What changed in this filing

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Item 1A. Risk Factors

2024-02-21 compared with 2023-02-16 · 237 added, 224 removed, 434 unchanged (52% of the section changed)

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This could cause the market price of our ordinary shares to decline.

Risks Related to the Potential Separation of Our Oncology Business

The potential separation of our neuroscience and oncology businesses, including a potential separation of our oncology business into an independent, publicly-traded company, is subject to various risks and uncertainties and may not be completed on the timeline currently contemplated or at all, and will involve significant time, effort and expense, which could disrupt or adversely affect our business and our financial condition, results of operations and cash flows.

In November 2022, we announced our intent, as approved by our board of directors, to explore a separation of our neuroscience business and oncology business.

We are exploring a separation of the oncology business into an independent, publicly-traded company (referred to in this Annual Report as “Oncology Co.”) as part of an ongoing review of strategic alternatives.

Our business may face significant risks and uncertainties as a result of the exploration and/or execution of the potential separation, including, without limitation:

the diversion of management’s attention from operating our neuroscience and oncology businesses and the overall disruption of, and impact on, our businesses;

potential difficulty in maintaining employee morale and retaining and/or recruiting key management and other employees;

potential difficulty in separating our oncology business from our neuroscience business, including allocation of operations, services, products and personnel;

difficulty and/or delays in obtaining regulatory approvals related to the potential separation of the businesses, including any approvals needed to effect the separation and/or those related to ongoing clinical trials of our oncology products;

the need to obtain third-party consents related to the potential separation of the businesses, which may be difficult to obtain and/or cause delay in our intended timelines for the separation or disrupt third-party relationships that are important to our business;

foreseen and unforeseen dis-synergy costs, costs of restructuring transactions (including potential taxes) and other significant costs and expenses, including costs related to the capitalization of Oncology Co.;

potential negative reactions from the financial markets, including reactions related to the proposed structure or other details of the potential separation or any potential delay or failure in completing the potential separation.

No assurance can be given as to whether we will be successful in managing these or any other significant risks that we may encounter in the potential separation of our businesses, and any of these risks could have a material adverse effect on our businesses, financial condition, results of operations, cash flows and/or the market price of our ordinary shares.

We have already incurred certain expenses, and expect to incur significant additional expenses, in connection with the exploration and potential consummation of a separation, and such costs and expenses may be greater than we anticipate, and may not yield the benefits that we or others may anticipate.

Adverse market conditions or tax consequences, litigation or other legal proceedings that may arise as a result of the potential separation, or delays or difficulties effecting the potential separation, including possible delays in obtaining any necessary stock exchange, regulatory or other approval or the failure to obtain any such approvals, possible delays in obtaining any required tax opinions or rulings or the failure to obtain any such tax opinions or rulings, changes in relevant law and other challenges, could delay, prevent or otherwise adversely impact the anticipated benefits of the potential separation.

No assurance can be given as to whether we will complete any separation on our anticipated timeline or at all.

Any of the foregoing may result in our not achieving the operational, financial, strategic and other benefits we anticipate realizing as a result of the potential separation, and in each case, our business, results of operations and financial condition and/or the market price of our ordinary shares could be adversely affected.

We may fail to realize some or all of the anticipated benefits of the potential separation of our neuroscience and oncology businesses and the market price of our ordinary shares may fluctuate significantly in connection with the potential separation.

Even if a separation of our neuroscience and oncology businesses is completed, the anticipated operational, financial, strategic and other benefits of a potential separation may not be achieved.

These anticipated benefits are based on a number of assumptions and uncertainties, which may prove to be incorrect or incomplete.

Furthermore, if separated, the two independent businesses will be smaller and less diversified than the combined company, with a narrower business focus, and may be more vulnerable to changing market conditions.

In addition, the market price of our ordinary shares may experience volatility around the time of announcements of plans for the potential separation, consummation of the potential separation and thereafter.

We also cannot predict the effect of a completed separation on the market price of our ordinary shares, which, following a separation, may be less than, equal to or greater than the market price of our ordinary shares prior to the separation.

Further, the combined value of our ordinary shares and those of Oncology Co.

may not be equal to or greater than what the value of our ordinary shares would have been had the separation not occurred.

The combined value of the ordinary shares of the two companies could be lower than anticipated for a variety of reasons, including, but not limited to, a failure of Oncology Co.

to operate and compete effectively as an independent company.

We continue to assess the tax consequences of potential structures for the separation of our oncology business from our neuroscience business, including a potential separation of the oncology business into an independent, publicly-traded company.

If such a separation does not qualify as a transaction that is generally tax-free for U.S.

federal and Irish tax purposes, we and/or our shareholders could be subject to significant tax liabilities.

In connection with the potential separation, we may seek a private letter ruling from the IRS (the “IRS Ruling”) and/or an opinion from our U.S.

tax advisor (the “U.S.

Tax Opinion”) regarding U.S.

federal and state income tax consequences of the separation, including that, among other things, the separation would generally qualify as tax-free for U.S.

federal income tax purposes under Sections 368(a)(1)(D) and 355 of the U.S.

Internal Revenue Code of 1986, as amended (the “Code”).

The IRS Ruling and/or the U.S.

Tax Opinion would be based on and rely on, among other things, certain facts, assumptions, representations, and undertakings from us and Oncology Co., including those relating to past and future conduct of the companies’ respective business operations and other matters .

If any of these facts, assumptions, representations, statements or undertakings are, or become, inaccurate or incomplete, or if we or Oncology Co.

breach any of our respective covenants in the separation documents, the IRS Ruling and/or the U.S.

Tax Opinion may be invalid and the conclusions reached therein could be jeopardized.

Notwithstanding a U.S.

Tax Opinion or IRS Ruling, the U.S.

Internal Revenue Service, or the IRS, could determine that a distribution or any related transaction is taxable for U.S.

federal income tax purposes if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated, or that the distribution should be taxable for other reasons, including if the IRS were to disagree with the conclusions in the U.S.

Tax Opinion will not be binding on the IRS or the courts.

Accordingly, the IRS or the courts may challenge the conclusions stated in the U.S.

Tax Opinion and such challenge could prevail.

If the potential separation transaction is ultimately determined to be taxable, we and/or our shareholders that are subject to U.S.

federal income tax could incur significant tax liabilities.

Furthermore, in connection with the potential separation, we may seek an opinion from our Irish tax advisor (the “Irish Tax Opinion”) regarding the Irish tax consequences of the separation.

The Irish Tax Opinion would be based on and rely on, among other things, certain facts, assumptions, representations, and undertakings from us, including those relating to past and future conduct of our business operations and other matters.

If any of these facts, assumptions, representations, statements or undertakings are, or become, inaccurate or incomplete the Irish Tax Opinion may be invalid and the conclusions reached therein could be jeopardized.

The Irish Tax Opinion will not be binding on the Irish Tax Authority or the Irish courts.

Accordingly, the Irish Tax Authority or the Irish courts may challenge the conclusions stated in the Irish Tax Opinion and such challenge could prevail.

In such an event, we and/or our shareholders could incur significant tax liabilities.

Risks Related to Our Business and Our Industry

Our business, financial condition and results of operations have been, and may continue to be, adversely affected by the ongoing COVID-19 pandemic or other similar outbreaks of contagious diseases.

Outbreaks of contagious diseases and other adverse public health developments affecting us and/or the third parties on which we rely, could have a material and adverse effect on our business, financial condition and results of operations .

The COVID-19 pandemic has impacted, and may continue to impact, many aspects of society, including the operation of healthcare systems, global travel, supply and labor markets and other business and economic activity worldwide.

Ireland, all U.S.

states, and many local jurisdictions and countries around the world have, at times during the pandemic, issued and implemented quarantines, vaccine and masking mandates, executive orders and other similar government orders, restrictions and recommendations for their residents to help control the spread of COVID-19.

Such orders, mandates, restrictions and/or recommendations have, at times during the pandemic, resulted in widespread interruptions and closures of businesses, including healthcare systems that serve people living with addiction and serious mental illness, work stoppages, slowdowns and/or delays, remote work policies and travel restrictions, among other effects.

The COVID-19 pandemic has had, and may continue to have, an adverse impact on our financial condition and results of operations.

For example, commercial sales of the medicines from which we derive revenue— including injectable medications administered by healthcare professionals—have been, and we expect may continue to be, adversely impacted as a result of COVID-19-related restrictions, labor shortages and other developments that have transpired, and may continue to transpire, many of which have contributed to limited access to, or reduced willingness to access, healthcare providers and locations where injectable medications may be administered.

Further, this pandemic has had, and may continue to have, an adverse effect on global economic conditions, which could have an adverse effect on the demand for, and ability of patients to access, our and our licensees’ medicines, reimbursement for our products and for services related to the use of our products , or our ability to obtain financing, if needed, on favorable terms or at all.

The COVID-19 pandemic has caused, and may continue to cause, varying degrees of disruption to our employees, our communities and our business operations.

While we have continued to operate our manufacturing facilities and to supply our medicines without interruption throughout the pandemic, we have, at times during the pandemic, experienced labor or supply chain delays or disruptions at our manufacturing facilities, and may continue to experience such delays or disruptions while the pandemic persists, which could impact our ability to manufacture our products and the third-party products from which we receive revenue in a timely matter or at all.

In addition, while we have continued to conduct our R&D activities, including our ongoing clinical trials, the COVID-19 pandemic has, at times, impacted the timelines of certain of our early-stage discovery efforts and clinical trials, and may continue to impact such timelines while the pandemic persists.

We work with our internal teams, our clinical investigators, R&D vendors and critical supply chain vendors to continually assess, and endeavor to mitigate, potential adverse impacts of COVID-19 on our manufacturing operations and R&D activities.

In addition, we rely upon third parties for many aspects of our business, including the provision of goods and services related to the manufacture of our clinical products and our and our partners’ marketed products, the conduct of our clinical trials, and the sale of our proprietary marketed products and the marketed products of our licensees from which we receive manufacturing and/or royalty revenue.

The COVID-19 pandemic has, to varying degrees, disrupted the business operations of the third parties on which we rely, including our suppliers, packagers, distributors, contract research organizations, customers, clinical site investigators, community advocacy partners, and others, and may continue to do so for so long as the pandemic and its impacts persist.

