23 unchanged sentences
Directors, Executive Officers and Corporate Governance
−Removed: The information required by this item is incorporated herein by reference to the Proxy Statement for our 2022 Annual General Meeting of Shareholders.
+Added: The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2023 annual general meeting of shareholders.
Executive Compensation
−Removed: The information required by this item is incorporated herein by reference to the Proxy Statement for our 2022 Annual General Meeting of Shareholders.
+Added: The information required by this item (excluding, for clarity, the information required by Item 402(v) of Regulation S-K) is incorporated herein by reference to our definitive proxy statement for our 2023 annual general meeting of shareholders.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
−Removed: The information required by this item is incorporated herein by reference to the Proxy Statement for our 2022 Annual General Meeting of Shareholders.
+Added: The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2023 annual general meeting of shareholders.
Certain Relationships and Related Transactions, and Director Independence
−Removed: The information required by this item is incorporated herein by reference to the Proxy Statement for our 2022 Annual General Meeting of Shareholders.
+Added: The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2023 annual general meeting of shareholders.
Principal Accounting Fees and Services
−Removed: The information required by this item is incorporated herein by reference to the Proxy Statement for our 2022 Annual General Meeting of Shareholders.
+Added: The information required by this item is incorporated herein by reference to our definitive proxy statement for our 2023 annual general meeting of shareholders.
Exhibits and Financial Statement Schedules
−Removed: Consolidated Financial Statements—The consolidated financial statements of Alkermes plc, required by this item, are submitted in a separate section beginning on page F‑1 of this Annual Report.
+Added: Consolidated Financial Statements—The consolidated financial statements of Alkermes plc, as required by this item, are submitted in a separate section beginning on page F‑1 of this Annual Report, as follows:
+Added: Financial Statement
+Added: Report of Independent Registered Public Accounting Firm (PCAOB ID:
+Added: Consolidated Balance Sheets
+Added: Consolidated Statements of Operations and Comprehensive Loss
+Added: Consolidated Statements of Shareholders’ Equity
+Added: Consolidated Statements of Cash Flows
+Added: Notes to the Consolidated Financial Statements
Financial Statement Schedules—All schedules have been omitted because the absence of conditions under which they are required or because the required information is included in the consolidated financial statements or notes thereto.
39 unchanged sentences
August 6, 2009
+Added: Incorporated by reference herein
+Added: Description of Exhibit
Second Amendment to Lease between Alkermes, Inc.
2 unchanged sentences
February 27, 2014
−Removed: Incorporated by reference herein
−Removed: Description of Exhibit
Third Amendment to Lease between Alkermes, Inc.
107 unchanged sentences
February 8, 2005
−Removed: Amended and Restated License Agreement, dated September 26, 2003, by and between Acorda Therapeutics, Inc.
−Removed: and Elan Corporation, plc.
−Removed: Exhibit 10.14 to the Acorda Therapeutics, Inc.
−Removed: Quarterly Report on Form 10-Q/A (File No.000-50513;
−Removed: July 20, 2011
−Removed: Supply Agreement, dated September 26, 2003, by and between Acorda Therapeutics, Inc.
−Removed: and Elan Corporation, plc.
−Removed: Exhibit 10.22 to the Alkermes plc Annual Report on Form 10-K (File No.
−Removed: Amendment No.
−Removed: 1 Agreement, dated June 30, 2009, to the Amended and Restated License Agreement dated September 26, 2003 and the Supply Agreement dated September 26, 2003, and Consent to Sublicense, by and among Elan Pharma International Limited (as successor in interest to Elan Corporation, plc), Acorda Therapeutics, Inc.
−Removed: and Biogen Idec International GmbH.
−Removed: Exhibit 10.56 to Acorda Therapeutics, Inc.’s Quarterly Report on Form 10-Q (File No.000-50513;
−Removed: August 10, 2009
−Removed: Amendment No.
−Removed: 2, dated March 29, 2012, to the Amended and Restated License Agreement, dated September 26, 2003, as amended, and the Supply Agreement, dated September 26, 2003, as amended, in each case by and between Acorda Therapeutics, Inc.
−Removed: and Alkermes Pharma Ireland Limited (as successor in interest to Elan Corporation, plc).
−Removed: Exhibit 10.46 to the Acorda Therapeutics, Inc.
