What changed in this filing

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Item 9A. Controls and Procedures

2024-02-21 compared with 2023-02-16 · 616 added, 411 removed, 1215 unchanged (46% of the section changed)

20 unchanged sentences

Other Information

Trading Plans

During the quarter ended December 31, 2023, the following officers (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted contracts, instructions or written plans for the purchase or sale of the Company’s securities that were intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (each, a “Rule 10b5-1 plan”):

On December 14, 2023 , Craig Hopkinson, M.D ., our Executive Vice President , Research and Development and Chief Medical Officer, adopted a Rule 10b5-1 plan providing for the sale of up to 820,467 ordinary shares of the Company (including shares that may be obtained from the exercise of vested stock options or vesting of restricted stock unit awards);

this plan is scheduled to expire on July 31, 2025 .

On December 14, 2023 , Christian Todd Nichols , our Senior Vice President Chief Commercial Officer , adopted a Rule 10b5-1 plan providing for the sale of up to 10,417 ordinary shares of the Company;

this plan is scheduled to expire on August 2, 2024 .

During the quarter ended December 31, 2023, no other officers or directors of the Company adopted , modified or terminated a Rule 10b5-1 plan or a trading plan not intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

Directors, Executive Of ficers and Corporate Governance

The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2024 annual general meeting of shareholders.

Executive Compensation

Executi ve Compensation

The information required by this item (excluding, for clarity, the information required by Item 402(v) of Regulation S-K) is incorporated herein by reference to our definitive proxy statement for our 2024 annual general meeting of shareholders.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certa in Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2024 annual general meeting of shareholders.

Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Relate d Transactions, and Director Independence

The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2024 annual general meeting of shareholders.

Principal Accounting Fees and Services

Principal Accou nting Fees and Services

The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2024 annual general meeting of shareholders.

Exhibits and Financial Statement Schedules

Consolidated Financial Statements—The consolidated financial statements of Alkermes plc, as required by this item, are submitted in a separate section beginning on page F‑1 of this Annual Report, as follows:

Exhibits and Fina ncial Statement Schedules

(a)(1) Consolidated Financial Statements—The consolidated financial statements of Alkermes plc, as required by this item, are submitted in a separate section beginning on page F-1 of this Annual Report, as follows:

Financial Statement

1 unchanged sentence

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Shareholders’ Equity

8 unchanged sentences

in November 2019).

Exhibit 2.1 to the Alkermes plc Current Report on Form 8-K/A (File No.

April 16, 2015

First Amendment to Purchase and Sale Agreement, dated December 8, 2016 by and among Alkermes Pharma Ireland Limited, Daravita Limited, Eagle Holdings USA, Inc., Recro Pharma, Inc., and Recro Gainesville LLC (assigned by Recro to Baudax Bio, Inc.

in November 2019).

Exhibit 2.1.1 to the Alkermes plc Annual Report on Form 10-K (File No.

February 17, 2017

Second Amendment to Purchase and Sale Agreement, dated December 20, 2018, by and among Alkermes Pharma Ireland Limited, Daravita Limited, Alkermes US Holdings, Inc.

(as successor in interest to Eagle Holdings USA, Inc.), Recro Pharma, Inc.

and Recro Gainesville LLC (assigned by Recro to Baudax Bio, Inc.

in November 2019).

Exhibit 2.1.2 to the Alkermes plc Annual Report on Form 10-K (File No.

February 15, 2019

Third Amendment to Purchase and Sale Agreement, dated August 17, 2020, by and among Alkermes Pharma Ireland Limited, Daravita Limited, Alkermes US Holdings, Inc.

(as successor in interest to Eagle Holdings USA, Inc.) and Baudax Bio, Inc.

(as successor in interest to Recro Pharma, Inc.

and Recro Gainesville LLC).

Exhibit 2.1 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

October 29, 2020

Agreement and Plan of Merger, dated November 14, 2019 by and among Alkermes, Inc., Thinker Merger Sub, Inc., Alkermes plc, Rodin Therapeutics, Inc., and Shareholder Representative Services LLC, as Company Equityholder Representative.

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November 25, 2019

Separation Agreement, dated as of November 13, 2023, by and between Alkermes plc and Mural Oncology plc.

Exhibit 2.1 to the Alkermes plc Current Report on Form 8-K (File No.

November 15, 2023

Memorandum and Articles of Association of Alkermes plc.

Exhibit 3.1 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

July 27, 2022

Description of Securities.

8 unchanged sentences

August 6, 2009

Incorporated by reference herein

Description of Exhibit

Second Amendment to Lease between Alkermes, Inc.

14 unchanged sentences

February 15, 2019

Incorporated by reference herein

Description of Exhibit

Sixth Amendment to Lease between Alkermes, Inc.

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February 25, 2016

Incorporated by reference herein

Description of Exhibit

Amendment to Manufacturing and Supply Agreement by and between JPI Pharmaceutica International, Janssen Pharmaceutica Inc.

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and Alkermes Controlled Therapeutics Inc.

II (assigned to Alkermes, Inc.

in July 2006), effective as of July 1, 2018.

Exhibit 10.11 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

October 23, 2018

Incorporated by reference herein

Description of Exhibit

II (assigned to Alkermes, Inc.

in July 2006), effective as of July 1, 2018.

Development and License Agreement, dated as of May 15, 2000, by and between Alkermes Controlled Therapeutics Inc.

1 unchanged sentence

in July 2006).

Exhibit 10.28 to the Alkermes, Inc.

Annual Report on Form 10-K (File No.

Third Amendment to Development and License Agreement, dated March 20, 2018, by and between Amylin Pharmaceuticals, LLC and Alkermes Pharma Ireland Limited (as successor-in-interest to Alkermes Controlled Therapeutics Inc.

II), amending that certain Development and License Agreement, by and between ACTII and Amylin, dated May 15, 2000, as amended on October 24, 2005 and July 17, 2006.

Exhibit 10.3 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

April 26, 2018

Agreement by and between JPI Pharmaceutica International, Janssen Pharmaceutica Inc.

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dated as of March 31, 1999.

Exhibit 10.23 to the Alkermes plc Annual Report on Form 10-K (File No.

Exhibit 10.1 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

April 26, 2023

First Amendment, dated as of July 31, 2003, to the License Agreement by and among Elan Drug Delivery, Inc.

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dated as of March 31, 1999, as amended by the First Amendment, dated as of July 31, 2003.

Exhibit 10.25 to the Alkermes plc Annual Report on Form 10-K (File No.

Exhibit 10.2 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

April 26, 2023

Amendment to First Lien Credit Agreement, dated September 25, 2012, among Alkermes, Inc., Alkermes plc, the guarantors party thereto, the lenders party thereto, Morgan Stanley Senior Funding, Inc.

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February 19, 2013

Incorporated by reference herein

Description of Exhibit

Amendment No.

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Amendment No.

4, dated as of October 12, 2016, to Amended and Restated Credit Agreement, dated as of September 16, 2011, as amended and restated on September 25, 2012, as further amended by Amendment No.

4, dated as of October 12, 2016, to Amended and Restated Credit Agreement, dated as of September 16, 2011, as amended and restated on September 25, 2012, as further

Exhibit 10.2 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

November 2, 2016

Incorporated by reference herein

Description of Exhibit

amended by Amendment No.

2 on February 14, 2013 and as amended by Amendment No.

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as Administrative Agent and Collateral Agent.

Exhibit 10.2 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

November 2, 2016

Amendment No.

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April 28, 2021

Amendment No.

7, dated as of June 28, 2023, to Amended and Restated Credit Agreement, dated as of September 16, 2011, as amended and restated on September 25, 2012, as further amended by Amendment No.

2 on February 14, 2013, as amended by Amendment No.

3 and Waiver to Amended and Restated Credit Agreement dated as of May 22, 2013, as amended by Amendment No.

4, dated as of October 12, 2016, as amended by Amendment No.

5, dated as of March 26, 2018, and as amended by Amendment No.

6, dated as of March 12, 2021, among Alkermes, Inc., Alkermes plc, the guarantors party thereto, the lenders party thereto and Morgan Stanley Senior Funding, Inc.

as Administrative Agent and Collateral Agent.

Exhibit 10.1 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

July 26, 2023

License and Collaboration Agreement, dated November 27, 2017, by and between Alkermes Pharma Ireland Limited and Biogen Swiss Manufacturing GmbH.

Exhibit 10.10 of the Alkermes plc Annual Report on Form 10-K (File No.

Exhibit 10.10 to the Alkermes plc Annual Report on Form 10-K (File No.

February 16, 2018

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Third Amendment to License and Collaboration Agreement between Alkermes Pharma Ireland Limited and Biogen Swiss Manufacturing GmbH, effective as of October 30, 2019.

Exhibit 10.10.3 of the Alkermes plc Annual Report on Form 10-K (File No.

Exhibit 10.10.3 to the Alkermes plc Annual Report on Form 10-K (File No.

February 13, 2020

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April 26, 2018

Incorporated by reference herein

Description of Exhibit

First Amendment to Lease, dated June 21, 2018, by and between Alkermes, Inc.

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July 25, 2019

Incorporated by reference herein

Description of Exhibit

Confidential Settlement and License Agreement, dated August 29, 2023, by and among Alkermes, Inc., Alkermes Pharma Ireland Limited and Teva Pharmaceuticals USA, Inc.

Exhibit 10.1 to the Alkermes plc Quarterly Report on Form 10-Q (File No.

October 25, 2023

Tax Matters Agreement, dated November 13, 2023, by and between Alkermes plc and Mural Oncology plc.

Exhibit 10.1 to the Alkermes plc Current Report on Form 8-K (File No.

November 15, 2023

Employee Matters Agreement, dated November 13, 2023, by and between Alkermes plc and Mural Oncology plc.

Exhibit 10.2 to the Alkermes plc Current Report on Form 8-K (File No.

November 15, 2023

Amendment to Employee Matters Agreement, dated December 14, 2023, by and between Alkermes plc and Mural Oncology plc.

Transition Services Agreement, dated November 13, 2023, by and between Alkermes, Inc.

and Mural Oncology, Inc.

Exhibit 10.3 to the Alkermes plc Current Report on Form 8-K (File No.

November 15, 2023

Transition Services Agreement, dated November 13, 2023, by and between Mural Oncology, Inc.

and Alkermes, Inc.

Exhibit 10.4 to the Alkermes plc Current Report on Form 8-K (File No.

November 15, 2023

Asset Purchase Agreement, dated December 13, 2023, by and between Alkermes Pharma Ireland Limited, Novo Nordisk Production Ireland Limited and Novo Nordisk A/S.

Employment Agreement, dated as of December 12, 2007, by and between Richard F.

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February 16, 2018

Incorporated by reference herein

Description of Exhibit

Offer Letter, dated March 29, 2019, by and between Alkermes, Inc.

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April 28, 2016

Incorporated by reference herein

Description of Exhibit

Form of Restricted Stock Unit Award Certificate (Time Vesting Only – U.S.) under the Alkermes plc Amended and Restated 2008 Stock Option and Incentive Plan, as amended.

21 unchanged sentences

October 23, 2018

Incorporated by reference herein

Description of Exhibit

Form of Restricted Stock Unit (Time-Vesting) Award Certificate under the Alkermes plc 2011 Stock Option and Incentive Plan, as amended.

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October 23, 2018

A lkermes plc 2018 Stock Option and Incentive Plan, as amended.

Alkermes plc 2018 Stock Option and Incentive Plan, as amended.

Exhibit 10.1 to the Alkermes plc Current Report on Form 8-K (File No.

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July 29, 2020

Incorporated by reference herein

Description of Exhibit

Form of Non-Employee Director Restricted Stock Unit (Time-Vesting) Award Certificate under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.

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Form of Incentive Stock Option Award Certificate for Reporting Officers under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.

Exhibit 10.19-9 to the Alkermes plc Annual Report on Form 10-K (File No.

February 16, 2023

Form of Non-Qualified Stock Option Award Certificate for Reporting Officers under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.

Exhibit 10.19-10 to the Alkermes plc Annual Report on Form 10-K (File No.

February 16, 2023

Form of Restricted Stock Unit (Time-Vesting) Award Certificate for Reporting Officers under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.

Exhibit 10.19-11 to the Alkermes plc Annual Report on Form 10-K (File No.

February 16, 2023

Form of Restricted Stock Unit (Performance-Vesting) Award Certificate for Reporting Officers under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.

Exhibit 10.19-12 to the Alkermes plc Annual Report on Form 10-K (File No.

February 16, 2023

Form of Restricted Stock Unit (Performance-Vesting) Award Certificate (rev.

2024) for Reporting Officers under the

Incorporated by reference herein

Description of Exhibit

Alkermes plc 2018 Stock Option and Incentive Plan, as amended.

Form of Restricted Stock Unit (Performance-Vesting) Award Certificate (rev.

2024) under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.

List of subsidiaries.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Label Linkbase Document.

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Alkermes plc Incentive Compensation Recoupment Policy.

Inline XBRL Taxonomy Extension Schema with Embedded Linkbases Document.

Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

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Such portions have been filed separately with the SEC pursuant to a confidential treatment request.

In accordance with Item 601(b)(2)(ii) of Regulation S-K, certain information (indicated by “[**]”) has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the Company if publicly disclosed.

Portions of this exhibit (indicated by “[**]”) have been omitted pursuant to Item 601(b) of Regulation S-K.

The Company undertakes to furnish an unredacted copy of this exhibit upon request by the U.S.

Securities and Exchange Commission.

Schedules and similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

The Company undertakes to furnish copies of any omitted schedules and similar attachments upon request by the U.S.

Securities and Exchange Commission.

Filed with this Annual Report solely for the purpose of transitioning this previously-filed exhibit, which is the subject of an expiring confidential treatment order, to the rules governing the filing of redacted exhibits under Regulation S-K Item 601(b) pursuant to the SEC’s CF Disclosure Guidance:

Portions of this exhibit (indicated by “[**]”) have been omitted pursuant to Item 601(b) of Regulation S-K.

Schedules and similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

The Company undertakes to furnish copies of any omitted schedules and similar attachments upon request by the U.S.

Securities and Exchange Commission.

Form 10-K Summary

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February 21, 2024

POWER OF ATTORNEY

POWER OF A TTORNEY

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

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February 21, 2024

Senior Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

/s/ B lair C.

Executive Vice President, Chief Operating Officer (Interim Principal Financial Officer)

February 21, 2024

/s/ S amuel J.

Vice President, Finance (Interim Principal Accounting Officer)

February 21, 2024

/s/ Emily Peterson Alva

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February 21, 2024

February 16, 2023

Report of Independent Registered Public Accounting Firm

Report of Independent R egistere d Public Accounting Firm

To the Board of Directors and Shareholders of Alkermes plc

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Alkermes plc and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Alkermes plc and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive income (loss), of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Tax-Free Determination of the Separation of the Oncology Business

As described in Notes 1 and 3 to the consolidated financial statements, the Company completed the separation of its oncology business into a new, independent, publicly-traded company on November 15, 2023.