For example, the third-party sites and investigators involved in our clinical trials have experienced, and may continue to experience, interruptions which have impacted, and may continue to impact, the conduct of our clinical trials, including with respect to enrollment rates, availability of investigators and clinical trial sites, and monitoring of data, and our ability to complete them in a timely manner or at all.

If our clinical programs are significantly delayed as a result of such impacts, there could be adverse effects on our expected timelines for regulatory review and potential approval of our product candidates.

Any prolonged material disruption to these or other third parties on which we rely could negatively impact our ability to conduct business in the manner and on the timelines presently planned, which could have a material adverse impact on our business, results of operations and financial condition.

The COVID-19 pandemic has also impacted, and may continue to impact, the regulatory agencies with which we interact in the development, manufacture, regulatory review and commercialization of our medicines, including the FDA, the HPRA and other regulatory agencies, which may, in turn, negatively impact expected timelines for regulatory interactions related to, and/or review and approval of, our product candidates, which could have an adverse effect on our business and the market price of our ordinary shares.

The degree to which the ongoing COVID-19 pandemic may continue to impact our employees, business, financial condition and results of operations will depend on the ultimate severity and duration of the pandemic and the manner in which it continues to evolve, including the emergence, prevalence and severity of new COVID-19 variants, and future developments in response thereto, including developments in the labor market and market practices related to remote work and our ability to attract and retain employees, which are highly uncertain and cannot be predicted as of the date of this Annual Report.

We receive substantial revenue from our key proprietary products and our success depends on our ability to successfully manufacture and commercialize such products.

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We rely on these licensees in various respects, including commercializing such products, conducting development activities with respect to new formulations or new indications for such products, and/or managing the regulatory approval process for such products.

We earn significant royalty and/or manufacturing revenue from sales by our licensees of our licensed products and third-party products incorporating our proprietary technologies.

We earn significant royalty revenue from sales by our licensees of our licensed products and third-party products incorporating our proprietary technologies.

We also earn manufacturing revenues for products that we currently manufacture on behalf of other parties.

The revenues we receive from such products depend primarily upon the success of our licensees in commercializing such products.

For example, we receive substantial revenue from Janssen’s sales of the long-acting INVEGA products and RISPERDAL CONSTA and from Biogen’s sales of VUMERITY and FAMPYRA.

For example, we receive substantial revenue from Janssen’s sales of the long-acting INVEGA products and RISPERDAL CONSTA and from Biogen’s sales of VUMERITY.

We have no involvement in the commercialization efforts for these and other products sold by third parties from which we receive revenue and cannot control the extent or effectiveness of such commercialization efforts.

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For example, in November 2021 we received notice of partial termination of an exclusive license agreement with Janssen.

Under this license agreement, we provided Janssen with rights to, and know-how, training and technical assistance in respect of, our small particle pharmaceutical compound technology, known as NanoCrystal technology, which was used to develop INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA, and INVEGA HAFYERA/BYANNLI.

When the partial termination became effective in February 2022, Janssen ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S.

The announcement of Janssen’s partial termination, expectations regarding the loss of royalty revenues from U.S.

sales of such products resulting from such termination, and actual losses of royalty revenues that have resulted from such termination, caused the market price of our ordinary shares to decline significantly.

In April 2022, we commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of this license agreement and Janssen’s royalty and other obligations under the agreement.

On December 21, 2022, we received an Interim Award in these proceedings from the Tribunal, in which the Tribunal agreed with our position that, while Janssen may terminate the agreement, it may not continue to sell Products (as defined in the agreement) developed during the term of the agreement without paying royalties pursuant to the term of the agreement.

This award is not yet final.

We will engage with Janssen and the Tribunal in additional proceedings prior to the Tribunal’s issuance of a final award and cannot be certain of the outcome of the final award or the impact that such final award may have on our business, financial condition, cash flows and results of operations.

While we ultimately prevailed in arbitration proceedings related to, among other things, this partial termination and Janssen’s royalty and other obligations under the license agreement, the announcement of the partial termination, expectations regarding the loss of royalty revenues, actual delays in receipt of royalty revenues that resulted from such termination, and the ultimate announcement of the resumption of payment of such royalty revenues, caused the market price of our ordinary shares to fluctuate significantly.

For these and other reasons that may be outside of our control, our revenues from products sold by our licensees, and related commercial milestone payments, may fall below our expectations, the expectations of our licensees or those of our shareholders, which could have a material adverse effect on our results of operations and the market price of our ordinary shares.

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In addition, there are many companies developing generic versions of our products, or products with similar technologies to ours or for use in similar indications with whom we and our licensees compete, many of whom are larger and have significantly greater financial and other resources than we do.

Other smaller or earlier stage companies may

also prove to be significant competitors, particularly through focused development programs and collaborative arrangements with large, established companies.

Some of t he products being developed by our competitors are being designed to work differently than our products and may turn out to be safer or more effective than our products , which may render our products or technology platforms obsolete or noncompetitive .

For a detailed discussion of the competition that we face with respect to our current marketed products, technology platforms and product indications, please see the section entitled “ Competition ” in “Item 1—Business” in this Annual Report.

If we are unable to compete successfully in th is highly competitive biopharmaceutical industry, our business, financial condition, cash flows and results of operations could be materially adversely affected.

Other smaller or earlier stage companies may also prove to be significant competitors, particularly through focused development programs and collaborative arrangements with large, established companies.

Some of the products being developed by our competitors are being designed to work differently than our products and may turn out to be safer or more effective than our products, which may render our products or technologies obsolete or noncompetitive.

For a detailed discussion of the competition that we face with respect to our current marketed products, technologies and product indications, please see the section entitled “ Competition ” in “Item 1—Business” in this Annual Report.

If we are unable to compete successfully in this highly competitive biopharmaceutical industry, our business, financial condition, cash flows and results of operations could be materially adversely affected.

Our revenues from sales of our products may decrease or grow at a slower than expected rate due to many factors.

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• the size of the markets for our products, and patient and physician satisfaction with our products;

significant changes in the competitive landscape for our products, including any approval of generic versions of our products or other branded products that may compete with our products;

• significant changes in the competitive landscape for our products, including any approvals of generic versions of our products or other branded products that may compete with our products;

• adverse event information relating to our products or to similar classes of drugs;

changes to the product labels of our products, or of products within the same drug classes, to add significant warnings or restrictions on use;

our continued ability to engage third parties to package and/or distribute our products on acceptable terms;

the unfavorable outcome of investigations, arbitrations, litigation or other legal proceedings, including government requests for information regarding VIVITROL, securities litigation, IP litigation, including so-called “Paragraph IV” litigation relating to VIVITROL and other products from which we receive revenue, litigation or other proceedings before the U.S.

• changes to the product labels of our products, or of products within the same drug classes, to add new significant warnings or restrictions on use;

• our continued ability to engage third parties to manufacture, package and/or distribute our products on acceptable terms;

• the unfavorable outcome of investigations, arbitrations, litigation or other legal proceedings, including government requests for information regarding VIVITROL, securities litigation, IP litigation, including so-called “Paragraph IV” litigation relating to products from which we receive revenue, litigation or other proceedings before the U.S.

Patent and Trademark Office’s (the “USPTO”) Patent Trial and Appeal Board (the “PTAB”) or its equivalent in other jurisdictions outside of the U.S., including opposition proceedings in the EU and any other litigation or arbitration related to any of our products;

• regulatory developments and actions related to the manufacture, commercialization or continued use of our products, including FDA actions such as the issuance of a REMS or warning letter, or conduct of an audit by the FDA or another regulatory authority in which a manufacturing or quality deficiency is identified;

the extent and effectiveness of the sales, marketing and distribution support for our products, including our licensees’ decisions as to the timing and volume of product orders and shipments, the timing of product launches, and product pricing and discounting;

disputes with our licensees relating to the use of our technology in, and marketing and sale of, products from which we received, or currently receive, manufacturing and/or royalty revenue and the amounts to be paid with respect to such products, including the dispute relating to our license agreement with Janssen described above;

• the extent and effectiveness of the sales, marketing and distribution support for our products, including our and our licensees’ decisions as to the timing and volume of product orders and shipments, the timing of product launches, and product pricing and discounting;

• disputes with our licensees relating to the use of our technology in, and marketing and sale of, products from which we received, or currently receive, manufacturing and/or royalty revenue and the amounts to be paid with respect to such products;

• exchange rate valuations and fluctuations;

and global political changes and/or instability, and any related changes in applicable laws and regulations, that may impact resources and markets for our products;

the impacts that the ongoing COVID-19 pandemic may have on the development, manufacture and commercialization of our products;

and global political changes, conflicts and/or instability, public health matters, economic conditions and/or any related changes in applicable laws and regulations, that may impact resources and markets for our products;

• any other material adverse developments with respect to the commercialization of our products.

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In August 2022, the Inflation Reduction Act was signed into law.

The Inflation Reduction Act includes several provisions that will impact our business to varying degrees, including those that impose new manufacturer financial liability on all drugs in Medicare Part D beginning in 2025, allow the U.S.

government to negotiate prices for some drugs covered under Medicare Part D beginning in 2026 and Medicare Part B in 2028, and require companies to pay rebates to Medicare beginning in 2023 for drug prices that increase faster than inflation.

The Inflation Reduction Act includes several provisions that will impact our business to varying degrees, including the Drug Price Negotiation Program applicable to Medicare Parts D and B and those provisions that impose new manufacturer financial liability on all drugs in Medicare Part D beginning in 2025, and require companies to pay rebates to Medicare for drug prices that increase faster than inflation.

The Drug Price Negotiation Program is subject to ongoing litigation, the outcome of which is difficult to predict.

In addition, economic pressure on state budgets may result in states increasingly seeking to achieve budget savings through mechanisms that limit coverage or payment for drugs, including but not limited to price control initiatives, discounts and other pricing-related actions.

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The PPACA significantly expanded coverage of mental health and substance use disorders and provided federal parity protections to such coverage benefits.

If successful, such efforts and proposed legislation or other future federal or state legislative or administrative changes relating to healthcare reform and drug pricing could adversely affect our business and financial results.

