What changed in this filing

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Item 1A. Risk Factors

2022-02-24 compared with 2021-02-23 · 81 added, 97 removed, 325 unchanged (35% of the section changed)

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The effects of the COVID-19 pandemic continue to significantly impact global economic conditions and have affected, and may continue to affect, our operations, supply chain, distribution, sales force, as well as the financial stability of hospitals and other customers, and have caused and could again cause a reduction in procedures, which could materially adversely affect our business, results of operations, financial condition, and stock price.

On March 11, 2020, the World Health Organization (“WHO”) characterized the Novel Coronavirus Disease 2019 (“COVID-19”) as a pandemic.

To date, and in continuing efforts to control the spread of COVID-19, and a highly contagious variant of COVID-19, governments around the world, including in the U.S., have and continue to implement various preventative measures including quarantines, “shelter in place” orders, “stay at home” orders, travel restrictions, business operation restrictions, school closures, and other similar types of measures.

The impact of the pandemic, while still evolving, has caused and will likely continue to cause significant economic and financial uncertainty in the U.S.

and around the world, generating concerns the effects will lead to a global recession or depression.

In response to the COVID-19 pandemic and related mitigation efforts, similar to many other employers in the U.S., the Company has and continues to require many employees to work remotely.

On March 11, 2020, the World Health Organization characterized the Novel Coronavirus Disease 2019 (“COVID-19”) as a pandemic.

The COVID-19 pandemic continues to have widespread and unpredictable impacts on global society, economies, financial markets, and business practices and negatively impact business and healthcare activity globally.

To date, and in continuing efforts to control the spread of COVID-19 (including subsequent surges and variants), governments around the world, including in the U.S., have and continue to implement various preventative measures including quarantines, “shelter in place” orders, “stay at home” orders, travel restrictions, business operation restrictions, school closures, and other similar types of measures.

Even as efforts to contain the pandemic have made progress, new variants of the virus are causing additional surges or outbreaks.

The COVID-19 pandemic has impacted and may continue to impact our business operations, including our employees, customers, suppliers, distributors, other service providers and communities in which we operate, and there is substantial uncertainty in the nature and degree of its continued effects over time.

In response to the COVID-19 pandemic and related mitigation efforts, similar to many other employers in the U.S., the Company has and continues to encourage many employees to work remotely.

The Company has continued to operate certain manufacturing facilities to date in compliance with federal, state and local orders regarding COVID-19.

The health of the Company’s workforce is our top concern and the Company has procured equipment and implemented safety protocols in an effort to maintain the health and safety of our employees.

While demand for our products has improved since mid-April 2020 when healthcare institutions were altering how they managed medical procedures in light of virus-related constraints, it is not possible to predict with precision whether and when demand for our products will return fully to levels that existed prior to the onset of the pandemic.

The Company has implemented extensive business contingency plans across its global organization and network of business partners which helps limit some of the impact of the COVID-19 pandemic but does not completely prevent or avoid a negative impact on the business.

A number of our network of business partners have been adversely affected by the COVID-19 pandemic.

These impacts could impair our ability to move our products through distribution channels to end customers, and any such delay or shortage in the supply of materials or products may result in our inability to satisfy consumer demand for certain of our products in a timely manner or at all, which could harm our reputation, future sales and profitability.

It is not possible to predict with precision how future demand for our products will be impacted by the COVID-19 pandemic as the scope and duration of the pandemic and its impact on our business and the markets in which we operate remain unpredictable.

The Company has implemented extensive business contingency plans across its global organization and network of third parties through which the Company conducts its business which helps limit some of the impact of the COVID-19 pandemic but does not completely prevent or avoid a negative impact on the business.

In addition, COVID-19 has impacted and may further impact the global economy and capital markets, including by negatively impacting access to capital markets, foreign currency exchange rates, and interest rates, each of which may adversely impact our business and liquidity.

The extent to which the COVID-19 pandemic will negatively affect the Company's operations and financial position will depend on future developments that remain uncertain and cannot be predicted with precision.

