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CALDERWOOD & HARKNESS LLP Attorneys at Law

1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 468-7200 Facsimile: (215) 468-7201

600 Lexington Avenue New York, NY 10022 Telephone: (212) 355-4000 Facsimile: (212) 355-4001

www.calderwoodharkness.com

October 3, 2022

VIA SECURE ELECTRONIC DELIVERY AND FIRST-CLASS MAIL

Revenue Agent Patricia Dunleavy Internal Revenue Service Large Business & International Division Exam Team ID LB&I-NE-TP-2022-00641

Re: Penterra Pharmaceuticals Corp. (EIN: 22-3741856) Response to Information Document Request No. 11 Tax Years Under Examination: 2017, 2018, 2019, 2020 C&H Matter Number: 1018-00009

Dear Revenue Agent Dunleavy:

I. Introduction and Authorization

Calderwood & Harkness LLP represents Penterra Pharmaceuticals Corp. ("PPC" or the "Company") in connection with the examination of PPC's federal income tax returns (Forms 1120) for tax years ending December 31, 2017, December 31, 2018, December 31, 2019, and December 31, 2020 (collectively, the "Examination Years") by the Internal Revenue Service ("IRS"), Large Business & International Division ("LB&I"). Our representation of PPC in this matter is authorized pursuant to IRS Form 2848 (Power of Attorney and Declaration of Representative), which was filed with the IRS on June 8, 2022, covering the following representatives of Calderwood & Harkness LLP: Leonard Cross, Esq. (Responsible Partner), Sylvia Hartwell, Esq. (Partner), Garrett Simmons, Esq. (Lead Associate), and Leila Nazari, Esq. (Associate). A copy of the executed Form 2848 was previously provided to the Examination Team and is on file with the IRS Centralized Authorization File ("CAF") unit.

This letter constitutes PPC's response to Information Document Request No. 11 ("IDR No. 11"), which was received by our office on or about September 19, 2022. IDR No. 11 requests detailed product-level revenue data by geographic territory for PPC's three principal pharmaceutical products — Veritaxol, Imvara, and Cerulon — for each of the fiscal years 2017 through 2020. As set forth in greater detail below, PPC is producing responsive documents and data in accordance with the scope of IDR No. 11. PPC appreciates the Examination Team's continued professionalism and cooperation throughout this examination and remains committed to providing timely and complete responses to the Examination Team's information requests.

II. Scope of IDR No. 11

As we understand the request, IDR No. 11 seeks net sales data for PPC's three principal commercial products — Veritaxol, Imvara, and Cerulon — segmented by product and by geographic territory, specifically: (i) Americas net sales and (ii) non-Americas net sales, for each of the four Examination Years (fiscal years 2017, 2018, 2019, and 2020). The Examination Team has further requested that the data be presented on a product-by-product basis and reconciled to PPC's publicly available financial disclosures and internal management reporting.

The territorial division specified in IDR No. 11 corresponds to the scope of the cost-sharing arrangement (the "CSA") between PPC and its Irish subsidiary, Penterra Biopharma International DAC ("PBI"), a designated activity company organized and existing under the laws of Ireland. The CSA, which became effective on July 1, 2012, governs the sharing of intangible development costs for PPC's pharmaceutical intellectual property portfolio. Under the CSA, PBI holds the exclusive rights to exploit PPC's pharmaceutical intellectual property portfolio outside the Americas (as defined in the CSA), with the "Americas" defined as North America, Central America, South America, and the Caribbean (the "Americas Territory"). PBI holds exploitation rights for all territories outside the Americas, encompassing the Europe, Middle East, and Africa ("EMEA") and Asia-Pacific ("APAC") regions (collectively, the "Non-Americas Territory"). PPC retains all exploitation rights within the Americas Territory.

PPC confirms its willingness to produce the requested product-level revenue data by territory for each of the Examination Years. The responsive information described herein and enclosed with this letter is derived from three principal sources: (i) PPC's audited consolidated financial statements for fiscal years 2017 through 2020, as filed with the U.S. Securities and Exchange Commission ("SEC") on Form 10-K; (ii) PBI's Irish statutory financial statements for the corresponding fiscal years, as audited by Crestfield & Associates LLP, PPC's independent registered public accounting firm (engagement partner Martin Ogilvy, CPA); and (iii) PPC's internal management reporting systems, which track revenue data at the product and territory level on a monthly and quarterly basis. PPC believes that these sources, taken together, provide a complete and accurate picture of the product-level revenue data requested by the Examination Team.

III. Description of Responsive Documents and Data

In response to IDR No. 11, PPC encloses the following materials:

Attachment A — Product Revenue Schedule. Enclosed as Attachment A is a detailed revenue schedule providing product-level net sales data by territory (Americas and Non-Americas) for each of PPC's three principal products — Veritaxol, Imvara, and Cerulon — for each of the fiscal years 2017, 2018, 2019, and 2020. The schedule also includes aggregate summary data across all three products, as well as a supplemental section presenting net sales data for legacy compounds (pre-2012 vintage, non-CSA products) in the Non-Americas Territory, which constitute the royalty base under the legacy intellectual property license agreement between PPC and PBI (the "Legacy License"). The Product Revenue Schedule is set forth in full in Section VII of this letter and is also provided as a standalone exhibit.

Attachment B — Supporting Excerpts from PPC Internal Management Revenue Reports. Enclosed as Attachment B are supporting excerpts from PPC's internal management revenue reports for the fiscal years 2017 through 2020. These reports reflect monthly and quarterly net sales data by product and territory, and have been reconciled to PPC's annual Form 10-K filings with the SEC and to PBI's Irish statutory financial statements as audited by Crestfield & Associates LLP (engagement partner Martin Ogilvy, CPA). A detailed description of the contents and reconciliation methodology for Attachment B is provided in Section VIII of this letter.

All revenue figures presented in the enclosed materials and in this letter are stated on a net-sales basis, reflecting gross sales less returns, rebates, discounts, and chargebacks. This presentation is consistent with PPC's revenue recognition policies as disclosed in the notes to PPC's audited consolidated financial statements and as required under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers, which PPC adopted effective January 1, 2018 (with restatement of the 2017 comparative period). PPC's fiscal year-end is December 31.

IV. Summary of Product Revenue Data

A. Overview of PPC's Principal Products

PPC is a global biopharmaceutical company engaged in the research, development, manufacture, and commercialization of innovative therapies across several therapeutic areas. PPC's product portfolio during the Examination Years was anchored by three principal commercial products, each of which is described briefly below:

Veritaxol. Veritaxol is PPC's flagship oncology therapeutic, indicated for the treatment of certain advanced solid tumors. Originally approved by the U.S. Food and Drug Administration ("FDA") in 2013, Veritaxol has since received marketing authorization in major jurisdictions worldwide, including the European Union, the United Kingdom, Japan, Canada, Australia, and numerous other countries across the EMEA and APAC regions. Veritaxol is PPC's largest product by revenue and has consistently been the primary driver of both PPC's Americas revenue and PBI's Non-Americas revenue throughout the Examination Years.

