What changed in this filing

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Item 1A. Risk Factors

2024-12-06 compared with 2023-12-08 · 176 added, 207 removed, 457 unchanged (46% of the section changed)

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Our operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors that impact our cost structure and revenue.

Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the war in Ukraine and other international conflicts, and steps taken by governments and central banks, as well as other stimulus and spending programs, have led to higher inflation, which is likely to lead to an increase in costs and may cause changes in fiscal and monetary policy, including increased interest rates.

Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, international conflicts, and steps taken by governments and central banks, as well as other stimulus and spending programs, have led to higher inflation, which is likely to lead to an increase in costs and may cause changes in fiscal and monetary policy, including increased interest rates.

In a higher inflationary environment, we may be unable to raise the prices of our products and services sufficiently to keep up with the rate of inflation.

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goods, the scope and duration of which remain uncertain;

and environmental laws and requirements applicable to our facilities, products or manufacturing processes, including evolving regulations regarding the use of hazardous substances or chemicals in our products.

• challenges in complying with a variety of international legal, compliance and regulatory requirements such as the Foreign Corrupt Practices Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the UK Bribery Act, international data security and privacy laws, EU MDR and EU IVDR and environmental laws and requirements applicable to our facilities, products or manufacturing processes, including evolving regulations regarding the use of hazardous substances or chemicals in our products;

• the need to engage third-party agents or intermediaries to act on our behalf in certain countries, including in those countries with a high risk of corruption;

• foreign customers creating longer payment cycles than customers in the United States;

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• general economic and political conditions in the countries where we operate having an adverse effect on our operations in those countries or being unfavorable to our growth strategy;

• natural disasters, pandemics, war, terrorism, labor disruptions and international conflicts may cause significant economic disruption and political and social instability, resulting in decreased demand for our products, adversely affecting our manufacturing and distribution capabilities, or causing interruptions in our supply chain;

• international conflicts, acts or threats of war or terrorism may lead to significant market and other disruptions, supply chain interruptions, political and social instability, trade disputes or trade barriers, embargoes, changes in consumer or purchase preferences, as well as an increase in cyberattacks and espionage;

• challenges in complying with new and evolving international economic and trade sanctions laws and regulations;

• natural disasters, pandemics and labor disruptions, the duration and severity of which are highly uncertain and difficult to predict;

• foreign governments adopting regulations, including those similar to the EU MDR and EU IVDR or take other actions that would have a direct or indirect adverse impact on our business and market opportunities, including but not limited to increased enforcement of potentially conflicting and ambiguous anti-bribery and privacy laws;

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However, any of these factors could adversely affect our international operations and, consequently, our business.

International Conflicts, such as the war between Russia and Ukraine, could adversely affect our business.

On February 24, 2022, Russian military forces launched a military action in Ukraine.

The military conflict is ongoing and the length, impact, and outcome is highly unpredictable.

It has led and could continue to lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, trade disputes or trade barriers, changes in consumer or purchaser preferences, as well as an increase in cyberattacks and espionage.

The war has led to significant sanctions programs imposed by the United States, the EU, the UK, Canada, Switzerland, Japan, and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic.

In retaliation against new international sanctions and as part of measures to stabilize and support the volatile Russian financial and currency markets, the Russian authorities also imposed significant currency control measures aimed at restricting the outflow of foreign currency and capital from Russia, imposed various restrictions on transacting with non-Russian parties, banned exports of various products, and imposed other economic and financial restrictions.

The situation continues to evolve and additional sanctions by Russia on the one hand, and by the other countries on the other hand, could adversely affect the global economy, financial markets, energy supply and prices, certain critical materials and metals, supply chains, and global logistics and could adversely affect our business.

Economic and trade sanctions could make it more difficult or costly for us to conduct our operations or achieve our business objectives.

Our business must be conducted in compliance with applicable economic and trade sanctions laws and regulations, including those administered and enforced by the U.S.

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Department of Commerce, the United Nations Security Council, and other relevant governmental authorities.

If we are found to be in violation of U.S.

sanctions or export control laws, it could result in substantial fines and penalties for us and for individuals working for us.

We are actively monitoring the situation in Ukraine and Russia and assessing its impact on our business, including our business partners, employees and customers.

To date, we have not experienced any material interruptions in our infrastructure, supplies, technology systems, or networks needed to support our operations.

The conflict has caused us to modify our operations in Russia and could lead to additional modifications in Russia.

We cannot predict the progress or outcome of the war or its impacts in the territories where we operate.

The extent and duration of the military action, sanctions, other consequences, such as Russia imposing restrictions on transactions or banning the export of energy products, including natural gas, and the resulting market disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time.

Any such disruption may also magnify the impact of other risks described in this section.

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These laws and regulations may restrict or prohibit altogether the sale or supply of certain of our products to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions, unless there are license exceptions that apply or specific licenses are obtained.

A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines and the denial of export privileges, which could have a material adverse effect on our business.

Acquisitions and other strategic transactions that we have made and may make in the future involve numerous risks.

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Future transactions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and an increase in amortization and/or impairments of goodwill and other intangible assets, which could have a material adverse effect upon our business.

In fiscal 2022, CooperVision acquired a private Denmark-based ortho-k contact lens distributor.

In fiscal 2022, CooperSurgical acquired a private cryopreservation services company and Generate Life Sciences (Generate), a private provider of donor egg and sperm for fertility treatments, fertility cryopreservation services and newborn stem cell storage (cord blood and cord tissue).

Risks we could face with respect to these acquisitions and other strategic transaction include:

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• difficulties in, and expenses related to, the integration of the operations, technologies, information technology and other enterprise resource planning systems, products and personnel of the acquired company and establishment of appropriate accounting controls and reporting procedures, data protection systems and other regulatory compliance procedures, including but not limited to third-party compliance and due diligence;

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• increased leverage and the risk of lack of access to available financing, including financing for the acquisition or refinancing of debt owed by us on a timely basis and on reasonable terms;

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• expenses, including restructuring expenses, to shut down our own locations or terminate our employees;

• application of and compliance with new and unfamiliar regulatory frameworks such as regulation applicable to our newly acquired fertility-related businesses;

• application of and compliance with new and unfamiliar regulatory frameworks;

• failure to successfully obtain or maintain reimbursements under the third-party payor plans, including but not limited to governmental programs, due to complex reporting and payment obligations;

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We manufacture a significant portion of the medical device products we sell.

Any prolonged disruption in the operations of our existing manufacturing or distribution facilities or our fertility and stem cell storage facilities, whether due to work stoppages, technical or labor difficulties, integration difficulties, destruction of or damage to any facility (as a result of natural disaster, use and storage of hazardous materials or other events), enforcement action by the FDA or other regulatory body if we are found to be in non-compliance with current Good Manufacturing Practices (cGMP) or similar foreign requirements or other reasons, could have a material adverse effect on our business.

Any prolonged disruption in the operations of our existing manufacturing or distribution facilities or our fertility and stem cell storage facilities, whether due to work stoppages, technical or labor difficulties, integration difficulties, destruction of or damage to any facility (as a result of natural disaster, use and storage of hazardous materials or other events), enforcement action by the FDA or other regulatory body if we are found to be in non-compliance with current cGMP or similar foreign requirements or other reasons, could have a material adverse effect on our business.

In addition, materials such as silicone hydrogel require improvements to our manufacturing processes to make them cost-effective.