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• Continued fluctuations in our operational results, revenues, and cash flows which may negatively impact our stock price;

• Impact our operations and sales including but not limited to delays in orders, ability to market, sell, deliver and service our products;

• Impact on our operations and sales including but not limited to delays in orders, ability to market, sell, deliver and service our products;

• Reductions in demand for our products and services due to the impact of COVID-19 on hospitals and customers such as continued or future postponement or cancellations of procedures, hospital postponement or cancellation of capital purchases, or elimination of services;

• Local and/or global recessions, which may result in hospitals and customers reducing capital spending and could materially affect our business, including but not limited to our future access to capital, and negatively impact the value of our stock.;

• Continued limitations on our operations due to restrictions associated with “shelter in place” orders and travel restrictions;

• Distraction of management time and focus;

• Increased risk that insurance coverage will not provide protection for all of the COVID-19-related disruption;

• Disruption to manufacturing operations and distribution supply chains;

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• Reduction or interruption to our manufacturing processes which could have a material adverse effect on our business;

• Local and/or global economic instability and inflation and recessions, which may result in hospitals and customers reducing capital spending and could materially affect our business, including but not limited to our future access to capital, and negatively impact the value of our stock;

• Continued limitations on our operations due to restrictions associated with “shelter in place” orders and travel restrictions;

• Distraction of management time and focus;

• Increased risk that insurance coverage will not provide protection for all of the COVID-19-related disruption;

• Continued and/or increased risks related to the health and safety of our employees (and retention issues), volatility of foreign currency exchange rates, and risk of cybersecurity attacks and breaches;

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• Write downs or impairments of investments in third parties, goodwill or intangible assets from recently acquired businesses, accounts receivable, or other assets.

As the situation surrounding the COVID-19 pandemic remains fluid, it is difficult to predict, with any certainty, the duration and extent of its impact which depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions including the distribution of a vaccine locally and globally, and the impact of these and other factors on our employees, customers, suppliers, service providers and business partners.

As the situation surrounding the COVID-19 pandemic remains fluid, it is difficult to predict, with any certainty, the duration and extent of its impact which depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus (including any variant strains), the extent and effectiveness of containment actions including the effectiveness of the vaccine against future variants and the availability of new antiviral medicines for the treatment of COVID-19, and the impact of these and other factors on our employees, customers, suppliers, distributors and other service providers.

If COVID-19, or a variant strain, continues to spread and escalate domestically or internationally, or if governments impose additional measures intended to mitigate the spread and related effects of the pandemic, the risks described above could be elevated significantly.

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• peer-reviewed publications discussing the clinical effectiveness of the products we sell;

determine are necessary or appropriate to address the results of those inspections, any of which may affect production and our ability to supply our customers with our products;

• inspections of our manufacturing facilities for compliance with Quality System Regulations (Good Manufacturing Practices) which could result in Form 483 observations, warning letters, injunctions or other adverse findings from the FDA or from equivalent regulatory bodies, and corrective actions, procedural changes and other actions that we determine are necessary or appropriate to address the results of those inspections, any of which may affect production and our ability to supply our customers with our products;

• changes in regulations or guidelines that impact the sales and marketing practices for products that we sell;

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• several foreign countries have implemented reforms of their respective healthcare sectors in an effort to reduce healthcare spending, including restricting funding to only those medical technologies and procedures with proven effectiveness, and increasing patient co-payments.

Governmental health systems have revised and continue to consider

revisions of healthcare budgets, which could result in stricter standards for implementing certain medical procedures, increased scrutiny of medical devices, and downward pricing pressure;

Governmental health systems have revised and continue to consider revisions of healthcare budgets, which could result in stricter standards for implementing certain medical procedures, increased scrutiny of medical devices, and downward pricing pressure;

• Medicare, Medicaid, private and public health insurer and foreign governmental cutbacks could create downward pricing pressure on our products;

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In addition to internally generated growth, our current strategy involves growth through acquisitions.

Between January 1, 2018 and December 31, 2020, we have acquired 2 businesses at a total cost of approximately $70.7 million.

In addition, in January 2021, we acquired ACell, Inc.

for $300 million, which added products to our complex wound management product portfolio and advanced growth of our Tissue Technologies segment.

Between January 1, 2019 and December 31, 2021, we have acquired 3 businesses at a total cost of approximately $404.3 million which amount includes our acquisition of ACell, Inc.

in January 2021 for $306.9 million.

This acquisition added products to our complex wound management product portfolio and provides additional growth opportunities for our TT segment.

We may be unable to continue to implement our growth strategy and it may ultimately be unsuccessful.

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We engage in evaluations of potential acquisitions and are in various stages of discussion regarding possible acquisitions, certain of which, if consummated, could be significant to us.

