What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-12 · 110 added, 127 removed, 295 unchanged (45% of the section changed)

6 unchanged sentences

A detailed discussion of our 2023 financial condition and results of operations, and of 2024 year-over-year changes as compared to 2023, can be found in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 12, 2025.

We have a portfolio of proprietary products that we manufacture, market and sell in the U.S.—VIVITROL, ARISTADA, ARISTADA INITIO and LYBALVI.

We also earn manufacturing and/or royalty revenues on net sales of products commercialized by our licensees, the most significant of which in 2024 were the long-acting INVEGA products and VUMERITY.

We expect VIVITROL, ARISTADA, ARISTADA INITIO, LYBALVI and VUMERITY to generate significant revenues for us in the near- and medium-term as we believe these products are singular or competitively advantaged products in their classes.

We have a portfolio of proprietary products that we manufacture, market and/or sell in the U.S., which in 2025 was comprised of ARISTADA, ARISTADA INITIO, LYBALVI and VIVITROL.

We also earned manufacturing and/or royalty revenues on net sales of products commercialized by our licensees, the most significant of which in 2025 were the long-acting INVEGA products and VUMERITY.

We expect ARISTADA, ARISTADA INITIO, LYBALVI, VIVITROL and VUMERITY, and our new product, LUMRYZ, which we acquired and began to market and sell in the U.S.

in February 2026, to generate significant revenues for us in the near- and medium-term as we believe these products are singular or competitively advantaged products in their classes.

In 2025, our net income from continuing operations was $241.7 million, as compared to $372.1 million in 2024.

The decrease in net income from continuing operations was primarily due to two significant one-time events in 2023, which were the receipt in June 2023 of back royalties and interest in respect of 2022 U.S.

sales of the long-acting INVEGA products, following the successful outcome of the arbitration proceedings related to such products, and the partial release of our valuation allowance maintained against certain Irish deferred tax assets.

These events were partially offset by an increase in our product sales, net and a decrease in our operating expenses in 2024.

The decrease in net income from continuing operations of $130.5 million was primarily due to an increase in total expenses of $84.9 million and a decrease of $182.8 million in manufacturing and royalty revenues.

These items were partially offset by an increase in product sales, net of $101.1 million and a decrease in our income tax provision of $21.8 million.

These items are discussed in further detail within the “Results of Operations” section below.

Business Update

In May 2024, we completed the sale of the Athlone Facility to Novo and entered into subcontracting arrangements to continue certain development and manufacturing activities performed at the Athlone Facility, which may continue through the end of 2025.

In November 2023, we completed the separation of our former oncology business into a new, independent, publicly-traded company (the “Separation”), which is more fully described in Note 3, Discontinued Operations , in the “Notes to Consolidated Financial Statements” in this Annual Report.

In October 2025, we entered into the Transaction Agreement with Avadel, which was subsequently amended in November 2025, pursuant to which we agreed to acquire the entire issued and to be issued ordinary share capital of Avadel for consideration of (i) $21.00 per Avadel Share, payable in cash at closing and (ii) a non-transferable CVR entitling holders of Avadel Shares to a potential additional cash payment of $1.50 per Avadel Share, contingent upon achievement of a certain specified milestone.

On February 12, 2026, we successfully completed the Avadel Acquisition, adding both LUMRYZ to our portfolio of proprietary commercial products and a commercial organization with experience in narcolepsy.

During the three months ended December 31, 2025, we incurred costs of approximately $10.0 million in connection with the Avadel Acquisition.

Results of Operations

As a result of the Separation, the historical results of our former oncology business have been reflected as discontinued operations in our consolidated financial statements through November 15, 2023, the date of the Separation.

Prior period results of operations and balance sheet information have been recast to reflect this presentation.

Product Sales, Net

Our product sales, net, consist of sales of VIVITROL, ARISTADA, ARISTADA INITIO, and LYBALVI, primarily to wholesalers, specialty distributors and pharmacies.

Our product sales, net, consisted of sales of ARISTADA, ARISTADA INITIO, LYBALVI and VIVITROL, primarily to wholesalers, specialty distributors and pharmacies.

The following table presents the adjustments deducted from product sales, gross to arrive at product sales, net, for sales of these products during the years ended December 31, 2025 and 2024:

Year Ended December 31,

(In millions, except for % of Sales)

6 unchanged sentences

Product sales, net

VIVITROL product sales, gross, increased by 10%, which was primarily due to a 7% increase in the number of units sold and a 3.2% increase in the selling price that went into effect in January 2024.