Imvara. Imvara is PPC's immunology therapeutic, indicated for the treatment of moderate-to-severe autoimmune conditions. Approved by the FDA in 2015 and subsequently authorized in major international markets, Imvara is PPC's second-largest revenue contributor and a significant component of both PPC's Americas business and PBI's Non-Americas commercial portfolio.

Cerulon. Cerulon is PPC's rare-disease therapeutic, indicated for the treatment of a specific lysosomal storage disorder. Approved by the FDA in 2016 and granted orphan drug designation in both the United States and the European Union, Cerulon serves a smaller patient population but has demonstrated a growing revenue base, particularly in the Non-Americas Territory, where PBI has pursued an aggressive market-entry and patient-access strategy in EMEA rare-disease markets.

PBI manages the commercialization of all three products in the Non-Americas Territory, encompassing the EMEA and APAC regions. PBI makes independent pricing decisions across approximately 68 country markets within the Non-Americas Territory and maintains dedicated commercial-strategy, regulatory, and medical-affairs personnel based at its registered office in Dublin, Ireland (4th Floor, Claremont House, Sandyford Business Park, Dublin D18 K7T4, Ireland). PPC manages the commercialization of all three products in the Americas Territory from its principal offices in the United States.

B. Veritaxol — Net Sales by Territory (2017–2020)

The table below summarizes Veritaxol net sales by territory for each of the Examination Years. Complete data for all four years is set forth in the Product Revenue Schedule at Attachment A. Veritaxol is the primary driver of both PPC's U.S. revenue and PBI's Non-Americas revenue, and its global net sales grew at a compound annual growth rate of approximately 10% over the 2017–2020 period, driven by continued uptake in existing indications and label expansion in both the Americas and Non-Americas Territories.

As the data reflect, the Non-Americas share of Veritaxol global net sales ranged from approximately 42% to 43% across the four Examination Years, consistent with PBI's growing commercial footprint and increasing market penetration in EMEA and APAC oncology markets.

C. Imvara — Net Sales by Territory (2017–2020)

The table below summarizes Imvara net sales by territory for each of the Examination Years. Imvara is PPC's second-largest product and a significant contributor to PBI's Non-Americas revenue base. Imvara net sales grew steadily over the 2017–2020 period as the product achieved broader formulary access and reimbursement coverage in multiple jurisdictions.

The Non-Americas share of Imvara global net sales ranged from approximately 41% to 42% across the four Examination Years, reflecting a gradual increase in PBI's share consistent with the sequential launch and market development of Imvara across Non-Americas jurisdictions.

D. Cerulon — Net Sales by Territory (2017–2020)

The table below summarizes Cerulon net sales by territory for each of the Examination Years. Although Cerulon serves a smaller patient population than either Veritaxol or Imvara, the product demonstrated strong growth across the Examination Years and achieved a relatively higher Non-Americas share of global net sales, reflecting PBI's successful market-entry strategy in European rare-disease markets, where orphan drug reimbursement frameworks have facilitated access.

As noted above, Cerulon's relatively higher Non-Americas share of global net sales — rising from approximately 43% in FY 2017 to approximately 45% in FY 2020 — reflects PBI's successful market-entry and patient-access strategy in EMEA rare-disease markets, including early pricing and reimbursement negotiations with health technology assessment bodies in key European markets.

E. Consolidated Revenue Summary

The following table provides an aggregate summary of net sales across all three principal products (Veritaxol, Imvara, and Cerulon) by territory for each of the Examination Years:

For reference, PPC's overall consolidated revenue for FY 2020, as reported in PPC's Form 10-K filed with the SEC, was approximately $6,820,000,000. The three principal products described above — Veritaxol, Imvara, and Cerulon — together accounted for approximately $5,610,000,000 of that total, representing approximately 82% of PPC's consolidated revenue. The balance of PPC's consolidated revenue for FY 2020 was attributable to legacy products, contract and collaboration revenue, and other smaller commercial products.

PBI's total revenue for FY 2020, as reported in PBI's Irish statutory financial statements audited by Crestfield & Associates LLP, was approximately €2,140,000,000. PBI's FY 2020 pre-tax income (profit before tax) was approximately €1,060,000,000. PPC's consolidated FY 2020 pre-tax income was approximately $1,470,000,000, as reported in PPC's Form 10-K filed with the SEC.

V. Relevance to Transfer Pricing Arrangements

Without waiving any applicable privilege, including attorney-client privilege and work-product protection, and without making any admissions with respect to the appropriateness of PPC's transfer pricing positions or methodologies, PPC notes that the product revenue data by territory produced in response to IDR No. 11 is relevant to the intercompany transfer pricing arrangements between PPC and PBI. Specifically, the data bear upon the following arrangements:

Cost-Sharing Arrangement (CSA). The CSA between PPC and PBI governs the sharing of qualified intangible development costs ("Coss") in accordance with Treasury Regulation § 1.482-7. Under the CSA, PBI's cost-sharing percentages for the Examination Years — which are based on the reasonably anticipated benefits ("RAB") to each controlled participant — were as follows: 38.2% (FY 2017), 39.6% (FY 2018), 41.1% (FY 2019), and 42.7% (FY 2020). These cost-sharing percentages were applied to total qualified R&D costs (Coss) shared under the CSA of $487,300,000 (FY 2017), $523,800,000 (FY 2018), $561,200,000 (FY 2019), and $598,400,000 (FY 2020). The RAB calculations use projected revenue splits by territory as a key input, and the actual product revenue data by territory is relevant to the evaluation and validation of the projected RAB ratios used to set the cost-sharing percentages for each year.

Legacy IP Royalty Arrangement (Legacy License). Under the Legacy License, PBI licenses from PPC certain pre-2012 vintage pharmaceutical compounds — i.e., compounds for which PPC held developed and commercialized intellectual property as of July 1, 2012, the effective date of the CSA — for exploitation in the Non-Americas Territory. PBI pays PPC a royalty of 4.5% of net sales of legacy compound products in the Non-Americas Territory. Legacy compound Non-Americas net sales (constituting the royalty base) during the Examination Years were as follows: $814,600,000 (FY 2017), $762,300,000 (FY 2018), $691,800,000 (FY 2019), and $624,100,000 (FY 2020). The declining trajectory of legacy compound net sales is consistent with the natural lifecycle of these older products, which are not subject to the CSA and for which no new development costs are being shared. This revenue data is relevant to the computation of the intercompany royalties paid by PBI to PPC under the Legacy License.

PPC notes that the revenue data produced herein supports the reasonably anticipated benefit calculations underlying the CSA and was prepared contemporaneously with PPC's transfer pricing documentation for each of the Examination Years. PPC's transfer pricing documentation was originally prepared by Susan Lam, CPA, Transfer Pricing Partner at Crestfield & Associates LLP, and was maintained by PPC in accordance with the penalty-protection standards under Internal Revenue Code § 6662(e) and the documentation requirements of Treasury Regulation § 1.6662-6.