Additional discounts, rebates, coverage or plan changes, restrictions or exclusions as described above could have a material adverse effect on sales of our affected products.

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Government enforcement agencies have shown increased interest in pharmaceutical companies' product and patient assistance programs, including reimbursement support services, and a number of investigations into these programs have resulted in significant civil and criminal settlements.

Our co-pay programs could become the target of similar insurer actions.

CMS intends to monitor the provision of such support and may take regulatory action to limit it in the future.

Our payment support programs could become the target of similar actions.

In addition, in November 2013, CMS issued guidance to the issuers of qualified health plans sold through the PPACA’s marketplaces encouraging such plans to reject patient cost-sharing support from third parties and indicating that CMS intends to monitor the provision of such support and may take regulatory action to limit it in the future.

CMS subsequently issued a rule requiring individual market qualified health plans to accept third-party premium and cost-sharing payments from certain government-related entities.

In September 2014, the O ffice of I nspector G eneral of the U.S.

D epartment of H ealth and H uman S ervices issued a Special Advisory Bulletin warning manufacturers that they may be subject to sanctions under the federal anti-kickback statute and/or civil monetary penalty laws if they do not take appropriate steps to exclude Part D beneficiaries from using co-pay programs .

In September 2014, the Office of Inspector General of the U.S.

Department of Health and Human Services issued a Special Advisory Bulletin warning manufacturers that they may be subject to sanctions under the federal anti-kickback statute and/or civil monetary penalty laws if they do not take appropriate steps to exclude Part D beneficiaries from using co-pay programs.

It is possible that changes in insurer policies regarding co-pay programs and/or the introduction and enactment of new legislation or regulatory action could restrict or otherwise negatively affect these patient support programs, which could result in fewer patients using affected products, and therefore could have a material adverse effect on our sales, business, and financial condition.

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Timelines for the initiation, conduct and completion of clinical trials may be delayed by many factors, including:

issues with the opening, operation or inspection of a new or ongoing clinical trial site;

delays or failures of third-party CROs and other third-party service providers and clinical investigators to manage and conduct the trials, perform oversight of the trials, including data audit and verification procedures, or to meet expected deadlines;

an inability to recruit clinical trial participants at the expected rate or at all, or to adequately follow participants following treatment;

unforeseen safety or tolerability issues;

• issues with the opening, operation or inspection of a new or ongoing clinical trial site, including those located in or near areas of conflict or areas impacted by political, environmental, public health or economic events;

• delays or failures of third-party CROs and other third-party service providers and clinical investigators to manage and conduct the trials, perform oversight of the trials, including data audit and verification procedures, or to meet expected timelines;

• an inability to recruit and enroll clinical trial participants at the expected rate or at all, or to adequately follow participants following treatment;

• safety or tolerability issues;

• an inability to manufacture or obtain sufficient quantities of materials used for clinical trials;

unforeseen governmental or regulatory issues or concerns, including those of the FDA and other regulatory agencies;

impacts of the potential separation of our neuroscience and oncology businesses;

global instability, including instability relating to political events or a global pandemic or other contagious disease, such as COVID-19, in or near the countries in which we conduct our clinical trials.

• unforeseen governmental or regulatory issues or concerns, including those of the FDA and other regulatory agencies, that may impact the strategies for, and design, timelines or feasibility of, our clinical development programs.

In addition, we are currently conducting and enrolling patients in clinical studies in a number of countries where our experience is more limited.

In these instances, we must depend on third parties, including independent clinical investigators, CROs and other third-party service providers, to successfully conduct our clinical trials and to audit, verify and accurately report results from such trials.

Though we do not have much control over many aspects of such third-party activities, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial.

Though we do not have much control over many aspects of such third-party activities, we are responsible for ensuring that each

of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial.

Third parties may not complete planned activities on schedule or conduct our trials in accordance with regulatory requirements or our stated protocols.

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Preliminary, topline or interim data from our clinical trials that we may announce, publish or report from time to time may change as more patient data become available or based on subsequent audit and verification procedures, and may not be indicative of final data from such trials, data from future trials or real-world results.

From time to time, we may announce, publish or report preliminary, topline or interim data from our clinical trials, including those we are conducting in oncology.

Such data are subject to the risk that one or more of the clinical outcomes may materially change as patients continue progressing through the study (for example, in oncology studies, a patient may progress from a complete or partial response to progressive disease), as patient enrollment continues and/or as more patient data become available, and such data may not

be indicative of final data from such trials , data from future trials or real-world results .

From time to time, we may announce, publish or report preliminary, topline or interim data from our clinical trials.

Such data are subject to the risk that one or more of the clinical outcomes may materially change as patients continue progressing through the study, as patient enrollment continues and/or as more patient data become available, and such data may not be indicative of final data from such trials, data from future trials or real-world results.

In addition, such data may remain subject to audit confirmation and verification procedures that may result in the final data being materially different from the preliminary, topline or interim data disclosed.

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Regulatory approval by the FDA or other regulatory agencies can be delayed, limited or not granted at all for many reasons, including:

a product may not demonstrate safety and efficacy for each target indication in accordance with applicable regulatory agencies’ standards;

• a product may not demonstrate sufficient safety and efficacy or a sufficiently favorable benefit/risk profile for each target indication in accordance with applicable regulatory agencies’ standards;

• data from preclinical testing and clinical trials may be interpreted by applicable regulatory agencies in different ways than we or our licensees interpret it;

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• regulatory agencies may change their requirements for approval or post-approval marketing;

adverse medical events during the trials could lead to requirements that trials be repeated or extended, or that a program be terminated or placed on clinical hold, even if other studies or trials relating to the program are successful.

In addition, disruptions at the FDA and other regulatory agencies that are unrelated to our company or our products, including those relating to COVID-19, a prolonged U.S.

government shutdown, or other political or economic conditions, could cause delays to the regulatory approval process for our products.

• adverse medical events during our clinical trials or during clinical trials of other product candidates in the same class could lead to requirements that trials be repeated or extended, or that a development program be terminated or placed on clinical hold, even if other studies or trials relating to the program are successful.

In addition, disruptions at the FDA and other regulatory agencies that are unrelated to our company or our products, including those relating to a prolonged U.S.

government shutdown, or other global, political or economic conditions, could cause delays to the regulatory approval process for our products.

Any failure to obtain, or delay in obtaining, regulatory approval for our products will prevent or delay their commercialization and could have a material adverse effect on our business, financial condition, cash flows and results of operations.

In addition, any failure to obtain, or delay in obtaining, approval for our products could have a material impact on our shareholders’ confidence in the strength of our development capabilities and/or our ability to generate significant revenue from our development programs and could result in a significant decline in our share price.

Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or other events could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner, or otherwise prevent those agencies from performing normal business functions, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.

Average review times at the agency have fluctuated in recent years as a result.

In addition, government funding of the SEC and other government agencies on which our operations may rely is subject to the impacts of political events, which are inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may increase the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which could adversely affect our business.

For example, over the last several years, the U.S.

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

If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA and the SEC to timely review and process our submissions, which could have a material adverse effect on our business.

The FDA or other regulatory agencies may impose limitations or post-approval requirements on approvals for our products.

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failures relating to materials, manufacturing equipment or processes, quality deviations or safety issues, vendor error, operator error, labor shortages or disputes, utility or transportation disruptions, or physical or electronic security breaches;

site-specific incidents (such as fires), environmental incidents, natural disasters and other severe weather events, including those that may occur as a result of climate change, or global disruptions such as the current global pandemic and the ongoing war in Ukraine;

site-specific incidents (such as fires), environmental incidents, natural disasters and other severe weather events, including those that may occur as a result of climate change;

global disruptions such as the COVID-19 pandemic and ongoing conflicts in various regions of the world;

and many other factors.

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We may not be able to resolve any such issues in a timely manner, or at all, which could result in declines in sales and reputational damage as well as significant remediation costs to address any issues that arise.

We rely solely on our manufacturing facility in Wilmington, Ohio for the manufacture of RISPERDAL CONSTA, VIVITROL, ARISTADA, ARISTADA INITIO and LYBALVI and on our manufacturing facility in Athlone, Ireland for the manufacture of FAMPYRA, VUMERITY, other products using our NanoCrystal or OCR technologies and certain of our other products in development.

We rely solely on our manufacturing facility in Wilmington, Ohio for the manufacture of RISPERDAL CONSTA, VIVITROL, ARISTADA, ARISTADA INITIO and LYBALVI and currently rely on the Athlone Facility for the manufacture of FAMPYRA, VUMERITY, other products using our NanoCrystal or OCR technologies and certain of our other products in development.

Due to regulatory and technical requirements, we have limited ability to shift production among our facilities or to outsource any portions of our manufacturing to third parties in the event of an interruption in manufacturing or demand for manufacturing that exceeds our capacity at the applicable facility.

Any need to shift production among our facilities or transition our manufacturing processes, or portions thereof, to a third party, whether due to an interruption in our manufacturing or to demand for a product that exceeds our manufacturing capacity, could take a significant amount of time and money, may not be successful, and could cause significant interruption or delay in our ability to supply product.

Any interruption or delay in supply, whether resulting from issues with equipment, materials, personnel, manufacturing processes, or internal or external quality audits or reviews, could result in delays in meeting our contractual obligations and could damage our reputation and relationships with our licensees, including the loss of manufacturing and supply rights and/or revenues.

Any need to shift production among our facilities or transition our manufacturing processes, or portions thereof, to a third party, whether due to an interruption in our manufacturing or to demand for a product that exceeds our manufacturing capacity or otherwise, could take a significant amount of time and money, may not be successful, and could cause significant interruption or delay in our ability to supply product.

In addition, in December 2023 we announced entry into a definitive agreement to sell the Athlone Facility to Novo and plans to enter into subcontracting arrangements to continue certain development and manufacturing activities currently performed at the Athlone Facility for a period of time after the closing of the transaction, which may continue through the end of 2025.

Such transaction is subject to various uncertainties and risk, including, without limitation, satisfaction of the conditions to closing of the transaction on the anticipated timeline, potential negative impacts on our relationships with current suppliers or licensees or diversion of management and employee attention from daily business operations, and risks inherent in the transition to subcontracting arrangements.

