Jazz Pharmaceuticals

JAZZ PHARMACEUTICALS PLC
PROXY STATEMENT | 2013 ANNUAL REPORT

M E E T L U L U

Our cover celebrates Lulu, age seven. Lulu was
diagnosed with acute lymphoblastic leukemia when
she was just four years old and received Erwinaze as
part of her treatment regimen. At the beginning of her
journey, Lulu had the profound wisdom to foresee that
there would be both storms and rainbows along the
way. We are thrilled to share that, with the storms
behind her, Lulu completed her last chemotherapy
treatment earlier this year.

The Children’s Hospital of Wisconsin commemorated
this momentous event with their traditional “ringing of
the bell” … and Lulu’s bell was heard by all.

These are the moments we work for.

Photos courtesy of Children’s Hospital of Wisconsin

June

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, 2014

Dear Shareholders,

Jazz Pharmaceuticals has continued to evolve and expand our business over the years, yet our core values and mission of improving patients’
lives have remained unchanged. In addition to delivering strong financial performance in 2013, we remained focused on identifying, developing
and commercializing differentiated medicines to help meet unmet needs of patients. Through our corporate development activities and targeted
R&D investments, we further expanded our commercial and development portfolio. In addition, we continued our commitment to improving
patient access to our medicines with investments in patient support services, educational programs for providers and patients and support for
patient assistance programs.

Highlights of our financial performance in 2013 included:
•

Total revenues of $872.4 million, driven primarily by sales of our lead marketed products, Xyrem® (sodium oxybate) oral solution and
Erwinaze®/Erwinase® (asparaginase Erwinia chrysanthemi).
GAAP income from continuing operations of $216.3 million, compared to $261.1 million in 2012.
Adjusted net income of $388.3 million, an increase of 34% over 2012.

Significant milestones in 2013 included:
•

In February 2013, we licensed rights to JZP-386, an early-stage investigational compound being developed for potential use
in narcolepsy, from Concert Pharmaceuticals, Inc.
In May 2013, our Board of Directors authorized the use of up to $200 million to repurchase the company’s ordinary shares. During 2013,
we spent $136.5 million to repurchase 1.8 million shares.
In December 2013, we launched a tender offer to acquire Gentium S.p.A., an Italian biopharmaceutical company primarily focused on the
development of defibrotide, which was granted marketing authorization under exceptional circumstances in October 2013 by the European
Commission for the treatment of severe hepatic veno-occlusive disease in adults and children undergoing hematopoietic stem cell
transplantation therapy.
During 2013, we added approximately 100 employees to our worldwide organization to further strengthen our capabilities and provide for a
scalable infrastructure to support our plans for future growth.

Continued execution on our corporate growth strategy:
In 2014, we continue to build the depth and breadth of our commercial and development assets in our sleep/narcolepsy and
hematology/oncology franchises through strategic acquisitions and disciplined investments.
•

In January 2014, we acquired rights to JZP-110, a late-stage investigational compound being developed for potential treatment of excessive
daytime sleepiness in patients with narcolepsy. We also intend to pursue development of JZP-110 for excessive daytime sleepiness in
patients with obstructive sleep apnea.
In January 2014, we acquired majority ownership of Gentium. We launched Defitelio® (defibrotide) in Germany and Austria in March 2014,
and in the United Kingdom in May 2014. In April 2014, Defitelio became reimbursable by the Italian National Health System under Law 648.
We expect to launch in additional European countries during 2014 and 2015.
In February 2014, we announced that we broke ground and began construction on a manufacturing and development facility 75 miles west
of our Dublin corporate headquarters. This investment is expected to strengthen our manufacturing capabilities, and represents our
commitment to expanding our presence in Ireland.

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For 2014, we are committed to furthering our mission of delivering important therapies to patients, while also continuing to create both short-
and long-term value for our shareholders. The successful execution of our corporate strategy will position Jazz well for future growth and
profitability. I look forward to sharing our progress throughout the year and thank you for your continued support.

Bruce C. Cozadd
Chairman and Chief Executive Officer

Total Revenue
(in millions)

$872

$586

$272

2011

2012

2013

Income From Continuing Operations1
(in millions)

GAAP

Adjusted net income
(unaudited)

$388

$2902

$2612

$216

$165

$125

2011

2012

2013

$1,000

$900

$800

$700

$600

$500

$400

$300

$200

$100

$0

$450

$400

$350

$300

$250

$200

$150

$100

$50

$0

2013 Worldwide Net Sales

ERWINAZE/
ERWINASE

XYREM

PRIALT

PSYCHIATRY

OTHER

Income From Continuing Operations
per Diluted Share1

$7.00

$6.00

$5.00

$4.00

$3.00

$2.67

GAAP

Adjusted net income
(unaudited)

$6.31

$4.822

$4.342

$3.52

$3.51

$2.00

$1.00

$0

2011

2012

2013

1. Reconciliations of GAAP income from continuing operations (and its related per share amount) to non-GAAP adjusted net income (and its
related per share amount) for each period presented can be found under the heading “Non-GAAP Financial Measures” in Part II, Item 7 of the
enclosed Annual Report on Form 10-K for the year ended December 31, 2013.

2. GAAP income from continuing operations (and its related per share amount) and non-GAAP adjusted net income (and its related per share
amount) for 2012 included Azur Pharma contribution from January 18, 2012 and EUSA Pharma contribution from June 12, 2012, and excluded
the results of the women’s health business, which were accounted for as discontinued operations. GAAP income from continuing operations
for 2012 included a one-time tax benefit of $104 million, or $1.73 per diluted share, due to the reversal of the valuation allowance against
substantially all of Jazz Pharmaceuticals’ U.S. deferred tax assets.

®

JAZZ PHARMACEUTICALS PUBLIC LIMITED COMPANY
Registered in Ireland – No. 399192
Fourth Floor, Connaught House
One Burlington Road
Dublin 4, Ireland
NOTICE OF 2014 ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 31, 2014

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Dear Shareholder:

You are cordially invited to attend the 2014 annual general meeting of shareholders (the “annual meeting”) of
Jazz Pharmaceuticals plc, a public limited company formed under the laws of Ireland (the “company”). The annual
meeting will be held on Thursday, July 31, 2014, at 10:30 a.m. local time at our corporate headquarters located at
Fourth Floor, Connaught House, One Burlington Road, Dublin 4, Ireland, for the following purposes:

1. To elect by separate resolutions the three nominees for director named in the accompanying proxy

statement (the “proxy statement”) to hold office until the 2017 annual general meeting of shareholders.

2. To approve the appointment of KPMG as the independent auditors of the company for the fiscal year
ending December 31, 2014 and to authorize the audit committee of the board of directors to determine
the auditors’ remuneration.

3. To authorize the company and/or any subsidiary of the company to make market purchases of the

company’s ordinary shares.

4. To approve, on an advisory basis, the compensation of the company’s named executive officers as

disclosed in the accompanying proxy statement.

5. To conduct any other business properly brought before the annual meeting.

These items of business are more fully described in the proxy statement.

The company’s Irish statutory accounts for the fiscal year ended December 31, 2013, including the reports of
the directors and auditors thereon, will be presented at the annual meeting. There is no requirement under Irish law
that such statements be approved by the shareholders, and no such approval will be sought at the annual meeting.
Under the company’s articles of association, Proposals 1 and 2 and the receipt and consideration of the Irish
statutory accounts by the company at the annual meeting are deemed to be ordinary business, and Proposals 3 and 4
are deemed to be special business.

The record date for the annual meeting is May 27, 2014. Only shareholders of record at the close of business

on that date may vote at the annual meeting or any adjournment or postponement thereof.

Important Notice Regarding the Availability of Proxy Materials for the annual general meeting of
shareholders to be held on July 31, 2014, at 10:30 a.m. local time at our corporate headquarters located
at Fourth Floor, Connaught House, One Burlington Road, Dublin 4, Ireland.
The proxy statement and our annual report are available at https://materials.proxyvote.com/G50871.

By order of the board of directors,

Shawn Mindus
Company Secretary

Dublin, Ireland
June 12, 2014

You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting,
please vote as soon as possible. You may vote your shares over the telephone or via the internet. If you received
a proxy card or voting instruction card by mail, you may submit your proxy card or voting instruction card by
completing, signing, dating and mailing your proxy card or voting instruction card in the envelope provided.
Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however,
that if the record holder of your ordinary shares is a broker, bank or other nominee, and you wish to vote at the
meeting, you must obtain a proxy issued in your name from that record holder.

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TABLE OF CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING . . . . . . . . . . . . .
PROPOSAL 1—ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CORPORATE GOVERNANCE AND BOARD MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPOSAL 2—APPROVE APPOINTMENT OF INDEPENDENT AUDITORS AND AUTHORIZE

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THE AUDIT COMMITTEE TO DETERMINE THEIR REMUNERATION . . . . . . . . . . . . . . . . . . . . . .

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PROPOSAL 3—AUTHORIZE THE COMPANY AND/OR ANY SUBSIDIARY OF THE COMPANY

TO MAKE MARKET PURCHASES OF THE COMPANY’S ORDINARY SHARES . . . . . . . . . . . . . . .
PROPOSAL 4—ADVISORY VOTE ON EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . .
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . .
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . .
EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . .
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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®

JAZZ PHARMACEUTICALS PUBLIC LIMITED COMPANY
Registered in Ireland – No. 399192
Fourth Floor, Connaught House
One Burlington Road
Dublin 4, Ireland

PROXY STATEMENT
FOR THE 2014 ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 31, 2014

INTRODUCTION

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General

Our board of directors is soliciting proxies for use at our 2014 annual general meeting of shareholders, or the

annual meeting. This proxy statement contains important information for you to consider when deciding how to
vote on the matters brought before the annual meeting. Please read it carefully. Our proxy materials, which include
this proxy statement, our annual letter to shareholders, and our annual report on Form 10-K for the year ended
December 31, 2013, are first being mailed or made available to shareholders on or about June 12, 2014. Our proxy
materials are also available online at https://materials.proxyvote.com/G50871.

This solicitation is made on behalf of our board of directors and we will pay for the entire cost of soliciting
proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by
telephone, or by other means of communication. Directors and employees will not be paid any additional
compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost
of forwarding proxy materials to beneficial owners. We have not yet retained a proxy solicitor in connection with
the annual meeting. However, we may engage a proxy solicitor as we deem necessary to assist in the solicitation
of proxies to which we would pay customary fees and expenses.

Our board of directors has set the close of business on May 27, 2014 as the record date for the annual
meeting. Shareholders of record who owned our ordinary shares on that date are entitled to vote at and attend the
annual meeting. Each ordinary share is entitled to one vote. There were 59,450,867 of our ordinary shares
outstanding and entitled to vote on the record date.

Basis of Presentation

On January 18, 2012, the businesses of Jazz Pharmaceuticals, Inc. and Azur Pharma Public Limited
Company, or Azur Pharma, were combined in a merger transaction, or the Azur Merger, in connection with
which Azur Pharma was re-named Jazz Pharmaceuticals plc and we became the parent company of and successor
to Jazz Pharmaceuticals, Inc., with Jazz Pharmaceuticals, Inc. becoming our wholly-owned subsidiary. Jazz
Pharmaceuticals, Inc. was treated as the acquiring company in the Azur Merger for accounting purposes, and, as
a result, the historical consolidated financial statements of Jazz Pharmaceuticals, Inc. became our consolidated
financial statements. In addition, on June 12, 2012, Jazz Pharmaceuticals plc completed the acquisition of EUSA
Pharma Inc., referred to as the EUSA Acquisition, and, in January and February 2014, pursuant to a tender offer,
Jazz Pharmaceuticals Italy S.p.A., our wholly-owned subsidiary, acquired approximately 98% of the outstanding
and fully diluted voting securities of Gentium S.p.A., referred to as the Gentium Acquisition.

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Unless otherwise indicated or the context otherwise requires, all references in this proxy statement to “Jazz
Pharmaceuticals,” “the company,” “we,” “us,” and “our” refer to Jazz Pharmaceuticals plc and its consolidated
subsidiaries, except when the context makes clear that the time period being referenced is prior to the effective
time of the Azur Merger, in which case such terms are references to Jazz Pharmaceuticals, Inc. and its
consolidated subsidiaries. All references to “Azur Pharma” are references to Jazz Pharmaceuticals plc (f/k/a Azur
Pharma Public Limited Company) and its consolidated subsidiaries prior to the effective time of the Azur
Merger. The disclosures in this proxy statement relating to the pre-Azur Merger business of Jazz
Pharmaceuticals, as well as statements relating to pre-Azur Merger compensation, board of directors and
corporate governance matters, unless noted as relating to Azur Pharma prior to the Azur Merger, pertain only to
Jazz Pharmaceuticals, Inc. prior to the Azur Merger. Accordingly, for purposes of the presentation of historical
executive and director compensation information in this proxy statement, this compensation information consists
of information with respect to Jazz Pharmaceuticals, Inc., our predecessor, for periods prior to January 18, 2012
and information with respect to Jazz Pharmaceuticals plc for periods after January 18, 2012.

Purpose of the annual meeting

The specific proposals to be considered and acted upon at the annual meeting are summarized in the
accompanying Notice of 2014 Annual General Meeting of Shareholders. Each proposal is described in more
detail in this proxy statement.

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

Why am I receiving these materials?

Our board of directors is soliciting your proxy to vote at the annual meeting, including at any adjournments

or postponements of the annual meeting. This proxy statement contains important information regarding the
annual meeting, the proposals on which you are being asked to vote, information you may find useful in
determining how to vote and voting procedures.

Why did I receive a notice in the mail regarding the internet availability of proxy materials instead of a
full set of proxy materials?

We are pleased to take advantage of U.S. Securities and Exchange Commission, or SEC, rules that allow
companies to furnish their proxy materials over the internet. Most of our shareholders holding their shares in
“street name” will not receive paper copies of our proxy materials (unless requested), and will instead be sent a
Notice of Internet Availability of Proxy Materials, or Notice, from the brokerage firms, banks or other agents
holding their accounts. All “street name” holders receiving a Notice will have the ability to access the proxy
materials on the website referred to in the Notice and to request a printed set of the proxy materials. Instructions
on how to access the proxy materials via the internet or to request a printed set of the proxy materials may be
found in the Notice.

Why did I receive a full set of proxy materials in the mail instead of a notice regarding the internet
availability of proxy materials?

We are providing shareholders of record who are holding shares in their own name and shareholders who
have previously requested a printed set of our proxy materials with paper copies of our proxy materials instead of
a Notice.

What is the annual report included in the proxy materials?

Under applicable U.S. securities laws, we are required to send an annual report to security holders along
with this proxy statement. We intend to satisfy this annual report requirement by sending the annual report on
Form 10-K for the year ended December 31, 2013 that we filed with the SEC on February 25, 2014 (referred to
throughout this proxy statement as the “2013 10-K”) together with this proxy statement.

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How do I attend the annual meeting?

You are invited to attend the annual meeting to vote on the proposals described in this proxy statement. The
annual meeting will be held on Thursday, July 31, 2014, at 10:30 a.m. local time at our corporate headquarters located
at Fourth Floor, Connaught House, One Burlington Road, Dublin 4, Ireland. For directions to attend the annual
meeting in person, please contact our Investor Relations department at + 353 1 634 7892 (Ireland) or + 1 650 496 2800
(U.S.) or by email at investorinfo@jazzpharma.com. Information on how to vote in person at the annual meeting is
discussed below. However, you do not need to attend the annual meeting to vote your ordinary shares.

Who can vote at the annual meeting?

Only shareholders of record at the close of business on May 27, 2014, the record date for the annual

meeting, will be entitled to vote at the annual meeting.

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Shareholders of Record: Shares registered in your name

If on May 27, 2014 your shares were registered directly in your name with our transfer agent, Computershare
Trust Company, N.A., then you are a shareholder of record. As a shareholder of record, you may vote in person at
the annual meeting or vote by proxy. Whether or not you plan to attend the annual meeting, we urge you to vote by
proxy over the telephone or via the internet as instructed below, or by filling out and returning a proxy card.

Beneficial Owners: Shares registered in the name of a broker, bank or other agent

If on May 27, 2014 your shares were held not in your name, but rather in an account at a brokerage firm,

bank or other agent, then you are the beneficial owner of shares held in “street name” and a Notice is being sent
to you by that broker, bank or other agent. The broker, bank or other agent holding your account is considered to
be the shareholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the
right to direct your broker, bank or other agent regarding how to vote the shares in your account as set forth in the
voting instructions in the Notice from your broker, bank or other agent. You are also invited to attend the annual
meeting. However, since you are not the shareholder of record, you may not vote your shares in person at the
annual meeting unless you request and obtain a valid proxy from your broker, bank or other agent.

What am I voting on?

There are four matters scheduled for a vote at the annual meeting:

• Election of the three nominees for director named below to hold office until the 2017 annual general

meeting of shareholders (Proposal 1).

• Approval of the appointment of KPMG as the independent auditors of the company for the fiscal year
ending December 31, 2014 and authorization of the audit committee of the board of directors to
determine the auditors’ remuneration (Proposal 2).

• Authorization of the company and/or any subsidiary of the company to make market purchases of the

company’s ordinary shares (Proposal 3).

• Advisory approval of the compensation of our named executive officers as disclosed in this proxy

statement (Proposal 4).

What are the board’s voting recommendations?

The board of directors recommends that you vote your shares:

•

•

“For” each of the nominees named below for director to hold office until the 2017 annual general
meeting of shareholders (Proposal 1).

“For” the appointment of KPMG as the independent auditors of the company for the fiscal year ending
December 31, 2014 and the authorization of the audit committee of the board of directors to determine
the auditors’ remuneration (Proposal 2).

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•

•

“For” the authorization of the company and/or any subsidiary of the company to make market
purchases of the company’s ordinary shares (Proposal 3).

“For” the approval, on an advisory basis, of the compensation of our named executive officers as
disclosed in this proxy statement (Proposal 4).

What if another matter is properly brought before the annual meeting?

The board of directors knows of no other matters that will be presented for consideration at the annual

meeting. If any other matters are properly brought before the annual meeting, it is the intention of the persons
named in the accompanying proxy, referred to this proxy statement as the “proxy holders,” to vote on those
matters in accordance with their best judgment.

How do I vote?

For the election of directors (Proposal 1), you may vote “For” or “Against” each nominee, or you may

abstain from voting for all or any of the nominees. For each of the other proposals, you may vote “For” or
“Against” or abstain from voting.

Shareholders of Record: Shares registered in your name

If you are a shareholder of record, you may vote in person at the annual meeting, you may vote by proxy

using the enclosed proxy card, or you may vote by proxy over the telephone or via the internet as instructed
below. Whether or not you plan to attend the annual meeting, we urge you to vote by proxy to ensure your vote is
counted. You may still attend the annual meeting and vote in person even if you have already voted by proxy.

• To vote in person, come to the annual meeting and we will give you a ballot when you arrive.

• To vote using a proxy card, simply complete, sign and date the enclosed proxy card and return it

promptly in the envelope provided. If you return your signed proxy card before the annual meeting, we
will vote your shares as you direct.

• To vote by telephone, dial toll-free 1-800-690-6903 within the United States, U.S. territories and

Canada using a touch-tone phone and follow the recorded instructions. You will be asked to provide
the company number and control number from the enclosed proxy card. Your vote must be received by
11:59 p.m., U.S. Eastern Time, on July 30, 2014 to be counted.

• To vote via the internet, go to www.proxyvote.com to complete an electronic proxy card. You will be
asked to provide the company number and control number from the enclosed proxy card. Your vote
must be received by 11:59 p.m., U.S. Eastern Time, on July 30, 2014 to be counted.

Beneficial Owners: Shares registered in the name of a broker, bank or other agent

If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you
should have received a Notice or the full set of proxy materials containing voting instructions from that broker,
bank or other agent rather than from us. Simply follow the voting instructions in the Notice or the full set of
proxy materials to ensure that your vote is counted. Alternatively, you may vote by telephone or via the internet
as instructed by your broker, bank or other agent. To vote in person at the annual meeting, you must request and
obtain a valid proxy from your broker, bank, or other agent. Follow the voting instructions from your broker,
bank or other agent, or contact your broker, bank or other agent to request a proxy form.

We provide internet proxy voting to allow you to vote your shares online, with procedures designed to
ensure the authenticity and correctness of your proxy vote instructions. However, please be aware
that you must bear any costs associated with your internet access, such as usage charges from internet
access providers and telephone companies.

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How many votes do I have?

On each matter to be voted upon, you have one vote for each ordinary share you own as of May 27, 2014.

What if I return a proxy card or otherwise vote but do not make specific choices?

Shareholders of Record: Shares registered in your name

If you are a shareholder of record and you do not specify your vote on each proposal individually when
voting via the internet or by telephone, or if you sign and return a proxy card without giving specific voting
instructions, then the proxy holders will vote your shares in the manner recommended by the board of directors
on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with
respect to any other matters properly presented for a vote at the annual meeting. The voting recommendations of
the board of directors are set forth under “What are the board’s voting recommendations?” above.

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Beneficial Owners: Shares registered in the name of a broker, bank or other agent

If you are a beneficial owner of shares held in “street name” and you do not provide the broker, bank or
other agent that holds your shares with specific instructions, under the rules of various national and regional
securities exchanges, the broker, bank or other agent that holds your shares may generally vote on routine matters
but cannot vote on non-routine matters. If the broker, bank or other agent that holds your shares does not receive
instructions from you on how to vote your shares on a non-routine matter, the broker, bank or other agent that
holds your shares will inform our inspector of elections that it does not have the authority to vote on that matter
with respect to your shares. This is generally referred to as a “broker non-vote.” When our inspector of elections
tabulates the votes for any particular matter, broker non-votes will be counted for purposes of determining
whether a quorum is present, but will not be counted toward the vote total for any proposal. We encourage you to
provide voting instructions to the broker, bank or other agent that holds your shares to ensure that your vote is
counted on all four proposals.

Which proposals are considered “routine” or “non-routine”?

The proposal to appoint KPMG, Dublin, or KPMG, as the independent auditors of the company for the
fiscal year ending December 31, 2014 and authorize the audit committee of the board of directors to determine
the auditors’ remuneration (Proposal 2) is considered routine under applicable rules. A broker or other nominee
may generally vote on routine matters, and therefore no broker non-votes are expected on Proposal 2.

The election of directors (Proposal 1), the authorization of the company and/or any subsidiary of the
company to make market purchases of the company’s ordinary shares (Proposal 3) and the advisory vote on the
compensation of our named executive officers (Proposal 4) are considered non-routine under applicable rules. A
broker or other nominee cannot vote without instructions on non-routine matters, and therefore we expect broker
non-votes on Proposals 1, 3 and 4.

What does it mean if I receive more than one set of proxy materials or more than one Notice, or
combination thereof?

If you receive more than one set of proxy materials, or more than one Notice or a combination thereof, your
shares may be registered in more than one name or are registered in different accounts. Please follow the voting
instructions on each set of proxy materials or Notices to ensure that all of your shares are voted.

Can I change my vote after submitting my proxy?

Yes. You can revoke your proxy at any time before the final vote at the annual meeting. If you are the

record holder of your shares, you may revoke your proxy in any one of the following ways:

• You may submit another properly completed proxy card with a later date.

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• You may grant a subsequent proxy by telephone or via the internet.

• You may send a timely written notice that you are revoking your proxy to our Company Secretary at

Fourth Floor, Connaught House, One Burlington Road, Dublin 4, Ireland.

• You may attend the annual meeting and vote in person. Simply attending the annual meeting will not,

by itself, revoke your proxy.

Your most recent proxy card or telephone or internet proxy is the one that is counted.

If your shares are held by your broker, bank or other agent as a nominee or agent, you should follow the

instructions provided by your broker, bank or other agent.

Do I need a ticket to attend the annual meeting?

Yes, you will need an admission ticket or proof of ownership of ordinary shares to enter the annual meeting.

If you are a shareholder of record, your admission ticket is the bottom half of the proxy card sent to you. If you
plan to attend the annual meeting, please so indicate when you vote and bring the ticket with you to the annual
meeting. If your shares are held in the name of a bank, broker or other holder of record, your admission ticket is
on your voting information form. If you do not bring your admission ticket, you will need proof of ownership to
be admitted to the annual meeting. A recent brokerage statement or letter from a bank or broker is an example of
proof of ownership. If you arrive at the annual meeting without an admission ticket, we will admit you only if we
are able to verify that you are a shareholder of our company. For directions to attend the annual meeting in
person, please contact our Investor Relations department at + 353 1 634 7892 (Ireland) or + 1 650 496 2800
(U.S.) or by email at investorinfo@jazzpharma.com.

How are votes counted?

Votes will be counted by the inspector of elections appointed for the meeting. The inspector of elections will
separately count, for each of the proposals, votes “For” and “Against” and abstentions, and, as applicable, broker
non-votes. Abstentions and broker non-votes will be treated as shares present for purposes of determining the
presence of a quorum for the transaction of business at the annual meeting. Abstentions and broker non-votes
will not, however, be considered votes cast at the annual meeting. Because the approval of all of the proposals is
based on the votes cast at the annual meeting, abstentions and broker non-votes will not have any effect on the
outcome of voting on the proposals.

How many votes are needed to approve each proposal?

Assuming that a quorum is present at the annual meeting, the following votes will be required for approval:

•

•

•

•

Proposal 1: For the election of directors, each nominee named herein for election to the board of
directors who receives the affirmative vote of a majority of the votes cast in person or by proxy at the
annual meeting on his or her election will be elected to the board of directors.

Proposal 2: The appointment of KPMG as the independent auditors of the company for the fiscal year
ending December 31, 2014 and the authorization of the audit committee of the board of directors to
determine the auditors’ remuneration must receive the affirmative vote of a majority of the votes cast in
person or by proxy at the annual meeting in order to be approved.

Proposal 3: The authorization of the company and/or any subsidiary of the company to make market
purchases of the company’s ordinary shares must receive the affirmative vote of a majority of the votes
cast in person or by proxy at the annual meeting in order to be approved.

Proposal 4: The advisory approval of the compensation of our named executive officers must receive
the affirmative vote of a majority of the votes cast in person or by proxy at the annual meeting in order
to be approved, although such vote will not be binding on us.

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What is the quorum requirement?

A quorum of shareholders is necessary to hold a valid meeting. A quorum will be present if shareholders
holding a majority of the issued and outstanding ordinary shares entitled to vote as of the record date are present
at the annual meeting or represented by proxy. On the record date, there were 59,450,867 ordinary shares
outstanding and entitled to vote.

Your shares will be counted towards the quorum only if you submit a valid proxy (or if one is submitted on
your behalf by your broker, bank or other nominee) or, provided that you are a shareholder of record, if you vote
in person at the annual meeting. Abstentions and broker non-votes will be counted towards the quorum
requirement. If there is no quorum within one hour of the time appointed for the annual meeting, the annual
meeting will stand adjourned to August 7, 2014 at 10:30 a.m. local time at the same location, or such other time
or place as the board of directors may determine.

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How can I find out the results of the voting at the annual meeting?

Preliminary voting results will be announced at the annual meeting. In addition, final voting results will be

published in a quarterly report on Form 10-Q or a current report on Form 8-K that we expect to file with the SEC
within four business days after the annual meeting. If final voting results are not available to us in time to file a
Form 10-Q or a Form 8-K within four business days after the annual meeting, we intend to file a Form 8-K to
publish preliminary results and, within four business days after the final results are known to us, file an additional
Form 8-K to publish the final results.

What are the Irish statutory accounts?

We are presenting our Irish statutory accounts, including the respective reports of the directors and the
auditors thereon, at the annual meeting and we are mailing those accounts to shareholders of record. Since we are
an Irish company, we are required to prepare Irish statutory accounts under applicable Irish company law and to
deliver those accounts to shareholders of record in connection with our annual general meetings of shareholders.
The Irish statutory accounts cover the results of operations and financial position of Jazz Pharmaceuticals plc for
the year ended December 31, 2013. The Irish statutory accounts are prepared in accordance with the International
Financial Reporting Standards as adopted by the European Union and as applied in accordance with the Irish
Companies Acts of 1963 to 2013. There is no requirement under Irish law that the Irish statutory accounts be
approved by the shareholders, and no such approval will be sought at the annual meeting.

We will mail without charge, upon written request, a copy of the Irish statutory accounts to beneficial
owners of our shares. Requests should be sent to: Jazz Pharmaceuticals plc, Attention: Company Secretary,
Fourth Floor, Connaught House, One Burlington Road, Dublin 4, Ireland.

What proxy materials are available on the internet?

This proxy statement, our letter to shareholders and the annual report are available at

https://materials.proxyvote.com/G50871.

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PROPOSAL 1
ELECTION OF DIRECTORS

Our board of directors is divided into three classes, designated Class I, Class II and Class III. The term of
the Class III directors will expire on the date of the annual meeting; the term of the Class I directors will expire
on the date of our 2015 annual general meeting of shareholders; and the term of the Class II directors will expire
on the date of our 2016 annual general meeting of shareholders. At each annual general meeting of shareholders,
successors to the class of directors whose term expires at that annual general meeting are elected for a three-year
term. Vacancies on the board of directors, including a vacancy that results from an increase in the authorized
number of directors, may be filled only by the affirmative vote of a majority of the directors then in office,
provided that a quorum is present. A director elected by the board of directors to fill a vacancy in a class will
serve for the remainder of the full term of that class and until the director’s successor is elected and qualified.

The board of directors currently has ten members and there are no vacancies on the board of directors. There

are currently three directors in Class III, the class whose term of office expires at the annual meeting, all of
whom are standing for election at the annual meeting. All three directors were nominated for election by the
board of directors upon the recommendation of our nominating and corporate governance committee.
Mr. Cozadd was previously elected to the Jazz Pharmaceuticals, Inc. board of directors by its stockholders.
Mr. Winningham was previously appointed to the Jazz Pharmaceuticals, Inc. board of directors in May 2010.
Messrs. Cozadd and Winningham were elected to our board of directors effective upon the consummation of the
Azur Merger. The board of directors elected Ms. McSharry to the board of directors in May 2013 upon
recommendation of our nominating and corporate governance committee, based on its review of her experience
and qualifications. Both Mr. Winningham and Ms. McSharry were initially identified to this committee by a
search firm and as a result of an extensive external nomination process.

In order to be elected as a director, each nominee must be appointed by an ordinary resolution and each
must receive the affirmative vote of a majority of the votes cast by the holders of ordinary shares represented at
the annual meeting in person or by proxy. If any nominee becomes unavailable for election as a result of an
unexpected occurrence, the proxy holders will vote your proxy for the election of any substitute nominee as may
be proposed by the nominating and corporate governance committee. Each nominee has agreed to serve if
elected, and we have no reason to believe that any nominee will be unable to serve. If elected at the annual
meeting, each nominee would serve as a director until the 2017 annual general meeting of shareholders and until
his or her successor has been elected and qualified, or, if sooner, until his or her death, resignation, retirement,
disqualification or removal. It is our policy to invite directors and nominees for director to attend annual general
meetings of shareholders. Eleven directors attended our 2013 annual general meeting of shareholders.

The following includes a brief biography of each nominee for director and each of our other current

directors, including their respective ages as of May 27, 2014. Each biography includes information regarding the
specific experience, qualifications, attributes or skills that led the nominating and corporate governance
committee and the board of directors to determine that the applicable nominee or other current director should
serve as a member of the board of directors.

Class III Director Nominees for Election for a Three-Year Term Expiring at the 2017 Annual General
Meeting

Bruce C. Cozadd, age 50, has served as our Chairman and Chief Executive Officer since the Azur Merger.
He was a co-founder and has served (and continues to serve) as Chairman and Chief Executive Officer of Jazz
Pharmaceuticals, Inc. since April 2009. From 2003 until 2009, he served as Jazz Pharmaceuticals, Inc.’s
Executive Chairman and as a member of its board of directors. From 1991 until 2001, he held various positions
with ALZA Corporation, a pharmaceutical company acquired by Johnson & Johnson, most recently as its
Executive Vice President and Chief Operating Officer, with responsibility for research and development,
manufacturing and sales and marketing. Previously at ALZA Corporation he held the roles of Chief Financial
Officer and Vice President, Corporate Planning and Analysis. He serves on the boards of Cerus Corporation, a

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biomedical products company, Threshold Pharmaceuticals, Inc., a clinical stage biopharmaceutical company, and
The Nueva School, a non-profit organization. He received a B.S. from Yale University and an M.B.A. from the
Stanford Graduate School of Business. As our Chief Executive Officer, he brings to our board of directors a
detailed knowledge of our business.

Heather Ann McSharry, age 52, has served as a member of our board of directors since May 2013.

Ms. McSharry currently serves as a non-executive director on the boards of directors of several public and private
companies, including Greencore Group plc, an international manufacturer of convenience foods, and CRH plc, an
international building materials group. From 2006 to 2009, Ms. McSharry was Managing Director Ireland of
Reckitt Benckiser, a multinational health, home and hygiene consumer products company. From 1989 to 2006, she
held various positions at Boots Healthcare, a leading global consumer healthcare company, most recently as
Managing Director of Boots Healthcare Ireland Limited. Ms. McSharry also serves on the board of directors of the
Industrial Development Agency in Ireland, where she is Chair of the audit and finance committee. From 2007 to
2011, Ms. McSharry served on the board of directors of the Bank of Ireland, including serving on its audit
committee from 2009 to 2011. Ms. McSharry holds a Bachelor of Commerce and a Master of Business Studies
degree from University College Dublin. Ms. McSharry brings to our board of directors almost 30 years of
experience in multiple international industries including healthcare, consumer goods and financial services.

Rick E Winningham, age 54, has served as a member of our board of directors since the Azur Merger and
was a director of Jazz Pharmaceuticals, Inc. from 2010 until the Azur Merger. In May 2014, Mr. Winningham
was appointed lead independent director of our board of directors. Since 2001, he has served as the Chief
Executive Officer and since 2010, as Chairman of the board of directors of Theravance, Inc., a royalty
management company. Since May 2014 he has also served as Chief Executive Officer and Chairman of the
Board of Directors of Theravance Biopharma, Inc., a biopharmaceutical company. From 1986 to 2001, he held
various positions with a pharmaceutical company, Bristol-Myers Squibb and its predecessor Bristol-Myers,
including serving as the President of Bristol-Myers Squibb Oncology/Immunology/Oncology Therapeutics
Network and, from 2000 to 2001, as its President of Global Marketing. He is the Chairman of the board of
directors of the California Healthcare Institute (CHI) and is also a member of the Biotechnology Industry
Organization’s Board of Directors, serving on the Health Section Governing Board and Board Standing
Committee on Reimbursement. Mr. Winningham holds an M.B.A. from Texas Christian University and a B.S.
from Southern Illinois University. Mr. Winningham’s experience in senior management positions in the
pharmaceutical industry provides significant industry knowledge and operational and management expertise to
our board of directors.

The board of directors recommends
a vote “For” each nominee named above.

Class I Directors Continuing in Office Until the 2015 Annual General Meeting

Peter Gray, age 59, has served as a member of our board of directors since May 2013 and was appointed as

chairperson of our audit committee, effective as of April 7, 2014. Mr. Gray currently serves as Chairman of the
board of directors of UDG Healthcare plc, an international provider of healthcare services, and as a business
consultant to the pharmaceutical industry. In September 2011, Mr. Gray retired from his position as the
Chief Executive Officer of ICON plc, a global provider of outsourced development services to the
pharmaceutical, biotechnology and medical device industries, which he held since November 2002. At ICON plc,
Mr. Gray previously served as Group Chief Operating Officer from June 2001 to November 2002 and
Chief Financial Officer from June 1997 to June 2001. Mr. Gray holds a degree in law from Trinity College
Dublin and is a chartered accountant. Based on his experience as Chief Executive Officer and Chief Financial
Officer of ICON plc, Mr. Gray brings to our board of directors and audit committee over 20 years of experience
in financial and operational management within the pharmaceutical industry.

Kenneth W. O’Keefe, age 47, has served as a member of our board of directors since the Azur Merger and
was a director of Jazz Pharmaceuticals, Inc. from 2004 until the Azur Merger. Since January 2011 he has been

9

Managing Partner of, and from 1997 to January 2011, he was Managing Director of, Beecken Petty
O’Keefe & Company, a private equity firm, which he co-founded. He serves on the boards of several privately
held healthcare companies. He received a B.A. from Northwestern University and an M.B.A. from the University
of Chicago. As a member of Beecken Petty O’Keefe, Mr. O’Keefe brings to our board of directors significant
expertise in accounting and financial matters and in analyzing and evaluating financial statements, as well as
substantial experience managing private equity investments. He serves or has served on the audit committee of
several companies in the healthcare industry. As the former chairperson of our audit committee until April 7,
2014 and the chairperson of the audit committee of Jazz Pharmaceuticals, Inc.’s board of directors for several
years, Mr. O’Keefe has detailed knowledge of our financial position and financial statements.

Catherine A. Sohn, Pharm. D., age 61, has served as a member of our board of directors since her election at

the July 2012 annual general meeting of shareholders and was appointed as chairperson of our nominating and
corporate governance committee, effective as of August 1, 2013. Dr. Sohn is the founder of Sohn Health
Strategies, where since 2010 she has consulted to pharmaceutical, biotechnology, medical device and consumer
healthcare companies in the areas of business strategy, business development and strategic product development.
She joined the board of directors of Neuralstem, Inc., a biotechnology company, in January 2014 and has served
as a director of Landec Corporation, a material sciences company, since November 2012. From 1982 to 2010, she
was with GlaxoSmithKline plc, a pharmaceutical company (and with SmithKline Beecham plc before its merger
with GlaxoWellcome plc), where she served most recently as Senior Vice President, Worldwide Business
Development and Strategic Alliances in the GSK Consumer Healthcare division, and before that, she held a
series of positions in Medical Affairs, Pharmaceutical Business Development, U.S. Product Marketing, and
global strategic product development in the pharmaceutical division. Dr. Sohn started her career as Assistant
Professor of Clinical Pharmacy at the University of the Sciences in Philadelphia, where she currently holds the
position of Dean’s Professor. She received a Pharm. D. from the University of California, San Francisco, School
of Pharmacy. She also received a Certificate of Professional Development from the Wharton School at the
University of Pennsylvania. Dr. Sohn brings to our board of directors almost three decades of product
development and business development experience in the pharmaceutical industry and a global perspective that is
directly relevant to our company.

Class II Directors Continuing in Office Until the 2016 Annual General Meeting

Paul L. Berns, age 47, has served as a member of our board of directors since the Azur Merger and was a
director of Jazz Pharmaceuticals, Inc. from 2010 until the Azur Merger. In March 2014, Mr. Berns was appointed
as the Chief Executive Officer and President of Anacor Pharmaceuticals, Inc., a biopharmaceutical company. He
has served as a member of the board of directors of Anacor Pharmaceuticals, Inc. since 2012 and served as the
Chairman of its board of directors since 2013. From September 2012 to March 2014, he was a self-employed
consultant to the pharmaceutical industry. From March 2006 to September 2012, he served as the President and
Chief Executive Officer, and as a member of the board of directors, of Allos Therapeutics, Inc., a pharmaceutical
company acquired by Spectrum Pharmaceuticals, Inc. From July 2005 to March 2006, Mr. Berns was a self-
employed consultant to the pharmaceutical industry. From June 2002 to July 2005, Mr. Berns was President,
Chief Executive Officer and a director of Bone Care International, Inc., a specialty pharmaceutical company that
was acquired by Genzyme Corporation in 2005. From 2001 to 2002, Mr. Berns served as Vice President and
General Manager of the Immunology, Oncology and Pain Therapeutics business unit of Abbott Laboratories, a
pharmaceutical company. From 2000 to 2001, he served as Vice President, Marketing of BASF Pharmaceuticals/
Knoll, a pharmaceutical company, and from 1990 to 2000, Mr. Berns held various positions, including senior
management roles, at Bristol-Myers Squibb Company, a pharmaceutical company. Mr. Berns joined the board of
directors of Cellectar Biosciences, Inc. (formerly Novelos Therapeutics, Inc.) in November 2013 and has been a
director of XenoPort, Inc. since 2005. Mr. Berns received a B.S. in Economics from the University of Wisconsin.
With his experience as Chief Executive Officer of Allos Therapeutics, Anacor Pharmaceuticals and Bone Care
International, and his experience serving on the boards of directors of public companies, Mr. Berns provides
significant management expertise and industry knowledge to our board of directors.

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Patrick G. Enright, age 52, has served as a member of our board of directors since the Azur Merger and was
a director of Jazz Pharmaceuticals, Inc. from 2009 until the Azur Merger. Since 2006, Mr. Enright has served as
a Managing Director of Longitude Capital, a venture capital firm, of which he is a founder. From 2002 through
2006, Mr. Enright was a Managing Director of Pequot Ventures, a venture capital investment firm, where he
co-led the life sciences investment practice. He currently serves on the boards of directors of Corcept
Therapeutics Incorporated, a pharmaceutical company, Esperion Therapeutics, Inc., a biopharmaceutical
company, and several privately-held companies. In the past five years he also served as a director of Threshold
Pharmaceuticals, Inc. and Sequenom, Inc. Mr. Enright received a B.S. from Stanford University and an M.B.A.
from the Wharton School at the University of Pennsylvania. Based on his experience as a venture capital investor
focused on life sciences companies and past work in the pharmaceutical industry, Mr. Enright brings to our board
of directors over 25 years of operating experience and financial expertise in the life sciences industry.

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Seamus Mulligan, age 53, has served as a member of our board of directors since the Azur Merger and was

a founder and principal investor of Azur Pharma. Since 2013, Mr. Mulligan has served as Chairman and Chief
Executive Officer of Adapt Pharma, plc, a specialty pharmaceutical company, and since 2006, Mr. Mulligan has
served as the Executive Chairman of Circ Pharma Limited and its subsidiaries, a pharmaceutical development
stage group. Mr. Mulligan served as our Chief Business Officer, International Business Development from the
Azur Merger until February 2013. Mr. Mulligan served as Azur Pharma’s Chairman and Chief Executive Officer
and as a member of its board of directors from 2005 until the Azur Merger. From 1984 until 2004, he held
various positions with Elan Corporation, plc, a pharmaceutical company, most recently as its Executive Vice
President, Business and Corporate Development. Previously at Elan Corporation, he held the roles of President of
Elan Pharmaceutical Technologies, the drug delivery division of Elan, Executive Vice President, Pharmaceutical
Operations, Vice President, U.S. Operations and Vice President, Product Development. He served as a member
of the board of directors of the U.S. National Pharmaceutical Council until 2004. Mr. Mulligan received a
B.Sc (Pharm) and M.Sc from Trinity College Dublin. As a founder of Azur Pharma and a senior executive of
Elan Corporation for 20 years, Mr. Mulligan brings his expertise in business development and deep knowledge of
the pharmaceutical industry to our board of directors.

Norbert G. Riedel, Ph.D., age 56, has served as a member of our board of directors since May 2013 and was

appointed chairperson of our compensation committee, effective as of August 1, 2013. Since January 2014,
Dr. Riedel has served as the Chief Executive Officer and President of Naurex, Inc., a biopharmaceutical
company. From 2001 to January 2013, he served as Corporate Vice President and Chief Scientific Officer of
Baxter International Inc., a diversified healthcare company, where from 1998 to 2001, he also served as President
and General Manager of the recombinant therapeutic proteins business unit and Vice President of Research and
Development of the bioscience business unit. From 1996 to 1998, Dr. Riedel served as head of worldwide
biotechnology and worldwide core research functions at Hoechst-Marion Roussel, now Sanofi-Aventis, a global
pharmaceutical company. Dr. Riedel serves on the board of directors of Ariad Pharmaceuticals, Inc., a
biotechnology company, and the board of directors of the Illinois Biotechnology Industry Organization.
Dr. Riedel is also a member of the Austrian Academy of Sciences, the advisory board of Northwestern
University’s Kellogg School of Management Center for Biotechnology, and the Illinois Innovation Council.
Dr. Riedel is an Adjunct Professor at Boston University School of Medicine and an Adjunct Professor of
Medicine at Northwestern University’s Feinberg School of Medicine. Dr. Riedel holds a Diploma in
biochemistry and a Ph.D. in biochemistry from the University of Frankfurt. Dr. Riedel brings significant
scientific, drug discovery and development, and commercial expertise to our board of directors with over
20 years of experience in the biotechnology and pharmaceutical industries.

There are no family relationships among any of our executive officers and directors.

11

CORPORATE GOVERNANCE AND BOARD MATTERS

Independence of the Board of Directors

As required under the NASDAQ Stock Market LLC listing standards, or NASDAQ listing standards, a
majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively
determined by the board of directors. Our board of directors consults with internal counsel to ensure that the
board’s determinations are consistent with relevant securities and other laws and regulations regarding the
definition of “independent,” including those set forth in applicable NASDAQ listing standards, as in effect from
time to time. Consistent with these considerations, after review of all relevant transactions or relationships
between each director, or any of his or her family members, and our company, its senior management and its
independent registered public accounting firm, the board of directors affirmatively determined that all of our
current directors as well as those directors serving on the board of directors during any portion of 2013 are (or
were in the case of former directors) independent directors within the meaning of the applicable NASDAQ listing
standards, except that Mr. Cozadd, our Chairman and Chief Executive Officer, and Mr. Mulligan, our former
Chief Business Officer, International Business Development, are not independent directors by virtue of their
employment (or past employment) with our company. In addition, our board of directors has determined that
each member of the audit committee, compensation committee and nominating and corporate governance
committee meets the applicable NASDAQ and SEC rules and regulations regarding “independence” and that
each member is free of any relationship that would impair his or her individual exercise of independent judgment
with regard to Jazz Pharmaceuticals plc.

Board Leadership Structure and Risk Oversight

Bruce Cozadd has served as our Chairman and Chief Executive Officer since the Azur Merger. Mr. Cozadd
has served (and continues to serve) as Chairman and Chief Executive Officer of Jazz Pharmaceuticals, Inc. since
April 2009. Prior to that, he was the Executive Chairman since the founding of Jazz Pharmaceuticals in 2003. We
believe that a combined Chairman/Chief Executive Officer role helps provide strong, unified leadership for our
management team and optimizes communication with our board of directors.

The board of directors believes that the Chief Executive Officer is best suited to serve as our Chairman

because he is the member of the board of directors who is most familiar with our business as a whole, and the
most capable of identifying and bringing to the attention of the full board of directors the strategic priorities and
key issues facing the company. Having served for many years as a director of publicly-traded and privately-held
companies and non-profit organizations and in executive management, Mr. Cozadd brings both a strategic and
operational perspective to this combined position.

At meetings of our board of directors, the independent directors convene regularly scheduled executive

sessions without the presence of management, and, in May 2014, the company established a lead independent
director role with the responsibilities described below. Mr. Winningham currently serves as our lead independent
director. In establishing the lead independent director role, the board of directors determined that having a lead
independent director would help to ensure the effective independent functioning of the board of directors in its
oversight responsibilities. The board of directors also believes the role of Chairman and Chief Executive Officer,
together with the role of the lead independent director, provide an appropriate balance in the company’s
leadership. The lead independent director is appointed by our independent directors. Specific roles and
responsibilities of the lead independent director include:

•

•

•

•

presiding at all meetings of the board of directors at which the Chairman is not present;

serving as the principal liaison between the independent directors and the Chairman;

coordinating the activities of the independent directors, including developing agendas for and presiding
at executive sessions of the independent directors;

advising the Chairman on board and committee agendas, meeting schedules and information provided
to other board members (including the quality, quantity and timeliness of such information); and

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•

discussing the results of the Chief Executive Officer’s performance evaluation with the chairperson of
the compensation committee.

The lead independent director also has the authority to call meetings of the independent directors of the
board of directors and is available for consultation and communication with major shareholders, if requested. Our
board of directors is currently comprised of ten directors, of whom eight are independent.

We believe that our directors provide effective oversight of risk management for our company, particularly

as a result of the work of our committees and the ongoing dialogue between the full board, our Chairman and
Chief Executive Officer and our lead independent director. Our audit committee is responsible for overseeing our
financial reporting process on behalf of our board of directors and reviewing with management and our auditors,
as appropriate, our major financial risk exposures and the steps taken by management to monitor and control
these exposures. Our nominating and corporate governance committee oversees the company’s risk management,
other than with respect to risks related to the company’s financial position or compensation policies, on behalf of
our board of directors. Our compensation committee approves all material compensation plans for our company
and reviews our compensation practices to ensure that they do not encourage excessive risk taking and provide
appropriate incentives for meeting both short-term and long-term objectives and increasing shareholder value
over time. At its meetings, our full board of directors receives reports concerning the management of the relevant
risks from each committee, in addition to reports concerning material risks and concerns or significant updates on
such matters from our General Counsel and other executive officers, as necessary.

Meetings of the Board

The Jazz Pharmaceuticals plc board of directors met five times during 2013 and did not act by written
consent during the year. All directors attended at least 75% of the aggregate number of meetings of the board of
directors and of the committees on which they served which were held during the portion of 2013 for which they
were directors or committee members, respectively.

As required under applicable NASDAQ listing standards, in 2013, the independent directors met at each
regularly scheduled board meeting in regularly scheduled executive sessions at which only independent directors
were present.

Information About the Committees of the Board of Directors

The committees of the board of directors include an audit committee, a compensation committee and a
nominating and corporate governance committee. Each of these committees is comprised solely of independent
directors and has a separate chairperson. Each committee has a written charter approved by the board of
directors, which reflects the applicable standards and requirements adopted by the SEC and NASDAQ. A copy of
each committee charter can be found on our website, www.jazzpharmaceuticals.com, in the section titled “About
Us” under the subsection titled “Board Committees.” In addition, in 2013 the board of directors had a transaction
committee that met on an as-needed basis.

The following table provides membership information for 2013 for each of the audit committee,

compensation committee and nominating and corporate governance committee:

Name

Paul L. Berns (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patrick G. Enright . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Peter Gray (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Heather Ann McSharry (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
James C. Momtazee (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kenneth W. O’Keefe (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Norbert Riedel, Ph.D. (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Catherine A. Sohn, Pharm. D. (7) . . . . . . . . . . . . . . . . . . . . . . . . .
Rick E Winningham (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13

Audit

Compensation

Nominating and
Corporate
Governance

X
X
X
X

X*

X*
X

X*
X
X

X

X
X*

X*
X

*

Served as committee chairperson during all or a portion of 2013.

(1) Mr. Berns served as chairperson of our compensation committee until August 1, 2013.

(2) Mr. Gray was appointed to our board of directors and our audit committee on May 2, 2013 and was

appointed chairperson of our audit committee effective as of April 7, 2014.

(3) Ms. McSharry was appointed to our board of directors and our audit committee on May 2, 2013 and to our

nominating and corporate governance committee on August 1, 2013.

(4) Mr. Momtazee served as chairperson of our nominating and corporate governance committee until

August 1, 2013. Mr. Momtazee resigned from our board of directors effective as of January 8, 2014.

(5) Mr. O’Keefe served as chairperson of our audit committee until April 7, 2014.

(6) Dr. Riedel was appointed to our board of directors and our compensation committee on May 2, 2013 and

appointed chairperson of our compensation committee effective as of August 1, 2013.

(7) Dr. Sohn was appointed chairperson of our nominating and corporate governance committee effective as of

August 1, 2013.

(8) Mr. Winningham was appointed to our nominating and corporate governance committee on August 1, 2013.

Audit Committee

The audit committee of the board of directors oversees our corporate accounting and financial reporting
processes, our systems of internal control over financial reporting and audits of our financial statements, as well
as the quality and integrity of our financial statements and reports and the qualifications, independence and
performance of the auditors engaged as our independent registered public accounting firm for purposes of
preparing or issuing an audit report or performing audit services. Specific responsibilities of the audit committee
include:

•

•

•

•

evaluating the performance of and assessing the qualifications of the independent auditors;

determining and approving the engagement and remuneration of the independent auditors;

determining whether to retain or terminate the existing independent auditors or to appoint and engage
new independent auditors;

determining and approving the engagement of the independent auditors to perform any proposed
permissible non-audit services;

• monitoring the rotation of partners of the independent auditors on our audit engagement team as

required by applicable laws and rules;

•

•

reviewing and advising on the selection and removal of the head of our internal audit function, the
activities and organizational structure of the internal audit function and the results of internal audit
activities;

reviewing and approving the internal audit charter on an annual basis and the annual internal audit plan
and budget;

• meeting to review our annual audited financial statements, our quarterly financial statements and our
financial press releases with management and the independent auditor, including reviewing our
disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” included in our annual and quarterly reports filed with the SEC;

•

•

reviewing, overseeing and approving transactions between our company and any related persons;

conferring with management, the internal auditors and the independent auditors regarding the scope,
adequacy and effectiveness of our internal control over financial reporting;

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•

•

reviewing with management, the internal auditors and the independent auditors, as appropriate, major
financial risk exposures and the steps taken by management to monitor and control these exposures;
and

establishing procedures, when and as required under applicable laws and rules, for the receipt, retention
and treatment of complaints received by our company (if any) regarding accounting, internal
accounting controls or auditing matters and the confidential and anonymous submission by employees
of concerns regarding questionable accounting or auditing matters.

The audit committee is currently composed of five directors: Messrs. Berns, Enright, Gray and O’Keefe and

Ms. McSharry. Our board of directors has determined that Messrs. Berns, Enright, Gray and O’Keefe and
Ms. McSharry meet the independence requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as
amended, or the Exchange Act, and the NASDAQ listing standards with respect to audit committee members.
Our board of directors has also determined that each of Messrs. Enright, Gray and O’Keefe and Ms. McSharry is
an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K. In making
this determination, our board of directors considered the overall knowledge, experience and familiarity of each of
Messrs. Enright, Gray and O’Keefe and Ms. McSharry with accounting matters and in analyzing and evaluating
financial statements, and, in the case of Messrs. Enright and O’Keefe, managing private equity investments.
Mr. Gray currently serves as chairperson of the audit committee.

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The audit committee met four times during 2013 and did not act by written consent during the year.

Report of the Audit Committee of the Board of Directors (1)

The audit committee has reviewed and discussed the company’s audited financial statements for the fiscal

year ended December 31, 2013 with management of the company. The audit committee has discussed with
KPMG, Dublin, the independent registered public accounting firm that audited the company’s financial
statements for the fiscal year ended December 31, 2013, the matters required to be discussed by Accounting
Standard No. 16 “Communications with Audit Committees,” as adopted by the Public Company Accounting
Oversight Board, or the PCAOB, in Release No. 2012-004. The audit committee has also received the written
disclosures and the letter from KPMG, Dublin required by applicable requirements of the PCAOB regarding the
independent accountants’ communications with the audit committee concerning independence, and has discussed
with KPMG, Dublin that firm’s independence. Based on the foregoing, the audit committee recommended to the
board of directors that the audited financial statements be included in the company’s annual report on Form 10-K
filed with the SEC for the fiscal year ended December 31, 2013.

Respectfully submitted,
The Audit Committee of the Board of Directors

Mr. Peter Gray (Chairperson)
Mr. Paul L. Berns
Mr. Patrick G. Enright
Ms. Heather Ann McSharry
Mr. Kenneth W. O’Keefe

(1) The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be

incorporated by reference in any filing of the company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of
any general incorporation language in any such filing.

15

Compensation Committee

The compensation committee oversees, reviews and approves our compensation policies, plans and
programs, determines the compensation to be paid to our executive officers and directors, and prepares and
reviews the compensation committee report included in our annual proxy statement. Specific responsibilities and
authority of our compensation committee include:

•

•

•

•

•

•

•

•

•

reviewing, modifying (as needed) and approving overall compensation strategy and policies;

recommending to our board of directors for determination and approval the compensation and other
terms of employment of our Chief Executive Officer and evaluating our Chief Executive Officer’s
performance in light of relevant goals and objectives;

reviewing and approving the goals and objectives of our other executive officers and determining and
approving the compensation and other terms of employment of these executive officers, as appropriate;

reviewing and recommending to our board of directors the type and amount of compensation to be paid
or awarded to the members of our board of directors;

having the full power and authority of our board of directors regarding the adoption, amendment and
termination of our compensation plans and programs and administering these plans and programs;

having the authority, in its sole discretion, to retain or obtain, at the expense of the company, advice
and assistance from compensation consultants and internal or external legal, accounting and other
advisors;

having direct responsibility for appointing, and providing compensation and oversight of the work of,
any compensation consultants and other advisors retained by the compensation committee and
considering the independence of each such advisor;

periodically reviewing with our Chief Executive Officer the plans for succession to the offices of our
executive officers and making recommendations to our board of directors with respect to the selection
of appropriate individuals to succeed to these positions; and

reviewing and discussing with management our disclosures contained under the caption
“Compensation Discussion and Analysis.”

The compensation committee is currently composed of five directors: Messrs. Berns, Enright and
Winningham, and Drs. Riedel and Sohn. Dr. Riedel currently serves as the chairperson of the compensation
committee. Each member of the compensation committee meets the independence requirements of the NASDAQ
listing standards with respect to compensation committee members. In determining whether Messrs. Berns,
Enright and Winningham and Drs. Riedel and Sohn are independent within the meaning of the NASDAQ listing
standards pertaining to compensation committee membership that will be in effect for us as of the annual
meeting, our board of directors determined, based on its consideration of factors specifically relevant to
determining whether any such director has a relationship to us that is material to that director’s ability to be
independent from management in connection with the duties of a compensation committee member, that no
member of the compensation committee has a relationship that would impair that member’s ability to make
independent judgments about compensation of our executive officers.

The compensation committee held five meetings during 2013 and did not act by written consent during the

year. The compensation committee also had a number of informal discussions and consultations with one another
and with Mr. Cozadd, our Chairman and Chief Executive Officer.

Compensation Committee Processes and Procedures

Typically, the compensation committee meets four times per year, generally on the same day as or near the

time of regularly scheduled board meetings, with an additional meeting to approve the “Compensation
Discussion and Analysis” included in this proxy statement and related matters, and with greater frequency if

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necessary. The agenda for each compensation committee meeting is usually developed by members of our human
resources department and Chief Executive Officer, with input from members of our legal department, and is
reviewed with the chairperson of the compensation committee. From time to time, various other members of
management and other employees as well as outside advisors or consultants may be invited by the compensation
committee to make presentations, provide financial or other background information or advice or otherwise
participate in compensation committee meetings. Mr. Cozadd may not participate in, or be present during, any
deliberations or determinations of the compensation committee regarding his compensation. The charter of the
compensation committee grants the compensation committee full access to all books, records, facilities and
personnel of the company, as well as authority to obtain, at our expense, advice and assistance from internal and
external legal, accounting or other advisors and consultants and other external resources that the compensation
committee considers necessary or appropriate in the performance of its duties. In particular, the compensation
committee has the authority, in its sole discretion, to retain or obtain, at the expense of the company,
compensation consultants to assist in its evaluation of executive compensation, and is directly responsible for the
appointment, compensation and oversight of the work of its compensation consultants. The compensation
committee has retained Radford, an Aon Hewitt company, as its independent compensation consultant to provide
the compensation committee with peer group and additional market compensation data and advice concerning
executive officers’ compensation, including base salaries, performance-based bonuses and long-term equity
compensation.

Under its charter, the compensation committee may form, and delegate authority to, subcommittees as

appropriate, including, but not limited to, a subcommittee composed of one or more members of the board of
directors, to grant stock awards under our equity compensation plans to persons other than our executive officers
and directors. The compensation committee has delegated authority to a committee of at least two of our Chief
Executive Officer, Chief Financial Officer, General Counsel, Senior Vice President, Human Resources and
Principal Accounting Officer, while still also retaining authority for itself and for the board of directors, to
approve discretionary equity grants under our 2011 Equity Incentive Plan, or the 2011 Plan, and our 2007 Equity
Incentive Plan, or the 2007 Plan, as applicable, (i) to non-executive officer employees of our company or any of
our subsidiaries as new hire grants, annual grants and promotion grants that are either (a) within the applicable
ranges approved by the compensation committee depending on the level of the employee and the type of grant, or
(b) in the aggregate with all annual grant, new hire and promotional grants do not exceed the maximum number
approved by the compensation committee as subject to this delegated authority for any calendar year; (ii) to
consultants that are within the ranges adopted by the compensation committee; (iii) to our President’s Club
participants (who are not executive officers) that are within the guidelines or limits for the President’s Club
program adopted by the compensation committee with respect to the year as to which the equity incentives are
being granted; and (iv) to non-executive officer employees of or consultants to the company or any of its
subsidiaries for extraordinary reasons, other than those listed in clauses (i) through (iii) above, that in the
aggregate with all grants listed in clause (i), do not exceed the maximum number approved by the compensation
committee as subject to this delegated authority for any calendar year. The purpose of this authority is to enhance
our flexibility to administer equity incentives and to facilitate the timely grant of stock awards to non-executive
officer employees of and consultants to the company within the specified guidelines approved by the
compensation committee. As part of its oversight function, the compensation committee reviews, at each
regularly scheduled meeting of the compensation committee, a report of any equity incentives granted under this
delegated authority since the last regularly scheduled meeting. The compensation committee does not delegate
any of its functions to others in determining executive compensation.

For additional information regarding our processes and procedures for the consideration and determination

of executive compensation, including the role of Radford in the determination of executive compensation, see the
section of this proxy statement entitled “Executive Compensation–Compensation Discussion and Analysis.” With
respect to director compensation matters, our compensation committee recommends to our board of directors and
our board of directors determines and sets non-employee director compensation. Our compensation arrangements
for our non-employee directors are described under the section of this proxy statement entitled “Director
Compensation.”

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Compensation Committee Interlocks and Insider Participation

From January to May 2013, our compensation committee was composed of four directors: Messrs. Berns,
Enright and Winningham and Dr. Sohn. In May 2013, Dr. Riedel joined our compensation committee following
his appointment to our board of directors. Please refer to the section of this proxy statement titled “Certain
Transactions With or Involving Related Persons” for information concerning certain transactions with or
involving investment funds affiliated with Mr. Enright.

None of the members of our compensation committee during 2013 has at any time been our officer or
employee. None of our executive officers serve, or in the past fiscal year has served, as a member of the board of
directors or the compensation committee of any entity that has one or more of its executive officers serving on
our board of directors or compensation committee.

Compensation Committee Report (1)

The compensation committee has reviewed and discussed with management the Compensation Discussion

and Analysis contained herein. Based on this review and discussion, the compensation committee has
recommended to the board of directors that the Compensation Discussion and Analysis be included in our proxy
statement for the 2014 annual general meeting of shareholders and be included in the Annual Report on
Form 10-K we filed with the SEC for the fiscal year ended December 31, 2013.

Respectfully submitted,
The Compensation Committee of the Board of

Directors

Dr. Norbert G. Riedel, Ph.D. (Chair)
Mr. Paul L. Berns
Mr. Patrick G. Enright
Dr. Catherine A. Sohn, Pharm.D.
Mr. Rick E Winningham

Nominating and Corporate Governance Committee

The nominating and corporate governance committee of our board of directors is responsible for, among

other things:

•

overseeing all aspects of our corporate governance functions on behalf of our board of directors;

• making recommendations to our board of directors regarding corporate governance issues;

•

•

•

•

•

identifying, reviewing and evaluating candidates to serve on our board of directors, and reviewing and
evaluating incumbent directors;

reviewing, evaluating and considering the recommendation for nomination of incumbent members for
reelection to our board of directors and monitoring the size of our board;

recommending director candidates to our board of directors;

overseeing on behalf of our board of directors the company’s compliance with applicable laws and
regulations, other than the financial compliance issues overseen by the audit committee;

overseeing on behalf of our board of directors the company’s risk management matters, other than with
respect to risks related to the company’s financial position or compensation policies overseen by the
audit committee and compensation committee, respectively;

(1) The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be

incorporated by reference in any filing of the company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of
any general incorporation language in any such filing.

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•

•

evaluating director nominations and proposals by our shareholders and establishing policies,
requirements, criteria and procedures in furtherance of the foregoing; and

reviewing, discussing and assessing the performance of our board of directors, including committees of
our board of directors, seeking input from senior management, our full board of directors and others.

The nominating and corporate governance committee believes that candidates for director should have

certain minimum qualifications, including the ability to read and understand basic financial statements, being
over 21 years of age, and the highest personal integrity and ethics. The nominating and corporate governance
committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer
advice and guidance to management, having sufficient time to devote to our affairs, demonstrated excellence in
his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously
represent the long-term interests of our shareholders. However, the nominating and corporate governance
committee retains the right to modify these qualifications from time to time. Members of the nominating and
corporate governance committee obtain recommendations for potential directors from their and other board
members’ contacts in our industry, and we or the nominating and corporate governance committee may from
time to time engage a search firm to assist in identifying potential directors.

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Candidates for director nominees are reviewed in the context of the then current composition of the board of

directors, the operating requirements of the company and the long-term interests of shareholders. While we do
not have a formal policy on board diversity, the nominating and corporate governance committee takes into
account a broad range of diversity considerations when assessing director candidates, including individual
backgrounds, skill sets, professional experience and other factors, which include gender and residency in and
outside of the United States and Ireland, that contribute to our board of directors having an appropriate range of
expertise, talents, experiences and viewpoints, and considers those diversity considerations, in view of the needs
of the board of directors as a whole, when making decisions on director nominations. In the case of incumbent
directors whose terms of office are set to expire, the nominating and corporate governance committee reviews
these directors’ overall service to the company during their terms, including the number of meetings attended,
level of participation, quality of performance and any other relationships and transactions that might impair the
directors’ independence, to determine whether to recommend them to the board of directors for nomination for a
new term. In the case of new director candidates, the nominating and corporate governance committee also
determines whether the nominee is “independent” based upon applicable NASDAQ listing standards, applicable
SEC rules and regulations and the advice of counsel, if necessary. The nominating and corporate governance
committee conducts appropriate and necessary inquiries into the backgrounds and qualifications of possible
candidates after considering the function and needs of the board of directors. The nominating and corporate
governance committee meets to discuss and consider the candidates’ qualifications and then selects a nominee
for recommendation to the board of directors.

In 2012, the company, at the direction of the nominating and corporate governance committee, engaged a

search firm (as it had done in prior years) to conduct a search on our behalf for an audit committee financial
expert with extensive Irish private limited company board experience and financial expertise gained as a chief
financial officer of a public company, an audit partner at a major public accounting firm or a senior executive
with responsibility for a division or corporation, in addition to experience in the healthcare or healthcare products
industries. The company additionally charged the search firm with being mindful of the gender diversity of our
board of directors in conducting this search. In 2013, the search firm identified and recommended Mr. Gray and
Ms. McSharry as director candidates with extensive relevant experience. Dr. Riedel was initially identified to the
nominating and corporate governance committee by our Chief Executive Officer in response to interest, on the
part of the board of directors, in adding an independent director with a strong scientific background and
significant experience managing research and development. The nominating and corporate governance
committee reviewed the background and qualifications of each of Mr. Gray, Ms. McSharry and Dr. Riedel and
nominated them to our board of directors, which elected each of them to our board of directors in May 2013.

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The nominating and corporate governance committee, to date, has not adopted a formal policy with regard
to the consideration of director candidates recommended by shareholders and will consider director candidates
recommended by shareholders on a case-by-case basis, as appropriate. Shareholders wishing to recommend
individuals for consideration by the nominating and corporate governance committee may do so by delivering a
written recommendation to our Company Secretary at Fourth Floor, Connaught House, One Burlington Road,
Dublin 4, Ireland with the candidate’s name, biographical data and qualifications and a document indicating the
candidate’s willingness to serve if elected. The nominating and corporate governance committee does not intend
to alter the manner in which it evaluates candidates based on whether the candidate was recommended by a
shareholder or not.

To date, the nominating and corporate governance committee has not received any such nominations nor has

it rejected a director nominee from a shareholder or shareholders holding more than 5% of our voting stock.

The nominating and corporate governance committee is currently composed of four directors: Messrs. Berns

and Winningham, Ms. McSharry and Dr. Sohn. Dr. Sohn is currently chairperson of the nominating and
corporate governance committee. Each member of the nominating and corporate governance committee meets
the independence requirements of the NASDAQ listing standards.

The nominating and corporate governance committee met four times during 2013 and did not act by written

consent.

Shareholder Communications with the Board of Directors

To date, we have not adopted a formal process related to shareholder communications with the board of
directors. Nevertheless, every effort has been made to ensure that the views of shareholders are heard by the
board of directors or individual directors, as applicable, and that appropriate responses are provided to
shareholders in a timely manner. We believe that our responsiveness to shareholder communications to the board
of directors has been excellent. As a result, the board of directors believes that there has not been a need to adopt
a formal process for shareholder communications with the board.

Code of Conduct

Our Code of Conduct applies to all of our employees, directors and officers, including our principal
executive officer, principal financial officer, principal accounting officer or controller, or persons performing
similar functions, and those of our subsidiaries. The Code of Conduct is available on our website at
www.jazzpharmaceuticals.com under the section entitled “About Us” at “Corporate Responsibility.”
Shareholders may request a free copy of the Code of Conduct by submitting a written request to Jazz
Pharmaceuticals plc, Attention: Investor Relations, Fourth Floor, Connaught House, One Burlington Road,
Dublin 4, Ireland. If we make any substantive amendments to the Code of Conduct or grant any waiver from a
provision of the Code of Conduct to any executive officer or director, we will promptly disclose the nature of the
amendment or waiver on our website.

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PROPOSAL 2
APPROVE APPOINTMENT OF INDEPENDENT AUDITORS
AND AUTHORIZE THE AUDIT COMMITTEE TO DETERMINE THEIR REMUNERATION

The audit committee of the board of directors is responsible for the appointment, remuneration and retention
of our independent auditors. The audit committee has selected KPMG, a registered public accounting firm, as our
independent auditors to audit our consolidated financial statements for the year ending December 31, 2014, and
our shareholders are being asked in this proposal to approve such appointment and to authorize the audit
committee to determine KPMG’s remuneration.

As described elsewhere in this proxy statement, Jazz Pharmaceuticals, Inc. was treated as the acquiring

company in the Azur Merger for accounting purposes, and, as a result, the historical consolidated financial
statements of Jazz Pharmaceuticals, Inc. became our consolidated financial statements upon the consummation of
the Azur Merger. Ernst &Young LLP was the independent registered public accounting firm that audited the
financial statements of Jazz Pharmaceuticals, Inc. for the fiscal year ended December 31, 2011. Ernst &Young
LLP had audited Jazz Pharmaceuticals, Inc.’s financial statements since its inception in 2003.

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Since we are an Irish company, our statutory auditor is required under the Irish Companies Acts of 1963 to

2013 to be based in Ireland. In addition, we determined that our independent registered public accounting firm
should be based in Ireland. In order to implement this decision, on January 13, 2012, in connection with but prior
to consummation of the Azur Merger, the board of directors of Azur Pharma, in consultation with the audit
committee of the board of directors of Jazz Pharmaceuticals, Inc., approved the engagement of KPMG as our
independent registered public accounting firm to audit our consolidated financial statements for the fiscal year
ended December 31, 2012, with such engagement effective upon consummation of the Azur Merger on
January 18, 2012.

Ernst & Young LLP remained as the independent registered public accounting firm of Jazz Pharmaceuticals,

Inc. during the period necessary to complete the audit for the year ended December 31, 2011. Our audit
committee dismissed Ernst & Young LLP as the independent registered public accounting firm of Jazz
Pharmaceuticals, Inc. upon the delivery by Ernst & Young LLP of its audit report for the Jazz Pharmaceuticals,
Inc. financial statements for the year ended December 31, 2011, which delivery and dismissal were effective on
February 28, 2012.

For the fiscal year ended December 31, 2011, no report by Ernst & Young LLP on the Jazz Pharmaceuticals,
Inc. financial statements contained an adverse opinion or a disclaimer of opinion, or was qualified or modified as
to uncertainty, audit scope or accounting principles. During the fiscal year ended December 31, 2011 and the
subsequent interim period through February 28, 2012, (i) there were no disagreements with Ernst & Young LLP
on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to Ernst & Young LLP’s satisfaction, would have caused
Ernst & Young LLP to make reference to the subject matter of the disagreement in connection with its report,
and (ii) there were no reportable events of the type described in Item 304(a)(1)(v) of Regulation S-K.

We provided Ernst & Young LLP with copies of the statements in the preceding paragraph, which

statements we also filed with the SEC on January 18, 2012 and February 28, 2012, in each case on a Form 8-K,
and in each case requested that Ernst & Young LLP furnish to us a letter addressed to the SEC stating whether or
not it agrees with the above statements made by us in response to Item 304(a) of Regulation S-K. Copies of those
letters, dated January 18, 2012 and February 28, 2012, are filed as Exhibit 16.1 to the applicable Form 8-K.

Prior to the Azur Merger, KPMG served as the statutory auditor and the independent registered public
accounting firm of Azur Pharma. During the fiscal year ended December 31, 2011, and during the subsequent
interim period through January 18, 2012, neither Jazz Pharmaceuticals, Inc. (as the accounting acquirer in the
Azur Merger and our predecessor) nor anyone acting on its behalf consulted KPMG regarding either: (i) the

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application of accounting principles to any transaction, either completed or proposed, or the type of audit opinion
that might be rendered on its financial statements, and either a written report was provided or oral advice was
provided that KPMG concluded was an important factor that Jazz Pharmaceuticals, Inc. considered in reaching a
decision as to the accounting, auditing or financial reporting issue, or (ii) any other matter that was either the
subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K, or a reportable event
of the type described in Item 304(a)(1)(v) of Regulation S-K.

Representatives of KPMG are expected to be present at the annual meeting, will have an opportunity to
make a statement if they so desire, and will be available to respond to appropriate questions. Representatives of
Ernst & Young LLP are not expected to be present at the annual meeting.

Independent Registered Public Accounting Firm Fees and Services

In connection with the audit of our 2013 financial statements, we entered into an engagement agreement
with KPMG which sets forth the terms under which KPMG performed audit and tax services for the company.

The following table represents aggregate fees billed to us for the years ended December 31, 2013 and 2012

by KPMG, our independent registered public accounting firm (in thousands):

Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-Related Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax compliance services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax advisory services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2013

$1,240
73
1,275
522
753
3

Total Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,591

2012

$1,706
70
2,183
119
2,064
3

$3,962

Year Ended December 31,

Audit Fees: Consists of fees and expenses for professional services in respect of the audit of the company’s

consolidated financial statements and of our internal control over financial reporting, the review of quarterly
consolidated financial statements and statutory audits.

Audit-Related Fees: Consists of fees for assurance and related services that are reasonably related to the
performance of the audit and the review of the financial statements and which are not reported under “Audit
Fees.”

Tax Fees: Consists of fees and expenses for professional services for tax compliance, tax advice and tax

planning. Tax compliance services consist of professional services related to domestic and international tax
compliance, and assistance with domestic and international tax return preparation. Tax advisory service fees
relate to tax advice and planning services provided to us in connection with significant transactions undertaken
by the company in 2012 and 2013. During the year ended December 31, 2013, fees and expenses of
approximately $522,000 were billed in connection with tax compliance services and of approximately $753,000
were billed in connection with tax advice and planning services. During the year ended December 31, 2012, fees
and expenses of approximately $119,000 were billed in connection with tax compliance services and of
approximately $2,064,000 were billed in connection with tax advice and planning services. The higher level of
tax advice and planning fees and expenses billed in 2012 included $760,000 billed for services provided in
connection with the Azur Merger, which was a significant, complex transaction for our company that resulted in
us transitioning from being a Delaware corporation to being a public limited company incorporated in, and a tax
resident of, Ireland. The remainder of the tax advice and planning fees and expenses billed in 2012 included
services provided in connection with two other significant transactions that occurred in that year: the EUSA
Acquisition and the disposition of our women’s health business.

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All Other Fees: Consists of fees for products and services other than the services described above. For the

years ended December 31, 2013 and 2012, these are fees paid in connection with access to the online accounting
and tax research tool of KPMG.

All fees described above for the years ended December 31, 2013 and 2012 were approved by our audit

committee.

Pre-Approval Policies and Procedures

Our audit committee has a policy and procedures for the pre-approval of audit and non-audit services
rendered by our independent registered public accounting firm. Our policy generally requires the pre-approval of
specified services in the defined categories of audit services, audit-related services, and tax services up to
specified amounts. Pre-approval may also be given as part of the audit committee’s approval of the scope of the
engagement of the independent auditor or on an individual explicit case-by-case basis before the independent
auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the
audit committee’s members, but the decision must be reported to the full audit committee at its next scheduled
meeting.

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Our audit committee determined that the rendering of the services other than audit services by our

independent registered public accounting firm is compatible with maintaining the principal accountant’s
independence.

Required Vote

The appointment of KPMG as the independent auditors of the company for the fiscal year ending

December 31, 2014 and the authorization of the audit committee to determine the auditors’ remuneration is an
ordinary resolution and must receive the affirmative vote of a majority of the votes cast in person or by proxy at
the annual meeting in order to be approved.

The board of directors recommends a vote “For” Proposal 2.

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PROPOSAL 3
AUTHORIZE THE COMPANY AND/OR ANY SUBSIDIARY OF THE COMPANY
TO MAKE MARKET PURCHASES OF THE COMPANY’S ORDINARY SHARES

In 2013, we received shareholder authorization to make open-market purchases of our ordinary shares. Our

management believes it is important to continue to preserve our flexibility to manage the number of our
outstanding ordinary shares. The company may currently effect repurchases either pursuant to the market
purchase authorization approved by our shareholders at our 2013 annual general meeting of shareholders or
under the redemption authority in the company’s articles of association.

In May 2013, our board of directors authorized a share repurchase program pursuant to which we may
repurchase a number of ordinary shares having an aggregate repurchase price of up to $200 million. During 2013,
we repurchased 1.8 million of our ordinary shares in open-market repurchases pursuant to our share repurchase
program. All repurchases under our current share repurchase program have been effected as redemptions
pursuant to the company’s articles of association, and whether or not this Proposal 3 is approved by our
shareholders, the company will retain its ability to effect repurchases as redemptions pursuant to its articles of
association, although after January 31, 2015, subsidiaries of the company will not be able to make market
purchases of our ordinary shares if this Proposal 3 is not approved.

In this proposal, shareholders are being asked to authorize the company and/or any of its subsidiaries to
make open-market purchases of up to 5,785,441 ordinary shares, which is equal to 10% of the company’s issued
ordinary shares outstanding as of December 31, 2013, in accordance with the Irish Companies Act 1990, for
18 months from the date of such authorization. Accordingly, if this Proposal 3 is approved by our shareholders,
the authority conferred thereby will expire on the close of business on January 30, 2016, unless re-approved by
our shareholders prior to such date. Acquisitions of our ordinary shares under this authority would be made only
at price levels that the board of directors considers to be in the best interests of the shareholders generally, after
taking into account the company’s overall financial position. In addition, this authority is being requested to
make repurchases at a price not less than 80% or more than 110% of the then closing market price of those shares
on the NASDAQ Global Select Market on the day preceding the day on which the relevant share is purchased.

In order for the company or any of its subsidiaries to make market purchases of the company’s ordinary
shares pursuant to the authority conferred under this Proposal 3, such shares must be purchased on a “recognized
stock exchange.” The NASDAQ Global Select Market, on which the company’s ordinary shares are listed, is
specified as a recognized stock exchange for this purpose by Irish law. This general authority, if approved by our
shareholders, will become effective from the date of the annual meeting.

The board of directors is asking our shareholders to vote “For” the following resolution:

“RESOLVED, that the company and any subsidiary of the company is hereby generally authorized to
make overseas market purchases of ordinary shares in the company (“shares”) on such terms and
conditions and in such manner as the board of directors (or a duly constituted committee thereof) of the
company may determine from time to time but subject to the provisions of the Irish Companies Act
1990 and to the following provisions:

a) The maximum number of shares authorized to be acquired by the company and/or any

subsidiary of the company pursuant to this resolution shall not exceed, together with any other
valid and existing authority approved by shareholders, in the aggregate, 10% of the company’s
issued ordinary shares outstanding as of December 31, 2013.

b) The maximum price to be paid for any ordinary share shall be an amount equal to 110% of the
closing price on the NASDAQ Global Select Market for the ordinary shares on the trading day
preceding the day on which the relevant ordinary share is purchased by the company or by the
relevant subsidiary of the company, and the minimum price to be paid for any ordinary share
shall be an amount equal to 80% of the closing price on the NASDAQ Global Select Market for
the ordinary shares on the trading day preceding the day on which the relevant ordinary share is
purchased by the company or by the relevant subsidiary of the company.

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c) This general authority will be effective from the date of passing of this resolution and will

expire 18 months from the date of the passing of this resolution, unless previously varied or
revoked or in accordance with the provisions of section 215 of the Irish Companies Act 1990.
The company or any such subsidiary may, before such expiry, enter into a contract for the
purchase of shares which would or might be executed wholly or partly after such expiry and
may complete any such contract as if the authority conferred hereby had not expired.”

The proposal to authorize the company and/or any subsidiary of the company to make market purchases of

the company’s ordinary shares is an ordinary resolution and must receive the affirmative vote of a majority of the
votes cast in person or by proxy at the annual meeting in order to be approved.

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The board of directors recommends a vote “For” Proposal 3.

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PROPOSAL 4
ADVISORY VOTE ON EXECUTIVE COMPENSATION

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and
Section 14A of the Exchange Act, our shareholders are entitled to vote to approve, on an advisory (nonbinding)
basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with
the compensation disclosure rules of the SEC. This nonbinding advisory vote is commonly referred to as a “say-
on-pay” vote.

At our 2012 annual general meeting of shareholders, we asked our shareholders to indicate if we should

hold a “say-on-pay” vote every year, every two years or every three years. The shareholders indicated by
advisory vote their preference to hold a say-on-pay vote every year. After consideration of the voting results, the
board of directors elected to hold a shareholder say-on-pay vote every year. Accordingly, at our 2013 annual
general meeting of shareholders, we provided our shareholders with the opportunity to cast an advisory vote
regarding the compensation of our named executive officers as disclosed in the proxy statement for our 2013
annual general meeting of shareholders. At our 2013 annual general meeting of shareholders, the shareholders
overwhelmingly approved the proposal, with approximately 98% of the votes cast voting in favor of the proposal.
This year we are again asking our shareholders to vote “For” the advisory approval of the compensation of our
named executive officers as disclosed in this proxy statement.

This vote is not intended to address any specific item of compensation, but rather the overall compensation
of our named executive officers and the philosophy, policies and practices described in this proxy statement. The
compensation of our named executive officers subject to the vote is disclosed in the Compensation Discussion
and Analysis, the compensation tables and the related narrative disclosure contained in this proxy statement. As
discussed in those disclosures, our compensation committee believes that our executive compensation program is
appropriately designed and reasonable in light of the executive compensation programs of our peer group
companies, as well as responsible in that it encourages executive officers to work for meaningful shareholder
returns consistent with our pay-for-performance philosophy. The goals of our executive compensation program
are to align executive officers’ compensation with our business objectives and the interests of our shareholders
and to incentivize and reward executive officers for our success. Specifically, we have an executive
compensation program that combines short- and long-term components, cash and equity, and fixed and
contingent payments, in the proportions that we believe are the most appropriate to incentivize and reward our
executive officers for achieving our corporate goals while minimizing incentives for excessive risk taking. We
place significant emphasis on pay-for-performance-based incentive compensation programs, so that targeted
compensation can be achieved only if performance goals are met and, in the case of our stock option awards,
only if our share price appreciates over time. We also strive to ensure that our compensation program for our
executive officers stays competitive to help attract, as needed, and retain talented individuals to manage and
operate all aspects of our business. To execute this compensation philosophy, the compensation committee
regularly assesses our individual and total compensation programs against comprehensive market data and
utilizes an independent compensation consultant to engage in ongoing review of all aspects of our executive
compensation programs. Our compensation committee believes that the compensation policies and elements
described in this proxy statement provide the necessary incentives to properly align our executive officers’
performance with the interests of our shareholders while maintaining equitable and competitive executive
compensation practices that enable us to attract and retain the highest caliber of executives.

The board of directors is asking our shareholders to indicate their support for the compensation of our
named executive officers as described in this proxy statement by casting a nonbinding advisory vote “For” the
following resolution:

“RESOLVED, that the compensation paid to Jazz Pharmaceuticals’ named executive officers, as
disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and
Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

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Because the vote is advisory, it is not binding on the board of directors or the company. Nevertheless, the
views expressed by our shareholders, whether through this vote or otherwise, are important to management and
the board of directors and, accordingly, the board of directors and the compensation committee intend to consider
the results of this vote in making determinations in the future regarding executive compensation arrangements.

Unless our board of directors modifies its policy on the frequency of future advisory votes on the
compensation of our named executive officers, the next advisory vote on the compensation of our named
executive officers will be held at the 2015 annual general meeting of shareholders.

Advisory approval of the compensation of our named executive officers is an ordinary resolution and must

receive the affirmative vote of a majority of the votes cast in person or by proxy at the annual meeting in order to
be approved.

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The board of directors recommends a vote “For” Proposal 4.

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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the ownership of our ordinary shares as of

May 15, 2014 (except as noted) by: (i) each director and each nominee for director; (ii) each of the executive
officers named in the Summary Compensation Table (referred to throughout this proxy statement as our “named
executive officers”); (iii) all of our executive officers and directors as a group; and (iv) all those known by us to
be beneficial owners of more than five percent of our ordinary shares.

Name and Address of Beneficial Owner (1)

Beneficial Ownership (2)

Number of
Shares

Percentage of
Total

5% Shareholders:
Putnam Investment, LLC (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,189,648

12.1%

One Post Office Square
Boston, MA 02109

FMR LLC (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,867,494

9.9%

82 Devonshire Street
Boston, MA 02109

Named Executive Officers and Directors:
612,599
Bruce C. Cozadd (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134,595
Kathryn Falberg (6)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52,424
Suzanne Sawochka Hooper (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,828
Russell J. Cox (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45,500
Fintan Keegan (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,496
Paul L. Berns (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
419,734
Patrick G. Enright (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,445
Peter Gray (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,445
Heather Ann McSharry (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,461,930
Seamus Mulligan (14)
33,124
Kenneth W. O’Keefe (15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,445
Norbert G. Riedel, Ph.D. (16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,930
Catherine A. Sohn, Pharm.D. (17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rick E Winningham (18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,962
All directors and executive officers as a group (16 persons) (19) . . . . . . . . . 2,824,526

1.0%
*
*
*
*
*
*
*
*
2.5%
*
*
*
*
4.7%

*

Less than 1%.

(1) Unless otherwise provided in the table above or in the notes below, the address for each of the beneficial

owners listed is c/o Fourth Floor, Connaught House, One Burlington Road, Dublin 4, Ireland.

(2) This table is based upon information supplied by officers, directors and shareholders known by us to be
beneficial owners of more than five percent of our ordinary shares. Unless otherwise indicated in the
footnotes to this table and subject to community property laws where applicable, we believe that each of the
shareholders named in this table has sole voting and investment power with respect to the ordinary shares
indicated as beneficially owned. Applicable percentages are based on 59,430,033 ordinary shares
outstanding on May 15, 2014, adjusted as required by rules promulgated by the SEC. The number of shares
beneficially owned includes ordinary shares issuable pursuant to the exercise of stock options that are
exercisable and restricted stock units, or RSUs, that will vest within 60 days of May 15, 2014, and shares
credited to individual non-employee director phantom stock accounts as of May 15, 2014 under our
Amended and Restated Directors Deferred Compensation Plan, which is referred in this proxy statement as
the Directors Deferred Plan. Amounts credited to individual non-employee director phantom stock accounts
under our Directors Deferred Plan are payable solely in our ordinary shares, but such shares do not have

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current voting or investment power. Shares issuable pursuant to the exercise of stock options that are
exercisable and RSUs that will vest within 60 days of May 15, 2014 and shares issuable pursuant to our
Directors Deferred Plan are deemed to be outstanding and beneficially owned by the person to whom such
shares are issuable for the purpose of computing the percentage ownership of that person, but they are not
treated as outstanding for the purpose of computing the percentage ownership of any other person.

(3) This information is based on a notification required by Section 67 of the Irish Companies Act 1990, or
Section 67 Notification, provided to us by Putnam Investments, LLC, or Putnam, on May 13, 2014,
reporting the holdings of Putnam as of May 9, 2014. According to the Section 67 Notification, the shares
reflected as beneficially owned by Putnam consist of 7,099,560 ordinary shares held by Putnam Investment
Management, LLC, or PIM, 60,759 ordinary shares held by The Putnam Advisory Company, LLC, or PAC,
18,000 ordinary shares held by Putnam Investments Limited, or PIL, and 11,329 ordinary shares held by
Putnam Fiduciary Trust Company, or PFTC. Each of PIM, PAC, PIL and PFTC is an affiliated entity of
Putnam. As of May 9, 2014, Putnam held indirect voting rights over all 7,189,648 ordinary shares reported.
The Section 67 Notification provided to us by Putnam provides information only as of May 9, 2014 and,
consequently, the beneficial ownership of the above-mentioned entities may have changed between May 9,
2014 and May 15, 2014.

(4) This information is based on a Section 67 Notification provided to us by FMR LLC, or FMR, on May 14, 2014,
reporting the holdings of FMR as of May 9, 2014. According to the Section 67 Notification, the shares reflected
as indirectly owned by FMR consist of 5,489,233 ordinary shares held by Fidelity Management & Research
Company Inc., or FMRC, 150 ordinary shares held by Fidelity Investments Money Management, Inc., or
FIMM, 229,300 ordinary shares held by Pyramis Global Advisors Trust Company, or PGATC, 73 ordinary
shares held by Strategic Advisers Group, or SAG, and 148,738 ordinary shares held by Crosby Advisors LLC,
or CA. Each of FMRC, FIMM, PGATC, SAG and CA is an affiliated entity of FMR. As of May 9, 2014, FMR
held indirect voting rights over all 5,867,494 ordinary shares reported. The Section 67 Notification provided to
us by FMR provides information only as of May 9, 2014, and, consequently, the beneficial ownership of the
above-mentioned entities may have changed between May 9, 2014 and May 15, 2014.

(5)

(6)

(7)

(8)

(9)

Includes 151,289 ordinary shares Mr. Cozadd has the right to acquire pursuant to options exercisable within
60 days of May 15, 2014.

Includes 95,137 ordinary shares held by Ms. Falberg as of March 9, 2014 and 39,458 ordinary shares
Ms. Falberg had the right to acquire pursuant to options exercisable within 60 days of March 9, 2014.
Ms. Falberg resigned from her position as our Chief Financial Officer effective as of March 9, 2014.

Includes 43,539 ordinary shares Ms. Hooper has the right to acquire pursuant to options exercisable within
60 days of May 15, 2014.

Includes 85,657 ordinary shares Mr. Cox has the right to acquire pursuant to options exercisable within
60 days of May 15, 2014.

Includes 39,478 ordinary shares Mr. Keegan has the right to acquire pursuant to options exercisable within
60 days of May 15, 2014.

(10) Includes 4,691 ordinary shares issuable to Mr. Berns pursuant to our Directors Deferred Plan as of May 15,
2014 and 8,625 ordinary shares Mr. Berns has the right to acquire pursuant to options exercisable within 60
days of May 15, 2014.

(11) Includes 9,929 ordinary shares issuable to Mr. Enright pursuant to our Directors Deferred Plan as of May 15,
2014 and 8,625 ordinary shares Mr. Enright has the right to acquire pursuant to options exercisable within 60
days of May 15, 2014. Also includes 392,142 ordinary shares held by Longitude Venture Partners, L.P. and
7,858 ordinary shares held by Longitude Capital Associates, L.P. The funds named in this footnote (11) are
sometimes referred to herein as the Longitude Funds. Each of Mr. Enright and Juliet Tammenoms Bakker are
managing members of Longitude Capital Partners, LLC, which is the general partner of each of the Longitude
Funds, and may be deemed to have shared voting and dispositive power with respect to the ordinary shares
held by the Longitude Funds. Each of Mr. Enright and Ms. Bakker disclaims beneficial ownership of all such
ordinary shares except to the extent of such person’s proportionate pecuniary interest therein.

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(12) Includes 3,111 ordinary shares Mr. Gray has the right to acquire pursuant to options exercisable within

60 days of May 15, 2014.

(13) Includes 3,111 ordinary shares Ms. McSharry has the right to acquire pursuant to options exercisable within

60 days of May 15, 2014.

(14) Includes 8,625 ordinary shares Mr. Mulligan has the right to acquire pursuant to options exercisable within

60 days of May 15, 2014.

(15) Includes 22,249 ordinary shares issuable to Mr. O’Keefe pursuant to our Directors Deferred Plan as of
May 15, 2014 and 8,625 ordinary shares Mr. O’Keefe has the right to acquire pursuant to options
exercisable within 60 days of May 15, 2014.

(16) Includes 3,111 ordinary shares Dr. Riedel has the right to acquire pursuant to options exercisable and 1,334
shares Dr. Riedel has the right to acquire pursuant to RSUs scheduled to vest, in each case within 60 days of
May 15, 2014.

(17) Includes 9,236 ordinary shares Dr. Sohn has the right to acquire pursuant to options exercisable within 60

days of May 15, 2014.

(18) Includes 8,625 ordinary shares Mr. Winningham has the right to acquire pursuant to options exercisable

within 60 days of May 15, 2014.

(19) Includes 400,000 ordinary shares held by entities affiliated with Mr. Enright, 414,301 ordinary shares that
our executive officers and non-employee directors have the right to acquire pursuant to options exercisable
within 60 days of May 15, 2014, 1,334 ordinary shares that our executive officers and non-employee
directors are expected to receive pursuant to RSUs scheduled to vest within 60 days of May 15, 2014, and
36,869 ordinary shares issuable to non-employee directors pursuant to the Directors Deferred Plan as of
May 15, 2014. Does not include 95,137 shares held by Ms. Falberg as of March 9, 2014 or 39,458 ordinary
shares Ms. Falberg had the right to acquire pursuant to options exercisable within 60 days of March 9, 2014.
Ms. Falberg resigned from her position as our Chief Financial Officer effective as of March 9, 2014. See
footnotes (5) through (18) above.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more

than ten percent of a registered class of our equity securities, to file with the Securities and Exchange
Commission, or SEC, initial reports of ownership and reports of changes in ownership of our ordinary shares and
other equity securities. Officers, directors and greater than ten percent shareholders are required by SEC
regulations to furnish us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written

representations that no other reports were required, during the fiscal year ended December 31, 2013, all
Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial
owners were complied with, except that a Form 4 originally filed on May 20, 2013 by Russell Cox, an executive
officer, omitted reporting his exercise of a stock option, which exercise was subsequently reported on a Form 5
filed on February 12, 2014, and a Form 4 reporting a sale of ordinary shares by Fintan Keegan on March 7, 2013
in order to satisfy tax obligations arising from the vesting of RSUs was filed late, on August 14, 2013.

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EXECUTIVE OFFICERS

The following table sets forth certain information regarding our executive officers as of May 27, 2014:

Name

Age

Position

Bruce C. Cozadd . . . . . . . . . . .
Russell J. Cox . . . . . . . . . . . . .
Suzanne Sawochka Hooper . .
Fintan Keegan . . . . . . . . . . . . .
. . . . .
Jeffrey K. Tobias, M.D.

50 Chairman and Chief Executive Officer
51 Executive Vice President and Chief Operating Officer
48 Executive Vice President and General Counsel
55 Executive Vice President, Technical Operations
59 Executive Vice President, Research and Development and Chief Medical

Karen J. Wilson . . . . . . . . . . .
Matthew P. Young . . . . . . . . .

51
45

Officer
Senior Vice President, Finance and Principal Accounting Officer
Senior Vice President and Chief Financial Officer

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Bruce C. Cozadd. Biographical information regarding Mr. Cozadd is set forth above under “Proposal 1—

Election of Directors—Class III Director Nominees for Election for a Three-Year Term Expiring at the 2017
Annual General Meeting.”

Russell J. Cox was appointed our Executive Vice President and Chief Operating Officer as of May 2014. He

served as our Executive Vice President and Chief Commercial Officer from March 2012 until May 2014 and
served as our Senior Vice President, Sales and Marketing from the Azur Merger until March 2012. Prior to the
Azur Merger, he served in a variety of senior management roles since joining Jazz Pharmaceuticals, Inc. in 2010.
From January 2009 to January 2010, he was Senior Vice President and Chief Commercial Officer of Ipsen
Group, a pharmaceutical company, and from 2007 until December 2008, he was Vice President of Marketing at
Tercica, Inc. (acquired by Ipsen Group), a biotechnology company. From 2003 to 2007, he was with Scios Inc.
(acquired by Johnson and Johnson later in 2003), where he also held the role of Vice President, Marketing. Prior
to 2003, Mr. Cox was with Genentech, Inc. for 12 years, where he was a Product Team Leader responsible for
the Growth Hormone franchise and led numerous product launches as a Group Product Manager. Mr. Cox
received a B.S. in Biomedical Science from Texas A&M University.

Suzanne Sawochka Hooper was appointed our Executive Vice President and General Counsel as of March

2012. From 1999 through early 2012, she was a partner in the law firm Cooley LLP. Ms. Hooper served for
several years as a member of Cooley’s Management Committee and as Vice Chair of the firm’s Business
Department. While at Cooley, Ms. Hooper practiced corporate and securities law, primarily with companies and
investors in the life sciences industry. Ms. Hooper received a J.D. from the University of California, Berkeley,
Boalt Hall School of Law and a B.A. in Political Science from the University of California, Santa Barbara.
Ms. Hooper is a member of the State Bar of California.

Fintan Keegan was appointed our Executive Vice President, Technical Operations as of July 2012 and
served as our Senior Vice President of Technical Operations from the Azur Merger until July 2012. Prior to the
Azur Merger, he was Senior Vice President and Chief Technical Officer of Azur Pharma from 2006 until the
Azur Merger, where he was responsible for quality, regulatory, compliance, supply chain and development. Prior
to his work with Azur Pharma, Mr. Keegan most recently served as Vice President of Quality and Regulatory for
Elan Corporation, plc. He also held various positions with Wyeth Pharmaceuticals, Inc., Merck & Co., Inc. and at
a clinical contract research organization. Mr. Keegan holds a B.Sc and a H. Dip in Pharmaceutical Manufacturing
Technology from Trinity College Dublin and a M.Sc from the School of Chemistry, University of Bristol, in the
United Kingdom.

Jeffrey K. Tobias, M.D., was appointed our Executive Vice President, Research and Development and Chief

Medical Officer as of March 2012 and served as our Senior Vice President, Research and Development and
Chief Medical Officer from the Azur Merger until March 2012. Prior to the Azur Merger, he served as Jazz
Pharmaceuticals, Inc.’s Senior Vice President, Research and Development and Chief Medical Officer since
joining Jazz Pharmaceuticals, Inc. in October 2011. From January 2010 to October 2011, Dr. Tobias served as

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Executive Vice President, Research and Development at NeurogesX, Inc.; previously, he served as NeurogesX’s
Chief Medical Officer since November 2005. Dr. Tobias was founder and managing director of the Aquila
Consulting Group, LLC, a biopharmaceutical consulting firm, from September 1996 to November 2005. Prior to
these activities, Dr. Tobias was a Director, New Product Discovery at ALZA Corporation, Director, Clinical
Development at Chiron Corporation and Director, Clinical Research at Xoma Corporation. Dr. Tobias received
board certification in both Internal Medicine and Pulmonary Medicine and completed training in Critical Care
Medicine at the University of California, Los Angeles. He received an M.D. with honors and a B.A. from the
University of Illinois.