ARISTADA and ARISTADA INITIO product sales, gross, increased by 5%, which was primarily due to a 3% increase in the number of units sold and a 3.0% increase in the selling price that went into effect in January 2024.

LYBALVI product sales, gross, increased by 52%, which was primarily due to a 45% increase in the number of units sold and increases of 3.8% and 2.0% in the selling price that went into effect in January 2024 and July 2024, respectively.

The decrease in Medicaid rebates as a percentage of sales was primarily due to the increase in sales of LYBALVI, which has lower Medicaid utilization than VIVITROL, ARISTADA and ARISTADA INITIO, and actual Medicaid utilization rates related to VIVITROL being lower than original estimates, due, in part, to $8.7 million in actual credits received in the fourth quarter of 2024 from certain states related to duplicate Medicaid billings.

The increase in product sales, gross was due to a 19% increase in the number of units sold for LYBALVI and a 3% price increase for each of LYBALVI, ARISTADA/ARISTADA INITIO and VIVITROL that went into effect in January 2025, partially offset by decreases of 3% and 2% in the number of units sold for VIVITROL and ARISTADA/ARISTADA INITIO, respectively.

The decrease in Medicaid rebates as a percentage of sales was primarily due to gross-to-net favorability, as actual Medicaid rebates related to VIVITROL and ARISTADA/ARISTADA INITIO were lower than original estimates by approximately $26.7 million and $13.6 million, respectively.

The following table compares product sales, net earned during the years ended December 31, 2025 and 2024:

4 unchanged sentences

A number of companies currently market and/or are developing products to treat addiction, including alcohol and opioid dependence, that may compete with, and negatively impact, future sales of VIVITROL.

Increased competition may lead to reduced unit sales of VIVITROL and increased pricing pressure.

The latest to expire of our patents covering VIVITROL will expire in 2029 in the U.S.

In addition, the latest to expire of our patents covering VIVITROL will expire in 2029 in the U.S.

and we expect generic versions of VIVITROL to enter the market in 2027.

Pursuant to the terms of a confidential settlement and license agreement entered into in August 2023 with Teva, we granted Teva a non-exclusive, royalty-free, non-transferable, non-sublicensable limited license under the remaining patent covering VIVITROL to market and sell a generic version of VIVITROL in the U.S.

1 unchanged sentence

Under the terms of a settlement and license agreement entered into in July 2019 with Amneal, we granted Amneal a non-exclusive license under certain patents covering VIVITROL, including the remaining patent covering VIVITROL in the U.S., to market and sell a generic formulation of VIVITROL in the U.S.

beginning on the earlier of the First Entry Date, sometime in 2028 or earlier under certain circumstances.

beginning on the earlier of the First Entry Date, sometime in 2028 or earlier under certain circumstances, and in September 2025, entered into an authorized generic product supply agreement (the “AG Agreement”) with Amneal, pursuant to which we granted Amneal certain rights to distribute and sell in the U.S.

an authorized generic version of VIVITROL for a one-year term beginning on the date of a Third Party ANDA Product Launch (as defined in the AG Agreement), subject to certain conditions set forth in the AG Agreement.

Increased competition may lead to reduced unit sales of VIVITROL and increased pricing pressure.

A number of companies currently market and/or are developing products to treat schizophrenia and/or bipolar I disorder that may compete with and negatively impact future sales of ARISTADA, ARISTADA INITIO and LYBALVI.

Increased competition may lead to reduced unit sales of ARISTADA, ARISTADA INITIO and LYBALVI and increased pricing pressure.

The latest to expire of our patents covering ARISTADA, ARISTADA INITIO and LYBALVI in the U.S.

will expire in 2039, 2039 and 2041, respectively;

The latest to expire of our patents covering ARISTADA and ARISTADA INITIO in the U.S.

will expire in 2039;

and, as such, we do not anticipate any generic versions of these products to enter the market in the near term.

The latest to expire of our patents covering LYBALVI in the U.S.

will expire in 2041.

We are currently engaged in Paragraph IV litigation with certain entities in respect of certain of the Company’s patents related to LYBALVI with expiration dates between 2032 and 2041.

For a discussion of these legal proceedings, see Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report and for information regarding the risks relating to these legal proceedings, see “Risks Related to our Intellectual Property—Uncertainty

over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we and our licensees have previously and may in the future face claims against IP rights covering our products and competition from generic drug manufacturers”.

Manufacturing and Royalty Revenues

Manufacturing revenue from RISPERDAL CONSTA and VUMERITY are recognized at the point in time that the product has been fully manufactured.

Royalties earned on our licensees’ net sales of products using our proprietary technologies are recognized in the period such products are sold by our licensees.