Any interruption or delay in supply, whether resulting from issues with equipment, materials, personnel, manufacturing processes, or internal or external quality audits or reviews, or issues related to the sale of the Athlone Facility and related subcontracting arrangements, could result in delays in meeting our contractual obligations and could damage our reputation and relationships with our licensees, and result in potential loss of revenues.

Our manufacturing facilities also require specialized personnel and are expensive to operate and maintain.

Any interruption in manufacturing, delay in a regulatory approval or commercial launch, or recall or suspension of sales of products manufactured in our facilities, may cause operating losses as we continue to operate these facilities and retain the required specialized personnel.

In addition, any significant personnel shortages at our manufacturing facilities, whether temporary or prolonged, including shortages resulting from impacts of the COVID-19 pandemic or related to the labor market more broadly, may cause significant interruptions to our manufacturing facilities and to our supply of products.

In addition, any significant personnel shortages at our manufacturing facilities, whether temporary or prolonged, including shortages related to the labor market, may cause significant interruptions to our manufacturing facilities and to our supply of products.

We are also dependent in certain cases on third parties who manufacture or distribute certain products from which we receive revenue.

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We rely on third parties for the timely supply of goods and services that play a role in our manufacturing activities, including, among others, specified raw materials, equipment, contract manufacturing, formulation and packaging services, storage and product distribution services, customer service activities and product returns processing, and some of these goods and services for our products are currently only available from a single source or a limited number of qualified sources.

Although we actively manage these third-party relationships to ensure continuity, quality and compliance with applicable regulations, events beyond our control, including natural disasters and other severe weather events, including those that may occur as a result of climate change, or global disruptions such as the current global pandemic and the ongoing war in Ukraine, could negatively impact the continuity of supply of such materials and/or services, their quality and their compliance with applicable standards.

Although we actively manage these third-party relationships to support continuity, quality and compliance with applicable regulations, events beyond our control, including natural disasters and other severe weather events, including those that may occur as a result of climate change, or global disruptions such as the COVID-19 pandemic and ongoing conflicts in various regions in the world, could negatively impact the continuity of supply of such materials and/or services, their quality and their compliance with applicable standards.

Any such failure could materially adversely affect our business, financial condition, cash flows and results of operations.

The manufacture of products and product components, including the procurement of bulk drug product and other materials used in the manufacture, packaging, storage and distribution of our products, requires successful coordination among us and multiple third-party providers.

Lack of capacity available at such third-party providers or any other issues with the quality or operations of these

third-party providers, including any issues related to regulatory permits, audits or requirements, could require us to delay shipment of saleable products, recall products previously shipped or impair our ability to supply products at all.

Lack of capacity available at such third-party providers or any other issues with the quality or operations of these third-party providers, including any issues related to regulatory permits, audits or requirements, could require us to delay shipment of saleable products, recall products previously shipped or impair our ability to supply products at all.

We endeavor to qualify and register new vendors and to develop contingency plans so that production is not materially impacted by third-party provider issues.

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and McKesson Corp—in the distribution of the products that we market and sell in the U.S.

If we are unable to maintain our business relationships with these wholesalers on commercially acceptable terms, if the buying patterns of these wholesalers fluctuate due to seasonality or any other reason or if wholesaler buying decisions or other factors outside of our control change, our business, financial condition, cash flows and results of operations could be materially adversely affected .

If we are unable to maintain our business relationships with these wholesalers on commercially acceptable terms, if these wholesalers experience prolonged business disruptions, if the buying patterns of these wholesalers fluctuate due to seasonality or any other reason or if wholesaler buying decisions or other factors outside of our control change, our business, financial condition, cash flows and results of operations could be materially adversely affected.

If we or our third-party providers fail to meet the stringent requirements of governmental regulation in the manufacture of our products, we could incur substantial remedial costs and a reduction in sales and/or revenues.

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We and our third-party providers are subject to unannounced inspections by the FDA and other agencies to confirm compliance with all applicable laws.

Any changes to our suppliers or modifications of methods of manufacturing require submission of amendments to our NDAs or other marketing applications to the FDA or other applicable regulatory agencies, and ultimate acceptance by such agencies of such amendments, prior to release of product to the applicable marketplace.

Any changes to our suppliers or modifications of methods of manufacturing require submission of amendments to our marketing applications to the FDA or other applicable regulatory agencies, and ultimate acceptance by such agencies of such amendments, prior to release of product to the applicable marketplace.

Our inability or the inability of our third-party providers to demonstrate ongoing compliance with cGMP or other regulatory requirements could require us to withdraw or recall products and interrupt clinical and commercial supply of our products.

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This could increase our costs, cause us to lose revenue or market share and damage our reputation with our collaboration partners or in the market generally.

In March 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law in the U.S., and served to increase the FDA’s existing authority with respect to drug shortage measures.

In March 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act ( the “CARES Act”) was signed into law in the U.S., and served to increase the FDA’s existing authority with respect to drug shortage measures.

Under the CARES Act, for each facility where marketed products for certain serious diseases or conditions are manufactured, or where components of such products are manufactured, we are required to have a risk management plan in place that identifies and evaluates risks to the supply of such products or product components, which plans may be subject to review during any FDA inspection.

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Adverse market conditions or other business developments may cause disruptions, delays or significant financial impact to our business or to the businesses of third parties from which we receive revenues, or reductions in the availability or extent of reimbursement available to us.

For example, we depend on our licensees and customers for substantial portions of our revenue, and the contracts with our licensees and customers pursuant to which we supply product, or under which we are eligible for certain development or sales milestones or royalties related to products that incorporate our proprietary technologies, may not be secured by collateral or other security.

For example, we depend on our licensees and customers for substantial portions of our revenue, and the contracts with our licensees and customers pursuant to which we supply product, or under which we are eligible for certain development or sales milestones or royalties related to licensed products or products that incorporate our proprietary technologies, may not be secured by collateral or other security.

Accordingly, we bear the risk that our licensees may not be able to pay amounts due to us under such contracts.

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federal and state health authorities may reduce the extent of their reimbursements (including Medicare and Medicaid reimbursements in the U.S.) or payments, and private insurers may increase their scrutiny of claims.

licensees or other third parties are unable or unwilling to pay amounts owed to us or satisfy their commitments to us, or if there are reductions to such payments or commitments, our business, financial condition, cash flows and results of operations may be materially adversely affected .

If our licensees or other third parties are unable or unwilling to pay amounts owed to us or satisfy their commitments to us, or if there are reductions to such payments or commitments, our business, financial condition, cash flows and results of operations may be materially adversely affected.

Our success largely depends upon our ability to attract, recognize and retain key personnel.

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The loss of key personnel due to any of these factors or our inability to hire and retain personnel who have technical, scientific, manufacturing, management, regulatory, compliance or commercial backgrounds could materially adversely impact our business, including the achievement of our manufacturing, research and development, commercial, financial and other operational and strategic business objectives.

The increasing use of social media platforms presents new risks and challenges.

Social media is increasingly being used as a means of corporate communications and for purposes of social networking and commentary.

We are increasingly using social media tools to communicate certain information about our business, our employees, our company values and corporate responsibility initiatives, to support disease state education in our areas of focus, and to provide information about our products or development programs.

Despite our efforts to monitor evolving social media guidance and to comply with applicable rules, regulations and regulatory guidance relating to social media, such practices are evolving and not always clear.

There is a risk that the use of social media by us or our employees to communicate about our products or business may cause us to be found in violation of applicable requirements and could result in regulatory actions or legal claims against us related to off-label marketing or other prohibited activities.

In addition, our employees may knowingly or inadvertently engage on social media in ways that may not comply with our social media policy or other legal, contractual or regulatory requirements, which may give rise to liability, lead to the loss of trade secrets and other intellectual property, or result in public disclosure of personal information of our employees, clinical trial patients, customers, and others.

In addition, negative or inaccurate posts or comments about us or our products on any social media platforms could damage our reputation, brand image and goodwill.

If such disclosures were to occur, there is a risk that we fail to monitor and comply with applicable adverse event reporting obligations or that we may not be able to defend the Company or the public’s legitimate interests due to restrictions on what we may say about our products or our business.

Any of these events, if they were to occur, could cause us to incur liability, face overly restrictive regulatory actions or suffer reputational or other harm to our business.

Risks Related to Intellectual Property

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The patent holder may not grant us a license on reasonable terms, or it may refuse to grant us a license at all.

could delay or prevent us from developing, manufacturing, selling or importing those of our products that would require the license.

This could delay or prevent us from developing, manufacturing, selling or importing those of our products that would require the license.

Claims of IP infringement may also require that we redesign affected products, enter into costly settlement or license agreements, pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our products.

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If any trade secret, know-how or other invention not protected by a patent were to be disclosed to, or independently developed by, a competitor, such event could materially and adversely affect our business, financial condition, cash flows and results of operations.

Uncertainty over IP in the biopharmaceutical industry has been the source of litigation, which is inherently costly and unpredictable, could significantly delay or prevent approval or negatively impact commercialization of our products, and could adversely affect our business.

Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, which are inherently costly and unpredictable, could significantly delay or prevent approval or negatively impact commercialization of our products, and could adversely affect our business.

There is considerable uncertainty within the biopharmaceutical industry about the validity, scope and enforceability of many issued patents in the U.S.

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beginning sometime in 2028 or earlier under certain circumstances.

Ultimately, the outcome of such litigation and proceedings, or any settlement arrangement with respect thereto, could adversely affect our business and the validity and scope of our patents or other proprietary rights or delay or prevent us from manufacturing and marketing our products.

In addition, in August 2023, we settled Paragraph IV litigation proceedings with Teva (described in more detail below) by granting Teva a license to market and sell a generic version of VIVITROL in the U.S.

beginning on January 15, 2027, or earlier under certain circumstances.

Ultimately, the outcome of such litigation and other proceedings, or any settlement arrangements with respect thereto, could adversely affect our business and the validity and scope of our patents or other proprietary rights or delay or prevent us from manufacturing and marketing our products.

We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.

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In September 2020, we initiated a Paragraph IV lawsuit against Teva to dispute such claims.

A trial is scheduled to begin on February 16, 2023.