The separation was effected by means of a distribution of shares to the Company’s shareholders.

Management determined that the separation and related distribution qualified as tax-free for U.S.

federal income tax purposes, which required significant judgment by management.

In making such determinations, management applied U.S.

federal tax law to relevant facts and circumstances and obtained:

(i) a favorable private letter ruling from the IRS;

(ii) a tax opinion;

and (iii) other external tax advice related to the concluded tax treatment.

If the separation and distribution were to fail to qualify for tax-free treatment for U.S.

federal income tax purposes, the Company and/or its shareholders could be subject to significant liabilities, which could have material adverse impacts on the Company’s business, financial condition, results of operations and cash flows in future reporting periods.

The principal considerations for our determination that performing procedures relating to the tax-free determination of the separation of the oncology business is a critical audit matter are (i) the significant judgment by management with regards to interpretation of the facts and the application of tax laws and regulations in order to conclude the divestiture would qualify as a tax-free transaction, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence in connection with management’s tax-free determination, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the key judgments in management’s evaluation of the tax treatment of the transaction.

These procedures also included, among others (i) testing management’s process for determining the tax-free treatment of the transaction, (ii) evaluating the information used in management’s determination, such as tax rulings from relevant taxing authorities and supporting information, tax opinion, and relevant tax laws, and (iii) evaluating the reasonableness of management’s position that the transaction qualifies for tax-free status.

Professionals with specialized skill and knowledge were used to assist in evaluating the transaction, the application of tax laws and regulations, the private letter ruling and tax opinion, and certain representations from management

Rebate Accruals – Medicaid Drug Rebate Program

As described in Note 2 and Note 10 to the consolidated financial statements, the Company’s revenue from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, health care providers or payers.

As described in Notes 2 and 11 to the consolidated financial statements, the Company’s revenue from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, health care providers or payers.

The Company records accruals for rebates to U.S.

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The Company estimates expected unit sales to individuals covered by Medicaid and rebates per unit under the Medicaid program and adjusts its rebate accrual based on actual unit sales and rebates per unit and changes in trends in Medicaid utilization.

The principal considerations for our determination that performing procedures relating to rebate accruals for the Medicaid Drug Rebate Program is a critical audit matter are (i) the significant judgment by management due to significant measurement uncertainty involved in developing the reserves, as the reserves are based on assumptions developed using historical experience, current contractual requirements, specific known market events and payment patterns and (ii) a high degree of auditor judgment, effort, and subjectivity in applying procedures related to these assumptions.

measurement uncertainty involved in developing the reserves, as the reserves are based on assumptions developed using historical experience, current contractual requirements, specific known market events and payment patterns and (ii) a high degree of auditor judgment, subjectivity and effort in applying procedures and evaluating evidence related to these assumptions.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

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ALKERMES PLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED B ALANCE SHEETS

December 31, 2023 and 2022

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Cash and cash equivalents

Investments—short-term

Receivables, net

Investments—short-term

Contract assets

Prepaid expenses and other current assets

Assets related to discontinued operations

Assets held for sale

Total current assets

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RIGHT-OF-USE ASSETS

ASSETS RELATED TO DISCONTINUED OPERATIONS—LONG-TERM

ASSETS HELD FOR SALE—LONG-TERM

INTANGIBLE ASSETS, NET

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Current portion of long-term debt

Liabilities related to discontinued operations

Total current liabilities

1 unchanged sentence

OPERATING LEASE LIABILITIES—LONG-TERM

LIABILITIES RELATED TO DISCONTINUED OPERATIONS—LONG-TERM

OTHER LONG-TERM LIABILITIES

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ALKERMES PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPE RATIONS AND COMPREHENSIVE INCOME (LOSS)

Years Ended December 31, 2023, 2022 and 2021

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Total expenses

OPERATING LOSS

OTHER (EXPENSE) INCOME, NET:

OPERATING INCOME (LOSS)

OTHER INCOME (EXPENSE), NET:

Interest income

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Change in the fair value of contingent consideration

Other income, net

Total other (expense) income, net

LOSS BEFORE INCOME TAXES

Other (expense) income, net

Total other income (expense), net

INCOME (LOSS) BEFORE INCOME TAXES

INCOME TAX (BENEFIT) PROVISION

LOSS PER ORDINARY SHARE:

Basic and diluted

NET INCOME (LOSS) FROM CONTINUING OPERATIONS

DISCONTINUED OPERATIONS, NET OF TAX

NET INCOME (LOSS)

EARNINGS (LOSS) PER ORDINARY SHARE:

Earnings (loss) per share from continuing operations - basic

Earnings (loss) per share from discontinued operations - basic

Earnings (loss) per share - basic

Earnings (loss) per share from continuing operations - diluted

Earnings (loss) per share from discontinued operations - diluted

Earnings (loss) per share - diluted

WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING:

Basic and diluted

COMPREHENSIVE LOSS:

Holding loss, net of a tax (benefit) provision of $( 973 ), $( 706 ) and $ 130 , respectively

COMPREHENSIVE LOSS

COMPREHENSIVE INCOME (LOSS):

Net income (loss)

Holding gain (loss), net of a tax provision (benefit) of $ 1,195 , $( 973 ) and $( 706 ), respectively

COMPREHENSIVE INCOME (LOSS)

The accompanying notes are an integral part of these consolidated financial statements.

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Share-based compensation

Unrealized gain on marketable securities, net of tax provision of $ 130

Unrealized loss on marketable securities, net of tax benefit of $ 706

BALANCE — December 31, 2021

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Share-based compensation

Unrealized loss on marketable securities, net of tax benefit of $ 973

Unrealized gain on marketable securities, net of tax provision of $ 1,195

Distribution of Mural Oncology plc

BALANCE —December 31, 2023

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ALKERMES PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEM ENTS OF CASH FLOWS

Years Ended December 31, 2023, 2022 and 2021

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CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to cash flows from operating activities:

Depreciation and amortization

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Sales and maturities of investments

Cash flows used in investing activities

Cash flows provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash transferred to Mural Oncology plc at separation

Proceeds from the issuance of ordinary shares under share-based compensation arrangements

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Cash flows (used in) provided by financing activities

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS—Beginning of period

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Alkermes plc (the “Company”) is a fully integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to research, develop and commercialize, both with partners and on its own, pharmaceutical products that are designed to address unmet medical needs of patients in the fields of neuroscience and oncology.

Alkermes has a portfolio of proprietary commercial products focused on alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder and a pipeline of product candidates in development for neurological disorders and cancer .

Headquartered in Dublin, Ireland, the Company has a research and development (“R&D”) center in Waltham, Massachusetts;

R&D and manufacturing facilities in Athlone, Ireland;

Alkermes plc (the “Company”) is a global biopharmaceutical company that seeks to develop innovative medicines in the field of neuroscience.

The Company has a portfolio of proprietary commercial products for the treatment of alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder and a pipeline of clinical and preclinical candidates in development for neurological disorders.

Headquartered in Dublin, Ireland, the Company has a research and development center in Waltham, Massachusetts;

a research and manufacturing facility in Athlone, Ireland;

and a manufacturing facility in Wilmington, Ohio.

On November 2, 2022, the Company announced its intent, as approved by its board of directors, to separate its neuroscience business and oncology business.

The Company is exploring a separation of the oncology business into an independent, publicly- traded company (referred to herein as “Oncology Co.”) as part of an ongoing review of strategic alternatives for the oncology business.

Following the planned separation, the Company would retain its focus on driving growth of its proprietary commercial products:

LYBALVI, ARISTADA/ARISTADA INITIO and VIVITROL, and advancing the development of pipeline programs focused on neurological disorders.

The Company also expects to retain manufacturing and royalty revenues related to its licensed products and third-party products using its proprietary technologies under license.

would focus on the discovery and development of cancer therapies, including the continued development of nemvaleukin alfa and the Company’s portfolio of novel, preclinical engineered cytokines.

The separation, if consummated, is expected to be completed in the second half of 2023 and is subject to customary closing conditions, including final approval by the Company’s board of directors and, if sought, receipt of a private letter ruling from the IRS and/or tax opinion from the Company’s tax advisors.

On November 15, 2023, the Company completed the separation of its oncology business into Mural Oncology plc (“Mural”), a new, independent, publicly-traded company (the “Separation”).

The Separation was effected by means of a distribution of all of the outstanding ordinary shares of Mural to the Company’s shareholders (the “Distribution”), in which each of the Company’s shareholders received one ordinary share, nominal value $ 0.01 per share, of Mural for every ten ordinary shares, par value $ 0.01 per share, of the Company (the “Distribution Ratio”) held by such shareholder as of the close of business on November 6, 2023, the record date for the Distribution (the “Record Date”).

The historical results of the oncology business have been reflected as discontinued operations in the Company’s consolidated financial statements through November 15, 2023 (the “Separation Date”).

For additional information related to the Separation, see Note 3, Discontinued Operations in these “Notes to Consolidated Financial Statements” in this Annual Report.

On December 14, 2023 the Company announced that it entered into a definitive agreement to sell its development and manufacturing facility located in Athlone, Ireland (the “Athlone Facility”) to Novo Nordisk (“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 arrangements may continue through the end of 2025.

Such transaction is expected to close in mid-2024, subject to certain closing conditions.

At December 31, 2023, the Company had classified the assets described under the related asset purchase agreement as “Assets held for sale” within the accompanying consolidated balance sheet.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Intercompany accounts and transactions have been eliminated.

Columns and rows within tables may not sum due to rounding.

Reclassification

The Company reclassified certain prior year amounts on the consolidated balance sheet to conform to the current year presentation.

These reclassifications had no impact on the previously reported total assets, liabilities or shareholders’ equity.

The Company has presented its former oncology business as discontinued operations in its consolidated financial statements for all periods presented.

See Note 3, Discontinued Operations in these “Notes to Consolidated Financial Statements” in this Annual Report for additional information.

Additionally, as a result of the planned sale of the Athlone Facility, the Company has classified the assets described under the related asset purchase agreement as held for sale.

The Company’s historical financial statements and footnotes have been recast accordingly.

Discontinued Operations

The Company determined that the separation of its oncology business in November 2023 met the criteria for classification of the oncology business as discontinued operations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205, Discontinued Operations .

Accordingly, the accompanying consolidated financial statements have been updated to present the assets and liabilities associated with the oncology business as discontinued operations as of December 31, 2022 on the consolidated balance sheets, and the results of the oncology business as discontinued operations through the Separation Date for the years ended December 31, 2023, 2022 and 2021 in the consolidated statements of operations and comprehensive income (loss).

Assets Held for Sale

In connection with the planned sale of the Athlone Facility, the Company reviewed FASB ASC 805, Business Combinations and, based on the definitions therein, has determined that the Athlone Facility constitutes a business.

Accordingly, the assets associated with the planned sale of the Athlone Facility have been classified as “Assets held for sale” within the accompanying consolidated balance sheets as of December 31, 2023 and 2022.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Use of Estimates

The preparation of the Company’s consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires that Company management make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an on‑going basis, the Company evaluates its estimates and judgments and methodologies, including but not limited to, those related to revenue from contracts with its customers and related allowances, impairment and amortization of intangibles and long‑lived assets, share‑based compensation, income taxes including the valuation allowance for deferred tax assets, valuation of investments, contingent consideration and litigation.

On an on-going basis, the Company evaluates its estimates, judgments and methodologies, including but not limited to, those related to revenue from contracts with its customers and related allowances, impairment and amortization of intangibles and long-lived assets, share-based compensation, income taxes including the valuation allowance for deferred tax assets, valuation of investments and litigation.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

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The Company values its cash and cash equivalents at cost plus accrued interest, which the Company believes approximates their market value.

The Company considers cash equivalents only those investments that are highly liquid, readily convertible into cash and so near their maturity, generally three months from the date of purchase, that they present insignificant risk of change in value because of interest rate changes.

The Company considers as cash equivalents only those investments that are highly liquid, readily convertible into cash and so near their maturity (generally three months from the date of purchase) that they present insignificant risk of change in value because of interest rate changes.

The Company has investments in various types of securities, consisting primarily of United States (“U.S.”) government and agency obligations, corporate debt securities and debt securities issued by non-U.S.

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At December 31, 2023, substantially all these investments were classified as available-for-sale and were recorded at fair value.

U nrealized gains and losses are included in accumulated other comprehensive loss in equity, net of related tax, in accumulated other comprehensive loss unless :

Unrealized gains and losses are included in accumulated other comprehensive loss in equity, net of related tax, unless:

(i) the security has experienced a credit loss;

(ii) the Company has determined that it has the intent to sell the security;

or (iii) it has determined that it is more likely than not that the Company will have to sell the security before its expected recovery.

P eriodic reviews are conducted to identify and evaluate each investment that has an unrealized loss in accordance with the meaning of other-than-temporary impairment.

or (iii) the Company has determined that it is more likely than not that it will have to sell the security before its expected recovery.

Periodic reviews are conducted to identify and evaluate each investment that has an unrealized loss in accordance with the meaning of other-than-temporary impairment.

An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis.

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The Company’s financial assets and liabilities are recorded at fair value and are classified as Level 1, 2 or 3 within the fair value hierarchy, as described in the accounting standards for fair value measurement.

At December 31, 2022, the Company’s financial assets consisted of cash equivalents, investments and contingent consideration and are classified within the fair value hierarchy as follows:

At December 31, 2023, the Company’s financial assets consisted of cash equivalents and investments and are classified within the fair value hierarchy as follows:

• Level 1 –these valuations are based on a market approach using quoted prices in active markets for identical assets.

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governments and investments in corporate debt securities that are trading in the credit markets.

Level 3 –these valuations are based on an income approach using certain inputs that are unobservable and are significant to the overall fair value measurement.

Valuations of these products require a significant degree of judgment.

At December 31, 2022, no assets utilized Level 3 inputs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses approximate fair value due to their short-term nature.

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and overhead.

Overhead is based on the normal capacity of the Company’s production facilities and does not include costs from abnormally low production or idle capacity, which are expensed directly to the consolidated statement of operations and comprehensive loss.

The Company capitalizes inventory costs associated with its products prior to regulatory approval when, based on management’s judgment, future commercialization of the product is considered probable and future economic benefit from such product is expected to be realized.

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The Company expenses previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or significant delay of approval by relevant regulatory agencies or other issues that may make the pre-approval inventory batches less likely or unlikely to be commercialized and to result in future economic benefit.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Property, Plant and Equipment

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Shorter of useful life or lease term

Contingent Consideration

The Company records contingent consideration it is entitled to receive related to the sale of a business at fair value on the acquisition date.

The Company estimates the fair value of contingent consideration through valuation models that incorporate probability-adjusted assumptions related to the likelihood of achievement of milestones and the corresponding likelihood of receiving related payments.