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Conversely, constrained, excess or idle capacity, which could result from acquisitions, unexpected demand, inaccurate sales forecasting or unexpected manufacturing efficiencies, could significantly impact our profitability, capital investments, customer service levels and near-term financial condition.

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CooperVision manufactures molded contact lenses, which represent the majority of our contact lens revenues, primarily at our facilities in Costa Rica, Hungary, Puerto Rico, the United Kingdom and the United States, with other smaller facilities also existing in multiple locations around the world.

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Cybersecurity threats continue to increase in frequency and sophistication;

a successful cybersecurity attack could interrupt or disrupt our information technology systems, or those of our third-party service providers, or cause the loss of confidential or protected data which could disrupt our business, force us to incur excessive costs or cause reputational harm.

a successful cybersecurity attack could interrupt or disrupt our information technology systems, or those of our third-party service providers, or cause the

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loss of confidential or protected data which could disrupt our business, force us to incur excessive costs or cause reputational harm.

Security breaches, computer malware and computer hacking attacks have become more prevalent across industries and may occur on our systems or those of our third-party service providers or partners.

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Like many other companies, we experience attempted cybersecurity actions on a frequent basis, and the frequency of such attempts could increase in the future.

While we have invested in the protection of data and information technology, we cannot be assured that our efforts will prevent or quickly identify service interruptions or security breaches.

While we have implemented procedures and controls to monitor and mitigate security threats and invested in the protection of data and information technology, we cannot be assured that our efforts will prevent or quickly identify service interruptions or security breaches.

The techniques used by cybercriminals change frequently, may not be recognized until launched and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments or agencies.

We cannot be assured that our data protection efforts and our investment in information technology will prevent significant breakdowns, data leakages or breaches in our systems or those of our third-party services providers or partners.

Any such interruption or breach of our systems could adversely affect our business operations and/or result in the loss of critical or sensitive confidential information or intellectual property, and could result in financial, legal, business and reputational harm to us.

Any such interruption or breach of our systems could adversely affect our business operations and/or result in the loss of critical or sensitive confidential information, including protected health information (PHI), or intellectual property, and could result in financial, legal, business and reputational harm to us, which could have a material adverse effect on our financial position, results of operations and cash flows.

There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.

We maintain cyber liability insurance;

however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.

however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems, and we cannot guarantee that applicable insurance will be available to us in the future on economically reasonable terms or at all.

We manage our businesses utilizing multiple complex integrated software and hardware information technology operating systems that are regularly maintained and upgraded;

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We cannot be assured that there will not be associated excessive costs or disruptions in portions of our business in the course of our maintenance, support and/or upgrade of these systems.

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We are in the midst of a multiyear process of implementing new enterprise resource planning (ERP) systems at CooperVision and CooperSurgical.

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We cannot be assured that we will successfully implement our new ERP system or that we will avoid these and other negative impacts from our implementation efforts.

If any of such systems or programs were to experience service interruptions, fail or create erroneous information in our hardware or software network infrastructure, possible consequences include our loss of communication links, inability to track sales and interruption of other operational or financial processes, which in turn could adversely affect our financial results, stock price and reputation.

We identified a material weakness in our internal control over financial reporting related to an ineffective information technology (IT) general control for the U.S.

operations within the CooperSurgical segment which, if not remediated appropriately or timely, could affect our ability to record, process and report financial information accurately and prepare financial statements within required time periods and could subject us to litigation or investigations, negatively affect investor confidence and adversely impact our stock price.

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Internal controls related to the operation of technology systems are critical to maintaining adequate internal control over financial reporting.

As disclosed in Part II, Item 9A, during fiscal 2024, management concluded our internal control over financial reporting was not effective as of October 31, 2024 due to a material weakness in IT general controls for the CooperSurgical operations in the U.S.

primarily related to the implementation and maintenance of certain enterprise resource planning systems during fiscal 2024.

The material weakness resulted from not having a sufficient complement of its personnel, inadequate training of personnel and ineffective assessment of the risks related to change management, user control monitoring and segregation of duties in the affected IT environment.

Manual controls that rely on system-generated data or reports from the affected IT environment or process level automated controls in the affected IT environment were ineffective because they could have been adversely impacted.

In response to the material weakness, management, with the oversight of the Audit Committee, has begun to implement steps to remediate the material weakness.

If we are unable to remediate the material weakness, or are otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected, which could subject us to reputational harm, legal claims or proceedings, regulatory investigations and enforcement actions, significant costs from remedial actions, additional management resources, and payment of legal and other expenses, negatively affect investor confidence in our financial statement and adversely impact our stock price.

Pricing pressure from our competitors, customers and changes in third-party coverage and reimbursement may adversely affect demand for our products and negatively impact our operating results.

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As a result of these competitive forces, we believe there will continue to be pricing pressure in the future.

Because our CooperSurgical products are generally purchased by hospitals and surgical centers, OB/GYN medical offices and fertility clinics, and billed to various third-party payors, changes in the purchasing behavior of such customers or the amount such payors are willing to reimburse our customers for procedures using our products, including as a result of healthcare reform initiatives, could create additional pricing pressure on us.

Because our CooperSurgical products are generally purchased by hospitals and surgery centers, OB/GYN medical offices and fertility clinics, and billed to various third-party payors, changes in the purchasing behavior of such customers or the amount such payors are willing to reimburse our customers for procedures using our products, including as a result of healthcare reform initiatives, could create additional pricing pressure on us.

In addition to these competitive forces, we continue to see pricing pressure as our customers introduce new pricing structures into their contracts and agreements, including fixed price formulas, capitated pricing and structured pricing intended to contain healthcare costs.

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Our supply chain and our cost of goods also may be negatively impacted by unanticipated price increases due to factors such as inflation, including wage inflation, or to supply restrictions beyond our control or the control of our suppliers.

Our results of operations have been adversely affected, and our results of operations, cash flow and financial condition could be materially adversely affected in the future, by the global COVID-19 pandemic and related economic disruptions.

The COVID-19 pandemic has negatively impacted business and healthcare activity globally and has created significant volatility, uncertainty and economic disruption within the markets in which we operate.

The pandemic has adversely affected and is likely to further adversely affect nearly all aspects of our business and markets, including our sales, operations, cash flow and workforce and the operations of our customers, suppliers, vendors and business partners.

The extent to which the COVID-19 pandemic and related economic disruptions impact our business, results of operations, cash flow and financial condition will depend on future developments, which are highly uncertain, difficult to predict and largely outside of our control.

Even after the COVID-19 pandemic has subsided, we may continue to experience materially adverse effects on our business.

If we fail to protect our intellectual property adequately, our business could suffer.

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Our failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business.

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We also may seek to enforce our intellectual property rights on others through litigation.

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• be expensive and time consuming to prosecute or defend;

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• result in a finding that we do not have certain intellectual property rights or that such rights lack sufficient scope or strength;

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• cause us to cease making, licensing or selling products that incorporate the challenged intellectual property;

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• require us to redesign or re-engineer our products, if feasible;

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• require us to enter into royalty or licensing agreements in order to obtain the right to use a necessary product, component or process.

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We cannot be certain of the outcome of any litigation.

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We cannot be assured that we will not experience material losses due to product liability claims or recalls, legal claims relating to our service offerings, or a decline in sales resulting from sales of counterfeit or other infringing products, in the future.

If our products are not accepted by the market, we will not be able to sustain or expand our business.

