. This assumption of responsibilities occurred pursuant to the Qualified Cost Sharing Arrangement ("QCSA") entered into between PPC and PBI, effective July 1, 2012 (the "CSA"), copies of which were previously produced to the examination team in connection with IDR No. 3. Under the CSA, PBI obtained rights to exploit PPC's pharmaceutical IP portfolio — including patents, trade secrets, know-how, regulatory dossiers, clinical data, and associated marketing intangibles — in all territories outside of the Americas (the "Non-Americas Territory").
The year-by-year trajectory of PBI's headcount growth from inception through the final year of the examination period is set forth in Exhibit A and is summarized below:
This sustained growth in headcount reflects PBI's expanding operational functions across multiple areas critical to the commercialization and ongoing development of PPC's product portfolio in the Non-Americas Territory. Specifically, PBI built out substantial capabilities in regulatory affairs, medical affairs, commercial strategy, supply-chain management, market access, and related support functions to serve 68 non-Americas country markets spanning the EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific) regions. The personnel growth was driven by the increasing complexity and geographic reach of PBI's commercial operations, including new product launches, expansion into additional country markets, and the assumption of additional Development, Enhancement, Maintenance, Protection, and Exploitation ("DEMPE") functions with respect to PPC's IP portfolio in the Non-Americas Territory.
By 2020, PBI maintained approximately 18,000 square feet of dedicated office space at Sandyford Business Park, Dublin, Ireland, comprising the entirety of the 4th floor and a substantial portion of the 3rd floor of Claremont House. PBI's Dublin office includes dedicated work areas for each of its principal departments, conference facilities, secure document storage, and information technology infrastructure supporting its global operations.
2.2 Headcount by Year for Examination Period (2017–2020)
For the specific tax years under examination, PBI's year-end headcount of full-time equivalent employees on PBI's Irish payroll was as follows:
These figures represent full-time equivalent employees ("FTEs") as reported on PBI's Irish payroll and as reflected in PBI's annual returns filed with the Irish Revenue Commissioners and the Companies Registration Office. The FTE counts include all permanent and fixed-term contract employees on PBI's payroll as of December 31 of the applicable year. Independent contractors, temporary agency workers, and secondees from other Penterra group entities (of whom there were none during the 2017–2020 period) are excluded from these figures.
All PBI employees included in the headcount figures set forth above work from PBI's Dublin office at Sandyford Business Park. PBI does not maintain satellite offices, branch locations, or remote work hubs outside of its Dublin headquarters. To the extent that individual PBI employees traveled to non-Americas country markets in connection with regulatory meetings, medical conferences, commercial negotiations, or distributor oversight, such travel was conducted on a temporary basis and did not alter the employees' primary place of work in Dublin.
2.3 Distinction from Penterra Manufacturing Ireland Ltd. (PMI)
To avoid any potential confusion, PPC wishes to clarify that PBI's headcount figures are separate and distinct from the headcount of Penterra Manufacturing Ireland Ltd. ("PMI"), a separate Irish private limited company registered with the Irish Companies Registration Office under CRO Number 512347. PMI is located at Unit 7, Ringaskiddy Industrial Estate, Co. Cork T12 PX29, Ireland, and operates a large-scale biopharmaceutical manufacturing facility at that location.
PMI has approximately 620 employees, substantially all of whom are engaged in the contract manufacturing of oncology and immunology biologics for the Non-Americas Territory. PMI performs these manufacturing services under a Contract Manufacturing Agreement with PBI, pursuant to which PMI is compensated on a cost-plus basis at a markup of 8% of total manufacturing costs (i.e., cost + 8%). This arrangement was previously documented in PPC's response to IDR No. 5, and copies of the Contract Manufacturing Agreement were produced under Bates numbers PPC-IDR05-000089 through PPC-IDR05-000142.
PMI employees are not included in PBI's headcount figures set forth in this response. PMI and PBI are separately organized, separately managed, and separately staffed Irish entities with distinct functions, facilities, and reporting structures. PMI's employees report to PMI's own management team and are on PMI's separate Irish payroll.