Any new acquisition could result in material transaction expenses, increased interest and amortization expense, increased depreciation expense, increased operating expense, and possible in-process research and development charges for acquisitions that do not meet the definition of a “business,” any of which could have a material, adverse effect on our operating results.

Any new acquisition could result in material transaction expenses, increased operating, amortization and interest expenses, and possible in-process research and development charges for acquisitions that do not meet the definition of a “business,” any of which could have a material, adverse effect on our operating results.

Certain businesses that we acquire may not have adequate financial, disclosure, regulatory, quality or other compliance controls at the time we acquire them and could require significant expenditures to address those controls or subject us to increased risk.

As we grow by acquisition, we must manage and integrate the new businesses to bring them into our systems for financial, disclosure, compliance, regulatory and quality control, realize economies of scale, and control costs.

If we cannot integrate acquired businesses and operations, manage the cost of providing our products or price our products appropriately, our profitability could suffer.

Failure to integrate acquired businesses and operations (including acquired employees and systems), retain key customers and suppliers of any acquired business or manage the cost of providing our products or price our products appropriately could preclude realization of the full benefits that we expect from there transactions.

Our failure to meet the challenges involved in integrating the business in order to realize the anticipated benefits of the acquisitions could cause an interruption of, or loss of momentum in, our activities and could materially and adversely affect our results of operations.

In addition, acquisitions involve other risks, including diversion of management resources otherwise available for the running of our business and the development of our business as well as risks associated with entering markets in which our marketing teams and sales force has limited experience or where experienced distribution alliances are not available.

Some acquisitions may include the need for ongoing product development to occur consistent with time sensitive milestones in order for the Company to achieve its commercial projections for the acquisition.

Our future profitability will depend in part upon our ability to develop our resources to adapt to these new products or business areas and to identify and enter into or maintain satisfactory distribution networks.

As a result of our acquisitions of other healthcare businesses, we may be subject to the risk of unanticipated business uncertainties, regulatory and other compliance matters or legal liabilities relating to those acquired businesses for which the sellers of the acquired businesses may not indemnify us, for which we may not be able to obtain insurance (or adequate insurance), or for

which the indemnification may not be sufficient to cover the ultimate liabilities.

Our future profitability will depend in part upon our

ability to develop our resources to adapt to these new products or business areas and to identify and enter into or maintain satisfactory distribution networks.

We may not be able to identify suitable acquisition candidates in the future, obtain acceptable financing or consummate any future acquisitions.

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If we are unsuccessful in our acquisition strategy, we may be unable to meet our financial targets and our financial performance could be materially and adversely affected.

Furthermore, the failure to integrate the business operations of recently acquired or future acquisitions successfully would have a material, adverse effect on our business, financial condition and results of operations.

Integrating the operations of multiple new businesses with that of our own is a complex, costly and time-consuming process, which requires significant management attention and resources, including the coordination of information technologies, sales and marketing, research and development, operations, manufacturing and finance functions.

The integration process could disrupt the businesses and, if implemented ineffectively, could preclude realization of the full benefits that we expect from these transactions.

Our failure to meet the challenges involved in integrating the businesses in order to realize the anticipated benefits of the acquisitions could cause an interruption of, or a loss of momentum in, our activities and could materially and adversely affect our results of operations.

Prior to each acquisition, the acquired business operated independently, with its own business, corporate culture, locations, employees and systems, any of which may prove incompatible with our Company.

There may be substantial difficulties, costs and delays involved in any integration of other businesses with that of our own.

For example, there could be adverse effects on existing business relationships with suppliers or customers, including failure to retain key customers and suppliers.

In addition, we may fail to retain key employees of our Company and of the acquired businesses.

These risks may be heightened in cases where the majority of the former businesses’ operations, employees and customers are located outside the U.S.

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Additional unanticipated costs could be incurred in the integration of the businesses.

All of these factors could cause a reduction to our earnings per share, decrease or delay the expected accretive effect of the transaction, and negatively impact the price of our ordinary shares.

All of these factors could cause a reduction to our earnings per share, decrease or delay the expected accretive effect of the transaction, and negatively impact the price of our common stock.

Our future financial results could be adversely affected by impairments or other charges.

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Lack of market acceptance for our products or market preference for technologies that compete with our products could reduce our revenues and profitability.

