What changed in this filing

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Item 1A. Risk Factors

2022-02-16 compared with 2021-02-11 · 243 added, 214 removed, 333 unchanged (58% of the section changed)

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Risks Related to Our Business and Our Industry

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

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

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

The COVID-19 pandemic has impacted, and is continuing to impact, many aspects of society, including the operation of the healthcare system and other business and economic activity worldwide.

Almost all U.S.

states, many local jurisdictions and countries across the world have, at various times throughout the pandemic, issued “shelter-in-place” orders, quarantines, and restrictions and recommendations for their residents to control the spread of COVID-19, resulting in widespread closures of businesses, work stoppages, slowdowns and delays, work-from-home policies and travel restrictions, among other effects.

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

Ireland, all U.S.

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

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

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

For example, commercial sales of the medicines from which we derive revenue—consisting primarily of injectable medications administered by healthcare professionals—have been, and we expect will continue to be, adversely impacted as a result of developments that have transpired, and may continue to transpire, related to this pandemic, including travel restrictions and social distancing measures, many of which have contributed to limited access to healthcare providers and locations where injectable medications may be administered.

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

Further, this pandemic and measures to mitigate the spread of COVID-19 have had, and may continue to have, an adverse effect on global economic conditions, which could have an adverse effect on our business and financial condition, including the demand for, and ability of patients to access, our and our licensees’ medicines, or our ability to obtain financing, if needed, on favorable terms or at all.

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

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

While we have continued to operate our manufacturing facilities and to supply our medicines without interruption throughout the pandemic, any prolonged labor or supply chain shortages at our manufacturing facilities could impact our ability to manufacture our products and the third-party products from which we receive revenue in a timely matter or at all.

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

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

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

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

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

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

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

The COVID-19 pandemic has also impacted, and may continue to impact, the regulatory agencies with which we interact in the development, manufacture, regulatory review and commercialization of our medicines.

For example, travel restrictions and social distancing measures have impacted the manner in which the FDA, the HPRA and other regulatory agencies conduct their pre- or post-approval inspections of manufacturing facilities, relying more heavily on remote record reviews than in-person interactions.

If such regulatory agencies do not find the results of such remote reviews to be sufficient for their regulatory purposes, our manufacturing activities or expected timelines for regulatory review and approval of our product candidates may be delayed, which could have an adverse effect on our business and the market price for our ordinary shares.

For example, we received a CRL from the FDA, which included a request for information, regarding the NDA for LYBALVI following the FDA’s remote review of records relating to the manufacture of LYBALVI at our Wilmington, Ohio facility.

We subsequently resubmitted our NDA, and the FDA assigned the application a PDUFA target action date of June 1, 2021.

Following our resubmission, the FDA issued a new request for records to supplement information that we previously provided.

There is no guarantee that the FDA’s remote review of our resubmission and additional records will be sufficient to meet the FDA’s requirements for approval of LYBALVI without the conduct of a pre-approval inspection.

Despite the spread of COVID-19 across the U.S., we have begun to observe, and expect to continue to observe, a gradual normalization in patient and healthcare provider practices, as providers and patients have adapted their behaviors and procedures to the evolving circumstances and as COVID-19 vaccines continue to be administered.

However, the degree to which the ongoing COVID-19 pandemic may continue to impact our business, financial condition and results of operations will depend on the ultimate severity and duration of this pandemic and the manner in which it continues to evolve, and future developments in response thereto, which are highly uncertain and cannot be predicted as of the date of this Annual Report and which may include, among other things, governmental, business or other actions that have been, or will be, taken in response to this pandemic, including continued restrictions on travel and mobility, business closures and imposition of social distancing measures;

impacts of the pandemic on our employees, the vendors or distribution channels in our supply chain and on our ability to continue to manufacture and supply our products;

impacts of the pandemic on the conduct of our clinical trials, including with respect to enrollment rates, availability of investigators and clinical

trial sites, and monitoring of data;

impacts of the pandemic on healthcare systems that serve people living with opioid dependence, alcohol dependence and schizophrenia;

For example, travel restrictions, social distancing, quarantine protocols and other protective measures may impact the timelines and manner in which the FDA, the HPRA and other regulatory agencies conduct regulatory activities, which may, in turn, negatively impact expected timelines for regulatory review and approval of our product candidates, which could have an adverse effect on our business and the market price for our ordinary shares.

The degree to which the ongoing COVID-19 pandemic may continue to impact our employees, business, financial condition and results of operations will depend on the ultimate severity and duration of the pandemic and the manner in which it continues to evolve, including the emergence, prevalence and severity of new COVID-19 variants, and future developments in response thereto, which are highly uncertain and cannot be predicted as of the date of this Annual Report and which may include, among other things, governmental, business or other actions that have been, are being or will be taken in response to this pandemic, such as restrictions on travel and mobility, business closures and operating restrictions, the imposition of vaccine and masking mandates and/or mandatory testing protocols.

We are unable to predict the impacts of the pandemic and of actions taken in response to the pandemic, on our employees, including with regard to their health, safety, wellbeing and job performance, or on the labor market and our ability to attract and retain employees;

impacts of the pandemic on the vendors or distribution channels in our supply chain and on our ability to continue to manufacture and supply our products;

impacts of the pandemic on the conduct of our clinical trials, including with respect to enrollment rates, availability of investigators and clinical trial sites, and monitoring of data;

impacts of the pandemic on healthcare systems that serve people living with opioid dependence, alcohol dependence, schizophrenia and bipolar I disorder;

impacts of the pandemic on the regulatory agencies with which we interact in the development, review, approval and commercialization of our medicines;

impacts of the pandemic on reimbursement for our products, including our Medicaid rebate liability, and for services related to the use of our products;

and impacts of the pandemic on the U.S., Irish and/or global economies more broadly.

For example, if the U.S.

Consumer Price Index—Urban (CPI-U) becomes negative, this would increase our Medicaid rebate liability.

For a discussion of the Medicaid rebate liability, please see the “Pricing and Reimbursement” section in “Item 1—Business” in this Annual Report.

We receive substantial revenue from our key proprietary products and our success depends on our ability to maintain or increase sales of such products.

and impacts of the pandemic on the U.S., Irish and global economies more broadly.

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

Sales of our proprietary products comprise an increasingly significant portion of our revenues.

We developed and exclusively manufacture VIVITROL for the treatment of alcohol dependence and opioid dependence, ARISTADA for the treatment of schizophrenia, and ARISTADA INITIO for initiation onto ARISTADA for the treatment of schizophrenia, and we exclusively commercialize these products in the U.S.

Our success depends in large part on our ability to continue to successfully manufacture and increase sales of such products in the complex markets into which they are sold.

We developed and exclusively manufacture VIVITROL for the treatment of alcohol dependence and opioid dependence, ARISTADA for the treatment of schizophrenia, ARISTADA INITIO for initiation onto ARISTADA for the treatment of schizophrenia, and LYBALVI for the treatment of adults with schizophrenia and for the treatment of adults with bipolar I disorder, as a maintenance monotherapy or for the acute treatment of manic or mixed episodes, as monotherapy or an adjunct to lithium or valproate, and we exclusively commercialize these products in the U.S.

Our success depends in large part on our ability to continue to successfully manufacture and commercialize such products in the complex markets into which they are sold.

Any significant negative developments relating to these products could have a material adverse effect on our revenues from these products and, in turn, on our business, financial condition, cash flows and results of operations and the market price of our ordinary shares.

We rely heavily on our licensees in the commercialization and continued development of products from which we receive revenue;

and if our licensees are not effective, our revenues could be materially adversely affected.

We rely heavily on our licensees in the commercialization and continued development of products from which we receive revenue and, if our licensees are not effective, or if disputes arise in respect of our contractual arrangements, our revenues could be materially adversely affected.

Our arrangements with licensees are critical to bringing to market and/or successfully commercializing products using our proprietary technologies and from which we receive manufacturing and/or royalty revenue.

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

For example, we receive substantial revenue from Janssen’s sales of RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA and upon sales of FAMPYRA by Biogen.

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

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

Disputes may also arise between us and a licensee involving the ownership of technology developed under a license, the terms and amounts of royalty payments to be paid under a license, or other issues arising out of any licenses or other collaborative agreements.

Such disputes may delay related development programs, impact commercialization or manufacturing activities for the related products or result in expensive arbitration or litigation, which may not be resolved in our favor and may adversely impact our financial condition.

Further, certain of our license agreements may be terminated without cause, or assigned in connection with a change in control, and we cannot guarantee that any of these relationships will continue or that our licensees will be able or willing to continue to perform their obligations under such agreements.

Disputes may also arise between us and a licensee involving the ownership of technology developed under a license, the use of our technology, including know-how, in third-party products, the terms and amounts of royalty payments to be paid under a license, or other issues arising out of any licenses or other collaborative agreements.

Such disputes may delay related development programs, impact commercialization or manufacturing activities for the related products, impact the timing or amount of revenue that we receive in respect of such products, or result in expensive arbitration, litigation or other dispute resolution, which may not be resolved in our favor and may adversely impact our financial condition.

Further, certain of our license agreements may be terminated, with or without cause, or assigned in connection with a change in control, and we cannot guarantee that any of these relationships will continue or that our licensees will be able or willing to continue to perform their obligations, including development, commercialization or payment obligations, under such agreements.

Any significant negative developments relating to our relationships with our licensees or our collaborative arrangements could have a material adverse effect on our business, financial condition, cash flows and results of operations.

For example, in November 2021 we received notice of partial termination in the U.S.

of our license agreement with Janssen related to INVEGA SUSTENNA, INVEGA TRINZA, and INVEGA HAFYERA.

The basis for this termination is Janssen’s assertion that it does not utilize our NanoCrystal technology licensed under the license agreement.

We strongly disagree with Janssen’s position and are prepared to pursue all options at our disposal to enforce our contractual rights and address any unauthorized use of our intellectual property;

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

sales of such products in early 2022 resulting from such termination, caused the market price of our ordinary

shares to decline significantly, and any actual losses of royalty revenues that result from such termination, and/or prolonged discussions, dispute resolution efforts or commercial arbitration or litigation in respect of such royalty revenues, could have a material adverse effect on our business, financial condition, cash flows and results of operations .

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

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Some of these competitors are also our licensees, who control the commercialization of products from which we receive manufacturing and/or royalty revenues.

For example, our proprietary product ARISTADA competes directly with RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA, products from which we receive significant manufacturing and/or royalty revenues.

For example, our proprietary products ARISTADA and LYBALVI compete with the long-acting INVEGA products and RISPERDAL CONSTA, products from which we receive manufacturing and/or royalty revenues.

The biopharmaceutical industry is characterized by intensive research, development and commercialization efforts and rapid and significant technological change.

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

Some of the products being developed by our competitors are being designed to work differently than

our products and may turn out to be safer or more effective than our products , which may render our products or technology platforms obsolete or noncompetitive .

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

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

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

There are many factors that could cause our revenues to decrease or grow at a slower than expected rate.

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

Our revenues may decrease or grow at a slower than expected rate due to many factors.

We cannot be assured that our products will be, or will continue to be, accepted in the U.S.

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Factors that may cause revenues from our products to grow at a slower than expected rate, decrease or cease all together, include, among others:

the perception of physicians and other members of the healthcare community as to our products’ safety and efficacy relative to that of competing products and the willingness or ability of physicians and other members of the healthcare community to prescribe, dispense and/or administer, and patients to use, our products, including those that may be scheduled by the DEA;

unfavorable publicity concerning us, our licensees, our products, similar classes of drugs or the industry generally;

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

the unfavorable outcome of investigations, litigation or other legal proceedings, including government requests for information regarding VIVITROL, securities litigation relating to ALKS 5461, IP litigation, including so-called “Paragraph IV” litigation relating to VIVITROL, INVEGA SUSTENNA and INVEGA TRINZA, and litigation or other proceedings before the U.S.

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

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

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

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

disputes with our licensees relating to the marketing and sale of products from which we receive manufacturing and/or royalty revenue and the amounts to be paid with respect to such products;

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

exchange rate valuations and fluctuations;

and global political changes and/or instability, including the recent change in the U.S.

presidential administration and the exit of the United Kingdom from the European Union (commonly referred to as “Brexit”), and any related changes in applicable laws and regulations, that may impact resources and markets for our products outside of the U.S.;

the impact that the COVID-19 pandemic may have on the manufacture and commercialization of our products;

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

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

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

Revenues generated by sales of our products depend on the availability from third-party payers of reimbursement for our products and the extent of cost-sharing arrangements for patients (e.g., patient co-payment, co-insurance, deductible obligations), cost-control measures imposed, reductions in payment rate or reimbursement or increases in our financial obligation to payers could result in decreased sales of our products and decreased revenues.

Revenues generated by sales of our products depend on the availability from third-party payers of reimbursement for our products and the extent of cost-sharing arrangements for patients (e.g., patient co-payment, co-insurance, deductible obligations) and cost-control measures imposed, and any reductions in payment rate or reimbursement or increases in our or in patients’ financial obligation to payers could result in decreased sales of our products and/or decreased revenues.

markets, sales of our products depend, in part, on the availability of reimbursement from third-party payers such as state and federal governments, including Medicare and Medicaid in the U.S.

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In addition, when a new product is approved, the availability of government and private reimbursement for that product and coverage restrictions that may be imposed for such product, are uncertain, as is the amount for which that product will be reimbursed.

We cannot predict the availability or amount of reimbursement or other access barriers for our products.

We cannot predict the availability or amount of reimbursement for, or the prevalence and extent of other access barriers to, our products.

In the U.S., federal and state legislatures, health agencies and third-party payers continue to focus on containing the cost of healthcare, including by comparing the effectiveness, benefits and costs of similar treatments.

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

Over the past several years, a number of states have enacted drug pricing transparency laws that require companies to report on drug price increases and justify how drug prices were set.

We expect additional state drug pricing initiatives to be proposed and enacted in 2021 and beyond.

In addition, state Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and requiring prior authorization by the state program for use of any drug.

In November 2021, the U.S.

House of Representatives passed the BBBA.

The BBBA includes several provisions that may impact our business, including provisions that create an out-of-pocket cap for seniors, impose new manufacturer financial liability (including in Medicare Part D), allow the U.S.

government to negotiate prices for some drugs covered under Medicare Part B and Part D, require inflation rebates to limit annual increases in drug prices in Medicare and private insurance, and repeal the rebate rule that would require pass through of pharmacy benefit manager rebates to beneficiaries.

While the BBBA has not yet been, and may not in its current form be, signed into law, such provisions, if enacted, could adversely impact our business and financial results.

Over the past several years, a number of states have enacted drug pricing transparency laws that require companies to report on drug price increases and justify how drug prices were set and we expect additional state drug pricing initiatives to be proposed and enacted in the future.

In addition, state Medicaid programs are increasingly requesting that manufacturers pay supplemental rebates and requiring prior authorization by the state program for use of any drug.

Managed care organizations continue to seek price discounts and, in some cases, to impose restrictions on the coverage of particular drugs.

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This may result in managed care organizations influencing prescription decisions for a larger segment of the population and a corresponding constraint on prices and reimbursement for our products.

In 2021, we may face uncertainties as a result of continued federal and administrative efforts to repeal, substantially modify or invalidate some or all of the provisions of the PPACA, the outcome of existing litigation related to PPACA, and potential reforms and changes to government negotiation or regulation of drug pricing.

Furthermore, we may face uncertainties as a result of continued federal and administrative efforts to repeal, substantially modify or invalidate some or all of the provisions of PPACA, the outcome of existing litigation related to PPACA, and potential reforms and changes to government negotiation or regulation of drug pricing.

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

There is no assurance that such efforts and proposed legislation will not adversely affect our business and financial results, and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform and drug pricing will affect our business.

If successful, such efforts and proposed legislation or other future federal or state legislative or administrative changes relating to healthcare reform and drug pricing could

adversely affect our business and financial results.

In addition, the outcome or settlement of litigation could impact the practices of healthcare providers and patients, and the policies and practices of third-party payers, including Medicare, Medicaid, managed care providers and private insurance plans, in a manner detrimental to our products, which in turn could materially and adversely affect our business and financial condition.

For example, one or more defendants in the opioid multi-district litigation has offered large volumes of generic buprenorphine free of charge to state plaintiffs as settlement compensation, which, if agreed to and approved, could negatively impact state reimbursement policies, healthcare provider practices, and patient access to alternative FDA-approved medications to generic buprenorphine, which includes VIVITROL, for the treatment of opioid dependence.

The government-sponsored healthcare systems in Europe and many other countries are the primary payers for healthcare expenditures, including payment for drugs and biologics.

In Europe and many other countries, government-sponsored healthcare systems are the primary payers for healthcare expenditures, including payment for drugs and biologics.

We expect that countries may take actions to reduce expenditure on drugs and biologics, including mandatory price reductions, patient access restrictions, suspensions of price increases, increased mandatory discounts or rebates, preference for generic products, reduction in the amount of reimbursement and greater importation of drugs from lower-cost countries.

These cost-control measures likely would reduce our revenues.

Any such cost-control measures would likely reduce our revenues.

In addition, certain countries set prices by reference to the prices in other countries where our products are marketed.

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Clinical trials for our products are expensive, may take several years to complete, and their outcomes are uncertain.

Before obtaining regulatory approvals for the commercial sale of any products, we or our licensees must demonstrate, through preclinical testing and clinical trials, that our products are safe and effective for use in humans.

In order to obtain regulatory approvals for the commercial sale of any products, we or our licensees must demonstrate, through preclinical testing and clinical trials, that our products are safe and effective for use in humans.

Designing, conducting and completing a clinical development program is often a lengthy, time-consuming and expensive process.

We have incurred, and we will continue to incur, substantial expense for preclinical testing and clinical trials and other activities related to our clinical development programs.

We have incurred, and we will continue to incur, substantial expenses for preclinical testing, clinical trials and other activities related to our clinical development programs.

Our preclinical and clinical development efforts may take several years or more, varying substantially with the type, complexity, novelty and intended use of the product and the clinical study designs and methodologies employed, and may not be successfully completed in a timely manner or at all.

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If a product fails to demonstrate safety and efficacy in clinical trials, or if third parties fail to conduct clinical trials in accordance with their obligations, the development, approval and commercialization of our products may be delayed or prevented, and such events could materially adversely affect our business, financial condition, cash flows and results of operations.

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

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

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

Such data also remain subject to audit confirmation and verification procedures that may result in the final data being materially different from the preliminary, topline o r interim data we previously disclose.

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

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

As a result, all preliminary, topline and interim data should be viewed with caution until the final data are available.

Material adverse differences between preliminary, topline or interim data and final data could significantly harm our business, financial condition, cash flows and results of operations.

The FDA or other regulatory agencies may not approve our products or may delay approval.

The FDA or other regulatory agencies may not agree with our regulatory approval strategies or components of our filings for our products and may not approve, or may delay approval of, our products.

We must obtain government approvals before marketing or selling our products.

FDA and DEA (to the extent a product is a controlled substance), and comparable regulatory agencies in other jurisdictions, impose substantial and rigorous requirements for the development, manufacture and commercialization of medicines, the satisfaction of which can take a significant number of years and can vary substantially based upon the type, complexity and novelty of the product.

The FDA in the U.S., and comparable regulatory agencies in other jurisdictions, impose substantial and rigorous requirements for the development, manufacture and commercialization of medicines, the satisfaction of which can take a significant number of years and can vary substantially based upon the type, complexity and novelty of the product.

In addition, regulation is not static, and regulatory agencies, including the FDA, evolve in their staff, interpretations and practices and may impose more stringent requirements than currently in effect, which may adversely affect our plans for product development, manufacture and/or commercialization.

The approval procedure and the time required to obtain approval also varies among countries.

Regulatory agencies may have varying interpretations of the same data, and approval by one regulatory agency does

not ensure approval by regulatory agencies in other jurisdictions.

In addition, the FDA or regulatory agencies outside the U.S.

may choose not to communicate with or update us during clinical testing and regulatory review periods and the ultimate decision by the FDA or other regulatory agencies regarding drug approval may not be consistent with prior communications.

Regulatory agencies may have varying interpretations of the same data, and approval by one regulatory agency does not ensure approval by regulatory agencies in other jurisdictions.

In addition, the FDA or other regulatory agencies may choose not to communicate with or update us during clinical testing and regulatory review periods and the ultimate decision by the FDA or other regulatory agencies regarding drug approval may not be consistent with prior communications.

The product approval process can last many years, be very costly and still be unsuccessful.

Regulatory approval by the FDA or non-U.S.

regulatory agencies can be delayed, limited or not granted at all for many reasons, including:

a product may not demonstrate safety and efficacy for each target indication in accordance with the FDA’s or other regulatory agencies’ standards;

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

the FDA or other regulatory agencies may not agree with our or our licensees’ regulatory approval strategies, plans for accelerated development timelines, components of our or our licensees’ filings such as clinical trial designs, conduct and methodologies, or the sufficiency of our or our licensees’ submitted data to meet their requirements for product approval;

the FDA or other regulatory agencies might not approve our or our licensees’ manufacturing processes or facilities, or those of the CROs and contract manufacturing organizations who conduct research or manufacturing work on our or our licensees’ behalf;

any failure by our clinical investigational sites and the records kept at such sites, including any clinical trial data, to be in compliance with the FDA’s GCP, or EU legislation governing GCP, or to pass FDA, EMA or EU member state inspections of clinical trials;

the FDA or other regulatory agencies may change their requirements for approval or post-approval marketing;

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

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

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

regulatory agencies may not agree with our or our licensees’ regulatory approval strategies, plans for accelerated development timelines, components of our or our licensees’ filings such as clinical trial designs, conduct and methodologies, or the sufficiency of our or our licensees’ submitted data to meet their requirements for product approval;

regulatory agencies might not approve our or our licensees’ manufacturing processes or facilities, or those of the CROs and contract manufacturing organizations who conduct research or manufacturing work on our or our licensees’ behalf;

failure by our clinical investigational sites and the records kept at such sites, including any clinical trial data, to be in compliance with the FDA’s GCP, or EU legislation governing GCP, or to pass FDA, EMA or EU member state inspections of clinical trials;

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

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

In addition, disruptions at the FDA and other regulatory agencies that are unrelated to our company or our products, including those relating to COVID-19 or other political or economic conditions, could cause delays to the regulatory approval process for our products.

As of June 23, 2020, the FDA noted it is continuing to ensure timely review of applications for medical products during the COVID-19 pandemic in line with its user fee performance goals;

however, FDA may not be able to continue its current pace and approval timelines could be extended, including in instances when a pre-approval inspection or an inspection of clinical trial sites is required and due to COVID-19 pandemic-related restrictions, the FDA may be unable to complete such required inspections during the review period.

In addition, if a prolonged U.S.

government shutdown occurs as a result of political or economic conditions or if the COVID-19 pandemic increases in severity or impact, the FDA’s ability to timely review and process our regulatory submissions could be significantly impacted.

For example, in December 2020, we resubmitted our NDA for LYBALVI for the treatment of adults with schizophrenia and adults with bipolar I disorder, following receipt from the FDA in November 2020 of a CRL, which included an information request, relating to the manufacture of LYBALVI at our manufacturing facility in Wilmington, Ohio.

The FDA accepted the NDA resubmission and assigned the application a PDUFA target action date of June 1, 2021 and subsequently issued a new request for records under Section 704(a)(4) of the Federal Food, Drug, and Cosmetic Act to supplement records that we previously provided.

The FDA review process for this NDA involves uncertainties and risks, particularly in the current COVID-19 environment, including whether the FDA’s remote review of our resubmission and additional records will be sufficient to meet the FDA’s requirements for approval of LYBALVI without the conduct of a pre-approval inspection, whether the FDA will have additional requests for records or information in order to complete its review of the NDA, or whether the NDA will be approved in a timely manner, or at all.

In June 2020, the FDA noted that it was continuing to ensure timely review of applications for medical products during the COVID-19 pandemic in line with its user fee performance goals;

however, if a prolonged U.S.

government shutdown occurs as a result of political or economic conditions or if the COVID-19 pandemic increases in severity or impact, the FDA’s ability to timely review and process regulatory submissions could be significantly impacted.

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

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

The FDA or other regulatory agencies may impose limitations or post-approval requirements on any product approval.

Even if regulatory approval to market a product is granted by the FDA or other regulatory agencies, the approved label may not be consistent with our initial expectations or commercial plans, including limitations on the clinical data that may be included or the indicated uses for which, or the manner in which, the product may be marketed, or the approval may impose additional post-approval requirements, such as a REMS, with which we would need to comply in order to maintain the approval of such product.

Our business could be seriously harmed if we do not complete these post-approval requirements and, as a result, the FDA or other regulatory agencies require us to change the label for our products, or if such post-approval requirements significantly restrict the marketing, sale

or use of our products .

Further, if a product for which we obtain regulatory approval is a controlled substance, it will not become commercially available until after the DEA provides its final schedule designation, which may take longer and may be more restrictive than we expect or may change after its initial designation.

For example, LYBALVI, our product currently under review by the FDA, contains samidorphan, which is currently a scheduled substance.

The DEA issued a proposed ruling to deschedule samidorphan in December 2020;

however, even if LYBALVI is approved by the FDA, until the DEA issues a final ruling, we will not be able to commercialize LYBALVI as a non-controlled substance.

In addition, any failure to obtain, or delay in obtaining, approval for our products could have a material impact on our shareholders’ confidence in the

strength of our development capabilities and/or our ability to generate significant revenue from our development program and could result in a significant decline in our share price.

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

Even if regulatory approval to market a product is granted by the FDA or other regulatory agencies, the approved label for the product may not be consistent with our initial expectations or commercial plans.

For example, the FDA or other regulatory agencies may impose limitations on the clinical data that may be included in the label for the product or the indicated uses for which, or the manner in which, the product may be marketed, or may impose additional post-approval requirements, such as a REMS, with which we would need to comply in order to maintain the approval of such product.

Our business could be seriously harmed if we do not complete these post-approval requirements and, as a result, the FDA or other regulatory agencies require us to change the label for such product, or if such post-approval requirements significantly restrict the marketing, sale or use of such product.

Further, if a product for which we obtain regulatory approval is a controlled substance, it will not become commercially available until after the DEA provides its final schedule designation for the product, which may take longer and may be more restrictive than we expect or may change after its initial designation.

In addition, a final designation that is more restrictive than we expect could adversely affect our ability to commercialize such product and could materially adversely affect our business, financial condition, cash flows and results of operations.

In addition, legislation and regulatory policies relating to post-approval requirements and restrictions on promotional activities for pharmaceutical products, or FDA or DEA regulations, guidance or interpretations with respect to such legislation or regulatory policy, may change, which may impact the development and commercialization of our products.

In addition, legislation and regulatory policies relating to post-approval requirements and restrictions on promotional activities for pharmaceutical products, or FDA, DEA or other regulatory agency regulations, guidance or interpretations with respect to such legislation or regulatory policy, may change, which may impact the development and commercialization of our products.

We are subject to risks related to the manufacture of our products.

The manufacture of pharmaceutical products is a highly complex process in which a variety of difficulties may arise from time to time including, but not limited to, the supply and quality of API, drug product and other product components;

failures relating to materials, manufacturing equipment or processes, vendor error, operator error, labor shortages or transportation, physical or electronic security breaches;

natural disasters or global disruptions such as the current global pandemic;

The manufacture of pharmaceutical products is a highly complex process in which a variety of difficulties may arise from time to time.

We have in the past, and may in the future, face unanticipated interruptions or delays in manufacturing through our internal or external supply chain and resources.

Such disruptions can occur for many reasons, including, but not limited to, the supply and quality of API, drug product and other product components and any potential shortages of such materials;

regulatory actions;

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

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

and many other factors.

Problems with manufacturing processes, whether at our facilities or those of our licensees or other third parties which manufacture products or components of products on our behalf, could result in product defects, manufacturing failures or products not being manufactured to their applicable specifications, which could require us to delay shipment of products or recall products previously shipped, or could impair our ability to receive regulatory approval for a product, expand into new markets or supply products in existing markets.

We may not be able to resolve any such issues in a timely manner, or at all.

We rely solely on our manufacturing facility in Wilmington, Ohio for the manufacture of RISPERDAL CONSTA, VIVITROL, ARISTADA, ARISTADA INITIO and certain of our other products in development, including LYBALVI.

We rely solely on our manufacturing facility in Athlone, Ireland for the manufacture of many products, including AMPYRA, FAMPYRA and VUMERITY and other products using our NanoCrystal or OCR technologies.

Due to regulatory and technical requirements, we have limited ability to shift production among our facilities or to outsource any part of our manufacturing to third parties.

Any need to shift production among our facilities or transition our manufacturing processes to a third party could take a significant amount of time and money, may not be successful, and could cause significant delay in our ability to supply product.

Any such problems with manufacturing processes, whether at our facilities or those of our licensees or other third parties that manufacture or package products or components of products on our behalf, could result in product defects or shortages, manufacturing failures or products not being manufactured to their applicable specifications, which could require us to delay shipment of products or recall products previously shipped, or could impair our ability to receive regulatory approval for a product, commercially launch a product, expand into new markets or supply products in existing markets.

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

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

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

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

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

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

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

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

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

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

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

For example, in the cases of INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA, we do not have manufacturing rights or any control over the manufacturing, supply or distribution of the product.

Supply or manufacturing issues related to such products could materially and adversely affect sales of such products, and in turn our revenue from such products.

We rely on third parties to provide services in connection with the manufacture and distribution of the products we manufacture.

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

Supply or manufacturing issues related to such products could materially and adversely affect sales of such products, and in

turn our revenue from such products .

We rely on third parties to provide goods and services in connection with the manufacture and distribution of the products we manufacture.

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

Although we actively manage these third-party relationships to ensure continuity, quality and compliance with applicable regulations, events beyond our control could result in the complete or partial failure of these goods and services.

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

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

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

Nonetheless, any such issues could increase our costs, cause us to lose revenue or market share and damage our reputation and may have a material adverse effect on our business, financial condition, cash flows and results of operations.

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

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

Nonetheless, any such third-party provider issues could increase our costs, cause us to lose revenue or market share and damage our reputation, and may have a material adverse effect on our business, financial condition, cash flows and results of operations.

In addition, we rely heavily on the three largest pharmaceutical wholesalers in the U.S.

market—Cardinal Health Inc., AmerisourceBergen Corp.

and McKesson Corp, in the distribution of the products that we market and sell.

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

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

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

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

We and our third-party providers are generally required to comply with cGMP regulations and other applicable non-U.S.

standards in the manufacture of our products.

We and the third-party providers that play a role in our manufacturing activities are generally required to comply with cGMP regulations and other applicable non-U.S.

standards in the manufacture of our products or components of our products.

In addition, in the U.S., the DEA and state-level agencies heavily regulate the manufacturing, holding, processing, security, recordkeeping and distribution of substances, including controlled substances.

Any of our products that are scheduled by the DEA as controlled substances make us subject to the DEA’s regulations.

If any of our products or components of our products are scheduled by the DEA as controlled substances, we would be subject to such DEA regulations.

We and our third-party providers are subject to unannounced inspections by the FDA, the DEA and comparable U.S.

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agencies in other jurisdictions to confirm compliance with all applicable laws.

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

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

Any delay, interruption or other issues that may arise in the manufacture, formulation, packaging or storage of our products as a result of a failure of our facilities or the facilities or operations of third-party providers to pass any regulatory agency inspection could significantly impair our ability to develop, obtain and maintain regulatory authority approval of, and commercialize or supply, products.

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

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

Any delay, interruption or other issues that may arise in the manufacture, formulation, packaging or storage of our products as a result of a failure of our facilities or operations or the facilities or operations of third-party providers to pass any regulatory agency inspection could significantly impair our ability to develop, obtain and maintain regulatory approval of, and commercialize or supply, products.

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

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Each of our facilities operates in accordance with a comprehensive quality management system, which includes risk assessment, preventive actions and regular review of inventory levels for each of the marketed products that we manufacture;

however, there is no guarantee that the FDA will consider our risk management program to be sufficient upon inspection or that we will not experience shortages in the supply of marketed products that we manufacture, which could materially adversely impact the patients who rely on such marketed products and our business, financial condition, cash flows and results of operations.

however, there is no guarantee that the FDA will consider our risk management program to be sufficient upon inspection or that we will not experience shortages in the supply of marketed products that we manufacture, which could materially adversely affect the patients who rely on such marketed products and our business, financial condition, cash flows and results of operations.

The FDA and various regulatory agencies outside the U.S.

have inspected and approved our commercial manufacturing facilities.

We cannot guarantee that the FDA or any other regulatory agencies will approve any other facility we or our third-party providers may operate or, once approved, that any of these facilities will remain in compliance with cGMP and other regulations.

Any third party we use to manufacture bulk drug product must be licensed by the FDA and, for controlled substances, the DEA.

Failure by us or our third-party providers to gain or maintain regulatory compliance with the FDA or other regulatory agencies could materially adversely affect our business, financial condition, cash flows and results of operations.

Adverse financial market conditions may exacerbate certain risks inherent to our business, including risk of payment from licensees and reimbursement for our products.

Due to volatility in the financial markets, there may be disruptions or delays in the performance of our third-party contractors, suppliers or licensees, or reductions in the availability or extent of reimbursement available to us.

For example, we depend on our licensees for significant portions of our revenue.

The contracts with our licensees pursuant to which we supply product, or under which we are eligible for certain development or sales milestones, or royalties, related to products that incorporate our proprietary technologies, may not be secured by collateral or other security.

However, we cannot guarantee that the FDA or any other regulatory agencies will approve any other facility that we or our third-party providers may operate or, once approved, that any of these facilities will remain in compliance with cGMP and other regulations.

Any third party we use to manufacture bulk drug product for use in the U.S.

must be licensed by the FDA and, for controlled substances, the DEA.

Failure by us or our third-party

providers to gain or maintain regulatory compliance with and approvals from the FDA or other regulatory agencies could materially adversely affect our business, financial condition, cash flows and results of operations .

Adverse market conditions may exacerbate certain risks inherent to our business, including risk of payment from licensees and customers and reimbursement for our products.

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

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

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

In addition, as a result of adverse financial market conditions, organizations that reimburse for use of our products, such as government health administration authorities and private health insurers, may be unable to satisfy such obligations or may delay payment.

In addition, as a result of adverse market conditions, organizations that provide reimbursement for use of our products, such as government health administration authorities and private health insurers, may be unable to satisfy such reimbursement obligations or may delay payment.

In addition, U.S.

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

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

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

In order to achieve our business strategy, we regularly review potential transactions related to technologies, products or product rights, and businesses that are complementary to our business, including mergers, acquisitions, licensing agreements and co-promotion agreements, among others.

We may choose to enter into one or more of these transactions at any time, which may cause substantial fluctuations in the market price of our ordinary shares.

Moreover, depending upon the nature of any transaction, we may experience a charge to earnings, which could also materially adversely affect our results of operations and could harm the market price of our ordinary shares.

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

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

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

In addition, future investors or lenders may demand, and may be granted, rights superior to those of existing shareholders.

If we issue additional debt securities, our existing debt service obligations will increase further.

If we are unable to generate sufficient cash to meet these obligations and need to use existing cash or liquidate investments in order to fund our debt service obligations or to repay our debt, we may be forced to curtail our operations.

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

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

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

Our ability to compete and succeed in the highly competitive biopharmaceutical industry and in the disease states in which we market and sell products depends largely upon the continued service of our management, scientific and commercial teams and our ability to attract, retain and motivate highly skilled technical, scientific, manufacturing, management, regulatory, compliance and selling and marketing personnel.

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

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

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

Our ability to compete and succeed in the highly competitive biopharmaceutical industry and in the disease states in which we market and sell products depends largely upon our ability to attract, recognize and retain highly skilled technical, scientific, manufacturing, management, regulatory, compliance and selling and marketing personnel.

Each of our executive officers and all of our employees are employed “at will,” meaning we or each officer or employee may terminate the employment relationship at any time.

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

We face intense competition for employees, due, among many factors, to the geographic locations in which we operate and the competitive benefits and compensation practices in our industry, and in recent years, new competition as employees are increasingly able to work remotely.

Government vaccine or masking mandates, testing protocols, or other restrictions that apply to us may have an impact on employee performance, retention and recruitment, particularly for those employees who perform essential tasks in our laboratories and manufacturing facilities and cannot perform their jobs remotely.

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

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

Social media is increasingly being used to communicate about our products and the diseases our medicines are designed to treat.

Social media practices in the biopharmaceutical industry continue to evolve, as do the regulations relating to such use.

This evolution creates uncertainty and risk of noncompliance with regulations applicable to our business.

For example, patients may use social media channels to comment on the effectiveness of a product or to report an alleged adverse event.

When such disclosures occur, there is a risk that we fail to monitor and comply with applicable adverse event reporting obligations or we may not be able to defend the company or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our products.

There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website.

If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face overly restrictive regulatory actions or incur other harm to our business.

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

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

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

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

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

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

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

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

Risks Related to Intellectual Property

Patent and other IP protection for our products is key to our business and our competitive position but is uncertain.

Receiving and maintaining patent and/or trademark protection for our products and technologies, including those that are subject to our licensing arrangements, maintaining our trade secrets, not infringing on the proprietary rights of others, and preventing others from infringing our proprietary rights are each key to our success and our competitive position.

Receiving and maintaining patent and/or trademark protection for our products and technologies, including those that are subject to our licensing arrangements, maintaining our trade secrets, not infringing the proprietary rights of others, and preventing others from infringing our proprietary rights are each key to our success and our competitive position.

Patent protection provides rights of exclusivity for the term of the patent.

We are able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary rights are covered by valid and enforceable patents or are effectively maintained as trade secrets.

We are able to protect our proprietary rights from

unauthorized use by third parties only to the extent that our proprietary rights are covered by valid and enforceable patents or are effectively maintained as trade secrets.

In this regard, we try to protect our proprietary position by filing patent applications in the U.S.

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Even if issued, such patents may not provide us with sufficient proprietary protection or competitive advantages against competitors with similar products or technology.

The development of new technologies or products may take a number of years, and there can be no assurance that any patents which may be granted in respect of such technologies or products will

not have expired or be due to expire by the time such products are commercialized , or that such patents will successfully withstand any challenge s during their respective terms .

Because the patent positions of biopharmaceutical companies involve complex legal and factual questions, enforceability of patents cannot be predicted with certainty.

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and in other important markets, remains uncertain and is dependent upon the scope of protection decided upon by the patent offices, courts and lawmakers in these countries.

Patents, if issued, may be challenged, invalidated or circumvented.

As our products achieve greater commercial sales, potential competitors are more likely to seek to challenge our patents.

The laws of certain countries may not protect our IP rights to the same extent as the laws of the U.S., and any patents that we own or license from others may not provide any protection against competitors.

In addition, in the case of certain of our licensed products or products incorporating our licensed technology, our licensees are responsible for prosecuting, maintaining, enforcing and defending the IP related to the product(s) from which we derive revenue.

Their failure to secure, maintain, enforce and defend this IP could materially and adversely affect our business, financial condition, cash flows, and results of operations.

The development of new technologies or products may take a number of years, and there can be no assurance that any patents which may be granted in respect of such technologies or products will not have expired or be due to expire by the time such products are commercialized, or that such patents will successfully withstand any challenges during their respective terms.

Although we make reasonable efforts to protect our IP rights and to ensure that our proprietary technology does not infringe the rights of third parties, we cannot ascertain the existence of all potentially conflicting IP claims.

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If we cannot, or do not, license the infringed technology on reasonable terms or at all, or substitute similar technology from another source, our business, financial condition, cash flows and results of operations could be materially adversely affected.

Patents, if issued, may be challenged, invalidated or circumvented.

As our products achieve greater commercial sales, potential competitors are more likely to seek to challenge our patents.

Their failure to secure, maintain, enforce and defend this IP could materially and adversely affect our business, financial condition, cash flows, and results of operations.

We also rely on trade secrets, know-how and inventions, which are not protected by patents, to maintain our competitive position.

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and elsewhere in the world.

We cannot currently determine the ultimate scope, validity and enforceability of patents which may be granted to third parties in the future or which patents might be asserted to be infringed by the manufacture, use or sale of our products.

We cannot currently determine the ultimate scope, validity and enforceability of patents which may be granted to third parties in the future or which patents third parties may assert are infringed by the manufacture, use or sale of our products.

Stemming in part from this uncertainty, there has been, and we expect that there may continue to be, significant litigation and an increasing number of inter partes reviews (“IPRs”) and administrative proceedings in the pharmaceutical industry regarding patents and other IP rights.

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In addition, we may need to enforce our IP rights against third parties who infringe our patents and other IP or challenge our patents, patent applications or trademark applications.

Litigation and trial proceedings, such as so-called Paragraph IV litigation and IPRs, concerning patents and other intellectual property rights may be expensive, protracted with no certainty of success, and distracting to management.

As a result, we may at times give up certain rights with respect to our IP in order to avoid or resolve timely and costly litigation or IPR proceedings.

Litigation and trial proceedings, such as so-called Paragraph IV litigation and IPRs, concerning patents and other IP rights may be expensive, protracted and distracting to management, with no certainty of

As a result, we may at times give up certain rights with respect to our IP in order to avoid or resolve timely and costly IP litigation or IPR proceedings.

For example, in July 2019, in order to resolve an IPR instituted by Amneal with the PTAB, we granted Amneal a non-exclusive license under certain patents covering VIVITROL, including the latest to expire patent covering VIVITROL in the U.S., to market and sell a generic formulation of VIVITROL in the U.S.

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

In the U.S., generic manufacturers of innovator drug products may file ANDAs and, in connection with such filings, certify that their products do not infringe the innovator’s patents and/or that the innovator’s patents are invalid.

This often results in litigation between the innovator and the ANDA applicant.

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

Janssen is similarly involved in Paragraph IV litigation with companies seeking approval to market generic versions of INVEGA SUSTENNA and INVEGA TRINZA, products from which we receive significant revenue.

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

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

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

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

Risks Related to Regulatory or Legal Matters

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

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

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

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

For example, in December 2018 and January 2019, two purported stockholders of ours filed putative class actions against us and certain of our officers on behalf of a putative class of purchasers of our securities alleging violations of Sections 10(b) and 20(a) of the Exchange Act based on allegedly false or misleading statements and omissions regarding our regulatory submission for ALKS 5461, our drug candidate for the adjunctive treatment of major depressive disorder, and the FDA’s review and consideration of that submission.

This and other legal proceedings, and the preparation therefor, could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

Moreover, if any of these legal proceedings were to result in an adverse outcome, it could have a material adverse effect on our results of operations and harm our business.

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

Such legal proceedings and the preparation therefor may result in substantial costs to us and diversion of management’s attention and resources, which in turn could harm our business.

Moreover, if any of such legal proceedings were to result in an adverse outcome, such outcome could have a material adverse effect on our business, financial condition, cash flows and results of operations.

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

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If, as a result of government requests, proceedings are initiated, including under the U.S.

federal anti-kickback statute and False Claims Act and state False Claims Acts, and we are found to have violated one or more applicable laws, we may be subject to significant liability, including without limitation, civil fines, criminal fines and penalties, civil damages and exclusion from U.S.

federal anti-kickback statute and False Claims Act and state False Claims Acts or other laws, and we are found to have violated one or more applicable laws, we may be subject to significant liability, including without limitation, civil fines, criminal fines and penalties, civil damages and exclusion from U.S.

federal funded healthcare programs such as Medicare and Medicaid, and may be required to enter into a corporate integrity or other settlement with the government, any of which could materially affect our reputation, business, financial condition, cash flows and results of operations.

Conduct giving rise to such liability could also form the basis for private civil litigation by third-party payers or other persons allegedly harmed by such conduct.

In addition, if some of our existing business practices are challenged as unlawful, we may have to change those practices, including those of our sales force, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

In addition, if any of our existing business practices, including those of our sales force, are challenged as unlawful, we may have to change those practices, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Further, our liability insurance coverage may not be sufficient to satisfy, or may not cover, any expenses or liabilities that may arise.

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

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

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

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

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

Even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while

it considers and responds to the petition, or may impose additional approval requirements as a result of such petition.

These outcomes and others could adversely affect our share price as well as our ability to generate revenues from the commercialization and sale of our products and products using our proprietary technologies .

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These types of events could have a material adverse effect on our business, financial condition, cash flows and results of operations.

If there are changes in, or we fail to comply with the extensive legal and regulatory requirements affecting the healthcare industry, we could face costs, penalties and a loss of business.

If there are changes in, or we fail to comply with, the extensive legal and regulatory requirements affecting the healthcare industry, we could face costs, penalties and business losses.

Our activities, and the activities of our licensees and third-party providers, are subject to extensive government regulation.

Government regulation by various national, state and local agencies includes detailed inspection of, and controls over, research and laboratory procedures, clinical investigations, product approvals and manufacturing, marketing and promotion, adverse event reporting, sampling, distribution, recordkeeping, storage, and disposal practices.

Government regulation by various national, state and local agencies includes detailed inspections of, and controls over, research and laboratory procedures, clinical investigations, product approvals and manufacturing, marketing and promotion, adverse event reporting, sampling, distribution, recordkeeping, storage, and disposal practices.

Achieving compliance with these regulations substantially increases the time, difficulty and costs incurred in obtaining and maintaining approvals to market newly developed and existing products.

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

While we have implemented numerous risk mitigation measures, we cannot guarantee that we, our employees, our licensees, our consultants or our contractors are, or will be, in compliance with all applicable laws and regulations, and interpretations of the applicability of these laws to our products, operations and marketing practices.

If we or our agents fail to comply with any of those regulations or laws, a range of actions could result, including the termination of clinical trials, the failure to approve a product, restrictions on our products or manufacturing processes, withdrawal of our products from the market, significant fines, exclusion from government healthcare programs or other sanctions or litigation.

Changes affecting the healthcare industry, including new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to patent protection and enforcement, access to healthcare, and product pricing and marketing, could also adversely affect our revenues and our potential to be profitable.

While we have implemented numerous risk mitigation measures, we cannot guarantee that we, our employees, our licensees, our consultants or our contractors are, or will be, in compliance with all applicable laws, regulations or interpretations of the applicability of these laws to our products, operations and marketing practices.

If we or our agents fail to comply with any of those laws, regulations or interpretations, a range of actions could result, including the suspension or termination of clinical trials, the failure to approve a product, restrictions on sales of our products or our manufacturing processes, withdrawal of our products from the market, significant fines, exclusion from government healthcare programs or other sanctions or litigation.

Changes affecting the healthcare industry, including new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to patent protection and enforcement, access to healthcare, environmental issues or product pricing and marketing, could also adversely affect our revenues, our public reputation or our potential to be profitable.

For example, the costs of prescription pharmaceuticals in the U.S.

has been the subject of considerable discussion in the U.S.

and the new administration may seek to address such costs through new legislative and/or administrative measures.

have been the subject of considerable discussion in the U.S.

and the government may seek to address such costs through new legislative and/or administrative measures.

Such changes in laws, regulations or decisions or in the interpretation of existing laws, regulations and decisions could have a material adverse effect on our business, financial condition, cash flows and results of operations.

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In addition to significant remediation costs, contamination can give rise to third-party claims for fines, penalties, natural resource damages, personal injury and damage (including property damage).

The costs of compliance with environmental, health and safety laws and regulations are significant.

The costs of compliance with environmental, health and safety laws and

regulations are significant.

We have developed and implemented a proprietary risk mitigation program to preemptively identify and address environmental, health, safety and security risks ;

however, there can be no assurance that a violation of current or future environmental, health or safety laws or regulations will not occur.

Any violations, even if inadvertent or accidental, or the cost of compliance with any resulting order, fine or liability that may be imposed, could materially adversely affect our business, financial

condition, cash flows and results of operations.

Any violations, even if inadvertent or accidental, or the cost of compliance with any resulting order , fine or liability that may be i mposed, could materially adversely affect our business, financial condition, cash flows and results of operations.

Risks Related to our Financial Condition and Tax Matters

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

successfully commercialize VIVITROL, the ARISTADA product family, RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA, FAMPYRA and any other marketed products for which we earn revenue in the countries in which such products are approved;

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

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

and in other countries;

manufacture our products and third-party products efficiently and in a cost-effective manner;

obtain adequate reimbursement coverage for our products from insurance companies, government programs and other third-party payers;

successfully manufacture our products and third-party products efficiently and in a cost-effective manner;

obtain adequate reimbursement coverage for our products and third-party products from insurance companies, government programs and other third-party payers;

achieve certain product development and sales milestones under our collaborative arrangements;

resolve favorably any commercial disputes that may arise in respect of collaborative arrangements from which we receive revenues.

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

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

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

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

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

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

the costs related to potential litigation, arbitration or government requests for information;

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

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

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

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

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If we are unsuccessful in defending any tax positions adopted in our submitted tax returns, we may be required to pay taxes for prior periods, interest, fines or penalties, and may be obligated to pay increased taxes in the future, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Changes in tax rules and regulations, or interpretations thereof, may adversely affect our financial condition.

Effective January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct R&D expenses in the year incurred and instead requires taxpayers to capitalize, and subsequently amortize such expenses over five years for research activities conducted in the U.S.

and over fifteen years for research activities conducted outside of the U.S.

As such, we expect a material decrease in cash flows provided from operations and a material increase in our net deferred tax assets over these amortization periods.

The actual impact of this change will depend on multiple factors, including the amount of R&D expenses incurred and whether the research activities are performed within or outside of the U.S.

Unless the U.S.

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

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

income tax liability over these amortization periods.

Our deferred tax assets may not be realized.

As of December 31, 2020, we had $86.2 million in net deferred tax assets in the U.S.

As of December 31, 2021, we had $81.8 million of net deferred tax assets in the U.S.

Included in this amount was approximately $1.7 million of U.S.

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in the future.

Losses may arise from unforeseen operating events or the occurrence of significant excess tax benefits arising from the exercise of stock options and/or the vesting of restricted stock units.

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

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

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net deferred tax assets of $81.8 million an amount of $36.1 million relating to employee share-based compensation expense.

It is possible that a material portion of this deferred tax asset will not be realized, especially if the price of our ordinary shares remains at its current level (refer to “Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in this Annual Report for details of the price of our ordinary shares).

It is possible that a material portion of this deferred tax asset will not be realized, especially if the price of our ordinary shares remains at its current level (refer to “Item 5 — Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in this Annual Report for details of the price of our ordinary shares).

Unless the price of our ordinary shares increases, we will incur a deferred tax expense as our U.S.-based employees exercise or forfeit their stock options and their restricted stock unit awards vest.

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

The business combination of Alkermes, Inc.

The business combination in 2011 of Alkermes, Inc.

and the drug technology business (“EDT”) of Elan Corporation, plc may limit our ability to use our tax attributes to offset taxable income, if any, generated from such business combination.

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corporation during the period beginning on the date the first assets are acquired as part of the acquisition, through the date which is ten years after the last date assets are acquired as part of the acquisition, shall be no less than the income or gain recognized by reason of the transfer during such period or by reason of a license of property by the expatriated entity after such acquisition to a foreign affiliate during such period, which is referred to as the “inversion gain,” if shareholders of the acquired U.S.

corporation own at least 60% (of either the voting power or the value) of the stock of the acquiring foreign corporation after the acquisition by reason of holding stock in the domestic corporation, and the “expanded affiliated group” of the acquiring corporation does not have substantial business activities in the country in which it is

If this rule was to apply to the Business Combination, among other things, Alkermes, Inc.

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

In March 2018, we amended and refinanced the term loan under our credit agreement (previously referred to as “Term Loan B-1”, and as so amended and refinanced, the “2023 Term Loans”), in order to, among other things, extend the due date of the loan from September 25, 2021 to March 26, 2023, reduce the interest payable thereon from LIBOR plus 2.75% with a LIBOR floor of 0.75% to LIBOR plus 2.25% with a 0% LIBOR floor and increase covenant flexibility.

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

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

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

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

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

As of December 31, 2021, our borrowings consisted of $295.8 million outstanding under the 2026 Term Loans.

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

Our future operating results may not be sufficient to ensure compliance with these covenants or to remedy any such default.

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

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

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

In July 2017, the U.K.

Financial Conduct Authority announced that LIBOR could be effectively discontinued after 2023.

In addition, other regulators have suggested reforming or replacing other benchmark rates.

In 2017, the U.K.

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

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

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

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

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

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

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

dollar LIBOR.

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

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

Uncertainty as to the nature of such potential discontinuation, reform or replacement may negatively impact the volatility of LIBOR rates, liquidity, our access to funding required to operate our business, or the trading market for our 2023 Term Loans.

Under our 2023 Term Loans, if the administrative agent determines that LIBOR is not reasonably ascertainable, or is notified by our lenders that LIBOR does not adequately and fairly reflect the costs to our lenders of maintaining the loans, we would be required to pay interest under an alternative base rate which could cause the amount of interest payable on the 2023 Term Loans to be materially different than expected.

We may choose in the future to pursue an amendment to our 2023 Term Loans to provide for a transition mechanism or other alternative reference rate in anticipation of LIBOR’s discontinuation, but we can give no assurance that we will be able to reach agreement with our lenders on any such amendment.

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

In order to achieve our business strategy, we regularly review potential transactions related to technologies, products or product rights, and businesses that are complementary to our business, including mergers and acquisitions, licenses and collaborations, and development and supply, commercialization or co-promotion arrangements, among others.

We may choose to enter into one or more of these or other transactions at any time, which may cause substantial fluctuations in the market price of our ordinary shares.

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

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

In May 2017, our shareholders authorized our Board to issue ordinary shares up to our maximum authorized but unissued share capital and to issue such ordinary shares for cash on a non-pre-emptive basis;

however, in accordance with Irish law, these share issuance authorities may only be granted for a maximum of five years, at which point they lapse unless renewed by our shareholders.

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

In addition, future investors or lenders may demand, and may be granted, rights superior to those of existing shareholders.

If we issue additional debt securities, our existing debt service obligations will increase further.

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

Currency exchange rates may affect revenues and expenses.

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We regularly review and update our internal controls, disclosure controls and procedures, and corporate governance policies.

addition, we are required under the Sarbanes-Oxley Act of 2002 to report annually on our internal control over financial reporting.

In addition, we are required under the Sarbanes-Oxley Act of 2002 to report annually on our internal control over financial reporting.

Any system of internal controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.

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If we cannot conclude that we have effective internal control over our financial reporting, or if our independent registered public accounting firm is unable to provide an unqualified opinion regarding the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our financial statements, which could lead to a decline in the trading price of our ordinary shares.

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

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

Risks Related to our Ordinary Shares

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Such actions may cause significant disruption to a company’s operations and cause a company to expend a significant amount of time and resources in responding to their requests.

In December 2020, we engaged in extensive dialogue with an activist shareholder, resulting in our entry into a cooperation agreement with such activist in which we agreed on certain matters relating to our Board and affirmed our commitment to, and plans for, meeting certain financial targets over a multi-year period.

In late 2020 and early 2021, we engaged in extensive dialogues with two distinct activist shareholders, resulting in our entry into an agreement with each activist in which we agreed on certain matters relating to our Board and, in the case of one of the agreements, affirmed our commitment to, and plans for, meeting financial profitability targets over a multi-year period.

These discussions resulted in the expenditure of significant time and energy by management and our Board and required dedication by the Company of significant resources.

We have undertaken, and will continue to implement, several initiatives in order to achieve the financial targets, but there is no assurance that we will achieve these targets, or that doing so will decrease the likelihood of activist shareholder engagement in the future.

If faced with a proxy contest or other activist shareholder request or action in the future, we may not be able or willing to respond successfully to the contest, action, or request, which could be significantly disruptive to our business.

Even if we are successful, our business could be adversely affected by any proxy contest or activist shareholder request or action involving us because:

We have undertaken, and will continue to implement, several initiatives in order to drive profitability and value creation for our shareholders, but there is no assurance that we will achieve such objectives, or that such achievement and the measures we have taken and will continue to take will decrease the likelihood of activist shareholder engagement in the future.

In addition, in January 2022, we received notice from one of these shareholders of its intent to nominate two directors to our Board at our 2022 annual general meeting of shareholders.

We have engaged, and plan to continue to engage, with this shareholder in respect of these nominations.

If faced with a proxy contest or other shareholder action or request, we may not be able or willing to respond successfully to the contest, action, or request, which could be significantly disruptive to our business.

Even if we are successful, our business could be adversely affected by any proxy contest or activist shareholder action or request involving us because:

responding to proxy contests and other actions by activist shareholders can be costly and time-consuming, disrupting operations and diverting the attention of management and employees, and can lead to uncertainty;

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Risks Related to Information Security and Data Privacy

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

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

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

In addition, the COVID-19 pandemic has required us to implement a global remote work policy for our employees who are able to work remotely.

In addition, the COVID-19 pandemic has required us to implement, and to adapt over time, global remote work flexibility for certain of our employees who are able to work remotely.

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

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

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

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

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

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

Any breakdown, invasion, corruption, destruction or breach of our, our partners’ or our third-party providers’ technology systems could compromise such IT systems and the information stored there could be accessed, modified, publicly disclosed, lost or stolen, which could result in legal claims or proceedings and liability under laws that protect the privacy of personal information, disrupt our operations, damage our reputation and adversely affect our business.

Although we retain cybersecurity insurance to cover costs and expenses related to a breach or similar event, any such costs and expenses may exceed the insurance available.

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

We retain cybersecurity insurance to cover costs and expenses related to a breach or similar event;

however, there is no guarantee that such costs and expenses would not exceed the insurance that we retain.

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

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In the EU, for example, the GDPR governs the processing of personal data.

The GDPR imposes significant obligations on controllers and processors of personal data, including, high standards for obtaining consent from individuals to process their personal data, robust notification requirements to individuals about the processing of their personal data, a strong individual data rights regime, mandatory data breach notifications, limitations on the retention of personal data and increased requirements pertaining to health data, and strict rules and restrictions on the transfer of personal data outside of the EU, including to the U.S.

The GDPR imposes significant obligations on controllers and processors of personal data, including, high standards for obtaining consent from individuals to process their personal data, robust notification requirements to individuals about the processing of their personal data, a strong individual data rights regime, mandatory data breach notifications, limitations on the retention of personal data and stringent requirements pertaining to health data, and strict rules and restrictions on the transfer of personal data outside of the EU, including to the U.S.

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

The GDPR allows EU member states to make additional laws and regulations further limiting the processing of genetic, biometric or health data.

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

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

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

What changed 10-K

Item 1A. Risk Factors