3. PBI Organizational Structure
3.1 Overview of Organizational Charts (Exhibit B)
Exhibit B contains PBI's organizational charts as of year-end for each of the four tax years under examination (2017, 2018, 2019, and 2020). These charts were prepared by PBI's Human Resources function in the ordinary course of business and have been updated and maintained on a regular basis.
PBI is headed by Managing Director Aidan Naughton, who has served in that capacity since PBI's incorporation in 2012. Mr. Naughton reports directly to the PBI Board of Directors, which is composed of a combination of independent non-executive directors and PPC-nominated directors. The composition of the PBI Board of Directors during the examination period was previously provided to the examination team in connection with IDR No. 4.
The organizational charts for each year during the examination period depict the following principal departments and functions within PBI:
1. Office of the Managing Director — Including the Managing Director, his executive assistant, and a small strategic planning team responsible for coordinating cross-functional initiatives and supporting PBI Board activities.
2. Regulatory Affairs — Responsible for managing regulatory submissions, marketing authorization applications, and post-marketing regulatory compliance across 68 non-Americas country markets, including interactions with the European Medicines Agency ("EMA"), national competent authorities, and regulatory bodies in APAC jurisdictions.
3. Medical Affairs — Responsible for medical evidence generation, medical information services, pharmacovigilance coordination, and key opinion leader ("KOL") engagement throughout the Non-Americas Territory.
4. Commercial Strategy and Market Access — Responsible for pricing strategy, market entry analysis, reimbursement and health technology assessment submissions, distribution partner selection and management, and overall commercial planning across all 68 non-Americas country markets.
5. Supply Chain and Distribution Management — Responsible for managing the contract manufacturing relationship with PMI, overseeing finished goods inventory, coordinating logistics and distribution through third-party distribution partners, and ensuring security of supply across the Non-Americas Territory.
6. Finance and Administration — Responsible for PBI's financial operations, including treasury management (PBI maintains its principal banking relationship with Glenmore Bank Ireland plc), financial reporting under both Irish GAAP and U.S. GAAP, tax compliance (Irish corporation tax and transfer pricing), budgeting, and general administrative support.
7. Legal and Compliance — Responsible for in-house legal support relating to intellectual property protection and enforcement in the Non-Americas Territory, regulatory compliance, contract management, data privacy, and anti-bribery and anti-corruption compliance.
The organizational charts show the reporting lines within each department and identify the department heads for each year. The charts also reflect changes in organizational structure over the examination period, including the creation of a dedicated Market Access sub-function within the Commercial Strategy department in 2018 and the expansion of the Regulatory Affairs department to include a dedicated APAC regulatory team in 2019.
The organizational structure reflected in Exhibit B is consistent with PBI's role as the IP-holding company and commercial principal for the non-Americas commercialization of PPC's pharmaceutical product portfolio across the EMEA and APAC territories. Each of PBI's departments performs substantive operational functions that are integral to the commercialization, regulatory maintenance, and ongoing development of PPC's products in the Non-Americas Territory.
3.2 Department-Level Staffing (Exhibit E)
Exhibit E provides a detailed breakdown of PBI's employee headcount by department for each year of the examination period (2017–2020). The following table summarizes the department-level staffing data contained in Exhibit E:
A brief description of each department's principal functions and staffing rationale is set forth below:
Regulatory Affairs. PBI's Regulatory Affairs department is the largest single function within PBI and is responsible for managing regulatory submissions, marketing authorization applications, variations, renewals, and post-marketing commitments across 68 country markets in the Non-Americas Territory. The department grew from 28 employees in 2017 to 44 employees in 2020, reflecting the increasing regulatory complexity associated with PBI's expanding product portfolio and geographic footprint. During the 2017–2020 period, PBI's cumulative regulatory expenditure (including personnel costs, external regulatory consultant fees, and regulatory agency fees) totaled approximately €47.2 million. This figure is documented in PBI's financial records and is consistent with data previously produced in response to IDR No. 6.
Medical Affairs. PBI's Medical Affairs department manages clinical evidence generation, medical information services, pharmacovigilance activities, and KOL engagement programs throughout the Non-Americas Territory. The department's staff of 32 employees (as of year-end 2020) includes medical directors, medical science liaisons, pharmacovigilance specialists, and medical information professionals. These personnel are responsible for maintaining and enhancing the clinical evidence base supporting PBI's marketed products and for ensuring that PBI's medical communications and KOL engagement activities comply with applicable regulatory requirements in each country market.