The Company revalues its contingent consideration each reporting period, with changes in the fair value of contingent consideration recognized within the consolidated statements of operations and comprehensive loss.

Changes in the fair value of contingent consideration can result from changes to one or multiple assumptions, including adjustments to the discount rates, changes in the amount and timing of cash flows, changes in the assumed achievement and timing of any development and sales-based milestones, changes in the assumed probability associated with regulatory approvals and changes in the probability of collection or default of portions of the contingent consideration due to the Company.

These fair value measurements are based on significant inputs, including inputs not observable in the market.

Significant judgment was employed in determining the appropriateness of these assumptions at the acquisition date and for each subsequent period.

Accordingly, changes in assumptions described above could have a material impact on the increase or decrease in the fair value of contingent consideration recorded in any given period.

Goodwill and Intangible Assets

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If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company would record an impairment loss equal to the difference.

When some, but not all, of a reporting unit is to be disposed of, the accounting for that reporting unit’s goodwill will depend on whether the disposal group constitutes a business.

If the disposal group constitutes a business, the Company attributes a portion of the reporting unit’s goodwill to the disposal group based on the relative fair values of:

(i) the disposal group;

and (ii) the portion of the reporting unit that will be retained.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s finite-lived intangible assets, consisting of core developed technology and collaboration agreements acquired as part of the Business Combination, were recorded at fair value at the time of their acquisition and are stated within the Company’s consolidated balance sheets net of accumulated amortization.

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Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset;

a significant change in the extent or manner in which an asset

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

a significant change in the extent or manner in which an asset is used;

a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset;

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Long-lived assets to be disposed of are carried at fair value less costs to sell them.

In April 2015, the Company sold its Gainesville, GA manufacturing facility, the related manufacturing and royalty revenue associated with certain products manufactured at the facility, and the rights to IV/IM and parenteral forms of Meloxicam to Recro Pharma, Inc.

(“Recro”) and Recro Gainesville LLC (such transaction the “Gainesville Transaction”).

The Gainesville Transaction included in the purchase price contingent consideration tied to low double digit royalties on net sales of the IV/IM and parenteral forms of Meloxicam and any other product with the same active ingredient as Meloxicam IV/IM that is discovered or identified using certain of the Company’s IP to which Recro was provided a right of use, through license or transfer, pursuant to the Gainesville Transaction (such products, the “Meloxicam Products”), and milestone payments upon the achievement of certain regulatory and sales milestones related to the Meloxicam Products.

In the third quarter of 2022, the Company determined that certain construction in progress related to the manufacture of ANJESO ® , the first approved Meloxicam Product, was impaired, as it had no alternative future use.

See Note 7, Property, Plant and Equipment , within the “Notes to Consolidated Financial Statements” in this Annual Report for details related to such construction in progress.

In the fourth quarter of 2022, the Company determined that an impairment triggering event occurred related to an arbitration panel’s ruling relative to the Company’s manufacturing and royalty revenue arrangement with Acorda related to AMPYRA ® .

Following this triggering event, the Company evaluated certain of its intangible assets for impairment under a held-and-used model.

The Company concluded in this instance that the long-lived assets evaluated for impairment were recoverable based on an analysis of the undiscounted cash flows to be generated from the use of these assets and that there was no impact to the remaining useful lives of these assets.

Revenue from Contracts with Customers

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“Topic 606”).

The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers (“Topic 606”).

When entering into arrangements with customers, the Company identifies whether its performance obligations under the arrangement represent a distinct good or service or a series of distinct goods or services.

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The Company’s product sales, net consist of sales in the U.S.

of VIVITROL ® , ARISTADA ® and ARISTADA INITIO ® and, following its commercial launch in October 2021, LYBALVI ® , primarily to wholesalers, specialty distributors and pharmacies.

of VIVITROL ® , ARISTADA ® and ARISTADA INITIO ® and LYBALVI ® , primarily to wholesalers, specialty distributors and pharmacies.

Product sales, net are recognized when the customer obtains control of the product, which is when the product has been received by the customer.

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The following are the Company’s significant categories of sales discounts and allowances:

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

• Medicaid Rebates —the Company records accruals for rebates to U.S.

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To date, actual Medicaid rebates have not differed materially from the Company’s estimates;

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

• Chargebacks —discounts that occur when contracted indirect customers purchase directly from wholesalers and specialty distributors.

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Once product is returned, it is destroyed.

To date, actual product returns have not differed materially from the Company’s estimates;

• Medicare Part D —the Company records accruals for Medicare Part D liabilities under the Medicare Coverage Gap Discount Program (“CGDP”) as a reduction of sales.

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Under an agreement with the Centers for Medicare and Medicaid Services, manufacturers are responsible to reimburse prescription plan sponsors for the portion of out-of-pocket expenses not covered under their Medicare plans.

To date, actual Medicare Part D rebates have not differed materially from the Company’s estimates.

Collaborative Arrangements

The Company has entered into collaboration agreements with pharmaceutical companies including, among others, Janssen Pharmaceuticals, Inc.

The Company has entered into collaborative arrangements with pharmaceutical companies including, among others, Janssen Pharmaceuticals, Inc.

(“Janssen, Inc.”), Janssen Pharmaceutica International, a division of Cilag International AG (“Janssen International”), and Janssen Pharmaceutica N.V.

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The Company recognizes manufacturing revenues from the sale of products it manufactures for resale by its licensees.

Manufacturing revenues for the Company’s partnered products, with the exception of those from Janssen related to RISPERDAL CONSTA and from Biogen related to VUMERITY, are recognized over time as products move through the manufacturing process, using a standard cost-based model as a measure of progress, which represents a faithful depiction of the transfer of control of the goods.

The Company recognizes manufacturing revenue from these products over time as it determined, in each instance, that it would have a right to payment for performance completed to date if its customer were to terminate the manufacturing agreement for reasons other than the Company’s non-performance and the products have no alternative use.

The Company invoices its licensees upon shipment with payment terms between 30 to 90 days .

The Company is the exclusive manufacturer of RISPERDAL CONSTA for commercial sale under its manufacturing and supply agreement with Janssen.

The Company determined that it is appropriate to record revenue under this agreement at the point in time when control of the product passes to Janssen, which is determined to be when the product has been fully manufactured, since Janssen does not control the product during the manufacturing process and, in the event Janssen terminates the manufacturing and supply agreement, it is uncertain whether, and at what amount, the Company would be reimbursed for performance completed to date for product not yet fully manufactured.

The manufacturing process is considered fully complete once the finished goods have been approved for shipment by both the Company and Janssen.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company recognize s manufacturing revenue related to VUMERITY at cost plus 15 %, upon making available bulk batches of VUMERITY to Biogen , to the extent the Company package s such product, then also when packaged batches of VUMERITY are made available to Biogen .

Control of the product passes to Biogen when VUMERITY , in either bulk or finished form, is made available to Biogen .

Substantially all of the manufacturing revenues are recognized at a point in time when control of the product passes to the licensee.

The sales price for certain of the Company’s manufacturing revenues is based on the end-market sales price earned by its licensees.

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Differences between actual manufacturing revenues and estimated manufacturing revenues are reconciled and adjusted for in the period in which they become known, which is generally within the same quarter.

The difference between the Company’s actual and estimated manufacturing revenues has not been material to date.

The differences between the Company’s actual and estimated manufacturing revenues have not been material to date.

Royalty Revenue

The Company recognizes royalty revenues related to the sale by its licensees of products that incorporate the Company’s technologies.

Substantially all of the Company’s royalties qualify for the sales-and-usage exemption under Topic 606 as (i) such royalties are based strictly on the sales-and-usage by the licensee;

All of the Company’s royalties qualify for the sales-and-usage exemption under Topic 606 as (i) such royalties are based strictly on the sales-and-usage by the licensee;

and (ii) a license of IP is the sole or predominant item to which such royalties relate.

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Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period in which they become known, which is generally within the same quarter.

The difference between the Company’s actual and estimated royalty revenues has not been material to date.

Research and Development Revenue

R&D revenue consists of funding that compensates the Company for formulation, preclinical and clinical testing under R&D arrangements with its partners.

The Company generally bills its partners under R&D arrangements using a full‑time equivalent or hourly rate, plus direct external costs, if any.

Revenue is recognized as the obligations under the R&D arrangements are performed.

The differences between the Company’s actual and estimated royalty revenues have not been material to date.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

License Revenue

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The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable.

The Company’s allowance for doubtful accounts was approximately $ 0.2 million at December 31, 2022 and 2021, respectively.

The Company’s allowance for doubtful accounts was approximately $ 0.2 million at each of December 31, 2023 and 2022.

Contract Assets

Contract assets include unbilled amounts resulting from sales under certain of the Company’s manufacturing contracts where revenue is recognized over time, except for $ 5.0 million of consideration related to the Company’s collaboration with Biogen related to VUMERITY, which was included in contract assets at December 31, 2021 and transferred to receivables, net, as the milestone related to such amount was achieved in November 2022 .

The manufacturing-related amounts included in the contract assets table below are classified as “Current assets” in the accompanying consolidated balance sheets, as they related to manufacturing processes that are completed in ten days to eight weeks.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Contract assets include unbilled amounts that will result in a sale under certain of the Company’s manufacturing contracts.

The amounts included in the contract assets table below are classified as “Current assets” in the accompanying consolidated balance sheets, as they relate to manufacturing processes that are completed in ten days to eight weeks .

Contract assets consisted of the following:

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Contract Liabilities

The Company’s contract liabilities consist of contractual obligations related to deferred revenue.

Contract liabilities consist of contractual obligations related to deferred revenue.

At December 31, 2023 and 2022, $ 2.7 million and $ 6.8 million of the contract liabilities, respectively, were classified as “Contract liabilities–short-term” in the accompanying consolidated balance sheets and $ 2.1 million and $ 3.9 million of the contract liabilities, respectively, were classified as “Other long-term liabilities” in the accompanying consolidated balance sheets.

Contract liabilities consisted of the following:

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Amounts recognized into revenue

Amounts recognized into other (expense) income, net

Contract liabilities at December 31, 2022

Amounts recognized into revenue

Amounts recognized into other income, net

Contract liabilities at December 31, 2023

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dollars at exchange rates prevailing on the subsequent balance sheet date.

Gains and losses as a result of translation adjustments are recorded within “Other income, net” in the accompanying consolidated statements of operations and comprehensive loss.

During the years ended December 31, 2022, 2021 and 2020, the Company recorded a gain of $ 0.7 million, a loss of $ 0.3 million and a gain of $ 2.4 million, respectively, on foreign currency translation.

Gains and losses as a result of translation adjustments are recorded within “Other (expense) income, net” in the accompanying consolidated statements of operations and comprehensive income (loss).

During the years ended December 31, 2023, 2022 and 2021, the Company recorded a loss of $ 0.5 million, a gain of $ 0.7 million and a loss of $ 0.3 million, respectively, on foreign currency translation.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Concentrations

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AmerisourceBergen

Indicates the revenues or receivables for the customer did not exceed 10 % of the Company’s total in each category as of or for the years ended December 31, 2022, 2021 or 2020, as noted.

Indicates the revenues or receivables for the customer did not exceed 10 % of the Company’s total in each category as of or for the years ended December 31, 2023, 2022 and 2021, as noted.

The Company holds its interest-bearing investments with major financial institutions and, in accordance with documented investment policies, the Company limits the amount of credit exposure to any one financial institution or corporate issuer.

The Company’s investment objectives are, first, to ensure liquidity and conservation of capital and, second, to obtain investment income.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Geographic Information

Company revenues by geographic location, as determined by the location of the customer, and the location of its assets, are as follows:

Company revenues by geographic location for the years ended December 31, 2023, 2022 and 2021, as determined by the location of the customer, are as follows:

Year Ended December 31,

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Rest of world

The location of the Company’s assets are as follows:

(In thousands)

Assets by region:

Current assets:

Assets related to discontinued operations

Other current assets

Assets held for sale

Other current assets

Rest of world

Long-term assets:

Assets related to discontinued operations

Intangible assets

Assets held for sale

(1) Prior period amounts have been retrospectively adjusted to reflect assets related to discontinued operations related to the Separation and assets held for sale related to the planned sale of the Athlone Facility.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Research and Development Expenses

For each of its R&D programs, the Company incurs both external and internal expenses.

External R&D expenses include fees related to clinical and non‑clinical activities performed by contract research organizations, consulting fees and costs related to laboratory services, purchases of drug product materials and third‑party manufacturing development costs.

External R&D expenses include fees related to clinical and preclinical activities performed by contract research organizations, consulting fees and costs related to laboratory services, purchases of drug product materials and third-party manufacturing development costs.

Internal R&D expenses include employee-related expenses, occupancy costs, depreciation and general overhead.

The Company tracks external R&D expenses for each of its development programs, however, internal R&D expenses are not tracked by individual program as they benefit multiple programs or the Company’s technologies in general.

The Company tracks external R&D expenses for each of its development programs, however, internal R&D expenses are not tracked by individual program as they benefit multiple development programs or the Company’s products or technologies in general.

Selling, General and Administrative Expenses

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Share-Based Compensation

The Company’s share‑based compensation programs grant awards in the form of stock options and restricted stock unit awards (“RSUs”), which vest with the passage of time and/or based on the achievement of certain performance criteria.

The Company’s share-based compensation programs permit grants of awards in the form of stock options and restricted stock unit awards (“RSUs”), which vest with the passage of time and/or based on the achievement of certain performance criteria.

The Company issues new shares upon the exercise of stock options or the vesting of RSUs.

Under the terms of the Company’s stock option and incentive plans (the “Plans”), certain of the Company’s employees may, at the discretion of the plan administrator, become eligible upon retirement for accelerated vesting of certain awards granted to them under the Plans.

Since there are no effective future service requirements for such employees, the fair value of awards to such employees would be expensed in full on the grant date or upon meeting the retirement eligibility criteria, whichever is later.

Under the terms of the Company’s stock option and incentive plans (the “Plans”), the Company’s employees may, at the discretion of the plan administrator, become eligible in certain circumstances set forth in the Plans for accelerated vesting of certain awards granted to them under the Plans.

In such circumstances, if there are no effective future service requirements for such employees, the remaining fair value of any such accelerated awards would be expensed as of the date of acceleration.

Time-Based Stock Options

Except as otherwise provided in the applicable Plan, stock option grants to employees expire ten years from the date of grant and generally vest in four equal annual installments, commencing on the first anniversary of the date of grant, provided the employee remains continuously employed with the Company during the applicable vesting period.

Except as otherwise provided in the applicable Plan, annual stock option grants to non-employee directors expire ten years from the grant date and generally vest over a one-year period provided that the director continues to serve on the Company’s board of directors through the vesting date.

