20 unchanged sentences
Other Information
+Added: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
+Added: Not applicable.
Directors, Executive Officers and Corporate Governance
39 unchanged sentences
Memorandum and Articles of Association of Alkermes plc.
−Removed: Exhibit 3.1 to the Alkermes plc Current Report on Form 8-K (File No.
+Added: Exhibit 3.1 to the Alkermes plc Quarterly Report on Form 10-Q (File No.
+Added: July 28, 2021
Description of Securities.
189 unchanged sentences
Description of Exhibit
+Added: Amendment No.
+Added: 6, dated as of March 12, 2021, to Amended and Restated Credit Agreement, dated as of September 16, 2011, as amended and restated on September 25, 2012, as further amended by Amendment No.
+Added: 2 on February 14, 2013, as amended by Amendment No.
+Added: 3 and Waiver to Amended and Restated Credit Agreement dated as of May 22, 2013, as amended by Amendment No.
+Added: 4, dated as of October 12, 2016, and as amended by Amendment No.
+Added: 5, dated as of March 26, 2018, among Alkermes, Inc., Alkermes plc, the guarantors party thereto, the lenders party thereto and Morgan Stanley Senior Funding, Inc.
+Added: as Administrative Agent and Collateral Agent.
+Added: Exhibit 10.1 to the Alkermes plc Quarterly Report on Form 10-Q (File No.
+Added: April 28, 2021
License and Collaboration Agreement, dated November 27, 2017, by and between Alkermes Pharma Ireland Limited and Biogen Swiss Manufacturing GmbH.
10 unchanged sentences
February 13, 2020
−Removed: Cooperation Agreement, dated as of December 10, 2020, by and among Alkermes plc and Elliott Investment Management L.P., Elliott Associates, L.P., Elliott Advisors (UK) Limited and Elliott International, L.P.
−Removed: Exhibit 10.1 to the Alkermes plc Current Report on Form 8-K (File No.
−Removed: December 10, 2020
Lease, dated March 23, 2018, by and between Alkermes, Inc.
40 unchanged sentences
Annual Report on Form 10-K (File No.
+Added: Incorporated by reference herein
+Added: Description of Exhibit
Form of Covenant Not to Compete, of various dates, by and between Alkermes, Inc.
10 unchanged sentences
November 2, 2016
−Removed: Incorporated by reference herein
−Removed: Description of Exhibit
Offer Letter by and between Alkermes, Inc.
34 unchanged sentences
April 28, 2016
+Added: Incorporated by reference herein
+Added: Description of Exhibit
Form of 2008 Restricted Stock Unit Award Certificate (Performance Vesting Only) under the Alkermes plc Amended and Restated 2008 Stock Option and Incentive Plan, as amended.
3 unchanged sentences
Exhibit 10.1 to the Alkermes plc Current Report on Form 8-K (File No.
−Removed: Incorporated by reference herein
−Removed: Description of Exhibit
Form of Incentive Stock Option Award Certificate under the Alkermes plc 2011 Stock Option and Incentive Plan, as amended.
14 unchanged sentences
Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
−Removed: Exhibit 10.1 to the Alkermes plc Current Report on Form 8-K (File No.
Form of Incentive Stock Option Award Certificate under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
26 unchanged sentences
Inline XBRL Taxonomy Extension Label Linkbase Document.
−Removed: Inline XBRL Taxonomy Extension Presentation Linkbase Document.
−Removed: Inline XBRL Taxonomy Extension Definition Linkbase Document.
Incorporated by reference herein
Description of Exhibit
+Added: Inline XBRL Taxonomy Extension Presentation Linkbase Document.
+Added: Inline XBRL Taxonomy Extension Definition Linkbase Document.
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)
6 unchanged sentences
Form 10-K Summary
−Removed: Not applicable.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
10 unchanged sentences
February 16, 2022
−Removed: Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
+Added: Senior Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
February 16, 2022
+Added: /s/ Emily Peterson Alva
+Added: Emily Peterson Alva
February 16, 2022
−Removed: /s/ Robert A.
February 16, 2022
−Removed: /s/ Shane Cooke
February 16, 2022
February 16, 2022
−Removed: /s/ Richard Gaynor
−Removed: Richard Gaynor
February 16, 2022
+Added: /s/ Richard B.
February 16, 2022
13 unchanged sentences
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
−Removed: Changes in Accounting Principles
−Removed: As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019 and the manner in which it accounts for revenue from contracts with customers in 2018.
Basis for Opinions
19 unchanged sentences
Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rebate Accruals - Medicaid Drug Rebate Program
5 unchanged sentences
states for all eligible units purchased under the Medicaid program based on a rebate per unit calculation, which is based on the Company’s average manufacturer prices.
−Removed: The Company estimates expected unit sales to individuals covered by Medicaid and rebates per unit under the Medicaid program and adjusts its rebate accrual based on actual unit sales and rebates per unit and changes in trends in Medicaid utilization.
+Added: The Company estimates expected unit sales to individuals covered by Medicaid and rebates per unit under the Medicaid program and adjust its rebate accrual based on actual unit sales and rebates per unit and changes in trends in Medicaid utilization.
The principal considerations for our determination that performing procedures relating to rebate accruals for the Medicaid Drug Rebate Program is a critical audit matter are (i) the significant judgment by management due to significant measurement uncertainty involved in developing the reserves, as the reserves are based on assumptions developed using historical experience, current contractual requirements, specific known market events and payment patterns and (ii) a high degree of auditor judgment, effort, and subjectivity in applying procedures related to these assumptions.
16 unchanged sentences
Cash and cash equivalents
−Removed: Investments—short-term
Receivables, net
+Added: Investments—short-term
Contract assets
2 unchanged sentences
PROPERTY, PLANT AND EQUIPMENT, NET
+Added: INVESTMENTS—LONG-TERM
RIGHT-OF-USE ASSETS
1 unchanged sentence
DEFERRED TAX ASSETS
−Removed: INVESTMENTS—LONG-TERM
CONTINGENT CONSIDERATION
34 unchanged sentences
Manufacturing and royalty revenues
−Removed: Research and development revenue
License revenue
+Added: Research and development revenue
Total revenues
6 unchanged sentences
OPERATING LOSS
−Removed: OTHER INCOME (EXPENSE), NET:
+Added: OTHER (EXPENSE) INCOME, NET:
Interest income
1 unchanged sentence
Change in the fair value of contingent consideration
−Removed: Other income (expense), net
−Removed: Total other income (expense), net
+Added: Other income, net
+Added: Total other (expense) income, net
LOSS BEFORE INCOME TAXES
5 unchanged sentences
COMPREHENSIVE LOSS:
−Removed: Holding gain, net of a tax provision of $ 130 , $ 426 , $ 159 , respectively
+Added: Holding (loss) gain, net of a tax (benefit) provision of $( 706 ), $ 130 and $ 426 , respectively
COMPREHENSIVE LOSS
10 unchanged sentences
Receipt of Alkermes' shares for the purchase of stock options or to satisfy minimum tax withholding obligations related to share-based awards
−Removed: Share-based compensation expense
+Added: Share-based compensation
Unrealized gain on marketable securities, net of tax provision of $ 426
−Removed: Cumulative effect adjustment related to the adoption of new accounting standards
BALANCE — December 31, 2019
1 unchanged sentence
Receipt of Alkermes' shares for the purchase of stock options or to satisfy minimum tax withholding obligations related to share-based awards
−Removed: Share-based compensation expense
+Added: Share-based compensation
Unrealized gain on marketable securities, net of tax provision of $ 130
2 unchanged sentences
Receipt of Alkermes' shares for the purchase of stock options or to satisfy minimum tax withholding obligations related to share-based awards
−Removed: Share-based compensation expense
−Removed: Unrealized gain on marketable securities, net of tax provision of $ 130
+Added: Share-based compensation
+Added: Unrealized loss on marketable securities, net of tax benefit of $ 706
BALANCE —December 31, 2021
7 unchanged sentences
Adjustments to reconcile net loss to cash flows from operating activities:
−Removed: Share-based compensation expense
Depreciation and amortization
+Added: Share-based compensation expense
Deferred income taxes
Change in the fair value of contingent consideration
−Removed: Loss on debt refinancing
−Removed: Payment made for debt refinancing
−Removed: Impairment of property, plant and equipment
+Added: Loss on debt extinguishment
+Added: Payment made for debt modification
+Added: Impairment of investment in Synchronicity Pharma, Inc.
Other non-cash charges
−Removed: Changes in assets and liabilities, excluding the effect of acquisitions:
+Added: Changes in assets and liabilities:
Contract assets
11 unchanged sentences
Return of Fountain Healthcare Partners II, L.P.
+Added: Payment made for licensed Intellectual Property ("IP")
Purchases of investments
5 unchanged sentences
Employee taxes paid related to net share settlement of equity awards
+Added: Proceeds from the issuance of long-term debt
+Added: Payment made for debt extinguishment
Principal payments of long-term debt
−Removed: Payment made for debt refinancing
−Removed: Cash flows (used in) provided by financing activities
+Added: Cash flows provided by (used in) financing activities
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
11 unchanged sentences
Alkermes plc (the “Company”) is a fully integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to research, develop and commercialize, both with partners and on its own, pharmaceutical products that are designed to address unmet medical needs of patients in major therapeutic areas.
−Removed: Alkermes has a diversified portfolio of marketed products focused on central nervous system disorders such as addiction and schizophrenia and a pipeline of product candidates in the fields of neuroscience and oncology.
+Added: Alkermes has a diversified portfolio of marketed products focused on central nervous system disorders such as alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder and a pipeline of product candidates in the fields of neuroscience and oncology.
Headquartered in Dublin, Ireland, the Company has a research and development (“R&D”) center in Waltham, Massachusetts;
5 unchanged sentences
Intercompany accounts and transactions have been eliminated.
−Removed: During the year ended December 31, 2020, Alkermes Finance S.à r.l, an indirect subsidiary of Alkermes plc, was liquidated and its net assets were transferred to its parent company, Alkermes Pharma Ireland Limited.
Use of Estimates
The preparation of the Company’s consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires that Company management make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
−Removed: On an on‑going basis, the Company evaluates its estimates and judgments and methodologies, including those related to revenue from contracts with its customers and related allowances, impairment and amortization of intangibles and long‑lived assets, share‑based compensation, income taxes including the valuation allowance for deferred tax assets, valuation of investments, contingent consideration and litigation.
+Added: On an on‑going basis, the Company evaluates its estimates and judgments and methodologies, including but not limited to, those related to revenue from contracts with its customers and related allowances, impairment and amortization of intangibles and long‑lived assets, share‑based compensation, income taxes including the valuation allowance for deferred tax assets, valuation of investments, contingent consideration and litigation.
The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
3 unchanged sentences
The Company considers cash equivalents only those investments that are highly liquid, readily convertible into cash and so near their maturity, generally three months from the date of purchase, that they present insignificant risk of change in value because of interest rate changes.
−Removed: The Company has investments in various types of securities, consisting primarily of United States (“U.S.”) government and agency obligations, corporate debt securities and debt securities issued by foreign agencies and backed by foreign governments.
+Added: The Company has investments in various types of securities, consisting primarily of United States (“U.S.”) government and agency obligations, corporate debt securities and debt securities issued by non-U.S.
+Added: agencies and backed by non-U.S.
The Company generally holds its interest-bearing investments with major financial institutions and in accordance with documented investment policies.
1 unchanged sentence
At December 31, 2021, substantially all these investments were classified as available-for-sale and were recorded at fair value.
−Removed: Holding gains and losses on available-for-sale investments are considered “unrealized” and are reported within “Accumulated other comprehensive loss,” a component of shareholders’ equity.
−Removed: The Company uses the specific identification method for reclassifying unrealized gains and losses into earnings when investments are sold.
−Removed: The Company conducts periodic reviews to identify and evaluate each investment that has an unrealized loss, in accordance with the meaning of other-than-temporary impairment and its application to certain investments, as required by GAAP.
+Added: Unrealized gains and losses are included in accumulated other comprehensive loss in equity, net of related tax effects, unless the security has experienced a credit loss, the Company has determined that it has the intent to sell the security or it has determined that it is more likely than not that the Company will have to sell the security before its expected recovery.
+Added: Realized gains and losses are reported in other income, net on a specific identification basis.
+Added: The Company conducts periodic reviews to identify and evaluate each investment that has an unrealized loss in accordance with the meaning of other-than-temporary impairment.
An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis.
−Removed: Unrealized losses on available-for-sale securities that are determined to be temporary, and not related to credit loss, are recorded in “Accumulated other comprehensive loss.”
−Removed: For securities with unrealized losses, the Company performs an analysis to assess whether it intends to sell or whether it would more likely than not be required to sell the security before the expected recovery of its amortized cost basis.
−Removed: If the Company intends to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is recorded within earnings as an impairment loss.
+Added: Unrealized losses on available-for-sale debt securities that are determined to be temporary, and not related to credit loss, are recorded, net of tax, in accumulated other comprehensive income.
+Added: For available-for-sale debt securities with unrealized losses, the Company performs an analysis to assess whether it intends to sell or whether it would more likely than not be required to sell the security before the expected recovery of the amortized cost basis.
+Added: Where the Company intends to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is reflected in earnings as an impairment loss.
Regardless of the Company’s intent to sell a security, the Company performs additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security.
10 unchanged sentences
Assets utilizing Level 2 inputs at December 31, 2021 included U.S.
−Removed: government agency debt securities, debt securities issued by foreign agencies and backed by foreign governments and investments in corporate debt securities that are trading in the credit markets;
+Added: government agency debt securities, debt securities issued by non-U.S.
+Added: agencies and backed by non-U.S.
+Added: governments and investments in corporate debt securities that are trading in the credit markets;
Level 3 –these valuations are based on an income approach using certain inputs that are unobservable and are significant to the overall fair value measurement.
Valuations of these products require a significant degree of judgment.
−Removed: At December 31, 2020, assets utilizing Level 3 inputs included contingent consideration and an investment in a corporate debt security.
+Added: At December 31, 2021, the only asset utilizing Level 3 inputs included contingent consideration.
The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses approximate fair value due to their short‑term nature.
11 unchanged sentences
The Company expenses previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or significant delay of approval by relevant regulatory agencies or other issues that may make the pre-approval inventory batches less likely or unlikely to be commercialized and to result in future economic benefit.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Property, Plant and Equipment
7 unchanged sentences
Shorter of useful life or lease term
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Contingent Consideration
−Removed: The Company records contingent consideration it is entitled to receive at fair value on the acquisition date.
+Added: The Company records contingent consideration it is entitled to receive at fair value on the sale date.
The Company estimates the fair value of contingent consideration through valuation models that incorporate probability-adjusted assumptions related to the likelihood of achievement of milestones and of receipt of the related payments.
8 unchanged sentences
Goodwill represents the excess cost of the Company’s investment in the net assets of acquired companies over the fair value of the underlying identifiable net assets at the date of acquisition.
−Removed: The Company’s goodwill consists solely of goodwill created as a result of the Company’s acquisition of Elan Drug Technologies (“EDT”) from Elan Corporation, plc (the “Business Combination”) in September 2011 and has been assigned to one reporting unit.
+Added: The Company’s goodwill consists solely of goodwill created as a result of the Company’s acquisition of Elan Drug Technologies (“EDT”) from Elan Corporation, plc (such acquisition, the “Business Combination”) in September 2011 and has been assigned to one reporting unit.
A reporting unit is an operating segment or one level below an operating segment or a component to which goodwill is assigned when initially recorded.
5 unchanged sentences
In the quantitative impairment test, the Company compares the fair value of its reporting unit to its carrying value.
−Removed: If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of its reporting unit, then the Company would record an impairment loss equal to the difference.
−Removed: The Company’s finite-lived intangible assets, consisting of core developed technology and collaboration agreements acquired as part of the acquisition of EDT, were recorded at fair value at the time of their acquisition and are stated within the Company’s consolidated balance sheets net of accumulated amortization.
+Added: If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company would record an impairment loss equal to the difference.
+Added: The Company’s finite-lived intangible assets, consisting of core developed technology and collaboration agreements acquired as part of the Business Combination, were recorded at fair value at the time of their acquisition and are stated within the Company’s consolidated balance sheets net of accumulated amortization.
The finite-lived intangible assets are amortized over their estimated useful lives using the economic use method, which reflects the pattern that the economic benefits of the intangible assets are consumed as revenue is generated from the underlying patent or contract.
The useful lives of the Company’s intangible assets are primarily based on the legal or contractual life of the underlying patent or contract, which does not include additional years for the potential extension or renewal of the contract or patent.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Impairment of Long‑Lived Assets
6 unchanged sentences
or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
−Removed: Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.
+Added: Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written ‑down to their estimated fair values.
Long ‑lived assets to be disposed of are carried at fair value less costs to sell them.
−Removed: In the fourth quarter of 2020, the Company determined that an impairment triggering event occurred and evaluated certain of its long-lived assets for impairment under a held-and-used model.
−Removed: The Company concluded that the long-lived assets evaluated for impairment were recoverable based on an analysis of the undiscounted net cash flows to be generated from the use of these assets.
+Added: In the fourth quarter of 2021, the Company determined that an impairment triggering event occurred related to the receipt of partial termination in the U.S.
+Added: of its license agreement with Janssen related to INVEGA SUSTENNA ® , INVEGA TRINZA ® , and INVEGA HAFYERA ® and evaluated certain of its intangible assets for impairment under a held-and-used model.
+Added: The Company concluded that the long-lived assets evaluated for impairment were recoverable based on an analysis of the undiscounted cash flows to be generated from the use of these assets.
Revenue from Contracts with Customers
7 unchanged sentences
Product Sales, Net
−Removed: The Company’s product sales, net consist of sales of VIVITROL ® , ARISTADA ® and ARISTADA INITIO ® in the U.S.
−Removed: primarily to wholesalers, specialty distributors and pharmacies.
+Added: The Company’s product sales, net consist of sales in the U.S.
+Added: of VIVITROL ® , ARISTADA ® and ARISTADA INITIO ® and, following its commercial launch in October 2021, LYBALVI ® , primarily to wholesalers, specialty distributors and pharmacies.
Product sales, net are recognized when the customer obtains control of the product, which is when the product has been received by the customer.
−Removed: Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, health care providers or payers.
+Added: Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, healthcare providers or payers.
The Company’s process for estimating reserves established for these variable consideration components does not differ materially from historical practices.
11 unchanged sentences
Contracted customers generally purchase a product at its contracted price.
−Removed: The wholesaler or specialty distributor, in turn, then generally charges back to the Company the difference between the wholesale acquisition cost and
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: the contracted price paid to the wholesaler or specialty distributor by the customer.
+Added: The wholesaler or specialty distributor, in turn, then generally charges back to the Company the difference between the wholesale acquisition cost and the contracted price paid to the wholesaler or specialty distributor by the customer.
The allowance for chargebacks is made using the expected value method and is based on actual and expected utilization of these programs.
2 unchanged sentences
Product Discounts — cash consideration, including sales incentives, given by the Company under agreements with a number of wholesaler, distributor, pharmacy, and treatment provider customers that provide them with a discount on the purchase price of products.
−Removed: The reserve is made using the expected value method and to date, actual product discounts have not differed materially from the Company’s estimates;
−Removed: Product Returns —the Company records an estimate for product returns at the time our customers take control of their product.
+Added: The reserve is made using the expected value method and to date, actual product discounts
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: have not differed materially from the Company’s estimates;
+Added: Product Returns —the Company records an estimate for product returns at the time its customers take control of their product.
The Company estimates this liability using the expected returns of product sold based on historical return levels and specifically identified anticipated returns due to known business conditions and product expiry dates.
3 unchanged sentences
Under the CGDP, patients reaching the annual coverage gap threshold are eligible for reimbursement coverage for out-of-pocket costs for covered prescription drugs.
−Removed: Under an agreement with the Center for Medicare and Medicaid, manufacturers are responsible to reimburse prescription plan sponsors for the portion of out-of-pocket expenses not covered under their Medicare plans.
+Added: Under an agreement with the Centers for Medicare and Medicaid Services, manufacturers are responsible to reimburse prescription plan sponsors for the portion of out-of-pocket expenses not covered under their Medicare plans.
Collaborative Arrangements
1 unchanged sentence
(“Janssen, Inc.”), Janssen Pharmaceutica International, a division of Cilag International AG (“Janssen International”), and Janssen Pharmaceutica N.V.
−Removed: (together with Janssen, Inc., Janssen International and their affiliates, “Janssen”) for INVEGA SUSTENNA ® /XEPLION ® and INVEGA TRINZA ® /TREVICTA ® as well as RISPERDAL CONSTA ® , Acorda Therapeutics, Inc.
−Removed: (“Acorda”) for AMPYRA ® /FAMPYRA ® and Biogen Swiss Manufacturing GmbH (together with its affiliates, “Biogen”) for VUMERITY ® .
+Added: (together with Janssen, Inc., Janssen International and their affiliates, “Janssen”) for INVEGA SUSTENNA/XEPLION ® , INVEGA TRINZA/TREVICTA ® , INVEGA HAFYERA/BYANNLI ® (the “long-acting INVEGA products”) and RISPERDAL CONSTA ® and Biogen Swiss Manufacturing GmbH (together with its affiliates, “Biogen”) for VUMERITY ® .
Substantially all of the products developed under these arrangements are currently being marketed as approved products for which the Company receives payments for manufacturing services and/or royalties on net product sales.
1 unchanged sentence
The Company recognizes manufacturing revenues from the sale of products it manufactures for resale by its licensees.
−Removed: Manufacturing revenues for the Company’s partnered products, with the exception of those from Janssen related to RISPERDAL CONSTA, are recognized over time as products move through the manufacturing process, using a standard cost-based model as a measure of progress, which represents a faithful depiction of the transfer of control of the goods.
+Added: Manufacturing revenues for the Company’s partnered products, with the exception of those from Janssen related to RISPERDAL CONSTA and from Biogen related to VUMERITY, are recognized over time as products move through the manufacturing process, using a standard cost-based model as a measure of progress, which represents a faithful depiction of the transfer of control of the goods.
The Company recognizes manufacturing revenue from these products over time as it determined, in each instance, that it would have a right to payment for performance completed to date if its customer were to terminate the manufacturing agreement for reasons other than the Company’s non-performance and the products have no alternative use.
3 unchanged sentences
The manufacturing process is considered fully complete once the finished goods have been approved for shipment by both the Company and Janssen.
+Added: The Company records manufacturing revenue for VUMERITY at the point in time when control of the product passes to Biogen, since Biogen does not control the product during the manufacturing process and, in the event Biogen terminates the commercial supply agreement, the Company would only be reimbursed for costs incurred for performance completed to date for product not yet fully manufactured.
+Added: Control of the product passes to Biogen when the manufacturing process is considered fully complete, which is upon quality release for bulk batches of VUMERITY and upon shipment for packaged lots of VUMERITY.
The sales price for certain of the Company’s manufacturing revenues is based on the end-market sales price earned by its licensees.
4 unchanged sentences
The Company recognizes royalty revenues related to the sale by its licensees of products that incorporate the Company’s technologies.
−Removed: Substantially all of the Company’s royalties qualify for the sales-and-usage exemption under Topic 606 as (i) royalties are based strictly on the sales-and-usage by the licensee;
−Removed: and (ii) a license of intellectual property (“IP”) is the sole or predominant
+Added: Substantially all of the Company’s royalties qualify for the sales-and-usage exemption under Topic 606 as (i) such royalties are based strictly on the sales-and-usage by the licensee;
+Added: and (ii) a license of IP is the sole or predominant item to which such royalties relate.
+Added: Based on this exemption, these royalties are earned in the period that the products are sold by the Company's licensee and the Company has a present right to payment.
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: item to which such royalties relate.
−Removed: Based on this exemption, these royalties are earned in the period the products are sold by the Company's partner and the Company has a present right to payment.
Certain of the Company’ s royalty revenues are recognized by the Company based on information supplied to the Company by its licensees and require estimates to be made.
Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period in which they become known, which is generally within the same quarter.
−Removed: The difference between the Company’s actual and estimated royalty revenues has not been material to date.
+Added: The difference between the Company’s actual and estimated royalty revenues ha s not been material to date .
Research and Development Revenue
3 unchanged sentences
License Revenue
−Removed: The Company recognizes revenue from the grant of distinct, right-to-use licenses of IP when control of the license is transferred to the customer, which is the point in time the customer is able to direct the use of and obtain substantially all of the benefits from the license.
+Added: The Company recognizes revenue from the grant of distinct, right-to-use licenses of IP when control of the license is transferred to the customer, which is the point in time that the customer is able to direct the use of and obtain substantially all of the benefits from the license.
Receivables, net
6 unchanged sentences
Contract Assets
−Removed: Contract assets include unbilled amounts resulting from sales under certain of the Company’s manufacturing contracts where revenue is recognized over time, except for $ 5.0 million of consideration related to the Company’s collaboration with Biogen related to VUMERITY, which the Company expects to receive in approximately two years , and is included in “Other assets” in the accompanying consolidated balance sheets.
+Added: Contract assets include unbilled amounts resulting from sales under certain of the Company’s manufacturing contracts where revenue is recognized over time, except for $ 5.0 million of consideration related to the Company’s collaboration with Biogen related to VUMERITY, which the Company expects to receive in 2022 .
The manufacturing-related amounts included in the contract assets table below are classified as “Current assets” in the accompanying consolidated balance sheets, as they related to manufacturing processes that are completed in ten days to eight weeks.
25 unchanged sentences
Gains and losses as a result of translation adjustments are recorded within “Other income (expense), net” in the accompanying consolidated statements of operations and comprehensive loss.
−Removed: During the years ended December 31, 2020, 2019 and 2018, the Company recorded a gain (loss) on foreign currency translation of $ 2.4 million, $( 0.9 ) million and $( 2.3 ) million, respectively.
+Added: During the years ended December 31, 2021, 2020 and 2019, the Company recorded a loss on foreign currency translation of $ 0.3 million, a gain of $ 2.4 million and a loss of $ 0.9 million, respectively.
Concentrations
6 unchanged sentences
AmerisourceBergen
−Removed: Indicates the revenues or receivables for the customer did not exceed 10 % of the Company’s total in each category as of or for the years ended December 31, 2020, 2019 and 2018, as noted.
+Added: Indicates the revenues or receivables for the customer did not exceed 10 % of the Company’s total in each category as of or for the years ended December 31, 2021, 2020 or 2019, as noted.
The Company holds its interest‑bearing investments with major financial institutions and, in accordance with documented investment policies, the Company limits the amount of credit exposure to any one financial institution or corporate issuer.
15 unchanged sentences
For each of its R&D programs, the Company incurs both external and internal expenses.
−Removed: External R&D expenses include costs related to clinical and non‑clinical activities performed by contract research organizations, consulting fees, laboratory services, purchases of drug product materials and third‑party manufacturing development costs.
+Added: External R&D expenses include fees related to clinical and non‑clinical activities performed by contract research organizations, consulting fees and costs related to laboratory services, purchases of drug product materials and third‑party manufacturing development costs.
Internal R&D expenses include employee‑related expenses, occupancy costs, depreciation and general overhead.
−Removed: The Company tracks external R&D expenses for each of its development programs, however, internal R&D expenses, with the exception of those expenses related to VUMERITY, are not tracked by individual program as they benefit multiple programs or the Company’s technologies in general.
+Added: The Company tracks external R&D expenses for each of its development programs, however, internal R&D expenses, with the exception of those related to VUMERITY prior to its approval by the U.S.
+Added: Food and Drug Administration (“FDA”), are not tracked by individual program as they benefit multiple programs or the Company’s technologies in general.
Selling, General and Administrative Expenses
3 unchanged sentences
Share‑Based Compensation
−Removed: The Company’s share‑based compensation programs grant awards in the form of stock options and restricted stock unit awards (“RSUs”), which vest with the passage of time and/or vest based on the achievement of certain performance criteria.
+Added: The Company’s share‑based compensation programs grant awards in the form of stock options and restricted stock unit awards (“RSUs”), which vest with the passage of time and/or based on the achievement of certain performance criteria.
The Company issues new shares upon the exercise of stock options or the vesting of RSUs.
−Removed: Under the terms of the Company’s stock option plans (the “Plans”), certain of the Company’s employees may, at the discretion of the plan administrator, become eligible upon retirement for accelerated vesting of certain awards granted to them under the Plans.
+Added: Under the terms of the Company’s stock option and incentive plans (the “Plans”), certain of the Company’s employees may, at the discretion of the plan administrator, become eligible upon retirement for accelerated vesting of certain awards granted to them under the Plans.
Since there are no effective future service requirements for such employees, the fair value of awards to such employees would be expensed in full on the grant date or upon meeting the retirement eligibility criteria, whichever is later.
1 unchanged sentence
Except as otherwise provided in the applicable Plan, stock option grants to employees expire ten years from the grant date and generally vest in four equal annual installments, commencing on the first anniversary of the date of grant, provided the employee remains continuously employed with the Company during the applicable vesting period.
−Removed: Except as otherwise provided in the applicable Plan, stock option grants to non-employee directors expire ten years from the grant date and generally vest over a one year period provided that the director continues to serve on the Company’s board of directors through the vesting date.
+Added: Except as otherwise provided in the applicable Plan, annual stock option grants to non-employee directors expire ten years from the grant date and generally vest over a one year period provided that the director continues to serve on the Company’s board of directors through the vesting date.
The estimated fair value of options is recognized over the requisite service period, which is generally the vesting period.
Share‑based compensation expense is based on awards ultimately expected to vest.
−Removed: Forfeitures are estimated based on historical experience at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.
+Added: Forfeitures are estimated based on historical experience at the
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.
The fair value of stock option grants is based on estimates as of the date of grant using a Black‑Scholes option valuation model.
39 unchanged sentences
The Company recognizes income taxes under the asset and liability method.
−Removed: Deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse.
−Removed: The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.
−Removed: In evaluating the Company’s ability to recover its deferred tax assets, the Company considers
+Added: Deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: all available positive and negative evidence including its past operating results, the existence of cumulative income in the most recent fiscal years, changes in the business in which the Company operates and its forecast of future taxable income.
−Removed: In determining future taxable income, the Company is responsible for assumptions utilized including the amount of Irish and foreign pre ‑tax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies.
+Added: which the differences are expected to reverse.
+Added: The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.
+Added: In evaluating the Company’s ability to recover its deferred tax assets, the Company considers all available positive and negative evidence including its past operating results, the existence of cumulative income in the most recent fiscal years, changes in the business in which the Company operates and its forecast of future taxable income.
+Added: In determining future taxable income, the Company is responsible for assumptions utilized including the amount of Irish and non-Irish pre ‑tax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies.
These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that the Company is using to manage the underlying business.
5 unchanged sentences
Comprehensive loss consists of net loss and other comprehensive loss.
−Removed: Other comprehensive loss includes changes in equity that are excluded from net loss, such as unrealized holding gains and losses on available‑for‑sale marketable securities.
+Added: Other comprehensive loss includes changes in equity that are excluded from net loss, such as unrealized holding gains and losses on available‑for‑sale investments.
Loss Per Share
18 unchanged sentences
To date, COVID-19 has surfaced in nearly all regions around the world and resulted in travel restrictions and business slowdowns and/or shutdowns in affected areas.
−Removed: states, and many local jurisdictions and countries around the world, including Ireland, have, at times during the pandemic, issued “shelter-in-place” orders, quarantines, executive orders and similar government orders, restrictions, and recommendations for their residents to control the spread of COVID-19.
−Removed: Such orders, restrictions and/or recommendations, and/or the perception that additional orders, restrictions or recommendations could occur, have resulted in widespread closures of businesses, including healthcare systems that serve people living with opioid dependence, alcohol dependence and schizophrenia, work stoppages, slowdowns and/or delays, work-from-home policies and travel restrictions, among other effects.
−Removed: The Company continues to closely monitor and rapidly respond to the ongoing impact of COVID-19 on its employees, communities and business operations.
−Removed: Due to numerous uncertainties surrounding the ongoing COVID-19 pandemic, the actual impact on the Company’s financial condition and operating results resulting from the pandemic may differ from current projections.
+Added: Ireland, all U.S.
+Added: states, and many local jurisdictions and countries around the world have, at times during the pandemic, issued and implemented quarantines, vaccine and masking mandates, restrictive executive orders and other similar government orders, restrictions, and recommendations for their residents to help control the spread of COVID-19, and may continue to do so while the pandemic persists.
+Added: Such orders, mandates, restrictions and/or recommendations, and/or the perception that additional orders, mandates, restrictions or recommendations could occur, 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.
+Added: The Company continues to closely monitor and respond to the ongoing impact of COVID-19 on its employees, communities and business operations, and has adopted, and adapted as needed, a series of precautionary measures in an effort to protect its
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: uncertainties include, among other things, the ultimate severity and duration of the pandemic;
−Removed: governmental, business or other actions that have been, are being or will be, taken in response to the pandemic, including restrictions on travel and mobility, business closures and operating restrictions, and imposition of social distancing measures;
−Removed: impacts of the pandemic on the Company’s employees, the vendors or distribution channels in the Company’s supply chain and on the Company’s ability to continue to manufacture its products;
−Removed: impacts of the pandemic on the conduct of the Company’s clinical trials, including with respect to enrollment rates, availability of investigators and clinical trial sites, and monitoring of data;
−Removed: impacts of the pandemic on healthcare systems that serve people living with opioid dependence, alcohol dependence and schizophrenia;
+Added: employees and mitigate the potential spread of COVID-19 in a community setting.
+Added: For example, at the start of the pandemic, the Company instituted a global remote work policy for those of its employees who were able to work remotely.
+Added: At the same time, the Company worked to continue its critical business functions, including operation of its manufacturing facilities and its laboratories, and continued to conduct its discovery efforts and supply its medicines.
+Added: For those of its employees who continued to work on-site in its laboratories and manufacturing facilities, the Company instituted additional safety precautions, including increased sanitization of its facilities, use of personal protective equipment, implementation of a daily health screening application and physical distancing practices.
+Added: The Company provided employees with COVID-19 vaccine information and sponsored vaccine clinics in Massachusetts and Ohio for its employees and their families.
+Added: The Company also took actions to support people living with opioid dependence, alcohol dependence, schizophrenia and bipolar I disorder to help support their access to information, resources and medicines that may assist in their treatment.
+Added: Certain of the Company’s field-based employees have resumed in-person interactions, and certain of its office-based employees have returned to the office, in each case on a voluntary basis and in accordance with location-specific guidance.
+Added: The Company is planning for a larger-scale return to the office and has developed flexible work arrangement guidelines to help balance business needs, employee health, wellbeing and safety and the evolving work environment.
+Added: The Company will continue to monitor guidance from local health authorities as the Company increases in-person interactions.
+Added: A number of the marketed products from which the Company derives revenue, including manufacturing and royalty revenue, are injectable medications administered by healthcare professionals.
+Added: Given developments that have transpired to date, and may continue to transpire, in response to the pandemic, including business closures, travel restrictions, quarantine, testing and/or vaccine mandates and other protocol, labor shortages, and other restrictive measures, commercial sales of these marketed products have been adversely impacted to varying degrees during the pandemic and may continue to be adversely impacted while the pandemic persists.
+Added: The COVID-19 pandemic has caused, and we expect may continue to cause, varying degrees of disruption to our employees and our business operations.
+Added: While the Company has continued to operate its manufacturing facilities and supply its medicines without interruption throughout the pandemic, we have at times during the pandemic experienced labor or supply chain disruptions at our manufacturing facilities, and may continue to experience such disruptions while the pandemic persists.
+Added: In addition, while the Company has continued to conduct R&D activities, including its ongoing clinical trials, the COVID-19 pandemic has at times impacted the timelines of certain of its early-stage discovery efforts and clinical trials, and may continue to impact such timelines while the pandemic persists.
+Added: The Company works with its internal teams, its clinical investigators, R&D vendors and critical supply chain vendors to continually assess, and mitigate, the potential impact of COVID-19 on its manufacturing operations and R&D activities.
+Added: Due to numerous uncertainties surrounding the ongoing COVID-19 pandemic, the actual impact of the pandemic on the Company’s financial condition and operating results may differ from its current projections.
+Added: These uncertainties include, among other things, the ultimate severity and duration of the pandemic and the manner in which it continues to evolve, including the emergence, prevalence and severity of 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 the pandemic, including restrictions on travel and mobility, business closures and operating restrictions, including the imposition of vaccine and masking mandates and/or mandatory testing policies;
+Added: impacts of the pandemic and of imposition of such mandates and protocols in response to the pandemic on its employees, including with regard to their health, safety, wellbeing and job performance, on the labor market more broadly and on the Company’s ability to attract and retain employees ;
+Added: impacts of the pandemic on the vendors or distribution channels in its supply chain and on its ability to continue to manufacture its products;
+Added: impacts of the pandemic on the conduct of its clinical trials, including with respect to enrollment rates, availability of investigators and clinical trial sites, and monitoring of data;
+Added: 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 the Company interacts in the development, review, approval and commercialization of its medicines;
−Removed: impacts of the pandemic on reimbursement for the Company’s products, including the Company’s Medicaid rebate liability, and for services related to the use of its products;
−Removed: and impacts of the pandemic on the U.S., Irish and global economies more broadly.
−Removed: The Company relies upon third parties for many aspects of its business, including the provision of goods and services related to the manufacture of its clinical products and its and its partners’ marketed products, the conduct of its clinical trials, and the sale of marketed products from which the Company receives manufacturing and royalty revenue.
−Removed: Any prolonged material disruption to the third parties on which the Company relies could negatively impact the Company’s ability to conduct business in the manner and on the timelines presently planned, which could have a material adverse impact on the Company’s business, results of operations and financial condition.
−Removed: The marketed products from which the Company derives revenue, including manufacturing and royalty revenue, are primarily injectable medications administered by healthcare professionals.
−Removed: Given developments that have transpired to date, and may continue to transpire, in response to the pandemic, including the implementation of “shelter-in-place” policies, social distancing requirements and other restrictive measures, commercial sales of these marketed products have been adversely impacted to varying degrees and the Company expects commercial sales of these marketed products to continue to be adversely impacted while the pandemic persists.
−Removed: As it relates to the Company’s proprietary marketed products, during the three months ended December 31, 2020, the Company saw a decrease of 5 % in the number of VIVITROL units sold compared to the three months ended September 30, 2020.
−Removed: ARISTADA units sold during the three months ended December 31, 2020 increased 12 % compared to the three months ended September 30, 2020.
−Removed: During the three months ended December 31, 2020, the Company continued to take actions to support uninterrupted access to its proprietary marketed products.
−Removed: However, the Company currently expects commercial sales of its marketed products, particularly VIVITROL, to continue to be impacted by the COVID-19 pandemic over the next few quarters.
−Removed: These items are discussed in greater detail in the “Results of Operations” section in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report.
−Removed: The Company continues to operate its manufacturing facilities and supply its medicines.
−Removed: While the Company continues to conduct R&D activities, including its ongoing clinical trials, the COVID-19 pandemic has impacted, and may continue to impact, the timelines of certain of its early-stage discovery efforts and clinical trials.
−Removed: The Company is working with its internal teams, its clinical investigators, R&D vendors and critical supply chain vendors to continually assess, and mitigate, any potential adverse impacts of COVID-19 on its manufacturing operations and R&D activities.
+Added: impacts of the pandemic on reimbursement for the Company’s products, including its Medicaid rebate liability, and for services related to the use of its products;
+Added: and impacts of the pandemic on the Irish, U.S.
+Added: and global economies more broadly.
+Added: For additional information about risks and uncertainties related to the COVID-19 pandemic that may impact the Company’s business, financial condition or results of operations, see “Part I, Item 1A—Risk Factors” in this Annual Report and specifically the section entitled “—Our business, financial condition and results of operations have been, and may continue to be, adversely affected by the ongoing COVID-19 pandemic or other similar outbreaks of contagious diseases.
New Accounting Pronouncements
1 unchanged sentence
Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.
−Removed: Recently Adopted Accounting Pronouncements
−Removed: The Company adopted ASU 2014-09, Topic 606, as of January 1, 2018 , using the modified retrospective method for all contracts not completed as of the date of adoption.
−Removed: The Company adopted ASU 2016-02, Leases (“Topic 842”), as of January 1, 2019 , using the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and did not restate prior periods.
−Removed: In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments , to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.
−Removed: To achieve this objective, the amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
−Removed: This ASU was adopted by the Company in the year ended December 31, 2020 .
−Removed: This standard primarily impacts how firms
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: account for credit losses and requires an impairment model, known as the current expected credit loss model (“CECL”), that is based on expected losses rather than incurred losses.
−Removed: Companies are required to carry an allowance for expected credit losses for most debt instruments (except those carried at fair value), trade receivables, certain lease receivables, reinsurance receivables, financial guarantee contracts and loan commitments.
−Removed: Available- for - sale debt securities are largely scoped out of th is guidance.
−Removed: The Company’s investment portfolio primarily consists of available- for - sale securities carried at fair value.
−Removed: Further, the Company’s trade receivables do not have abnormally long terms and the Company has rarely ever written off trade receivables.
−Removed: The adoption of this ASU did not have an impact on the Company’s consolidated financial statements.
−Removed: In August 2018, the FASB issued ASU 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which aims to improve the effectiveness of fair value measurement disclosures.
−Removed: The amendments in this ASU modify the disclosure requirements on fair value measurements based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting - Chapter 8:
−Removed: Notes to Financial Statements, including the consideration of costs and benefits.
−Removed: This ASU was adopted by the Company in the year ended December 31, 2020 and did not have a material impact on the Company’s consolidated financial statements.
−Removed: In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).
−Removed: This ASU also requires the entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals.
−Removed: This ASU was adopted by the Company in the year ended December 31, 2020 , using the prospective transition method, whereby it applied the requirements to any eligible costs incurred after adoption.
−Removed: The adoption of this ASU did not have an impact on the Company’s consolidated financial statements.
−Removed: In November 2018, the FASB issued ASU 2018-18, Clarifying the Interaction Between Topic 808 and Topic 606 , which clarifies when transactions between participants in a collaborative arrangement are within the scope of the FASB’s revenue standard, Topic 606.
−Removed: This ASU was adopted by the Company in the year ended December 31, 2020 and after review of its collaborative arrangements, the Company determined that there are no collaborative arrangements that are considered within the scope of this standard.
−Removed: In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles of ASC 740, Income Taxes .
−Removed: The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.
−Removed: Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis.
−Removed: This ASU was adopted by the Company in the year ended December 31, 2020 and the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
−Removed: New Accounting Pronouncements not Adopted
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform , which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.
This amendment applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.
−Removed: This ASU became effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022.
−Removed: The Company is currently assessing the impact that this ASU may have on its consolidated financial statements.
+Added: This ASU became effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: evaluated on or before December 31, 2022.
+Added: The Company believes this ASU will not have a material impact on its consolidated financial statements .
REVENUE FROM CONTRACTS WITH CUSTOMERS
4 unchanged sentences
Total product sales, net
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During the years ended December 31, 2021, 2020 and 2019, the Company recorded manufacturing and royalty revenues from its collaboration arrangements as follows:
3 unchanged sentences
Royalty Revenue
−Removed: INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA
+Added: Long-acting INVEGA products
RISPERDAL CONSTA
4 unchanged sentences
Royalty Revenue
−Removed: INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA
+Added: Long-acting INVEGA products
RISPERDAL CONSTA
4 unchanged sentences
Royalty Revenue
−Removed: INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA
+Added: Long-acting INVEGA products
RISPERDAL CONSTA
AMPYRA/FAMPYRA
−Removed: The research and development revenue and license revenue recorded during the years ended December 31, 2020, 2019 and 2018 primarily related to revenue earned under the Company’s license and collaboration agreement with Biogen for VUMERITY.
−Removed: In addition to the research and development revenue and license revenue, during the year ended December 31, 2020, 2019 and 2018 the Company recognized $ 22.5 million.
−Removed: $ 1.0 million and no ne, respectively, of manufacturing and royalty revenue related to VUMERITY.
+Added: In November 2021, the Company received notice of partial termination in the U.S.
+Added: of its license agreement with Janssen related to INVEGA SUSTENNA, INVEGA TRINZA, and INVEGA HAFYERA.
+Added: The basis for this termination is Janssen’s assertion that it does not utilize the Company’s NanoCrystal technology licensed under the license agreement.
+Added: The Company strongly disagrees with Janssen’s position and is prepared to pursue all options at its disposal to enforce its contractual rights and address any unauthorized use of its intellectual property.
+Added: When the termination became effective in February 2022, the Company stopped recognizing royalty revenue related to net sales of INVEGA SUSTENNA, INVEGA TRINZA, and INVEGA HAFYERA in the U.S.
+Added: The research and development revenue and license revenue recorded during the year ended December 31, 2019 primarily related to revenue earned under the Company’s license and collaboration agreement with Biogen for VUMERITY.
+Added: Except in limited circumstances, the Company was responsible for the development of VUMERITY until it was approved by the FDA.
+Added: Following FDA approval of VUMERITY in October 2019, and except for the manufacturing responsibilities discussed below, Biogen is now
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: responsible for development and commercialization activities for VUMERITY and other products covered by patents licensed to Biogen.
Under a license and collaboration agreement with Biogen, which the Company entered into in November 2017 and amended in October 2018, January 2019 and October 2019, the Company granted Biogen a worldwide, exclusive, sublicensable license to develop, manufacture and commercialize VUMERITY and other products covered by patents licensed to Biogen under the agreement.
−Removed: Upon entering into the license and collaboration agreement, the Company received an up-front cash payment of $ 28.0 million and was also eligible to receive additional payments upon achievement of developmental milestones with respect to VUMERITY.
−Removed: In June 2018, the Company received an additional cash payment of $ 50.0 million following Biogen’s review of preliminary gastrointestinal tolerability data from the clinical development program for VUMERITY.
−Removed: In November 2019, the Company received an additional payment of $ 150.0 million following the U.S.
−Removed: Food and Drug Administration’s (“FDA”) approval of the New Drug Application (“NDA”) for VUMERITY and transfer of such NDA to Biogen.
−Removed: The Company is also eligible to receive additional payments upon achievement of developmental milestones with respect to the first two products other than VUMERITY covered by patents licensed to Biogen under the license and collaboration agreement.
−Removed: Biogen paid a portion of the VUMERITY development costs the Company incurred in 2017 and, in January 2018, Biogen became responsible for all VUMERITY development costs that the Company incurred, subject to annual budget limitations.
+Added: Under the license and collaboration agreement, the Company received an up-front cash payment and was also eligible to receive additional payments upon achievement of certain milestones with respect to VUMERITY.
+Added: In November 2019, the Company received a payment of $ 150.0 million following the FDA approval of the New Drug Application (“NDA”) for VUMERITY and transfer of such NDA to Biogen.
+Added: The Company is also eligible to receive additional payments upon achievement of other milestones, including development milestones with respect to the first two products other than VUMERITY covered by patents licensed to Biogen under the license and collaboration agreement.
+Added: In January 2018, Biogen became responsible for all VUMERITY development costs that the Company incurred, subject to annual budget limitations.
Following FDA approval of the NDA for VUMERITY in October 2019, the NDA and any further development responsibilities with respect to VUMERITY were transferred to Biogen.
6 unchanged sentences
The deliverables, aside from the participation in the joint steering committee which was considered to be perfunctory, were determined to be separate performance obligations as the license is separately identifiable from the development services and clinical supply, and the development services are not expected to significantly modify or customize the IP.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company allocated the arrangement consideration to each performance obligation using the standalone selling prices based on its estimate of selling price for the license and other deliverables.
1 unchanged sentence
To estimate the standalone selling price of the license, the Company assessed the likelihood of the FDA’s approval of VUMERITY and estimated the expected future cash flows assuming FDA approval and maintenance of the IP protecting VUMERITY.
−Removed: The Company then discounted these cash flows using a discount rate of 8.0 %, which it believes captures a market participant’s view of the risk associated with the expected cash flows.
+Added: The Company then discounted these cash flows using a discount rate of 8.0 %, which it believed captures a market participant’s view of the risk associated with the expected cash flows.
The estimate of selling price of the development services and clinical supply were determined through third-party evidence.
The Company believes that a change in the assumptions used to determine its estimate of selling price for the license most likely would not have a significant effect on the allocation of consideration transferred.
−Removed: Under Topic 606, the Company allocated the $ 28.0 million up-front payment and the $ 50.0 million June 2018 payments as follows:
−Removed: $ 27.0 million and $ 48.3 million to the delivery of the license;
−Removed: $ 0.9 million and $ 1.5 million to future development services;
−Removed: and $ 0.1 million and $ 0.2 million to clinical supply, respectively.
The Company allocated the $ 150.0 million milestone payment received in November 2019 to the relevant performance obligations as follows:
11 unchanged sentences
Under the license and collaboration agreement, Biogen appointed the Company as the toll manufacturer of clinical and commercial supplies of VUMERITY, subject to Biogen’s right to manufacture or have manufactured commercial supplies as a back-up manufacturer and subject to good faith agreement by the parties on the terms of such manufacturing arrangements.
−Removed: In October 2019, the Company entered into a commercial supply agreement with Biogen for the commercial supply of VUMERITY, an amendment to such commercial supply agreement and an amendment to the November 2017 license and collaboration agreement with Biogen.
−Removed: Under these agreements, Biogen has an option to assume responsibility, subject to a transition period, for the manufacture (itself or through a designee) of clinical supplies of VUMERITY and up to 100 % of commercial supplies of VUMERITY in exchange for an increase in the royalty rate to be paid by Biogen to the Company on net sales of that portion of product that is manufactured by Biogen or its designee.
+Added: In October 2019, the Company entered into a commercial supply agreement with Biogen for the commercial supply of VUMERITY, an
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: amendment to such commercial supply agreement and an amendment to the November 2017 license and collaboration agreement with Biogen.
+Added: Under these agreements, Biogen elected to initiate a technology transfer relating to the manufacture of VUMERITY (the “Tech Transfer”) and, following a transition period, to assume responsibility for the manufacture (itself or through a designee) of clinical supplies of VUMERITY and up to 100 % of commercial supplies of VUMERITY in exchange for an increase in the royalty rate to be paid by Biogen to the Company on net sales of that portion of product that is manufactured by Biogen or its designee.
The Company evaluated the commercial supply agreement and the related amendments under Topic 606 and determined that these agreements should be combined and accounted for as a separate contract since the commercial supply agreement and amendment to the November 2017 license and collaboration agreement were negotiated together to achieve a common economic objective and the additional performance obligations under the commercial supply agreement are considered distinct obligations priced at their standalone selling prices.
−Removed: The Company determined that it had two separate performance obligations, the commercial supply of VUMERITY and, upon an election by Biogen to commence a transfer of technology relating to the manufacture of VUMERITY (the “Tech Transfer”), services to be performed by the Company in connection with such Tech Transfer.
+Added: The Company determined that it had two separate performance obligations, the commercial supply of VUMERITY and services to be performed by the Company in connection with the Tech Transfer.
There are other deliverables under the agreements that were determined to be perfunctory or immaterial.
In connection with the entry into the commercial supply agreement and the related amendments, the Company received payments in the aggregate amount of $ 5.8 million in the fourth quarter of 2019 and the Company will be eligible to receive an additional $ 5.0 million payment upon the earlier of successful completion of the Tech Transfer or a date in the fourth quarter of 2022.
−Removed: The $ 5.8 million received in the fourth quarter of 2019 plus amounts received in connection with the Tech Transfer will be allocated to each of the performance obligations using the standalone selling prices based on the Company’s estimate of selling price for the commercial supply of VUMERITY and the services related to the Tech Transfer, and this additional arrangement consideration will
+Added: The $ 5.8 million received in the fourth quarter of 2019 plus amounts that will be received in connection with the Tech Transfer are allocated to each of the performance obligations using the standalone selling prices based on the Company’s estimate of selling price for the commercial supply of VUMERITY and the services related to the Tech Transfer, and this additional arrangement consideration will be recognized as the Company delivers commercial supply of VUMERITY and/or provides services relating to the Tech Transfer.
+Added: The Company began performing under this commercial supply agreement in 2020.
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: be recognized as the Company delivers commercial supply of VUMERITY and/or provides services relating to the Tech Transfer.
−Removed: The Company began performing under this commercial supply agreement in 2020.
Investments consist of the following:
7 unchanged sentences
government and agency debt securities
−Removed: International government agency debt securities
−Removed: Held-to-maturity securities:
−Removed: Fixed term deposit account
+Added: government debt securities
Total short-term investments
2 unchanged sentences
Corporate debt securities
−Removed: International government agency debt securities
+Added: government and agency debt securities
+Added: government debt securities
Held-to-maturity securities:
7 unchanged sentences
government and agency debt securities
−Removed: International government agency debt securities
+Added: government debt securities
+Added: Held-to-maturity securities:
+Added: Fixed term deposit account
Total short-term investments
2 unchanged sentences
Corporate debt securities
−Removed: International government agency debt securities
−Removed: government and agency debt securities
+Added: government debt securities
Held-to-maturity securities:
Certificates of deposit
−Removed: Fixed term deposit account
Total long-term investments
Total investments
−Removed: At December 31, 2020, the Company reviewed its investment portfolio to assess whether the unrealized losses on its available-for-sale investments were other-than-temporary.
−Removed: Investments with unrealized losses consisted primarily of corporate debt securities and debt securities issued by foreign agencies and backed by foreign governments.
−Removed: In making the determination whether the decline in fair value of these securities was other-than-temporary, the Company evaluated whether it intended to sell the security and whether it was more likely than not that the Company would be required to sell the security before recovering its amortized cost basis.
−Removed: If the Company intends to sell a security, or it is more likely than not that the Company would be required to sell a security prior to recovering its amortized cost basis, an other-than-temporary impairment is deemed to have occurred.
−Removed: The amount of an other-than-temporary impairment related to a credit loss, or investments that the Company intends to sell before recovery, is recognized in earnings.
−Removed: The amount of an other-than-temporary impairment on available-for-sale investments related to other factors is recorded as a component of accumulated other comprehensive income.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: At December 31, 2021, the Company reviewed its investment portfolio to assess whether the unrealized losses on its available-for-sale investments were temporary.
+Added: Investments with unrealized losses consisted primarily of corporate debt securities and debt securities issued by non-U.S.
+Added: agencies and backed by non-U.S.
+Added: In making the determination whether the decline in fair value of these securities were temporary, the Company evaluated whether it intended to sell the security and whether it was more likely than not that the Company would be required to sell the security before recovering its amortized cost basis.
In September 2019, the Company purchased $ 1.9 million of convertible promissory notes from Synchronicity Pharma, Inc.
(“Synchronicity”), a related party.
−Removed: The notes mature on the earlier of June 30, 2021 or the closing of a preferred equity financing or closing of a merger, business combination or sale of stock resulting in Synchronicity’s stockholders owning less than 50 % of the surviving entity.
−Removed: The note is classified as a corporate debt instrument and is classified as available-for-sale.
−Removed: During the year ended December 31, 2020, the Company recorded an other-than-temporary credit loss of $ 1.0 million against the value of this investment.
−Removed: The loss was recorded within “Other income (expense), net” in the accompanying consolidated statements of operations and comprehensive loss.
+Added: The notes were due to mature on the earlier of June 30, 2021 , the closing of a preferred equity financing, the closing of a merger, business combination or sale of stock resulting in Synchronicity’s stockholders owning less than 50 % of the surviving entity, or an event of default.
+Added: During the year ended December 31, 2021 and 2020, the Company recorded an other-than-temporary credit loss of $ 0.9 million and $ 1.0 million, respectively, against the value of this investment and at December
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: 31, 2021, this investment was fully impaired .
+Added: The loss es w ere recorded within “Other income (expense), net” in the accompanying consolidated statements of operations and comprehensive loss.
+Added: In January 2022, the Company purchased $ 0.5 million of convertible promissory notes from Synchronicity that mature on the earlier of September 30, 2022 , the closing of a preferred equity financing , the closing of a merger, business combination or sale of stock resulting in Synchronicity’s stockholders owning less than 50 % of the surviving entity , or an event of default .
In May 2014, the Company entered into an agreement whereby it is committed to provide up to € 7.4 million to a partnership, Fountain Healthcare Partners II, L.P.
3 unchanged sentences
During the year ended December 31, 2020, two of the companies within the Fountain portfolio were acquired by third parties.
−Removed: The Company’s proportional share of the proceeds from these transactions was $ 11.1 million, of which $ 10.4 million was received in September 2020 and $ 0.7 million is being held in escrow.
−Removed: The Company expects to collect the funds in escrow in 2021.
+Added: The Company’s proportional share of the proceeds from these transactions was $ 11.1 million, of which $ 10.4 million was received during the year ended December 31, 2020 and the remaining $ 0.7 million was received during the year ended December 31, 2021.
The transactions were accounted for under the cumulative earnings approach whereby the return on investment of $ 8.3 million was recorded as a gain within “Other income (expense), net” in the accompanying consolidated statements of operations and comprehensive loss and the return of investment of $ 2.8 million was recorded as a reduction in the Company’s net investment in Fountain.
The Company’s net investment in Fountain was $ 6.1 million and $ 6.2 million at December 31, 2021 and 2020, respectively, and was included within “Other assets” in the accompanying consolidated balance sheets.
−Removed: During the years ended December 31, 2020, 2019 and 2018, the Company recorded an increase in its investment in Fountain of $ 0.3 million, a reduction of $ 0.4 million and an increase of $ 0.5 million, respectively, which represented the Company’s proportional share of Fountain’s net gains or losses for such periods.
−Removed: Realized gains and losses on the sales and maturities of marketable securities, which were identified using the specific identification method, were as follows:
+Added: During the years ended December 31, 2021, 2020 and 2019, the Company recorded a decrease in its investment in Fountain of $ 0.4 million, an increase of $ 0.3 million and a decrease of $ 0.4 million, respectively, which represented the Company’s proportional share of Fountain’s net gains or losses for such periods.
+Added: Realized gains and losses on the sales and maturities of investments, which were identified using the specific identification method, were as follows:
Year Ended December 31,
(In thousands)
−Removed: Proceeds from the sales and maturities of marketable securities
+Added: Proceeds from the sales and maturities of investments
Realized gains
6 unchanged sentences
After 1 year through 5 years
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy and the valuation techniques the Company utilized to determine such fair value:
(In thousands)
−Removed: Cash equivalents
government and agency debt securities
Corporate debt securities
−Removed: International government agency debt securities
+Added: government debt securities
Contingent consideration
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Cash equivalents
1 unchanged sentence
Corporate debt securities
−Removed: International government agency debt securities
+Added: government debt securities
Contingent consideration
6 unchanged sentences
Milestone and royalty payments received by the Company related to contingent consideration
−Removed: Royalty payments due to the Company related to contingent consideration
Impairment of corporate debt security
+Added: Royalty payments due to the Company related to contingent consideration
Balance, December 31, 2021
The Company’s investments in U.S.
−Removed: government and agency debt securities, international government agency debt securities and corporate debt securities classified as Level 2 within the fair value hierarchy were initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing market-observable data.
+Added: government and agency debt securities, non-U.S.
+Added: government agency debt securities and corporate debt securities classified as Level 2 within the fair value hierarchy were initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing market-observable data.
The market-observable data included reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events.
6 unchanged sentences
As part of this transaction, Recro’s obligations to pay certain contingent consideration from the Gainesville Transaction were assigned and/or transferred to Baudax.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: In Baudax’s Quarterly Report on Form 10-Q for the period ended September 30, 2020, Baudax included disclosures around its ability to continue as a going concern.
At December 31, 2021, the Company determined the fair value of the contingent consideration to be received as follows:
−Removed: The Company received $ 3.8 million and $ 10.0 million in milestone payments during 2020 and 2019, respectively, and is due to receive an additional $ 1.5 million in June 2021 related to the FDA approval in February 2020 of the NDA for ANJESO, the first Meloxicam Product, and $ 45.0 million in seven equal, annual installments beginning in February 2021, which is the first anniversary of such approval;
+Added: The Company received $ 7.8 million and $ 3.8 million in milestone payments during 2021 and 2020, respectively, and is due to receive an additional $ 38.6 million related to the FDA approval in February 2020 of the NDA for ANJESO in six equal, annual installments from February 2022 through February 2027;
The Company is entitled to receive future royalties on net sales of Meloxicam Products;
2 unchanged sentences
To employ this methodology, the Company used a risk-adjusted expected growth rate based on its assessments of expected growth in net sales of the approved Meloxicam Product, adjusted by an appropriate factor capturing their respective correlation with the market.
−Removed: In order to address the substantial doubt about Baudax’s ability to continue as a going concern, the Company split its fair value analysis into two scenarios and applied an equal weighting to each.
−Removed: In the first scenario, the amounts above were all discounted using a rate of 13 %, which the Company believes captures a market participant’s view of the risk associated with the expected payments assuming Baudax is able to continue as a going concern.
−Removed: In the second scenario, the Company used the undiscounted values derived from the amounts summarized above and applied a recovery rate of 18 %, based on an analysis performed by Moody’s Investor Service regarding recoveries in a pandemic-driven default cycle.
+Added: In Baudax’s Quarterly Report on Form 10-Q for the period ended September 30, 2021, Baudax included disclosures around its ability to continue as a going concern.
+Added: In order to address the substantial doubt about Baudax’s ability to continue as a going concern,
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: the Company split its fair value analysis into two scenarios.
+Added: In the first scenario, the amounts above were all discounted using a rate which the Company believe s captures a market participant’s view of the risk associated with the expected payments assuming Baudax is able to continue as a going concern.
+Added: This scenario received a weighting of 45 %.
+Added: In the second scenario, the Company used the undiscounted values derived from the amounts summarized above and applied a recovery rate of 18 %, based largely on an analysis performed by Moody’s Investor Service regarding recoveries in a pandemic-driven default cycle.
+Added: This scenario received a weighting of 55 %.
At December 31, 2021 and 2020, the Company determined that the fair value of the contingent consideration was $ 23.0 million and $ 32.5 million, respectively.
−Removed: At December 31, 2020 and 2019, $ 7.8 million and no ne, respectively, of the fair value of the contingent consideration was included within “Prepaid expenses and other current assets” in the accompanying consolidated balance sheets, and $ 24.7 million and $ 32.4 million, respectively, of the fair value of the contingent consideration was included within “Contingent consideration” in the accompanying consolidated balance sheets.
−Removed: The Company recorded an increase of $ 3.9 million, and decreases of $ 22.8 million and $ 19.6 million during the years ended December 31, 2020, 2019 and 2018, respectively, within “Change in the fair value of contingent consideration” in the accompanying consolidated statements of operations and comprehensive loss.
+Added: At December 31, 2021 and 2020, $ 6.4 million and $ 7.8 million, respectively, of the fair value of the contingent consideration was included within “Prepaid expenses and other current assets” in the accompanying consolidated balance sheets, and $ 16.6 million and $ 24.7 million, respectively, of the fair value of the contingent consideration was included within “Contingent consideration” in the accompanying consolidated balance sheets.
+Added: Changes in the fair value of the contingent consideration are recorded within “Change in the fair value of contingent consideration” in the accompanying consolidated statements of operations and comprehensive loss.
The carrying amounts reflected in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, contract assets, other current assets, accounts payable and accrued expenses, approximate fair value due to their short-term nature.
−Removed: The estimated fair value of the Company’s long-term debt under the 2023 Term Loans, which was based on quoted market price indications (Level 2 in the fair value hierarchy) and which may not be representative of actual values that could have been, or will be, realized in the future, was $ 275.1 million and $ 277.9 million at December 31, 2020 and 2019, respectively.
−Removed: Please refer to Note 11, Long-Term Debt within these “Notes to Consolidated Financial Statements” in this Annual Report.
+Added: The estimated fair value of the Company’s long-term debt under the 2026 Term Loans (as defined in Note 11, Long-Term Debt within these “Notes to Consolidated Financial Statements” in this Annual Report), which was based on quoted market price indications (Level 2 in the fair value hierarchy) and which may not be representative of actual values that could have been, or will be, realized in the future, was $ 285.8 million at December 31, 2021.
+Added: The estimated fair value of the Company’s long-term debt under the 2023 Term Loans (as defined in Note 11, Long-Term Debt within these “Notes to Consolidated Financial Statements” in this Annual Report), which was based on quoted market price indications (Level 2 in the fair value hierarchy) and which may not be representative of actual values that could have been, or will be, realized in the future, was $ 275.1 million at December 31, 2020.
Inventory consists of the following:
5 unchanged sentences
At December 31, 2021 and 2020, the Company had $ 25.1 million and $ 26.5 million, respectively, of finished goods inventory located at its third‑party warehouse and shipping service provider.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: In November 2020, the Company received a complete response letter, which included a request for information, from the FDA regarding the LYBALVI (formerly referred to as ALKS 3831) NDA, following the FDA’s remote review of manufacturing records to the manufacture of LYBALVI at the Company’s Wilmington, Ohio facility.
−Removed: The NDA was resubmitted in December 2020 and the assigned the NDA a Prescription Drug User Fee Act target action date of June 1, 2021.
−Removed: In the third quarter of 2020, the Company capitalized a total of $ 15.3 million of LYBALVI inventory in advance of regulatory approval, of which $ 6.3 million was subsequently expensed in the fourth quarter of 2020 as the Company determined that certain lots were no longer probable of being sold commercially.
−Removed: As of December 31, 2020 and 2019, the carrying value of inventory included $ 13.8 million and none , respectively, associated with LYBALVI, which was capitalized in advance of regulatory approval.
+Added: At December 31, 2020, the carrying value of inventory included $ 13.8 million associated with LYBALVI, which was capitalized in advance of its regulatory approval in May 2021 and its launch in October 2021.
PROPERTY, PLANT AND EQUIPMENT
−Removed: Property, plant and equipment consist of the following:
+Added: Property, plant and equipment consists of the following:
(In thousands)
6 unchanged sentences
Depreciation expense was $ 40.5 million, $ 42.4 million and $ 40.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: Also, during the years ended December 31, 2020, 2019 and 2018, the Company wrote off furniture, fixtures and equipment that had an approximate carrying value of less than $ 0.1 million, $ 0.9 million and $ 0.5 million, respectively, at the time of disposition.
+Added: Also, during the years ended December 31, 2021, 2020 and 2019, the Company wrote off furniture, fixtures and
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: equipment that had a n approximate carrying value of $ 0.1 million, less than $ 0.1 million and $ 0.9 million, respectively, at the time of disposition.
Amounts included as construction in progress in the consolidated balance sheets primarily include capital expenditures at the Company’s manufacturing facility in Wilmington, Ohio.
−Removed: Approximately $ 24.2 million of the construction in progress balance at December 31, 2020 relates to certain building and equipment that the Company would place into service upon approval by the FDA of the NDA for LYBALVI.
The Company continues to evaluate its manufacturing capacity based on expectations of demand for its products and will continue to record such amounts within construction in progress until such time as the underlying assets are placed into service.
1 unchanged sentence
GOODWILL AND INTANGIBLE ASSETS
−Removed: Goodwill and intangible assets consist of the following:
+Added: Goodwill and intangible assets consists of the following:
December 31, 2021
10 unchanged sentences
Collaboration agreements
−Removed: NanoCrystal technology
−Removed: OCR (1) technologies
−Removed: (1) OCR refers to the Company’s oral control led release technologies.
−Removed: The Company’s finite‑lived intangible assets consist of collaborative agreements and the NanoCrystal and OCR technologies acquired as part of the EDT acquisition.
+Added: Capitalized IP
+Added: The Company’s finite‑lived intangible assets consist of collaborative agreements and the NanoCrystal and oral controlled release technologies acquired as part of the EDT acquisition.
The Company recorded $ 38.1 million, $ 39.5 million and $ 40.4 million of amortization expense related to its finite‑lived intangible assets during the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: Based on the Company’s most recent analysis, amortization of intangible assets included within its consolidated balance sheets at December 31, 2020 is expected to be approximately $ 40.0 million, $ 35.0 million, $ 35.0 million, $ 1.0 million and none in the years ending
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: December 31, 20 2 1 through 202 5 , respectively.
+Added: Based on the Company’s most recent analysis, amortization of intangible assets included within its consolidated balance sheets at December 31, 2021 is expected to be approximately $ 35.0 million, $ 35.0 million and $ 1.0 in the years ending December 31, 2022, 2023, and 2024, respectively.
Although the Company believes such available information and assumptions are reasonable, given the inherent risks and uncertainties underlying its expectations regarding such future revenues, there is the potential for the Company’s actual results to vary significantly from such expectations.
1 unchanged sentence
The Company performed its annual goodwill impairment test as of October 31, 2021.
−Removed: The Company elected to perform a quantitative impairment test and determined that the fair value of the reporting unit exceeded its carrying value.
−Removed: Leases are recorded in accordance with FASB Topic 842, which the Company adopted on January 1, 2019 under the modified retrospective transition method.
−Removed: The Company determines if an arrangement includes a lease at the inception of the agreement.
−Removed: For each of the Company’s lease arrangements, a right-of-use asset representing its right to use an underlying asset for the lease term and a lease liability representing its obligation to make lease payments are recorded.
−Removed: Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the net present value of lease payments over the term of the lease.
−Removed: See “Item 2—Properties” in this Annual Report for a description of the significant operating leases of offices and laboratory space the Company had as of December 31, 2020.
−Removed: The Company did not assume lease extension options would be exercised in its right-of-use asset and lease liability amounts.
−Removed: The Company has three additional operating leases that are included in its lease accounting but are not considered significant.
−Removed: The Company determined that the identified operating leases did not contain non-lease components and required no further allocation of the total lease cost.
−Removed: Additionally, the agreements in place did not contain information to determine the rate implicit in the leases.
−Removed: As such, the Company calculated the incremental borrowing rate based on the assumed remaining lease term for each lease in order to calculate the present value of the remaining lease payments.
+Added: The Company elected to perform a qualitative impairment test and based on the weight of all available evidence, determined that the fair value of the reporting unit more-likely-than-not exceeded its carrying value.
+Added: All of the Company’s leases are accounted for as operating leases.
+Added: The Company’s two significant operating leases at December 31, 2021 include the following:
+Added: 900 Winter Street
+Added: The Company leases approximately 231,000 square feet of office and laboratory space located at 900 Winter Street in Waltham, Massachusetts.
+Added: The initial term of the lease commenced on January 20, 2020 , expires in 2035 and includes an option to extend the term for an additional ten-year period.
+Added: 852 Winter Street
+Added: The Company leases approximately 180,000 square feet of corporate office space, administrative areas and laboratories at 852 Winter Street in Waltham, Massachusetts.
+Added: The original lease commenced in 2010 and was extended, at the Company’s option, for five years in 2020.
+Added: The lease extension commenced in March 2021 for 163,000 square feet of space and in September 2021 for the remaining 17,000 square feet of space.
+Added: The lease expires in 2026 and includes a tenant option to extend the term of the lease for an additional five-year period.
At December 31, 2021, the weighted average incremental borrowing rate and the weighted average remaining lease term for the operating leases held by the Company were 5.25 % and 11.7 years, respectively.
−Removed: In July 2020, the Company entered into an amendment to its existing lease at 852 Winter Street, Waltham, Massachusetts (as amended, the “852 Winter Street Lease”).
−Removed: The amendment became effective on October 7, 2020.
−Removed: The 852 Winter Street Lease governs approximately 180,000 square feet of corporate office space, administrative areas and laboratories.
−Removed: The amendment served to, among other things, extend the term of the 852 Winter Street Lease for a period of approximately five years , to commence in March 2021 and expire in April 2026 with respect to approximately 163,000 square feet of the 852 Winter Street Lease premises (the “Base Premises”) and to commence in September 2021 and expire in October 2026 with respect to approximately 17,000 square feet of the 852 Winter Street Lease premises (the “Additional Premises”).
−Removed: The Company expects to make annual lease payments of approximately $ 5.7 million for the Base Premises and $ 0.5 million for the Additional Premises, subject to annual increases.
−Removed: Under the terms of the 852 Winter Street Lease, the Company will have the option to extend the term for an additional five-year period.
−Removed: The Company determined that the amendment did not grant an additional right-of-use and therefore was not deemed to be a separate new lease and that the 852 Winter Street Lease should be reassessed and remeasured as of the effective date of the amendment.
−Removed: The Company accounted for the amendment prospectively.
−Removed: In March 2018, the Company entered into a lease agreement for approximately 220,000 square feet of office and laboratory space located in a building that was to be built at 900 Winter Street, Waltham, Massachusetts (the “900 Winter Street Lease”).
−Removed: The initial term of the lease commenced on January 20, 2020 (the “Commencement Date”) and includes an option to extend the term for an additional ten-year period.
−Removed: As the lease had not commenced as of December 31, 2019 and the Company:
−Removed: (a) did not have the right to obtain or control the leased premises during the construction period;
−Removed: (b) did not have the right of payment for the partially constructed assets, and thus, the partially constructed assets could have potentially been leased to another tenant;
−Removed: and (c) did not legally own or control the land on which the property improvements were being constructed, the lease assets were not included as right-of-use assets at December 31, 2019.
−Removed: The future lease payments outlined below do not include the 900 Winter Street Lease payments as of December 31, 2019 under Topic 842.
−Removed: As of December 31, 2020 and 2019, right-of-use assets arising from operating leases were $ 131.7 million and $ 12.4 million, respectively, and right-of-use liabilities arising from operating leases were $ 135.2 million and $ 13.8 million, respectively.
−Removed: During the year ended December 31, 2020 and 2019, cash paid for amounts included for the measurement of lease liabilities was $ 17.3 million and $ 9.1 million, respectively.
−Removed: The Company recorded operating lease expense of $ 16.3 million, $ 8.1 million and $ 10.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.
+Added: During the years ended December 31, 2021, 2020 and
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: 2019, cash paid for amounts included for the measurement of lease liabilities was $ 16.8 million , $ 16.3 million and $ 9.1 million , respectively .
+Added: T he Company recorded operating lease expense of $ 17.1 millio n , $ 17.3 million and $ 8.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Future lease payments under non-cancelable leases as of December 31, 2021 consisted of the following:
(In thousands)
−Removed: Total lease payments
−Removed: imputed interest
−Removed: Total operating lease liabilities
−Removed: For comparable purposes, future lease payments under non-cancelable leases as of December 31, 2019 consisted of the following:
−Removed: (In thousands)
−Removed: Total lease payments
+Added: Total operating lease payments
imputed interest
1 unchanged sentence
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
−Removed: Accounts payable and accrued expenses consist of the following:
+Added: Accounts payable and accrued expenses consists of the following:
(In thousands)
8 unchanged sentences
2026 Term Loans, due March 12, 2026
+Added: 2023 Term Loans, due March 26, 2023
current portion
Long-term debt
−Removed: 2023 Term Loans
−Removed: In March 2018, the Company amended and refinanced its existing term loan, previously referred to as Term Loan B-1 (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 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 (the “Refinancing”).
−Removed: The Refinancing involved multiple lenders who were considered members of a loan syndicate.
−Removed: In determining whether the Refinancing was to be accounted for as a debt extinguishment or a debt modification, the Company considered whether creditors
+Added: In March 2021, the Company amended and refinanced its existing term loan, previously referred to as the 2023 Term Loans, in order to, among other things, provide for a new class of replacement term loans equal to $ 300.0 million;
+Added: extend the due date of the loan from March 26, 2023 to March 12, 2026 ;
+Added: 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 %;
+Added: and increase covenant flexibility (such refinancing, the “Term Loan Refinancing” and the 2023 Term Loans as so amended and refinanced the “2026 Term Loans”).
+Added: The 2026 Term Loans were also amended to include customary ARRC hardwired benchmark replacement language.
+Added: The 2026 Term Loans have an incremental facility capacity in an amount of $ 175.0 million, plus additional amounts as long as the Company meets certain conditions, including a specified leverage ratio.
+Added: The 2026 Term Loans include a number of restrictive covenants that, among other things and subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and certain of its subsidiaries.
+Added: The 2026 Term Loans also contain customary affirmative covenants and events of default.
+Added: The Company was in compliance with its debt covenants at December 31, 2021.
+Added: The Term Loan Refinancing involved multiple lenders who were considered members of a loan syndicate.
+Added: In determining whether the Term Loan Refinancing was to be accounted for as a debt extinguishment or a debt modification, the Company considered whether creditors remained the same or changed and whether the changes in debt terms were substantial.
+Added: A change in the debt terms was considered to be substantial if the present value of the remaining cash flows under the new terms of the 2026 Term Loans was at least 10 % different from the present value of the remaining cash flows under the 2023 Term Loans (commonly referred to as the “10% Test”).
+Added: The Company performed a separate 10% Test for each individual creditor participating in the loan syndication.
+Added: With the exception of three lenders, who owned between 2 %- 7 % of the total outstanding principal amount of the 2023 Term Loans immediately prior to the Term Loan Refinancing whose holding amounts were accounted for as a debt extinguishment, the Term Loan Refinancing was otherwise accounted for as a debt modification.
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: remained the same or changed and whether the changes in debt terms were substantial.
−Removed: A change in the debt terms was considered to be substantial if the present value of the remaining cash flows under the new terms of the 2023 Term Loans was at least 10 % different from the present value of the remaining cash flows under the former Term Loan B-1 (commonly referred to as the “10% Test”).
−Removed: The Company performed a separate 10% Test for each individual creditor participating in the loan syndication.
−Removed: With the exception of one lender, who owned 1 % of the total outstanding principal amount of Term Loan B-1 at the date of the Refinancing and was accounted for as a debt extinguishment, the Refinancing was accounted for as a debt modification.
−Removed: The Refinancing resulted in a $ 2.3 million charge in the three months ended March 31, 2018, which was included in “Interest expense” in the accompanying consolidated statement of operations and comprehensive loss.
+Added: The Term Loan Refinancing resulted in a $ 2.1 million charge in the year ended December 31, 2021, which was included in “Interest expense” in the accompanying consolidated statement of operations and comprehensive loss.
Scheduled maturities with respect to the 2026 Term Loans are as follows (in thousands):
2 unchanged sentences
To date, the Company has not been required to make any such mandatory prepayments.
−Removed: The 2023 Term Loans have an incremental facility capacity in an amount of $ 175.0 million, plus additional amounts as long as the Company meets certain conditions, including a specified leverage ratio.
−Removed: The 2023 Term Loans include a number of restrictive covenants that, among other things and subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and certain of its subsidiaries.
−Removed: The 2023 Term Loans also contain customary affirmative covenants and events of default.
−Removed: The Company was in compliance with its debt covenants at December 31, 2020.
At December 31, 2021, the Company’s balance of unamortized deferred financing costs and unamortized original issue discount costs were $ 0.6 million and $ 1.3 million, respectively.
These costs are being amortized to interest expense over the estimated repayment period of the 2026 Term Loans using the effective interest method.
−Removed: During each of the years ended December 31, 2020, 2019 and 2018, the Company had amortization expense of $ 0.7 million related to deferred financing costs and original issue discount.
+Added: During each of the years ended December 31, 2021, 2020 and 2019, the Company had amortization expense of $ 0.5 million, $ 0.7 million and $ 0.7 million, respectively, related to deferred financing costs and original issue discount.
LOSS PER SHARE
5 unchanged sentences
Stock options
−Removed: Restricted stock units
+Added: Restricted stock unit awards
SHAREHOLDERS’ EQUITY
24 unchanged sentences
Effective May 20, 2020, the 2018 Plan was amended such that any shares underlying any outstanding awards granted under the 2011 Plan or the 2008 Plan that are forfeited, canceled, repurchased or otherwise terminated (other than by exercise) from and after such date will become available for issuance pursuant to the 2018 Plan, notwithstanding anything to the contrary in the terms of the 2011 Plan or the 2008 Plan.
−Removed: The 2018 Plan allows for the issuance of non-qualified and incentive stock options, restricted stock, restricted stock units, cash-based awards and performance shares to employees, officers and directors of, and consultants to, the Company in such amounts and with such terms and conditions as may be determined by the compensation committee of the Company's board of directors, subject to the provisions of the 2018 Plan, as applicable.
+Added: The 2018 Plan allows for the issuance of non-qualified and incentive stock options, restricted stock, restricted stock unit awards, cash-based awards and performance shares to employees, officers and directors of, and consultants to, the Company in such amounts and with such terms and conditions as may be determined by the compensation committee of the Company's board of directors, subject to the provisions of the 2018 Plan, as applicable.
At December 31, 2021, there were 13.8 million ordinary shares available for issuance in the aggregate under the 2018 Plan.
13 unchanged sentences
At December 31, 2021, the aggregate intrinsic value of stock options exercisable was $ 8.7 million with a weighted average remaining contractual term of 4.7 years.
−Removed: The number of stock options expected to vest was determined by applying the pre‑vesting forfeiture rate to the total outstanding options.
−Removed: The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the stock option.
+Added: The number of stock options expected to vest was determined by applying the pre‑vesting forfeiture rate to the total number of outstanding options.
+Added: The intrinsic value of a stock option is the amount by which the market value of the underlying shares exceeds the exercise price of the stock option.
At December 31, 2021, there was $ 31.3 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 1.9 years.
2 unchanged sentences
The unrecognized compensation cost related to these performance-based stock options was $ 1.1 million at December 31, 2021 and is included in the unrecognized compensation cost noted above.
−Removed: Cash received from option exercises under the Company’s award plans during the years ended December 31, 2020, 2019 and 2018 was $ 8.4 million, $ 18.9 million and $ 20.9 million, respectively.
Time‑Based Restricted Stock Unit Awards
−Removed: A summary of time‑vested RSU activity is presented in the following table:
+Added: A summary of time-based RSU activity is presented in the following table:
Weighted Average
1 unchanged sentence
Unvested, December 31, 2021
−Removed: The weighted average grant date fair value of time‑vested RSUs granted during the years ended December 31, 2020, 2019 and 2018 were $ 20.22 , $ 30.47 and $ 63.01 , respectively.
−Removed: The total fair value of time‑vested RSUs that vested during the years ended December 31, 2020, 2019 and 2018, was $ 45.9 million, $ 42.4 million and $ 34.5 million, respectively.
−Removed: At December 31, 2020, there was $ 61.0 million of total unrecognized compensation cost related to unvested time‑vested RSUs, which will be recognized over a weighted average remaining contractual term of 1.8 years.
+Added: The weighted average grant date fair value of time‑vesting RSUs granted during the years ended December 31, 2021, 2020 and 2019 were $ 20.83 , $ 20.22 and $ 30.47 , respectively.
+Added: The total fair value of time-vesting RSUs that vested during the years ended December 31, 2021, 2020 and 2019, was $ 56.3 million, $ 45.9 million and $ 42.4 million, respectively.
+Added: At December 31, 2021, there was $ 61.8 million of total unrecognized compensation cost related to unvested time-vesting RSUs, which will be recognized over a weighted average remaining contractual term of 1.9 years.
Performance-Based Restricted Stock Unit Awards
−Removed: In February 2020, the compensation committee of the Company’s board of directors approved awards of performance-based RSUs to employees of the Company at the Senior Vice President level and above, in each case subject to vesting on the achievement of certain commercial and R&D performance criteria to be assessed over a performance period of three years from the date of the grant, and subject, at the end of such three-year performance period, to upward or downward adjustment based on a market condition tied to relative share price performance over the three-year performance period.
+Added: In February 2021 and 2020, the compensation committee of the Company’s board of directors approved awards of performance-based RSUs to employees of the Company at the Senior Vice President level and above, in each case subject to vesting based on the achievement of certain financial, commercial and/or R&D performance criteria to be assessed over a performance period of three years from the date of the grant, and subject, at the end of such three-year performance period, to upward or downward adjustment based on a market condition tied to relative share price performance over the three-year performance period.
A summary of performance-based RSU activity is presented in the following table:
2 unchanged sentences
Unvested, December 31, 2021
−Removed: As the performance-based RSUs granted in February 2020 are subject to a market condition, the grant date fair value for such RSUs was based on a Monte Carlo simulation model.
−Removed: At December 31, 2020, the Company believed it probable that commercial performance criteria underlying the RSUs will be met and, accordingly, has recognized share-based compensation expense related to this portion of the performance-based RSUs.
−Removed: At December 31, 2020, the Company did not consider it probable that the performance criteria related to the R&D portion of the awards will be met and has not recognized any additional share-based compensation expense
+Added: The weighted average grant date fair value of performance-based RSUs granted during the years ended December 31, 2021 and 2020 were $ 23.09 and $ 23.43 , respectively.
+Added: The total fair value of performance-based RSUs that vested during the years ended December 31, 2021 and 2020 were $ 4.2 million and none , respectively.
+Added: At December 31, 2021, there was $ 2.7 million of unrecognized compensation cost related to the performance-based RSUs, which would be recognized in accordance with the terms of the award when the Company deems it probable that the performance criteria will be met.
+Added: The unvested awards will expire if it is determined that the performance criteria have not been met during the applicable three-year performance period.
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: related to this portion of the performance-based RSUs.
−Removed: At December 31, 2020, there was $ 10.4 million of unrecognized compensation cost related to the R&D portion of the performance-based RSUs, which would be recognized in accordance with the terms of the award when the Company deems it probable that the performance criteria will be met.
−Removed: The unvested awards will expire if it is determined that the performance criteria have not been met on or before December 31, 2022.
−Removed: In February 2017, the compensation committee of the Company’s board of directors approved awards of RSUs to all employees employed by the Company during 2017, in each case subject to vesting on the achievement of certain performance criteria which were to be assessed over a performance period of three years from the date of the grant (the “2017 Performance Awards”).
−Removed: The grant date fair value of the 2017 Performance Awards was equal to the closing price of the Company’s stock on the Nasdaq Global Select Market on the dates of grant.
−Removed: In December 2018, the Company achieved one such performance criteria, resulting in the vesting of a portion of the 2017 Performance Awards.
−Removed: Prior to December 2018, the Company did not consider it probable that the performance criteria related to the awards would be met and had not recognized any share-based compensation expense related to the 2017 Performance Awards.
−Removed: Once it was deemed probable that certain performance conditions would be achieved, the Company recognized $ 17.1 million in share-based compensation expense related to such awards.
−Removed: The Company recognized $ 2.1 million, $ 6.7 million and $ 8.3 million of this expense in cost of goods manufactured and sold, R&D expense and SG&A expense, respectively.
−Removed: In the first quarter of 2020, the compensation committee of the Company’s board of directors determined the two remaining performance criteria of the 2017 Performance Awards were not achieved.
−Removed: The unvested portion of the 2017 Performance Awards expired as the performance conditions were not met on or before the three year anniversary of the grant date.
RESTRUCTURING
2 unchanged sentences
The Company recorded a charge of $ 13.4 million in the fourth quarter of 2019 as a result of the Restructuring, which consisted of one-time termination benefits for employee severance, benefits and related costs, all of which resulted in cash expenditures and substantially all of which were paid out by December 31, 2020.
−Removed: Restructuring activity during the year ended December 31, 2020 was as follows:
−Removed: (In thousands)
−Removed: Balance, January 1, 2020
−Removed: Amounts paid during the period:
−Removed: Outplacement services
−Removed: Balance, December 31, 2020
−Removed: At December 31, 2020 and 2019, $ 0.5 million and $ 9.0 million of the restructuring accrual were included within “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets, respectively, and none and $ 0.2 million of the restructuring accrual were included within “Other long-term liabilities” in the accompanying consolidated balance sheets, respectively.
+Added: At December 31, 2021 and 2020, none and $ 0.5 million of the restructuring accrual were included within “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets, respectively.
On November 18, 2019 , the Company entered into a definitive agreement to acquire Rodin Therapeutics, Inc.
(“Rodin”), a privately held biopharmaceutical company focused on developing novel, small molecule therapeutics for synaptopathies.
−Removed: The acquisition was completed on November 25, 2019 and, under the terms of the agreement, the Company made an upfront cash payment of $ 98.1 million to Rodin’s former security holders and may make up to $ 850.0 million in future payments, $ 225.0 million of which are triggered upon achievement by the development candidates acquired in the acquisition of Rodin of certain specified clinical milestones, $ 300.0 million of which are triggered by the development candidates acquired in the acquisition of Rodin of certain regulatory milestones and $ 325.0 million of which are triggered upon the attainment of certain sales thresholds.
+Added: The acquisition was completed on November 25, 2019 and, under the terms of the agreement, the Company made an upfront cash payment of $ 98.1 million to Rodin’s former security holders and agreed to make up to $ 850.0 million in future payments, $ 225.0 million of which would be triggered upon achievement by the development candidates acquired in the acquisition of Rodin of certain specified clinical milestones, $ 300.0 million of which would be triggered by the development candidates acquired in the acquisition of Rodin of certain regulatory milestones and $ 325.0 million of which would be triggered upon the attainment of certain sales thresholds.
The Company accounted for the transaction as an asset acquisition, as substantially all of the fair value of Rodin’s gross assets acquired were concentrated in its in-process research and development (“IPR&D”), which was largely in the preclinical stage.
As the IPR&D was determined to not have an alternative future use, the Company recorded a charge to R&D expense in the accompanying consolidated statements of operations and comprehensive loss of $ 86.6 million, which was the amount determined to be the relative fair value of the $ 98.1 million payment attributed to the acquired IPR&D.
−Removed: The Company has not recorded any of the $ 850.0 million in
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: contingent consideration as a liability in the accompanying consolidated balance sheet as none of the future events which would trigger a milestone payment were considered probable of occurring at December 31, 2020 and 2019 .
+Added: In the year ended December 31, 2021, the Company made a $ 25.0 million contingent consideration payment to the former security-holders of Rodin, which was recorded as R&D expense in the accompanying consolidated statements of operations and comprehensive loss.
+Added: The Company has not recorded any of the remaining $ 825.0 million in possible contingent consideration payments as a liability in the accompanying consolidated balance sheet as none of the future events which would trigger a milestone payment were considered probable of occurring at December 31, 2021.
The following were the amounts allocated to the assets acquired, liabilities assumed and amounts expensed at the acquisition date based on their respective fair values:
7 unchanged sentences
Research and development expense
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
COLLABORATIVE ARRANGEMENTS
3 unchanged sentences
The Company’s significant collaborative arrangements are described below:
−Removed: INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA
−Removed: Under a license agreement with Janssen Pharmaceutica N.V., the Company granted Janssen a worldwide exclusive license under its NanoCrystal technology to develop, commercialize and manufacture INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA and related products.
−Removed: Under this license agreement, the Company received milestone payments upon the achievement of certain development goals from Janssen;
+Added: INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI
+Added: In November 2021, the Company received notice of partial termination in the U.S.
+Added: of its license agreement with Janssen related to INVEGA SUSTENNA, INVEGA TRINZA, and INVEGA HAFYERA.
+Added: The basis for this termination is Janssen’s assertion that it does not utilize the Company’s NanoCrystal technology licensed under the license agreement.
+Added: The Company strongly disagrees with Janssen’s position and is prepared to pursue all options at its disposal to enforce its contractual rights and address any unauthorized use of its intellectual property.
+Added: Under a license agreement with Janssen Pharmaceutica N.V., the Company granted Janssen a worldwide exclusive license under its NanoCrystal technology to develop, commercialize and manufacture injectable pharmaceutical products containing 9 O-H risperidone palimate and related products, which include the long-acting INVEGA products.
+Added: Under this license agreement, the Company received milestone payments from Janssen upon the achievement of certain development goals from Janssen;
there are no further milestones to be earned under this agreement.
−Removed: The Company receives tiered royalty payments between 5 % and 9 % of INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA end-market net sales in each country where the license is in effect, with the exact royalty percentage determined based on aggregate worldwide net sales.
+Added: The agreement also provides for tiered royalty payments between 5 % and 9 % of net sales of products subject to this agreement in each country where the license is in effect, with the exact royalty percentage determined based on aggregate worldwide net sales.
The tiered royalty payments consist of a patent royalty and a know‑how royalty, both of which are determined on a country‑by‑country basis.
1 unchanged sentence
The know‑how royalty is a tiered royalty of 3.5 %, 5.5 % and 7.5 % on aggregate worldwide net sales of below $ 250 million, between $ 250 million and $ 500 million, and greater than $ 500 million, respectively.
−Removed: The know‑how royalty rate resets to 3.5 % at the beginning of each calendar year and is payable until 15 years from first commercial sale of a product, subject to the expiry of the license agreement.
−Removed: These royalty payments may be reduced in any country based on patent litigation or on competing products achieving certain minimum sales thresholds.
−Removed: The license agreement expires upon the expiration of the last of the patents subject to the agreement.
−Removed: After expiration, Janssen retains a non‑exclusive, royalty‑free license to develop, manufacture and commercialize the products.
+Added: The know‑how royalty rate resets to 3.5 % at the beginning of each calendar year and is payable until 15 years from first commercial sale of a product These royalty payments may be reduced in any country based on patent litigation or on competing products achieving certain minimum sales thresholds.
+Added: The license agreement, unless earlier terminated, terminates upon the expiration of the last of the patents subject to the agreement.
+Added: After expiration, Janssen retains a non‑exclusive, royalty‑free license to develop, manufacture and commercialize the products, subject to certain surviving obligations.
Janssen may terminate the license agreement in whole or in part upon three months’ notice to the Company.
3 unchanged sentences
Under the development agreement, Janssen provided funding to the Company for the development of RISPERDAL CONSTA and Janssen is responsible for securing all necessary regulatory approvals for the product.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Under two license agreements, the Company granted Janssen and an affiliate of Janssen exclusive worldwide licenses to use and sell RISPERDAL CONSTA.
5 unchanged sentences
(i) the expiration of the last patent claiming the product in such country;
−Removed: or (ii) 15 years after the date of the first commercial sale of the product in such country, provided that in no event will the license granted to Janssen expire later than the twentieth anniversary of the first commercial sale of the product in each such country, with the exception of Canada, France, Germany, Italy, Japan, Spain and the United Kingdom, in each case where the fifteen ‑year minimum shall pertain regardless.
+Added: or (ii) 15 years after the date of the first commercial sale of the product in such country, provided that in no event will the license granted to Janssen expire later than the twentieth anniversary of the first commercial sale of the product in each such country, with the exception of Canada, France,
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Germany, Italy, Japan, Spain and the United Kingdom, in each case where the fifteen ‑year minimum shall pertain regardless.
After expiration, Janssen retains a non ‑exclusive, royalty ‑free license to manufacture, use and sell RISPERDAL CONSTA.
The Company exclusively manufactures RISPERDAL CONSTA for commercial sale.
−Removed: Under its manufacturing and supply agreement with Janssen, the Company records manufacturing revenues when product fully manufactured and approved for shipment by both Janssen and the Company.
+Added: Under its manufacturing and supply agreement with Janssen, the Company records manufacturing revenues when product is fully manufactured and approved for shipment by both Janssen and the Company.
Revenue is based on a percentage of Janssen’s net unit sales price for RISPERDAL CONSTA for the applicable calendar year.
3 unchanged sentences
In the event that Janssen terminates the manufacturing and supply agreement without terminating the license agreements, the royalty rate payable to the Company on Janssen’s net sales of RISPERDAL CONSTA would increase from 2.5 % to 5.0 %.
−Removed: Under an amended and restated license agreement, the Company granted Acorda an exclusive worldwide license to use and sell and, solely in accordance with its supply agreement, to make or have made AMPYRA/FAMPYRA.
−Removed: The Company receives certain commercial and development milestone payments, license revenues and a royalty of approximately 10 % based on net selling price of AMPYRA and FAMPYRA by Acorda and its sub‑licensee, Biogen, respectively.
−Removed: This royalty payment may be reduced in any country based on lack of patent coverage, competing products achieving certain minimum sales thresholds and whether Alkermes manufactures the product.
−Removed: In June 2009, the Company entered into an amendment of the amended and restated license agreement and the supply agreement with Acorda and, pursuant to such amendment, consented to the sublicense by Acorda to Biogen of Acorda’s rights to use and sell FAMPYRA in certain territories outside of the U.S.
−Removed: (to the extent that such rights were to be sublicensed to Biogen pursuant to its separate collaboration and license agreement with Acorda).
−Removed: Under this amendment, the Company agreed to modify certain terms and conditions of the amended and restated license agreement and the supply agreement with Acorda to reflect the sublicense by Acorda to Biogen.
−Removed: Acorda has the right to terminate the amended and restated license agreement upon 90 days’ written notice.
−Removed: The Company has the right to terminate the amended and restated license agreement for countries in which Acorda fails to launch a product within a specified time after obtaining the necessary regulatory approval or fails to file regulatory approvals within a commercially reasonable time after completion of and receipt of positive data from all pre-clinical and clinical studies required for filing a marketing authorization application.
−Removed: Either party has the right to terminate the amended and restated license agreement by written notice following a material breach of the other party, which is not cured within a certain time period, or upon the other party’s entry into bankruptcy or dissolution proceedings.
−Removed: If the Company terminates Acorda’s license in any country, the Company is entitled to a license from Acorda of its patent rights and know-how relating to the product as well as the related data, information and regulatory files, and to market the product in the applicable country, subject to an initial payment equal to Acorda’s cost of developing such data, information and regulatory files and to ongoing royalty payments to Acorda.
−Removed: Subject to the termination of the amended and restated license agreement, licenses granted under the license agreement terminate on a country-by-country basis upon the expiration of the last to expire of our patents or the existence of a threshold level of competition in the marketplace.
−Removed: Under its commercial manufacturing supply agreement with Acorda, the Company manufactures and supplies AMPYRA/FAMPYRA for Acorda (and its sub‑licensee, Biogen).
−Removed: Under the terms of the agreement, Acorda may obtain up to 25 % of its total annual requirements of product from a second‑source manufacturer.
−Removed: The Company receives manufacturing royalties equal to 8 % of net selling price (or higher under certain circumstances) for all product manufactured by it and a compensating payment for product manufactured and supplied by a third party.
−Removed: The Company may terminate the commercial manufacturing supply agreement
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: upon 12 months ’ prior written notice to Acorda and either party may terminate the commercial manufacturing supply agreement following a material and uncured breach of the commercial manufacturing supply agreement or amended and restated license agreement or the entry into bankruptcy or dissolution proceedings by the other party.
−Removed: In addition, subject to early termination of the commercial manufacturing supply agreement noted above, the commercial manufacturing supply agreement terminates upon the expiry or termination of the amended and restated license agreement.
−Removed: The Company is entitled to receive the following milestone payments under its amended and restated license agreement with Acorda for each of the third and fourth new indications of the product developed thereunder:
−Removed: (i) initiation of a phase 3 clinical trial:
−Removed: $ 1.0 million;
−Removed: (ii) acceptance of an NDA by the FDA:
−Removed: $ 1.0 million;
−Removed: (iii) approval of the NDA by the FDA:
−Removed: $ 1.5 million;
−Removed: and (iv) the first commercial sale:
−Removed: $ 1.5 million.
Under a license and collaboration agreement with Biogen, which the Company entered into in November 2017 and amended in October 2018, January 2019 and October 2019, the Company granted Biogen a worldwide, exclusive, sublicensable license to develop, manufacture and commercialize VUMERITY and other products covered by patents licensed to Biogen under the agreement.
−Removed: Under this license and collaboration agreement, the Company received an upfront cash payment of $ 28.0 million in November 2017, and milestone payments of $ 50.0 million, $ 150.0 million and $ 5.0 million in June 2018, November 2019 and December 2019, respectively, upon the achievement of certain developmental milestones, including FDA approval of the NDA for VUMERITY in October 2019, and amendment of the license and collaboration agreement in October 2019.
−Removed: The Company is also eligible to receive additional payments upon achievement of milestones with respect to the first two products, other than VUMERITY, covered by patents licensed to Biogen under the license and collaboration agreement.
+Added: Under this license and collaboration agreement, the Company received an upfront cash payment and milestone payments upon the achievement of certain development and other milestones, including FDA approval of the NDA for VUMERITY in October 2019, and amendment of the license and collaboration agreement in October 2019.
+Added: The Company is also eligible to receive additional payments upon achievement of certain additional milestones, including development milestones relating to the first two products, other than VUMERITY, covered by patents licensed to Biogen under the license and collaboration agreement.
In addition, the Company receives a 15 % royalty on worldwide net sales of VUMERITY, subject to, under certain circumstances, minimum annual payments for the first five years following FDA approval of VUMERITY.
2 unchanged sentences
Royalties for all products and the minimum annual payments for VUMERITY are subject to customary reductions, as set forth in the license and collaboration agreement.
−Removed: Except in limited circumstances, we were responsible for the development of VUMERITY until it was approved by the FDA.
−Removed: Following FDA approval of VUMERITY in October 2019 and except for the manufacturing responsibilities discussed below, Biogen is now responsible for all development and commercialization activities for VUMERITY and all other products covered by patents licensed to Biogen.
Under the license and collaboration agreement, Biogen appointed the Company as the toll manufacturer of clinical and commercial supplies of VUMERITY, subject to Biogen’s right to manufacture or have manufactured commercial supplies as a back-up manufacturer and subject to good faith agreement by the parties on the terms of such manufacturing arrangements.
1 unchanged sentence
Biogen has elected to initiate a technology transfer and, following a transition period, assume responsibility for the manufacture (itself or through a designee) of clinical supplies of VUMERITY and up to 100 % of commercial supplies of VUMERITY in exchange for an increase in the royalty rate to be paid by Biogen to the Company on net sales of that portion of product that is manufactured by Biogen or its designee.
−Removed: If VUMERITY discontinuations due to gastrointestinal adverse events in VUMERITY’s long-term safety clinical trial exceed a certain pre-defined threshold, then “GI Inferiority” shall be deemed to exist, and (i) Biogen shall have the right to recapture from the Company its $ 50.0 million option payment through certain temporary reductions in royalty rates, and (ii) the minimum annual payments Biogen owes to the Company shall terminate.
Unless earlier terminated, the license and collaboration agreement will remain in effect until the expiry of all royalty obligations.
Biogen has the right to terminate the license and collaboration agreement at will, on a product-by-product basis or in its entirety upon 180 days’ prior notice to the Company.
−Removed: Either party has the right to terminate the license and collaboration agreement following any governmental prohibition of the transactions effected by the agreement, or in connection with an insolvency event involving the other
+Added: Either party has the right to terminate the license and collaboration agreement following any governmental prohibition of the transactions effected by the agreement, or in connection with an insolvency event involving the other party.
+Added: Upon termination of the license and collaboration agreement by either party, then, at the Company’s request, the VUMERITY program will revert to the Company.
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Upon termination of the license and collaboration agreement by either party, then, at the Company’s request, the VUMERITY program will revert to the Company.
−Removed: The Company’s provision (benefit) for income taxes is comprised of the following:
+Added: The Company’s provision (benefit) for income taxes consists of the following:
Year Ended December 31,
4 unchanged sentences
Total tax provision (benefit)
−Removed: The income tax provision in 2020, the income tax benefit in 2019 and the income tax provision in 2018 were primarily due to U.S.
−Removed: federal and state taxes.
−Removed: The unfavorable change in income taxes in 2020, as compared to 2019, and the favorable change in income taxes in 2019, as compared to 2018 was primarily due to a significant benefit recorded in 2019 relating to the foreign derived intangible income (“FDII”) proposed regulations issued by the U.S.
+Added: The income tax provision in 2021 and 2020 were primarily due to U.S.
+Added: federal and state taxes on income earned in the U.S.
+Added: and the tax impact of employee equity activity.
+Added: The income tax benefit in 2019 was primarily due to a significant benefit relating to the foreign derived intangible income (“FDII”) proposed regulations issued by the U.S.
Department of the Treasury and the U.S.
Internal Revenue Service in March 2019.
−Removed: On March 27, 2020 the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was passed by the U.S.
−Removed: Congress and signed into law by the President of the United States.
−Removed: The CARES Act, among other things, includes certain income tax provisions for individuals and corporations;
−Removed: however, these benefits have limited impact on the Company’s income tax provision.
No provision for income tax has been provided on undistributed earnings of the Company’s foreign subsidiaries because such earnings are indefinitely reinvested in the foreign operations.
2 unchanged sentences
The Company estimates that approximately $ 45.0 million of income taxes would be payable on the repatriation of the unremitted earnings to Ireland.
−Removed: The distribution of the Company’s loss before the provision (benefit) for income taxes by geographical area consisted of the following:
+Added: The distribution of the Company’s loss before the provision (benefit) for income taxes by geographical area consists of the following:
Year Ended December 31,
2 unchanged sentences
Loss before provision (benefit) for income taxes
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: The components of the Company’s net deferred tax assets (liabilities) were as follows:
+Added: The components of the Company’s net deferred tax assets (liabilities) consists of the following:
(In thousands)
9 unchanged sentences
Net deferred tax assets
−Removed: The activity in the valuation allowance associated with deferred taxes consisted of the following:
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: The activity in the valuation allowance associated with deferred taxes consists of the following:
(In thousands)
Balance at Beginning of Period
−Removed: Additions (1)
+Added: (Additions) / Reductions (1)
End of Period
2 unchanged sentences
Deferred tax asset valuation allowance for the year ended December 31, 2021
−Removed: The additions in each of the periods presented relate primarily to Irish NOLs.
+Added: The (additions)/reductions in each of the periods presented relate primarily to Irish NOLs.
Additionally, in 2019 the Company’s valuation allowance was increased by $ 3.0 million as a result of the attributes acquired as part of the acquisition of Rodin.
3 unchanged sentences
If the Company incurs losses in the U.S.
−Removed: in the future, or experiences significant excess tax benefits arising from the future exercise of stock options and/or the vesting of RSUs, the evaluation of the recoverability of the U.S.
+Added: in the future, the evaluation of the recoverability of the U.S.
deferred tax assets could change and a valuation allowance against the U.S.
9 unchanged sentences
These attributes are subject to multiple limitations based upon prior changes in the ownership of the ordinary shares of Rodin.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A reconciliation of the Company’s statutory tax rate to its effective tax rate is as follows:
3 unchanged sentences
Loss before income taxes at statutory rate
−Removed: Change in valuation allowance
Share-based compensation
Foreign rate differential (1)
+Added: Change in valuation allowance
Intercompany amounts (2)
−Removed: state income taxes, net of U.S.
−Removed: federal benefit
Irish rate differential (3)
1 unchanged sentence
Non deductible lobbying expenses
+Added: state income taxes, net of U.S.
+Added: federal benefit
Federal tax law change (4)
8 unchanged sentences
Represents income or losses of Irish companies subject to tax at a rate other than the Irish statutory rate.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During the year ended December 31, 2019, federal tax law change represents federal income tax benefit related to the foreign derived intangible income deductions for 2018 following the publications by the IRS and the Department of Treasury of proposed regulations in March 2019.
−Removed: Represents the tax effect of the research and development expense recorded on the acquisition of Rodin.
+Added: Represents the tax effect of the research and development expense recorded in connection with the acquisition of Rodin.
Other permanent items include, but are not limited to, non-deductible meals and entertainment expenses and non-deductible compensation of senior officers of the Company.
8 unchanged sentences
Balance, December 31, 2020
−Removed: Additions based on tax positions related to prior periods
+Added: Reductions based on tax positions related to prior periods
Additions based on tax positions related to the current period
8 unchanged sentences
In the U.S., the 2017 through 2021 fiscal years remain subject to examination by the respective tax authorities.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: In Ireland, the years 201 6 to 2020 remain subject to examination by the Irish tax authorities.
+Added: In Ireland, the 2017 through 2021 fiscal years remain subject to examination by the Irish tax authorities.
Additionally, because of the Company’s Irish and U.S.
2 unchanged sentences
The years ended December 31, 2018 and 2017 for Alkermes Finance S.a.r.l are currently under examination by the Tax Authorities in Luxembourg.
−Removed: There are no uncertain tax positions or adjustments associated with the audit at this time.
+Added: There are no uncertain tax positions or adjustments under examination at this time.
COMMITMENTS AND CONTINGENT LIABILITIES
6 unchanged sentences
INVEGA SUSTENNA ANDA Litigation
−Removed: Janssen Pharmaceuticals NV and Janssen Pharmaceuticals, Inc.
+Added: Janssen Pharmaceutica NV and Janssen Pharmaceuticals, Inc.
initiated patent infringement lawsuits in the U.S.
1 unchanged sentence
(“Teva”) and Teva Pharmaceuticals Industries, Ltd.
−Removed: (“Teva PI”), in August 2019 against Mylan Laboratories Limited (“Mylan Labs”), Mylan Pharmaceuticals Inc.
−Removed: (“Mylan”), and Mylan Institutional LLC and in December 2019 against Pharmascience, Inc.
−Removed: (“Pharmascience”), Mallinckrodt plc, and SpecGX LLC, following the respective filings by each of Teva, Mylan Labs, and Pharmascience of an Abbreviated New Drug Application (“ANDA”) seeking approval from the FDA to market a generic version of INVEGA SUSTENNA before the expiration of U.S.
−Removed: In October 2020, a trial was held in the lawsuit between the Janssen entities and the Teva entities.
−Removed: Requested judicial remedies in each of the lawsuits included recovery of litigation costs and injunctive relief.
+Added: (“Teva PI”) (such lawsuit, the “Teva Lawsuit”), in August 2019 against Mylan Laboratories Limited (“Mylan Labs”) and other Mylan entities (the “Mylan Lawsuit”) and in December 2019 against Pharmascience, Inc.
+Added: (“Pharmascience”), Mallinckrodt plc, and SpecGX LLC (the “Pharmascience Lawsuit”), and in the U.S.
+Added: District Court for the District
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: of Delaware in December 2021 against Tolmar Holding, Inc., Tolmar Pharmaceuticals, Inc., Tolmar Therapeutics, Inc., and Tolmar , Inc.
+Added: (“ Tolmar ” and such lawsuit, the “ Tolmar Lawsuit”), following the respective filings by each of Teva, Mylan Labs, Pharmascience , and Tolmar of an Abbreviated New Drug Application (“ANDA”) seeking approval from the FDA to market a generic version of INVEGA SUSTENNA before the expiration of U.S.
+Added: On October 8, 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Teva Lawsuit.
+Added: On December 22, 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Mylan Lawsuit, based on the parties’ prior stipulation to be bound by the judgment in the Teva Lawsuit.
+Added: The Teva entities and Mylan Labs each filed notices of appeal of their respective judgments with the U.S.
+Added: Court of Appeals for the Federal Circuit, which were consolidated in January 2022.
+Added: The Pharmascience Lawsuit and Tolmar Lawsuit remain pending.
The Company is not a party to any of these proceedings.
11 unchanged sentences
The Company will continue to vigorously defend the EP ’577 Patent.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
VIVITROL ANDA Litigation
5 unchanged sentences
The filing of the lawsuit triggered a stay of FDA approval of the ANDA for up to 30 months in accordance with the U.S.
−Removed: Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act).
+Added: Drug Price Competition and Patent Term Restoration Act of 1984.
Government Matters
2 unchanged sentences
The Company is cooperating with the investigations.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Securities Litigation
9 unchanged sentences
The lawsuit seeks, among other things, unspecified money damages, prejudgment and postjudgment interest, reasonable attorneys’ fees, expert fees and other costs.
−Removed: In August 2019, the defendants filed a pre-motion letter (in respect of a requested motion to dismiss filing) with the EDNY District Court and plaintiff filed a response.
−Removed: On November 27, 2019, the defendants served the plaintiff with a motion to dismiss, and on December 27, 2019, the plaintiff served the defendants with its opposition to such motion.
−Removed: On January 17, 2020, the defendants filed the fully-briefed motion, including a reply to the plaintiff’s opposition, with the EDNY District Court.
+Added: In February 2021, the EDNY District Court entered a final judgment and order dismissing the action in its entirety (the “Final Judgment and Order”).
+Added: In March 2021, the plaintiff filed a notice of appeal captioned In re Alkermes Public Limited Co.
+Added: Securities Litig., No.
+Added: 21-801 , appealing the Final Judgment and Order to the United States Court of Appeals for the Second Circuit (the “Second Circuit”).
+Added: On December 7, 2021, the Second Circuit issued a Summary Order affirming the EDNY District Court’s Final Judgment and Order.
Product Liability and Other Legal Proceedings
3 unchanged sentences
Purchase Commitments
−Removed: The Company has open purchase orders for plant and equipment as part of the normal course of business.
+Added: The Company has open purchase orders for plant and equipment as part of its normal course of business.
At December 31, 2021, the Company’s open purchase orders were $ 14.1 million for capital commitments.
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.