Substantially all of our manufacturing revenue was recognized at the point in time that the product has been fully manufactured.

Royalties earned on our licensees’ net sales of products using our proprietary technologies and our licensed product were recognized in the period such products were sold by our licensees.

The following table compares manufacturing and royalty revenues earned in the years ended December 31, 2025 and 2024:

5 unchanged sentences

Manufacturing and royalty revenues

The decrease in royalty revenues related to the long-acting INVEGA products was primarily due to the receipt in June 2023 of back royalties of $195.4 million, inclusive of $8.1 million in late-payment interest, related to 2022 U.S.

sales of the long-acting INVEGA products following the successful outcome of the arbitration proceedings related to such products and the expiration of our royalty on U.S.

net sales of INVEGA SUSTENNA in August 2024.

Pursuant to the Final Award issued in the arbitration proceedings,

we are entitled to royalty revenues from Janssen related to U.S.

net sales of INVEGA TRINZA and INVEGA HAFYERA through certain specified dates in 2030.

We expect royalty revenues from net sales of the long-acting INVEGA products to decrease further in 2025, as the royalty revenues related to U.S.

net sales of INVEGA SUSTENNA comprised a significant portion of the overall royalty revenues for the long-acting INVEGA products.

For additional discussion of our agreements with Janssen related to the long-acting INVEGA products, including the royalty provisions set forth therein and the related arbitration proceedings and outcome, see the section entitled “ Collaborative Arrangements — Janssen ” in “Item 1—Business” in this Annual Report.

In addition, each of INVEGA SUSTENNA and INVEGA TRINZA is currently subject to Paragraph IV litigation in response to companies seeking to market generic versions of such product.

Increased competition from new products or generic versions of any one or more of the long-acting INVEGA products may lead to reduced unit sales of the long-acting INVEGA products, including those not yet genericized, and increased pricing pressure.

For a discussion of legal proceedings related to INVEGA TRINZA, see Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report, and for information about risks relating to these legal proceedings, see “Item 1A—Risk Factors” in this Annual Report, and specifically the section entitled “Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”

The increase in VUMERITY revenue was due to an $8.3 million increase in royalty revenue, partially offset by a $3.6 million decrease in manufacturing revenue.

The increase in royalty revenue was primarily due to an increase in end-market sales of VUMERITY to $628.0 million in 2024, as compared to $576.3 million in 2023.

The decrease in manufacturing revenue was primarily due to a reduction in the selling price.

The manufacturing fee we earn is based on our cost to produce VUMERITY.

As the assets used to manufacture VUMERITY were classified as held for sale and transferred to Novo in connection with the sale of the Athlone Facility, depreciation expense was removed from the manufacturing cost base, which had a negative impact on our manufacturing fee.

The decrease in royalty revenues related to the long-acting INVEGA products was primarily due to the expiration of our royalty on net sales of INVEGA SUSTENNA in the U.S.

in August 2024.

Although we expect royalty revenues related to U.S.

net sales of INVEGA TRINZA and INVEGA HAFYERA through certain specified dates in 2030, total royalty revenues from net sales of the long-acting INVEGA products have been, and we expect will continue to be lower as the royalty revenues related to U.S.

net sales of INVEGA SUSTENNA comprised a significant portion of the overall royalty revenues from the long-acting INVEGA products.

In addition, INVEGA SUSTENNA is currently subject to Paragraph IV litigation in response to companies seeking to market generic versions of such product.

Though we no longer receive royalties from INVEGA SUSTENNA in the U.S., increased competition from new products or generic versions of any one or more of the long-acting INVEGA products may lead to reduced unit sales of all of the long-acting INVEGA products, including those not yet genericized, and increased pricing pressure.

For additional discussion of our agreements with Janssen related to the long-acting INVEGA products, including the royalty provisions set forth therein and the related completed arbitration proceedings and outcome, see the section entitled “ Collaborative Arrangements — Janssen ” in “Item 1—Business” in this Annual Report.

The decrease in VUMERITY revenue was due to a $22.8 million decrease in manufacturing revenue, primarily due to a reduction in the number of batches manufactured for sale to Biogen, partially offset by a $19.2 million increase in royalty revenue, due to an increase in end-market sales of the product.

For a discussion of our agreements with Biogen related to VUMERITY, including the manufacturing and royalty revenue provisions set forth therein, see the section entitled “ Collaborative Arrangements—Biogen ” in “Item 1—Business” in this Annual Report.

The decrease in revenue from RISPERDAL CONSTA was primarily due to a decrease of $13.0 million in manufacturing revenue, which was primarily due to a decrease in the number of batches made available to Janssen.