Except as otherwise provided in the applicable Plan or award certificate, stock option grants to employees expire ten years from the date of grant and generally vest in four equal annual installments, commencing on the first anniversary of the date of grant, provided the employee remains continuously employed with the Company during the applicable vesting period.

Except as otherwise provided in the applicable Plan:

(i) annual stock option grants to non-employee directors expire ten years from the grant date and generally vest over a one-year period, provided that the director continues to serve on the Company’s board of directors through the vesting date;

and (ii) stock option grants to new non-employee directors expire ten years from the grant date and generally vest over a three-year period, provided that the director continues to serve on the Company’s board of directors through the vesting date.

The estimated fair value of options is recognized over the requisite service period, which is generally the vesting period.

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Forfeitures are estimated based on historical experience at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair value of stock option grants is based on estimates as of the date of grant using a Black-Scholes option valuation model.

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The exercise price of options granted is equal to the closing price of the Company’s ordinary shares traded on the Nasdaq Global Select Market on the date of grant.

The fair value of each stock option grant was estimated on the grant date with the following weighted‑average assumptions:

The fair value of each stock option granted was estimated on the grant date with the following weighted-average assumptions:

Year Ended December 31,

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Expected annual dividend yield

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Time-Based Restricted Stock Unit Awards

Except as otherwise provided in the applicable Plan, time‑based RSUs awarded to employees generally vest in four equal annual installments, commencing on the first anniversary of the date of grant, provided the employee remains continuously employed with the Company during the applicable vesting period.

Except as otherwise provided in the applicable Plan or award certificate, time-based RSUs awarded to employees generally vest in four equal annual installments, commencing on the first anniversary of the date of grant, provided the employee remains continuously employed with the Company during the applicable vesting period.

Shares subject to these RSUs are delivered to the employee upon vesting, subject to payment of applicable withholding taxes.

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Compensation expense for performance-based RSUs is recognized from the date the Company determines the performance criteria probable of being achieved to the date the award, or relevant portion of the award, is expected to vest.

Cumulative adjustments are recorded on a quarterly basis to reflect subsequent changes to the estimated outcome of the performance criteria until the date results are determined.

Cumulative adjustments are recorded on a quarterly basis to reflect subsequent changes to the estimated outcome of the performance criteria until the date that the final outcome of the performance criteria is determined.

Conversion and modification of equity awards outstanding at Separation date

In connection with the Separation, and in accordance with the provisions of the Alkermes Stock Option and Incentive Plans (as defined in Note 15, Share-based Compensation ) and the terms of that certain employee matters agreement, dated as of November 13, 2023, as amended, by and between the Company and Mural (the “Employee Matters Agreement”), outstanding stock options, RSUs and performance-based RSUs were adjusted (an equitable adjustment) in order to preserve the intrinsic value of such awards immediately before and immediately after the Separation Date.

Based upon the terms and the methodology set forth in the Employee Matters Agreement, one conversion ratio was calculated for awards held by current and former employees of the Company (the “Alkermes Conversion Ratio”), a second conversion ratio was calculated for stock options held by employees who transferred to Mural in connection with the Separation and a third conversion ratio was calculated for RSUs held by employees who transferred to Mural in connection with the Separation (the “Mural Conversion Ratios”).

Following the application of the Alkermes Conversion Ratio to applicable awards that were outstanding immediately before the Separation Date, the Company compared the fair value of such awards to the fair value of the awards that were outstanding immediately after the Separation Date, as adjusted, to determine whether the Company would recognize an incremental fair value adjustment related to the awards.

Following this calculation, it was determined that no incremental fair value resulted from the application of the Alkermes Conversion Ratio.

Following the application of the applicable Mural Conversion Ratios to applicable awards that were outstanding immediately before the Separation Date, Mural compared the fair value of such awards to the fair value of the awards that were outstanding immediately after the Separation Date, as adjusted, to determine whether an incremental fair value adjustment was required.

Following this calculation, it was determined that the fair value of the post-conversion awards held by employees who transferred to Mural increased immediately following the Separation, resulting in an incremental fair value charge as of the Separation Date.

In accordance with FASB ASC 718, Compensation—Stock Compensation , the Company recognized a charge within share-based compensation expense of $ 1.6 million, which represented the incremental fair value related to stock option awards that had vested prior to the Separation Date.

The Company recognizes income taxes under the asset and liability method.

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These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that the Company is using to manage the underlying business.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company accounts for uncertain tax positions using a more-likely-than-not threshold for recognizing and resolving uncertain tax positions.

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The Company also accrues for potential interest and penalties related to unrecognized tax benefits in income tax expense.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Comprehensive Loss

Comprehensive loss consists of net loss and other comprehensive loss.

Other comprehensive loss includes changes in equity that are excluded from net loss, such as unrealized holding gains and losses on available‑for‑sale investments.

Loss Per Share

Basic loss per share is calculated based upon net loss available to holders of ordinary shares divided by the weighted average number of ordinary shares outstanding.

For the calculation of diluted earnings per share, the Company uses the weighted average number of ordinary shares outstanding, as adjusted for the effect of potential dilutive securities, including stock options and RSUs.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss).

Other comprehensive income (loss) includes changes in equity that are excluded from net income (loss), such as unrealized holding gains and losses on available-for-sale investments.

Earnings (Loss) Per Share

Basic earnings (loss) per ordinary share from continuing operations is calculated based upon net income (loss) from continuing operations available to holders of ordinary shares divided by the weighted average number of ordinary shares outstanding.

Basic loss per ordinary share from discontinued operations is calculated based upon net loss from discontinued operations available to holders of ordinary shares, divided by the weighted average number of ordinary shares outstanding.

For the calculation of diluted earnings (loss) per ordinary share from continuing operations and discontinuing operations, the Company utilizes the treasury stock method and adjusts the weighted average number of ordinary shares outstanding for the potential dilutive effect of outstanding ordinary share equivalents such as stock options and RSUs.

Segment Information

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During the years ended December 31, 2023, 2022 and 2021, the Company contributed $ 5.6 million, $ 5.1 million and $ 5.2 million, respectively, in contributions to the Defined Contribution Plan.

Risks and Uncertainties

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.

A number of the marketed products from which the Company derives revenue, including manufacturing and royalty revenue, are injectable medications administered by healthcare professionals, which have been, and the Company expects may continue to be, adversely impacted to varying degrees as a result of COVID-19 related closures restrictions, labor shortages and other disruptions that have transpired, and may continue to transpire, while the pandemic persists.

The COVID-19 pandemic has caused, and the Company expects may continue to cause, varying degrees of disruption to its employees and business operations.

While the Company has continued to operate its manufacturing facilities and supply its medicines throughout the pandemic, the Company has at times during the pandemic experienced labor or supply chain disruptions at its manufacturing facilities and may continue to experience such disruptions while the pandemic persists, which could impact the Company’s ability to manufacture its products and the third-party products from which it receives revenue in a timely matter or at all.

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

The Company works with its internal teams, its clinical investigators, R&D vendors and critical supply chain vendors to continually assess, and mitigate, the potential impact of COVID-19 on its manufacturing operations and R&D activities.

The degree to which the COVID-19 pandemic may continue to impact the Company’s 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.

Due to these and numerous other uncertainties surrounding the ongoing COVID-19 pandemic, the actual impact of the pandemic on the Company’s financial condition and operating results may differ from its current projections.

For additional information about risks

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and uncertainties related to the COVID-19 pandemic that may impact the Company’s business, financial condition or results of operations, see “Part I, Item 1A—Risk Factors” in this Annual Report and specifically the section entitled “—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.”

New Accounting Pronouncements

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Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosure , which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss and the title and position of the Company’s chief operating decision maker.

The amendments in this guidance also expand the interim segment disclosure requirements.

All disclosure requirements under this guidance are required for public entities with a single reportable segment.

This ASU became effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and the amendments in this guidance are required to be applied on a retrospective basis.

The Company is currently evaluating the potential impact this ASU will have on its consolidated financial statements and related disclosures.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures in order to provide information to assist key stakeholders in better assessing how the Company’s operations and related tax risks and tax planning and operational opportunities affect the Company’s tax rate and prospects for future cash flows.

This ASU becomes effective for public companies for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

This guidance will be applied on a prospective basis.

The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

DISCONTINUED OPERATIONS

Mural Oncology Separation

On November 15, 2023, the Company completed the Separation.

In connection with the Separation, the Company entered into a separation agreement with Mural, dated as of November 13, 2023, that, among other things, sets forth the Company’s agreements with Mural regarding the principal actions taken or to be taken in connection with the Separation, including the Distribution.

The separation agreement identified those assets to be transferred to, liabilities to be assumed by and contracts to be assigned to Mural, including the operating lease for the office and laboratory space at 852 Winter Street in Waltham, Massachusetts, as part of the Separation, and it provided for when and how such transfers, assumptions and assignments were to occur.

The purpose of the separation agreement was to provide Mural and the Company with those assets necessary to operate their respective businesses and to retain or assume the respective liabilities related to those assets.

Under the terms of the separation agreement, the Company granted Mural a perpetual, worldwide, non-exclusive, royalty-free, fully paid-up license (or, as the case may be, sublicense) to IP controlled by the Company as of the date of the Distribution to allow Mural to use such IP for the oncology business, and Mural granted the Company a perpetual, worldwide, non-exclusive, royalty-free, fully paid-up license (or, as the case may be, sublicense) to IP transferred to Mural as part of the Separation for the Company’s use outside of the oncology business.

Each of Mural and the Company agreed to releases with respect to pre-Distribution claims, and cross-indemnities with respect to post-Distribution claims, that are principally designed to place financial responsibility for the obligations and liabilities allocated to Mural under the separation agreement with Mural, and financial responsibility for the obligations and liabilities allocated to the Company under the separation agreement with the Company.

The Company and Mural are also each subject to mutual six-month employee non-solicitation and non-hire restrictions, subject to certain customary exceptions, and certain confidentiality restrictions and information sharing obligations.

The transfer of assets and liabilities to Mural was effected through a contribution in accordance with the separation agreement, as summarized below:

(In thousands)

November 15, 2023

Current Assets:

Cash and cash equivalents

Total current assets

Property, plant and equipment, net

Right-of-use assets

Deferred tax asset

Current Liabilities

Operating lease liabilities—short-term

Total current liabilities

Operating lease liabilities—long-term

Total liabilities

Net assets transferred to Mural

The Company determined that the Separation and related Distribution qualified as tax-free for U.S.

federal income tax purposes, which required significant judgment by management.

In making such determinations, the Company applied U.S.

federal tax law to

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

relevant facts and circumstances and obtained:

(i) a favorable private letter ruling from the IRS;

(ii) a tax opinion;

and (iii) other external tax advice related to the concluded tax treatment.

If the Separation and Distribution were to ultimately fail to qualify for tax-free treatment for U.S.

Furthermore, other than taxes recorded on the transfer of intellectual property, the Company determined that the Separation and related Distribution qualified as tax-free for Irish tax purposes, which required significant judgment by management.

In making such determinations, the Company applied Irish tax law to relevant facts and circumstances and obtained:

(i) a tax opinion;

and (ii) other external tax advice related to the concluded tax treatment.

If the Separation and Distribution were to ultimately fail to qualify for tax-free treatment for Irish tax purposes, the Company and/or its shareholders could be subject to significant liabilities, which could have material adverse impacts on the Company’s business, financial condition, results of operations and cash flows in future reporting periods.

In connection with the Separation, the Company also entered into a tax matters agreement with Mural, dated as of November 13, 2023 .

The tax matters agreement governs the Company’s and Mural’s respective rights, responsibilities and obligations with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the Distribution, together with certain related transactions, to qualify as tax-free for U.S.

federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and assistance and cooperation in respect of tax matters.

In connection with the Separation, the Company also entered into the Employee Matters Agreement.

The Employee Matters Agreement, as amended, governs the Company’s, Mural’s and their respective subsidiaries’ and affiliates’ rights, responsibilities and obligations after the Separation with respect to, employment, benefits and compensation matters relating to employees and former employees (and their respective dependents and beneficiaries) who are or were associated with the Company, including those who became employees of Mural in connection with the Separation;

the allocation of assets and liabilities generally relating to employees, employment or service-related matters and employee benefit plans;

other human resources, employment and employee benefits matters;

and the treatment of equity-based awards granted by the Company prior to the Separation.

The Company entered into two transition services agreements with Mural.

On November 13, 2023, Alkermes, Inc., a wholly-owned subsidiary of the Company (“Alkermes US”), and Mural Oncology, Inc., a wholly-owned subsidiary of Mural (“Mural US”), entered into one transition services agreement, pursuant to which the Company and its subsidiaries will provide, on an interim, transitional basis, various services to Mural and its subsidiaries, and a second transition services agreement, pursuant to which Mural and its subsidiaries will provide certain services to the Company and its subsidiaries, in each case for a term of two years , unless earlier terminated in accordance with the terms of the applicable agreement.

As of December 31, 2023, the Company had an immaterial amount of accounts receivable and accounts payable due from and to Mural related to such transition services agreements.

Discontinued Operations

The results of the oncology business and transaction costs related to the Separation have been reflected as “Loss from discontinued operations, net of taxes” in the accompanying consolidated statement of operations and comprehensive income (loss) through the Separation Date.

Prior periods have been recast to reflect this presentation.

The transaction costs related to the Separation were $ 36.0 million during 2023 and $ 1.4 million during 2022, and primarily relate to professional fees for separation activities within the finance, tax, legal and information technology functions.

As of December 31, 2022, the assets and liabilities associated with the oncology business are classified as “Assets held for discontinued operations” and “Liabilities related to discontinued operations” in the accompanying consolidated balance sheet.

The following table summarizes expenses of the discontinued operations for the years ended December 31, 2023, 2022 and 2021:

Year Ended December 31,

(In thousands)

Operating expenses from discontinued operations

Cost of goods manufactured

Research and development

Selling, general and administrative

Total operating expenses from discontinued operations

Operating loss from discontinued operations

Income tax benefit from discontinued operations

Net loss and comprehensive loss from discontinued operations

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

There were no assets and $ 4.5 million of liabilities related to the Separation as of December 31, 2023.

All assets were transferred to Mural as of the Separation Date.

The $ 4.5 million of liabilities classified as “Liabilities related to discontinued operations” in the accompanying consolidated balance sheet relates to bonus amounts accrued for employees that transferred to Mural during 2023 through the Separation Date that will be paid by the Company, in accordance with the terms of the Employee Matters Agreement.