Karen J. Wilson was appointed our Senior Vice President, Finance and Principal Accounting Officer as of

February 2013 and served as our Vice President, Finance and Principal Accounting Officer from the Azur
Merger until February 2013. Prior to the Azur Merger, she served as Jazz Pharmaceuticals, Inc.’s Vice President,
Finance since February 2011 and was appointed Principal Accounting Officer in March 2011. From 2009 to
January 2011, Ms. Wilson served as Vice President of Finance and Principal Accounting Officer at PDL
BioPharma, Inc., a biotechnology company. From 2005 to 2009, she served as a principal at the consulting firm
Wilson Crisler LLC. Previously, from 2001 to 2004, she was Chief Financial Officer of ViroLogic, Inc., a
biosciences company. Prior to joining ViroLogic, Ms. Wilson served as Chief Financial Officer and Vice
President of Operations for Novare Surgical Systems, Inc. from 1999 to 2001. Prior to 1999, Ms. Wilson worked
for Deloitte & Touche LLP for ten years, serving clients in both the medical and technology fields. Ms. Wilson is
a Certified Public Accountant in the State of California and received a B.S. in Business from the University of
California, Berkeley.

Matthew P. Young was appointed our Senior Vice President and Chief Financial Officer as of March 2014

and previously served as our Senior Vice President, Corporate Development since April 2013. Prior to joining us,
Mr. Young worked in investment banking for approximately 20 years. From February 2009 to April 2013,
Mr. Young served as a managing director in global healthcare of Barclays Capital Inc., an investment banking
firm, where his role included acting as the co-head of life sciences at Barclays Capital. From 2007 to 2008,
Mr. Young served as a managing director of Citigroup Global Markets Inc., an investment banking firm, and
from 2003 to 2007, as a managing director of Lehman Brothers Inc., an investment banking firm. From 1992 to
2003, Mr. Young served in various capacities at other investment banking firms. Mr. Young received a B.S. in
Economics and an M.B.A. from the Wharton School of the University of Pennsylvania.

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Compensation Discussion and Analysis

EXECUTIVE COMPENSATION

The following Compensation Discussion and Analysis describes the material elements of compensation for

the individuals who served as our principal executive officer, principal financial officer and three other most
highly compensated executive officers as of December 31, 2013, or the named executive officers: Bruce C.
Cozadd, Chairman and Chief Executive Officer, Kathryn E. Falberg, former Executive Vice President and Chief
Financial Officer, Suzanne Sawochka Hooper, Executive Vice President and General Counsel, Russell J. Cox,
Executive Vice President and Chief Operating Officer and Fintan Keegan, Executive Vice President, Technical
Operations. Ms. Falberg resigned from her position as our Executive Vice President and Chief Financial Officer
in March 2014.

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Executive Summary

The compensation committee believes that our executive compensation program is appropriately designed

and reasonable in light of the executive compensation programs of our peer group companies and in line with our
business strategy and priorities. The compensation committee also believes that our executive compensation
program is responsible in that it encourages executive officers to work for meaningful shareholder returns
consistent with our pay-for-performance philosophy, without encouraging our executive officers to assume
excessive risks.

2013 was an outstanding year for Jazz Pharmaceuticals. The highlights of our performance during the year

included:

• The price of our ordinary shares increased by approximately 138%. As of December 31, 2013, our one-

year and three-year annualized total shareholder returns were approximately 138% and 86%,
respectively, and significantly outperformed the Global Industry Classification Standard for the
Pharmaceuticals, Biotechnology and Life Sciences Industry Group median one-year and three-year
total shareholder returns of approximately 48% and 17% for the same periods (as published by
Institutional Shareholder Services).

• We continued to achieve strong revenue growth, primarily from the sales of our lead marketed

products, Xyrem® (sodium oxybate) oral solution and Erwinaze® (asparaginase Erwinia chrysanthemi),
called Erwinase® in markets outside of the United States.

• Total revenues were $872.4 million in 2013, representing an increase of 49% over total revenues

of $586.0 million in 2012.

• Net sales of Xyrem were $569.1 million in 2013, representing an increase of 50% over net sales of

$378.7 million in 2012.

• Worldwide net sales of Erwinaze/Erwinase were $174.3 million in 2013, representing an increase

of 32% over full year pro forma net sales of $131.9 million in 2012.

• Adjusted net income for 2013 was $388.3 million, representing an increase of 34% over adjusted

net income of $290.4 million in 2012. (1)

(1)

Adjusted net income as used in this proxy statement is a non-GAAP (not a U.S. generally accepted
accounting principles, or GAAP) financial measure that excludes certain items from GAAP income from
continuing operations. For more information on our presentation and calculation of adjusted net income,
and a reconciliation of adjusted net income to GAAP income from continuing operations, see “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP
Financial Measures” in the 2013 10-K.

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• GAAP income from continuing operations was $216.3 million in 2013, compared to $261.1

million in 2012. (2)

• As of February 21, 2014, we acquired approximately 98% of the outstanding and fully diluted voting

securities of Gentium S.p.A. pursuant to a tender offer we launched on December 23, 2013. As a result
of the Gentium Acquisition, we acquired the product Defitelio® (defibrotide). In October 2013, the
European Commission granted marketing authorization under exceptional circumstances for Defitelio
for the treatment of severe veno-occlusive disease in adults and children undergoing hematopoietic
stem cell transplantation therapy. We commenced the launch of Defitelio in Europe in March 2014,
with an initial launch in Germany and Austria, and expect to launch in additional European countries
during 2014 and 2015. In addition to its existing approved indication in the European Union,
defibrotide has the potential to be developed for approval in other indications, and for approval in
countries outside the European Union, including the United States.

• We made significant progress and investment in expanding our product development pipeline. In
February 2013, we licensed rights to JZP-386, an early-stage investigational compound being
developed for potential use in narcolepsy, from Concert Pharmaceuticals, Inc. In January 2014, we
acquired rights to JZP-110, a late-stage investigational compound being developed for potential
treatment of excessive daytime sleepiness, or EDS, in patients with narcolepsy, from Aerial BioPharma
LLC. We also intend to pursue development of JZP-110 for EDS in patients with obstructive sleep
apnea.

• Three additional patents for Xyrem issued in 2013.

We believe our executive compensation program design provides a balanced approach between rewarding

our executives for current and long-term performance. Our executive compensation policies in 2013 included the
following:

• The majority of our compensation is linked to performance: for our Chief Executive Officer, 94% of
2013 compensation was performance-based and 6% of 2013 compensation was fixed, and, for our
other named executive officers, 87% of 2013 compensation was performance-based and 13% of 2013
compensation was fixed.

• We align our executives’ interests with our shareholders’ interests by rewarding our executives for both
current performance and longer-term performance, with performance measured both by milestones for
financial performance and advancement of our long-term development programs and strategic
initiatives.

• We maintain an executive change in control and severance benefit plan, or change in control plan, that

complies with corporate governance best practices:

•

•

the change in control plan is limited to “double-trigger” payments (requiring termination other
than for cause or resignation for good reason in connection with a change in control to trigger
payments); and

the change in control plan does not provide for any tax gross ups.

• Our Chief Executive Officer’s performance bonus is based 100% on our company’s overall

performance and achievement of our annual corporate objectives, which aligns our Chief Executive
Officer’s interests with our shareholders’ interests.

• We do not provide any executive fringe benefits to our named executive officers, such as car

allowances, personal security, financial planning advice or club memberships.

•

In 2013, our board of directors adopted minimum share ownership guidelines for our board of
directors, Chief Executive Officer and certain other employees who serve on our executive committee,

(2)

2012 GAAP income from continuing operations included a $104 million non-recurring tax benefit due to the
reversal of the valuation allowance against substantially all of Jazz Pharmaceuticals’ U.S. deferred tax assets.

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including the named executive officers, so that they have an even greater financial stake in our
company, thereby further aligning the interests of our named executive officers and non-employee
directors with those of our shareholders.

Our board of directors and/or compensation committee have also implemented a number of other corporate

governance practices that were determined to be in the best interest of our shareholders:

• Our 2013 advisory say-on-pay vote was approved by approximately 98% of our shareholders voting on
the advisory proposal. Based on this positive feedback, the board of directors and the compensation
committee decided to maintain our current approach to executive compensation for our Chief
Executive Officer and named executive officers;

• Our compensation committee is composed solely of independent directors;

• Our compensation committee has engaged an independent compensation consultant that reports
directly to the compensation committee, which has the sole authority to direct the work of the
consultant;

• The compensation committee regularly meets in executive session without management present;

• The company’s insider trading policy prohibits executives from engaging in speculative trading

activities, including hedging or pledging their company securities as collateral; and

• The compensation committee conducts an annual assessment of executive compensation, which
includes reviewing market and peer company data prepared by the compensation committee’s
independent compensation consultant to ensure that we provide competitive compensation packages to
attract, retain, reward and incentivize our executive management team to achieve success for us and our
shareholders over the longer term.

Overview

Our executive compensation program is designed to help attract talented individuals to manage and operate

all aspects of our business, to reward those individuals fairly over time, and to retain those individuals who
continue to meet our high expectations. The goals of our executive compensation program are to align executive
officers’ compensation with our business objectives and the interests of our shareholders and to incentivize and
reward executive officers for our success. Specifically, we have an executive compensation program that
combines short- and long-term components, cash and equity, and fixed and contingent payments, in the
proportions that we believe are the most appropriate to incentivize and reward our executive officers for
achieving our corporate goals while minimizing incentives for excessive risk taking. We place significant
emphasis on pay-for-performance-based incentive compensation programs, so that targeted compensation can be
achieved only if performance goals are met and, in the case of our stock option awards, only if our share price
appreciates over time. We consider our annual performance bonus awards and equity incentive awards to be “at
risk,” or performance-based compensation, because our annual bonus awards are not earned unless pre-
determined levels of performance are achieved against annual corporate objectives that are derived from the
annual corporate goals approved by our board of directors in advance, and our stock option awards will not
provide realizable value and our RSU awards will not provide increased value unless there is an increase in the
value of our stock. Our executive compensation program is intended to attract and retain key employees with
relevant experience in the life sciences industry, where there is significant competition for talented employees,
and to be fair to professionals within our organization. We believe that we must provide competitive
compensation packages to attract and retain executive officers and to incentivize our executive management team
to achieve success for us and our shareholders over the longer term.

As discussed in further detail below, our executive compensation program consists of the following three

principal components:

• Base Salary. Our compensation committee reviews and determines base salary rates for our executive
officers each year, which are then generally effective by March 1. Base salary rates are determined, in

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consultation with the compensation committee’s independent compensation consultant, based on each
executive officer’s responsibilities, individual performance, achievement of corporate and strategic
goals and a review of competitive salary and total cash compensation data.

• Performance Bonus Awards. We have an annual performance-based incentive bonus plan, or the

performance bonus plan, for our employees, including our executive officers, under which bonuses
may be paid after the end of each year at the discretion of the compensation committee (and our board
of directors in the case of the Chief Executive Officer), based on our performance in meeting
designated corporate objectives for the prior year and each individual’s performance and contribution
in meeting such corporate objectives.

• Equity Grants. Our executive officers are eligible to receive equity grants which serve as long-term
incentives to ensure that a portion of their total compensation is linked to our long-term success,
thereby aligning their incentive compensation with the interests of our shareholders.

The compensation committee does not have any formal policies for allocating compensation among salary,
performance bonus awards and equity grants. Instead, the compensation committee uses its judgment to establish
for each named executive officer a mix of current, short-term and long-term incentive compensation, and cash
and non-cash compensation, that it believes appropriate to achieve the goals of our executive compensation
program and our corporate goals. However, because we believe it is important to our success to aggressively
pursue long-term corporate goals, to avoid excessive risk taking, and to preserve our cash resources, a significant
portion of the named executive officers’ total compensation is comprised of performance-based bonus
opportunities and long-term equity awards, which align the executive officers’ incentives with the interests of our
shareholders. This allocation is consistent with our pay-for-performance philosophy, the compensation market
data provided by our compensation committee’s independent compensation consultant for each executive
officer’s position, and our continued success in achieving corporate goals and increasing total shareholder return.

Role of the Compensation Committee and Executive Officers in Setting Executive Compensation

The compensation committee reviews and oversees our compensation policies, plans and programs and
reviews and determines the compensation to be paid to the executive officers, including the named executive
officers other than our Chief Executive Officer. Our board of directors approves the compensation of our Chief
Executive Officer, upon recommendation from the compensation committee. In making its executive
compensation determinations, the compensation committee considers recommendations from the Chief
Executive Officer. In making his recommendations, the Chief Executive Officer receives input from our human
resources department and has access to various third party compensation surveys and compensation data
provided by the independent compensation consultant to the compensation committee, as described below. While
the Chief Executive Officer discusses his recommendations for the other executive officers with the
compensation committee, he does not participate in the deliberations and recommendations to our board of
directors concerning, or the determination of, his own compensation. Members of our human resources and legal
departments also attend compensation committee meetings. The compensation committee discusses and makes
determinations with respect to executive compensation matters without any named executive officers or other
executive officers, other than the Chief Executive Officer as described above, present. From time to time, various
other members of management and other employees as well as outside advisors or consultants may be invited by
the compensation committee to make presentations, provide financial or other background information or advice
or otherwise participate in the compensation committee meetings. The compensation committee does not
delegate any of its functions to others in determining executive compensation.

The compensation committee generally engages an independent compensation consultant each year to
provide a competitive compensation assessment with respect to the executive officers to assist the compensation
committee in making annual compensation decisions. Since 2010, Radford, an Aon Hewitt Company, has been
engaged by the compensation committee each year to provide peer company and industry compensation data and
provide the compensation committee with advice regarding executive officers’ compensation, including base
salaries, performance-based bonuses and long-term equity compensation. The compensation committee has also

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consulted with Radford to update the peer company and industry compensation data on an annual basis and as
needed with respect to specific questions that arise, new compensation programs being considered and best
practices for compensation committees. Specific examples of services provided by Radford include comparing our
executive officers’ compensation with the compensation of our peer group in preparation for making annual cash
compensation decisions and for the preparation of equity award guidelines for executive officers and key personnel.
Radford reports directly to the compensation committee, which maintains the authority to direct their work and
engagement, and advises the compensation committee and our human resources department on ad hoc projects from
time to time. Radford interacts with management to gain access to company information that is required to perform
services and to understand the culture and policies of the organization. The compensation committee and Radford
meet, as needed, in executive session with no members of management present, to address various compensation
matters, including deliberations regarding the Chief Executive Officer’s compensation.

The compensation committee has analyzed whether the work of Radford as a compensation consultant
raised any conflict of interest, taking into consideration the following factors: (i) the provision of other services
to our company by Radford; (ii) the amount of fees we paid to Radford as a percentage of the firm’s total
revenue; (iii) Radford’s policies and procedures that are designed to prevent conflicts of interest; (iv) any
business or personal relationship of Radford or the individual compensation advisors employed by it with an
executive officer of our company; (v) any business or personal relationship of the individual compensation
advisors with any member of the compensation committee; and (vi) any stock of our company owned by Radford
or the individual compensation advisors employed by it. The compensation committee has determined, based on
its analysis of the above factors, that the work of Radford and the individual compensation advisors employed by
it as compensation consultants to our company has not created any conflict of interest.

The compensation committee is (and was at all times during 2013) composed entirely of independent
directors, as defined by Rule 5605(a)(2) of the NASDAQ listing standards. Our compensation committee meets
as often as it determines necessary to carry out its duties and responsibilities through regularly scheduled
meetings and, if necessary, special meetings. Our compensation committee also has the authority to take certain
actions by written consent of all members. The agenda for each compensation committee meeting is usually
developed by members of our human resources department and Chief Executive Officer, with input from
members of our legal department, and is reviewed with the chair of the compensation committee.

In 2013, the compensation committee met five times and did not act by unanimous written consent. As of

the date of this proxy statement, in 2014 the compensation committee met three times and has not acted by
unanimous written consent.

Competitive Assessment of Cash and Long-Term Compensation

We aim to attract and retain the most highly qualified executives in an extremely competitive market.
Accordingly, the compensation committee believes that it is important when making its compensation decisions
to be informed as to the current practices of comparable public companies with which we compete for top talent.
To this end, the compensation committee reviews market data for each executive’s position, compiled by
Radford, as described below, including information relating to the mix and levels of compensation for executives
in the life sciences industry.

In late 2012, when developing a proposed list of our peer group companies to be used in connection with
making compensation decisions for 2013, Radford reexamined our compensation philosophy and peer group and
recommended updates to the list of peer companies to reflect our growth as a result of the Azur Merger and the
completion of the EUSA Acquisition and the related increase in our revenues and market capitalization, the
expansion of our geographic reach, product portfolio and headcount, and the consolidation in our industry.
Radford selected companies that were in the life sciences industry with commercial products on the market, had
revenue of approximately one half (0.5x) to two times (2x) our then-projected revenue (resulting in a range of
generally $300 million to $1.2 billion in revenue), had market values of approximately one third (0.3x) to three
times (3x) our market capitalization at the time (resulting in a range of between $1 billion to $10 billion in

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market capitalization), and were located primarily in the United States or headquartered in Europe. Based on
these criteria, for 2013, Radford recommended that Amylin Pharmaceuticals, Inc. (which was acquired) and
InterMune Inc. (which no longer met the criteria) be removed from our peer company list and that Incyte
Corporation, Medivation, Inc. and Seattle Genetics Inc. be added to our peer group company list.

Based on these parameters, in late 2012 our compensation committee approved the following companies as
our appropriate peer group for 2013: Acorda Therapeutics, Inc., Alexion Pharmaceuticals, Inc., Alkermes, Inc.,
Auxilium Pharmaceuticals, Inc., BioMarin Pharmaceutical Inc., Cubist Pharmaceuticals, Inc., Elan Corporation,
plc, Endo Health Solutions Inc. (formerly Endo Pharmaceuticals Holdings Inc.), Impax Laboratories, Inc., Incyte
Corporation, Medivation, Inc., Myriad Genetics, Inc., Onyx Pharmaceuticals, Inc., Regeneron Pharmaceuticals,
Inc., Salix Pharmaceuticals, Ltd., The Medicines Company, Seattle Genetics Inc., United Therapeutics
Corporation, and ViroPharma Incorporated. In determining executive compensation for 2013, the compensation
committee reviewed data from this group of peer companies. At the time of approval of our 2013 peer group, our
company was in the 64th percentile of the peer group for market capitalization, 88th percentile of the peer group
for one-year revenue growth, 25th percentile of the peer group for revenue, and 81st percentile of the peer group
for one-year stock price performance.

To better inform the compensation committee in making compensation decisions for our executive officers,
in late 2012, Radford also provided our compensation committee with updated market data regarding executive
compensation at comparable public companies in the life sciences industry that reflected our increased revenue,
market value and headcount. This market data was compiled from multiple sources, including: (i) data from
public biotechnology and pharmaceutical companies in the Radford Global Life Sciences Survey that had
revenues between $300 million and $1.2 billion, or the general survey data, which includes survey data with
respect to our selected 2013 peer group companies; (ii) data from the Radford Global Life Sciences Survey with
respect to the 2013 selected peer group companies listed above, or the peer survey data; and (iii) the 2013
selected peer group companies’ publicly disclosed information, or public peer data. The components of the
market data were based on the availability of sufficient comparative data for an executive’s position. Generally,
peer survey data and public peer data is used in establishing market data reference points, and the general survey
data is used when there is a lack of peer survey data and public peer data for an executive’s position. The peer
survey data, the general survey data, and the public peer data, collectively referred to in this proxy statement as
market data, were reviewed by the compensation committee, with the assistance of Radford, and used as one
reference point, in addition to other factors, in setting our executive officers’ compensation.

The compensation committee generally reviews both cash compensation and equity compensation against

the market data described above primarily to ensure that our executive compensation program as a whole is
competitive to attract and retain the highest caliber executives. The compensation committee does not target
compensation to a particular level of the market data; rather, the compensation committee reviews a range of
market data reference points (generally at the 25th, 50th, 60th and 75th percentiles of the market data) with respect
to cash compensation (including both base salary and the annual target performance bonus) and equity
compensation.

Our Chief Executive Officer assesses the performance of each named executive officer (other than himself)

and presents his recommendations, which reflect his consideration of the market data, the performance of each
named executive officer, internal pay equity among individuals (including qualifications and contributions to
meeting our corporate objectives), criticality and scope of job function and our Chief Executive Officer’s
extensive industry experience, to the compensation committee. The compensation committee reviews and
considers the market data described above, our Chief Executive Officer’s recommendations and Radford’s
recommendations on specific pay levels for each named executive officer, and also reviews internal pay equity
among individuals and positions, criticality and scope of job function, retention risk, company performance and
individual performance (including qualifications and contributions to meeting our corporate objectives), total
targeted and historical compensation for each individual named executive officer and any other factors the
compensation committee determines important. The compensation committee uses all of these factors to set the

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compensation of our named executive officers at levels that the compensation committee considers to be
competitive and appropriate for each named executive officer, using the compensation committee’s professional
experience and judgment.

In 2013, when developing a proposed list of our peer group companies to be used in connection with making

compensation decisions for 2014, Radford selected companies that were in the life sciences industry with
commercial products on the market, had revenue of approximately one half (0.5x) to two times (2x) our then-
projected revenue (resulting in a range of generally $300 million to $1.5 billion in revenue), had market values of
approximately one third (0.3x) to three times (3x) our market capitalization at the time (resulting in a range of
between $1.2 billion to $12 billion in market capitalization), and were located primarily in the United States or
headquartered in Europe. Based on these criteria, for 2014, Radford recommended and our compensation
committee approved the addition of Questcor Pharmaceuticals, Inc. to our 2014 peer group company list.

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Advisory Vote on Executive Compensation

At our 2013 annual general meeting of shareholders, the shareholders approved, on an advisory basis, the
compensation of the named executive officers, as disclosed in the proxy statement for that meeting pursuant to
the compensation disclosure rules of the SEC. The compensation committee reviewed the final vote results for
the proposal, and, given the significant level of shareholder support (approximately 98% of total votes cast with
respect to the advisory proposal), concluded that our compensation program continues to provide a competitive
pay-for-performance package that effectively incentivizes the named executive officers and encourages long-
term retention. Accordingly, the compensation committee and, with respect to our Chief Executive Officer’s
compensation, our board of directors, determined not to make any significant changes to our executive
compensation policies or decisions as a result of the vote. Our compensation committee and, with respect to our
Chief Executive Officer’s compensation, our board of directors, expects to continue to consider the outcome of
our say-on-pay votes and our shareholders’ views when making future compensation decisions for the named
executive officers.

Executive Compensation Program

Our executive compensation program currently consists of three principal components: base salary, annual

performance bonuses (if approved by the compensation committee or board of directors, as applicable) and long-
term incentive compensation, currently in the form of stock options and RSU awards which are subject to time-
based vesting. We also offer our executive officers certain severance benefits upon a change in control under our
change in control plan. Finally, the named executive officers have the opportunity to participate in the employee
stock purchase plan and other benefits generally available to all employees in their respective countries of
employment, which include, for all U.S.-based employees, including the named executive officers other than
Mr. Keegan, the opportunity to participate in the Jazz Pharmaceuticals, Inc. 401(k) plan, or the 401(k) Plan.
Mr. Keegan, who is based in Ireland, has the opportunity to participate in our Ireland retirement benefit plan,
which is a defined contribution plan qualified under Irish tax law, or the Ireland tax-qualified defined
contribution plan, offered to all Ireland-based employees. Each component of compensation is evaluated based
on the factors discussed below.

Base Salary

None of the named executive officers has a guaranteed base salary; base salary is set each year by the
compensation committee. The compensation committee reviews and determines the appropriate level of base
salary for the named executive officers, generally effective by March 1 of each year.

As described above under the heading “Compensation Discussion and Analysis—Competitive Assessment of

Cash and Long-Term Compensation,” the compensation committee considers several factors in setting base
salary. One such factor is that competition for executive talent is intense in our industry and in our geographic

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areas. Our executives have many years of valuable experience in our industry, and their continued leadership is
deemed critical to our short-term and long-term success. Because the compensation committee aims to ensure
that our executives’ base salaries are competitive, the base salaries of individual executive officers may vary
based on a particular individual’s experience, overall qualifications and criticality of skills to the future
performance of our company, in addition to market data for each named executive officer’s position.

Performance Bonus Plan

In accordance with the performance bonus plan, we maintain an annual bonus award program to reward the

named executive officers (and other employees) for attaining our company’s corporate objectives and for their
individual contributions toward such achievements. Corporate objectives under the performance bonus plan are
derived from our annual corporate goals and generally relate to our commercial efforts, financial measures (such
as sales and adjusted net income targets), financing efforts, strategic transactions, progress of our clinical
development programs, regulatory matters, regulatory and sales and marketing compliance and effective
employee engagement, alignment and professional development.

In keeping with our pay-for-performance philosophy, the compensation committee takes a formulaic

approach to determining our bonus pool under the performance bonus plan. The compensation committee assigns
a specific weighting to each quantitative corporate objective and assigns a separate weighting to the qualitative
corporate objectives taken as a whole. An algorithm is defined for calculating the achievement of the quantitative
corporate objectives. The achievement of the qualitative corporate objectives is reviewed quarterly and, at the
end of each year, the bonus pool is set by the compensation committee, based on its determination of the
company’s success in achieving such objectives.

The compensation committee determines the portion of the bonus pool, if any, that will be allocated to the

named executive officers, including the named executive officers, as a group and the bonuses for each individual
executive officer. Actual performance bonus awards to executive officers are determined based on the
compensation committee’s (and in the case of the Chief Executive Officer, our board of directors’) subjective
assessment of each executive officer’s contribution to the achievement of our company’s corporate objectives.
The Chief Executive Officer provides input and recommendations to the compensation committee with respect to
bonuses for the executive officers other than himself.

The performance bonus plan, approved by the compensation committee, sets specific executive target bonus

opportunities, expressed as a percentage of base salary paid in the applicable year. The target bonuses are
determined by our compensation committee based on several factors, including market data, as described above
under the heading “Compensation Discussion and Analysis—Competitive Assessment of Cash and Long-Term
Compensation.” Target bonuses are reviewed on an annual basis, considering both the target percentage of base
salary and also the resulting total target cash compensation amount an executive may receive when combined
with base salary. The compensation committee determines the appropriate annual target performance bonus as a
percentage of base salary, based on each executive’s job level, in order to promote internal equity for positions of
similar scope and impact and, given the cross functional nature of our business, to reinforce teamwork across the
executive group. Annual target performance bonuses generally represent a larger percentage of compensation for
those executives who have a greater opportunity to impact corporate performance.

At the end of each year, the compensation committee determines the funding of the total bonus pool under

the performance bonus plan, as described above. The actual performance bonus awarded to each executive
officer in a year, if any, may be more or less than the applicable target, depending primarily on the compensation
committee’s determination of our company’s achievement of corporate objectives (and therefore the total bonus
pool) and the executive’s individual performance with respect to such objectives. Whether or not a performance
bonus is paid for any year is within the discretion of the compensation committee (or the board of directors in the
case of our Chief Executive Officer) based on such achievement.

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We have not historically paid any guaranteed bonuses to the named executive officers. From time to time,
we pay signing bonuses in connection with the commencement of employment of executive officers, contingent
upon their continued service, such as the signing and retention bonuses paid to Ms. Hooper pursuant to her offer
letter, described below under the heading “Description of Compensation Arrangements—Executive Employment
Agreements.”

As a public company, if we are required to restate our financial results due to our material noncompliance
with any financial reporting requirements under the federal securities laws as a result of misconduct, the Chief
Executive Officer and Chief Financial Officer may be legally required to reimburse our company for any bonus
or other incentive-based or equity-based compensation they receive in accordance with the provisions of
section 304 of the Sarbanes-Oxley Act of 2002. Additionally, we intend to implement a Dodd-Frank Wall Street
Reform and Consumer Protection Act-compliant clawback policy as soon as, and to the extent that, the
requirements of such clawbacks are more clearly defined by the SEC.

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Long-Term Equity Awards

The compensation committee believes that long-term performance is achieved through an ownership culture

that rewards executive officers through the use of equity incentives. We grant stock options and RSUs to our
executive officers in part because the compensation committee believes that long-term equity awards composed
of a mix of both types of awards may better align our executive officers’ interests with those of our shareholders
by minimizing the incentive for inappropriate short-term risk taking at the expense of realizing long-term value.
Stock options provide a return to our executive officers only if the market price of our ordinary shares
appreciates over the stock option term. For this reason, the compensation committee views stock options as a key
aspect of our pay-for-performance culture and as fostering alignment between our executives and our
shareholders. RSU awards generally cover fewer shares than the stock options that we would otherwise grant to
deliver a similar value to an executive officer. As a result, RSU awards enable the company to minimize dilution
to shareholders while reinforcing the importance of shareholder value creation. Both stock options and RSUs vest
over time, thereby providing retention incentives for the company.

Equity award grants may be made at varying times and in varying amounts in the discretion of the
compensation committee, but are generally approved for executive officers, including the named executive
officers, once a year unless an executive officer is promoted, in which case a grant will normally be made at that
time, or, in rare circumstances, for recognition of outstanding performance. Our equity incentive grant policy,
which was initially approved by our board of directors after the Azur Merger and amended and restated in July
2013, provides that all equity grants that are approved for executive officers will be granted on the second trading
day following the filing date of our next quarterly or annual report filed under the Exchange Act that occurs after
the date on which such grants are approved by our board of directors or compensation committee, as applicable.
Accordingly, our equity incentive grant policy requires that grants to our executive officers, if any, be made
shortly after we have released information about our financial performance to the public for the applicable annual
or quarterly period, so that the market will have an opportunity to absorb the financial and other information
included in our annual and periodic reports before such grants are awarded. As a result, the timing of equity
awards is not coordinated in a manner that intentionally benefits our executive officers; rather, the policy is
designed with the objective that the market price of our ordinary shares at the time of grant can generally be
expected to reflect our then-current results and prospects.

For all employees, the exercise price of stock options is equal to the fair market value (the closing price as
reported on NASDAQ) of our shares on the date of grant. Stock option grants generally vest 25% upon the one
year anniversary of the vesting commencement date, which is generally the employment commencement date for
new hire grants and the grant date for annual grants, and vest as to the remainder of the shares in 36 equal
monthly installments thereafter, subject to the optionholder’s continued service with us. RSUs typically vest
annually over four years from the grant date, also subject to the holder’s continued service with us. Stock options
and RSUs are subject to potential vesting acceleration as described below under the heading “Potential Payments
upon Termination or Change in Control.”

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The compensation committee considers several factors in setting long-term equity awards, including market
data, as described above under the heading “Compensation Discussion and Analysis—Competitive Assessment of
Cash and Long-Term Compensation.” In determining the size of equity awards, the compensation committee
considers the value of the award as well as the percentage of company ownership by a particular executive
officer, giving effect to such award. Vesting schedules are established to ensure a meaningful incentive to remain
employed with our company and to work toward its success over time. Accordingly, an equity award will
generally provide a return to the employee only if he or she remains in our company’s service, and then, in the
case of stock options, only if the market price of our stock appreciates over the equity award term.

We currently grant equity awards to the named executive officers, including stock options and RSUs, under

the 2011 Equity Incentive Plan, or the 2011 Plan. The 2011 Plan was adopted by Jazz Pharmaceuticals, Inc.’s
board of directors and approved by Jazz Pharmaceuticals, Inc.’s stockholders in connection with their approval of
the Azur Merger in December 2011 and was assumed by us upon the completion of the Azur Merger. The 2011
Plan replaces our 2007 Equity Incentive Plan, or the 2007 Plan, and affords the compensation committee the
flexibility to utilize a broad array of equity incentives and performance cash incentives in order to secure and
retain the services of employees of our company and its subsidiaries, and to provide long-term incentives that
align the interests of employees with the interests of our shareholders. Before the 2011 Plan was adopted, we
granted stock options under our 2007 Plan, which was adopted by Jazz Pharmaceuticals, Inc.’s board of directors
and approved by Jazz Pharmaceuticals, Inc.’s stockholders in connection with Jazz Pharmaceuticals, Inc.’s initial
public offering.

Additional long-term equity incentives are provided through the 2007 Employee Stock Purchase Plan, as
amended and restated, or the ESPP, which we assumed upon the completion of the Azur Merger. Pursuant to the
ESPP, all eligible employees, including the named executive officers, may allocate up to 15% of their base salary
to purchase our stock at a 15% discount to the market price, subject to specified limits.

In February 2013, we adopted share ownership guidelines for the named executive officers, certain other

executive officers and non-employee directors in order to better align their interests with those of our
shareholders. All of our executive officers and non-employee directors who have been employed by or served the
company for at least one year hold our shares. The practice of implementing share ownership guidelines for
executive officers is aligned with our ownership culture and is becoming more common in our industry. In
addition, our board of directors determined that establishing such a policy would no longer place us at a
competitive disadvantage compared to other life sciences companies. A description of this policy is included
below under the heading “Ownership Guidelines for Directors and Executive Officers.”

Severance Benefits upon Change in Control

Employees at the vice president level or above who are based in the United States, which includes all of the
named executive officers other than Mr. Keegan, are eligible to participate in the change in control plan, or in the
case of executive employees residing in Ireland, including Mr. Keegan, to receive comparable severance benefits,
during their employment with our company. We assumed the change in control plan in connection with the Azur
Merger and the compensation committee approved certain modifications to the change in control plan in 2012
and 2013 with respect to the benefits payable under the plan to our executive officers. A description of this plan
is included below under the heading “Potential Payments upon Termination or Change in Control” and a
description of Mr. Keegan’s employment agreement, including his severance benefits upon a change in control,
is included below under the heading “Description of Compensation Arrangements—Employment Agreement with
Fintan Keegan” and “Potential Payments upon Termination or Change in Control.”

The change in control plan, or in the case of Mr. Keegan, his employment agreement, provide certain
severance benefits to our executive officers, including the named executive officers, in connection with specified
involuntary termination events, including termination without cause and constructive termination, following a
change in control. The compensation committee believes these severance benefits are important from a retention
perspective to provide some level of protection to our executives who might be terminated following a change in
control and the amounts are reasonable and maintain the competitiveness of our executive compensation and

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retention program. Severance compensation is structured as a “double-trigger” benefit, meaning that an executive
officer receives benefits only if the executive officer has an involuntary termination within a specified period of
time following a change in control transaction. No benefit is provided solely as a result of a change in control.
The compensation committee believes this structure serves to mitigate the distraction and loss of key executive
officers that may occur in connection with rumored or actual fundamental corporate changes. Such payments
protect the interests of our shareholders by enhancing executive focus during rumored or actual change in control
activity, retaining executives despite the uncertainty that generally exists while a transaction is under
consideration and encouraging the executives responsible for negotiating potential transactions to do so with
independence and objectivity. Furthermore, this protection assists us in attracting and retaining highly valued
executives. The compensation committee also believes that termination without cause and constructive
termination are the appropriate involuntary termination events that should trigger benefits in a change in control
transaction, because such terminations are generally considered to be beyond the control of a terminated
employee and are terminations that, under different circumstances, would not have occurred. We do not provide
any tax gross up payments on severance benefits.

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Other Benefits

Executive officers based in the United States are eligible to participate in all of our benefit plans, such as the

401(k) Plan (see the section below “Description of Compensation Arrangements—401(k) Plan”), medical,
dental, vision, short-term disability, long-term disability, group life insurance and the ESPP, in each case
generally on the same basis as other employees. We also have a section 125 flexible benefits healthcare plan and
a flexible benefits childcare plan under which employees can set aside pre-tax funds to pay for qualified
healthcare expenses and qualified childcare expenses not reimbursed by insurance. We do not currently offer
pension or other retirement benefits in the United States, but do offer pension or other retirement benefits in
certain other countries.

Our named executive officer based in Ireland is eligible to participate in all of our benefit plans offered to
employees in Ireland, such as the Ireland tax-qualified defined contribution plan, medical, disability, group life
insurance and the ESPP.

Ownership Guidelines for Directors and Executive Officers

In February 2013, our board of directors adopted share ownership guidelines for the company’s non-
employee directors, Chief Executive Officer and certain other employees who serve on our executive committee,
including the named executive officers, or the covered individuals. Under the guidelines, these individuals are
expected to own a number of the company’s ordinary shares with a value equal to: three times (3x) base salary,
for the company’s Chief Executive Officer; one times (1x) base salary, for each other member of the company’s
executive committee; and three times (3x) the director’s annual cash retainer, for each non-employee director of
the company.

The guidelines provide that the individuals subject to the guidelines are expected to establish the minimum
ownership levels within five years of the company’s adoption of the guidelines (or within five years of the date
an officer or director first becomes subject to them).

The value of the company’s ordinary shares for purposes of determining the number of shares subject to
these guidelines in a given year is determined as the product of (i) the number of ordinary shares credited as held
by the individual and (ii) the greater of (a) the closing price of the company’s ordinary shares on the applicable
date, or (b) the purchase or exercise price paid for such shares. Shares that count toward satisfaction of these
guidelines include: shares owned outright by the individual (including RSUs that have vested but not yet settled,
net of taxes); shares retained after an option exercise or issuance under another type of equity award granted
under the company’s equity incentive plans; shares retained after purchase under the company’s ESPP; shares
held in trust for the benefit of the individual; and, solely with respect to non-employee directors, shares held in a
deferral account and issuable to such director pursuant to the Directors Deferred Plan.

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The compensation committee has discretion to develop an alternative individual guideline or an alternative

method of complying with the applicable individual guideline for a covered individual if compliance would place
a significant hardship on such covered individual.

2013 Compensation Decisions for the Named Executive Officers

We believe that 2013 was an outstanding year for the company due in part to our continued strong revenue

growth, the announcement of the Gentium Acquisition which we completed in early 2014 and the significant
progress and investment we made in expanding our product development pipeline. As described above under the
heading “Compensation Discussion and Analysis—Executive Summary,” this transformational growth was
reflected in our one-year and three-year annualized total shareholder returns, or TSRs, of approximately 138%
and 86%, respectively, which placed us in approximately the 90th percentile of our peer group, reflecting strong
performance for our shareholders.

Base Salary

Upon recommendation from the compensation committee, the board of directors increased the 2013 base

salary rate for Mr. Cozadd by 3.3% from 2012. After the increase, Mr. Cozadd’s 2013 base salary was between
the 50th percentile and 60th percentile of the market data for his position, reflecting Mr. Cozadd’s outstanding
achievement and integral role in our company’s exceptional performance in 2012.

Ms. Falberg’s 2013 base salary rate was increased by 3.3% from her 2012 base salary rate. Following this
increase, Ms. Falberg’s 2013 base salary rate was at approximately the 75th percentile of the market data for her
position, reflecting the multiple functions she managed and the strength of the teams she assembled.

Ms. Hooper’s 2013 base salary rate was increased from her 2012 base salary rate by 2.2%. Following this
increase, Ms. Hooper’s 2013 base salary remained above the 75th percentile of the market data for her position,
reflecting her superior performance and leadership in building an expanded legal team.

Mr. Cox’s 2013 base salary rate was increased from his 2012 base salary rate by 9.0%. Following this
increase, Mr. Cox’s 2013 base salary rate approximated the 75th percentile of the market data for his position,
reflecting the strong performance of the U.S. commercial organization and advancing internal pay equity within
the senior management team, which the compensation committee determined was appropriate in this
circumstance.

Mr. Keegan was promoted in mid-2012 from Senior Vice President to Executive Vice President.

Mr. Keegan’s 2013 base salary rate was increased by 1.4% from his base salary rate in effect at the end of 2012.
Following this increase, Mr. Keegan’s 2013 base salary rate was between the 60th and 75th percentile of the
market data for his position, reflecting his excellent performance and strength of his team’s performance.

The 2013 base salary rates and percentage increases from the 2012 base salary rates for the named executive

officers are set forth in the table below.

Name

Bruce C. Cozadd . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kathryn E. Falberg . . . . . . . . . . . . . . . . . . . . . . . . .
Suzanne Sawochka Hooper . . . . . . . . . . . . . . . . . . .
Russell J. Cox . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fintan Keegan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2013 Base
Salary
($) (1)

775,000
475,000
475,000
425,000
356,667

Increase over
2012 Base
Salary (%)

3.3
3.3
2.2
9.0
1.4

(1) Base salary rates, generally effective by March 1, 2013. Mr. Keegan’s base salary is paid in Euro and was
€270,000 for 2013. The conversion to U.S. dollars reflected in this column was calculated based on the
average exchange rate for each month as reported by the OANDA Corporation, or OANDA.

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In February 2014, the compensation committee and, with respect to Mr. Cozadd, the board of directors,
approved the following 2014 base salaries for the named executive officers, generally effective by March 1,
2014: Mr. Cozadd, $840,000; Ms. Falberg, $485,000; Ms. Hooper, $485,000; Mr. Cox, $455,000; and
Mr. Keegan, $376,667. Mr. Keegan’s base salary is paid in Euro and is €275,000 for 2014. This conversion to
U.S. dollars was calculated based on the average monthly exchange rate for December 2013 as reported by
OANDA. The 2014 base salaries for the named executive officers reflect merit increases, adjustments to advance
internal pay equity among members of senior management of the company and adjustments to align with the
market data for each position.

Performance Bonus Awards

There were no changes to our target performance bonuses for 2013 compared to 2012; in early 2013, the
board of directors approved a target performance bonus for Mr. Cozadd of 100% of his base salary earned during
2013, and the compensation committee approved a target performance bonus for each of our other named
executive officers of 50% of each officer’s base salary earned during 2013. We set these targets in order to
provide financial incentives to the named executive officers to work to achieve our annual corporate goals, and to
assist the company in remaining competitive with the performance bonus practices of its peers. The board of
directors sets the annual target performance bonus for the Chief Executive Officer at a higher percentage than the
percentages for other executive officers to reflect that the Chief Executive Officer has ultimate responsibility for,
and control over, our company’s performance.

In recommending to our board of directors the Chief Executive Officer’s annual target performance bonus,
the compensation committee considered his total cash compensation (including both base salary and this annual
target performance bonus), which for 2013 was between the 60th and 75th percentile of market data for his
position, in recognition of Mr. Cozadd’s outstanding achievement and integral role in our company’s exceptional
performance in 2012. In setting the annual target performance bonuses for the named executive officers other
than Mr. Cozadd, the compensation committee considered the total cash compensation for each individual
(including both base salary and this annual target performance bonus), which were: for Ms. Falberg, at the 60th
percentile of the market data for her position; for Ms. Hooper and Mr. Cox, between the 60th and the 75th
percentile of the market data for each of their respective positions; and for Mr. Keegan, at the 75th percentile of
the market data for his position.

Our board of directors approved quantitative and qualitative corporate objectives for purposes of

establishing the level of funding for our performance bonus plan for 2013 and communicated these objectives to
the named executive officers in early 2013. For 2013, our board of directors determined that the bonus pool for
the 2013 plan year should be based 80% on the level of achievement of the four specific quantitative corporate
objectives (each with a relative weighting) and 20% on the level of achievement of certain qualitative corporate
objectives collectively. The quantitative and qualitative objectives are described below.

Quantitative Objectives

The table below summarizes the objectives, weights, targets, actual results, their corresponding multipliers

and the resulting bonus pool funding percentage used for the quantitative objectives. In addition to the four
quantitative objectives, the compensation committee approved three “add-on” revenue goals that were weighted
an additional 17.5% collectively.

The compensation committee defined a payout algorithm with respect to each quantitative objective for

calculating the actual percentage of bonus pool funding attributable to each such objective. The compensation
committee set specific minimum and maximum levels of achievement for the total revenue goal, Xyrem revenue
bottle growth add-on goal and adjusted net income goal, which are described in the footnotes to the table below.
For the quantitative objectives relating to acquiring new products and product candidates and advancing the R&D
pipeline, the compensation committee did not set a minimum performance level, and performance levels between

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0% and 200% for each of these two objectives was determined by the compensation committee and used to
calculate the applicable bonus pool funding percentage attributable to such quantitative objective.

Corporate Quantitative Objectives

Weighting

Actual Results

Multiplier

Bonus Pool
Funding (2)

1. Achieve total revenue of $829 million (1)

• Revenue Goal Add-on: Achieve Xyrem year-
over-year revenue bottle growth of 11% or
12% (3)

35%

7.5%

• Revenue Goal Add-on: Achieve Erwinaze/

7.5%

Erwinase vial growth of 10.0%

Total revenue of
$872.4 million

Xyrem revenue
bottle growth of
12.3%

Erwinaze/
Erwinase vial
growth of 15.1%

130.6%

45.7%

100.0%

7.5%

100.0%

7.5%

• Revenue Goal Add-on: Achieve Prialt®

2.5%

Below target

— %

— %

(ziconotide) intrathecal infusion 2013 net
sales goal

2. Acquire new products and new product

15%

Above target (4)

150.0%

22.5%

candidates

3. Advance our R&D pipeline, which included the

10%

following four goals:

Partial
achievement (5)

25.0%

2.5%

•

•

•

•

finalize a clinical trial protocol for a Phase 2/3
study for Asparec by the end of the second
quarter of 2013;

initiate enrollment in a Xyrem lifecycle
management related clinical trial by the end
of 2013;

complete enrollment by the end of the second
quarter of 2013 in a clinical trial of the
intravenous administration of Erwinaze; and

enroll the first patient in a clinical trial to
evaluate Erwinaze in adolescents and young
adults with acute lymphoblastic leukemia by
the end of 2013.

4. Achieve adjusted net income* of $364 million (1)

20%

Total

Adjusted net
income of $388.3
million (6)

155.1%

31.0%

117%

(1)

If a specified minimum annual performance level was met (96% of target for total revenue goal and adjusted
net income goal), then a scaled performance multiplier (ranging from 50% to 150% for the total revenue
goal and 50% to 200% for the adjusted net income goal) is determined and used to calculate the applicable
bonus pool funding percentage attributable to such quantitative objective. The performance multiplier would
be zero if performance was below the minimum level, 50% if performance was at the minimum level, and
then scaled for performance between 51% and the applicable maximum level. The performance multiplier
was capped for performance above the specified maximum annual performance level (109% of target for
total revenue goal and 112% of target for adjusted net income goal).

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(2) The percentages in this column represent, for each quantitative objective, the weight of the quantitative
objective, multiplied by the performance multiplier that corresponds to the actual achievement of such
quantitative objective.

(3) With respect to the Xyrem bottle growth goal, the minimum annual performance level was set at 11%

growth, resulting in a 50% performance multiplier. The performance multiplier increased to 100% at 12%
growth or above.

(4) With respect to the quantitative objective of acquiring new products and product candidates, the

compensation committee determined the actual achievement by the company was above target, resulting in
a performance multiplier of 150%, and therefore a 22.5% bonus pool funding percentage.

(5) With respect to the quantitative objective of advancing our R&D pipeline, the compensation committee

determined that the actual achievement by the company was 25% of target due to full achievement of one of
the four sub-goals, enrollment in a clinical trial of the intravenous administration of Erwinaze by the end of
the second quarter, resulting in a performance multiplier of 25%, and therefore a 2.5% bonus pool funding
percentage. The Xyrem lifecycle management related clinical trial goal was inapplicable based on FDA
feedback, and we did not meet the other two sub-goals described in the table above.

(6) The dollar figure for our Actual Results in this row represents our adjusted net income for the year ended
December 31, 2013. See “Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations—Non-GAAP Financial Measures” in the 2013 10-K.

*

Adjusted net income as used in this proxy statement is a non-GAAP financial measure that excludes
certain items from GAAP income from continuing operations. For more information on our
presentation and calculation of adjusted net income, and a reconciliation of adjusted net income to
GAAP income from continuing operations, see “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations—Non-GAAP Financial Measures” in the 2013 10-K.

Qualitative Objectives

The other four qualitative corporate objectives approved by the board of directors are inherently less
quantifiable than the quantitative objectives and accordingly were not assigned individual weightings. The four
qualitative corporate objectives were:

• Maintain our supply of commercial products and ensure quality standards are met;

• Enhance and defend our intellectual property;

• Continue our corporate culture of compliance by achieving our corporate objectives while operating in

a manner that is compliant with the laws and regulations that govern our industry; and

• Continue to build our organization through effective communication, investment in talent, and

providing opportunities for innovative learning and development.

In evaluating the qualitative objectives, the compensation committee determined the following
accomplishments were relevant: (i) maintaining and strengthening our corporate culture of compliance,
(ii) continuing progress in our intellectual property efforts, (iii) significant efforts to maintain and ensure
adequate supplies of products that are compliant with our quality standards and (iv) continuing and expanding
our organization through investment in talent, as well as working to achieve more effective internal
communication and providing opportunities for innovative learning and development. After balancing the
performance with respect to all of the qualitative objectives, the compensation committee determined that overall
achievement resulted in a multiplier of 100%, and therefore a 20% bonus pool funding percentage for the 2013
qualitative objectives.

After adding together the bonus pool funding percentages for the quantitative and qualitative objectives
based on their relative weightings of 80% and 20%, respectively, the compensation committee approved an

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overall bonus pool funding percentage of up to 137% for 2013, or the 2013 bonus percentage, which resulted in
approval of an aggregate corporate bonus payout for the company’s employees of 137% of the target bonus pool
for the 2013 plan year.

The compensation committee did not set specific objectives for individual executive officers. Each of the

executive officers is responsible for meeting the corporate objectives, and each objective was deemed important
in determining the level of the company’s performance during the year. Accordingly, the actual bonus amount
paid under the performance bonus plan for each named executive officer (other than the Chief Executive Officer)
in 2013 was determined in part based on such officer’s individual contributions towards achievement of the
corporate objectives, including the achievement of the functions each leads, as determined by the compensation
committee based on its review and an assessment and recommendation by our Chief Executive Officer. The
compensation committee determined the actual 2013 bonus amount for each named executive officer based upon
the 2013 bonus percentage, the named executive officer’s (other than the Chief Executive Officer’s) individual
contributions (and the contributions of the functions each leads) to achievement of the corporate objectives, the
named executive officer’s target bonus percentage and the actual salary the named executive officer earned
during the year. All of the named executive officers and the functions each leads contributed significantly to the
achievement of our corporate objectives in 2013. However, certain of the named executive officers’
responsibilities and contributions more directly related to achievement of key corporate objectives and therefore
were given a greater weight in the compensation committee’s determination of the bonus amount paid to each
named executive officer.

The compensation committee (with approval from the board of directors with regard to Mr. Cozadd)

determined that the company’s overall 2013 bonus percentage of 137% was applicable to Mr. Cozadd, because as
Chief Executive Officer, Mr. Cozadd is responsible for the company meeting all of its objectives. Ms. Falberg
was awarded a bonus at a rate higher than the company’s 2013 bonus percentage because of her leadership of the
company’s corporate development efforts, including successful completion of the Gentium Acquisition and
related financing, her continued strong management of the functions responsible for the company’s balance sheet
and financial planning and analysis and her continued development of the company’s strategic plan. Mr. Cox was
awarded a bonus at a rate higher than the company’s 2013 bonus percentage because of his leadership of the U.S.
commercial organization and the strong performance of the Xyrem and Erwinaze product teams in the United
States. Ms. Hooper was awarded a bonus at a rate higher than the company’s 2013 bonus percentage because she
was responsible for the legal aspects that relate to all of the corporate objectives, including, in particular, the
company’s corporate development objectives and successful completion of the Gentium Acquisition, and her
strategic leadership of the legal efforts to continue to strengthen and defend our intellectual property. Mr. Keegan
was awarded a bonus at a rate higher than the company’s 2013 bonus percentage because of his strategic
leadership of the company’s supply chain and technical operations functions to support the company’s products.

In February 2014, the compensation committee and, with respect to Mr. Cozadd, the board of directors,

approved the following performance cash bonus award payments for 2013 under the performance bonus plan:
Mr. Cozadd, $1,056,500; Ms. Falberg, $380,000; Ms. Hooper, $430,000; Mr. Cox, $380,000; and Mr. Keegan,
$260,000. The compensation committee made no changes to the target performance bonuses for 2014 after
reviewing the market data provided by Radford. The board of directors approved a target performance bonus for
Mr. Cozadd of 100% of his base salary earned during 2014, and the compensation committee approved a target
performance bonus for each of our other named executive officers of 50% of each officer’s base salary earned
during 2014.

Stock Option and RSU Awards

In February 2013, the compensation committee and, with respect to Mr. Cozadd, the board of directors,

approved annual equity grants under our 2011 Plan to the named executive officers. Mr. Cozadd was awarded
125,000 options and 50,000 RSUs. Each of Ms. Falberg and Ms. Hooper was awarded 32,000 options and
16,000 RSUs. Mr. Cox was awarded 27,500 options and 13,750 RSUs, and Mr. Keegan was awarded 25,000

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options and 12,500 RSUs. For the stock options grants, the long-term incentive value was calculated using the
Black-Scholes methodology as of the date of grant and as a percentage of outstanding shares. The compensation
committee and the board of directors determined that these equity grants should generally be structured to consist
of 50% stock options and 50% RSUs using a 2:1 ratio of stock option grants to RSUs to control dilution and to
reflect the increased value of receiving shares at full value without the payment of an exercise price.

The 2013 equity awards for our named executive officers fell above the 75th percentile of the market data,

except for Ms. Falberg’s awards, which fell between the 60th and 75th percentile of the market data. The
compensation committee and the board of directors determined this was appropriate given our exceptional 2012
performance and each of our named executive officer’s key efforts towards such performance. In addition,
several of our named executive officers’ outstanding equity awards were substantially vested and therefore
lacked the same retention value as unvested awards. Additionally, the 2013 equity award positioning reflected
our greater emphasis on long-term compensation that aligns the interests of our executives with those of our
shareholders and encourages them to work towards increasing value for our shareholders.

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The compensation committee believes that equity award grants to the named executive officers in 2013 were

consistent with providing each continuing named executive officer with an ongoing equity position in the
company that is competitive with similarly situated executive officers at companies included in the market data
and fosters an ownership culture focused on the company’s long-term performance. In further support of an
ownership culture, in February 2013, we adopted share ownership guidelines for the named executive officers,
certain other executive officers and non-employee directors in order to better align their interests with those of
our shareholders. A description of this policy is included above under the heading “Ownership Guidelines for
Directors and Executive Officers.”

In February 2014, the compensation committee and the board of directors determined to maintain the

general structure of our equity program such that equity grants consist of 50% stock options and 50% RSUs
using a 2:1 ratio of stock option grants to RSUs, for the reasons described above. The compensation committee
and, with respect to Mr. Cozadd, the board of directors, approved annual equity grants under our 2011 Plan to the
named executive officers in the following amounts. Mr. Cozadd was awarded 66,000 options and 33,000 RSUs.
Each of Ms. Falberg, Ms. Hooper and Mr. Cox was awarded 20,000 options and 10,000 RSUs. Mr. Keegan was
awarded 15,000 options and 7,500 RSUs. These equity grants vest over four years, with 25% of the shares
subject to the option awards vesting on the one-year anniversary of the grant date and the remainder vesting in
equal monthly installments thereafter over the remaining 36 months, and 25% of the RSUs vesting on the first
through fourth anniversaries of the grant date. The 2014 annual equity grants to the named executive officers
reflect the compensation committee’s review of market data for annual grants to executive officers in similar
positions, based on industry and responsibility level. Ms. Falberg subsequently delivered notice of her
resignation prior to the grant date and therefore did not receive the 2014 equity grant that was approved by the
compensation committee.

Change In Control Plan

Our change in control plan provides that if an executive’s employment terminates under certain

circumstances in connection with a change in control, the executive will be eligible to receive certain severance
benefits, including cash benefits based on the executive’s base salary and annual bonus, COBRA premiums and
equity award acceleration. The terms of the change in control plan are described below under the heading
“Potential Payments upon Termination or Change in Control—Amended and Restated Executive Change in
Control and Severance Benefit Plan.” Our compensation committee periodically reviews the terms of our change
in control plan against market data to ensure that the benefits we offer remain appropriate. In July 2013, the
compensation committee reviewed the benefits offered under the change in control plan and approved
modifications to our change in control plan that the compensation committee determined were appropriate in
order to (i) provide that an executive’s cash severance payment relating to the executive’s annual bonus would be
reduced by the amount of any bonus payments made to or earned by such executive for performance in the year

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of termination and (ii) eliminate a special bonus calculation for newly-hired executives. Only our executives
based in the United States participate in the change in control plan; executives based in other locations, such as
Mr. Keegan, receive comparable change in control benefits pursuant to their employment agreements. The
compensation committee believes that the benefits we provide under the change in control plan are representative
of market practice, both in terms of design and cost, and are sufficient to retain our current executive team and to
recruit talented executives in the future.

Accounting and Tax Considerations

Under Financial Accounting Standard Board ASC Topic 718, or ASC 718, the company is required to
estimate and record an expense for each award of equity compensation (including stock options and RSUs) over
the vesting period of the award. We record share-based compensation expense on an ongoing basis according to
ASC 718. The compensation committee has considered, and may in the future consider, the grant of restricted
stock or other stock awards to executive officers in lieu of or in addition to stock option and RSU grants in light
of the accounting impact of ASC 718 with respect to stock option and RSU grants and other considerations.

Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, limits companies to a
deduction for federal income tax purposes of not more than $1 million of compensation paid to certain executive
officers in a calendar year. Compensation above $1 million may be deducted if it is “performance-based
compensation,” as defined in the Code and accompanying regulations. To maintain flexibility in compensating
executive officers in a manner designed to promote the company’s goals, the compensation committee
considered and determined at this time to not establish a policy for determining which forms of incentive
compensation awarded to executive officers shall be designed to qualify as “performance-based compensation”
for purposes of section 162(m) or that requires all compensation to be deductible. The compensation committee
intends to continue to evaluate the effects of the compensation limits of section 162(m) on any compensation it
proposes to grant, and the compensation committee intends to continue to provide future compensation in a
manner consistent with the best interests of the company and its shareholders.

Risk Assessment Concerning Compensation Practices and Policies

The compensation committee annually reviews all of the company’s compensation policies and practices to

assess whether they encourage employees to take inappropriate risks. After reviewing each of the company’s
compensation plans, and the checks and balances built into, and oversight of, each plan, in February 2013 the
compensation committee determined that any risks arising from our compensation policies and practices for our
employees are not reasonably likely to have a material adverse effect on our company as a whole. In addition, the
compensation committee believes that the mix and design of the elements of executive compensation do not
encourage management to assume excessive risks and, as described above under the heading “Compensation
Discussion and Analysis,” significant compensation decisions, and decisions concerning the compensation of the
company’s executives, include subjective considerations by the compensation committee or the full board of
directors, which restrain the influence of formulae or objective factors on excessive risk taking. Finally, the mix
of short-term compensation (in the form of salary and annual bonus, if any), and long-term compensation (in the
form of stock options and RSUs) also prevents undue focus on short-term results and helps align the interests of
the company’s executives with the interests of our shareholders.

Conclusion

It is the opinion of the compensation committee that the compensation policies and elements described
above provide the necessary incentives to properly align our executive officers’ performance with the interests of
our shareholders while maintaining equitable and competitive executive compensation practices that enable us to
attract and retain the highest caliber of executives.

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SUMMARY COMPENSATION TABLE

Summary of Compensation

The following table sets forth certain summary information for the years indicated with respect to the
compensation earned by the named executive officers for fiscal years 2013, 2012 and 2011, as applicable. The
compensation information presented below consists of information with respect to Jazz Pharmaceuticals, Inc.,
our predecessor, for periods prior to January 18, 2012 and information with respect to Jazz Pharmaceuticals plc
for the period January 18, 2012 through December 31, 2013. See “Basis of Presentation.”

Bonus
($) (2)

Stock
Awards
($) (3)

Option
Awards
($) (4)

Non-Equity
Incentive
Plan
Compensation
($) (5)

— 2,956,500 3,478,750 1,056,500

All
Other
Compensation
($) (6)
3,622

Salary
Name and Principal Position
($) (1)
Bruce C. Cozadd . . . . . . . . . . . . . . . . . 2013 771,154

Year

Chairman and Chief Executive
Officer

2012 722,158
2011 563,173

— 4,682,990 4,627,340 1,081,600
552,000
— 2,474,780
—

Kathryn E. Falberg (7) . . . . . . . . . . . . . 2013 472,693

— 946,080

890,560

380,000

Former Executive Vice President
and Chief Financial Officer

2012 446,769
2011 377,635

— 1,639,047 1,619,569
— 707,080
—

Suzanne Sawochka Hooper (8) . . . . . . 2013 473,462 62,500

890,560
2012 420,289 187,500 1,639,047 1,619,569

946,080

Executive Vice President and
General Counsel

Russell J. Cox . . . . . . . . . . . . . . . . . . . . 2013 419,616

— 813,038

765,325

380,000

Executive Vice President and Chief
Operating Officer

2012 379,250
2011 322,576

— 1,639,047 1,619,569
— 707,080
—

300,000
225,000

390,000
300,000

430,000
350,000

y
x
o
r
P

Total
($)
8,266,526

11,115,798
3,591,663

2,692,955

4,098,007
1,387,027

2,805,291
4,217,858

2,381,601

3,939,495
1,255,723

1,710
1,710

3,622

2,622
2,312

2,689
1,453

3,622

1,629
1,067

Fintan Keegan (9) . . . . . . . . . . . . . . . . . 2013 356,667

Executive Vice President, Technical
Operations

— 739,125

695,750

260,000

27,300

2,078,842

(1) The dollar amounts in this column represent base salary earned during the indicated fiscal year. For more
information regarding salaries in 2013, see “Compensation Discussion and Analysis—2013 Compensation
Decisions for the Named Executive Officers—Base Salary” above. Mr. Keegan is paid in Euro. The
conversion to U.S. dollars reflected in this column was calculated based on the average exchange rate for
each month as reported by OANDA.

(2) The dollar amounts in this column represent cash signing and or retention bonuses, as applicable, paid

during the indicated fiscal years to Ms. Hooper. See “Description of Compensation Arrangements—
Executive Employment Agreements” below.

(3) The dollar amounts in this column reflect the aggregate grant date fair value of all RSU awards granted during the
indicated fiscal year computed in accordance with ASC 718. The grant date fair value of each RSU award is
measured based on the closing price of our ordinary shares on the date of grant. These amounts do not necessarily
correspond to the actual value recognized or that may be recognized by the named executive officers.
(4) The dollar amounts in this column reflect the aggregate grant date fair value of all stock option awards

granted during the indicated fiscal year. These amounts have been calculated in accordance with ASC 718,
using the Black-Scholes option-pricing model and excluding the effect of estimated forfeitures.
Assumptions used in the calculation of these amounts are included in the notes to our audited consolidated
financial statements included in the 2013 10-K. These amounts do not necessarily correspond to the actual
value recognized or that may be recognized by the named executive officers.

(5) The dollar amounts in this column represent the cash bonus awarded under the performance bonus plan for
the indicated fiscal year. For more information, see “Compensation Discussion and Analysis—2013
Compensation Decisions for the Named Executive Officers—Performance Bonus Awards” above.
Mr. Keegan is paid in Euro. The conversion to U.S. dollars reflected in this column was calculated based on
the average exchange rate for each month as reported by OANDA.

51

(6) The dollar amounts in this column represent group term life insurance premiums paid and, for the named
executive officers based in the United States, up to $1,000 of matching contributions made to the 401(k)
Plan during the indicated fiscal year, and for Mr. Keegan, $21,462 of matching contributions made to the
Ireland tax-qualified defined contribution plan during 2013. Mr. Keegan is paid in Euro. The conversion to
U.S. dollars reflected in this column was calculated based on the average exchange rate for each month as
reported by OANDA.

(7) Ms. Falberg resigned from her position as our Chief Financial Officer in March 2014.

(8) Ms. Hooper joined us in February 2012 and became an executive officer in March 2012.

(9) Mr. Keegan joined us in January 2012 in connection with the Azur Merger and became an executive officer

in July 2012.

Grants of Plan-Based Awards

The following table shows, for the fiscal year ended December 31, 2013, certain information regarding

grants of plan-based awards to the named executive officers.

GRANTS OF PLAN-BASED AWARDS IN FISCAL 2013

Name
Bruce C. Cozadd . . . . . . . . . Annual Cash

Award
Type

Grant
Date
—

Annual Option 3/5/2013
3/5/2013
Annual RSU
Kathryn E. Falberg . . . . . . . . Annual Cash

—

Annual Option 3/5/2013
3/5/2013
Annual RSU
Suzanne Sawochka Hooper . . Annual Cash

—

Annual Option 3/5/2013
3/5/2013
Annual RSU
Russell J. Cox . . . . . . . . . . . Annual Cash

—

Annual Option 3/5/2013
3/5/2013
Annual RSU
Fintan Keegan . . . . . . . . . . . Annual Cash

—

Annual Option 3/5/2013
3/5/2013
Annual RSU

2/13/2013
2/13/2013

Estimated
Possible
Payouts
Under
Non-Equity
Incentive
Plan
Awards
Target
($) (1)
— 771,154

Approval
Date

2/13/2013
2/13/2013

2/13/2013
2/13/2013

2/13/2013
2/13/2013

2/13/2013
2/13/2013

— 236,346

— 236,731

— 209,808

— 178,334

—
—

—
—

—
—

—
—

—
—

All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) (2)
—
—
50,000
—
—
16,000
—
—
16,000
—
—
13,750
—
—
12,500

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) (2)
—
125,000
—
—
32,000
—
—
32,000
—
—
27,500
—
—
25,000
—

Exercise
or Base
Price of
Option
Awards
($/Sh) (3)
—

Grant
Date
Fair
Value
of Stock
and
Option
Awards
($) (4)
—
59.13 3,478,750
— 2,956,500
—
—
890,560
59.13
946,080
—
—
—
890,560
59.13
946,080
—
—
—
765,325
59.13
813,038
—
—
—
695,750
59.13
739,125
—

(1) This column sets forth the target bonus amount for each named executive officer for the year ended

December 31, 2013 under the performance bonus plan. There are no thresholds or maximum bonus amounts
for each individual officer established under the performance bonus plan. Target bonuses were set as a
percentage of each named executive officer’s base salary earned for the fiscal year ended December 31,
2013 and were 100% for Mr. Cozadd and 50% for each of Ms. Falberg, Ms. Hooper, Mr. Cox and
Mr. Keegan. The dollar value of the actual bonus award earned for the year ended December 31, 2013 for
each named executive officer is set forth in the Summary Compensation Table above. As such, the amounts
set forth in this column do not represent either additional or actual compensation earned by the named
executive officers for the year ended December 31, 2013. For a description of the performance bonus plan,
see “Compensation Discussion and Analysis—Executive Compensation Program—Performance Bonus
Plan” and “Compensation Discussion and Analysis—2013 Compensation Decisions for the Named
Executive Officers—Performance Bonus Awards” above.

(2) Annual stock options and RSU awards were granted under the 2011 Plan, and for Mr. Keegan, under the

2011 Plan sub plan governing awards to participants in the Republic of Ireland, or the Ireland sub plan. Each
of the stock option awards listed in the table above vests as to 25% of the ordinary shares underlying the

52

stock options upon the one year anniversary of the grant date and vest as to the remainder of the shares in 36
equal monthly installments thereafter. Each of the RSU awards vest in four equal annual installments on the
anniversary of the grant date. As a general matter, the vested portion of stock options granted to the named
executive officers will expire three months after each named executive officer’s last day of service, subject
to extension upon certain termination situations, such as death or disability, and RSUs will cease vesting
upon each named executive officer’s last day of service. Stock option and RSU awards are subject to
potential vesting acceleration as described below under the headings “Description of Compensation
Arrangements—Equity Compensation Arrangements—2011 Equity Incentive Plan” and “Potential Payments
upon Termination or Change in Control—Amended and Restated Executive Change in Control Plan and
Severance Benefit Plan” below. See also “Description of Compensation Arrangements—Equity
Compensation Arrangements—2011 Equity Incentive Plan” below for a general description of the material
terms of the 2011 Plan.

y
x
o
r
P

(3) Stock options were granted with an exercise price equal to 100% of the fair market value on the date of

grant, $59.13 per share, which was the closing price of our ordinary shares on the grant date.

(4) The dollar amounts in this column represent the grant date fair value of each stock option and RSU award,
as applicable, granted to the named executive officers in 2013. These amounts have been calculated in
accordance with ASC 718. The grant date fair value of each stock option is calculated using the Black-
Scholes option-pricing model and excluding the effect of estimated forfeitures. Assumptions used in the
calculation of these amounts are included in the notes to our audited consolidated financial statements
included in the 2013 10-K. The grant date fair value of each RSU award is measured based on the closing
price of our ordinary shares on the date of grant.

Description of Compensation Arrangements

Executive Employment Agreements

We do not have employment agreements currently in effect with any of our named executive officers who

are based in the United States. Like other employees, executives are eligible for annual salary increases,
participation in the performance bonus plan and discretionary equity grants. We have employment agreements in
effect with certain employees based outside of the United States, including Mr. Keegan.

From time to time, for employees based in the United States, we have provided an offer letter in connection
with an executive officer’s commencement of employment, which describes such executive officer’s initial terms
of employment. For example, in January 2012, we provided an offer letter to Ms. Hooper that included her initial
base salary and a hiring bonus of $125,000, payable in connection with commencement of employment, and a
retention bonus of $62,500, which amount was payable on each of the six and twelve months following the date
she commenced employment. However, Ms. Hooper’s employment, as is the case for all of our employees based
in the United States, is at-will and not governed by the terms of her offer letter.

Employment Agreement with Fintan Keegan

In connection with the Azur Merger, Azur Pharma and Mr. Keegan entered into an employment agreement

in September 2011, as amended in February 2012, that became effective on the Azur Merger closing date and
that superseded all prior employment-related agreements between Mr. Keegan and Azur Pharma. Pursuant to the
employment agreement, Mr. Keegan continued his employment with us on the terms and conditions set forth in
the employment agreement. Mr. Keegan’s employment agreement sets forth his initial base salary with us for
2012, and his rights to participate in the performance bonus plan, to an initial equity grant following the closing
of the Azur Merger and to certain severance and change in control payments that are substantially similar to the
severance and change in control payments available under our change in control plan, a description of which is
included below under the heading “Potential Payments upon Termination or Change in Control.” In addition to
standard terms and conditions applicable to our employment agreements with employees based outside the
United States, the employment agreement also requires a minimum three months’ notice period prior to

53

termination of Mr. Keegan’s employment by either Mr. Keegan or us (except if we terminate Mr. Keegan for
cause), subject to our discretion to require Mr. Keegan to serve this notice period on garden leave or to make a
payment to Mr. Keegan in lieu of his serving this notice period.

Amended and Restated Executive Change in Control and Severance Benefit Plan

Each of the named executive officers, other than Mr. Keegan, is a participant in the change in control plan, a

description of which is included below under the heading “Potential Payments upon Termination or Change in
Control.”

Equity Compensation Arrangements

Since the Azur Merger, we have granted stock options and RSU awards to employees, including the named

executive officers, under the 2011 Plan. From the initial public offering of Jazz Pharmaceuticals, Inc. until the
Azur Merger, we granted stock options to our employees, including some of the named executive officers, under
the 2007 Plan. For more information on our current equity compensation program and decisions regarding the
grants of equity awards in 2013 for our named executive officers, see “Compensation Discussion and Analysis—
Executive Compensation Program—Long-Term Equity Awards” and “Compensation Discussion and Analysis—
2013 Compensation Decisions for the Named Executive Officers—Stock Option and RSU Awards.” The
following is a brief summary of the material terms of each of our equity compensation plans.

2011 Equity Incentive Plan.

In connection with the Azur Merger, Jazz Pharmaceuticals, Inc.’s board of directors adopted the 2011 Plan
in October 2011, and its stockholders approved the 2011 Plan at the special meeting of the stockholders held in
December 2011. The 2011 Plan became effective immediately before the consummation of the Azur Merger and
was assumed and adopted by us upon the consummation of the Azur Merger. The following is a brief summary
of the material terms of the 2011 Plan.

Administration. The board of directors has delegated its authority to administer the 2011 Plan to the

compensation committee. Subject to the terms of the 2011 Plan, the board of directors or a committee authorized
by the board determines recipients, dates of grant, the numbers and types of stock awards to be granted, and the
terms and conditions of the stock awards, including the period of their exercisability and vesting. The
compensation committee has the authority to delegate its administrative powers under the 2011 Plan to a
subcommittee consisting of members of the compensation committee and may, at any time, revest in itself some
or all of the power previously delegated to the subcommittee. Our board of directors may also delegate to one or
more of our officers the authority to designate employees who are not officers to be recipients of certain stock
awards and the number of shares subject to such stock awards, provided that our board of directors must specify
the total number of shares that may be subject to the stock awards granted by such officer and such officer may
not grant a stock award to himself or herself.

Types of Awards. The 2011 Plan provides for the grant of incentive stock options, nonstatutory stock
options, stock appreciation rights, restricted stock awards, RSU awards, other stock awards, and performance
awards that may be settled in cash, shares, or other property, which may be granted to employees, including
officers.

Corporate Transactions. In the event of certain significant Corporate Transactions, our board of directors

will have the discretion to take one or more of the following actions with respect to outstanding stock awards
(contingent upon the closing or completion of such Corporate Transaction), unless otherwise provided in the
stock award agreement or other written agreement with the participant or unless otherwise provided by our board
of directors at the time of grant:

•

arrange for assumption, continuation, or substitution of a stock award by a surviving or acquiring
corporation (or its parent company);

54

•

•

•

accelerate the vesting and exercisability of a stock award and provide for its termination prior to the
effective time of the Corporate Transaction;

arrange for the assignment or the lapse of any reacquisition or repurchase rights held by us or any of
our affiliates with respect to the stock award;

cancel or arrange for the cancellation of a stock award, to the extent not vested or exercised prior to the
effective time of the Corporate Transaction, in exchange for such cash consideration, if any, as the
board of directors may consider appropriate; or

• make a payment equal to the excess, if any, of (a) the value of the property that the participant would
have received upon the exercise of the stock award over (b) any exercise price payable in connection
with such exercise.

y
x
o
r
P

Our board of directors need not take the same action for each stock award or with regard to all participants.

For purposes of the 2011 Plan, a “Corporate Transaction” generally means (i) a sale or disposition of all or
substantially all of our assets or a sale or disposition of at least 90% of our outstanding securities; (ii) a merger,
consolidation or similar transaction after which we are not the surviving corporation; or (iii) a merger,
consolidation or similar transaction after which we are the surviving corporation but our shares are converted into
other property.

Change in Control. The board of directors has the discretion to provide additional acceleration of vesting
and exercisability upon or after a Change in Control (as defined in the 2011 Plan and described below) as may be
provided in a stock award agreement or any other written agreement between us or any of our affiliates and a
participant. The forms of stock option agreement and RSU award agreement adopted by the board of directors
under the 2011 Plan provide that in the event a participant’s service relationship with us or a successor entity is
terminated due to an Involuntary Termination Without Cause (as defined in the stock award agreement and as
described below) within 12 months following, or one month prior to, the effective date of a Change in Control,
the vesting (and in the case of stock options, exercisability) of the stock award will accelerate in full.

For purposes of the 2011 Plan and the forms of stock option agreement and RSU award agreement issued
thereunder, a “Change in Control” generally means (i) a person or group acquires ownership of more than 50% of
the combined voting power of our outstanding securities (other than in connection with a financing or a
repurchase program); (ii) a merger, consolidation or similar transaction involving our company, after which our
shareholders do not own more than 50% of the combined voting power of the surviving entity or its parent in
substantially the same proportion as their ownership of our outstanding voting securities immediately before the
transaction; (iii) our shareholders or our board of directors approves a complete dissolution or liquidation of our
company, or a complete dissolution or liquidation of our company otherwise occurs (except for a liquidation into
a parent company); (iv) a sale, lease, license or other disposition of substantially all of our assets; or
(v) individuals who are members of our board of directors on the date of adoption of the 2011 Plan (or members
of our board of directors approved or recommended by a majority vote of such members still in office) cease to
constitute a majority of our board of directors.

An “Involuntary Termination Without Cause” generally means that a participant’s service relationship with

us is terminated for any reason other than for the following reasons (and not upon a participant’s death or
disability): (i) participant’s commission of any felony or crime involving fraud, dishonesty or moral turpitude
under the laws of the United States or any state thereof (with respect to Irish participants, the participant’s
conviction for any criminal offense (other than an offense under any road traffic legislation in Ireland, the United
Kingdom or elsewhere for which a fine or non-custodial penalty is imposed) or any offense under any regulation
or legislation relating to insider dealing, fraud or dishonesty); (ii) participant’s attempted commission of or
participation in a fraud or act of dishonesty against us; (iii) participant’s intentional, material violation of any
contract or agreement with us or of any statutory duty owed to us; (iv) participant’s unauthorized use or
disclosure of our confidential information or trade secrets; or (v) participant’s gross misconduct.

55

2007 Equity Incentive Plan

The 2007 Plan, which was initially adopted by the Jazz Pharmaceuticals, Inc. board of directors and
approved by the Jazz Pharmaceuticals, Inc. stockholders in connection with its initial public offering, was
continued and assumed by us upon consummation of the Azur Merger. The following is a brief summary of the
material terms of the 2007 Plan.

Administration. The board of directors has delegated its authority to administer the 2007 Plan to the

compensation committee. Subject to the terms of the 2007 Plan, the board of directors or a committee authorized
by the board determines recipients, dates of grant, the numbers and types of stock awards to be granted, and the
terms and conditions of the stock awards, including the period of their exercisability and vesting.

Types of Awards. The 2007 Plan provides for the grant of incentive stock options, nonstatutory stock
options, restricted stock awards, RSU awards, stock appreciation rights, performance stock awards and other
forms of equity compensation, which may be granted to employees, including officers, non-employee directors,
and consultants. Incentive stock options may be granted only to employees, including executive officers.

Corporate Transactions. Pursuant to the 2007 Plan, in the event of a Corporate Transaction (as defined in
the 2007 Plan and described below), the board of directors has the discretion to take one or more of the following
actions with respect to outstanding stock awards, unless otherwise provided in the stock award agreement or
other written agreement with the participant or unless otherwise provided by our board of directors at the time of
grant:

•

•

•

•

•

•

arrange for the assumption, continuation, or substitution of a stock award by the surviving or acquiring
entity (or its parent company);

arrange for the assignment of any reacquisition or repurchase rights applicable to any shares issued
pursuant to a stock award to the surviving or acquiring corporation (or its parent company);

accelerate the vesting and exercisability of a stock award prior to the effective time of the Corporate
Transaction followed by the termination of such stock award if it is not exercised at or prior to the
Corporate Transaction;

arrange for the lapse of any reacquisition or repurchase rights applicable to any shares issued pursuant
to a stock award;

cancel or arrange for the cancellation of a stock award, to the extent not vested or not exercised prior to
the effective time of the Corporate Transaction, in exchange for cash consideration as the board of
directors considers appropriate; and

arrange for the surrender of a stock award in exchange for a payment equal to the excess of (a) the
value of the property the holder of the stock award would have received upon the exercise of the stock
award, over (b) any exercise price payable by such holder in connection with such exercise.

The board of directors need not take the same action for each stock award. For purposes of the 2007 Plan, a
“Corporate Transaction” generally means (i) a sale or disposition of all of our assets or a sale or disposition of at
least 90% of our outstanding securities; (ii) a merger, consolidation or similar transaction after which we are not
the surviving corporation; or (iii) a merger, consolidation or similar transaction after which we are the surviving
corporation but our shares are converted into other property.

Change in Control. The board of directors has the discretion to provide additional acceleration of vesting
and exercisability upon or after a Change in Control (as defined in the 2007 Plan and described below) as may be
provided in a stock award agreement or any other written agreement between us or any of our affiliates and a
participant. The forms of stock option agreement and RSU award agreement adopted by the board of directors
under the 2007 Plan provide that in the event a participant’s service relationship with us or a successor entity is
terminated due to an Involuntary Termination Without Cause (as defined in the stock award agreement and as

56

y
x
o
r
P

described below) within 12 months following, or one month prior to, the effective date of a Change in Control,
the vesting (and in the case of stock options, exercisability) of the stock award will accelerate in full. For
purposes of the 2007 Plan and the forms of stock option agreement and RSU award agreement issued thereunder,
a “Change in Control” has a similar meaning as under the change in control plan, as described below under the
heading “Potential Payments upon Termination or Change in Control—Amended and Restated Executive Change
in Control and Severance Benefit Plan,” except that it also means a change in which the members of the
incumbent board of directors (or persons elected by a majority of the incumbent board of directors) cease to
constitute a majority of the board of directors.

The term “Involuntary Termination Without Cause” has a similar meaning as under the 2011 Plan, as

described above.

2007 Employee Stock Purchase Plan

Additional long-term equity incentives are provided through the ESPP, which was amended and restated by

Jazz Pharmaceuticals, Inc.’s board of directors in October 2011 and approved by its stockholders in December
2011, to be effective immediately prior to the Azur Merger, and, in October 2012, amended and restated by our
compensation committee. The ESPP was assumed by us upon the consummation of the Azur Merger. The ESPP
is intended to qualify as an “employee stock purchase plan” within the meaning of section 423 of the Code.
Under the ESPP, all of our regular employees and employees of any of our parent or subsidiary companies if the
board of directors designates such company as eligible to participate (including the named executive officers)
may participate and may contribute, normally through payroll deductions, up to 15% of their earnings up to a
total of $15,000 per purchase period for the purchase of our ordinary shares under the ESPP. The ESPP is
currently offered to our regular employees in Ireland and the United States. The ESPP is implemented through a
series of offerings of purchase rights to eligible employees. Under the ESPP, we may specify offerings with a
duration of not more than 27 months, and may specify shorter purchase periods within each offering. Each
offering will have one or more purchase dates on which our ordinary shares will be purchased for employees
participating in the offering. Unless otherwise determined by the board of directors, ordinary shares are
purchased for accounts of employees participating in the ESPP at a price per share equal to the lower of (a) 85%
of the fair market value of an ordinary share on the first date of an offering or (b) 85% of the fair market value of
an ordinary share on the date of purchase.

Performance Bonus Plan

We maintain a performance bonus plan to reward executive officers and other employees for successful
achievement of company-wide and individual performance objectives on an annual basis. More information
regarding the performance bonus plan is provided above under the headings “Compensation Discussion and
Analysis—Executive Compensation Program—Performance Bonus Plan” and “Compensation Discussion and
Analysis—2013 Compensation Decisions for the Named Executive Officers—Performance Bonus Awards.”

401(k) Plan and Ireland Tax-Qualified Defined Contribution Plan

Our employees based in the United States are eligible to participate in the 401(k) Plan. The 401(k) Plan is

intended to qualify as a tax-qualified plan under section 401 of the Code. The 401(k) Plan provides that each
participant may contribute a portion of his or her pretax compensation, up to a statutory annual limit, which was
$17,500 for employees under age 50, and $23,000 for employees age 50 and over. Employee contributions are
held and invested by the plan’s trustee. The 401(k) Plan also permits us to make discretionary contributions and
matching contributions, subject to established limits and a vesting schedule. Through 2012, we had not made any
such discretionary or matching contributions to the plan. In 2013, we began making discretionary matching
contributions subject to an annual limit of $1,000 per employee.

Our employees based in Ireland are eligible to participate in the Ireland tax-qualified defined contribution

plan. The Ireland tax-qualified defined contribution plan is an occupation pension scheme and a defined

57

contribution scheme within the meaning of the Pension Act 1990 intended to qualify as an exempt approved
retirement benefits scheme under Section 774 of the Taxes Consolidation Act, 1997. The Ireland tax-qualified
defined contribution plan provides that each eligible employee may contribute a portion (from 2% to 6%) of his
or her salary to the plan. In 2013, when we adopted the plan, we also began to contribute matching contributions
to the plan, ranging from 4% to 8% based on the amount contributed by an employee. Employees have the ability
to make additional voluntary contributions to the plan, subject to certain limits, that we do not match. Employees
may direct the manner in which contributions to the plan are invested. If an employee fails to make investment
directions, such employee’s contributions are invested according to a default investment strategy.

Additional Benefits

The named executive officers are eligible to participate in our benefit plans generally available to all
employees, as described in “Compensation Discussion and Analysis—Executive Compensation Program—Other
Benefits.”

Pension Benefits

Other than with respect to tax-qualified defined contribution plans such as the 401(k) Plan and the Ireland

tax-qualified defined contribution plan, the named executive officers do not participate in any plan that provides
for retirement payments and benefits, or payments and benefits that will be provided primarily following
retirement.

Nonqualified Deferred Compensation

During the year ended December 31, 2013, the named executive officers did not contribute to, or earn any
amounts with respect to, any defined contribution or other plan sponsored by us that provides for the deferral of
compensation on a basis that is not tax-qualified.

58

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth, for the fiscal year ended December 31, 2013, certain information regarding

outstanding equity awards at fiscal year-end for the named executive officers.

OUTSTANDING EQUITY AWARDS AT 2013 FISCAL YEAR-END TABLE

Option Awards

Stock Awards

Name
Bruce C. Cozadd . . . . . . . . . . . . . .

Kathryn E. Falberg (8) . . . . . . . . . .

Suzanne Sawochka Hooper . . . . . .

Russell J. Cox . . . . . . . . . . . . . . . . .

Fintan Keegan . . . . . . . . . . . . . . . .

y
x
o
r
P

Number of
Securities
Underlying
Unexercised
Options
(#)

Exercisable
—
66,666
5,081

Number of
Securities
Underlying
Unexercised
Options
(#) (1)

Unexercisable
125,000 (3)
133,334 (4)
8,710 (5)

—
23,333
—
10,204

—
23,333

—
23,333
35,450

—
3,000
20,125

32,000 (3)
46,667 (4)
3,750 (5)

—

32,000 (3)
46,667 (4)

27,500 (3)
46,667 (4)
8,750 (6)

25,000 (3)
6,000 (4)
25,875 (7)

Option
Exercise
Price
($)
59.13
46.83
11.48

59.13
46.83
11.48
7.35

59.13
46.83

59.13
46.83
8.23

59.13
46.83
51.83

Option
Expiration
Date
3/4/2023
8/8/2022
3/7/2020

3/4/2023
8/8/2022
3/7/2020
12/6/2019

3/4/2023
8/8/2022

3/4/2023
8/8/2022
8/24/2020

3/4/2023
8/8/2022
2/28/2022

Number of
Shares or
Units of
Stock
That Have
Not
Vested (#)
125,000

Market Value
of Shares
or Units
of Stock
That Have
Not Vested
($) (2)
15,820,000

42,250

5,347,160

42,250

5,347,160

40,000

5,062,400

33,125

4,192,300

(1)

In addition to the specific vesting schedule for each stock option award, each unvested stock option is
subject to the general terms of the 2011 Plan and 2007 Plan, as applicable, including the potential for future
vesting acceleration described above under the heading “Description of Compensation Arrangements—
Equity Compensation Arrangements” as well as the potential vesting acceleration under the terms of the
change in control plan and, with respect to Mr. Keegan, his employment agreement described below under
the heading “Potential Payments upon Termination or Change in Control.”

(2) The market values of the RSU awards that have not vested are calculated by multiplying the number of
shares underlying the RSU awards shown in the table by the closing price of our ordinary shares on
December 31, 2013, which was $126.56.

(3) The unexercisable shares subject to this stock option award as of December 31, 2013 vested with respect to
25% of the shares underlying the stock option on March 5, 2014 and the remainder will vest monthly from
April 5, 2014 to March 5, 2017.

(4) The unexercisable shares subject to this stock option award as of December 31, 2013 will vest monthly from

January 9, 2014 to August 9, 2016.

(5) The unexercisable shares subject to this stock option award as of December 31, 2013 fully vested on

March 8, 2014.

(6) The unexercisable shares subject to this stock option award as of December 31, 2013 will vest monthly from

January 21, 2014 to July 21, 2014.

(7) The unexercisable shares subject to this stock option award as of December 31, 2013 will vest monthly from

January 1, 2014 to March 1, 2016.

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(8) Ms. Falberg resigned from her position as our Chief Financial Officer in March 2014, and pursuant to the
terms of her stock option awards and the 2011 Plan, any vested but unexercised option awards will be
canceled three months from the date Ms. Falberg ceased to be our employee.

Option Exercises and Stock Vested

The following table provides information on RSUs vested and stock options exercised, including the number
of shares acquired upon exercise and the value realized, determined as described below, for the named executive
officers in the year ended December 31, 2013.

Name

Option Awards

Stock Awards

Number of Shares
Acquired on
Exercise (#)

Value Realized
on Exercise
($) (1)

Number of Shares
Acquired on
Vesting (#)

Value Realized
on Vesting
($) (2)

Bruce C. Cozadd . . . . . . . . . . . . . . . . . . .
Kathryn E. Falberg . . . . . . . . . . . . . . . . .
Suzanne Sawochka Hooper . . . . . . . . . . .
Russell J. Cox . . . . . . . . . . . . . . . . . . . . .
Fintan Keegan . . . . . . . . . . . . . . . . . . . . .

49,934
44,216
—
1,000
—

1,871,838
2,289,504
—
50,260
—

25,000
8,750
8,750
8,750
6,875

2,021,978
707,699
707,699
707,699
430,987

(1) The value realized on exercise is based on the difference between the closing price of our ordinary shares on
the date of exercise and the applicable exercise price of those options, and does not represent actual amounts
received by the named executive officers as a result of the option exercises.

(2) The value realized on vesting is based on the number of shares underlying the RSUs that vested and the

closing price of our ordinary shares on the vesting date.

Potential Payments upon Termination or Change in Control

Amended and Restated Executive Change in Control and Severance Benefit Plan

Under Jazz Pharmaceuticals, Inc.’s executive change in control plan, which we assumed upon the

consummation of the Azur Merger, as amended through July 2013, or the change in control plan, in the event that
an executive’s employment terminates due to an Involuntary Termination without Cause or a Constructive
Termination within 12 months following a Change in Control (as such capitalized terms are defined in the change
in control plan and described generally below), and assuming all of the other conditions of the change in control
plan are met, then each executive who is a participant in the change in control plan would be entitled to the
following benefits under the change in control plan:

•

a single lump sum cash severance payment equal to the sum of: (1) the executive’s base salary in effect
during the last regularly scheduled payroll period immediately preceding the termination (without, as a
general matter, giving effect to any voluntary pay reduction taken by the executive during the
12 months preceding the date of termination), which is referred to as the applicable base salary,
multiplied by the applicable percentage set forth below; plus (2) the product of (i) the applicable base
salary and (ii) the applicable bonus percentage described below, and (iii) the applicable percentage set
forth below; plus (3) the product of (A) the executive’s applicable base salary and (B) the executive’s
applicable bonus percentage and (C) the quotient obtained by dividing the number of full months that
an executive is employed in the year of the termination by 12.

• The “applicable percentage” as of December 31, 2013 was 200% for the Chief Executive Officer,
Executive Chairman or President (currently only Mr. Cozadd), 150% for Senior Vice Presidents
and above (which includes our Executive Vice Presidents) and 100% for Vice Presidents.

• The “applicable bonus percentage” is the greater of (a) any annual bonus, as a percentage of annual
base salary paid in the year of determination, paid to the executive in respect of either of the last two
calendar years prior to the date of termination or (b) the executive’s target bonus, expressed as a
percentage of annual base salary, for the calendar year in which the termination occurs;

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•

•

full payment of all of the applicable COBRA premiums for any health, dental or vision plan sponsored
by us. As of December 31, 2013, the applicable COBRA payments were for a period of up to (i) 24
months for the Chief Executive Officer, Executive Chairman or President, (ii) 18 months for Senior
Vice Presidents and above (which includes our Executive Vice Presidents), and (iii) 12 months for
Vice Presidents, provided that the executive timely elects continued coverage; and

acceleration in full of the vesting and exercisability, and termination of any of our repurchase rights,
with respect to outstanding stock options and other equity awards held by the executives.

The following key terms are defined in the change in control plan:

• A “Change in Control” generally means the consummation of any of the following events (i) a person
or group acquires ownership of more than 50% of our outstanding securities (other than in connection
with a private financing, recapitalization or conversion or restructuring of our indebtedness); (ii) a
merger transaction involving us, after which our shareholders do not own more than 50% of the
combined voting power of the surviving entity; (iii) our complete dissolution or liquidation; or (iv) a
sale, lease, license or other disposition of substantially all of our assets.

• An “Involuntary Termination without Cause” generally means an executive’s employment relationship is
terminated by any reason other than for the following reasons (and not upon an executive’s death or
disability) (i) executive’s unauthorized use or disclosure of confidential information or trade secrets which
causes material harm to us; (ii) executive’s material breach of any agreement with us after an opportunity
to cure; (iii) executive’s material failure to comply with our written policies or rules after an opportunity
to cure; (iv) executive’s conviction or plea of guilty or no contest to any crime involving fraud, dishonesty
or moral turpitude; (v) executive’s gross misconduct; (vi) executive’s continued failure to perform his or
her assigned duties after notification; or (vii) executive’s failure to cooperate in good faith with any
governmental or internal investigation of us or our directors, officers or employees.

• A “Constructive Termination” generally means an executive resigns employment after any of the

following actions or events (i) a reduction in executive’s base salary by more than ten percent (other
than a company-wide or executive-level general reduction); (ii) a relocation of executive’s place of
employment by more than 35 miles without executive’s consent; (iii) a substantial reduction in the
executive’s duties or responsibilities that are in effect prior to a Change in Control; (iv) a reduction in
executive’s title; or (v) a substantial increase in executive’s required business travel without
executive’s consent.

We benefit by requiring our executive officers to execute an effective general waiver and release of claims

in order to be eligible to receive benefits under the change in control plan. All other benefits (such as life
insurance, disability coverage and 401(k) Plan eligibility) will terminate as of the executive’s termination date.

The change in control plan does not provide for the gross up of any excise taxes imposed by section 4999 of
the Code. If any of the severance benefits payable under the change in control plan would constitute a “parachute
payment” within the meaning of section 280G of the Code, subject to the excise tax imposed by section 4999 of
the Code, the change in control plan provides for a best after-tax analysis with respect to such payments, under
which the executive will receive whichever of the following two alternative forms of payment would result in
executive’s receipt, on an after-tax basis, of the greater amount of the transaction payment notwithstanding that
all or some portion of the transaction payment may be subject to the excise tax: (i) payment in full of the entire
amount of the transaction payment, or (ii) payment of only a part of the transaction payment so that the executive
receives the largest payment possible without the imposition of the excise tax.

No executive would receive benefits under the change in control plan if (i) the executive has entered into an
individually negotiated employment agreement that provides for severance or change in control benefits, (ii) the
executive is entitled to receive benefits under another change in control plan maintained by us that provides
benefits in connection with an Involuntary Termination without Cause or a Constructive Termination, in each
case within 12 months following a Change in Control, (iii) the executive voluntarily terminates employment with

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us to accept employment with another entity that is controlled, directly or indirectly, by us or is otherwise
affiliated with us, or (iv) the executive does not confirm in writing that he or she is subject to agreements with us
relating to proprietary and confidential information. In addition, benefits would be terminated under the change
in control plan if the executive willfully breaches his or her agreements with us relating to proprietary and
confidential information or engages in certain solicitation or business interference activities.

The structure and amount of benefits provided under the change in control plan are intended to balance our

goals of attracting and retaining highly qualified individuals, providing the appropriate incentive for such
individuals to perform in the best interests of our shareholders and maintaining responsible pay practices. Our
compensation committee periodically reviews market data to gain a general understanding of the change in
control benefits offered by our competitors and reviews the benefits offered under the change in control plan
against such market data to ensure that the benefits under our change in control plan remain appropriate.

Employment Agreement with Fintan Keegan

Mr. Keegan’s employment agreement provides for the same benefits described above under the change in

control plan with respect to Executive Vice Presidents, and the same definitions as described above under the
change in control plan, except that (i) an “Involuntary Termination Without Cause” also includes any action by
Mr. Keegan warranting his summary dismissal (which includes being guilty of dishonesty; acting in any manner
likely to bring himself or us into disrepute or prejudices our interests; becoming prohibited by law from being a
director; or directly or indirectly advising, participating in or acting in concert with any person who makes or is
considering making an offer for our issued share capital) and (ii) a “Constructive Termination” does not include
Mr. Keegan’s resignation following a substantial increase in required business travel without his consent.

Equity Compensation Plans

The 2011 Plan and 2007 Plan and award agreements thereunder provide for potential vesting acceleration

upon an executive’s termination in connection with a change in control and, at the discretion of the board of
directors, upon certain change in control events, as further described above under the heading “Description of
Compensation Arrangements—Equity Compensation Arrangements.”

Potential Payments upon Termination or Change in Control Table

The following table estimates the potential severance payments and benefits under the change in control

plan, or in the case of Mr. Keegan, his employment agreement, to which the named executive officers would be
entitled in connection with specified termination events, calculated as if the named executive officers’
employment had terminated as of December 31, 2013. In addition, the table sets forth the amounts to which the
named executive officers would be entitled under the 2011 Plan and 2007 Plan if, upon a corporate transaction or
change in control transaction, the board of directors exercised its discretion to accelerate the vesting and
exercisability of stock options and the vesting of RSU awards, and such event occurred on December 31, 2013.

There are no other agreements, arrangements or plans that entitle any named executive officers to severance,

perquisites or other benefits upon termination of employment or a change in control. For purposes of the table
below, we have assumed that none of the potential severance benefits payable under the change in control plan
would be subject to the excise tax imposed by section 4999 of the Code and therefore would not be reduced in
accordance with the terms of the change in control plan.

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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
AS OF DECEMBER 31, 2013

Name

Benefit

Bruce C. Cozadd . . . . . . . . Lump Sum Cash Severance Payment

COBRA Payments
Vesting Acceleration (3)

Benefit Total

Kathryn E. Falberg (4) . . . . Lump Sum Cash Severance Payment

COBRA Payments
Vesting Acceleration (3)

Benefit Total

Suzanne Sawochka

Hooper . . . . . . . . . . . . . . Lump Sum Cash Severance Payment

COBRA Payments
Vesting Acceleration (3)

Benefit Total

Russell J. Cox . . . . . . . . . . . Lump Sum Cash Severance Payment

COBRA Payments
Vesting Acceleration (3)

Benefit Total

Fintan Keegan . . . . . . . . . . Lump Sum Cash Severance Payment

Health Insurance Payments
Vesting Acceleration (3)

Benefit Total

Involuntary Termination
Without Cause or
Constructive Termination in
Connection with a Change of
Control ($) (1)

2011 Plan and 2007
Plan—Certain
Corporate
Transactions ($) (2)

5,032,230
61,390
35,881,817

40,975,437

1,749,109
46,042
11,657,230

13,452,381

1,701,403
32,231
11,225,680

12,959,314

1,477,975
46,967
11,672,872

13,197,814

1,221,649
2,914
8,290,069

9,514,632

—
—

35,881,817

35,881,817

—
—

11,657,230

11,657,230

—
—

11,225,680

11,225,680

—
—

11,672,872

11,672,872

—
—
8,290,069

8,290,069

(1) These benefits would be payable under the change in control plan, or with respect to Mr. Keegan, his

employment agreement, if the Involuntary Termination without Cause or Constructive Termination occurred
within 12 months following a Change in Control and assuming such termination took place on
December 31, 2013. The forms of stock option and RSU agreements under the 2011 Plan and the 2007 Plan
(including the Ireland sub plan, with respect to Mr. Keegan) provide for the same vesting acceleration
benefit as shown here under the change in control plan, therefore no separate vesting acceleration benefit is
listed.