−Removed: Annual Report on Form 10-K (File No.000-50513;
−Removed: February 28, 2013
−Removed: Incorporated by reference herein
−Removed: Description of Exhibit
−Removed: Amendment No.
−Removed: 3, dated February 14, 2013, to the Amended and Restated License Agreement, dated September 26, 2003, as amended and the Supply Agreement, dated September 26, 2003, as amended, in each case by and between Acorda Therapeutics, Inc.
−Removed: and Alkermes Pharma Ireland Limited (as successor in interest to Elan Corporation, plc).
−Removed: Exhibit 10.1 to the Acorda Therapeutics, Inc.
−Removed: Quarterly Report on Form 10-Q (File No.
License Agreement by and among Elan Pharmaceutical Research Corp., d/b/a Nanosystems and Elan Pharma International Limited and Janssen Pharmaceutica N.V.
17 unchanged sentences
February 19, 2013
+Added: Incorporated by reference herein
+Added: Description of Exhibit
Amendment No.
17 unchanged sentences
April 26, 2018
−Removed: Incorporated by reference herein
−Removed: Description of Exhibit
Amendment No.
19 unchanged sentences
February 13, 2020
+Added: Fourth Amendment to License and Collaboration Agreement between Alkermes Pharma Ireland Limited and Biogen Swiss Manufacturing GmbH, effective as of August 25, 2022.
+Added: Exhibit 10.1 to the Alkermes plc Quarterly Report on Form 10-Q (File No.
+Added: November 2, 2022
Lease, dated March 23, 2018, by and between Alkermes, Inc.
10 unchanged sentences
July 25, 2019
+Added: Incorporated by reference herein
+Added: Description of Exhibit
Employment Agreement, dated as of December 12, 2007, by and between Richard F.
15 unchanged sentences
Form of Employment Agreement, as amended by the Form of Amendment to Employment Agreement set forth in 10.12.1, entered into by and between Alkermes, Inc.
−Removed: and each of James M.
−Removed: Frates, Blair C.
+Added: and each of Blair C.
Jackson and Michael J.
7 unchanged sentences
Form of Covenant Not to Compete, of various dates, by and between Alkermes, Inc.
−Removed: Exhibit 10.15 to the Alkermes, Inc.
−Removed: Annual Report on Form 10-K (File No.
−Removed: Incorporated by reference herein
−Removed: Description of Exhibit
−Removed: Form of Covenant Not to Compete, of various dates, by and between Alkermes, Inc.
and Michael J.
18 unchanged sentences
Form of Indemnification Agreement entered into by and between Alkermes, Inc.
−Removed: and each of its Directors and Secretaries of Alkermes plc and its Irish subsidiaries.
+Added: and each of the Directors and Secretaries of Alkermes plc and its Irish subsidiaries.
Exhibit 10.2 to the Alkermes plc Quarterly Report on Form 10-Q (File No.
12 unchanged sentences
April 28, 2016
+Added: Incorporated by reference herein
+Added: Description of Exhibit
Form of Restricted Stock Unit Award Certificate (Time Vesting Only – U.S.) under the Alkermes plc Amended and Restated 2008 Stock Option and Incentive Plan, as amended.
10 unchanged sentences
April 28, 2016
−Removed: Incorporated by reference herein
−Removed: 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.
18 unchanged sentences
October 23, 2018
−Removed: Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
+Added: A lkermes plc 2018 Stock Option and Incentive Plan, as amended.
+Added: 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 .
13 unchanged sentences
July 29, 2020
+Added: Incorporated by reference herein
+Added: Description of Exhibit
Form of Non-Employee Director Restricted Stock Unit (Time-Vesting) Award Certificate under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
1 unchanged sentence
July 29, 2020
+Added: Form of Non-Employee Director New Director Grant Non-Qualified Stock Option Award Certificate under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
+Added: Exhibit 10.1.1 to the Alkermes plc Quarterly Report on Form 10-Q (File No.
+Added: July 27, 2022
+Added: Form of Non-Employee Director New Director Grant Restricted Stock Unit (Time-Vesting) Award Certificate under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
+Added: Exhibit 10.1.2 to the Alkermes plc Quarterly Report on Form 10-Q (File No.
+Added: July 27, 2022
+Added: Form of Incentive Stock Option Award Certificate for Reporting Officers under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
+Added: Form of Non-Qualified Stock Option Award Certificate for Reporting Officers under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
+Added: Form of Restricted Stock Unit (Time-Vesting) Award Certificate for Reporting Officers under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
+Added: Form of Restricted Stock Unit (Performance-Vesting) Award Certificate for Reporting Officers under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
List of subsidiaries .