Market acceptance of our products depends on many factors, including our ability to convince prospective collaborators and customers that our technology is an attractive alternative to other technologies, to manufacture products in sufficient quantities and at acceptable costs, and to supply and service sufficient quantities of our products directly or through our distribution alliances.

Market acceptance of our products depends on many factors, including our ability to convince prospective customers that our technology is an attractive alternative to other technologies, to manufacture products in sufficient quantities and at acceptable costs, and to supply and service sufficient quantities of our products directly or through our distribution alliances.

For example, the use of autograft tissue is a well-established means for repairing the dermis, and it competes for acceptance in the market with our collagen-based wound care products.

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For example, greater market acceptance of our wound graft products may ultimately depend on our ability to demonstrate that coverage and reimbursement are available and favorable, or because they are an attractive, cost-effective alternative to other treatment options.

If there are negative events in the industry, whether real or perceived, there could be a negative impact on the industry as a whole.

If there are negative events in the healthcare industry, whether real or perceived, there could be a negative impact on the industry as a whole.

The industry is subject to rapid and continuous change arising from, among other things, consolidation, technological improvements, the pressure on governments, third-party payors and providers to reduce healthcare costs, and healthcare reform legislation and initiatives domestically and internationally.

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We may not be able to find a sufficient alternative supplier in a reasonable time period, or on commercially reasonable terms, if at all, and our ability to produce and supply our products could be impaired.

We believe that these factors are most likely to affect the following products that we manufacture:

We believe that these factors are most likely to affect the following products that we sell:

• our collagen-based products, such as the Integra Dermal Regeneration Template and wound matrix products, the DuraGen ® family of products, our Absorbable Collagen Sponges, PriMatrix ® and SurgiMend ® products;

• our products made from silicone, such as our neurosurgical shunts and drainage systems and hemodynamic shunts;

• products which use many different specialty parts or chemicals from numerous suppliers, such as our intracranial monitors, shunts, catheters and headlights;

• products which use many different specialty parts, electrical components, or chemicals from numerous suppliers, such as our intracranial monitors, shunts, catheters, tissue ablation, and headlights;

• products which are amniotic tissue-based

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To the extent these suppliers are unable to provide sterilization services, whether due to lack of capacity, regulatory requirements, environmental concerns such as those relating to ethylene oxide or otherwise, we may be unable to transition sterilization to other suppliers in a timely or cost effective manner, or at all, which could have an adverse impact on our operating results.

qualify new components or materials quickly enough to prevent a disruption if one or more of our suppliers ceases production of important components or materials.

We may experience difficulties, delays, performance impact or unexpected costs from consolidation of facilities.

We consolidated several facilities in recent years and may further consolidate our operations in the future in order to improve our cost structure, achieve increased operating efficiencies, and improve our competitive standing or results of operations and/or to address unfavorable economic conditions.

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.

While it is our policy to maintain sufficient inventory of components so that our production will not be significantly disrupted even if a particular component or material is not available for a period of time, we remain at risk that we will not be able to qualify new components or materials quickly enough to prevent a disruption if one or more of our suppliers ceases production of important components or materials.

We may experience difficulties, delays, performance impact or unexpected costs from consolidation of facilities and transfer of manufacturing facilities.

In recent years, we consolidated several facilities or transferred manufacturing operations from third parties to our existing internal manufacturing facilities and may further undertake similar consolidations or transfers in the future in order to improve our cost structure, achieve increased operating efficiencies, and improve our competitive standing or results of operations and/or to address unfavorable economic conditions.

As part of these initiatives, we may also lose favorable tax incentives or not be able to renew leases on acceptable terms.

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In the United States, the Patient Protection and Affordable Care Act (the “ACA”), signed into law in March 2010, includes several provisions that impact our businesses in the U.S.

The ACA includes provisions that, among other things, reduce and/or

limit Medicare reimbursement, require all individuals to have health insurance (with limited exceptions), and require detailed disclosure of transfers of value made to healthcare professionals.

We cannot predict what impact ongoing uncertainty regarding federal and state health reform proposals, including the implementation or repeal of the ACA, instability of the insurance markets, changes in the U.S.

The ACA includes provisions that, among other things, reduce and/or limit Medicare reimbursement, require all individuals to have health insurance (with limited exceptions), and require detailed disclosure of transfers of value made to healthcare professionals.

Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted, including The Budget Control Act of 2011, The American Taxpayer Relief Act of 2012 and Medicare Access and CHIP Reauthorization Act of 2015, which, among other things, have reduced payments under Medicare and Medicaid to certain healthcare providers or altered the formula by which Medicare makes annual payment adjustments.

We cannot predict what impact ongoing uncertainty regarding federal and state health reform proposals, including the implementation or repeal of the ACA, judicial review and interpretation of the ACA and other healthcare laws, instability of the insurance markets, changes in the U.S.

administration and policy, an expansion in government’s role in and/or additional proposals and/or changes to the U.S.

health care system or its legislation will have on our customer’s purchasing decisions and/or reimbursement which could have a material adverse effect on our business.

We expect that additional state and federal health care reform measures will be adopted in the future, including those initiatives affecting coverage and reimbursement for our products, any of which could limit the amounts that federal and state governments will pay for health care products and services, which could adversely affect the growth of the market for our products or demand for our products, or result in additional pricing pressures.

We cannot predict the ultimate content, timing or effect of any healthcare reform legislation or the impact of potential legislation on us.

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We are also subject to the European Medical Device Regulation, which was adopted by the European Union (“EU”) as a common legal framework for all EU member states.

The EU Parliament issued a delay in implementation by one year to May 26, 2021 due to the COVID-19 pandemic.

The implementation for Class I products is scheduled for May 26, 2021 and the EUDAMED Database is May 26, 2022.

The implementation for Class I products occurred on May 26, 2021 and the EUDAMED Database is scheduled for May 26, 2022.

Under this regulation, companies that wish to manufacture and distribute medical devices in EU member states must meet certain quality system, and safety requirements as well as ongoing product monitoring responsibilities.

Companies must also obtain a “CE” marking (i.e., a mandatory conformity marking for certain products sold within the European Economic Area) for their products.

Complying with the requirements of these regulations may require us to incur significant expenditures.

Various penalties exist for non-compliance with the laws implementing the European Medical Device Regulations which if incurred, could have a material adverse impact on our business, results of operations and cash flows.

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• government regulators or courts will interpret those laws or regulations in a manner consistent with our interpretation.

We have in place policies and procedures for compliance that we believe are at least as stringent as those set forth in the AdvaMed Code, and we regularly train our sales and marketing personnel on our policies regarding sales and marketing practices.

We have in place policies and procedures for compliance that we believe are at least as stringent as those set forth in the AdvaMed Code of Ethics which was developed by AdvaMed, a trade association that represents the medical device industry, and which is intended to represent best practices with respect to medical device companies' interactions with healthcare providers.

We regularly train our sales and marketing personnel on our policies regarding sales and marketing practices.

Pursuant to the AdvaMed Code, we have certified our adoption of the AdvaMed Code.

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Noncompliance with GDPR could trigger fines of up to 4% of global annual revenues.

Compliance with these requirements may require changes in business practices, complicate our operations, and add complexity and additional management and oversight needs.

In addition, we are subject to the new China Personal Information Protection Law that went into effect November 1, 2021 which focuses on protecting personal information and cross border transfers of the information.

Compliance with these requirements, either individually or in the aggregate, may require changes in business practices added complexity and additional management oversight.

They also may complicate our clinical research activities, as well as product offerings that involve transmission or use of clinical data.

Non-compliance may result in proceedings against us by governmental or other entities and/or significant fines which could negatively impact our reputation and adversely effect our business.

Non-compliance may result in proceedings against us by governmental or other entities and/or significant fines which could negatively impact our reputation and adversely affect our business.

Should we delay or fail to comply with one or more of the regulatory requirements we could have reduced sales, increased costs, delays to new product introductions, enhancements or our strategic plans, or harm to our reputation or competitiveness, which could have a material adverse effect on our business and financial results.

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This public scrutiny has been particularly acute in Japan and Western Europe with respect to products derived from animal sources, because of concern that materials infected with the agent that causes bovine spongiform encephalopathy, otherwise known as BSE or mad cow disease, may, if ingested or implanted, cause a variant of the human Creutzfeldt-Jakob Disease, an ultimately fatal disease with no known cure.

The World Organization for Animal Health ("OIE") recognizes the U.S.

The World Organization for Animal Health recognizes the U.S.

as having a negligible risk for BSE, which is the highest status available.

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and New Zealand.

New Zealand has

never had a case of BSE.

New Zealand has never had a case of BSE.