The following table summarizes the assets and liabilities related to Mural that have been classified as assets and liabilities from discontinued operations in our accompanying consolidated balance sheet as of December 31, 2022:

(In thousands)

December 31, 2022

Current Assets:

Prepaid expenses and other current assets

Total current assets

Right-of-use assets

Property, plant and equipment, net

Deferred tax asset

Assets from discontinued operations

Current Liabilities:

Operating lease liabilities—short-term

Total current liabilities

Operating lease liability—long-term

Liabilities related to discontinued operations

The following table summarizes the significant non-cash items and capital expenditures of the discontinued operations that are included in the consolidated statements of cash flows for the years ended December 31, 2023, 2022 and 2021:

Year Ended December 31,

(In thousands)

OPERATING ACTIVITIES:

Share-based compensation expense

Right-of-use assets

Operating lease liabilities

INVESTING ACTIVITIES:

Additions of property, plant and equipment

REVENUE FROM CONTRACTS WITH CUSTOMERS

4 unchanged sentences

Total product sales, net

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During the years ended December 31, 2023, 2022 and 2021, the Company recorded manufacturing and royalty revenues from its collaboration arrangements as follows:

19 unchanged sentences

INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate).

In October 2022, an arbitration panel found that the Company must return to Acorda $ 16.5 million (inclusive of prejudgment interest and administrative fees) previously paid by Acorda under a license agreement between the Company and Acorda and in November 2022, the panel found that the Company must pay to Acorda an additional $ 1.8 million (inclusive of prejudgment interest).

These amounts represent a portion of the royalty revenue paid to the Company by Acorda since July 2020 related to AMPYRA.

The Company paid the $ 16.5 million in October 2022 and paid the additional $ 1.8 million in December 2022.

In addition, during the three months ended June 30, 2022, the Company had recorded $ 3.2 million of royalty revenue related to AMPYRA as the Company believed that it had met the necessary revenue recognition criteria under the Financial Accounting Standards Board Accounting

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Standards Codification 606, Revenue from Contracts with Customers (“Topic 606”).

However, as a result of the arbitration ruling, the Company reversed the $ 3.2 million as the panel found that the Company was no longer entitled to be paid those royalties.

During the three months ended September 30, 2022, the Company recorded both the $ 18.3 million in repayments and the $3.2 million reversal as reversals of royalty revenue within “Manufacturing and royalty revenue” in the accompanying consolidated statements of operations and comprehensive loss.

As a result of the arbitration ruling, the Company no longer has a contractual obligation to manufacture and supply AMPYRA or a contractual right to receive future manufacturing or royalty revenue related to AMPYRA.

In January 2023, Acorda filed a petition with the U.S.

District Court for the Southern District of New York asking the court to confirm in part and modify in part the final arbitral award rendered by the arbitration panel in October 2022 and, as part of the requested modification, seeking an additional approximately $ 66.0 million in damages.

The Company intend s to contest this petition and believe it is without merit.

In November 2021, the Company received notice of partial termination of an exclusive license agreement with Janssen.

Under this license agreement, the Company provided Janssen with rights to, and know-how, training and technical assistance in respect of, the Company’s small particle pharmaceutical compound technology, known as NanoCrystal technology, which it 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.

and the Company stopped recognizing royalty revenue related to net sales of these products in the U.S.

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

On December 21, 2022, the Company received an interim award (the “Interim Award”) in these proceedings from the arbitral tribunal (the “Tribunal”), in which the Tribunal agreed with the Company’s 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 terms of the agreement.

This award is not yet final.

The Company will engage with Janssen and the Tribunal in additional proceedings prior to the Tribunal’s issuance of a final award.

Accordingly, the Company has not recognized royalty revenue related to U.S.

sales of the long-acting INVEGA products since February 2022.

Refer to Note 17, Commitments and Contingent Liabilities within the “Notes to Consolidated Financial Statements” in this Annual Report for additional information regarding the arbitration proceedings with Janssen.

Under this license agreement, the Company provided Janssen with rights to, and know-how, training and technical assistance in respect of, the Company’s small particle pharmaceutical compound technology, known as NanoCrystal technology, which was used to develop the long-acting INVEGA products.

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

Accordingly, the Company ceased recognizing royalty revenue related to sales of these products in February 2022.

In April 2022, the Company 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.

In May 2023, the arbitral tribunal (the “Tribunal”) in the arbitration proceedings issued a final award (the “Final Award”) which concluded the arbitration proceedings.

The Final Award provided, among other things, that the Company was due back royalties of $ 195.4 million, inclusive of $ 8.1 million in late-payment interest related to 2022 U.S.

net sales of the long-acting INVEGA products, which amount the Company received from Janssen in the second quarter of 2023, and is entitled to 2023 and future royalty revenues from Janssen related to net sales of INVEGA SUSTENNA through August 20, 2024, INVEGA TRINZA through the second quarter of 2030 (but no later than May 2030 when the license agreement expires) and INVEGA HAFYERA through May 2030 (when the license agreement expires).

Following issuance of the Final Award, the Company recognized royalty revenues related to the back royalties noted above and resumed recognizing royalty revenue related to ongoing U.S.

sales of the long-acting INVEGA products.

During 2023, the Company recor ded $ 486.1 mill ion in royalty revenue from sales of the long-acting INVEGA products, including $ 195.4 million related to back royalties and associated interest related to net sales of the long-acting INVEGA in the U.S.

in 2022 and resumed recognizing royalty revenue related to worldwide net sales of the long-acting INVEGA products of approximately $ 290.7 million, as compared to royalty revenue of $ 115.7 million during 2022.

In October 2022 and November 2022, an arbitration panel found that the Company must return to Acorda Therapeutics, Inc.

(“Acorda”) $ 16.5 million (inclusive of prejudgment interest and administrative fees) and $ 1.8 million (inclusive of prejudgment interest), respectively, previously paid by Acorda under a license agreement between the Company and Acorda.

These amounts represented a portion of the royalty revenue paid to the Company by Acorda since July 2020 related to AMPYRA.

The Company paid

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Acorda the aggregate $ 18.3 million in the fourth quarter of 2022.

However, as a result of the arbitration ruling, the Company reversed the $ 3.2 million as the panel found that the Company was no longer entitled to be paid those royalties.

During the three months ended September 30, 2022, the Company recorded both the $ 18.3 million in repayments and the $ 3.2 million reversal as reversals of royalty revenue within “Manufacturing and royalty revenue” in the accompanying consolidated statements of operations and comprehensive income (loss).

The amounts related to such arbitration ruling were included as part of “Other” within the manufacturing and royalty revenue table above for the year ended December 31, 2022.

As a result of the arbitration ruling, the Company has no contractual obligation to manufacture and supply AMPYRA or contractual right to receive future manufacturing or royalty revenue related to AMPYRA.

Refer to Note 19, Commitments and Contingent Liabilities within the “Notes to Consolidated Financial Statements” in this Annual Report for information regarding additional legal proceedings related to the arbitration with Acorda.

Investments consist of the following:

3 unchanged sentences

Available-for-sale securities:

Corporate debt securities

government and agency debt securities

Corporate debt securities

government debt securities

2 unchanged sentences

Available-for-sale securities:

Corporate debt securities

government and agency debt securities

government debt securities

Corporate debt securities

Held-to-maturity securities:

19 unchanged sentences

At December 31, 2023, the Company reviewed its investment portfolio to assess whether the unrealized losses on its available-for-sale investments were temporary.

Investments with unrealized losses consisted primarily of corporate debt securities and debt securities issued by non-U.S.

agencies and backed by non-U.S.

Investments with unrealized losses consisted primarily of corporate debt securities and debt securities issued and backed by U.S.

agencies and the U.S.

At December 31, 2023, 97 of the Company’s 231 investment securities were in an unrealized loss position and had an aggregate estimated fair value of $ 135.0 million.

Approximately 47 % and 45 % of the Company’s investment securities at December 31, 2022 are in corporate debt securities, with a minimum rating of A2 (Moody’s)/A (Standard and Poor’s), and debt securities issued by the U.S.

government or its agencies, respectively.

In a rising interest rate environment, the Company expects its fixed-rate investment securities will carry unrealized losses.

In making the determination whether the decline in fair value of these securities was other-than-temporary, the Company evaluated whether it intended to sell the security and whether it was more likely than not that the Company would be required to sell the security before recovering its amortized cost basis.

The Company has the intent and ability to hold these investments until recovery, which may be at maturity.

In September 2019, the Company purchased $ 1.9 million of convertible promissory notes from Synchronicity Pharma, Inc.

(“Synchronicity”), a related party.

The notes were due to mature on the earlier of June 30, 2021 , the closing of a preferred equity financing, the closing of a merger, business combination or sale of stock resulting in Synchronicity’s stockholders owning less than 50 % of the surviving entity, or an event of default.

During the years ended December 31, 2021 and 2020, the Company recorded an other-than-temporary credit loss of $ 0.9 million and $ 1.0 million, respectively, against the value of this investment and at December

Approximately 36 % and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

31, 2021, this investment was fully impaired .

The loss es w ere recorded within “Other incom e , net” in the accompanying consolidated statements of operations and comprehensive loss.

In January 2022, the Company purchased $ 0.5 million of convertible promissory notes from Synchronicity that matured on the earlier of September 30, 2022 , the closing of a preferred equity financing, the closing of a merger, business combination or sale of stock resulting in Synchronicity’s stockholders owning less than 50 % of the surviving entity, or an event of default .

During the year ended December 31, 2022, the Company determined there was an other-than-temporary loss related to this investment in Synchronicity and the $ 0.5 million was recorded within “Other income, net” in the accompanying consolidated statements of operations and comprehensive loss.

In May 2014, the Company entered into an agreement whereby it is committed to provide up to € 7.4 million to a partnership, Fountain Healthcare Partners II, L.P.

of Ireland (“Fountain”), which was created to carry on the business of investing exclusively in companies and businesses engaged in the healthcare, pharmaceutical and life sciences sectors.

As of December 31, 2022, the Company’s total contribution in Fountain was equal to € 7.4 million, and its commitment represented approximately 7 % of the partnership’s total funding.

The Company is accounting for its investment in Fountain under the equity method.

During the year ended December 31, 2020, two of the companies within the Fountain portfolio were acquired by third parties.

The Company’s proportional share of the proceeds from these transactions was $ 11.1 million, of which $ 10.4 million was received during the year ended December 31, 2020 and the remaining $ 0.7 million was received during the year ended December 31, 2021.

The transactions were accounted for under the cumulative earnings approach whereby the return on investment of $ 8.3 million was recorded as a gain within “Other income, net” in the accompanying consolidated statements of operations and comprehensive loss and the return of investment of $ 2.8 million was recorded as a reduction in the Company’s net investment in Fountain.

During the three months ended March 31, 2022, one of the companies within the Fountain portfolio was acquired by a third party.

The Company’s proportional share of the proceeds from this transaction was $ 1.1 million, of which $ 1.0 million was received during the three months ended March 31, 2022 and the remaining $ 0.1 million is being held in escrow until May 2023.

The transaction was accounted for under the cumulative earnings approach whereby the return on investment of $ 0.6 million was recorded as a gain within “Other income, net” in the accompanying consolidated statements of operations and comprehensive loss and the return of investment of $ 0.5 million was recorded as a reduction in the Company’s net investment in Fountain.

The Company’s net investment in Fountain was $ 7.9 million and $ 6.1 million at December 31, 2022 and 2021, respectively, and was included within “Other assets” in the accompanying consolidated balance sheets.

During the years ended December 31, 2022, 2021 and 2020, the Company recorded an increase in its investment in Fountain of $ 1.8 million, a decrease of $ 0.4 million and an increase of $ 0.3 million, respectively, which represented the Company’s proportional share of Fountain’s net gains or losses for such periods.

61 % of the Company’s investment securities at December 31, 2023 were in corporate debt securities, with a minimum rating of A2 (Moody’s)/A (Standard and Poor’s), and debt securities issued by the U.S.

government or its agencies, respectively.

The primary reason for the unrealized losses in the Company’s investment portfolio is that its investments are fixed-rate securities acquired in a rising interest rate environment.

In making the determination whether the decline in fair value of these securities was temporary, the Company evaluated whether it intended to sell the security and whether it was more likely than not that the Company would be required to sell the security before recovering its amortized cost basis.

The Company has the intent and ability to hold these investments until recovery, which may be at maturity.

Realized gains and losses on the sales and maturities of investments, which were identified using the specific identification method, were as follows:

10 unchanged sentences

After 1 year through 5 years

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy and the valuation techniques the Company utilized to determine such fair value:

4 unchanged sentences

government debt securities

Cash equivalents

government and agency debt securities

1 unchanged sentence

government debt securities

Contingent consideration

The Company transfers its financial assets and liabilities, measured at fair value on a recurring basis, between the fair value hierarchies at the end of each reporting period.

There were no transfers of any securities between levels during the year ended December 31, 2023.

The following table is a rollforward of the fair value of the Company’s investments whose fair value was determined using Level 3 inputs at December 31, 2022:

(In thousands)

Balance, January 1, 2022

Purchase of corporate debt security

Change in the fair value of contingent consideration

Milestone and royalty payments received by the Company related to contingent consideration

Impairment of corporate debt security

Balance, December 31, 2022

At December 31, 2023, the Company had no investments with fair values that were determined using Level 3 inputs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s investments in U.S.

3 unchanged sentences

The Company validated the prices developed using the market-observable data by obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active.

(“Recro”) and Recro Gainesville LLC (such transaction the “Gainesville Transaction”).

In November 2019, Recro Pharma, Inc.

4 unchanged sentences

In March 2022, Baudax reduced its workforce by approximately 80 %, which was designed to reduce its operational expenses and conserve its cash resources.

As a result of these events and the fact that, as of March 31, 2022, Baudax had only paid $ 0.5 million of the $ 6.4 million milestone payment that was due to the Company in March 2022, the Company recorded a reduction in the fair value of the contingent consideration of $ 19.1 million during the three months ended March 31, 2022.

In light of Baudax’s disclosures and the fact that, as of September 30, 2022, Baudax had only paid $ 1.2 million of the $ 6.4 million that was due to the Company in March 2022, the Company determined, during the three months ended September 30, 2022, that it was unlikely to collect any further proceeds under this arrangement and recorded a $ 3.6 million charge to reduce the fair value of the contingent consideration to zero within “Change in the fair value of contingent consideration”.

In light of Baudax’s disclosures and the fact that, as of September 30, 2022, Baudax had only paid $ 1.2 million of the $ 6.4 million that was due to the Company in March 2022, the Company determined, during the three months ended September 30, 2022, that it was unlikely to collect any further proceeds under this arrangement and reduced the fair value of the contingent consideration to zero within “Change in the fair value of contingent consideration”.

In addition, during the three months ended September 30, 2022, the Company determined that certain construction in progress related to the manufacture of ANJESO ® had no future value.

See Note 8, Property, Plant and Equipment , within the “Notes to Consolidated Financial Statements” in this Annual Report for details related to such construction in progress.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In December 2022, Baudax announced that it would discontinue the sale of ANJESO and on December 28, 2022, the U.S.

In December 2022, Baudax announced that it would discontinue the sale of ANJESO and the U.S.

Food and Drug Administration (“FDA”) acknowledged the discontinuation of sale of ANJESO via listing in the Orange Book.