(2) These benefits would be payable under the 2011 Plan and the 2007 Plan (including the Ireland sub plan,

with respect to Mr. Keegan) if, upon a corporate transaction event, the board of directors exercised its
discretion to accelerate the vesting and exercisability of outstanding stock options and RSU awards,
assuming the vesting acceleration took place on December 31, 2013. For a description of the potential
vesting acceleration provisions in the 2011 Plan and the 2007 Plan, see “Description of Compensation
Arrangements—Equity Compensation Arrangements” above.

(3) The value of stock option and RSU award vesting acceleration is based on the closing price of $126.56 per

ordinary share on December 31, 2013, minus, in the case of stock options, the exercise price of the unvested
stock option shares subject to acceleration.

(4) Ms. Falberg resigned from her position as our Chief Financial Officer in March 2014. Ms. Falberg did not

receive any severance or other payments in connection with her resignation.

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DIRECTOR COMPENSATION

Non-Employee Director Compensation Policy

Pursuant to our non-employee director compensation policy, or director compensation policy, each non-
employee director was entitled to receive the following cash compensation for board services, as applicable, for
2013:

•

•

•

a $55,000 annual retainer for service as a member of our board of directors (paid quarterly);

a supplemental annual retainer for the chairs of the board committees in the following amounts:
$25,000 for the chair of the audit committee, $22,500 for the chair of the compensation committee,
$20,000 for the chair of the nominating and corporate governance committee and $22,500 for the chair
of the transaction committee (each paid quarterly); and

a supplemental annual retainer for each member of the following committees other than the chairs, in
the following amounts: $15,000 for service as a member of the audit committee, $12,500 for service as
a member of the compensation committee, $10,000 for service as a member of the nominating and
corporate governance committee and $12,500 for service as a member of the transaction committee
(each paid quarterly).

Our director compensation policy was originally approved by our board of directors in May 2013 and was

amended in August 2013 to, among other things, provide for cash retainers for the chair and members of the
transaction committee. In May 2014, our director compensation policy was again amended to provide for a
$25,000 supplemental annual retainer for our lead independent director and to reduce the number of ordinary
shares covered by the automatic equity grants discussed below.

The director compensation policy also provides for the automatic grant of equity awards to our non-

employee directors over the period of their service on our board of directors. During 2013, our director
compensation policy provided that any individual who first becomes a non-employee director is automatically
granted the following initial grants: (a) an option to purchase 8,000 ordinary shares that vests with respect to 1/3
of the shares on the first anniversary of the date of such individual’s election or appointment to the board of
directors, and, with respect to the balance, in a series of 24 successive equal monthly installments thereafter and
(b) an RSU award covering 4,000 ordinary shares that vests in equal annual installments over three years from
the date of such individual’s election or appointment to the board of directors. In May 2014, the numbers of
shares subject to these initial grants were reduced to 5,000 shares with respect to the initial option and to 2,500
shares with respect to the initial RSU award.

During 2013, our director compensation policy provided that each continuing non-employee director will

automatically be granted the following continuing grants in connection with each annual general meeting: (i) an
option to purchase 4,500 ordinary shares that vests in a series of 12 successive equal monthly installments
measured from the date of the annual general meeting of our shareholders with respect to which the option is
granted and (ii) an RSU award covering 2,250 ordinary shares that vests in full on the first anniversary of the date
of the annual general meeting of our shareholders with respect to which the RSU award is granted. If a director is
elected or appointed as a director for the first time other than at an annual general meeting, in order to receive
automatic continuing grants, the director must have first joined the board at least four calendar months before the
date of the applicable annual general meeting. If a director is elected or appointed as a director for the first time
at an annual general meeting, the director will not receive automatic continuing grants for such meeting. In May
2014, the numbers of shares subject to these annual grants were reduced to 3,300 shares with respect to the
annual option and to 1,650 shares with respect to the annual RSU award.

The automatic initial grant and continuing grant options are granted under the Amended and Restated 2007

Non-Employee Directors Stock Option Plan, or 2007 Directors Plan, unless the board or compensation
committee determines such options will be granted under the 2007 Plan, and the automatic initial grant and
continuing grant RSU awards are granted under the 2007 Plan.

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The grant date of the automatic initial grants and automatic continuing grants is the second trading day
following the filing date of our next quarterly or annual report filed under the Exchange Act that occurs after the
date the director first joined our board of directors (with respect to the automatic initial grants) or the date of our
annual general meeting (with respect to the automatic continuing grants). The other terms and conditions
applicable to equity awards made to our non-employee directors are included below under the heading “Equity
Compensation Arrangements.”

Directors Continuing Education

In furtherance of our ongoing commitment to the continuing education of our directors, in February 2013

our nominating and corporate governance committee adopted a policy for the reimbursement of director
continuing education, which was amended in February 2014. Under this policy, we will pay or reimburse each
director for enrollment fees and reasonable expenses incurred in connection with attending and participating each
year in one director continuing education program and in one healthcare industry continuing education program,
each sponsored by an outside provider. In addition, our non-employee directors are reimbursed for travel and
other reasonable expenses incurred in attending board or committee meetings, as are our employees who serve as
directors.

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Directors Deferred Compensation Plan

In May 2007, the Jazz Pharmaceuticals, Inc. board of directors adopted the Directors Deferred

Compensation Plan, which was amended in December 2008 and amended and restated in August 2010. The
Directors Deferred Compensation Plan, as amended and restated, is referred in this proxy statement as the
Directors Deferred Plan. We continued and assumed the Directors Deferred Plan in connection with the Azur
Merger. The Directors Deferred Plan allows each non-employee director to elect to defer receipt of all or a
portion of his or her annual retainer fees to a future date or dates. Amounts deferred under the Directors Deferred
Plan are credited as our ordinary shares to a phantom stock account, and the number of shares credited is based
on the amount of the retainer fees deferred divided by the market value of our ordinary shares on the first trading
day of the first open window period following the date the retainer fees were deemed earned. On the tenth
business day following the day of separation from the board of directors or the occurrence of a change in control,
or as soon thereafter as practical once the non-employee director has provided the necessary information for
electronic deposit of the deferred shares, each non-employee director will receive (or commence receiving,
depending upon whether the director has elected to receive distributions from his phantom stock account in a
lump sum or in installments over time) a distribution from his phantom stock account in our ordinary shares. The
Directors Deferred Plan may be amended or terminated at any time by the board of directors. The Directors
Deferred Plan in form and operation is intended to be compliant with section 409A of the Code.

Although we continue to maintain the Directors Deferred Plan, since the closing of the Azur Merger we
have not permitted and will not permit our non-employee directors to defer any annual retainer fees under the
Directors Deferred Plan.

Ownership Guidelines for Directors and Executive Officers

In February 2013, our board of directors adopted share ownership guidelines for the company’s non-
employee directors, Chief Executive Officer and certain other employees who serve on our executive committee,
including the named executive officers. Under the guidelines, these individuals are expected to own the
company’s ordinary shares with a value equal to: three times (3x) base salary, for our Chief Executive Officer;
one times (1x) base salary, for each other member of the company’s executive committee; and three times
(3x) the director’s annual cash retainer, for each non-employee director. A description of this policy is included
above under the heading “Compensation Discussion and Analysis—Executive Compensation Program—
Ownership Guidelines for Directors and Executive Officers.”

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Equity Compensation Plans

The 2007 Directors Plan, which was initially adopted by the Jazz Pharmaceuticals, Inc. board of directors
and approved by the Jazz Pharmaceuticals, Inc. stockholders in connection with its initial public offering, was
continued and assumed by us upon the consummation of the Azur Merger. The automatic initial option awards
and continuing option awards under our director compensation policy described above are granted under the
2007 Directors Plan unless otherwise determined by our board of directors.

With respect to options granted under the 2007 Directors Plan and 2007 Plan, if a non-employee director’s
service relationship with us or any of our affiliates, whether as a non-employee director or subsequently as our
employee, director or consultant or that of any of our affiliates, ceases for any reason other than disability or
death, or, with respect to options granted under the 2007 Directors Plan only, after any 12-month period
following a change in control, the optionee may exercise any vested options for a period of three months
following the cessation of service. If such optionee’s service relationship with us, or any of our affiliates, ceases
due to disability or death (or an optionee dies within a certain period following cessation of service), the optionee
or a beneficiary may exercise the option for a period of 12 months in the event of disability, and 18 months in the
event of death. With respect to options granted under the 2007 Directors Plan, if such optionee’s service
terminates within 12 months following a specified change in control transaction, the optionee may exercise any
vested portion of the option for a period of 12 months following the effective date of such a transaction. The
option term may be extended in the event that exercise of the option following termination of service is
prohibited by applicable securities laws. In no event, however, may an option be exercised beyond the expiration
of its term.

With respect to RSU awards granted under the 2007 Plan, if a non-employee director’s service relationship
with us or any of our affiliates, whether as a non-employee director or subsequently as our employee, director or
consultant or that of any of our affiliates, ceases for any reason, any RSU awards that were unvested as of the
date of such termination will be forfeited.

In the event of certain significant corporate transactions (which generally have a meaning similar to
“Corporate Transaction” under the 2007 Plan), all outstanding options under the 2007 Directors Plan may be
assumed, continued or substituted for by any surviving or acquiring entity (or its parent company). If the
surviving or acquiring entity (or its parent company) elects not to assume, continue or substitute for such options,
then (a) with respect to any such options that are held by optionees then performing services for us or our
affiliates, the vesting and exercisability of such options will be accelerated in full and such options will be
terminated if not exercised prior to the effective date of the corporate transaction and (b) all other outstanding
options will terminate if not exercised prior to the effective date of the corporate transaction. The board of
directors may also provide that the holder of an outstanding option not assumed in the corporate transaction will
surrender such option in exchange for a payment equal to the excess of (i) the value of the property that the
optionee would have received upon exercise of the option, over (ii) the exercise price otherwise payable in
connection with the option. In addition, the vesting and exercisability of options under the 2007 Directors Plan
held by non-employee directors who are either required to resign their position in connection with a specified
change in control transaction (which generally has a similar meaning as a “Change in Control” under the 2007
Plan) or are removed from their position in connection with such a change in control will be accelerated in full.

The treatment of outstanding options and RSU awards under the 2007 Plan in the event of certain significant

corporate transactions or a specified change in control transaction is described above under the heading
“Executive Compensation—Description of Compensation Arrangements—Equity Compensation Arrangements—
2007 Equity Incentive Plan.”

2013 Equity Grants

In accordance with our non-employee director compensation policy described above, we made automatic

initial grants to each of Mr. Gray, Ms. McSharry and Dr. Riedel as a result of their first joining the board of

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directors in May 2013. We also made automatic continuing grants to each of Dr. Sohn and Messrs. Berns,
Enright, Mulligan, O’Keefe and Winningham as a result of their continuing on the board of directors through our
annual general meeting in 2013. All options granted during 2013 were granted under the 2007 Directors Plan and
all RSU awards granted during 2013 were granted under the 2007 Plan. Additionally, in February 2013,
following his resignation from his position as our Chief Business Officer, International Business Development,
the board of directors approved the following grants (which were consistent with the then level of annual grants
made to continuing non-employee directors) to Mr. Mulligan with a grant date of March 5, 2013, the first trading
day of the first open window period after the February 2013 meeting of the board of directors: (i) under the 2007
Directors Plan, an option to purchase 4,500 ordinary shares that vests in a series of 12 successive equal monthly
installments measured from the date of grant and (ii) under the 2007 Plan, an RSU award covering 2,250
ordinary shares that vests in full on the first anniversary of the date of grant.

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Director Compensation Table

The following table sets forth certain information with respect to the compensation of all of our non-

employee directors for the fiscal year ended December 31, 2013.

Mr. Cozadd, our Chairman and Chief Executive Officer, is not listed in the following table because he is our

employee. Mr. Cozadd’s compensation is described under “Executive Compensation.” Mr. Cozadd received no
additional compensation for serving on our board of directors in 2013.

DIRECTOR COMPENSATION FOR FISCAL 2013

Name

Paul L. Berns (4) . . . . . . . . . . . . . . . . .
Patrick G. Enright (4) . . . . . . . . . . . . .
Peter Gray (4)(6) . . . . . . . . . . . . . . . . .
James C. Momtazee (4)(7) . . . . . . . . .
Heather Ann McSharry (4)(6) . . . . . . .
Seamus Mulligan (4) . . . . . . . . . . . . . .
Kenneth W. O’Keefe (4) . . . . . . . . . . .
Norbert G. Riedel (4)(6) . . . . . . . . . . .
Catherine A. Sohn (4) . . . . . . . . . . . . .
Rick E Winningham (4) . . . . . . . . . . .

Fees Earned or
Paid in Cash
($) (1)

Stock Awards
($) (2)

98,342
82,500
51,669
70,842
55,827
57,093
80,000
48,970
86,855
71,658

183,960
183,960
221,120
183,960
221,120
317,002
183,960
221,120
183,960
183,960

Option
Awards
($) (3)(4)

169,967
169,967
205,012
169,967
205,012
295,202
169,967
205,012
169,967
169,967

All Other
Compensation
($) (5)

—
—
—
—
—
49,560
—
—
—
—

Total
($)

452,269
436,427
477,801
424,769
481,959
718,857
433,927
475,102
440,782
425,585

(1) The dollar amounts in this column represent each non-employee director’s actual annual cash retainer for

board services, which is equal to the aggregate of his or her annual retainer of $55,000 plus his or her annual
retainers for service on one or more board committees, in each case for 2013. Each non-employee director’s
total fees were earned and payable in four quarterly installments subject to the non-employee director’s
continuous service at the end of each quarter. Fees paid to each of Ms. McSharry and Messrs. Gray and
Mulligan were paid in Euro. The conversion to U.S. dollars was calculated based on the average exchange rate
for each quarter as reported by OANDA. Following the Azur Merger, the board of directors did not permit
cash retainer fees to be deferred by our non-employee directors pursuant to the Directors Deferred Plan. The
total number of shares previously credited to each individual non-employee director’s phantom stock account
under the Directors Deferred Plan as of December 31, 2013 were as follows: 4,691 shares for Mr. Berns; 9,929
shares for Mr. Enright; 17,507 shares for Mr. Momtazee; 22,249 shares for Mr. O’Keefe; and no shares for
each of Drs. Riedel and Sohn, Ms. McSharry and Messrs. Gray, Mulligan and Winningham.

(2) The dollar amounts in this column reflect the aggregate grant date fair value of RSU awards computed in
accordance with ASC 718. The grant date fair value of each RSU award is measured based on the closing
price of our ordinary shares on the date of grant. These amounts do not necessarily correspond to the actual
value recognized or that may be recognized by the non-employee directors.

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(3) The dollar amounts in this column represent the aggregate grant date fair value of each stock option award
granted to our non-employee directors in 2013. These amounts have been calculated in accordance with
ASC 718, using the Black-Scholes option-pricing model and excluding the effect of estimated forfeitures.
Assumptions used in the calculation of these amounts are included in the notes to our audited consolidated
financial statements included in the 2013 10-K. These amounts do not necessarily correspond to the actual
value recognized or that may be recognized by the non-employee directors.

(4) The aggregate number of shares subject to outstanding stock options and RSU awards held by the non-

employee directors listed in the table above as of December 31, 2013 was as follows: 9,000 shares subject to
outstanding stock options and 2,250 RSUs for each of Messrs. Berns, Enright, Momtazee, O’Keefe and
Winningham; 12,500 shares subject to outstanding stock options and 4,916 RSUs for Dr. Sohn; 9,000 shares
subject to outstanding stock options and 4,500 RSUs for Mr. Mulligan and 8,000 shares subject to
outstanding stock options and 4,000 RSUs for each of Ms. McSharry, Mr. Gray and Dr. Riedel.

(5) Mr. Mulligan served as our Chief Business Officer, International Business Development, until February

2013, when he resigned from that position and became a non-employee director. The amount in this column
represents the amount paid, which was paid in Euro, through February 2013 as base salary to Mr. Mulligan
in connection with his employment. The conversion to U.S. dollars was calculated based on the average
exchange rate for each month as reported by OANDA.

(6) Ms. McSharry, Mr. Gray and Dr. Riedel were appointed to our board of directors in May 2013.

(7) Mr. Momtazee resigned from our board of directors in January 2014 and the outstanding shares then

credited to his phantom stock account were distributed to him in accordance with the terms of the Directors
Deferred Plan.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Policy and Procedures for Review of Related Party Transactions

We have adopted a Related Party Transaction Policy that sets forth our procedures for the identification,
review, consideration and approval or ratification of “related-person transactions.” For purposes of our policy
only, a “related-person transaction” is a transaction, arrangement or relationship (or any series of similar
transactions, arrangements or relationships) in which we and any “related person” are, were or will be
participants and in which the amount involved exceeds $120,000. Transactions involving compensation for
services provided to us as an employee or director are not covered by this policy. A “related person” is any
executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including
any of their immediate family members and any entity owned or controlled by such persons.

Under the policy, if a transaction has been identified as a related-person transaction (including any
transaction that was not a related-person transaction when originally consummated or any transaction that was
not initially identified as a related-person transaction prior to consummation), our management must present
information regarding the related-person transaction to our audit committee (or, if audit committee approval
would be inappropriate, to another independent body of our board of directors) for review, consideration and
approval or ratification. The presentation must include a description of, among other things, the material facts,
the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether the
transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated
third party or to or from employees generally. Under the policy, we will, on an annual basis, collect information
that our General Counsel deems reasonably necessary from each director, executive officer and (to the extent
feasible) significant shareholder to enable us to identify any existing or potential related-person transactions and
to effectuate the terms of the policy. In addition, under our Code of Conduct, our employees and directors have
an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give
rise to a conflict of interest to our General Counsel, or, if the employee is an executive officer, to our board of
directors. In considering related-person transactions, our audit committee (or other independent body of our

68

board of directors) will take into account the relevant available facts and circumstances including, but not limited
to, the risks, costs and benefits to us, the terms of the transaction, the availability of other sources for comparable
services or products and, if applicable, the impact on a director’s independence in the event that the related
person is a director, immediate family member of a director or an entity with which a director is affiliated.

The policy requires that, in determining whether to approve, ratify or reject a related-person transaction, our

audit committee (or other independent body of our board of directors) must consider, in light of known
circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our
shareholders, as our audit committee (or other independent body of our board of directors) determines in the
good faith exercise of its discretion.

Certain Transactions With or Involving Related Persons

Set forth below is information with respect to certain transactions with or involving related persons and to

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which we were or will be a participant.

Secondary Offering

In March 2013, we entered into an underwriting agreement with Barclays Capital Inc. and certain selling
shareholders, pursuant to which the selling shareholders sold to the underwriter an aggregate of 5,375,000 of our
ordinary shares at a purchase price of $58.28 per ordinary share, resulting in aggregate gross proceeds to the
selling shareholders of approximately $314.4 million, before deducting underwriting discounts and commissions
and other offering expenses. The offering closed on March 8, 2013. We did not receive any proceeds from the
sale of our ordinary shares by the selling shareholders in the offering. The names of the selling shareholders and
number of shares sold to the underwriters in the offering are included in a table below. Consistent with our
obligations under existing registration rights agreements, we were obligated to pay our total expenses in
connection with this offering, including registration, filing and listing fees, printing fees and legal and accounting
expenses, as well as fees of special counsel to the selling shareholders of up to $50,000, which total offering
expenses were approximately $0.5 million. Our participation in this offering did not require approval under our
Related Party Transaction Policy because our actions with respect to the offering were undertaken in accordance
with our pre-existing obligations under certain registration rights agreements. Our nominating and corporate
governance committee, which served as the independent review and oversight body, was advised of the
relationship between the selling shareholders and our company prior to the transaction.

Selling Shareholder

Number of Shares Sold

Principal Shareholder or Affiliated Entities: (1)
Entities affiliated with Kohlberg Kravis Roberts & Co. L.P.
. . . . . . . . . . . . . . . . . . . . . . . . .
Entities affiliated with Longitude Capital Partners, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Entities affiliated with Beecken Petty O’Keefe & Company, LLC . . . . . . . . . . . . . . . . . . . .

Director:
Seamus Mulligan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,750,000
800,000
400,000

425,000

(1) Certain of our current and former directors are affiliated or associated with the entities listed in the table as

indicated below:

Entities

Name

Entities affiliated with Kohlberg Kravis Roberts & Co. L.P. . . . . . . . . . . . . . . . . . . . . . . .
Entities affiliated with Longitude Capital Partners, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . Patrick G. Enright
Entities affiliated with Beecken Petty O’Keefe & Company, LLC . . . . . . . . . . . . . . . . . . Kenneth W. O’Keefe

James C. Momtazee

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Warrant Exercises and Resale Registration

On July 7, 2009, Jazz Pharmaceuticals, Inc., our predecessor, issued to Longitude Venture Partners, L.P. and

to Longitude Capital Associates, L.P., or the Longitude Funds, warrants to purchase an aggregate of 947,867
shares of Jazz Pharmaceuticals, Inc.’s common stock at an exercise price of $4.00 per share, which warrants were
subsequently converted into warrants to purchase our ordinary shares (on a one-for-one basis) in connection with
the Azur Merger. Mr. Enright is a managing member of Longitude Capital Partners, LLC, which is the general
partner of each of the Longitude Funds. On February 28, 2014, the Longitude Funds exercised the warrants in
full for an aggregate cash purchase price payable to us of approximately $3.8 million. Based solely on the
difference between the closing price of our ordinary shares on the date of exercise and the exercise price of the
warrants, the value realized by the Longitude Funds upon exercise of the warrants was approximately $140.2
million. In accordance with the terms of an existing investor rights agreement with the Longitude Funds, we
registered the resale of the ordinary shares underlying the warrants by the Longitude Funds and, pursuant to such
agreement, we were obligated to pay our total expenses in connection with the resale registration, including
registration fees and legal expenses estimated to be approximately $75,000. Our involvement in these warrant
exercises and the registration for resale of the ordinary shares underlying the warrants did not require approval
under our Related Party Transaction Policy because our actions with respect to such matters were undertaken in
accordance with our pre-existing obligations under the warrants and the investor rights agreement with the
Longitude Funds. Consistent with our audit committee charter, our audit committee reviewed these transactions.

Indemnification Agreements

On or after the effective time of the Azur Merger, we entered into indemnification agreements with our
directors, executive officers and certain other of our officers and employees, or the indemnification agreements.
The indemnification agreements require us, under the circumstances and to the extent provided for therein, to
indemnify such persons to the fullest extent permitted by applicable law against certain expenses and other
amounts incurred by any such person as a result of such person being made a party to certain actions, suits,
proceedings and other actions by reason of the fact that such person is or was a director, officer, employee,
consultant, agent or fiduciary of our company or any of our subsidiaries or other affiliated enterprises. The rights
of each person who is a party to an indemnification agreement are in addition to any other rights such person may
have under our Memorandum and Articles of Association, the Irish Companies Acts 1963 to 2013, any other
agreement, a vote of the shareholders of our company, a resolution of directors of our company or otherwise. We
believe that these agreements are necessary to attract and retain qualified persons as our officers and directors.
We also maintain directors’ and officers’ liability insurance.

OTHER MATTERS

Presentation of Irish Statutory Accounts

Our Irish statutory accounts for the fiscal year ended December 31, 2013, including the reports of the
directors and auditors thereon, will be presented at the annual meeting in accordance with the requirements of the
Irish Companies Acts of 1963 to 2013. Our Irish statutory accounts will be approved by the board of directors.
There is no requirement under Irish law that such statements be approved by shareholders, and no such approval
will be sought at the annual meeting.

Registered and Principal Executive Offices

The registered and principal executive offices of Jazz Pharmaceuticals plc are located at Fourth Floor,

Connaught House, One Burlington Road, Dublin 4, Ireland. Our telephone number there is +353 1 634 7800.

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Shareholder Proposals and Director Nominations for the 2015 Annual General Meeting

Our shareholders may submit proposals on matters appropriate for shareholder action shareholder meetings

in accordance with Rule 14a-8 promulgated under the Exchange Act. For such proposals to be included in our
proxy materials relating to our 2015 annual general meeting of shareholders, all applicable requirements of
Rule 14a-8 must be satisfied and, pursuant to Rule 14a-8, such proposals must be received by us no later than
February 12, 2015. However, if our 2015 annual general meeting of shareholders is not held between July 1,
2015 and August 30, 2015, then the deadline will be a reasonable time prior to the time that we begin to print and
mail our proxy materials. Such proposals should be delivered to Jazz Pharmaceuticals plc, Attention: Company
Secretary, Fourth Floor, Connaught House, One Burlington Road, Dublin 4, Ireland.

Our memorandum and articles of association provide that shareholder nominations of persons to be elected

to the board of directors at an annual general meeting must be made following written notice to our Company
Secretary which is executed by a shareholder and accompanied by certain background and other information
specified in our memorandum and articles of association. Such written notice and information must be received
by our Company Secretary not later than the close of business on March 14, 2015 nor earlier than January 13,
2015; provided, however, that in the event our 2015 annual general meeting of shareholders is not held between
July 1, 2015 and August 30, 2015, notice must be delivered no earlier than 150 days prior to nor later than 90
days prior to the date of the 2015 annual general meeting or the 10th day following the day on which public
announcement of the date of such meeting is first made. Our memorandum and articles of association provide
that other proposals may only be proposed at an annual general meeting if either (i) it is proposed by or at the
direction of our board of directors; (ii) it is proposed at the direction of the Irish High Court; or (iii) the chairman
of the meeting decides, in his or her absolute discretion, that the proposal may properly be regarded as within the
scope of the relevant meeting. In addition, the proxy solicited by our board of directors for the 2015 annual
general meeting of shareholders will confer discretionary voting authority with respect to (i) any proposal
presented by a shareholder at that meeting for which we have not been provided with notice by April 28, 2015
and (ii) if we have received notice of such proposal by April 28, 2015, if the 2015 proxy statement briefly
describes the matter and how management’s proxy holders intend to vote on it, if the shareholder does not
comply with the requirements of Rule 14a-4(c)(2) promulgated under the Exchange Act. On any other business
which may properly come before the annual meeting, or any adjournment thereof, and whether procedural or
substantive in nature (including without limitation any motion to amend a resolution or adjourn the meeting) not
specified in this proxy statement, the proxy will act at his/her discretion.

Householding of Proxy Materials

The SEC has adopted rules that permit companies and intermediaries (such as brokers) to satisfy the

delivery requirements for Notices and proxy materials with respect to two or more shareholders sharing the same
address by delivering a single Notice or a single set of proxy materials, as applicable, addressed to those
shareholders. This process, which is commonly referred to as “householding,” potentially means extra
convenience for shareholders and cost savings for companies.

A number of brokers with account holders who are Jazz Pharmaceuticals shareholders will be

“householding” Notices and our proxy materials. A single Notice or a single set of proxy materials, as applicable,
may be delivered to multiple shareholders sharing an address unless contrary instructions have been received
from the affected shareholders. Once you have received notice from your broker that it will be “householding”
communications to your address, “householding” will continue until you are notified otherwise or until you
revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to
receive a separate Notice or set of proxy materials, as applicable, in the future you may: (1) notify your broker,
(2) direct your written request to Jazz Pharmaceuticals plc, Attention: Investor Relations, Fourth Floor,
Connaught House, One Burlington Road, Dublin 4, Ireland or (3) contact our Investor Relations department at
+ 353 1 634 7892 (Ireland) or + 1 650 496 2800 (U.S.) or by email at investorinfo@jazzpharma.com.
Shareholders who currently receive multiple copies of Notices or proxy materials at their address and would like
to request

71

“householding” of their communications should contact their broker. In addition, we will promptly deliver, upon
written or oral request to the address or telephone number above, a separate copy of a Notice or set of proxy
materials to a shareholder at a shared address to which a single Notice or set of proxy materials, as applicable,
was delivered.

Annual Report on Form 10-K

We will mail without charge, upon written request, a copy of our Annual Report on Form 10-K for
the fiscal year ended December 31, 2013, including the consolidated financial statements, schedules and list
of exhibits, and any particular exhibit specifically requested. Requests should be sent to: Jazz
Pharmaceuticals plc, Attention: Company Secretary, Fourth Floor, Connaught House, One Burlington
Road, Dublin 4, Ireland.

General

Your proxy is solicited on behalf of our board of directors. Unless otherwise directed, at the annual meeting
(or an adjournment or postponement thereof), proxies will be voted “For” all of the nominees listed in Proposal 1
and “For” Proposals 2, 3 and 4. If any matter other than those described in this proxy statement properly comes
before the annual meeting, or with respect to any adjournment or postponement thereof, it is the intention of the
persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.

By order of the board of directors,

Shawn Mindus
Company Secretary

June 12, 2014

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

(Mark One)
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended December 31, 2013
or

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from

to

Commission File Number: 001-33500
JAZZ PHARMACEUTICALS PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)

Ireland
(State or other jurisdiction of incorporation or organization)

98-1032470
(I.R.S. Employer Identification No.)

Fourth Floor, Connaught House,
One Burlington Road, Dublin 4, Ireland
011-353-1-634-7800
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Ordinary shares, nominal value $0.0001 per share

The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act. Yes ‘ No È

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes È No ‘

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive

Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes È No ‘

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be

contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.

Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘

Smaller reporting company ‘

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ‘ No È

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, as of June 28, 2013, the
last business day of the registrant’s most recently completed second fiscal quarter, was approximately $3,527,521,407 based upon the last sale
price reported for the registrant’s ordinary shares on such date on the NASDAQ Global Select Market. The calculation of the aggregate
market value of voting and non-voting common equity excludes 6,924,013 ordinary shares of the registrant held by executive officers,
directors, and shareholders that the registrant concluded were affiliates of the registrant on that date. Exclusion of such shares should not be
construed to indicate that any such person possesses the power, direct or indirect, to direct or cause the direction of the management or
policies of the registrant or that such person is controlled by or under common control with the registrant.

As of February 19, 2014, a total of 58,068,360 ordinary shares, nominal value $0.0001 per share, of the registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for the 2014 Annual General Meeting of Shareholders to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this
Form 10-K are incorporated by reference in Part III, Items 10-14 of this Form 10-K.

[THIS PAGE INTENTIONALLY LEFT BLANK]

JAZZ PHARMACEUTICALS PLC
2013 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

PART I

Item 1.

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 2.

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 3.

Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 6.

Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . .

Page

2

36

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83

83

85

86

90

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . .

115

Item 8.

Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . .

117

Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117

Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119

PART III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119

Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . .

120

Item 14.

Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120

PART IV

Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120

Signatures

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129

We own or have rights to various copyrights, trademarks, and trade names used in our business in the United
States and/or other countries, including the following: Jazz Pharmaceuticals®, Xyrem® (sodium oxybate) oral
solution, Xyrem Success Program®, Erwinaze® (asparaginase Erwinia chrysanthemi), Erwinase®, Defitelio®
(defibrotide), Prialt® (ziconotide) intrathecal infusion, FazaClo® (clozapine, USP), VersaclozTM (clozapine) oral
suspension, AsparecTM (mPEG-r-crisantaspase), LeukotacTM (inolimomab), ProstaScint® (capromab pendetide),
JumpStartTM and NAVIGATOR Reimbursement and Access ProgramTM. This report also includes trademarks,
service marks, and trade names of other companies.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
or the Exchange Act, which are subject to the “safe harbor” created by those sections. Forward-looking
statements are based on our management’s beliefs and assumptions and on information currently available to
our management. In some cases, you can identify forward-looking statements by terms such as “may,” “will,”
“should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,”
“intend,” “continue,” “potential,” “possible,” “foreseeable,” “likely” and similar expressions intended to
identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance, time frames or achievements to be materially different
from any future results, performance, time frames or achievements expressed or implied by the forward-looking
statements. We discuss many of these risks, uncertainties and other factors in this Annual Report on Form 10-K
in greater detail under the heading “Risk Factors.” Given these risks, uncertainties and other factors, you should
not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent
our estimates and assumptions only as of the date of this filing. You should read this Annual Report on Form 10-
K completely and with the understanding that our actual future results may be materially different from what we
expect. We hereby qualify our forward-looking statements by our cautionary statements. Except as required by
law, we assume no obligation to update our forward-looking statements publicly, or to update the reasons that
actual results could differ materially from those anticipated in these forward-looking statements, even if new
information becomes available in the future.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

On January 18, 2012, the businesses of Jazz Pharmaceuticals, Inc. and Azur Pharma Public Limited
Company, or Azur Pharma, were combined in a merger transaction, or the Azur Merger, in connection with
which Azur Pharma was re-named Jazz Pharmaceuticals plc and we became the parent company of and
successor to Jazz Pharmaceuticals, Inc., with Jazz Pharmaceuticals, Inc. becoming our wholly-owned subsidiary.
Jazz Pharmaceuticals, Inc. was treated as the acquiring company in the Azur Merger for accounting purposes,
and as a result, the historical consolidated financial statements of Jazz Pharmaceuticals, Inc. became our
consolidated financial statements. In this report, unless otherwise indicated or the context otherwise requires, all
references to “Jazz Pharmaceuticals,” “the registrant,” “we,” “us,” and “our” refer to Jazz Pharmaceuticals
plc and its consolidated subsidiaries, except when the context makes clear that the time period being referenced
is prior to the Azur Merger, in which case such terms are references to Jazz Pharmaceuticals, Inc. and its
consolidated subsidiaries. The disclosures in this report relating to the pre-Azur Merger business of Jazz
Pharmaceuticals pertain to the business of Jazz Pharmaceuticals, Inc. prior to the Azur Merger.

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Item 1.

Business

Overview

PART I

We are a specialty biopharmaceutical company focused on improving patients’ lives by identifying,
developing and commercializing differentiated products that address unmet medical needs. Our strategy is to
continue to create shareholder value by:

•

•

•

Growing sales of the existing products in our portfolio, including by identifying new growth
opportunities;

Acquiring additional marketed specialty products or products close to regulatory approval to leverage
our existing expertise and infrastructure; and

Pursuing targeted development of a pipeline of post-discovery specialty product candidates.

In 2013 and to date in 2014, we have made substantial progress in the execution of our strategy. Our strong

revenue growth continued, primarily from the sales of our lead marketed products, Xyrem® (sodium oxybate)
oral solution and Erwinaze® (asparaginase Erwinia chrysanthemi), called Erwinase® in markets outside of the
United States. We acquired the product Defitelio® (defibrotide) as a result of our acquisition pursuant to a tender
offer of approximately 98% of the outstanding and fully diluted voting securities of Gentium S.p.A., or Gentium,
as of February 21, 2014, for an aggregate acquisition cost of approximately $993 million, which we refer to as
the Gentium Acquisition. For a detailed discussion of the Gentium Acquisition, see Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” In October 2013, the European
Commission granted marketing authorization under exceptional circumstances for Defitelio for the treatment of
severe hepatic veno-occlusive disease, or severe VOD, in adults and children undergoing hematopoietic stem cell
transplantation, or HSCT, therapy. We plan to launch Defitelio in selected European Union, or EU, countries
during 2014, and expect to begin these efforts in the first half of 2014 after Defitelio’s patient registry has been
established and is open for recruitment, subject to the receipt of a positive recommendation by the
Pharmacovigilance Risk Assessment Committee, or PRAC, at the European Medicines Agency, or EMA, on the
patient registry design. We are engaged in pricing and reimbursement submissions in applicable EU countries in
preparation for planned launches in these countries. We intend eventually to promote Defitelio in all EU markets
where it has marketing authorization. In February 2014, we launched VersaclozTM (clozapine) oral suspension in
the United States for treatment-resistant schizophrenia and for reducing the risk of recurrent suicidal behavior in
patients with schizophrenia or schizoaffective disorders.

As a result, going into 2014, we have a portfolio of approved products that address medical needs in the

following therapeutic areas, including:

Narcolepsy: Xyrem, the only product approved by the United States Food and Drug Administration, or

FDA, for the treatment of both cataplexy and excessive daytime sleepiness in patients with narcolepsy;

Hematology/Oncology: Erwinaze, a treatment for patients with acute lymphoblastic leukemia, or ALL, who

have developed hypersensitivity to E. coli-derived asparaginase, and Defitelio, for the treatment of severe VOD
in adults and children undergoing HSCT therapy;

Pain: Prialt® (ziconotide) intrathecal infusion, the only non-opioid intrathecal analgesic indicated for the

management of severe chronic pain for patients who are intolerant of or refractory to other treatments; and

Psychiatry: A portfolio of products, including FazaClo® (clozapine, USP) HD and FazaClo LD, orally

disintegrating clozapine tablets indicated for treatment-resistant schizophrenia, and Versacloz.

We also commercialize a portfolio of other products, mostly in markets outside of the United States. These

products are primarily in the oncology, critical care and oncology supportive care therapeutic areas.

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In addition, we made significant progress and investment in expanding our product development pipeline. In

February 2013, we licensed rights to JZP-386, an early-stage investigational compound being developed for
potential use in narcolepsy, from Concert Pharmaceuticals, Inc., or Concert. In January 2014, we acquired rights
to JZP-110 (formerly known as ADX-N05), a late-stage investigational compound being developed for potential
treatment of excessive daytime sleepiness, or EDS, in patients with narcolepsy from Aerial BioPharma LLC, or
Aerial. We also intend to pursue development of JZP-110 for EDS in patients with obstructive sleep apnea, or
OSA. In addition to its existing approved indication in the EU, Defitelio has the potential to be developed for
approval in other indications, and for approval in countries outside the EU, including the United States. We are
currently assessing what we believe would be the optimal path for potential approval of defibrotide in the United
States. Finally, we are conducting ongoing trials involving AsparecTM (mPEG-r-crisantaspase), a pegylated
recombinant Erwinia asparaginase for the treatment of patients with ALL with E. coli asparaginase
hypersensitivity, and LeukotacTM (inolimomab), an anti-CD25 monoclonal antibody for the treatment of steroid-
refractory acute graft versus host disease, or GvHD.

Our development pipeline projects also include line extensions for existing products and the generation of

additional clinical data for existing products. We plan to conduct a clinical trial to further evaluate the use of
Erwinaze in young adults age 18 to 39 with ALL who are hypersensitive to E. coli-derived asparaginase.

In addition, through the Gentium Acquisition we acquired a manufacturing facility that produces active
pharmaceutical ingredients, including defibrotide, the drug substance in Defitelio, and in February 2014 we
announced we commenced construction of a manufacturing and development facility in Ireland.

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Over the past two years, we have made targeted investments to strengthen our capabilities and enhance and
diversify our commercial and development portfolio. We intend to continue to leverage our commercial, medical
and scientific experience to seek to maximize the potential of our existing and potential products. Our
investments have allowed us to build a scalable infrastructure designed to support future growth and to continue
to create shareholder value.

Our Products

Xyrem® (sodium oxybate) oral solution

Xyrem is the only treatment approved by the FDA for both EDS and cataplexy in patients with narcolepsy.
Sodium oxybate, the active pharmaceutical ingredient in Xyrem, is a formulation of the sodium salt of gamma-
hydroxybutyrate, an endogenous neurotransmitter and metabolite of gamma-aminobutyric acid. Xyrem was
approved for the treatment of cataplexy in patients with narcolepsy in 2002 and was approved for EDS in patients
with narcolepsy in 2005. The American Academy of Sleep Medicine recommended Xyrem as a standard of care
for the treatment of both EDS and cataplexy associated with narcolepsy.

Narcolepsy is a chronic neurological disorder caused by a loss of neurons that produce the neurotransmitter
hypocretin (also known as orexin), which is hypothesized to stabilize sleep-wake states. The primary symptoms
of narcolepsy include EDS, cataplexy, sleep paralysis, hypnogogic hallucinations and disrupted nighttime sleep.
EDS is an essential symptom of narcolepsy, is present in all narcolepsy patients and is characterized by chronic,
pervasive sleepiness as well as sudden irresistible and overwhelming urges to sleep (inadvertent naps and sleep
attacks). Cataplexy, the sudden loss of muscle tone, can be one of the most debilitating symptoms of narcolepsy.
Cataplexy is present in approximately 70% of patients with narcolepsy. Cataplexy can range from slight
weakness or a drooping of facial muscles to the complete loss of muscle tone resulting in postural collapse. It
may also impair a patient’s vision or speech. Cataplexy is often triggered by strong emotions such as laughter,
anger or surprise. Cataplexy can severely impair a patient’s quality of life and ability to function.

Narcolepsy may affect many areas of life, including limiting a patient’s education and employment
opportunities and leading to driving or machinery accidents or difficulties at work resulting in disability or job

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dismissal. Patients with narcolepsy may also suffer from significant medical comorbidities, including social
anxiety disorder, OSA, bipolar disorder, depression, hypercholesterolaemia, diseases of the digestive system,
cardiovascular diseases, upper respiratory tract diseases and hypertension.

It is estimated that narcolepsy affects approximately 1 in 2,000 people in the United States, or

approximately 157,000 people. Less than half of those people have been definitively diagnosed with narcolepsy.
In the fourth quarter of 2013, the average number of patients receiving Xyrem treatment was approximately
11,250 patients in the United States, and we believe that there are significantly more patients with narcolepsy and
cataplexy and/or EDS who might benefit from treatment with Xyrem. In an effort to reach more patients, we are
seeking to expand the base of physicians who prescribe Xyrem through a number of initiatives, including
increased outreach to prescribers who treat narcolepsy and through physician disease education.

In 2013, net product sales of Xyrem were $569.1 million, which represented 65.8% of our total net product

sales.

We promote Xyrem in the United States through a specialty sales force of approximately 100 sales

professionals dedicated to Xyrem. Our marketing, sales and distribution of Xyrem are subject to a risk management
and controlled distribution system, which we refer to as the Xyrem Risk Management Program, that was required in
conjunction with Xyrem’s approval by the FDA to ensure the safe distribution of Xyrem and minimize the risk of
misuse, abuse and diversion of sodium oxybate. Elements of the Xyrem Risk Management Program, adopted in
2002 before the FDA had authority to require a risk evaluation and mitigation strategy, or REMS, are deemed to be
an approved REMS pursuant to the Food and Drug Administration Amendments Act of 2007, or the FDAAA. The
Xyrem Risk Management Program, however, is not in the form that is now required for REMS documents. The
FDAAA requires that deemed REMS and related documents be updated to comply with the current requirements for
REMS documents. We are engaged in ongoing communications with the FDA with respect to our REMS
documents for Xyrem, but we have not reached agreement on certain significant terms. For example, we disagree
with the FDA’s current position that, as part of the current REMS process, the Xyrem deemed REMS should be
modified to enable the distribution of Xyrem through more than one pharmacy, or potentially through retail
pharmacies and wholesalers, as well as with certain modifications proposed by the FDA that would, in the FDA’s
view, make the REMS more consistent with the FDA’s current practices for REMS documents.

The FDA has notified us that it would exercise its claimed authority to modify our REMS and that it would

finalize the REMS as modified by the FDA unless we initiate dispute resolution procedures with respect to the
modification of the Xyrem deemed REMS. Given these circumstances, we will initiate dispute resolution
procedures with the FDA by the end of February 2014. We cannot predict whether, or on what terms, we will
reach agreement with the FDA on final REMS documents for Xyrem, whether we will initiate additional dispute
resolution proceedings with the FDA or other legal proceedings prior to finalizing the REMS documents, or the
outcome or timing of any such proceedings. We expect that final REMS documents for Xyrem will include
modifications to, and/or requirements that are not currently implemented in, the Xyrem Risk Management
Program. Any such modifications or additional requirements could potentially make it more difficult or
expensive for us to distribute Xyrem, make it easier for future generic competitors, and/or negatively affect sales
of Xyrem.

Three companies have notified us that they have filed abbreviated new drug applications, or ANDAs, with

the FDA seeking FDA approval to market a generic version of Xyrem. We initiated lawsuits against each of these
companies, and the litigation proceedings are ongoing. In January 2014, the FDA held an initial meeting with us
and current Xyrem ANDA applicants to facilitate the development of a single shared system REMS for Xyrem
(sodium oxybate). We also expect to face pressure to license or share our Xyrem Risk Management Program,
which is the subject of multiple issued patents, or elements of it, with generic competitors. We cannot predict the
outcome or impact on our business of any future action that we may take with respect to the development of a
single shared system REMS for Xyrem (sodium oxybate), licensing or sharing our REMS, or the FDA’s response
to a certification that a third party had been unable to obtain a license. See the discussion under “Government
Regulation” in this Item 1.

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Under our current Xyrem Risk Management Program, all of the Xyrem sold in the United States must be
shipped directly to patients through a single central pharmacy, Express Scripts Specialty Distribution Services
and its affiliate CuraScript, Inc., or ESSDS. Xyrem may not be stocked in retail pharmacies. Physicians and
patients must enroll in the Xyrem Success Program®, which is part of our Xyrem Risk Management Program,
prior to fulfillment of Xyrem prescriptions. Each physician and patient receives materials concerning the risks
and benefits of the product before the physician can prescribe, or a patient can receive, Xyrem. Whenever a
prescription is received by the central pharmacy, the central pharmacy verifies the prescription and must speak
with the patient before each shipment of Xyrem is sent to the patient. The central pharmacy ships the product
directly to the patient by a courier service, and the patient or his/her designee signs for the package. The initial
shipment may only be for up to a one-month supply, and refill orders may be for up to a three-month supply.
ESSDS also provides reimbursement support to patients by coordinating insurance coverage for Xyrem, and as
applicable, referring qualified patients to various patient savings or assistance programs.

Pursuant to our agreement, ESSDS exclusively distributes Xyrem in the United States and provides
customer support services related to the sales and marketing of Xyrem in the United States. Our agreement,
which has been in effect since July 2002, expires on June 30, 2015, subject to automatic two-year extensions
unless either party provides notice to the other of its intent to terminate the agreement not less than 120 days
before the end of the then current term. Under the agreement, we own all of the standard operating procedures,
business rules and intellectual property, and the agreement provides for ESSDS to assist in the orderly transfer of
the services that ESSDS provides to us and the related intellectual property, including intellectual property
related to the patient database, to any new pharmacy that we may we engage.

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Xyrem is a controlled substance in the United States, and therefore its manufacturing and distribution are
highly restricted. The finished product and active pharmaceutical ingredient for Xyrem are each manufactured
for us by a single source contract manufacturer.

Outside of the United States, we have licensed to UCB Pharma Limited, or UCB, the exclusive right to
market Xyrem for the treatment of narcolepsy in 54 countries in exchange for milestone and royalty payments to
us. UCB currently markets the product in Mexico and 22 countries in Europe. We have licensed to Valeant
Canada Limited, or Valeant, the Canadian marketing rights to Xyrem for the treatment of narcolepsy. We supply
Xyrem to UCB and Valeant.

We have fourteen U.S. patents covering Xyrem, which expire at various times from December 2019 to
June 2024. Our issued patents relate to Xyrem’s stable and microbially resistant formulation, its manufacturing
process and its method of use, including its restricted distribution system. There are currently three Xyrem
ANDA applicants and we are involved in litigation with all three companies. For a description of these matters,
please see Item 3. “Legal Proceedings.”

Erwinaze® (asparaginase Erwinia chrysanthemi)

Erwinaze, a biologic product, is used in conjunction with chemotherapy to treat patients with ALL who have

developed hypersensitivity to E. coli-derived asparaginase. Erwinaze is an asparaginase, a type of enzyme that
can deprive leukemic cells of an amino acid essential for their growth. It is derived from a rare bacterium
(Erwinia chrysanthemi) and is immunologically distinct from E. coli-derived asparaginase and suitable for
patients with hypersensitivity to E. coli-derived treatments. For ALL patients with hypersensitivity to E. coli-
derived asparaginase, Erwinaze is a crucial component of their therapeutic regimen. Erwinaze is currently
approved in the United States for administration via intramuscular injection in conjunction with chemotherapy.
Erwinaze was originally developed by Public Health England, a U.K. national executive agency, or PHE.
Erwinaze was approved by the FDA under a biological license application, or BLA, and was launched in the
United States in November 2011. Outside of the United States, Erwinaze is sold under the name Erwinase
pursuant to marketing authorizations, named patient programs, temporary use authorizations or similar
authorizations in multiple countries in Europe and elsewhere.

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ALL is the most common childhood cancer. Based on data from the U.S. National Cancer Institute, the U.S.

Census Bureau and the American Cancer Society, we estimate that approximately 5,000 to 6,000 new cases of
ALL were diagnosed in the United States in 2013. Approximately 50% of ALL patients were diagnosed under
age 15 and approximately 20% were diagnosed between 15 and 39 years of age, which suggests that
approximately 3,500 to 4,200 ALL patients were pediatric, adolescent and young adults. A study published by
Dana Farber Cancer Institute, with median follow-up of 57 months, concluded that the intensive use of high-dose
asparaginase has an important role in the treatment of children with ALL. Data reported in two papers published
in Pediatric Blood & Cancer and Journal of Clinical Oncology suggest that approximately 20% of ALL patients
develop hypersensitivity to E. coli-derived asparaginase. Current treatment guidelines and protocols recommend
switching a patient receiving E. coli-derived asparaginase to treatment with Erwinaze if the patient’s
hypersensitivity reaction to the E. coli-derived asparaginase is Grade 2-4, indicating that the hypersensitivity
reaction has resulted in an intervention or interruption in infusion occurring in the patient’s treatment regimen.
While pediatric treatment protocols commonly include asparaginase, adult protocols do not. A retrospective
comparison to determine whether the outcome for adolescent and young adult ALL patients differed depending
on their enrollment in pediatric compared with adult cooperative group trials showed that the seven-year overall
survival rate among the adolescent and young adult ALL patients treated on pediatric protocols was 67%
compared to 46% for those patients treated on adult protocols. As more treatment protocols incorporate the use of
asparaginase-based regimens in adult centers, we expect to see increased use of Erwinaze. In addition, we believe
that Erwinaze has the potential for use in patients with silent hypersensitivity, a situation in which E. coli-derived
asparaginase may induce antibodies that can neutralize the enzyme or increase its clearance, thereby depriving
patients of its therapeutic benefits, without manifesting the clinical symptoms of hypersensitivity. In February
2013, a third party introduced an assay to determine the enzyme activity of asparaginase in patients who have
been treated with any E. coli-derived asparaginase or Erwinaze. With this assay, physicians may be able to
monitor asparaginase levels to identify patients with silent hypersensitivity and maintain asparaginase activity by
switching asparaginase preparations. We expect broad adoption of this assay to be limited until its use is included
in existing pediatric and adult treatment protocols.

We promote Erwinaze in the United States through a specialty sales force of approximately 25 sales
professionals. We provide reimbursement support through our JumpStartTM Access & Reimbursement Solutions
program, a dedicated Erwinaze call center. Our field-based and office-based reimbursement team provides
additional reimbursement support, dealing specifically with the more complex needs of physicians and payors.

In Europe and elsewhere around the world, Erwinase is sold pursuant to marketing authorizations, named
patient programs, temporary use authorizations or similar authorizations. By the time of the planned launch of
Defitelio, as described below, our hematology and oncology sales force outside of the United States is expected
to have approximately 35 sales professionals responsible for promoting Erwinase and Defitelio in approved
markets and approximately 15 medical science liaisons and medical directors responsible for responding to
medical information requests and for providing information consistent with local treatment protocols.

In 2013, net product sales of Erwinaze/Erwinase were $174.3 million, which represented 20.1% of our total

net product sales.

Erwinaze is exclusively licensed to us for worldwide marketing, sales and distribution by PHE, which also
manufactures the product for us. PHE is our sole supplier for Erwinaze. We are obligated to make tiered royalty
payments to PHE based on worldwide net sales of Erwinaze and Erwinase.

Although Erwinaze is not covered by any patents, Erwinaze has orphan drug marketing exclusivity in the
United States through 2018 (seven years from its FDA approval), and we expect to receive data exclusivity for
Erwinaze in the United States through 2023 under the U.S. Biologics Price Competition and Innovation Act, or
BPCIA.

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Defitelio® (defibrotide)

Defibrotide, the active pharmaceutical ingredient in Defitelio, is the sodium salt of a complex mixture of
single-stranded oligodeoxyribonucleotides derived from porcine DNA. In in vitro studies, defibrotide has shown
a number of pharmacological effects that suggest it has a role in both protection of the endothelial cells that form
the inner lining of blood vessels and the restoration of the balance between clot formation and breakdown in the
blood.

Gentium historically focused the development of defibrotide on the treatment and prevention of VOD, a

potentially life-threatening complication of HSCT. Stem cell transplantation is a frequently used treatment
modality for hematologic cancers and other conditions in both adults and children. Certain high-dose
conditioning regimens used as part of HSCT can damage the lining cells of hepatic vessels which is thought to
lead to the development of VOD, a blockage of the small vessels in the liver, that leads to liver failure and can
result in significant dysfunction in other organs such as the kidneys and lungs. The condition is also referred to as
“sinusoidal obstruction syndrome.” Severe VOD is the most extreme form of VOD and is associated with multi-
organ failure and high rates of morbidity and mortality. An analysis of retrospective data, prospective cohort
studies and clinical trials published between 1979 and 2007 found that the 100-day mortality rate in severe VOD
cases is greater than 80%. Based on data from published surveys and our market research, we estimate that of the
approximately 35,000 patients undergoing HSCT annually in the EU, approximately 6,300 are considered at high
risk for the development of VOD, and the incidence of VOD is approximately 3,600 patients. Our review of
relevant literature and market research also suggests that about one-third to two-thirds of VOD patients may be
eligible for treatment using defibrotide.

Defibrotide has been granted orphan drug designation to treat severe VOD and to prevent VOD by the FDA,
by the EMA and by the Korean Ministry of Food and Drug Safety. The Commonwealth of Australia-Department
of Health has granted defibrotide orphan drug designation for the treatment of severe VOD. In November 2013,
the EMA also granted orphan drug designation to defibrotide for the prevention of GvHD, another potentially
fatal complication of HSCT that afflicts up to 50% of all donor transplant patients.

In October 2013, the European Commission granted marketing authorization under exceptional

circumstances for Defitelio for the treatment of severe VOD in adults and children undergoing HSCT therapy.
Defitelio is the first approved treatment in the EU for this potentially life-threatening condition. Defitelio has
generally been well-tolerated; the most frequent adverse reactions observed during pre-marketing use of the
product are hemorrhage, hypotension and coagulopathy.

We plan to launch Defitelio in selected EU countries during 2014, and expect to begin these efforts in the

first half of 2014 after Defitelio’s patient registry has been established and is open for recruitment, subject to the
receipt of a positive recommendation by the PRAC on the patient registry design. We are engaged in pricing and
reimbursement submissions in applicable EU countries in preparation for planned launches in those countries.
We intend eventually to promote Defitelio in all EU markets where it has marketing authorization. We expect to
promote Defitelio along with Erwinase to many of the same hematology and oncology specialists, and believe
that we can benefit from the operational synergy in commercializing these products to the same targeted
audience. Defitelio is currently available in approximately 40 countries through ten distribution partnerships on a
named patient basis.

Under a license and supply agreement, Gentium has licensed the rights to commercialize defibrotide for the

treatment and prevention of VOD in North America, Central America and South America, subject to receipt of
marketing authorization in the applicable territory, if any, to Sigma-Tau Pharmaceuticals, Inc., or Sigma-Tau.
Pursuant to the terms of the license and supply agreement, Sigma-Tau has agreed to reimburse us for certain
costs associated with the development of defibrotide. In addition, we are entitled to certain milestone payments
following regulatory approval in the United States and to royalty payments equal to 7% of Sigma-Tau’s net sales
of defibrotide as well as a supply margin equal to the greater of 31% of net sales or €50 (approximately $68) per
unit of defibrotide finished product.

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There are currently no approved treatments for severe VOD in the United States. Defibrotide is being

distributed to patients diagnosed with severe VOD in the United States through an expanded access program
pursuant to a treatment investigational new drug, or IND, protocol. Defibrotide also received Fast Track
designation by the FDA to treat severe VOD. The Fast Track program is designed to enable more frequent
interactions with the FDA during drug development and to expedite the FDA’s review of a new drug candidate.
We are currently assessing what we believe would be the optimal path for potential approval of defibrotide in the
United States.

The drug substance defibrotide was developed and is manufactured in a facility in Italy that we acquired

through the Gentium Acquisition. The finished product is manufactured for us by a single source contract
manufacturer. The unique process of deriving defibrotide from porcine DNA is extensive and uses both chemical
and biological processes which rely on complex characterization methods. We have a portfolio of U.S. and non-
U.S. patents and patent applications relating to various compositions of defibrotide, methods of use and methods
of characterization, which will expire at various times between April 2017 and June 2032.

Prialt® (ziconotide) intrathecal infusion

Prialt is an intrathecally administered infusion of ziconotide, approved by the FDA in December 2004 for

the management of severe chronic pain in patients for whom intrathecal therapy is warranted, and who are
intolerant of or refractory to other treatment, such as systemic analgesics, adjunctive therapies or intrathecal
morphine. Intrathecal therapy is the delivery of the drug into the intrathecal space in the spine through an
infusion system comprised of a programmable infusion pump and catheter. Ziconotide is a synthetic neuroactive
peptide known as conotoxin and is the synthetic equivalent of a naturally-occurring conopeptide found in the
piscivorous marine snail, Conus Magus. Ziconotide is thought to inhibit pain signals transmitted via N-type
calcium channels, most densely located in the dorsal horn of the spinal cord, although the precise mechanism of
action in humans is unknown. For most patients who achieve good pain relief and tolerability with Prialt, pain
relief can be maintained over time without cumulative toxicity. Prialt is the only FDA-approved non-opioid
intrathecal analgesic.

Azur Pharma acquired the rights to Prialt from Elan Pharmaceuticals, Inc. (subsequently acquired by Perrigo

Company plc), or Elan, in May 2010. Pursuant to an asset purchase agreement executed between Azur Pharma
and Elan in April 2010, Azur Pharma acquired worldwide rights to Prialt excluding those territories licensed by
Elan to Eisai Co. Limited, or Eisai, which consist of 34 countries outside of the United States, mainly in Europe.
We supply Prialt to Eisai. Azur Pharma paid Elan $5 million on the closing of the transaction, with an additional
$12 million in deferred payments, which we paid to Elan in 2012. We are also obligated to pay up to a maximum
aggregate amount of $120 million in tiered contingent payments, with the first such payment becoming due if net
sales of at least $75 million are achieved in a calendar year, as well as a tiered royalty payment in the teens based
on net sales.

We promote Prialt through a specialty sales force of approximately 30 sales professionals. We use a
centralized distribution system for Prialt, the NAVIGATOR Reimbursement and Access ProgramTM. This
distribution system provides a simplified single point of access to Prialt, offering reimbursement and insurance
support that is intended to reduce the burden on physicians and patients and providing information and support
through a dedicated Prialt call center outsourced to a third party vendor. Our field-based reimbursement team
provides additional support, dealing specifically with the more complex needs of physicians and payors. In 2013,
we expanded our collaboration with Medtronic Inc., the maker of SynchroMed® II programmable implantable
pumps approved by the FDA for use with Prialt, to enhance our ability to access physicians and provide
education regarding the use of Prialt.

The finished product and active pharmaceutical ingredient are each manufactured for us by a single source

contract manufacturer. We have three U.S. patents covering Prialt, which will expire from June 2015 to
December 2016.

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Psychiatry Products

We market FazaClo HD and FazaClo LD, each of which is an orally disintegrating tablet formulation of

clozapine that is indicated for the management of severely ill schizophrenic patients who fail to respond
adequately to standard drug treatment for schizophrenia and for reduction in the risk of recurrent suicidal
behavior in patients with schizophrenia or schizoaffective disorder who are judged to be at chronic risk for
re-experiencing suicidal behavior, based on history and recent clinical state. FazaClo LD, comprising the original
three lower dosage strength presentations, was approved by the FDA in February 2004 with respect to the 25mg
and 100mg tablets and in May 2007 for the 12.5mg tablets. Azur Pharma acquired the rights to FazaClo LD from
Avanir Pharmaceuticals, Inc., or Avanir, in August 2007. FazaClo HD, comprising the two high dosage strengths
of 150mg and 200mg tablets, was developed by Azur Pharma and received FDA approval in July 2010.

In February 2014, we launched Versacloz, an oral suspension formulation of clozapine, for treatment-
resistant schizophrenia and for reducing the risk of recurrent suicidal behavior in patients with schizophrenia or
schizoaffective disorders. Versacloz was approved by the FDA for both indications in February 2013. In
February 2010, Azur Pharma entered into a license and supply agreement with Douglas Pharmaceuticals America
Limited, or Douglas Pharmaceuticals, and obtained an exclusive license to market, distribute and sell Versacloz
in the United States and Mexico from Douglas Pharmaceuticals. The initial term of the license and supply
agreement expires 10 years after the first commercial sale of Versacloz in the United States, subject to automatic
extension for additional five-year terms unless terminated by either party subject to certain conditions.

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According to Symphony Health Solutions, the U.S. clozapine market is dominated by generics, which
accounted for approximately 95.3% of clozapine prescription volumes in 2013. Our FazaClo HD and FazaClo
LD products accounted for approximately 1.3% and 3.4%, respectively, of clozapine prescription volumes in
2013. An authorized generic version of FazaClo LD launched in August 2012. Other clozapine generics are
referenced to Clozaril, a standard immediate release tablet formulation of clozapine from Novartis
Pharmaceuticals Corporation. FazaClo HD and FazaClo LD incorporate the DuraSolv® orally disintegrating
tablet technology that we license from CIMA Labs Inc., or CIMA, now a subsidiary of Teva Pharmaceutical
Industries Limited, or Teva, which enables the products to dissolve without the need to chew or to swallow with
water. FazaClo HD and FazaClo LD (including its authorized generic version) are currently the only orally
disintegrating tablet formulations of clozapine available in the United States. Versacloz is currently the only oral
suspension formulation of clozapine available in the United States.

Versacloz is sold under an approved REMS. FazaClo HD and FazaClo LD are sold under a risk

management plan in the United States. One element of the risk management plan for FazaClo HD and FazaClo
LD is a patient registry. The FDA requires that patients being prescribed any clozapine product, including
FazaClo HD, FazaClo LD and Versacloz, must be enrolled in an FDA-approved patient registry, a database
monitoring patients’ white blood cell counts and absolute neutrophil counts to permit early detection of
clozapine-induced leukopenia or agranulocytosis. The authorized generic form of FazaClo LD is part of the
FazaClo HD and FazaClo LD patient registry. Similarly, as part of the REMS for Versacloz, patients who are
prescribed Versacloz are required to be enrolled in the Versacloz patient registry.

The FazaClo HD and FazaClo LD risk management plan is not in the form that is now required for a REMS.

In 2012, the FDA notified us, along with other holders of applications for products containing clozapine, that a
single shared system should be used to implement the REMS for this entire class of products, including
Versacloz. We are working with other manufacturers of clozapine products to address the FDA’s requirements.

We promote FazaClo HD, FazaClo LD and Versacloz in the United States through a specialty sales force of

approximately 25 sales professionals, with the support of our in-house registry team and a team of clinical
compliance liaisons, who provide patient registry support services for FazaClo HD, FazaClo LD and Versacloz.

FazaClo HD and FazaClo LD are covered by three U.S. formulation patents. All are licensed by us, one
from Ethypharm S.A., expiring in December 2017, and the other two from CIMA, expiring April 2018. The

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patentability of certain claims of two formulation patents that we license from CIMA and which cover FazaClo
HD and FazaClo LD were confirmed by the U.S. Patent and Trademark Office, or the USPTO, in 2013.
Versacloz is covered by a U.S. formulation patent and a pending U.S. patent application that we license from
Douglas Pharmaceuticals. The patent expires in May 2028. We have single source third party suppliers for each
of FazaClo LD, FazaClo HD and Versacloz.

Three generic manufacturers have filed ANDAs requesting approval to market generic versions of FazaClo

LD, and one of them, Teva, has also submitted an ANDA requesting approval to market a generic version of
FazaClo HD. Azur Pharma brought lawsuits against each of them and settled the lawsuit with Teva in 2011. In
the settlement agreement, Azur Pharma granted a sublicense to an affiliate of Teva of Azur Pharma’s rights to
have manufactured, market and sell a generic version of both FazaClo LD and FazaClo HD, as well as an option
for supply of authorized generic product. The sublicenses for FazaClo LD commenced in July 2012, and the
sublicense for FazaClo HD will commence in May 2015, or earlier upon the occurrence of certain events. Teva
exercised its option for supply of an authorized generic product for FazaClo LD and launched the authorized
generic product in August 2012.

Research and Development

Our development pipeline projects currently include clinical development of new product candidates, line

extensions for existing products and the generation of additional clinical data for existing products. These
projects are concentrated in our sleep and hematology and oncology therapeutic areas, where we believe we will
be able to leverage our existing specialty commercial expertise and infrastructure, as well as our strong clinical,
medical and commercial teams.

In the sleep area, we have two product candidates under development.

•

•

JZP-110. JZP-110 is a novel, investigational compound in clinical development for the treatment of
EDS in patients with narcolepsy. While the mechanism of action is not fully understood, the molecule
has demonstrated wake-promoting properties in pre-clinical and clinical studies. We intend to pursue
Phase 3 clinical trials in the treatment of EDS in patients with narcolepsy, as well as EDS in patients
with OSA. We plan to discuss our development plans with the FDA and intend to initiate our Phase 3
clinical program for JZP-110 as quickly as practicable thereafter, subject to the availability of clinical
trial materials. In January 2014, we entered into an asset purchase agreement with Aerial to acquire the
worldwide development, manufacturing and commercial rights to JZP-110, other than in certain
jurisdictions in Asia where SK Biopharmaceuticals Co., Ltd, or SK, retains rights. Under the
agreement, we made an upfront payment totaling $125 million in January 2014 and are also obligated
to make certain milestone payments, in an aggregate amount of up to $272 million, based on
development, regulatory and sales milestones and to pay tiered royalties from high single digits to
mid-teens based on potential future sales of JZP-110.

JZP-386. We are conducting pre-clinical research and development work on JZP-386, a deuterium-
modified analog of sodium oxybate, the active pharmaceutical ingredient in Xyrem. We licensed
JZP-386 from Concert in February 2013, for potential use in patients with narcolepsy. We submitted an
investigational medicinal product dossier, or IMPD, for JZP-386 in Europe at the end of 2013 and
received approval of the IMPD in January 2014. We intend to begin our first study of JZP-386 in
humans in 2014, subject to the availability of clinical trial materials.

In the hematology and oncology area, we are conducting several clinical studies as well as evaluating one

compound for further development.

•

Asparec. We are conducting a Phase 1 clinical trial in Europe of Asparec, a pegylated recombinant
Erwinia asparaginase being developed for the treatment of patients with ALL with E. coli asparaginase
hypersensitivity. In June 2013, the FDA granted Fast Track designation to the investigation of Asparec
for the treatment of ALL. We have reviewed our development plans with the FDA and are working

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with investigators to initiate our first study of Asparec in children. We license worldwide rights to
develop and commercialize Asparec from Alizé Pharma II, or Alizé Under our license agreement with
Alizé, we are subject to contractual obligations to meet certain development milestones within certain
timeframes.

Defibrotide. A prior new drug application, or NDA, submission by Gentium seeking approval in the
United States for defibrotide for the treatment of severe VOD was voluntarily withdrawn from
consideration in order to address issues raised by the FDA. We are currently assessing what we believe
would be the optimal path for potential approval of defibrotide in the United States, which may include
filing a new application with existing clinical data or generating additional clinical data before a new
application is ready for submission and FDA review. We are also assessing the potential for approval
of defibrotide in other countries and for additional development of defibrotide in other indications. For
example, prior to the Gentium Acquisition, Gentium had completed a randomized controlled study of
defibrotide for the prevention of VOD in pediatric HSCT patients.

Erwinaze. We are preparing to initiate a clinical trial to further evaluate the use of Erwinaze in young
adults age 18 to 39 with ALL who are hypersensitive to E. coli-derived asparaginase. We have
identified a principal investigator for this study, have finalized the study protocol and will begin the
process of identifying, recruiting and initiating study sites. We expect to begin this planned trial in the
first half of 2014. In 2013, we also completed a pharmacokinetic clinical trial of the intravenous
administration of Erwinaze in North America. Based on data collected in the study, which met the
primary end point, we submitted an amendment to the Erwinaze BLA to the FDA to allow intravenous
administration of Erwinaze. The FDA determined that the data should be submitted as a supplemental
BLA, or sBLA, and refused to file the initial submission. As a result, we plan to resubmit the data as an
sBLA in the first quarter of 2014.

Leukotac. We are also conducting a Phase 3 clinical trial in Europe of Leukotac (inolimomab), an
anti-CD25 monoclonal antibody for the treatment of steroid-refractory acute GvHD. We acquired the
rights to Leukotac from Biotest AG.

•

•

•

For the years ended December 31, 2013, 2012 and 2011, we recorded $46.6 million, $20.5 million and
$14.1 million, respectively, in research and development expenses. For 2014 and beyond, we expect that our
research and development expenses will increase substantially from these historical levels, particularly as we
initiate our various planned clinical trials and development work.

Sales and Marketing

Our commercial activities in the United States are dedicated to our marketed products Xyrem, Erwinaze,
Prialt, FazaClo HD, FazaClo LD and Versacloz, as well as providing support for sales of certain of our other
products. We currently have approximately 180 trained, experienced sales professionals who detail our marketed
products to physicians in specialties appropriate for each marketed product in the United States.

In Europe, we promote Erwinase to hematology and oncology specialists. By the time we begin our planned

launch of Defitelio in selected EU countries, our hematology and oncology team is expected to have
approximately 35 hematology field specialists responsible for promoting Erwinase and Defitelio in approved
markets, and we believe that we can benefit from the operational synergy of commercializing these products to
the same targeted audience. In markets where Erwinase is not currently approved, approximately 15 medical
science liaisons and medical directors are responsible for responding to medical information requests and for
providing information consistent with local treatment protocols. In addition, we sell products in oncology,
oncology supportive care and critical care outside of the United States through a network of local distributors and
wholesalers in more than 80 countries.

Our commercial activities include marketing and related services and commercial support services. We also

employ third party vendors, such as advertising agencies, market research firms and suppliers of marketing and
other sales support related services, to assist with our commercial activities.

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We currently have a relatively small number of sales representatives compared with the number of sales

representatives of most other pharmaceutical companies with marketed products. Each of our sales
representatives is responsible for a territory of significant size. We believe that the size of our sales force is
appropriate to effectively reach our target audience for our marketed products in the specialty markets in which
we currently operate. Continued growth of our current products and the launch of any future products may
require expansion of our sales force and sales support organization in the United States and internationally, and
we may need to commit significant additional funds, management and other resources to the growth of our sales
organization.

Competition

The pharmaceutical industry is highly competitive and characterized by a number of established, large
pharmaceutical companies as well as specialty pharmaceutical companies that market neurology, oncology, pain,
psychology and other products. Many of these companies, particularly large pharmaceutical and life sciences
companies, have substantially greater financial, operational and human resources than we do. They can spend
more on, and have more expertise in, research and development, regulatory, manufacturing, distribution and sales
activities. As a result, our competitors may obtain FDA, European Commission or other regulatory approvals for
their product candidates more rapidly than we may and may market their products more effectively than we do.
Smaller or earlier stage companies may also prove to be significant competitors, particularly through
collaborative arrangements with large, established companies.

Our ability to continue to grow requires that we compete successfully with other specialty pharmaceutical

companies for product and product candidate acquisition and in-licensing opportunities. Some of these
competitors include Endo Health Solutions Inc., Forest Laboratories, Inc., Shire Pharmaceuticals, Inc., Teva and
Valeant. These established companies may have a competitive advantage over us due to their size and financial
resources.

We also face competition from manufacturers of generic drugs. Generic competition often results in
decreases in the prices at which branded products can be sold, particularly when there is more than one generic
available in the marketplace. In addition, legislation enacted in the United States allows for, and in a few
instances in the absence of specific instructions from the prescribing physician mandates, the dispensing of
generic products rather than branded products where a generic version is available.

Our products and product candidates may also compete in the future with new products currently under
development by others. Any products that we develop are likely to be in a highly competitive market, and many
of our competitors may succeed in developing products that may render our products obsolete or noncompetitive.
In particular, our marketed products and product candidates face competition as described below:

•

Xyrem® (sodium oxybate) oral solution. Xyrem is the only product approved for the treatment of both
cataplexy and EDS in patients with narcolepsy. No product other than Xyrem is approved for the
treatment of cataplexy. The only other products approved by the FDA for the treatment of EDS in
patients with narcolepsy are Provigil® (modafinil) and Nuvigil® (armodafinil), which are marketed by
Teva, and the generic versions of Provigil. Provigil, its generic equivalents and Nuvigil are also
approved for improving wakefulness in patients with EDS associated with treated OSA or shift work
disorder. Xyrem is often used in conjunction with stimulants and wake-promoting drugs, which are
administered during the day.

As alternatives to Xyrem, cataplexy is often treated with tricyclic antidepressants and selective
serotonin reuptake inhibitors, or SSRIs, or selective norepinephrine reuptake inhibitors, or SNRIs,
although these products are not approved by the FDA for the treatment of cataplexy. Tricyclic
antidepressants are a class of antidepressant drugs first used in the 1950s. The use of these drugs can
often result in somnolence, which exacerbates the EDS already experienced by all patients with
narcolepsy. SSRIs and SNRIs are compounds typically used for the treatment of clinical depression.

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Somnolence and insomnia are commonly reported side effects with SSRIs, while loss of sleep is a
commonly reported side effect with SNRIs. These side effects may be problematic for patients with
narcolepsy.

Three companies have notified us that they have filed abbreviated new drug applications, or ANDAs, with

the FDA seeking FDA approval to market a generic version of Xyrem. We initiated lawsuits against each of these
companies, and the litigation proceedings are ongoing. If generic products that compete with Xyrem are
approved and launched, sales of Xyrem would be adversely affected.

•

•

•

•

Erwinaze® (asparaginase Erwinia chrysanthemi). Erwinaze is a biologic product used in conjunction
with chemotherapy and is indicated for patients with ALL who have developed hypersensitivity to
E. coli-derived asparaginase. While there is currently no direct competition to Erwinaze to treat ALL
patients with hypersensitivity to E. coli-derived asparaginase, other companies are developing new
treatments for ALL, including new asparaginase treatments that could reduce the rate of
hypersensitivity in patients with ALL and new treatment protocols for ALL that may not include
asparaginase-containing regimens. Any of these potential new treatments could reduce the market for
Erwinaze. As a biologic product, Erwinaze also faces potential competition from biosimilar products.

Defitelio® (defibrotide). Defitelio is the first approved treatment in the EU for the treatment of severe
VOD in HSCT. Various anti-clotting strategies have been tried by researchers with mixed results,
including Activase (Alteplase), a recombinant tissue plasminogen activator, marketed by Genentech,
Inc., generic heparin sodium injection, and Thrombate III (antithrombin III (human)), marketed by
Grifols Therapeutics, Inc. While there is currently no direct competition to Defitelio to treat severe
VOD, changes in the types of conditioning regimens used as part of HSCT may affect the incidence
rate of VOD and demand for Defitelio.

Prialt® (ziconotide) intrathecal infusion. Prialt is the only FDA-approved non-opioid intrathecal
analgesic. It competes with intrathecally administered morphine, which is the only other product
approved by the FDA for the intrathecal treatment of severe chronic pain. Other drugs are also used
intrathecally by physicians, including hydromorphone, clonidine, baclofen and sufentanil.

FazaClo® HD (clozapine, USP) and FazaClo LD (clozapine, USP) Orally Disintegrating Tablets and
VersaclozTM (clozapine) oral suspension. FazaClo HD, FazaClo LD and the authorized generic version
of FazaClo LD launched in 2012 are the only orally disintegrating tablet formulations of clozapine
available. FazaClo HD and FazaClo LD compete against the authorized generic of Fazaclo LD.
Versacloz is currently the only oral suspension formulation of clozapine available in the United States.
The substantial majority of prescriptions for clozapine are generic tablets, which also compete with
FazaClo HD, FazaClo LD and Versacloz. In addition, prior to prescribing clozapine, most physicians
choose other branded products as treatment options, including Latuda® (lurasidone hydrochloride),
marketed by Sunovion Pharmaceuticals Inc., Risperdal® Consta® (risperidone), marketed by Janssen
Pharmaceuticals, Inc., Seroquel® (quetiapine fumarate), marketed by AstraZeneca Pharmaceuticals LP,
and Zyprexa® (olanzapine), marketed by Lilly USA, LLC.

With respect to all of our products and product candidates, we believe that our ability to successfully

compete will depend on, among other things:

•

•

•

•

•

the existence of competing or alternative products in the marketplace, including generic competition,
and the relative price of those products;

the efficacy, safety and reliability of our products and product candidates compared to competing or
alternative products;

product acceptance by physicians, other health care providers and patients;

protection of our proprietary rights;

obtaining reimbursement for our products in approved indications;

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•

•

•

our ability to complete clinical development and obtain regulatory approvals for our product
candidates, and the timing and scope of regulatory approvals;

our ability to supply commercial quantities of a product to the market; and

our ability to recruit, retain and develop skilled employees.

Customers and Information About Geographic Areas

In the United States, Xyrem is sold to one specialty pharmacy, ESSDS, which ships Xyrem directly to
patients, Erwinaze is sold through an exclusive wholesaler and distributor, Accredo Health Group, Inc., to
hospitals, and Prialt is sold through an exclusive wholesale distributor and pharmacy, BioScrip, Inc., to medical
facilities. The other products that we sell in the United States are sold primarily to distributors who distribute the
product to pharmacies and hospitals. In 2013, the principal distributors for our other products in the United States
were Cardinal Health, Inc., McKesson Corporation and AmerisourceBergen Corporation and its subsidiary,
Integrated Commercialization Solutions Inc. We have standard industry agreements made in the ordinary course
of business with these distributors, which include prompt payment discounts and various standard fee or rebate
arrangements. Purchases are made on a purchase order basis.

Outside of the United States, UCB has rights to market Xyrem in 54 countries and Valeant has rights for

Canada. Xyrem is currently sold in 23 countries by UCB and in Canada by Valeant. We distribute Erwinase
through Durbin PLC, a U.K. based wholesaler and distributor, to hospitals and local wholesalers in Europe where
we market Erwinase directly and, in markets where we do not market Erwinase directly, to local distributors and
wholesalers in Europe and elsewhere in the world. We plan to launch Defitelio in the EU during 2014 and
initially expect to continue to distribute Defitelio through Gentium’s legacy distribution partner IDIS Ltd, a U.K.
based company. We also sell other products both directly and through local distributors and wholesalers in
Europe and elsewhere in the world in accordance with local regulatory approval status. Eisai has rights to market
Prialt in 34 countries outside of the United States. While we retain the rights to Prialt in the rest of the non-U.S.
territories, we are not currently selling the product outside of the United States. We do not have rights outside of
the United States to our psychiatry products.

Information on our total revenues attributed to United States and non-U.S. sources and customers who
represented at least 10% of our total revenues in each of 2013, 2012 and 2011, as well as the location of our long-
lived assets, is included in Note 14 to our consolidated financial statements.

Our worldwide headquarters are in Dublin, Ireland, and we have offices in Philadelphia, Pennsylvania and

Palo Alto, California in the United States, as well as in Oxford, United Kingdom, Lyon, France, Villa Guardia
(Como), Italy, Zug, Switzerland and elsewhere in Europe.

Manufacturing

Other than the manufacturing plant in Italy where we produce some active pharmaceutical ingredients,
including the defibrotide drug substance, discussed in more detail below, we do not currently have our own
manufacturing capability for our products or product candidates, or their active pharmaceutical ingredients, or the
capability to package our products. Currently, we have a single source of supply for each of our marketed
products and for the active pharmaceutical ingredients used in these products. Our ability to develop and deliver
products in a timely and competitive manner depends on our third party suppliers and manufacturers being able
to continue to meet our ongoing commercial needs (except with respect to the defibrotide drug substance, which
we manufacture for ourselves). Manufacturers of pharmaceutical products often encounter difficulties in
production, including difficulties with production yields, process controls, quality control and quality assurance,
including testing of stability, impurities and impurity levels and other product specifications by validated test
methods, and compliance with strictly enforced U.S., state and non-U.S. regulations. These difficulties can be
heightened when a supplier or manufacturer is required to scale up to produce increased quantities to meet
growing demand.

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In April 2010, we entered into an agreement with Siegfried (USA) Inc., subsequently renamed Siegfried

USA, LLC, or Siegfried, for the supply of sodium oxybate, the active pharmaceutical ingredient of Xyrem.
Siegfried was approved by the FDA as our supplier in November 2011. Although Siegfried has been our only
supplier of sodium oxybate since 2012, we have the right to purchase a portion of our worldwide requirements of
sodium oxybate from other suppliers. Under our agreement, we provide periodic rolling forecasts to Siegfried,
and a portion of each rolling forecast constitutes a firm purchase order. The agreement with Siegfried expires in
April 2018, subject to automatic three-year extensions until either party provides notice to the other of its intent
to terminate the agreement at least 18 months before the end of the then-current term. Either party has the right to
terminate the agreement in the event of the other party’s uncured material breach or insolvency. During the term
of the agreement and, under certain circumstances for 18 months after the agreement terminates, Siegfried is not
permitted to manufacture sodium oxybate for any other company.

We have an exclusive agreement with Patheon Pharmaceuticals, or Patheon, which became effective in
2008, under which we have agreed to purchase exclusively from Patheon (except in very limited circumstances),
and Patheon has agreed to manufacture, supply and package, our worldwide supply of Xyrem. The current term
of the agreement with Patheon, which is our sole supplier of Xyrem, extends until July 2016 and may be
extended, at our option, for additional two-year terms with written notice at least twelve months before the end of
the then current term. Either party has the right to terminate the agreement in the event of the other party’s
uncured material breach or insolvency.

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Quotas from the U.S. Drug Enforcement Administration, or DEA, are required in order to manufacture and

package sodium oxybate and Xyrem. DEA quotas are required for Siegfried to supply us with sodium oxybate
and for Patheon to supply us with Xyrem. Since the DEA typically grants quota on an annual basis and requires a
detailed submission and justification for a quota request, obtaining a sufficient DEA quota can be a difficult and
time-consuming process. The need for quota has prevented us in the past, and may prevent us in the future, from
building significant inventories. For information related to this quota requirement by the DEA, see “Government
Regulation—U.S. Regulations—Other Regulatory Requirements” in this Item 1.

Erwinaze is exclusively licensed to us, and manufactured for us, by PHE, which is our sole supplier for
Erwinaze. The agreement with PHE expires in December 2020, subject to automatic extension for additional five-
year periods unless terminated by either party in writing prior to a fixed date before the end of the then-current term.
Either party has the right to terminate the agreement in the event of the other party’s uncured material breach or
insolvency. We provide periodic rolling forecasts to PHE, and a portion of each rolling forecast constitutes a firm
purchase order. We are obligated to make tiered royalty payments to PHE based on worldwide net sales of Erwinaze
and Erwinase. The BLA approving Erwinaze includes a number of post-marketing commitments related to the
manufacture of Erwinaze by PHE. We have limited inventory of Erwinaze, and, during 2013, our supply of
Erwinaze was nearly completely absorbed by demand for the product. In the past, we have experienced a disruption
of supply of Erwinase in the European market due to manufacturing challenges, including shortages related to the
failure of a batch to meet certain specifications in 2013, and we may experience similar or other manufacturing
challenges in the future. If our continued efforts to avoid supply shortages are not successful, we could experience
Erwinaze supply interruptions in the future, which could have a material adverse effect on our sales of and revenues
from Erwinaze and limit our potential future maintenance and growth of the market for this product. In addition,
while we continue to work with PHE to evaluate potential steps to increase the supply of Erwinaze over the longer
term to address expected growing worldwide demand, our ability to increase sales of Erwinaze may be limited by
our ability to obtain an increased supply of the product.

Furthermore, if PHE experiences a disruption in supply or capacity constraints as a result of increased
demand, we do not have the right to engage a backup supplier for Erwinaze except in very limited circumstances,
such as following the termination of the agreement by us due to the uncured material breach by PHE or the
cessation of PHE’s business. If we are required to engage a backup or alternative supplier, the transfer of
technical expertise and manufacturing process to the backup or alternative supplier would be difficult, costly and
time-consuming and would increase the likelihood of a delay or interruption in manufacturing or a shortage of
supply of Erwinaze.

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We manufacture the defibrotide drug substance at our manufacturing plant in Italy. We are our sole supplier

of defibrotide and do not believe there is another producer of defibrotide currently available. There is an
agreement in place with a single third party supplier based in Italy to process the defibrotide drug substance into
its finished vial form for our commercial supply for the planned launch of Defitelio in the EU and for our future
clinical supply.

We are in the process of changing our supplier for ziconotide, the active pharmaceutical ingredient in Prialt,
and have commenced the transfer to the new supplier. We believe that we have sufficient supply of ziconotide to
meet our commercial requirements for finished product for a number of years, which we expect to be sufficient
time to complete the transfer to the new supplier. In addition, our new manufacturer of finished product was
approved by the FDA in December 2012 and started to supply us with Prialt finished product in January 2014.

For FazaClo HD, FazaClo LD and Versacloz, we have single sources of supply for both the active

pharmaceutical ingredient and finished product, and should it become necessary to change suppliers, the process
could take two years or longer.

We are in the process of identifying a supplier for JZP-110. In order to commence our planned Phase 3
clinical programs, we need to have sufficient quantity of JZP-110 manufactured. In addition, we rely on Concert
to transfer its manufacturing methods to us and our contract manufacturers to produce sufficient quantity of JZP-
386 required for our planned first study in humans. We believe that we will be able to obtain sufficient supplies
of JZP-110 and JZP-386 before the commencement of the applicable planned clinical trials. Any delay in
receiving sufficient supplies of JZP-110 or JZP-386 for our planned studies could negatively impact our
development programs.

Our active pharmaceutical ingredient and finished product manufacturers may not be able to continue to

meet our requirements for quality, quantity and timeliness. In addition, our manufacturers and suppliers are
subject to the FDA’s current Good Manufacturing Practices, or cGMP, requirements, DEA regulations and other
rules and regulations prescribed by non-U.S. regulatory authorities. We depend on our third party suppliers and
manufacturers for continued compliance with these requirements, and they may not be able to do so.

Government Regulation

The research, testing, manufacturing, labeling, packaging, adverse event reporting, storage, advertising,
promotion, sale, distribution, recordkeeping, importing and exporting of pharmaceutical products are subject to
extensive regulation by the FDA, the European Commission and other regulatory authorities, and regulations
differ from country to country. In the United States, the FDA, under the Federal Food, Drug and Cosmetic Act,
or FDCA, and its implementing regulations, regulates the review, approval, manufacturing and marketing of
pharmaceutical products. We are not permitted to market medicines in the United States or in the EU member
states until we receive approval from the FDA, the European Commission or the competent authorities of the EU
member states, respectively, generally of an NDA or a BLA, or their non-U.S. equivalent. The application must
contain information demonstrating the quality, safety and efficacy of the pharmaceutical product, including data
from preclinical and clinical trials, information pertaining to the preparation and manufacture of the drug or
biologic, analytical methods, product formulation, details on the manufacture of finished products, proposed
product packaging, labeling and information concerning the stability of the drug or biologic.

Xyrem is also regulated as a controlled substance and is subject to additional regulation by the DEA under

the Controlled Substances Act, or CSA, and its implementing regulations. Similarly, Xyrem is regulated as a
controlled substance in accordance with the national laws of the EU member states and Canada.

Failure of us or any of our third party partners to comply with applicable requirements could subject us to

administrative or judicial sanctions or other negative consequences, such as delays in approval or refusal to
approve a product candidate, withdrawal of product approval, notices of violation, untitled letters, warning

16

letters, fines and other monetary penalties, unanticipated expenditures, product recall or seizure, total or partial
suspension of production or distribution, interruption of manufacturing or clinical trials, operating restrictions,
injunctions, suspension of licenses, civil penalties and/or criminal prosecution.

U.S. Regulations

Drug and Biologic Approval Process

To obtain FDA approval of a product candidate, an applicant, also called a sponsor, must, among other
things, submit the results of preclinical and clinical trials with data supporting safety and efficacy, together with,
among other things, detailed information on the manufacture and composition of the product candidate and
proposed labeling. The submission is in the form of an NDA or BLA, as applicable, and includes payment of a
user fee.

The testing and collection of data and the preparation of necessary applications are expensive and time-
consuming. The steps required before a drug or biologic may be approved for marketing in the United States
generally include: preclinical laboratory tests and animal tests; submission to the FDA of an IND for human
clinical testing, which must become effective before human clinical trials commence; adequate and well-
controlled human clinical trials to establish the safety and efficacy of the drug or biologic for each indication; the
submission to the FDA of a marketing application; satisfactory completion of an FDA inspection of the
manufacturing facilities at which the product is made, analyzed and stored to assess compliance with cGMP;
potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the application;
and FDA review and approval of the application.

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The FDA reviews all applications submitted before it accepts them for filing and may request additional

information rather than, or before, accepting an NDA or BLA for filing. For example, a prior NDA submission
for defibrotide in the United States was voluntarily withdrawn from consideration in order to address issues
raised by the FDA. We are currently assessing what we believe would be the optimal path for potential approval
of defibrotide in the United States.

Once an NDA or BLA submission is accepted for filing, the FDA begins an in-depth review of the
application. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or
PDUFA, the FDA has twelve months from submission in which to complete its initial review of a standard
application and respond to the applicant, and eight months for a priority application. The FDA does not always
meet its PDUFA goal dates, and in certain circumstances the PDUFA goal date may be extended. The FDA may
not act quickly or favorably in reviewing applications, and we may encounter significant difficulties or costs in
any efforts to obtain FDA approvals, which could delay or preclude us from marketing our product candidates.

If the FDA determines that a REMS is necessary to ensure that the benefits of the drug outweigh the risks, a

sponsor may be required to include, as part of the application or after approval, a proposed REMS, which may
include a patient package insert or a medication guide to provide information to consumers about the product’s
risks and benefits, a plan for communication to healthcare providers, and restrictions on the product’s distribution
referred to as “elements to assure safe use,” or ETASU. For example, Xyrem is required to have a REMS.
Elements of the Xyrem Risk Management Program, adopted in 2002 before the FDA had authority to require
REMS, are deemed to be an approved REMS pursuant to the FDAAA. The Xyrem Risk Management Program,
however, is not in the form that is now required for REMS documents. The FDAAA, which amended the FDCA,
requires that deemed REMS and related documents be updated to comply with the current requirements for
REMS documents. We are engaged in ongoing communications with the FDA with respect to our REMS
documents for Xyrem, but we have not reached agreement on certain significant terms. For example, we disagree
with the FDA’s current position that, as part of the current REMS process, the Xyrem deemed REMS should be
modified to enable the distribution of Xyrem through more than one pharmacy, or potentially through retail
pharmacies and wholesalers, as well as with certain modifications proposed by the FDA that would, in the FDA’s
view, make the REMS more consistent with the FDA’s current practices for REMS documents.

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The FDA has notified us that it would exercise its claimed authority to modify our REMS and that it would

finalize the REMS as modified by the FDA unless we initiate dispute resolution procedures with respect to the
modification of the Xyrem deemed REMS. Given these circumstances, we will initiate dispute resolution
procedures with the FDA by the end of February 2014. We cannot predict whether, or on what terms, we will
reach agreement with the FDA on final REMS documents for Xyrem, whether we will initiate additional dispute
resolution proceedings with the FDA or other legal proceedings prior to finalizing the REMS documents, or the
outcome or timing of any such proceedings. We expect that final REMS documents for Xyrem will include
modifications to, and/or requirements that are not currently implemented in, the Xyrem Risk Management
Program. Any such modifications or additional requirements could potentially make it more difficult or
expensive for us to distribute Xyrem, make it easier for future generic competitors, and/or negatively affect sales
of Xyrem. See the discussion below regarding REMS in the context of potential generic competition under “The
Hatch-Waxman Act” and in the risk factor in Item 1A entitled “The manufacture, distribution and sale of Xyrem
are subject to significant regulatory oversight and restrictions and the requirements of a risk management
program, and these restrictions and requirements subject us to increased risks and uncertainties, any of which
could negatively impact sales of Xyrem.”

FazaClo HD and FazaClo LD are sold under one risk management plan in the United States and Versacloz is

sold under an approved REMS, each involving a patient registry. In 2012, the FDA notified us, along with other
holders of applications for products containing clozapine, that a single shared system should be used to
implement the REMS for this entire class of products. We are working with other manufacturers of clozapine
products to address the FDA’s requirements.

After the FDA evaluates a marketing application, including a REMS program when applicable, it also
evaluates any manufacturing facilities for the proposed product. When the FDA’s evaluation is complete, it
issues an approval letter or a complete response letter. A complete response letter generally outlines the
deficiencies in the submission and may require substantial additional testing or information in order for the FDA
to reconsider the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a
resubmission of the application, the FDA will issue an approval letter. The FDA may also refer an application to
the appropriate advisory committee, typically a panel of clinicians, for review, evaluation and a recommendation
as to whether the application should be approved. The FDA is not bound by the recommendations of the advisory
committee.

The FDA has and has used various programs, including fast track, priority review, breakthrough therapy and

accelerated approval (Subpart H and E), that are intended to expedite or simplify the process for reviewing
certain applications and/or provide for approval on the basis of surrogate endpoints or restricted distribution.
Generally, drugs and biologics may be eligible for one or more of these programs if they are intended for serious
or life-threatening diseases or conditions, have potential to address unmet medical needs, or may provide
meaningful benefit over existing treatments. In June 2013, the FDA granted Fast Track designation to the
investigation of Asparec for ALL. Defibrotide has been granted Fast Track Designation by the FDA to treat
severe VOD. We cannot be sure that any of our other product candidates will qualify for any of these programs,
or that, if a product candidate does qualify, the review time will be shorter than a standard review.

Post-Approval Regulation

After approval, certain changes to the approved product, such as adding new indications, making certain

manufacturing changes, modifying a REMS, or making certain additional labeling claims, are subject to further
FDA review and approval. Obtaining approval for a new indication generally requires that additional clinical
studies be conducted.

Often, even after a drug or biologic has been approved by the FDA for sale, the FDA may require that
certain post-approval requirements be satisfied, including the conduct of additional clinical studies and trials. If
such post-approval conditions are not satisfied, the FDA may impose civil money penalties, declare the product

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misbranded or prohibit the introduction of the drug in interstate commerce. In addition, holders of an approved
NDA or BLA are required to: report certain adverse reactions to the FDA; comply with certain requirements
concerning advertising and promotional labeling for their products; submit drug safety or adverse event reports;
and continue to have quality control and manufacturing procedures conform to cGMP after approval. For
example, the FDA’s approval of the BLA for Erwinaze includes a number of post-marketing commitments
related to the manufacture of Erwinaze by us and the PHE. Also, the marketing authorization in the EU for
Defitelio requires us to comply with a number of post-marketing obligations, including obligations relating to the
establishment of a patient registry. Before we can launch Defitelio in the EU, we need to establish Defitelio’s
patient registry and open it for recruitment, which is subject to our receipt of a positive recommendation by the
PRAC on the design of the patient registry.

We monitor adverse events resulting from the use of our commercial products, as do the regulatory
authorities, and we file periodic reports with the authorities concerning adverse events. The authorities review
these events and reports, and if they determine that any events and/or reports indicate a trend or signal, they can
require a change in a product label, restrict sales and marketing and/or require or conduct other actions. From
time to time, the FDA issues drug safety communications on its adverse event reporting system based on its
review of reported adverse events. In December 2012, the FDA issued a drug safety communication reminding
physicians and patients that the use of Xyrem with alcohol or central nervous system depressants can impair
consciousness and lead to severe breathing problems. At that time, we agreed with the FDA on a change to our
label that included a new contraindication for the use of alcohol with Xyrem. See also the risk factor in Item 1A
entitled “The manufacture, distribution and sale of Xyrem are subject to significant regulatory oversight and
restrictions and the requirements of a risk management program, and these restrictions and requirements subject
us to increased risks and uncertainties, any of which could negatively impact sales of Xyrem.”

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The manufacturing process for pharmaceutical products is highly regulated and regulators may shut down

manufacturing facilities that they believe do not comply with regulations. We, our third party manufacturers and
our corporate partners are subject to cGMP, which are extensive regulations governing manufacturing processes,
stability testing, record keeping and quality standards as defined by the FDA, the EMA and other regulatory
authorities. The FDA also periodically inspects the sponsor’s records related to safety reporting and/or
manufacturing facilities; this latter effort includes assessment of compliance with cGMP. Accordingly,
manufacturers must continue to expend time, money, and effort in the area of production and quality control to
maintain cGMP compliance. Discovery of problems with a product after approval may result in restrictions on a
product, manufacturer, or holder of an approved product, including withdrawal of the product from the market.

The FDA and other governmental authorities also actively enforce regulations prohibiting off-label

promotion, and the government has levied large civil and criminal fines against companies for alleged improper
promotion. The government has also required companies to enter into complex corporate integrity agreements
and/or non-prosecution agreements that impose significant reporting and other burdens on the affected
companies.

The Hatch-Waxman Act

The approval process described above is premised on the applicant being the owner of, or having obtained a
right of reference to, all of the data required to prove the safety and effectiveness of a drug product. This type of
marketing application, sometimes referred to as a “full” or “stand-alone” NDA, is governed by Section 505(b)(1)
of the FDCA. A Section 505(b)(1) NDA contains full reports of investigations of safety and effectiveness, which
includes the results of preclinical studies and clinical trials, together with detailed information on the
manufacture and composition of the product, in addition to other information.

Alternatively, the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman

Act, which updated certain sections of the FDCA, establishes two abbreviated approval pathways for drug
products that are in some way follow-on versions of products already covered by an approved NDA. The first

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path, under Section 505(b)(2), is for the approval of a product that is similar, but not identical, to a
previously-approved product. Under this path, the applicant is permitted to rely to some degree on the FDA’s
finding that the referenced drug is safe and effective, and must submit its own product-specific data of safety and
effectiveness to an extent necessary because of the differences between the products. The FDA may then approve
the new drug product for all or some of the label indications for which the referenced product has been approved,
or for a new indication sought by the Section 505(b)(2) applicant.

The second path established under the Hatch-Waxman Act is for the approval of generic drugs.

Section 505(j) of the FDCA permits the submission of an ANDA for a generic version of an approved,
brand-name drug. Generally, an ANDA must contain data and information showing that the proposed generic
product and the approved, brand-name drug, which is referred to as the “referenced drug,” (1) have the same
active ingredient, in the same strength and dosage form, to be delivered via the same route of administration,
(2) are intended for the same uses, and (3) are bioequivalent. This data and information are provided instead of
independently demonstrating the proposed generic product’s safety and effectiveness, which are inferred from
the fact that the generic product is the same as the referenced drug, which the FDA previously found to be safe
and effective. Each of Roxane Laboratories, Inc., or Roxane, Amneal Pharmaceuticals, LLC, or Amneal, and Par
Pharmaceutical, Inc., or Par, has filed an ANDA with the FDA requesting approval to market a generic version of
Xyrem. ANDAs have been filed in the past seeking approval to market generic versions of certain of our other
products, and additional ANDAs may be filed in the future seeking approval to market generic forms of Xyrem
and/or other products.

