Commitments and Contingencies	12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 16 – COMMITMENTS AND CONTINGENCIES Purchase Commitments Under the Company’s supply agreement with AGC Biologics A/S (formerly known as CMC Biologics A/S) (“AGC Biologics”), the Company has agreed to purchase certain minimum annual order quantities of TEPEZZA drug substance. In addition, the Company must provide AGC Biologics with rolling forecasts of TEPEZZA drug substance requirements, with a portion of the forecast being a firm and binding order. At December 31, 2022, the Company had binding purchase commitments with AGC Biologics for TEPEZZA drug substance of €72.8 million ($77.6 million converted at a Euro-to-Dollar exchange rate as of December 31, 2022 of 1.0660), to be delivered through December 2024. Under the Company’s supply agreement with Catalent Indiana, LLC (“Catalent”), the Company must provide Catalent with rolling forecasts of TEPEZZA drug product requirements, with a portion of the forecast being a firm and binding order. At December 31, 2022, the Company had binding purchase commitments with Catalent for TEPEZZA drug product of $6.0 million, to be delivered through June 2024. The Company received FDA approval in December 2021 for a second drug product manufacturer, Patheon. Under the Company’s supply agreement with Patheon, the Company must provide Patheon with rolling forecasts of TEPEZZA drug product requirements, with a portion of the forecast being a firm and binding order. As of December 31, 2022, the Company had binding purchase commitments with Patheon for TEPEZZA drug product of €7.0 million ($7.4 million converted at an exchange rate as of December 31, 2022 of 1.0660), to be delivered through June 2024. Under the Company’s agreement with Bio-Technology General (Israel) Ltd (“BTG Israel”), the Company has agreed to purchase certain minimum annual order quantities and is obligated to purchase at least 80% of its annual worldwide bulk product requirements for KRYSTEXXA from BTG Israel. Under the agreement, if the manufacture of the bulk product is moved out of Israel, the Company may be required to obtain the approval of the Israel Innovation Authority (formerly known as Israeli Office of the Chief Scientist) (“IIA”) because certain KRYSTEXXA intellectual property was initially developed with a grant funded by the IIA. The Company issues eighteen-month forecasts of the volume of KRYSTEXXA that the Company expects to order. The first nine months of each forecast is considered a binding firm order. As of December 31, 2022, the Company had a total purchase commitment, including the minimum annual order quantities and binding firm orders, with BTG Israel for KRYSTEXXA of $31.8 million, to be delivered through December 2026. Under an agreement with Boehringer Ingelheim Biopharmaceuticals GmbH (“Boehringer Ingelheim Biopharmaceuticals”), Boehringer Ingelheim Biopharmaceuticals is required to manufacture and supply ACTIMMUNE to the Company. The Company is required to purchase minimum quantities of finished medicine during the term of the agreement, which term extends to at least September 30, 2024. As of December 31, 2022, the minimum purchase commitment to Boehringer Ingelheim Biopharmaceuticals was €5.9 million ($6.3 million converted using a Euro-to-Dollar exchange rate of 1.0660 as of December 31, 2022) through September 2024. Excluding the above, additional purchase orders and other commitments relating to the manufacture of PROCYSBI, RAVICTI, UPLIZNA, BUPHENYL, QUINSAIR, RAYOS and VIMOVO of $17.4 million were outstanding at December 31, 2022. Contingencies The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. In addition, the Company from time to time has billing disputes with vendors in which amounts invoiced are not in accordance with the terms of their contracts. Disclosure of ongoing matters is considered at the time of each filing and matters may be removed if the statute of limitations has lapsed or circumstances have changed that reduce the risk of exposure. On August 3, 2022, the Company received a civil investigative demand from the United States Department of Justice (“DOJ”) pursuant to the Federal False Claims Act regarding an investigation concerning potentially false information in prior authorization forms. A prior authorization form is a managed care practice whereby the payer (either a commercial insurer or a government health program) requires that the prescribing physician provide additional justification or information supporting the physician’s decision to prescribe a particular medicine. The civil investigative demand requests certain documents and information related to DUEXIS, PENNSAID 2%, VIMOVO and RAYOS. The Company is cooperating with the investigation and the DOJ has not indicated to the Company whether it believes the Company engaged in any wrongdoing or if the Company is the subject of the investigation. While the Company is not aware of any fraudulent scheme to provide false information in prior authorization forms for its medicines that resulted in improper payments from government healthcare programs, no assurance can be given as to the timing or outcome of the DOJ’s investigation, or that it will