Commercial Strategy and Market Access. PBI's Commercial Strategy and Market Access department is co-equal in size with Regulatory Affairs and is responsible for making independent pricing, market entry, and distribution partner selection decisions across 68 non-Americas country markets. The department's personnel exercise decision-making authority over commercial terms, pricing submissions to governmental and quasi-governmental payers, health technology assessment dossier preparation, and the negotiation and management of distribution agreements with third-party distributors. The growth of this department from 30 employees in 2017 to 44 employees in 2020 reflects the expansion of PBI's commercial operations into additional markets and the increasing complexity of market access and reimbursement environments in the EMEA and APAC regions.
Supply Chain and Distribution Management. PBI's Supply Chain department manages the contract manufacturing relationship with PMI as well as the logistics and distribution of finished pharmaceutical products to end markets. The department's responsibilities include demand forecasting, production planning coordination with PMI, quality assurance oversight, cold-chain logistics management, and the selection and oversight of third-party distribution partners. As of 2020, this department comprised 22 employees.
Finance and Administration. PBI's Finance and Administration department oversees the entity's financial operations, including treasury management through PBI's banking relationship with Glenmore Bank Ireland plc, financial reporting under both Irish GAAP and U.S. GAAP for consolidation purposes, tax compliance (including Irish corporation tax filings and transfer pricing documentation), budgeting and forecasting, and general administrative functions such as human resources, facilities management, and information technology. The department grew from 17 employees in 2017 to 23 employees in 2020.
Legal and Compliance. PBI's in-house Legal and Compliance team supports IP protection and enforcement activities in the Non-Americas Territory, manages contractual relationships with distribution partners and service providers, oversees data privacy compliance (including GDPR compliance), and administers PBI's anti-bribery and anti-corruption compliance program. The department grew from 10 employees in 2017 to 15 employees in 2020, reflecting the increasing regulatory and compliance requirements applicable to PBI's operations.
4. Key Personnel — Role Descriptions (Exhibit C)
Exhibit C contains detailed role descriptions for key PBI personnel during the 2017–2020 period. Each role description sets forth the employee's title, reporting line, key responsibilities, decision-making authority, and geographic scope of activity. A summary of the most senior positions is provided below for the examination team's convenience.
4.1 Managing Director — Aidan Naughton (Exhibit D)
Exhibit D provides a detailed profile of PBI's Managing Director, Aidan Naughton, whose role is central to PBI's operations and governance. The key elements of Mr. Naughton's role are summarized as follows:
Title: Managing Director, Penterra Biopharma International DAC
Location: Dublin, Ireland (Sandyford Business Park offices)
Tenure: March 2012 to present (appointed Managing Director at PBI's incorporation)
Reporting Line: Reports to the PBI Board of Directors
Overview: Mr. Naughton is responsible for the overall strategic direction and day-to-day management of PBI. He serves as the most senior executive of PBI and exercises authority over all aspects of PBI's operations in the Non-Americas Territory.
Mr. Naughton's key responsibilities include the following:
• Management Committee. Mr. Naughton chairs PBI's management committee, which meets bi-weekly and includes all department heads. The management committee reviews and approves operational plans, budgets, major commercial initiatives, and cross-functional projects.
• Commercialization Oversight. Mr. Naughton has direct oversight of all non-Americas commercialization activities for PPC's product portfolio, including PBI's three principal marketed products:
• Veritaxol (oncology), which generated non-Americas net sales of $1.34 billion in 2020;
• Imvara (immunology), which generated non-Americas net sales of $790 million in 2020; and
• Cerulon (rare disease), which generated non-Americas net sales of $280 million in 2020.
• Pricing Authority. Mr. Naughton exercises final decision-making authority on pricing strategy across PBI's 68 non-Americas country markets. This authority includes the approval of pricing submissions to governmental and quasi-governmental payers, the setting of ex-manufacturer prices, and the negotiation of pricing terms with distribution partners. Pricing decisions are made by Mr. Naughton and his Commercial Strategy team based on market-specific analyses conducted by PBI's Dublin-based personnel, taking into account local competitive dynamics, regulatory requirements, health technology assessments, and payer willingness-to-pay in each jurisdiction.