To the extent that an ANDA or a Section 505(b)(2) NDA applicant is relying on the FDA’s findings for an

already-approved product, the applicant is required to certify that there are no patents listed for that product in
the FDA’s publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” or Orange Book,
or that for each Orange-Book-listed patent the listed patent has expired, or will expire on a particular date and
approval is sought after patent expiration, or the listed patent is invalid or will not be infringed by the
manufacture, use or sale of the new product. A certification that the new product will not infringe the referenced
product’s Orange-Book-listed patents or that such patents are invalid is called a Paragraph IV Certification. If the
applicant does not challenge the listed patents, the ANDA or the Section 505(b)(2) NDA will not be approved
until all the listed patents claiming the referenced product have expired, as well as any additional period of
exclusivity that might be obtained for completing pediatric studies pursuant to the FDA’s written request. The
ANDA or the Section 505(b)(2) NDA may also be subject to delay in review or approval based on applicable
non-patent exclusivities, such as exclusivity that results from obtaining approval of a new chemical entity or of a
new use of a previously approved active ingredient.

If the applicant has provided a Paragraph IV Certification to the FDA, the applicant must also send notice of

the Paragraph IV Certification to the holder of the NDA and the relevant patent holders once the ANDA or the
Section 505(b)(2) NDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a
legal challenge to the proposed generic product for infringing the patent. The filing of a patent infringement
lawsuit within 45 days of receipt of a Paragraph IV Certification automatically prevents the FDA from approving
the ANDA or the Section 505(b)(2) NDA until the earliest of 30 months after the NDA holder’s receipt of the
notice of the Paragraph IV Certification, expiration of the patent, settlement of the lawsuit or a decision in the
infringement case that is favorable to the ANDA sponsor. The 30-month stay period may also be shortened or
lengthened upon order of the court in the infringement lawsuit. For drugs with five-year exclusivity, if an action
for patent infringement is initiated after year four of that exclusivity period, then the 30-month stay period is
extended by such amount of time so that 7.5 years has elapsed since the approval of the reference drug NDA.
This period could be extended by six months if the NDA sponsor obtains pediatric exclusivity. Alternatively, if
the listed patent holder does not file a patent infringement lawsuit within the required 45-day period, the
applicant will not be subject to the 30-month stay. The FDA may issue tentative approval of an ANDA if the
generic applicant meets all conditions for approval but cannot receive effective approval because the 30-month
stay or a period of statutory exclusivity has not expired.

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We intend to submit for Orange Book listing all relevant patents for our products and product candidates,

and to vigorously defend any patents for our approved products, including Orange Book-listed patents. In
October 2010, December 2012 and November 2013, respectively, we received a Paragraph IV Certification from
each of Roxane, Amneal and Par that each had filed an ANDA with the FDA requesting approval to market a
generic version of Xyrem before the expiration of the Orange-Book-listed patents relating to Xyrem. We have
sued Roxane, Amneal and Par seeking to prevent them from introducing a generic version of Xyrem that would
infringe our patents. For a description of these matters, please see Item 3. “Legal Proceedings.” If an ANDA is
approved after the 30-month stay and before conclusion of any relevant patent litigation at the district, and
potentially appellate, court, a generic manufacturer could nonetheless choose to commercialize the generic
product. In the event of such commercialization, the generic manufacturer generally would be liable to the NDA
holder for damages if the NDA holder ultimately prevails in the patent litigation.

Section 505-1(i)(1) of the FDCA generally provides that (i) an ANDA with a referenced drug subject to the
REMS requirements is required to have a REMS with the same or comparable elements as the referenced drug,
such as a medication guide, a patient package insert and other ETASU, and (ii) the ANDA drug and the
referenced drug shall use a single shared system to assure safe use. However, the FDA may waive this
requirement for a single shared system and permit the ANDA holder to submit a separate but comparable REMS
if the FDA either determines that the burden of creating a single shared system outweighs its benefit, or if the
ANDA applicant certifies that it has been unable to obtain a license to any aspects of the REMS for the
referenced drug product that are covered by a patent or a trade secret. The FDCA provides that the FDA may
seek to negotiate a license between the ANDA sponsor and the sponsor of the listed product before granting a
waiver of the single shared system requirement. The FDCA further states that a REMS shall not be used by an
NDA holder to block or delay generic drugs from entering the market. Accordingly, we expect to face pressure to
license or share our Xyrem Risk Management Program, or elements of it, with generic competitors. We cannot
predict the outcome or impact on our business of any future action that we may take with regard to licensing or
sharing our REMS program.

In the FDA’s December 2012 response denying a Citizen Petition we filed in July 2012, the FDA stated that

when an NDA holder has a deemed REMS, the FDA directs the ANDA applicant(s) to work with the NDA
holder to create a single shared system to implement the ETASU that will be approved as a final REMS. More
broadly, the FDA has stated that it expects the negotiation of a single shared REMS between an NDA holder and
ANDA applicants to proceed concurrently with the FDA’s review of ANDA applications. The FDA has further
stated that it typically monitors the progress of industry working groups attempting to develop shared REMS
systems, and that it has acted to help ensure that sponsors were cooperating and that there were no obstacles to
developing a single shared system. In January 2014, the FDA held an initial meeting with us and current Xyrem
ANDA applicants to facilitate the development of a single shared system REMS. We cannot predict the timing,
outcome or impact on our business of any discussions with the FDA and/or any ANDA applicant with respect to
the potential creation of a single shared system REMS for Xyrem (sodium oxybate), including the impact of the
ongoing process with respect to potential modifications to the Xyrem deemed REMS as discussed above, or the
impact of single shared system REMS discussions on our ongoing litigation with each of the ANDA applicants.
See the risk factor in Item 1A entitled “We may incur substantial costs as a result of litigation or other
proceedings relating to patents and other intellectual property rights, and we may be unable to protect our rights
to, or commercialize, our products.”

If we do not develop a single shared system REMS or license or share our REMS with a generic competitor
within a time frame or on terms that the FDA considers acceptable, the FDA may assert that its waiver authority
permits it to allow the generic competitor to market a generic drug with a REMS that does not include the same
elements that are in our deemed REMS or, when Xyrem REMS documents are approved, with a separate REMS
that includes different, but comparable, ETASU.

It is also possible that the FDA may take the position that a potential generic competitor does not need a

REMS that has the same ETASU as our Xyrem deemed REMS in order to obtain approval of its ANDA. In the

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denial of our Citizen Petition described above, the FDA stated that if the FDA determines that an ANDA may be
ready for approval before final approval of the REMS of a sponsor holding a deemed REMS, the FDA will direct
the ANDA applicant to submit a proposed risk management plan with ETASU that are comparable to the
ETASU that are approved for the referenced drug to have adequate risk management elements in place for the
ANDA until the final REMS is approved. The legal basis for this position is uncertain. However, it is possible
that the FDA may rely on this position as a basis to grant approval of an ANDA with a risk management plan
rather than a final REMS. The 30-month stay of FDA approval of Roxane’s ANDA expired on April 18, 2013,
and we have not yet received approval of final REMS documents for Xyrem. Accordingly, it is possible that,
consistent with the position that the FDA articulated in its denial of our Citizen Petition, the FDA could approve
Roxane’s ANDA with a risk management plan that is separate from our Xyrem deemed REMS, rather than with
a final REMS or a shared REMS for both the generic and Xyrem. We expect that the approval of an ANDA that
results in the launch of a generic version of Xyrem would have a material adverse effect on our business,
financial condition, results of operations and growth prospects. See the risk factor in this Item 1A entitled “We
may incur substantial costs as a result of litigation or other proceedings relating to patents and other intellectual
property rights, and we may be unable to protect our rights to, or commercialize, our products.”

Under the Hatch-Waxman Act, newly-approved drugs and indications may benefit from a statutory period
of non-patent marketing exclusivity. The Hatch-Waxman Act provides five-year marketing exclusivity to the first
applicant to gain approval of an NDA for a new chemical entity, meaning that the FDA has not previously
approved any other new drug containing the same active moiety. The Hatch-Waxman Act prohibits the FDA
accepting for review an ANDA or a Section 505(b)(2) NDA for another version of such drug during the five-year
exclusive period; however, as explained above, submission of an ANDA or Section 505(b)(2) NDA containing a
Paragraph IV Certification is permitted after four years, which may trigger litigation leading to a 30-month stay
of approval of the ANDA or Section 505(b)(2) NDA that could extend to 7.5 years after approval of the
referenced drug. Protection under the Hatch-Waxman Act will not prevent the submission or approval of another
“full” NDA; however, the applicant would be required to conduct its own preclinical and adequate and well-
controlled clinical trials to demonstrate safety and effectiveness. The Hatch-Waxman Act also provides three
years of marketing exclusivity for the approval of new and supplemental NDAs, including Section 505(b)(2)
NDAs, for, among other things, new indications, dosages, or strengths of an existing drug, if new clinical
investigations that were conducted or sponsored by the applicant are determined by the FDA to be essential to the
approval of the application.

The Hatch-Waxman Act also permits a patent term extension of up to five years as compensation for patent
term lost during product development and the FDA regulatory review process. However, a patent term extension
cannot extend the remaining term of a patent beyond a total of 14 years after the FDA approves a marketing
application. The patent term extension period is generally equal to the sum of one-half the time between the
effective date of an IND and the submission date of an NDA, and all of the time between the submission date of
an NDA and the approval of that application, up to a total of five years. Only one patent applicable to a product
or its use may be extended, and only if the regulatory review leads to the first commercial marketing of that drug,
and the extension must be applied for prior to expiration of the patent. The USPTO, in consultation with the
FDA, reviews and approves the application for patent term extension. We will consider applying for a patent
term extension for some of our patents to add patent life beyond the expiration date, if we meet the legal
requirements permitting an extension and depending on the expected length of clinical trials and other factors
involved in the submission of an NDA.

Orphan Drug and Other Exclusivities

Some jurisdictions, including the United States, may designate drugs or biologics for relatively small patient

populations as orphan drugs. The FDA grants orphan drug designation to drugs or biologics intended to treat a
rare disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000
individuals in the United States if there is no reasonable expectation that the cost of developing and making
available in the United States a drug or biologic for this type of disease or condition will be recovered from sales

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in the United States for that product. In the United States, in order to obtain orphan drug designation, this
designation must be requested before submitting an application for marketing approval. An orphan drug
designation does not shorten the duration of the regulatory review and approval process. If a product that has an
orphan drug designation subsequently receives the first FDA approval for the indication for which it has such
designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other
application to market the same product for the same indication for a period of seven years from the time of FDA
approval, except in limited circumstances, such as a showing of clinical superiority to the product with orphan
drug exclusivity. Competitors may receive approval of different drugs or biologics for the indications for which
the orphan product has exclusivity.

The FDA designated and approved Xyrem as an orphan drug for treatment of EDS and cataplexy in patients
with narcolepsy, but those periods of orphan drug exclusivity have expired. Erwinaze has orphan drug exclusivity
until November 2018, seven years from its FDA approval. Asparec and defibrotide have been granted orphan
drug designation by the FDA for ALL and severe VOD, respectively.

Separately, Erwinaze, as a biologic product approved under a BLA, is subject to the BPCIA. The BPCIA

establishes a period of twelve years of data exclusivity for reference products in order to preserve incentives for
future innovation, protecting data included by the applicant in a BLA by prohibiting others from gaining FDA
approval based in part on reliance on, or reference to, the data in the BLA during a twelve-year period. The FDA
is in the process of implementing the BPCIA and has not established final guidelines for administering the
review and approval of applications for data exclusivity. We expect that Erwinaze would receive data exclusivity
in the United States through 2023 under the BPCIA.

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Products also may be eligible for six months of additional exclusivity and patent protection if the sponsor

submits pediatric data that fairly respond to a written request from the FDA for this data. The data do not need to
show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly
respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric studies are
submitted to and accepted by the FDA within statutory time limits, whatever statutory or regulatory periods of
exclusivity or listed patent protection cover the drug are extended by six months. This is not a patent term
extension, but it effectively extends the period during which, because of regulatory exclusivity or listed patents,
the FDA cannot approve an ANDA or 505(b)(2) NDA. We will consider seeking pediatric exclusivity if we meet
the legal requirements and believe it will be commercially beneficial.

United States Healthcare Reform

In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and
Education Affordability Reconciliation Act of 2010, together the Healthcare Reform Act, was adopted in the
United States. This law substantially changes the way healthcare is financed by both governmental and private
insurers, and significantly impacts the pharmaceutical industry. The Healthcare Reform Act contains a number of
provisions that are expected to impact our business and operations, in some cases in ways we cannot currently
predict. Changes that may affect our business include those governing enrollment in federal healthcare programs,
reimbursement changes, rules regarding prescription drug benefits under the health insurance exchanges,
expansion of the 340B program, and fraud and abuse and enforcement. These changes will impact existing
government healthcare programs and will result in the development of new programs, including Medicare
payment for performance initiatives and improvements to the physician quality reporting system and feedback
program. Many of the Healthcare Reform Act’s most significant reforms do not take effect until 2014.

The Healthcare Reform Act made significant changes to the Medicaid Drug Rebate program. Effective
March 23, 2010, rebate liability expanded from fee-for-service Medicaid utilization to include the utilization of
Medicaid managed care organizations as well. With regard to the amount of the rebates owed, the Healthcare
Reform Act increased the minimum Medicaid rebate from 15.1% to 23.1% of the average manufacturer price for
most innovator products and from 11% to 13% for non-innovator products; changed the calculation of the rebate

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for certain innovator products that qualify as line extensions of existing drugs; and capped the total rebate
amount for innovator drugs at 100% of the average manufacturer price. In addition, the Healthcare Reform Act
and subsequent legislation changed the definition of average manufacturer price. A final regulation regarding
these changes to the Medicaid Drug Rebate program is expected in 2014. Finally, the Healthcare Reform Act
requires pharmaceutical manufacturers of branded prescription drugs to pay a branded prescription drug fee to
the federal government beginning in 2011. Each individual pharmaceutical manufacturer pays a prorated share of
the branded prescription drug fee of $3.0 billion in 2014 (and set to increase in ensuing years), based on the
dollar value of its branded prescription drug sales to certain federal programs identified in the law. Sales of
orphan drugs are excluded from this fee as long as no non-orphan indications have been approved for such
orphan drugs.

Additional provisions of the Healthcare Reform Act, some of which became effective in 2011, may
negatively affect our revenues in the future. For example, as part of the Healthcare Reform Act’s provisions
closing a coverage gap that currently exists in the Medicare Part D prescription drug program (commonly known
as the “donut hole”), we are required to provide a 50% discount on branded prescription drugs dispensed to
beneficiaries within this donut hole.

The Healthcare Reform Act also expanded the Public Health Service’s 340B drug pricing discount program.

The 340B pricing program requires participating manufacturers to agree to charge statutorily-defined covered
entities no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs. The Healthcare
Reform Act expanded the 340B program to include additional types of covered entities: certain free-standing
cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, each as defined by
the Healthcare Reform Act. The Healthcare Reform Act exempts “orphan drugs”—those designated under
section 526 of the FDCA—from the ceiling price requirements for these newly-eligible entities. The Health
Resources and Services Administration, or HRSA, which administers the 340B program, issued a final regulation
to implement the orphan drug exception in July 2013. The final regulation interprets the orphan drug exception
narrowly. It exempts orphan drugs from the ceiling price requirements for the newly-eligible entities only when
the orphan drug is used for its orphan indication. The newly-eligible entities are entitled to purchase orphan drugs
at the ceiling price when the orphan drug is not used for its orphan indication. The final regulation, which became
effective October 1, 2013, is subject to a pending lawsuit that seeks to block its implementation. The narrow
scope of the orphan drug exception in HRSA’s final regulation will increase the complexity of compliance, will
make compliance more time-consuming, and could negatively impact our results of operations.

The Healthcare Reform Act also obligates the Secretary of the U.S. Department of Health and Human
Services, or the HHS, to create regulations and processes to improve the integrity of the 340B program and to
update the agreement that manufacturers must sign to participate in the 340B program to obligate a manufacturer
to offer the 340B price to covered entities if the manufacturer makes the drug available to any other purchaser at
any price and to report to the government the ceiling prices for its drugs. HRSA is expected to issue a
comprehensive proposed regulation in 2014 that will address many aspects of the 340B program. When that
regulation is finalized, it could affect our obligations under the 340B program in ways we cannot anticipate. In
addition, legislation may be introduced that, if passed, would further expand the 340B program to additional
covered entities or would require participating manufacturers to agree to provide 340B discounted pricing on
drugs used in the inpatient setting.

In 2012, the Supreme Court of the United States heard challenges to the constitutionality of the individual

mandate and the viability of certain provisions of the Healthcare Reform Act. The Supreme Court’s decision
upheld most of the Healthcare Reform Act and determined that requiring individuals to maintain “minimum
essential” health insurance coverage or pay a penalty to the Internal Revenue Service was within Congress’s
constitutional taxing authority. However, the Supreme Court struck down a provision in the Healthcare Reform
Act that penalized states that choose not to expand their Medicaid programs through an increase in the Medicaid
eligibility income limit from a state’s current eligibility levels to 133% of the federal poverty limit. As a result of
the Supreme Court’s ruling, some states have elected not to expand their Medicaid programs by raising the

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income limit to 133% of the federal poverty level. For each state that does not choose to expand its Medicaid
program, there may be fewer insured patients overall, which could impact our sales, business and financial
condition.

Other Regulatory Requirements

We are also subject to regulation by other regional, national, state and local agencies, including the DEA, the

Department of Justice, the Federal Trade Commission, or FTC, the U.S. Department of Commerce, the Office of
Inspector General of the HHS and other regulatory bodies. In addition to the FDCA, other statutes and regulations
govern to varying degrees the research, development, manufacturing and commercial activities relating to
prescription pharmaceutical products, including preclinical testing, approval, production, labeling, sale, distribution,
import, export, post-market surveillance, advertising, dissemination of information, promotion, marketing, and
pricing to government purchasers and government healthcare programs. Our partners, including our suppliers,
manufacturers and distributors and the central pharmacy for Xyrem, are subject to many of the same requirements.

These requirements include obtaining sufficient quota from the DEA each year to manufacture sodium
oxybate and Xyrem. In addition to quota requirements, the DEA imposes various registration, recordkeeping and
reporting requirements, labeling and packaging requirements, importing, exporting, security controls and a
restriction on prescription refills on certain pharmaceutical products under the CSA. The states also impose
similar requirements for handling controlled substances. A principal factor in determining the particular
requirements, if any, applicable to a product is the actual or potential abuse profile. Sodium oxybate, in the form
of an active pharmaceutical ingredient, is regulated by the DEA as a Schedule I controlled substance, a category
reserved for products believed to present the highest risk of substance abuse and with no approved medicinal use.
When contained in Xyrem, sodium oxybate is regulated as a Schedule III controlled substance. Controlled
substances are subject to DEA and state regulations relating to manufacturing, storage, distribution and physician
prescription procedures, and the DEA regulates the amount of the scheduled substance that would be available
for clinical trials and commercial distribution. As a Schedule III drug, Xyrem is subject to limitations on
prescription refills. Sodium oxybate, as a Schedule I substance, is subject to additional controls, including quotas
that limit the amount of product that can be manufactured each year. The DEA publishes an annual aggregate
quota for the active pharmaceutical ingredient of Xyrem, and our supplier is required to request and justify
allocation of sufficient annual manufacturing quota, as well as additional manufacturing quota if needed
throughout the year. Until 2011, our active pharmaceutical ingredient supplier obtained substantially all of the
published annual aggregate quota for use in the manufacture of Xyrem. However, for each of 2012, 2013 and
2014, our supplier has been allocated only a portion of the published annual aggregate quota for the active
pharmaceutical ingredient. Consequently, a generic manufacturer may be able to obtain a portion of the annual
aggregate active pharmaceutical ingredient quota.

The third parties who perform our clinical and commercial manufacturing, distribution, dispensing and
clinical studies for Xyrem are required to maintain necessary DEA registrations and state licenses. The DEA
periodically inspects facilities for compliance with its rules and regulations. Failure to comply with current and
future regulations of the DEA or relevant state authorities could lead to a variety of sanctions, including
revocation or denial of renewal of DEA registrations, fines, injunctions, or civil or criminal penalties, and could
have an adverse effect on our business and financial condition.

We are also subject to laws and regulations covering data privacy and the protection of health-related and

other personal information. The legislative and regulatory landscape for privacy and data protection continues to
evolve, and there has been an increasing focus on privacy and data protection issues which may affect our
business, including recently enacted laws in all jurisdictions where we operate. Numerous federal and state laws,
including state security breach notification laws, state health information privacy laws and federal and state
consumer protection laws, govern the collection, use and disclosure of personal information. In addition, we
obtain patient health information from most healthcare providers who prescribe our products and research
institutions we collaborate with, and they are subject to privacy and security requirements under the Health
Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information

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Technology for Economic and Clinical Health, or HITECH, Act. Although we are not directly subject to HIPAA
other than with respect to providing certain employee benefits, we could potentially be subject to criminal
penalties if we knowingly obtain or disclose individually identifiable health information maintained by a HIPAA-
covered entity in a manner that is not authorized or permitted by HIPAA.

In addition, pursuant to the Export Administration Regulations, we are required to obtain a license from the

U.S. Department of Commerce prior to the exportation of certain materials and technical information related to
Prialt, a synthesized conotoxin, which is a designated controlled biological toxin.

A discussion of the U.S. Foreign Corrupt Practices Act, or the FCPA, is included below.

Non-U.S. Regulations

We are also subject to a variety of regulations and oversight in countries outside of the United States
governing medicinal products and medical devices, including with respect to pre- and post-authorization clinical
studies, product manufacturing, advertising and promotion, distribution, and safety reporting. Outside of the
United States, our ability to market a product generally depends upon receiving a marketing authorization from
the appropriate regulatory authorities. The requirements governing the conduct of clinical trials, marketing
authorization, pricing and reimbursement vary widely from country to country. In any country, however, we will
generally be permitted to commercialize our products if the appropriate regulatory authority is satisfied that we
have presented adequate evidence of safety, quality and efficacy. In addition, many countries have adopted
specific legal frameworks and procedures to enable the supply of unauthorized medicinal products in the context
of named patient or compassionate use programs. These programs are subject to different requirements and
subject to different rules in the countries where we operate.

Most of the countries where we market our products have product authorization and post-authorization
regulatory processes. In the EU, marketing authorization for medicinal products can be obtained through several
different procedures. The centralized procedure allows a company to submit a single application to the EMA
which will provide a positive opinion regarding the application if it meets certain quality, safety, and efficacy
requirements. A centralized marketing authorization, valid in all EU member states, can then be granted by the
European Commission. The centralized procedure is mandatory for certain medicinal products, including orphan
medicinal products, biologic products and certain other new products, and optional for certain other products.
Unlike the centralized procedure, the national procedure requires a separate application to, and leads to separate
approval by, each EU member state. The decentralized procedure allows applicants to file identical applications
to several EU member states and receive national approvals based on the recognition by the EU member states
concerned of an assessment by a reference member state. The mutual recognition procedure similarly is based on
the acceptance by EU member states of the assessment and/or authorization of a medicinal product by a reference
member state. The making available or placing on the EU market of unauthorized medicinal products is generally
prohibited, but EU member states may exceptionally and temporarily allow the making available of such
products to individual patients or a group of patients. Clinical studies must be conducted in accordance with the
requirements of the EU Clinical Trials Directive and applicable good clinical practice standards, as implemented
into national legislation by EU member states. The time needed to secure approval for medicinal products may be
longer or shorter than that required for FDA approval. The regulatory approval and oversight process in other
countries includes all of the risks associated with regulation by the FDA and certain state regulatory agencies as
described above.

The initial marketing authorization granted in the EU is valid for five years, but once renewed is usually valid
for an unlimited period. In addition, products for which the applicant can demonstrate that comprehensive data on
the efficacy and safety under normal conditions of use cannot be provided as a result of certain specified reasons
may be eligible for marketing authorization under exceptional circumstances. A marketing authorization granted
under exceptional circumstances is also valid for five years, but is subject to an annual reassessment of the risk-
benefit balance. In October 2013, the European Commission granted marketing authorization under exceptional
circumstances for Defitelio for the treatment of severe VOD in adults and children undergoing HSCT therapy.

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In the EU, orphan drug status is granted to products that can be used in the diagnosis, treatment or

prevention of life-threatening diseases with an incidence of no more than 5 in 10,000. In order to receive orphan
status, there must also be either no satisfactory method of diagnosis, prevention or treatment of the authorized
condition, or if such a method exists, the medicine must potentially be of a significant benefit to those affected by
the condition. Orphan status confers 10 years of marketing exclusivity in all EU member countries following
approval and in addition a range of other benefits during the development and regulatory review process
including scientific assistance for study protocols, access to the centralized review process covering all member
countries and a reduction or elimination of registration and marketing authorization fees. Defibrotide has been
granted orphan drug designation by the EMA both to treat severe VOD and to prevent VOD and for the
prevention of GvHD. The Korean Ministry of Food and Drug Safety has granted defibrotide orphan drug
designation both to treat severe VOD and to prevent VOD and the Commonwealth of Australia-Department of
Health has granted defibrotide orphan drug designation for the treatment of severe VOD.

Irrespective of the different marketing authorization tracks, various additional requirements apply to the
manufacturing and placing on the EU market of medicinal products. The manufacturing of medicinal products in
the EU requires a manufacturing authorization, and the manufacturing authorization holder must comply with
various requirements set out in the EU Medicinal Products Directive and EU Medicinal Products Regulation.
These requirements include compliance with EU equivalent cGMP standards when manufacturing active
pharmaceutical ingredients outside of the EU with the intention to import the active pharmaceutical ingredients
into the EU. Similarly, the distribution of medicinal products into and within the EU is subject to compliance
with EU requirements and guidelines.

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The holder of an EU marketing authorization for a medicinal product must also comply with the EU’s
revised pharmacovigilance legislation adopted in 2010, which entered into force in mid-2012 and entails many
new and revised requirements for conducting pharmacovigilance, as well as the codification of various existing
requirements previously set out in guidance. EU regulators now can, for example, require post-authorization
efficacy studies at the time of approval of a medicinal product or afterwards, and require additional monitoring of
products placed on the EU market. Compliance with the pharmacovigilance requirements, as well as the
requirements of the EU Paediatric Regulation, is subject to the EU Penalties Regulation, which enables the
European Commission to impose financial penalties on central marketing authorization holders for violation of
specific pharmacovigilance and paediatric requirements. National marketing authorization holders may be
subject to civil, criminal or administrative sanctions in case of non-compliance with the EU requirements
applicable to the manufacturing and marketing of medicinal products.

The EU legal framework applicable to medical devices currently does not provide for a marketing

authorization. Instead, medical devices are classified in different risk categories, and different requirements apply
based on the classification of a device. The current EU legal framework relies on self-certification and
registration (generally for low-risk devices) or on a conformity assessment performed by so-called Notified
Bodies (generally for higher-risk devices). Notified Bodies are private entities considered competent by the EU
member states to perform conformity assessments. Manufacturers of medical devices must ensure that their
products comply with specific requirements set out in the EU Medical Device Directive, the EU Active
Implantable Medical Device Directive, or the EU In Vitro Diagnostic Directive, as implemented into national
legislation by EU member states, before they place their products on the EU market. Manufacturers must also
have appropriate medical device vigilance and quality assurance systems in place, in accordance with EU
guidance documents and national requirements.

Enforcement of medical device related requirements remains the responsibility of the competent authorities
of EU member states, and non-compliance may result in civil, criminal or administrative sanctions under national
laws. Oversight and coordination between competent authorities of EU member states increased after an incident
with medical devices manufactured by a French manufacturer became public early in 2012. In September 2012,
the European Commission published proposals for two regulations intended to replace the current three EU
medical device directives, which if adopted would likely lead to more stringent requirements related to the
manufacturing and placing on the EU market of medical devices.

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The United States and the EU member states are parties to the Convention on Psychotropic Substances

(1971), or the 1971 Convention. In October 2012, the World Health Organization, or the WHO, sent a
recommendation to the United Nations Commission on Narcotic Drugs, or the CND, to reschedule gamma-
hydroxybutyrate, or GHB, under the 1971 Convention from its current Schedule IV status to Schedule II status.
In March 2013, the CND voted to reschedule GHB from Schedule IV to Schedule II under the 1971 Convention.
While the DEA imposes its own scheduling requirements in the United States under the CSA, the United States is
obligated as a signatory to the 1971 Convention to ensure that drug scheduling in the United States is consistent
with its obligations under the international treaties. Because sodium oxybate, the active pharmaceutical
ingredient in Xyrem, is a derivative of GHB, the international rescheduling of GHB means that Xyrem and/or
sodium oxybate may be subject to more restrictive registration, recordkeeping, reporting, importing, exporting
and other requirements in the EU and certain other countries than the restrictions currently in place. In the United
States, under DEA regulations, the Xyrem finished product is currently classified as a Schedule III controlled
substance, with sodium oxybate, classified as a Schedule I controlled substance. Although the HHS has taken the
position in the past that the United States would not be required to alter the domestic control of GHB should it be
rescheduled to Schedule II under the 1971 Convention, we cannot guarantee that international rescheduling of
GHB from Schedule IV to Schedule II will not impact restrictions on Xyrem in the United States. Failure by us
or any of our partners, including suppliers, manufacturers and distributors, to comply with such requirements
could result in, among other things, additional operating costs to us, delays in shipments outside or into the
United States and adverse regulatory actions.

Our business activities outside of the United States are subject to the FCPA and similar anti-bribery or anti-

corruption laws, regulations or rules of other countries in which we operate, including the U.K. Bribery Act of
2010, or the UK Bribery Act. The FCPA and similar anti-corruption laws generally prohibit the offering,
promising, giving, or authorizing others to give anything of value, either directly or indirectly, to non-U.S.
government officials in order to improperly influence any act or decision, secure an improper advantage, or
obtain or retain business. Excepted from the FCPA are payments to facilitate or expedite routine government
action and bona fide, reasonable reimbursement of expenses. The FCPA also requires public companies to make
and keep books and records that accurately and fairly reflect the transactions of the company and to devise and
maintain an adequate system of internal accounting controls. The UK Bribery Act prohibits giving, offering, or
promising bribes to any person, including non-UK government officials and private persons, as well as
requesting, agreeing to receive, or accepting bribes from any person. In addition, under the UK Bribery Act,
companies which carry on a business or part of a business in the UK may be held liable for bribes given, offered
or promised to any person, including non-UK government officials and private persons, by employees and
persons associated with the company in order to obtain or retain business or a business advantage for the
company. Liability is strict, with no element of a corrupt state of mind, but a defense of having in place adequate
procedures designed to prevent bribery is available. Furthermore, under the UK Bribery Act there is no exception
for facilitation payments. As described above, our business is heavily regulated and therefore involves significant
interaction with public officials, including officials of non-U.S. governments. Additionally, in many other
countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the
purchasers of pharmaceuticals are government entities; therefore, our dealings with these prescribers and
purchasers may be subject to the FCPA. Recently the Securities and Exchange Commission, or SEC, and the
Department of Justice have increased their FCPA enforcement activities with respect to pharmaceutical
companies. In addition, under the Dodd-Frank Wall Street Reform and Consumer Protection Act, private
individuals who report to the SEC original information that leads to successful enforcement actions may be
eligible for a monetary award. We are engaged in ongoing efforts that are designed to ensure our compliance
with these laws, including due diligence, training, policies, procedures, and internal controls. However, there is
no certainty that all employees and third party business partners (including our distributors, wholesalers, agents,
contractors, and other partners) will comply with anti-bribery laws. In particular, we do not control the actions of
manufacturers and other third party agents, although we may be liable for their actions. Violation of these laws
may result in civil or criminal sanctions, which could include monetary fines, criminal penalties, and
disgorgement of past profits, which could have a material adverse impact on our business and financial condition.

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We are also subject to laws and regulations in non-U.S. countries covering data privacy and the protection

of health-related and other personal information. EU member states and other jurisdictions have adopted data
protection laws and regulations, which impose significant compliance obligations. For example, the EU Data
Protection Directive, as implemented into national laws by the EU member states, imposes strict obligations and
restrictions on the ability to collect, analyze and transfer personal data, including health data from clinical trials
and adverse event reporting. Data protection authorities from the different EU member states may interpret the
EU Data Protection Directive and national laws differently, which adds to the complexity of processing personal
data in the EU, and guidance on implementation and compliance practices are often updated or otherwise revised.
Failing to comply with these laws could lead to government enforcement actions and significant penalties against
us, and adversely impact our operating results. The EU Data Protection Directive prohibits the transfer of
personal data to countries outside of the European Economic Area, or EEA, that are not considered by the
European Commission to provide an adequate level of data protection, including the United States. There are also
similar data transfer restrictions in Switzerland. However, there are a number of legal mechanisms to allow for
the transfer of personal data from the EEA and Switzerland to the United States, including, among others, a
voluntary U.S.—EU Safe Harbor Framework, a voluntary U.S.—Switzerland Safe Harbor Framework and the
EU’s set of standard form contractual clauses for the transfer of personal data outside of the EEA. Our United
States subsidiary, Jazz Pharmaceuticals, Inc., has certified compliance with the U.S.—EU Safe Harbor
Framework and the U.S.—Switzerland Safe Harbor Framework through the U.S. Department of Commerce. A
proposal for an EU Data Protection Regulation, intended to replace the current EU Data Protection Directive, is
currently under consideration and, if adopted, could lead to additional and stricter requirements and penalties in
the event of non-compliance.

Additional requirements and restrictions regarding, among other things, the export and importation of
products, intellectual property rights, the environment, taxation and work safety apply in individual countries,
and non-compliance with such requirements may result in civil, criminal or administrative sanctions.

Pharmaceutical Pricing and Reimbursement

Our ability to commercialize our products successfully, and to attract commercialization partners for our

products, depends in significant part on the availability of adequate financial coverage and reimbursement from
third party payors, including, in the United States, governmental payors such as the Medicare and Medicaid
programs, managed care organizations, and private health insurers. In the United States, the federal government
provides health insurance for people who are 65 or older, certain younger people with disabilities, and people
with End-Stage Renal Disease through the Medicare program, and many prescription drugs, including some of
our products, are covered under Medicare Part D. Medicaid, another program in the United States, is a health
insurance program for low-income children, families, pregnant women, and people with disabilities that is jointly
funded by the federal and state governments, but administered by the states. In general, state Medicaid programs
are required to cover drugs and biologics of manufacturers that have entered into a Medicaid Drug Rebate
Agreement, as discussed below, although such drugs and biologics may be subject to prior authorization or other
utilization controls. Both Medicare and Medicaid are administered by the Centers for Medicare and Medicaid
Services, or CMS.

Third party payors decide which drugs they will pay for and establish reimbursement and co-pay levels.

Third party payors are increasingly challenging the prices charged for medical products and services and
examining their cost effectiveness, in addition to their safety and efficacy. We may need to conduct expensive
pharmacoeconomic studies in order to demonstrate the cost effectiveness of our products. Even with studies, our
products may be considered less safe, less effective or less cost-effective than other products, and third party
payors may not provide coverage and reimbursement for our products or any of our product candidates that we
commercialize, in whole or in part.

Political, economic and regulatory influences are subjecting the healthcare industry in the United States to

fundamental changes. There have been, and we expect there will continue to be, legislative and regulatory

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proposals to change the healthcare system in ways that could impact our ability to sell our products profitably.
We expect to experience pricing pressure in the United States in connection with the sale of our products due to
managed healthcare, the increasing influence of health maintenance organizations and additional legislative
proposals. We anticipate that the United States Congress, state legislatures and the private sector will continue to
consider and may adopt healthcare policies intended to curb rising healthcare costs. These cost containment
measures include: controls on government-funded reimbursement for drugs; new or increased requirements to
pay prescription drug rebates to government health care programs, controls on healthcare providers; challenges to
the pricing of drugs or limits or prohibitions on reimbursement for specific products through other means;
requirements to try less expensive products or generics before a more expensive branded product; changes in
drug importation laws; expansion of use of managed care systems in which healthcare providers contract to
provide comprehensive healthcare for a fixed cost per person; and public funding for cost effectiveness research,
which may be used by government and private third party payors to make coverage and payment decisions.

Payors also are increasingly considering new metrics as the basis for reimbursement rates, such as average

sales price, or ASP, average manufacturer price and Actual Acquisition Cost. The existing data for
reimbursement based on these metrics is relatively limited, although certain states have begun to survey
acquisition cost data for the purpose of setting Medicaid reimbursement rates. CMS, the federal agency that
administers the Medicaid Drug Rebate program, has made draft National Average Drug Acquisition Cost, or
NADAC, and draft National Average Retail Price, or NARP, data publicly available on at least a monthly basis.
In July 2013, CMS suspended the publication of draft NARP data, pending funding decisions. In November
2013, CMS moved to publishing final rather than draft NADAC data and has since made updated NADAC data
publicly available on a weekly basis. Therefore, it may be difficult to project the impact of these evolving
reimbursement mechanics on the willingness of payors to cover our products.

We participate in the Medicaid Drug Rebate program, established by the Omnibus Budget Reconciliation
Act of 1990 and amended by the Veterans Health Care Act of 1992 as well as subsequent legislation. We also
participate in and have certain price reporting obligations to several state Medicaid supplemental rebate programs
and other governmental pricing programs, and we have obligations to report ASP for the Medicare program.
Under the Medicaid Drug Rebate program, we are required to pay a rebate to each state Medicaid program for
our covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid
program as a condition of having federal funds being made available to the states for our drugs under Medicaid
and Medicare Part B. Those rebates are based on pricing data reported by us on a monthly and quarterly basis to
the CMS. These data include the average manufacturer price and, in the case of innovator products, the best price
for each drug. A significant portion of our revenue from sales of Erwinaze is obtained through government
payors, including Medicaid, and any failure to qualify for reimbursement for Erwinaze under those programs
would have a material adverse effect on revenues from sales of Erwinaze.

Federal law also requires that a company that participates in the Medicaid rebate program report ASP

information to CMS for certain categories of drugs that are paid under Part B of the Medicare program.
Manufacturers calculate ASP based on a statutorily defined formula and interpretations of the statute by CMS as
to what should or should not be considered in computing ASP. An ASP for each National Drug Code for a
product that is subject to the ASP reporting requirement must be submitted to CMS no later than 30 days after the
end of each calendar quarter. CMS uses these submissions to determine payment rates for drugs under Medicare
Part B. Changes affecting the calculation of ASP could affect the ASP calculations for our products and the
resulting Medicare payment rate, and could negatively impact our results of operations.

Beginning April 1, 2013, Medicare payments for all items and services, including drugs and biologics, have
been reduced by 2% under the sequestration (i.e., automatic spending reductions) required by the Budget Control
Act of 2011, Pub. L. No. 112-25, as amended by the American Taxpayer Relief Act of 2012, Pub. L. 112-240. The
Bipartisan Budget Act of 2013, Pub. L. No. 113-67, extended the 2% reduction to 2023. If Congress does not take
action in the future to modify these sequestrations, Part D plans could seek to reduce their negotiated prices for
drugs. Other legislative or regulatory cost containment provisions, as described below, could have a similar effect.

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Federal law requires that any company that participates in the Medicaid rebate program also participate in the

Public Health Service’s 340B drug pricing discount program in order for federal funds to be available for the
manufacturer’s drugs under Medicaid and Medicare Part B. The 340B pricing program requires participating
manufacturers to agree to charge statutorily-defined covered entities no more than the 340B “ceiling price” for the
manufacturer’s covered outpatient drugs. These 340B covered entities include a variety of community health clinics
and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a
disproportionate share of low-income patients. The 340B ceiling price is calculated using a statutory formula, which
is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated under
the Medicaid rebate program. Changes to the definition of average manufacturer price and the Medicaid rebate
amount under the Healthcare Reform Act and CMS’s issuance of final regulations implementing those changes also
could affect our 340B ceiling price calculations and negatively impact our results of operations.

In order to be eligible to have our products paid for with federal funds under the Medicaid and Medicare
Part B programs and purchased by certain federal agencies, we participate in the Department of Veterans Affairs
Federal Supply Schedule, or FSS, pricing program, established by Section 603 of the Veterans Health Care Act
of 1992. Under this program, we are obligated to make our product available for procurement on an FSS contract
and charge a price to four federal agencies, Department of Veterans Affairs, Department of Defense, Public
Health Service and Coast Guard, that is no higher than the statutory Federal Ceiling Price, or FCP. The FCP is
based on the non-federal average manufacturer price, or Non-FAMP, which we calculate and report to the
Department of Veterans Affairs on a quarterly and annual basis. We also participate in the Tricare Retail
Pharmacy program, established by Section 703 of the National Defense Authorization Act for FY 2008 and
related regulations, under which we pay quarterly rebates on utilization of innovator products that are dispensed
through the Tricare Retail Pharmacy network to Tricare beneficiaries. The rebates are calculated as the difference
between Annual Non-FAMP and FCP.

Outside of the United States, political, economic and regulatory developments are also subjecting the
healthcare industry to fundamental changes and challenges. Pressure by governments and other stakeholders on
prices and reimbursement levels continue to exist. In various European countries we expect to be subject to
continuous cost-cutting measures, such as lower maximum prices, lower or lack of reimbursement coverage and
incentives to use cheaper, usually generic, products as an alternative. In the EU, our products are marketed through
various channels and within different legal frameworks. In certain EU member states, reimbursement for
unauthorized products is provided through national named patient or compassionate use programs. Such
reimbursement may no longer be available if authorization for named patient or compassionate use programs expire
or are terminated. In other EU member states, authorization and reimbursement policies may also delay
commercialization of our products, or may adversely affect our ability to sell our products on a profitable basis. For
example, we are currently engaged in pricing and reimbursement submissions in preparation for our planned launch
of Defitelio in several EU countries in 2014. After initial price and reimbursement approvals, reductions in prices
and changes in reimbursement levels can be triggered by multiple factors, including reference pricing systems and
publication of discounts by third party payors or authorities in other countries. In the EU, prices can be reduced
further by parallel distribution and parallel trade, or arbitrage between low-priced and high-priced member states.

We are unable to predict what additional legislation, regulations or policies, if any, relating to the healthcare

industry or third party coverage and reimbursement may be enacted in the future or what effect such legislation,
regulations or policies would have on our business. Any cost containment measures, including those listed above,
or other healthcare system reforms that are adopted, could have a material adverse effect on our ability to operate
profitably in the EU.

Patents and Proprietary Rights

We actively seek to patent, or to obtain licenses to or to acquire third party patents, to protect our products,

inventions and improvements that we consider important to our business. We own a portfolio of United States
and non-U.S. patents and patent applications and have licensed rights to a number of issued patents and patent
applications. Our owned and licensed patents and patent applications cover certain formulations of our products

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and product candidates, uses of our products and product candidates to treat particular conditions, drug delivery
technologies and delivery profiles relating to our products and product candidates and methods for producing our
products and product candidates. Patents extend for varying periods according to the date of the patent filing or
grant and the legal term of patents in the various countries where patent protection is obtained. The actual
protection afforded by a patent, which can vary from country to country, depends on the type of patent, the scope
of its coverage and the availability of legal remedies in the country. The patents and patent applications that
relate to our products and product candidates include the following:

•

•

•

•

Xyrem® (sodium oxybate) oral solution. Xyrem is covered by fourteen U.S. patents that expire at
various times from December 2019 to June 2024. These patents relate to Xyrem’s stable and
microbially resistant formulation, its manufacturing process, and its method of use, including its
restricted distribution system. Eleven of these fourteen patents are listed in the Orange Book. Of the
patents listed in the Orange Book, three are formulation patents, two of which expire in December
2019 and one expires July 2020; six are method of use patents covering the distribution of Xyrem,
three expire in June 2024 and three expire in December 2022; two are method of use patents covering
Xyrem’s use in narcolepsy, both of which expire in December 2019; and two are method of treatment
patents expiring in December 2019. Two process patents for methods for making the formulation and a
distribution system patent are not listed in the Orange Book also relate to Xyrem and expire in
December 2019 and June 2024, respectively. A Xyrem formulation patent has issued in multiple non-
U.S. countries and will expire in December 2019. This formulation patent is currently pending in two
additional countries. In addition to our issued patents, we have patent applications relating to Xyrem
pending in the United States. The patent laws of non-U.S. countries differ from those in United States,
and the degree of protection afforded by non-U.S. patents may be different from the protection offered
by U.S. patents. Three companies have notified us that they have filed ANDAs with the FDA seeking
FDA approval to market a generic version of Xyrem. We initiated lawsuits against each of these
companies, and the litigation proceedings are ongoing. See the risk factor in Item 1A entitled “We may
incur substantial costs as a result of litigation or other proceedings relating to patents and other
intellectual property rights, and we may be unable to protect our rights to, or commercialize, our
products.”

Defitelio® (defibrotide). We have a portfolio of U.S. and non-U.S. patents and patent applications
relating to various compositions of defibrotide and methods of use, which will expire at various times
between April 2017 and June 2032. One patent that issued in the United States and several other
countries covers the method for determining the biological activity of defibrotide. This patent expires
in November 2022 in most countries.

Prialt® (ziconotide) intrathecal infusion. Prialt is covered by a portfolio of three U.S. patents for a
formulation and methods of use. Two of these patents are listed in the Orange Book. These patents will
expire from June 2015 to December 2016. Also, there are four non-U.S. patents that will expire in June
2016. There are also eight additional U.S. patents issued on a formulation containing Prialt and other
active ingredients and methods for their use as well as some pending patent applications relating to
methods of use that will expire in October 2024. One of the eight additional U.S. patents is listed in the
Orange Book. We also have equivalent non-U.S. applications to these additional patents pending in
Canada and Japan that, if issued, would expire in October 2024.

FazaClo® HD (clozapine, USP) and FazaClo® LD (clozapine, USP) Orally Disintegrating Tablets.
FazaClo HD and FazaClo LD are covered by three U.S. formulation patents. All are licensed by us, one
from Ethypharm, expiring in December 2017, and the other two from CIMA, expiring in April 2018.
The three patents are listed in the Orange Book. The patentability of the two patents licensed from
CIMA was confirmed in re-examination proceedings at the USPTO. As part of its settlement with Teva
in 2011, Azur Pharma granted a sublicense to an affiliate of Teva of its rights to have manufactured,
market and sell a generic version of both FazaClo HD and FazaClo LD. The sublicenses for
FazaClo LD commenced in July 2012, and the sublicense for FazaClo HD will commence in May
2015, or earlier upon the occurrence of certain events.

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•

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VersaclozTM (clozapine) oral suspension. Versacloz is covered by a U.S. formulation patent and a
pending U.S. patent application that we license from Douglas Pharmaceuticals. The patent expires in
May 2028.

AsparecTM (mPEG-r-crisantaspase) is not yet covered by any issued U.S. patents. We have rights to
patent applications for Asparec pending in the United States and many other countries that, if issued,
would expire in July 2030, subject to any patent term extension.

JZP-110. JZP-110 and its associated uses are claimed in multiple U.S. and non-U.S. patents and
applications. We acquired rights to JZP-110 from Aerial in January 2014, including rights to the patent
portfolio, other than in certain jurisdictions in Asia where SK retains rights. The U.S. composition of
matter patents begin to expire in September 2015 and the methods of use patents covering treatment for
narcolepsy will expire in August 2027, subject to any patent term extension.

Erwinaze® (asparaginase Erwinia chrysanthemi) has no patent protection, and we rely on trade secrets and

other unpatented proprietary information to protect our commercial position, which we may be unable to do.

We cannot be certain that any of our patent applications, or those of our licensors, will result in issued

patents. Changes in patent laws could increase the uncertainties and costs surrounding the prosecution of our
patent applications and the enforcement or defense of our issued patents. In addition, because the patent positions
of pharmaceutical companies are highly uncertain and involve complex legal and factual questions, the patents
we own and license, or any additional patents we may own or license, may not prevent other companies from
developing similar or therapeutically equivalent products. In recent years, several companies have been
extremely aggressive in challenging patents covering pharmaceutical products, and the challenges have often
been successful.

As reflected above, generic manufacturers have challenged our patents covering Xyrem, FazaClo HD and
FazaClo LD. Azur Pharma settled a suit against Teva relating to FazaClo LD and FazaClo HD. Other suits are
ongoing. See Item 3. “Legal Proceedings.” We cannot assure you that our patents will not be further challenged
by third parties or that we will be successful in any defense we undertake. Failure to successfully defend a patent
challenge could materially and adversely affect our business.

We cannot ensure that others will not be issued patents that may prevent the sale of our products or require

licensing and the payment of significant fees or royalties. Furthermore, to the extent that any of our future
products or methods is not patentable or infringes the patents of third parties, or in the event that our patents or
future patents fail to give us an exclusive position in the subject matter claimed by those patents, our business
could be adversely affected. We may be unable to avoid infringement of third party patents and may have to
obtain a license, defend an infringement action, or challenge the validity of the patents in court. A license may be
unavailable on terms and conditions acceptable to us, if at all. Patent litigation is costly and time-consuming, and
we may be unable to prevail in any such patent litigation or devote sufficient resources to pursue such litigation.
If we do not obtain a license under necessary patents, are found liable for infringement, or are not able to have
such patents declared invalid, we may be liable for significant money damages, encounter significant delays in
bringing products to market, or be precluded from participating in the manufacture, use or sale of products or
methods of treatment requiring such licenses.

We have also applied for a number of trademarks and service marks to further protect the proprietary
position of our products. We have approximately 70 registered trademarks and service marks in the United States
and over 300 registered trademarks and service marks in other jurisdictions. We also have pending trademark and
service mark applications in the United States. We also rely on our trade secrets and those of our licensors, as
well as other unpatented proprietary information, to protect our products. To the extent that our products have a
competitive edge as a result of our reliance on trade secrets and unpatented know-how, our competitive position
may be compromised if others independently develop products using the same or similar technologies or trade
secrets.

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We seek to protect our trade secrets and proprietary knowledge in part through confidentiality agreements
with our employees, consultants, advisors and collaboration partners. Nevertheless, these agreements may not
effectively prevent disclosure of our confidential information and may not provide us with an adequate remedy in
the event of unauthorized disclosure of our confidential information. In addition, if our employees, consultants,
advisors or collaboration partners develop inventions or processes independently or jointly with us that may be
applicable to our products under development, disputes may arise about ownership or proprietary rights to those
inventions and processes. Such inventions and processes will not necessarily become our property, but may
remain the property of those third parties or their employers. Protracted and costly litigation could be necessary
to enforce and determine the scope of our proprietary rights. In addition, courts outside of the United States are
sometimes less willing to protect trade secrets. Failure to obtain or maintain patent and trade secret protection,
for any reason, could have a material adverse effect on our business.

Employees

As of February 19, 2014, we had approximately 810 employees worldwide. We consider our employee

relations to be good.

Environment, Health and Safety

Our manufacturing of active pharmaceutical ingredients in Italy involves the controlled storage, use and

disposal of chemicals and solvents. We are subject to Italian laws, which implement EU directives and
regulations governing the use, transportation, treatment, storage, handling and disposal of solid and hazardous
materials, wastewater discharges and air emissions. We have obtained certification under the UNI EN ISO 14001
Standard for our environmental management system and have an Eco-management and Audit Scheme (EMAS)
for our plant in Italy. Our environmental policy is designed to comply with current regulations on environmental
protection, to provide for continuous improvement of our manufacturing performance, to protect our employees’
health, to protect the safety of people working at our location in Italy and to respect the safety of people living
close to our plant and in the surrounding community.

About Jazz Pharmaceuticals plc

Jazz Pharmaceuticals plc is a public limited company formed under the laws of Ireland (registered number

399192) and is the ultimate parent company to the Jazz Pharmaceuticals group of companies. Jazz
Pharmaceuticals plc was originally formed as a private limited liability company in March 2005 under the name
Azur Pharma Limited, and was subsequently re-registered as a public limited company under the name Azur
Pharma Public Limited Company in October 2011. On January 18, 2012, the business of Jazz Pharmaceuticals,
Inc. and Azur Pharma were combined in the Azur Merger in connection with which Azur Pharma was re-named
Jazz Pharmaceuticals plc and we became the parent company of and successor to Jazz Pharmaceuticals, Inc. Jazz
Pharmaceuticals, Inc. was treated as the acquiring company in the Azur Merger, for accounting purposes and the
transaction was accounted for as a reverse acquisition under the acquisition method of accounting for business
combinations. Our predecessor, Jazz Pharmaceuticals, Inc., was originally incorporated in California in March
2003 and was reincorporated in Delaware in January 2004. In the Azur Merger, all outstanding shares of Jazz
Pharmaceuticals, Inc.’s common stock were canceled and converted into the right to receive, on a one-for-one
basis, our ordinary shares. Our ordinary shares trade on the same exchange, The NASDAQ Global Select Market,
and under the same trading symbol, “JAZZ,” as the Jazz Pharmaceuticals, Inc. common stock prior to the Azur
Merger.

Our principal offices are located at One Burlington Road, Dublin 4, Ireland, and our telephone number is
353-1-634-7800. We have offices in Palo Alto, California and Philadelphia, Pennsylvania in the United States
and non-U.S. offices in Oxford, United Kingdom, Lyon, France, Villa Guardia (Como), Italy, Zug, Switzerland
and elsewhere in Europe. Our website address is www.jazzpharmaceuticals.com. Information found on, or
accessible through, our website is not a part of, and is not incorporated into, this Annual Report on Form 10-K.
Service marks, trademarks and trade names appearing in this Annual Report on Form 10-K are the property of
their respective owners.

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Available Information

We file our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and

amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act,
electronically with the SEC. We make available on our website at www.jazzpharmaceuticals.com, free of charge,
copies of these reports as soon as reasonably practicable after we electronically file such material with, or furnish
it to, the SEC. Further copies of these reports are located at the SEC’s Public Reference Room at 100 F Street,
NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by
calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and information
statements, and other information regarding our filings, at www.sec.gov.

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Item 1A. Risk Factors

We have identified the following risks and uncertainties that may have a material adverse effect on our

business, financial condition or results of operations. The risks described below are not the only ones we face.
Additional risks not presently known to us or that we currently believe are immaterial may also significantly
impair our business operations. Our business could be harmed by any of these risks. The trading price of our
ordinary shares could decline due to any of these risks, and you may lose all or part of your investment. In
assessing these risks, you should refer to the other information contained in this Annual Report on Form 10-K,
including our consolidated financial statements and related notes.

Risks Relating to Xyrem and the Significant Impact of Xyrem Sales

Xyrem is our largest selling product, and our inability to maintain or increase sales of Xyrem would have a
material adverse effect on our business, financial condition, results of operations and growth prospects.

Xyrem® is our largest selling product and our financial results are significantly influenced by sales of
Xyrem, which accounted for 65.8% of our net product sales for the year ended December 31, 2013 and 65.2% of
our net product sales for the year ended December 31, 2012. Our future plans assume that sales of Xyrem will
increase. While Xyrem product sales grew from 2011 to 2012 and from 2012 to 2013, we cannot assure you that
we can maintain sales of Xyrem at or near current levels, or that Xyrem sales will continue to grow. We have
periodically increased the price of Xyrem, most recently in February 2014, and we cannot assure you that price
adjustments we have taken or may take in the future will not negatively affect Xyrem sales volumes.

In addition to other risks described herein, our ability to maintain or increase Xyrem product sales is subject to

a number of risks and uncertainties, the most important of which are discussed below, including those related to:

•

•

•

•

•

•

•

•

the potential introduction of a generic version of Xyrem;

changed or increased regulatory restrictions, including changes to our risk management program and
the terms of the final REMS documents for Xyrem, and the pressure to develop a single shared system
REMS with potential generic competitors, as discussed in more detail in the risk factors below;

our manufacturing partners’ ability to obtain sufficient quota from the DEA to satisfy our needs for
Xyrem;

any supply, manufacturing or distribution problems arising with any of our manufacturing and
distribution partners, all of whom are sole source providers for us;

the availability of reimbursement from third party payors;

changes in healthcare laws and policy, including changes in requirements for rebates, reimbursement
and coverage by federal healthcare programs;

continued acceptance of Xyrem as safe and effective by physicians and patients, even in the face of
negative publicity that surfaces from time to time; and

changes to our label, including new safety warnings or changes to our boxed warning, that further
restrict how we market and sell Xyrem.

These and the other risks described below related to Xyrem product sales and protection of our proprietary

rights could have a material adverse effect on our ability to maintain or increase sales of Xyrem.

If sales of Xyrem were to decline significantly, we might need to reduce our operating expenses or to seek

to raise additional funds, which would have a material adverse effect on our business, financial condition, results
of operations and growth prospects, or we might not be able to acquire, in-license or develop new products in the
future to grow our business.

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If generic products that compete with Xyrem are approved and launched, sales of Xyrem would be adversely
affected.

Although Xyrem is covered by patents covering its formulation, distribution system and method of use,
three third parties have filed ANDAs seeking FDA approval of generic versions of Xyrem, and additional third
parties may also seek to introduce generic versions of Xyrem. If one or more companies receive FDA approval of
an ANDA, it is possible that such company or companies could introduce generic versions of Xyrem before our
patents expire if they do not infringe our patents, if it is determined that our patents are invalid or unenforceable,
or if such company or companies decide, before applicable ongoing patent litigation is concluded, to launch
generic competition to Xyrem at risk of potentially being held liable for damages for patent infringement.

In October 2010, December 2012 and November 2013 we received a Paragraph IV Certification from each of
Roxane, Amneal and Par, respectively, that each had filed an ANDA with the FDA requesting approval to market a
generic version of Xyrem before the expiration of the Orange-Book-listed patents relating to Xyrem. We have sued
Roxane, Amneal and Par seeking to prevent them from introducing a generic version of Xyrem that would infringe
our patents, but we cannot assure you that any of the lawsuits will prevent the introduction of a generic version of
Xyrem for any particular length of time, or at all. Additional ANDAs could also be filed requesting approval to
market generic versions of Xyrem. If an ANDA is approved, and a generic version of Xyrem is introduced, our
sales of Xyrem would be adversely affected. Although no trial date has been set in any of the ANDA suits, we
anticipate that trial in the Roxane case could occur as early as late in the fourth quarter of 2014. However, the actual
timing of events may be significantly earlier or later than contemplated by current scheduling orders, and we cannot
predict the timing or outcome of events in this or the other ANDA litigations. In accordance with the
Hatch-Waxman Act, as a result of our having filed a timely lawsuit against Roxane, FDA approval of Roxane’s
ANDA had been stayed until April 18, 2013, which was 30 months after our October 18, 2010 receipt of Roxane’s
Paragraph IV Certification, but that stay has expired. We do not know the status of Roxane’s ANDA and cannot
predict what actions the FDA or Roxane may take with respect to Roxane’s ANDA. With the expiration of the
30-month stay, if Roxane’s ANDA is approved by the FDA, Roxane may seek to launch a generic version of Xyrem
prior to a District Court, or potential appellate court, decision in our ongoing patent litigation. While, in the event of
such commercialization, Roxane would be liable to us for damages in the event we ultimately prevail in the patent
litigation, we expect that the introduction of generic competition for Xyrem would have a material adverse effect on
our business, financial condition, results of operations and growth prospects. See the next risk factor in this Item 1A
entitled “The manufacture, distribution and sale of Xyrem are subject to significant regulatory oversight and
restrictions and the requirements of a risk management program, and these restrictions and requirements, as well
as the potential impact of changes to those restrictions and requirements, subject us to increased risks and
uncertainties, any of which could negatively impact sales of Xyrem.”

A generic manufacturer would need to obtain quota from the DEA in order to manufacture both the active

pharmaceutical ingredient and the finished product for a generic version of Xyrem. The DEA publishes an annual
aggregate quota for the active pharmaceutical ingredient of Xyrem, and our supplier is required to request and
justify allocation of sufficient annual manufacturing quota as well as additional manufacturing quota if needed
throughout the year. Until 2011, our active pharmaceutical ingredient supplier obtained substantially all of the
published annual aggregate quota for use in the manufacture of Xyrem. However, for each of 2012, 2013 and 2014,
our supplier was allocated only a portion of the published annual aggregate quota for the active pharmaceutical
ingredient. Consequently, a generic manufacturer may be able to obtain a portion of the annual aggregate active
pharmaceutical ingredient quota. In addition, our supplier was initially allocated only a portion of the quota it
requested for 2013 to make the active pharmaceutical ingredient of Xyrem. Similarly, our finished product
manufacturer for Xyrem was initially allocated only a portion of the quota it requested to make finished product. As
a result, in 2013, both our active pharmaceutical ingredient supplier and our finished product manufacturer had to
request and justify increased quotas from the DEA. For 2014, both our active pharmaceutical ingredient supplier
and finished product manufacturer have been allocated most, but not all, of their respective requested quotas and
may need to request and justify increased quotas from the DEA in 2014. If we and our supplier and manufacturer
cannot obtain the quotas that are needed on a timely basis, or at all, our business, financial condition, results of
operations and growth prospects could be materially and adversely affected.

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After any introduction of a generic competitor, a significant percentage of the prescriptions written for
Xyrem may be filled with the generic version, resulting in a loss in sales of Xyrem. Generic competition often
results in decreases in the prices at which branded products can be sold, particularly when there is more than one
generic available in the marketplace. In addition, legislation enacted in the United States allows for, and in a few
instances in the absence of specific instructions from the prescribing physician mandates, the dispensing of
generic products rather than branded products where a generic version is available. We expect that generic
competition for Xyrem would have a material adverse effect on our business, financial condition, results of
operations and growth prospects.

The manufacture, distribution and sale of Xyrem are subject to significant regulatory oversight and
restrictions and the requirements of a risk management program, and these restrictions and requirements, as
well as the potential impact of changes to those restrictions and requirements, subject us to increased risks
and uncertainties, any of which could negatively impact sales of Xyrem.

As a condition of approval of Xyrem, the FDA mandated that we maintain a risk management and

controlled distribution system, which we refer to as the Xyrem Risk Management Program, that was
implemented at the time Xyrem was approved, which includes parts of the Xyrem Success Program, to ensure the
safe distribution of Xyrem and minimize the risk of misuse, abuse and diversion of sodium oxybate. Our Xyrem
Risk Management Program includes a number of elements including patient and physician education, a database
of information so that we may track and report certain information, and the use of a single central pharmacy to
distribute Xyrem. Elements of the Xyrem Risk Management Program, adopted in 2002 before the FDA had
authority to require REMS are deemed to be an approved REMS pursuant to the Food and Drug Administration
Amendments Act of 2007, or the FDAAA. The Xyrem Risk Management Program, however, is not in the form
that is now required for REMS documents. The FDAAA requires that deemed REMS and related documents be
updated to comply with the current requirements for REMS documents. We are engaged in ongoing
communications with the FDA with respect to our REMS documents for Xyrem, but we have not reached
agreement on certain significant terms. For example, we disagree with the FDA’s current position that, as part of
the current REMS process, the Xyrem deemed REMS should be modified to enable the distribution of Xyrem
through more than one pharmacy, or potentially through retail pharmacies and wholesalers, as well as with
certain modifications proposed by the FDA that would, in the FDA’s view, make the REMS more consistent with
the FDA’s current practices for REMS documents.

The FDA has notified us that it would exercise its claimed authority to modify our REMS and that it would

finalize the REMS as modified by the FDA unless we initiate dispute resolution procedures with respect to the
modification of the Xyrem deemed REMS. Given these circumstances, we will initiate dispute resolution
procedures with the FDA by the end of February 2014. We cannot predict whether, or on what terms, we will
reach agreement with the FDA on final REMS documents for Xyrem, whether we will initiate additional dispute
resolution proceedings with the FDA or other legal proceedings prior to finalizing the REMS documents, or the
outcome or timing of any such proceedings. We expect that final REMS documents for Xyrem will include
modifications to, and/or requirements that are not currently implemented in, the Xyrem Risk Management
Program. Any such modifications or additional requirements could potentially make it more difficult or
expensive for us to distribute Xyrem, make it easier for future generic competitors, and/or negatively affect sales
of Xyrem.

Section 505-1(i)(1) of the FDCA generally provides that (i) an ANDA with a referenced drug subject to the

REMS requirements is required to have a REMS with the same elements as the referenced drug, such as a
medication guide, a patient package insert and other ETASU, and (ii) the ANDA drug and the referenced drug
shall use a single shared system to assure safe use. However, the FDA may waive this requirement for a single
shared system and permit the ANDA holder to submit separate but comparable REMS documents if the
FDA either determines that the burden of creating a single shared system outweighs its benefit, or if the
ANDA applicant certifies that it has been unable to obtain a license to any aspects of the REMS for the
referenced drug product that are covered by a patent or a trade secret. The FDCA provides that the FDA may

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seek to negotiate a license between the ANDA sponsor and the sponsor of the listed product before granting a
waiver of the single shared system requirement. Accordingly, we expect to face pressure to license or share our
Xyrem Risk Management Program, which is the subject of multiple issued patents, or elements of it, with generic
competitors. We cannot predict the outcome or impact on our business of any future action that we may take with
respect to licensing or sharing our REMS, or the FDA’s response to a certification that a third party has been
unable to obtain a license.

In the FDA’s December 2012 response denying a Citizen Petition that we filed in July 2012, the FDA stated

that when an NDA holder has a deemed REMS, the FDA directs the ANDA applicant(s) to work with the NDA
holder to create a single shared system to implement the ETASU that will be approved as a final REMS. More
broadly, the FDA has stated that it expects the negotiation of a single shared REMS between an NDA holder and
ANDA applicants to proceed concurrently with the FDA’s review of ANDA applications. The FDA has further
stated that it typically monitors the progress of industry working groups attempting to develop shared REMS
systems, and that it has acted to help ensure that sponsors were cooperating and that there were no obstacles to
developing a single shared system. In January 2014, the FDA held an initial meeting with us and current Xyrem
ANDA applicants to facilitate the development of a single shared system REMS. We cannot predict the timing,
outcome or impact on our business of discussions with the FDA and/or any ANDA applicant with respect to the
potential creation of a single shared system REMS for Xyrem (sodium oxybate), including the impact of the
ongoing process with respect to potential modifications to the Xyrem deemed REMS as discussed above, or the
impact of any single shared system REMS on our ongoing litigation with each of the ANDA applicants. See the
risk factor in this Item 1A entitled “We may incur substantial costs as a result of litigation or other proceedings
relating to patents and other intellectual property rights, and we may be unable to protect our rights to, or
commercialize, our products.”

If we do not develop a single shared system REMS or license or share our REMS with a generic competitor
within a time frame or on terms that the FDA considers acceptable, the FDA may assert that its waiver authority
permits it to allow the generic competitor to market a generic drug with a REMS that does not include the same
elements that are in our deemed REMS or, when Xyrem REMS documents are approved, with a separate
REMS that includes different, but comparable, ETASU.

The FTC has been paying increasing attention to the use of REMS by companies selling branded products,

in particular to whether REMS may be deliberately being used to reduce the risk of competition from generic
drugs in a way that may be deemed to be anticompetitive. It is possible that the FTC or others could claim that
our REMS or other practices are being used in an anticompetitive manner. The FDCA further states that a
REMS shall not be used by an NDA holder to block or delay generic drugs from entering the market. Two of the
ANDA applicants have asserted that our patents covering the distribution system for Xyrem should not have been
listed in the Orange Book, and that the Xyrem REMS is blocking competition. We cannot predict the outcome of
these claims in the ongoing litigation, or the impact of any similar claims that may be made in the future.

It is also possible that the FDA may take the position that a potential generic competitor does not need a

REMS that has the same ETASU as our Xyrem deemed REMS in order to obtain approval of its ANDA. In the
denial of our Citizen Petition described above, the FDA stated that if the FDA determines that an ANDA may be
ready for approval before final approval of the REMS of a sponsor holding a deemed REMS, the FDA will direct
the ANDA applicant to submit a proposed risk management plan with ETASU that are comparable to the
ETASU that are approved for the referenced drug in order to have adequate risk management elements in place
for the ANDA until the final REMS is approved. The legal basis for this position is uncertain. However, it is
possible that the FDA may rely on this position as a basis to grant approval of an ANDA with a risk management
plan rather than a final REMS. The 30-month stay of FDA approval of Roxane’s ANDA expired on April 18,
2013, and we have not yet received approval of final REMS documents for Xyrem. Accordingly, it is possible
that, consistent with the position that the FDA articulated in its denial of our Citizen Petition, the FDA could
approve Roxane’s ANDA with a risk management plan that is separate from our Xyrem deemed REMS, rather
than with a final REMS or a shared REMS for both the generic and Xyrem. We expect that the approval of an

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ANDA that results in the launch of a generic version of Xyrem would have a material adverse effect on our
business, financial condition, results of operations and growth prospects. See the risk factor in this Item 1A
entitled “We may incur substantial costs as a result of litigation or other proceedings relating to patents and
other intellectual property rights, and we may be unable to protect our rights to, or commercialize, our
products.”

Currently, our Xyrem deemed REMS requires that all of the Xyrem sold in the United States must be
shipped directly to patients through a single central pharmacy. The process under which patients receive Xyrem
under our program is cumbersome. While we have an exclusive agreement with the central pharmacy for Xyrem,
ESSDS, through June 2015, if the central pharmacy does not fulfill its contractual obligations to us, or refuses or
fails to adequately serve patients, shipments of Xyrem and our sales would be adversely affected. If we change
our central pharmacy, new contracts might be required with government and other insurers who pay for Xyrem,
and the terms of any new contracts could be less favorable to us than current agreements. In addition, any new
central pharmacy would need to be registered with the DEA and would also need to implement the particular
processes, procedures and activities necessary to distribute Xyrem under our Xyrem Risk Management Program
or any REMS that we are subject to in the future. Transitioning to a new pharmacy could result in product
shortages, which would adversely affect sales of Xyrem in the United States, result in additional costs and
expenses for us, and/or take a significant amount of time, any of which could materially and adversely affect our
business, financial condition, results of operations and growth prospects.

As required by the FDA and other regulatory agencies, the adverse event information that we collect for
Xyrem is regularly reported to the FDA and could result in the FDA requiring changes to the Xyrem label or taking
or requiring us to take other actions that could have an adverse effect on Xyrem’s commercial success. Our Xyrem
deemed REMS includes unique features that provide more extensive information about adverse events, including
deaths, than is generally available for other products that are not subject to similar risk management programs. For
example, in April 2011, we learned that deaths of patients who had been prescribed Xyrem between 2003 and 2010
had not always been reported to us by ESSDS and therefore to the FDA by us, as required. We reported these cases
to the FDA when we discovered them, investigated the related data from ESSDS as well as additional data we
gathered, and submitted an analysis of the data to the FDA. In October 2011, we received a warning letter from the
FDA regarding certain aspects of our adverse event reporting system for Xyrem and drug safety procedures related
to the deaths that we discovered in April 2011 which had not been reported. We completed the actions and
submitted the data required to address the observations in the 2011 warning letter and arising from a subsequent
inspection. In August 2013, we received a close-out letter from the FDA. Although we believe that we have taken
appropriate corrective action to address the issues that led to the failure to report certain patient deaths, and that the
FDA will not require additional investigation or corrective action, there can be no assurance that, despite the close-
out letter, the FDA will not require us to take additional actions with respect to adverse event reporting or other
matters. Such actions may be costly or time consuming and/or negatively affect the commercial success of Xyrem.

Any failure to demonstrate our substantial compliance with applicable regulatory requirements to the FDA’s

or any other regulatory authority’s satisfaction could result in such regulatory authorities taking actions in the
future, which could have a material and adverse effect on Xyrem sales and therefore on our business, financial
condition, results of operations and growth prospects. See also the risk factor in this Item 1A entitled “We are
subject to significant ongoing regulatory obligations and oversight, which may result in significant additional
expense and limit our ability to commercialize our products.”

The FDA has required that Xyrem’s label include a boxed warning regarding the risk of abuse. A boxed

warning is the strongest type of warning that the FDA can require for a drug product and warns prescribers that
the drug carries a significant risk of serious or even life-threatening adverse effects. A boxed warning also
means, among other things, that the product cannot be advertised through reminder ads, or ads that mention the
pharmaceutical brand name but not the indication or medical condition it treats. In addition, Xyrem’s FDA
approval under the FDA’s Subpart H regulations requires that all of the promotional materials for Xyrem be
provided to the FDA for review at least 30 days prior to the intended time of first use. We cannot predict whether

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the FDA will require additional warnings, including boxed warnings, to be included on Xyrem’s label. Warnings
in the Xyrem label and any limitations on our ability to advertise and promote Xyrem may have affected, and
could in the future negatively affect, Xyrem sales and therefore our business, financial condition, results of
operations and growth prospects.

Risks Relating to Our Business

While Xyrem remains our largest product, our success also depends on our ability to effectively commercialize
our other products. Our inability to do so could have a material adverse effect on our business, financial
condition, results of operations and growth prospects.

In addition to Xyrem, we are commercializing a portfolio of products, including our other key products
Erwinaze® (asparaginase Erwinia chrysanthemi) (called Erwinase® in markets outside the United States) and
Prialt® (ziconotide) intrathecal infusion, and we intend to launch Defitelio in selected countries in the EU during
2014. See the discussion regarding the planned launch of Defitelio in the risk factor in this Item 1A entitled “We
may not be able to successfully launch and market Defitelio in the EU, or obtain marketing approval in other
countries, including the United States, which could have a material adverse effect on our business, financial
condition, results of operations and growth prospects.”

Erwinaze, a biologic product, is used in conjunction with chemotherapy to treat patients with ALL with
hypersensitivity to E. coli-derived asparaginase. Erwinaze is exclusively licensed to us, and manufactured for us,
by PHE, and was approved by the FDA under a BLA and launched in the U.S. market in November 2011. It is
also being sold under marketing authorizations, named patient programs, temporary use authorizations or similar
authorizations in multiple countries in Europe and elsewhere.

Erwinaze represents an important part of our strategy to grow sales of our existing products. However, our

ability to successfully and sustainably grow sales of Erwinaze is subject to a number of challenges, including the
limited population of patients with ALL and the incidence of hypersensitivity reactions to E. coli-derived
asparaginase within that population, our ability to obtain approval for the intravenous administration of Erwinaze
in the United States, our ability to obtain data on the use of Erwinaze in young adults age 18 to 39 with ALL who
are hypersensitive to E. coli-derived asparaginase, as well as our need to apply for and receive marketing
authorizations, through the EU’s mutual recognition procedure or otherwise, in certain additional countries so we
can launch promotional efforts in those countries. Another significant challenge to maintenance of current sales
level and continued growth is our need to ensure sufficient supply of Erwinaze on a timely basis. See the
discussion regarding Erwinaze supply issues in the risk factor in this Item 1A entitled “We depend on single
source suppliers and manufacturers for each of our products, product candidates and their active
pharmaceutical ingredients. The loss of any of these suppliers or manufacturers, or delays or problems in the
supply or manufacture of our products for commercial sale or our product candidates for use in our clinical
trials, could materially and adversely affect our business, financial condition, results of operations and growth
prospects.”

We also face numerous other risks that may impact Erwinaze sales, including regulatory risks, the

development of new asparaginase treatments that could reduce the rate of hypersensitivity in patients with ALL,
the development of new treatment protocols for ALL that may not include asparaginase-containing regimens,
difficulties with obtaining and maintaining favorable pricing and reimbursement arrangements and potential
competition from biosimilar products. In addition, if we fail to comply with our obligations under our agreement
with PHE and lose exclusive rights to Erwinaze, or otherwise fail to maintain and grow sales of Erwinaze, our
growth prospects could be negatively affected.

Prialt, an intrathecally administered infusion of ziconotide, was approved by the FDA in December 2004 for

the management of severe chronic pain in patients for whom intrathecal therapy is warranted and who are
intolerant of or refractory to other treatment, such as systemic analgesics, adjunctive therapies or intrathecal
morphine. We face many challenges in maintaining and growing sales of Prialt, including acceptance of

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intrathecal administration by patients and physicians and challenges for physicians with timely reimbursement
for use of Prialt. In addition, the FDA has required that the label for Prialt include a boxed warning regarding the
risk of psychiatric symptoms and neurological impairment. We cannot predict whether the FDA will require
additional warnings, or place any additional limitations on our ability to advertise and promote Prialt, which
could negatively impact Prialt sales. In May 2013, we completed the roll-out of the NAVIGATOR
Reimbursement and Access ProgramTM, a centralized program that provides a single point of access to Prialt, and
transitioned to a centralized distribution system for Prialt through an exclusive distributor and pharmacy. In
connection with the implementation of the new distribution system, we experienced some fluctuation in product
sales.

Failure to maintain or increase prescriptions and revenue from sales of our products, including Erwinaze and

Prialt, could have a material adverse effect on our business, financial condition, results of operations and growth
prospects. We may choose to increase the price of our products, and we cannot assure you that price adjustments
will not negatively affect our sales volumes. In addition, sales of Erwinaze may fluctuate significantly from
quarter to quarter, depending on the number of patients receiving treatment, the availability of supply to meet the
demand for the product, the dosing requirements of treated patients and other factors. The market price of our
ordinary shares may decline if the sales of our products do not continue or grow at the rates anticipated by
financial analysts or investors.

In addition, if we fail to obtain approvals for certain of our products in new indications or formulations, we

will be unable to commercialize our products in new indications or formulations, which could have a material
adverse effect on our business, financial condition, results of operations and growth prospects.

We may not be able to successfully launch and market Defitelio in the EU, or obtain marketing approval in
other countries, including the United States, which could have a material adverse effect on our business,
financial condition, results of operations and growth prospects.

We acquired Defitelio as a result of the Gentium Acquisition. In October 2013, the European Commission
granted marketing authorization for Defitelio for the treatment of severe VOD in adults and children undergoing
HSCT therapy. We plan to launch Defitelio in the EU during 2014, and expect to begin these efforts in selected
countries in the first half of 2014 after Defitelio’s patient registry has been established and is open for
recruitment. Opening of the Defitelio patient registry is subject to the receipt of a positive recommendation by
the PRAC on the patient registry design. We do not know whether we will receive positive recommendations or
whether the PRAC will request additional information or require modifications to our proposed design. Any
delay in receiving positive recommendations on Defitelio’s patient registry design would negatively affect the
timing of the launch of Defitelio and anticipated revenue from Defitelio in 2014 and could negatively affect our
growth prospects.

We are also making pricing and reimbursement submissions with respect to Defitelio in those EU countries

where pricing and reimbursement approvals are required for launch. We have not yet obtained pricing and
reimbursement guidelines in any of those countries and therefore cannot predict the timing of Defitelio’s launch
in those countries. If we experience delays and unforeseen difficulties in obtaining pricing and reimbursement
approvals for Defitelio in any of these countries, the planned launch would be delayed and our anticipated
revenue from Defitelio in 2014 and our growth prospects could be negatively affected. We have developed
estimates of anticipated pricing for these countries, which are based on our research and understanding of the
product and target market. However, due to efforts to provide for containment of health care costs, one or more
EU countries may not support our estimated level of governmental pricing and reimbursement for Defitelio,
particularly in light of the budget crises faced by a number of countries in the EU, which would negatively
impact anticipated revenue from Defitelio. In addition, until 2008, Gentium sold forms of defibrotide in Italy to
treat vascular disease with risk of thrombosis at a price that was substantially lower than the anticipated
commercial price for Defitelio. The regulators in Italy may use the price of the past sales by Gentium as a
reference price for Defitelio, which may make it more difficult for us to justify our requested higher commercial
price, which would also negatively impact anticipated revenue from Defitelio in Italy.

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Furthermore, after initial price and reimbursement approvals, reductions in prices and changes in

reimbursement levels can be triggered by multiple factors, including reference pricing systems and publication of
discounts by third party payors or authorities in other countries. In the EU, prices can be reduced further by
parallel distribution and parallel trade, or arbitrage between low-priced and high-priced EU countries. If any of
these events occurs, our anticipated revenue from Defitelio would be negatively affected.

We also cannot predict the level of sales of Defitelio in the EU after its planned launch. If sales of Defitelio

do not reach the levels we expect, our anticipated revenue from Defitelio would be negatively affected which
could have a material adverse effect on our business, financial condition, results of operations and growth
prospects.

Although Defitelio has been approved in Europe, a prior NDA submission by Gentium seeking approval in
the United States for defibrotide for the treatment of severe VOD was voluntarily withdrawn from consideration
in order to address issues raised by the FDA. We are currently assessing what we believe would be the optimal
path for potential approval of defibrotide in the United States, which may include filing a new application with
existing clinical data or generating additional clinical data before a new application is ready for submission and
FDA review. We are also assessing the potential for approval of defibrotide in other countries and for additional
development of defibrotide in other indications. We cannot know when, if ever, defibrotide will be approved in
the United States or in any other country or under what circumstances, and what, if any, additional clinical or
other development activities will be required in order to potentially obtain such regulatory approval and the cost
associated with any such activities. If we fail to obtain approval for defibrotide in other countries or for new
indications, our anticipated revenue from defibrotide and our growth prospects would be negatively affected.

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While we have limited revenue from sales of defibrotide on a named patient basis, we cannot predict whether
historical revenues from named patient programs will continue, whether we will be able to continue to
distribute defibrotide on a named patient basis, or whether the planned launch of Defitelio in the EU will
generate higher revenue in the applicable EU countries than revenues generated from sales on a named
patient basis.

Defibrotide is currently available in approximately 40 countries on a named patient basis and is being

distributed to patients diagnosed with severe VOD in the United States through an expanded access program
pursuant to a treatment IND protocol. In certain EU countries, reimbursement for products that have not yet
received marketing authorization is provided through national named patient or compassionate use programs.
Such reimbursement may cease to be available if authorization for named patient or compassionate use programs
expires or is terminated. While Gentium has generated and we continue to generate revenue on the distribution of
defibrotide through named patient programs, we cannot predict whether historical revenues from these programs
will continue, whether we will be able to continue to distribute defibrotide on a named patient basis in these
countries, or whether the planned launch of Defitelio in the EU will generate higher revenue in the applicable EU
countries than revenues historically generated from sales on a named patient basis. Any failure to maintain
revenues from sales of defibrotide on a named patient basis and/or to generate higher revenues following the
planned launched of Defitelio would have a material adverse effect on our business, financial condition, results
of operations and growth prospects.

We depend on single source suppliers and manufacturers for each of our products, product candidates and
their active pharmaceutical ingredients. The loss of any of these suppliers or manufacturers, or delays or
problems in the supply or manufacture of our products for commercial sale or our product candidates for use
in our clinical trials, could materially and adversely affect our business, financial condition, results of
operations and growth prospects.

The manufacture of pharmaceutical products requires significant expertise and capital investment, including
the development of process controls required to consistently produce the active pharmaceutical ingredient and the
finished product in sufficient quantities that meet detailed product specifications on a repeated basis.

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Manufacturers of pharmaceutical products often encounter difficulties in production, including difficulties with
production costs and yields, process controls, quality control and quality assurance, including testing of stability,
impurities and impurity levels and other product specifications by validated test methods, and compliance with
strictly enforced U.S., state and non-U.S. regulations. If we or any of our third party suppliers or manufacturers
encounter these or any other manufacturing, quality or compliance difficulties with respect to any of our
products, we may be unable to meet the commercial demand for such products, which could adversely affect our
business, financial condition, results of operations and growth prospects.

Other than the manufacturing plant in Italy where we produce some active pharmaceutical ingredients,
including the defibrotide drug substance, we do not currently have our own manufacturing capability for our
products or product candidates, or their active pharmaceutical ingredients, or the capability to package our
products. The availability of our products for commercial sale depends upon our ability to procure the
ingredients, raw materials, packaging materials and finished products we need from third parties. In part due to
the limited market size for our products and product candidates, we have entered into supply and manufacturing
agreements with suppliers and manufacturers, each of which is currently our single source for each of our
marketed products and for the active pharmaceutical ingredients used in some of these products.

We maintain limited inventories of certain of our products, including Xyrem and Erwinaze, as well as the
ingredients or raw materials used to make our products. Our limited inventory puts us at significant risk of not
being able to meet product demand. During 2013, our supply of Erwinaze was nearly completely absorbed by
demand for the product. In the past, we have experienced a disruption of supply of Erwinase in the European
market due to manufacturing challenges, including shortages related to the failure of a batch to meet certain
specifications in 2013, and we may experience similar or other manufacturing challenges in the future. If our
continued efforts to avoid supply shortages are not successful, we could experience Erwinaze supply
interruptions in the future, which could have a material adverse effect on our sales of and revenues from
Erwinaze and limit our potential future maintenance and growth of the market for this product. Other difficulties
or delays in production, such as those described elsewhere in this risk factor, could also result in supply
interruptions in the future. If, for any reason, our suppliers and manufacturers, including any new suppliers, do
not continue to supply us with our products or product candidates in a timely fashion and in compliance with
applicable quality and regulatory requirements, or otherwise fail or refuse to comply with their obligations to us
under our supply and manufacturing arrangements, we may not have adequate remedies for any breach, and their
failure to supply us could result in a shortage of our products or product candidates, which could adversely affect
our business, financial condition, results of operations and growth prospects.

In addition, if one of our suppliers or manufacturers fails or refuses to supply us for any reason, it would take a

significant amount of time and expense to qualify a new supplier or manufacturer. The loss of one of our suppliers
or manufacturers could require us to obtain regulatory clearance in the form of a “prior approval supplement” and to
incur validation and other costs associated with the transfer of the active pharmaceutical ingredient or product
manufacturing process. We believe that it could take up to two years, or longer in certain cases, to qualify a new
supplier or manufacturer, and we may not be able to obtain active pharmaceutical ingredients or finished products
from new suppliers or manufacturers on acceptable terms and at reasonable prices, or at all. Should we lose either
an active pharmaceutical ingredient supplier or a finished product manufacturer, we could run out of salable product
to meet market demands or investigational product for use in clinical trials while we wait for FDA or similar
international regulatory body approval of a new supplier or manufacturer.

Our current supplier of sodium oxybate, Siegfried was approved by the FDA in late 2011 and became our
sole supplier in 2012. We expect that Siegfried will continue to be our sole supplier of sodium oxybate for the
foreseeable future, and we cannot assure you that Siegfried can or will continue to supply on a timely basis, or at
all, sufficient quantities of active pharmaceutical ingredient to enable the manufacture of the quantities of Xyrem
that we need.

Erwinaze is licensed to us, and manufactured for us, by PHE, which is our sole supplier for Erwinaze. The

FDA’s approval of the BLA for Erwinaze includes a number of post-marketing commitments related to the

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manufacture of Erwinaze by us and the PHE. Inability by PHE to comply with regulatory requirements, including
follow through on manufacturing-related post-marketing commitments that are part of the BLA approval and
monitored by the FDA, could adversely affect its ability to supply Erwinaze to us and could result in FDA
approval being revoked or product recalls, either of which could have a material adverse effect on our sales of
and revenues from Erwinaze and limit our potential future maintenance and growth of the market for this
product. In addition, if the FDA or any non-U.S. regulatory authority mandates any changes to the specifications
for Erwinaze, we may face challenges having product produced to meet such specifications, and PHE may charge
us more to supply Erwinaze meeting such specifications, which may result in additional costs to us and may
decrease any profit we would otherwise achieve with Erwinaze.

We cannot assure you that PHE will be able to continue to supply our ongoing commercial needs of
Erwinaze in a timely manner, or at all, especially if our demand for product continues to increase. If PHE
experiences a disruption in supply or capacity constraints as a result of increased demand or otherwise, we do not
have the right to engage a backup supplier for Erwinaze except in very limited circumstances, such as following
the termination of the agreement by us due to the uncured material breach by PHE or the cessation of PHE’s
business. If we are required to engage a backup or alternative supplier, the transfer of technical expertise and
manufacturing process to the backup or alternative supplier would be difficult, costly and time-consuming, might
not be successful and would increase the likelihood of a delay or interruption in manufacturing or a shortage of
supply of Erwinaze. While we continue to work with PHE to evaluate potential steps to increase the supply of
Erwinaze over the longer term to address expected growing worldwide demand, our ability to increase sales of
Erwinaze may be limited by our ability to obtain an increased supply of the product. Any inability of PHE to
supply sufficient quantities of Erwinaze to meet commercial needs at historic levels or higher could have a
material adverse effect on our business, financial condition, results of operations and growth prospects.

We are in the process of changing our supplier for ziconotide, the active pharmaceutical ingredient in Prialt,
and have commenced the transfer to the new supplier. We believe that we have sufficient supply of ziconotide to
meet our commercial requirements for finished product for a number of years, which we expect to be sufficient
time to complete the transfer to the new supplier. In addition, our new manufacturer of finished product was
approved by the FDA in December 2012 and started to supply us with Prialt finished product in January 2014.
There can be no assurance that the new supplier of ziconotide will be approved by the FDA or non-U.S.
regulatory authorities or that the new manufacturer of Prialt finished product will be able to meet our demand in
the future. Any failure to obtain and maintain sufficient commercial supplies could have a material adverse effect
on our business, financial condition, results of operations and growth prospects.

For FazaClo HD, FazaClo LD and Versacloz, we have single sources of supply for both the active

pharmaceutical ingredient and finished product, and should it become necessary to change suppliers, the process
could take two years or longer.

We are in the process of identifying a supplier for JZP-110. In order to commence our planned Phase 3
clinical programs, we need to have sufficient quantity of JZP-110 manufactured. In addition, we rely on Concert
to transfer its manufacturing methods to us and our contract manufacturers to produce sufficient quantity of
JZP-386 required for our planned first study in humans. We believe that we will be able to obtain sufficient
supplies of JZP-110 and JZP-386 before the commencement of the applicable planned clinical trials. Any delay
in receiving sufficient supplies of JZP-110 or JZP-386 for our planned studies could negatively impact our
development programs.

The DEA limits the quantity of certain Schedule I controlled substances that may be produced in the United

States in any given calendar year through a quota system. Because the active pharmaceutical ingredient of
Xyrem, sodium oxybate, is a Schedule I controlled substance, our supplier of sodium oxybate, as well as our
finished product manufacturer, must each obtain separate DEA quotas in order to supply us with sodium oxybate
and Xyrem. Since the DEA typically grants quotas on an annual basis, our sodium oxybate supplier and Xyrem
manufacturer are required to request and justify allocation of sufficient annual DEA quotas as well as additional
DEA quotas if our commercial or clinical requirements exceed the allocated quotas throughout the year. In the

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past, we have had to engage in lengthy efforts to obtain the needed quotas after the original annual quotas had
first been allocated. For example, in 2013, our supplier was initially allocated only a portion of the quota it
requested to make the active pharmaceutical ingredient of Xyrem. Similarly, our finished product manufacturer
for Xyrem was initially allocated only a portion of the quota it requested to make finished product. As a result, in
2013, both our active pharmaceutical ingredient supplier and our finished product manufacturer had to request
and justify increased quotas from the DEA for 2013. For 2014, both our active pharmaceutical ingredient
supplier and finished product manufacturer have been allocated most, but not all, of their respective requested
quotas and may need to request and justify increased quotas from the DEA later in 2014. If we and our supplier
and manufacturer cannot obtain the quotas that are needed on a timely basis, or at all, our business, financial
condition, results of operations and growth prospects could be materially and adversely affected.

In addition, the FDA and similar international regulatory bodies must approve manufacturers of the active

and inactive pharmaceutical ingredients and certain packaging materials used in our products. If there are delays
in qualifying new manufacturers or facilities or a new manufacturer is unable to obtain a sufficient quota from
the DEA, if required, or to otherwise meet FDA or similar international regulatory body’s requirements for
approval, there could be a shortage of the affected products for the marketplace or for use in clinical studies, or
both, particularly since we do not have secondary sources for supply and manufacture of the active
pharmaceutical ingredient or backup manufacturers for our products and product candidates.

Failure by our third party manufacturers to comply with regulatory requirements could adversely affect their

ability to supply products or ingredients to us. All facilities and manufacturing techniques used for the
manufacture of pharmaceutical products must be operated in conformity with the FDA’s current cGMP
requirements. In complying with cGMP requirements, our suppliers must continually expend time, money and
effort in production, record-keeping and quality assurance and control to ensure that our products and product
candidates meet applicable specifications and other requirements for product safety, efficacy and quality. DEA
regulations also govern facilities where controlled substances such as sodium oxybate, Xyrem’s active
pharmaceutical ingredient, are manufactured. Manufacturing facilities of our suppliers have been and are subject
to periodic unannounced inspection by the FDA, the DEA and other regulatory authorities, including state
authorities and similar authorities in non-U.S. jurisdictions. For example, the FDA inspected the PHE facility
where Erwinaze is manufactured in 2013 and will do so again in the future. Failure to comply with applicable
legal requirements subjects the suppliers to possible legal or regulatory action, including shutdown, which may
adversely affect their ability to supply us with the ingredients or finished products we need.

Our ability to develop and deliver products in a timely and competitive manner depends on our third party

suppliers and manufacturers being able to continue to meet our ongoing commercial needs. Any delay in
supplying, or failure to supply, products by any of our suppliers could result in our inability to meet the
commercial demand for our products, or our needs for use in clinical trials, and could adversely affect our
business, financial condition, results of operations and growth prospects.

We may not realize the anticipated financial and strategic benefits from the recent Gentium Acquisition or be
able to successfully integrate the acquired business.

After the close of the tender offer, we have acquired approximately 98% of the outstanding voting securities

of Gentium for an aggregate acquisition cost of approximately $993 million. The Gentium Acquisition creates
numerous uncertainties and risks, and has required, and will continue to require, significant efforts and
expenditures, including with respect to integrating the acquired business with our historical business. We may
encounter unexpected difficulties, or incur unexpected costs, in connection with our transition activities and
integration efforts, which include:

•

•

the potential disruption of our historical core business;

the risk that our relative lack of experience in the hematology/oncology market will not allow us to
achieve anticipated sales of Defitelio;

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•

•

•

•

•

•

•

the strain on, and need to continue to expand, our existing operational, technical, financial and
administrative infrastructure;

the difficulties in assimilating employees and corporate cultures, including our lack of experience in
maintaining positive interactions with unionized employees;

the failure to retain key managers and other personnel, including the employees from the acquired
Gentium business who might experience uncertainty about their future roles with us;

the challenges in controlling additional costs and expenses in connection with and as a result of the
acquisition;

the diversion of our management’s attention to integration of operations and corporate and
administrative infrastructures;

any unanticipated liabilities for activities of or related to Gentium or its operations, products or product
candidates; and

the challenges and risks associated with Gentium not being our wholly owned subsidiary, including
needing to consider the rights of, and duties owed to, the minority shareholders of Gentium under
Italian law when making future decisions that might impact Gentium, its business or operations.

If any of these factors impairs our ability to integrate successfully, we may be required to spend time or
money on integration activities that otherwise would be spent on the development and expansion of our business.
If we fail to integrate or otherwise manage the acquired business successfully and in a timely manner, resulting
operating inefficiencies could increase costs and expenses more than we planned, could negatively impact the
market price of our ordinary shares and could otherwise distract us from execution of our strategy. Failure to
maintain effective financial controls and reporting systems and procedures could also impact our ability to
produce timely and accurate financial statements.

We have grown rapidly, and our business and corporate structure has become substantially more complex.

There can be no assurance that we will effectively manage the increased complexity without experiencing
operating inefficiencies or control deficiencies. Significant management time and effort is required to effectively
manage the increased complexity of our company, and our failure to successfully do so could have a material
adverse effect on our business, financial condition, results of operations and growth prospects.

We have substantially expanded our international footprint and operations, and we may expand further in the
future, but we do not yet have substantial historical experience in international markets and may not achieve
the results that we or our shareholders expect.

We are headquartered in Dublin, Ireland and have multiple offices in the United States, the United

Kingdom, Italy and other countries in Europe. Our headcount has grown from approximately 260 employees at
the end of 2011 to approximately 810 in February 2014. This includes employees in fourteen countries in North
America and Europe, a European commercial presence, and a complex distribution network for products in
Europe and additional territories. In addition, we may expand our international operations into other countries in
the future, either organically or by acquisition. While we have acquired significant management and other
personnel with substantial international experience, conducting our business in multiple countries subjects us to a
variety of risks and complexities that may materially and adversely affect our business, results of operations and
financial condition, including, among other things:

•

•

•

•

the increased complexity and costs inherent in managing international operations;

diverse regulatory, financial and legal requirements, and any changes to such requirements in one or
more countries where we are located or do business;

country-specific tax, labor and employment laws and regulations;

applicable trade laws, tariffs, export quotas, custom duties or other trade restrictions and any changes to
them;

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•

•

•

challenges inherent in efficiently managing employees in diverse geographies, including the need to
adapt systems, policies, benefits and compliance programs to differing labor and other regulations, as
well as maintaining positive interactions with unionized employees in one of our international
locations;

changes in currency rates; and

regulations relating to data security and the unauthorized use of, or access to, commercial and personal
information.

Failure to effectively manage these risks could have a material adverse effect on our business. For example,

although the European Commission granted marketing authorization under exceptional circumstances for
Defitelio for the treatment of severe VOD in adults and children undergoing HSCT therapy in October 2013,
before launching Defitelio in certain EU countries, country-specific pricing and reimbursement approvals must
be obtained. If we experience delays or unforeseen difficulties in obtaining pricing and reimbursement for
Defitelio in any of these countries, the planned launch would be delayed and our anticipated revenue from
Defitelio in 2014 could be negatively affected.

In recent years, the global economy has been impacted by the effects of an ongoing global financial crisis,

including the European sovereign debt crisis, which has caused extreme disruption in the financial markets,
including severely diminished liquidity and credit availability. In addition, we expect to continue to grow our
product sales in Europe, including through our planned launch of Defitelio. Continuing worldwide economic
instability, including challenges faced by the Eurozone and certain of the countries in Europe and the ongoing
budgetary difficulties faced by a number of EU member states, including Greece and Spain, has led and may
continue to lead to substantial delays in payment and payment partially with government bonds rather than cash
for medicinal drug products, which could negatively impact our revenues and profitability.

The commercial success of our products depends upon their market acceptance by physicians, patients, third
party payors and the medical community.

Physicians may not prescribe our products, in which case we would not generate the revenues we anticipate
from product sales. Market acceptance of any of our products by physicians, patients, third party payors and the
medical community depends on:

•

•

•

•

•

•

•

•

the clinical indications for which a product is approved, including any restrictions placed upon the
product in connection with its approval, such as a REMS, patient registry or labeling restrictions;

the prevalence of the disease or condition for which the product is approved and the severity of side
effects;

acceptance by physicians and patients of each product as a safe and effective treatment;

perceived advantages over alternative treatments;

relative convenience and ease of administration;

the cost of treatment in relation to alternative treatments, including generic products;

the extent to which the product is approved for inclusion on formularies of hospitals and managed care
organizations; and

the availability of adequate reimbursement by third parties.

Because of our dependence upon market acceptance of our products, any adverse publicity associated with
harm to patients or other adverse effects resulting from the use or misuse of our products or any similar products
distributed by other companies, including generic versions of our products, could materially and adversely affect
our business, financial condition, results of operations and growth prospects. For example, from time to time,

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there is negative publicity about illicit GHB and its effects, including with respect to illegal use, overdoses,
serious injury and death. Because sodium oxybate, the active pharmaceutical ingredient in Xyrem, is a derivative
of GHB, Xyrem sometimes also receives negative mention in publicity relating to GHB. Patients, physicians and
regulators may therefore view Xyrem as the same as or similar to illicit GHB. In addition, there are regulators
and some law enforcement agencies that oppose the prescription and use of Xyrem generally because of its
connection to GHB. Xyrem’s label includes information about adverse events from GHB.

In addition, we have periodically increased the price of Xyrem and may do so again in the future. We also

have made and may in the future make similar price increases on our other products. Price increases of our
products and publicity regarding price increases of any products distributed by other pharmaceutical companies
could negatively affect market acceptance of our products.