not result in a material adverse effect on the Company’s business. In the third and fourth quarter of 2022, the Company was served with several complaints from plaintiffs alleging to have taken TEPEZZA and suffered hearing impairments. Although hearing impairment, including deafness, was identified as a potential adverse event in the pivotal clinical trials for TEPEZZA, addressed at the FDA advisory committee meeting that considered the safety and efficacy of TEPEZZA, and listed as a potential adverse event in the FDA-approved TEPEZZA product label, the plaintiffs allege that the Company failed to adequately inform them about the risk of hearing impairment before taking the medicine. The Company intends to vigorously defend itself in the lawsuits and maintains insurance coverage for product liability claims. Nevertheless, no assurance can be given as to the outcome of the litigation, whether additional similar lawsuits will be initiated or whether the Company’s insurance coverage will be adequate to cover the costs of the litigation or any resulting settlements or judgments. Royalty and Milestone Agreements TEPEZZA River Vision Acquisition Agreement and S.R. One/Lundbeckfond Agreements Under the acquisition agreement for River Vision in May 2017, the Company agreed to pay up to $325.0 million upon the attainment of various milestones, composed of $100.0 million related to FDA approval and $225.0 million related to net sales thresholds for TEPEZZA. The agreement also included a royalty payment of 3% of the portion of annual worldwide net sales exceeding $300.0 million. S.R. One and Lundbeckfond, as two of the former River Vision stockholders, both held rights to receive approximately 35.66% of any future TEPEZZA payments. As a result of the Company’s agreements with S.R. One and Lundbeckfond in April 2020, the Company’s remaining net obligations to make payments for TEPEZZA sales milestones and royalties to the former stockholders of River Vision was reduced by approximately 70.25%, after including payments to a third party. This resulted in milestone payments of $67.0 million to the other former River Vision stockholders during the year ended December 31, 2021. There are no further TEPEZZA net sales milestone obligations remaining to the former River Vision stockholders. In addition, as a result of the S.R. One and Lundbeckfond agreements, annual earnout payments of 0.893% are due on the portion of annual worldwide net sales exceeding $300.0 million. Roche License Agreement Under the Company’s license agreement with Roche, the Company is required to pay Roche up to CHF103.0 million upon the attainment of various development, regulatory and sales milestones for TEPEZZA. The Company made a milestone payment of CHF5.0 million ($5.2 million when converted using a CHF-to-Dollar exchange rate at the date of payment of 1.0382) related to FDA approval during the first quarter of 2020. The agreement with Roche also includes tiered royalties on annual worldwide net sales between 9% and 12%. During the year ended December 31, 2021, the Company made a milestone payment of CHF50.0 million ($56.1 million when converted using a CHF-to-Dollar exchange rate at the date of payment of 1.1228) in relation to the attainment of TEPEZZA net sales milestones. The Company’s remaining obligation to Roche relating to the attainment of various TEPEZZA development and regulatory milestones is CHF43.0 million ($46.5 million when converted using a CHF-to-Dollar exchange rate at December 31, 2022 of 1.0823). KRYSTEXXA Under the terms of a license agreement with Duke University (“Duke”) and Mountain View Pharmaceuticals, Inc. (“MVP”), the Company is obligated to pay Duke a mid-single-digit royalty on its global net sales of KRYSTEXXA and a royalty of between 5% and 15% on any global sublicense revenue. The Company is also obligated to pay MVP a mid-single-digit royalty on its net sales of KRYSTEXXA outside of the United States and a royalty of between 5% and 15% on any sublicense revenue outside of the United States. RAVICTI Under the terms of an asset purchase agreement with Bausch Health Companies Inc. (formerly Ucyclyd Pharma, Inc.) (“Bausch”), the Company is obligated to pay to Bausch mid-single-digit royalties on its global net sales of RAVICTI. Under the terms of a license agreement with Saul W. Brusilow, M.D. and Brusilow Enterprises, Inc. (“Brusilow”), the Company is obligated to pay low single-digit royalties to Brusilow on net sales of RAVICTI that are covered by a valid claim of a licensed patent. PROCYSBI Under the terms of an amended and restated license agreement with The Regents of the University of California, San Diego (“UCSD”), as amended, the Company is obligated to pay to UCSD tiered low to mid-single-digit royalties on its net sales of PROCYSBI, including a minimum annual royalty in an amount less than $0.1 million. The Company must also pay UCSD a percentage in the mid-teens of any fees it receives from its sublicensees under the agreement that are not earned royalties. The Company may also be obligated to pay UCSD aggregate developmental milestone payments of $0.3 million and aggregate regulatory milestone payments of $1.8 million for each orphan