8 unchanged sentences
Inline XBRL Taxonomy Extension Label Linkbase Document.
−Removed: Incorporated by reference herein
−Removed: Description of Exhibit
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
27 unchanged sentences
February 16, 2023
−Removed: February 16, 2022
−Removed: February 16, 2022
/s/ Richard B.
6 unchanged sentences
February 16, 2023
+Added: /s/ Christopher I.
+Added: Christopher I.
February 16, 2023
+Added: February 16, 2023
Report of Independent Registered Public Accounting Firm
32 unchanged sentences
states under the Medicaid Drug Rebate Program as a reduction of sales when the product is shipped into the distribution channel using the expected value method.
−Removed: As of December 31, 2021, total accrued sales discounts, allowances and reserves were $237.2 million, of which a significant amount related to Medicaid rebates.
+Added: As of December 31, 2022, accrued Medicaid rebates were $208.3 million, of which a significant amount related to the Medicaid Drug Rebate Program.
The Company rebates individual U.S.
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 adjust 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 adjusts its rebate accrual based on actual unit sales and rebates per unit and changes in trends in Medicaid utilization.
The principal considerations for our determination that performing procedures relating to rebate accruals for the Medicaid Drug Rebate Program is a critical audit matter are (i) the significant judgment by management due to significant measurement uncertainty involved in developing the reserves, as the reserves are based on assumptions developed using historical experience, current contractual requirements, specific known market events and payment patterns and (ii) a high degree of auditor judgment, effort, and subjectivity in applying procedures related to these assumptions.
16 unchanged sentences
Cash and cash equivalents
−Removed: Receivables, net
Investments—short-term
+Added: Receivables, net
Contract assets
6 unchanged sentences
DEFERRED TAX ASSETS
−Removed: CONTINGENT CONSIDERATION
LIABILITIES AND SHAREHOLDERS’ EQUITY
1 unchanged sentence
Accounts payable and accrued expenses
+Added: Accrued sales discounts, allowances and reserves
Operating lease liabilities—short-term
4 unchanged sentences
OPERATING LEASE LIABILITIES—LONG-TERM
−Removed: CONTRACT LIABILITIES—LONG-TERM
OTHER LONG-TERM LIABILITIES
30 unchanged sentences
Amortization of acquired intangible assets
−Removed: Restructuring expense
Total expenses
7 unchanged sentences
LOSS BEFORE INCOME TAXES
−Removed: INCOME TAX PROVISION (BENEFIT)
+Added: INCOME TAX (BENEFIT) PROVISION
LOSS PER ORDINARY SHARE:
3 unchanged sentences
COMPREHENSIVE LOSS:
−Removed: Holding (loss) gain, net of a tax (benefit) provision of $( 706 ), $ 130 and $ 426 , respectively
+Added: Holding loss, net of a tax (benefit) provision of $( 973 ), $( 706 ) and $ 130 , respectively
COMPREHENSIVE LOSS
16 unchanged sentences
Share-based compensation
−Removed: Unrealized gain on marketable securities, net of tax provision of $ 130
+Added: Unrealized loss on marketable securities, net of tax benefit of $ 706
BALANCE —December 31, 2021
16 unchanged sentences
Change in the fair value of contingent consideration
−Removed: Loss on debt extinguishment
−Removed: Payment made for debt modification
−Removed: Impairment of investment in Synchronicity Pharma, Inc.
Other non-cash charges
4 unchanged sentences
Accounts payable and accrued expenses
+Added: Accrued sales discounts, allowances and reserves
Contract liabilities
10 unchanged sentences
Sales and maturities of investments
−Removed: Acquisition of Rodin Therapeutics, Inc.'s net assets, net of cash acquired
Cash flows used in investing activities
5 unchanged sentences
Principal payments of long-term debt
−Removed: Cash flows provided by (used in) financing activities
−Removed: NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
+Added: Cash flows (used in) provided by financing activities
+Added: NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS—Beginning of period
9 unchanged sentences
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
−Removed: 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 alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder and a pipeline of product candidates in the fields of neuroscience and oncology.