VI. Privilege Reservation

PPC produces the documents and data enclosed with this letter solely in response to the specific requests set forth in IDR No. 11 and without waiver of any applicable privilege, including the attorney-client privilege, the work-product doctrine, and any other applicable protection under federal, state, or foreign law. Any documents responsive to IDR No. 11 that have been withheld from production on the basis of privilege are identified, or will be identified, on PPC's privilege log, which will be updated as necessary in the course of this examination. PPC reserves all rights to supplement, amend, or correct this response as additional information becomes available or as further analysis is completed. Nothing in this response shall be construed as a waiver of any right, claim, privilege, or defense that PPC may have or assert in connection with this examination or any subsequent administrative or judicial proceeding.

VII. Document Production List

The following attachments are enclosed with this letter and are produced in response to IDR No. 11:

1. Attachment A: Product Revenue Schedule — Veritaxol, Imvara, and Cerulon, Net Sales by Territory (Americas / Non-Americas), Fiscal Years 2017–2020, including legacy compound net sales and royalty computation data.

2. Attachment B: Supporting Excerpts from PPC Internal Management Revenue Reports (Fiscal Years 2017–2020), including reconciliation to PPC's SEC Form 10-K filings and PBI's Irish statutory financial statements as audited by Crestfield & Associates LLP.

VIII. Offer of Further Cooperation

PPC remains fully committed to cooperating with the Examination Team and is willing to provide additional data, documents, or clarification as may be reasonably requested by Revenue Agent Dunleavy or other members of the Examination Team in connection with IDR No. 11 or any related information requests. Should the Examination Team require access to underlying transactional data (e.g., invoice-level records), PPC is prepared to discuss the scope and logistics of such a production to ensure that responsive materials are provided in a timely and efficient manner.

The primary point of contact for follow-up on this IDR response is:

Garrett Simmons, Esq. Lead Associate Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 468-7218

Email: g.simmons@calderwoodharkness.com

For escalated matters, please direct inquiries to:

Leonard Cross, Esq. Partner (Responsible Partner) Calderwood & Harkness LLP 600 Lexington Avenue New York, NY 10022 Telephone: (212) 355-4012

Email: l.cross@calderwoodharkness.com

We appreciate the Examination Team's courtesy in this matter and look forward to continued productive dialogue. Please do not hesitate to contact us if you have any questions regarding this response or the enclosed materials.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Garrett Simmons Lead Associate Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103

On behalf of Penterra Pharmaceuticals Corp.

cc (via electronic delivery):

Leonard Cross, Esq. — Calderwood & Harkness LLP Sylvia Hartwell, Esq. — Calderwood & Harkness LLP Marcus Whitfield — Vice President, Global Tax, Penterra Pharmaceuticals Corp. Deborah Staines — General Counsel, Penterra Pharmaceuticals Corp. Supervisory Revenue Agent Gerald Meskill — IRS LB&I, Team Manager

Enclosures (2)

ATTACHMENT A

PRODUCT REVENUE SCHEDULE Veritaxol, Imvara, and Cerulon Net Sales by Territory (Americas / Non-Americas) Fiscal Years 2017–2020

Prepared in Response to IDR No. 11 Penterra Pharmaceuticals Corp. (EIN: 22-3741856) C&H Matter No. 1018-00009

Part 1: Veritaxol — Net Sales by Territory

Part 2: Imvara — Net Sales by Territory

Part 3: Cerulon — Net Sales by Territory

Part 4: Aggregate Summary — All Three Principal Products

Part 5: Legacy Compounds (Pre-2012 Vintage, Non-CSA Products) — Non-Americas Territory

The declining net sales trajectory for legacy compounds is consistent with the natural product lifecycle of these older therapeutic products, which were fully developed and commercialized prior to the effective date of the CSA (July 1, 2012) and are not subject to the cost-sharing provisions of the CSA. These products are instead governed by the Legacy License, under which PBI pays PPC a royalty at the fixed rate of 4.5% of Non-Americas net sales.

Notes to Product Revenue Schedule

Note 1: All figures are presented on a net-sales basis, reflecting gross sales less returns, rebates, discounts, and chargebacks, consistent with PPC's revenue recognition policies under ASC Topic 606, Revenue from Contracts with Customers.

Note 2: "Americas" is defined as North America (the United States, Canada, and Mexico), Central America, South America, and the Caribbean, in accordance with the territorial definitions set forth in the CSA between PPC and PBI, effective July 1, 2012.

Note 3: "Non-Americas" encompasses all territories outside the Americas, including the EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific) regions, which are managed and commercialized by PBI from its Dublin, Ireland headquarters.

Note 4: Source data are derived from PPC's audited consolidated financial statements for the fiscal years 2017 through 2020 (audited by Crestfield & Associates LLP, engagement partner Martin Ogilvy, CPA) and PBI's Irish statutory financial statements for the corresponding fiscal years (also audited by Crestfield & Associates LLP). Internal management revenue reports provide the underlying product- and territory-level detail and have been reconciled to the audited financial statements as set forth in Attachment B.

Note 5: PBI's revenue is denominated in euros (€). For purposes of this schedule, Non-Americas revenue figures attributable to PBI have been converted to U.S. dollars ($) at the average USD/EUR exchange rate for each fiscal year, as follows: FY 2017 — 1.1297; FY 2018 — 1.1810; FY 2019 — 1.1195; FY 2020 — 1.1422. These rates are consistent with the exchange rates used in PPC's audited consolidated financial statements for each respective year.

Note 6: PPC's fiscal year-end is December 31. PPC is publicly traded on the Nasdaq Stock Market under the ticker symbol "PPCA." PBI's fiscal year-end is also December 31, consistent with PPC's consolidated reporting calendar.

ATTACHMENT B

SUPPORTING EXCERPTS FROM PPC INTERNAL MANAGEMENT REVENUE REPORTS Fiscal Years 2017–2020

Prepared in Response to IDR No. 11 Penterra Pharmaceuticals Corp. (EIN: 22-3741856) C&H Matter No. 1018-00009

Description of Enclosed Materials

Attachment B consists of excerpts from PPC's internal management revenue reports for the fiscal years 2017, 2018, 2019, and 2020. These internal reports were generated from PPC's enterprise resource planning ("ERP") system and its commercial analytics platform, and they reflect monthly and quarterly net sales data by product and by geographic territory (Americas and Non-Americas) for each of PPC's three principal products — Veritaxol, Imvara, and Cerulon — as well as for legacy compound products. The excerpts enclosed herein have been selected to provide the Examination Team with the product- and territory-level detail necessary to substantiate the figures presented in the Product Revenue Schedule at Attachment A.