Certain of our proposed products have not yet been clinically tested or commercially introduced, and some of our existing products are marketed and sold on the basis of potential future medical or therapeutic value (assuming technology advances), and we cannot be sure that any of them will achieve market acceptance or generate revenues or operating profits.

The development of a market for our products may be influenced by many factors, some of which are out of our control, including:

• acceptance of our products by eye care and health care practitioners;

• the cost competitiveness of our products;

• consumer reluctance to try and use a new product;

If our products or services are not accepted by the market, we will not be able to sustain or expand our business.

Certain of our proposed products or services have not yet been clinically tested or commercially introduced, and some of our existing products or services are marketed and sold on the basis of potential future medical or therapeutic value (assuming technology advances), and we cannot be sure that any of them will achieve market acceptance or generate revenues or operating profits.

The development of a market for our products or services may be influenced by many factors, some of which are out of our control, including:

• acceptance of our products or services by eye care or other health care practitioners;

• the cost competitiveness of our products and services;

• consumer reluctance to try and use a new product or service;

• regulatory and legislative requirements;

• adequate coverage and reimbursement by third-party payors;

• lack of scientific advancements to validate the medical value of certain products, such as stored cord blood or cord tissue (or scientific advancements in other medical approaches that reduce or eliminate the value of such products);

• the earlier release of competitive products, such as new silicone hydrogel products or contraceptive technologies, into the market by our competitors;

and the emergence of newer and more competitive products.

• lack of scientific advancements to validate the medical value of certain products or services, such as stored cord blood or cord tissue (or scientific advancements in other medical approaches that reduce or eliminate the value of such products or services);

• the earlier release of competitive products or services, such as new silicone hydrogel products or contraceptive technologies, into the market by our competitors;

and the emergence of newer and more competitive products or services.

We operate in the highly competitive health care industry, and we cannot be assured that we will be able to compete successfully.

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may have substantially greater financial resources, larger research and development budgets, larger sales forces, greater market penetration and/or larger manufacturing volumes than CooperVision.

They offer competitive products and differentiated materials, plus a variety of other eye care products including lens care products and ophthalmic pharmaceuticals, which may give them a competitive

They offer competitive products and differentiated materials, plus a variety of other eye care products including lens care products and ophthalmic pharmaceuticals, which may give them a competitive advantage in marketing their lenses.

The market for contact lenses is intensely competitive and is characterized by declining sales volumes for older product lines and growing demand for silicone hydrogel-based products.

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advantage in marketing their lenses.

The market for contact lenses is intensely competitive and is characterized by declining sales volumes for older product lines and growing demand for silicone hydrogel-based products.

Our ability to respond to these competitive pressures will depend on our ability to decrease our costs and maintain gross margins and operating results and to introduce new products successfully, on a timely basis in the Americas, EMEA and Asia Pacific, and to achieve manufacturing efficiencies and sufficient manufacturing capacity and capabilities for such products.

and to achieve manufacturing efficiencies and sufficient manufacturing capacity and capabilities for such products.

Any significant decrease in our costs per lens will depend, in part, on our ability to increase sales volume and production capabilities and our ability to secure adequate supply of materials used in production at reasonable costs.

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CooperSurgical has historically purchased, leveraged or licensed the technology developments of others.

CooperSurgical also has invested in expanding the internal research and development function with the goal of organic growth and to complement our acquisitions

CooperSurgical also has invested in expanding the internal research and development function with the goal of organic growth and to complement our acquisitions strategy.

Research and development time commitments, higher feasibility risk with longer term projects, greater dependence on, and reduced control over, third-party deliverables, the cost of obtaining necessary regulatory approval or certification and other costs related to product innovations can be substantial.

We cannot be assured that we will successfully obtain necessary regulatory approvals, certifications or clearances for our new products or that our new

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We cannot be assured that we will successfully obtain necessary regulatory approvals, certifications or clearances for our new products or that our new products will successfully compete in the marketplace and, as a result, justify the expense involved in their development and regulatory approval or certification.

products will successfully compete in the marketplace and, as a result, justify the expense involved in their development and regulatory approval or certification.

In addition, our competitors may have developed or may in the future develop new products or technologies.

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These and similar legislation that has been or is in the process of being enacted in Japan, China and various states of the United States may require us to re-design certain products to ensure compliance with the applicable laws and regulations.

In addition, new disclosure standards and rules related to environmental, social and corporate governance (ESG) matters have been adopted and may continue to be introduced in various states and other jurisdiction.

In addition, new disclosure standards and rules related to ESG matters have been adopted and may continue to be introduced in various states and other jurisdiction.

For example, the European Union Corporate Sustainability Reporting Directive (CSRD) became effective in 2023 and applies to both EU and non-EU entities.

In October 2023, California adopted new carbon and climate-related reporting requirements for large public and private companies doing business in the state.

Further, the SEC is expected to finalize a climate change disclosure proposal in 2023.

Further, the SEC adopted a final rule on the Enhancement and Standardization of Climate-Related Disclosures in 2024.

International ESG disclosure standards have also been produced (and further standards will be produced) under the auspices of the International Sustainability Standards Board (ISSB), which some countries (such as the UK) have indicated they may incorporate into ESG disclosure standards required of certain companies.

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As our disclosure obligations increase, third parties may make claims or bring litigation relating to those disclosures which may be costly.

Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverse effect on our business and damage our reputation.

Environmental, social and corporate governance issues, including those related to climate change and sustainability, may have an adverse effect on our business and damage our reputation.

There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters.

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Concern over climate change or plastics and packaging materials, in particular, may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment.

Changing customer and consumer preferences or increased regulatory requirements may result in increased demands or requirements regarding plastics and packaging materials, including single-use and non-recyclable plastic products and packaging, other components of our products and their environmental impact on sustainability, or increased customer and consumer concerns or perceptions (whether accurate or inaccurate)

Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.

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regarding the effects of substances present in certain of our products.

Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.

If we do not adapt to or comply with new regulations, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, and customers and consumers may choose to stop purchasing our products, which could have a material adverse effect on our reputation and business.

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Competition for these persons in our industry is intense, and we may not be able to successfully recruit, train or retain qualified personnel.

We are experiencing increasing challenges in building and retaining our workforce in certain markets, where pressure from inflation and competition have exacerbated turnover and retention trends continuing from the COVID-19 pandemic.

We are experiencing increasing challenges in building and retaining our workforce in certain markets, where pressure from inflation and competition have exacerbated turnover and retention trends.

Labor shortages and competition for qualified personnel could cause disruptions in our business operations.

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New and emerging laws may be interpreted to limit access to contraceptive technologies or cryostorage services, which could adversely affect certain aspects of CooperSurgical’s business.

In addition, the EU landscape concerning medical devices (including IVDs) has recently evolved.

In addition, the EU landscape concerning medical devices (including IVDs) has recently evolved and may be subject to further developments in 2025.

A new set of two EU regulations have been adopted on April 5, 2017.

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The EU IVDR became applicable on May 26, 2022.

However, on October 14, 2021, the European Commission proposed a “progressive” roll-out of the EU IVDR to prevent disruption in the supply of IVDs.

The European Parliament and Council adopted the proposed regulation on December 15, 2021.

However, the European institutions adopted subsequent regulations amending the EU IVDR for a gradual roll-out of the EU IVDR to prevent disruptions in the supply of IVDs.

The EU IVDR fully applies since May 26, 2022, but there is a tiered system extending the grace period for many devices (depending on their risk classification) before they have to be fully compliant with the regulation.