Conducting clinical trials is costly and time-consuming, and the outcomes are uncertain. A failure to prove
that our product candidates are safe and effective in clinical trials would require us to discontinue their
development, which could materially and adversely affect our business, financial condition, results of
operations and growth prospects.

We have made significant investments into expanding our product development pipeline and expect to

substantially increase our research and development organization to pursue targeted development activities in
2014 and beyond. Significant clinical, development and financial resources will be required to progress product
candidates to obtain necessary regulatory approvals and to develop them into commercially viable products. We
have a number of product candidates under development, including JZP-110 and JZP-386 in the sleep area and
Asparec and Leukotac in the hematology and oncology area. As a condition to regulatory approval, each drug
product candidate must undergo extensive and expensive clinical trials to demonstrate to a statistically significant
degree that the product candidate is safe and effective. Clinical testing can take many years to complete and
failure can occur any time during the clinical trial process. If a product candidate fails at any stage of
development, it will not receive regulatory approval, we will not be able to commercialize it, and we will not
receive any return on our investment from that product candidate.

Our development pipeline projects include not only new product candidates, but also projects involving line
extensions for existing products and the generation of additional clinical data for existing products. Specifically,
in the hematology and oncology therapeutic area, we have ongoing projects involving Erwinaze and are
evaluating potential development of defibrotide in indications in addition to the treatment of severe VOD in
adults and children undergoing HSCT therapy. These development efforts may not be successful, and any
adverse events or other information generated during the course of our studies related to existing products could
result in action by the FDA or any non-U.S. regulatory agency, which may restrict our ability to sell, or sales of,
currently marketed products, or such events or other information could otherwise have a material adverse effect
on a related commercial product. Any failure or delay in completing clinical trials for line extensions or the
generation of additional clinical data could materially and adversely affect the maintenance and growth of the
markets for the related marketed products, which could adversely affect our business, financial condition, results
of operations and overall growth prospects.

Although Defitelio has been approved in Europe, a prior NDA submission by Gentium for defibrotide in the
United States was voluntarily withdrawn from consideration before an FDA decision on accepting the application
for filing, based on issues raised by the FDA. We are currently assessing what we believe would be the optimal
path for potential approval of defibrotide in the United States, which may include filing a new application with
existing clinical data or generating additional clinical data before a new application is ready for submission and
FDA review. We cannot know when, if ever, defibrotide will be approved in the United States or under what
circumstances, and what, if any, additional clinical or other development activities will be required in order to
potentially obtain regulatory approval in the United States and the cost associated with any such activities. These
development efforts may not be successful, which could adversely affect our potential future revenue from
defibrotide and our growth prospects.

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We also intend to pursue clinical development of other product candidates that we may acquire or in-license
in the future. Any failure or delay in completing clinical trials for our product candidates would prevent or delay
the commercialization of our product candidates, which could materially and adversely affect our business,
financial condition, results of operations and growth prospects.

Clinical trials can be delayed or halted for a variety of reasons, including:

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delays or failures in obtaining regulatory authorization to commence a trial because of safety concerns
of regulators relating to our product candidates or similar product candidates of our competitors or
failure to follow regulatory guidelines;

delays or failures in obtaining clinical materials and manufacturing sufficient quantities of the product
candidate for use in trials;

delays or failures in reaching agreement on acceptable terms with prospective study sites;

delays or failures in obtaining approval of our clinical trial protocol from an institutional review board,
also known as Ethics Committees in Europe, to conduct a clinical trial at a prospective study site;

delays in recruiting patients to participate in a clinical trial;

failure of our clinical trials and clinical investigators to be in compliance with the FDA and other
regulatory agencies’ Good Clinical Practice Guidelines;

unforeseen safety issues, including negative results from ongoing preclinical studies and adverse events
associated with product candidates;

inability to monitor patients adequately during or after treatment;

difficulty monitoring multiple study sites;

failure of our third party clinical trial managers to satisfactorily perform their contractual duties,
comply with regulations or meet expected deadlines; or

insufficient funds to complete the trials.

The results from early clinical trials may not be predictive of results obtained in later and larger clinical

trials, and product candidates in later clinical trials may fail to show the desired safety and efficacy despite
having progressed successfully through initial clinical testing. In that case, the FDA or the equivalent in
jurisdictions outside of the United States may determine our data is not sufficiently compelling to warrant
marketing approval and may require us to engage in additional clinical trials or provide further analysis which
may be costly and time-consuming. A number of companies in the pharmaceutical industry, including us, have
suffered significant setbacks in clinical trials, even in advanced clinical trials after showing positive results in
earlier clinical trials.

We are currently undertaking a Phase 1 clinical trial of Asparec in Europe. Under our license agreement
with Alizé, under which we obtained rights to develop and commercialize Asparec, we are subject to contractual
obligations to meet certain development milestones within the applicable timeframes provided under the license
agreement. Our ability to meet some of these milestones is uncertain, and depends upon a number of factors,
including our ability to obtain clinical material, to recruit study centers with appropriate expertise and patient
populations and to develop a clinical program meeting the development requirements of both the FDA and
European regulatory authorities in a timely fashion. If our development activities are delayed and we fail to meet
our licensing obligations to Alizé, we may lose our rights to develop and commercialize Asparec. We submitted
an IND to conduct studies relating to Asparec to the FDA in November 2012, and received FDA confirmation in
December 2012 that we may proceed with the initial clinical study. We are working with investigators to initiate
our first study of Asparec in children.

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In June 2013, the FDA granted Fast Track designation to the investigation of Asparec for ALL. Defibrotide

has also been granted Fast Track designation by the FDA to treat severe VOD. The Fast Track program is
designed to enable more frequent interactions with the FDA during drug development and to expedite new drug
candidate review. Although we have obtained Fast Track designation from the FDA for Asparec and defibrotide,
receipt of Fast Track designation may not result in a faster development process, review or approval compared to
drugs considered for approval under conventional FDA procedures, and Fast Track designation may be
withdrawn by the FDA at any time. In addition, Fast Track designation does not guarantee that we will be able to
take advantage of the expedited review procedures and does not increase the likelihood that either Asparec or
defibrotide will receive any regulatory approvals.

We rely on third parties to conduct our clinical trials, and if they do not properly and successfully perform
their legal and regulatory obligations, as well as their contractual obligations to us, we may not be able to
obtain regulatory approvals for our product candidates.

We rely on contract research organizations and other third parties to assist us in designing, managing,

monitoring and otherwise carrying out our clinical trials, including with respect to site selection, contract
negotiation and data management. We do not control these third parties and, as a result, they may not treat our
clinical studies as a high priority, or in the manner in which we would prefer, which could result in delays. We
are responsible for confirming that each of our clinical trials is conducted in accordance with its general
investigational plan and protocol, as well as the FDA’s and non-U.S. regulatory agencies’ requirements,
commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical
trials to ensure that the data and results are credible and accurate and that the trial participants are adequately
protected. The FDA and non-U.S. regulatory agencies enforce good clinical practices through periodic
inspections of trial sponsors, principal investigators and trial sites. If we, contract research organizations or other
third parties assisting us or our study sites fail to comply with applicable good clinical practices, the clinical data
generated in our clinical trials may be deemed unreliable and the FDA or its non-U.S. counterparts may require
us to perform additional clinical trials before approving our marketing applications. We cannot assure you that,
upon inspection, the FDA or non-U.S. regulatory agencies will determine that any of our clinical trials comply
with good clinical practices. In addition, our clinical trials must be conducted with product produced under the
FDA’s cGMP regulations and similar regulations outside of the United States. Our failure, or the failure of our
product manufacturers, to comply with these regulations may require us to repeat or redesign clinical trials,
which would delay the regulatory approval process.

If third parties do not successfully carry out their duties under their agreements with us, if the quality or

accuracy of the data they obtain is compromised due to failure to adhere to our clinical protocols or regulatory
requirements, or if they otherwise fail to comply with clinical trial protocols or meet expected deadlines, our
clinical trials may not meet regulatory requirements. If our clinical trials do not meet regulatory requirements or
if these third parties need to be replaced, our clinical trials may be extended, delayed, suspended or terminated. If
any of these events occur, we may not be able to obtain regulatory approval of our product candidates or succeed
in our efforts to create approved line extensions for certain of our existing products or generate additional useful
clinical data in support of these products.

We may not be able to successfully identify and acquire, in-license or develop additional products or product
candidates to grow our business, and, even if we are able to do so, we may not be able to successfully manage
the risks associated with integrating any products or product candidates we may acquire in the future into our
product portfolio or we may otherwise fail to realize the anticipated benefits of these acquisitions.

We intend to grow our business over the long term by acquiring or in-licensing and developing additional
products and product candidates that we believe have significant commercial potential. Future growth through
acquisition or in-licensing will depend upon the availability of suitable products and product candidates for
acquisition or in-licensing on acceptable prices, terms and conditions. Any growth through development will
depend upon our identifying and obtaining product candidates, our ability to develop those product candidates

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and the availability of funding to complete the development of, obtain regulatory approval for and commercialize
these product candidates. Even if appropriate opportunities are available, we may not be able to successfully
identify them, or we may not have the financial resources necessary to pursue them. Other companies, many of
which may have substantially greater financial, marketing and sales resources, compete with us for these
opportunities.

We cannot assure you that we will be able to successfully manage these risks or other anticipated and
unanticipated problems in connection with an acquisition or in-licensing. We may not be able to realize the
anticipated benefits of any acquisition or in-licensing for a variety of reasons, including the possibility that a
product candidate proves not to be safe or effective in later clinical trials, a product fails to reach its forecasted
commercial potential or the integration of a product or product candidate gives rise to unforeseen difficulties and
expenditures. Any failure in identifying and managing these risks and uncertainties effectively would have a
material adverse effect on our business.

We face substantial competition from other companies, including companies with greater resources, including
larger sales organizations and more experience working with large and diverse product portfolios, than we
have.

The commercial potential of our current products and any future products may be reduced or eliminated if

our competitors develop or acquire and commercialize generic or branded products that are safer or more
effective, have fewer side effects, are easier to administer or are less expensive than our products. Many of our
competitors, particularly large pharmaceutical and life sciences companies, have substantially greater financial,
operational and human resources than we do. They can spend more on, and have more expertise in, research and
development, regulatory, manufacturing, distribution and sales activities. As a result, our competitors may obtain
FDA or other regulatory approvals for their product candidates more rapidly than we may and may market their
products more effectively than we do. Smaller or earlier stage companies may also prove to be significant
competitors, particularly through collaborative arrangements with large, established companies.

In addition, many of our competitors are able to deploy more personnel to market and sell their products

than we do. We currently have a relatively small number of sales representatives compared with the number of
sales representatives of most other pharmaceutical companies with marketed products. Each of our sales
representatives is responsible for a territory of significant size. The continued growth of our current products and
the launch of any future products may require expansion of our sales force and sales support organization
internationally, and we may need to commit significant additional funds, management and other resources to the
growth of our sales organization. We may not be able to achieve any necessary growth in a timely or cost-
effective manner or realize a positive return on our investment, and we may not have the financial resources to
achieve the necessary growth in a timely manner or at all. We also have to compete with other pharmaceutical
and life sciences companies to recruit, hire, train and retain sales and marketing personnel, and turnover in our
sales force and marketing personnel could negatively affect sales of our products. If our specialty sales force and
sales organization are not appropriately sized to adequately promote any current or potential future products, the
commercial potential of our current products and any future products may be diminished.

In 2012 we added Erwinaze, as well as other smaller products in the oncology supportive care market, to our

product portfolio. We are further expanding our hematology and oncology product offering with the planned
launch of Defitelio in Europe. We compete with a significant number of pharmaceutical and life sciences
companies with extensive sales, marketing and promotional experience in the oncology and oncology supportive
care markets, and our failure to compete effectively in this area could negatively affect our sales of Erwinaze,
Defitelio and other products.

We also face competition, and may in the future face additional competition, from manufacturers of generic

drugs. Generic competition often results in decreases in the prices at which branded products can be sold,
particularly when there is more than one generic available in the marketplace. In addition, legislation enacted in

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the United States allows for, and in a few instances in the absence of specific instructions from the prescribing
physician mandates, the dispensing of generic products rather than branded products where a generic version is
available. See the risk factor in this Item 1A entitled “If generic products that compete with Xyrem are approved
and launched, sales of Xyrem would be adversely affected.”

Our products and product candidates may also compete in the future with new products currently under
development by others. Any products that we develop are likely to be in a highly competitive market, and many
of our competitors may succeed in developing products that may render our products obsolete or noncompetitive.

If we fail to attract, retain and motivate key personnel or to retain the members of our executive management
team, our operations and our future growth may be adversely affected.

Our success and our ability to grow depend in part on our continued ability to attract, retain and motivate

highly qualified personnel and on our ability to develop and maintain important relationships with leading
academic institutions, clinicians and scientists. We are highly dependent upon our executive management team
and other critical personnel, all of whom work on many complex matters that are essential to our success. We do
not carry “key person” insurance. The loss of services of one or more members of our executive management
team or other key personnel could delay or prevent the successful completion of some of our vital activities. Any
employee may terminate his or her employment at any time without notice or with only short notice and without
cause or good reason. The resulting loss of institutional knowledge may negatively impact our operations and
future growth.

In addition, to grow our company we will need additional personnel. Competition for qualified personnel in

the pharmaceutical industry is very intense. If we are unable to attract, retain and motivate quality individuals,
our business, financial condition, results of operations and growth prospects could be adversely affected.

We also depend on the unique abilities, industry experience and institutional knowledge of the members of
our board of directors to efficiently set company strategy and effectively guide our executive management team.
We cannot be certain that future board turnover will not negatively affect our business in the future.

Significant disruptions of information technology systems or breaches of data security could adversely affect
our business.

We are increasingly dependent on information technology systems and infrastructure, including mobile
technologies, to operate our business. In the ordinary course of our business, we collect, store and transmit large
amounts of confidential information, including intellectual property, proprietary business information and
personal information. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of
such confidential information. We have also outsourced elements of our information technology infrastructure,
and as a result we manage a number of third party vendors who may or could have access to our confidential
information. The size and complexity of our information technology systems, and those of third party vendors
with whom we contract, make such systems potentially vulnerable to breakdown, malicious intrusion, security
breaches and other cyber attacks. In addition, the prevalent use of mobile devices that access confidential
information increases the risk of data security breaches, which could lead to the loss of confidential information,
trade secrets or other intellectual property. While we have implemented security measures to protect our data
security and information technology systems, such measures may not prevent the adverse effect of such events.
Significant disruptions of our information technology systems or breaches of data security could adversely affect
our business.

Risks Related to Our Intellectual Property

It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection.

Our commercial success depends in part on obtaining and maintaining patent protection and trade secret

protection of our products and product candidates and their use and the methods used to manufacture and

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distribute them, as well as successfully defending these patents against third party challenges, and successfully
protecting our trade secrets. Our ability to protect our products and product candidates from unauthorized
making, using, selling, offering to sell or importation by third parties depends on the extent to which we have
rights under valid and enforceable patents, or have trade secrets that cover these activities.

The patent position of pharmaceutical companies can be highly uncertain and involve complex legal and
factual questions. Changes in either the patent laws or in interpretations of patent laws in the United States and
other countries may diminish the value of our intellectual property. Even if we are able to obtain patents covering
our products and product candidates, any patent may be challenged, invalidated, held unenforceable or
circumvented. Although Xyrem is covered by patents covering its formulation, distribution system and method of
use, third parties are seeking to introduce generic versions of Xyrem, and additional third parties may also
attempt to invalidate or design around the patents, or assert that they are invalid or otherwise unenforceable, and
seek to introduce generic versions of Xyrem. If one or more companies receive FDA approval of an ANDA, it is
possible that such company or companies could introduce generic versions of Xyrem before our patents expire if
they do not infringe our patents, if it is determined that our patents are invalid or unenforceable, or if such
company or companies decide, before applicable ongoing patent litigation is concluded, to launch generic
versions of Xyrem at risk of potentially being held liable for damages for patent infringement.

In October 2010, December 2012 and November 2013, we received a Paragraph IV Certification from each

of Roxane, Amneal and Par, respectively, that each had filed an ANDA with the FDA requesting approval to
market a generic version of Xyrem before the expiration of the Orange-Book-listed patents relating to Xyrem. If
any one of these applications is approved, and a generic version of Xyrem is introduced, our sales of Xyrem
would be adversely affected. Additional ANDAs could also be filed requesting approval to market generic
versions of Xyrem; if those applications for generics were approved and the generics were launched, sales of
Xyrem would decrease. We have sued Roxane, Amneal and Par seeking to prevent them from introducing a
generic version of Xyrem that would infringe our patents, but we cannot assure you that the lawsuits will prevent
the introduction of a generic version of Xyrem for any particular length of time, or at all. See the risk factor in
this Item 1A entitled “If generic products that compete with Xyrem are approved and launched, sales of Xyrem
would be adversely affected.”

Azur Pharma received Paragraph IV certifications from three generic manufacturers, two in 2008 and one in
2010, relating to generic versions of FazaClo LD. Azur Pharma and CIMA, our licensor and whose drug-delivery
technology is incorporated into FazaClo LD, filed lawsuits in response to each certification. In July 2011, Azur
Pharma, CIMA, Barr Laboratories (one of the three generic manufacturers) and Teva, which had acquired Barr
Laboratories, entered into an agreement settling the patent litigation and granting an affiliate of Teva a license of
our rights to have manufactured, market and sell a generic version of FazaClo LD and FazaClo HD, as well as an
option for supply of authorized generic product. The sublicenses for FazaClo LD commenced in July 2012; the
sublicense for FazaClo HD will commence in May 2015 or earlier upon the occurrence of certain events. In
August 2011, Azur Pharma received a Paragraph IV certification notice from Teva advising that Teva had filed
an ANDA with the FDA seeking approval to market a generic version of FazaClo HD. As noted above, FazaClo
HD was covered under the July 2011 settlement agreement with Teva. Teva exercised its option for supply of an
authorized generic product for FazaClo LD and launched the authorized generic product at the end of August
2012, which is having a negative impact on our sales of FazaClo LD and, to some extent, FazaClo HD and is
expected to continue to do so.

The two formulation patents covering FazaClo HD and FazaClo LD that we license from CIMA were under

reexamination by the USPTO, and both of the reexamination proceedings proceeded to appeal at the USPTO.
The ANDA lawsuits with the other two generic manufacturers had been stayed pending the outcome of these
reexamination proceedings. In September 2013 and January 2014, reexamination certificates were issued for the
two patents, with the claims of the patents confirmed and the parties have requested the stay of litigation be
lifted. We cannot predict the timing or outcome of the patent litigation, or the impact on the entry of additional
generic competitors for FazaClo HD or FazaClo LD.

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The existence of a patent will not necessarily prevent other companies from developing similar or
therapeutically equivalent products or protect us from claims of third parties that our products infringe their
issued patents, which may require licensing and the payment of significant fees or royalties. Competitors may
successfully challenge our patents, produce similar products that do not infringe our patents, or manufacture
products in countries where we have not applied for patent protection or that do not respect our patents.
Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our patents, our licensed
patents or in third party patents.

On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into
law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These changes include
provisions that affect the way patent applications are being filed and prosecuted and may also affect patent
litigation. The final substantive provisions of the Leahy-Smith Act, including the first to file system, became
effective on March 16, 2013. The Leahy-Smith Act and its implementation could increase the uncertainties and
costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents,
all of which could have a material adverse effect on our business, financial condition, results of operations and
growth prospects.

The degree of future protection to be afforded by our proprietary rights is uncertain because legal means

afford only limited protection and may not adequately protect our rights or permit us to gain or keep our
competitive advantage. For example:

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others may be able to make products that are similar to our product candidates but that are not covered
by the claims of our patents, or for which we are not licensed under our license agreements;

we or our licensors or partners might not have been the first to invent or file, as appropriate, subject
matters covered by our issued patents or pending patent applications or the pending patent applications
or issued patents of our licensors or partners;

others may independently develop similar or alternative products without infringing our intellectual
property rights;

our pending patent applications may not result in issued patents;

our issued patents and the issued patents of our licensors or partners may not provide us with any
competitive advantages, or may be held invalid or unenforceable as a result of legal challenges by third
parties;

our issued patents and the issued patents of our licensors or partners may be vulnerable to legal
challenges as a result of changes in applicable law;

we may not develop additional proprietary products that are patentable; or

the patents of others may have an adverse effect on our business.

We also may rely on trade secrets and other unpatented proprietary information to protect our technology,

especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are
difficult to protect. Although we use reasonable efforts to protect our trade secrets and other unpatented
proprietary information, our employees, consultants, advisors and partners may unintentionally or willfully
disclose our proprietary information to competitors, and we may not have adequate remedies for such
disclosures.

If our employees, consultants, advisors and partners develop inventions or processes independently, or
jointly with us, that may be applicable to our products under development, disputes may arise about ownership or
proprietary rights to those inventions and processes. Enforcing a claim that a third party illegally obtained and is
using any of our inventions or trade secrets is expensive and time-consuming, and the outcome is unpredictable.
In addition, courts outside of the United States are sometimes less willing to protect trade secrets. Moreover, our
competitors may independently develop equivalent knowledge, methods and know-how.

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Certain of the products we sell have no patent protection and, as a result, potential competitors face fewer
barriers in introducing competing products. For example, Erwinaze has no patent protection, and we rely on trade
secrets and other unpatented proprietary information to protect our commercial position, which we may be
unable to do. Another method of protection is regulatory exclusivity. Erwinaze, as a biologic product approved
under a BLA, is subject to the BPCIA. The BPCIA establishes a period of twelve years of data exclusivity for
reference products in order to preserve incentives for future innovation, protecting data included by the applicant
in a BLA by prohibiting others from gaining FDA approval based in part on reliance on, or reference to, the data
in the BLA during a twelve-year period. The FDA is in the process of implementing the BPCIA and has not
established final guidelines for administering the review and approval of applications for data exclusivity.
Although we expect that Erwinaze would receive data exclusivity in the United States through 2023 under the
BPCIA, we cannot provide assurance that it will receive this exclusivity. While Erwinaze has orphan drug
marketing exclusivity for a seven-year period from its FDA approval in the United States until November 2018,
and is expected to receive data exclusivity in the United States through 2023 under the BPCIA, it is possible that
a potential competitor might obtain earlier approval from the FDA based upon an approval application that does
not rely on or refer to data in our BLA for Erwinaze. In the EU, the regulatory data protection and thus regulatory
exclusivity period for Erwinaze has lapsed. This also means that any new marketing authorizations for Erwinaze
in other EU member states will not receive any regulatory data protection. If a biosimilar product to Erwinaze is
approved in the future in the United States or in other countries where it is sold, a significant percentage of the
prescriptions written for Erwinaze may be filled with the biosimilar version, resulting in a loss in sales of
Erwinaze, and there may be a decrease in the price at which Erwinaze can be sold. Competition from a biosimilar
product to Erwinaze could have a material adverse effect on our business, financial condition, results of
operations and growth prospects. In addition, although there are patent applications for Asparec pending in the
United States and many other countries, it is not yet covered by any U.S. patents. Asparec was granted orphan
drug designation in Europe and the United States subject to certain conditions. In addition, the FDA has not yet
clarified whether Asparec is eligible to receive data exclusivity under the BPCIA. Defibrotide has been granted
orphan drug designation by the FDA, by the EMA and by the Korean Ministry of Food and Drug Safety, both to
treat and to prevent VOD, and by the Commonwealth of Australia-Department of Health for the treatment of
VOD. If we fail to obtain orphan drug marketing exclusivity and/or data exclusivity, and if we also fail to
successfully execute on other strategies to protect our intellectual property with respect to Asparec, including
protection by one or more issued patents, Asparec would be subject to competition from a biosimilar product,
which could have a material adverse effect on our ability to recognize any return on our investment in the
development of this product as well as on our future growth prospects.

Our research and development collaborators may have rights to publish data and other information to which
we have rights. In addition, we sometimes engage individuals or entities to conduct research that may be relevant
to our business. While the ability of these individuals or entities to publish or otherwise publicly disclose data
and other information generated during the course of their research is subject to contractual limitations, these
contractual provisions may be insufficient or inadequate to protect our trade secrets and may impair our patent
rights. If we do not apply for patent protection prior to such publication, or if we cannot otherwise maintain the
confidentiality of our innovations and other confidential information, then our ability to obtain patent protection
or protect our proprietary information may be jeopardized. Moreover, a dispute may arise with our research and
development collaborators over the ownership of rights to jointly developed intellectual property. Such disputes,
if not successfully resolved, could lead to a loss of rights and possibly prevent us from pursuing certain new
products or product candidates.

We may incur substantial costs as a result of litigation or other proceedings relating to patents and other
intellectual property rights, and we may be unable to protect our rights to, or commercialize, our products.

Our ability, and that of our partners, to commercialize any approved products will depend, in part, on our

ability to obtain patents, enforce those patents and operate without infringing the proprietary rights of third
parties. The patent positions of pharmaceutical companies can be highly uncertain and involve complex legal and
factual questions. We have filed multiple U.S. patent applications and non-U.S. counterparts, and may file

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additional U.S. and non-U.S. patent applications related thereto. There can be no assurance that any issued
patents we own or control will provide sufficient protection to conduct our business as presently conducted or as
proposed to be conducted. Moreover, for a variety of reasons, including the existence of relevant prior research
performed and the existence of conflicting patent applications submitted in the same manner or similar fields,
there can be no assurance that any patents will issue from the patent applications owned by us, or that we will
remain free from infringement claims by third parties.

If we choose to go to court to stop a third party from infringing our patents, our licensed patents or our
partners’ patents, that third party has the right to ask the court to rule that these patents are invalid and/or should
not be enforced against that third party. These lawsuits are expensive and consume time and other resources,
even if we were successful in stopping the infringement of these patents. In addition, there is a risk that a court
will decide that these patents are not valid or infringed and that we do not have the right to stop the other party
from using the patented subject matter. There is also the risk that, even if the validity of these patents is upheld
and infringement of these patents found, the court will refuse to stop the other party on the grounds that it is in
the public interest to permit the infringing activity. We are prosecuting lawsuits against the generic
manufacturers who delivered Paragraph IV certifications to us with respect to Xyrem, FazaClo HD and FazaClo
LD. See Item 3 “Legal Proceedings.” We cannot assure you that these, or other lawsuits we may file in the
future, will be successful in stopping the infringement of our patents, that any such litigation will be cost-
effective, or that the litigation will have a satisfactory result for us.

A third party may claim that we or our manufacturing or commercialization partners are using inventions

covered by the third party’s patent rights, or that we or such partners are infringing, misappropriating or
otherwise violating other intellectual property rights, and may go to court to stop us from engaging in our normal
operations and activities, including making or selling our products. Such lawsuits are costly and could affect our
results of operations and divert the attention of management and development personnel. There is a risk that a
court could decide that we or our partners are infringing, misappropriating or otherwise violating third party
patent or other intellectual property rights, which could be very costly to us and have a material adverse effect on
our business.

In the pharmaceutical and life sciences industry, like other industries, it is not always clear to industry
participants, including us, which patents cover various types of products or methods. The coverage of patents is
subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent
infringement, we would need to demonstrate that our products or methods do not infringe the patent claims of the
relevant patent and/or that the patent claims are invalid or unenforceable, and we may not be able to do this.

Because some patent applications in the United States may be maintained in secrecy until the patents are

issued, because patent applications in the United States and many non-U.S. jurisdictions are typically not
published until 18 months after their priority date, and because publications in the scientific literature often lag
behind actual discoveries, we cannot be certain that others have not filed patent applications for inventions
covered by our licensors’ or our issued patents or pending applications, or that we or our licensors were the first
inventors. Our competitors may have filed, and may in the future file, patent applications covering subject matter
similar to ours. Any such patent application may have priority over our or our licensors’ patents or applications
and could further require us to obtain rights to issued patents covering such subject matter. If another party has
filed a U.S. patent application on inventions similar to ours, we may have to participate in an interference
proceeding declared by the USPTO to determine priority of invention in the United States. The costs of these
proceedings could be substantial, and it is possible that such efforts would be unsuccessful, resulting in a loss of
our U.S. patent position with respect to such inventions. Patent interferences are limited or unavailable for
applications filed after March 16, 2013.

Some of our competitors may be able to sustain the costs of complex patent and other intellectual property

litigation more effectively than we can because they have substantially greater resources. In addition, any
uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect
on our ability to raise the funds necessary to continue our operations.

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We own patents that cover the formulation and method of use covering the administration for Xyrem, as

well as method of use patents and trade secrets that cover elements of the Xyrem deemed REMS, including
patents that cover the use of a single central pharmacy to distribute Xyrem. We are engaged in ongoing
communications with the FDA with respect to our REMS documents for Xyrem, but we have not reached
agreement on certain significant terms. For example, we disagree with the FDA’s current position that, as part of
the current REMS process, the Xyrem deemed REMS should be modified to enable the distribution of Xyrem
through more than one pharmacy, or potentially through retail pharmacies and wholesalers, as well as with
certain modifications proposed by the FDA that would, in the FDA’s view, make the REMS more consistent with
the FDA’s current practices for REMS documents.

The FDA has notified us that it would exercise its claimed authority to modify our REMS and that it would

finalize the REMS as modified by the FDA unless we initiate dispute resolution procedures with respect to the
modification of the Xyrem deemed REMS. Given these circumstances, we will initiate dispute resolution
procedures with the FDA by the end of February 2014. We cannot predict whether, or on what terms, we will
reach agreement with the FDA on final REMS documents for Xyrem, whether we will initiate additional dispute
resolution proceedings with the FDA or other legal proceedings prior to finalizing the REMS documents, or the
outcome or timing of any such proceedings. We expect that final REMS documents for Xyrem will include
modifications to, and/or requirements that are not currently implemented in, the Xyrem Risk Management
Program. See the risk factor in this Item 1A entitled “The manufacture, distribution and sale of Xyrem are
subject to significant regulatory oversight and restrictions and the requirements of a risk management program,
and these restrictions and requirements, as well as the potential impact of changes to those restrictions and
requirements, subject us to increased risks and uncertainties, any of which could negatively impact sales of
Xyrem.”

We expect that final REMS documents for Xyrem will include modifications to, and/or requirements that
are not currently implemented in, the Xyrem Risk Management Program. Any such modifications or additional
requirements could potentially make it more difficult or expensive for us to distribute Xyrem, make it easier for
future generic competitors, and/or negatively affect sales of Xyrem. In particular, depending on the extent to
which certain provisions of our Xyrem deemed REMS which are currently protected by our method of use
patents covering the distribution of Xyrem are changed, the ability of our existing patents to protect our Xyrem
distribution system from generic competitors may be reduced. Certain claims of our patents may not provide as
much protection in the context of a modified REMS structure. In addition, the extent of protection provided by
our method of use patents covering the distribution of Xyrem depends on the nature of the distribution system
that may be used by any generic competitor, including whether the distribution system is as restricted as the
distribution system set forth in our current Xyrem deemed REMS. If a generic competitor is able to obtain
ANDA approval for a generic version of Xyrem based on a risk management plan or REMS that does not fall
within the scope of any of the claims of our distribution patents, those patents will not be a barrier to the generic
version’s entry into the market. We cannot be certain whether our existing distribution patents or patents that
may be granted in the future will be construed to cover any generic REMS or risk management plan that might be
approved by the FDA. The interpretation of intellectual property protections and the effect of these protections
are extremely complex, and we cannot predict the impact of any changes to our REMS documents on our
business.

Risks Related to Our Industry

The regulatory approval process is expensive, time-consuming and uncertain and may prevent us or our
partners from obtaining approvals for the commercialization of some or all of our product candidates.

The research, testing, manufacturing, labeling, advertising and promotion, distributing and exporting of
pharmaceutical products are subject to extensive regulation, and regulations differ from country to country.
Approval in the United States, or in any jurisdiction, does not ensure approval in other jurisdictions. The
regulatory approval process is lengthy, expensive and uncertain, and we may be unable to obtain approval for our

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product candidates. For example, we are not permitted to market our product candidates in the United States or in
the EU member states until we receive approval from the FDA, the European Commission, or the competent
authorities of the EU member states, respectively, generally of an NDA, a BLA or a marketing authorization
application. The application must contain information demonstrating the quality, safety and efficacy of the
medicinal product, including data from the preclinical and clinical trials, information pertaining to the
preparation and manufacture of the drug or biologic, analytical methods, product formulation, details on the
manufacture of finished products, proposed product packaging, labeling and information concerning the stability
of the medicinal product. Submission of an application for marketing authorization does not assure approval for
marketing in any jurisdiction, and we may encounter significant difficulties or costs in our efforts to obtain
approval to market products. If we are unable to obtain regulatory approval of our product candidates, we will
not be able to commercialize them and recoup our research and development costs. Any delay or failure in
obtaining approval of a drug candidate, or receiving approval for narrower conditions of use than sought, can
have a negative impact on our financial performance.

If the FDA, the European Commission or the competent authorities of the EU member states determine that

a REMS or the imposition of post-marketing obligations is necessary to ensure that the benefits of the drug
outweigh the risks, we may be required to include a proposed REMS as part of an NDA or to propose post-
marketing obligations to be included in the marketing authorization for our products in the EU. We may also be
required to include a package insert directed to patients, a plan for communication with healthcare providers,
restrictions on a drug’s distribution, or a medication guide to provide information to consumers about the drug’s
risks and benefits. For example, the FDA requires a REMS for Xyrem, discussed in detail under the risk factor
“The manufacture, distribution and sale of Xyrem are subject to significant regulatory oversight and restrictions
and the requirements of a risk management program, and these restrictions and requirements, as well as the
potential impact of changes to those restrictions and requirements, subject us to increased risks and
uncertainties, any of which could negatively impact sales of Xyrem” above, and other products that we sell are or
may become subject to a REMS specific to our product or shared with other products in the same class of drug.
We cannot predict the impact that any new REMS requirements applicable to any of our products would have on
our business.

As another example, the marketing authorization in the EU for Defitelio requires us to comply with a
number of post-marketing obligations, including obligations relating to the establishment of a patient registry.
We may be unable to comply with the post-marketing obligations imposed as part of the marketing authorization
for Defitelio. Failure to comply with these requirements may lead to the suspension, variation or withdrawal of
the marketing authorization for Defitelio in the EU.

Changes in healthcare law and implementing regulations, including those based on recently enacted
legislation, as well as changes in healthcare policy, may impact our business in ways that we cannot currently
predict and these changes could have a material adverse effect on our business and financial condition.

In March 2010, the U.S. President signed the Patient Protection and Affordable Care Act, as amended by the

Health Care and Education Reconciliation Act of 2010, together the Healthcare Reform Act. This law
substantially changes the way healthcare is financed by both governmental and private insurers, and significantly
impacts the pharmaceutical industry. The Healthcare Reform Act contains a number of provisions that are
expected to impact our business and operations, in some cases in ways we cannot currently predict. Changes that
may affect our business include those governing enrollment in federal healthcare programs, reimbursement
changes, rules regarding prescription drug benefits under the health insurance exchanges, expansion of the 340B
program, and fraud and abuse and enforcement. These changes will impact existing government healthcare
programs and will result in the development of new programs, including Medicare payment for performance
initiatives and improvements to the physician quality reporting system and feedback program.

The Healthcare Reform Act made significant changes to the Medicaid Drug Rebate program and expanded

the Public Health Service’s 340B drug pricing discount program. Details of these changes are discussed under the

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risk factor “If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate
program or other governmental pricing programs, we could be subject to additional reimbursement
requirements, penalties, sanctions and fines which could have a material adverse effect on our business,
financial condition, results of operations and growth prospects.”

Additional provisions of the Healthcare Reform Act, some of which became effective in 2011, may
negatively affect our revenues in the future. For example, as part of the Healthcare Reform Act’s provisions
closing a coverage gap that currently exists in the Medicare Part D prescription drug program (commonly known
as the “donut hole”), we are required to provide a 50% discount on branded prescription drugs dispensed to
beneficiaries within this donut hole.

Many of the Healthcare Reform Act’s most significant reforms do not take effect until 2014. In 2012, CMS

issued proposed regulations to implement the changes to the Medicaid Drug Rebate program under the Healthcare
Reform Act but has not yet issued final regulations. CMS is expected to release the final regulations in 2014.

In 2012, the Supreme Court of the United States heard challenges to the constitutionality of certain

provisions of the Healthcare Reform Act. The Supreme Court’s decision upheld most of the Healthcare Reform
Act; however, the Supreme Court struck down a provision in the Healthcare Reform Act that penalized states that
choose not to expand their Medicaid programs through an increase in the Medicaid eligibility income limit from
a state’s current eligibility levels to 133% of the federal poverty limit. As a result of the Supreme Court’s ruling,
some states have elected not to expand their Medicaid programs by raising the income limit to 133% of the
federal poverty level. For each state that does not choose to expand its Medicaid program, there may be fewer
insured patients overall, which could impact our sales, business and financial condition. Where patients receive
insurance coverage under any of the new options made available through the Healthcare Reform Act, the
possibility exists that manufacturers may be required to pay Medicaid rebates on drugs used under these
circumstances, a decision that could impact manufacturer revenues. In addition, the federal government has also
announced delays in the implementation of key provisions of the Healthcare Reform Act, including the employer
mandate. The implications of these delays for our sales, business and financial condition, if any, are not yet clear.

Moreover, legislative changes to the Healthcare Reform Act remain possible. We expect that the Healthcare

Reform Act, as currently enacted or as it may be amended in the future, and other healthcare reform measures
that may be adopted in the future, could have a material adverse effect on our industry generally and on our
ability to maintain or increase our product sales or successfully commercialize our product candidates.

In addition to the Healthcare Reform Act, there will continue to be proposals by legislators at both the

federal and state levels, regulators and third party payors to keep healthcare costs down while expanding
individual healthcare benefits. Likewise, in the countries in the EU, legislators, policymakers and healthcare
insurance funds continue to propose and implement cost-containing measures to keep healthcare costs down, due
in part to the attention being paid to health care cost containment and other austerity measures in the EU. Certain
of these changes could impose limitations on the prices we will be able to charge for our products and any
approved product candidates or the amounts of reimbursement available for these products from governmental
agencies or third-party payors, may increase the tax obligations on pharmaceutical companies such as ours, or
may facilitate the introduction of generic competition with respect to our products. Further, an increasing number
of EU member states and other foreign countries use prices for medicinal products established in other countries
as “reference prices” to help determine the price of the product in their own territory. Consequently, a downward
trend in prices of medicinal products in some countries could contribute to similar downward trends elsewhere.
In addition, the ongoing budgetary difficulties faced by a number of EU member states, including Greece and
Spain, have led and may continue to lead to substantial delays in payment and payment partially with
government bonds rather than cash for medicinal drug products, which could negatively impact our revenues and
profitability. Moreover, in order to obtain reimbursement of our medicinal products in some countries, including
some EU member states, we may be required to conduct clinical trials that compare the cost-effectiveness of our
products to other available therapies. There can be no assurance that our medicinal products will obtain favorable
reimbursement status in any country.

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To help patients afford our products, we have various programs to assist them, including patient assistance
programs, a Xyrem free product voucher program and co-pay coupon programs for certain products. The co-pay
coupon programs of other pharmaceutical manufacturers are the subject of ongoing class action lawsuits, first
filed in 2012, challenging their legality under a variety of federal and state laws, and our co-pay coupon
programs could become the target of similar lawsuits. In addition, co-pay coupon programs, including our
program for Xyrem, have received some negative publicity related to their use to promote branded
pharmaceutical products over other less costly alternatives. It has also come to our attention that at least one
insurer has directed its network pharmacies to no longer accept co-pay coupons for certain drugs the insurer
identified. In addition, in November 2013 CMS issued guidance to the issuers of qualified health plans sold
through the Healthcare Reform Act’s marketplaces encouraging such plans to reject patient cost-sharing support
from third parties and indicating that CMS intends to monitor the provision of such support and may take
regulatory action to limit it in the future. It is possible that the outcome of the pending litigation against other
manufacturers, changes in insurer policies regarding co-pay coupons, and/or the introduction and enactment of
new legislation or regulatory action could restrict or otherwise negatively affect these programs, which could
result in fewer patients using affected products, which could include Xyrem, and therefore could have a material
adverse effect on our sales, business and financial condition.

We are subject to significant ongoing regulatory obligations and oversight, which may result in significant
additional expense and limit our ability to commercialize our products.

Oversight by FDA and Equivalent Non-U.S. Regulatory Authorities

We are subject to significant ongoing regulatory obligations with respect to our marketed products, such as

safety reporting requirements and additional post-marketing obligations, including regulatory oversight of the
promotion and marketing of our products. In addition, research, testing, manufacturing, labeling, packaging, adverse
event reporting, storage, advertising, promotion, sale, distribution, recordkeeping, importing and exporting of our
products are, and any of our product candidates that may be approved by the FDA, the European Commission, the
competent authorities of the EU member states and other non-U.S. regulatory authorities will be, subject to
extensive and ongoing regulatory requirements. These requirements apply both to us and to third parties we contract
with to perform services and supply us with products. Failure by us or any of our third party partners, including
suppliers, manufacturers and distributors and our respective central pharmacies for Xyrem and for Prialt, to comply
with applicable requirements could subject us to administrative or judicial sanctions or other negative consequences,
such as delays in approval or refusal to approve a product candidate, withdrawal, suspension or variation of product
approval, untitled letters, warning letters, fines and other monetary penalties, unanticipated expenditures, product
recall, withdrawal or seizure, total or partial suspension of production or distribution, interruption of manufacturing
or clinical trials, operating restrictions, injunctions; suspension of licenses, civil penalties and/or criminal
prosecution, any of which could have a significant impact on our sales, business and financial condition.

If we receive regulatory approvals to sell our products, the FDA, the European Commission, the competent
authorities of the EU member states and other non-U.S. regulatory authorities in Europe or other countries where
our products are approved may impose significant restrictions on the indicated uses or marketing of our products,
or impose requirements for burdensome post-approval study commitments. The terms of any product approval,
including labeling, may be more restrictive than we desire and could affect the commercial potential of the
product. If we become aware of problems with any of our products in the United States or overseas or at our
contract manufacturers’ facilities, a regulatory agency may impose restrictions on our products, our contract
manufacturers or on us. In such an instance, we could experience a significant drop in the sales of the affected
products, our product revenues and reputation in the marketplace may suffer, and we could become the target of
lawsuits. Under regulations in the EU related to pharmacovigilance, or the assessment and monitoring of the
safety of drugs, we may be required to conduct a labor intensive collection of data regarding the risks and
benefits of marketed products and may be required to engage in ongoing assessments of those risks and benefits,
including the possible requirement to conduct additional clinical studies, which may be time consuming and
expensive and could impact our profitability. Non-compliance with such obligations can lead to the imposition of
financial penalties or other enforcement measures.

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The FDA approved the BLA for Erwinaze in the United States in November 2011, subject to certain post-

marketing requirements, including developing and validating assays and conducting certain non-clinical studies.
In addition, the BLA approval for Erwinaze is subject to compliance with numerous post-marketing
commitments, including certain commitments which must be met by PHE with respect to product manufacturing,
which are outside of our control. While activities are underway to complete the post-marketing requirements and
to comply with the post-marketing commitments, if we and/or PHE fail to do so within the timeframe established
by the FDA, or if the results of the non-clinical studies raise concerns or other issues for the FDA, our approval
to market Erwinaze in the United States may be withdrawn or otherwise jeopardized.

The marketing authorization in the EU for Defitelio requires us to comply with a number of post-marketing

obligations. These include obligations relating to the establishment of a patient registry. We may be unable to
comply with the post-marketing obligations imposed as part of the marketing authorization for Defitelio. Failure
to comply with these requirements may lead to the suspension, variation or withdrawal of the marketing
authorization for Defitelio in the EU.

We have not obtained marketing authorizations and/or may not currently have updated the marketing
authorization approval dossiers for Erwinaze and several other medicinal products in every international market
in which those products are being sold. For example, in some EU countries where we do not have a marketing
authorization, Erwinaze is being provided to patients on the basis of government-approved named patient
programs or temporary use authorizations. In addition, Defitelio has been provided to patients in some EU
countries on a named patient basis and in certain of these countries, reimbursement is provided for unauthorized
products provided through national named patient or compassionate use programs. Such reimbursement may no
longer be available if authorization for named patient or compassionate use programs expire or are terminated.
While we believe we have satisfied the regulations regarding our communications and medical affairs activities
in those countries, if any such country’s regulatory authorities determine that we are promoting Erwinaze or
Defitelio without a marketing authorization in place, we could be found to be in violation of pharmaceutical
advertising law or the regulations permitting sales under named patient programs. In that case, we may be subject
to financial or other penalties.

For a patient to be prescribed Prialt, the patient must have a surgically implanted infusion pump. One of the
two pumps the FDA has approved for use with Prialt is Medtronic’s SynchroMed® II Drug Infusion System. Any
regulatory action involving the pump or delivery of Prialt via the pump could materially adversely impact sales
of Prialt.

In addition, certain of our products are currently marketed as medical devices in individual EU member
states. If a competent authority in the EU were to determine that the products concerned are incorrectly classified
as a medical device, we may be subject to administrative action or other enforcement measures, such as the
suspension of the marketing or the withdrawal from the market of the product concerned.

The FDA requires advertising and promotional labeling to be truthful and not misleading, and products to be

marketed only for the approved indications and in accordance with the provisions of the approved label. The
FDA routinely provides its interpretations of that authority in informal communications and also in more formal
communications such as untitled letters or warning letters, and although such communications may not be
considered final agency decisions, companies may decide not to contest the agency’s interpretations so as to
avoid disputes with the FDA, even if they believe the claims to be truthful, not misleading and otherwise lawful.
For example, in September 2012, we received a warning letter from the FDA related to a direct-to-consumer
patient brochure for FazaClo. We were no longer using the allegedly violative promotional materials at the time
we received the letter, but reviewed all of our other promotional materials for FazaClo in accordance with the
letter. We agreed with the FDA on plans for correcting the promotional materials and disseminating the
corrective messages to healthcare providers, patients and consumers and began implementation of the corrective
actions in accordance with the agreed-upon plans in February 2013. We believe that we have taken necessary
actions required to fully address the agency’s concerns. However, there can be no assurance that the FDA will

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agree with our assessment. The FDA could take further action, could require us to take further action, with
respect to our FazaClo promotional materials, or could otherwise conclude we have not taken all appropriate
corrective actions with respect to the warning letter. The FDA or other regulatory authorities may disagree with
our response to the warning letter or challenge other of our promotional materials or activities in the future,
through additional enforcement action, which may have a negative impact on our sales and/or may subject us to
financial or other penalties.

The FDA, the competent authorities of the EU member states and other governmental authorities also
actively enforce regulations prohibiting off-label promotion, and the government has levied large civil and
criminal fines against companies for alleged improper promotion. The government has also required companies
to enter into complex corporate integrity agreements and/or non-prosecution agreements that impose significant
reporting and other burdens on the affected companies. For example, a predecessor company to Jazz
Pharmaceuticals, Inc. was investigated for off-label promotion of Xyrem, and, while Jazz Pharmaceuticals, Inc.
was not prosecuted, as part of the settlement Jazz Pharmaceuticals, Inc. entered into a corporate integrity
agreement with the Office of Inspector General, U.S. Department of Health and Human Services, which extended
through mid-2012. The investigation resulted in significant fines and penalties, which Jazz Pharmaceuticals, Inc.
has paid, and the corporate integrity agreement required us to maintain a comprehensive compliance program.
For all of our products, it is important that we maintain a comprehensive compliance program. Failure to
maintain a comprehensive and effective compliance program, and to integrate the operations of acquired
businesses into a combined comprehensive and effective compliance program on a timely basis, could subject us
to a range of regulatory actions that could affect our ability to commercialize our products and could harm or
prevent sales of the affected products, or could substantially increase the costs and expenses of commercializing
and marketing our products.

Various U.S. state agencies traditionally oversee pharmaceutical compounding activities. Compounded
drugs are made by certain pharmacies, typically by combining, mixing or altering ingredients of a drug to make a
formulation that is not readily available to patients and/or approved by the FDA. A number of problems have
been associated with the making and use of compounded drugs, including product contamination, product
toxicity, product instability and impaired performance of medical devices used to deliver drugs. Improperly
compounded products can pose serious public health issues, as evidenced by the October 2012 fungal meningitis
outbreak in the United States which was traced to compounded drugs from the New England Compounding
Center. Pharmaceutical products administered intrathecally, such as Prialt, are frequently compounded with other
products by pharmacies, a process over which we have no control. If any of our products are used in compounded
drugs, we may have exposure to claims by patients treated with compounded formulations containing our
products and to regulatory action by relevant government agencies. Any such claims or regulatory actions could
result in harm to our reputation and have a negative effect on our business. In addition, since late 2012, there
have been increased legislative and enforcement activities on the federal level and new legislation was passed in
November 2013 which gives the FDA increased authority over compounding operations. We cannot predict the
impact of any new legislation on our business.

Other Regulatory Authorities

We are also subject to regulation by other regional, national, state and local agencies, including the DEA,
the Department of Justice, the FTC, the U.S. Department of Commerce, the Office of Inspector General of the
U.S. Department of Health and Human Services and other regulatory bodies, as well as governmental authorities
in those non-U.S. countries in which we commercialize our products. In addition to the FDCA, other federal,
state and non-U.S. statutes and regulations govern to varying degrees the research, development, manufacturing
and commercial activities relating to prescription pharmaceutical products, including preclinical testing,
approval, production, labeling, sale, distribution, import, export, post-market surveillance, advertising,
dissemination of information, promotion, marketing, and pricing to government purchasers and government
healthcare programs. Our partners, including our suppliers, manufacturers and distributors and the central
pharmacy for Xyrem, are subject to many of the same requirements.

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These requirements include obtaining sufficient quota from the DEA each year to manufacture sodium

oxybate and Xyrem. In addition to quota requirements, the DEA imposes various registration, importing,
exporting, recordkeeping and reporting requirements, labeling and packaging requirements, security controls and
a restriction on prescription refills on certain pharmaceutical products under the CSA. The states also impose
similar requirements for handling controlled substances. The United States and the EU member states are parties
to the 1971 Convention. In October 2012, the WHO sent a recommendation to the CND to reschedule GHB,
under the 1971 Convention from its current Schedule IV status to Schedule II status. In March 2013, the CND
voted to reschedule GHB from Schedule IV to Schedule II under the 1971 Convention. While the DEA imposes
its own scheduling requirements in the United States under the CSA, the United States is obligated as a signatory
to the 1971 Convention to ensure that drug scheduling in the United States is consistent with its obligations under
the international treaties. Because sodium oxybate, the active pharmaceutical ingredient in Xyrem, is a derivative
of GHB, the international rescheduling of GHB means that Xyrem and/or sodium oxybate may be subject to
more restrictive registration, recordkeeping, reporting, importing, exporting and other requirements in the EU
and certain other countries than the restrictions currently in place. In the United States, under DEA regulations,
the Xyrem finished product is currently classified as a Schedule III controlled substance, with sodium oxybate,
classified as a Schedule I controlled substance. Although the HHS, has taken the position in the past that the
United States would not be required to alter the domestic control of GHB should it be rescheduled to Schedule II
under the 1971 Convention, we cannot guarantee that international rescheduling of GHB from Schedule IV to
Schedule II will not impact restrictions on Xyrem in the United States. Failure by us or any of our partners,
including suppliers, manufacturers and distributors, to comply with such requirements could result in, among
other things, additional operating costs to us, delays in shipments outside or into the United States and adverse
regulatory actions.

In addition, pursuant to the Export Administration Regulations, we are required to obtain a license from the

U.S. Department of Commerce prior to the exportation of certain materials and technical information related to
Prialt, a synthesized conotoxin, which is a designated controlled biological toxin.

The U.S. federal healthcare program anti-kickback statute prohibits, among other things, knowingly and
willfully offering, paying, soliciting, or receiving remuneration to induce or in return for purchasing, leasing,
ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under
Medicare, Medicaid or other federally financed healthcare programs. This statute has been interpreted to apply to
arrangements between pharmaceutical companies on one hand and prescribers, purchasers and formulary
managers on the other. Although there are a number of statutory exemptions and regulatory safe harbors
protecting certain common manufacturer business arrangements and activities from prosecution, the exemptions
and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing,
purchases or recommendations of our products may be subject to scrutiny if they do not qualify for an exemption
or safe harbor. We seek to comply with the exemptions and safe harbors whenever possible, but our practices
may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability.

The U.S. Federal False Claims Act prohibits any person from knowingly presenting, or causing to be
presented, a false claim for payment of federal funds, or knowingly making, or causing to be made, a false
statement to get a false claim paid. Many pharmaceutical and other healthcare companies have been investigated
and have reached substantial financial settlements with the federal government under the False Claims Act for a
variety of alleged improper marketing activities, including providing free product to customers with the
expectation that the customers would bill federal programs for the product; providing consulting fees, grants, free
travel, and other benefits to physicians to induce them to prescribe the company’s products; and inflating prices
reported to private price publication services, which are used to set drug reimbursement rates under government
healthcare programs. In addition, in recent years the government has pursued False Claims Act cases against a
number of pharmaceutical companies for causing false claims to be submitted as a result of the marketing of their
products for unapproved uses. Pharmaceutical and other healthcare companies also are subject to other federal
false claim laws, including federal criminal healthcare fraud and false statement statutes that extend to non-
government health benefit programs.

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In addition, the Physician Payment Sunshine provisions of the Healthcare Reform Act require extensive
tracking of physician and teaching hospital payments, maintenance of a payments database, and public reporting
of the payment data. CMS has issued a final rule implementing the Physician Payment Sunshine
provisions and clarifying the scope of the reporting obligations. The final rule also provided that manufacturers
begin tracking on August 1, 2013 and begin reporting payment data to CMS by March 31, 2014. It is widely
anticipated that public reporting under the Sunshine Act will result in increased scrutiny of the financial
relationships between industry, teaching hospitals and physicians, and such scrutiny may negatively impact our
ability to engage with physicians on matters of importance to us.

The majority of states also have statutes or regulations similar to the federal anti-kickback law and false

claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in
several states, apply regardless of the payor. A number of states now require pharmaceutical companies to report
expenses relating to the marketing and promotion of pharmaceutical products and to report gifts and payments to
individual physicians in the states. Other states restrict when pharmaceutical companies may provide meals to
prescribers or engage in other marketing related activities. Still other states require the posting of information
relating to clinical studies and their outcomes. In addition, California, Connecticut, Massachusetts and Nevada
require pharmaceutical companies to implement compliance programs or marketing codes of conduct. Additional
states are considering or recently have considered similar proposals. Non-U.S. governments often have similar
regulations which we also will be subject to in those countries where we market and sell products.

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In the EU, the advertising and promotion of our products are subject to EU member states’ laws governing

promotion of medicinal products, interactions with physicians, misleading and comparative advertising and
unfair commercial practices. In addition, other legislation adopted by individual EU member states may apply to
the advertising and promotion of medicinal products. These laws require that promotional materials and
advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics, or
SmPC, as approved by the competent authorities. The SmPC is the document that provides information to
physicians concerning the safe and effective use of the medicinal product. It forms an intrinsic and integral part
of the marketing authorization granted for the medicinal product. Promotion of a medicinal product that does not
comply with the SmPC is considered to constitute off-label promotion. The off-label promotion of medicinal
products is prohibited in the EU. The applicable laws at EU level and in the individual EU member states also
prohibit the direct-to-consumer advertising of prescription-only medicinal products. Violations of the rules
governing the promotion of medicinal products in the EU could be penalized by administrative measures, fines
and imprisonment. These laws may further limit or restrict the advertising and promotion of our products to the
general public and may also impose limitations on our promotional activities with health care professionals.

Interactions between pharmaceutical companies and physicians are also governed by strict laws, regulations,

industry self-regulation codes of conduct and physicians’ codes of professional conduct in the individual
EU member states. The provision of benefits or advantages to physicians to induce or encourage the prescription,
recommendation, endorsement, purchase, supply, order or use of medicinal products is prohibited in the EU. The
provision of benefits or advantages to physicians is also governed by the national anti-bribery laws of the
EU member states. One example is the UK Bribery Act. As further discussed below, the UK Bribery Act applies
to any company incorporated in or “carrying on business” in the UK, irrespective of where in the world the
alleged bribery activity occurs, which could have implications for our interactions with physicians both in and
outside the UK. Violation of these laws could result in substantial fines and imprisonment.

Payments made to physicians in certain EU member states must be publicly disclosed. Moreover,
agreements with physicians must often be the subject of prior notification and approval by the physician’s
employer, his/her competent professional organization, and/or the competent authorities of the individual
EU member states. These requirements are provided in the national laws, industry codes, or professional codes of
conduct, applicable in the EU member states. Failure to comply with these requirements could result in
reputational risk, public reprimands, administrative penalties, fines or imprisonment.

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Our business activities outside of the United States are subject to the FCPA and similar anti-bribery or anti-
corruption laws, regulations or rules of other countries in which we operate, including the UK Bribery Act. The
FCPA and similar anti-corruption laws generally prohibit the offering, promising, giving, or authorizing others to
give anything of value, either directly or indirectly, to non-U.S. government officials in order to improperly
influence any act or decision, secure any other improper advantage, or obtain or retain business. The FCPA also
requires public companies to make and keep books and records that accurately and fairly reflect the transactions
of the company and to devise and maintain an adequate system of internal accounting controls. The UK Bribery
Act prohibits giving, offering, or promising bribes to any person, including non-UK government officials and
private persons, as well as requesting, agreeing to receive, or accepting bribes from any person. In addition,
under the UK Bribery Act, companies which carry on a business or part of a business in the UK may be held
liable for bribes given, offered or promised to any person, including non-UK government officials and private
persons, by employees and persons associated with the company in order to obtain or retain business or a
business advantage for the company. Liability is strict, with no element of a corrupt state of mind, but a defense
of having in place adequate procedures designed to prevent bribery is available. Furthermore, under the
UK Bribery Act there is no exception for facilitation payments. As described above, our business is heavily
regulated and therefore involves significant interaction with public officials, including officials of non-U.S.
governments. Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are
employed by their government, and the purchasers of pharmaceuticals are government entities; therefore, our
dealings with these prescribers and purchasers may be subject to regulation under the FCPA. Recently the
SEC and the Department of Justice have increased their FCPA enforcement activities with respect to
pharmaceutical companies. In addition, under the Dodd-Frank Wall Street Reform and Consumer Protection Act,
private individuals who report to the SEC original information that leads to successful enforcement actions may
be eligible for a monetary award. We are engaged in ongoing efforts that are designed to ensure our compliance
with these laws, including due diligence, training, policies, procedures, and internal controls. However, there is
no certainty that all employees and third party business partners (including our distributors, wholesalers, agents,
contractors, and other partners) will comply with anti-bribery laws. In particular, we do not control the actions of
manufacturers and other third party agents, although we may be liable for their actions. Violation of these laws
may result in civil or criminal sanctions, which could include monetary fines, criminal penalties, and
disgorgement of past profits, which could have a material adverse impact on our business and financial condition.

We are also subject to laws and regulations covering data privacy and the protection of health-related and

other personal information. The legislative and regulatory landscape for privacy and data protection continues to
evolve, and there has been an increasing focus on privacy and data protection issues which may affect our
business, including recently enacted laws in all jurisdictions where we operate. Numerous federal and state laws,
including state security breach notification laws, state health information privacy laws and federal and state
consumer protection laws, govern the collection, use and disclosure of personal information. In addition, we
obtain patient health information from most healthcare providers who prescribe our products and research
institutions we collaborate with, and they are subject to privacy and security requirements under the HIPAA, as
amended by the HITECH Act. Although we are not directly subject to HIPAA other than with respect to
providing certain employee benefits, we could potentially be subject to criminal penalties if we knowingly obtain
or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is
not authorized or permitted by HIPAA. Moreover, EU member states and other jurisdictions have adopted data
protection laws and regulations, which impose significant compliance obligations. For example, the EU Data
Protection Directive, as implemented into national laws by the EU member states, imposes strict obligations and
restrictions on the ability to collect, analyze and transfer personal data, including health data from clinical trials
and adverse event reporting. Data protection authorities from the different EU member states may interpret the
EU Data Protection Directive and national laws differently, which adds to the complexity of processing personal
data in the EU, and guidance on implementation and compliance practices are often updated or otherwise revised.
Failing to comply with these laws could lead to government enforcement actions and significant penalties against
us, and adversely impact our operating results. The EU Data Protection Directive prohibits the transfer of
personal data to countries outside of the EEA that are not considered by the European Commission to provide an
adequate level of data protection, including the U.S. There are also similar data transfer restrictions in

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Switzerland. However, there are a number of legal mechanisms to allow for the transfer of personal data from the
EEA and Switzerland to the United States, including, among others, a voluntary U.S.—EU Safe Harbor
Framework, a voluntary U.S.—Switzerland Safe Harbor Framework and the EU’s set of standard form
contractual clauses for the transfer of personal data outside of EEA. Our U.S. subsidiary, Jazz Pharmaceuticals,
Inc., has certified compliance with the U.S.—EU Safe Harbor Framework through the U.S. Department of
Commerce. A proposal for an EU Data Protection Regulation, intended to replace the current EU Data Protection
Directive, is currently under consideration. The EU Data Protection Regulation is expected to introduce new data
protection requirements in the EU and substantial fines for breaches of the data protection rules. If the draft
EU Data Protection Regulation is adopted in its current form it may increase our responsibility and liability in
relation to personal data that we process and we may be required to put in place additional mechanisms ensuring
compliance with the new EU data protection rules.

The number and complexity of both federal and state laws continue to increase, and additional governmental

resources are being added to enforce these laws and to prosecute companies and individuals who are believed to
be violating them. In particular, the Healthcare Reform Act includes a number of provisions aimed at
strengthening the government’s ability to pursue anti-kickback and false claims cases against pharmaceutical
manufacturers and other healthcare entities, including substantially increased funding for healthcare fraud
enforcement activities, enhanced investigative powers, and amendments to the False Claims Act that make it
easier for the government and whistleblowers to pursue cases for alleged kickback and false claim violations.
While it is too early to predict what effect these changes will have on our business, we anticipate that government
scrutiny of pharmaceutical sales and marketing practices will continue for the foreseeable future and subject us to
the risk of government investigations and enforcement actions. Responding to a government investigation or
enforcement action would be expensive and time-consuming, and could have a material adverse effect on our
business, financial condition, results of operations and growth prospects.

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Compliance with the various EU, national, and federal and state laws that apply to pharmaceutical

manufacturers is difficult and time consuming, and companies that violate them may face substantial penalties.
The potential sanctions include civil monetary penalties, exclusion of a company’s products from reimbursement
under government programs, criminal fines and imprisonment. Because of the breadth of these laws and, in some
cases, the lack of extensive legal guidance in the form of regulations or court decisions, it is possible that some of
our business activities could be subject to challenge under one or more of these laws. For example, the FTC has
been paying increasing attention to the use of REMS by companies selling branded products, in particular to
whether REMS may be being deliberately used to reduce the risk of competition from generic drugs in a way that
may be deemed to be anticompetitive. It is possible that the FTC or others could claim that our REMS or other
practices are being used in an anticompetitive manner. The FDCA further states that a REMS shall not be used
by an NDA holder to block or delay generic drugs from entering the market. Two of the ANDA applicants have
asserted that our patents covering the distribution system for Xyrem should not have been listed in the Orange
Book, and that the Xyrem REMS is blocking competition. Such a challenge or any other challenge that we or our
business partners have failed to comply with applicable laws and regulations could have a material adverse effect
on our business, financial condition, results of operations and growth prospects. If we or the other parties with
whom we work fail to comply with applicable regulatory requirements, we or they could be subject to a range of
regulatory actions that could affect our ability to commercialize our products and could harm or prevent sales of
the affected products, or could substantially increase the costs and expenses of commercializing and marketing
our products. Any threatened or actual government enforcement action could also generate adverse publicity and
require that we devote substantial resources that could otherwise be used in other aspects of our business.

We manufacture certain active pharmaceutical ingredients, including the defibrotide drug substance, at our

manufacturing facility in Italy. In addition, we have engaged a third party manufacturer to process defibrotide
into the finished product at its Italian manufacturing plant. These facilities are subject to continuing regulation by
the Italian Health Authority and other Italian regulatory authorities with respect to the manufacturing of active
pharmaceutical ingredients, including the defibrotide drug substance or its finished form. These facilities are also
subject to inspection and regulation by the FDA and the EMA with respect to the manufacturing of the

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defibrotide drug substance and its finished form. Also, part of the process to obtain FDA and EMA approval for
defibrotide is to obtain certification from those authorities that these facilities are in compliance with cGMP.
Following initial approval, if any, the FDA or the EMA will continue to inspect our manufacturing facilities, in
some cases, unannounced, to confirm ongoing compliance with cGMP. These regulators may deny approval to
manufacture our active pharmaceutical ingredients or otherwise require us to stop manufacturing our active
pharmaceutical ingredients if they determine that either our facility or our third party manufacturer’s facility in
Italy does not meet the standards of compliance required under applicable regulations. In addition, these
regulators may require us to complete costly alterations to our facilities.

If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate program or
other governmental pricing programs, we could be subject to additional reimbursement requirements,
penalties, sanctions and fines which could have a material adverse effect on our business, financial condition,
results of operations and growth prospects.

We participate in the Medicaid Drug Rebate program, established by the Omnibus Budget Reconciliation
Act of 1990 and amended by the Veterans Health Care Act of 1992 as well as subsequent legislation. We also
participate in and have certain price reporting obligations to several state Medicaid supplemental rebate and other
governmental pricing programs, and we have obligations to report average sales price under the Medicare
program. Under the Medicaid Drug Rebate program, we are required to pay a rebate to each state Medicaid
program for our covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state
Medicaid program as a condition of having federal funds being made available to the states for our drugs under
Medicaid and Medicare Part B. Those rebates are based on pricing data reported by us on a monthly and
quarterly basis to CMS, the federal agency that administers the Medicaid Drug Rebate program. These data
include the average manufacturer price and, in the case of innovator products, the best price for each drug which,
in general, represents the lowest price at which the drug is made available to any commercial purchaser or payor,
net of rebates and other price concessions. Such data previously have not been submitted for our two
radiopharmaceutical products, ProstaScint® (capromab pendetide) and Quadramet® (samarium sm 153
lexidronam injection). We have been engaged in interactions with CMS and a trade group, the Council on
Radionuclides and Radiopharmaceuticals, or CORAR, regarding the reporting of Medicaid pricing data and
paying Medicaid rebates for radiopharmaceutical products. For ProstaScint, we plan to begin making any
required reports when CMS provides guidance on this requirement and reporting methodology, which is
currently expected in 2014. We sold Quadramet to a third party in December 2013, but have retained any
liabilities related to sales of the product during prior periods. In addition to the discussions with CMS as part of
CORAR, we have had separate discussions with CMS directly regarding Quadramet. We are currently unable to
predict whether price reporting and rebates will be required for ProstaScint and Quadramet and if so, for what
period they will be required. We are currently unable to reasonably estimate an amount or range of a potential
contingent loss related to the payment of rebates for Quadramet or ProstaScint. Any material liability resulting
from radiopharmaceutical price reporting and rebates would negatively impact our financial results.

The Healthcare Reform Act made significant changes to the Medicaid Drug Rebate program. Effective
March 23, 2010, rebate liability expanded from fee-for-service Medicaid utilization to include the utilization of
Medicaid managed care organizations as well. With regard to the amount of the rebates owed, the Healthcare
Reform Act increased the minimum Medicaid rebate from 15.1% to 23.1% of the average manufacturer price for
most innovator products and from 11.0% to 13.0% for non-innovator products; changed the calculation of the rebate
for certain innovator products that qualify as line extensions of existing drugs; and capped the total rebate amount
for innovator drugs at 100% of the average manufacturer price. In addition, the Healthcare Reform Act and
subsequent legislation changed the definition of average manufacturer price. Finally, the Healthcare Reform Act
requires pharmaceutical manufacturers of branded prescription drugs to pay a branded prescription drug fee to the
federal government beginning in 2011. Each individual pharmaceutical manufacturer pays a prorated share of the
branded prescription drug fee of $3.0 billion in 2014 (and set to increase in ensuing years), based on the dollar value
of its branded prescription drug sales to certain federal programs identified in the law. Sales of orphan drugs are
excluded from this fee as long as no non-orphan indications have been approved for such orphan drugs.

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In 2012, the CMS issued proposed regulations to implement the changes to the Medicaid Drug Rebate program

under the Healthcare Reform Act but has not yet issued final regulations. CMS is currently expected to release the
final regulations in 2014. Moreover, in the future, Congress could enact legislation that further increases Medicaid
drug rebates or other costs and charges associated with participating in the Medicaid Drug Rebate program. The
issuance of regulations and coverage expansion by various governmental agencies relating to the Medicaid Drug
Rebate program has and will continue to increase our costs and the complexity of compliance, has been and will be
time-consuming, and could have a material adverse effect on our results of operations.

Federal law requires that any company that participates in the Medicaid Drug Rebate program also
participate in the Public Health Service’s 340B drug pricing discount program in order for federal funds to be
available for the manufacturer’s drugs under Medicaid and Medicare Part B. The 340B pricing program requires
participating manufacturers to agree to charge statutorily-defined covered entities no more than the 340B “ceiling
price” for the manufacturer’s covered outpatient drugs. These 340B covered entities include a variety of
community health clinics and other entities that receive health services grants from the Public Health Service, as
well as hospitals that serve a disproportionate share of low-income patients. The 340B ceiling price is calculated
using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered
outpatient drug as calculated under the Medicaid Drug Rebate program. Changes to the definition of average
manufacturer price and the Medicaid rebate amount under the Healthcare Reform Act and CMS’s issuance of
final regulations implementing those changes also could affect our 340B ceiling price calculations and negatively
impact our results of operations. The initiation of any reporting of Medicaid pricing data for ProstaScint and
Quadramet could result in retroactive 340B ceiling price liability for these two products as well as prospective
340B ceiling price obligations for ProstaScint. We are currently unable to reasonably estimate an amount or
range of a contingent loss. Any material liability resulting from radiopharmaceutical price reporting would
negatively impact our financial results.

The Healthcare Reform Act expanded the 340B program to include additional entity types: certain free-

standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, each as
defined by the Healthcare Reform Act. The Healthcare Reform Act exempts “orphan drugs”—those designated
under section 526 of the FDCA—from the ceiling price requirements for these newly-eligible entities. The
HRSA, which administers the 340B program, issued a final regulation to implement the orphan drug exception in
July 2013. The final regulation interprets the orphan drug exception narrowly. It exempts orphan drugs from the
ceiling price requirements for the newly-eligible entities only when the orphan drug is used for its orphan
indication. The newly-eligible entities are entitled to purchase orphan drugs at the ceiling price when the orphan
drug is not used for its orphan indication. The final regulation, which became effective October 1, 2013, is
subject to a pending lawsuit that seeks to block its implementation. The narrow scope of the orphan drug
exception in HRSA’s final regulation will increase the complexity of compliance, will make compliance more
time-consuming, and could negatively impact our results of operations.

The Healthcare Reform Act also obligates the Secretary of the HHS to create regulations and processes to

improve the integrity of the 340B program and to update the agreement that manufacturers must sign to
participate in the 340B program to obligate a manufacturer to offer the 340B price to covered entities if the
manufacturer makes the drug available to any other purchaser at any price and to report to the government the
ceiling prices for its drugs. HRSA is expected to issue a comprehensive proposed regulation in 2014 that will
address many aspects of the 340B program. When that regulation is finalized, it could affect our obligations
under the 340B program in ways we cannot anticipate. In addition, legislation may be introduced that, if passed,
would further expand the 340B program to additional covered entities or would require participating
manufacturers to agree to provide 340B discounted pricing on drugs used in the inpatient setting.

Federal law also requires that a company that participates in the Medicaid Drug Rebate program report ASP

information to CMS for certain categories of drugs that are paid under Part B of the Medicare program.
Manufacturers calculate ASP based on a statutorily defined formula as well as regulations and interpretations of the
statute by CMS as to what should or should not be considered in computing ASP. An ASP for each National Drug

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Code for a product that is subject to the ASP reporting requirement must be submitted to CMS no later than 30 days
after the end of each calendar quarter. CMS uses these submissions to determine payment rates for drugs under
Medicare Part B. Statutory or regulatory changes or CMS binding guidance could affect the ASP calculations for
our products and the resulting Medicare payment rate, and could negatively impact our results of operations.

Pricing and rebate calculations vary among products and programs. The calculations are complex and are
often subject to interpretation by us, governmental or regulatory agencies and the courts. The Medicaid rebate
amount is computed each quarter based on our submission to CMS of our current average manufacturer prices
and best prices for the quarter. If we become aware that our reporting for a prior quarter was incorrect, or has
changed as a result of recalculation of the pricing data, we are obligated to resubmit the corrected data for a
period not to exceed twelve quarters from the quarter in which the data originally were due. Such restatements
and recalculations increase our costs for complying with the laws and regulations governing the Medicaid Drug
Rebate program. Any corrections to our rebate calculations could result in an overage or underage in our rebate
liability for past quarters, depending on the nature of the correction. Price recalculations also may affect the
ceiling price at which we are required to offer our products to certain covered entities, such as safety-net
providers, under the 340B drug discount program.

We are liable for errors associated with our submission of pricing data. In addition to retroactive rebates and
the potential for 340B program refunds, if we are found to have knowingly submitted false average manufacturer
price, average sales price, or best price information to the government, we may be liable for civil monetary
penalties in the amount of $100,000 per item of false information. Our failure to submit monthly/quarterly
average manufacturer price, average sales price, and best price data on a timely basis could result in a civil
monetary penalty of $10,000 per day for each day the information is late beyond the due date. Such failure also
could be grounds for CMS to terminate our Medicaid drug rebate agreement, pursuant to which we participate in
the Medicaid program. In the event that CMS terminates our rebate agreement, no federal payments would be
available under Medicaid or Medicare Part B for our covered outpatient drugs.

In September 2010, CMS and the Office of the Inspector General indicated that they intend more
aggressively to pursue companies who fail to report these data to the government in a timely manner.
Governmental agencies may also make changes in program interpretations, requirements or conditions of
participation, some of which may have implications for amounts previously estimated or paid. We cannot assure
you that our submissions will not be found by CMS to be incomplete or incorrect.

Federal law requires that for a company to be eligible to have its products paid for with federal funds under
the Medicaid and Medicare Part B programs as well as to be purchased by certain federal agencies, it also must
participate in the VA FSS pricing program. To participate, we are required to enter into an FSS contract with the
VA, under which we must make our innovator “covered drugs” available to the “Big Four” federal agencies—the
VA, the Department of Defense, or DoD, the Public Health Service, and the Coast Guard—at pricing that is
capped pursuant to a statutory federal ceiling price, or FCP, formula set forth in Section 603 of the VHCA. The
FCP is based on a weighted average Non-FAMP, which manufacturers are required to report on a quarterly and
annual basis to the VA. If a company misstates Non-FAMPs or FCPs it must restate these figures. Pursuant to the
VHCA, knowing provision of false information in connection with a Non-FAMP filing can subject a
manufacturer to penalties of $100,000 for each item of false information.

FSS contracts are federal procurement contracts that include standard government terms and conditions,

separate pricing for each product, and extensive disclosure and certification requirements. All items on FSS
contracts are subject to a standard FSS contract clause that requires FSS contract price reductions under certain
circumstances where pricing is reduced to an agreed “tracking customer.” Further, in addition to the “Big Four”
agencies, all other federal agencies and some non-federal entities are authorized to access FSS contracts. FSS
contractors are permitted to charge FSS purchasers other than the Big Four agencies “negotiated pricing” for
covered drugs that is not capped by the FCP; instead, such pricing is negotiated based on a mandatory disclosure
of the contractor’s commercial “most favored customer” pricing. We offer one single FCP-based FSS contract
price to all FSS purchasers for all products.

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In addition, pursuant to regulations issued by the DoD TRICARE Management Activity, or TMA, to
implement Section 703 of the National Defense Authorization Act for Fiscal Year 2008, each of our covered
drugs is listed on a Section 703 Agreement with TMA under which we have agreed to pay rebates on covered
drug prescriptions dispensed to TRICARE beneficiaries by TRICARE network retail pharmacies. Companies are
required to list their innovator products on Section 703 Agreements in order for those products to be eligible for
DoD formulary inclusion. The formula for determining the rebate is established in the regulations and our
Section 703 Agreement and is based on the difference between the Annual Non-FAMP and the FCP (as
described above, these price points are required to be calculated by us under the VHCA).

If we overcharge the government in connection with our FSS contract or Section 703 Agreement, whether

due to a misstated FCP or otherwise, we are required to refund the difference to the government. Failure to make
necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False
Claims Act and other laws and regulations. Unexpected refunds to the government, and responding to a
government investigation or enforcement action, would be expensive and time-consuming, and could have a
material adverse effect on our business, financial condition, results of operations and growth prospects.

Price approvals and reimbursement may not be available for our products, which could diminish our sales or
affect our ability to sell our products profitably.

In both U.S. and non-U.S. markets, our ability to commercialize our products successfully, and to attract
commercialization partners for our products, depends in significant part on the availability of adequate financial
coverage and reimbursement from third party payors, including, in the United States, governmental payors such
as the Medicare and Medicaid programs, managed care organizations and private health insurers. In many
countries, price approvals must be obtained before products can be placed on the market or submitted for
reimbursement. Third party payors, including government payors, decide which drugs can be reimbursed and
establish reimbursement and co-pay levels. Third party payors are increasingly challenging the prices charged for
medical products and services and examining their cost effectiveness, in addition to their safety and efficacy. In
some cases, for example, third party payors try to encourage the use of less expensive generic products through
their prescription benefits coverage and reimbursement and co-pay policies. We may need to conduct expensive
pharmacoeconomic and/or clinical studies in order to demonstrate the cost-effectiveness of our products. Even
with such studies, our products may be considered less safe, less effective or less cost-effective than other
products, and third party payors may not provide and maintain price approvals, coverage and reimbursement for
our products or any of our product candidates that we commercialize, in whole or in part. In addition, third party
payors’ reimbursement practices may affect the price levels for our products, including Xyrem, or the availability
of reimbursement for Xyrem. Our business could be materially harmed if the Medicaid program, Medicare
program or other third party payors were to deny reimbursement for our products or provide reimbursement only
on unfavorable terms. This risk is particularly significant with respect to Xyrem, in part due to payor sensitivity
to the price of Xyrem. Our business could also be harmed if the Medicaid program, Medicare program or other
reimbursing bodies or payors limit the indications for which our products will be reimbursed to a smaller set of
indications than we believe is appropriate or limit the circumstances under which our products will be reimbursed
to a smaller set of circumstances than we believe is appropriate.

In addition, third party payors draw on diagnostic criteria to establish reimbursement guidelines. Meaningful

changes to the diagnostic criteria for narcolepsy are included in the recently published fifth edition of the
Diagnostic and Statistical Manual of Mental Disorders (DSM-5) and are expected to be included in the third
edition of International Classification of Sleep Disorders (ICSD-3), which is expected to be published in 2014.
As a result, third party payors may make changes to the coverage and reimbursement for our products, which
may have a negative impact on revenues from Xyrem.

In many countries, procedures to obtain price approvals, coverage and reimbursement can take considerable
time after the receipt of marketing approval. We have not yet obtained pricing and reimbursement with respect to
Defitelio in any of the EU countries where pricing and reimbursement approvals are required for launch. If we

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fail to obtain such pricing and reimbursement for Defitelio in any of EU countries in which we intend to market
Defitelio or if we experience delays in obtaining such pricing and reimbursement, our growth prospects could be
negatively affected. See the discussion regarding the planned launch of Defitelio in the risk factor in this Item 1A
entitled “We may not be able to successfully launch and market Defitelio in the EU, which could have a material
adverse effect on our business, financial condition, results of operations and growth prospects.”

We cannot predict actions third party payors may take, or whether they will limit the price approvals,
coverage and level of reimbursement for our products or refuse to provide and maintain any approvals or
coverage at all. For example, because some of our products compete in a market with both branded and generic
products, obtaining and maintaining price approvals and reimbursement coverage by government and private
payors may be more challenging than for new chemical entities for which no therapeutic alternatives exist.
Additionally, in many countries, reimbursement guidelines and incentives provided to prescribing physicians by
third party payors may have a significant impact on the prescribing physicians’ willingness to prescribe our
products. For example, the U.S. federal government follows a diagnosis-related group, or DRG, payment system
for certain institutional services provided under Medicare or Medicaid. The DRG system entitles a healthcare
facility to a fixed reimbursement based on discharge diagnoses rather than actual costs incurred in providing
inpatient treatment, thereby increasing the incentive for the facility to limit or control expenditures for many
healthcare products. For our products used in the inpatient setting, there may not be sufficient reimbursement
under the DRG to fully cover the cost of our products. We cannot be sure that reimbursement amounts, or the
lack of reimbursement, will not reduce the demand for, or the price of, our products. If reimbursement is not
available or is available only at limited levels, we may not be able to effectively commercialize our products.

Third party payors frequently require that drug companies negotiate agreements with them that provide

discounts or rebates from list prices. We have agreed to provide such discounts and rebates to some third party
payors in relation to our products. We expect increasing pressure to offer larger discounts or discounts to a
greater number of third party payors to maintain acceptable reimbursement levels and access for patients at copay
levels that are reasonable and customary. A number of third party payors also require prior authorization for,
require reauthorization for continuation of, or even refuse to provide, reimbursement for our products, including
Xyrem, and others may do so in the future. Patients who cannot meet the conditions of prior authorizations are
often prevented from obtaining the prescribed medication, because they cannot afford to pay for the medication
without reimbursement. If we are unsuccessful in maintaining reimbursement for our products at acceptable
levels, or if reimbursement for our products by third party payors is subject to overly restrictive prior
authorizations, our business will be harmed. In addition, if our competitors reduce the prices of their products, or
otherwise demonstrate that they are better or more cost effective than our products, this may result in a greater
level of reimbursement for their products relative to our products, which would reduce our sales and harm our
results of operations.

In recent years, there have been a number of legislative and regulatory changes in and proposals to change

the healthcare system in ways that could impact our ability to sell our products profitably. These changes and
proposals include measures that would limit or prohibit payments for some medical treatments or subject the
pricing of drugs to government control and regulations changing the rebates we are required to provide. For
example, much attention has been paid to legislation proposing federal rebates on Medicare Part D and Medicare
Advantage utilization for drugs issued to certain groups of lower income beneficiaries and the desire to change
the provisions that treat these dual-eligible patients differently from traditional Medicare patients. Any such
changes could have a negative impact on revenues from sales of our products.

Payors also are increasingly considering new metrics as the basis for reimbursement rates, such as average
sales price, average manufacturer price and Actual Acquisition Cost. The existing data for reimbursement based
on these metrics is relatively limited, although certain states have begun to survey acquisition cost data for the
purpose of setting Medicaid reimbursement rates. CMS has made draft NADAC and draft NARP data publicly
available on at least a monthly basis. In July 2013, CMS suspended the publication of draft NARP data, pending
funding decisions. In November 2013, CMS moved to publishing final rather than draft NADAC data and has

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since made updated NADAC data publicly available on a weekly basis. Therefore, it may be difficult to project
the impact of these evolving reimbursement mechanics on the willingness of payors to cover our products. Any
failure to cover products appropriately under our DoD pricing agreements, in addition to legislative and
regulatory changes and others that may occur in the future, could impact our ability to maximize revenues in the
Federal marketplace. As discussed above, recent legislative changes to the 340B drug pricing program, the
Medicaid Drug Rebate program, and the Medicare Part D prescription drug benefit also could impact our
revenues. A significant portion of our revenue from sales of Erwinaze is obtained through government payors,
including Medicaid, and any failure to qualify for reimbursement for Erwinaze under those programs would have
a material adverse effect on revenues from sales of Erwinaze.

We expect to experience pricing pressure in the United States in connection with the sale of our products

due to managed healthcare, the increasing influence of health maintenance organizations and additional
legislative proposals. In various EU member states we expect to be subject to continuous cost-cutting measures,
such as lower maximum prices, lower or lack of reimbursement coverage and incentives to use cheaper, usually
generic, products as an alternative. If we fail to successfully secure and maintain reimbursement coverage for our
products or are significantly delayed in doing so, we will have difficulty achieving market acceptance of our
products and our business will be harmed. We have periodically increased the price of Xyrem, most recently in
February 2014, and we have made and may in the future make similar price increases on our other products. We
cannot assure you that such price adjustments will not negatively affect our ability to secure and maintain
reimbursement coverage for our products, which could negatively impact our sales volumes.

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There also continue to be legislative proposals to amend U.S. laws to allow the importation into the United

States of prescription drugs, which can be sold at prices that are regulated by the governments of various
non-U.S. countries. For example, in October 2013, the State of Maine enacted a bill to allow residents of the state
to purchase prescription drugs from other countries, including Canada. The potential importation of prescription
drugs could pose significant safety concerns for patients, increase the risk of counterfeit products becoming
available in the market, and could also have a negative impact on prescription drug prices in the United States.
For example, the potential importation of Xyrem without the safeguard of our Xyrem REMS program could harm
patients and could also negatively impact Xyrem revenues.

Beginning April 1, 2013, Medicare payments for all items and services, including drugs and biologicals, have

been reduced by 2% under the sequestration (i.e., automatic spending reductions) required by the Budget Control
Act of 2011, Pub. L. No. 112-25, as amended by the American Taxpayer Relief Act of 2012, Pub. L. 112-240. The
Bipartisan Budget Act of 2013, Pub. L. No. 113-67, extended the 2% reduction to 2023. If Congress does not take
action in the future to modify these sequestrations, Part D plans could seek to reduce their negotiated prices for
drugs. Other legislative or regulatory cost containment provisions, as described below, could have a similar effect.
These cuts reduce reimbursement payments related to our products, which could potentially negatively impact our
revenue.

Product liability and product recalls could harm our business.

The development, manufacture, testing, marketing and sale of pharmaceutical products are associated with

significant risks of product liability claims or recalls. Side effects of, or manufacturing defects in, the products
sold by us could exacerbate a patient’s condition, or could result in serious injury or impairments or even death.
This could result in product liability claims and/or recalls of one or more of our products. Some of our products,
including Xyrem, have boxed warnings in their labels. In many countries, including in EU member states,
national laws provide for strict (no-fault) liability which applies even where damages are caused both by a defect
in a product and by the act or omission of a third party.

Product liability claims may be brought by individuals seeking relief for themselves, or by groups seeking to

represent a class of injured patients. Further, third party payors, either individually or as a putative class, may
bring actions seeking to recover monies spent on one of products. While we have not had to defend against any

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product liability claims to date, as sales of our products increase, we believe it is likely product liability claims
will be made against us. The risk of product liability claims may also increase if a company receives a warning
letter from a regulatory agency. We cannot predict the frequency, outcome or cost to defend any such claims.

Product liability insurance coverage is expensive, can be difficult to obtain and may not be available in the
future on acceptable terms, if at all. Our product liability insurance may not cover all of the future liabilities we
might incur in connection with the development, manufacture or sale of our products. In addition, we may not
continue to be able to obtain insurance on satisfactory terms or in adequate amounts.

A successful claim or claims brought against us in excess of available insurance coverage could subject us
to significant liabilities and could have a material adverse effect on our business, financial condition, results of
operations and growth prospects. Such claims could also harm our reputation and the reputation of our products,
adversely affecting our ability to market our products successfully. In addition, defending a product liability
lawsuit is expensive and can divert the attention of key employees from operating our business.

Product recalls may be issued at our discretion or at the discretion of our suppliers, government agencies

and other entities that have regulatory authority for pharmaceutical sales. Any recall of our products could
materially adversely affect our business by rendering us unable to sell that product for some time and by
adversely affecting our reputation. A recall could also result in product liability claims by individuals and third
party payors. In addition, product liability claims could result in an investigation of the safety or efficacy of our
products, our manufacturing processes and facilities, or our marketing programs conducted by the FDA, the
EMA, or the competent authorities of the EU member states. An FDA investigation could also potentially lead to
a recall of our products or more serious enforcement actions, limitations on the indications for which they may be
used, or suspension, variation, or withdrawal of approval. Similarly, any such regulatory action by the FDA, the
EMA or the competent authorities of the EU member states could lead to product liability lawsuits as well.
Similar investigations and risks can occur in other countries outside the United States.

We use hazardous materials in our manufacturing facility, and any claims relating to the improper handling,
storage, release or disposal of these materials could be time-consuming and expensive.

Our manufacturing of active pharmaceutical ingredients in Italy involves the controlled storage, use and

disposal of chemicals and solvents. We are subject to Italian laws, which implement EU directives and
regulations governing the use, transportation, treatment, storage, handling and disposal of solid and hazardous
materials, wastewater discharges and air emissions. We have obtained certification under the UNI EN ISO 14001
Standard for our environmental management system and have an Eco-management and Audit Scheme (EMAS)
for our plant in Italy. Our environmental policy is designed to comply with current regulations on environmental
protection, to provide for continuous improvement of our manufacturing performance, to protect our employees’
health, to protect the safety of people working at our location in Italy and to respect the safety of people living
close to our plant and in the surrounding community. Although we believe that our safety procedures for
handling and disposing of these hazardous materials comply with the standards prescribed by these laws and
regulations, we cannot completely eliminate the risk of contamination or injury from hazardous materials. If an
accident occurs, an injured party could seek to hold us liable for any damages that result and any liability could
exceed the limits or fall outside the coverage of our insurance. We may not be able to maintain insurance on
acceptable terms, or at all. We may incur significant costs to comply with current or future environmental laws
and regulations.

Risks Relating to Our Financial Condition

We have incurred substantial debt, which could impair our flexibility and access to capital and adversely
affect our financial position.

As of December 31, 2013, we had approximately $554.4 million in secured debt outstanding. In connection
with the Gentium Acquisition, we incurred an additional $650.0 million in secured debt, including $350.0 million

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of incremental term loans and $300.0 million of revolving loans. All of our secured debt was incurred pursuant to
a credit agreement that we entered into in connection with our acquisition of EUSA Pharma Inc., or the EUSA
Acquisition, in June 2012 and subsequently amended in June 2013 and in January 2014, which is referred to in
this report as our credit agreement. Our debt may:

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limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or
other general business purposes;

limit our ability to use our cash flow or obtain additional financing for future working capital, capital
expenditures, acquisitions or other general business purposes;

require us to use a substantial portion of our cash flow from operations to make debt service payments;

limit our flexibility to plan for, or react to, changes in our business and industry;

place us at a competitive disadvantage compared to our less leveraged competitors; and

increase our vulnerability to the impact of adverse economic and industry conditions.

Our ability to meet our debt service obligations will depend on our future performance, which will be
subject to financial, business, and other factors affecting our operations, many of which are beyond our control.
If we do not have sufficient funds to meet our debt service obligations, we may be required to refinance all or
part of our existing debt, sell assets, borrow more money or sell securities, none of which we can assure you that
we would be able to do in a timely manner or at all.

Covenants in our credit agreement restrict our business and operations in many ways and if we do not
effectively manage our covenants, our financial conditions and results of operations could be adversely
affected.

Our credit agreement currently provides for $904.4 million of term loans due in June 2018 and a

$425.0 million revolving credit facility, with loans under such revolving credit facility due in June 2017. The
credit agreement contains various covenants that limit our ability and/or our restricted subsidiaries’ ability to,
among other things:

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incur or assume liens or additional debt or provide guarantees in respect of obligations of other
persons;

issue redeemable preferred stock;

pay dividends or distributions or redeem or repurchase capital stock;

prepay, redeem or repurchase certain debt;

make loans, investments, acquisitions (including acquisitions of exclusive licenses) and capital
expenditures;

enter into agreements that restrict distributions from our subsidiaries;

sell assets and capital stock of our subsidiaries;

enter into certain transactions with affiliates; and

consolidate or merge with or into, or sell substantially all of our assets to, another person.

Our credit agreement also includes a financial covenant that requires us to maintain a maximum secured
leverage ratio. Our ability to comply with this financial covenant may be affected by events beyond our control.
In addition, the covenants under the credit agreement could restrict our operations, particularly our ability to
respond to changes in our business or to take specified actions to take advantage of certain business opportunities
that may be presented to us. Our failure to comply with any of the covenants could result in a default under the
credit agreement, which could permit the lenders to declare all or part of any outstanding borrowings to be

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immediately due and payable, or to refuse to permit additional borrowings under the revolving credit facility. In
addition, if we are unable to repay those amounts, the lenders under the credit agreement could proceed against
the collateral granted to them to secure that debt, which would seriously harm our business.

To continue to grow our business, we will need to commit substantial resources, which could result in future
losses or otherwise limit our opportunities or affect our ability to operate our business.

The scope of our business and operations has grown substantially since the beginning of 2012 through the

Azur Merger, the EUSA Acquisition and the Gentium Acquisition. To continue to grow our business over the
longer-term, we will need to commit substantial additional resources to in-licensing and/or acquiring new
products and product candidates, and to costly and time-consuming product development and clinical trials of our
product candidates. We also intend to continue to invest in our commercial operations in an effort to grow sales
of our current products. Our future capital requirements will depend on many factors, including many of those
discussed above, such as:

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the revenues from our commercial products, which may be affected by many factors, including the
extent of generic competition for our products;

the costs of our commercial operations;

the costs of integration activities related to any future strategic transactions we may engage in;

the cost of acquiring and/or licensing any new products and product candidates;

the scope, rate of progress, results and costs of our development and clinical activities;

the cost and timing of obtaining regulatory approvals and of compliance with laws and regulations;

the cost of preparing, filing, prosecuting, defending and enforcing patent claims and other intellectual
property rights;

the cost of investigations, litigation and/or settlements related to regulatory oversight and third party
claims; and

changes in laws and regulations, including, for example, healthcare reform legislation.

Our strategy includes the expansion of our business through the licensing, acquisition and/or development of

additional marketed or close to approval products and specialty product candidates. We cannot assure you that
we will continue to identify attractive opportunities or that our funds will be sufficient to fund these activities if
opportunities arise. We may be unable to expand our business if we do not have sufficient capital or cannot
borrow or raise additional capital on attractive terms. In particular, the debt under the amended credit agreement
may limit our ability to borrow additional funds for acquisitions or to use our cash flow or obtain additional
financing for future acquisitions. In addition, if we use a substantial amount of our funds to acquire or in-license
products or product candidates, we may not have sufficient additional funds to conduct all of our operations in
the manner we would otherwise choose.

We may not be able to access the capital and credit markets on terms that are favorable to us, or at all.

During the past several years, domestic and international financial markets have experienced extreme
disruption from time to time, including, among other things, high volatility and significant declines in stock
prices and severely diminished liquidity and credit availability for both borrowers and investors. We may again
decide to access the capital or credit markets to supplement our existing cash balances, cash we expect to
generate from operations and funds available under our revolving credit facility to satisfy our needs for working
capital, capital expenditures and debt service requirements or to continue to grow our business over the longer
term through product acquisition and in-licensing, product development and clinical trials of product candidates,
and expansion of our commercial operations. In the event of adverse capital and credit market conditions, we
may not be able to obtain capital market financing or credit on favorable terms, or at all, which could have a

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material adverse effect on our business and growth prospects. Changes in our credit ratings issued by nationally
recognized credit rating agencies could adversely affect our cost of financing and have an adverse effect on the
market price of our securities.

We may not be able to successfully maintain our tax rates, which could adversely affect our business and
financial condition, results of operations and growth prospects.

We are incorporated in Ireland and maintain subsidiaries in North America, a number of other European

jurisdictions and Bermuda. Azur Pharma was able to achieve a low average tax rate through the performance of
certain functions and ownership of certain assets in tax-efficient jurisdictions, including Ireland and Bermuda,
together with intra-group service and transfer pricing agreements, each on an arm’s length basis. We are
continuing to use a substantially similar structure and arrangements. Taxing authorities, such as the U.S. Internal
Revenue Service, or the IRS, actively audit and otherwise challenge these types of arrangements, and have done
so in the pharmaceutical industry. The IRS or other taxing authority may challenge our structure and transfer
pricing arrangements through an audit or lawsuit. Responding to or defending such a challenge could be
expensive and consume time and other resources, and divert management’s time and focus from operating our
business. We cannot predict whether taxing authorities will conduct an audit or file a lawsuit challenging this
structure, the cost involved in responding to any such audit or lawsuit, or the outcome. If we are unsuccessful, we
may be required to pay taxes for prior periods, interest, fines or penalties, and may be obligated to pay increased
taxes in the future, any of which could require us to reduce our operating expenses, decrease efforts in support of
our products or seek to raise additional funds, all of which could have a material adverse effect on our business,
financial condition, results of operations and growth prospects.

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The IRS may not agree with the conclusion that we should be treated as a foreign corporation for U.S. federal
tax purposes.

Although we are incorporated in Ireland, the IRS may assert that we should be treated as a U.S. corporation

(and, therefore, a U.S. tax resident) for U.S. federal tax purposes pursuant to Section 7874 of the Internal Revenue
Code of 1986, as amended, or the Code. For U.S. federal tax purposes, a corporation generally is considered a tax
resident in the jurisdiction of its organization or incorporation. Because we are an Irish incorporated entity, we
would be classified as a foreign corporation (and, therefore, a non-U.S. tax resident) under these rules. Section 7874
of the Code provides an exception under which a foreign incorporated entity may, in certain circumstances, be
treated as a U.S. corporation for U.S. federal tax purposes. Because we indirectly acquired all of Jazz
Pharmaceuticals, Inc.’s assets through the acquisition of the shares of Jazz Pharmaceuticals, Inc. common stock in
the Azur Merger, the IRS could assert that we should be treated as a U.S. corporation for U.S. federal tax purposes
under Section 7874. For us to be treated as a foreign corporation for U.S. federal tax purposes under Section 7874 of
the Code, either (1) the former stockholders of Jazz Pharmaceuticals, Inc. must have owned (within the meaning of
Section 7874 of the Code) less than 80% (by both vote and value) of our ordinary shares by reason of holding shares
in Jazz Pharmaceuticals, Inc. (the “ownership test”), or (2) we must have substantial business activities in Ireland
after the Azur Merger (taking into account the activities of our expanded affiliated group). The Jazz
Pharmaceuticals, Inc. stockholders owned less than 80% of our share capital immediately after the Azur Merger by
reason of their ownership of shares of Jazz Pharmaceuticals, Inc. common stock. As a result, we believe that we
should be treated as a foreign corporation for U.S. federal tax purposes. It is possible that the IRS could disagree
with the position that the ownership test is satisfied and assert that Section 7874 of the Code applies to treat us as a
U.S. corporation following the Azur Merger. There is limited guidance regarding the Code Section 7874 provisions,
including the application of the ownership test described above. The IRS continues to scrutinize transactions that are
potentially subject to Section 7874, and issued new final and temporary regulations under Section 7874 in June
2012 and in January 2014. We do not expect these regulations to affect the U.S. tax consequences of the Azur
Merger. Nevertheless, new statutory and/or regulatory provisions under Section 7874 of the Code or otherwise
could be enacted that adversely affect our status as a foreign corporation for U.S. federal tax purposes, and any such
provisions could have retroactive application to us, Jazz Pharmaceuticals, Inc., our respective shareholders, and/or
the Azur Merger.