The decrease in royalty revenue was due to expirations of the patents covering RISPERDAL CONSTA, which expired in the U.S.

in January 2023 and in the EU in 2021.

The decrease in revenue related to RISPERDAL CONSTA was primarily due to a $3.6 million decrease in manufacturing revenue, primarily due to a decrease in the number of batches made available to Janssen for sale in the U.S., which has a higher selling price than product sold outside of the U.S.

We expect revenues from RISPERDAL CONSTA to continue to decrease as patents covering RISPERDAL CONSTA continue to expire in markets where end-market net sales of RISPERDAL CONSTA occur.

We are aware of potential generic and other competition to RISPERDAL CONSTA that may lead to reduced unit sales and increased pricing pressure.

We are aware of generic and other competition to RISPERDAL CONSTA that may lead to reduced unit sales and increased pricing pressure.

For a discussion of our agreements with Janssen related to RISPERDAL CONSTA, including the manufacturing provisions set forth therein, see the section entitled “ Collaborative Arrangements—Janssen ” in “Item 1—Business” in this Annual Report.

During the years ended December 31, 2024 and 2023, we recognized $36.6 million and $49.9 million, respectively, in manufacturing and royalty revenue related to FAMPYRA which is included within “Other” in the table above.

As of December 31, 2024, our manufacturing obligations related to FAMPYRA concluded.

Accordingly, we do not expect to recognize any revenues related to FAMPYRA going forward.

The decrease in Other manufacturing and royalty revenue was primarily due to a $36.6 million decrease in revenue from FAMPYRA, as our manufacturing obligations for FAMPYRA concluded on December 31, 2024, and a $10.5 million decrease in manufacturing revenue from certain of our other legacy products.

Certain of our manufacturing and royalty revenues are earned in countries outside of the U.S.

6 unchanged sentences

Cost of goods manufactured and sold

The decrease in cost of goods manufactured and sold was primarily due to lower cost of goods manufactured for certain legacy products due to a decrease in volumes of such products.

This includes RISPERDAL CONSTA as well as products manufactured at the Athlone Facility.

This decrease was partially offset by an increase in the cost of goods sold for certain of our proprietary products due to increases in the number of units sold as discussed above, and an increase in costs related to VIVITROL out-of-specification batches and subsequent investigation costs.

The decrease in the cost of goods manufactured and sold was primarily related to a $43.7 million decrease in the cost of goods manufactured for certain legacy products following the sale of the Athlone Facility in May 2024.

We also had decreases in the cost of goods sold for certain of our proprietary products, primarily due to decreases in costs related to out-of-specification batches and investigation costs.

These decreases were partially offset by an increase in the cost of goods sold for LYBALVI due to an increase in the number of units sold, as discussed above.

Research and Development Expenses

17 unchanged sentences

In an effort to allocate our spending most effectively, we continually evaluate our products under development based on the performance of such products in preclinical and/or clinical trials, our expectations regarding the likelihood of their regulatory approval and our view of their future potential commercial viability, among other factors.

The increase in expenses related to ALKS 2680 was primarily due to an increase in spend related to the advancement of the development programs for the product, including completion of our phase 1b proof-of-concept studies, initiation of our phase 2 clinical studies, Vibrance-1 and Vibrance-2 and preparatory spend in advance of initiation of our phase 2 study for IH.

The increase in expenses related to LYBALVI was primarily due to increased spend on our pediatric studies related to the product, partially offset by decreased spend following the completion of our long-term safety and tolerability studies.

The decrease in other external R&D expenses was primarily due to identifying cost-effective resourcing options for clinical programming and outsourced data management services and decreases in spend on activities associated with certain of our research programs.

The decrease in employee-related expenses was primarily due to a decrease in salaries and benefits related to a 10% reduction in R&D-related headcount during 2024.

The increase in expenses related to alixorexton was primarily due to increased spend related to the advancement of the development program for the product, including initiation of our Vibrance-3 phase 2 clinical study, costs related to the completion of our Vibrance-1 and Vibrance-2 phase 2 studies, startup costs related to planning for our phase 3 clinical program and costs related to our long-term extension study for the product.

The increase in other external R&D expenses was primarily due to activities associated with our preclinical development programs.

We expect R&D expense to increase in 2026, as we plan to initiate the phase 3 program for alixorexton and as ALKS 4510 and ALKS 7290, two internal early-stage development candidates which entered the clinic in 2025, advance.

The increase in employee-related expenses was primarily due to increases in labor and benefits expense related to a 7% increase in R&D-related headcount during 2025.