Both regulations have been adopted to establish a

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EU IVDR fully applies since May 26, 2022, but there is a tiered system extending the grace period for many devices (depending on their risk classification) before they have to be fully compliant with the regulation.

Both regulations have been adopted to establish a uniform, transparent, predictable and sustainable regulatory framework across the EU for medical devices (including IVDs) and ensure a high level of safety and health while supporting innovation.

uniform, transparent, predictable and sustainable regulatory framework across the EU for medical devices (including IVDs) and ensure a high level of safety and health while supporting innovation.

These modifications may have an effect on the way we intend to develop our business in the EU and EEA.

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Additionally, only a few notified bodies have been designated for EU IVDR certification, which could adversely affect our ability to grow our business.

Following the end of the “Brexit” transitional period, from January 1, 2021, the Medicines and Healthcare products Regulatory Agency (MHRA) became the UK’s independent regulatory agency for medical devices.

Following the end of the “Brexit” transitional period, from January 1, 2021, the MHRA became the UK’s independent regulatory agency for medical devices.

Post-Brexit, amendments have been made to the existing UK medical devices legislation which require medical devices to be registered with the MHRA before being placed on the Great Britain market.

Manufacturers based outside of the UK need to appoint a UK Responsible Person to register devices with the MHRA.

Following a government consultation on changes to the UK’s medical device regulations, the response to which was published on June 26, 2022, it is anticipated that the core aspects of the future regime will now apply from July 1, 2025 so that medical devices placed on the market in Great Britain (England, Scotland, and Wales) will require a UK Conformity Assessment (UKCA) mark.

However, the MHRA has recently confirmed that, subject to certain conditions, general medical devices compliant with the EU medical devices directive (EU MDD) or EU active implantable medical devices directive (EU AIMDD) with a valid declaration and CE marking can be placed on the Great Britain market up until the sooner of expiry of certificate or June 30, 2028.

IVDs with valid certification can continue to be placed on the market until the earlier of certificate expiry or June 30, 2030.

In advance of the new regime, the government also intends to introduce specific legislation on post-market surveillance, with new provisions expected to apply from mid-2024.

However, UKCA marking alone will not be recognized in the EU.

The rules for placing medical devices on the Northern Ireland market will differ from those in Great Britain.

These modifications may have an effect on the way we intend to conduct our business in these countries.

Our medical device products are subject to reporting requirements and recalls, even after receiving regulatory clearance, approval or certification, which could harm our reputation and business.

After a device is placed on the market, numerous regulatory requirements apply, including the FDA's QSR regulations, which require manufacturers to follow, among other things, design, testing, production, control, documentation and other quality assurance procedures during the manufacturing process;

On January 9, 2024, the MHRA published a roadmap setting out its plans and timelines for towards the reform of the regulatory framework for medical devices in the UK.

Regulations implementing core elements of the new framework are intended to be in place by 2025.

Pending such reform of the UK regulatory framework, the government has confirmed that general medical devices compliant with the EU MDD with a valid declaration and CE marking can be placed on the Great Britain market up until the sooner of expiry of certificate or June 30, 2028.

Medical devices, including custom-made devices, compliant with the EU MDR can be placed on the Great Britain market up until June 30, 2030.

The rules for placing medical devices on the market in Northern Ireland, which is part of the UK, differ from those in Great Britain (England, Scotland and Wales) and continue to be based on EU law.

These developments, or the perception that any related developments could occur, have had and may continue to have a material adverse effect on global economic conditions and financial markets, and our business may be impacted and the demand for our products could be depressed.

Our products are subject to reporting requirements and recalls, even after receiving regulatory clearance, approval or certification, which could harm our reputation and business.

After a drug or device is placed on the market, numerous regulatory requirements apply, including the FDA's cGMP and QSR regulations, which require manufacturers to follow, among other things, design, testing, production, control, documentation and other quality assurance procedures during the manufacturing process;

labeling regulations;

and medical device reporting regulations that require us to report to FDA or similar governmental bodies in other countries if our products may have caused or contributed to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to death or serious injury if the malfunction were to recur.

and adverse event reporting regulations that require us to report to FDA or similar governmental bodies in other countries if our products may have caused or contributed to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to death or serious injury if the malfunction were to recur.

The FDA and similar governmental bodies in other countries have the authority to require the recall of our products in the event of material deficiencies or defects in design or manufacture or in the event that a product poses an unacceptable risk to health.

Medical device manufacturers, such as CooperVision and CooperSurgical, may, under their own initiative, recall a product if a reasonable possibility of serious injury or any material deficiency in a device is found, or withdraw a product to improve device performance or for other reasons.

The FDA requires that certain corrections or removals, including recalls, be reported to the FDA within ten working days of initiating the correction or removal.

Manufacturers, such as CooperVision and CooperSurgical, may, under their own initiative, recall a product if a reasonable possibility of serious injury or any material deficiency in a product is found, or withdraw a product for other reasons.

The FDA requires that certain medical device corrections or removals, including recalls, be reported to the FDA within ten working days of initiating the correction or removal.

Recalls of any of our products may divert managerial and financial resources and have an adverse effect on our financial condition and results of operations.

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If our manufacturing operations fail to comply with applicable regulations, our manufacturing could be delayed or disrupted, our products could be subject to recall, and sales and profitability could suffer.

Our manufacturing operations and processes are required to comply with numerous federal, state and foreign regulatory requirements, including the FDA's cGMP for medical devices, known as the QSR regulations, which govern the procedures related to the design, testing, production processes, controls, quality assurance, labeling, packaging, storage, importing, exporting and shipping of our products.

We also are subject to state requirements and licenses applicable to manufacturers of medical devices.

Our manufacturing operations and processes are required to comply with numerous federal, state and foreign regulatory requirements, including the FDA's cGMP regulations for drugs and QSR for medical devices, which govern the procedures related to the design, testing, production processes, controls, quality assurance, labeling, packaging, storage, importing, exporting and shipping of our products.

We also are subject to state requirements and licenses applicable to manufacturers of drugs and medical devices.

In addition, we must engage in extensive recordkeeping and reporting and must make available our manufacturing facilities and records for periodic unscheduled inspections by governmental agencies, including the FDA, state authorities and comparable agencies (as well as audits by notified bodies) in other countries.

Failure to comply with QSR requirements and other applicable domestic or international regulatory requirements or to respond to any adverse inspectional observations or product safety issues could result in disruption of our operations and manufacturing delays in addition to, among other things, warning letters, significant fines, injunctions, suspension of approvals, seizures, recalls or import holds of products, operating restrictions and criminal prosecutions.

Failure to comply with cGMP, QSR and other applicable domestic or international regulatory requirements or to respond to any adverse inspectional observations or product safety issues could result in disruption of our operations and manufacturing delays in addition to, among other things, warning letters, significant fines, injunctions, suspension of approvals, seizures, recalls or import holds of products, operating restrictions and criminal prosecutions.

As a result, any failure to comply with applicable requirements could adversely affect our product sales and profitability.

On January 31, 2024, the FDA issued a final rule to amend the QSR regulations to align more closely with the International Organization for Standardization standards.

Accordingly, this could impose additional or different regulatory

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On February 23, 2022, the FDA issued a proposed rule to amend the QSR regulations to align more closely with the International Organization for Standardization standards.

This proposal has not yet been finalized or adopted.

Accordingly, it is unclear the extent to which this or any other proposals, if adopted, could impose additional or different regulatory requirements on CooperVision and CooperSurgical that could increase the costs of compliance or otherwise create competition that may negatively affect our business.