Reconciliation to PPC's SEC Form 10-K Revenue Disclosures

The internal management revenue reports enclosed as Attachment B have been reconciled to PPC's annual revenue disclosures as set forth in PPC's Form 10-K filings with the SEC for each of the fiscal years 2017 through 2020. The reconciliation was performed by PPC's Global Finance team under the supervision of Marcus Whitfield, Vice President, Global Tax, and verified by Crestfield & Associates LLP in connection with the annual audit of PPC's consolidated financial statements. The reconciliation confirms that the product-level and territory-level net sales data in PPC's internal management reports are consistent with the consolidated revenue figures reported in PPC's Form 10-K, subject to immaterial rounding differences. Any such differences are documented in the reconciliation workpapers, copies of which are included in the enclosed excerpts.

Reconciliation to PBI's Irish Statutory Financial Statements

The Non-Americas revenue data reflected in the internal management revenue reports have also been reconciled to PBI's Irish statutory financial statements for each of the fiscal years 2017 through 2020, as audited by Crestfield & Associates LLP (engagement partner Martin Ogilvy, CPA). The reconciliation accounts for differences arising from currency translation (PBI reports in euros; PPC's consolidated financial statements are presented in U.S. dollars), intercompany elimination entries, and timing differences related to revenue recognition cut-off procedures at year-end. The reconciliation workpapers are included in the enclosed excerpts and demonstrate full consistency between PBI's statutory revenue and the Non-Americas revenue figures presented in the Product Revenue Schedule at Attachment A.

Availability of Underlying Transactional Data

PPC notes that the underlying transactional data supporting the internal management revenue reports — including invoice-level detail reflecting individual customer transactions across all product and territory segments — is maintained in PPC's and PBI's respective ERP systems and is available upon specific request by the Examination Team. Due to the substantial volume of invoice-level data (comprising millions of individual transactions across the four Examination Years), PPC has not produced this transactional data at this stage but is prepared to discuss the scope, format, and logistics of any such production with the Examination Team upon request. PPC is committed to providing access to this data in a manner that is both responsive to the Examination Team's needs and operationally feasible.

PBI Banking Arrangements

For the Examination Team's reference, PBI maintained independent banking arrangements with Glenmore Bank Ireland plc throughout the Examination Years, through which Non-Americas revenue was collected and managed. All revenue receipts from PBI's Non-Americas commercial operations were deposited into PBI's accounts at Glenmore Bank Ireland plc, and PBI independently managed its cash, working capital, and treasury functions from its Dublin offices. Bank statements and transaction records from PBI's Glenmore Bank Ireland plc accounts are available upon specific request and can be produced to corroborate the Non-Americas revenue figures presented in this response.

End of Attachment B — Supporting Excerpts from PPC Internal Management Revenue Reports (Fiscal Years 2017–2020). Reconciliation workpapers and selected report excerpts follow this cover page.

Veritaxol	FY 2017	FY 2018	FY 2019	FY 2020
Global Net Sales	$2,330,000,000	$2,610,000,000	$2,870,000,000	$3,120,000,000
Americas Net Sales	$1,352,000,000	$1,505,000,000	$1,636,000,000	$1,780,000,000
Non-Americas Net Sales	$978,000,000	$1,105,000,000	$1,234,000,000	$1,340,000,000
Non-Americas % of Global	~42.0%	~42.3%	~43.0%	~43.0%
Imvara	FY 2017	FY 2018	FY 2019	FY 2020
Global Net Sales	$1,390,000,000	$1,540,000,000	$1,710,000,000	$1,870,000,000
Americas Net Sales	$820,000,000	$904,000,000	$999,000,000	$1,080,000,000
Non-Americas Net Sales	$570,000,000	$636,000,000	$711,000,000	$790,000,000
Non-Americas % of Global	~41.0%	~41.3%	~41.6%	~42.2%
Cerulon	FY 2017	FY 2018	FY 2019	FY 2020
Global Net Sales	$380,000,000	$450,000,000	$530,000,000	$620,000,000
Americas Net Sales	$217,000,000	$253,000,000	$297,000,000	$340,000,000
Non-Americas Net Sales	$163,000,000	$197,000,000	$233,000,000	$280,000,000
Non-Americas % of Global	~42.9%	~43.8%	~44.0%	~45.2%
All Products	FY 2017	FY 2018	FY 2019	FY 2020
Global Net Sales	$4,100,000,000	$4,600,000,000	$5,110,000,000	$5,610,000,000
Americas Net Sales	$2,389,000,000	$2,662,000,000	$2,932,000,000	$3,200,000,000
Non-Americas Net Sales	$1,711,000,000	$1,938,000,000	$2,178,000,000	$2,410,000,000
Non-Americas % of Global	~41.7%	~42.1%	~42.6%	~43.0%
Veritaxol	FY 2017	FY 2018	FY 2019	FY 2020
Global Net Sales	$2,330,000,000	$2,610,000,000	$2,870,000,000	$3,120,000,000
Americas Net Sales	$1,352,000,000	$1,505,000,000	$1,636,000,000	$1,780,000,000
Non-Americas Net Sales	$978,000,000	$1,105,000,000	$1,234,000,000	$1,340,000,000
Non-Americas % of Global	42.0%	42.3%	43.0%	43.0%

Imvara	FY 2017	FY 2018	FY 2019	FY 2020
Global Net Sales	$1,390,000,000	$1,540,000,000	$1,710,000,000	$1,870,000,000
Americas Net Sales	$820,000,000	$904,000,000	$999,000,000	$1,080,000,000
Non-Americas Net Sales	$570,000,000	$636,000,000	$711,000,000	$790,000,000
Non-Americas % of Global	41.0%	41.3%	41.6%	42.2%
Cerulon	FY 2017	FY 2018	FY 2019	FY 2020
Global Net Sales	$380,000,000	$450,000,000	$530,000,000	$620,000,000
Americas Net Sales	$217,000,000	$253,000,000	$297,000,000	$340,000,000
Non-Americas Net Sales	$163,000,000	$197,000,000	$233,000,000	$280,000,000
Non-Americas % of Global	42.9%	43.8%	44.0%	45.2%
All Products (Veritaxol, Imvara, Cerulon)	FY 2017	FY 2018	FY 2019	FY 2020
Global Net Sales	$4,100,000,000	$4,600,000,000	$5,110,000,000	$5,610,000,000
Americas Net Sales	$2,389,000,000	$2,662,000,000	$2,932,000,000	$3,200,000,000
Non-Americas Net Sales	$1,711,000,000	$1,938,000,000	$2,178,000,000	$2,410,000,000
Non-Americas % of Global	41.7%	42.1%	42.6%	43.0%
Legacy Compounds	FY 2017	FY 2018	FY 2019	FY 2020
Non-Americas Net Sales (Royalty Base)	$814,600,000	$762,300,000	$691,800,000	$624,100,000
Royalty Paid to PPC at 4.5%	$36,657,000	$34,303,500	$31,131,000	$28,084,500