+Added: Alkermes plc (the “Company”) is a fully integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to research, develop and commercialize, both with partners and on its own, pharmaceutical products that are designed to address unmet medical needs of patients in the fields of neuroscience and oncology.
+Added: Alkermes has a portfolio of proprietary commercial products focused on alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder and a pipeline of product candidates in development for neurological disorders and cancer .
Headquartered in Dublin, Ireland, the Company has a research and development (“R&D”) center in Waltham, Massachusetts;
1 unchanged sentence
and a manufacturing facility in Wilmington, Ohio.
+Added: On November 2, 2022, the Company announced its intent, as approved by its board of directors, to separate its neuroscience business and oncology business.
+Added: The Company is exploring a separation of the oncology business into an independent, publicly- traded company (referred to herein as “Oncology Co.”) as part of an ongoing review of strategic alternatives for the oncology business.
+Added: Following the planned separation, the Company would retain its focus on driving growth of its proprietary commercial products:
+Added: LYBALVI, ARISTADA/ARISTADA INITIO and VIVITROL, and advancing the development of pipeline programs focused on neurological disorders.
+Added: The Company also expects to retain manufacturing and royalty revenues related to its licensed products and third-party products using its proprietary technologies under license.
+Added: would focus on the discovery and development of cancer therapies, including the continued development of nemvaleukin alfa and the Company’s portfolio of novel, preclinical engineered cytokines.
+Added: The separation, if consummated, is expected to be completed in the second half of 2023 and is subject to customary closing conditions, including final approval by the Company’s board of directors and, if sought, receipt of a private letter ruling from the IRS and/or tax opinion from the Company’s tax advisors.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2 unchanged sentences
Intercompany accounts and transactions have been eliminated.
+Added: Reclassification
+Added: The Company reclassified certain prior year amounts on the consolidated balance sheet to conform to the current year presentation.
+Added: These reclassifications had no impact on the previously reported total assets, liabilities or shareholders’ equity.
Use of Estimates
11 unchanged sentences
At December 31, 2022, substantially all these investments were classified as available-for-sale and were recorded at fair value.
−Removed: 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.
−Removed: Realized gains and losses are reported in other income, net on a specific identification basis.
−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.
+Added: U nrealized gains and losses are included in accumulated other comprehensive loss in equity, net of related tax, in accumulated other comprehensive loss unless :
+Added: ( i ) the security has experienced a credit loss ;
+Added: (ii) the Company has determined that it has the intent to sell the security ;
+Added: or (iii) it has determined that it is more likely than not that the Company will have to sell the security before its expected recovery.
+Added: P eriodic reviews are conducted to identify and evaluate each investment that has an unrealized loss in accordance with the meaning of other-than-temporary impairment.
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 debt securities that are determined to be temporary, and not related to credit loss, are recorded, net of tax, in accumulated other comprehensive income.
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.
17 unchanged sentences
Valuations of these products require a significant degree of judgment.
−Removed: At December 31, 2021, the only asset utilizing Level 3 inputs included contingent consideration.
+Added: At December 31, 2022, no assets utilized Level 3 inputs.
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.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Property, Plant and Equipment
7 unchanged sentences
Shorter of useful life or lease term
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Contingent Consideration
−Removed: The Company records contingent consideration it is entitled to receive at fair value on the sale date.
−Removed: 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.
+Added: The Company records contingent consideration it is entitled to receive related to the sale of a business at fair value on the acquisition date.
+Added: The Company estimates the fair value of contingent consideration through valuation models that incorporate probability-adjusted assumptions related to the likelihood of achievement of milestones and the corresponding likelihood of receiving related payments.
The Company revalues its contingent consideration each reporting period, with changes in the fair value of contingent consideration recognized within the consolidated statements of operations and comprehensive loss.
−Removed: Changes in the fair value of contingent consideration can result from changes to one or multiple assumptions, including adjustments to discount rates, changes in the amount and timing of cash flows, changes in the assumed achievement and timing of any development and sales-based milestones, changes in the assumed probability associated with regulatory approvals and creditworthiness of the counterparty.
−Removed: The period over which the Company discounts its contingent consideration is based on the current development stage of the product candidate, the specific development plan for that product candidate, adjusted for the probability of completing the development steps, and when contingent payments would be triggered.
−Removed: In estimating the probability of success, the Company utilizes data regarding similar milestone events from several sources, including industry studies and the Company’s own experience.