We received approval in the U.S., the EU, Japan, Taiwan, China, Argentina as well as other countries for the use of New Zealand-sourced tendon in the manufacturing of our products.

If we cannot continue to use or qualify a source of tendon from New Zealand or another country that has never had a case of BSE, we could be prohibited from selling our collagen products in certain countries.

Certain of our products are derived from human tissue and are subject to additional regulations and requirements.

We manufacture and distribute products derived from human tissue.

As discussed in detail above in " Human Cells, Tissues and Cellular and Tissue-Based Products ," the FDA has specific regulations governing human cells, tissues and cellular and tissue-based products, or HCT/Ps.

An HCT/P is a product containing or consisting of human cells or tissue intended for transplantation into a human patient.

On June 22, 2015, the FDA issued an Untitled Letter alleging that BioD Logic LLC's ("BioD") morselized amniotic membrane tissue based products do not meet the criteria for regulation as HCT/Ps solely under Section 361 and that, as a result, BioD would need a biologics license to lawfully market those morselized products.

In November 2017, the FDA issued the final guidance document related to human tissue titled, “Regulatory Considerations for Human Cells, Tissues, and Cellular and Tissue-Based Products:

Minimal Manipulation and Homologous Use” (the “HCT/P Final Guidance”).

The HCT/P Final Guidance maintains the FDA’s position that products such as the Company’s morselized amniotic membrane tissue-based products do not meet the criteria for regulation solely as HCT/Ps.

In addition, the FDA articulated a risk-based approach to enforcement and, while some uses for amniotic membrane tissue-based products would enjoy as much as thirty-six months of enforcement discretion, other high risk uses could be subject to immediate enforcement action.

The Company does not believe the uses for its amniotic membrane tissue-based products fall into the high risk-category.

Nonetheless, we can make no assurances that the FDA will continue to exercise its enforcement discretion with respect to the Company’s amniotic membrane tissue-based products, and any potential action of the FDA could have a financial impact regarding the sales of such products.

The Company has been considering and continues to consider regulatory approval pathways for its amniotic membrane tissue-based products.

Revenues from BioD morselized amniotic material-based products for the year ended December 31, 2020 was less than 1% of consolidated revenues.

We are subject to current and potential future requirements relating to protection of the environment, such as hazardous materials regulations, which may impose significant compliance or other costs on us.

Our manufacturing, product development, research, and development operations and processes involve the controlled use of certain hazardous materials.

Certain of our processes in manufacturing and research and development involve the controlled use of certain hazardous materials.

In addition, we own and/or lease a number of facilities at which hazardous materials have been used in the past.

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For all of these reasons, we are subject to federal, state, foreign, and local laws and regulations governing the use, manufacture, storage, transportation, handling, treatment, remediation, and disposal of hazardous materials and certain waste products (“Environmental, Health, Safety and Transportation Laws”).

Although we believe that our procedures for handling, transporting, and disposing of hazardous materials comply with the Environmental, Health, Safety and Transportation Laws, the Environmental Health, Safety and Transportation Laws may be amended in ways that increase our cost of compliance, perhaps materially.

Although we believe that our procedures for handling, transporting, and disposing of hazardous materials comply with the Environmental, Health, Safety and Transportation Laws, such laws may be amended in ways that increase our cost of compliance, perhaps materially.

Furthermore, the potential risk of accidental contamination or injury from these materials cannot be eliminated, and there is also a risk that such contamination previously has occurred in connection with one of our facilities or in connection with one of the companies we have purchased.

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We may not be able to maintain insurance on acceptable terms or at all.

Moreover, climate change and sustainability efforts and potential climate change regulations could lead to business interruption, significantly increased costs and/or other adverse consequences to our business.

If regulations are enacted in the United States, Europe, or any other jurisdictions in which we do business that, for example, limit or reduce allowable greenhouse gas emissions and other emissions, such restrictions could effect or interrupt our operations or the operations of our suppliers, potentially leading to higher costs, and therefore negatively impact our results of operations.

Our business and operations are subject to risks related to climate change.

The long-term effects of global climate change present both physical risks (from the increased frequency of extreme weather conditions or natural disasters) and transition risks (from regulatory requirements or technology changes).

Such extreme weather conditions could pose physical risks to our facilities and disrupt operation of our supply chain and may impact operational costs.

Concern over global climate change could result in new legal or regulatory requirements designed to mitigate the effects of climate change on the environment.