• Regulatory Strategy. Mr. Naughton approves regulatory submission strategies and associated budgets for all non-Americas markets. This includes the sequencing and prioritization of marketing authorization applications across jurisdictions, the allocation of regulatory resources, and the approval of significant regulatory commitments.
• Distribution Partner Management. Mr. Naughton is responsible for the selection and management of distribution partners in the Non-Americas Territory. PBI contracts with approximately 40 distribution partners across 68 country markets, and Mr. Naughton has approval authority over the selection of new partners, the termination of existing relationships, and the negotiation of key commercial terms.
• Board Reporting. Mr. Naughton reports to the PBI Board of Directors, which met 42 times during the 2017–2020 examination period. These meetings consisted of regularly scheduled quarterly board meetings as well as special sessions convened to address significant strategic matters, including new product launches, major regulatory developments, and material commercial transactions. All 42 board meetings during the 2017–2020 period were held in Dublin, Ireland.
4.2 Additional Key Personnel
In addition to Mr. Naughton, Exhibit C contains role descriptions for the following key PBI personnel, each of whom held a senior leadership position during all or a significant portion of the 2017–2020 examination period:
1. Orla Brennan — Head of Regulatory Affairs. Ms. Brennan oversees all regulatory submissions and approvals across the 68 non-Americas jurisdictions in which PBI operates. She reports directly to Mr. Naughton and manages a team that grew from 28 to 44 employees during the examination period. Ms. Brennan is responsible for the strategic planning and execution of regulatory submissions, including marketing authorization applications, Type II variations, periodic safety update reports, and pediatric investigation plans. Under her leadership, PBI's Regulatory Affairs department managed cumulative regulatory expenditures of approximately €47.2 million during the 2017–2020 period. Ms. Brennan exercises independent decision-making authority with respect to the timing, content, and strategy of regulatory filings, subject to budgetary approval by Mr. Naughton.
2. Declan Farrell — Head of Commercial Strategy. Mr. Farrell leads PBI's pricing, market entry, and market access functions across all 68 non-Americas country markets. He reports directly to Mr. Naughton and manages a team that grew from 30 to 44 employees during the examination period. Mr. Farrell exercises independent authority over commercial terms, including the development of country-specific pricing strategies, the preparation and submission of health technology assessment dossiers, and the negotiation of distribution agreements. His team conducts market analyses, competitive intelligence assessments, and payer engagement activities that inform PBI's commercial decision-making. Mr. Farrell's decision-making authority extends to the approval of commercial terms in individual country markets, subject to Mr. Naughton's final review for pricing decisions exceeding defined thresholds.
3. Siobhan Kelly — Head of Medical Affairs. Dr. Kelly directs PBI's medical evidence generation programs, medical information services, pharmacovigilance coordination, and KOL engagement activities throughout the Non-Americas Territory. She reports to Mr. Naughton and oversees a team of 32 employees (as of year-end 2020), including medical directors, medical science liaisons, and pharmacovigilance specialists. Dr. Kelly is responsible for ensuring that PBI's medical communications are scientifically accurate, balanced, and compliant with applicable regulatory requirements across all jurisdictions in which PBI operates.
4. Ciarán Walsh — Head of Supply Chain. Mr. Walsh manages PBI's contract manufacturing relationship with PMI and oversees the logistics and distribution of finished pharmaceutical products across the Non-Americas Territory. He reports to Mr. Naughton and manages a team of 22 employees (as of year-end 2020). Mr. Walsh's responsibilities include demand forecasting, production planning coordination with PMI, quality assurance oversight, cold-chain management, and the selection and oversight of third-party distribution and logistics partners. Mr. Walsh exercises decision-making authority over supply chain matters, including inventory management, distribution network design, and supplier selection.
5. Eoin Murray — Finance Director. Mr. Murray oversees PBI's financial operations, including treasury management, financial reporting, tax compliance, budgeting, and forecasting. He reports to Mr. Naughton and manages a team of 23 employees (as of year-end 2020). Mr. Murray is responsible for managing PBI's banking relationship with Glenmore Bank Ireland plc, through which PBI maintains its principal operating accounts and conducts treasury operations. Mr. Murray coordinates with PPC's corporate finance function on matters related to U.S. GAAP consolidation and intercompany transactions, but exercises independent authority over PBI's day-to-day financial operations and Irish tax compliance.