Selling, General and Administrative Expenses

4 unchanged sentences

Selling, general and administrative expense

The decrease in selling and marketing expense was primarily due to a $34.6 million decrease in marketing expense related primarily to decreased media spend and free goods, a $7.1 million decrease in professional services, primarily due to the decrease in media spend, and a $3.6 million decrease in employee related expenses, primarily due to a 7% decrease in sales and marketing headcount.

Amortization of Acquired Intangible Assets

(In millions)

Amortization of acquired intangible assets

Our amortizable intangible assets primarily consisted of technology and collaborative arrangements acquired as part of the acquisition of Elan Drug Technologies (“EDT”) in September 2011.

These intangible assets were amortized over 12 to 13 years using the economic use method, which reflects the pattern that the economic benefits of the intangible assets are consumed as revenue is generated from the underlying patent or contract, and became fully amortized during 2024.

The increase in selling and marketing expense was primarily due to increases of $33.3 million and $9.4 million in employee-related expenses and certain sales and marketing-related training programs and materials, respectively, due to a 10% increase in sales and marketing-related headcount, partially offset by a $9.5 million decrease in marketing spend, primarily related to decreases in media spend for our proprietary products.

The increase in general and administrative expense was primarily due to a $12.5 million increase in employee-related expenses, primarily due to a 9% increase in general and administrative-related headcount and a $10.7 million increase in professional service fees, primarily related to the Avadel Acquisition.

Other Income, Net

3 unchanged sentences

Interest expense

Other income (expense), net

Other income, net

Total other income, net

Interest income consists of interest earned on our cash and available-for-sale investments.

The increase in interest income was due to an increase in our cash and investments and increases in interest rates due to the rising interest rate environment.

Interest expense consists of interest incurred on our previously outstanding term loans scheduled to become due in 2026 (the “Former Term Loans”) under our former amended and restated credit agreement (the “Former Credit Agreement”), which we prepaid in full and terminated on December 19, 2024.

The increase in other income (expense), net was primarily due to the gain on the sale of the Athlone Facility of approximately $1.5 million, following the completion of the sale in May 2024.

Income Tax Provision (Benefit)

Interest expense consisted, in 2025, of financing costs related to the amended and restated bridge term loan credit agreement that we entered into on November 18, 2025, which provided for a senior secured bridge term loan facility in an aggregate amount of up to approximately $1.5 billion to fund the Avadel Acquisition (the “Bridge Credit Agreement”) and, in 2024, of previously outstanding term loans (the “Former Term Loans”) that were scheduled to become due in 2026 under our former amended and restated credit agreement, which we prepaid in full and terminated in December 2024.

See Note 11, Long-Term Debt in the “Notes to Consolidated Financial Statements” in this Annual Report for additional information regarding the Bridge Credit Agreement and Former Term Loans.

Income Tax Provision

Year Ended December 31,

(In millions)

Income tax provision (benefit)

The income tax provision in 2024 was primarily due to taxes on income earned in Ireland.

The income tax benefit in 2023 was primarily attributable 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.

Income tax provision

The income tax provisions in 2025 and 2024 were primarily due to taxes on income earned in Ireland.

Our effective tax rate during the year ended December 31, 2025 was 17.1%, which exceeds the Irish statutory tax rate of 12.5%, primarily due to non-deductible expenses and income that was taxable at rates higher than the Irish statutory tax rate.

The new corporate minimum tax rate of 15.0% did not have a material impact on our business in 2024.

Our effective tax rate during the year ended December 31, 2024 was 16.1%.

The increase in the effective tax rate was primarily due to an increase in income taxable at rates higher than the Irish statutory tax rate.

The new corporate minimum tax rate of 15% did not have a material impact on our business in 2025 and 2024.

Cumulative unremitted earnings of U.S.

7 unchanged sentences

Included within these loss and credit carryforwards are $13.6 million of U.S.

federal NOL carryforwards and $5.8 million of state NOL

carryforwards, acquired as part of the acquisition of Rodin Therapeutics, Inc.

(“Rodin”) in November 2019, each of which are subject to a $0.5 million annual limitation.

federal NOL carryforwards and $5.3 million of state NOL carryforwards, acquired as part of the acquisition of Rodin Therapeutics, Inc.

in November 2019, each of which are subject to a $0.5 million annual limitation.

Liquidity and Capital Resources

4 unchanged sentences

Cash and cash equivalents

Restricted cash

Investments—short-term

Investments—long-term

Total cash and investments

Outstanding borrowings—short and long-term

Total cash, restricted cash and investments

At December 31, 2025, our investments consisted of the following:

7 unchanged sentences

We generated $520.8 million and $439.1 million of cash from operating activities during the years ended December 31, 2025 and 2024, respectively.