CALDERWOOD & HARKNESS LLP Attorneys at Law
1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 468-7200 Facsimile: (215) 468-7201
600 Lexington Avenue New York, NY 10022 Telephone: (212) 355-4000 Facsimile: (212) 355-4001
www.calderwoodharkness.com
October 3, 2022
VIA SECURE ELECTRONIC DELIVERY AND FIRST-CLASS MAIL
Revenue Agent Patricia Dunleavy Internal Revenue Service Large Business & International Division Exam Team ID LB&I-NE-TP-2022-00641
Re: Penterra Pharmaceuticals Corp. (EIN: 22-3741856) Response to Information Document Request No. 11 Tax Years Under Examination: 2017, 2018, 2019, 2020 C&H Matter Number: 1018-00009
Dear Revenue Agent Dunleavy:
I. Introduction and Authorization
Calderwood & Harkness LLP represents Penterra Pharmaceuticals Corp. ("PPC" or the "Company") in connection with the examination of PPC's federal income tax returns (Forms 1120) for tax years ending December 31, 2017, December 31, 2018, December 31, 2019, and December 31, 2020 (collectively, the "Examination Years") by the Internal Revenue Service ("IRS"), Large Business & International Division ("LB&I"). Our representation of PPC in this matter is authorized pursuant to IRS Form 2848 (Power of Attorney and Declaration of Representative), which was filed with the IRS on June 8, 2022, covering the following representatives of Calderwood & Harkness LLP: Leonard Cross, Esq. (Responsible Partner), Sylvia Hartwell, Esq. (Partner), Garrett Simmons, Esq. (Lead Associate), and Leila Nazari, Esq. (Associate). A copy of the executed Form 2848 was previously provided to the Examination Team and is on file with the IRS Centralized Authorization File ("CAF") unit.
This letter constitutes PPC's response to Information Document Request No. 11 ("IDR No. 11"), which was received by our office on or about September 19, 2022. IDR No. 11 requests detailed product-level revenue data by geographic territory for PPC's three principal pharmaceutical products — Veritaxol, Imvara, and Cerulon — for each of the fiscal years 2017 through 2020. As set forth in greater detail below, PPC is producing responsive documents and data in accordance with the scope of IDR No. 11. PPC appreciates the Examination Team's continued professionalism and cooperation throughout this examination and remains committed to providing timely and complete responses to the Examination Team's information requests.
II. Scope of IDR No. 11
As we understand the request, IDR No. 11 seeks net sales data for PPC's three principal commercial products — Veritaxol, Imvara, and Cerulon — segmented by product and by geographic territory, specifically: (i) Americas net sales and (ii) non-Americas net sales, for each of the four Examination Years (fiscal years 2017, 2018, 2019, and 2020). The Examination Team has further requested that the data be presented on a product-by-product basis and reconciled to PPC's publicly available financial disclosures and internal management reporting.
The territorial division specified in IDR No. 11 corresponds to the scope of the cost-sharing arrangement (the "CSA") between PPC and its Irish subsidiary, Penterra Biopharma International DAC ("PBI"), a designated activity company organized and existing under the laws of Ireland. The CSA, which became effective on July 1, 2012, governs the sharing of intangible development costs for PPC's pharmaceutical intellectual property portfolio. Under the CSA, PBI holds the exclusive rights to exploit PPC's pharmaceutical intellectual property portfolio outside the Americas (as defined in the CSA), with the "Americas" defined as North America, Central America, South America, and the Caribbean (the "Americas Territory"). PBI holds exploitation rights for all territories outside the Americas, encompassing the Europe, Middle East, and Africa ("EMEA") and Asia-Pacific ("APAC") regions (collectively, the "Non-Americas Territory"). PPC retains all exploitation rights within the Americas Territory.
PPC confirms its willingness to produce the requested product-level revenue data by territory for each of the Examination Years. The responsive information described herein and enclosed with this letter is derived from three principal sources: (i) PPC's audited consolidated financial statements for fiscal years 2017 through 2020, as filed with the U.S. Securities and Exchange Commission ("SEC") on Form 10-K; (ii) PBI's Irish statutory financial statements for the corresponding fiscal years, as audited by Crestfield & Associates LLP, PPC's independent registered public accounting firm (engagement partner Martin Ogilvy, CPA); and (iii) PPC's internal management reporting systems, which track revenue data at the product and territory level on a monthly and quarterly basis. PPC believes that these sources, taken together, provide a complete and accurate picture of the product-level revenue data requested by the Examination Team.
III. Description of Responsive Documents and Data
In response to IDR No. 11, PPC encloses the following materials:
Attachment A — Product Revenue Schedule. Enclosed as Attachment A is a detailed revenue schedule providing product-level net sales data by territory (Americas and Non-Americas) for each of PPC's three principal products — Veritaxol, Imvara, and Cerulon — for each of the fiscal years 2017, 2018, 2019, and 2020. The schedule also includes aggregate summary data across all three products, as well as a supplemental section presenting net sales data for legacy compounds (pre-2012 vintage, non-CSA products) in the Non-Americas Territory, which constitute the royalty base under the legacy intellectual property license agreement between PPC and PBI (the "Legacy License"). The Product Revenue Schedule is set forth in full in Section VII of this letter and is also provided as a standalone exhibit.
Attachment B — Supporting Excerpts from PPC Internal Management Revenue Reports. Enclosed as Attachment B are supporting excerpts from PPC's internal management revenue reports for the fiscal years 2017 through 2020. These reports reflect monthly and quarterly net sales data by product and territory, and have been reconciled to PPC's annual Form 10-K filings with the SEC and to PBI's Irish statutory financial statements as audited by Crestfield & Associates LLP (engagement partner Martin Ogilvy, CPA). A detailed description of the contents and reconciliation methodology for Attachment B is provided in Section VIII of this letter.
All revenue figures presented in the enclosed materials and in this letter are stated on a net-sales basis, reflecting gross sales less returns, rebates, discounts, and chargebacks. This presentation is consistent with PPC's revenue recognition policies as disclosed in the notes to PPC's audited consolidated financial statements and as required under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers, which PPC adopted effective January 1, 2018 (with restatement of the 2017 comparative period). PPC's fiscal year-end is December 31.
IV. Summary of Product Revenue Data
A. Overview of PPC's Principal Products
PPC is a global biopharmaceutical company engaged in the research, development, manufacture, and commercialization of innovative therapies across several therapeutic areas. PPC's product portfolio during the Examination Years was anchored by three principal commercial products, each of which is described briefly below:
Veritaxol. Veritaxol is PPC's flagship oncology therapeutic, indicated for the treatment of certain advanced solid tumors. Originally approved by the U.S. Food and Drug Administration ("FDA") in 2013, Veritaxol has since received marketing authorization in major jurisdictions worldwide, including the European Union, the United Kingdom, Japan, Canada, Australia, and numerous other countries across the EMEA and APAC regions. Veritaxol is PPC's largest product by revenue and has consistently been the primary driver of both PPC's Americas revenue and PBI's Non-Americas revenue throughout the Examination Years.
Imvara. Imvara is PPC's immunology therapeutic, indicated for the treatment of moderate-to-severe autoimmune conditions. Approved by the FDA in 2015 and subsequently authorized in major international markets, Imvara is PPC's second-largest revenue contributor and a significant component of both PPC's Americas business and PBI's Non-Americas commercial portfolio.
Cerulon. Cerulon is PPC's rare-disease therapeutic, indicated for the treatment of a specific lysosomal storage disorder. Approved by the FDA in 2016 and granted orphan drug designation in both the United States and the European Union, Cerulon serves a smaller patient population but has demonstrated a growing revenue base, particularly in the Non-Americas Territory, where PBI has pursued an aggressive market-entry and patient-access strategy in EMEA rare-disease markets.
PBI manages the commercialization of all three products in the Non-Americas Territory, encompassing the EMEA and APAC regions. PBI makes independent pricing decisions across approximately 68 country markets within the Non-Americas Territory and maintains dedicated commercial-strategy, regulatory, and medical-affairs personnel based at its registered office in Dublin, Ireland (4th Floor, Claremont House, Sandyford Business Park, Dublin D18 K7T4, Ireland). PPC manages the commercialization of all three products in the Americas Territory from its principal offices in the United States.
B. Veritaxol — Net Sales by Territory (2017–2020)
The table below summarizes Veritaxol net sales by territory for each of the Examination Years. Complete data for all four years is set forth in the Product Revenue Schedule at Attachment A. Veritaxol is the primary driver of both PPC's U.S. revenue and PBI's Non-Americas revenue, and its global net sales grew at a compound annual growth rate of approximately 10% over the 2017–2020 period, driven by continued uptake in existing indications and label expansion in both the Americas and Non-Americas Territories.
As the data reflect, the Non-Americas share of Veritaxol global net sales ranged from approximately 42% to 43% across the four Examination Years, consistent with PBI's growing commercial footprint and increasing market penetration in EMEA and APAC oncology markets.
C. Imvara — Net Sales by Territory (2017–2020)
The table below summarizes Imvara net sales by territory for each of the Examination Years. Imvara is PPC's second-largest product and a significant contributor to PBI's Non-Americas revenue base. Imvara net sales grew steadily over the 2017–2020 period as the product achieved broader formulary access and reimbursement coverage in multiple jurisdictions.
The Non-Americas share of Imvara global net sales ranged from approximately 41% to 42% across the four Examination Years, reflecting a gradual increase in PBI's share consistent with the sequential launch and market development of Imvara across Non-Americas jurisdictions.
D. Cerulon — Net Sales by Territory (2017–2020)
The table below summarizes Cerulon net sales by territory for each of the Examination Years. Although Cerulon serves a smaller patient population than either Veritaxol or Imvara, the product demonstrated strong growth across the Examination Years and achieved a relatively higher Non-Americas share of global net sales, reflecting PBI's successful market-entry strategy in European rare-disease markets, where orphan drug reimbursement frameworks have facilitated access.
As noted above, Cerulon's relatively higher Non-Americas share of global net sales — rising from approximately 43% in FY 2017 to approximately 45% in FY 2020 — reflects PBI's successful market-entry and patient-access strategy in EMEA rare-disease markets, including early pricing and reimbursement negotiations with health technology assessment bodies in key European markets.
E. Consolidated Revenue Summary
The following table provides an aggregate summary of net sales across all three principal products (Veritaxol, Imvara, and Cerulon) by territory for each of the Examination Years:
For reference, PPC's overall consolidated revenue for FY 2020, as reported in PPC's Form 10-K filed with the SEC, was approximately $6,820,000,000. The three principal products described above — Veritaxol, Imvara, and Cerulon — together accounted for approximately $5,610,000,000 of that total, representing approximately 82% of PPC's consolidated revenue. The balance of PPC's consolidated revenue for FY 2020 was attributable to legacy products, contract and collaboration revenue, and other smaller commercial products.
PBI's total revenue for FY 2020, as reported in PBI's Irish statutory financial statements audited by Crestfield & Associates LLP, was approximately €2,140,000,000. PBI's FY 2020 pre-tax income (profit before tax) was approximately €1,060,000,000. PPC's consolidated FY 2020 pre-tax income was approximately $1,470,000,000, as reported in PPC's Form 10-K filed with the SEC.
V. Relevance to Transfer Pricing Arrangements
Without waiving any applicable privilege, including attorney-client privilege and work-product protection, and without making any admissions with respect to the appropriateness of PPC's transfer pricing positions or methodologies, PPC notes that the product revenue data by territory produced in response to IDR No. 11 is relevant to the intercompany transfer pricing arrangements between PPC and PBI. Specifically, the data bear upon the following arrangements:
Cost-Sharing Arrangement (CSA). The CSA between PPC and PBI governs the sharing of qualified intangible development costs ("Coss") in accordance with Treasury Regulation § 1.482-7. Under the CSA, PBI's cost-sharing percentages for the Examination Years — which are based on the reasonably anticipated benefits ("RAB") to each controlled participant — were as follows: 38.2% (FY 2017), 39.6% (FY 2018), 41.1% (FY 2019), and 42.7% (FY 2020). These cost-sharing percentages were applied to total qualified R&D costs (Coss) shared under the CSA of $487,300,000 (FY 2017), $523,800,000 (FY 2018), $561,200,000 (FY 2019), and $598,400,000 (FY 2020). The RAB calculations use projected revenue splits by territory as a key input, and the actual product revenue data by territory is relevant to the evaluation and validation of the projected RAB ratios used to set the cost-sharing percentages for each year.
Legacy IP Royalty Arrangement (Legacy License). Under the Legacy License, PBI licenses from PPC certain pre-2012 vintage pharmaceutical compounds — i.e., compounds for which PPC held developed and commercialized intellectual property as of July 1, 2012, the effective date of the CSA — for exploitation in the Non-Americas Territory. PBI pays PPC a royalty of 4.5% of net sales of legacy compound products in the Non-Americas Territory. Legacy compound Non-Americas net sales (constituting the royalty base) during the Examination Years were as follows: $814,600,000 (FY 2017), $762,300,000 (FY 2018), $691,800,000 (FY 2019), and $624,100,000 (FY 2020). The declining trajectory of legacy compound net sales is consistent with the natural lifecycle of these older products, which are not subject to the CSA and for which no new development costs are being shared. This revenue data is relevant to the computation of the intercompany royalties paid by PBI to PPC under the Legacy License.