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Section 7874 of the Code limits Jazz Pharmaceuticals, Inc. and its U.S. affiliates’ ability to utilize their U.S.
tax attributes to offset certain U.S. taxable income, if any, generated by certain taxable transactions.

Following certain acquisitions of a U.S. corporation by a foreign corporation, Section 7874 of the Code can

limit the ability of the acquired U.S. corporation and its U.S. affiliates to utilize U.S. tax attributes such as net
operating losses to offset U.S. taxable income resulting from certain transactions. Based on the limited guidance
available, this limitation applies to us. As a result, after the Azur Merger, Jazz Pharmaceuticals, Inc. or its U.S.
affiliates have not been able and will continue to be unable, for a period of time, to utilize their U.S. tax attributes
to offset their U.S. taxable income, if any, resulting from certain taxable transactions. Notwithstanding this
limitation, we plan to fully utilize Jazz Pharmaceuticals, Inc.’s U.S. net operating losses, or NOLs, prior to their
expiration. As a result of this limitation, however, it may take Jazz Pharmaceuticals, Inc. longer to use its NOLs.
Moreover, contrary to these plans, it is possible that the limitation under Section 7874 of the Code on the
utilization of U.S. tax attributes could prevent Jazz Pharmaceuticals, Inc. from fully utilizing its U.S. tax
attributes prior to their expiration if Jazz Pharmaceuticals, Inc. does not generate sufficient taxable income.

Our U.S. affiliates’ ability to use their net operating losses to offset potential taxable income and related
income taxes that would otherwise be due could be subject to further limitations if we do not generate taxable
income in a timely manner or if the “ownership change” provisions of Sections 382 and 383 of the Code result
in further annual limitations.

Our U.S. affiliates have a significant amount of NOLs. Our ability to use these NOLs to offset potential
future taxable income and related income taxes that would otherwise be due is dependent upon our generation of
future taxable income before the expiration dates of the NOLs, and we cannot predict with certainty when, or
whether, our U.S. affiliates will generate sufficient taxable income to use all of the NOLs. In addition, realization
of NOLs to offset potential future taxable income and related income taxes that would otherwise be due is subject
to annual limitations under the “ownership change” provisions of Sections 382 and 383 of the Code and similar
state provisions, which may result in the expiration of additional NOLs before future utilization. In general, an
“ownership change” occurs if, during a three-year rolling period, there is a change of 50% or more in the
percentage ownership of a company by 5% shareholders (and certain persons treated as 5% shareholders), as
defined in the Code and Treasury Regulations. In this regard, we currently estimate that, as a result of these
ownership change provisions, we have an annual limitation on the utilization of certain NOLs of $28.6 million
for each of the years 2014 to 2016, $11.9 million for 2017, and a combined total of $3.3 million for 2018 to 2026.
However, Sections 382 and 383 of the Code are extremely complex provisions with respect to which there are
many uncertainties, and we have not requested a ruling from the IRS to confirm our analysis of the ownership
change limitations related to the NOLs generated by our U.S. affiliates. Therefore, we have not established
whether the IRS would agree with our analysis regarding the application of Sections 382 and 383 of the Code. If
the IRS were to disagree with our analysis, or if our U.S. affiliates were to experience additional ownership
changes in the future, our U.S. affiliates could be subject to further annual limitations on the use of the NOLs to
offset potential taxable income and related income taxes that would otherwise be due.

Future changes to the tax laws under which we expect to be treated as a foreign corporation for U.S. federal
tax purposes or in other tax laws relating to multinational corporations could adversely affect us.

As described above, under current law, we believe that we should be treated as a foreign corporation for

U.S. federal tax purposes. Changes to Section 7874 or the Treasury Regulations promulgated thereunder could
adversely affect our status as a foreign corporation for U.S. federal tax purposes, and any changes could have
prospective or retroactive application. In addition, recent legislative proposals have aimed to expand the scope of
U.S. corporate tax residence. This legislation, if passed, could adversely affect us.

In addition, the U.S. Congress, the Organization for Economic Co-operation and Development and other

government agencies in jurisdictions where we and our affiliates do business have had an extended focus on
issues related to the taxation of multinational corporations. One example is in the area of “base erosion and profit
shifting,” where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction

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with lower tax rates. As a result, the tax laws in the United States and other countries in which we and our
affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely
affect us.

We have significant intangible assets and goodwill. Consequently, the potential impairment of our intangible
assets and goodwill may significantly impact our profitability.

As of December 31, 2013, we had recorded $1.3 billion of intangible assets and goodwill related to our past
acquisitions. Intangible assets and goodwill are subject to an impairment analysis whenever events or changes in
circumstances indicate the carrying amount of the asset may not be recoverable. Additionally, goodwill and
indefinite-lived assets are subject to an impairment test at least annually.

Events giving rise to impairment are an inherent risk in the pharmaceutical industry and cannot be

predicted. As a result of the significance of intangible assets and goodwill, our results of operations and financial
position in a future period could be negatively impacted should an impairment of intangible assets or goodwill
occur.

Our financial results could be adversely affected by foreign exchange fluctuations.

We have significant operations in Europe as well as in the United States, but we report revenues, costs and

earnings in U.S. dollars. Our primary currency translation exposures relate to our subsidiaries that have
functional currencies denominated in the Euro and the British Pound. Exchange rates between the U.S. dollar and
each of the Euro and British Pound are likely to fluctuate from period to period. Because our financial results are
reported in U.S. dollars, we are exposed to foreign currency exchange risk as the functional currency financial
statements of non-U.S. subsidiaries are translated to U.S. dollars for reporting purposes. As we continue to
expand our international operations, including with the Gentium Acquisition, we will conduct more transactions
in currencies other than the U.S. dollar. To the extent that revenue and expense transactions are not denominated
in the functional currency, we are also subject to the risk of transaction losses. Given the volatility of exchange
rates, there is no assurance that we will be able to effectively manage currency transaction and/or conversion
risks. We have not entered into derivative instruments to offset the impact of foreign exchange fluctuations.
Fluctuations in foreign currency exchange rates could have a material adverse effect on our results of operations
and financial condition.

Risks Relating to Our Ordinary Shares

The market price of our ordinary shares has been volatile and may continue to be volatile in the future, and
the value of your investment could decline significantly.

Investors who hold our ordinary shares may not be able to sell their shares at or above the price at which

they purchased their ordinary shares (or the price at which they purchased their shares of Jazz Pharmaceuticals,
Inc. common stock prior to the Azur Merger). The price of our ordinary shares has fluctuated significantly from
time to time since the completion of the Azur Merger in January 2012, and the price of Jazz Pharmaceuticals,
Inc.’s common stock historically fluctuated significantly. The risk factors described above relating to our
business and products could cause the price of our ordinary shares to continue to fluctuate significantly. In
addition, the stock market in general, including the market for life sciences companies, has experienced extreme
price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of
those companies. These broad market and industry factors may seriously harm the market price of our ordinary
shares, regardless of our operating performance.

Our share price may be dependent upon the valuations and recommendations of the analysts who cover our

business. If our results do not meet these analysts’ forecasts, the expectations of our investors or the financial
guidance we provide to investors in any period, the market price of our ordinary shares could decline. In the past,
following periods of volatility in the market or significant price decline, securities class-action litigation has

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often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs
and diversion of management’s attention and resources, which could materially and adversely affect our
business, financial condition, results of operations and growth prospects.

In addition, the market price of our ordinary shares may decline if the effects of the Gentium Acquisition

and/or potential future acquisitions on the financial results of our company are not consistent with the
expectations of financial analysts or investors.

Future sales of our ordinary shares in the public market could cause our share price to fall.

Sales of a substantial number of our ordinary shares in the public market, including sales by members of our
management or board of directors, or the perception that these sales might occur, could depress the market price
of our ordinary shares and could impair our ability to raise capital through the sale of additional equity or
equity-related securities. As of February 19, 2014, we had 58,068,360 ordinary shares outstanding, all of which
shares are eligible for sale in the public market, subject in some cases to the volume limitations and manner of
sale and other requirements under Rule 144.

In addition, we have in the past and may in the future grant rights to some of our shareholders that require us

to register the resale of our ordinary shares on behalf of these shareholders and/or facilitate offerings of ordinary
shares held by these shareholders, including in connection with potential future acquisitions of additional
products, product candidates, or companies. For example, consistent with our obligations under existing
registration rights agreements, we entered into underwriting agreements with certain underwriters and selling
shareholders pursuant to which selling shareholders sold an aggregate of approximately 13 million ordinary
shares in two separate registered public offerings in March 2012 and in March 2013. If current or potential future
holders of registration rights, by exercising their registration rights or otherwise, sell a large number of shares,
the sale could adversely affect the market price of our ordinary shares. We have also filed registration statements
to register the sale of our ordinary shares reserved for issuance under our equity incentive and employee stock
purchase plans, and intend to file additional registration statements to register any shares automatically added
each year to the share reserves under these plans.

Irish law differs from the laws in effect in the United States and may afford less protection to holders of our
securities.

It may not be possible to enforce court judgments obtained in the United States against us in Ireland based
on the civil liability provisions of the U.S. federal or state securities laws. In addition, there is some uncertainty
as to whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained against us or
our directors or officers based on the civil liabilities provisions of the U.S. federal or state securities laws or hear
actions against us or those persons based on those laws. We have been advised that the United States currently
does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil
and commercial matters. Therefore, a final judgment for the payment of money rendered by any U.S. federal or
state court based on civil liability, whether or not based solely on U.S. federal or state securities laws, would not
automatically be enforceable in Ireland.

As an Irish company, we are governed by the Irish Companies Acts, which differ in some material respects

from laws generally applicable to U.S. corporations and shareholders, including, among others, differences
relating to interested director and officer transactions and shareholder lawsuits. Likewise, the duties of directors
and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies
generally do not have a personal right of action against directors or officers of the company and may exercise
such rights of action on behalf of the company only in limited circumstances. Accordingly, holders of our
securities may have more difficulty protecting their interests than would holders of securities of a corporation
incorporated in a jurisdiction of the United States.

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Provisions of our articles of association and Irish law could delay or prevent a takeover of us by a third party.

Our articles of association could delay, defer or prevent a third party from acquiring us, despite the possible

benefit to our shareholders, or otherwise adversely affect the price of our ordinary shares. For example, our
articles of association:

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impose advance notice requirements for shareholder proposals and nominations of directors to be
considered at shareholder meetings;

stagger the terms of our board of directors into three classes;

require the approval of a supermajority of the voting power of the shares of our share capital entitled to
vote generally at a meeting of shareholders to amend or repeal our articles of association; and

permit our board of directors to issue one or more series of preferred shares with rights and
preferences, as our shareholders may determine by ordinary resolution.

In addition, several mandatory provisions of Irish law could prevent or delay an acquisition of us. For

example, Irish law does not permit shareholders of an Irish public limited company to take action by written
consent with less than unanimous consent. We are also subject to various provisions of Irish law relating to
mandatory bids, voluntary bids, requirements to make a cash offer and minimum price requirements, as well as
substantial acquisition rules and rules requiring the disclosure of interests in its shares in certain circumstances.

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These provisions may discourage potential takeover attempts, discourage bids for our ordinary shares at a

premium over the market price or adversely affect the market price of, and the voting and other rights of the
holders of, our ordinary shares. These provisions could also discourage proxy contests and make it more difficult
for you and other shareholders to elect directors other than the candidates nominated by our board.

We have never declared or paid dividends on our capital stock and we do not anticipate paying dividends in
the foreseeable future.

Other than funds we have allocated for the purposes of supporting our share repurchase program announced

in May 2013, we anticipate that we will retain all earnings, if any, to support our operations and our proprietary
drug development programs, acquire or in-license additional products and product candidates, and pursue other
opportunities. If we propose to pay dividends in the future, we must do so in accordance with Irish law, which
provides that distributions including dividend payments, share repurchases and redemptions be funded from
“distributable reserves.” In addition, our ability to pay cash dividends on or repurchase our ordinary shares is
restricted under the terms of our credit agreement. Any future determination as to the payment of dividends will,
subject to Irish legal requirements, be at the sole discretion of our board of directors and will depend on our
financial condition, results of operations, capital requirements, compliance with the terms of our credit agreement
and other factors our board of directors deems relevant. Accordingly, holders of our ordinary shares must rely on
increases in the trading price of their shares for returns on their investment in the foreseeable future.

A transfer of our ordinary shares may be subject to Irish stamp duty.

In certain circumstances, the transfer of shares in an Irish incorporated company will be subject to Irish
stamp duty, which is a legal obligation of the buyer. This duty is currently charged at the rate of 1.0% of the price
paid or the market value of the shares acquired, if higher. Because our ordinary shares are traded on a recognized
stock exchange in the United States, an exemption of this stamp duty is available to transfers by shareholders
who hold our ordinary shares beneficially through brokers which in turn hold those shares through the Depositary
Trust Company, or DTC, to holders who also hold through DTC. However, a transfer by a record holder who
holds our ordinary shares directly in his, her or its own name could be subject to this stamp duty. We, in our
absolute discretion and insofar as the Irish Companies Acts or any other applicable law permit, may, or may
provide that a subsidiary of ours will, pay Irish stamp duty arising on a transfer of our ordinary shares on behalf
of the transferee of such ordinary shares. If stamp duty resulting from the transfer of our ordinary shares which

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would otherwise be payable by the transferee is paid by us or any of our subsidiaries on behalf of the transferee,
then in those circumstances, we will, on our behalf or on behalf of our subsidiary (as the case may be), be entitled
to (i) seek reimbursement of the stamp duty from the transferee, (ii) set-off the stamp duty against any dividends
payable to the transferee of those ordinary shares and (iii) claim a first and permanent lien on the ordinary shares
on which stamp duty has been paid by us or our subsidiary for the amount of stamp duty paid. Our lien shall
extend to all dividends paid on those ordinary shares.

Dividends paid by us may be subject to Irish dividend withholding tax.

In certain circumstances, as an Irish tax resident company, we will be required to deduct Irish dividend
withholding tax (currently at the rate of 20%) from dividends paid to our shareholders. Shareholders that are
resident in the United States, EU countries (other than Ireland) or other countries with which Ireland has signed a
tax treaty (whether the treaty has been ratified or not) generally should not be subject to Irish withholding tax so
long as the shareholder has provided its broker, for onward transmission to our qualifying intermediary or other
designated agent (in the case of shares held beneficially), or us or our transfer agent (in the case of shares held
directly), with all the necessary documentation by the appropriate due date prior to payment of the dividend.
However, some shareholders may be subject to withholding tax, which could adversely affect the price of our
ordinary shares.

Our auditor, like other independent registered public accounting firms operating in Ireland and a number of
other European countries, is not currently permitted to be subject to inspection by the U.S. Public Company
Accounting Oversight Board, or the PCAOB, and as such, our investors currently do not have the benefits of
PCAOB oversight.

As an auditor of companies that are publicly-traded in the United States and as a firm registered with the

PCAOB, our independent registered public accounting firm is required by the laws of the United States to
undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and the
professional standards of the PCAOB. However, because our auditor is located in Ireland, a jurisdiction where
the PCAOB is currently unable to conduct inspections, our auditor is not currently inspected by the PCAOB.
Inspections of other auditors conducted by the PCAOB outside of Ireland have at times identified deficiencies in
those auditor’s audit procedures and quality control procedures, which may be addressed as part of the inspection
process to improve future audit quality. The lack of PCAOB inspections in Ireland prevents the PCAOB from
regularly evaluating our auditor’s audits and its quality control procedures. In addition, the inability of the
PCAOB to conduct auditor inspections in Ireland makes it more difficult to evaluate the effectiveness of our
auditor’s audit procedures or quality control procedures as compared to auditors located outside of Ireland that
are subject to regular PCAOB inspections. As a result, our investors are deprived of the benefits of PCAOB
inspections, and may lose confidence in our reported financial information and procedures and the quality of our
financial statements.

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Item 1B. Unresolved Staff Comments

There are no material unresolved written comments that were received from the SEC staff 180 days or more

before the end of our 2013 fiscal year relating to our periodic or current reports under the Exchange Act.

Item 2.

Properties

Our corporate headquarters are located in Dublin, Ireland and our United States operations are located in

Palo Alto, California and Philadelphia, Pennsylvania.

We occupy approximately 12,000 square feet of office space in Dublin, Ireland under a lease which expires
in May 2022. We have an option to terminate this lease in May 2017, with no less than six months’ prior written
notice and the payment of a termination fee. In Palo Alto, California, we occupy a total of approximately 100,000
square feet of office space, 44,000 square feet of which is occupied under a lease, or the Palo Alto Lease, that
expires in August 2017, 17,000 square feet of which is occupied under a sublease that expires in July 2017 and
39,000 square feet of which is occupied under a sublease that expires in April 2016. We have the right to extend
the term of the Palo Alto Lease for up to an additional two years. We also occupy approximately 19,000 square
feet of office space in Philadelphia, Pennsylvania under a lease that expires in February 2018.

In addition, we have offices in Oxford, United Kingdom, Lyon, France, Villa Guardia (Como), Italy and
elsewhere in Europe. We occupy approximately 5,000 square feet of office space in Oxford, United Kingdom under
a lease that expires in March 2015. We also occupy approximately 9,000 square feet of office space in Lyon, France
under a lease that expires January 2019. We have an option to terminate this lease in December 2015. We own a
manufacturing facility in Villa Guardia (Como), Italy which is subject to a mortgage securing repayment of an
aggregate of approximately €1.1 million ($1.5 million) of debt owed to Banca Nazionale del Lavoro. The
manufacturing facility is 25,295 square feet in size. We also lease approximately 51,667 square feet of office and
laboratory space and 1,076 square feet of laboratory and manufacturing space in Villa Guardia (Como), Italy under
leases that expire in December 2017.

We believe that our existing properties are in good condition and suitable for the conduct of our business.

As we continue to expand our operations, we may need to lease additional or alternative facilities.

Item 3.

Legal Proceedings

We are involved in several legal proceedings, including the following matters:

Xyrem ANDA Matters: On October 18, 2010, we received a Paragraph IV Certification notice from Roxane
that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. Roxane’s
Paragraph IV Certification alleged that all five patents then listed for Xyrem in the Orange Book on the date of
the Paragraph IV Certification are invalid, unenforceable or not infringed by Roxane’s proposed generic product.
On November 22, 2010, we filed a lawsuit against Roxane in response to Roxane’s Paragraph IV Certification in
the United States District Court for the District of New Jersey, or the District Court. We are seeking a permanent
injunction to prevent Roxane from introducing a generic version of Xyrem that would infringe our patents.
Additional patents covering Xyrem have issued since the original suit was filed, and cases involving these
patents have been consolidated with the original action. In December 2013, the District Court permitted Roxane
to amend its Answer in the consolidated case to allege additional equitable defenses, and the parties have been
given additional time for discovery on those new defenses. Although no trial date for the consolidated case has
been scheduled, based on the current scheduling order, we anticipate that trial in the consolidated case could
occur as early as late in the fourth quarter of 2014. However, the actual timing of events in this litigation may be
significantly earlier or later than contemplated by the scheduling order, and we cannot predict the timing or
outcome of events in this litigation. In accordance with the Hatch-Waxman Act, as a result of our having filed a
timely lawsuit against Roxane, FDA approval of Roxane’s ANDA had been stayed until April 18, 2013, which
was 30 months after our October 18, 2010 receipt of Roxane’s Paragraph IV Certification notice, but that stay
has expired. We cannot predict the timing or outcome of this matter.

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On December 10, 2012, we received a Paragraph IV Certification notice from Amneal that it had submitted

an ANDA to the FDA requesting approval to market a generic version of Xyrem. Amneal’s Paragraph IV
Certification alleged that seven patents listed for Xyrem in the Orange Book are not infringed by Amneal’s
proposed generic product. Amneal’s Paragraph IV Certification further alleged that an eighth patent listed in the
Orange Book for Xyrem is invalid. On December 13, 2012, we received a supplemental Paragraph IV
Certification notice alleging that a ninth patent listed in the Orange Book for Xyrem is invalid. On January 18,
2013, we filed a lawsuit against Amneal in response to Amneal’s Paragraph IV Certifications in the District
Court. An additional patent covering Xyrem issued since the original suit was filed and the case involving this
patent has been consolidated with the original case. We are seeking a permanent injunction to prevent Amneal
from introducing a generic version of Xyrem that would infringe our patents. In accordance with the
Hatch-Waxman Act, as a result of having filed a timely lawsuit against Amneal, FDA approval of Amneal’s
ANDA will be stayed until the earlier of (i) June 10, 2015, which is 30 months after our receipt of Amneal’s
Paragraph IV Certification notice on December 10, 2012, or (ii) a District Court decision finding that the
identified patents are invalid, unenforceable or not infringed. We cannot predict the timing or outcome of this
matter.

On November 21, 2013, we received a Paragraph IV Certification notice from Par that it had submitted an
ANDA to the FDA requesting approval to market a generic version of Xyrem. Par’s Paragraph IV Certification
alleged that ten patents listed in the Orange Book for Xyrem are invalid, unenforceable, and/or will not be
infringed by Par’s proposed generic product. On December 27, 2013, we filed a lawsuit against Par in the United
States District Court, in response to Par’s Paragraph IV Certification. We are seeking a permanent injunction to
prevent Par from introducing a generic version of Xyrem that would infringe our patents. In accordance with the
Hatch-Waxman Act, as a result of having filed a timely lawsuit against Par, FDA approval of Par’s ANDA will
be stayed until the earlier of (i) May 21, 2016, which is 30 months after our receipt of Par’s Paragraph IV
Certification notice on November 21, 2013, or (ii) a District Court decision finding that the identified patents are
invalid, unenforceable or not infringed. We cannot predict the timing or outcome of this matter.

FazaClo ANDA Matters: Azur Pharma received Paragraph IV Certification notices from three generics
manufacturers, Barr Laboratories, Inc., or Barr, Novel Laboratories, Inc., or Novel, and Mylan Pharmaceuticals,
Inc., or Mylan, indicating that ANDAs had been filed with the FDA requesting approval to market generic
versions of FazaClo LD. Azur Pharma and CIMA, a subsidiary of Teva, our licensor and the entity whose drug-
delivery technology is incorporated into FazaClo LD, filed a lawsuit in response to each certification claiming
infringement based on such certification against Barr on August 21, 2008, against Novel on November 25, 2008
and against Mylan on July 23, 2010. Each case was filed in the United States District Court for the District of
Delaware. On July 6, 2011, CIMA, Azur Pharma and Teva, which had acquired Barr, entered into an agreement
settling the patent litigation and Azur Pharma granted a sublicense to an affiliate of Teva of Azur Pharma’s rights
to have manufactured, market and sell a generic version of both FazaClo LD and FazaClo HD, as well as an
option for supply of authorized generic product. The sublicense for FazaClo LD commenced in July 2012, and
the sublicense for FazaClo HD will commence in May 2015, or earlier upon the occurrence of certain events.
Teva exercised its option for supply of an authorized generic product for FazaClo LD and launched the
authorized generic product at the end of August 2012. The Novel and Mylan matters have been stayed pending
reexamination of the patents in the lawsuits. In September 2013 and January 2014, reexamination certificates
were issued for the two patents-in-suit, with the claims of the patents confirmed, and the parties have requested
that the stay of litigation be lifted. We cannot predict the timing or outcome of this litigation.

Cutler Matter: On October 19, 2011, Dr. Neal Cutler, one of the original owners of FazaClo, filed a
complaint against Azur Pharma and one of its subsidiaries, as well as Avanir in the California Superior Court in
the County of Los Angeles, or the Superior Court. The complaint alleges that Azur Pharma and its subsidiary
breached certain contractual obligations. Azur Pharma acquired rights to FazaClo from Avanir in 2007. The
complaint alleges that as part of the acquisition of FazaClo, Azur Pharma’s subsidiary agreed to assume certain
contingent payment obligations to Dr. Cutler. The complaint further alleges that certain contingent payments are
due because revenue thresholds have been achieved, entitling Dr. Cutler to either a $10.5 million or $25.0 million
contingent payment, plus unspecified punitive damages and attorneys’ fees. In March 2012, the Superior Court

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granted our petition to compel arbitration of the dispute in New York and stayed the Superior Court litigation. In
July 2012, the arbitrator dismissed the arbitration on the grounds that the parties’ dispute falls outside of the
scope of the arbitration clause in the applicable contract. That ruling was affirmed by the California Court of
Appeal in January 2014, and the case was remanded to Superior Court. We cannot predict the timing or outcome
of this litigation.

Shareholder Litigation Matter: In January 2014, we became aware of a purported class action lawsuit filed

in the Southern District of New York in connection with the Gentium Acquisition. The lawsuit, captioned Xavion
Jyles, Individually and on Behalf of All Others Similarly Situated v. Gentium S.P.A. et al., names Gentium, each
of the Gentium’s directors, us and our Italian subsidiary as defendants. The lawsuit alleges, among other things,
that Gentium’s directors breached their fiduciary duties to Gentium’s shareholders in connection with a tender
offer agreement that Gentium entered into with us and our Italian subsidiary valuing Gentium ordinary shares
and ADSs at $57 per share, and that we and our Italian subsidiary violated Sections 14(e) and 20(a) of the
Exchange Act by allegedly overseeing Gentium’s preparation of an allegedly false and misleading Section 14D-9
Solicitation/Recommendation Statement. The lawsuit seeks, among other relief, class action status, rescission,
and unspecified costs, attorneys’ fees and other expenses. We cannot predict the timing or outcome of this
matter.

From time to time we are involved in legal proceedings arising in the ordinary course of business. We
believe there is no other litigation pending that could have, individually or in the aggregate, a material adverse
effect on our results of operations or financial condition.

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Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

PART II

Equity Securities

Market Information

Our ordinary shares began trading on The NASDAQ Global Select Market under the trading symbol

“JAZZ” on January 18, 2012. From June 1, 2007 until January 17, 2012, the common stock of Jazz
Pharmaceuticals, Inc. was traded on The NASDAQ Global Select Market (or The NASDAQ Global Market prior
to January 3, 2012) also under the trading symbol “JAZZ.” The following table sets forth the high and low
intraday sales prices of our ordinary shares (and for periods prior to January 18, 2012, the common stock of Jazz
Pharmaceuticals, Inc.) on The NASDAQ Global Select Market (or The NASDAQ Global Market prior to
January 3, 2012) for the periods indicated.

Calendar Quarter—2012
First Quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Calendar Quarter—2013
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
First Quarter
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

High

Low

$ 53.10
$ 54.50
$ 58.94
$ 60.00

$ 60.79
$ 72.00
$ 93.84
$128.49

$37.90
$40.38
$43.38
$47.37

$53.52
$50.76
$69.00
$80.40

On February 19, 2014, the last reported sales price per share of our ordinary shares was $170.28 per share.

Holders of Ordinary Shares

As of February 19, 2014, there were three holders of record of our ordinary shares. Because substantially all

of our ordinary shares are held by brokers, nominees and other institutions on behalf of shareholders, we are
unable to estimate the total number of shareholders represented by these record holders.

Dividends

No cash dividends have ever been declared or paid on the common equity to date by Jazz Pharmaceuticals,

Inc. or us, and we do not currently plan to pay cash dividends in the foreseeable future. Under Irish law,
dividends may only be paid, and share repurchases and redemptions must generally be funded only out of,
“distributable reserves.” In addition, the terms of our credit agreement restrict our ability to make certain
restricted payments, including dividends and other distributions by us in respect of our ordinary shares, subject to
a general exception for dividends and other restricted payments up to $30 million and another exception for
restricted payments, so long as there is no default or event of default under our credit agreement and our total
leverage ratio (as defined in our amended credit agreement) exceeds 2:1 after giving pro forma effect to the
dividend or distribution, permits dividends and other restricted payments up to $100 million plus a formula-based
amount that tied our consolidated net income. Any future determination as to the payment of dividends will,
subject to Irish legal requirements, be at the sole discretion of our board of directors and will depend on our
financial condition, results of operations, capital requirements, compliance with the terms of our credit agreement
and other factors our board of directors deems relevant.

Unregistered Sales of Equity Securities

Except as previously reported in our quarterly reports on Form 10-Q filed with the SEC during the year
ended December 31, 2013, there were no unregistered sales of equity securities by us during the year ended
December 31, 2013.

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Irish Law Matters

As we are an Irish incorporated company, the following matters of Irish law are relevant to the holders of

our ordinary shares.

Irish Restrictions on Import and Export of Capital

Except as indicated below, there are no restrictions on non-residents of Ireland dealing in Irish domestic
securities, which includes ordinary shares of Irish companies. Dividends and redemption proceeds also continue
to be freely transferable to non-resident holders of such securities. The Financial Transfers Act 1992 gives power
to the Minister for Finance of Ireland to restrict financial transfers between Ireland and other countries and
persons. Financial transfers are broadly defined and include all transfers that would be movements of capital or
payments within the meaning of the treaties governing the member states of the European Union, or EU. The
acquisition or disposal of interests in shares issued by an Irish incorporated company and associated payments
falls within this definition. In addition, dividends or payments on redemption or purchase of shares and payments
on a liquidation of an Irish incorporated company would fall within this definition. At present the Financial
Transfers Act, 1992 prohibits financial transfers involving the late Slobodan Milosevic and associated persons,
Republic of Guinea-Bissau, Myanmar/Burma, Belarus, certain persons indicted by the International Criminal
Tribunal for the former Yugoslavia, the late Osama bin Laden, Al-Qaida, the Taliban of Afghanistan, Democratic
Republic of Congo, Democratic People’s Republic of Korea (North Korea), Iran, Iraq, Côte d’Ivoire, Lebanon,
Liberia, Zimbabwe, Sudan, Somalia, Republic of Guinea, Afghanistan, Egypt, Eritrea, Libya, Syria, Tunisia,
certain known terrorists and terrorist groups, and countries that harbor certain terrorist groups, without the prior
permission of the Central Bank of Ireland.

Any transfer of, or payment in respect of, a share or interest in a share involving the government of any
country that is currently the subject of United Nations sanctions, any person or body controlled by any of the
foregoing, or by any person acting on behalf of the foregoing, may be subject to restrictions pursuant to such
sanctions as implemented into Irish law.

Irish Taxes Applicable to U.S. Holders

Withholding Tax on Dividends. While we have no current plans to pay dividends, dividends on our ordinary
shares would generally be subject to Irish Dividend Withholding Tax, or DWT, at the standard rate of income tax
(currently 20%), unless an exemption applies.

Dividends on our ordinary shares that are owned by residents of the United States and held beneficially
through the Depositary Trust Company, or DTC, will not be subject to DWT provided that the address of the
beneficial owner of the ordinary shares in the records of the broker is in the United States.

Dividends on our ordinary shares that are owned by residents of the United States and held directly (outside

of DTC) will not be subject to DWT provided that the shareholder has completed the appropriate Irish DWT
form and this form remains valid. Such shareholders must provide the appropriate Irish DWT form to our transfer
agent at least seven business days before the record date for the first dividend payment to which they are entitled.

If any shareholder who is resident in the United States receives a dividend subject to DWT, he or she should

generally be able to make an application for a refund from the Irish Revenue Commissioners on the prescribed
form.

While the United States/Ireland Double Tax Treaty contains provisions regarding withholding, due to the

wide scope of the exemptions from DWT available under Irish domestic law, it would generally be unnecessary
for a United States resident shareholder to rely on the treaty provisions.

87

Income Tax on Dividends. A shareholder who is neither resident nor ordinarily resident in Ireland and who
is entitled to an exemption from DWT generally has no additional liability to Irish income tax or to the universal
social charge on a dividend from us unless that shareholder holds our ordinary shares through a branch or agency
in Ireland through which a trade is carried on.

A shareholder who is neither resident nor ordinarily resident in Ireland and who is not entitled to an

exemption from DWT generally has no additional liability to Irish income tax or to the universal social charge on
a dividend from us. The DWT deducted by us discharges the liability to Irish income tax and to the universal
social charge. This however is not the case where the shareholder holds the ordinary shares through a branch or
agency in Ireland through which a trade is carried on.

Irish Tax on Capital Gains. A shareholder who is neither resident nor ordinarily resident in Ireland and does

not hold our ordinary shares in connection with a trade or business carried on by such shareholder in Ireland
through a branch or agency should not be within the charge to Irish tax on capital gains on a disposal of our
ordinary shares.

Capital Acquisitions Tax. Irish capital acquisitions tax, or CAT, is comprised principally of gift tax and

inheritance tax. CAT could apply to a gift or inheritance of our ordinary shares irrespective of the place of
residence, ordinary residence or domicile of the parties. This is because our ordinary shares are regarded as
property situated in Ireland as our share register must be held in Ireland. The person who receives the gift or
inheritance has primary liability for CAT.

CAT is levied at a rate of 33% above certain tax-free thresholds. The appropriate tax-free threshold is

dependent upon (i) the relationship between the donor and the donee and (ii) the aggregation of the values of
previous gifts and inheritances received by the donee from persons within the same category of relationship for
CAT purposes. Gifts and inheritances passing between spouses are exempt from CAT. Our shareholders should
consult their own tax advisers as to whether CAT is creditable or deductible in computing any domestic tax
liabilities.

Stamp Duty. Irish stamp duty (if any) may become payable in respect of ordinary share transfers. However,
a transfer of our ordinary shares from a seller who holds shares through DTC to a buyer who holds the acquired
shares through DTC will not be subject to Irish stamp duty. A transfer of our ordinary shares (i) by a seller who
holds ordinary shares outside of DTC to any buyer, or (ii) by a seller who holds the ordinary shares through DTC
to a buyer who holds the acquired ordinary shares outside of DTC, may be subject to Irish stamp duty (currently
at the rate of 1% of the price paid or the market value of the ordinary shares acquired, if greater). The person
accountable for payment of stamp duty is the buyer or, in the case of a transfer by way of a gift or for less than
market value, all parties to the transfer.

A shareholder who holds ordinary shares outside of DTC may transfer those ordinary shares into DTC
without giving rise to Irish stamp duty provided that the shareholder would be the beneficial owner of the related
book-entry interest in those ordinary shares recorded in the systems of DTC (and in exactly the same
proportions) as a result of the transfer and at the time of the transfer into DTC there is no sale of those book-entry
interests to a third party being contemplated by the shareholder. Similarly, a shareholder who holds ordinary
shares through DTC may transfer those ordinary shares out of DTC without giving rise to Irish stamp duty
provided that the shareholder would be the beneficial owner of the ordinary shares (and in exactly the same
proportions) as a result of the transfer, and at the time of the transfer out of DTC there is no sale of those ordinary
shares to a third party being contemplated by the shareholder. In order for the share registrar to be satisfied as to
the application of this Irish stamp duty treatment where relevant, the shareholder must confirm to us that the
shareholder would be the beneficial owner of the related book-entry interest in those ordinary shares recorded in
the systems of DTC (and in exactly the same proportions) (or vice-versa) as a result of the transfer and there is no
agreement for the sale of the related book-entry interest or the ordinary shares or an interest in the ordinary
shares, as the case may be, by the shareholder to a third party being contemplated.

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Performance Measurement Comparison(1)

The following graph shows the total shareholder return on the last day of each year of an investment of $100

in cash as if made on December 31, 2008 in (i) our ordinary shares; (ii) the NASDAQ Composite Index; and
(iii) the NASDAQ Biotechnology Index through December 31, 2013. Information set forth in the graph below
represents the performance of the Jazz Pharmaceuticals, Inc. common stock from December 31, 2008 until
January 17, 2012, the day before the businesses of Jazz Pharmaceuticals, Inc. and Azur Pharma Public Limited
Company, or Azur Pharma, were combined in a merger transaction, or the Azur Merger; and the performance of
our ordinary shares from January 18, 2012 through December 31, 2013. Our ordinary shares trade on the same
exchange, the NASDAQ Global Select Market (or The NASDAQ Global Market prior to January 3, 2012), and
under the same trading symbol, “JAZZ,” as the Jazz Pharmaceuticals, Inc. common stock prior to the Azur
Merger. Pursuant to applicable SEC rules, all values assume reinvestment of the full amount of all dividends;
however, we did not declare or pay any dividends on our common stock or ordinary shares during the
comparison period. The shareholder return shown in the graph below is not necessarily indicative of future
performance, and we do not make or endorse any predictions as to future shareholder returns.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Jazz Pharmaceuticals, Inc. the NASDAQ Composite Index,
and the NASDAQ Biotechnology Index

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$7,000

$6,000

$5,000

$4,000

$3,000

$2,000

$1,000

$0

12/08

12/09

12/10

12/11

12/12

12/13

Jazz Pharmaceuticals, Inc

NASDAQ Composite

NASDAQ Biotechnology

(1) This section is not “soliciting material”, is not deemed “filed” with the SEC and is not to be incorporated by
reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, whether
made before or after the date hereof and irrespective of any general incorporation language in any such
filing.

*

$100 invested on 12/31/08 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

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Issuer Purchases of Equity Securities

The following table summarizes purchases of our ordinary shares made by or on behalf of us or any of our
“affiliated purchasers” as defined in Rule 10b-18(a)(3) under the Exchange Act during each fiscal month during
the three-month period ended December 31, 2013:

Total Number of
Shares Purchased(1)

Average Price Paid
per Share(2)

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs(3)

Maximum Number (or
Approximate Dollar
Value) of Shares that
May Yet Be Purchased
Under the Plans or
Programs(4)

October 1 - 31, 2013 . . . . . . . . .
November 1 - 30, 2013 . . . . . . .
December 1 - 31, 2013 . . . . . . .

267,518
110,855

—

Total . . . . . . . . . . . . . . . . . . . . . .

378,373

$87.85
$95.49
$ —

$90.09

267,518
110,855
—

378,373

$74,136,183
$63,552,629
$63,552,629

(1) This table does not include ordinary shares that we withheld in order to satisfy minimum tax withholding

requirements in connection with the vesting or exercise of restricted stock units.

(2) Average price paid per share includes brokerage commissions.

(3) The ordinary shares reported in the table above were purchased pursuant to our publicly announced share

repurchase program. On May 7, 2013, we announced that our board of directors authorized the use of up to
$200 million to repurchase our ordinary shares. This authorization has no expiration date.

(4) The dollar amount shown represents, as of the end of each period, the approximate dollar value of ordinary
shares that may yet be purchased under our publicly announced share repurchase program, exclusive of any
brokerage commissions. The timing and amount of repurchases will depend on a variety of factors,
including the price of our ordinary shares, alternative investment opportunities, restrictions under the
amended credit agreement, corporate and regulatory requirements and market conditions, and may again be
suspended or otherwise discontinued at any time without prior notice.

Item 6.

Selected Financial Data

The following selected consolidated financial data should be read together with our consolidated financial

statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” appearing elsewhere in this Annual Report on Form 10-K. The selected consolidated
financial data in this section is not intended to replace our consolidated financial statements and the
accompanying notes. Our historical results are not necessarily indicative of our future results.

We derived the consolidated statements of operations data for the years ended December 31, 2013, 2012 and

2011 and the consolidated balance sheet data as of December 31, 2013 and 2012 from the audited consolidated
financial statements appearing elsewhere in this Annual Report on Form 10-K. The consolidated statements of
operations data for the years ended December 31, 2010 and 2009, and the selected consolidated balance sheet
data as of December 31, 2011, 2010 and 2009 are derived from audited consolidated financial statements not
included in this Annual Report on Form 10-K. The selected consolidated financial data for periods prior to the
year ended December 31, 2012 is that of Jazz Pharmaceuticals, Inc. and its consolidated subsidiaries, our
predecessor, while the selected consolidated financial data for periods after and including the year ended
December 31, 2012 is that of Jazz Pharmaceuticals plc and its consolidated subsidiaries.

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Consolidated Statements of Operations Data:
Revenues:
Product sales, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalties and contract revenues . . . . . . . . . . . . . . . . . .

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses:

Cost of product sales (excluding amortization of
acquired developed technologies) . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . .
Intangible asset amortization . . . . . . . . . . . . . . . .

Year Ended December 31,

2013

2012(1)

2011

2010

2009

(In thousands, except per share amounts)

$865,398
7,025

$580,527
5,452

$266,518
5,759

$170,006
3,775

$115,108
13,341

872,423

585,979

272,277

173,781

128,449

102,146
304,303
46,620
79,042

78,425
223,882
20,477
65,351

13,942
108,936
14,120
7,448

13,559
68,996
25,612
7,825

9,638
58,652
36,561
7,668

Total operating expenses . . . . . . . . . . . . . . .

532,111

388,135

144,446

115,992

112,519

Income from operations . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net (including $570 and $1,183
for the years ended December 31, 2010 and
2009, respectively, pertaining to a related
party)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency loss . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment and modification of debt

(including $701 for the year ended
December 31, 2010 pertaining to a related
party)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from continuing operations before

income tax provision (benefit) . . . . . . . . . . . . . . . . .
Income tax provision (benefit) . . . . . . . . . . .

Income (loss) from continuing operations . . . . . . . . . .
Income from discontinued operations, net of taxes . . .

340,312

197,844

127,831

57,789

15,930

(26,916)
(1,697)

(16,869)
(3,620)

(1,600)
—

(12,724)
—

(22,766)
—

(3,749)

—

(1,247)

(12,287)

—

307,950
91,638

216,312
—

177,355
(83,794)

261,149
27,437

124,984
—

124,984
—

32,778
—

32,778
—

(6,836)
—

(6,836)
—

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$216,312

$288,586

$124,984

$ 32,778

$ (6,836)

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Basic income (loss) per ordinary share:(2)

Income (loss) from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . .

Net income (loss) . . . . . . . . . . . . . . . . . . . . .

Diluted income (loss) per ordinary share:(2)

Income (loss) from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . .

Net income (loss) . . . . . . . . . . . . . . . . . . . . .

Weighted-average number of ordinary shares

outstanding: (2)

$

$

$

$

3.71
—

3.71

3.51
—

3.51

$

$

$

$

4.61
0.48

5.09

4.34
0.45

4.79

$

$

$

$

3.01
—

3.01

2.67
—

2.67

$

$

$

$

0.90
—

0.90

0.83
—

0.83

$

$

$

$

(0.23)
—

(0.23)

(0.23)
—

(0.23)

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58,298

56,643

41,499

36,343

30,018

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61,569

60,195

46,798

39,411

30,018

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2013

2012(1)

2011

2010

2009

As of December 31,

(In thousands)

Consolidated Balance Sheet Data:
Cash, cash equivalents and marketable

securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Working capital (deficit) . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, current and non-current

(including $6,552 as of December 31, 2009
held by a related party) . . . . . . . . . . . . . . . . . .
Retained earnings (accumulated deficit) . . . . . .
Total shareholders’ equity (deficit) . . . . . . . . . .

$ 636,504
660,589
2,238,221

$ 387,196
360,034
1,966,493

$ 157,898
146,261
253,573

$ 44,794
14,522
135,729

$ 15,595
(22,287)
107,396

549,976
18,532
1,295,534

456,761
(61,296)
1,121,292

—

(349,882)
192,788

40,693
(474,866)
30,551

114,866
(507,644)
(72,830)

(1) On January 18, 2012, the businesses of Jazz Pharmaceuticals, Inc. and Azur Pharma were combined in the
Azur Merger pursuant to which all outstanding shares of Jazz Pharmaceuticals, Inc.’s common stock were
canceled and converted into the right to receive, on a one-for-one basis, our ordinary shares. Jazz
Pharmaceuticals, Inc. was treated as the acquiring company in the Azur Merger for accounting purposes,
and as a result, the historical consolidated financial statements of Jazz Pharmaceuticals, Inc. became our
consolidated financial statements. On June 12, 2012, we completed our acquisition of EUSA Pharma Inc., or
the EUSA Acquisition. At the closing of the EUSA Acquisition, we paid $678.4 million in cash, and agreed
to make an additional contingent payment of $50.0 million in cash if Erwinaze achieved net sales in the
United States of $124.5 million or more in 2013. In 2013, net sales of Erwinaze in the United States
exceeded $124.5 million and as a result, we are obligated to make this payment in the first quarter of 2014.
The results of operations of the acquired Azur Pharma and EUSA Pharma businesses, along with the
estimated fair values of the assets acquired and liabilities assumed in each transaction, are included in our
consolidated financial statements since the effective dates of the Azur Merger and the EUSA Acquisition,
respectively. We financed the EUSA Acquisition, in part, by entering into our credit agreement, which at the
time provided for $475.0 million principal amount of term loans and a $100.0 million revolving credit
facility. We used all of the proceeds of those term loans, together with cash on hand, for the EUSA
Acquisition.

(2) All references to “ordinary shares” refer to Jazz Pharmaceuticals, Inc.’s common stock with respect to

periods prior to the year ended December 31, 2012 and to our ordinary shares with respect to periods after
and including the year ended December 31, 2012. Our earnings per share in the periods prior to the year
ended December 31, 2012 were not impacted by the Azur Merger since each share of Jazz Pharmaceuticals,
Inc. common stock issued and outstanding immediately prior to the effective time of the Azur Merger was
canceled and converted into the right to receive one ordinary share upon the consummation of the Azur
Merger.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction
with the consolidated financial statements and notes to consolidated financial statements included elsewhere in
this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and
uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and
uncertainties that characterize our business. In particular, we encourage you to review the risks and
uncertainties described in Part I Item 1A. “Risk Factors” included elsewhere in this report. These risks and
uncertainties could cause actual results to differ materially from those projected in forward-looking statements
contained in this report or implied by past results and trends.

Overview

We are a specialty biopharmaceutical company focused on improving patients’ lives by identifying,
developing and commercializing differentiated products that address unmet medical needs. Our strategy is to
continue to create shareholder value by:

•

•

•

Growing sales of the existing products in our portfolio, including by identifying new growth
opportunities;

Acquiring additional marketed specialty products or products close to regulatory approval to leverage
our existing expertise and infrastructure; and

Pursuing targeted development of a pipeline of post-discovery specialty product candidates.

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In 2013 and to date in 2014, we have made substantial progress in the execution of our strategy. Our strong

revenue growth continued, primarily from the sales of our lead marketed products, Xyrem® (sodium oxybate)
oral solution and Erwinaze® (asparaginase Erwinia chrysanthemi), called Erwinase® in markets outside of the
United States. We acquired the product Defitelio® (defibrotide) as a result of our acquisition pursuant to a tender
offer of approximately 98% of the outstanding and fully diluted voting securities of Gentium S.p.A., or Gentium,
as of February 21, 2014, for an aggregate acquisition cost of approximately $993 million, which we refer to as
the Gentium Acquisition. In October 2013, the European Commission granted marketing authorization for
Defitelio for the treatment of severe hepatic veno-occlusive disease, or VOD, in adults and children undergoing
hematopoietic stem cell transplantation, or HSCT, therapy. We plan to launch Defitelio in selected EU countries
during 2014, and expect to begin these efforts in the first half of 2014 after Defitelio’s patient registry has been
established and is open for recruitment, subject to the receipt of a positive recommendation by the
Pharmacovigilance Risk Assessment Committee, or PRAC, at the European Medicines Agency, or EMA, on the
patient registry design. We are engaged in pricing and reimbursement submissions in applicable EU countries in
preparation for planned launches in these countries. We intend eventually to promote Defitelio in all EU markets
where it has marketing authorization. In February 2014, we launched VersaclozTM (clozapine) oral suspension in
the United States for treatment-resistant schizophrenia and for reducing the risk of recurrent suicidal behavior in
patients with schizophrenia or schizoaffective disorders.

As a result, going into 2014, we have a portfolio of approved products that address medical needs in the

following therapeutic areas, including:

Narcolepsy: Xyrem, the only product approved by the United States Food and Drug Administration, or

FDA, for the treatment of both cataplexy and excessive daytime sleepiness in patients with narcolepsy;

Hematology/Oncology: Erwinaze, a treatment for patients with acute lymphoblastic leukemia, or ALL, who

have developed hypersensitivity to E. coli-derived asparaginase, and Defitelio, for the treatment of severe VOD
in adults and children undergoing HSCT therapy;

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Pain: Prialt® (ziconotide) intrathecal infusion, the only non-opioid intrathecal analgesic indicated for the

management of severe chronic pain for patients who are intolerant of or refractory to other treatments; and

Psychiatry: A portfolio of products, including FazaClo® (clozapine, USP) HD and FazaClo LD, orally

disintegrating clozapine tablets indicated for treatment-resistant schizophrenia, and Versacloz.

We also commercialize a portfolio of other products, mostly in markets outside of the United States. These

products are primarily in the oncology, critical care and oncology supportive care therapeutic areas.

In addition, we made significant progress and investment in expanding our product development pipeline. In

February 2013, we licensed rights to JZP-386, an early-stage investigational compound being developed for
potential use in narcolepsy, from Concert Pharmaceuticals, Inc., or Concert. In January 2014, we acquired rights
to JZP-110 (formerly known as ADX-N05), a late-stage investigational compound being developed for potential
treatment of excessive daytime sleepiness, or EDS, in patients with narcolepsy from Aerial BioPharma LLC, or
Aerial, with an upfront payment totaling $125 million. We also intend to pursue development of JZP-110 for
EDS in patients with obstructive sleep apnea, or OSA. In addition to its existing approved indication in the EU,
Defitelio has the potential to be developed for approval in other indications, and for approval in countries outside
the EU, including the United States. We are currently assessing what we believe would be the optimal path for
potential approval of defibrotide in the United States. Finally, we are conducting ongoing trials involving
AsparecTM (mPEG-r-crisantaspase), a pegylated recombinant Erwinia asparaginase for the treatment of patients
with ALL with E. coli asparaginase hypersensitivity, and LeukotacTM (inolimomab), an anti-CD25 monoclonal
antibody for the treatment of steroid-refractory acute graft versus host disease, or GvHD.

Our development pipeline projects also include line extensions for existing products and the generation of

additional clinical data for existing products. We plan to conduct a clinical trial to further evaluate the use of
Erwinaze in young adults age 18 to 39 with ALL who are hypersensitive to E. coli-derived asparaginase.

For 2014 and beyond, we expect that our research and development expenses will increase substantially

from historical levels, particularly as we initiate our various planned clinical trials and development work.

In addition, through the Gentium Acquisition we acquired a manufacturing facility that produces active
pharmaceutical ingredients, including defibrotide, the drug substance in Defitelio, and in February 2014 we
announced we commenced construction of a manufacturing and development facility in Ireland.

The Gentium Acquisition was carried out pursuant to a tender offer agreement that we entered into with a
wholly-owned subsidiary of ours, as purchaser, and Gentium. On December 23, 2013, we launched a tender offer
for all of Gentium’s ordinary shares and American Depositary Shares, or ADSs, at a purchase price of $57.00 per
share, net to the holders in cash, without interest on the purchase price, less any required withholding taxes. The
initial tender offer period expired on January 22, 2014, and we accepted and purchased all of the Gentium
ordinary shares and ADSs properly tendered at that time, which represented approximately 69% of the then fully
diluted number of Gentium ordinary shares and ADSs. Following the expiration of the tender offer, and in
accordance with the terms of the tender offer agreement, we commenced a subsequent offering period of the
tender offer to acquire all remaining untendered ordinary shares and ADSs. The subsequent offering period
expired on February 20, 2014 and we accepted and purchased an additional approximately 29% of the fully
diluted Gentium ordinary shares and ADSs properly tendered during the subsequent offering period, resulting in
total purchases pursuant to the tender offer of approximately 98% of the fully diluted number of Gentium
ordinary shares and ADSs as of February 21, 2014. The acquisition cost of the total number of Gentium ordinary
shares and ADSs we purchased pursuant to the tender offer was approximately $993 million. We intend to cause
Gentium to seek the voluntary delisting of Gentium ADSs from the NASDAQ Stock Market, or NASDAQ, and
the deregistration of Gentium ordinary shares and ADSs under the Securities and Exchange Act of 1934, as
amended, or the Exchange Act. We expect that there will not be an active trading market for outstanding ADSs
following the delisting.

94

In June 2012, we entered into a credit agreement that provided for $475.0 million principal amount of term

loans and a $100.0 million revolving credit facility. The proceeds from the term loans were used to partially
finance the EUSA Acquisition. In June 2013, we amended the credit agreement to provide for $557.2 million
principal amount of term loans and a new revolving credit facility of $200.0 million that replaced the
$100 million revolving credit facility. We used a portion of the proceeds from the new term loans to refinance in
full the $457.2 million principal amount of term loans outstanding under the credit agreement prior to the
amendment. In January 2014, in connection with the Gentium Acquisition, we further amended the credit
agreement to provide for a tranche of incremental term loans in the aggregate principal amount of $350.0 million,
a tranche of term loans that refinanced the approximately $554.4 million principal amount of term loans
outstanding prior to this amendment, and a $425.0 million revolving credit facility that replaced the
$200.0 million revolving credit facility. We used the proceeds from the incremental term loans and
$300.0 million of loans under the revolving credit facility, together with cash on hand, to purchase the Gentium
ordinary shares and ADSs properly tendered pursuant to the tender offer.

In 2013, we initiated purchases under a share repurchase program for up to $200 million of our ordinary
shares. We spent a total of $136.5 million, including commission, to repurchase our ordinary shares under this
program in 2013. We suspended our share repurchase program in November 2013 to preserve cash for future
business development opportunities, and subject to market conditions and alternative uses of cash, we plan to
resume the program in 2014.

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Over the past two years, we have made targeted investments to strengthen our capabilities and enhance and
diversify our commercial and development portfolio. We intend to continue to leverage our commercial, medical
and scientific experience to seek to maximize the potential of our existing and potential products. Our
investments have allowed us to build a scalable infrastructure to support future growth and to continue to create
shareholder value.

We anticipate that we will continue to face a number of challenges and risks to our business and our ability
to execute our strategy in 2014. For example, while we now have a more diversified product portfolio than in the
past, our financial results remain significantly influenced by sales of Xyrem, which accounted for 65.8% of our
net product sales for 2013. As a result, we continue to place a high priority on seeking to maintain and increase
sales of Xyrem in its approved indications, while remaining focused on ensuring the safe and effective use of the
product. We are also focusing on the lifecycle management of Xyrem, including seeking to enhance and enforce
our intellectual property rights.

Our ability to maintain or increase Xyrem product sales is subject to a number of risks and uncertainties,
including those discussed in Part I, Item 1A of this Annual Report on Form 10-K. In particular, there are three
abbreviated new drug applications, or ANDAs, submitted to the FDA by third parties seeking to market generic
versions of Xyrem. We initiated lawsuits against all three third parties, and the litigation proceedings are
ongoing. We cannot predict the timing or outcome of these proceedings. Although no trial date for the
consolidated case with the first ANDA filer, Roxane Laboratories, Inc., or Roxane, has been scheduled, we
anticipate that trial in that case could occur as early as late in the fourth quarter of 2014. We expect that the
approval of an ANDA that results in the launch of a generic version of Xyrem would have a material adverse
effect on our business, financial condition, results of operations and growth prospects.

In addition, we are continuing our efforts on various regulatory matters, including working with the FDA on

updated documents that we have submitted to the FDA on our risk management and controlled distribution
system for Xyrem, which we refer to as the Xyrem Risk Management Program. We are engaged in ongoing
communications with the FDA with respect to our risk evaluation and mitigation strategies, or REMS, documents
for Xyrem, but we have not reached agreement on certain significant terms. For example, we disagree with the
FDA’s current position that, as part of the current REMS process, the Xyrem deemed REMS should be modified
to enable the distribution of Xyrem through more than one pharmacy, or potentially through retail pharmacies
and wholesalers, as well as with certain modifications proposed by the FDA that would, in the FDA’s view, make
the REMS more consistent with the FDA’s current practices for REMS documents.

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The FDA has notified us that it would exercise its claimed authority to modify our REMS and that it would

finalize the REMS as modified by the FDA unless we initiate dispute resolution procedures with respect to the
modification of the Xyrem deemed REMS. Given these circumstances, we will initiate dispute resolution
procedures with the FDA by the end of February 2014. We cannot predict whether, or on what terms, we will reach
agreement with the FDA on final REMS documents for Xyrem, whether we will initiate additional dispute
resolution proceedings with the FDA or other legal proceedings prior to finalizing the REMS documents, or the
outcome or timing of any such proceedings. We expect that final REMS documents for Xyrem will include
modifications to, and/or requirements that are not currently implemented in, the Xyrem Risk Management Program.
Any such modifications or additional requirements could potentially make it more difficult or expensive for us to
distribute Xyrem, make it easier for future generic competitors, and/or negatively affect sales of Xyrem.

In January 2014, the FDA held an initial meeting with us and current Xyrem ANDA applicants to facilitate
the development of a single shared system REMS for Xyrem (sodium oxybate). We also expect to face pressure
to license or share our Xyrem Risk Management Program, which is the subject of multiple issued patents, or
elements of it, with generic competitors. We cannot predict the outcome or impact on our business of any future
action that we may take with respect to the development of a single shared system REMS for Xyrem (sodium
oxybate), licensing or sharing our REMS, or the FDA’s response to a certification that a third party had been
unable to obtain a license.

Our financial results are increasingly influenced by sales of our second largest product, Erwinaze/Erwinase,

which have continued to grow. Sales of Erwinaze/Erwinase accounted for 20.1% of our net product sales in
2013. We seek to maintain and increase sales of Erwinaze, as well as to make Erwinaze more widely available,
through ongoing research and development activities. However, our ability to successfully and sustainably grow
sales of Erwinaze is subject to a number of risks and uncertainties, including those discussed in Part I, Item 1A of
this Annual Report on Form 10-K. In particular, a key challenge to our ability to maintain the current sales level
and continue to increase sales is our need to assure sufficient supply of Erwinaze on a timely basis. We have
limited inventory of Erwinaze, and, during 2013, our supply of Erwinaze was nearly completely absorbed by
demand for the product. In the past, we have experienced a disruption of supply of Erwinase in the European
market due to manufacturing challenges, including shortages related to the failure of a batch to meet certain
specifications in 2013, and we may experience similar or other manufacturing challenges in the future. If our
continued efforts to avoid supply shortages are not successful, we could experience Erwinaze supply
interruptions in the future, which could have a material adverse effect on our sales of and revenues from
Erwinaze and limit our potential future maintenance and growth of the market for this product. In addition, while
we continue to work with the manufacturer of Erwinaze to evaluate potential steps to increase the supply of
Erwinaze over the longer term to address expected growing worldwide demand, our ability to increase sales of
Erwinaze may be limited by our ability to obtain an increased supply of the product.

The implementation of our strategy is also subject to other challenges and risks specific to our business, as

well as risks and uncertainties common to companies in the pharmaceutical industry with development and
commercial operations. In addition to risks related to Xyrem and Erwinaze, other key challenges and risks that
we face include risks and uncertainties related to:

•

•

•

the challenges of protecting our intellectual property rights;

delays or problems in the supply or manufacture of our products, particularly because we maintain
limited inventories of certain products, including products for which our supply demands are growing,
and we are dependent on single source suppliers to continue to meet our ongoing commercial needs;

the need to obtain appropriate pricing and reimbursement for our products in an increasingly
challenging environment due to, among other things, the attention being paid to health care cost
containment and other austerity measures in the United States and worldwide, and in particular the
need to maintain reimbursement for Xyrem in the United States and obtain appropriate pricing
approvals in order to launch Defitelio in certain EU countries which represent a significant market
opportunity for Defitelio;

96

•

•

•

•

•

•

the ongoing regulation and oversight by the FDA, the U.S. Drug Enforcement Administration, or DEA,
and non-U.S. regulatory agencies, including with respect to product labeling, requirements for
distribution, obtaining sufficient DEA quotas where needed, marketing and promotional activities,
adverse event reporting and product recalls or withdrawals;

the challenges of achieving and maintaining commercial success of our products, such as obtaining
sustained acceptance of our products by patients, physicians and payors, and in particular the
successful commercial launch of Defitelio in the EU throughout 2014;

the challenges inherent in the integration of the business of Gentium with our historic business,
including the increase in geographic dispersion among our centers of operation and taking on the
operation of a manufacturing plant;

the difficulty and uncertainty of pharmaceutical product development and the uncertainty of clinical
success and regulatory approval, especially as we continue to undertake increased activities, and make
growing investment in, our product pipeline development projects;

our ability to identify and acquire, in-license or develop additional products or product candidates to
grow our business; and

possible restrictions on our ability and flexibility to pursue certain future opportunities as a result of our
substantial outstanding debt obligations, which have increased significantly as a result of, among other
things, the Gentium Acquisition and the acquisition of JZP-110.

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All of these risks are discussed in greater detail, along with other risks, in Part I, Item 1A of this Annual

Report on Form 10-K.

Results of Operations

The following discussions of our results of continuing operations exclude the results related to the women’s

health business sold in 2012 (see “Income from Discontinued Operations, Net of Taxes” below for more
information). This business has been segregated from continuing operations and reflected as a discontinued
operation for the 2012 period. The following table presents revenues and expenses from continuing operations
for the years ended December 31, 2013, 2012 and 2011 (amounts in thousands):

Product sales, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalties and contract revenues . . . . . . . . . . . . . . . . . . . . . .
Cost of product sales (excluding amortization of acquired

developed technologies) . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . . . . .
Research and development
. . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible asset amortization . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net
Foreign currency loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment and modification of debt
. . . . . . . .
Income tax provision (benefit) . . . . . . . . . . . . . . . . . . . . . . .

2013

Change

2012(1)

Change

2011

$865,398
7,025

49% $580,527
5,452
29%

118% $266,518
5,759

(5)%

102,146
304,303
46,620
79,042
26,916
1,697
3,749
91,638

30% 78,425
36% 223,882
128% 20,477
21% 65,351
60% 16,869
(53)%
3,620
N/A(2)
N/A(2)

463% 13,942
106% 108,936
45% 14,120
7,448
777%
1,600
954%
—
N/A(2)
1,247
— N/A(2)
—
(83,794) N/A(2)

(1) Our financial results include the financial results of the historic Azur Pharma and EUSA Pharma businesses
since the completion of the Azur Merger on January 18, 2012 and the EUSA Acquisition on June 12, 2012.

(2) Comparison to prior period is not meaningful.

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Revenues

The following table presents product sales, royalties and contract revenues, and total revenues for the years

ended December 31, 2013, 2012 and 2011 (amounts in thousands):

2013

Change

2012

Change

2011

Xyrem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Erwinaze/Erwinase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prialt
Psychiatry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$569,113
174,251
27,103
49,226
45,705

50% $378,663
72,083
142%
26,360
3%
(36)% 76,489
26,932
70%

62% $233,348
—
N/A(1)
—
N/A(1)
131% 33,170
—
N/A(1)

Product sales, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalties and contract revenues . . . . . . . . . . . . . . . . . . . . .

865,398
7,025

49% 580,527
5,452
29%

118% 266,518
5,759

(5%)

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$872,423

49% $585,979

115% $272,277

(1) Comparison to prior period is not meaningful.

Product Sales, Net

Xyrem product sales increased in 2013 and 2012 compared to the immediately preceding years, primarily
due to higher average net selling prices in the 2013 and 2012 periods and, to a lesser extent, increases in sales
volume. Price increases in 2013 and 2012 were based on market analysis. Xyrem product sales volumes
increased by 12% and 11% in 2013 and 2012, respectively, compared to the immediately preceding years. The
sales volume increases in both periods were driven by an increase in the average number of patients on Xyrem
and by a greater number of Xyrem patients who refilled their Xyrem prescriptions on schedule and who remained
on therapy, which we believe resulted from our efforts to increase physician knowledge about Xyrem and to
improve patient support services. Recently, we have seen higher growth in sales volume from new or previously
infrequent physician prescribers who treat narcolepsy. The sales volume increase in the 2012 period was also
impacted by the deployment of a dedicated Xyrem sales force to increase physician awareness of narcolepsy and
its diagnosis. We acquired Erwinaze/Erwinase in the EUSA Acquisition in June 2012. Erwinaze/Erwinase
product sales increased in 2013 compared to 2012 primarily due to the inclusion of product sales for the full
reporting period in 2013. On a pro forma basis, Erwinaze/Erwinase product sales increased by 32% in 2013
compared to 2012, primarily due to an increase in sales volume and to a lesser extent, a price increase in January
2013. The sales volume increase was driven primarily by a growth in new treatment sites prescribing Erwinaze as
well as existing treatment sites identifying additional ALL patients with hypersensitivity to E. coli-derived
asparaginase. Prialt product sales increased by 3% in 2013 compared to 2012. Psychiatry product sales decreased
in 2013 compared to 2012 due to the launch of a generic version of Luvox CR® (fluvoxamine maleate) in 2013
and, to a lesser extent, the continued impact of the sale of the authorized generic product for FazaClo LD.
Psychiatry product sales increased in 2012 compared to 2011, primarily due to the acquisition of FazaClo LD and
FazaClo HD in January 2012 and, to a lesser extent, an increase in Luvox CR product sales. Luvox CR product
sales increased in 2012 compared to 2011 due to price increases, partially offset by a decrease in sales volumes
of 3%. We expect total product sales will increase in 2014 over 2013, primarily due to growth in sales of Xyrem
and Erwinaze/Erwinase and the inclusion of product sales resulting from the Gentium Acquisition, partially
offset by decreases in sales of certain other products.

Royalties and Contract Revenues

Royalties and contract revenues increased in 2013 compared to 2012 due to royalties from the acquired

EUSA Pharma business. We expect royalties and contract revenues in 2014 to be consistent with 2013.

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Cost of Product Sales

Cost of product sales increased in 2013 compared to 2012, primarily due to increased sales, partially offset
by a decrease in acquisition accounting inventory fair value step-up adjustments. Cost of product sales increased
in 2012 compared to 2011, primarily due to cost of product sales in relation to products acquired in the Azur
Merger and the EUSA Acquisition, including acquisition accounting inventory fair value step-up adjustments of
$16.8 million in 2012. Gross margins as a percentage of net product sales were 88.2%, 86.5% and 94.8% in
2013, 2012 and 2011, respectively. The increase in our gross margin percentage in 2013 as compared to 2012
was primarily due to a decrease in acquisition accounting inventory fair value step-up adjustments of $13.0
million in 2013 compared to 2012. The decrease in our gross margin percentage in 2012 as compared to 2011
was primarily due to the acquisition accounting inventory fair value step-up adjustments and also due to the
impact of our product mix in 2012. The gross margins on products acquired during 2012 were lower than the
gross margins earned on our legacy products. We expect our gross margin percentage to increase slightly in 2014
compared to 2013, primarily driven by a change in product mix.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were higher in 2013 compared to 2012, primarily due to an

increase in salary and benefit related expenses (including share-based compensation expense) of $47.8 million,
driven in most part by the expansion of our business; an increase in the change in fair value of the contingent
consideration payable of $15.5 million; an increase in sales and promotional expenses of $10.8 million; and an
increase in facility and maintenance expenses of $7.2 million; partially offset by decreases in transaction,
integration and restructuring expenses of $13.9 million. Selling, general and administrative expenses were higher
in 2012 compared to 2011 primarily due to an increase in salary and benefit related headcount expenses
(including share-based compensation) of $49.0 million driven primarily by increased headcount following the
Azur Merger in January 2012 and the EUSA Acquisition in June 2012; an increase in sales and promotional
expenses of $12.8 million; an increase in transaction, integration and restructuring expenses of $10.4 million; an
increase in professional and service fees of $15.2 million; and an increase in travel, facility and maintenance
expenses of $15.5 million. We expect that selling, general and administrative expenses will be higher in 2014
than in 2013 due to increased headcount to support our larger, global organization, an increase in direct
marketing spend on key products and the inclusion of expenses resulting from the Gentium Acquisition.

Research and Development Expenses

Research and development expenses consist primarily of personnel expenses, costs related to clinical studies

and outside services, and other research and development costs. Personnel expenses relate primarily to salaries,
benefits and share-based compensation. Clinical study and outside services costs relate primarily to clinical
studies performed by clinical research organizations, materials and supplies, and other third party fees. Other
research and development expenses primarily include overhead allocations consisting of various support and
facilities-related costs. We do not track fully-burdened research and development expenses on a project-by-
project basis. We manage our research and development expenses by identifying the research and development
activities that we anticipate will be performed during a given period and then prioritizing efforts based on our
assessment of what development activities are important to our business and have a reasonable probability of
success, and by dynamically allocating resources accordingly. We also continually review our development
pipeline projects and the status of their development and, as necessary, reallocate resources among our
development pipeline projects that we believe will best support the future growth of our business.

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The following table provides a breakout of our research and development expenses by major categories of

expense (in thousands):

Year Ended December 31,

2013

2012

2011

Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Clinical studies and outside services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,019
21,373
3,228

$10,432
8,566
1,479

10,581
2,145
1,394

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$46,620

$20,477

$14,120

Research and development expenses increased by $26.1 million in 2013 compared to 2012 primarily due to
increased clinical studies and outside services costs of $12.8 million and increased personnel expenses of $11.6
million due to a 40% increase in headcount. Clinical studies and outside services expenses in 2013 included
upfront license fees of $5.0 million, primarily in connection with our licensing of JZP-386 from Concert, with no
similar expense in 2012. Clinical studies and outside services costs increased in 2013 compared to 2012,
primarily due to an increase in costs incurred to develop new product candidates that we acquired in the EUSA
Acquisition, in addition to an increase in costs related to the development of line extensions for existing products
and the generation of additional clinical data. Research and development expenses increased by $6.4 million in
2012 compared to 2011, primarily due to increased clinical studies and outside services costs related to the
generation of additional clinical data and the development of line extensions for existing products, and to a lesser
extent, costs incurred to develop new product candidates that we acquired in the EUSA Acquisition and the Azur
Merger. Personnel expenses and other research and development expenses in 2012 were consistent with 2011.

For 2014 and beyond, we expect that our research and development expenses will increase substantially
from these historical levels, particularly as we initiate our various planned clinical trials and development work.
A discussion of the risks and uncertainties with respect to our research and development activities, including
completing the development of our product candidates, and the consequences to our business, financial position
and growth prospects can be found in “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Intangible Asset Amortization

We acquired finite-lived intangible assets in connection with the Azur Merger and the EUSA Acquisition

that are expected to be amortized over their useful economic lives of two to 15 years. The increase in
amortization expense in 2013 compared to 2012 was primarily due to the inclusion of a full year of amortization
expense relating to the intangible assets acquired in the EUSA Acquisition. The amortization of the intangible
assets acquired in the Azur Merger and the EUSA Acquisition accounted for all of the increase in amortization
expense in 2012 compared to 2011. During 2011, our intangible assets consisted primarily of developed
technology related to Xyrem and Luvox CR. As a result of the Gentium Acquisition, we expect to record
significant intangible assets and accordingly we expect intangible asset amortization to increase significantly in
2014.

Interest Expense, Net

Interest expense, net increased by $10.0 million in 2013 compared to 2012 primarily due to a larger debt
balance, with the inclusion of interest expense on the term loans we obtained under our credit agreement in June
2012 and on the term loans we obtained in connection with the amendment of our credit agreement in June 2013.
As of December 31, 2013, $554.4 million principal amount of term loans was outstanding and the interest rate on
these term loans was 3.5%. Interest expense, net increased in 2012 compared to 2011 primarily due to a larger
debt balance. In July 2011, we fully repaid a term loan outstanding at that time. In January 2014, in connection
with the Gentium Acquisition, we incurred an additional $650.0 million in secured debt, including $350.0 million
of incremental term loans and $300.0 million of revolving loans. Accordingly, we expect interest expense will be
higher in 2014 compared to 2013 due to the increase in our debt balance.

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Foreign Currency Loss

The foreign currency loss in 2013 and 2012 related to the translation of foreign currency monetary assets

and liabilities, including intercompany balances.

Loss on Extinguishment and Modification of Debt

We recorded a loss of $3.7 million in 2013 in connection with the June 2013 refinancing of the term loans

under our credit agreement. This was comprised of $2.7 million related to the expensing of unamortized deferred
financing costs and unamortized original issue discount associated with extinguished debt and $1.0 million
related to new third party fees associated with modified debt. In 2011, as a result of the repayment of a prior term
loan and the termination of a prior credit agreement, we recorded a loss on extinguishment of debt of
$1.2 million, which consisted of a $0.8 million non-cash charge related to the write-off of unamortized debt
issuance costs and a debt discount, with the remainder related to a prepayment penalty and a termination fee.

Income Tax Provision (Benefit)

During 2013, we recognized an income tax provision of $91.6 million. Our 2013 effective tax rate from
continuing operations was 29.8%. During 2012, we recognized an income tax benefit of $83.8 million relating to
the United States, Ireland and other foreign jurisdictions. This tax benefit included a deferred tax benefit of
$113.9 million, offset by an income tax provision of $30.1 million. The deferred tax benefit included a benefit of
$104.2 million, primarily attributable to the release of a valuation allowance against substantially all of our U.S.
federal and state deferred tax assets. Management determined that it was more likely than not that these deferred
tax assets would be recoverable and the related valuation allowance was no longer needed based on an
assessment of the relative impact of all positive and negative evidence that existed at December 31, 2012,
including an evaluation of cumulative income in recent years, future sources of taxable income, and significant
risks and uncertainties related to our business. The 2013 effective tax rate was higher than the Irish statutory rate
of 12.5%, primarily due to income taxable at a rate higher than the Irish statutory rate, certain uncertain tax
positions, current year losses in some jurisdictions for which no tax benefit is available and various expenses not
deductible for tax purposes, partially offset by benefits from certain originating income tax credits. The 2012
effective income tax rate on continuing activities before utilization of our U.S. federal net operating loss
carryforwards, or NOLs, and tax credit carryforwards and release in valuation allowance in 2012 of 42.5% was
higher than the Irish statutory rate of 12.5% due to a number of factors, including income taxable at a rate higher
than the Irish statutory rate, losses in certain tax jurisdictions for which no tax benefit is available and various
expenses not deductible for tax purposes. The decrease in the effective tax rate in 2013 compared to 2012 was
primarily due to changes in income mix among the various jurisdictions in which we operate, as well as higher
taxes in 2012 relating to acquisition restructuring.

During 2011, we had operations only in the United States and made no provision for income taxes due to
our utilization of our NOLs to offset both regular taxable income and alternative minimum taxable income and to
our utilization of deferred state tax benefits.

Income from Discontinued Operations, Net of Taxes

In 2012, we sold our women’s health business to Meda Pharmaceuticals Inc. and Meda Pharma, Sàrl, or

collectively, Meda, for $97.6 million, including $2.6 million for certain inventory transferred to Meda upon the
closing of the sale, less transaction costs of $3.7 million. As part of the transaction, Meda purchased six women’s
health products from us. As part of the sale, approximately 60 employees who directly supported the women’s
health business became Meda employees. We recorded a non-recurring gain on the sale of $35.2 million.

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Net revenue and income from discontinued operations were as follows (in thousands):

Product sales, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations before income taxes(1) . . . . . . . . . . . . . . . . . . . .
Income tax expense(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss from discontinued operations, net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of discontinued operations(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20,873
$ (5,787)
(2,020)

(7,807)
35,244

Income from discontinued operations, net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .

$27,437

Year Ended
December 31, 2012

(1) The income tax expense relates to profits generated by the women’s health business in 2012 which are

attributable to the United States.

(2) The gain on sale of discontinued operations was not impacted by income taxes as the value attributable to

the women’s health business was held in a non-taxable jurisdiction.

Non-GAAP Financial Measures

To supplement our financial results presented on a U.S. generally accepted accounting principles, or GAAP,

basis, we use certain non-GAAP, also referred to as adjusted or non-GAAP adjusted, financial measures as
shown in the table and footnotes below. We believe that each of these non-GAAP financial measures is helpful in
understanding our past financial performance and potential future results, particularly in light of the effect of
various acquisition and divestiture transactions effected by the company. They are not meant to be considered in
isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with our
consolidated financial statements prepared in accordance with GAAP. Our management regularly uses these
supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and
make operating decisions. Compensation of our executives is based in part on the performance of our business
based on certain of these non-GAAP financial measures. In addition, we believe that the presentation of these
non-GAAP financial measures is useful to investors because it enhances the ability of investors to compare our
results from period to period and allows for greater transparency with respect to key financial metrics we use in
making operating decisions, and also because our investors and analysts regularly use them to model and track
our financial performance. Investors should note that these non-GAAP financial measures are not prepared under
any comprehensive set of accounting rules or principles and do not reflect all of the amounts associated with our
results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP
financial measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their
usefulness to investors. In addition, from time to time in the future there may be other items that we may exclude
for the purposes of our non-GAAP financial measures; likewise, we may in the future cease to exclude items that
we have historically excluded for the purpose of our non-GAAP financial measures. Because of the non-
standardized definitions, the non-GAAP financial measures used in this Annual Report on Form 10-K may be
calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by
our competitors and other companies. Adjusted net income measures exclude from GAAP income from
continuing operations, as applicable, intangible asset amortization, share-based compensation expense,
acquisition accounting inventory fair value step-up adjustments, transaction and integration costs, restructuring
charges, change in fair value of contingent consideration, upfront license fees, depreciation expense, loss on
extinguishment and modification of debt and other non-cash expense (income), and adjust the income tax
provision to the estimated amount of taxes payable in cash.

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A reconciliation of GAAP reported income from continuing operations to adjusted net income, a non-GAAP

financial measure, and related per share amounts is as follows (in thousands, except per share amounts):

GAAP reported income from continuing operations . . . . . . . . . . . . . . . . . . . .
Intangible asset amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition accounting inventory fair value step-up adjustments . . . . . .
Transaction and integration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in fair value of contingent consideration . . . . . . . . . . . . . . . . . . .
Upfront license fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment and modification of debt
. . . . . . . . . . . . . . . . . .
Other non-cash expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax adjustments(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance release(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2013

2012

2011

$216,312
79,042
44,551
3,826
6,240
1,457
15,200
4,988
3,048
3,749
4,591
5,253
—

$ 261,149
65,351
23,006
16,794
18,821
2,789
(300)
—
—
—
2,860
4,171
(104,247)

$124,984
7,448
20,704
—
11,245
—
—
—
—
1,247
(744)
—
—

Non-GAAP adjusted net income(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$388,257

$ 290,394

$164,884

GAAP reported income from continuing operations per diluted share . . . . . .

Non-GAAP adjusted net income per diluted share(3) . . . . . . . . . . . . . . . . . . .

$

$

3.51

6.31

$

$

4.34

4.82

$

$

2.67

3.52

Shares used in computing GAAP reported income from continuing
operations and non-GAAP adjusted net income per diluted share
amounts(4)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61,569

60,195

46,798

(1) Tax adjustments to convert the income tax provision to the estimated amount of taxes payable in cash.

(2) Reversal of valuation allowance against deferred tax assets, primarily in the United States.

(3) Non-GAAP adjusted net income and non-GAAP adjusted net income per diluted share in the table above

exclude the impact of discontinued operations.

(4) All references to “share” or “shares” in this table refer to Jazz Pharmaceuticals plc’s ordinary shares with
respect to 2013 and 2012 and to Jazz Pharmaceuticals, Inc.’s common stock with respect to 2011. GAAP
reported income from continuing operations per diluted share and adjusted net income per diluted share in
2011 were not impacted by the Azur Merger in 2012 since each share of Jazz Pharmaceuticals, Inc. common
stock issued and outstanding immediately prior to the effective time of the Azur Merger was canceled and
automatically converted into and became the right to receive one ordinary share upon the consummation of
the Azur Merger.

Liquidity and Capital Resources

As of December 31, 2013, we had cash and cash equivalents of $636.5 million, borrowing availability under
a $200.0 million revolving credit facility and $554.4 million principal amount of term loans outstanding. During
2013, 2012 and 2011 we generated cash flows from operations of $283.6 million, $249.8 million and
$151.6 million, respectively, and we expect to continue to generate positive cash flow from operations. In
January 2014, we made an upfront payment totaling $125.0 million to Aerial under an asset purchase agreement
to acquire the worldwide development, manufacturing and commercial rights to JZP-110 (other than in certain
jurisdictions in Asia where SK Biopharmaceuticals Co., Ltd, or SK, retains rights). In January 2014, we amended
our credit agreement to provide for $350.0 million of incremental term loans, a tranche of term loans that
refinanced the approximately $554.4 million aggregate principal amount of term loans previously outstanding,
and a $425.0 million revolving credit facility that replaced our $200.0 million revolving credit facility. We used

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the proceeds from the incremental term loans and loans under the revolving credit facility, together with cash on
hand, to purchase approximately 98% of the outstanding and fully diluted Gentium ordinary shares and ADSs
properly tendered and accepted as of February 21, 2014, for an acquisition cost of approximately $993 million.

We believe that our existing cash balances, cash we expect to generate from operations and funds remaining
available under our revolving credit facility will be sufficient to fund our operations, to fund our share repurchase
program and to meet our existing obligations for the foreseeable future, including our obligations under our
current credit agreement, which include $904.4 million aggregate principal amount of term loans and $300.0
million of loans currently outstanding under the revolving credit facility, and our obligation to make a contingent
consideration payment of $50.0 million in connection with the EUSA Acquisition as a result of Erwinaze
achieving U.S. net sales of greater than $124.5 million in 2013. The adequacy of our cash resources depends on
many assumptions, including primarily our assumptions with respect to product sales and expenses, as well as the
other factors set forth in Part I, Item 1A of this Annual Report on Form 10-K under the headings “Xyrem is our
largest selling product, and our inability to maintain or increase sales of Xyrem would have a material adverse
effect on our business, financial condition, results of operations and growth prospects,” “If generic products that
compete with Xyrem are approved and launched, sales of Xyrem would be adversely affected,” “The
manufacture, distribution and sale of Xyrem are subject to significant regulatory oversight and restrictions and
the requirements of a risk management program, and these restrictions and requirements, as well as the potential
impact of changes to those restrictions and requirements, subject us to increased risks and uncertainties, any of
which could negatively impact sales of Xyrem,” and “To continue to grow our business, we will need to commit
substantial resources, which could result in future losses or otherwise limit our opportunities or affect our ability
to operate our business.” Our assumptions may prove to be wrong or other factors may adversely affect our
business, and as a result we could exhaust or significantly decrease our available cash resources which could,
among other things, force us to raise additional funds and/or force us to reduce our expenses, either of which
could have a material adverse effect on our business.

To continue to grow our business over the longer term, we will need to commit substantial resources to one

or more of product acquisition and in-licensing, product development and clinical trials of product candidates,
and expansion of our commercial, manufacturing and other operations. In this regard, we have evaluated and
expect to continue to evaluate a wide array of strategic transactions as part of our strategy to acquire or in-license
and develop additional products and product candidates. Acquisition opportunities that we pursue could
materially affect our liquidity and capital resources and may require us to incur additional indebtedness, seek
equity capital or both. In addition, we may pursue new operations or the expansion of our existing operations. For
example, in February 2014, we announced that we had commenced construction of a manufacturing and
development facility in Ireland, and we expect to invest approximately €45 to €50 million ($61 to $68 million) to
build and open the facility. Accordingly, we may again seek to raise additional funds to license or acquire
additional products, product candidates or companies, to expand our operations or for general corporate purposes.
Raising additional capital could be accomplished through one or more public or private debt or equity financings,
collaborations or partnering arrangements. Any equity financing would be dilutive to our shareholders, and the
consent of the lenders under our current credit agreement could be required for certain potential financings.

In May 2013, our board of directors authorized a share repurchase program pursuant to which we may
repurchase a number of ordinary shares having an aggregate repurchase price of up to $200 million, exclusive of
any brokerage commissions. The authorization became effective immediately and has no set expiration date.
Under this authorization, we may repurchase our ordinary shares through open market purchases, privately
negotiated purchases or a combination of these transactions. The timing and amount of repurchases will depend
on a variety of factors, including the price of our ordinary shares, alternative investment opportunities,
restrictions under the current credit agreement, corporate and regulatory requirements and market conditions.
Share repurchases may be suspended or discontinued at any time without prior notice. We initiated purchases
under this program in May 2013. In 2013, we spent a total of $136.5 million to repurchase 1.8 million of our
ordinary shares at an average total purchase price, including commissions, of $74.67 per share. All ordinary
shares repurchased by the company were canceled. As of December 31, 2013, the remaining amount authorized

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under the share repurchase program was $63.6 million. We suspended our share repurchase program in
November 2013 to preserve cash for future business development opportunities, and subject to market conditions
and alternative uses of cash, we plan to resume the program in 2014.

The following table shows a summary of our cash flows for the periods indicated (in thousands):

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rates on cash and cash equivalents . . . . . . . . . . . . . . . . . .

$283,616
(11,276)
(24,029)
997

$ 249,752
(395,294)
448,530
2,132

$151,596
(81,232)
(33,082)
—

Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$249,308

$ 305,120

$ 37,282

Year Ended December 31,

2013

2012

2011

Net cash provided by operating activities of $283.6 million in 2013 related to net income of $216.3 million,

adjusted for non-cash items of $148.3 million primarily related to intangible asset amortization, share-based
compensation expense and the change in fair value of contingent consideration. This was partially offset by $81.0
million of net cash outflow related to changes in operating assets and liabilities which included an increase in
accounts receivable of $48.8 million primarily related to a pre-negotiated change in payment terms under a long-
term contract with one large customer in connection with the elimination of a prompt pay discount as well as the
impact of income tax payments. The revised payment terms will continue to result in higher accounts receivable
balances in future periods that will reduce net cash from operating activities in those periods. However, we do
not anticipate that the change in payment terms will result in potential collectability difficulties nor do we expect
that the change will materially impact our liquidity. Net cash provided by operating activities of $249.8 million
in 2012 related to net income of $288.6 million, offset by non-cash items of $33.7 million primarily related to
deferred income taxes, and by a net cash outflow of $5.2 million related to changes in operating assets and
liabilities. Net cash provided by operating activities of $151.6 million in 2011 related to net income of $125.0
million, adjusted for non-cash items of $30.3 million primarily related to share-based compensation expense.
This was partially offset by $3.7 million of net cash outflow related to changes in operating assets and liabilities.

Net cash used in investing activities in 2013 related to purchases of property and equipment and acquisition

of intangible assets. Net cash used in investing activities in 2012 primarily related to funding the EUSA
Acquisition, partially offset by net proceeds of $93.9 million from the sale of our women’s health business and
net proceeds from the sales and maturities of investments of $75.8 million. Net cash used in investing activities
in 2011 primarily related to purchases of marketable securities, scheduled payments under our agreement for the
rights to market Luvox CR and to a lesser extent purchases of property and equipment, partially offset by
proceeds from maturities of marketable securities and releases of restricted cash.

Net cash used in financing activities in 2013 primarily related to repayments totaling $465.9 million
primarily for the full principal amount outstanding under the original term loans, $136.5 million used to
repurchase our ordinary shares under our share repurchase program and payments totaling $5.6 million of income
tax withholdings on behalf of employees related to the net share settlement of vested RSUs, partially offset by
net proceeds of $553.4 million from our term loans under the June 2013 amended credit agreement and proceeds
of $30.7 million from employee equity incentive and purchase plans and exercise of warrants. Net cash provided
by financing activities in 2012 primarily related to net proceeds of $450.9 million from the original term loans
and proceeds of $25.0 million from employee equity incentive and purchase plans and exercise of warrants,
partially offset by payments totaling $25.3 million of income tax withholdings on behalf of certain employees
related to the net share settlement of exercised share options in connection with the Azur Merger. Net cash used
in financing activities in 2011 included a repayment of $41.7 million for the full principal amount outstanding
under a term loan and $7.4 million for net repayments of a revolving credit facility, partially offset by proceeds
from employee equity incentive and purchase plans and exercise of warrants.

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Credit Agreement

As discussed above, we entered into our credit agreement in July 2012 in connection with the EUSA

Acquisition, and we subsequently amended the credit agreement in July 2013 and January 2014. As of
December 31, 2013, $554.4 million principal amount of term loans was outstanding under the credit agreement.
After giving effect to the January 2014 amendment, the credit agreement provided for $904.4 million principal
amount of term loans and a $425.0 million revolving credit facility. The term loans under the credit agreement
have the same June 12, 2018 maturity date that was applicable to the refinanced term loans and the loans under
the revolving credit facility have the same June 12, 2017 maturity date that was applicable to the prior revolving
credit facility.

The term loans bear interest, at our option, at a rate equal to either the London Interbank Offered Rate
(LIBOR), plus an applicable margin of 2.50% per annum (subject to a 0.75% LIBOR floor), or the prime lending
rate, plus an applicable margin equal to 1.50% per annum (subject to a 1.75% prime rate floor). Borrowings
under the revolving credit facility bear interest, at our option, at a rate equal to either LIBOR, plus an applicable
margin of 2.50% per annum, or the prime lending rate, plus an applicable margin equal to 1.50% per annum,
subject to reduction by 0.25% or 0.50% based upon our secured leverage ratio. The revolving credit facility has a
commitment fee payable on the undrawn amount ranging from 0.25% to 0.50% per annum based upon our
secured leverage ratio.

As a result of the June 2013 amendment, the interest rate margins on the term loans and the revolving loans
were reduced by 150 basis points, and as a result of the January 2014 amendment, the interest rate margins on the
terms loans were reduced by a further 25 basis points. As of February 19, 2014, the interest rates on the
outstanding term loans was 3.25% and on our borrowings under the revolving credit facility was 2.66%. The
interest rates on the term loans and loans under the revolving credit facility are subject to fluctuation based on
LIBOR or the prime lending rate, as applicable.

Certain of our wholly-owned subsidiaries are borrowers under the credit agreement. The borrowers’
obligations under the credit agreement, and any hedging or cash management obligations entered into with a
lender or an affiliate of a lender, are guaranteed by us and certain of our subsidiaries and are secured by
substantially all of our, the borrowers’ and the guarantor subsidiaries’ assets.

We may make voluntary prepayments of principal at any time without payment of a premium except that a

1% premium would apply to any repricing of the term loans effected on or prior to July 23, 2014. We are
required to make mandatory prepayments of the term loans (without payment of a premium) with (1) net cash
proceeds from certain non-ordinary course asset sales (subject to reinvestment rights and other exceptions),
(2) net cash proceeds from issuances of debt (other than certain permitted debt), (3) beginning with the fiscal
year ending December 31, 2014, 50% of our excess cash flow as defined in the current credit agreement (subject
to decrease to 25% if our secured leverage ratio is equal to or less than 2.25 to 1.00 and greater than 1.25 to 1.00
or 0% if our secured leverage ratio is equal to or less than 1.25 to 1.00), and (4) casualty proceeds and
condemnation awards (subject to reinvestment rights and other exceptions).

Principal repayments of the term loans are due quarterly beginning in March 2014 and are equal to 1.0% per

annum of the original principal amount of $904.4 million with any remaining balance payable on the final
maturity date.

Our credit agreement contains customary representations and warranties and customary affirmative and
negative covenants applicable to us and our restricted subsidiaries, including, among other things, restrictions on
indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and
other distributions. The credit agreement also contains a financial covenant that requires Jazz Pharmaceuticals
plc and its restricted subsidiaries to maintain a maximum secured leverage ratio. We were, as of December 31,
2013, and are currently in compliance with this financial covenant.

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Contractual Obligations

The table below presents a summary of our contractual obligations as of December 31, 2013 (in thousands):

Contractual Obligations(1)

Term loan—principal . . . . . . . . . . . . . . . . . . . . . . . . . . .
Term loan—interest(2) . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations(3)
. . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease obligations(4) . . . . . . . . . . . . . . . . . . . .
Revolving credit facility(5)
. . . . . . . . . . . . . . . . . . . . . .
Contingent consideration obligation(6) . . . . . . . . . . . . .

Payments due by period

Total

$554,402
85,685
54,456
29,309
2,623
50,000

Less than
1 Year

$

5,572
19,599
52,046
9,760
760
50,000

1-3 Years

3-5 Years

$11,144
38,658
850
15,546
1,523
—

$537,686
27,428
400
3,873
340
—

More than
5 years

$ —
—
1,160
130
—
—

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$776,475

$137,737

$67,721

$569,727

$1,290

(1) This table does not include potential future milestone payment or royalty obligations to third parties under
asset purchase, product development and license agreements as the timing and likelihood of such milestone
payments are not known, and, in the case of royalty obligations, as the amount of such obligations are not
estimable. On January 13, 2014, we signed a definitive agreement with Aerial under which we acquired
rights to JZP-110, a novel compound in clinical development for the treatment of EDS in patients with
narcolepsy. Under the agreement, we acquired worldwide development, manufacturing and commercial
rights to JZP-110 (other than in certain countries in Asia where SK retains rights). Under the agreement,
Aerial received an upfront payment of $125.0 million in January 2014. Aerial and SK are eligible to receive
milestone payments up to an aggregate of $272.0 million based on development, regulatory and sales
milestones and tiered royalties from high single digits to mid-teens based on potential future sales of
JZP-110. Potential future milestone payments to other third parties under other agreements could be up to an
aggregate of $286.0 million, of which up to $120.0 million will become due and payable to Perrigo
Company plc (formally Elan Pharmaceuticals, Inc.) in tiered contingent payments, with the first such
payment becoming due if net sales of Prialt of at least $75.0 million are achieved in a calendar year. The
remainder would become due and payable to other third parties upon the achievement of certain
developmental, clinical, regulatory and/or commercial milestones, the timing and likelihood of which are
not known. We are also obligated under these agreements to pay royalties on net sales of certain products at
specified rates, which royalties are dependent on future product sales and are not provided for in the table
above as they are not estimable.

(2) The interest rate was 3.5% at December 31, 2013, which we used to estimate interest owed on the term

loans outstanding as of December 31, 2013 until the final maturity date in June 2018.

(3) Consists primarily of non-cancelable commitments to third party manufacturers.

(4)

Includes the minimum lease payments for our office buildings and automobile lease payments for our sales
force.

(5) Our revolving credit facility has a commitment fee payable on the undrawn amount ranging from 0.25% to
0.50% per annum based upon our secured leverage ratio. In the table above, we used a rate of 0.375% and
assumed undrawn amounts of $200.0 million to estimate commitment fees owed. No amount was borrowed
under the revolving credit facility as of December 31, 2013.

(6)

In 2013, Erwinaze U.S. net sales were greater than $124.5 million and, as a result, we are obligated to make
a contingent consideration payment of $50.0 million in the first quarter of 2014.

The table above does not reflect the additional $650.0 million in debt we incurred under our credit

agreement in connection with the Gentium Acquisition or the related interest rate adjustment. The table also does
not include a fee of $5.0 million we are required to pay our investment banker as a result of the completion of the
Gentium Acquisition.

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In February 2014, we agreed to pay a third party up to approximately €4.2 million ($5.7 million) to carry out

the site preparation work needed to initiate construction of a manufacturing facility in Ireland, which is not
included in the table above.

No provision for income tax in Ireland has been recognized on undistributed earnings of our foreign
subsidiaries because we consider such earnings to be indefinitely reinvested. Cumulative unremitted earnings of
our foreign subsidiaries totaled approximately $664.3 million at December 31, 2013. In the event of the
distribution of those earnings in the form of dividends or otherwise, we may be liable for income taxes, subject to
an adjustment, if any, for foreign tax credits and foreign withholding taxes payable to certain foreign tax
authorities. As of December 31, 2013, it is not practicable to determine the amount of the income tax liability
related to these undistributed earnings due to a variety of factors.

As of December 31, 2013, our liability for unrecognized tax benefits amounted to $21.6 million (including
interest and penalties). Due to the nature and timing of the ultimate outcome of these uncertain tax positions, we
cannot make a reasonably reliable estimate of the amount and period of related future payments, if any.
Therefore, our liability has been excluded from the above contractual obligations table. We do not expect a
significant tax payment related to these obligations within the next year.

Critical Accounting Policies and Significant Estimates

A critical accounting policy is one that is both important to the portrayal of our financial condition and
results of operations and requires management’s most difficult, subjective or complex judgments, often as a
result of the need to make estimates about the effect of matters that are inherently uncertain. While our
significant accounting policies are more fully described in Note 2 of the Notes to the Consolidated Financial
Statements included in this Annual Report on Form 10-K, we believe the following accounting estimates and
policies to be critical.

Revenue Recognition

Revenues are recognized when there is persuasive evidence that an arrangement exists, delivery has

occurred, the price is fixed and determinable and collection is reasonably assured.

Product Sales, Net

Product sales revenue is recognized when title has transferred to the customer and the customer has assumed
the risks and rewards of ownership, which is typically on delivery to the customer or, in the case of products that
are subject to consignment agreements, when the customer removes product from our consigned inventory
location for shipment directly to a patient.

A significant portion of our net product revenues are derived from sales of Xyrem. We sell Xyrem in the

United States to a single central pharmacy, Express Scripts Specialty Distribution Services and its affiliate
CuraScript, Inc., or Express Scripts. In 2013, sales of Xyrem to Express Scripts accounted for 65.5% of our net
product sales. We recognize revenues from sales of Xyrem within the United States upon transfer of title, which
occurs when Express Scripts removes product from our consigned inventory location at its facility for shipment
directly to a patient. We accept returns from and provide Express Scripts with a credit for any product returned
by patients to Express Scripts with defects that were not reasonably discoverable upon receipt of the consigned
product by Express Scripts. Based on our experience over the past eight years, product returns to Express Scripts
from patients are rare; during 2013, we issued credits totaling less than $0.2 million to Express Scripts for
returned product.

Items Deducted from Gross Product Sales. Revenues from sales of products are recorded net of government

rebates and rebates under managed care plans, estimated allowances for sales returns, government chargebacks,

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prompt payment discounts, patient coupon programs, and specialty distributor and wholesaler fees. Calculating
certain of these items involves estimates and judgments based on sales or invoice data, contractual terms,
historical utilization rates, new information regarding changes in applicable regulations and guidelines that would
impact the amount of the actual rebates, our expectations regarding future utilization rates and channel inventory
data. We review the adequacy of our provisions for sales deductions on a quarterly basis. Amounts accrued for
sales deductions are adjusted when trends or significant events indicate that adjustment is appropriate and to
reflect actual experience. Because we derive a significant portion of our revenues from sales of Xyrem in the
United States to one specialty pharmacy customer, Express Scripts, we have a much higher level of knowledge
about each prescription than if we sold the product through the normal pharmaceutical wholesaler channel as we
do with most of our other products. The most significant items deducted from gross product sales where we
exercise judgment are rebates, sales returns and chargebacks.

The following table presents the activity and ending balances for our sales-related accruals and allowances

(in thousands):

Rebates
payable

Sales
Returns
Reserve

Chargebacks

Discounts and
Distributor Fees

Total

Balance at December 31,

2010 . . . . . . . . . . . . . . . . . . . .
Provision . . . . . . . . . . . . . . . . . .
Payments/credits . . . . . . . . . . . .

$ 6,620
21,742
(17,585)

$ 3,539
2,250
(1,487)

$

12
451
(443)

$ 1,582
16,178
(15,993)

$ 11,753
40,621
(35,508)

Balance at December 31,

2011 . . . . . . . . . . . . . . . . . . . .

10,777

4,302

20

1,767

16,866

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Additions relating to

acquisitions . . . . . . . . . . . . . .
Provision(1) . . . . . . . . . . . . . . . .
Payments/credits . . . . . . . . . . . .

Balance at December 31,

2012(2)

. . . . . . . . . . . . . . . . .
Provision . . . . . . . . . . . . . . . . . .
Payments/credits . . . . . . . . . . . .

Balance at December 31,

8,809
52,603
(46,942)

25,247
66,895
(60,584)

18,833
9,733
(6,483)

26,385
2,836
(8,111)

—
13,072
(10,556)

2,536
21,777
(19,903)

911
35,161
(34,193)

3,646
51,432
(49,188)

28,553
110,569
(98,174)

57,814
142,940
(137,786)

2013(2)

. . . . . . . . . . . . . . . . .