In connection with the Avadel Acquisition, we placed $731.2 million in escrow to finance the portion of the consideration in excess of the commitments secured under the Bridge Credit Agreement.

In December 2024, we prepaid our previously outstanding long-term debt without penalty in the amount of $289.5 million and, during the course of 2024, repurchased approximately $200.0 million of our ordinary shares.

We expect that our existing cash, cash equivalents and investments will be sufficient to finance our anticipated working capital and other cash requirements, including capital expenditures, for at least the twelve months following the date from which our financial statements were issued.

We expect that our existing cash, cash equivalents, restricted cash and investments will be sufficient to finance our anticipated working capital and other cash requirements, including debt services and capital expenditures, for at least the twelve months following the date from which our financial statements were issued.

Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures.

7 unchanged sentences

We have no off-balance sheet arrangements that are reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources in the next 12 months.

In connection with our acquisition of Rodin, we may become obligated to make up to $825.0 million in future milestone payments to the former shareholders of Rodin, $200.0 million of which would be triggered upon achievement of certain specified clinical milestones, $300.0 million of which would be triggered by the achievement of certain regulatory milestones and $325.0 million of which would be triggered upon the attainment of certain sales thresholds.

At December 31, 2024, we had not recorded a liability related to these milestone payments as none of the future events that would trigger a milestone payment were considered probable of occurring.

Information about our cash flows, by category, is presented in the accompanying consolidated statements of cash flows.

3 unchanged sentences

(In millions)

Cash and cash equivalents, beginning of period

Cash, cash equivalents and restricted cash, beginning of period

Cash flows provided by operating activities

Cash flows (used in) provided by investing activities

Cash flows used in financing activities

Cash and cash equivalents, end of period

Cash flows provided by (used in) investing activities

Cash flows provided by (used in) financing activities

Cash, cash equivalents and restricted cash, end of period

Operating Activities

Cash flows provided by operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities.

Operating cash flow is derived by adjusting our net income (loss) for non-cash operating items such as depreciation, amortization and share-based compensation and changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our results of operations.

Cash flows provided by operating activities during 2024 primarily consisted of net income of $367.1 million, adjusted for non-cash items, including share-based compensation of $96.6 million and depreciation and amortization of $28.5 million and deferred income taxes of $40.5 million.

Cash flows provided by operating activities during 2023 primarily consisted of net income of $355.8 million, adjusted for non-cash items, including share-based compensation of $100.9 million and depreciation and amortization of $74.9 million, partially offset by changes in working capital of $36.7 million and deferred income taxes of $99.9 million.

During 2023, net income included receipt of $195.4 million from Janssen, inclusive of $8.1 million in late-payment interest, related to 2022 U.S.

net sales of the long-acting INVEGA products following the successful outcome of the arbitration proceedings in respect of such products.

Operating cash flow is derived by adjusting our net income for non-cash operating items such as depreciation, amortization and share-based compensation and changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our results of operations.

Cash flows provided by operating activities during 2025 primarily consisted of net income of $241.7 million, adjusted for non-cash items, including share-based compensation of $98.7 million, depreciation and amortization of $27.2 million, deferred income taxes of $28.8 million and $119.1 million of changes in working capital.

Cash flows provided by operating activities during 2024 primarily consisted of net income of $367.1 million, adjusted for non-cash items, including share-based compensation of $96.6 million, depreciation and amortization of $28.5 million and deferred income taxes of $40.5 million, partially offset by changes in working capital of $97.4 million.

Investing Activities

Cash flows provided by investing activities during 2025 primarily consisted of $333.1 million of net proceeds from the sale and maturities of investments, partially offset by the purchase of $40.4 million of property, plant and equipment.

Cash flows used in investing activities during 2024 primarily consisted of $176.2 million in net purchases of investments and the purchase of $33.5 million of property, plant and equipment.

These outflows were offset by proceeds from the sale of the Athlone Facility and related business of $97.9 million.

Cash flows provided by investing activities during 2023 primarily consisted of $101.1 million in net sales of investments and offset by the purchase of $48.0 million of property, plant and equipment.

These outflows were partially offset by proceeds from the sale of the Athlone Facility and related business of $97.9 million.

We expect to spend approximately $40.0 million to $50.0 million during the year ending December 31, 2026 for capital expenditures.

2 unchanged sentences

Financing Activities

Cash flows provided by financing activities during 2025 were due to $43.4 million of cash that we received upon exercises of employee stock options, partially offset by $31.0 million of employee taxes paid related to the net share settlement of equity awards.