indication, and aggregate developmental milestone payments of $0.8 million and aggregate regulatory milestone payments of $3.5 million for each non-orphan indication. UPLIZNA Following the acquisition of Viela on March 15, 2021, the Company is party to a number of third-party license agreements. Under these license agreements, the Company is obligated to pay up to a total of $30.0 million in milestone payments subject to UPLIZNA net sales exceeding $500.0 million. In addition, the Company is required to pay mid-single-digit royalties on annual worldwide net sales of UPLIZNA. ACTIMMUNE Under an amended license agreement, with the original developer of ACTIMMUNE, the Company is obligated to pay a low single digit royalty on its annual net sales of ACTIMMUNE. In addition, under the terms of an assignment and option agreement with a separate third-party, the Company is obligated to pay low single-digit royalties on the Company’s net sales of ACTIMMUNE in the United States. RAYOS and LODOTRA Effective January 1, 2019, the Company was obligated to pay Vectura a mid-teens percentage royalty on its RAYOS net sales in North America, subject to a minimum royalty of $8.0 million per year, which minimum royalty requirement expired on December 31, 2022. In addition, under the amendments, the Company ceased recording LODOTRA revenue and is no longer required to pay a royalty in respect of LODOTRA. For all of the royalty agreements entered into by the Company, a total royalty and earnout expense of $338.5 million, $289.7 million and $169.3 million was recorded in cost of goods sold in the consolidated statements of comprehensive income during the years ended December 31, 2022, 2021 and 2020, respectively. Other Agreements Xeris Pharmaceuticals, Inc. On November 22, 2022, the Company entered into a research collaboration and option agreement with Xeris under which Xeris is obligated to use its proprietary formulation technology platform, XeriJect, to conduct a research program to develop an ultra-concentrated, ready-to-use, subcutaneous injection of TEPEZZA. The Company received an option to obtain a commercial license for any reformulated product developed under the research program. An upfront payment of $2.75 million was paid during the year ended December 31, 2022. In addition, Xeris is entitled to receive a milestone payment of $6.0 million upon the earlier of either (i) the exercise of the Company’s option or (ii) the achievement of the minimally acceptable target product profile by a reformulated product generated through the research program. If the Company exercises its option to continue development of and commercialize the reformulated product, Xeris may also be entitled to receive additional development and regulatory milestones and royalties on future sales. Refer to Note 4 for further details. Q32 Bio Inc. On August 12, 2022, the Company entered into a collaboration and option agreement with Q32 related to its pipeline candidate ADX-914, a monoclonal antibody antagonist of the interleukin-7 receptor for the treatment of autoimmune and inflammatory diseases. An upfront payment of $15.0 million and milestone-based development funding of $17.5 million were paid during the year ended December 31, 2022. The Company may also be obligated to pay up to $22.5 million in the form of additional milestone-based development funding. If the Company exercises the option, it may be obligated to make up to an additional $645.0 million in closing and milestone payments, as well as tiered royalties on net sales from a high single-digit to a low double-digit percentage, inclusive of certain amounts payable to a third party under a pre-existing license agreement. Refer to Note 4 for further details. Alpine Immune Science, Inc. On December 15, 2021, the Company entered into an exclusive license agreement with Alpine for the development and commercialization of up to four preclinical candidates generated from Alpine’s unique discovery platform. In connection with the execution of the license agreement, the Company entered into a stock purchase agreement with Alpine to purchase a minority stake of 951,980 shares of Alpine’s common stock in a private placement. Under the terms of the agreements, the Company paid Alpine $15.0 million in the fourth quarter of 2021 and paid $25.0 million in the first quarter of 2022. In addition, Alpine is eligible to receive up to $381.0 million per program, or approximately $1.52 billion in total, in future success-based payments related to development, regulatory and commercial milestones. Additionally, Alpine is eligible to receive tiered royalties from a mid-single-digit percentage to a low double-digit percentage on worldwide net sales of licensed medicines. Alpine is required to advance candidate molecules to pre-defined preclinical milestones, and the Company will be responsible for the costs. The Company will then be required to assume responsibility for development and commercialization activities and costs. Refer to Note 4 for further details. Arrowhead Pharmaceuticals, Inc. On June 18, 2021, the Company entered into a global agreement with Arrowhead for HZN-457, a discovery-stage investigational RNAi therapeutic being developed