−Removed: These fair value measurements are based on significant inputs not observable in the market.
+Added: Changes in the fair value of contingent consideration can result from changes to one or multiple assumptions, including adjustments to the discount rates, changes in the amount and timing of cash flows, changes in the assumed achievement and timing of any development and sales-based milestones, changes in the assumed probability associated with regulatory approvals and changes in the probability of collection or default of portions of the contingent consideration due to the Company.
+Added: These fair value measurements are based on significant inputs, including inputs not observable in the market.
Significant judgment was employed in determining the appropriateness of these assumptions at the acquisition date and for each subsequent period.
17 unchanged sentences
Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset;
−Removed: a significant change in the extent or manner in which an asset is used;
+Added: a significant change in the extent or manner in which an asset
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset;
2 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
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.
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 2021, the Company determined that an impairment triggering event occurred related to the receipt of partial termination in the U.S.
−Removed: 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.
−Removed: 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.
+Added: In April 2015, the Company sold its Gainesville, GA manufacturing facility, the related manufacturing and royalty revenue associated with certain products manufactured at the facility, and the rights to IV/IM and parenteral forms of Meloxicam to Recro Pharma, Inc.
+Added: (“Recro”) and Recro Gainesville LLC (such transaction the “Gainesville Transaction”).
+Added: The Gainesville Transaction included in the purchase price contingent consideration tied to low double digit royalties on net sales of the IV/IM and parenteral forms of Meloxicam and any other product with the same active ingredient as Meloxicam IV/IM that is discovered or identified using certain of the Company’s IP to which Recro was provided a right of use, through license or transfer, pursuant to the Gainesville Transaction (such products, the “Meloxicam Products”), and milestone payments upon the achievement of certain regulatory and sales milestones related to the Meloxicam Products.
+Added: In the third quarter of 2022, the Company determined that certain construction in progress related to the manufacture of ANJESO ® , the first approved Meloxicam Product, was impaired, as it had no alternative future use.
+Added: See Note 7, Property, Plant and Equipment , within the “Notes to Consolidated Financial Statements” in this Annual Report for details related to such construction in progress.
+Added: In the fourth quarter of 2022, the Company determined that an impairment triggering event occurred related to an arbitration panel’s ruling relative to the Company’s manufacturing and royalty revenue arrangement with Acorda related to AMPYRA ® .
+Added: Following this triggering event, the Company evaluated certain of its intangible assets for impairment under a held-and-used model.
+Added: The Company concluded in this instance that the long-lived assets evaluated for impairment were recoverable based on an analysis of the undiscounted cash flows to be generated from the use of these assets and that there was no impact to the remaining useful lives of these assets.
Revenue from Contracts with Customers
16 unchanged sentences
The following are the Company’s significant categories of sales discounts and allowances:
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Medicaid Rebates — the Company records accruals for rebates to U.S.
11 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
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: have not differed materially from the Company’s estimates;
+Added: The reserve is made using the expected value method and to date, actual product discounts have not differed materially from the Company’s estimates;
Product Returns —the Company records an estimate for product returns at the time its customers take control of their product.
6 unchanged sentences
Collaborative Arrangements
−Removed: The Company has entered into collaboration agreements with pharmaceutical companies including, among others, Janssen Pharmaceutica Inc.
+Added: The Company has entered into collaboration agreements with pharmaceutical companies including, among others, Janssen Pharmaceuticals, Inc.
(“Janssen, Inc.”), Janssen Pharmaceutica International, a division of Cilag International AG (“Janssen International”), and Janssen Pharmaceutica N.V.
−Removed: (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 ® .
+Added: (together with Janssen, Inc., Janssen International and their affiliates, “Janssen”) related to 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”) related to 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.
7 unchanged sentences
The manufacturing process is considered fully complete once the finished goods have been approved for shipment by both the Company and Janssen.
−Removed: 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.
−Removed: 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.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: The Company recognize s manufacturing revenue related to VUMERITY at cost plus 15 %, upon making available bulk batches of VUMERITY to Biogen , to the extent the Company package s such product, then also when packaged batches of VUMERITY are made available to Biogen .
+Added: Control of the product passes to Biogen when VUMERITY , in either bulk or finished form, is made available to Biogen .
The sales price for certain of the Company’s manufacturing revenues is based on the end-market sales price earned by its licensees.
7 unchanged sentences
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.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 ha s not been material to date .