$ 31,558

$21,110

$

4,410

$ 5,890

$ 62,968

(1) The 2012 provision includes rebates, sales returns, chargebacks, and discounts and distributor fees related to
our discontinued women’s health business of $1.2 million, $3.8 million, $0.8 million and $2.4 million,
respectively. The women’s health business was acquired and disposed of in 2012.

(2)

Includes both continuing operations and discontinued operations to date of disposal.

Total items deducted from gross product sales from continuing operations were $142.9 million, $102.4

million and $40.6 million, or 14.2%, 15.0% and 13.2% as a percentage of gross product sales from continuing
operations, for the years ended December 31, 2013, 2012 and 2011, respectively. Included in these amounts are
immaterial adjustments related to prior-year sales due to changes in estimates. Such amounts represented less
than 1% of net product sales for the years ended December 31, 2013, 2012 and 2011.

Rebates

We are subject to rebates on sales made under governmental and managed-care pricing programs in the
United States. The largest of these rebates is associated with sales covered by Medicaid. We participate in state
government-managed Medicaid programs as well as certain other qualifying federal and state government

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programs under the terms of which discounts and rebates are provided to participating government entities. We
offer rebates and discounts to managed health care organizations in the United States. In estimating our
provisions for rebates, we consider relevant statutes with respect to governmental pricing programs and
contractual sales terms with managed-care providers and group purchasing organizations. We estimate the rebate
provision based on historical utilization rates, historical payment experience, new information regarding changes
in regulations and guidelines that would impact the amount of the actual rebates, our expectations regarding
future utilization rates and channel inventory data obtained from our major U.S. wholesalers in accordance with
our inventory management agreements. Estimating these rebates is complex, in part due to the time delay
between the date of sale and the actual settlement of the liability. We believe that the methodology we use to
estimate rebates on product sales made under governmental and managed-care pricing programs is reasonable
and appropriate given current facts and circumstances. However, estimates may vary from actual experience.

Rebates from continuing operations were $66.9 million, $51.4 million and $21.7 million, or 6.6%, 7.5% and
7.1% as a percentage of gross product sales from continuing operations, for the years ended December 31, 2013,
2012 and 2011, respectively. Rebates as a percentage of gross product sales decreased in 2013 compared to 2012
primarily due to our exiting certain programs for certain products and the impact of generics on per-unit rebate
amounts. Rebates as a percentage of gross product sales increased in 2012 compared to 2011 primarily due to the
acquisition of products as part of the Azur Merger which had higher levels of rebates than the products we sold
prior to the Azur Merger. We expect that rebates will continue to significantly impact our reported net sales.
However, rebates as a percentage of gross product sales are not expected to change materially in 2014 compared
to 2013.

Sales returns

For certain products, we allow customers to return product within a specified period before and after the
applicable expiration date and issue credits which may be applied against existing or future invoices. We account
for sales returns as a reduction in net revenue at the time a sale is recognized by establishing an accrual in an
amount equal to the estimated value of products expected to be returned. The sales return accrual is estimated
principally based on historical experience, the level and estimated shelf life of inventory in the distribution
channel, our return policy and expected future market events including generic competition.

Sales returns from continuing operations were $2.8 million, $5.9 million and $2.3 million, or 0.3%, 0.9%
and 0.7% as a percentage of gross product sales from continuing operations, for the years ended December 31,
2013, 2012 and 2011, respectively. Sales returns as a percentage of gross product sales in 2013 were lower
compared to 2012 primarily due to a reduction in the sales returns reserve rate for certain products as a result of
lower than anticipated product returns and decreased sales of products for which we have historically
experienced higher levels of sales returns. Sales returns as a percentage of gross product sales in 2012 were
relatively consistent with 2011. While sales returns will continue to impact our reported net product sales, sales
returns as a percentage of gross product sales in 2014 are expected to remain consistent with 2013.

Chargebacks

We participate in chargeback programs with a number of entities, principally the U.S. Department of

Defense, the U.S. Department of Veterans Affairs and other public parties, under which pricing on products
below wholesalers’ list prices is provided to participating entities. These entities purchase product through
wholesalers at the lower negotiated price and the wholesalers charge back to us the difference between their
acquisition cost and the lower negotiated price. We record the difference as allowances against accounts
receivable. We determine our estimate of the chargebacks provision primarily based on historical experience on a
product and program basis, current contract prices under the chargeback programs and channel inventory data.

Chargebacks from continuing operations were $21.8 million, $12.3 million and $0.5 million, or 2.2%, 1.8% and
0.1% as a percentage of gross product sales from continuing operations, for the years ended December 31, 2013, 2012

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and 2011, respectively. Chargebacks as a percentage of gross product sales increased in 2013 compared to 2012
primarily due to products acquired as part of the EUSA Acquisition being included for the full year. Chargebacks as a
percentage of gross product sales increased in 2012 compared to 2011 primarily due to the acquisition of products as
part of the EUSA Acquisition that have significantly higher levels of chargebacks. Prior to the EUSA Acquisition in
June 2012, chargebacks were minimal. As a result of the products we acquired in the EUSA Acquisition, particularly
Erwinaze, chargebacks are expected to continue to significantly impact our reported net product sales. Chargebacks as
a percentage of gross product sales are not expected to change materially in 2014 compared to 2013.

Discounts and distributor fees

Discounts and distributor fees comprise prompt payment discounts, patient coupon programs and specialty

distributor and wholesaler fees. We offer customers a cash discount on gross product sales as an incentive for
prompt payment. We estimate provisions for prompt pay discounts based on contractual sales terms with
customers and historical payment experience. To help patients afford our products, we have various programs to
assist them, including patient assistance programs, a free product voucher program and co-pay coupon programs
for certain products. We estimate provisions for these programs primarily based on expected program utilization,
adjusted as necessary to reflect our actual experience on a product and program basis. Specialty distributor and
wholesaler fees comprise fees for distribution of our products. We estimate provisions for distributor and
wholesaler fees primarily based on sales volumes and contractual terms with our distributors.

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Discounts and distributor fees from continuing operations were $51.4 million, $32.8 million and $16.2
million, or 5.1%, 4.8% and 5.3% as a percentage of gross product sales from continuing operations, for the years
ended December 31, 2013, 2012 and 2011, respectively. Discounts and distributor fees as a percentage of gross
product sales increased in 2013 compared to 2012 primarily due to increased patient coupon programs partially
offset by decreased wholesaler dispensing fees and prompt payment discounts. Discounts and distributor fees as a
percentage of gross product sales decreased in 2012 compared to 2011 primarily due to increased revenues from
products for which distributor and wholesaler fees are either fixed or variable based on factors other than the
level of gross product sales, which was partially offset by increased patient coupon programs. We expect that
discounts and distributor fees as a whole will continue to significantly impact our reported net product sales. In
this regard, discounts and distributor fees as a percentage of gross product sales are expected to increase slightly
in 2014 compared to 2013 due primarily to an increase in patient coupon programs.

Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of the acquisition consideration over the fair value of assets acquired and

liabilities assumed. We test goodwill for impairment annually in October and when events or changes in
circumstances indicate that the carrying value may not be recoverable. We have determined that we operate in a
single segment and have a single reporting unit associated with the development and commercialization of
pharmaceutical products. The annual test for goodwill impairment is a two-step process. The first step is a
comparison of the fair value of the reporting unit with its carrying amount, including goodwill. If this step
indicates impairment, then in the second step, the loss is measured as the excess of recorded goodwill over its
implied fair value. Implied fair value is the excess of the fair value of the reporting unit over the fair value of all
identified assets and liabilities. We have determined the fair value of our single reporting unit to be equal to our
market capitalization, as determined by our traded share price, plus a control premium. The control premium
used was based on a review of such premiums identified in recent acquisitions of companies of similar size and
in similar industries. We performed our annual goodwill impairment test in October 2013 and concluded that
goodwill was not impaired as the fair value of the reporting unit significantly exceeded its carrying amount,
including goodwill. As of December 31, 2013, we had $450.5 million of goodwill primarily resulting from the
Azur Merger on January 18, 2012 and the EUSA Acquisition on June 12, 2012.

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Intangible Assets

In connection with the Azur Merger and the EUSA Acquisition, we acquired a number of intangible assets,
including intangible assets related to currently marketed products (developed technology) and intangible assets
related to product candidates (in process research and development, or IPR&D). When significant identifiable
intangible assets are acquired, we engage an independent third party valuation firm to assist in determining the
fair values of these assets as of the acquisition date. Discounted cash flow models are typically used in these
valuations, which require the use of significant estimates and assumptions, including but not limited to:

•

•

•

•

estimating the timing of and expected costs to complete the in-process projects;

projecting regulatory approvals;

estimating future cash flows from product sales resulting from completed products and in-process
projects; and

developing appropriate discount rates and probability rates by project.

We believe the fair values that we assign to the intangible assets acquired are based upon reasonable
estimates and assumptions given available facts and circumstances as of the acquisition dates. No assurance can
be given, however, that the underlying assumptions used to estimate expected cash flows will transpire as
estimated. In addition, we are required to estimate the period of time over which to amortize the intangible assets,
which requires significant judgment.

Our finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives,
which range from two to 15 years. The estimated useful lives associated with intangible assets are consistent with
the estimated lives of the products and may be modified when circumstances warrant. Intangible assets with
finite lives are reviewed for impairment whenever events or circumstances indicate that the carrying value of an
asset may not be recoverable. Events giving rise to impairment are an inherent risk in the pharmaceutical industry
and cannot be predicted. Factors that we consider in deciding when to perform an impairment review include
significant under-performance of a product in relation to expectations, significant negative industry or economic
trends, and significant changes or planned changes in our use of the assets. An impairment loss would be
recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its
eventual disposition are less than its carrying amount. Estimating future cash flows related to an intangible asset
involves estimates and assumptions. If our assumptions are not correct, there could be an impairment loss or, in
the case of a change in the estimated useful life of the asset, a change in amortization expense.

IPR&D is not amortized but is tested for impairment annually or when events or circumstances indicate that

the fair value may be below the carrying value of the asset. If the carrying value of the assets is not expected to
be recovered, the assets are written down to their estimated fair values.

As of December 31, 2013, we had $778.1 million of finite-lived intangible assets and $34.3 million of
IPR&D assets primarily related to the marketed products and the IPR&D projects that we acquired in the Azur
Merger and the EUSA Acquisition. We did not recognize an impairment charge related to our intangible assets
during 2013, 2012 or 2011. Please refer to the footnotes to the consolidated financial statements included
elsewhere in this Annual Report on Form 10-K for further information about our intangible assets and the
remaining useful lives of our finite-lived intangible assets as of December 31, 2013.

Income Taxes

We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets

and liabilities are determined based on differences between the financial statement carrying amount and the tax
basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the
differences are expected to reverse. We provide a valuation allowance when it is more-likely-than-not that
deferred tax assets will not be realized.

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Our most significant tax jurisdictions are Ireland, the United States and France. Significant estimates are
required in determining our provision for income taxes. Some of these estimates are based on management’s
interpretations of jurisdiction-specific tax laws or regulations and the likelihood of settlement related to tax audit
issues. Various internal and external factors may have favorable or unfavorable effects on our future effective
income tax rate. These factors include, but are not limited to, changes in tax laws, regulations and/or rates,
changing interpretations of existing tax laws or regulations, changes in estimates of prior years’ items, the impact
of accounting for share-based compensation, changes in our international organization, likelihood of settlement,
and changes in overall levels of income before taxes.

Realization of our deferred tax assets is dependent upon the generation of future taxable income, the amount

and timing of which are uncertain. In evaluating our ability to recover our deferred tax assets, we consider all
available positive and negative evidence, including cumulative income in recent fiscal years, our forecast of
future taxable income exclusive of reversing temporary differences and significant risks and uncertainties related
to our business. In determining future taxable income, we are responsible for assumptions utilized including the
amount of state, federal and international pre-tax operating income, the reversal of temporary differences and the
implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment
about the forecasts of future taxable income and are consistent with the plans and estimates that we are using to
manage our underlying business.

Based on available objective evidence at December 31, 2012, we reversed the valuation allowance recorded
against substantially all of our deferred tax assets in the United States, resulting in a tax benefit of $104.2 million.
Management determined that a valuation allowance was no longer needed on these deferred tax assets based on
an assessment of the relative impact of all positive and negative evidence that existed at December 31, 2012,
including an evaluation of cumulative income in recent years, our forecast of future sources of taxable income
exclusive of reversing temporary differences, and significant risks and uncertainties related to our business. We
continue to maintain a valuation allowance against certain other deferred tax assets where realizability is not
certain. We periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying
amount of these deferred tax assets by a valuation allowances to the extent we believe a portion will not be
realized. This determination depends on a variety of factors, some of which are subjective, including our recent
cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, carryforward
periods available to us for tax reporting purposes, various income tax strategies and other relevant factors. If we
determine that the deferred tax assets are not realizable in a future period, we would record material changes to
income tax expense in that period.

We have also provided for uncertain tax positions that we believe are not more-likely-than-not to be
sustained upon examination by tax authorities. The evaluation of uncertain tax positions is based on factors that
include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken
in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or
circumstances related to a tax position. We evaluate uncertain tax positions on a quarterly basis and adjust the
level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions.
Our liabilities for uncertain tax positions can be relieved only if the contingency becomes legally extinguished
through either payment to the taxing authority or the expiration of the statute of limitations, the recognition of the
benefits associated with the position meet the more-likely-than-not threshold or the liability becomes effectively
settled through the examination process. We consider matters to be effectively settled once the taxing authority
has completed all of its required or expected examination procedures, including all appeals and administrative
reviews. We also accrue for potential interest and penalties related to unrecognized tax benefits in income tax
provision (benefit).

Contingent Consideration

As part of the EUSA Acquisition, we agreed to make an additional contingent payment of $50.0 million in

cash if Erwinaze achieved U.S. net sales of $124.5 million or greater in 2013. Contingent consideration is

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initially recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is
remeasured to fair value at each reporting date until the contingency is resolved and changes in fair value are
recognized in earnings. In 2012, the estimate of fair value contained uncertainties as it involved assumptions
about the probability of 2013 U.S. net sales of Erwinaze equaling or exceeding the $124.5 million threshold and
the discount rate. As of December 31, 2013, the fair value of this contingent consideration liability was $50.0
million, reflecting the achievement of the Erwinaze U.S. net sales milestone in the fourth quarter of 2013. We
expect to pay this contingent consideration in the first quarter of 2014.

Share-Based Compensation

We have elected to use the Black-Scholes option pricing model to calculate the fair value of share option
grants under our equity incentive plans and grants under our employee stock purchase plan, or ESPP, and we are
using the straight-line method to allocate compensation cost to reporting periods. The fair value of share options
was estimated using the following assumptions:

Year Ended December 31,

2013

2012

2011

Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Range of risk-free rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58%
4.4

64%
4.6
0.5-1.4% 0.5-1.1% 0.0-2.7%
— %

72%
5.2

— %

— %

The two inputs which require the greatest judgment and have a large impact on fair values are expected term

and volatility.

The expected term of share option grants represents the weighted-average period the awards are expected to

remain outstanding. We estimated the weighted-average expected term based on historical exercise data.

Since 2012, we rely only on a blend of the historical and implied volatilities of our own ordinary shares to

determine expected volatility for share option grants because our trading history exceeds the expected term of the
share options. In addition, we use a single volatility estimate for each share option grant. The weighted average
volatility is determined by calculating the weighted average of volatilities for all share options granted in a given
year. Prior to 2012, we used a blend of the historical volatility and implied volatility of our ordinary shares, as
well as the historical volatility of a peer group, to determine expected volatility for share option grants, and we
used the implied volatility of our ordinary shares for grants under our ESPP. We included consideration of the
historical volatility of a peer group to estimate expected volatility for share option grants since the trading history
of our ordinary shares was less than the expected term of the share options.

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update,

or ASU, No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward,
a Similar Tax Loss, or a Tax Credit Carryforward Exists”, or ASU No. 2013-11, which concludes that, under
certain circumstances, unrecognized tax benefits should be presented in the financial statements as a reduction to
a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU
No. 2013-11 is effective for us beginning January 1, 2014. We do not anticipate that the adoption of this standard
will have a material impact on our financial position.

In March 2013, the FASB issued ASU No. 2013-05, “Parent’s Accounting for the Cumulative Translation

Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an
Investment in a Foreign Entity”, or ASU No. 2013-05. The objective of ASU No. 2013-05 is to resolve the
diversity in practice regarding the release into net income of the cumulative translation adjustment upon

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derecognition of a subsidiary or group of assets within a foreign entity. ASU No. 2013-05 is effective for us
beginning January 1, 2014. We do not anticipate that the adoption of this standard will have a material impact on
our results of operations or financial position, absent any material transactions involving the derecognition of
subsidiaries or groups of assets within a foreign entity.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Related Parties

In 2013, we entered into an underwriting agreement with an underwriter and certain selling shareholders,

pursuant to which the selling shareholders sold to the underwriter 5.4 million of our ordinary shares, resulting in
aggregate gross proceeds to the selling shareholders of approximately $314.4 million, before deducting
underwriting discounts, commissions and other offering expenses. The selling shareholders included entities
affiliated with certain members of our board of directors and one of our directors. We did not receive any
proceeds from the sale of our ordinary shares by the selling shareholders in the offering and, consistent with our
obligations under existing registration rights agreements with those shareholders, we paid expenses of
approximately $0.5 million in connection with the offering.

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In 2012, in connection with the Azur Merger, we assumed a lease for office space in Dublin, Ireland. The

lease agreement was with Seamus Mulligan, the former Chief Executive Officer of Azur Pharma, who is a
member of our board of directors. Rentals paid on this lease amounted to $0.3 million in 2012. In November
2012, we terminated this lease at a cost of $1.2 million, which was the carrying value of our above market lease
liability. There was no resulting gain or loss on the lease termination.

In 2012, we entered into an underwriting agreement with two underwriters and certain selling shareholders,

pursuant to which the selling shareholders agreed to sell to the underwriters 7.9 million of our ordinary shares,
resulting in aggregate gross proceeds to the selling shareholders of approximately $390.7 million. The selling
shareholders included entities affiliated with certain members of our board of directors, four of our directors and
four of our executive officers at the time of the agreement. We did not receive any proceeds from the sale of our
ordinary shares by the selling shareholders in the offering, and we paid expenses of approximately $0.4 million
in connection with this offering.

In 2011, Azur Pharma entered into an agreement with Circ Pharma Limited/Circ Pharma Research and

Development Limited, or Circ, companies controlled by Seamus Mulligan, whereby Azur Pharma obtained an
option to license certain rights and assets in relation to Tramadol (a chronotherapeutic formulation) and to
conduct certain development activities. Azur Pharma paid Circ $0.3 million for this option in 2011. In 2012, we
terminated the agreement at no cost.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk. The primary objectives of our investment policy, in order of priority, are as follows:

safety and preservation of principal and diversification of risk; liquidity of investments sufficient to meet cash
flow requirements; and competitive yield. Although our investments are subject to market risk, our investment
policy specifies credit quality standards for our investments and limits the amount of credit exposure from any
single issue, issuer or certain types of investment. Our investment policy allows us to maintain a portfolio of cash
equivalents and short-term investments in a variety of securities, including United States federal government and
federal agency securities, corporate bonds or commercial paper issued by United States corporations, money
market instruments, certain qualifying money market mutual funds, certain repurchase agreements, and tax-
exempt obligations of states, agencies and municipalities in the United States. Our cash equivalents as of
December 31, 2013 consisted of time deposits which are not subject to significant interest rate risk.

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We are exposed to risks associated with changes in interest rates in connection with our term loans and

borrowings under our revolving credit facility. Our indebtedness under our term loans is subject to LIBOR or
base rate floors of 0.75% and 1.75%, respectively. We have elected to have the terms loans and borrowings under
the revolving credit facility bear interest based on LIBOR (as opposed to the prime lending rate). Currently
LIBOR is below the floor of 0.75%, and therefore an increase in interest rates would only impact our net interest
expense on our term loans to the extent LIBOR exceeds the floor. Based on indebtedness under our term loans of
$904.4 million as of February 19, 2014, a 1.0% change in interest rates, above the LIBOR floor, would increase
net interest expense on our term loans for 2014 by approximately $8.6 million. Borrowings under our revolving
credit facility are not subject to a LIBOR floor. Based on indebtedness under our revolving credit facility of
$300.0 million as of February 19, 2014, a 1.0% change in interest rates would increase net interest expense on
our revolving loan borrowings for 2014 by approximately $2.9 million.

Foreign Exchange Risk. We have significant operations in Europe as well as in the United States. The

functional currency of each foreign subsidiary is generally the local currency. We are exposed to foreign
currency exchange risk as the functional currency financial statements of foreign subsidiaries are translated to
U.S. dollars. The assets and liabilities of our foreign subsidiaries having a functional currency other than the U.S.
dollar are translated into U.S. dollars at the exchange rate prevailing at the balance sheet date, and at the average
exchange rate for the reporting period for revenue and expense accounts. The cumulative foreign currency
translation adjustment is recorded as a component of accumulated other comprehensive income in shareholders’
equity. The reported results of our foreign subsidiaries will be influenced by their translation into U.S. dollars by
currency movements against the U.S. dollar. Our primary currency translation exposures are related to our
subsidiaries that have functional currencies denominated in the Euro and the British Pound. A 10%
strengthening/(weakening) in the rates used to translate the results of our foreign subsidiaries would have
increased/(decreased) net income for the year ended December 31, 2013 by approximately $2.5 million.

Transactional exposure arises where transactions occur in currencies other than the functional currency.
Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction. The
resulting monetary assets and liabilities are translated into the appropriate functional currency at exchange rates
prevailing at the balance sheet date and the resulting gains and losses are reported in the foreign currency loss in
the consolidated statements of income. At December 31, 2013, our primary exposure to transaction risk related to
British Pound net monetary assets held by subsidiaries with a Euro functional currency. At December 31, 2013, a
10% strengthening/(weakening) in the British Pound against the Euro would have increased/(decreased) net
income by approximately $2.0 million.

Item 8.

Financial Statements and Supplementary Data

Our consolidated financial statements as listed below are included in this Annual Report on Form 10-K as

pages F-1 through F-40.

Jazz Pharmaceuticals plc
F-1
Reports of Independent Registered Public Accounting Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-3
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-4
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-5
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-6
Consolidated Statements of Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-8
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10

Page

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Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. We have carried out an evaluation under the supervision

and with the participation of management, including our principal executive officer and principal financial
officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the
end of the period covered by this Annual Report on Form 10-K. Based on their evaluation, our principal
executive officer and principal financial officer concluded that our disclosure controls and procedures were
effective as of December 31, 2013.

Limitations on the Effectiveness of Controls. A control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of
inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all
control issues, if any, within an organization have been detected. Accordingly, our disclosure controls and
procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure
control system are met and, as set forth above, our principal executive officer and principal financial officer have
concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure
controls and procedures were effective to provide reasonable assurance that the objectives of our disclosure
control system were met.

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Changes in Internal Control over Financial Reporting. During the quarter ended December 31, 2013, there
were no changes to our internal control over financial reporting that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting. The following report is provided by

management in respect of our internal control over financial reporting (as defined in Rule 13a-15(f) of the
Exchange Act):

1. Our management is responsible for establishing and maintaining adequate internal control over financial
reporting.

2. Our management used the Committee of Sponsoring Organizations of the Treadway Commission, or the
COSO framework (1992), to evaluate the effectiveness of internal control over financial reporting.
Management believes that the COSO framework is a suitable framework for its evaluation of financial
reporting because it is free from bias, permits reasonably consistent qualitative and quantitative
measurements of our internal control over financial reporting, is sufficiently complete so that those relevant
factors that would alter a conclusion about the effectiveness of our internal control over financial reporting
are not omitted and is relevant to an evaluation of internal control over financial reporting.

3. Management has assessed the effectiveness of our internal control over financial reporting as of
December 31, 2013 and has concluded that such internal control over financial reporting was effective.
There were no material weaknesses in internal control over financial reporting identified by management.

4. KPMG, our independent registered public accounting firm, has audited the consolidated financial
statements of Jazz Pharmaceuticals plc as of and for the year ended December 31, 2013, included herein,
and has issued an audit report on our internal control over financial reporting which is included below.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Jazz Pharmaceuticals plc

We have audited Jazz Pharmaceuticals plc’s internal control over financial reporting as of December 31,

2013, based on criteria established in Internal Control—Integrated Framework (1992) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Jazz Pharmaceuticals plc’s management is
responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on
Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedures as we considered necessary
in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

In our opinion, Jazz Pharmaceuticals plc maintained, in all material respects, effective internal control over

financial reporting as of December 31, 2013, based on criteria established in Internal Control—Integrated
Framework (1992) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board

(United States), the consolidated balance sheet of Jazz Pharmaceuticals plc and subsidiaries as of December 31,
2013 and 2012, and the related consolidated statements of income, comprehensive income, shareholders’ equity,
and cash flows for each of the years in the two-year period ended December 31, 2013, and the related financial
statement schedule, and our report dated February 25, 2014 expressed an unqualified opinion on those
consolidated financial statements and the related financial statement schedule.

/s/ KPMG

Dublin, Ireland
February 25, 2014

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Item 9B. Other Information

Not applicable.

PART III

Certain information required by Part III is omitted from this Annual Report on Form 10-K and incorporated

by reference to our definitive proxy statement for our 2014 annual general meeting of shareholders to be filed
pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended. If such definitive proxy
statement is not filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-
K, the omitted information will be included in an amendment to this Annual Report on Form 10-K filed not later
than the end of such 120-day period.

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item relating to our directors and nominees for director is to be included in

the section entitled “Proposal 1—Election of Directors” in the proxy statement for our 2014 annual general
meeting of shareholders. Such information is incorporated herein by reference. The information required by this
item relating to our executive officers is to be included in the section entitled “Executive Officers” in the proxy
statement for our 2014 annual general meeting of shareholders. Such information is incorporated herein by
reference. The information required by this item relating to our audit committee, audit committee financial expert
and procedures by which shareholders may recommend nominees to our board of directors is to be included in
the section entitled “Corporate Governance and Board Matters” in the proxy statement for our 2014 annual
general meeting of shareholders. Such information is incorporated herein by reference. Information regarding
compliance with Section 16(a) of the Exchange Act is to be included in the section entitled “Section 16(a)
Beneficial Ownership Reporting Compliance” in our proxy statement for our 2014 annual general meeting of
shareholders. Such information is incorporated herein by reference.

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Our Code of Conduct applies to all of our employees, directors and officers, including our principal
executive officer, principal financial officer, principal accounting officer or controller, or persons performing
similar functions, and those of our subsidiaries. The Code of Conduct is available on our website at
www.jazzpharmaceuticals.com under the section entitled “About Us” at “Corporate Responsibility.”
Shareholders may request a free copy of the Code of Conduct by submitting a written request to Jazz
Pharmaceuticals plc, Attention: Investor Relations, Fourth Floor, Connaught House, One Burlington Road,
Dublin 4, Ireland. We intend to satisfy the disclosure requirements under Item 5.05 of the SEC Form 8-K
regarding an amendment to, or waiver from, a provision of our Code of Conduct by posting such information on
our website at the website address and location specified above.

Item 11. Executive Compensation

The information required by this item is to be included in our proxy statement for our 2014 annual general

meeting of shareholders under the sections entitled “Executive Compensation,” “Director Compensation,”
“Corporate Governance and Board Matters—Compensation Committee Interlocks and Insider Participation” and
“Corporate Governance and Board Matters—Compensation Committee Report” and is incorporated herein by
reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

The information required by this item with respect to equity compensation plans is to be included in our

proxy statement for our 2014 annual general meeting of shareholders under the section entitled “Equity
Compensation Plan Information” and is incorporated herein by reference. The information required by this item

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with respect to security ownership of certain beneficial owners and management is to be included in our proxy
statement for our 2014 annual general meeting of shareholders under the section entitled “Security Ownership of
Certain Beneficial Owners and Management” and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is to be included in our proxy statement for our 2014 annual general

meeting of shareholders under the sections entitled “Certain Relationships and Related Transactions” and
“Corporate Governance and Board Matters—Independence of the Board of Directors” and is incorporated herein
by reference.

Item 14. Principal Accountant Fees and Services

The information required by this item is to be included in our proxy statement for our 2014 annual general

meeting of shareholders under the section entitled “Proposal 2-Approval of Appointment of Independent
Auditors and Authorize the Audit Committee to Determine their Remuneration” and is incorporated herein by
reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report on Form 10-K

1.

Index to Financial Statements:

See Index to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.

2.

Financial Statement Schedules:

The following financial statement schedule of Jazz Pharmaceuticals plc is filed as part of this Annual Report
on Form 10-K on page F-40 and should be read in conjunction with the consolidated financial statements of Jazz
Pharmaceuticals plc.

Schedule II: Valuation and Qualifying Accounts

All other schedules are omitted because they are not applicable, not required under the instructions, or the

requested information is shown in the consolidated financial statements or related notes thereto.

(b) Exhibits—The following exhibits are included herein or incorporated herein by reference:

Exhibit
Number

2.1

Description of Document

Agreement and Plan of Merger and Reorganization, dated as of September 19, 2011, by and among
Azur Pharma Limited (now Jazz Pharmaceuticals plc), Jaguar Merger Sub Inc., Jazz
Pharmaceuticals, Inc. and Seamus Mulligan, solely in his capacity as the Indemnitors’ Representative
(incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals, Inc.’s current report on
Form 8-K (File No. 001-33500) filed with the SEC on September 19, 2011).

2.2

Letter Agreement, dated as of January 17, 2012, by and among Jazz Pharmaceuticals plc, Jaguar
Merger Sub Inc. Jazz Pharmaceuticals, Inc. and Seamus Mulligan, solely in his capacity as the
Indemnitors’ Representative (incorporated by reference to Exhibit 2.2 in Jazz Pharmaceuticals plc’s
current report on Form 8-K (File No. 001-33500), as filed with the SEC on January 18, 2012).

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Exhibit
Number

2.3

2.4

2.5

2.6

2.7†

3.1

4.1

4.2A

4.2B

4.2C

4.2D

4.2E

Description of Document

Agreement and Plan of Merger, dated as of April 26, 2012, by and among Jazz Pharmaceuticals plc,
Jewel Merger Sub Inc., EUSA Pharma Inc., and Essex Woodlands Health Ventures, Inc., Mayflower
L.P., and Bryan Morton, in their capacity as the representatives of the equity holders of EUSA
Pharma Inc. (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current
report on Form 8-K (File No. 001-33500), as filed with the SEC on April 27, 2012).

Assignment, dated as of June 11, 2012, by and among Jazz Pharmaceuticals plc and Jazz
Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 2.1B in Jazz Pharmaceuticals
plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on June 12, 2012).

Asset Purchase Agreement, dated as of September 5, 2012, by and among Jazz Pharmaceuticals plc,
Jazz Pharmaceuticals International II Limited, Meda Pharmaceuticals Inc. and Meda Pharma, Sàrl
(incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on
Form 8-K (File No. 001-33500), as filed with the SEC on October 15, 2012).

Tender Offer Agreement, dated December 19, 2013, by and among Jazz Pharmaceuticals Public
Limited Company, Jazz Pharmaceuticals Italy S.r.l. and Gentium S.p.A. (incorporated herein by
reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K/A
(File No. 001-33500), as filed with the SEC on December 20, 2013).

Asset Purchase Agreement, dated January 13, 2014, by and among Jazz Pharmaceuticals
International III Limited, Aerial BioPharma, LLC and Jazz Pharmaceuticals plc (incorporated herein
by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K
(File No. 001-33500), as filed with the SEC on January 13, 2014).

Memorandum and Articles of Association of Jazz Pharmaceuticals plc (incorporated herein by
reference to Exhibit 3.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K
(File No. 001-33500), as filed with the SEC on January 18, 2012).

Reference is made to Exhibit 3.1.

Third Amended and Restated Investor Rights Agreement, made effective as of June 6, 2007, by and
between Jazz Pharmaceuticals, Inc. and the other parties named therein (incorporated herein by
reference to Exhibit 4.3 in Jazz Pharmaceuticals, Inc.’s quarterly report on Form 10-Q
(File No. 001-33500) for the period ended June 30, 2007, as filed with the SEC on August 10, 2007).

Waiver and Amendment Agreement, dated as of March 12, 2008, by and between Jazz
Pharmaceuticals, Inc. and the other parties named therein (incorporated herein by reference to
Exhibit 4.3B in Jazz Pharmaceuticals, Inc.’s annual report on Form 10-K (File No. 001-33500), for
the period ended December 31, 2007, as filed with the SEC on March 31, 2008).

Waiver and Amendment Agreement, dated as of May 7, 2008, by and between Jazz Pharmaceuticals,
Inc. and the other parties named therein (incorporated herein by reference to Exhibit 4.3C in Jazz
Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on
May 9, 2008).

Waiver and Amendment Agreement, dated as of July 6, 2009, by and between Jazz Pharmaceuticals,
Inc. and the other parties named therein (incorporated herein by reference to Exhibit 4.3D in Jazz
Pharmaceuticals, Inc.’s quarterly report on Form 10-Q (File No. 001-33500) for the period ended
June 30, 2009, as filed with the SEC on August 14, 2009).

Assignment, Assumption and Amendment Agreement, dated as of January 18, 2012, by and among
Jazz Pharmaceuticals, Inc., Jazz Pharmaceuticals plc and the other parties named therein
(incorporated herein by reference to Exhibit 4.2E in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals plc
on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28, 2012).

121

Exhibit
Number

4.3

4.4

4.5A

4.5B

4.6

10.1†

10.2†

10.3†

10.4

10.5†

Description of Document

Form of Jazz Pharmaceuticals plc Warrant to Purchase Ordinary Shares issued to holders of assumed
Registered Direct Common Stock Warrants originally issued by Jazz Pharmaceuticals, Inc.
(incorporated herein by reference to Exhibit 4.5 in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals plc
on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28, 2012).

Form of Jazz Pharmaceuticals plc Warrant to Purchase Ordinary Shares issued to holders of assumed
Common Stock Warrants originally issued by Jazz Pharmaceuticals, Inc. on July 7, 2009
(incorporated herein by reference to Exhibit 4.6 in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals plc
on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28, 2012).

Investor Rights Agreement, dated July 7, 2009 by and between Jazz Pharmaceuticals, Inc. and the
other parties named therein (incorporated herein by reference to Exhibit 10.88 in Jazz
Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on
July 7, 2009).

Assignment, Assumption and Amendment Agreement, dated as of January 18, 2012, by and among
Jazz Pharmaceuticals, Inc., Jazz Pharmaceuticals plc and the other parties named therein
(incorporated herein by reference to Exhibit 4.7B in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals plc
on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28, 2012).

Registration Rights Agreement made as of January 13, 2012, by and among Jazz Pharmaceuticals plc
and certain shareholders named therein (incorporated herein by reference to Exhibit 10.2 in Jazz
Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on
January 18, 2012).

Xyrem Manufacturing Services and Supply Agreement, dated as of March 13, 2007, by and between
Jazz Pharmaceuticals, Inc. and Patheon Pharmaceuticals, Inc. (incorporated herein by reference to
Exhibit 10.50 in Jazz Pharmaceuticals, Inc.’s registration statement on Form S-1, as amended
(File No. 333-141164), as filed with the SEC on May 31, 2007).

Quality Agreement, dated as of March 13, 2007, by and between Jazz Pharmaceuticals, Inc. and
Patheon Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 10.51 in Jazz
Pharmaceuticals, Inc.’s registration statement on Form S-1, as amended (File No. 333-141164), as
filed with the SEC on March 27, 2007).

Supply Agreement, dated as of April 1, 2010, by and between Jazz Pharmaceuticals, Inc. and
Siegfried (USA) Inc. (incorporated herein by reference to Exhibit 10.54 in Jazz Pharmaceuticals,
Inc.’s quarterly report on Form 10-Q (File No. 001-33500) for the period ended March 31, 2010, as
filed with the SEC on May 6, 2010).

Master Services Agreement, dated April 15, 2011, by and between Jazz Pharmaceuticals, Inc.,
CuraScript, Inc. and Express Scripts Specialty Distribution Services, Inc. (incorporated herein by
reference to Exhibit 10.2 in Jazz Pharmaceuticals, Inc.’s quarterly report on Form 10-Q
(File No. 001-33500) for the period ended March 31, 2011, as filed with the SEC on May 9, 2011).

Royalty Bearing License Agreement and Supply Agreement Re Erwinia-Derived Asparaginase,
dated July 22, 2005, between the Health Protection Agency and EUSA Pharma SAS (formerly OPi,
S.A.), as amended on each of December 22, 2009, March 23, 2012 and August 8, 2012 (incorporated
herein by reference to Exhibit 10.11 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q/A
(File No. 001-33500), as filed with the SEC on August 9, 2012).

122

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Exhibit
Number

10.6

10.7

10.8

10.9

10.10

10.11+

10.12+

10.13+

10.14+

10.15+

10.16+

10.17+

Description of Document

Credit Agreement, dated as of June 12, 2012, by and among Jazz Pharmaceuticals plc, Jazz
Pharmaceuticals, Inc., the Lenders and Barclays Bank PLC, as Administrative Agent, Collateral
Agent, Swing Line Lender and L/C Issuer (incorporated herein by reference to Exhibit 10.1 in Jazz
Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on
June 12, 2012).

Commercial Lease, dated as of June 2, 2004, by and between Jazz Pharmaceuticals, Inc. and The
Board of Trustees of the Leland Stanford Junior University (incorporated herein by reference to
Exhibit 10.52 in Jazz Pharmaceuticals, Inc.’s registration statement on Form S-1, as amended
(File No. 333-141164), as filed with the SEC on March 27, 2007).

First Amendment of Lease, dated June 1, 2009, by and between Jazz Pharmaceuticals, Inc. and
Wheatley-Fields, LLC, successor in interest to The Board of Trustees of the Leland Stanford Junior
University (incorporated herein by reference to Exhibit 10.86 in Jazz Pharmaceuticals, Inc.’s current
report on Form 8-K (File No. 001-33500), as filed with the SEC on June 4, 2009).

Second Amendment of Lease, dated February 28, 2012, by and between Jazz Pharmaceuticals, Inc.
and Wheatley-Fields, LLC, successor in interest to The Board of Trustees of the Leland Stanford
Junior University (incorporated herein by reference to Exhibit 10.31 in the annual report on
Form 10-K (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz
Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on
February 28, 2012).

Lease, dated May 8, 2012, by and between John Ronan and Castle Cove Property Developments
Limited and Jazz Pharmaceuticals plc (incorporated herein by reference to Exhibit 10.2 in Jazz
Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC on
August 7, 2012).

Form of Indemnification Agreement between Jazz Pharmaceuticals plc and its officers and directors
(incorporated herein by reference to Exhibit 10.1 in Jazz Pharmaceuticals plc’s current report on
Form 8-K (File No. 001-33500), as filed with the SEC on January 18, 2012).

Offer Letter from Jazz Pharmaceuticals, Inc. to Kathryn Falberg (incorporated herein by reference
to Exhibit 10.92 in Jazz Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500),
as filed with the SEC on December 3, 2009).

Noncompetition Agreement by and between Seamus Mulligan and Jazz Pharmaceuticals plc
(incorporated herein by reference to Exhibit 10.3 in Jazz Pharmaceuticals plc’s registration
statement on Form S-4 (File No. 333-177528), as filed with the SEC on October 26, 2011).

Offer Letter from Jazz Pharmaceuticals, Inc. to Jeffrey Tobias, M.D. (incorporated herein by
reference to Exhibit 10.1 in Jazz Pharmaceuticals, Inc.’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on November 8, 2011).

Offer Letter from Jazz Pharmaceuticals, Inc. to Suzanne Sawochka Hooper (incorporated herein by
reference to Exhibit 10.19 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on May 8, 2012).

Employment Agreement by and between Fintan Keegan and Jazz Pharmaceuticals plc (incorporated
herein by reference to Exhibit 10.4 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on August 7, 2012).

Amendment to Employment Agreement by and between Fintan Keegan and Jazz Pharmaceuticals
plc (incorporated herein by reference to Exhibit 10.6 in Jazz Pharmaceuticals plc’s quarterly report
on Form 10-Q (File No. 001-33500), as filed with the SEC on August 7, 2012).

123

Exhibit
Number

10.18+

10.19A+

10.19B+

10.19C+

10.19D+

10.19E+

10.19F+

10.19G+

10.19H+

10.20A+

10.20B+

Description of Document

Noncompetition Agreement by and between Fintan Keegan and Jazz Pharmaceuticals plc
(incorporated herein by reference to Exhibit 10.5 in Jazz Pharmaceuticals plc’s quarterly report on
Form 10-Q (File No. 001-33500), as filed with the SEC on August 7, 2012).

Jazz Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by reference to
Exhibit 99.3 in Jazz Pharmaceuticals plc’s registration statement on Form S-8
(File No. 333-179075), as filed with the SEC on January 18, 2012).

Jazz Pharmaceuticals plc 2007 Equity Incentive Plan Sub-Plan Governing Awards to Participants
in the Republic of Ireland (incorporated herein by reference to Exhibit 10.3B in the annual report
on Form 10-K (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz
Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals Inc. with the SEC on
February 28, 2012).

Form of Notice of Grant of Stock Options and Form of Option Agreement (U.S.) under the Jazz
Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by reference to
Exhibit 10.27C in Jazz Pharmaceuticals plc’s annual report on Form 10-K (File No. 001-33500),
as filed with the SEC on February 26, 2013).

Form of Notice of Grant of Stock Options and Form of Option Agreement (Irish) under Jazz
Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by reference to
Exhibit 10.27D in Jazz Pharmaceuticals plc’s annual report on Form 10-K (File No. 001-33500),
as filed with the SEC on February 26, 2013).

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement
(U.S.) under the Jazz Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.27E in Jazz Pharmaceuticals plc’s annual report on Form 10-K
(File No. 001-33500), as filed with the SEC on February 26, 2013).

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement
(Irish) under the Jazz Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.27F in Jazz Pharmaceuticals plc’s annual report on Form 10-K
(File No. 001-33500), as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals plc 2007 Equity Incentive Plan—Form of Non-U.S. Option Grant Notice
and Form of Non-U.S. Option Agreement (approved July 31, 2013) (incorporated herein by
reference to Exhibit 10.1 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on November 5, 2013).

Jazz Pharmaceuticals plc 2007 Equity Incentive Plan—Form of Non-U.S. Restricted Stock Unit
Award Grant Notice and Form of Non-U.S. Restricted Stock Unit Award Agreement (approved
July 31, 2013) (incorporated herein by reference to Exhibit 10.2 in Jazz Pharmaceuticals plc’s
quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC on November 5, 2013).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by reference to
Exhibit 99.1 in Jazz Pharmaceuticals plc’s registration statement on Form S-8
(File No. 333-179075), as filed with the SEC on January 18, 2012).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan Sub-Plan Governing Awards to Participants
in the Republic of Ireland (incorporated herein by reference to Exhibit 10.39B in the annual report
on Form 10-K (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz
Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals Inc. with the SEC on
February 28, 2012).

124

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Exhibit
Number

10.20C+

10.20D+

10.20E+

10.20F+

10.20G+

10.20H+

10.20I+

10.20J+

10.20K+

10.20L+

Description of Document

Form of Option Grant Notice and Form of Stock Option Agreement (U.S.) under the Jazz
Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.7
in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with
the SEC on August 7, 2012).

Form of Stock Option Grant Notice and Form of Option Agreement (Irish) under the Jazz
Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.8
in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with
the SEC on August 7, 2012).

Form of Non-U.S. Option Grant Notice and Form of Non-U.S. Option Agreement under the Jazz
Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by reference to
Exhibit 10.28E in Jazz Pharmaceuticals plc’s annual report on Form 10-K (File No. 001-33500),
as filed with the SEC on February 26, 2013).

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement
(U.S.) under the Jazz Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.9 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on August 7, 2012).

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement
(Irish) under the Jazz Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.10 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on August 7, 2012).

Form of Non-U.S. Restricted Stock Unit Grant Notice and Form of Non-U.S. Restricted Stock
Unit Award Agreement under the Jazz Pharmaceuticals plc 2011 Equity Incentive Plan
(incorporated herein by reference to Exhibit 10.28H in Jazz Pharmaceuticals plc’s annual report
on Form 10-K (File No. 001-33500), as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan—Form of U.S. Option Grant Notice and
Form of U.S. Option Agreement (approved July 31, 2013) (incorporated herein by reference to
Exhibit 10.3 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as
filed with the SEC on November 5, 2013).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan—Form of U.S. Restricted Stock Unit Award
Grant Notice and Form of U.S. Restricted Stock Unit Award Agreement (approved July 31, 2013)
(incorporated herein by reference to Exhibit 10.4 in Jazz Pharmaceuticals plc’s quarterly report on
Form 10-Q (File No. 001-33500), as filed with the SEC on November 5, 2013).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan—Form of Non-U.S. Option Grant Notice
and Form of Non-U.S. Option Agreement (approved July 31, 2013) (incorporated herein by
reference to Exhibit 10.4 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on November 5, 2013).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan—Form of Non-U.S. Restricted Stock Unit
Award Grant Notice and Form of Non-U.S. Restricted Stock Unit Award Agreement (approved
July 31, 2013) (incorporated herein by reference to Exhibit 10.6 in Jazz Pharmaceuticals plc’s
quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC on November 5, 2013).

10.21+

Jazz Pharmaceuticals plc Amended and Restated Directors Deferred Compensation Plan
(incorporated herein by reference to Exhibit 99.6 in Jazz Pharmaceuticals plc’s registration
statement on Form S-8 (File No. 333-179075), as filed with the SEC on January 18, 2012).

125

Exhibit
Number

10.22A+

10.22B+

10.22C+

10.23A+

10.23B+

10.24A+

10.24B+

10.24C+

Description of Document

Jazz Pharmaceuticals plc Amended and Restated 2007 Non-Employee Directors Stock Option
Plan (incorporated herein by reference to Exhibit 99.4 in Jazz Pharmaceuticals plc’s registration
statement on Form S-8 (File No. 333-179075), as filed with the SEC on January 18, 2012).

Form of Non-U.S. Option Grant Notice and Form of Non-U.S. Option Agreement under the Jazz
Pharmaceuticals plc Amended and Restated 2007 Non-Employee Directors Stock Option Plan
(incorporated herein by reference to Exhibit 10.30B in Jazz Pharmaceuticals plc’s annual report
on Form 10-K (File No. 001-33500), as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals plc Amended and Restated 2007 Non-Employee Directors Stock Option
Plan—Form of Non-U.S. Option Grant Notice and Form of Non-U.S. Option Agreement
(approved August 1, 2013) (incorporated herein by reference to Exhibit 10.7 in Jazz
Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC
on November 5, 2013).

Jazz Pharmaceuticals plc 2007 Employee Stock Purchase Plan, as amended and restated
(incorporated herein by reference to Exhibit 10.31A in Jazz Pharmaceuticals plc’s annual report
on Form 10-K (File No. 001-33500), as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals plc 2007 Employee Stock Purchase Plan Sub-Plan Governing Purchase
Rights to Participants in the Republic of Ireland (incorporated by reference herein to
Exhibit 10.4C in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500)
for the period ended March 31, 2012, as filed with the SEC on August 7, 2012).

Jazz Pharmaceuticals plc Cash Bonus Plan, (incorporated herein by reference to Exhibit 10.33 in
the annual report on Form 10-K/A (File No. 001-33500) for the period ended December 31, 2011,
as filed by Jazz Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals, Inc.
with the SEC on April 27, 2012).

Jazz Pharmaceuticals plc Cash Bonus Plan for U.S. Affiliates (incorporated herein by reference to
Exhibit 10.32B in Jazz Pharmaceuticals plc’s annual report on Form 10-K (File No. 001-33500),
as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals Cash Bonus Plan for International Affiliates (2013) (incorporated herein by
reference to Exhibit 10.32C in Jazz Pharmaceuticals plc’s annual report on Form 10-K
(File No. 001-33500), as filed with the SEC on February 26, 2013).

10.24D+

Jazz Pharmaceuticals Cash Bonus Plan for International Affiliates (2014).

10.25A+

10.25B+

10.26+

Jazz Pharmaceuticals plc Amended and Restated Executive Change in Control and Severance
Benefit Plan (incorporated herein by reference to Exhibit 10.34 in the annual report on
Form 10-K/A (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz
Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on
April 27, 2012).

Jazz Pharmaceuticals plc Amended and Restated Executive Change in Control and Severance
Benefit Plan (approved July 31, 2013) (incorporated herein by reference to Exhibit 10.8 in Jazz
Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC
on November 5, 2013).

Jazz Pharmaceuticals plc 2012 Non-Employee Director Compensation Arrangements
(incorporated herein by reference to Exhibit 10.32 in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals
plc on behalf of and as successor to Jazz Pharmaceuticals Inc. with the SEC on February 28,
2012).

126

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Exhibit
Number

10.27+

10.28+

10.29

10.30+

10.31

10.32#

21.1

23.1

23.2

24.1

31.1

31.2

Description of Document

Jazz Pharmaceuticals plc 2012 Executive Officer Compensation Arrangements (incorporated
herein by reference to Exhibit 10.3 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500) for the period ended June 30, 2012, as filed with the SEC on August 7,
2012).

Jazz Pharmaceuticals plc 2013 Executive Officer Compensation Arrangements (incorporated
herein by reference to Exhibit 10.6 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500) for the period ended March 31, 2013, as filed with the SEC on May 7, 2013).

Amendment No. 1, dated as of June 13, 2013, to the Original Credit Agreement and related
Guaranty, by and among Jazz Pharmaceuticals, Inc., Jazz Financing I Limited and Jazz
Pharmaceuticals Ireland Limited, as borrowers, Jazz Pharmaceuticals plc, as guarantor, the
Lenders thereto and Barclays Bank PLC, as Administrative Agent, Collateral Agent, L/C Issuer
and Swing Line Lender (incorporated herein by reference to Exhibit 10.1 in Jazz Pharmaceuticals
plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on June 13, 2013).

Jazz Pharmaceuticals plc Non-Employee Director Compensation Policy (approved August 1, 2013
(incorporated herein by reference to Exhibit 10.9 in Jazz Pharmaceuticals plc’s quarterly report on
Form 10-Q (File No. 001-33500), as filed with the SEC on November 5, 2013).

Amended and Restated Commitment Letter, dated as of January 6, 2014, by and between Jazz
Pharmaceuticals plc, Barclays Bank PLC, J.P. Morgan Securities LLC, JPMorgan Chase Bank,
N.A., Merrill Lynch Pierce, Fenner & Smith Incorporated, Bank of America, N.A., Citigroup
Global Markets Inc., Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, DNB Bank
ASA and DNB Capital Markets, Inc. (incorporated herein by reference to Exhibit 99.(B)(1) in Jazz
Pharmaceuticals plc’s tender offer statement on Schedule TO, as amended, as filed with the SEC
on January 7, 2014).

Amendment No. 2, dated as of January 23, 2014, to the Credit Agreement, dated as of June 12,
2012, by and among Jazz Pharmaceuticals, Inc., Jazz Financing I Limited and Jazz
Pharmaceuticals Ireland Limited, as borrowers, Jazz Pharmaceuticals Public Limited Company, as
guarantor, the Lenders thereto and Barclays Bank PLC, as Administrative Agent, Collateral Agent,
L/C Issuer and Swing Line Lender.

Subsidiaries of Jazz Pharmaceuticals plc.

Consent of KPMG, Independent Registered Public Accounting Firm.

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

Power of Attorney (included on the signature page hereto).

Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated
under the Securities Exchange Act of 1934, as amended.

Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated
under the Securities Exchange Act of 1934, as amended.

32.1*

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

127

Exhibit
Number

Description of Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

+

†

#

*

Indicates management contract or compensatory plan.

Confidential treatment has been granted for portions of this exhibit. Omitted portions have been filed
separately with the Securities and Exchange Commission.

This exhibit replaces the exhibit previously filed as Exhibit 10.1 in Jazz Pharmaceuticals plc’s current report
on Form 8-K (File No. 001-33500), as filed with the SEC on January 24, 2014.

The certifications attached as Exhibit 32.1 accompany this Annual Report on Form 10-K pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall
not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended.

128

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant

has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 25, 2014

Jazz Pharmaceuticals Public Limited Company
(Registrant)

/S/ BRUCE C. COZADD

Bruce C. Cozadd
Chairman and Chief Executive Officer and Director
(Principal Executive Officer)

/S/ KATHRYN E. FALBERG

Kathryn E. Falberg
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

/S/ KAREN J. WILSON

Karen J. Wilson
Senior Vice President, Finance
(Principal Accounting Officer)

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129

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below

constitutes and appoints Bruce C. Cozadd, Kathryn E. Falberg, Suzanne Sawochka Hooper and Karen J. Wilson,
and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution for
him or her, and in his or her name in any and all capacities, to sign any and all amendments to this Annual Report
on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing requisite and necessary to be done therewith,
as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, and any of them, his or her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the

registrant and in the capacities and on the dates indicated have signed this report below:

Signature

Title

Date

/S/ BRUCE C. COZADD

Bruce C. Cozadd

/S/ KATHRYN E. FALBERG

Kathryn E. Falberg

/S/ KAREN J. WILSON

Karen J. Wilson

/S/ PAUL L. BERNS

Paul L. Berns

Chairman, Chief Executive Officer and
Director
(Principal Executive Officer)

Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)

Senior Vice President, Finance
(Principal Accounting Officer)

February 25, 2014

February 25, 2014

February 25, 2014

Director

February 25, 2014

/S/ PATRICK G. ENRIGHT

Director

February 25, 2014

Patrick G. Enright

/S/ PETER GRAY

Peter Gray

Director

February 25, 2014

/S/ HEATHER ANN MCSHARRY

Director

February 25, 2014

Heather Ann McSharry

/S/ SEAMUS C. MULLIGAN

Director

February 25, 2014

Seamus C. Mulligan

/S/ KENNETH W. O’KEEFE

Director

February 25, 2014

Kenneth W. O’Keefe

/S/ NORBERT G. RIEDEL, PH.D.

Director

February 25, 2014

Norbert G. Riedel, Ph.D.

/S/ CATHERINE A. SOHN, PHARM.D.

Director

February 25, 2014

Catherine A. Sohn, Pharm.D.

/S/ RICK E WINNINGHAM

Director

February 25, 2014

Rick E Winningham

130

Report of KPMG, Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Jazz Pharmaceuticals plc

We have audited the accompanying consolidated balance sheets of Jazz Pharmaceuticals plc and
subsidiaries (the Company) as of December 31, 2013 and 2012, and the related consolidated statements of
income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the two-year period
ended December 31, 2013. In connection with our audit of the consolidated financial statements, we also have
audited the financial statement schedule at Item 15(a)2 for the years ended December 31, 2013 and 2012. These
consolidated financial statements and financial statement schedule are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements and financial
statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.

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In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,

the financial position of Jazz Pharmaceuticals plc and subsidiaries as of December 31, 2013 and 2012, and the
results of their operations and their cash flows for each of the years in the two-year period ended December 31,
2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule for the years ended December 31, 2013 and 2012, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information
set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board

(United States), Jazz Pharmaceuticals plc’s internal control over financial reporting as of December 31, 2013,
based on criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 25, 2014
expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG

Dublin, Ireland
February 25, 2014

F-1

Report of Ernst & Young LLP, Independent Registered Public Accounting Firm

The Board of Directors and Stockholder of
Jazz Pharmaceuticals, Inc., a wholly-owned subsidiary of Jazz Pharmaceuticals plc

We have audited the accompanying consolidated statements of operations, comprehensive income,
stockholders’ equity and cash flows of Jazz Pharmaceuticals, Inc. for the year ended December 31, 2011. Our
audit also included the financial statement schedule for 2011 listed in the Index at Item 15(a)2. These financial
statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the
consolidated results of its operations and its cash flows for the year ended December 31, 2011, in conformity
with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.

/s/ Ernst & Young LLP

Redwood City, California
February 28, 2012

F-2

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JAZZ PHARMACEUTICALS PLC

CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)

December 31,

2013

2012

Current assets:

ASSETS

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net of allowances of $3,680 and $3,779 at December 31,

2013 and 2012, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets, net, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 636,504

$ 387,196

124,805
28,669
7,183
33,613
33,843
864,617
14,246
812,396
450,456
74,597
14,605
7,304
$2,238,221

75,480
26,525
7,445
35,813
19,113
551,572
7,281
869,952
442,600
74,850
16,576
3,662
$1,966,493

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liability, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue, non-current
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contingent consideration, non-current
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liability, net, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies (Note 10)
Shareholders’ equity:

Ordinary shares, nominal value $0.0001 per share; 300,000 shares authorized;
57,854 and 58,014 shares issued and outstanding at December 31, 2013 and
2012, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-voting euro deferred shares, €0.01 par value per share; 4,000 shares

$

21,005
119,718
5,572
336
50,000
6,259
1,138
204,028
5,718
544,404
—
168,497
20,040

$

15,887
104,666
29,688
39,884
—
275
1,138
191,538
6,776
427,073
34,800
178,393
6,621

6

6

authorized, issued and outstanding at both December 31, 2013 and 2012 . . . . .
Capital redemption reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings (accumulated deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55
471
1,220,317
56,153
18,532
1,295,534
$2,238,221

55
471
1,151,010
31,046
(61,296)
1,121,292
$1,966,493

The accompanying notes are an integral part of these consolidated financial statements.

F-3

JAZZ PHARMACEUTICALS PLC

CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

Year Ended December 31,

2013

2012

2011

Revenues:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Product sales, net
Royalties and contract revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$865,398
7,025

$580,527
5,452

$266,518
5,759

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

872,423

585,979

272,277

Operating expenses:

Cost of product sales (excluding amortization of acquired developed

technologies)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible asset amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

102,146
304,303
46,620
79,042

78,425
223,882
20,477
65,351

13,942
108,936
14,120
7,448

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

532,111

388,135

144,446

Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment and modification of debt . . . . . . . . . . . . . . . . . . .

Income from continuing operations before income tax provision (benefit)

. . .
Income tax provision (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations, net of taxes . . . . . . . . . . . . . . . . . . . . . .

340,312
(26,916)
(1,697)
(3,749)

307,950
91,638

216,312
—

197,844
(16,869)
(3,620)
—

177,355
(83,794)

261,149
27,437

127,831
(1,600)
—
(1,247)

124,984

—

124,984
—

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$216,312

$288,586

$124,984

Basic income per ordinary share:

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted income per ordinary share:

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

$

$

3.71
—

3.71

3.51
—

3.51

$

$

$

$

4.61
0.48

5.09

4.34
0.45

4.79

$

$

$

$

3.01
—

3.01

2.67
—

2.67

Weighted-average ordinary shares used in per share computations:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58,298

56,643

41,499

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61,569

60,195

46,798

The accompanying notes are an integral part of these consolidated financial statements.

F-4

JAZZ PHARMACEUTICALS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss):

Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . .
Available-for-sale securities:

Year Ended December 31,

2013

2012

2011

$216,312

$288,586

$124,984

25,107

31,046

—

Net unrealized gain (loss) on available-for-sale securities, net of

income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reclassification adjustments for gains included in earnings, net of

income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

8

23

Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,107

31,077

(31)

—

(31)

Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$241,419

$319,663

$124,953

Total comprehensive income arises from:

Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$241,419
—
$241,419

$292,226
27,437
$319,663

$124,953
—
$124,953

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The accompanying notes are an integral part of these consolidated financial statements.

F-5

JAZZ PHARMACEUTICALS PLC

CONSOLIDATED STATEMENTS OF
SHAREHOLDERS’ EQUITY
(In thousands)

Ordinary Shares

Non-voting
Euro Deferred

Shares Amount Shares Amount

Capital
Redemp-
tion
Reserve

Additional
Paid-in
Capital

Accumu-
lated
Other
Compre-
hensive
Income

Retained
Earnings
(Accumulated
Deficit)

Total
Shareholders’
Equity

Balance at December 31,

2010 . . . . . . . . . . . . . . . . . . 39,959

$

4

— $—

$— $ 505,413 $ — $(474,866)

$

30,551

Stock issued/issuable under

directors deferred
compensation plan . . . . . . .
Issuance of common stock in
conjunction with exercise
of stock options . . . . . . . . .
Issuance of common stock in
conjunction with vesting of
restricted stock units . . . . .

Issuance of common stock
under employee stock
purchase plan . . . . . . . . . . .
Issuance of common stock in
conjunction with exercise
of warrants . . . . . . . . . . . . .

13 —

—

—

1,400 —

—

—

13 —

—

—

359 —

—

—

Stock-based compensation . . —
Other comprehensive loss . . . —
Net income . . . . . . . . . . . . . . —

724 —
—
—
—

—
—
—
—

—
—
—
—

Balance at December 31,

2011 . . . . . . . . . . . . . . . . . . 42,468
Merger with Azur Pharma . . . 12,360
Issuance costs related to Azur

4
2

—
4,000

—
55

Merger . . . . . . . . . . . . . . . . —

—

—

—

Shares issued under directors
deferred compensation
plan . . . . . . . . . . . . . . . . . .
Issuance of ordinary shares in
conjunction with exercise
of share options . . . . . . . . .

Issuance of ordinary shares
under employee stock
purchase plan . . . . . . . . . . .

45 —

—

—

1,951 —

—

—

151 —

—

—

Shares withheld for payment
of employee’s withholding
tax liability . . . . . . . . . . . . —

—

—

—

Issuance of ordinary shares in
conjunction with exercise
of warrants . . . . . . . . . . . . .

1,039 —
—

Share-based compensation . . —
Excess tax benefits from

employee share options . . . —

Other comprehensive

income . . . . . . . . . . . . . . . . —
Net income . . . . . . . . . . . . . . —

—

—
—

Balance at December 31,

—
—

—

—
—

—
—

—

—
—

—

—

—

—

—
—
—
—

—
471

—

—

—

—

—

—
—

—

—
—

368

12,214

—

1,546

2,659
20,497
—
—

542,697
575,936

—

—

—

—

—
—
(31)
—

(31)
—

(241)

—

—

14,212

3,707

—

—

—

(25,299)

—

7,084
23,129

9,785

—
—

—

—

—

—

—

—
—
—

124,984

(349,882)

—

—

—

—

—

—

—
—

—

368

12,214

—

1,546

2,659
20,497
(31)
124,984

192,788
576,464

(241)

—

14,212

3,707

(25,299)

7,084
23,129

9,785

— 31,077
—
—

—
288,586

31,077
288,586

2012 . . . . . . . . . . . . . . . . . . 58,014

$

6

4,000

$ 55

$471

$1,151,010 $31,046

$ (61,296)

$1,121,292

F-6

JAZZ PHARMACEUTICALS PLC

CONSOLIDATED STATEMENTS OF
SHAREHOLDERS’ EQUITY—(Continued)
(In thousands)

Ordinary Shares

Non-voting
Euro Deferred

Shares Amount Shares Amount

Capital
Redemp-
tion
Reserve

Additional
Paid-in
Capital

Accumu-
lated
Other
Compre-
hensive
Income

Retained
Earnings
(Accumulated
Deficit)

Total
Shareholders’
Equity

Balance at December 31,

2012 . . . . . . . . . . . . . . . . . . 58,014

$

6

4,000

$ 55

$471

$1,151,010 $31,046

$ (61,296)

$1,121,292

Issuance of ordinary shares in
conjunction with exercise
of share options . . . . . . . . .

Issuance of ordinary shares
under employee stock
purchase plan . . . . . . . . . . .
Issuance of ordinary shares in
conjunction with vesting of
restricted stock units . . . . .

904 —

—

—

147 —

—

—

146 —

—

—

Shares withheld for payment
of employee’s withholding
tax liability . . . . . . . . . . . . —

—

—

—

Issuance of ordinary shares in
conjunction with exercise
of warrants . . . . . . . . . . . . .

471 —
—

Share-based compensation . . —
Excess tax benefits from

employee share options . . . —

Shares repurchased . . . . . . . .
Other comprehensive

—
(1,828) —

income . . . . . . . . . . . . . . . . —
Net income . . . . . . . . . . . . . . —

—
—

Balance at December 31,

—
—

—
—

—
—

—
—

—
—

—
—

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—

—

—

—

—
—

—
—

—
—

20,895

5,410

—

—

—

—

(5,590)

—

4,398
44,367

(173)
—

—
—

—
—

—

—

—

—

—
—

—

(136,484)

20,895

5,410

—

(5,590)

4,398
44,367

(173)
(136,484)

— 25,107
—
—

—
216,312

25,107
216,312

2013 . . . . . . . . . . . . . . . . . . 57,854

$

6

4,000

$ 55

$471

$1,220,317 $56,153

$ 18,532

$1,295,534

The accompanying notes are an integral part of these consolidated financial statements.

F-7

JAZZ PHARMACEUTICALS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating

activities:

Year Ended December 31,

2013

2012

2011

$216,312

$ 288,586

$124,984

Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of property and equipment
. . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from share-based compensation . . . . . . . . . . . . . . . . .
Acquisition accounting inventory fair value step-up adjustments . . . . . .
Change in fair value of contingent consideration . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for losses on accounts receivable and inventory . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
Loss on extinguishment and modification of debt
Other non-cash transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in assets and liabilities:

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . .
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liability under government settlement . . . . . . . . . . . . . . . . . . . . . . .

79,042
3,048
46
44,551
173
3,826
15,200
(10,097)
—
2,446
3,749
6,278

(48,846)
(8,516)
(13,871)
(4,306)
5,089
14,717
(38,984)
(1,061)
14,820
—

72,922
1,307
163
23,006
(9,785)
19,939
(300)
(113,862)
(35,244)
4,654
—
3,523

(4,724)
1,697
(13,091)
(3,491)
(7,286)
(11,428)
39,340
(1,205)
2,351
(7,320)

7,448
379
33
20,704
—
—
—
—
—
59
1,247
394

(12,293)
1,239
(934)
186
2,080
11,211
—
(1,273)
(82)
(3,786)

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

283,616

249,752

151,596

Investing activities

Acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net proceeds from sale of business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of marketable securities . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from maturities of marketable securities . . . . . . . . . . . . . . . . . .
Acquisition of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of product rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—
—
—
(1,300)
(9,976)
—
—

(542,531)
(37,443)
93,922
81,246
31,988
—
(5,976)
(16,500)
—

—
(79,886)
—
—
4,033
—
(1,279)
(4,500)
400

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11,276)

(395,294)

(81,232)

F-8

JAZZ PHARMACEUTICALS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
(In thousands)

Year Ended December 31,

2013

2012

2011

Financing activities

Net proceeds from issuance of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from employee equity incentive and purchase plans and

exercise of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share repurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of employee withholding taxes related to share-based

awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from share-based compensation . . . . . . . . . . . . . . . . .
Repayment of long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of debt extinguishment costs . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net repayments under revolving credit facility . . . . . . . . . . . . . . . . . . . . .

553,425

450,916

—

30,703
(136,484)

25,003
—

16,419
—

(5,590)
(173)
(465,910)

—
—

(25,299)
9,785
(11,875)
—
—

—
—
(41,668)
(483)
(7,350)

Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . .

(24,029)

448,530

(33,082)

Effect of exchange rates on cash and cash equivalents . . . . . . . . . . . . . . . . . . .

997

2,132

—

Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, at beginning of period . . . . . . . . . . . . . . . . . . . . . .

249,308
387,196

305,120
82,076

37,282
44,794

Cash and cash equivalents, at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 636,504

$387,196

$ 82,076

Supplemental disclosure of cash flow information:
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash investing activities:
Acquisition consideration for Azur Merger

. . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 18,278
$ 137,616

$ 14,192
9,143
$

$ 1,621
$ —

$

— $576,464

$ —

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The consolidated statements of cash flows include the activities of discontinued operations.
The accompanying notes are an integral part of these consolidated financial statements.

F-9

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Description of Business

Jazz Pharmaceuticals plc, a public limited company formed under the laws of Ireland, is a specialty

biopharmaceutical company focused on improving patients’ lives by identifying, developing and
commercializing differentiated products that address unmet medical needs. Our strategy is to continue to create
shareholder value by:

•

•

•

Growing sales of the existing products in our portfolio, including by identifying new growth
opportunities;

Acquiring additional marketed specialty products or products close to regulatory approval to leverage
our existing expertise and infrastructure; and

Pursuing targeted development of a pipeline of post-discovery specialty product candidates.

On January 18, 2012, the businesses of Jazz Pharmaceuticals, Inc. and Azur Pharma Public Limited

Company, or Azur Pharma, were combined in a merger transaction, or the Azur Merger, accounted for as a
reverse acquisition under the acquisition method of accounting for business combinations, with Jazz
Pharmaceuticals, Inc. treated as the acquiring company for accounting purposes. As part of the Azur Merger, a
wholly-owned subsidiary of Azur Pharma merged with and into Jazz Pharmaceuticals, Inc., with Jazz
Pharmaceuticals, Inc. surviving the Azur Merger as a wholly-owned subsidiary of Jazz Pharmaceuticals plc. Prior
to the Azur Merger, Azur Pharma changed its name to Jazz Pharmaceuticals plc.

On June 12, 2012, we completed the acquisition of EUSA Pharma Inc., or EUSA Pharma, which we refer to

as the EUSA Acquisition.

In January and February 2014, pursuant to a tender offer, we acquired approximately 98% of the

outstanding and fully diluted voting securities of Gentium S.p.A., or Gentium, for an acquisition cost of
approximately $993 million, which we refer to as the Gentium Acquisition. Please see Note 20 for additional
information regarding this acquisition.

Unless otherwise indicated or the context otherwise requires, references to “Jazz Pharmaceuticals,” “the

registrant,” “we,” “us,” and “our” refer to Jazz Pharmaceuticals plc and its consolidated subsidiaries, including
its predecessor, Jazz Pharmaceuticals, Inc., except that all such references prior to the effective time of the Azur
Merger on January 18, 2012 are references to Jazz Pharmaceuticals, Inc. and its consolidated subsidiaries. All
references to “Azur Pharma” are references to Jazz Pharmaceuticals plc (f/k/a Azur Pharma Public Limited
Company) and its consolidated subsidiaries prior to the effective time of the Azur Merger on January 18, 2012.
The disclosures in this report relating to the pre-Azur Merger business of Jazz Pharmaceuticals plc, unless noted
as being the business of Azur Pharma prior to the Azur Merger, pertain to the business of Jazz Pharmaceuticals,
Inc. prior to the Azur Merger. All references to “EUSA Pharma” in this report are references to EUSA Pharma
Inc. and its consolidated subsidiaries prior to the effective time of the EUSA Acquisition.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Jazz Pharmaceuticals plc and our wholly-
owned subsidiaries and intercompany transactions and balances have been eliminated. The results of operations
of the acquired Azur Pharma and EUSA Pharma businesses, along with the estimated fair values of the assets
acquired and liabilities assumed in each transaction, are included in our consolidated financial statements since
the effective dates of the Azur Merger and the EUSA Acquisition, respectively. Certain prior period amounts
presented in the accompanying footnotes have been reclassified to conform to current period presentation, as
described in Note 4.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Significant Risks and Uncertainties

Our financial results are significantly influenced by sales of Xyrem® (sodium oxybate) oral solution. In

2013, net product sales of Xyrem were $569.1 million, which represented 65.8% of total net product sales.
Maintaining or increasing sales of Xyrem in its approved indications is subject to a number of risks and
uncertainties, including the potential introduction of generic competition, changed or increased regulatory
restrictions, and continued acceptance of Xyrem as safe and effective by physicians and patients. Three
abbreviated new drug applications, or ANDAs, have been filed with the United States Food and Drug
Administration, or FDA, by third parties seeking to market generic versions of Xyrem. We initiated lawsuits
against all three third parties, and the litigation proceedings are ongoing. We cannot predict the timing or
outcome of these proceedings. Although no trial date for the consolidated case with the first ANDA filer, Roxane
Laboratories, Inc., or Roxane, has been scheduled, we anticipate that trial in that case could occur as early as late
in the fourth quarter of 2014. We expect that the approval of an ANDA that results in the launch of a generic
version of Xyrem would have a material adverse effect on our business, financial condition, results of operations
and growth prospects.

In addition, we are continuing our efforts on various regulatory matters, including working with the FDA on

updated documents that we have submitted to the FDA on our risk management and controlled distribution
system for Xyrem, which we refer to as the Xyrem Risk Management Program. We are engaged in ongoing
communications with the FDA with respect to our risk evaluation and mitigation strategies, or REMS, documents
for Xyrem, but we have not reached agreement on certain significant terms. For example, we disagree with the
FDA’s current position that, as part of the current REMS process, the Xyrem deemed REMS should be modified
to enable the distribution of Xyrem through more than one pharmacy, or potentially through retail pharmacies
and wholesalers, as well as with certain modifications proposed by the FDA that would, in the FDA’s view, make
the REMS more consistent with the FDA’s current practices for REMS documents.

The FDA has notified us that it would exercise its claimed authority to modify our REMS and that it would

finalize the REMS as modified by the FDA unless we initiate dispute resolution procedures with respect to the
modification of the Xyrem deemed REMS. Given these circumstances, we will initiate dispute resolution
procedures with the FDA by the end of February 2014. We cannot predict whether, or on what terms, we will
reach agreement with the FDA on final REMS documents for Xyrem, whether we will initiate additional dispute
resolution proceedings with the FDA or other legal proceedings prior to finalizing the REMS documents, or the
outcome or timing of any such proceedings. We expect that final REMS documents for Xyrem will include
modifications to, and/or requirements that are not currently implemented in, the Xyrem Risk Management
Program. Any such modifications or additional requirements could potentially make it more difficult or
expensive for us to distribute Xyrem, make it easier for future generic competitors, and/or negatively affect sales
of Xyrem.

In January 2014, the FDA held an initial meeting with us and current Xyrem ANDA applicants to facilitate
the development of a single shared system REMS for Xyrem (sodium oxybate). We also expect to face pressure
to license or share our Xyrem Risk Management Program, which is the subject of multiple issued patents, or
elements of it, with generic competitors. We cannot predict the outcome or impact on our business of any future
action that we may take with respect to the development of a single shared system REMS for Xyrem (sodium
oxybate), licensing or sharing our REMS, or the FDA’s response to a certification that a third party had been
unable to obtain a license.

Our financial results are increasingly influenced by sales of our second largest product, Erwinaze®
(asparaginase Erwinia chrysanthemi), called Erwinase® in markets outside of the United States, which have
continued to grow. In 2013, net product sales of Erwinaze/Erwinase were $174.3 million, which represented

F-11

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

20.1% of total net product sales in 2013. We seek to maintain and increase sales of Erwinaze, as well as to make
Erwinaze more widely available, through ongoing research and development activities. However, our ability to
successfully and sustainably grow sales of Erwinaze is subject to a number of risks and uncertainties, including
the limited population of patients with ALL and the incidence of hypersensitivity reactions to E. coli-derived
asparaginase within that population, our ability to obtain approval for the intravenous administration of Erwinaze
in the United States, our ability to obtain data on the use of Erwinaze in young adults age 18 to 39 with ALL who
are hypersensitive to E. coli-derived asparaginase, as well as our need to apply for and receive marketing
authorizations, through the EU’s mutual recognition procedure or otherwise, in certain additional countries so we
can launch promotional efforts in those countries. Another significant challenge to maintenance of current sales
level and continued growth is our need to ensure sufficient supply of Erwinaze on a timely basis. We have
limited inventory of Erwinaze, and, during 2013, our supply of Erwinaze was nearly completely absorbed by
demand for the product. In the past, we have experienced a disruption of supply of Erwinase in the European
market due to manufacturing challenges, including shortages related to the failure of a batch to meet certain
specifications in 2013, and we may experience similar or other manufacturing challenges in the future. If our
continued efforts to avoid supply shortages are not successful, we could experience Erwinaze supply
interruptions in the future, which could have a material adverse effect on our sales of and revenues from
Erwinaze and limit our potential future maintenance and growth of the market for this product. In addition, while
we continue to work with the manufacturer of Erwinaze to evaluate potential steps to increase the supply of
Erwinaze over the longer term to address expected growing worldwide demand, our ability to increase sales of
Erwinaze may be limited by our ability to obtain an increased supply of the product.

In addition to risks related specifically to Xyrem and Erwinaze, we are subject to other challenges and risks
specific to our business, as well as risks and uncertainties common to companies in the pharmaceutical industry
with development and commercial operations, including: the challenges of protecting our intellectual property
rights; delays or problems in the supply or manufacture of our products, particularly because we maintain limited
inventories of certain products, including products for which our supply demands are growing, and we are
dependent on single source suppliers to continue to meet our ongoing commercial needs; the need to obtain
appropriate pricing and reimbursement for our products in an increasingly challenging environment due to,
among other things, the attention being paid to health care cost containment and other austerity measures in the
United States and worldwide, and in particular the need to maintain reimbursement for Xyrem in the United
States and obtain appropriate pricing approvals in order to launch Defitelio® (defibrotide) in certain EU countries
which represent a significant market opportunity for Defitelio; the ongoing regulation and oversight by the FDA,
the U.S. Drug Enforcement Administration, or DEA, and non-U.S. regulatory agencies, including with respect to
product labeling, requirements for distribution, obtaining sufficient DEA quotas where needed, marketing and
promotional activities, adverse event reporting and product recalls or withdrawals; the challenges of achieving
and maintaining commercial success of our products, such as obtaining sustained acceptance of our products by
patients, physicians and payors, and in particular the successful commercial launch of Defitelio in the EU
throughout 2014; the challenges inherent in the integration of the business of Gentium with our historic business,
including the increase in geographic dispersion among our centers of operation and taking on the operation of a
manufacturing plant; and the difficulty and uncertainty of pharmaceutical product development and the
uncertainty of clinical success and regulatory approval, especially as we continue to undertake increased
activities, and make growing investment in, our product pipeline development projects. Other risks and
uncertainties related to our ability to execute on our strategy include: our ability to identify and acquire, in-
license or develop additional products or product candidates to grow our business; and possible restrictions on
our ability and flexibility to pursue certain future opportunities as a result of our substantial outstanding debt
obligations, which have increased significantly as a result of, among other things, the Gentium Acquisition and
the acquisition of JZP-110.

F-12

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Business Acquisitions

Our consolidated financial statements include the operations of an acquired business after the completion of
the acquisition. We account for acquired businesses using the acquisition method of accounting. The acquisition
method of accounting for acquired businesses requires, among other things, that assets acquired and liabilities
assumed be recognized at their estimated fair values as of the acquisition date, with limited exceptions, and that
the fair value of acquired in-process research and development, or IPR&D, be recorded on the balance sheet.
Also, transaction costs are expensed as incurred. Any excess of the acquisition consideration over the assigned
values of the net assets acquired is recorded as goodwill. Contingent consideration is included within the
acquisition cost and is recognized at its fair value on the acquisition date. A liability resulting from contingent
consideration is remeasured to fair value at each reporting date until the contingency is resolved and changes in
fair value are recognized in earnings.

Concentrations of Risk

Financial instruments that potentially subject us to concentrations of credit risk consist of cash equivalents

and marketable securities. Our investment policy permits investments in U.S. federal government and federal
agency securities, corporate bonds or commercial paper issued by U.S. corporations, money market instruments,
certain qualifying money market mutual funds, certain repurchase agreements, and tax-exempt obligations of
U.S. states, agencies and municipalities and places restrictions on credit ratings, maturities, and concentration by
type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our
cash, cash equivalents and marketable securities and issuers of investments to the extent recorded on the balance
sheet.

We are also subject to credit risk from our accounts receivable related to our product sales. We monitor our
exposure within accounts receivable and record a reserve against uncollectible accounts receivable as necessary.
We extend credit to hospitals, pharmaceutical wholesale distributors and specialty pharmaceutical distribution
companies, primarily in the United States, and to other international distributors. Customer creditworthiness is
monitored and collateral is not required. We monitor deteriorating economic conditions in certain European
countries which may result in variability of the timing of cash receipts and an increase in the average length of
time that it takes to collect accounts receivable outstanding. Historically, we have not experienced significant
credit losses on our accounts receivable and we do not expect to have write-offs or adjustments to accounts
receivable which would have a material adverse effect on our financial position, liquidity or results of operations.
As of December 31, 2013, five customers accounted for 85% of gross accounts receivable including Express
Scripts Specialty Distribution Services, Inc. and its affiliate CuraScript, Inc., or Express Scripts, which accounted
for 69% of gross accounts receivable and Accredo Health Group, Inc. which accounted for 9% of gross accounts
receivable. As of December 31, 2012, five customers accounted for 78% of gross accounts receivable including
Express Scripts which accounted for 51% of gross accounts receivable and Accredo Health Group, Inc. which
accounted for 11% of gross accounts receivable.

We rely on certain sole suppliers for drug substance and certain sole manufacturing partners for certain of

our marketed products and product candidates.

Cash Equivalents and Marketable Securities

We consider all highly liquid investments, readily convertible to cash, that mature within three months or

less from date of purchase to be cash equivalents.

Marketable securities are investments in debt securities with maturities of less than one year from the
balance sheet date, or securities with maturities of greater than one year that are specifically identified to fund

F-13

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

current operations. Collectively, cash equivalents, restricted cash and marketable securities are considered
available-for-sale and are recorded at fair value. Unrealized gains and losses, net of tax, are recorded in
accumulated other comprehensive income in shareholders’ equity. We use the specific-identification method for
calculating realized gains and losses on securities sold. Realized gains and losses and declines in value judged to
be other than temporary on marketable securities are included in interest expense, net in the consolidated
statements of income. Realized gains and losses on sales of marketable securities have not been significant.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method

for all inventories. Our policy is to write down inventory that has become obsolete, inventory that has a cost basis
in excess of its expected net realizable value and inventory in excess of expected requirements. The estimate of
excess quantities is subjective and primarily dependent on our estimates of future demand for a particular
product. If the estimate of future demand is too high, we may have to increase the reserve for excess inventory
for that product and record a charge to cost of product sales. For product candidates that have not been approved
by the FDA, inventory used in clinical trials is expensed at the time of production and recorded as research and
development expense. For products that have been approved by the FDA, inventory used in clinical trials is
expensed at the time the inventory is packaged for the clinical trial. Prior to receiving FDA approval, costs
related to purchases of the active pharmaceutical ingredient and the manufacturing of the product candidate are
recorded as research and development expense. All direct manufacturing costs incurred after approval are
capitalized into inventory. The fair value of inventories acquired included a step-up in the value of inventories of
$0.2 million and $4.0 million as of December 31, 2013 and 2012, respectively.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using

the straight-line method over the estimated useful lives of the assets, which range from three to 10 years.
Leasehold improvements are amortized over the shorter of the noncancelable term of our operating lease or their
economic useful lives. Maintenance and repairs are expensed as incurred.

Goodwill

Goodwill represents the excess of the acquisition consideration over the fair value of assets acquired and
liabilities assumed. We have determined that we operate in a single segment and have a single reporting unit
associated with the development and commercialization of pharmaceutical products. The annual test for goodwill
impairment is a two-step process. The first step is a comparison of the fair value of the reporting unit with its
carrying amount, including goodwill. If this step indicates impairment, then in the second step, the loss is
measured as the excess of recorded goodwill over its implied fair value. Implied fair value is the excess of the
fair value of the reporting unit over the fair value of all identified assets and liabilities. We test goodwill for
impairment annually in October and when events or changes in circumstances indicate that the carrying value
may not be recoverable.

Intangible Assets

Intangible assets with finite useful lives consist primarily of purchased developed technology and are
amortized on a straight-line basis over their estimated useful lives, which range from two to 15 years. The
estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the
associated products and may be modified when circumstances warrant. Intangible assets with finite lives are
reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be

F-14

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected
to result from the use of the asset and its eventual disposition are less than its carrying amount. The amount of
any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

The fair value of IPR&D acquired through a business combination is capitalized as an indefinite-lived
intangible asset until the completion or abandonment of the related research and development activities. IPR&D
is not amortized but is tested for impairment annually or when events or circumstances indicate that the fair value
may be below the carrying value of the asset. If and when development is complete, which generally occurs
when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and
would then be amortized over their estimated useful lives.

Revenue Recognition

Revenues are recognized when there is persuasive evidence that an arrangement exists, delivery has

occurred, the price is fixed and determinable and collection is reasonably assured.

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Product Sales, Net

Product sales revenue is recognized when title has transferred to the customer and the customer has assumed
the risks and rewards of ownership, which is typically on delivery to the customer or, in the case of products that
are subject to consignment agreements, when the customer removes product from our consigned inventory
location for shipment directly to a patient.

Revenue from sales transactions where the buyer has the right to return the product is recognized at the time

of sale only if (i) the seller’s price to the buyer is substantially fixed or determinable at the date of sale, (ii) the
buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale
of the product, (iii) the buyer’s obligation to the seller would not be changed in the event of theft or physical
destruction or damage of the product, (iv) the buyer acquiring the product for resale has economic substance
apart from that provided by the seller, (v) the seller does not have significant obligations for future performance
to directly bring about resale of the product by the buyer, and (vi) the amount of future returns can be reasonably
estimated.

Revenues from sales of products are recorded net of estimated allowances for returns, specialty distributor

fees, wholesaler fees, prompt payment discounts, government rebates, government chargebacks, coupon
programs and rebates under managed care plans. Provisions for returns, specialty distributor fees, wholesaler
fees, government rebates, coupon programs and rebates under managed care plans are included within current
liabilities in our consolidated balance sheets. Provisions for government chargebacks and prompt payment
discounts are generally shown as a reduction in accounts receivable. Calculating certain of these items involves
estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new
information regarding changes in these programs’ regulations and guidelines that would impact the amount of the
actual rebates, our expectations regarding future utilization rates for these programs and channel inventory data.
Adjustments to estimates for these allowances have not been material.

Royalties and Contract Revenues

We receive royalties from third parties based on sales of our products under licensing and distribution
arrangements. For those arrangements where royalties are reasonably estimable, we recognize revenues based on
estimates of royalties earned during the applicable period, and adjust for differences between the estimated and
actual royalties in the following quarter. Historically, these adjustments have not been significant.

F-15

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our contract revenues consist of fees and milestone payments. Non-refundable fees where we have no

continuing performance obligations are recognized as revenues when there is persuasive evidence of an
arrangement and collection is reasonably assured. In situations where we have continuing performance
obligations, non-refundable fees are deferred and are recognized ratably over our projected performance period.
We recognize at-risk milestone payments, which are typically related to regulatory, commercial or other
achievements by us or our licensees and distributors, as revenues when the milestone is accomplished and
collection is reasonably assured. Sales-based milestone payments are typically payments made to us that are
triggered when aggregate net sales of a product by a collaborator for a specified period (for example, an annual
period) reach an agreed upon threshold amount. We recognize sales-based milestone payments from a
collaborator when the event which triggers the obligation of payment has occurred, there is no further obligation
on our part in connection with the payment, and collection is reasonably assured. Refundable fees are deferred
and recognized as revenues upon the later of when they become nonrefundable or when our performance
obligations are completed.

Cost of Product Sales

Cost of product sales includes third party manufacturing and distribution costs, the cost of drug substance,

royalties due to third parties on product sales, product liability and cargo insurance, FDA user fees, freight,
shipping, handling and storage costs and salaries and related costs of employees involved with production. Cost
of product sales in 2013 and 2012 included $3.8 million and $16.8 million, respectively, of inventory costs
associated with the fair value step-up in acquired inventory. Excluded from cost of product sales, as shown on the
consolidated statements of income, is amortization of acquired developed technology of $78.8 million, $65.1
million and $7.2 million in 2013, 2012 and 2011, respectively.

Research and Development

Research and development expenses consist primarily of personnel expenses, costs related to clinical studies

and outside services, and other research and development costs. Personnel expenses relate primarily to salaries,
benefits and share-based compensation. Clinical study and outside services costs relate primarily to clinical
studies performed by clinical research organizations, materials and supplies, and other third-party fees. Other
research and development expenses primarily include overhead allocations consisting of various support and
facilities-related costs. Research and development costs are expensed as incurred, including payments made
under license agreements. For product candidates that have not been approved by the FDA, inventory used in
clinical trials is expensed at the time of production and recorded as research and development expense. For
products that have been approved by the FDA, inventory used in clinical trials is expensed at the time the
inventory is packaged for the trial.

Advertising Expenses

We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses for

2013, 2012 and 2011 were $1.0 million, $0.7 million and $1.0 million, respectively.

Income Taxes

We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets

and liabilities are determined based on differences between the financial statement carrying amount and the tax
basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the
differences are expected to reverse. A valuation allowance is provided when it is more-likely-than-not that some

F-16

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

portion or all of a deferred tax asset will not be realized. We account for uncertain tax positions using a “more-
likely-than-not” threshold for recognizing and resolving uncertain tax positions. A recognized tax position is then
measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon
settlement. Interest and penalties related to uncertain tax positions are included in the income tax provision
(benefit) and classified with the related liability on the consolidated balance sheets.

Foreign Currency

Our functional and reporting currency is the U.S. dollar. The assets and liabilities of our subsidiaries that

have a functional currency other than the U.S. dollar are translated into U.S. dollars at the exchange rate
prevailing at the balance sheet date with the results of operations of subsidiaries translated at the average
exchange rate for the reporting period. The cumulative foreign currency translation adjustment is recorded as a
component of accumulated other comprehensive income in shareholders’ equity.

Transactions in foreign currencies are translated into the functional currency of the relevant subsidiary at the

rate of exchange prevailing at the date of the transaction. Any monetary assets and liabilities arising from these
transactions are translated into the relevant functional currency at exchange rates prevailing at the balance sheet
date or on settlement. Resulting gains and losses are recorded in foreign currency loss in our consolidated
statements of income.

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Financing Costs

Deferred financing costs are reported at cost, less accumulated amortization and the related amortization
expense is included in interest expense, net in our consolidated statements of income. The carrying amount of
debt includes any related unamortized original issue discount.

Contingencies

From time to time, we may become involved in claims and other legal matters arising in the ordinary course

of business. We record accruals for loss contingencies to the extent that we conclude that it is probable that a
liability has been incurred and the amount of the related loss can be reasonably estimated. Legal fees and other
expenses related to litigation are expensed as incurred and included in selling, general and administrative
expenses.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or
GAAP, requires management to make estimates and assumptions that affect the amounts and disclosures reported
in the consolidated financial statements and accompanying notes. Management bases its estimates on historical
experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ
materially from those estimates.

F-17

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Net Income per Ordinary Share

Basic net income per ordinary share is based on the weighted-average number of ordinary shares

outstanding. Diluted net income per ordinary share is based on the weighted-average number of ordinary shares
outstanding and potentially dilutive ordinary shares outstanding. Basic and diluted net income per ordinary share
were computed as follows (in thousands, except per share amounts):

Year Ended December 31,

2013

2012

2011

Numerator:

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$216,312
—

$261,149
27,437

$124,984
—

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$216,312

$288,586

$124,984

Denominator:

Weighted-average ordinary shares—basic . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of employee equity incentive and purchase plans . . . . . . .
Dilutive effect of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted-average ordinary shares—diluted . . . . . . . . . . . . . . . . . . . . . . .

58,298
1,772
1,499

61,569

56,643
1,536
2,016

60,195

41,499
2,715
2,584

46,798

Basic income per ordinary share:

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted income per ordinary share:

Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

$

$

3.71
—

3.71

3.51
—

3.51

$

$

$

$

4.61
0.48

5.09

4.34
0.45

4.79

$

$

$

$

3.01
—

3.01

2.67
—

2.67

Potentially dilutive ordinary shares from employee equity plans and warrants are determined by applying

the treasury stock method to the assumed exercise of warrants and share options, the assumed vesting of
outstanding restricted stock units, or RSUs, and the assumed issuance of ordinary shares under our employee
stock purchase plan. The following table represents the weighted-average ordinary shares that were excluded
from the computation of diluted net income per ordinary share for the periods presented because including them
would have an anti-dilutive effect (in thousands):

Year Ended December 31,

2013

2012

2011

Options to purchase ordinary shares and RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,584

1,506

1,038

All references to “ordinary shares” in the discussion and tables above refer to Jazz Pharmaceuticals plc’s
ordinary shares with respect to the years ended December 31, 2013 and 2012 and to Jazz Pharmaceuticals, Inc.’s
common stock with respect to the year ended December 31, 2011. Our earnings per share in the year ended
December 31, 2011 was not impacted by the Azur Merger in 2012 since each share of Jazz Pharmaceuticals, Inc.
common stock issued and outstanding immediately prior to the effective time of the Azur Merger was canceled
and automatically converted into and became the right to receive one ordinary share upon the consummation of
the Azur Merger.

F-18

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Share-Based Compensation

We account for compensation cost for all share-based awards at fair value on the date of grant. The fair

value is recognized as expense over the service period, net of estimated forfeitures, using the straight-line
method. The estimation of share-based awards that will ultimately vest requires judgment, and to the extent
actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative
adjustment in the period estimates are revised. We primarily consider historical experience when estimating
expected forfeitures.

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update,

or ASU, No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward,
a Similar Tax Loss, or a Tax Credit Carryforward Exists”, or ASU No. 2013-11, which concludes that, under
certain circumstances, unrecognized tax benefits should be presented in the financial statements as a reduction to
a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU
No. 2013-11 will be effective for us beginning January 1, 2014. We do not anticipate that the adoption of this
standard will have a material impact on our financial position.

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In March 2013, the FASB issued ASU No. 2013-05, “Parent’s Accounting for the Cumulative Translation

Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an
Investment in a Foreign Entity”, or ASU No. 2013-05. The objective of ASU No. 2013-05 is to resolve the
diversity in practice regarding the release into net income of the cumulative translation adjustment upon
derecognition of a subsidiary or group of assets within a foreign entity. ASU No. 2013-05 will be effective for us
beginning January 1, 2014. We do not anticipate that the adoption of this standard will have a material impact on
our results of operations or financial position, absent any material transactions involving the derecognition of
subsidiaries or groups of assets within a foreign entity.

3. Fair Value Measurement

Cash and cash equivalents consisted of the following:

December 31, 2013

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value

Cash and
Cash
Equivalents

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$495,990
140,514

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$636,504

$—
—

$—

$—
—

$—

$495,990
140,514

$495,990
140,514

$636,504

$636,504

December 31, 2012

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value

Cash and
Cash
Equivalents

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . .

$343,548
43,648

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$387,196

$—
—

$—

$—
—

$—

$343,548
43,648

$343,548
43,648

$387,196

$387,196

F-19

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash equivalents are considered available-for-sale. We use the specific-identification method for calculating

realized gains and losses on securities sold and include them in interest expense, net in the consolidated
statements of income. Proceeds from sales of available-for-sale securities in 2012 were $81.2 million and were
used to partially fund the EUSA Acquisition. Gross realized gains and losses in 2012 were insignificant. All
available-for-sale securities held as of December 31, 2013 and 2012 were cash equivalents.

The following table summarizes, by major security type, our available-for-sale securities that are measured

at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

December 31, 2013

December 31, 2012

Significant
Other
Observable
Inputs (Level 2)

Total
Estimated
Fair Value

Quoted
Prices in Active
Markets for
Identical Assets
(Level 1)

Significant
Unobservable
Inputs (Level 3)

Total
Estimated
Fair Value

Assets:
Available-for-sale securities

Time deposits . . . . . . . . . . . . . . . . . .
Money market funds . . . . . . . . . . . . .

$140,514
—

$140,514

—

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$140,514

$140,514

$ —
43,648

$43,648

$ —
—

$ —

$ —
43,648

$43,648

Liabilities:
Contingent consideration . . . . . . . . . . . . .

$ 50,000

$ 50,000

$ —

$34,800

$34,800

As of December 31, 2013, our available-for-sale securities included time deposits which were measured at

fair value using Level 2 inputs and their carrying values were approximately equal to their fair values. As of
December 31, 2012, our available-for-sale securities included money market funds which were measured at fair
value using Level 1 inputs and their carrying values were approximately equal to their fair values. We reviewed
trading activity and pricing for these investments as of each measurement date. Level 2 inputs, obtained from
various third party data providers, represent quoted prices for similar assets in active markets, or these inputs
were derived from observable market data, or if not directly observable, were derived from or corroborated by
other observable market data. Level 1 inputs are quoted prices in active markets for identical assets or liabilities.
There were no transfers between the different levels of the fair value hierarchy in 2013 or in 2012 except for the
contingent consideration obligation as described below.

As part of the EUSA Acquisition, we agreed to make an additional contingent payment of $50.0 million in

cash if Erwinaze achieved U.S. net sales of $124.5 million or greater in 2013. In 2012, the fair value
measurement of this contingent consideration obligation was determined using unobservable Level 3 inputs.
These inputs included the probability of 2013 U.S. net sales of Erwinaze equaling or exceeding the $124.5
million threshold and the discount rate. In 2013, Erwinaze U.S. net sales were greater than $124.5 million and as
a result, we are obligated to make the payment of $50.0 million in the first quarter of 2014.

The change in fair value of the contingent consideration payable was as follows (in thousands):

Balance at December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value adjustment recorded within selling, general and

Level 3

$34,800

administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,200

Balance at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . .

$50,000

F-20

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2013, the principal amount outstanding and estimated fair value of our term loans was

$554.4 million and the carrying amount was $550.0 million. The fair value was determined using quotes from the
administrative agent of our credit facility that are based on bid/ask prices of our term loan (Level 2). For
additional information regarding our term loans please see Note 8.

4. Inventories

Inventories consisted of the following (in thousands):

Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,900
8,907
14,862

$ 4,979
5,410
16,136

Total inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$28,669

$26,525

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December 31,

2013

2012

Inventories of $4.2 million previously classified as raw materials as of December 31, 2012 have been
reclassified to work in process to conform to our current period presentation. Inventories included $0.2 million
and $4.0 million related to acquisition accounting inventory fair value step-up as of December 31, 2013 and
2012, respectively.

5. Property and Equipment

Property and equipment consisted of the following (in thousands):

December 31,

2013

2012

Computer software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 7,960
5,610
4,587
4,388
1,897
417

$ 4,292
3,687
3,899
1,135
1,953
94

Subtotal

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation and amortization . . . . . . . .

24,859
(10,613)

15,060
(7,779)

Property and equipment, net

. . . . . . . . . . . . . . . . . . . . . . . .

$ 14,246

$ 7,281

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. Accrued liabilities

Accrued liabilities consisted of the following (in thousands):

December 31,

2013

2012

Rebates and other sales deductions . . . . . . . . . .
Employee compensation and benefits . . . . . . . .
Sales returns reserve . . . . . . . . . . . . . . . . . . . . .
Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional fees . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 38,772
31,829
21,110
6,082
5,675
16,250

$ 29,235
24,900
26,385
3,271
2,163
18,712

Total accrued liabilities . . . . . . . . . . . . . . . . . . .

$119,718

$104,666

7. Goodwill and Intangible Assets

The gross carrying amount of goodwill was as follows (in thousands):

Balance at December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 442,600
7,856

Balance at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . .

$ 450,456

The gross carrying amounts and net book values of our intangible assets were as follows (in thousands):

December 31, 2013

December 31, 2012

Remaining
Weighted-
Average Useful
Life (In years)

Gross
Carrying
Amount

Accumulated
Amortization

Net Book
Value

Gross
Carrying
Amount

Accumulated
Amortization

Net Book
Value

Acquired developed

technologies . . . . . . . . . . . . .
Trademarks . . . . . . . . . . . . . . .