6. Fiona Maguire — Head of Legal and Compliance. Ms. Maguire manages PBI's in-house legal function, which supports IP protection and enforcement, contract management, regulatory compliance, data privacy (including GDPR compliance), and anti-bribery and anti-corruption compliance. She reports to Mr. Naughton and manages a team of 15 employees (as of year-end 2020). Ms. Maguire exercises decision-making authority on legal matters affecting PBI's operations in the Non-Americas Territory, including the initiation of IP enforcement actions, the negotiation of commercial agreements, and the management of litigation and regulatory proceedings.
7. Additional Department Heads and Senior Managers. Exhibit C also contains role descriptions for six additional senior managers within PBI, including the Deputy Head of Regulatory Affairs (APAC), the Senior Director of Market Access (EMEA), the Senior Director of Pharmacovigilance, the Head of Human Resources, the Head of Information Technology, and the Senior Manager of Strategic Planning. Each of these individuals holds a management-level position within PBI, reports to the relevant department head, and exercises responsibilities and decision-making authority within his or her respective functional area. The role descriptions for these additional personnel follow the same format as those described above, setting forth each individual's title, reporting line, key responsibilities, decision-making authority, and geographic scope of activity.
5. PBI's Functional Role and Economic Substance
The personnel and organizational data produced herewith — including the headcount figures, organizational charts, role descriptions, and department-level staffing breakdowns — demonstrate that PBI maintains a substantive operational presence in Ireland with the personnel, facilities, and organizational infrastructure necessary to perform the functions, assume the risks, and manage the assets associated with its role as the commercial principal for the Non-Americas Territory.
PBI bears market risk for the Non-Americas Territory and makes key commercial decisions — including pricing, market entry, regulatory strategy, and distribution partner selection — through its Dublin-based personnel. These decisions are made by PBI's management team under the leadership of Managing Director Aidan Naughton, exercising independent judgment based on market-specific analyses and operational expertise developed by PBI's personnel in Dublin. PBI's decision-making processes are conducted through regular management committee meetings, department-level review processes, and governance structures that are documented in PBI's corporate records.
PBI's headcount growth from 52 employees at its inception in 2012 to 185 employees at the end of 2020 reflects the entity's increasing assumption of DEMPE functions with respect to PPC's pharmaceutical IP portfolio in the Non-Americas Territory. This growth has been consistent and organic, driven by the expansion of PBI's commercial operations, the launch of additional products, and the entry into new country markets. The staffing trajectory is consistent with the economic substance of PBI's role as the entity that bears the costs, manages the risks, and exercises the decision-making authority associated with the commercialization of PPC's pharmaceutical products in 68 non-Americas country markets.
During the 2017–2020 examination period, PBI's Board of Directors held 42 meetings, all of which took place in Dublin, Ireland. These meetings addressed key strategic and operational decisions, including the approval of annual budgets, the authorization of major commercial initiatives, the review of product launch strategies, and the oversight of PBI's financial performance. The frequency and Dublin-based location of these board meetings are consistent with the exercise of substantive governance and oversight functions by PBI's directors.
PPC respectfully notes that the personnel and organizational data produced in response to IDR No. 8 should be considered in conjunction with the comprehensive functional analysis currently being prepared in coordination with Whitmore Valuation Group LLC ("WVG"), an independent economic consulting firm retained by C&H under a Kovel arrangement (C&H Reference 1018-00009-KV). WVG's functional analysis will provide a detailed documentation of PBI's functions, assets, and risks, and will include an economic analysis of the arm's-length nature of the intercompany transactions between PPC and PBI, consistent with the requirements of Section 482 of the Internal Revenue Code and the regulations thereunder. PPC anticipates producing the WVG functional analysis to the examination team upon its completion and will advise the examination team of the expected timeline for that production.
6. Privilege Reservation and Limitations
PPC expressly reserves all objections, claims of privilege (including attorney-client privilege and the work-product doctrine), and all other rights, defenses, and protections with respect to the documents and information produced in connection with this response to IDR No. 8. The production of documents and information herein is made solely in response to IDR No. 8 and does not constitute a waiver of any privilege, protection, or other right, whether or not expressly asserted herein.