+Added: The difference between the Company’s actual and estimated royalty revenues has 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 that 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 licensee, which is the point in time that the licensee is able to direct the use of and obtain substantially all of the benefits from the license.
Receivables, net
1 unchanged sentence
The amounts due are stated at their net estimated realizable value.
−Removed: The Company’s unbilled receivable balance was $ 127.6 million and $ 110.9 million at December 31, 2021 and 2020, respectively, and related primarily to royalty revenues.
+Added: The Company’s unbilled receivable balance was $ 72.0 million and $ 127.6 million at December 31, 2022 and 2021, respectively, and related primarily to royalty revenue.
The Company maintains an allowance for doubtful accounts to provide for the estimated amounts of receivables that will not be collected.
The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable.
−Removed: The Company’s allowance for doubtful accounts was approximately $ 0.2 million and $ 0.1 million at December 31, 2021 and 2020, respectively.
+Added: The Company’s allowance for doubtful accounts was approximately $ 0.2 million at December 31, 2022 and 2021, respectively.
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 2022 .
+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 was included in contract assets at December 31, 2021 and transferred to receivables, net, as the milestone related to such amount was achieved in November 2022 .
The manufacturing-related amounts included in the contract assets table below are classified as “Current assets” in the accompanying consolidated balance sheets, as they related to manufacturing processes that are completed in ten days to eight weeks.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Contract assets consisted of the following:
6 unchanged sentences
Contract assets at December 31, 2022
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Contract Liabilities
7 unchanged sentences
Amounts recognized into revenue
+Added: Amounts recognized into other income, net
Contract liabilities at December 31, 2022
4 unchanged sentences
dollars at exchange rates prevailing on the subsequent balance sheet date.
−Removed: 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, 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.
+Added: Gains and losses as a result of translation adjustments are recorded within “Other income, net” in the accompanying consolidated statements of operations and comprehensive loss.
+Added: During the years ended December 31, 2022, 2021 and 2020, the Company recorded a gain of $ 0.7 million, a loss of $ 0.3 million and a gain of $ 2.4 million, respectively, on foreign currency translation.
Concentrations
26 unchanged sentences
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 related to VUMERITY prior to its approval by the U.S.
−Removed: Food and Drug Administration (“FDA”), 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 are not tracked by individual program as they benefit multiple programs or the Company’s technologies in general.
Selling, General and Administrative Expenses
8 unchanged sentences
Time-Based Stock Options
−Removed: 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.
+Added: Except as otherwise provided in the applicable Plan, stock option grants to employees expire ten years from the date of grant and generally vest in four equal annual installments, commencing on the first anniversary of the date of grant, provided the employee remains continuously employed with the Company during the applicable vesting period.
Except as otherwise provided in the applicable Plan, annual stock option grants to non-employee directors expire ten years from the grant date and generally vest over a one-year period provided that the director continues to serve on the Company’s board of directors through the vesting date.
1 unchanged sentence
Share‑based compensation expense is based on awards ultimately expected to vest.
−Removed: Forfeitures are estimated based on historical experience at the
+Added: Forfeitures are estimated based on historical experience at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
16 unchanged sentences
Expected annual dividend yield
−Removed: Performance-Based Stock Options
−Removed: Certain of the Company’s granted stock options are subject to achievement of a specified market condition prior to vesting in addition to being subject to time-based vesting.
−Removed: The estimated fair value of these stock options that vest upon the achievement of a market condition was determined through the use of a Monte Carlo simulation model, which utilizes input variables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair market value for the award.
−Removed: The Monte Carlo simulation model used the following assumptions:
−Removed: Weighted-Average
−Removed: Expected Volatility
−Removed: Cost of Equity
−Removed: Interest Rate
−Removed: February 21, 2019
−Removed: Compensation expense for the stock options that vest upon the achievement of a market condition is recognized over a derived service period as determined by the Monte Carlo simulation model.
−Removed: The vesting of these stock options is also subject to continued employment of the grantee.
Time‑Based Restricted Stock Unit Awards
10 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
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: which the differences are expected to reverse.
+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 which the differences are expected to reverse.
The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.
6 unchanged sentences
The Company also accrues for potential interest and penalties related to unrecognized tax benefits in income tax expense.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Comprehensive Loss
19 unchanged sentences
Risks and Uncertainties
−Removed: In March 2020, COVID-19 was declared a global pandemic by the World Health Organization.