by Arrowhead as a potential treatment for uncontrolled gout. Arrowhead granted the Company a worldwide exclusive license to develop, manufacture and commercialize medicines based on the RNAi therapeutic. Arrowhead is required to use commercially reasonable efforts to conduct research and preclinical development activities for the RNAi therapeutic products. The Company must use commercially reasonable efforts in, and will be responsible for, clinical development and commercialization of the RNAi therapeutic products. Under the terms of the agreement, the Company paid Arrowhead an upfront cash payment of $40.0 million in July 2021 and agreed to pay additional potential future milestone payments of up to $660.0 million contingent on the achievement of certain development, regulatory and commercial milestones, and low to mid-teens royalties on worldwide calendar year net sales of licensed medicines. In addition, a $15.0 million development milestone was recognized in the fourth quarter of 2022. Refer to Note 4 for further details. Halozyme Therapeutics, Inc. On November 21, 2020, the Company entered into a global agreement with Halozyme that gives the Company exclusive access to Halozyme’s ENHANZE drug delivery technology for SC formulation of medicines targeting IGF-1R. The Company is exploring ENHANZE to develop a SC formulation of TEPEZZA. Under the terms of the agreement, the Company paid Halozyme an upfront cash payment of $30.0 million in December 2020 and agreed to pay additional potential future milestone payments of up to $160.0 million contingent on the satisfaction of certain development and sales thresholds. The upfront payment was paid in December 2020. Curzion Pharmaceuticals, Inc. On April 1, 2020, the Company acquired Curzion for an upfront cash payment of $45.0 million with additional payments of up to $15.0 million contingent on the achievement of certain development and regulatory milestones. Under separate agreements with two additional parties, the Company is also required to make contingent payments upon the achievement of certain development and regulatory milestones and certain net sales thresholds. These separate agreements also include mid to high-single-digit royalty payments based on the portion of annual worldwide net sales. Venture capital funds The Company is committed to invest as a strategic limited partner in four venture capital funds: Forbion Growth Opportunities Fund I C.V., Forbion Capital Fund V C.V., Aisling Capital V, L.P. and RiverVest Venture Fund V, L.P. As of December 31, 2022, the total carrying amount of the Company’s investments in these funds was $27.0 million, which is included in other long-term assets in the consolidated balance sheet, and includes $2.0 million in net cash payments for investments made during the year ended December 31, 2022. As of December 31, 2022, the Company’s total future commitments to these funds are $36.2 million. The Company recorded investment income under the equity method of $2.0 million during the year ended December 31, 2022, and a loss $0.7 million during the year ended December 31, 2021, in the other (expense) income, net line item of the Company’s consolidated statement of comprehensive income related to these funds. Non-cancellable advertising commitments As of December 31, 2022, the Company had $71.3 million of non-cancellable advertising commitments due within one year, primarily related to its U.S. commercial business. Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. The Company may record charges in the future as a result of these indemnification obligations. In accordance with its memorandum and articles of association, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. Additionally, the Company has entered into, and intends to continue to enter into, separate indemnification agreements with its directors and executive officers. These agreements, among other things, require the Company to indemnify its directors and executive officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of the Company’s directors or executive officers, or any of the Company’s subsidiaries or any other company or enterprise to which the person provides services at the Company’s request. The Company also has a director and officer insurance policy that enables it to recover a portion of any amounts paid for current and future potential claims. The Company also has indemnification obligations to the former officers and directors of Viela for certain events or occurrences related to their former roles at Viela, subject to certain limits. Several individual directors and officers of Viela were named as defendants in a lawsuit, Sciannella v. Astrazeneca UK Limited et.al., Case No. 2023-0125, filed in the Court of Chancery of the State of Delaware, which alleges various breaches of fiduciary duties in connection with Viela’s decision to be acquired by the Company. The Company has a director and officer insurance policy that enables it to recover a portion of certain amounts that may be paid by (and for which the Company may be obligated to indemnity) the former Viela officers and directors as a result of the lawsuit.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