PPC notes that the revenue data produced herein supports the reasonably anticipated benefit calculations underlying the CSA and was prepared contemporaneously with PPC's transfer pricing documentation for each of the Examination Years. PPC's transfer pricing documentation was originally prepared by Susan Lam, CPA, Transfer Pricing Partner at Crestfield & Associates LLP, and was maintained by PPC in accordance with the penalty-protection standards under Internal Revenue Code § 6662(e) and the documentation requirements of Treasury Regulation § 1.6662-6.
VI. Privilege Reservation
PPC produces the documents and data enclosed with this letter solely in response to the specific requests set forth in IDR No. 11 and without waiver of any applicable privilege, including the attorney-client privilege, the work-product doctrine, and any other applicable protection under federal, state, or foreign law. Any documents responsive to IDR No. 11 that have been withheld from production on the basis of privilege are identified, or will be identified, on PPC's privilege log, which will be updated as necessary in the course of this examination. PPC reserves all rights to supplement, amend, or correct this response as additional information becomes available or as further analysis is completed. Nothing in this response shall be construed as a waiver of any right, claim, privilege, or defense that PPC may have or assert in connection with this examination or any subsequent administrative or judicial proceeding.
VII. Document Production List
The following attachments are enclosed with this letter and are produced in response to IDR No. 11:
1. Attachment A: Product Revenue Schedule — Veritaxol, Imvara, and Cerulon, Net Sales by Territory (Americas / Non-Americas), Fiscal Years 2017–2020, including legacy compound net sales and royalty computation data.
2. Attachment B: Supporting Excerpts from PPC Internal Management Revenue Reports (Fiscal Years 2017–2020), including reconciliation to PPC's SEC Form 10-K filings and PBI's Irish statutory financial statements as audited by Crestfield & Associates LLP.
VIII. Offer of Further Cooperation
PPC remains fully committed to cooperating with the Examination Team and is willing to provide additional data, documents, or clarification as may be reasonably requested by Revenue Agent Dunleavy or other members of the Examination Team in connection with IDR No. 11 or any related information requests. Should the Examination Team require access to underlying transactional data (e.g., invoice-level records), PPC is prepared to discuss the scope and logistics of such a production to ensure that responsive materials are provided in a timely and efficient manner.
The primary point of contact for follow-up on this IDR response is:
Garrett Simmons, Esq. Lead Associate Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: (215) 468-7218
Email: g.simmons@calderwoodharkness.com
For escalated matters, please direct inquiries to:
Leonard Cross, Esq. Partner (Responsible Partner) Calderwood & Harkness LLP 600 Lexington Avenue New York, NY 10022 Telephone: (212) 355-4012
Email: l.cross@calderwoodharkness.com
We appreciate the Examination Team's courtesy in this matter and look forward to continued productive dialogue. Please do not hesitate to contact us if you have any questions regarding this response or the enclosed materials.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Garrett Simmons Lead Associate Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103
On behalf of Penterra Pharmaceuticals Corp.
cc (via electronic delivery):
Leonard Cross, Esq. — Calderwood & Harkness LLP Sylvia Hartwell, Esq. — Calderwood & Harkness LLP Marcus Whitfield — Vice President, Global Tax, Penterra Pharmaceuticals Corp. Deborah Staines — General Counsel, Penterra Pharmaceuticals Corp. Supervisory Revenue Agent Gerald Meskill — IRS LB&I, Team Manager
Enclosures (2)
ATTACHMENT A
PRODUCT REVENUE SCHEDULE Veritaxol, Imvara, and Cerulon Net Sales by Territory (Americas / Non-Americas) Fiscal Years 2017–2020
Prepared in Response to IDR No. 11 Penterra Pharmaceuticals Corp. (EIN: 22-3741856) C&H Matter No. 1018-00009
Part 1: Veritaxol — Net Sales by Territory
Part 2: Imvara — Net Sales by Territory
Part 3: Cerulon — Net Sales by Territory
Part 4: Aggregate Summary — All Three Principal Products
Part 5: Legacy Compounds (Pre-2012 Vintage, Non-CSA Products) — Non-Americas Territory
The declining net sales trajectory for legacy compounds is consistent with the natural product lifecycle of these older therapeutic products, which were fully developed and commercialized prior to the effective date of the CSA (July 1, 2012) and are not subject to the cost-sharing provisions of the CSA. These products are instead governed by the Legacy License, under which PBI pays PPC a royalty at the fixed rate of 4.5% of Non-Americas net sales.
Notes to Product Revenue Schedule
Note 1: All figures are presented on a net-sales basis, reflecting gross sales less returns, rebates, discounts, and chargebacks, consistent with PPC's revenue recognition policies under ASC Topic 606, Revenue from Contracts with Customers.
Note 2: "Americas" is defined as North America (the United States, Canada, and Mexico), Central America, South America, and the Caribbean, in accordance with the territorial definitions set forth in the CSA between PPC and PBI, effective July 1, 2012.
Note 3: "Non-Americas" encompasses all territories outside the Americas, including the EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific) regions, which are managed and commercialized by PBI from its Dublin, Ireland headquarters.
Note 4: Source data are derived from PPC's audited consolidated financial statements for the fiscal years 2017 through 2020 (audited by Crestfield & Associates LLP, engagement partner Martin Ogilvy, CPA) and PBI's Irish statutory financial statements for the corresponding fiscal years (also audited by Crestfield & Associates LLP). Internal management revenue reports provide the underlying product- and territory-level detail and have been reconciled to the audited financial statements as set forth in Attachment B.
Note 5: PBI's revenue is denominated in euros (€). For purposes of this schedule, Non-Americas revenue figures attributable to PBI have been converted to U.S. dollars ($) at the average USD/EUR exchange rate for each fiscal year, as follows: FY 2017 — 1.1297; FY 2018 — 1.1810; FY 2019 — 1.1195; FY 2020 — 1.1422. These rates are consistent with the exchange rates used in PPC's audited consolidated financial statements for each respective year.
Note 6: PPC's fiscal year-end is December 31. PPC is publicly traded on the Nasdaq Stock Market under the ticker symbol "PPCA." PBI's fiscal year-end is also December 31, consistent with PPC's consolidated reporting calendar.
ATTACHMENT B
SUPPORTING EXCERPTS FROM PPC INTERNAL MANAGEMENT REVENUE REPORTS Fiscal Years 2017–2020
Prepared in Response to IDR No. 11 Penterra Pharmaceuticals Corp. (EIN: 22-3741856) C&H Matter No. 1018-00009
Description of Enclosed Materials