Although we intend to vigorously defend our IP rights, and we expect our licensees to do the same, there can be no assurance that we or our licensees will prevail.

A trial was held in February 2023.

In August 2023, we entered into a confidential settlement and license agreement (the “Settlement Agreement”) with Teva to resolve the proceedings between the parties.

Pursuant to the terms of the Settlement Agreement, we granted Teva a non-exclusive, royalty-free, non-transferable, non-sublicensable limited license to market and sell a generic version of VIVITROL in the U.S.

beginning on January 15, 2027, or earlier under certain circumstances.

Although we intend to vigorously defend our IP rights, and we expect our licensees to do the same, there can be no assurance that we or our licensees will prevail or settle any such legal proceedings or disputes on favorable terms.

Our and our licensees’ existing patents could be invalidated, found unenforceable or found not to cover generic forms of our or our licensees’ products.

If Teva or other ANDA filer s were to receive FDA approval to sell generic version s of our products or the products from which we receive revenue and/or prevail in any patent litigation with respect to such products , such products would become subject to increased competition , and our business, financial condition, cash flows and results of operations could be materially adversely affected .

If any ANDA filers were to receive FDA approval to sell generic versions of our products or the products from which we receive revenue and/or prevail in any patent litigation with respect to such products, such products would become subject to increased competition, and our business, financial condition, cash flows and results of operations could be materially adversely affected.

Risks Related to Regulatory or Legal Matters

Litigation or arbitration filed against Alkermes, including securities litigation, or actions (such as citizens petitions) filed against regulatory agencies in respect of our products, may result in financial losses, harm our reputation, divert management resources, negatively impact the approval of our products, or otherwise negatively impact our business.

We are, and may in the future become, involved in various legal proceedings, including those asserting violations of securities and/or fraud and abuse laws and those asserting claims related to product liability, intellectual property and/or contractual arrangements.

Such proceedings may include claims for, or the possibility of, damages or fines and penalties involving substantial amounts of money or other relief, including but not limited to civil or criminal fines and penalties.

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Additionally, regardless of whether or not there is merit to the claims underlying any legal proceedings to which we are subject, or whether or not we are found as a result of such lawsuits to have violated any applicable laws, such lawsuits and inquiries can be expensive to defend or respond to, may divert the attention of our management and other resources that would otherwise be engaged in managing our business, and may further cause significant and potentially irreparable harm to our public reputation.

We have been, and may again be, the subject of citizen petitions that request that the FDA refuse to approve, delay approval of, or impose additional approval requirements on our NDAs.

If successful, such petitions can significantly delay, or even prevent, the approval of the NDA in question.

We have been, and may again be, the subject of citizen petitions or litigation that request that the FDA refuse to approve, delay or withdraw approval of, or impose additional approval requirements on our marketing applications.

If successful, such petitions can significantly delay, or even prevent, the approval of the marketing application in question or cause such marketing application approval to be withdrawn.

Even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition, or may impose additional approval requirements as a result of such petition.

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Government regulatory actions, including audits, records requests and inspections of manufacturing facilities, can result in delay in the release of products, seizure or recall of products, suspension or revocation of the authority necessary for the manufacture and sale of products, and other regulatory enforcement actions, including the levying of civil fines or criminal penalties, the issuance of a warning letter, or the imposition of an injunction.

Biopharmaceutical companies also have been the target of government lawsuits and investigations alleging violations of government regulation, including claims asserting submission of incorrect pricing information, impermissible promotion of pharmaceutical products, payments intended to influence the referral of healthcare business, submission of false claims for government reimbursement, antitrust violations and violations related to environmental matters.

We have been, and may continue to be, the subject of certain government inquiries or requests for documentation.

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Department of Veterans Affairs, FSS pricing program, and the Tricare program, and have obligations to report the average sales price for certain of our drugs to the Medicare program.

For calendar quarters beginning January 1, 2022, manufacturers will need to start reporting the average sales price for drugs under the Medicare program regardless of whether they are enrolled in the Medicaid Drug Rebate Program.

Currently, only manufacturers participating in the Medicaid Drug Rebate Program are obligated to do so.

Pricing and rebate calculations vary across products and programs, are complex, and are often subject to interpretation by us, governmental or regulatory agencies and the courts, which can change and evolve over time.

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Civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we are found to have made a misrepresentation in the reporting of our average sales price, if we fail to submit the required price data on a timely basis, or if we are found to have charged 340B covered entities more than the statutorily mandated ceiling price.

The CMS could also decide to terminate our Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid or Medicare Part B for our covered outpatient drugs.

CMS could also decide to terminate our Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid or Medicare Part B for our covered outpatient drugs.

We cannot assure you that our submissions will not be found by CMS to be incomplete or incorrect.

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Regulatory and legislative changes, and judicial rulings relating to the Medicaid Drug Rebate Program and related policies (including coverage expansion), have increased and will continue to increase our costs and the complexity of compliance, have been and will continue to be time-consuming to implement, and could have a material adverse effect on our results of operations, particularly if CMS or another agency challenges the approach we take in our implementation.

The HRSA issued a final regulation regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities, which became effective in January 2019.

HRSA issued a final regulation regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities, which became effective in January 2019.

Implementation of this regulation could affect our obligations and potential liability under the 340B program in ways we cannot anticipate.

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Further, legislation may be introduced that, if passed, would, among other things, further expand the 340B program to additional covered entities or would require participating manufacturers to agree to provide 340B discounted pricing on drugs used in an inpatient setting, and any additional future changes to the definition of average manufacturer price or the Medicaid rebate amount could affect our 340B ceiling price calculations and negatively impact our results of operations.

Additionally, certain pharmaceutical manufacturers are involved in ongoing litigation regarding contract pharmacy arrangements under the 340B Program.

The outcome of those judicial proceedings and the potential impact on the way in which manufacturers extend discounts to covered entities through contract pharmacies remain uncertain.

Additionally, certain pharmaceutical manufacturers are involved in ongoing litigation regarding their initiatives that restrict covered entities’ ability to purchase products at the 340B program price for shipment through an unlimited number of contract pharmacies.

Based on the outcome of litigation related to this topic or for other reasons, we may implement, and other pharmaceutical manufacturers have implemented, similar restrictions.

The outcome of pending judicial proceedings and the potential impact on the way in which manufacturers extend discounts to covered entities through contract pharmacies remain uncertain and one or more negative legal rulings, or the passage of legislation in respect of this topic, may materially adversely impact our results of operations if we were to impose limitations on contract pharmacy arrangements.

We have obligations to report the average sales price for certain of our drugs to the Medicare program.

Statutory or regulatory changes or CMS guidance could affect the average sales price calculations for our products and the resulting Medicare payment rate, and could negatively impact our results of operations.

In addition, we are required to report the best price for our drugs, as defined under the Medicaid Drug Rebate Program, to CMS.

Statutory or regulatory changes or changes in CMS guidance could affect the average sales price or best price calculations for our products and the resulting Medicare payment rate or rebates we owe to state Medicaid programs.

Such changes could negatively impact our results of operations.

Pursuant to applicable law, knowing provision of false information in connection with price reporting under the U.S.

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Risks Related to our Financial Condition and Tax Matters

We may not become profitable on a sustained basis.

At December 31, 2022, our accumulated deficit was $1.7 billion, which was primarily the result of net losses incurred from 1987, the year Alkermes, Inc., was founded, through December 31, 2022, partially offset by net income over certain fiscal periods.

Our ability to achieve sustained profitability in the future will depend on our ability to grow and diversify our revenue and effectively and efficiently manage our costs.

We may not be able to maintain profitability on a sustained basis.

At December 31, 2023, our accumulated deficit was $1.3 billion, which was primarily the result of net losses incurred from continuing operations from 1987, the year Alkermes, Inc., was founded, through December 31, 2022, partially offset by net income from continuing operations over certain fiscal periods, including net income earned during the year ended December 31, 2023.

Our ability to maintain profitability on a sustained basis will depend on our ability to continue to grow and diversify our revenue and to effectively and efficiently manage our costs.

Factors that may impact our future revenue, and in turn our future profitability, include our or our licensees’ (as applicable) ability to:

successfully commercialize VIVITROL, the ARISTADA product family, LYBALVI, VUMERITY, RISPERDAL CONSTA, the long-acting INVEGA products, FAMPYRA and any other marketed products for which we earn revenue in the countries in which such products are approved;

successfully develop, and obtain and maintain regulatory approval for, products both in the U.S.

• successfully commercialize VIVITROL, the ARISTADA product family, LYBALVI, VUMERITY, the long-acting INVEGA products and any other marketed products for which we earn revenue in the countries in which such products are approved;

• successfully develop, and obtain and maintain regulatory approval for, products in the U.S.

and in other countries;

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Factors that may impact our future spend, and in turn our future profitability, include:

the scope of our research and development activities, including the number of products, indications or new technologies that we may pursue, and our ability, if sought, to share development costs through potential collaborations;

• the scope of our research and development activities, including the number of programs, products, indications or new technologies that we may pursue, and our ability, if sought, to share development costs through potential collaborations;

• the time and expense required to pursue FDA and/or other regulatory approvals for our products;

• the time and expense required to prosecute, enforce, defend and/or challenge patent and other IP rights;

the costs of operating and maintaining our manufacturing and research facilities;

• the costs of operating and maintaining our manufacturing and research facilities, including the costs and availability of raw materials or components of our products;

• the costs of doing business with third-party vendors, including suppliers, manufacturers, packagers and distributors;

the cost of possible licenses or acquisitions of technologies, compounds or product rights or the potential acquisition of other assets, including equipment, facilities or businesses;

• the scope and costs of our commercial activities, including our investment in direct-to-consumer campaigns and other initiatives;

• the cost of possible business development activities, including licenses or acquisitions of technologies, compounds or product rights or the potential acquisition of other assets, including equipment, facilities, businesses or entire companies;

• the costs related to potential litigation, arbitration or other legal proceedings or government requests for information;

• the costs of defending against potential or actual proxy contests or other activist shareholder actions;

the costs associated with the planning for and/or execution of the potential separation of our neuroscience and oncology businesses;

• the costs of compliance with new regulations applicable to us, including those related to the measurement, reporting and assurance of environmental performance data;

• the costs associated with recruiting, compensating and retaining a highly-skilled workforce in an environment where competition for highly-skilled employees is intense.