NOTE 16 – COMMITMENTS AND CONTINGENCIES

Purchase Commitments

Under the Company’s supply agreement with AGC Biologics A/S (formerly known as CMC Biologics A/S) (“AGC Biologics”), the Company has agreed to purchase certain minimum annual order quantities of TEPEZZA drug substance. In addition, the Company must provide AGC Biologics with rolling forecasts of TEPEZZA drug substance requirements, with a portion of the forecast being a firm and binding order. At December 31, 2022, the Company had binding purchase commitments with AGC Biologics for TEPEZZA drug substance of €72.8 million ($77.6 million converted at a Euro-to-Dollar exchange rate as of December 31, 2022 of 1.0660), to be delivered through December 2024. Under the Company’s supply agreement with Catalent Indiana, LLC (“Catalent”), the Company must provide Catalent with rolling forecasts of TEPEZZA drug product requirements, with a portion of the forecast being a firm and binding order. At December 31, 2022, the Company had binding purchase commitments with Catalent for TEPEZZA drug product of $6.0 million, to be delivered through June 2024. The Company received FDA approval in December 2021 for a second drug product manufacturer, Patheon. Under the Company’s supply agreement with Patheon, the Company must provide Patheon with rolling forecasts of TEPEZZA drug product requirements, with a portion of the forecast being a firm and binding order. As of December 31, 2022, the Company had binding purchase commitments with Patheon for TEPEZZA drug product of €7.0 million ($7.4 million converted at an exchange rate as of December 31, 2022 of 1.0660), to be delivered through June 2024.

Under the Company’s agreement with Bio-Technology General (Israel) Ltd (“BTG Israel”), the Company has agreed to purchase certain minimum annual order quantities and is obligated to purchase at least 80% of its annual worldwide bulk product requirements for KRYSTEXXA from BTG Israel. Under the agreement, if the manufacture of the bulk product is moved out of Israel, the Company may be required to obtain the approval of the Israel Innovation Authority (formerly known as Israeli Office of the Chief Scientist) (“IIA”) because certain KRYSTEXXA intellectual property was initially developed with a grant funded by the IIA. The Company issues eighteen-month forecasts of the volume of KRYSTEXXA that the Company expects to order. The first nine months of each forecast is considered a binding firm order. As of December 31, 2022, the Company had a total purchase commitment, including the minimum annual order quantities and binding firm orders, with BTG Israel for KRYSTEXXA of $31.8 million, to be delivered through December 2026.

Under an agreement with Boehringer Ingelheim Biopharmaceuticals GmbH (“Boehringer Ingelheim Biopharmaceuticals”), Boehringer Ingelheim Biopharmaceuticals is required to manufacture and supply ACTIMMUNE to the Company. The Company is required to purchase minimum quantities of finished medicine during the term of the agreement, which term extends to at least September 30, 2024. As of December 31, 2022, the minimum purchase commitment to Boehringer Ingelheim Biopharmaceuticals was €5.9 million ($6.3 million converted using a Euro-to-Dollar exchange rate of 1.0660 as of December 31, 2022) through September 2024.

Excluding the above, additional purchase orders and other commitments relating to the manufacture of PROCYSBI, RAVICTI, UPLIZNA, BUPHENYL, QUINSAIR, RAYOS and VIMOVO of $17.4 million were outstanding at December 31, 2022.

Contingencies

The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. In addition, the Company from time to time has billing disputes with vendors in which amounts invoiced are not in accordance with the terms of their contracts.

Disclosure of ongoing matters is considered at the time of each filing and matters may be removed if the statute of limitations has lapsed or circumstances have changed that reduce the risk of exposure.

On August 3, 2022, the Company received a civil investigative demand from the United States Department of Justice (“DOJ”) pursuant to the Federal False Claims Act regarding an investigation concerning potentially false information in prior authorization forms. A prior authorization form is a managed care practice whereby the payer (either a commercial insurer or a government health program) requires that the prescribing physician provide additional justification or information supporting the physician’s decision to prescribe a particular medicine. The civil investigative demand requests certain documents and information related to DUEXIS, PENNSAID 2%, VIMOVO and RAYOS. The Company is cooperating with the investigation and the DOJ has not indicated to the Company whether it believes the Company engaged in any wrongdoing or if the Company is the subject of the investigation. While the Company is not aware of any fraudulent scheme to provide false information in prior authorization forms for its medicines that resulted in improper payments from government healthcare programs, no assurance can be given as to the timing or outcome of the DOJ’s investigation, or that it will not result in a material adverse effect on the Company’s business.