11.5
1.0

Total finite-lived

intangible assets . . . . . .
Acquired IPR&D assets . . . . . .

$957,089 $(179,225) $777,864 $930,834 $(97,578) $833,256
546

(2,054)

(2,327)

2,600

2,600

273

959,689
34,259

(181,552) 778,137
34,259

—

933,434
36,150

(99,632)
—

833,802
36,150

Total intangible assets . . . . . . .

$993,948 $(181,552) $812,396 $969,584 $(99,632) $869,952

Our two most significant intangible assets are related to Erwinaze/Erwinase, which we acquired in the
EUSA Acquisition, and Prialt® (ziconotide) intrathecal infusion, which we acquired in the Azur Merger. The net
book values of these assets as of December 31, 2013 were $458.7 million and $199.5 million, respectively.

The increase in the gross carrying amount of intangible assets in 2013 reflects the positive impact of foreign

currency exchange which is primarily due to the strengthening of the Euro against the U.S. dollar.

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Based on finite-lived intangible assets recorded as of December 31, 2013, and assuming the underlying

assets will not be impaired in the future and that we will not change the expected lives of the assets, future
amortization costs were estimated as follows (in thousands):

Year Ending December 31,

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Estimated Amortization
Expense

$ 82,865
76,816
72,486
72,395
72,326
401,249

$778,137

In 2012, we sold the women’s health business, a component of the acquired Azur Pharma business.
Intangible assets related to the women’s health business had a net book value of $41.4 million. Please see Note
18 for information regarding discontinued operations.

8. Long-Term Debt

Amendment of Credit Facility and Term Loan Refinancing

In June 2012, Jazz Pharmaceuticals plc, as guarantor, and certain of its wholly owned subsidiaries, as
borrowers, entered into a credit agreement providing for $475.0 million principal amount of term loans and a
$100.0 million revolving credit facility. On June 13, 2013, we amended the credit agreement to provide for
$557.2 million principal amount of new term loans and a $200.0 million revolving credit facility that replaced the
$100.0 million revolving credit facility. We used a portion of the proceeds from these new term loans to
refinance in full the $457.2 million aggregate principal amount of outstanding term loans under the credit
agreement prior to the amendment. As a result of the June 2013 amendment, interest rate margins on the term
loans and the revolving loans were reduced by 150 basis points.

Scheduled maturities with respect to the term loans principal outstanding as of December 31, 2013 were as

follows (in thousands):

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Year ending December 31,

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scheduled
Term Loan
Maturities

$

5,572
5,572
5,572
5,572
532,114

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$554,402

The 2013 refinancing of the term loans involved multiple lenders who were considered members of a loan

syndicate. In determining whether the refinancing was to be accounted for as a debt extinguishment or
modification, we considered whether the creditors remained the same or changed and whether the change in debt
terms was substantial. The debt terms were considered substantially different if the present value of the cash

F-23

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

flows of the term loans under the credit agreement, as amended, was at least 10% different from the present value
of the remaining cash flows of the original term loans, or the 10% Test. We performed a separate 10% Test for
each individual creditor participating in the loan syndication. The loans of creditors who did not participate in the
refinanced term loans were accounted for as a debt extinguishment. When there was a change in principal
balance for individual creditors, in applying the 10% Test, we used the cash flows related to the lowest common
principal balance, or the Net Method. Under the Net Method, any principal in excess of a creditor’s reinvested
principal balance was treated as a new, separate debt issuance, and any decrease in principal was treated as a
partial extinguishment of debt.

For debt considered to be extinguished, the unamortized deferred financing costs and unamortized original

issue discount associated with the extinguished debt were expensed. For debt considered to be modified, the
unamortized deferred financing costs and unamortized original issue discount associated with the modified debt
continue to be amortized, new creditor fees were capitalized and new third party fees were expensed. For new
creditors, new creditor fees and new third party fees were capitalized. Deferred financing costs of $11.7 million
and an original issue discount of $4.9 million were associated with the 2013 refinancing and are being amortized
to interest expense using the interest method over the life of the term loans under the credit agreement.

As the borrowing capacity relating to each creditor under the revolving credit facility after giving effect to

the June 2013 amendment was greater than that under the original revolving credit facility, unamortized deferred
financing costs, new creditor fees and new third party fees, totaling $4.7 million, were associated with the new
arrangement and were deferred and are being amortized to interest expense on a straight-line basis over the life of
the facility. As of December 31, 2013, we had not borrowed under the revolving credit facility.

The refinancing resulted in a $3.7 million charge in 2013, which was comprised of $2.7 million related to
the expensing of unamortized deferred financing costs and unamortized original issue discount associated with
extinguished debt and $1.0 million related to new third party fees associated with modified debt.

As of December 31, 2013, the interest rate on the term loans outstanding under the credit agreement was

3.5%. Interest expense associated with these term loans is recorded using the interest method and includes non-
cash interest related to the amortization of the debt discount and debt issuance costs. As of December 31, 2013,
the effective interest rate on the term loans outstanding was 4.3%. As of December 31, 2013, the current portion
of the carrying amount of the term loans outstanding was $5.6 million and the non-current portion was $544.4
million.

In 2011, we terminated a credit agreement and repaid a term loan in full and as a result, we recorded a loss

on extinguishment of debt of $1.2 million, which consisted of a $0.8 million non-cash charge related to the write-
off of unamortized debt issuance costs and a debt discount and the remainder related to a prepayment penalty and
a termination fee.

On January 23, 2014, we entered into a second amendment to the credit agreement to provide for (i) a
tranche of incremental term loans in the aggregate principal amount of $350.0 million, (ii) a tranche of term loans
to refinance the $554.4 million aggregate principal amount of term loans previously outstanding under the
amended credit agreement, or the prior term loans, in their entirety and (iii) a $425.0 million revolving credit
facility that replaces the $200.0 million revolving credit facility. We used the proceeds from the incremental term
loans and $300.0 million of loans under the revolving credit facility together with cash on hand, to purchase the
Gentium ordinary stock and American Depositary Shares properly tendered and accepted for payment on the
January 22, 2014 expiration of the initial tender offer period relating to the Gentium Acquisition. Please see Note
20 for additional information regarding this acquisition. The January 2014 amendment also reduced the interest
rate margins on the terms loans by 25 basis points.

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The term loans under the credit agreement, as amended in January 2014, mature on June 12, 2018 and the
revolving credit facility terminates, and any loans outstanding thereunder become due and payable on, June 12,
2017.

The term loans under the credit agreement, as amended in January 2014, bear interest, at our option, at a rate

equal to either the LIBOR, plus an applicable margin of 2.50% per annum (subject to a 0.75% LIBOR floor), or
the prime lending rate, plus an applicable margin equal to 1.50% per annum (subject to a 1.75% prime rate floor).
Borrowings under the new revolving credit facility bear interest, at our option, at a rate equal to either the
LIBOR, plus an applicable margin of 2.50% per annum, or the prime lending rate, plus an applicable margin
equal to 1.50% per annum, subject to reduction by 0.25% or 0.50% based upon our secured leverage ratio. The
revolving credit facility has a commitment fee payable on the undrawn amount ranging from 0.25% to 0.50% per
annum based upon our secured leverage ratio.

The borrowers’ obligations under the credit agreement, as amended in January 2014, and any hedging or

cash management obligations entered into with a lender or an affiliate of a lender are guaranteed by us and
certain of our subsidiaries and are secured by substantially all of our, the borrower’s and the subsidiary
guarantors’ assets.

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We may make voluntary prepayments of principal at any time without payment of a premium except that a

1% premium would apply to any repricing of the term loans effected on or prior to July 23, 2014. We are
required to make mandatory prepayments of the term loans (without payment of a premium) with (1) net cash
proceeds from certain non-ordinary course asset sales (subject to reinvestment rights and other exceptions),
(2) net cash proceeds from issuances of debt (other than certain permitted debt), (3) beginning with the fiscal
year ending December 31, 2014, 50% of our excess cash flow as defined in the amended credit agreement
(subject to decrease to 25% if our secured leverage ratio is equal to or less than 2.25 to 1.00 and greater than 1.25
to 1.00 or 0% if our secured leverage ratio is equal to or less than 1.25 to 1.00), and (4) casualty proceeds and
condemnation awards (subject to reinvestment rights and other exceptions).

Principal repayments of the term loans are due quarterly beginning in March 2014 and are equal to 1.0% per

annum of the original principal amount of $904.4 million with any remaining balance payable on the final
maturity date.

The credit agreement contains customary representations and warranties and customary affirmative and
negative covenants applicable to Jazz Pharmaceuticals plc and its restricted subsidiaries, including, among other
things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness
and dividends and other distributions. The credit agreement contains a financial covenant that requires Jazz
Pharmaceuticals plc and its restricted subsidiaries to maintain a maximum secured leverage ratio. We were, as of
December 31, 2013, and are currently in compliance with this financial covenant.

9. Deferred Revenue

We have an agreement with UCB under which UCB has the right to market Xyrem for certain indications in

various countries outside of the United States. We recognized contract revenues of $1.1 million during each of
2013, 2012, and 2011 relating to two upfront payments received from UCB in 2006 totaling $15.0 million. As of
December 31, 2013, $6.8 million was recorded as deferred revenues related to this agreement, of which
$1.1 million is a current liability. The deferred revenue balance is being recognized ratably through 2019.

F-25

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10. Commitments and Contingencies

Indemnification

In the normal course of business, we enter into agreements that contain a variety of representations and
warranties and provide for general indemnification, including indemnification associated with product liability or
infringement of intellectual property rights. Our exposure under these agreements is unknown because it involves
future claims that may be made but have not yet been made against us. To date, we have not paid any claims or
been required to defend any action related to these indemnification obligations.

We have agreed to indemnify our officers, directors and certain other employees for losses and costs
incurred in connection with certain events or occurrences, including advancing money to cover certain costs,
subject to certain limitations. The maximum potential amount of future payments we could be required to make
under the indemnification obligations is unlimited; however, we maintain insurance policies that may limit our
exposure and may enable us to recover a portion of any future amounts paid. Assuming the applicability of
coverage, the willingness of the insurer to assume coverage, and subject to certain retention, loss limits and other
policy provisions, we believe the fair value of these indemnification obligations is not significant. Accordingly,
we have not recognized any liabilities relating to these obligations as of December 31, 2013 and December 31,
2012. No assurances can be given that the covering insurers will not attempt to dispute the validity, applicability,
or amount of coverage without expensive litigation against these insurers, in which case we may incur substantial
liabilities as a result of these indemnification obligations.

Lease and Other Commitments

We have noncancelable operating leases for our office buildings and we are obligated to make payments

under noncancelable operating leases for automobiles used by our sales force.

Rent expense under all operating leases was as follows (in thousands):

Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$6,213

$3,074

$2,593

Year Ended December 31,

2013

2012

2011

Future minimum lease payments under our noncancelable operating leases at December 31, 2013, were as

follows (in thousands):

Year ending December 31,

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lease
Payments

$ 9,760
9,131
6,415
3,192
681

Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$29,309

In 2013, we entered into a new operating lease agreement for additional office space in Palo Alto for a term
of three years with an option to extend for one additional year and we amended and extended the operating lease
for our existing Philadelphia office building for additional space for a term of five years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2013, we had $52.0 million of noncancelable purchase commitments due within one

year, primarily related to agreements with third party manufacturers.

Legal Proceedings

We are involved in several legal proceedings, including the following matters:

Xyrem ANDA Matters: On October 18, 2010, we received a Paragraph IV Patent Certification notice, or
Paragraph IV Certification, from Roxane Laboratories, Inc., or Roxane, that it had submitted an ANDA to the
FDA requesting approval to market a generic version of Xyrem. Roxane’s Paragraph IV Certification alleged that
all five patents then listed for Xyrem in the FDA’s publication “Approved Drug Products with Therapeutic
Equivalence Evaluations,” or Orange Book, on the date of the Paragraph IV Certification are invalid,
unenforceable or not infringed by Roxane’s proposed generic product. On November 22, 2010, we filed a lawsuit
against Roxane in response to Roxane’s Paragraph IV Certification in the United States District Court for the
District of New Jersey, or the District Court. We are seeking a permanent injunction to prevent Roxane from
introducing a generic version of Xyrem that would infringe our patents. Additional patents covering Xyrem have
issued since the original suit was filed, and cases involving these patents have been consolidated with the original
action. In December 2013, the District Court permitted Roxane to amend its Answer in the consolidated case to
allege additional equitable defenses, and the parties have been given additional time for discovery on those new
defenses. Although no trial date for the consolidated case has been scheduled, based on the current scheduling
order, we anticipate that trial in the consolidated case could occur as early as late in the fourth quarter of 2014.
However, the actual timing of events in this litigation may be significantly earlier or later than contemplated by
the scheduling order, and we cannot predict the timing or outcome of events in this litigation. In accordance with
the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, as a result of
our having filed a timely lawsuit against Roxane, FDA approval of Roxane’s ANDA had been stayed until
April 18, 2013, which was 30 months after our October 18, 2010 receipt of Roxane’s Paragraph IV Certification,
but that stay has expired. We cannot predict the timing or outcome of this matter.

On December 10, 2012, we received a Paragraph IV Certification from Amneal Pharmaceuticals, LLC, or
Amneal, that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem.
Amneal’s Paragraph IV Certification alleged that seven patents listed for Xyrem in the Orange Book are not
infringed by Amneal’s proposed generic product. Amneal’s Paragraph IV Certification further alleged that an
eighth patent listed in the Orange Book for Xyrem is invalid. On December 13, 2012, we received a supplemental
Paragraph IV Certification alleging that a ninth patent listed in the Orange Book for Xyrem is invalid. On
January 18, 2013, we filed a lawsuit against Amneal in response to Amneal’s Paragraph IV Certifications in the
District Court. An additional patent covering Xyrem issued since the original suit was filed and the case
involving this patent has been consolidated with the original case. We are seeking a permanent injunction to
prevent Amneal from introducing a generic version of Xyrem that would infringe our patents. In accordance with
the Hatch-Waxman Act, as a result of having filed a timely lawsuit against Amneal, FDA approval of Amneal’s
ANDA will be stayed until the earlier of (i) June 10, 2015, which is 30 months after our receipt of Amneal’s
Paragraph IV Certification on December 10, 2012, or (ii) a District Court decision finding that the identified
patents are invalid, unenforceable or not infringed. We cannot predict the timing or outcome of this matter.

On November 21, 2013, we received a Paragraph IV Certification from Par Pharmaceutical, Inc., or Par, that

it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. Par’s
Paragraph IV Certification alleged that ten patents listed in the Orange Book for Xyrem are invalid,
unenforceable, and/or will not be infringed by Par’s proposed generic product. On December 27, 2013, we filed a
lawsuit against Par in the United States District Court, in response to Par’s Paragraph IV notice. We are seeking a
permanent injunction to prevent Par from introducing a generic version of Xyrem that would infringe our patents.

F-27

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In accordance with the Hatch-Waxman Act, as a result of having filed a timely lawsuit against Par, FDA
approval of Par’s ANDA will be stayed until the earlier of (i) May 21, 2016, which is 30 months after our receipt
of Par’s Paragraph IV Certification on November 21, 2013, or (ii) a District Court decision finding that the
identified patents are invalid, unenforceable or not infringed. We cannot predict the timing or outcome of this
matter.

FazaClo ANDA Matters: Azur Pharma received Paragraph IV Certifications from three generics

manufacturers, Barr Laboratories, Inc., or Barr, Novel Laboratories, Inc., or Novel, and Mylan Pharmaceuticals,
Inc., or Mylan, indicating that ANDAs had been filed with the FDA requesting approval to market generic
versions of FazaClo® (clozapine, USP) LD orally disintegrating clozapine tablets. Azur Pharma and CIMA Labs
Inc., or CIMA, a subsidiary of Teva Pharmaceutical Industries Limited, or Teva, our licensor and the entity
whose drug-delivery technology is incorporated into FazaClo LD, filed a lawsuit in response to each certification
claiming infringement based on such certification against Barr on August 21, 2008, against Novel on
November 25, 2008, and against Mylan on July 23, 2010. Each case was filed in the United States District Court
for the District of Delaware. On July 6, 2011, CIMA, Azur Pharma and Teva, which had acquired Barr, entered
into an agreement settling the patent litigation and Azur Pharma granted a sublicense to an affiliate of Teva of
Azur Pharma’s rights to have manufactured, market and sell a generic version of both FazaClo LD and FazaClo
HD, as well as an option for supply of authorized generic product. The sublicense for FazaClo LD commenced in
July 2012, and the sublicense for FazaClo HD will commence in May 2015, or earlier upon the occurrence of
certain events. Teva exercised its option for supply of an authorized generic product for FazaClo LD and
launched the authorized generic product at the end of August 2012. The Novel and Mylan matters have been
stayed pending reexamination of the patents in the lawsuits. In September 2013 and January 2014, reexamination
certificates were issued for the two patents-in-suit, with the claims of the patents confirmed, and the parties have
requested that the stay of litigation be lifted. We cannot predict the timing or outcome of this litigation.

Cutler Matter: On October 19, 2011, Dr. Neal Cutler, one of the original owners of FazaClo, filed a

complaint against Azur Pharma and one of its subsidiaries, as well as Avanir Pharmaceuticals, Inc., or Avanir, in
the California Superior Court in the County of Los Angeles, or the Superior Court. The complaint alleges that
Azur Pharma and its subsidiary breached certain contractual obligations. Azur Pharma acquired rights to FazaClo
from Avanir in 2007. The complaint alleges that as part of the acquisition of FazaClo, Azur Pharma’s subsidiary
agreed to assume certain contingent payment obligations to Dr. Cutler. The complaint further alleges that certain
contingent payments are due because revenue thresholds have been achieved, entitling Dr. Cutler to either a
$10.5 million or $25.0 million contingent payment, plus unspecified punitive damages and attorneys’ fees. In
March 2012, the Superior Court granted our petition to compel arbitration of the dispute in New York and stayed
the Superior Court litigation. In July 2012, the arbitrator dismissed the arbitration on the grounds that the parties’
dispute falls outside of the scope of the arbitration clause in the applicable contract. That ruling was affirmed by
the California Court of Appeal in January 2014, and the case was remanded to Superior Court. We cannot predict
the timing or outcome of this litigation.

Shareholder Litigation Matter: In January 2014, we became aware of a purported class action lawsuit filed in

the Southern District of New York in connection with the Gentium Acquisition. The lawsuit, captioned Xavion
Jyles, Individually and on Behalf of All Others Similarly Situated v. Gentium S.P.A. et al., names Gentium, each of
the Gentium’s directors, us and our Italian subsidiary as defendants. The lawsuit alleges, among other things, that
Gentium’s directors breached their fiduciary duties to Gentium’s shareholders in connection with a tender offer
agreement that Gentium entered into with us and our Italian subsidiary valuing Gentium ordinary shares and ADSs
at $57.00 per share, and that we and our Italian subsidiary violated Sections 14(e) and 20(a) of the Exchange Act by
allegedly overseeing Gentium’s preparation of an allegedly false and misleading Section 14D-9 Solicitation/
Recommendation Statement. The lawsuit seeks, among other relief, class action status, rescission, and unspecified
costs, attorneys’ fees and other expenses. We cannot predict the timing or outcome of this matter.

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

From time to time we are involved in legal proceedings arising in the ordinary course of business. We
believe there is no other litigation pending that could have, individually or in the aggregate, a material adverse
effect on our results of operations or financial condition.

Other Contingencies

We have not previously submitted pricing data for our two radiopharmaceutical products, ProstaScint and

Quadramet, for Medicaid and 340B programs. We have been engaged in interactions with the Centers for
Medicare and Medicaid Services, or CMS, and a trade group, the Council on Radionuclides and
Radiopharmaceuticals, or CORAR, regarding the reporting of Medicaid pricing data and paying Medicaid rebates
for radiopharmaceutical products. For ProstaScint, we plan to begin making any required reports when CMS
provides guidance on this requirement and reporting methodology, which is currently expected in 2014. We sold
Quadramet to a third party in December 2013, but have retained any liabilities related to sales of the product
during prior periods. In addition to the discussions with CMS as part of CORAR, we have had separate
discussions with CMS directly regarding Quadramet. We are currently unable to predict whether price reporting
and rebates will be required for ProstaScint and Quadramet and if so, for what period they will be required. The
initiation of any reporting of Medicaid pricing data for ProstaScint and Quadramet could result in retroactive
340B ceiling price liability for these two products as well as prospective 340B ceiling price obligations for
ProstaScint. We are currently unable to reasonably estimate an amount or range of a contingent loss. Any
material liability resulting from radiopharmaceutical price reporting would negatively impact our financial
results.

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11. Shareholders’ Equity

Share Repurchase Program

In May 2013, our board of directors authorized a share repurchase program pursuant to which we may
repurchase a number of ordinary shares having an aggregate repurchase price of up to $200 million, exclusive of
any brokerage commissions. The authorization became effective immediately and has no set expiration date.
Under this authorization, we may repurchase our ordinary shares through open market purchases, privately
negotiated purchases or a combination of these transactions. The timing and amount of repurchases will depend
on a variety of factors, including the price of our ordinary shares, alternative investment opportunities,
restrictions under the amended credit agreement, corporate and regulatory requirements and market conditions.
Share repurchases may be suspended or discontinued at any time without prior notice. We initiated purchases
under this program in May 2013. In 2013, we spent a total of $136.5 million to repurchase 1.8 million of our
ordinary shares at an average total purchase price, including commissions, of $74.67 per share. All ordinary
shares repurchased by the company were canceled. As of December 31, 2013, the remaining amount authorized
under the share repurchase program was $63.6 million.

Additional Paid-in Capital

In April 2013, the Irish High Court approved a $1.6 billion reduction of the share premium account of Jazz

Pharmaceuticals plc to offset its accumulated deficit, with the resulting reserve to be treated as distributable
reserves of our parent company. This transaction impacted our parent company balance sheet only and had no
impact on our U.S. GAAP consolidated balance sheet.

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Authorized But Unissued Ordinary Shares

We had reserved the following shares of authorized but unissued ordinary shares (in thousands):

2011 Equity Incentive Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 Equity Incentive Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 Employee Stock Purchase Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amended and Restated 2007 Non-Employee Directors Stock Option Plan . . . . . . . . . . .
Amended and Restated Directors Deferred Compensation Plan . . . . . . . . . . . . . . . . . . . .
Exercise of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of
December 31,
2013

8,917
988
704
374
183
1,552

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,718

Warrants

As of December 31, 2013, we had ordinary shares issuable under the following warrants (in thousands):

Warrants Issued

Expiration Date

Ordinary
Shares

Exercise
Price

Warrants issued in 2008 in conjunction with registered direct public

offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .

Warrants issued in 2009 in conjunction with private placement

July 20, 2014
July 5, 2016

$7.37
$4.00

604
948

1,552

The fair values of these warrants were recorded in shareholders’ equity when they were originally issued.

12. Comprehensive Income

Comprehensive income includes net income and all changes in shareholders’ equity during a period, except

for those changes resulting from investments by shareholders or distributions to shareholders.

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income at December 31, 2013 and December 31,

2012 were as follows (in thousands):

Foreign Currency
Translation Adjustments

Total Accumulated
Other Comprehensive
Income

Balance at December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$31,046
25,107

$56,153

$31,046
25,107

$56,153

During 2013, other comprehensive income reflects foreign currency translation adjustments which are

primarily due to the strengthening of the Euro against the U.S. dollar.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

13. Share-Based Compensation

2011 Equity Incentive Plan

In connection with the Azur Merger, Jazz Pharmaceuticals, Inc.’s board of directors adopted the 2011
Equity Incentive Plan, or the 2011 Plan, in October 2011 and its stockholders approved the 2011 Plan at the
special meeting of the stockholders held in December 2011 in connection with the Azur Merger. The 2011 Plan
became effective immediately before the consummation of the Azur Merger and was assumed and adopted by us
upon the consummation of the Azur Merger. The terms of the 2011 Plan provide for the grant of stock options,
stock appreciation rights, restricted stock awards, RSUs, other stock awards, and performance awards that may
be settled in cash, shares, or other property. All of the grants under the 2011 Plan were granted to employees and
vest ratably over service periods of 4 years and expire no more than 10 years after the date of grant. As of
December 31, 2013, a total of 10,945,888 of our ordinary shares had been authorized for issuance under the 2011
Plan. In addition, the share reserve under the 2011 Plan will automatically increase on January 1 of each year
through January 1, 2022, by the least of (a) 4.5% of the total number of ordinary shares outstanding on
December 31 of the preceding calendar year, (b) 5,000,000 shares, or (c) such lesser number of ordinary shares
as determined by our board of directors. On January 1, 2014, the share reserve under the 2011 Plan automatically
increased by 2,603,448 ordinary shares pursuant to this provision.

2007 Equity Incentive Plan

The 2007 Equity Incentive Plan, or the 2007 Plan, which was initially adopted by the Jazz Pharmaceuticals,
Inc. board of directors and approved by the Jazz Pharmaceuticals, Inc. stockholders in connection with its initial
public offering, was continued and assumed by us upon consummation of the Azur Merger. The 2007 Plan
provided for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, RSUs, stock
appreciation rights, performance stock awards and other forms of equity compensation to employees, including
officers, non-employee directors and consultants. Prior to the consummation of the Azur Merger, all of the grants
under the 2007 Plan were granted to employees and vest ratably over service periods of three to five years and
expire no more than 10 years after the date of grant. Effective as of the closing of the Azur Merger on
January 18, 2012, the number of shares reserved for issuance under the 2007 Plan was set to 1,000,000 ordinary
shares. The share reserve under the 2007 Plan will not automatically increase. Since the Azur Merger, all of the
new grants under the 2007 Plan were granted to non-employee directors and vest ratably over service periods of
one to three years and expire no more than 10 years after the date of grant.

2007 Employee Stock Purchase Plan

In 2007, Jazz Pharmaceuticals, Inc.’s employees became eligible to participate in the Employee Stock
Purchase Plan, or ESPP. The ESPP was amended and restated by Jazz Pharmaceuticals, Inc.’s board of directors
in October 2011 and approved by its stockholders in December 2011. The amended and restated ESPP became
effective immediately prior to the effective time of the Azur Merger and was assumed by us upon the
consummation of the Azur Merger. The amended and restated ESPP allows our eligible employee participants
(including employees of any of a parent or subsidiary company if our board of directors designates such company
as eligible to participate) to purchase our ordinary shares at a discount of 15% through payroll deductions. The
ESPP consists of a fixed offering period of 24 months with four purchase periods within each offering period.
The number of shares available for issuance under our ESPP during any six month purchase period is 175,000
shares. As of December 31, 2013, a total of 2,660,000 of our ordinary shares had been authorized for issuance
under the ESPP. The share reserve under the ESPP will automatically increase on January 1 of each year through
January 1, 2022, by the least of (a) 1.5% of the total number of ordinary shares outstanding on December 31 of
the preceding calendar year, (b) 1,000,000 shares, or (c) such lesser number of ordinary shares as determined by
our board of directors. Our compensation committee determined not to automatically increase the share reserve
under the ESPP on January 1, 2014.

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Amended and Restated 2007 Non-Employee Directors Stock Option Plan

The Amended and Restated 2007 Non-Employee Directors Stock Option Plan, or the 2007 Directors Option

Plan, which was initially adopted by the Jazz Pharmaceuticals, Inc. board of directors and approved by the Jazz
Pharmaceuticals, Inc. stockholders in connection with its initial public offering, was continued and assumed by
us upon the consummation of the Azur Merger. Until October 2011, the 2007 Directors Option Plan provided for
the automatic grant of nonstatutory stock options to purchase shares of Jazz Pharmaceuticals, Inc.’s common
stock to its non-employee directors initially at the time any individual first became a non-employee director,
which vest over three years, and then annually over their period of service on its board of directors, which vest
over one year. On October 24, 2011, Jazz Pharmaceuticals, Inc.’s board of directors amended the 2007 Directors
Option Plan to eliminate all future initial and annual automatic grants so that future automatic grants would not
be made that would be subject to the excise tax imposed by Section 4985 of the Internal Revenue Code of 1986,
as amended, in connection with the merger with Azur Pharma. Accordingly, all future stock option grants under
the 2007 Directors Option Plan will be at the discretion of our board of directors. Since the date of the Azur
Merger and as of the date of this report, our board of directors has approved one grant to a non-employee director
under the 2007 Directors Option Plan. In addition, the 2007 Directors Option Plan provides the source of shares
to fund distributions made prior to August 15, 2010 under the Directors Deferred Compensation Plan described
below. As of December 31, 2013, a total of 777,713 of our ordinary shares had been authorized for issuance
under the 2007 Directors Option Plan. The number of shares reserved for issuance under the 2007 Directors Plan
automatically increases on each January 1, from January 1, 2008 through (and including) January 1, 2017, by the
excess of (a) the number of shares subject to options granted, over (b) the number of shares added back to the
share reserve, in each case, during the preceding calendar year under the 2007 Directors Plan; provided, that, for
any year, the automatic increase may not exceed 200,000 shares and the board of directors may approve a lesser,
or no, automatic increase. On January 1, 2014, the share reserve under the 2007 Directors Option Plan
automatically increased by 60,000 ordinary shares pursuant to this provision.

Amended and Restated Directors Deferred Compensation Plan

In May 2007, the Jazz Pharmaceuticals, Inc. board of directors adopted the Directors Deferred
Compensation Plan, or the Directors Deferred Plan, which was amended in December 2008 and was then
amended and restated in August 2010, and which was continued and assumed by us upon consummation of the
Azur Merger. The Directors Deferred Plan allows each non-employee director to elect to defer receipt of all or a
portion of his or her annual retainer fees to a future date or dates. Amounts deferred under the Directors Deferred
Plan are credited as shares of Jazz Pharmaceuticals, Inc.’s common stock (or our ordinary shares following the
Azur Merger) to a phantom stock account, the number of which are based on the amount of the retainer fees
deferred divided by the market value of Jazz Pharmaceuticals, Inc.’s common stock (or our ordinary shares
following the Azur Merger) on the first trading day of the first open window period following the date the
retainer fees are deemed earned. On the 10th business day following the day of separation from the board of
directors or the occurrence of a change in control, or as soon thereafter as practical once the non-employee
director has provided the necessary information for electronic deposit of the deferred shares, each non-employee
director will receive (or commence receiving, depending upon whether the director has elected to receive
distributions from his or her phantom stock account in a lump sum or in installments over time) a distribution of
his or her phantom stock account, in our ordinary shares (i) reserved under the 2007 Directors Option Plan prior
to August 15, 2010 and (ii) from a new reserve of 200,000 shares set up under the Directors Deferred Plan on
August 15, 2010. Although we continue to maintain the Directors Deferred Plan, since the consummation of the
Azur Merger we have not permitted and will not permit the non-employee directors to defer any annual retainer
fees under the Directors Deferred Plan. We recorded no expense in 2013 and in 2012 related to retainer fees
earned and deferred, and in 2011 we incurred expense of $0.4 million. As of December 31, 2013, 19,170 of our
ordinary shares which were unissued related to retainer fees that were deferred under the Directors Deferred Plan.

F-32

K
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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Share-Based Compensation

The table below shows, for all share option grants, the weighted-average assumptions used in the Black-
Scholes option pricing model and the resulting weighted-average grant date fair value of share options granted in
each of the past three years:

Grant date fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Range of risk-free rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2013

2012

2011

$ 29.09

$ 25.28 $ 17.38

58 %
4.4

64 %
4.6
0.5-1.4% 0.5-1.1% 0.0-2.7%
— % — % — %

72 %
5.2

Since 2012, we rely on a blend of the historical and implied volatilities of our own ordinary shares to
determine expected volatility for share option grants because our trading history exceeds the expected term of the
share options. Prior to 2012, we used a blend of the historical volatility and implied volatility of our ordinary
shares, as well as the historical volatility of a peer group, to determine expected volatility for share option grants,
and we used the implied volatility of our ordinary shares for grants under our ESPP. We included consideration
of the historical volatility of a peer group to estimate expected volatility for share option grants since the trading
history of our ordinary shares was less than the expected term of the share options. In addition, we use a single
volatility estimate for each share option grant. The weighted average volatility is determined by calculating the
weighted average of volatilities for all share options granted in a given year.

The expected term of share option grants represents the weighted-average period the awards are expected to

remain outstanding and our estimates were based on historical exercise data. The risk-free interest rate
assumption was based on zero coupon U.S. Treasury instruments whose term was consistent with the expected
term of our share option grants. The expected dividend yield assumption was based on our history and
expectation of dividend payouts.

Share-based compensation expense in continuing operations related to share options, RSUs, ordinary shares

credited to the directors’ phantom share accounts and grants under our ESPP was as follows (in thousands):

Year Ended December 31,

2013

2012

2011(1)

Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of product sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 35,674
6,673
2,204

$18,950
2,640
1,416

$15,592
4,488
624

Total share-based compensation expense, pre-tax . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit from share-based compensation expense . . . . . . . . . . . . . . . . . . . . . .

44,551
(13,822)

23,006
(7,499)

20,704
—

Total share-based compensation expense, net of tax . . . . . . . . . . . . . . . . . . . . . . .

$ 30,729

$15,507

$20,704

(1)

Includes expense of $7.3 million related to the acceleration of vesting in December 2011 of certain non-
qualified share options held by 17 executives and non-employee directors in connection with the Azur
Merger, of which $6.9 million was recorded in selling, general and administrative and $0.4 million was
recorded in research and development.

We realized tax benefits related to share option exercises of $6.7 million and $18.3 million in 2013 and

2012, respectively, and none in 2011.

F-33

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Share Options

The following table summarizes information as of December 31, 2013 and activity during 2013 related to

our share option plans:

Shares
Subject to
Outstanding
Options
(In thousands)

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Term (Years)

Aggregate
Intrinsic
Value
(In thousands)

Outstanding at January 1, 2013 . . . . . . . . . . . . . . . . . . . . . .
Options granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Outstanding at December 31, 2013 . . . . . . . . . . . . . . . . . . .

Vested and expected to vest at December 31, 2013 . . . . . .
Exercisable at December 31, 2013 . . . . . . . . . . . . . . . . . . .

4,178
1,348
(904)
(316)
—

4,306

3,988
1,590

$32.21
62.46
23.13
46.44
—

42.54

41.53
26.09

7.9

7.8
6.6

$361,807

339,073
159,704

Aggregate intrinsic value shown in the table above is equal to the difference between the exercise price of
the underlying share options and the fair value of our ordinary shares for share options that were in the money.
The aggregate intrinsic value changes based on the fair market value of our ordinary shares. The aggregate
intrinsic value of share options exercised was $46.0 million, $106.5 million and $33.5 million, during 2013, 2012
and 2011, respectively. We issued new ordinary shares upon exercise of share options.

As of December 31, 2013, total compensation cost not yet recognized related to unvested share options was

$53.7 million, which is expected to be recognized over a weighted-average period of 2.6 years. As of
December 31, 2013, total compensation cost not yet recognized related to grants under the ESPP was $3.0
million, which is expected to be recognized over a weighted-average period of less than one year.

Restricted Stock Units

In 2013, we granted RSUs covering an equal number of our ordinary shares to employees with a weighted-

average grant date fair value of $61.80. The fair value of RSUs is determined on the date of grant based on the
market price of our ordinary shares as of that date. The fair value of the RSUs is recognized as expense ratably
over the vesting period of four years. In 2013, 222,000 RSUs were released with 146,000 ordinary shares issued
and 76,000 ordinary shares withheld for tax purposes.

As of December 31, 2013, total compensation cost not yet recognized related to unvested RSUs was $42.8

million, which is expected to be recognized over a weighted-average period of 2.8 years.

F-34

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes information as of December 31, 2013 and activity during 2013 related to

our RSUs:

Weighted-
Average
Grant-Date
Fair Value

Weighted-
Average
Remaining
Contractual
Term (Years)

Aggregate
Intrinsic
Value
(In thousands)

Number of RSUs
(in thousands)

Outstanding at January 1, 2013 . . . . . . . . . . . . . . . . . . .
RSUs granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RSUs released . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RSUs forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RSUs expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

956
585
(222)
(155)
—

Outstanding at December 31, 2013 . . . . . . . . . . . . . . . .

1,164

$49.04
61.80
49.04
50.40
—

55.28

14. Segment and Other Information

1.6

$147,333

K
-
0
1
m
r
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F

Our operating segment is reported in a manner consistent with the internal reporting provided to the chief
operating decision maker or, CODM. Our CODM has been identified as our chief executive officer. We have
determined that we operate in one business segment, which is the development and commercialization of
specialty pharmaceutical products. The following table presents a summary of total revenues (in thousands):

Year Ended December 31,

2013

2012

2011

Xyrem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Erwinaze . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prialt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Psychiatry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Product sales, net

. . . . . . . . . . . . . . . . . . . . . . . . .
Royalties and contract revenues . . . . . . . . . . . . . . . . . .

$569,113
174,251
27,103
49,226
45,705

865,398
7,025

$378,663
72,083
26,360
76,489
26,932

580,527
5,452

$233,348
—
—
33,170
—

266,518
5,759

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$872,423

$585,979

$272,277

The following table presents a summary of total revenues attributed to geographic sources (in thousands):

Year Ended December 31,

2013

2012

2011

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$792,518
61,843
18,062

$538,219
38,590
9,170

$265,718
6,224
335

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$872,423

$585,979

$272,277

F-35

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents a summary of the percentage of total revenues from customers that represented

more than 10% of our total revenues:

Year Ended December 31,

2013

2012

2011

Express Scripts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accredo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65%
16% N/A

64% 85%

N/A

The following table presents total long-lived assets by location (in thousands):

Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5,799
7,734
713

$2,437
4,451
393

Total long-lived assets (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$14,246

$7,281

December 31,

2013

2012

(1) Long-lived assets consist of property and equipment.

15. Income Taxes

The components of income from continuing operations before the income tax provision (benefit) were as

follows (in thousands):

Year Ended December 31,

2013

2012

2011

Republic of Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$186,903
132,855
(11,808)

$ (73,949)
250,348
956

$ —
124,984
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$307,950

$177,355

$124,984

The following table sets forth the details of the income tax provision (benefit) (in thousands):

Year Ended December 31,

2013

2012

2011

Current

Republic of Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,089
71,964
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,682
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

$ (10,733)
33,387
7,414

Total current income tax . . . . . . . . . . . . . . . . . . . . .

101,735

30,068

$—
—
—

—

Deferred

Republic of Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

8,353
(3,513)
(14,937)

(315) —
(103,932) —
(9,615) —

Total deferred income tax provision (benefit) . . . . .

(10,097)

(113,862) —

Total income tax provision (benefit) . . . . . . . . . . . . . . . . . . . . $ 91,638

$ (83,794)

$—

F-36

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During 2013, we recognized an income tax provision of $91.6 million related to tax arising on income in

Ireland, the United States and certain other foreign jurisdictions, certain uncertain tax positions and various
expenses not deductible for tax purposes. During 2012, we recognized an income tax benefit of $83.8 million
which resulted primarily from our reversal of a valuation allowance on most of our U.S. federal and state
deferred tax assets, as described below. As discussed in Note 1, in January 2012, the businesses of Jazz
Pharmaceuticals, Inc. and Azur Pharma were combined in a merger transaction accounted for as a reverse
acquisition and the combined company changed its domicile from the United States to Ireland. During 2011, we
had operations only in the United States and made no provision for income taxes due to our utilization of federal
net operating loss carryforwards, or NOLs, to offset both regular taxable income and alternative minimum
taxable income and to our utilization of deferred state tax benefits for which the related deferred tax assets were
offset by a valuation allowance.

The effective tax rate for 2013 of 29.8% was higher than the Irish statutory rate of 12.5% primarily due to
income taxable at a rate higher than the Irish statutory rate, certain uncertain tax positions, current year losses in
some jurisdictions for which no tax benefit is available, and various expenses not deductible for tax purposes,
partially offset by benefits from certain originating income tax credits. In 2012, following the Azur Merger and
the change in the combined company’s domicile, the statutory income tax rate changed from the U.S. rate of
35.0% to the Irish rate of 12.5%. In June 2012, we completed the EUSA Acquisition, which further expanded our
global operations. The 2012 effective income tax rate on continuing activities before utilization of NOLs and tax
credit carryforwards and release in valuation allowance in 2012 of 42.5% was higher than the Irish statutory rate
of 12.5% due to a number of factors, including income taxable at a rate higher than the Irish statutory rate, losses
in certain tax jurisdictions for which no tax benefit is available and various expenses not deductible for tax
purposes. The decrease in the effective tax rate in 2013 compared to 2012 was primarily due to changes in
income mix among the various jurisdictions in which we operate as well as higher taxes in 2012 relating to
acquisition restructuring. We are currently paying taxes in Ireland, the United States and certain other foreign
jurisdictions where we have operations and either all NOLs have been utilized, or are restricted as a result of the
Azur Merger.

A reconciliation of income taxes at the statutory income tax rate to our effective income tax rate was as

follows (in thousands):

K
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0
1
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r
o
F

Year Ended December 31,

2013

2012

2011

Statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . .

12.5 %

12.5 %

35.0 %

Income tax provision at statutory rate . . . . . . . . . . . . . . . .
Acquisition-related costs . . . . . . . . . . . . . . . . . .
Research and other tax credits . . . . . . . . . . . . . .
Non-deductible share-based compensation . . . .
Foreign income tax rate differential
. . . . . . . . .
Change in unrecognized tax benefits . . . . . . . . .
Prior period adjustments . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . .
Non-deductible contingent consideration . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$38,494
—
(5,957)
2,497
31,651
8,685
3,375
3,220
5,320
4,353

22,169
763
(100)
873
52,066
2,249
(2,524)
(159,158)

—
(132)

43,744
3,552
(1,323)
670
—
—
—
(46,996)
—
353

Income tax provision (benefit)

. . . . . . . . . . . . . . . . . . . . .

$91,638

$ (83,794)

$ —

Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . .

29.8 %

(47.2)%

— %

F-37

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In 2013, the change in valuation allowance was $3.2 million. In 2012, the change in valuation allowance of
$159.2 million was comprised of NOLs and tax credit carryforwards of $55.0 million and a release in valuation
allowance of $104.2 million as described below.

Deferred income taxes reflect the tax effects of NOLs and tax credit carryforwards and the net temporary
differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for
income tax purposes using currently enacted tax rates and regulations that are expected to be in effect when the
differences are expected to be recovered or settled.

Significant components of our net deferred tax assets/(liabilities) were as follows (in thousands):

December 31,

2013

2012

Deferred tax assets:

Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . .
Tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue and other

$ 71,364
11,374
10,733
8,116
30,730
9,252

$ 71,636
6,034
13,940
3,875
32,594
13,797

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

141,569
(20,691)

141,876
(17,471)

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities:

120,878

124,405

Acquired intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(176,576)
(10,848)

(191,341)
(1,069)

Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . .

$ (66,546)

$ (68,005)

The following table presents the breakdown between current and non-current deferred tax assets/(liabilities)

(in thousands):

Year Ended December 31,

2013

2012

Current deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . .

$ 33,613
(6,259)
74,597
(168,497)

$ 35,813
(275)
74,850
(178,393)

Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (66,546)

$ (68,005)

As of December 31, 2013, we had NOL carryforwards and tax credit carryforwards for U.S. federal income
tax purposes of approximately $227.9 million and $18.5 million, respectively, available to reduce future income
subject to income taxes. The NOL carryforwards are inclusive of $114.6 million from the EUSA Acquisition in
2012. The federal NOL carryforwards will expire, if not utilized, in the tax years 2016 to 2031, and the federal
tax credits will expire, if not utilized, in the tax years 2017 to 2033. In addition, we had approximately
$292.2 million of NOL carryforwards and $2.6 million of tax credit carryforwards as of December 31, 2013
available to reduce future taxable income for state income tax purposes. The state NOL carryforwards will
expire, if not utilized, in the tax years 2014 to 2032. The state tax credits have no expiration date. In addition, as

F-38

JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

of December 31, 2013, there were NOL carryforwards for income tax purposes of approximately $59.5 million
and $4.3 million available to reduce future income subject to income taxes in the United Kingdom and Germany,
respectively. The NOLs generated in the United Kingdom and Germany have no expiration period and we
maintain a full valuation allowance against the associated deferred tax assets until sufficient positive evidence
exists to support reversal.

Approximately $65.4 million of both the U.S. federal and state NOL carryforwards as of December 31,

2013 resulted from exercises of employee share options and certain sales by employees of shares issued under
other employee equity compensation plans. We have not recorded the tax benefit of the deduction related to these
exercises and sales as deferred tax assets on our balance sheet. When we realize the tax benefit as a reduction to
taxable income in our tax returns, we will account for the tax benefit as a credit to shareholders’ equity rather
than as a reduction of our income tax provision in our financial statements.

Valuation allowances require an assessment of both positive and negative evidence when determining
whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a
jurisdiction by jurisdiction basis. Our valuation allowance was $20.7 million and $17.5 million as of
December 31, 2013 and 2012, respectively, for certain U.S. state and foreign deferred tax assets which we
maintain until sufficient positive evidence exists to support reversal. During the fourth quarter of 2012, we
recognized an income tax benefit of $104.2 million relating to the reversal of a valuation allowance against
substantially all of our U.S. federal and state deferred tax assets. Management determined that a valuation
allowance was no longer needed on these deferred tax assets based on an assessment of the relative impact of all
positive and negative evidence that existed at December 31, 2012, including an evaluation of cumulative income
in recent years, future sources of taxable income exclusive of reversing temporary differences, and significant
risks and uncertainties related to our business. We periodically evaluate the likelihood of the realization of
deferred tax assets and will adjust such amounts in light of changing facts and circumstances including, but not
limited to, future projections of taxable income, tax legislation, rulings by relevant tax authorities, the progress of
tax audits and the regulatory approval of products currently under development.

Utilization of certain of our NOL and tax credit carryforwards in the United States is subject to annual

limitation due to the ownership change limitations provided by Sections 382 and 383 of the Internal Revenue
Code and similar state provisions. Such an annual limitation may result in the expiration of certain NOLs and tax
credits before future utilization. We currently estimate that we have an annual limitation on the utilization of
certain acquired federal NOLs of $28.6 million for each of the years 2014 to 2016, $11.9 million for 2017, and a
combined total of $3.3 million for 2018 to 2026. In addition, as a result of the Azur Merger, we are subject to
certain limitations under the Internal Revenue Code in relation to the utilization of U.S. NOLs to offset U.S.
taxable income resulting from certain transactions.

Temporary differences related to investments in foreign subsidiaries totaled approximately $664.3 million

and $604.2 million as of December 31, 2013 and 2012, respectively. In the event of the distribution of those
earnings in the form of dividends, a sale of the subsidiaries, or certain other transactions, we may be liable for
income taxes, subject to an adjustment, if any, for foreign tax credits and foreign withholding taxes payable to
certain foreign tax authorities. As of December 31, 2013 it was not practicable to determine the amount of the
income tax liability related to these investments.

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We are required to recognize the financial statement effects of a tax position when it is more likely than not,

based on the technical merits, that the position will be sustained upon examination. As a result, we have
established a liability for certain tax benefits which we judge may not be sustained upon examination. A
reconciliation of our unrecognized tax benefits follows (in thousands):

December 31,

2013

2012

2011

Balance at the beginning of the year . . . . . . . . . . . . . . . . . . .
Increases related to current year tax positions . . . . . . . . . . .
Increases related to prior year tax positions . . . . . . . . . . . . .
Decreases related to prior year tax positions . . . . . . . . . . . .

$ 7,288
14,308
183
(142)

$3,764
3,492
40
(8)

$ 4,852
242
213
(1,543)

Balance at the end of the year . . . . . . . . . . . . . . . . . . . . . . . .

$21,637

$7,288

$ 3,764

The unrecognized tax benefits were included in other non-current liabilities and deferred tax assets, net,
non-current in our consolidated balance sheet. Interest related to our unrecognized tax benefits is recorded in
income tax provision (benefit) in our consolidated statements of income. As of December 31, 2013 and 2012, our
accrued interest and penalties related to uncertain tax positions were not significant. Included in the balance of
unrecognized tax benefits were potential benefits of $16.3 million and $6.3 million at December 31, 2013 and
2012, respectively, that, if recognized, would affect the effective tax rate on income. We do not anticipate that
the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12
months.

Our major tax jurisdictions are Ireland, the U.S. and France. Because of our net operating loss and tax credit

carryforwards, substantially all of our tax positions remain open to federal and state examination in the U.S. In
France, tax periods open to examination include the periods 2010 to 2013. In Ireland, tax periods open to
examination include the periods 2009 to 2013. Certain of our subsidiaries are currently under examination by the
U.S. Internal Revenue Service in respect of periods from 2010 to 2012 and by the French tax authorities in
respect of periods from 2010 to 2012.

16. Related Party Transactions

In 2013, we entered into an underwriting agreement with an underwriter and certain selling shareholders,

pursuant to which the selling shareholders sold to the underwriter 5.4 million of our ordinary shares, resulting in
aggregate gross proceeds to the selling shareholders of approximately $314.4 million, before deducting
underwriting discounts, commissions and other offering expenses. The selling shareholders included entities
affiliated with certain members of our board of directors and one of our directors. We did not receive any
proceeds from the sale of our ordinary shares by the selling shareholders in the offering and, consistent with our
obligations under existing registration rights agreements with those shareholders, we paid expenses of
approximately $0.5 million in connection with the offering.

In 2012, in connection with the Azur Merger, we assumed a lease for office space in Dublin, Ireland. The

lease agreement was with Seamus Mulligan, the former Chief Executive Officer of Azur Pharma, who is a
member of our board of directors. Rentals paid on this lease amounted to $0.3 million in 2012. In November
2012, we terminated this lease at a cost of $1.2 million, which was the carrying value of our above market lease
liability. There was no resulting gain or loss on the lease termination.

In 2012, we entered into an underwriting agreement with two underwriters and certain selling shareholders,

pursuant to which the selling shareholders agreed to sell to the underwriters 7.9 million of our ordinary shares,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

resulting in aggregate gross proceeds to the selling shareholders of approximately $390.7 million. The selling
shareholders included entities affiliated with certain members of our board of directors, four of our directors and
four of our executive officers at the time of the agreement. We did not receive any proceeds from the sale of our
ordinary shares by the selling shareholders in the offering, and we paid expenses of approximately $0.4 million
in connection with this offering.

In 2011, Azur Pharma entered into an agreement with Circ Pharma Limited/Circ Pharma Research and

Development Limited, or Circ, companies controlled by Seamus Mulligan, whereby Azur Pharma obtained an
option to license certain rights and assets in relation to Tramadol (a chronotherapeutic formulation) and to
conduct certain development activities. Azur Pharma paid Circ $0.3 million for this option in 2011. In 2012, we
terminated the agreement at no cost.

17. Restructuring

Termination Benefits

In June 2012, we initiated a restructuring plan to re-align certain support functions across the company
following the Azur Merger and the EUSA Acquisition. In connection with this restructuring, we incurred costs of
severance for terminated employees as well as retention bonus costs for certain employees retained to assist with
the transition process, which was completed in June 2013. The one-time termination benefits were recorded over
the remaining service period where employees were required to stay through their termination date to receive the
benefits. We recorded costs related to these one-time termination benefits of $1.0 million and $2.8 million in the
years ended December 31, 2013 and 2012 respectively, within selling, general and administrative expenses in our
consolidated statements of income. To date, we have incurred one-time termination benefit costs under this plan
of $3.8 million. We do not expect to incur any additional one-time termination benefit costs in connection with
this plan. There were no restructuring activities during 2011.

Facility Closure Costs

In connection with our restructuring plan, we vacated our Langhorne, Pennsylvania facility in June 2013.

We incurred facility closure costs of $0.4 million in the year ended December 31, 2013 for the remaining
operating lease obligations related to this facility, net of estimated sublease rentals that could be reasonably
obtained. Facility closure costs are recorded within selling, general and administrative expenses in our
consolidated statements of income. We do not expect to incur any additional facility closure costs in connection
with this plan.

The following table summarizes the amounts related to restructuring for the year ended December 31, 2013

(in thousands):

Termination
Benefits

Facility Closure
Costs

Balance at December 31, 2012 . . . . . . .
Costs incurred during the period . .
Cash payments . . . . . . . . . . . . . . . .

$ 1,227
1,045
(2,272)

Balance at December 31, 2013 . . . . . . .

$ —

$ —

412
(160)

$ 252

Total

$ 1,227
1,457
(2,432)

$

252

The balance at December 31, 2013 was included within accrued liabilities in our consolidated balance sheet.

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

18. Discontinued Operations

In 2012, we sold the women’s health business, a component of the acquired Azur Pharma business, to Meda
Pharmaceuticals Inc. and Meda Pharma, Sàrl, or collectively, Meda, for $97.6 million, including $2.6 million for
certain inventory transferred to Meda upon the closing of the sale, less transaction costs of $3.7 million. As part
of the transaction, Meda purchased six women’s health products from us and offered positions to approximately
60 of our employees who directly supported the women’s health business. We recorded a non-recurring gain on
the sale of $35.2 million.

We decided to sell our women’s health business to concentrate our commercial efforts on our core products

in our target therapeutic areas. The results of the women’s health business are included in income from
discontinued operations in 2012. As the women’s health business was acquired in the Azur Merger, it is not
included in the results for 2011. Goodwill was allocated to the divested women’s health business using the
relative fair value method.

Net revenue and income from discontinued operations were as follows (in thousands):

Year Ended
December 31,
2012

Product sales, net

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20,873

Loss from discontinued operations before income taxes(1) . . . . . . . .
Income tax expense(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss from discontinued operations, net of taxes . . . . . . . . . . . . . . . .
Gain on sale of discontinued operations(2) . . . . . . . . . . . . . . . . . . . .

$ (5,787)
(2,020)

(7,807)
35,244

Income from discontinued operations, net of taxes . . . . . . . . . . . . . .

$27,437

(1) The income tax expense relates to profits generated by the women’s health business in 2012 which are

attributable to the United States.

(2) The gain on sale of discontinued operations was not impacted by income taxes as the value attributable to

the women’s health business was held in a non-taxable jurisdiction.

19. Employee Benefit Plans

We operate a number of defined contribution retirement plans. The costs of these plans are charged to the

income statement in the period they are incurred. We recorded expense related to our defined contribution plans
of $1.1 million and $0.3 million in the year ended December 31, 2013 and 2012, respectively, and none in 2011.
In Ireland, we operate a defined contribution plan in which we contribute up to 8% of an employee’s eligible
earnings. We recorded expense of $0.3 million in the year ended December 31, 2013 and none in 2012 and 2011
in connection with the contributions we made under the Irish defined contribution plan. In the United States, we
provide a qualified 401(k) savings plan for our U.S. based employees. All U.S. based employees are eligible to
participate, provided they meet the requirements of the plan. In 2013, we elected to match employee
contributions under the 401(k) savings plan and recorded expense of $0.4 million. No such matching
contributions were made prior to 2013. In the United Kingdom, we operate a defined contribution plan in which
we contribute up to 12% of an employee’s eligible earnings. We recorded expense of $0.4 million and
$0.2 million in the year ended December 31, 2013 and 2012, respectively, and none in 2011, in connection with
contributions we made under the U.K. defined contribution plan. In France, we accrue for a potential liability
which is payable if an employee retires. The accrued liability was $0.3 million as of December 31, 2013 and
2012.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

20. Subsequent Events

Acquisition of Gentium

On December 19, 2013, we entered into a definitive agreement with Gentium, or the Gentium tender offer

agreement, pursuant to which we made a cash tender offer of $57.00 per share for all outstanding Gentium
ordinary shares and American Depositary Shares, or ADSs. As of the expiration of the initial offering period on
January 22, 2014, 12,244,156 Gentium ordinary shares and ADSs were properly tendered and not withdrawn in
the tender offer. These ordinary shares and ADSs represented approximately 79% of Gentium’s issued and
outstanding ordinary shares and ADSs and 69% of the fully diluted number of ordinary shares and ADSs (in each
case without duplication for ordinary shares underlying ADSs). All properly tendered ordinary shares and ADSs
as of such date were accepted for payment, which was made in accordance with the terms of the tender offer.
Upon payment for the properly tendered ordinary shares and ADSs, we became the indirect majority shareholder
of Gentium. Following the expiration of the initial offering period, and in accordance with the terms of the tender
offer agreement, we commenced a subsequent offering period to acquire all remaining untendered ordinary
shares and ADSs. The subsequent offering period expired on February 20, 2014 and we accepted and purchased
an additional approximately 29% of the fully diluted Gentium ordinary shares and ADSs properly tendered
during the subsequent offering period, resulting in total purchases pursuant to the tender offer of approximately
98% of the fully diluted number of Gentium ordinary shares and ADSs as of February 21, 2014. The acquisition
cost of the total number of Gentium ordinary shares and ADSs we purchased pursuant to the tender offer was
approximately $993 million. We intend to cause Gentium to seek the voluntary delisting of Gentium ADSs from
the NASDAQ Stock Market, or NASDAQ, and the deregistration of Gentium ordinary shares and ADSs under
the Exchange Act. We expect that there will not be an active trading market for outstanding ordinary shares and
ADSs following the delisting.

To finance this transaction, in January 2014, we amended our credit agreement to provide for $350.0 million

principal amount of incremental term loans and a $425.0 million revolving credit facility. Please see Note 8 for
further information regarding the credit agreement and the January 2014 amendments thereto. We used the
proceeds from the incremental term loans and loans under the revolving credit facility, together with cash on
hand, to purchase the Gentium ordinary shares and American Depositary Shares properly tendered and accepted
for payment pursuant to the tender offer. As a result of the January 2014 amendment to the credit agreement, the
interest rate margin on our existing term loans was reduced by 25 basis points. As of February 19, 2014, the
interest rate on the outstanding term loans was 3.25% and on revolving loan borrowings was 2.66%.

Gentium is a biopharmaceutical company focused on the development and manufacturing of therapies to

treat and prevent a variety of rare diseases and conditions that currently have few or no treatment options,
including orphan vascular diseases related to cancer treatments. In October 2013, the European Commission
granted marketing authorization for Defitelio, Gentium’s lead product, for the treatment of severe hepatic veno-
occlusive disease (VOD) in adults and children undergoing hematopoietic stem cell transplantation. We believe
the acquisition will provide us with an opportunity to diversify our development and commercial portfolio and
complement our clinical experience in hematology/oncology and our expertise in reaching targeted physicians
who treat serious medical conditions.

The acquisition of Gentium will be accounted for as a business combination using the acquisition method.

We are in the process of determining fair values of the assets acquired and liabilities assumed in the business
combination, and completing the required supplemental pro forma revenue and earnings information for this
acquisition. We expect to include a preliminary determination of the acquisition consideration and detail of the
assets acquired and liabilities assumed in our consolidated financial statements for the quarter ending March 31,
2014.

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Acquisition of Rights to JZP-110 (formerly known as ADX-N05)

On January 13, 2014, we entered into a definitive agreement with Aerial BioPharma, LLC, or Aerial, under
which we acquired certain assets related to JZP-110, a novel compound in clinical development for the treatment
of excessive daytime sleepiness in patients with narcolepsy. Under the agreement, and in exchange for an upfront
initial payment from us totaling $125.0 million, we acquired worldwide development, manufacturing and
commercial rights to JZP-110, other than in certain countries in Asia where SK Biopharmaceuticals Co., Ltd, or
SK, retains rights. Aerial and SK are eligible to receive milestone payments, in an aggregate amount of up $272.0
million, based on development, regulatory and sales milestones and tiered royalties from high single digits to
mid-teens based on potential future sales. This acquisition will be accounted for as a purchase of IPR&D assets
with no alternative future use. Accordingly, the $125.0 million upfront payment will be charged to research and
development expense in the first quarter of 2014.

21. Quarterly Financial Data (Unaudited)

The following interim financial information presents our 2013 and 2012 results of operations on a quarterly

basis (in thousands, except per share amounts):

March 31

June 30

September 30 December 31

2013

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income per share, basic . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income per share, diluted . . . . . . . . . . . . . . . . . . . . . . . . . .

$196,237
167,432
43,425
0.74
0.71

$208,252
181,533
42,185
0.72
0.69

$232,160
206,134
75,409
1.30
1.23

$235,774
208,153
55,293
0.96
0.90

March 31

June 30

September 30 December 31

2012

Revenues(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . . . .
Income (loss) from discontinued operations . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income per share, basic . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income per share, diluted . . . . . . . . . . . . . . . . . . . . . . . . . .

$102,530
93,708
30,235
(2,554)
27,681
0.51
0.48

$124,231
110,714
31,113
(3,968)
27,145
0.48
0.45

$175,515
141,501
33,595
(386)
33,209
0.58
0.55

$183,703
156,179
166,206
34,345
200,551
3.46
3.28

(1) Gross margin excludes amortization of acquired developed technology of $19.5 million, $19.3 million,
$19.5 million and $20.5 million in the first, second, third and fourth quarters of 2013, respectively, and
$10.7 million, $12.9 million, $19.7 million and $21.8 million in the first, second, third and fourth quarters of
2012, respectively.

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JAZZ PHARMACEUTICALS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(2)

In 2012, we sold our women’s health business. The women’s health business met the discontinued
operations criteria in the third quarter of 2012. See Note 18 for information regarding discontinued
operations. As a result, revenues and gross margin for the first two quarters of 2012 have been restated to
reflect only our continuing operations. There was no effect on previously reported net income. Below is a
reconciliation of the revenues and gross margin amounts as previously reported in our quarterly reports on
Form 10-Q to the restated amounts reported above.

2012

March 31

June 30

Revenues, as previously reported . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less product sales from discontinued operations . . . . . . . . . . . . . . .

$108,414
(5,884)

$129,539
(5,308)

Revenues, as adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$102,530

$124,231

Gross margin, as previously reported . . . . . . . . . . . . . . . . . . . . . . . .
Less gross margin from discontinued operations . . . . . . . . . . . . . . .

$ 96,578
(2,870)

$112,940
(2,226)

Gross margin, as adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 93,708

$110,714

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The tables above include the following unusual or infrequently occurring items:

• As part of the EUSA Acquisition, we agreed to make an additional contingent payment of $50.0
million in cash if Erwinaze achieved U.S. net sales of $124.5 million or greater in 2013. In 2013,
Erwinaze U.S. net sales were greater than $124.5 million and as a result, we are obligated to make the
payment of $50.0 million in the first quarter of 2014. The change in fair value of the contingent
consideration payable was $4.5 million, $3.4 million, $5.0 million and $2.3 million in the first, second,
third and fourth quarters of 2013, respectively;

• Upfront license fees of $4.0 million and $1.0 million in the first and third quarters of 2013,

respectively;

• A loss on extinguishment and modification of debt of $3.7 million in the second quarter of 2013;

• Acquisition accounting inventory fair value step-up adjustments of $1.5 million, $1.1 million, $0.5

million and $0.7 million in the first, second, third and fourth quarters of 2013, respectively;

• Transaction costs of $0.4 million and $4.4 million in the second and fourth quarters of 2013,

respectively;

• We completed the Azur Merger on January 18, 2012 and the EUSA Acquisition on June 12, 2012 and
contributions of the acquired businesses to our total revenues from continuing operations were $18.4
million, $23.5 million, $59.9 million and $59.6 million in the first, second, third and fourth quarters of
2012, respectively, as measured from the date of each acquisition. The portion of gross margin and net
income associated with the acquired businesses was not separately identifiable due to the integration
with our operations;

• A gain from the sale of our women’s health business of $35.2 million recorded in the fourth quarter of 2012;

• A tax benefit of $104.2 million on the release of an income tax valuation allowance in the fourth

quarter of 2012;

• Acquisition accounting inventory fair value step-up adjustments in continuing operations of $1.3

million, $3.0 million, $10.3 million and $2.1 million in the first, second, third and fourth quarters of
2012, respectively; and

• Transaction costs of $3.5 million and $8.9 million in the first and second quarters of 2012, respectively.

F-45

Schedule II

Valuation and Qualifying Accounts
(In thousands)

Balance at
beginning
of period

Additions
charged to
costs and
expenses

Other

Additions Deductions

Balance at
end of
period

For the year ended December 31, 2013
Allowance for doubtful accounts . . . . . . . . . . . .
Allowance for sales discounts . . . . . . . . . . . . . .
Allowance for chargebacks . . . . . . . . . . . . . . . .
Deferred tax asset valuation allowance . . . . . . .

(1)
(1)
(1)
(2)

$

715
528
2,536
17,471

$

(4) $ — $

(117) $

5,267
21,047
3,220

—
—
—

(5,417)
(20,875)
—

For the year ended December 31, 2012
Allowance for doubtful accounts . . . . . . . . . . . .
Allowance for sales discounts . . . . . . . . . . . . . .
Allowance for chargebacks . . . . . . . . . . . . . . . .
Deferred tax asset valuation allowance . . . . . . .
For the year ended December 31, 2011

(1)
(1)
(1)
(3)(4)

$

50
296
20
111,188

$

678
6,022
13,072
3,421

$ — $
—
—
62,971

(13) $

(5,790)
(10,556)
(160,109)

594
378
2,708
20,691

715
528
2,536
17,471

Allowance for doubtful accounts . . . . . . . . . . . .
Allowance for sales discounts . . . . . . . . . . . . . .
Allowance for chargebacks . . . . . . . . . . . . . . . .
Deferred tax asset valuation allowance . . . . . . .

(1)
(1)
(1)
(4)

$

50
420
12
155,519

$

3
3,604
451
—

$ — $
—
—
—

(3) $

(3,728)
(443)
(44,331)

50
296
20
111,188

(1) Shown as a reduction of accounts receivable. Charges related to sales discounts and chargebacks are

reflected as a reduction of revenue.

(2) Additions to the deferred tax asset valuation allowance relate to movements on certain U.S. state and other
foreign deferred tax assets where we continue to maintain a valuation allowance until sufficient positive
evidence exists to support reversal.

(3) Other additions to the deferred income tax asset valuation allowance resulted from the Azur Merger and the

EUSA Acquisition.

(4) Deductions to the deferred tax asset valuation allowance include movements relating to utilization of NOLs
and tax credit carryforwards, release in valuation allowance and other movements including adjustments
following finalization of tax returns.

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Exhibit
Number

2.1

2.2

2.3

2.4

2.5

2.6

2.7†

3.1

4.1

4.2A

4.2B

EXHIBIT INDEX

Description of Document

Agreement and Plan of Merger and Reorganization, dated as of September 19, 2011, by and
among Azur Pharma Limited (now Jazz Pharmaceuticals plc), Jaguar Merger Sub Inc., Jazz
Pharmaceuticals, Inc. and Seamus Mulligan, solely in his capacity as the Indemnitors’
Representative (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals, Inc.’s
current report on Form 8-K (File No. 001-33500) filed with the SEC on September 19, 2011).

Letter Agreement, dated as of January 17, 2012, by and among Jazz Pharmaceuticals plc, Jaguar
Merger Sub Inc. Jazz Pharmaceuticals, Inc. and Seamus Mulligan, solely in his capacity as the
Indemnitors’ Representative (incorporated by reference to Exhibit 2.2 in Jazz Pharmaceuticals
plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on January 18,
2012).

Agreement and Plan of Merger, dated as of April 26, 2012, by and among Jazz Pharmaceuticals
plc, Jewel Merger Sub Inc., EUSA Pharma Inc., and Essex Woodlands Health Ventures, Inc.,
Mayflower L.P., and Bryan Morton, in their capacity as the representatives of the equity holders
of EUSA Pharma Inc. (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals
plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on April 27, 2012).

Assignment, dated as of June 11, 2012, by and among Jazz Pharmaceuticals plc and Jazz
Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 2.1B in Jazz Pharmaceuticals
plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on June 12, 2012).

Asset Purchase Agreement, dated as of September 5, 2012, by and among Jazz Pharmaceuticals
plc, Jazz Pharmaceuticals International II Limited, Meda Pharmaceuticals Inc. and Meda Pharma,
Sàrl (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report
on Form 8-K (File No. 001-33500), as filed with the SEC on October 15, 2012).

Tender Offer Agreement, dated December 19, 2013, by and among Jazz Pharmaceuticals Public
Limited Company, Jazz Pharmaceuticals Italy S.r.l. and Gentium S.p.A. (incorporated herein by
reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K/A
(File No. 001-33500), as filed with the SEC on December 20, 2013).

Asset Purchase Agreement, dated January 13, 2014, by and among Jazz Pharmaceuticals
International III Limited, Aerial BioPharma, LLC and Jazz Pharmaceuticals plc (incorporated
herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K
(File No. 001-33500), as filed with the SEC on January 13, 2014).

Memorandum and Articles of Association of Jazz Pharmaceuticals plc (incorporated herein by
reference to Exhibit 3.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K
(File No. 001-33500), as filed with the SEC on January 18, 2012).

Reference is made to Exhibit 3.1.

Third Amended and Restated Investor Rights Agreement, made effective as of June 6, 2007, by
and between Jazz Pharmaceuticals, Inc. and the other parties named therein (incorporated herein
by reference to Exhibit 4.3 in Jazz Pharmaceuticals, Inc.’s quarterly report on Form 10-Q
(File No. 001-33500) for the period ended June 30, 2007, as filed with the SEC on August 10,
2007).

Waiver and Amendment Agreement, dated as of March 12, 2008, by and between Jazz
Pharmaceuticals, Inc. and the other parties named therein (incorporated herein by reference to
Exhibit 4.3B in Jazz Pharmaceuticals, Inc.’s annual report on Form 10-K (File No. 001-33500),
for the period ended December 31, 2007, as filed with the SEC on March 31, 2008).

Exhibit
Number

4.2C

4.2D

4.2E

4.3

4.4

4.5A

4.5B

4.6

10.1†

10.2†

Description of Document

Waiver and Amendment Agreement, dated as of May 7, 2008, by and between Jazz
Pharmaceuticals, Inc. and the other parties named therein (incorporated herein by reference to
Exhibit 4.3C in Jazz Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500), as
filed with the SEC on May 9, 2008).

Waiver and Amendment Agreement, dated as of July 6, 2009, by and between Jazz
Pharmaceuticals, Inc. and the other parties named therein (incorporated herein by reference to
Exhibit 4.3D in Jazz Pharmaceuticals, Inc.’s quarterly report on Form 10-Q (File No. 001-33500)
for the period ended June 30, 2009, as filed with the SEC on August 14, 2009).

Assignment, Assumption and Amendment Agreement, dated as of January 18, 2012, by and
among Jazz Pharmaceuticals, Inc., Jazz Pharmaceuticals plc and the other parties named therein
(incorporated herein by reference to Exhibit 4.2E in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals
plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28,
2012).

Form of Jazz Pharmaceuticals plc Warrant to Purchase Ordinary Shares issued to holders of
assumed Registered Direct Common Stock Warrants originally issued by Jazz Pharmaceuticals,
Inc. (incorporated herein by reference to Exhibit 4.5 in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals
plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28,
2012).

Form of Jazz Pharmaceuticals plc Warrant to Purchase Ordinary Shares issued to holders of
assumed Common Stock Warrants originally issued by Jazz Pharmaceuticals, Inc. on July 7, 2009
(incorporated herein by reference to Exhibit 4.6 in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals
plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28,
2012).

Investor Rights Agreement, dated July 7, 2009 by and between Jazz Pharmaceuticals, Inc. and the
other parties named therein (incorporated herein by reference to Exhibit 10.88 in Jazz
Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on
July 7, 2009).

Assignment, Assumption and Amendment Agreement, dated as of January 18, 2012, by and
among Jazz Pharmaceuticals, Inc., Jazz Pharmaceuticals plc and the other parties named therein
(incorporated herein by reference to Exhibit 4.7B in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals
plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28,
2012).

Registration Rights Agreement made as of January 13, 2012, by and among Jazz Pharmaceuticals
plc and certain shareholders named therein (incorporated herein by reference to Exhibit 10.2 in
Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the
SEC on January 18, 2012).

Xyrem Manufacturing Services and Supply Agreement, dated as of March 13, 2007, by and
between Jazz Pharmaceuticals, Inc. and Patheon Pharmaceuticals, Inc. (incorporated herein by
reference to Exhibit 10.50 in Jazz Pharmaceuticals, Inc.’s registration statement on Form S-1, as
amended (File No. 333-141164), as filed with the SEC on May 31, 2007).

Quality Agreement, dated as of March 13, 2007, by and between Jazz Pharmaceuticals, Inc. and
Patheon Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 10.51 in Jazz
Pharmaceuticals, Inc.’s registration statement on Form S-1, as amended (File No. 333-141164), as
filed with the SEC on March 27, 2007).

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Exhibit
Number

10.3†

10.4

10.5†

10.6

10.7

10.8

10.9

10.10

10.11+

10.12+

10.13+

Description of Document

Supply Agreement, dated as of April 1, 2010, by and between Jazz Pharmaceuticals, Inc. and
Siegfried (USA) Inc. (incorporated herein by reference to Exhibit 10.54 in Jazz Pharmaceuticals,
Inc.’s quarterly report on Form 10-Q (File No. 001-33500) for the period ended March 31, 2010,
as filed with the SEC on May 6, 2010).

Master Services Agreement, dated April 15, 2011, by and between Jazz Pharmaceuticals, Inc.,
CuraScript, Inc. and Express Scripts Specialty Distribution Services, Inc. (incorporated herein by
reference to Exhibit 10.2 in Jazz Pharmaceuticals, Inc.’s quarterly report on Form 10-Q
(File No. 001-33500) for the period ended March 31, 2011, as filed with the SEC on May 9,
2011).

Royalty Bearing License Agreement and Supply Agreement Re Erwinia-Derived Asparaginase,
dated July 22, 2005, between the Health Protection Agency and EUSA Pharma SAS (formerly
OPi, S.A.), as amended on each of December 22, 2009, March 23, 2012 and August 8, 2012
(incorporated herein by reference to Exhibit 10.11 in Jazz Pharmaceuticals plc’s quarterly report
on Form 10-Q/A (File No. 001-33500), as filed with the SEC on August 9, 2012).

Credit Agreement, dated as of June 12, 2012, by and among Jazz Pharmaceuticals plc, Jazz
Pharmaceuticals, Inc., the Lenders and Barclays Bank PLC, as Administrative Agent, Collateral
Agent, Swing Line Lender and L/C Issuer (incorporated herein by reference to Exhibit 10.1 in
Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the
SEC on June 12, 2012).

Commercial Lease, dated as of June 2, 2004, by and between Jazz Pharmaceuticals, Inc. and The
Board of Trustees of the Leland Stanford Junior University (incorporated herein by reference to
Exhibit 10.52 in Jazz Pharmaceuticals, Inc.’s registration statement on Form S-1, as amended
(File No. 333-141164), as filed with the SEC on March 27, 2007).

First Amendment of Lease, dated June 1, 2009, by and between Jazz Pharmaceuticals, Inc. and
Wheatley-Fields, LLC, successor in interest to The Board of Trustees of the Leland Stanford
Junior University (incorporated herein by reference to Exhibit 10.86 in Jazz Pharmaceuticals,
Inc.’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on June 4, 2009).

Second Amendment of Lease, dated February 28, 2012, by and between Jazz Pharmaceuticals,
Inc. and Wheatley-Fields, LLC, successor in interest to The Board of Trustees of the Leland
Stanford Junior University (incorporated herein by reference to Exhibit 10.31 in the annual report
on Form 10-K (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz
Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on
February 28, 2012).

Lease, dated May 8, 2012, by and between John Ronan and Castle Cove Property Developments
Limited and Jazz Pharmaceuticals plc (incorporated herein by reference to Exhibit 10.2 in Jazz
Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC
on August 7, 2012).

Form of Indemnification Agreement between Jazz Pharmaceuticals plc and its officers and
directors (incorporated herein by reference to Exhibit 10.1 in Jazz Pharmaceuticals plc’s current
report on Form 8-K (File No. 001-33500), as filed with the SEC on January 18, 2012).

Offer Letter from Jazz Pharmaceuticals, Inc. to Kathryn Falberg (incorporated herein by reference
to Exhibit 10.92 in Jazz Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500),
as filed with the SEC on December 3, 2009).

Noncompetition Agreement by and between Seamus Mulligan and Jazz Pharmaceuticals plc
(incorporated herein by reference to Exhibit 10.3 in Jazz Pharmaceuticals plc’s registration
statement on Form S-4 (File No. 333-177528), as filed with the SEC on October 26, 2011).

Exhibit
Number

10.14+

10.15+

10.16+

10.17+

10.18+

10.19A+

10.19B+

10.19C+

10.19D+

10.19E+

10.19F+

10.19G+

10.19H+

Description of Document

Offer Letter from Jazz Pharmaceuticals, Inc. to Jeffrey Tobias, M.D. (incorporated herein by
reference to Exhibit 10.1 in Jazz Pharmaceuticals, Inc.’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on November 8, 2011).

Offer Letter from Jazz Pharmaceuticals, Inc. to Suzanne Sawochka Hooper (incorporated herein
by reference to Exhibit 10.19 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on May 8, 2012).

Employment Agreement by and between Fintan Keegan and Jazz Pharmaceuticals plc
(incorporated herein by reference to Exhibit 10.4 in Jazz Pharmaceuticals plc’s quarterly report on
Form 10-Q (File No. 001-33500), as filed with the SEC on August 7, 2012).

Amendment to Employment Agreement by and between Fintan Keegan and Jazz Pharmaceuticals
plc (incorporated herein by reference to Exhibit 10.6 in Jazz Pharmaceuticals plc’s quarterly
report on Form 10-Q (File No. 001-33500), as filed with the SEC on August 7, 2012).

Noncompetition Agreement by and between Fintan Keegan and Jazz Pharmaceuticals plc
(incorporated herein by reference to Exhibit 10.5 in Jazz Pharmaceuticals plc’s quarterly report on
Form10-Q (File No. 001-33500), as filed with the SEC on August 7, 2012).

Jazz Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by reference to
Exhibit 99.3 in Jazz Pharmaceuticals plc’s registration statement on Form S-8
(File No. 333-179075), as filed with the SEC on January 18, 2012).

Jazz Pharmaceuticals plc 2007 Equity Incentive Plan Sub-Plan Governing Awards to Participants
in the Republic of Ireland (incorporated herein by reference to Exhibit 10.3B in the annual report
on Form 10-K (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz
Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals Inc. with the SEC on
February 28, 2012).

Form of Notice of Grant of Stock Options and Form of Option Agreement (U.S.) under the Jazz
Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by reference to
Exhibit 10.27C in Jazz Pharmaceuticals plc’s annual report on Form 10-K (File No. 001-33500),
as filed with the SEC on February 26, 2013).

Form of Notice of Grant of Stock Options and Form of Option Agreement (Irish) under Jazz
Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by reference to
Exhibit 10.27D in Jazz Pharmaceuticals plc’s annual report on Form 10-K (File No. 001-33500),
as filed with the SEC on February 26, 2013).

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement
(U.S.) under the Jazz Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.27E in Jazz Pharmaceuticals plc’s annual report on Form 10-K
(File No. 001-33500), as filed with the SEC on February 26, 2013).

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement
(Irish) under the Jazz Pharmaceuticals plc 2007 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.27F in Jazz Pharmaceuticals plc’s annual report on Form 10-K
(File No. 001-33500), as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals plc 2007 Equity Incentive Plan—Form of Non-U.S. Option Grant Notice
and Form of Non-U.S. Option Agreement (approved July 31, 2013) (incorporated herein by
reference to Exhibit 10.1 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on November 5, 2013).

Jazz Pharmaceuticals plc 2007 Equity Incentive Plan—Form of Non-U.S. Restricted Stock Unit
Award Grant Notice and Form of Non-U.S. Restricted Stock Unit Award Agreement (approved
July 31, 2013) (incorporated herein by reference to Exhibit 10.2 in Jazz Pharmaceuticals plc’s
quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC on November 5, 2013).

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Exhibit
Number

10.20A+

10.20B+

10.20C+

10.20D+

10.20E+

10.20F+

10.20G+

10.20H+

10.20I+

10.20J+

10.20K+

Description of Document

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by reference to
Exhibit 99.1 in Jazz Pharmaceuticals plc’s registration statement on Form S-8
(File No. 333-179075), as filed with the SEC on January 18, 2012).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan Sub-Plan Governing Awards to Participants
in the Republic of Ireland (incorporated herein by reference to Exhibit 10.39B in the annual report
on Form 10-K (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz
Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals Inc. with the SEC on
February 28, 2012).

Form of Option Grant Notice and Form of Stock Option Agreement (U.S.) under the Jazz
Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.7
in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with
the SEC on August 7, 2012).

Form of Stock Option Grant Notice and Form of Option Agreement (Irish) under the Jazz
Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.8
in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with
the SEC on August 7, 2012).

Form of Non-U.S. Option Grant Notice and Form of Non-U.S. Option Agreement under the Jazz
Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by reference to
Exhibit 10.28E in Jazz Pharmaceuticals plc’s annual report on Form 10-K (File No. 001-33500),
as filed with the SEC on February 26, 2013).

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement
(U.S.) under the Jazz Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.9 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on August 7, 2012).

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement
(Irish) under the Jazz Pharmaceuticals plc 2011 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.10 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on August 7, 2012).

Form of Non-U.S. Restricted Stock Unit Grant Notice and Form of Non-U.S. Restricted Stock
Unit Award Agreement under the Jazz Pharmaceuticals plc 2011 Equity Incentive Plan
(incorporated herein by reference to Exhibit 10.28H in Jazz Pharmaceuticals plc’s annual report
on Form 10-K (File No. 001-33500), as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan—Form of U.S. Option Grant Notice and
Form of U.S. Option Agreement (approved July 31, 2013) (incorporated herein by reference to
Exhibit 10.3 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as
filed with the SEC on November 5, 2013).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan—Form of U.S. Restricted Stock Unit Award
Grant Notice and Form of U.S. Restricted Stock Unit Award Agreement (approved July 31, 2013)
(incorporated herein by reference to Exhibit 10.4 in Jazz Pharmaceuticals plc’s quarterly report on
Form 10-Q (File No. 001-33500), as filed with the SEC on November 5, 2013).

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan—Form of Non-U.S. Option Grant Notice
and Form of Non-U.S. Option Agreement (approved July 31, 2013) (incorporated herein by
reference to Exhibit 10.4 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500), as filed with the SEC on November 5, 2013).

Exhibit
Number

10.20L+

10.21+

10.22A+

10.22B+

10.22C+

10.23A+

10.23B+

10.24A+

10.24B+

10.24C+

Description of Document

Jazz Pharmaceuticals plc 2011 Equity Incentive Plan—Form of Non-U.S. Restricted Stock Unit
Award Grant Notice and Form of Non-U.S. Restricted Stock Unit Award Agreement (approved
July 31, 2013) (incorporated herein by reference to Exhibit 10.6 in Jazz Pharmaceuticals plc’s
quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC on November 5, 2013).

Jazz Pharmaceuticals plc Amended and Restated Directors Deferred Compensation Plan
(incorporated herein by reference to Exhibit 99.6 in Jazz Pharmaceuticals plc’s registration
statement on Form S-8 (File No. 333-179075), as filed with the SEC on January 18, 2012).

Jazz Pharmaceuticals plc Amended and Restated 2007 Non-Employee Directors Stock Option
Plan (incorporated herein by reference to Exhibit 99.4 in Jazz Pharmaceuticals plc’s registration
statement on Form S-8 (File No. 333-179075), as filed with the SEC on January 18, 2012).

Form of Non-U.S. Option Grant Notice and Form of Non-U.S. Option Agreement under the Jazz
Pharmaceuticals plc Amended and Restated 2007 Non-Employee Directors Stock Option Plan
(incorporated herein by reference to Exhibit 10.30B in Jazz Pharmaceuticals plc’s annual report
on Form 10-K (File No. 001-33500), as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals plc Amended and Restated 2007 Non-Employee Directors Stock Option
Plan—Form of Non-U.S. Option Grant Notice and Form of Non-U.S. Option Agreement
(approved August 1, 2013) (incorporated herein by reference to Exhibit 10.7 in Jazz
Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC
on November 5, 2013).

Jazz Pharmaceuticals plc 2007 Employee Stock Purchase Plan, as amended and restated
(incorporated herein by reference to Exhibit 10.31A in Jazz Pharmaceuticals plc’s annual report
on Form 10-K (File No. 001-33500), as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals plc 2007 Employee Stock Purchase Plan Sub-Plan Governing Purchase
Rights to Participants in the Republic of Ireland (incorporated by reference herein to
Exhibit 10.4C in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500)
for the period ended March 31, 2012, as filed with the SEC on August 7, 2012).

Jazz Pharmaceuticals plc Cash Bonus Plan, (incorporated herein by reference to Exhibit 10.33 in
the annual report on Form 10-K/A (File No. 001-33500) for the period ended December 31, 2011,
as filed by Jazz Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals, Inc.
with the SEC on April 27, 2012).

Jazz Pharmaceuticals plc Cash Bonus Plan for U.S. Affiliates (incorporated herein by reference to
Exhibit 10.32B in Jazz Pharmaceuticals plc’s annual report on Form 10-K (File No. 001-33500),
as filed with the SEC on February 26, 2013).

Jazz Pharmaceuticals Cash Bonus Plan for International Affiliates (2013) (incorporated herein by
reference to Exhibit 10.32C in Jazz Pharmaceuticals plc’s annual report on Form 10-K
(File No. 001-33500), as filed with the SEC on February 26, 2013).

10.24D+

Jazz Pharmaceuticals Cash Bonus Plan for International Affiliates (2014).

10.25A+

10.25B+

Jazz Pharmaceuticals plc Amended and Restated Executive Change in Control and Severance
Benefit Plan (incorporated herein by reference to Exhibit 10.34 in the annual report on
Form 10-K/A (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz
Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on
April 27, 2012).

Jazz Pharmaceuticals plc Amended and Restated Executive Change in Control and Severance
Benefit Plan (approved July 31, 2013) (incorporated herein by reference to Exhibit 10.8 in Jazz
Pharmaceuticals plc’s quarterly report on Form 10-Q (File No. 001-33500), as filed with the SEC
on November 5, 2013).

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Exhibit
Number

10.26+

10.27+

10.28+

10.29

10.30+

10.31

10.32#

21.1

23.1

23.2

24.1

31.1

31.2

Description of Document

Jazz Pharmaceuticals plc 2012 Non-Employee Director Compensation Arrangements
(incorporated herein by reference to Exhibit 10.32 in the annual report on Form 10-K
(File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals
plc on behalf of and as successor to Jazz Pharmaceuticals Inc. with the SEC on February 28,
2012).

Jazz Pharmaceuticals plc 2012 Executive Officer Compensation Arrangements (incorporated
herein by reference to Exhibit 10.3 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500) for the period ended June 30, 2012, as filed with the SEC on August 7,
2012).

Jazz Pharmaceuticals plc 2013 Executive Officer Compensation Arrangements (incorporated
herein by reference to Exhibit 10.6 in Jazz Pharmaceuticals plc’s quarterly report on Form 10-Q
(File No. 001-33500) for the period ended March 31, 2013, as filed with the SEC on May 7,
2013).

Amendment No. 1, dated as of June 13, 2013, to the Original Credit Agreement and related
Guaranty, by and among Jazz Pharmaceuticals, Inc., Jazz Financing I Limited and Jazz
Pharmaceuticals Ireland Limited, as borrowers, Jazz Pharmaceuticals plc, as guarantor, the
Lenders thereto and Barclays Bank PLC, as Administrative Agent, Collateral Agent, L/C Issuer
and Swing Line Lender (incorporated herein by reference to Exhibit 10.1 in Jazz Pharmaceuticals
plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on June 13, 2013).

Jazz Pharmaceuticals plc Non-Employee Director Compensation Policy (approved August 1, 2013
(incorporated herein by reference to Exhibit 10.9 in Jazz Pharmaceuticals plc’s quarterly report on
Form 10-Q (File No. 001-33500), as filed with the SEC on November 5, 2013).

Amended and Restated Commitment Letter, dated as of January 6, 2014, by and between Jazz
Pharmaceuticals plc, Barclays Bank PLC, J.P. Morgan Securities LLC, JPMorgan Chase Bank,
N.A., Merrill Lynch Pierce, Fenner & Smith Incorporated, Bank of America, N.A., Citigroup
Global Markets Inc., Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, DNB Bank
ASA and DNB Capital Markets, Inc. (incorporated herein by reference to Exhibit 99.(B)(1) in
Jazz Pharmaceuticals plc’s tender offer statement on Schedule TO, as amended, as filed with the
SEC on January 7, 2014).

Amendment No. 2, dated as of January 23, 2014, to the Credit Agreement, dated as of June 12,
2012, by and among Jazz Pharmaceuticals, Inc., Jazz Financing I Limited and Jazz
Pharmaceuticals Ireland Limited, as borrowers, Jazz Pharmaceuticals Public Limited Company, as
guarantor, the Lenders thereto and Barclays Bank PLC, as Administrative Agent, Collateral
Agent, L/C Issuer and Swing Line Lender.

Subsidiaries of Jazz Pharmaceuticals plc.

Consent of KPMG, Independent Registered Public Accounting Firm.

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

Power of Attorney (included on the signature page hereto).

Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated
under the Securities Exchange Act of 1934, as amended.

Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated
under the Securities Exchange Act of 1934, as amended.

32.1*

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit
Number

Description of Document

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

+

†

#

*

Indicates management contract or compensatory plan.

Confidential treatment has been granted for portions of this exhibit. Omitted portions have been filed
separately with the Securities and Exchange Commission.

This exhibit replaces the exhibit previously filed as Exhibit 10.1 in Jazz Pharmaceuticals plc’s current report
on Form 8-K (File No. 001-33500), as filed with the SEC on January 24, 2014.

The certifications attached as Exhibit 32.1 accompany this Annual Report on Form 10-K pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall
not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended.

Name of Subsidiary

State or Jurisdiction of Incorporation or Organization

Subsidiaries of the Registrant

EXHIBIT 21.1

Jazz Pharmaceuticals Ireland Limited
Jazz Pharmaceuticals, Inc.
Jazz Pharmaceuticals International Limited
Jazz Pharmaceuticals International III Limited
EUSA Pharma International Limited
EUSA Pharma SAS
EUSA Pharma Holdings SAS
EUSA Pharma (Luxembourg) S.à.r.l.
Jazz Pharmaceuticals (EUSA Pharma Holdings) Inc.

Ireland
Delaware
Bermuda
Bermuda
Gibraltar
France
France
Luxembourg
Delaware

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Consent of KPMG, Independent Registered Public Accounting Firm

Exhibit 23.1

The Board of Directors
Jazz Pharmaceuticals plc:

We consent to the incorporation by reference in the registration statement (No. 333-186886) on Form S-8,

the registration statement (No. 333-179075) on Form S-8, and the registration statement (No. 333-179080) on
Form S-3, of Jazz Pharmaceuticals plc of our reports dated February 25, 2014, with respect to the consolidated
balance sheets of Jazz Pharmaceuticals plc as of December 31, 2013 and 2012, and the related consolidated
statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the
two-year period then ended, and the related financial statement schedule, and the effectiveness of internal control
over financial reporting as of December 31, 2013, which reports appear in the December 31, 2013 annual report
on Form 10-K of Jazz Pharmaceuticals plc.

/S/ KPMG

Dublin, Ireland
February 25, 2014

Exhibit 23.2

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-186886)
pertaining to the 2011 Equity Incentive Plan of Jazz Pharmaceuticals plc, the Registration Statement (Form S-8
No. 333-179075) pertaining to the 2011 Equity Incentive Plan, the 2007 Equity Incentive Plan, the 2003 Equity
Incentive Plan, the 2007 Employee Stock Purchase Plan, the Amended and Restated 2007 Non-Employee
Directors Stock Option Plan and the Amended and Restated Directors Deferred Compensation Plan of Jazz
Pharmaceuticals plc (the Successor), and the Registration Statement (Form S-3 No. 333-179080) of Jazz
Pharmaceuticals plc and in the related prospectuses, of our report dated February 28, 2012, with respect to the
consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows of Jazz
Pharmaceuticals, Inc. (the Predecessor) and its subsidiaries for the year ended December 31, 2011, and the
related financial statement schedule for 2011, included in this Annual Report (Form 10-K) for the year ended
December 31, 2013.

/s/ ERNST & YOUNG LLP

Redwood City, California
February 25, 2014

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Exhibit 31.1

CERTIFICATION

I, Bruce C. Cozadd, certify that:

1.

I have reviewed this Annual Report on Form 10-K of Jazz Pharmaceuticals Public Limited Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and

procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2014

By:

/s/ BRUCE C. COZADD

Bruce C. Cozadd

Chairman and Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Kathryn E. Falberg, certify that:

1.

I have reviewed this Annual Report on Form 10-K of Jazz Pharmaceuticals Public Limited Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the registrant and have:

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a) Designed such disclosure controls and procedures, or caused such disclosure controls and

procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2014

By:

/s/ KATHRYN E. FALBERG

Kathryn E. Falberg

Executive Vice President and Chief Financial Officer

CERTIFICATION(1)

Exhibit 32.1

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended

(the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C.
Section 1350), Bruce C. Cozadd, Chief Executive Officer of Jazz Pharmaceuticals Public Limited Company (the
“Company”), and Kathryn E. Falberg, Executive Vice President and Chief Financial Officer of the Company,
each hereby certifies that, to the best of his or her knowledge:

1.

2.

The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, to which
this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the
requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, and

The information contained in the Periodic Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.

Date: February 25, 2014

/s/ BRUCE C. COZADD

Bruce C. Cozadd
Chairman and Chief Executive Officer

/s/ KATHRYN E. FALBERG

Kathryn E. Falberg
Executive Vice President and Chief Financial Officer

(1) This certification accompanies the Annual Report on Form 10-K to which it relates, is not deemed filed with

the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Jazz
Pharmaceuticals Public Limited Company under the Securities Act of 1933, as amended, or the Exchange
Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation
language contained in such filing. A signed original of this written statement required by Section 906 of the
Sarbanes-Oxley Act of 2002 has been provided to Jazz Pharmaceuticals Public Limited Company and will
be retained by Jazz Pharmaceuticals Public Limited Company and furnished to the Securities and Exchange
Commission or its staff upon request.

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[THIS PAGE INTENTIONALLY LEFT BLANK]

Executive Committee

Bruce C. Cozadd
Chairman and Chief Executive Officer

Russell J. Cox
Executive Vice President and Chief Operating Officer

Suzanne Sawochka Hooper
Executive Vice President and General Counsel

Fintan Keegan
Executive Vice President, Technical Operations

Jeffrey Tobias, M.D.
Executive Vice President, Research and Development and Chief
Medical Officer

Heather McGaughey
Senior Vice President, Human Resources

Iain McGill
Senior Vice President and Head of EUSA International

Robert McKague
Senior Vice President and Chief Compliance Officer

Michael P. Miller
Senior Vice President, Head of U.S. Commercial

Matthew P. Young
Senior Vice President and Chief Financial Officer

Company Secretary
Shawn Mindus
Vice President, Financial Planning, Analysis and Strategy

Ordinary Shares
Jazz Pharmaceuticals plc ordinary shares are traded on the
NASDAQ Global Select Market under the symbol “JAZZ.”

Jazz Pharmaceuticals plc Corporate Headquarters
Fourth Floor, Connaught House
One Burlington Road, Dublin 4, Ireland
+353 1 634 7800
+353 1 634 7850 fax
www.jazzpharmaceuticals.com

Annual General Meeting
The annual general meeting of shareholders will be held
at 10:30 a.m. local time on July 31, 2014, at the company’s
corporate headquarters located at Fourth Floor, Connaught
House, One Burlington Road, Dublin 4, Ireland.

Board of Directors

Paul L. Berns
Chairman and Chief Executive Officer, Anacor Pharmaceuticals, Inc.

Bruce C. Cozadd
Chairman and Chief Executive Officer, Jazz Pharmaceuticals plc

Patrick G. Enright
Managing Director, Longitude Capital

Peter Gray
Chairman, UDG Healthcare plc

Heather Ann McSharry
Director, CRH plc and Greencore Group plc

Seamus Mulligan
Chairman and Chief Executive Officer, Adapt Pharma Limited
Executive Chairman, Circ Pharma Limited

Kenneth W. O’Keefe
Managing Partner, Beecken Petty O’Keefe & Company

Norbert G. Riedel
President and Chief Executive Officer, Naurex, Inc.

Catherine A. Sohn
Founder, Sohn Health Strategies

Rick E. Winningham
Lead Independent Director, Jazz Pharmaceuticals plc
Chairman and Chief Executive Officer, Theravance, Inc.

Registrar and Transfer Agent
Computershare
www.computershare.com

Ireland
+353 1 447 5566
+353 1 447 5571 fax
Heron House
Corrig Road
Sandyford Industrial Estate
Dublin 18, Ireland

United States
+1 781 575 2879 (outside U.S.)
+1 877 373 6374 (inside U.S.)
P.O. Box 30170
College Station, TX 77842 USA

Independent Registered Public Accounting Firm
KPMG, Dublin, Ireland

For More Information
Information about Jazz Pharmaceuticals plc can be found on the Internet at www.jazzpharmaceuticals.com. Inquiries regarding Jazz Pharmaceuticals plc and its
activities may be directed to the Investor Relations Department at investorinfo@jazzpharma.com or +353 1 634 7892 (Ireland) or +1 650 496 2800 (U.S.).
Communications concerning shares and transfer requirements, lost certificates or changes of address should be directed to the Transfer Agent.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995
This proxy statement and 2013 annual report contain forward-looking statements, including, but not limited to, statements related to Jazz Pharmaceuticals' future
financial results and growth potential, strategy, plans to launch Defitelio in additional European countries and related timelines, potential development of new
treatments through its expanded pipeline, potential strengthening of the company’s manufacturing capabilities and other statements that are not historical facts.
These forward-looking statements are based on Jazz Pharmaceuticals' current expectations and inherently involve significant risks and uncertainties. Actual results
and the timing of events could differ materially from those anticipated in such forward looking statements as a result of these risks and uncertainties, which include,
without limitation, risks and uncertainties associated with maintaining and increasing sales of and revenue from Xyrem, such as the potential introduction of generic
competition and changed or increased regulatory restrictions on Xyrem, as well as similar risks related to effectively commercializing the company's other marketed
products, including Erwinaze and Defitelio; protecting and expanding the company's intellectual property rights; obtaining appropriate pricing and reimbursement
for the company's products in an increasingly challenging environment; ongoing regulation and oversight by U.S. and non-U.S. regulatory agencies; dependence on
key customers and single source suppliers; the difficulty and uncertainty of pharmaceutical product development and the uncertainty of clinical success and
regulatory approval; risks associated with business combination or product acquisition transactions, such as the risk that the acquired businesses, including the
acquired Gentium business, will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; the
company’s ability to identify and acquire, in-license or develop additional products or product candidates to grow its business; and potential restrictions on the
company's ability and flexibility to pursue future opportunities as a result of its substantial outstanding debt obligations; as well as risks related to future
opportunities and plans, including the uncertainty of expected future financial performance and results; and those risks detailed from time-to-time under the
caption "Risk Factors" and elsewhere in Jazz Pharmaceuticals plc's Securities and Exchange Commission filings and reports (Commission File No. 001-33500),
including in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 and future filings and reports by the company. Jazz Pharmaceuticals
undertakes no duty or obligation to update any forward-looking statements contained in this proxy statement and 2013 annual report as a result of new information,
future events or changes in its expectations.

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Fourth Floor, Connaught House

One Burlington Road

Dublin 4

Ireland

+353 1 634 7800

www.jazzpharmaceuticals.com

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