Cash flows used in financing activities during 2024 primarily related to the prepayment of our previously outstanding long-term debt in the full amount of $289.5 million, payment for the repurchase of our ordinary shares and related expenses in the amount of $200.3 million, and $29.6 million of employee taxes paid related to net share settlements of equity awards, partially offset by $27.6 million of cash that we received upon exercises of employee stock options.

Cash flows used in financing activities during 2023 primarily related to $275.0 million in cash distributed to Mural Oncology plc in connection with the Separation and $28.5 million of employee taxes paid related to net share settlements of equity awards, partially offset by $16.8 million of cash that we received upon exercises of employee stock options.

In December 2024, we prepaid in full all Former Term Loans under the Former Credit Agreement for a total of $289.5 million.

The Company did not incur any early termination penalties in connection with the termination of the Former Credit Agreement (other than customary breakage costs).

On February 12, 2026, in connection with the Avadel Acquisition, we entered into a credit agreement (the “Credit Agreement”), by and among Alkermes plc, as the TopCo Borrower, Alkermes, Inc., as the U.S.

Borrower, Alkermes Finance LLC, as the U.S.

Co-Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Joint Lead Arranger and Joint Bookrunner, BofA Securities, Inc., as Joint Lead Arranger and Joint Bookrunner, and the lenders party thereto.

The Credit Agreement provides for (i) a senior secured term loan A facility in an aggregate principal amount of up to $750.0 million (the “TLA Facility”) and (ii) a senior secured term loan B facility in an aggregate principal amount of up to $775.0 million (the “TLB Facility” and together with the TLA Facility, the “Facilities”).

The TLA Facility matures on February 12, 2031, and the TLB Facility matures on August 12, 2031.

On the closing date of the Facilities (the “Closing Date”), we borrowed the full $1.525 billion available under the Facilities.

Borrowings under the TLA Facility will bear interest at an annual rate of, at our option, either (i) the Term SOFR Rate (as defined in the Credit Agreement) plus a Secured Net Leverage Ratio (as defined in the Credit Agreement)-based margin, which will initially be 2.75% per annum or (ii) the Alternate Base Rate (as defined in the Credit Agreement) plus a Secured Net Leverage Ratio-based margin, which will initially be 1.75% per annum.

Borrowings under the TLB Facility will bear interest at an annual rate of, at our option, either (i) the Term SOFR Rate plus a margin of 2.75% per annum or (ii) the Alternate Base Rate plus a margin of 1.75% per annum.

We have agreed to pay certain fees and expenses in connection with the Facilities, as set forth in the Credit Agreement and certain related fee letters.

The Credit Agreement (other than with respect to the TLB Facility) requires the maintenance of a maximum Secured Net Leverage Ratio and a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement), in each case, with the levels set forth in the Credit Agreement, as of the last day of any of our fiscal quarters ending after the Closing Date.

In addition, the Credit Agreement contains customary affirmative and negative covenants that apply after the Closing Date, including limitations on indebtedness, liens, mergers, consolidations, sales of assets, investments, transactions with affiliates, restricted payments and sales and leasebacks.

The Credit Agreement also contains certain customary events of default, including upon a change of control.

The Credit Agreement is guaranteed by subsidiary guarantors and secured by a lien on substantially all of the assets of the borrowers and the subsidiary guarantors, whether owned as of the Closing Date or thereafter acquired.

Also on February 12, 2026, in connection with completion of the Avadel Acquisition and our entry into the Credit Agreement, we terminated the Bridge Credit Agreement entered into in order to fund the Avadel Acquisition, as the commitments under the Credit Agreement, together with our cash on hand, were sufficient to fund the Avadel Acquisition.

In December 2024, we prepaid in full all Former Term Loans under the Company’s then-in-effect amended and restated credit agreement (the “Former Credit Agreement”) for a total of $289.5 million and terminated the agreement.

We did not incur any early termination penalties in connection with the termination of the Former Credit Agreement (other than customary breakage costs).

All liens on the collateral securing the obligations under the Former Credit Agreement were released in connection with the termination.

21 unchanged sentences

Product Sales, Net

Our product sales, net consist of sales in the U.S.

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

Our product sales, net in 2025 and 2024 consisted of sales in the U.S.

of ARISTADA, ARISTADA INITIO, LYBALVI and VIVITROL 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.

10 unchanged sentences

We estimate expected unit sales to individuals covered by Medicaid and rebates per unit under the Medicaid program and adjust our rebate accrual based on actual unit sales and rebates per unit and changes in trends in Medicaid utilization.