In the third and fourth quarter of 2022, the Company was served with several complaints from plaintiffs alleging to have taken TEPEZZA and suffered hearing impairments. Although hearing impairment, including deafness, was identified as a potential adverse event in the pivotal clinical trials for TEPEZZA, addressed at the FDA advisory committee meeting that considered the safety and efficacy of TEPEZZA, and listed as a potential adverse event in the FDA-approved TEPEZZA product label, the plaintiffs allege that the Company failed to adequately inform them about the risk of hearing impairment before taking the medicine. The Company intends to vigorously defend itself in the lawsuits and maintains insurance coverage for product liability claims. Nevertheless, no assurance can be given as to the outcome of the litigation, whether additional similar lawsuits will be initiated or whether the Company’s insurance coverage will be adequate to cover the costs of the litigation or any resulting settlements or judgments.

Royalty and Milestone Agreements

TEPEZZA

River Vision Acquisition Agreement and S.R. One/Lundbeckfond Agreements

Under the acquisition agreement for River Vision in May 2017, the Company agreed to pay up to $325.0 million upon the attainment of various milestones, composed of $100.0 million related to FDA approval and $225.0 million related to net sales thresholds for TEPEZZA.

The agreement also included a royalty payment of 3% of the portion of annual worldwide net sales exceeding $300.0 million.

S.R. One and Lundbeckfond, as two of the former River Vision stockholders, both held rights to receive approximately 35.66% of any future TEPEZZA payments. As a result of the Company’s agreements with S.R. One and Lundbeckfond in April 2020, the Company’s remaining net obligations to make payments for TEPEZZA sales milestones and royalties to the former stockholders of River Vision was reduced by approximately 70.25%, after including payments to a third party. This resulted in milestone payments of $67.0 million to the other former River Vision stockholders during the year ended December 31, 2021. There are no further TEPEZZA net sales milestone obligations remaining to the former River Vision stockholders. In addition, as a result of the S.R. One and Lundbeckfond agreements, annual earnout payments of 0.893% are due on the portion of annual worldwide net sales exceeding $300.0 million.

Roche License Agreement

Under the Company’s license agreement with Roche, the Company is required to pay Roche up to CHF103.0 million upon the attainment of various development, regulatory and sales milestones for TEPEZZA. The Company made a milestone payment of CHF5.0 million ($5.2 million when converted using a CHF-to-Dollar exchange rate at the date of payment of 1.0382) related to FDA approval during the first quarter of 2020. The agreement with Roche also includes tiered royalties on annual worldwide net sales between 9% and 12%. During the year ended December 31, 2021, the Company made a milestone payment of CHF50.0 million ($56.1 million when converted using a CHF-to-Dollar exchange rate at the date of payment of 1.1228) in relation to the attainment of TEPEZZA net sales milestones.

The Company’s remaining obligation to Roche relating to the attainment of various TEPEZZA development and regulatory milestones is CHF43.0 million ($46.5 million when converted using a CHF-to-Dollar exchange rate at December 31, 2022 of 1.0823).

KRYSTEXXA

Under the terms of a license agreement with Duke University (“Duke”) and Mountain View Pharmaceuticals, Inc. (“MVP”), the Company is obligated to pay Duke a mid-single-digit royalty on its global net sales of KRYSTEXXA and a royalty of between 5% and 15% on any global sublicense revenue. The Company is also obligated to pay MVP a mid-single-digit royalty on its net sales of KRYSTEXXA outside of the United States and a royalty of between 5% and 15% on any sublicense revenue outside of the United States.

RAVICTI

Under the terms of an asset purchase agreement with Bausch Health Companies Inc. (formerly Ucyclyd Pharma, Inc.) (“Bausch”), the Company is obligated to pay to Bausch mid-single-digit royalties on its global net sales of RAVICTI. Under the terms of a license agreement with Saul W. Brusilow, M.D. and Brusilow Enterprises, Inc. (“Brusilow”), the Company is obligated to pay low single-digit royalties to Brusilow on net sales of RAVICTI that are covered by a valid claim of a licensed patent.