We have broad discretion regarding use of our cash and cash equivalents and we may not allocate our cash in ways that ultimately increase the value of our ordinary shares.

We have broad discretion in the allocation of our cash and cash equivalents and we may not allocate our cash in ways that ultimately increase the value of our ordinary shares.

We could make capital allocation decisions to utilize such funds in a way that our shareholders do not agree with or that do not ultimately generate shareholder value in the manner they, or we, anticipate or at all.

If our cash and cash equivalents are not deployed effectively or do not generate shareholder value, we may fail to achieve expected financial results or other business objectives, which could have a material negative impact on our financial condition, results of operations or the market price of our ordinary shares.

holders of our ordinary shares may suffer adverse tax consequences if any of our non-U.S.

subsidiaries are characterized as a “controlled foreign corporation”.

In December 2017, the Tax Cuts and Jobs Act was signed into law.

In December 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Cuts and Jobs Act”) was signed into law.

This legislation significantly changed U.S.

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The impact of this change on certain holders of our ordinary shares is uncertain and could be adverse, including potential income inclusions and reporting requirements for U.S.

persons (as defined in the Code) who are treated as owning (directly or indirectly) at least 10% of the value or voting power of our shares.

persons (as defined in the U.S.

Internal Revenue Code of 1986, as amended (the “Code”)) who are treated as owning (directly or indirectly) at least 10% of the value or voting power of our shares.

The determination of CFC status is complex and includes attribution rules, the application of which are not entirely certain.

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federal income tax consequences of investments in us.

If goodwill or other intangible assets become impaired, we could have to take significant charges against earnings.

At December 31, 2022, we had $37.7 million of amortizable intangible assets and $92.9 million of goodwill.

If goodwill becomes impaired, we could have to take significant charges against earnings.

At December 31, 2023, we had $83.0 million of goodwill.

Under accounting principles generally accepted in the U.S.

(“GAAP”), we must assess, at least annually and potentially more frequently, whether the value of goodwill and other indefinite‑lived intangible assets have been impaired.

Amortizing intangible assets will be assessed for impairment in the event of an impairment indicator.

Any reduction or impairment of the value of goodwill or other intangible assets will result in a charge against earnings, which could materially adversely affect our results of operations and shareholders’ equity in future periods.

(“GAAP”), we must assess, at least annually and potentially more frequently, whether the value of goodwill has been impaired.

Any reduction or impairment of the value of goodwill will result in a charge against earnings, which could materially adversely affect our results of operations and shareholders’ equity in future periods.

Our effective tax rate may increase.

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Effective January 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct R&D expenses in the year incurred and instead requires taxpayers to capitalize, and subsequently amortize such expenses over five years for research activities conducted in the U.S., and over fifteen years for research activities conducted outside of the U.S.

As such, we expect a material decrease in cash flows provided from operations and a material increase in our net deferred tax assets over the next number of years.

Unless the U.S.

Department of the Treasury issues regulations that narrow the application of this provision to a smaller subset of our R&D expenses or the provision is deferred, modified or repealed by the U.S.

Congress, there will be a material increase in our U.S.

income tax liability over the next number of years.

As such, we expect a material decrease in cash flows provided from operations and a material increase in our net deferred tax assets over the next number of years, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

In December 2023, the IRS issued Notice 2024-12 that provided clarity on the application of Section 174 of the Code (“Section 174”).

On this basis, we adjusted our estimate of expenses that should be capitalized and amortized which resulted in lower taxable income for the year ended December 31, 2023.

In December 2022, the EU agreed to implement a corporate minimum tax rate of 15% on companies with combined annual revenue of at least €750.0 million.

The Irish government has transposed the corporate minimum tax rules into Irish legislation with effect as of January 1, 2024.

As such, we expect a material increase in our tax expense and a material decrease in cash flows provided from operations, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Our deferred tax assets may not be realized.

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in the future.

Losses may arise from unforeseen operating events, an enlarged foreign derived intangible income deduction due to the capitalization of R&D expenses, or the occurrence of significant excess tax benefits arising from the exercise of stock options and/or the vesting of restricted stock units.

Losses may arise from operating events (including clinical program progression), or the occurrence of significant excess tax benefits arising from the exercise of stock options and/or the vesting of restricted stock units.

Unless we are able to generate sufficient taxable income in the future, a substantial valuation allowance to reduce the carrying value of our U.S.

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This could materially increase our tax expense and may materially adversely affect our financial condition and results of operations.

As of December 31, 2023, we had $94.7 million of net deferred tax assets in Ireland including $87.5 million relating to net operating losses (“NOL”).

The NOLs can be carried forward, without time limit, against trading income of the same trade in future accounting periods.

The disposition of the Athlone Facility may result in (i) a significant change to the existing trade such that the same trade is no longer continued, and (ii) a complete discontinuance of the existing trade and the commencement of a new trade.

We do not believe that the disposition would amount to a significant change or a discontinuance of our existing trade;

however, the Irish Tax Authority could assert a contrary position, in which case we could become involved in tax controversy with the Irish Tax Authority regarding possible additional tax liabilities.

If we were to be unsuccessful in resolving any such tax controversy in our favor, we could be liable for significant tax liabilities which would materially adversely affect our financial condition, cash flows and results of operations.

The business combination in 2011 of Alkermes, Inc.

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federal and state income tax than we anticipate being liable for as a result of the Business Combination, which would place further demands on our cash needs.

Our level of indebtedness could adversely affect our business and limit our ability to plan for or respond to changes in our business.

If the separation of our oncology business completed in November 2023 does not ultimately qualify as a transaction that is generally tax-free for U.S.

federal and Irish tax purposes as we anticipate, we and/or our shareholders could be subject to significant tax liabilities.

In connection with the separation of our oncology business into Mural Oncology plc completed in November 2023, we sought and received a private letter ruling from the IRS (the “IRS Ruling”) and an opinion from our U.S.

tax advisor (the “U.S.

Tax Opinion”) regarding U.S.

federal income tax consequences of the separation, including that, among other things, the separation would be expected to generally qualify as tax-free for U.S.

federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code.

The IRS Ruling and/or the U.S.

Tax Opinion were based on and relied on, among other things, certain facts, assumptions, representations, and undertakings from us and Mural Oncology plc, including those relating to past and future conduct of the companies’ respective business operations and other matters.

If any of these facts, assumptions, representations, statements or undertakings are, or become, inaccurate or incomplete, or if we or Mural Oncology plc breach any of our respective covenants in the separation documents, the IRS Ruling and/or the U.S.

Tax Opinion may be invalid and the conclusions reached therein could be jeopardized.

Notwithstanding the U.S.

Tax Opinion or IRS Ruling, the U.S.

Internal Revenue Service, or the IRS, could determine that a distribution or any related transaction is taxable for U.S.

Tax Opinion will not be binding on the IRS or the courts.

Accordingly, the IRS or the courts may challenge the conclusions stated in the U.S.

Tax Opinion and such challenge could prevail.

If the separation transaction is ultimately determined to be taxable, we and/or our shareholders that are subject to U.S.

federal income tax could incur significant tax liabilities.

Furthermore, in connection with the separation, we sought and received an opinion from our Irish tax advisor (the “Irish Tax Opinion”) regarding the Irish tax consequences of the separation.

The Irish Tax Opinion was based on and relied on, among other things, certain facts, assumptions, representations, and undertakings from us, including those relating to past and future conduct of our business operations and other matters.

The Irish Tax Opinion will not be binding on the Irish Tax Authority or the Irish courts.

Accordingly, the Irish Tax Authority or the Irish courts may challenge the conclusions stated in the Irish Tax Opinion and such challenge could prevail.

In such an event, we and/or our shareholders could incur significant tax liabilities.

Our level of indebtedness, and the interest-rate transition to SOFR, could adversely affect our business and limit our ability to plan for or respond to changes in our business.

In March 2021, we amended and refinanced our then-existing term loan (the “2023 Term Loans”), in order to, among other things, provide for a new class of replacement term loans equal to $300.0 million;

extend the due date of the loan from March 26, 2023 to March 12, 2026;

amend the interest payable from LIBOR plus 2.25% with no LIBOR floor to LIBOR plus 2.50% with a LIBOR floor of 0.5%;

amend the interest payable from London Interbank Offered Rate (“LIBOR”) plus 2.25% with no LIBOR floor to LIBOR plus 2.50% with a LIBOR floor of 0.5%;

and increase covenant flexibility (such refinancing, the “Term Loan Refinancing” and the 2023 Term Loans as so amended and refinanced, the “2026 Term Loans”).

The 2026 Term Loans were also amended to include customary Alternative Reference Rates Committee (“ARRC”) hardwired benchmark replacement language.

In June 2023, we amended the 2026 Term Loans to transition the interest rate available for borrowings thereunder from a LIBOR-based interest rate to an interest rate based on SOFR and to make other confirming and mechanical changes.

SOFR is a relatively new reference rate and its composition and characteristics are not the same as LIBOR.

Given SOFR’s very limited history and potential volatility as compared to other benchmark or market rates, the future performance of SOFR cannot be predicted based on historical performance.

The consequences of using SOFR could include an increase in the cost of our variable rate indebtedness.

As of December 31, 2023, our borrowings consisted of $291.8 million outstanding under the 2026 Term Loans.

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The agreements governing the 2026 Term Loans include a number of restrictive covenants that, among other things, and subject to certain exceptions and baskets, impose operating and financial restrictions on us.

Our failure to comply with these restrictions or to make these payments could lead to an event of default that could result in an acceleration of the indebtedness.

Our failure to comply with these restrictions could lead to an event of default that could result in an acceleration of the indebtedness.

Our future operating results may not be sufficient to ensure our ability to make our debt payments or to remedy any such default.

In the event of an acceleration of this indebtedness, we may not have, or be able to obtain, sufficient funds to make any accelerated payments.

Discontinuation, reform or replacement of LIBOR, or uncertainty related to the potential for any of the foregoing, may adversely affect us.

In 2017, the U.K.