The manufacture of pharmaceutical therapeutics, such as Paragard, is complex and requires significant expertise and capital investment.

We and our contract manufacturers must comply with cGMP regulations and guidelines.

requirements on CooperVision and CooperSurgical that could increase the costs of compliance or otherwise create competition that may negatively affect our business.

The manufacture of drug-device combination products, such as Paragard, is complex and requires significant expertise and capital investment.

We and our contract manufacturers must comply with applicable cGMP, QSR and similar foreign regulations and guidelines.

Manufacturers of pharmaceutical therapeutics often encounter difficulties in production, including difficulties with production costs and yields, quality control, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.

Furthermore, if microbial, viral or other contaminations are discovered in our therapeutics or in the manufacturing facilities in which our therapeutics, if approved, are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

We cannot be assured that any stability or other issues relating to the manufacture of any of our therapeutics will not occur in the future.

Furthermore, if microbial, viral or other contamination are discovered in our drug products or in the manufacturing facilities in which our drug products are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

We cannot be assured that any stability or other issues relating to the manufacture of any of our drug products will not occur in the future.

Additionally, our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments.

If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide any therapeutic candidates to patients in clinical trials would be jeopardized.

Any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.

Any adverse developments affecting clinical or commercial manufacturing of our therapeutics may result in shipment delays, inventory shortages, lot failures, therapeutic withdrawals or recalls, or other interruptions in the supply of our therapeutics or therapeutic candidates.

We may also have to take inventory write-offs and incur other charges and expenses for therapeutics or therapeutic candidates that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives.

Accordingly, failures or difficulties faced at any level of our supply chain could materially adversely affect our business and delay or impede the development and commercialization of any of our therapeutics or therapeutic candidates and could have a material adverse effect on our business.

If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to continue marketing our drug products would be jeopardized.

Any adverse developments affecting manufacturing of our products may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our products.

We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives.

Accordingly, failures or difficulties faced at any level of our supply chain could materially adversely affect our business and delay or impede the commercialization and marketing of any of our products and could have a material adverse effect on our business.

Our failure to comply with regulatory requirements or to receive regulatory clearance, approval or certification for our products or operations could adversely affect our business.

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In the United States, the FDA regulates virtually all aspects of medical device and pharmaceutical design, development, testing, manufacture, safety, labeling (including, for example, unique device identifier regulations), storage, recordkeeping, reporting, marketing, promotion, advertising and distribution, as well as product import and export.

Our failure to comply with FDA regulations could lead to the imposition of administrative or judicial sanctions, including injunctions, fines, warning letters, suspensions or the loss of regulatory approvals, product recalls, termination of distribution or product seizures.

Our failure to comply with FDA regulations could lead to the imposition of administrative or judicial sanctions, including injunctions, fines, warning letters, suspensions or the loss of regulatory clearances or approvals, product recalls, termination of distribution or product seizures.

In the most egregious cases, criminal sanctions or closure of our manufacturing facilities are possible.

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Medical devices and drug products may only be marketed for the indications for which they are approved or cleared.

The process of obtaining, renewing and maintaining regulatory clearances and approvals to market a medical device, particularly from the FDA, can be costly and time consuming.

The process of obtaining, renewing and maintaining regulatory clearances and approvals to market product, particularly from the FDA, can be costly and time consuming.

We cannot be assured that such clearances and approvals will be granted on a timely basis, if at all, and significant delays in the introduction of any new products or product enhancements may occur, which could adversely affect our competitive position and results of operations.

In addition, the FDA and authorities in foreign jurisdictions may change their policies, adopt additional regulations or revise existing regulations, each of which could prevent or delay premarket approval or clearance of our products, increase the cost of compliance, impose additional regulatory requirements on us, or otherwise impact our ability to market our currently approved or cleared products.

Modifications and enhancements to medical devices also require a new FDA clearance or approval if they could significantly affect its safety or effectiveness or would constitute a major change in its intended use, design or manufacture.

Modifications and enhancements to medical devices require a new FDA clearance or approval if they could significantly affect its safety or effectiveness or would constitute a major change in its intended use, design or manufacture.

The FDA requires every medical device manufacturer to make this determination in the first instance, but the FDA may review any manufacturer's decision.

We have made modifications and enhancements to our medical devices that we do not believe require a new clearance or application, but we cannot confirm that the FDA will agree with our decisions.

We have made modifications and enhancements to our medical devices that we do not believe require a new clearance or approval, but we cannot confirm that the FDA will agree with our decisions.

If the FDA requires us to seek clearance or approval for a modification of a previously cleared product for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties, which could have a material adverse effect on our financial results and competitive position.

We also cannot assure that we will be successful in obtaining clearances or approvals for our modifications, if required.

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Our efforts to promote some of our products and services via direct-to-consumer marketing initiatives may subject us to additional scrutiny by the FDA, FTC or other agencies.

For example, we promote PARAGARD and cord blood and cord tissue storage directly to end consumers.

Regulatory agencies may scrutinize our practices with respect to effective communication of risk information, benefits or claims with respect to such products.

Regulatory agencies may further scrutinize our practices with respect to effective communication of risk information, benefits or claims with respect to such products.

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Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products and product candidates.

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A notified body would typically audit and examine a product’s technical dossiers and the manufacturer’s quality system (notified body must presume that quality systems which implement the relevant harmonized standards—ISO 13485:2016 for Quality Management Systems—conform to these requirements).

If satisfied that the relevant product conforms to the general safety and performance requirements, the notified body issues an EU certificate, which the manufacturer uses as a basis for its own declaration of conformity.

If satisfied that the relevant product conforms to the general safety and performance requirements, the notified body issues a CE certificate, which the manufacturer uses as a basis for its declaration of conformity.

The manufacturer may then apply the CE mark to the device, which allows the device to be placed on the market throughout the EU.

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Regulatory authorities have broad compliance and enforcement powers and if such issues cannot be resolved to their satisfaction can take a variety of actions, including untitled or warning letters, fines, consent decrees, injunctions, or civil or criminal penalties.

The EU regulatory landscape concerning medical devices (including IVDs) has recently evolved and the new requirements may have a significant effect on the way we conduct our business in the EU and the EEA.

The EU regulatory landscape concerning medical devices (including IVDs) is continuously evolving and the new requirements may have a significant effect on the way we conduct our business in the EU and the EEA.

Following Brexit, the UK regulatory landscape concerning medical devices (including IVDs) is evolving and may have a significant effect on the way we conduct our business in the UK.

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Development and marketing of our products are subject to strict governmental regulation by foreign regulatory agencies, and failure to receive, or delay in receiving, foreign qualifications or certifications could have a material adverse effect on our business.

In many of the foreign countries in which we market our products, we are subject to regulations affecting, among other things, product standards, packaging requirements, labeling requirements, import restrictions, tariff regulations, the reporting of certain payments to health care practitioners in certain markets (for example, the French anti-gift legislation),

Many of the regulations applicable to our devices and products in such countries are similar to those of the FDA.

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duties and tax requirements.

Many of the regulations applicable to our devices and products in such countries are similar to those of the FDA.

The advertising and promotion of medical devices is subject to some general principles set forth in the EU legislation.

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However, our failure to receive, or delays in the receipt of, relevant foreign qualifications could have a material adverse effect on our business, financial condition and results of operations.