PROCYSBI

Under the terms of an amended and restated license agreement with The Regents of the University of California, San Diego (“UCSD”), as amended, the Company is obligated to pay to UCSD tiered low to mid-single-digit royalties on its net sales of PROCYSBI, including a minimum annual royalty in an amount less than $0.1 million. The Company must also pay UCSD a percentage in the mid-teens of any fees it receives from its sublicensees under the agreement that are not earned royalties. The Company may also be obligated to pay UCSD aggregate developmental milestone payments of $0.3 million and aggregate regulatory milestone payments of $1.8 million for each orphan indication, and aggregate developmental milestone payments of $0.8 million and aggregate regulatory milestone payments of $3.5 million for each non-orphan indication.

UPLIZNA

Following the acquisition of Viela on March 15, 2021, the Company is party to a number of third-party license agreements. Under these license agreements, the Company is obligated to pay up to a total of $30.0 million in milestone payments subject to UPLIZNA net sales exceeding $500.0 million. In addition, the Company is required to pay mid-single-digit royalties on annual worldwide net sales of UPLIZNA.

ACTIMMUNE

Under an amended license agreement, with the original developer of ACTIMMUNE, the Company is obligated to pay a low single digit royalty on its annual net sales of ACTIMMUNE. In addition, under the terms of an assignment and option agreement with a separate third-party, the Company is obligated to pay low single-digit royalties on the Company’s net sales of ACTIMMUNE in the United States.

RAYOS and LODOTRA

Effective January 1, 2019, the Company was obligated to pay Vectura a mid-teens percentage royalty on its RAYOS net sales in North America, subject to a minimum royalty of $8.0 million per year, which minimum royalty requirement expired on December 31, 2022. In addition, under the amendments, the Company ceased recording LODOTRA revenue and is no longer required to pay a royalty in respect of LODOTRA.

For all of the royalty agreements entered into by the Company, a total royalty and earnout expense of $338.5 million, $289.7 million and $169.3 million was recorded in cost of goods sold in the consolidated statements of comprehensive income during the years ended December 31, 2022, 2021 and 2020, respectively.

Other Agreements

Xeris Pharmaceuticals, Inc.

On November 22, 2022, the Company entered into a research collaboration and option agreement with Xeris under which Xeris is obligated to use its proprietary formulation technology platform, XeriJect, to conduct a research program to develop an ultra-concentrated, ready-to-use, subcutaneous injection of TEPEZZA. The Company received an option to obtain a commercial license for any reformulated product developed under the research program. An upfront payment of $2.75 million was paid during the year ended December 31, 2022. In addition, Xeris is entitled to receive a milestone payment of $6.0 million upon the earlier of either (i) the exercise of the Company’s option or (ii) the achievement of the minimally acceptable target product profile by a reformulated product generated through the research program. If the Company exercises its option to continue development of and commercialize the reformulated product, Xeris may also be entitled to receive additional development and regulatory milestones and royalties on future sales. Refer to Note 4 for further details.

Q32 Bio Inc.

On August 12, 2022, the Company entered into a collaboration and option agreement with Q32 related to its pipeline candidate ADX-914, a monoclonal antibody antagonist of the interleukin-7 receptor for the treatment of autoimmune and inflammatory diseases. An upfront payment of $15.0 million and milestone-based development funding of $17.5 million were paid during the year ended December 31, 2022. The Company may also be obligated to pay up to $22.5 million in the form of additional milestone-based development funding. If the Company exercises the option, it may be obligated to make up to an additional $645.0 million in closing and milestone payments, as well as tiered royalties on net sales from a high single-digit to a low double-digit percentage, inclusive of certain amounts payable to a third party under a pre-existing license agreement. Refer to Note 4 for further details.

Alpine Immune Science, Inc.

On December 15, 2021, the Company entered into an exclusive license agreement with Alpine for the development and commercialization of up to four preclinical candidates generated from Alpine’s unique discovery platform. In connection with the execution of the license agreement, the Company entered into a stock purchase agreement with Alpine to purchase a minority stake of 951,980 shares of Alpine’s common stock in a private placement.

Under the terms of the agreements, the Company paid Alpine $15.0 million in the fourth quarter of 2021 and paid $25.0 million in the first quarter of 2022. In addition, Alpine is eligible to receive up to $381.0 million per program, or approximately $1.52 billion in total, in future success-based payments related to development, regulatory and commercial milestones. Additionally, Alpine is eligible to receive tiered royalties from a mid-single-digit percentage to a low double-digit percentage on worldwide net sales of licensed medicines. Alpine is required to advance candidate molecules to pre-defined preclinical milestones, and the Company will be responsible for the costs. The Company will then be required to assume responsibility for development and commercialization activities and costs. Refer to Note 4 for further details.

Arrowhead Pharmaceuticals, Inc.

On June 18, 2021, the Company entered into a global agreement with Arrowhead for HZN-457, a discovery-stage investigational RNAi therapeutic being developed by Arrowhead as a potential treatment for uncontrolled gout. Arrowhead granted the Company a worldwide exclusive license to develop, manufacture and commercialize medicines based on the RNAi therapeutic. Arrowhead is required to use commercially reasonable efforts to conduct research and preclinical development activities for the RNAi therapeutic products. The Company must use commercially reasonable efforts in, and will be responsible for, clinical development and commercialization of the RNAi therapeutic products. Under the terms of the agreement, the Company paid Arrowhead an upfront cash payment of $40.0 million in July 2021 and agreed to pay additional potential future milestone payments of up to $660.0 million contingent on the achievement of certain development, regulatory and commercial milestones, and low to mid-teens royalties on worldwide calendar year net sales of licensed medicines. In addition, a $15.0 million development milestone was recognized in the fourth quarter of 2022. Refer to Note 4 for further details.

Halozyme Therapeutics, Inc.

On November 21, 2020, the Company entered into a global agreement with Halozyme that gives the Company exclusive access to Halozyme’s ENHANZE drug delivery technology for SC formulation of medicines targeting IGF-1R. The Company is exploring ENHANZE to develop a SC formulation of TEPEZZA. Under the terms of the agreement, the Company paid Halozyme an upfront cash payment of $30.0 million in December 2020 and agreed to pay additional potential future milestone payments of up to $160.0 million contingent on the satisfaction of certain development and sales thresholds. The upfront payment was paid in December 2020.

Curzion Pharmaceuticals, Inc.

On April 1, 2020, the Company acquired Curzion for an upfront cash payment of $45.0 million with additional payments of up to $15.0 million contingent on the achievement of certain development and regulatory milestones. Under separate agreements with two additional parties, the Company is also required to make contingent payments upon the achievement of certain development and regulatory milestones and certain net sales thresholds. These separate agreements also include mid to high-single-digit royalty payments based on the portion of annual worldwide net sales.

Venture capital funds

The Company is committed to invest as a strategic limited partner in four venture capital funds: Forbion Growth Opportunities Fund I C.V., Forbion Capital Fund V C.V., Aisling Capital V, L.P. and RiverVest Venture Fund V, L.P. As of December 31, 2022, the total carrying amount of the Company’s investments in these funds was $27.0 million, which is included in other long-term assets in the consolidated balance sheet, and includes $2.0 million in net cash payments for investments made during the year ended December 31, 2022. As of December 31, 2022, the Company’s total future commitments to these funds are $36.2 million. The Company recorded investment income under the equity method of $2.0 million during the year ended December 31, 2022, and a loss $0.7 million during the year ended December 31, 2021, in the other (expense) income, net line item of the Company’s consolidated statement of comprehensive income related to these funds.

Non-cancellable advertising commitments

As of December 31, 2022, the Company had $71.3 million of non-cancellable advertising commitments due within one year, primarily related to its U.S. commercial business.

Indemnification

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. The Company may record charges in the future as a result of these indemnification obligations.

In accordance with its memorandum and articles of association, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. Additionally, the Company has entered into, and intends to continue to enter into, separate indemnification agreements with its directors and executive officers. These agreements, among other things, require the Company to indemnify its directors and executive officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of the Company’s directors or executive officers, or any of the Company’s subsidiaries or any other company or enterprise to which the person provides services at the Company’s request. The Company also has a director and officer insurance policy that enables it to recover a portion of any amounts paid for current and future potential claims.

The Company also has indemnification obligations to the former officers and directors of Viela for certain events or occurrences related to their former roles at Viela, subject to certain limits. Several individual directors and officers of Viela were named as defendants in a lawsuit, Sciannella v. Astrazeneca UK Limited et.al., Case No. 2023-0125, filed in the Court of Chancery of the State of Delaware, which alleges various breaches of fiduciary duties in connection with Viela’s decision to be acquired by the Company. The Company has a director and officer insurance policy that enables it to recover a portion of certain amounts that may be paid by (and for which the Company may be obligated to indemnity) the former Viela officers and directors as a result of the lawsuit.