Financial Conduct Authority announced its intention to phase out LIBOR after 2023.

Currently, it is anticipated that LIBOR will be completely phased out by June 30, 2023.

Federal Reserve, in conjunction with the ARRC, a steering committee comprised of large U.S.

financial institutions, has proposed a new index calculated by short term repurchase agreements, backed by U.S.

Treasury securities, called the Secured Overnight Financing Rate (“SOFR”) as an alternative to LIBOR for use in contracts that are currently indexed to U.S.

dollar LIBOR and has proposed a paced market transition plan to SOFR.

On July 29, 2021, the ARRC formally recommended SOFR as its preferred alternative replacement rate for U.S.

dollar LIBOR.

The 2026 Term Loans contain customary ARRC hardwired benchmark replacement language to transition from LIBOR to SOFR.

The discontinuation, reform or replacement of LIBOR or any other benchmark rates may have an unpredictable impact on contractual mechanics in the credit markets or cause disruption to the broader financial markets.

Uncertainty as to the nature of such potential discontinuation, reform or replacement may negatively impact the volatility of LIBOR rates, liquidity, or our access to funding required to operate our business.

In addition, SOFR is a relatively new reference rate and its composition and characteristics are not the same as LIBOR.

Given SOFR’s very limited history and potential volatility as compared to other benchmark or market rates, the future performance of SOFR cannot be predicted based on historical performance.

The consequences of using SOFR could include an increase in the cost of our variable rate indebtedness.

We are monitoring these transition efforts and, although the 2026 Term Loans contain provisions designed to accommodate an alternate reference rate, we may need to amend these and other contracts to accommodate any replacement rate.

Our business strategy may involve future transactions which may harm the market price of our ordinary shares or require us to seek additional funds, and such funding may not be available on commercially favorable terms or at all and may cause dilution to our existing shareholders.

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In order to finance such transactions, we may require additional funds, and we may seek such funds through various sources, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets, monetization of royalty streams or other financing methods or structures.

The source, timing and availability of any financings will depend on global economic conditions, credit and financial market conditions, interest rates and other factors.

The source, timing and availability of any financing will depend on global economic conditions, credit and financial market conditions, interest rates and other factors.

If we issue additional equity securities or securities convertible into equity securities, our shareholders would suffer dilution of their investment, and it may adversely affect the market price of our ordinary shares.

In addition, under Irish law, the directors of an Irish public limited company must have specific authority, as approved by the company’s shareholders, to allot and issue any ordinary shares (other than pursuant to employee equity plans) and, if such directors desire to allot and issue ordinary shares for cash, such shares must first be offered on the same or more favorable terms to the Company’s existing shareholders on a pro-rata basis, unless this statutory pre-emption right is disapplied by approval of the company’s shareholders.

In July 2022, our shareholders authorized our board of directors to allot and issue ordinary shares in an amount equal to approximately 33% of our issued share capital (at the date of such authorization), and to issue ordinary shares for cash on a non-pre-emptive basis in an amount equal to approximately 5% of our issued share capital (at the date of such authorization) or in an amount equal to approximately 10% of our issued share capital (at the date of such authorization) under certain specified circumstances;

however, these share issuance authorities were granted for eighteen months only, at which point they lapse unless renewed by our shareholders.

In June 2023, our shareholders authorized our board of directors to allot and issue ordinary shares in an amount equal to approximately 20% of our issued ordinary share capital (as of May 15, 2023), and to issue ordinary shares for cash on a non-pre-emptive basis in an amount equal to approximately 20% of our issued share capital (as of May 15, 2023) under certain specified circumstances;

however, these share issuance authorities were granted for eighteen months only, at which point they will lapse unless renewed by our shareholders.

If we are unable to obtain renewal of share issuance authorities from our shareholders, or are otherwise limited by the terms of new share issuance authorities approved by our shareholders, our ability to use our authorized but unissued share capital to effect or to fund acquisition or other transaction opportunities, or to otherwise raise capital, could be adversely affected.

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We cannot be certain that additional financing will be available from any of these sources when needed or, if available, will be on acceptable terms.

If we fail to obtain additional capital when we need it, we may not be able to execute our business strategy successfully and may have to give up rights to our product platforms, and/or products, or grant licenses on terms that may not be favorable to us.

If we fail to obtain additional capital if needed, we may not be able to execute our business strategy successfully and may have to give up rights to our product platforms, and/or products, or grant licenses on terms that may not be favorable to us.

Even if we are able to finance potential transactions without seeking any external financing, expenditure of a significant amount of cash on such transactions may require difficult capital allocation decisions and may limit our ability to pursue other important business and strategic objectives, may significantly impact our financial condition and profitability and limit our potential to return capital to shareholders.

As a result of these and other potential impacts, the market price of our ordinary shares may fluctuate significantly.

Currency exchange rates may affect revenues and expenses.

We conduct a large portion of our business in international markets.

For example, we derive a majority of our RISPERDAL CONSTA revenues and all of our FAMPYRA, XEPLION, TREVICTA and BYANNLI revenues from sales in countries other than the U.S., and these sales are denominated in non-U.S.

For example, we derive all of our XEPLION, TREVICTA and BYANNLI revenues from sales in countries other than the U.S., and these sales are denominated in non-U.S.

dollar (“USD”) currencies.

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During the year ended December 31, 2023, the closing price of our ordinary shares on the Nasdaq Global Select Market ranged from $23.37 to $33.63 per share.

The market price of our ordinary shares is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and industry factors, our results of operations, our ability to maintain and increase sales of our products, the success of our key development programs, our ability to achieve profitability, and other factors, including the risk factors described in this Annual Report.

The market price of our ordinary shares is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and industry factors, our results of operations, our ability to maintain and increase sales of our products, the success of our key development programs, our ability to achieve and sustain profitability, the outcomes of business development transactions in which we may participate, our capital allocation decisions, and other factors, including the risk factors described in this Annual Report.

We have also experienced significant volatility in the market price of our ordinary shares based on our business performance, including in relation to our commercial sales and the financial guidance that we issue for such sales, results from our clinical development programs, and events relating to regulatory actions and interactions related to our product candidates and commercial products.

For example, a series of adverse actions by the FDA in 2018 relating to our NDA for ALKS 5461, our investigational product for the treatment of major depressive disorder, caused the market price of our ordinary shares to decline significantly.

In addition, t he stock market in general, including the market for biopharmaceutical companies, has experienced extreme price and trading volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.

In addition, the stock market in general, including the market for biopharmaceutical companies, has experienced extreme price and trading volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.

In particular, negative publicity regarding pricing and price increases by pharmaceutical companies, and potential legislation to regulate drug pricing, has negatively impacted, and may continue to negatively impact, the market for biopharmaceutical companies.

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Activist shareholders may agitate, either publicly or privately, for changes to a company’s board of directors, management, structure, spend or strategic direction, among other things.

Since 2021, we have engaged in extensive dialogue with principals of Sarissa Capital Offshore Master Fund LP and its affiliates.

These engagements and activities related to these engagements required the expenditure of significant time and energy by management and our board of directors.

Proxy contests and other actions by activist shareholders can be costly and time-consuming, disrupting operations and diverting the attention of management and employees, and can lead to perceived uncertainties as to the future direction of the Company or its business that may result in the loss of potential acquisitions, collaborations or in-licensing opportunities and make it more difficult to attract and retain qualified personnel and business partners.

In addition, if individuals are elected to our board of directors with a specific agenda, it may adversely affect our ability to effectively implement our strategic plan in a timely manner and create additional value for our shareholders.

Any such activist shareholder contests, actions or requests, or the mere public presence of activist shareholders among our shareholder base, could cause the market price of our ordinary shares to experience periods of significant volatility.

In recent years, we engaged in extensive dialogue with principals of Elliot Investment Management L.P.

and Sarissa Capital Offshore Master Fund LP and their affiliates, resulting in negotiation of settlement arrangements in 2020 and 2021 pursuant to which directors were elected to our Board and a contested election in 2023.

The extensive interactions and activities related to our engagement with activist shareholders required the expenditure of time, energy and expense by management and our board of directors and diverted employee and management attention from business operations.

Any future activist shareholder interactions, contests, actions or requests, or the mere public presence of activist shareholders among our shareholder base, could cause the market price of our ordinary shares to experience periods of significant volatility.

Risks Related to Information Security and Data Privacy

Information security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data, including IP, our proprietary business information and that of our suppliers and partners, as well as personally identifiable information of patients, clinical trial participants and employees.

In recent years, we have implemented additional remote work flexibility for certain of our employees who are able to work remotely.

In the ordinary course of our business, we collect and store sensitive data, including IP, proprietary business information of ours and that of our suppliers and partners, as well as personally identifiable information of persons who use our medicines, clinical trial participants and employees.

Our partners and third-party providers also possess certain of our sensitive data.

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While we take prudent measures to secure our IT systems, the risk still exists that such systems may become compromised by successful breaches, malfeasance, human error or technological fault.

Moreover, the prevalent use of mobile devices to access confidential information increases the risk of security breaches.

Cyber-attacks have increased in frequency, persistence, sophistication and intensity, often conducted by sophisticated and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage, hactivists and organized come).

Moreover, the prevalent use of mobile devices to access confidential information, the expansion of remote work, and the increased use of artificial intelligence presents new and increased risk of security breaches.

In addition to the extraction of important information, such attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of our information.

Certain types of attacks or breaches on our IT systems or infrastructure may go undetected for a prolonged period.

Certain types of attacks or breaches on our IT systems or infrastructure, or those of our partners and third-party providers, may go undetected for a prolonged period.

Although to our knowledge we have not experienced any material incident or interruption to date, any breakdown, invasion, corruption, destruction or breach of our, our partners’ or our third-party providers’ technology systems could compromise such IT systems and the information stored there could be accessed, modified, publicly disclosed, lost or stolen, which could result in legal claims or proceedings and liability under laws that protect the privacy of personal information, demands for ransom or other forms of blackmail, disruptions to our development programs or commercial operations, damage to our reputation and adverse effects on our business.

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We may be subject to numerous and varying privacy and security laws, and our failure to comply could result in penalties and reputational damage.

We are subject to laws and regulations covering data privacy and the protection of personal information, including health information.