Attachment B consists of excerpts from PPC's internal management revenue reports for the fiscal years 2017, 2018, 2019, and 2020. These internal reports were generated from PPC's enterprise resource planning ("ERP") system and its commercial analytics platform, and they reflect monthly and quarterly net sales data by product and by geographic territory (Americas and Non-Americas) for each of PPC's three principal products — Veritaxol, Imvara, and Cerulon — as well as for legacy compound products. The excerpts enclosed herein have been selected to provide the Examination Team with the product- and territory-level detail necessary to substantiate the figures presented in the Product Revenue Schedule at Attachment A.
Reconciliation to PPC's SEC Form 10-K Revenue Disclosures
The internal management revenue reports enclosed as Attachment B have been reconciled to PPC's annual revenue disclosures as set forth in PPC's Form 10-K filings with the SEC for each of the fiscal years 2017 through 2020. The reconciliation was performed by PPC's Global Finance team under the supervision of Marcus Whitfield, Vice President, Global Tax, and verified by Crestfield & Associates LLP in connection with the annual audit of PPC's consolidated financial statements. The reconciliation confirms that the product-level and territory-level net sales data in PPC's internal management reports are consistent with the consolidated revenue figures reported in PPC's Form 10-K, subject to immaterial rounding differences. Any such differences are documented in the reconciliation workpapers, copies of which are included in the enclosed excerpts.
Reconciliation to PBI's Irish Statutory Financial Statements
The Non-Americas revenue data reflected in the internal management revenue reports have also been reconciled to PBI's Irish statutory financial statements for each of the fiscal years 2017 through 2020, as audited by Crestfield & Associates LLP (engagement partner Martin Ogilvy, CPA). The reconciliation accounts for differences arising from currency translation (PBI reports in euros; PPC's consolidated financial statements are presented in U.S. dollars), intercompany elimination entries, and timing differences related to revenue recognition cut-off procedures at year-end. The reconciliation workpapers are included in the enclosed excerpts and demonstrate full consistency between PBI's statutory revenue and the Non-Americas revenue figures presented in the Product Revenue Schedule at Attachment A.
Availability of Underlying Transactional Data
PPC notes that the underlying transactional data supporting the internal management revenue reports — including invoice-level detail reflecting individual customer transactions across all product and territory segments — is maintained in PPC's and PBI's respective ERP systems and is available upon specific request by the Examination Team. Due to the substantial volume of invoice-level data (comprising millions of individual transactions across the four Examination Years), PPC has not produced this transactional data at this stage but is prepared to discuss the scope, format, and logistics of any such production with the Examination Team upon request. PPC is committed to providing access to this data in a manner that is both responsive to the Examination Team's needs and operationally feasible.
PBI Banking Arrangements
For the Examination Team's reference, PBI maintained independent banking arrangements with Glenmore Bank Ireland plc throughout the Examination Years, through which Non-Americas revenue was collected and managed. All revenue receipts from PBI's Non-Americas commercial operations were deposited into PBI's accounts at Glenmore Bank Ireland plc, and PBI independently managed its cash, working capital, and treasury functions from its Dublin offices. Bank statements and transaction records from PBI's Glenmore Bank Ireland plc accounts are available upon specific request and can be produced to corroborate the Non-Americas revenue figures presented in this response.
End of Attachment B — Supporting Excerpts from PPC Internal Management Revenue Reports (Fiscal Years 2017–2020). Reconciliation workpapers and selected report excerpts follow this cover page.
Veritaxol | FY 2017 | FY 2018 | FY 2019 | FY 2020
Global Net Sales | $2,330,000,000 | $2,610,000,000 | $2,870,000,000 | $3,120,000,000
Americas Net Sales | $1,352,000,000 | $1,505,000,000 | $1,636,000,000 | $1,780,000,000
Non-Americas Net Sales | $978,000,000 | $1,105,000,000 | $1,234,000,000 | $1,340,000,000
Non-Americas % of Global | ~42.0% | ~42.3% | ~43.0% | ~43.0%
Imvara | FY 2017 | FY 2018 | FY 2019 | FY 2020
Global Net Sales | $1,390,000,000 | $1,540,000,000 | $1,710,000,000 | $1,870,000,000
Americas Net Sales | $820,000,000 | $904,000,000 | $999,000,000 | $1,080,000,000
Non-Americas Net Sales | $570,000,000 | $636,000,000 | $711,000,000 | $790,000,000
Non-Americas % of Global | ~41.0% | ~41.3% | ~41.6% | ~42.2%
Cerulon | FY 2017 | FY 2018 | FY 2019 | FY 2020
Global Net Sales | $380,000,000 | $450,000,000 | $530,000,000 | $620,000,000
Americas Net Sales | $217,000,000 | $253,000,000 | $297,000,000 | $340,000,000
Non-Americas Net Sales | $163,000,000 | $197,000,000 | $233,000,000 | $280,000,000
Non-Americas % of Global | ~42.9% | ~43.8% | ~44.0% | ~45.2%
All Products | FY 2017 | FY 2018 | FY 2019 | FY 2020
Global Net Sales | $4,100,000,000 | $4,600,000,000 | $5,110,000,000 | $5,610,000,000
Americas Net Sales | $2,389,000,000 | $2,662,000,000 | $2,932,000,000 | $3,200,000,000
Non-Americas Net Sales | $1,711,000,000 | $1,938,000,000 | $2,178,000,000 | $2,410,000,000
Non-Americas % of Global | ~41.7% | ~42.1% | ~42.6% | ~43.0%
Veritaxol | FY 2017 | FY 2018 | FY 2019 | FY 2020
Global Net Sales | $2,330,000,000 | $2,610,000,000 | $2,870,000,000 | $3,120,000,000
Americas Net Sales | $1,352,000,000 | $1,505,000,000 | $1,636,000,000 | $1,780,000,000
Non-Americas Net Sales | $978,000,000 | $1,105,000,000 | $1,234,000,000 | $1,340,000,000
Non-Americas % of Global | 42.0% | 42.3% | 43.0% | 43.0%
Imvara | FY 2017 | FY 2018 | FY 2019 | FY 2020
Global Net Sales | $1,390,000,000 | $1,540,000,000 | $1,710,000,000 | $1,870,000,000
Americas Net Sales | $820,000,000 | $904,000,000 | $999,000,000 | $1,080,000,000
Non-Americas Net Sales | $570,000,000 | $636,000,000 | $711,000,000 | $790,000,000
Non-Americas % of Global | 41.0% | 41.3% | 41.6% | 42.2%
Cerulon | FY 2017 | FY 2018 | FY 2019 | FY 2020
Global Net Sales | $380,000,000 | $450,000,000 | $530,000,000 | $620,000,000
Americas Net Sales | $217,000,000 | $253,000,000 | $297,000,000 | $340,000,000
Non-Americas Net Sales | $163,000,000 | $197,000,000 | $233,000,000 | $280,000,000
Non-Americas % of Global | 42.9% | 43.8% | 44.0% | 45.2%
All Products (Veritaxol, Imvara, Cerulon) | FY 2017 | FY 2018 | FY 2019 | FY 2020
Global Net Sales | $4,100,000,000 | $4,600,000,000 | $5,110,000,000 | $5,610,000,000
Americas Net Sales | $2,389,000,000 | $2,662,000,000 | $2,932,000,000 | $3,200,000,000
Non-Americas Net Sales | $1,711,000,000 | $1,938,000,000 | $2,178,000,000 | $2,410,000,000
Non-Americas % of Global | 41.7% | 42.1% | 42.6% | 43.0%
Legacy Compounds | FY 2017 | FY 2018 | FY 2019 | FY 2020
Non-Americas Net Sales (Royalty Base) | $814,600,000 | $762,300,000 | $691,800,000 | $624,100,000
Royalty Paid to PPC at 4.5% | $36,657,000 | $34,303,500 | $31,131,000 | $28,084,500

CALDERWOOD & HARKNESS LLP Attorneys at Law

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CALDERWOOD & HARKNESS LLP

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