7 unchanged sentences

(1) At December 31, 2023 and 2022, the Company had $ 33.9 million and $ 30.9 million, respectively, of finished goods inventory located at its third-party warehouse and shipping service provider.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

PROPERTY, PLANT AND EQUIPMENT

7 unchanged sentences

Total property, plant and equipment, net

Depreciation expense was $ 41.7 million, $ 40.5 million and $ 42.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Also, during the years ended December 31, 2022, 2021 and 2020, the Company wrote off furniture, fixtures and equipment that had an approximate carrying value of $ 0.5 million, $ 0.1 million and less than $ 0.1 million, respectively, at the time of disposition.

(1) In connection with the sale of the Athlone Facility, certain of the Company’s property, plant and equipment has been classified as “Assets held for sale” in the accompanying consolidated balance sheets at December 31, 2023 and 2022.

In addition, certain prior period amounts have been retrospectively adjusted to reflect the effects of the Separation and classified as “Assets held for discontinued operations” in the accompanying consolidated balance sheet at December 31, 2022.

Depreciation expens e was $ 25.7 million, $ 26.3 million and $ 23.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Also, during the years ended December 31, 2023, 2022 and 2021, the Company wrote off furniture, fixtures and equipment that had an approximate carrying valu e of $ 1.7 million, $ 0.5 million and $ 0.1 million, respectively, at the time of disposition.

Amounts included as construction in progress in the consolidated balance sheets primarily include capital expenditures at the Company’s manufacturing facility in Wilmington, Ohio.

The Company continues to evaluate its manufacturing capacity based on expectations of demand for its products and will continue to record such amounts within construction in progress until such time as the underlying assets are placed into service.

The Company expects that approximately $ 44.3 million of construction in progress will be placed into service in the second half of 2023.

The Company expects that approximately $ 30.6 million of construction in progress will be placed into service during 2024.

The Company continues to periodically evaluate whether facts and circumstances indicate that the carrying value of its long-lived assets to be held and used may not be recoverable.

In September 2022, the Company determined that $ 8.7 million of its construction in progress that related to the manufacture of ANJESO had no future value.

The Company had previously received $ 6.4 million from Baudax related to such equipment which it had recorded as contract liabilities within “Other long-term liabilities” in the accompanying consolidated balance sheets and the net amount of $ 2.3 million was written off through “other income, net” in the accompanying consolidated statements of operations and comprehensive loss.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company had previously received $ 6.4 million from Baudax related to such equipment which it had recorded as contract liabilities within “Other long-term liabilities” in the accompanying consolidated balance sheets and the net amount of $ 2.3 million was written off through “other (expense) income, net” in the accompanying consolidated statements of operations and comprehensive income (loss) during the year ended December 31, 2022.

In December 2023, the Company determined that $ 2.9 million of its construction in progress at its Wilmington, Ohio manufacturing facility had no future value and was written off through “cost of goods manufactured and sold” in the accompanying consolidated statements of operations and comprehensive income (loss) during the year ended December 31, 2023.

GOODWILL AND INTANGIBLE ASSETS

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Capitalized IP

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s finite-lived intangible assets consist of collaborative agreements and the NanoCrystal and oral controlled release technologies acquired as part of the EDT acquisition.

The Company recorded $ 35.7 million, $ 36.4 million and $ 38.1 million of amortization expense related to its finite-lived intangible assets during the years ended December 31, 2023, 2022 and 2021, respectively.

Based on the Company’s most recent analysis, amortization of intangible assets included within its consolidated balance sheets at December 31, 2022 is expected to be approximately $ 35.0 million and $ 1.0 million in the years ending December 31, 2023 and 2024, respectively.

Although the Company believes such available information and assumptions are reasonable, given the inherent risks and uncertainties underlying its expectations regarding such future revenues, there is the potential for the Company’s actual results to vary significantly from such expectations.

If revenues are projected to change, the related amortization of the intangible assets will change in proportion to the change in revenues.

The Company’s intangible assets included within its consolidated balance sheets at December 31, 2023 are expected to be fully amortized in the year ending December 31, 2024.

The Company performed its annual goodwill impairment test as of October 31, 2023.

The Company elected to perform a qualitative impairment test and based on the weight of all available evidence, determined that the fair value of the reporting unit more-likely-than-not exceeded its carrying value.

The Company performed a quantitative impairment test and based on the weight of all available evidence, determined that the fair value of the reporting unit exceeded its carrying value.

As part of the assessment performed as of October 31, 2023, it was determined that a portion of the Company’s goodwill should be allocated to Mural, as a portion of the IP that transferred to Mural was owned by the reporting unit to which the Company’s goodwill was assigned.

In connection with the completion of the Separation, the Company recorded a reduction in goodwill of $ 7.8 million in the accompanying consolidated balance sheet.

In addition, in connection with the planned sale of the Athlone Facility, the Company reviewed FASB ASC 805, Business Combinations and determined that the Athlone Facility constitutes a business and, accordingly, $ 2.0 million of the Company’s goodwill was allocated to the Athlone Facility and is classified as “Assets held for sale” within the consolidated balance sheets as of December 31, 2023 and 2022.

All of the Company’s leases are accounted for as operating leases.

The Company’s two significant operating leases at December 31, 2022 include the following:

900 Winter Street

The Company leases approximately 231,000 square feet of office and laboratory space located at 900 Winter Street in Waltham, Massachusetts (the “900 Winter Street Lease”).

The initial term of the lease commenced on January 20, 2020 , expires in 2035 and includes an option to extend the term for an additional ten-year period.

On November 13, 2023, in connection with the Separation, Alkermes US and Mural US entered into an assignment and assumption of lease agreement (the “Assignment”), pursuant to which Alkermes US assigned to Mural US an operating lease for approximately 180,000 square feet of corporate office space, administrative areas and laboratories located at 852 Winter Street in Waltham, Massachusetts (the “852 Winter Street Lease”).

Under the terms of the Assignment, Mural US assumed all of Alkermes US’ obligations under the 852 Winter Street Lease.

In accordance with FASB ASC 842, Leases , as the Company can no longer access or direct the use of the asset following the Assignment, the 852 Winter Street Lease no longer meets the definition of a lease for the Company.

On November 15, 2023, the effective date of the Assignment, the Company reduced its right-of-use asset and lease liability by $ 14.5 million and $ 15.4 million, respectively in the accompanying consolidated balance sheet.

In December 2022, the Company exercised an early payment option included within the terms of the 900 Winter Street Lease.

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As of December 31, 2022, the remeasurement and subsequent payment resulted in an increase in the right-of-use asset of $ 12.8 million and a net decrease in the lease liability of $ 2.5 million.

852 Winter Street

The Company leases approximately 180,000 square feet of corporate office space, administrative areas and laboratories at 852 Winter Street in Waltham, Massachusetts.

The original lease commenced in 2010 and was extended, at the Company’s option, for five years in 2020.

The lease extension commenced in March 2021 for 163,000 square feet of space and in September 2021 for the remaining 17,000 square feet of space.

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

At December 31, 2023 and 2022, the operating leases held by the Company had a weighted average incremental borrowing rate of 4.4 % and 5.5 %, respectively, and a weighted average remaining lease term of 8.7 years and 9.6 years, respectively.

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The Company recorded operating lease expense of $ 10.2 million, $ 10.7 million and $ 11.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Future lease payments under non-cancelable leases as of December 31, 2023 consisted of the following:

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Total operating lease liabilities

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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Total accrued sales discounts, allowances and reserves

Included in accounts payable was approximately $ 34.5 million and $ 0.8 million of amounts payable related to state Medicaid rebates as of December 31, 2023 and 2022, respectively.

LONG-TERM DEBT

4 unchanged sentences

Long-term debt

In March 2021, the Company amended and refinanced its existing term loan, previously referred to as 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 %;

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 ARRC hardwired benchmark replacement language.

The 2026 Term Loans have an incremental facility capacity in an amount of $ 175.0 million, plus additional potential amounts, provided that the Company meets certain conditions, including a specified leverage ratio.

The Company’s outstanding term loans mature on March 12, 2026 (the “2026 Term Loans”).

In June 2023, the Company amended the 2026 Terms Loans to transition the interest rate available for borrowings thereunder from a London Interbank Offered Rate (“LIBOR”)-based interest rate to an interest rate based on the Secured Overnight Financing Rate (“SOFR”) and to make other conforming and mechanical changes.

The 2026 Term Loans bear interest at SOFR plus a credit spread adjustment applicable to the interest period and an applicable margin of 2.50 % with a floor of 0.5 %.

The 2026 Term Loans have an incremental facility capacity in the amount of $ 175.0 million plus additional potential amounts, provided that the Company meets certain conditions, including a specified leverage ratio.

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 the Company and certain of its subsidiaries.

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The Company was in compliance with its debt covenants at December 31, 2023.

The Term Loan Refinancing involved multiple lenders who were considered members of a loan syndicate.

In determining whether the Term Loan Refinancing was to be accounted for as a debt extinguishment or a debt modification, the Company considered whether creditors remained the same or changed and whether the changes in debt terms were substantial.

A change in the debt terms was considered to be substantial if the present value of the remaining cash flows under the new terms of the 2026 Term Loans was at least 10 % different from the present value of the remaining cash flows under the 2023 Term Loans (commonly referred to as the “10% Test”).

The Company performed a separate 10% Test for each individual creditor participating in the loan syndication.

With the exception of three lenders, who owned between 2 %- 7 % of the total outstanding principal amount of the 2023 Term Loans immediately prior to the Term Loan Refinancing whose holding amounts were accounted for as a debt extinguishment, the Term Loan Refinancing was otherwise accounted for as a debt modification.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Term Loan Refinancing resulted in a $ 2.1 million charge in the year ended December 31, 2021, which was included in “Interest expense” in the accompanying consolidated statement of operations and comprehensive loss.

Scheduled maturities with respect to the 2026 Term Loans are as follows (in thousands):

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To date, the Company has not been required to make any such mandatory prepayments.

At December 31, 2022, the Company’s balance of unamortized deferred financing costs and unamortized original issue discount costs were $ 0.5 million and $ 1.0 million, respectively.

These costs are being amortized to interest expense over the estimated repayment period of the 2026 Term Loans using the effective interest method.

During each of the years ended December 31, 2022, 2021 and 2020, the Company had amortization expense of $ 0.5 million, $ 0.5 million and $ 0.7 million, respectively, related to deferred financing costs and original issue discount.

LOSS PER SHARE

Basic loss per ordinary share is calculated based upon net loss available to holders of ordinary shares divided by the weighted average number of shares outstanding.

For the years ended December 31, 2022, 2021 and 2020, as the Company was in a net loss position, the diluted loss per share calculation did not assume conversion or exercise of stock options and restricted stock unit awards, as they would have had an anti-dilutive effect on loss per share.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

EARNINGS (LOSS) PER SHARE

Basic loss per ordinary share from discontinued operations, is calculated based upon net loss from discontinued operations available to holders of ordinary shares, divided by the weighted average number of ordinary shares outstanding.

Year Ended December 31,

(In thousands)

Net income (loss) from continuing operations

Net (loss) discontinued operations

Net income (loss)

Weighted average number of ordinary shares outstanding

Effect of dilutive securities:

Stock options

Restricted stock unit awards

Dilutive ordinary share equivalents

Shares used in calculating diluted earnings (loss) per ordinary share

(1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

The following potential ordinary share equivalents were not included in the net loss per share calculation because the effect would have been anti-dilutive:

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Restricted stock unit awards

(1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

SHAREHOLDERS’ EQUITY

Share Repurchase Program

On September 16, 2011, the Company’s board of directors authorized the continuation of the Alkermes, Inc.

share repurchase program to repurchase up to $ 215.0 million of the Company’s ordinary shares at the discretion of management from time to time in the open market or through privately negotiated transactions.

At December 31, 2022, approximately $ 101.0 million was available to repurchase ordinary shares pursuant to the repurchase program.

All shares repurchased are recorded as treasury stock.

On February 15, 2024, the Company’s board of directors authorized a share repurchase program to repurchase ordinary shares of the Company in an aggregate amount of up to $ 400.0 million (exclusive of any fees, commissions or other expenses related to such repurchases) from time to time (the “2024 Repurchase Program”).

The timing and amount of any share repurchases under the 2024 Repurchase Program will be based on a variety of factors, including but not limited to ongoing assessments of the Company’s capital needs, alternative investment opportunities, the market price of the Company’s ordinary shares and general market conditions.

The 2024 Repurchase Program has no set expiration date and may be suspended or discontinued at any time.

During the years ended December 31, 2022 and 2021, the Company did no t acquire any ordinary shares under the repurchase program.

The 2024 Repurchase Program terminates, and supersedes in its entirety, the Company’s prior share repurchase program authorized by its board of directors in September 2011 (the “Prior Repurchase Program”) under which the Company has purchased a total of 8,866,342 ordinary shares at a cost of $ 114.0 million.

During the years ended December 31, 2023, 2022 and 2021 the Company did no t purchase any ordinary shares under the Prior Repurchase Program.

ALKERMES PLC AND SUBSIDIARIES

2 unchanged sentences

Share-Based Compensation Expense

The following table presents share‑based compensation expense included in the Company’s consolidated statements of operations and comprehensive loss:

The following table presents share-based compensation expense from continuing and discontinued operations included in the Company’s consolidated statements of operations and comprehensive income (loss):

Year Ended December 31,

3 unchanged sentences

Selling, general and administrative

Share-based compensation expense from continuing operations

Cost of goods manufactured and sold

Research and development

Selling, general and administrative

Share-based compensation expense from discontinued operations

Total share-based compensation expense

4 unchanged sentences

The Company has two share-based compensation plans pursuant to which outstanding awards have been made, but from which no further awards can or will be made:

the Alkermes plc Amended and Restated 2008 Stock Option and Incentive Plan, as amended, (the “2008 Plan”) and the Alkermes plc 2011 Stock Option and Incentive Plan, as amended (the “2011 Plan,” and together with the 2018 Plan and the 2008 Plan, the “the Alkermes Stock Option and Incentive Plans”).

Effective May 20, 2020, the 2018 Plan was amended such that any shares underlying any outstanding awards granted under the 2011 Plan or the 2008 Plan that are forfeited, canceled, repurchased or otherwise terminated (other than by exercise) from and after such date will become available for issuance pursuant to the 2018 Plan, notwithstanding anything to the contrary in the terms of the 2011 Plan or the 2008 Plan.

The 2018 Plan allows for the issuance of non-qualified and incentive stock options, restricted stock, restricted stock unit awards, cash-based awards and performance shares to employees, officers and directors of, and consultants to, the Company in such amounts and with such terms and conditions as may be determined by the compensation committee of the Company’s board of directors, subject to the provisions of the 2018 Plan, as applicable.