In 2024, actual Medicaid utilization rates related to VIVITROL were lower than original estimates, due, in part, to $8.7 million in actual credits received in the fourth quarter of 2024 from certain states related to duplicate Medicaid billings.

Medicaid rebates for our other products have not differed materially from our estimates;

In 2025, actual Medicaid utilization rates related to VIVITROL and ARISTADA/ARISTADA INITIO, were lower than original estimates by approximately $26.7 million and $13.6 million, respectively.

In 2024, actual Medicaid utilization rates related to VIVITROL were lower than original estimates, due, in part, to $8.7 million in actual credits received from certain states in the fourth quarter of 2024 related to duplicate Medicaid billings;

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

11 unchanged sentences

Actual product returns have not differed materially from our estimates;

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

Under the CGDP, patients reaching the annual coverage gap threshold are eligible for reimbursement coverage for out-of-pocket costs for covered prescription drugs.

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

Actual Medicaid Part D rebates have not differed materially from our estimates.

• Medicare Part D —we record accruals for Medicare Part D liabilities under the Medicare Manufacturer Discount Program as a reduction of sales.

Under an agreement with the Centers for Medicare and Medicaid Services, manufacturers are responsible for reimbursing Medicare for a specified percentage discount on the cost of applicable drugs during the initial coverage phase and a specified percentage discount during the catastrophic coverage phase of the Medicare Part D benefit.

Actual Medicare Part D rebates have not differed materially from our estimates.

A rollforward of our provisions for sales and allowances is as follows:

23 unchanged sentences

We recognize royalty revenues related to the sale by our licensees of products that incorporate our technology.

All of our 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 our 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.

5 unchanged sentences

We determined that the separation of our former oncology business, which was completed on November 15, 2023, represented a disposal plan that met the criteria for classification of the oncology business as a discontinued operation in accordance with ASC 205-20, Discontinued Operations .

Accordingly, the accompanying consolidated financial statements for all periods have been updated to present the assets and liabilities associated with the oncology business separately as discontinued operations on the consolidated balance sheet and the results of such discontinued operations reported as a separate component of income in the consolidated statements of operations and comprehensive income (loss).

For additional information related to discontinued operations, see Note 15, Discontinued Operations , in our “Notes to Consolidated Financial Statements” in this Annual Report.

9 unchanged sentences

Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows.

We evaluate goodwill for impairment for our reporting units annually, as of October 31, and whenever events or changes in circumstances indicate the carrying value of the reporting units may not be recoverable.

A reporting unit is an operating segment, as defined by GAAP, or a component of an operating segment.

A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and is reviewed by management.

Two or more components of an operating segment may be aggregated and deemed a single reporting unit for goodwill impairment testing purposes if the components have similar economic characteristics.

As of December 31, 2024, we have one operating segment and two reporting units.

Our goodwill, which solely relates to the Business Combination, has been assigned to one reporting unit which consists of the former EDT business.

We have the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test.

If we elect this option and determine, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required;

otherwise, no further testing is required.

Among other relevant events and circumstances that affect the fair value of reporting units, we consider individual factors, such as microeconomic conditions, changes in the industry and the markets in which we operate as well as historical and expected future financial performance.

Alternatively, we may elect to not first assess qualitative factors and instead immediately perform the quantitative impairment test.

On October 31, 2024, we elected to perform a qualitative impairment test and determined that, based on the weight of all available evidence, the fair value of the reporting unit more-likely-than-not exceeded its carrying value.

Valuation of Deferred Tax Assets

50 unchanged sentences

Operating income from continuing operations

Net income from continuing operations

Net (loss) income from discontinued operations

Earnings (loss) per share—basic:

Earnings per share—basic:

From continuing operations

1 unchanged sentence

From net income

Earnings (loss) per share—diluted:

Earnings per share—diluted:

From continuing operations

3 unchanged sentences

Year Ended December 31, 2024

Total revenues from continuing operations

Total operating expenses from continuing operations

Operating (loss) income from continuing operations

Net (loss) income from continuing operations

Net loss from discontinued operations

Net (loss) income

(Loss) earnings per share—basic:

Total revenues

Total operating expenses

Operating income from continuing operations

Net income from continuing operations

Net (loss) income from discontinued operations

Earnings (loss) per share—basic:

From continuing operations

From discontinued operations

From net (loss) income

(Loss) earnings per share—diluted:

From net income

Earnings (loss) per share—diluted:

From continuing operations

From discontinued operations

From net (loss) income

From net income

Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure

1 unchanged sentence

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 7. Management’s Discussion and Analysis