If such laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet the regulatory obligations and such measures may interrupt our operations or the operations of our suppliers, potentially leading to higher costs, and therefore negatively impact our results of operations.

We are subject to requirements relating to information technology which could adversely affect our business.

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Our worldwide operations means that we are subject to laws and regulations, including data protection and cyber security laws and regulations, in many jurisdictions.

The variety of

The variety of U.S.

and international privacy and cybersecurity laws and regulations impacting our operations are described in “Item 1.

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The results of an audit or litigation could have a material, adverse effect on our financial statements in the period or periods for which that determination is made.

Changes in tax laws or exposures to additional tax liabilities could negatively impact the Company's operating results.

We are subject to income taxes, as well as taxes that are not income-based, in both the U.S.

and many foreign jurisdictions.

Our future effective tax rate could be unfavorably affected by numerous factors including a change in, or the interpretation of, tax rules and regulations in the jurisdictions in which we operate (including changes in legislation currently being considered), a change in our geographic earnings mix, and/or to the jurisdictions in which we operate, or a change in the measurement of our deferred taxes.

Our leverage and debt service obligations could adversely affect our business.

As of December 31, 2020, our total consolidated external debt was approximately $1.1 billion (See item 7 and Note 6 for a discussion of our consolidated external debt).

As of December 31, 2021, our total consolidated external debt was approximately $1.6 billion (See Item 7 and Note 5,5 Debt of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K) for a discussion of our consolidated external debt).

We may also incur additional indebtedness in the future.

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Our debt service obligations will require us to use a portion of our operating cash flow to pay interest and principal on indebtedness instead of for other corporate purposes, including funding future expansion of our business, acquisitions, and ongoing capital expenditures, which could impede our growth.

Any disruptions in our operations, the financial markets, or the overall economy, including as a result of COVID-19, may adversely affect the availability and cost of credit to us and/or our ability to comply with our existing obligations.

In addition, our ability to comply with, renegotiate or extend the Company’s debt obligations will depend on our operating and financial performance, which in turn is subject to prevailing economic conditions and financial, business and other factors beyond our control.Any disruptions in our operations, the financial markets, or the overall economy, including as a result of COVID-19, may adversely affect the availability and cost of credit to us and/or our ability to comply with our existing obligations.

Changes in the calculation and or complete replacement of LIBOR could have an impact on our business.

The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced in July 2017 that it will no longer persuade or require banks to submit rates for LIBOR after 2021.

This announcement and global financial benchmark reforms generally have resulted in the future of certain interest rate benchmarks being more uncertain.

LIBOR may be disrupted, materially change, or no longer be published in the future.

The United Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced in July 2017 that it will no longer persuade or require banks to submit rates for LIBOR.

On March 5, 2021, the ICE Benchmark Administration, which administers LIBOR, and the FCA announced that all LIBOR settings will either cease to be provided by any administrator, or no longer be representative immediately after December 31, 2021, for all non-U.S.

dollar LIBOR settings and one-week and two-month U.S.

dollar LIBOR settings, and immediately after June 30, 2023 for the remaining U.S.

dollar LIBOR settings.

We have multiple debt facilities which utilizes a variable rate equal to Eurodollar LIBOR rate as a component of our interest rate.

The upcoming transition away from LIBOR as a common reference rate in the global financial market could have a material, adverse effect on our business.

This transition away from LIBOR as a common reference rate in the global financial market could have a material, adverse effect on our business.

Management continues to monitor the status and discussions regarding LIBOR.

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Damage to our manufacturing, distribution, development and/or research facilities because of fire, extreme weather conditions, natural disaster, power loss, communications failure, geopolitical disruption, unauthorized entry or other events, such as a flu or other health epidemic, such as COVID-19, could significantly disrupt our operations, the operations of suppliers and critical infrastructure and delay or prevent product manufacture and shipment during the time required to repair, rebuild or replace the damaged facilities.

Certain of our manufacturing facilities are located in Puerto Rico, which in the past has experienced both severe earthquakes and other natural disasters.

Climate change may increase both the frequency and severity of natural disasters and, consequently, risks to our operations and growth.

Although we maintain property damage and business interruption

insurance coverage on these facilities, our insurance might not cover all losses under such circumstances, and we may not be able to renew or obtain such insurance in the future on acceptable terms with adequate coverage or at reasonable costs.