On July 7, 2022, the Company’s shareholders approved an amended version of the Alkermes plc 2018 Stock Option and Incentive Plan that served to, among other things, increase the number of ordinary shares authorized for issuance thereunder by 8.3 million.

On June 29, 2023, the Company’s shareholders approved an amended version of the Alkermes plc 2018 Stock Option and Incentive Plan that served to, among other things, increase the number of ordinary shares authorized for issuance thereunder by 6.5 million.

At December 31, 2023, there were 15.1 million ordinary shares available for issuance in the aggregate under the 2018 Plan.

The 2018 Plan provides that awards other than stock options will be counted against the total number of shares available under the plan in a 1.8 -to-1 ratio.

In connection with the Separation and in accordance with the provisions of the Alkermes Stock Option and Incentive Plans, the Company adjusted outstanding equity awards as described in Note 2, Significant Accounting Policies within these “Notes to consolidated financial statements” in this Annual Report, and specifically the section entitled “Conversion and Modification of Equity Awards Outstanding at Separation Date”.

The incremental number of ordinary shares underlying each award that was outstanding immediately prior to the Separation is included as “Conversion Reissuance” in each of the associated tables below.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock Options

3 unchanged sentences

Outstanding, January 1, 2023

Conversion Reissuance

Outstanding, December 31, 2023

2 unchanged sentences

The aggregate intrinsic value of stock options exercised during the years ended December 31, 2023, 2022 and 2021 was $ 6.0 million, $ 11.6 million and $ 8.3 million, respectively.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

At December 31, 2022, there were 7.2 million stock options expected to vest with a weighted average exercise price of $ 23.46 per share, a weighted average contractual remaining life of 8.2 years with an aggregate intrinsic value of $ 24.8 million.

At December 31, 2023, there were 6.9 million stock options expected to vest, with a weighted average exercise price of $ 24.46 per share, a weighted average contractual remaining life of 8.0 years and an aggregate intrinsic value of $ 24.6 million.

At December 31, 2023, the aggregate intrinsic value of stock options exercisable was $ 29.4 million with a weighted average remaining contractual term of 4.5 years.

1 unchanged sentence

The intrinsic value of a stock option is the amount by which the market value of the underlying shares exceeds the exercise price of the stock option.

At December 31, 2022, there was $ 32.7 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 1.9 years.

Included within the outstanding stock option balances at December 31, 2022 consisted of 382,200 performance-based stock options that were granted in 2019 and valued using a Monte Carlo simulation model.

The weighted average grant date fair value of such performance-based stock options was $ 16.78 .

The unrecognized compensation cost related to these performance-based stock options was less than $ 0.1 million at December 31, 2022 and is included in the unrecognized compensation cost noted above.

At December 31, 2023, there was $ 33.0 million of unrecognized share-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of 1.9 years.

Time-Based Restricted Stock Unit Awards

2 unchanged sentences

Unvested, January 1, 2023

Conversion reissuance

Unvested, December 31, 2023

The weighted average grant date fair value of time‑vesting RSUs granted during the years ended December 31, 2022, 2021 and 2020 were $ 25.27 , $ 20.83 and $ 20.22 , respectively.

The weighted average grant date fair values of time-vesting RSUs granted during the years ended December 31, 2023, 2022 and 2021 were $ 27.65 , $ 25.27 and $ 20.83 , respectively.

The total fair value of time-vesting RSUs that vested during the years ended December 31, 2023, 2022 and 2021, was $ 63.0 million, $ 54.3 million and $ 56.3 million, respectively.

At December 31, 2022, there was $ 62.4 million of total unrecognized compensation cost related to unvested time-vesting RSUs, which will be recognized over a weighted average remaining contractual term of 1.9 years.

At December 31, 2023, there was $ 55.4 million of total unrecognized share-based compensation expense related to unvested time-vesting RSUs, which will be recognized over a weighted average remaining contractual term of 1.9 years.

Performance-Based Restricted Stock Unit Awards

In February 2023, 2022 and 2021, the compensation committee of the Company’s board of directors approved awards of performance-based RSUs to employees of the Company at the Senior Vice President level and above, in each case subject to vesting based on the achievement of certain financial, commercial and/or R&D performance criteria to be assessed over a performance period of three years from the date of the grant, and subject, at the end of such three-year performance period, to upward or downward adjustment based on a market condition tied to relative share price performance over the three-year performance period.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of performance-based RSU activity is presented in the following table:

1 unchanged sentence

Unvested, January 1, 2023

Conversion reissuance

Unvested, December 31, 2023

The weighted average grant date fair value of performance-based RSUs granted during the years ended December 31, 2022, 2021 and 2020 were $ 30.73 , $ 23.09 and $ 23.43 , respectively.

The total fair value of performance-based RSUs that vested during the years ended December 31, 2022, 2021 and 2020 were none , $ 4.2 million and none , respectively.

At December 31, 2022, there was $ 5.1 million of unrecognized compensation cost related to the performance-based RSUs, which would be recognized in accordance with the terms of the award when the Company deems it probable that the performance criteria will be met.

The unvested awards will expire if it is determined that the performance criteria have not been met during the applicable three-year performance period.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted average grant date fair values of performance-based RSUs granted during the years ended December 31, 2023, 2022 and 2021 were $ 29.91 , $ 30.73 and $ 23.09 , respectively.

The total fair value of performance-based RSUs that vested during the years ended December 31, 2023, 2022 and 2021 were $ 5.9 million, none and $ 4.2 million, respectively.

At December 31, 2023, there was $ 2.5 million of unrecognized share-based compensation expense related to performance-based RSUs granted in February 2022 and 2023, which would be recognized in accordance with the terms of the awards when the Company deems it probable that the performance criteria will be met.

The Company has additional unrecognized share-based compensation expense related to performance-based RSUs that were granted in February 2021.

As of December 31, 2023, the financial performance criteria for these awards were deemed not probable of being achieved.

On February 8, 2024, the compensation committee of the Company’s board of directors determined that the Company partially achieved the financial performance criteria.

This was considered a modification in accordance with FASB ASC 718, Compensation—Stock Compensation and resulted in a modification charge of approximately $ 6.8 million.

On February 8, 2024 , the compensation committee of the Company’s board of directors also determined that the Company achieved the pipeline performance criteria for these awards, resulting in a $ 2.6 million incremental share-based compensation expense, as it was deemed such pipeline performance criteria had been met.

The share-based compensation expense related to these achievements will be recognized in 2024.

COLLABORATIVE ARRANGEMENTS

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INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI

In November 2021, the Company received notice of partial termination of an exclusive license agreement with Janssen.

Under this license agreement, the Company provided Janssen with rights to, and know-how, training and technical assistance in respect of, the Company’s 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.

and the Company stopped recognizing royalty revenue related to net sales of these products.

On December 21, 2022, we received the 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.

Accordingly, the Company has not recognized royalty revenue related to U.S.

sales of the long-acting INVEGA products since February 2022.

For additional information about these proceedings, see Note 17, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report.

Under this license agreement, the Company granted Janssen a worldwide exclusive license under the Company’s NanoCrystal technology to develop, commercialize and manufacture injectable pharmaceutical products containing paliperidone palmitate, which include the long-acting INVEGA products, and the Company received milestone payments from Janssen upon the achievement of certain development goals from Janssen;

Under an exclusive license agreement with Janssen, the Company provided Janssen with rights to, and know-how, training and technical assistance in respect of, the Company’s small particle pharmaceutical compound technology, known as NanoCrystal technology, which was used to develop the long-acting INVEGA products, and the Company received milestone payments from Janssen upon the achievement of certain development goals from Janssen;

there are no further milestones to be earned under this agreement.

The agreement also provides for tiered royalty payments between 5 % and 9 % of net sales of products subject to this agreement in each country where the license is in effect, with the exact royalty percentage determined based on aggregate worldwide net sales.

The tiered royalty payments consist of a patent royalty and a know‑how royalty, both of which are determined on a country‑by‑country basis.

The agreement also provides for tiered royalty payments, which consist of a patent royalty and a know-how royalty, both of which are determined on a country-by-country basis.

The patent royalty, which equals 1.5 % of net sales, is payable in each country until the expiration of the last of the patents claiming the product in such country.

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In November 2021, the Company received notice from Janssen of partial termination of the license agreement, following which Janssen ceased paying the Company royalties related to U.S.

sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA.

In May 2023, the Tribunal in the arbitration proceedings issued a Final Award that served to reinstate the Janssen royalties and required payment by Janssen of back royalties and interest for amounts owed but not yet paid since the effective date of the partial termination.

The Final Award also provided, among other things, that the Company was entitled to royalty revenues from Janssen related to net sales of INVEGA SUSTENNA through August 20, 2024, INVEGA TRINZA through the second quarter of 2030 (but no later than May 2030 when the license agreement expires) and INVEGA HAFYERA through May 2030 (when the license agreement expires).

RISPERDAL CONSTA

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After expiration, Janssen retains a non-exclusive, royalty-free license to manufacture, use and sell RISPERDAL CONSTA.

The Company exclusively manufactures RISPERDAL CONSTA for commercial sale.

The Company exclusively manufactures RISPERDAL CONSTA at its Wilmington, Ohio facility for commercial sale.

Under its manufacturing and supply agreement with Janssen, the Company records manufacturing revenues when product is fully manufactured and approved for shipment by both Janssen and the Company.

11 unchanged sentences

Royalties for all products and the minimum annual payments for VUMERITY are subject to customary reductions, as set forth in the license and collaboration agreement.

Under the license and collaboration agreement, Biogen appointed the Company as the toll manufacturer of clinical and commercial supplies of VUMERITY, subject to Biogen’s right to manufacture or have manufactured commercial supplies as a back-up manufacturer and subject to good faith agreement by the parties on the terms of such manufacturing arrangements.

In October 2019, the Company entered into a commercial supply agreement with Biogen for the commercial supply of VUMERITY, an amendment to such commercial supply agreement and an amendment to the license and collaboration agreement with Biogen, pursuant to which Biogen has elected to conduct a technology transfer and, following a transition period, assume responsibility for the manufacture (itself or through a designee) of clinical supplies of VUMERITY and up to 100 % of commercial supplies of VUMERITY in exchange for an increase in the royalty rate to be paid by Biogen to the Company on net sales of that portion of product that is manufactured by Biogen or its designee.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In October 2019, the Company entered into a commercial supply agreement with Biogen for the commercial supply of VUMERITY, an amendment to such commercial supply agreement and an amendment to the license and collaboration agreement with Biogen, pursuant to which Biogen has elected to conduct a technology transfer and, following an agreed transition period, assume responsibility for the manufacture (itself or through a designee) of clinical supplies of VUMERITY and up to 100 % of commercial supplies of VUMERITY in exchange for an increase in the royalty rate to be paid by Biogen to the Company on net sales of that portion of product that is manufactured by Biogen or its designee.

Unless earlier terminated, the license and collaboration agreement will remain in effect until the expiry of all royalty obligations.

2 unchanged sentences

Upon termination of the license and collaboration agreement by either party, then, at the Company’s request, the VUMERITY program will revert to the Company.

The Company’s (benefit) provision for income taxes consists of the following:

The Company’s (benefit) provision for income taxes from continuing operations consists of the following:

Year Ended December 31,

(In thousands)

Current income tax provision:

Current income tax (benefit) provision:

Rest of world

1 unchanged sentence

Total tax (benefit) provision

The income tax benefit in 2022 was primarily due to an enhanced foreign derived intangible income deduction as a result of a change to Section 174 of the Tax Cuts and Jobs Act in relation to capitalization and amortization of R&D expenses.

(1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

The income tax benefit in 2023 was primarily due to the partial release of the valuation allowance maintained against certain Irish deferred tax assets, partially offset by taxes on income earned in the U.S.

The income tax provisions in 2022 and 2021 were primarily due to U.S.

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and the tax impact of employee equity activity.

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

On this basis, the Company adjusted its estimate of expenses that should be capitalized and amortized, resulting in lower taxable income and an elimination of the foreign derived intangible income (“FDII”) deduction for the year ended December 31, 2023.

The income tax benefit associated with the Company’s oncology business, and the tax impact of the Separation, are discussed in further detail in Note 3, Discontinued Operations, in these “Notes to Consolidated Financial Statements” in this Annual Report.

The tax benefits included within discontinued operations were $ 1.4 million, $ 11.1 million, and $ 2.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.

No provision for income tax has been provided on undistributed earnings of the Company’s foreign subsidiaries because such earnings are indefinitely reinvested in the foreign operations.

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The Company estimates that approximately $ 70.8 million of income taxes would be payable on the repatriation of the unremitted earnings to Ireland.

The distribution of the Company’s loss before income taxes by geographical area consists of the following:

Year Ended December 31,

(In thousands)

Rest of world

Loss before income taxes

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The distribution of the Company’s income (loss) before the (benefit) provision for income taxes by geographical area consists of the following:

Year Ended December 31,

(In thousands)

Income (loss) from continuing operations before (benefit) provision for income taxes

(1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

The components of the Company’s net deferred tax assets consist of the following:

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Deferred tax assets:

NOL carryforwards

Net operating loss carryforwards

Research and development expenses

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Net deferred tax assets

(1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

The activity in the valuation allowance associated with deferred taxes consists of the following:

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(Additions) / Reductions (2)

End of Period

Balance at End of Period (1)

Deferred tax asset valuation allowance for the year ended December 31, 2021

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Deferred tax asset valuation allowance for the year ended December 31, 2023

The (additions)/reductions in each of the periods presented relate primarily to Irish NOLs.

(1) Inclusive of continuing and discontinued operations for all periods other than the balance at December 31, 2023.

(2) (Additions) reductions represent continuing and discontinued operations.

The reduction during the year ended December 31, 2023 primarily relates to the partial release of the valuation allowance maintained against certain Irish net deferred tax assets.

The (additions) reductions in 2022 and 2021 relate primarily to Irish net operating losses (“NOLs”).

The Company regularly assesses the need for a valuation allowance against its deferred tax assets.

In making such assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized.

During the year ended December 31, 2023, the Company:

(i) achieved a favorable outcome in its arbitration with Janssen (as described in Note 4, Revenue from Contracts with Customers in these “Notes to Consolidated Financial Statements” in this Annual Report);

(ii) successfully completed the Separation;

and (iii) recorded significant pre-tax income due to multiple factors, including the growth of its proprietary revenues and items (i) and (ii) above.

As a result, the Company’s main operating subsidiary in Ireland recorded cumulative income during the year ended December 31, 2023 and the three-year period ended December 31, 2023.

On this basis and other positive factors (such as anticipated future earnings) and negative factors (such as the potential decrease in certain manufacturing and royalty revenues), the Company has concluded that it is more-likely-than-not that certain Irish deferred tax assets will be realized.

Of the $ 271.5 million valuation allowance maintained as of December 31, 2022, the Company released $ 143.9 million during the year ended December 31, 2023.