Increased regulatory scrutiny of genetic testing may adversely affect our business through increased costs and risks associated with gaining marketing approvals or certifications and potential decreased demand for our genetic testing services.

We offer certain genetic testing services to help identify the likelihood of pregnancy as well as identify possible disorders or diseases of a child prior to birth.

Regulatory and legislative proposals addressing oversight of genetic testing have been introduced in the United States, and we expect that new proposals will be introduced from time to time both in the United States and in foreign countries in the future.

Although the FDA has statutory authority to assure that medical devices, including IVDs, are safe and effective for their intended uses, the FDA has historically exercised its enforcement discretion and not enforced applicable provisions of the FDCA and regulations with respect to laboratory developed tests (LDTs).

The FDA defines LDTs as a type of in vitro diagnostic test that is designed, manufactured, and used within a single laboratory.

We believe our tests fall within the definition of an LDT.

As a result, we believe our tests are not currently subject to the FDA’s enforcement of its medical device regulations and the applicable FDCA provisions.

However, if there are changes in the FDA’s policy, or if the FDA disagrees that our marketed tests are LDTs or that we are marketing our tests outside the scope of the FDA’s current policy of enforcement discretion, we may become subject to extensive regulatory requirements and may be required to stop selling our existing tests or launching any other tests we may develop and to conduct additional clinical trials or take other actions prior to continuing to market our tests.

This could significantly increase the costs and expenses of conducting, or otherwise harm, our business.

Legislative proposals addressing the FDA’s oversight of LDTs have been introduced by Congress in the past and new legislative proposals may be introduced from time to time in the future.

The likelihood that Congress will pass such legislation and the extent to which such legislation may affect the FDA’s ability to enforce its medical device regulations with respect to certain LDTs is difficult to predict at this time.

If the FDA ultimately begins to enforce its medical device requirements with respect to LDTs, our genetic tests may be subject to additional regulatory requirements imposed by the FDA, the nature and extent of which would depend upon applicable final guidance or regulation by the FDA or instruction by Congress.

For example, as part of the Spring 2023 Unified Agenda, the FDA published a proposed rule to the Office of Management and Budget to amend FDA regulations to make explicit that LDTs are devices under the FDCA.

If the FDA imposes significant changes to the regulation of LDTs it could reduce our revenue or increase our costs and adversely affect our business.

Any new FDA enforcement policies affecting LDTs or new legislation, regulations such as the EU IVDR regulation may result in increased regulatory burdens on our ability to continue marketing our genetic products and to develop and introduce new products in the future, which could reduce our revenue or increase our costs and adversely affect our business.

In addition, changes in the way the EU regulates LDTs could result in additional expenses for offering our current and any future tests or possibly delay or suspend development or commercialization of such tests.

In the EU, the regulatory landscape has recently evolved and the general safety and performance requirements set out in the EU Good Manufacturing Practice guidelines are also applicable to devices manufactured and used only within health institutions.

Manufacturers of such devices are required to demonstrate conformity with the general safety and performance requirements through performance evaluations and the manufacturer’s quality management system framework.

The EU IVDR provides that, with the exception of the relevant general safety and performance requirements, the requirements imposed by the EU IVDR on in vitro diagnostic medical devices do not generally apply to devices manufactured and used only within health institutions established in the EU, provided that certain conditions are met.

Under the EU IVDR, health institutions may manufacture, modify and use medical devices within such institutions, thereby addressing the specific needs of target patient groups on a non-industrial scale.

Under such circumstances, where the LDTs are manufactured and used strictly within health institutions (which may include hospitals, laboratories, public health institutions that support the healthcare system and/or address patient needs but do not treat or care for patients directly), LDTs would continue to be

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exempt from regulation.

However, compared to the EU IVDD, the exemptions for LDTs will, overall, be narrowed, as even in relation to LDTs, health institutions—among others—are required to provide information upon request on the use of such devices to their competent authority and each health institution will have to draw up a declaration which it will make publicly available.

If these conditions are not met and/or diagnostic tests are manufactured and used only within health institutions but “on an industrial scale,” such tests will qualify as in vitro diagnostic medical devices with the full applicability of the EU IVDR.

LDTs regulated by the EU IVDR will be subject to conformity assessments and inspections by the relevant competent authority, who will also review the declarations and statements made by the health institutions in relation to their LDTs.

If our tests do not qualify for an exemption, we may be subject to the full application of the EU IVDR with respect to some or all of our existing, as well as future, tests, and we would be required to expend additional time and resources to complying with the requirements of the EU IVDR.

In the United States, in vitro diagnostic devices (IVDs) are a type of medical device that can be used in the diagnosis or detection of diseases or other conditions.

The FDA considers laboratory developed tests (LDTs) to be a subset of IVDs that are designed, manufactured, and used within a single laboratory.

Similar tests are also known as In-House Tests (IH-Tests) in the EU and LDTs have historically been subject to enforcement discretion by the FDA and were not previously regulated under the 98/79EC in-vitro diagnostic directive (IVDD) of the EU.

On May 6, 2024, the FDA published a final rule on the regulation LDTs, making explicit that LDTs are medical devices under the FDCA.

In addition, the FDA is finalizing a policy under which the FDA will provide greater oversight of IVDs offered as LDTs through a phaseout of its general enforcement discretion approach over the course of four years, as well as targeted enforcement discretion policies for certain categories of IVDs manufactured by laboratories.

We offer certain genetic testing services to help identify the likelihood of pregnancy as well as identify possible disorders or diseases of a child prior to birth, and we have historically marketed these tests as LDTs in the United States.

As a result, our tests may now be subject to the FDA’s enforcement of its medical device regulations and the applicable FDCA provisions, subject to the four year phase-out of enforcement discretion beginning in May of 2025.

Compliance with the new requirements may require additional analytical or clinical studies or other actions in order to continue marketing our tests during the phase-out period, which could increase costs and expenses or otherwise negatively affect our business.

The FDA LDT regulation is currently subject to legislative challenges which may result in less stringent requirements or a decrease in FDA enforcement of LDT requirements.

Therefore, the costs to comply with the FDA LDT regulation and its impact on our business is difficult to predict.

Similarly, in the EU, the regulatory landscape has evolved to include the definition of an IH-Test as is an IVD that is developed and produced by a laboratory on a non-industrial scale and is provided to health institutions in accordance with Article 5 of the EU IVDR.

Under such circumstances, many IH-Tests may continue to be exempt from regulation indefinitely or until 2030 in circumstances where commercially available CE marked options exist.

Our genetic tests may be subject to the full application of the EU IVDR with respect to some or all of our existing, as well as future, tests if our tests do not qualify for an IH-Test exemption.

We may be required to expend additional time and resources to comply with the requirements of the EU IVDR, resulting in additional expenses for offering our current and any future tests as well as possibly delaying or suspending development or commercialization of such tests.

We expect that new proposals or legislative changes may be introduced from time to time both in the U.S.

and in foreign countries.

Any new FDA enforcement policies affecting LDTs or regulations such as the EU IVDR is likely to result in increased regulatory burden on our ability to continue marketing our genetic products and to develop and introduce new products in the future, which could adversely affect our business.

If we fail to comply with applicable federal, state, local and foreign laboratory licensing requirements, we could lose the ability to perform our genetic tests or experience disruptions to our business.

We are subject to the Clinical Laboratory Improvement Amendments of 1988 (CLIA), a federal law regulating clinical laboratories that perform testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention or treatment of disease.