An experienced third-party hosts and maintains the enterprise business system used to support certain of our transaction processing for accounting and financial reporting, supply chain and manufacturing.

Currently, we have developed a comprehensive disaster recovery plan for the Company’s infrastructure and we have tested this plan.

In addition, we have implemented procedures to conduct annual disaster recovery testing for our enterprise business system.

We also implemented a comprehensive backup and recovery process for our key applications.

Our global production and distribution operations are dependent on the effective management of information flow between facilities.

An interruption of the support provided by our enterprise business systems could have a material, adverse effect on the business.

Certain of our manufacturing facilities are located in Puerto Rico, which in the past has experienced both severe earthquakes and other natural disasters.Climate change may increase both the frequency and severity of extreme weather conditions and natural disasters and, consequently, risks to our operations and growth.

Although we maintain property damage and business interruption insurance coverage on these facilities, our insurance might not cover all losses under such circumstances, and we may not be able to renew or obtain such insurance in the future on acceptable terms with adequate coverage or at reasonable costs.

We are exposed to a variety of risks relating to our international sales and operations.

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Although we address currency risk management through regular operating and financing activities, and, on a limited basis, through the use of derivative financial instruments, those actions may not prove to be fully effective.

For a description of our use of derivative financial instruments, see Note 7, Derivative Instruments in our consolidated financial statements.

For a description of our use of derivative financial instruments, see Note 6, Derivative Instruments of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K).

Our international operations subject us to laws regarding sanctioned countries, entities and persons, customs, import-export, laws regarding transactions in foreign countries, the U.S.

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and other countries.

For instance, the U.S.

and China have imposed tariffs on products imported into their respective countries.

While we currently do not anticipate that these tariffs will have a material impact on our business, the list of items subject to these tariffs could change and it is possible that they could adversely impact our supply chain costs or our ability to sell certain of our products in China.

More generally, additional tariffs or other trade barriers imposed by the U.S.

or other countries could materially and adversely affect our operations and financial results.

Owing to the complex relationships between the U.S.

and such other countries, political, diplomatic, military, or other events could result in business disruptions, including increased regulatory enforcement against companies, tariffs, trade embargoes, and export restrictions.

The imposition of such restrictions could increase the cost of the Company’s products and the components and raw materials that go into making them, require the Company to change its operations and the products it offers and negatively impact consumer confidence and spending, all of which, both individually and in the aggregate, could materially and adversely affect our operations and financial results.

GENERAL RISK FACTORS

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We are increasingly dependent on sophisticated information technology for our infrastructure and to support business decisions.

Our information systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving systems and regulatory standards, the increasing need to protect patient and customer information, and changing customer

An experienced third party maintains the enterprise business system used to support our transaction processing, accounting and financial reporting, and supply chain and manufacturing processes.

Any significant breakdown, intrusion, interruption, corruption, or destruction of these systems, as well as any data breaches, could have a material, adverse effect on our business.

Third parties may attempt to breach our systems and may obtain data relating to patients, proprietary or sensitive information.

If we fail to maintain or protect our information systems and data integrity effectively, we could lose existing customers, have difficulty attracting new customers, suffer backlash from negative public relations, have regulatory sanctions or penalties imposed, have increases in operating expenses, incur expenses or lose revenues as a result of a data privacy breach, or suffer other adverse consequences.

As a result of the COVID-19 pandemic, we may face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

If we, or third parties on whom we rely, fail to maintain or protect our information systems and data integrity effectively, we could lose existing customers, have difficulty attracting new customers, suffer backlash from negative public relations, have regulatory sanctions or penalties imposed, have increases in operating expenses, incur expenses or lose revenues as a result of a data privacy breach, or suffer other adverse consequences.

We have programs, processes (including ongoing improvements) and technologies in place to prevent, detect, contain, respond to and mitigate security related threats and potential incidents.

Because the techniques used to obtain unauthorized access change frequently and can be difficult to detect, anticipating, identifying or preventing these intrusions or mitigating them if and when they occur, may be challenging.

Because the techniques used to obtain unauthorized access or interrupt services change frequently and can be difficult to detect, anticipating, identifying or preventing these threats or mitigating them if and when they occur, may be challenging.

We are also dependent on third party vendors to supply and/or support certain aspects of our information technology systems which may contain defects in design or manufacture or other problems that could result in system disruption or unexpectedly compromise the information security of our own systems.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors