United states securities and exchange commission

Table of Contents
43
Our revenues are also subject to foreign currency exchange rate fluctuations due to the global nature of our 
operations. Although we have foreign currency forward contracts to hedge specific forecasted transactions 
denominated in foreign currencies, our efforts to mitigate the impact of fluctuating currency exchange rates may not 
be successful. As a result, currency fluctuations among our reporting currency, the U.S. dollar, and the other 
currencies in which we do business will affect our operating results, often in unpredictable ways. Our net income may 
also fluctuate due to the impact of charges we may be required to take with respect to foreign currency hedge 
transactions. In particular, we may incur higher than expected charges from hedge ineffectiveness or from the 
termination of a hedge relationship.
Our operating results during any one period do not necessarily suggest the anticipated results of future periods.
Our investment in Samsung Bioepis, and our success in commercializing biosimilars developed by Samsung Bioepis, 
is subject to risks and uncertainties inherent in the development, manufacture and commercialization of biosimilars.
Our investment in Samsung Bioepis, and our success in commercializing biosimilars developed by Samsung 
Bioepis, is subject to a number of risks, including:
•  Reliance on Third Parties. We are dependent on the efforts of Samsung Bioepis and other third parties over 
whom we have limited or no control in the development and manufacturing of biosimilars products. If Samsung 
Bioepis or such other third parties fail to perform successfully, we may not realize the anticipated benefits of 
our investment in Samsung Bioepis;
•  Regulatory Compliance. Biosimilar products may face regulatory hurdles or delays due to the evolving and 
uncertain regulatory and commercial pathway of biosimilars products in certain jurisdictions; 
•  Intellectual Property and Regulatory Challenges. Biosimilar products may face extensive patent clearances, 
patent infringement litigation, injunctions or regulatory challenges, which could prevent the commercial launch 
of a product or delay it for many years; 
•  Failure to Gain Market and Patient Acceptance. Market success of biosimilar products will be adversely affected 
if patients, physicians and/or payors do not accept biosimilar products as safe and efficacious products 
offering a more competitive price or other benefit over existing therapies; 
•  Ability to Provide Adequate Supply. Manufacturing biosimilars is complex. If we encounter any manufacturing or 
supply chain difficulties, we may be unable to meet higher than anticipated demand; and
•  Competitive Challenges. Biosimilar products face significant competition, including from innovator products and 
from biosimilar products offered by other companies. In some jurisdictions, local tendering processes may 
restrict biosimilar products from being marketed and sold in those jurisdictions. The number of competitors in a 
jurisdiction, the timing of approval and the ability to market biosimilar products successfully in a timely and 
cost-effective matter are additional factors that may impact our success and/or the success of Samsung 
Bioepis in this business area.
Our investments in properties may not be fully realized.
We own or lease real estate primarily consisting of buildings that contain research laboratories, office space 
and manufacturing operations. For strategic or other operational reasons, we may decide to consolidate or co-locate 
certain aspects of our business operations or dispose of one or more of our properties, some of which may be 
located in markets that are experiencing high vacancy rates and decreasing property values. If we determine that the 
fair value of any of our owned properties is lower than their book value we may not realize the full investment in 
these properties and incur significant impairment charges or additional depreciation when the expected useful lives 
of certain assets have been shortened due to the anticipated closing of facilities. If we decide to fully or partially 
vacate a leased property, we may incur significant cost, including facility closing costs, employee separation and 
retention expenses, lease termination fees, rent expense in excess of sublease income and impairment of leasehold 
improvements and accelerated depreciation of assets. Any of these events may have an adverse impact on our 
results of operations.

---

Table of Contents
44
Our portfolio of marketable securities is subject to market, interest and credit risk that may reduce its value.
We maintain a portfolio of marketable securities for investment of our cash. Changes in the value of our 
portfolio of marketable securities could adversely affect our earnings. In particular, the value of our investments may 
decline due to increases in interest rates, downgrades of the bonds and other securities included in our portfolio, 
instability in the global financial markets that reduces the liquidity of securities included in our portfolio, declines in 
the value of collateral underlying the securities included in our portfolio and other factors. Each of these events may 
cause us to record charges to reduce the carrying value of our investment portfolio or sell investments for less than 
our acquisition cost. Although we attempt to mitigate these risks through diversification of our investments and 
continuous monitoring of our portfolio's overall risk profile, the value of our investments may nevertheless decline.
There can be no assurance that we will continue to repurchase stock or that we will repurchase stock at favorable 
prices.
From time to time our Board of Directors authorizes stock repurchase programs, including most recently a 
program to repurchase up to $5.0 billion of our common stock, which was authorized by our Board of Directors in 
July 2016 (2016 Share Repurchase Program). The amount and timing of stock repurchases are subject to capital 
availability and our determination that stock repurchases are in the best interest of our shareholders and are in 
compliance with all respective laws and our agreements applicable to the repurchase of stock. Our ability to 
repurchase stock will depend upon, among other factors, our cash balances and potential future capital 
requirements for strategic transactions, our results of operations, our financial condition and other factors beyond 
our control that we may deem relevant. A reduction in, or the completion or expiration of, our stock repurchase 
programs could have a negative effect on our stock price. We can provide no assurance that we will repurchase 
stock at favorable prices, if at all.
We may not be able to access the capital and credit markets on terms that are favorable to us.
We may seek access to the capital and credit markets to supplement our existing funds and cash generated 
from operations for working capital, capital expenditure and debt service requirements and other business 
initiatives. The capital and credit markets have experienced extreme volatility and disruption in the past, which leads 
to uncertainty and liquidity issues for both borrowers and investors. In the event of adverse capital and credit market 
conditions, we may be unable to obtain capital or credit market financing on favorable terms. Changes in credit 
ratings issued by nationally recognized credit rating agencies could also adversely affect our cost of financing and 
the market price of our securities.
Our indebtedness could adversely affect our business and limit our ability to plan for or respond to changes in our 
business. 
Our indebtedness, together with our significant contingent liabilities, including milestone and royalty payment 
obligations, could have important consequences to our business; for example, such obligations could: 
•  increase our vulnerability to general adverse economic and industry conditions;
•  limit our ability to access capital markets and incur additional debt in the future;
•  require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, 
thereby reducing the availability of our cash flow for other purposes, including business development efforts, 
research and development and mergers and acquisitions; and
•  limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, 
thereby placing us at a competitive disadvantage compared to our competitors that have less debt.
Our business involves environmental risks, which include the cost of compliance and the risk of contamination or 
injury.
Our business and the business of several of our strategic partners involve the controlled use of hazardous 
materials, chemicals, biologics and radioactive compounds. Although we believe that our safety procedures for 
handling and disposing of such materials comply with state, federal and foreign standards, there will always be the 
risk of accidental contamination or injury. If we were to become liable for an accident, or if we were to suffer an 
extended facility shutdown, we could incur significant costs, damages and penalties that could harm our business. 
Manufacturing of our products and product candidates also requires permits from government agencies for water 
supply and wastewater discharge. If we do not obtain appropriate permits, including permits for sufficient quantities 
of water and wastewater, we could incur significant costs and limits on our manufacturing volumes that could harm 
our business.

---