We are subject to the CLIA, a federal law regulating clinical laboratories that perform testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention or treatment of disease.

Our clinical laboratories must be certified under CLIA and ISO 15189 in order for us to perform testing on human specimens.

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The law also requires us to maintain a state laboratory license to conduct testing in that state.

In addition, we are subject to the UK Human Fertilization & Embryology Association (HFEA) regulating IVF.

In addition, we are subject to the UK Human Fertilization &

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Embryology Association (HFEA) regulating IVF.

Our laboratories are located in Japan, the United Kingdom and United States, and we must maintain the requisite licenses in each jurisdiction.

Any sanction imposed under CLIA, its implementing regulations, or state or foreign laws or regulations governing licensure, or our failure to renew a CLIA certificate, a state or foreign license or accreditation, could have a material and adverse effect on our diagnostic testing business, operating results and financial condition.

The CMS also has the authority to impose a wide range of sanctions, including revocation of the CLIA certification along with a bar on the ownership or operation of a CLIA-certified laboratory by any owners or operators of the deficient laboratory.

Any sanction imposed under CLIA, its implementing regulations, or state or foreign laws or regulations governing licensure, or our failure to renew a CLIA certificate, or a state or foreign license or accreditation, could have a material and adverse effect on our diagnostic testing business, operating results and financial condition.

Three federal agencies are responsible for administering the CLIA program in the United States:

the Centers for Medicare & Medicaid Services (CMS), the Centers for Disease Control and Prevention (CDC), and the FDA.

The CMS in particular has the authority to impose a wide range of sanctions, including revocation of CLIA certification along with a bar on the ownership or operation of a CLIA-certified laboratory by any owners or operators of the deficient laboratory.

If we were to lose our CLIA certification or required state or foreign licensure, we would not be able to operate our clinical laboratory and conduct our tests, worldwide or in particular jurisdictions, which would adversely impact our diagnostic testing business, operating results, and financial condition.

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In the United States, we provide donor egg and sperm for fertility treatments, in addition to fertility cryopreservation services and newborn stem cell storage (cord blood and cord tissue).

Donated reproductive tissues, including eggs and sperm, as well as cord blood and cord tissue, are regulated to by the FDA as human cells, tissues and cellular or tissue-based products (HCT/Ps).

In the United States, we are marketing these HCT/Ps pursuant to Section 361 of the Public Health Service Act (PHSA) and 21 C.F.R.

Donated reproductive tissues, including eggs and sperm, as well as cord blood and cord tissue, are regulated to by the FDA as HCT/Ps.

In the United States, we are marketing these HCT/Ps pursuant to Section 361 of the PHSA and 21 C.F.R.

Part 1271 of FDA’s regulations.

The so-called “361 HCT/Ps” are not currently subject to the FDA requirements to obtain marketing authorizations, so long as they meet certain criteria set forth in FDA regulations.

Products subject to regulation as “361 HCT/Ps” are not currently required to obtain marketing authorizations, so long as they meet certain criteria set forth in FDA regulations.

However, HCT/Ps regulated as 361 HCT/Ps are currently subject to requirements relating to registering facilities and listing products with the FDA, as well as stringent requirements relating to processing, storing, labeling and distributing HCT/Ps, including, screening and testing for tissue donor eligibility, providing required labeling information, record keeping and adverse event reporting.

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However, the FDA could disagree with our determination that these human tissue products are 361 HCT/Ps and could determine that these products are biologics requiring a BLA or medical devices requiring 510(k) clearance or PMA approval, and could require that we cease marketing such products and/or recall them pending appropriate clearance, approval or licensure from the FDA, which would adversely affect our business.

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In addition, the FDA may in the future modify the scope of its enforcement discretion with respect to 361 HCT/Ps or change its position on which current or future products qualify as 361 HCT/Ps, or determine that some or all of our HCT/P products may not be lawfully marketed without a marketing authorization.

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Disruptions at the FDA, foreign agencies and notified bodies and other agencies may also slow the time necessary for new drugs and medical devices or modifications to cleared or approved drugs and medical devices to be reviewed, approved and/or certified by necessary government agencies or notified bodies, which would adversely affect our business.

For example, over the last several years, the United States government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical employees and stop critical activities.

Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of foreign and domestic manufacturing facilities.

Even though the FDA has since resumed standard inspection operations of domestic facilities where feasible, the FDA has continued to monitor and implement changes to its inspectional activities to ensure the safety of its employees and those of the firms it regulates as it adapts to the evolving COVID-19 pandemic, and any resurgence of the virus or emergence of new variants may lead to further inspectional delays.

Regulatory authorities outside the United States have adopted similar restrictions or other policy measures in response to the COVID-19 pandemic.

If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA, other regulatory authorities, or notified bodies from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA, other regulatory authorities or notified bodies to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

For example, over the last several years, the United

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States government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical employees and stop critical activities.

In the EU, notified bodies must be officially designated to certify products and services in accordance with the EU MDR and EU IVDR.

Several notified bodies have been designated under the EU MDR but only a few notified bodies have been designated under the EU IVDR so far.

The COVID-19 pandemic has significantly slowed down their designation process and the current designated notified bodies are facing a large amount of requests with the new regulations, as a consequence of which review times may have lengthened.

Their designation process, which is significantly stricter under the new Regulations, has experienced considerable delays.

Despite a recent increase in designations, the current number of notified bodies designated under the new Regulations remains significantly lower than the number of notified bodies designated under the previous regimes.

The current designated notified bodies are, therefore, facing a backlog of requests, and review times have lengthened.

This situation may impact the ability of our notified body to timely review and process our regulatory submissions and perform its audits.

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Some of our businesses expose us to increasingly stringent regulations for handling personal information (where, for example, we collect or process PII deemed to be sensitive by regulatory authorities, such as PHI).

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law, HIPAA establishes national privacy and security standards for protection of PHI by covered entities and the business associates with whom such entities contract for services.

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The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that has increased the likelihood of, and risks associated with data breach litigation.

Further, the California Privacy Rights Act, which went into effect on January 1, 2023, significantly amends the CCPA and imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk processing, and opt outs for certain uses of sensitive data.

It also creates a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.

Similar laws have been proposed or enacted in other states and at the federal level, and when passed, such laws may have potentially conflicting requirements that would make compliance challenging.

Similar laws have been enacted in other states and proposed at the federal level, and such laws may have potentially conflicting requirements that make compliance challenging.

We are also subject to laws and regulations in countries other than United States covering data privacy and the protection of health-related and other personal information.

EU and EEA member states and other jurisdictions have adopted data protection laws and regulations, which impose significant compliance obligations.

For example, the GDPR imposes stringent operational requirements for processors and controllers of personal data in the context of an establishment in the EEA or the processing of personal data of individuals within the EEA and increases the scrutiny of transfer of personal data from the EEA.

For example, the GDPR imposes stringent operational requirements for processors and controllers of personal data in the context of an establishment in the

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EEA or the processing of personal data of individuals within the EEA and increases the scrutiny of transfer of personal data from the EEA.

Following the UK's withdrawal from the EEA and the EU, and the expiry of the transition period, companies will have to comply with the GDPR and the GDPR as incorporated into the UK national law (the UK GDPR).

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We may be subject to diverging requirements under EU member state laws and UK law.

We are also subject to China's Personal Information Protection Law (PIPL), which imposes requirements regarding processing PII, data localization and cross-border transfers of PII, as well as a number of other laws in the Asia Pacific area, As these laws develop, we may need to make operational changes to adapt to these diverging rules, which could increase our costs and adversely affect our business.

As these laws develop, we may need to make operational changes to adapt to these diverging rules, which could increase our costs and adversely affect our business.

Compliance with U.S.

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If the third parties we work with violate applicable laws, contractual obligations or suffer a security breach, such violations may also put us in breach of our obligations under privacy laws and regulations and could in turn have a material adverse effect on our business.

When we acquire companies or business that engage personal data processing, we may become subject to additional regulation or scrutiny, particularly if such activity is different in nature from what we have done in the past.

When we acquire companies or business that engage in personal data processing, we may become subject to additional regulation or scrutiny, particularly if such activity is different in nature from what we have done in the past.

For example, with the recent addition of cord blood and cord tissue storage (and other cryostorage) businesses, we interact directly with our customers and collect and maintain personal information regarding our customers and donors.

Acquisitions like this could subject us to additional regulatory and consumer liability risk and the cost of analyzing and integrating new privacy compliance programs.

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Changes in legislation and government regulation of the health care industry both in the United States and internationally, as well as third-party payors' efforts to control the costs of health care could materially adversely affect our business.

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These measures could result in decreased net revenues or increased expenses from our fertility, office and surgical portfolios and decrease potential returns from our development efforts.

Other legislative changes have been proposed and adopted since the ACA was enacted.

The Budget Control Act of 2011, among other things, included aggregate reductions to Medicare payments to providers.

In addition, the Medicare Access and CHIP Reauthorization Act of 2015, among other things, repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments began in 2019 that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations.

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

For example, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price (AMP), beginning January 1, 2024.

Most recently, on August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law.

Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);

and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).

The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

For that and other reasons, it is currently unclear how the IRA will be effectuated and the impact of the IRA on the pharmaceutical industry cannot yet be fully determined.

Other legislative changes which impact the medical device and pharmaceutical industry have been proposed and adopted since the ACA was enacted, including, the Budget Control Act of 2011, which, among other things, included aggregate reductions to Medicare payments to providers and the Medicare Access and CHIP Reauthorization Act of 2015, which, among other things, replaced and changed the formula by which Medicare made annual payment adjustments to physicians and the American Rescue Plan Act of 2021, which eliminated the statutory Medicaid drug rebate cap.

In foreign countries where we market our products, recent healthcare reform has taken place as well.

For instance, in December 2021, the EU Regulation No 2021/2282 on Health Technology Assessment (HTA) amending Directive 2011/24/EU was adopted.

While the regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim.

Once the regulation becomes applicable, it will have a phased implementation depending on the concerned products.

This regulation intends to boost cooperation among EU member states in assessing health technologies, including certain high-risk medical devices, and providing the basis for cooperation at the EU level for joint clinical assessments in these areas.

The regulation will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.

For instance, in December 2021, the EU Regulation No 2021/2282 on Health Technology Assessment (HTA) amending Directive

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2011/24/EU was adopted.

This Regulation intends to boost cooperation among EU member states in assessing health technologies, including certain high-risk medical devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.

It will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the highest potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.

Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement.

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We cannot predict the effect such reforms or the prospect of their enactment may have on our business.

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In addition, third-party payors, whether governmental or commercial, whether inside the United States or abroad, increasingly attempt to contain or reduce the costs of health care.

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These prohibitions apply regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral;

• the federal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval that are false or fraudulent, or knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or knowingly making or causing to be made a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.

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causing to be made or used, a false record or statement material to a false or fraudulent claim, or knowingly making or causing to be made a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.

In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute or Stark Law constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

• the federal Civil Monetary Penalties Law, which, among other things, authorizes the imposition of civil monetary penalties, assessments, and exclusion against an individual or entity based on a variety of prohibited conduct, including, but not limited to, offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider;

• the federal Health Insurance Portability and Accountability Act of 1996, which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

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chiropractors), certain non-physician practitioners including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

• the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the CMS, information related to payments and other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

• analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers and self-pay patients;

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We expect to generate an increasing portion of our revenue and incur a significant portion of our expenses in currencies other than U.S.

To the extent we are unable to materially offset non-functional currency flows, exchange rate fluctuations could have a positive or negative impact on our financial condition and results of operations.

To the extent we are unable to materially offset non-functional currency flows, exchange rate fluctuations could

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have a positive or negative impact on our financial condition and results of operations.

Because our consolidated financial results are reported in U.S.

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We may not be successful in structuring such swap agreements to manage our risks effectively, which could adversely affect our business.

Effective February 1, 2023, the Company transitioned its credit agreements from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate ("SOFR").

The Company adopted this guidance prospectively on February 1, 2023, and it did not have a material impact on our business.

Our indebtedness could adversely affect our financial health and prevent us from fulfilling our debt obligations.

We have now and expect to continue to have a significant amount of indebtedness.

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Our indebtedness could:

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Risks Relating to Taxes

Changes in tax laws, examinations by tax authorities, and changes in our geographic composition of income could adversely affect our business.

Income taxes and other taxes are based on enacted tax laws and the results of operations in each jurisdiction.

Taxes could significantly increase due to changes in tax laws or changes in our interpretation of those laws.

Changes in tax laws could result from a framework being developed by the Organisation for Economic Co-operation and Development (OECD), a global policy forum, that, if implemented, includes a global minimum tax rate of 15%.

Taxes could also significantly increase due to changes in accounting guidance.

Income taxes and other taxes could significantly increase based on the resolution of tax authority examinations.

Tax authorities could challenge our interpretations of tax laws and estimates we use to calculate taxes.

Tax authorities could also challenge our positions related to transfer pricing and intercompany transactions, including the valuation of intangible assets.

Tax examinations can result in costly litigation with significant interest and penalties and ultimate settlement can take several years.

For example, we have engaged (and expect to continue to engage) with tax authorities over tax positions we have taken in connection with acquisitions, and such examinations could cause us to incur significant expense (and adverse determinations by the tax authority could result in penalties).

Our effective tax rate could fluctuate based on the geographic composition of income, which could significantly change based on our business results and acquisitions.

Our effective tax rate could also fluctuate based on changes in estimates, changes in excess tax benefits from share-based compensation, changes in non-deductible expenses, and the valuation of deferred tax assets and liabilities.

These fluctuations could have an adverse effect on our business.

Unresolved Staff Comments .

Changes in tax laws, examinations by tax authorities, and changes in our geographic composition of income could adversely affect our financial results.

We are subject to U.S.

and foreign tax laws that may change.

The base erosion and profit shifting (BEPS) project undertaken by the Organisation for Economic Co-operation and Development (OECD) includes Pillar Two, a global minimum tax rate of 15% that may adversely affect our provision for income taxes.

We are subject to the examination of our tax returns and other matters by tax authorities.

Tax authorities could challenge our positions related to transfer pricing and intercompany transactions, including the valuation of intangible assets.

Tax examinations can result in costly litigation with significant interest and penalties and ultimate settlement can take several

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For example, we have engaged (and expect to continue to engage) with tax authorities over tax positions we have taken in connection with our acquisitions, and such examinations could cause us to incur significant expense (and adverse determinations by the tax authority could result in penalties) which could have an adverse effect on our financial results.

Our effective tax rate could fluctuate based on the geographic composition of income, which could significantly change based on our business results and acquisitions.

These fluctuations could have an adverse effect on our financial results.

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What changed 10-K

Item 1A. Risk Factors