With respect to Exhibit F (Summary of PBI Employee Compensation and Benefits Structure), PPC has provided certain individual compensation data in redacted or aggregate form in order to protect the privacy interests of PBI's employees. This approach is consistent with the Internal Revenue Manual's guidance on taxpayer privacy in the context of IDR responses. PPC is prepared to discuss with the examination team any additional specific data needs relating to PBI employee compensation, and will endeavor to accommodate reasonable requests for additional detail to the extent consistent with applicable privacy protections.
To the extent that any documents responsive to IDR No. 8 have been withheld on the basis of attorney-client privilege, the work-product doctrine, or any other applicable privilege or protection, such documents are identified on the privilege log previously provided to the examination team on July 15, 2022, as updated and supplemented on August 19, 2022. PPC will continue to update its privilege log as necessary to reflect any additional responsive documents identified during the course of the examination.
The production of documents and information in this response is without prejudice to PPC's right to assert additional objections, claims of privilege, or other rights in connection with future IDRs or other requests from the examination team.
7. Offer to Discuss and Contact Information
PPC and C&H remain available to discuss the materials produced herewith or to respond to any follow-up questions that the examination team may have regarding PBI's personnel, organizational structure, or related matters. We welcome the opportunity to meet with the examination team, whether in person or by teleconference, to review the produced documents and to address any questions that may arise.
All communications regarding this IDR response, including any requests for additional information or follow-up inquiries, should be directed to the following members of the C&H engagement team:
Leonard Cross, Partner Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 864-7112
Email: lcross@calderwoodharkness.com
Garrett Simmons, Counsel Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 864-7238
Email: gsimmons@calderwoodharkness.com
Leila Nazari, Associate Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 864-7345
Email: lnazari@calderwoodharkness.com
We trust that the foregoing response and the accompanying exhibits are responsive to IDR No. 8. We look forward to continuing to work cooperatively with the examination team throughout this process.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Leonard Cross Partner, Tax Department Calderwood & Harkness LLP 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, Partner, Calderwood & Harkness LLP Garrett Simmons, Counsel, Calderwood & Harkness LLP Leila Nazari, Associate, Calderwood & Harkness LLP
Enclosures:
Exhibit A — PBI Annual Headcount Summary (2012–2020) Exhibit B — PBI Organizational Charts (Year-End 2017, 2018, 2019, 2020) Exhibit C — Role Descriptions for Key PBI Personnel (2017–2020) Exhibit D — PBI Managing Director Profile — Aidan Naughton Exhibit E — PBI Department-Level Staffing Breakdowns (2017–2020) Exhibit F — Summary of PBI Employee Compensation and Benefits Structure (Redacted/Aggregate)
Exhibit | Description
Exhibit A | PBI Annual Headcount Summary (2012–2020)
Exhibit B | PBI Organizational Charts (as of year-end for each of 2017, 2018, 2019, and 2020)
Exhibit C | Role Descriptions for Key PBI Personnel (2017–2020)
Exhibit D | PBI Managing Director Profile — Aidan Naughton
Exhibit E | PBI Department-Level Staffing Breakdowns (2017–2020)
Exhibit F | Summary of PBI Employee Compensation and Benefits Structure (redacted for individual privacy; aggregate data provided)
Year | Year-End FTE Headcount
2012 | 52
2013 | 64
2014 | 78
2015 | 91
2016 | 108
2017 | 127
2018 | 143
2019 | 162
2020 | 185
Tax Year | Year-End FTE Headcount
2017 | 127
2018 | 143
2019 | 162
2020 | 185
Department | 2017 | 2018 | 2019 | 2020
Office of the Managing Director | 4 | 4 | 5 | 5
Regulatory Affairs | 28 | 33 | 38 | 44
Medical Affairs | 22 | 25 | 28 | 32
Commercial Strategy and Market Access | 30 | 34 | 39 | 44
Supply Chain and Distribution Management | 16 | 18 | 20 | 22
Finance and Administration | 17 | 18 | 20 | 23
Legal and Compliance | 10 | 11 | 12 | 15
Total | 127 | 143 | 162 | 185

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