At December 31, 2023, the Company maintained a valuation allowance of $ 27.3 million against certain U.S.

state deferred tax assets and $ 245.8 million against certain Irish deferred tax assets as the Company has determined that it is more-likely-than-not that these net deferred tax assets will not be realized.

If the Company demonstrates consistent profitability in the future, the evaluation of the recoverability of these deferred tax assets could change and the remaining valuation allowances could be released in part or in whole.

If the Company incurs losses in the U.S.

in the future, the evaluation of the recoverability of the U.S.

deferred tax assets could change and a valuation allowance against the U.S.

deferred tax assets may be required in part or in whole.

As of December 31, 2022, the Company had $ 1.7 billion of Irish NOL carryforwards, $1

state deferred tax assets and $ 102.0 million against certain Irish deferred tax assets, as the Company has determined that it is more-likely-than-not that these deferred tax assets will not be realized and some may be abandoned.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5 .1 million of U.S.

If the Company incurs losses in the U.S.

or in Ireland in the future, the evaluation of the recoverability of the deferred tax assets could change and a valuation allowance against such deferred tax assets may be required in part or in whole.

The Company will continue to monitor the need for a valuation allowance against its deferred tax assets on a quarterly basis.

As of December 31, 2023, the Company had $ 1.3 billion of Irish NOL carryforwards, $ 14.6 million of U.S.

federal NOL carryforwards, $ 43.2 million of state NOL carryforwards, $ 9.7 million of federal R&D credits and $ 31.0 million of state tax credits which will either expire on various dates through 2043 or can be carried forward indefinitely.

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Included within these loss and credit carryforwards are $ 14.6 million of U.S.

federal NOL carryforwards and $ 6.8 million of state NOL carryforwards, acquired as part of the acquisition of Rodin, each of which are subject to a $ 0.5 million annual limitation.

federal NOL carryforwards and $ 6.3 million of state NOL carryforwards, acquired as part of the acquisition of Rodin Therapeutics, Inc.

(“Rodin”), each of which are subject to a $ 0.5 million annual limitation.

A reconciliation of the Company’s statutory tax rate to its effective tax rate is as follows:

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Statutory tax rate

Loss before income taxes at statutory rate

Income (loss) from continuing operations before income taxes at statutory rate

Share-based compensation

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Effective tax rate

(1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

(2) Represents income or losses of U.S.

subsidiaries, subject to tax at a rate other than the Irish statutory rate.

Intercompany amounts include cross-territory eliminations, the pre-tax effect of which has been eliminated in arriving at the Company's consolidated loss before taxes.

(3) Intercompany amounts include cross-territory eliminations, the pre-tax effect of which has been eliminated in arriving at the Company's consolidated income (loss) before taxes from continuing operations.

In 2023, this included a tax benefit of $ 15.7 million related to the intercompany transfer of inventory that was owned by the Company at December 31, 2023.

(4) Represents income or losses of Irish companies subject to tax at a rate other than the Irish statutory rate.

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(6) Other permanent items include, but are not limited to, non-deductible meals and entertainment expenses and non-deductible compensation of senior officers of the Company.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

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Balance, December 31, 2020

Additions based on tax positions related to prior periods

Additions based on tax positions related to the current period

Balance, December 31, 2020

Reductions based on tax positions related to prior periods

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Balance, December 31, 2021

Reductions based on the lapse of applicable statues of limitations

Reductions based on the lapse of applicable statutes of limitations

Additions based on tax positions related to prior periods

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Balance, December 31, 2022

Reductions based on the lapse of applicable statutes of limitations

Additions based on tax positions related to the prior period

Additions based on tax positions related to the current period

Balance, December 31, 2023

The unrecognized tax benefits at December 31, 2023, if recognized, would affect the Company’s effective tax rate.

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For the years ended December 31, 2023, 2022 and 2021, the Company’s accrued interest and penalties related to uncertain tax positions were not material.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s major taxing jurisdictions include Ireland and the U.S.

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The years ended December 31, 2018 and 2017 for Alkermes Finance S.à.r.l, a former indirect subsidiary of Alkermes plc that was liquidated during the year ended December 31, 2020, are currently under examination by the Tax Authorities in Luxembourg (the “LTA”).

In November 2022, the Company received a notice of assessment in the amount of € 2.2 million for the year ended December 31, 2017 from the LTA.

The Company disagrees with this assessment and believes this assessment to be incorrect.

The Company will timely appeal the notice of assessment and pursue available administrative and judicial avenues as may be necessary or appropriate.

In February 2023, the Company submitted an appeal to the LTA against the notice of assessment received in 2022 for the year ended December 31, 2017.

In the third quarter of 2023, the Company received confirmation that the LTA changed its position and agreed to the originally filed tax return, resulting in the closure of the examination of the year ended December 31, 2017.

In connection with the closure, the Company received a refund of approximately € 2.2 million from the LTA.

As of December 31, 2023, the Company had no t received a notice of assessment from the LTA in relation to the year ended December 31, 2018.

RESTRUCTURING

In July 2023 , in conjunction with the Company’s ongoing review of operations and the Separation, the Company implemented a restructuring plan, which included the elimination of approximately 60 positions across the Company (the “Restructuring”).

The Company recorded a charge of $ 6.0 million during the third quarter of 2023 as a result of the Restructuring, which consisted of one-time termination benefits for employee severance, benefits and related costs, all of which are expected to result in cash expenditures, and all of which are expected to be paid within 12 months of the Restructuring.

The Company recognized $ 4.5 million and $ 1.5 million of this expense in R&D expense and SG&A expense, respectively, in the accompanying consolidated statements of comprehensive income (loss).

Activity related to the Restructuring during the year ended December 31, 2023 was as follows:

(In thousands)

Balance, December 31, 2022

Restructuring charge

Amounts paid during the period:

Outplacement services

Balance, December 31, 2023

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

COMMITMENTS AND CONTINGENT LIABILITIES

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At December 31, 2023, there were no potential material losses from claims, asserted or unasserted, or legal proceedings that the Company determined were probable of occurring.

Janssen Arbitration Proceedings

In April 2022, Alkermes Pharma Ireland Limited commenced binding arbitration proceedings to settle, among other things, whether, notwithstanding Janssen Pharmaceutica N.V.’s partial termination of two license agreements with the Company, Janssen Pharmaceutica has a continuing obligation to pay royalties on sales in the U.S.

of INVEGA SUSTENNA, INVEGA TRINZA, INVEGA HAFYERA and CABENUVA.

The request for arbitration seeks, among other remedies, a declaration that Janssen Pharmaceutica N.V.

is in breach of the license agreements and a resumption of royalty payments for sales of the relevant products in the U.S.

On December 21, 2022, the Company received the Interim Award in these proceedings from the Tribunal.

In the Interim Award, the Tribunal agreed with the Company’s position that, while Janssen Pharmaceutica N.V.

may terminate the agreements, it may not continue to sell Products (as defined in the agreements) developed during the term of the agreements without paying royalties pursuant to the terms of the respective agreements.

The Company will engage with Janssen Pharmaceutica N.V.

and the Tribunal in additional proceedings prior to the Tribunal’s issuance of a final award.

The arbitration is to be conducted pursuant to the Institute for Conflict Prevention and Resolution (CPR) Rules for Non-Administered Arbitration.

INVEGA SUSTENNA ANDA Litigation

Janssen Pharmaceutica N.V.

and Janssen Pharmaceuticals, Inc.

Janssen Pharmaceutica and Janssen Pharmaceuticals, Inc.

initiated patent infringement lawsuits in the U.S.

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(“Teva”) and Teva Pharmaceuticals Industries, Ltd.

(“Teva PI”) (such lawsuit, the “Teva Lawsuit”), in August 2019 against Mylan Laboratories Limited (“Mylan Labs”) and other Mylan entities (the “Mylan Lawsuit”) and in December 2019 against Pharmascience, Inc.

(“Pharmascience”), Mallinckrodt plc, and SpecGX LLC (the “Pharmascience Lawsuit”), and in the U.S.

District Court for the District of Delaware in December 2021 against Tolmar Holding, Inc., Tolmar Pharmaceuticals, Inc., Tolmar Therapeutics, Inc., and Tolmar, Inc.

(“Tolmar” and such lawsuit, the “Tolmar Lawsuit”), following the respective filings by each of Teva, Mylan Labs, Pharmascience and Tolmar of an Abbreviated New Drug Application (“ANDA”) seeking approval from the FDA to market a generic version of INVEGA SUSTENNA before the expiration of U.S.

(“Teva PI”) (such lawsuit, the “Teva Lawsuit”), in August 2019 against Mylan Laboratories Limited (“Mylan Labs”) and other Mylan entities (the “Mylan Lawsuit”), in December 2019 against Pharmascience, Inc.

(“Pharmascience”), Mallinckrodt plc, and SpecGX LLC (the “Pharmascience Lawsuit”), and in February 2022 against Accord Healthcare, Inc., Accord Healthcare, Ltd.

and Intas Pharmaceuticals, Ltd (“Accord” and such lawsuit, the “Accord Lawsuit”), and in the U.S.

District Court for the District of Delaware (the “DE District Court”) in December 2021 against Tolmar Holding, Inc., Tolmar Pharmaceuticals, Inc., Tolmar Therapeutics, Inc., and Tolmar, Inc.

(“Tolmar” and such lawsuit, the “Tolmar Lawsuit”), following the respective filings by each of Teva, Mylan Labs, Pharmascience, Accord and Tolmar of an Abbreviated New Drug Application (“ANDA”) seeking approval from the FDA to market a generic version of INVEGA SUSTENNA before the expiration of U.S.

In October 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Teva Lawsuit.

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Court of Appeals for the Federal Circuit, which were consolidated in January 2022 (the “Teva Appeal”).

A trial has been scheduled in the Tolmar Lawsuit for October 2023.

The Pharmascience Lawsuit was administratively terminated in July 2022, pending the outcome of the Teva Appeal.

A trial was held in the Tolmar Lawsuit in October 2023.

The Pharmascience Lawsuit and the Accord Lawsuit were administratively terminated in July 2022, pending the outcome of the Teva Appeal.

The Company is not a party to any of these proceedings.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

INVEGA TRINZA ANDA Litigation

In September 2020, Janssen Pharmaceutica N.V., Janssen Pharmaceuticals, Inc., and Janssen Research & Development, LLC, initiated a patent infringement lawsuit in the NJ District Court against Mylan Labs, Mylan, and Mylan Institutional LLC following the filing by Mylan Labs of an ANDA seeking approval from the FDA to market a generic version of INVEGA TRINZA before the expiration of U.S.

In September 2020, Janssen Pharmaceutica, Janssen Pharmaceuticals, Inc., and Janssen Research & Development, LLC initiated a patent infringement lawsuit in the NJ District Court against Mylan Labs, Mylan, and Mylan Institutional LLC following the filing by Mylan Labs of an ANDA seeking approval from the FDA to market a generic version of INVEGA TRINZA before the expiration of U.S.

10,143,693 (the “’693 Patent”).

Requested judicial remedies include recovery of litigation costs and injunctive relief.

A bench trial concluded on December 9, 2022.

In May 2023, the NJ District Court issued an opinion in favor of the Janssen entities on the issues of infringement and validity of the ’693 Patent and the Mylan entities filed a notice of appeal of the decision.

The Company is not a party to this proceeding.

VIVITROL ANDA Litigation

In September 2020, Alkermes, Inc.

and Alkermes Pharma Ireland Limited filed a patent infringement lawsuit in the NJ District Court against Teva and Teva PI following the filing by Teva of an ANDA seeking approval from the FDA to engage in the commercial manufacture, use or sale of a generic version of VIVITROL (naltrexone for extended-release injectable suspension) before the expiration of the Company’s U.S.

A bench trial, adjourned from its prior scheduled start date due to COVID-19, is now scheduled to begin on February 16, 2023.

The Company intends to vigorously defend its IP.

VUMERITY ANDA Litigation

In July 2023, Biogen Inc., Biogen Swiss Manufacturing GmbH and Alkermes Pharma Ireland Limited filed a patent infringement lawsuit in the DE District Court against Zydus Worldwide DMCC, Zydus Pharmaceuticals (USA) Inc.

and Zydus Lifesciences Limited (collectively, “Zydus”) following the filing by Zydus of an ANDA seeking approval from the FDA to engage in the commercial manufacture, use or sale of a generic version of VUMERITY (diroximel fumarate) delayed-release capsules for oral use, 231 mg, before expiration of the Company’s U.S.

and 10,080,733.

The filing of the lawsuit triggered a stay of FDA approval of the ANDA for up to 30 months in accordance with the U.S.

Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”).

In October 2023, Zydus filed an answer to the complaint.

Government Matters

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The Company is cooperating with the investigations.

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Product Liability and Other Legal Proceedings

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The Company intends to vigorously defend itself in these matters.

In addition, on January 10, 2023, Acorda filed a petition with the U.S.

District Court for the Southern District of New York asking the court to confirm in part and modify in part the final arbitral award rendered by an arbitration panel in October 2022 and, as part of the requested modification, seeking an additional approximately $ 66.0 million in damages.

The Company intends to contest this petition and believes it is without merit.

In addition, in January 2023, Acorda filed a petition with the U.S.

District Court for the Southern District of New York (the “NY Southern District Court”) asking the court to confirm in part and modify in part the final arbitral award rendered by an arbitration panel in October 2022 and, as part of the requested modification, seeking an additional approximately $ 66.0 million in damages.

In August 2023, the NY Southern District Court confirmed the final arbitral award and declined to modify the final award to increase the damages awarded thereunder.

In September 2023, Acorda filed a notice of appeal of the NY Southern District Court decision to the U.S.

Court of Appeals for the Federal Circuit (the “Federal Circuit”), and the Company filed a motion to transfer the appeal to the U.S.

Court of Appeals for the Second Circuit.

On October 10, 2023, Acorda filed an opposition to such motion.

On January 18, 2024, the Federal Circuit denied without prejudice the Company’s motion to transfer the appeal and instructed the parties to brief the jurisdictional question as part of the merits appeal.

While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing proceedings would have a material adverse effect on the Company’s business or financial condition.

In connection with the Separation, the Company entered into the Assignment related to the 852 Winter Street Lease, which is described in more detail in Note 10, Leases in these “Notes to Consolidated Financial Statements” in this Annual Report.

Although the Assignment transferred all of the rights, title and interest in, to and under the 852 Winter Street Lease to Mural US as of November 15, 2023, the Company ratified and reaffirmed for the remainder of the lease term its guarantor obligations under that certain Guaranty dated as of May 16, 2014 related to the 852 Winter Street Lease.

Upon completion of the Separation, the Assignment was accounted for as a termination of the original lease and the Company de-recognized the right-of-use asset and lease liability related to the 852 Winter Street Lease.

At December 31, 2023, the fair value of the guarantee was no t material to the Company.

Purchase Commitments

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

What changed 10-K

Item 9A. Controls and Procedures