In the ordinary course of business, we may process personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, patient data and sensitive third-party data.

Our data processing activities subjects us to laws and regulations covering data privacy and the protection of personal information, including health information.

The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which may affect our business.

In the U.S., numerous federal and state laws and regulations, including state security breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of personal information.

Each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues for us.

In the U.S., numerous federal and state laws and regulations, including state security breach notification laws, federal and state consumer protection laws, and state health information privacy laws (for example, the California Consumer Privacy Act of 2018 and the California Privacy Rights Act of 2020), govern the collection, use, disclosure, and protection of personal information.

Such federal and state laws and regulations may require businesses to provide specific disclosures and implement processes to permit individuals to exercise certain privacy rights, which in each case could increase our potential liability, increase our compliance costs, and affect our ability to collect and use personal information.

The privacy regulation landscape is rapidly evolving, and any changes to existing legislation or adoption of new state or federal regulations may further complicate compliance efforts and further increase legal risk and compliance costs for us and the third parties upon whom we rely.

In addition, each of these current and potential future laws may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for us and the third parties upon whom we rely.

If we fail to comply with applicable laws and regulations, we could be subject to penalties or sanctions, including criminal penalties if we knowingly obtain or disclose individually identifiable health information from a covered entity in a manner that is not authorized or permitted by the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or HIPAA.

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The GDPR also imposes additional obligations on, and required contractual provisions to be included in, contracts between companies subject to the GDPR and their third-party processors that relate to the processing of personal data.

The GDPR allows EU member states to make additional laws and regulations in order to introduce further conditions, including limitations, with regard to the processing of genetic, biometric or health data.

The GDPR allows EU member states to adopt additional laws and regulations in order to introduce further conditions, including limitations, with regard to the processing of genetic, biometric or health data.

Adoption of the GDPR increased our responsibility and liability in relation to personal data that we process and may require us to put in place additional mechanisms to ensure compliance.

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General Risk Factors

A future pandemic, epidemic or outbreak of an infectious disease, may materially and adversely affect our business, financial condition and results of operations.

For example, the COVID-19 pandemic, which impacted the operation of healthcare systems, global travel, supply and labor markets and other business and economic activity worldwide, had an adverse impact on our financial condition and results of operations.

For example, commercial sales of the medicines from which we derive revenue—including injectable medications administered by healthcare professionals—were adversely impacted as a result of COVID-19-related restrictions, labor shortages and other developments that transpired, many of which contributed to limited access to, or reduced willingness to access, healthcare providers and locations where injectable medications may be administered.

In addition, the COVID-19 pandemic disrupted, to varying degrees, the business operations of the third parties on which we rely, including our suppliers, packagers, distributors, contract research organizations, customers, clinical site investigators, community advocacy partners, and others.

Any prolonged material disruption to the third parties on which we rely could negatively impact our ability to conduct our clinical development, manufacturing or other business activities in the manner and on the timelines presently planned, which could have a material adverse impact on our business, results of operations and financial condition.

The COVID-19 pandemic also impacted, at various stages of the pandemic, the regulatory agencies with which we interact in the development, manufacture, regulatory review and commercialization of our medicines, including the FDA, the HPRA and other regulatory agencies.

Any disruptions to these agencies can negatively impact expected timelines for regulatory interactions related to, and/or review and approval of, our product candidates, which could have an adverse effect on our business and the market price of our ordinary shares.

Although the acute COVID-19 public health emergency has lapsed, we will continue to monitor its long-term impacts, including impacts on market practices and on the labor market, and adjust our policies and practices as needed to mitigate any adverse impacts to our business operations and financial condition.

We will also work with our internal teams and the third-parties on which we rely to assess, and seek to mitigate, the potential impacts on our business operations and financial condition of any future outbreaks of contagious diseases or other adverse public health developments that may emerge from time to time.

If we identify a material weakness in our internal control over financial reporting, our ability to meet our reporting obligations and the trading price of our ordinary shares could be negatively affected.

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Failure to comply with reporting requirements could also subject us to sanctions and/or investigations by Nasdaq or the SEC or other regulatory authorities.

Unresolved Staff Comments

The increasing use of social media platforms presents new risks and challenges.

Social media is increasingly being used as a means of corporate communications and for purposes of social networking and commentary.

In addition, our employees may knowingly or inadvertently engage on social media in ways

that may not comply with our social media policy or other legal, contractual or regulatory requirements, which may give rise to liability, lead to the loss of trade secrets and other intellectual property, or result in public disclosure of personal information of our employees, clinical trial patients, customers, and others.

In addition, negative or inaccurate posts or comments about us or our products on any social media platforms could damage our reputation, brand image and goodwill.

Any of these events, if they were to occur, could cause us to incur liability, face overly restrictive regulatory actions or suffer reputational or other harm to our business.

Unresolve d Staff Comments

Cy bersecurity

Risk Management and Strategy

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, proprietary business information of ours and that of our suppliers and partners, and personally identifiable information of persons who use our medicines, clinical trial participants and employees.

Our partners and third-party providers also possess certain of our sensitive data.

The secure maintenance of all such information and the secure performance of our information technology (“IT”) systems are critical to our operations and business strategy.

As our dependency on, and the complexity of, our IT systems increases, the confidentiality, integrity and availability of our IT systems and the data that they store is critical to managing our business.

Our Information Security Management System (“ISMS”) is a key element of our information security program, and it is designed to identify, assess, help mitigate, and monitor information technology risks across the organization, including information security risks.

The ISMS is informed by the structured principles of International Standard- ISO/IEC27001:2022 (Information security, cybersecurity, and privacy protection), which outlines guidance for the establishment, implementation, maintenance, and improvement of information security management systems.

Our ISMS is comprised of processes designed to identify cybersecurity risks, safeguard information assets and preserve the confidentiality, integrity, and availability of information owned, managed and maintained by us.

Our ISMS includes formal written policies and procedures, technical security controls, such as automated tools designed to detect and prevent cybersecurity incidents, and programs designed to promote internal and third-party risk management, audit management, incident response and security awareness, including employee security awareness trainings and other initiatives.

Our ISMS also includes periodic security audits, vulnerability assessments and penetration testing to proactively identify potential system vulnerabilities.

Our ISMS is periodically assessed by third-party assessors and the results of such assessments, including any cybersecurity risks identified and managed thereby, are reported to the audit and risk committee of our board of directors, as described below, and are used by us to improve our ISMS specifically and our information security program generally.

As part of our information security program, we also have a program in place for management of cybersecurity risks associated with third-party handling of our confidential information, including their provision of critical services on our behalf.

We conduct due diligence of our third-party vendors through an assessment of their security practices and overall risk profile, including through their completion of vendor assessment questionnaires and our application of established mechanisms for ongoing monitoring of such third parties, including tools such as security ratings services and periodic reassessment questionnaires.

As of the date of this Annual Report, we have not experienced any information security incidents that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations, or financial condition, and we have not identified any current cybersecurity threats that we believe are reasonably likely to materially affect our business strategy, results of operations, or financial condition.

Governance and Oversight

We have a multi-layered information security governance framework in place to provide oversight of our information security program and strategy, our ISMS, and related risks and opportunities.

This governance framework includes procedures for escalation of identified information security risks, threats or incidents through various management levels, including up to our Information Security Governing Body, which is comprised of our Chief Executive Officer, Chief Information Officer, Chief Operating Officer, Chief Financial Officer, Chief Legal Officer and other members of management, and as appropriate, up to our board of directors.

Our information security team, led by our Chief Information Officer, is responsible for developing, implementing and overseeing our Company-wide information security strategy and related policies and practices.

The information security team is managed on a day-to-day basis by our Director and Executive Director of Information Security and works cross-functionally throughout the organization to assess and prepare the Company for identification and mitigation of, and if necessary response to, information security risks.

Our information security team members collectively have extensive IT, IT security and cloud industry experience, as well as certifications pertaining to information security and privacy (such as such as Certified Information Systems Security Professional, Certified Information Security Manager, Certified Information Privacy Technologist, GIAC Security Essentials and GIAC Information Security Professional certifications).

Our board of directors, as a whole and through its committees, has responsibility for the oversight of risk management.

The audit and risk committee of our board of directors specifically oversees critical risks and opportunities facing the Company and, in this context, reviews and provides feedback on our company-wide enterprise risk management program, which encompasses risks related to information technology and cybersecurity and mitigations put in place, or to be put in place, in response to such risks.

The audit and risk committee periodically reports to the full board of directors regarding the audit and risk committee’s oversight of the Company’s enterprise risk management program and periodic risk assessment results.

In addition, our board of directors receives periodic updates from our Chief Information Officer and our Executive Director of Information Security on the ISMS and other information security initiatives, and on our information security governance framework.

We lease approximately 14,600 square feet of corporate office space in Dublin, Ireland, which houses our corporate headquarters.

In 2023, we exercised our option to extend the lease term for a four-year period.

This extended lease expires in 2027 and does not include an additional tenant option to further extend the term.

We lease approximately 231,000 square feet of office and laboratory space in Waltham, Massachusetts.

This lease, which commenced in January 2020, expires in 2035 and includes a tenant option to extend the term for an additional ten-year period.

We serve as the guarantor of a lease assigned to Mural Oncology, Inc.

for a facility in Waltham, Massachusetts with approximately 180,000 square feet of corporate offices, administrative areas and laboratories.

This lease expires in 2026 and includes a tenant option to extend the term for an additional five-year period.

We lease approximately 7,000 square feet of corporate office and administrative space in Washington, DC.

This lease expires in 2029 and includes a tenant option to extend the term for an additional five-year period.

We own the Athlone Facility (approximately 400,000 square feet).

In December 2023, we announced our entry into an agreement to sell this facility, which is expected to occur in mid-2024.

We own a manufacturing facility in Wilmington, Ohio (approximately 375,000 square feet).

We believe that our current facilities are suitable and adequate for our current and near-term preclinical, clinical and commercial requirements.

Legal Proceedings

For information regarding legal proceedings, refer to the discussion under the heading “Litigation” in Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report, which discussion is incorporated into this Item 3 by reference.

Mine Saf ety Disclosures

Not Applicable.

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