−Removed: 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: Ireland, all U.S.
−Removed: 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.
−Removed: 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.
−Removed: 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
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: employees and mitigate the potential spread of COVID-19 in a community setting.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The Company provided employees with COVID-19 vaccine information and sponsored vaccine clinics in Massachusetts and Ohio for its employees and their families.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The Company will continue to monitor guidance from local health authorities as the Company increases in-person interactions.
−Removed: A number of the marketed products from which the Company derives revenue, including manufacturing and royalty revenue, are 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 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.
−Removed: The COVID-19 pandemic has caused, and we expect may continue to cause, varying degrees of disruption to our employees and our business operations.
−Removed: 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: The COVID-19 pandemic has impacted, and may continue to impact, many aspects of society, including the operation of healthcare systems, global travel, supply and labor markets and other business and economic activity worldwide.
+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, which have been, and the Company expects may continue to be, adversely impacted to varying degrees as a result of COVID-19 related closures restrictions, labor shortages and other disruptions that have transpired, and may continue to transpire, while the pandemic persists.
+Added: The COVID-19 pandemic has caused, and the Company expects may continue to cause, varying degrees of disruption to its employees and business operations.
+Added: While the Company has continued to operate its manufacturing facilities and supply its medicines throughout the pandemic, the Company has at times during the pandemic experienced labor or supply chain disruptions at its manufacturing facilities and may continue to experience such disruptions while the pandemic persists, which could impact the Company’s ability to manufacture its products and the third-party products from which it receives revenue in a timely matter or at all.
In addition, while the Company has continued to conduct R&D activities, including its ongoing clinical trials, the COVID-19 pandemic has at times impacted the timelines of certain of its early-stage discovery efforts and clinical trials, and may continue to impact such timelines while the pandemic persists.
The Company works with its internal teams, its clinical investigators, R&D vendors and critical supply chain vendors to continually assess, and mitigate, the potential impact of COVID-19 on its manufacturing operations and R&D activities.
−Removed: 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.
−Removed: 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;
−Removed: 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 ;
−Removed: impacts of the pandemic on the vendors or distribution channels in its supply chain and on its ability to continue to manufacture its products;
−Removed: 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;
−Removed: impacts of the pandemic on healthcare systems that serve people living with opioid dependence, alcohol dependence, schizophrenia and bipolar I disorder;
−Removed: 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 its Medicaid rebate liability, and for services related to the use of its products;
−Removed: and impacts of the pandemic on the Irish, U.S.
−Removed: and global economies more broadly.
−Removed: 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.
+Added: The degree to which the COVID-19 pandemic may continue to impact the Company’s employees, business, financial condition and results of operations will depend on the ultimate severity and duration of the pandemic and the manner in which it continues to evolve, including the emergence, prevalence and severity of new COVID-19 variants, and future developments in response thereto.
+Added: Due to these and numerous other uncertainties surrounding the ongoing COVID-19 pandemic, the actual impact of the pandemic on the Company’s financial condition and operating results may differ from its current projections.
+Added: For additional information about risks
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: 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: 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.
−Removed: 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
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: evaluated on or before December 31, 2022.
−Removed: The Company believes this ASU will not have a material impact on its consolidated financial statements .
REVENUE FROM CONTRACTS WITH CUSTOMERS
11 unchanged sentences
RISPERDAL CONSTA
−Removed: AMPYRA/FAMPYRA
Year Ended December 31, 2021
4 unchanged sentences
RISPERDAL CONSTA
−Removed: AMPYRA/FAMPYRA
Year Ended December 31, 2020
4 unchanged sentences
RISPERDAL CONSTA
−Removed: AMPYRA/FAMPYRA
−Removed: In November 2021, the Company received notice of partial termination in the U.S.
−Removed: of its license agreement with Janssen related to INVEGA SUSTENNA, INVEGA TRINZA, and INVEGA HAFYERA.
−Removed: The basis for this termination is Janssen’s assertion that it does not utilize the Company’s NanoCrystal technology licensed under the license agreement.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Except in limited circumstances, the Company was 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
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: responsible for development and commercialization activities for VUMERITY and other products covered by patents licensed to Biogen.
−Removed: 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 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.
−Removed: 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.
−Removed: 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.
−Removed: In January 2018, Biogen became responsible for all VUMERITY development costs that the Company incurred, subject to annual budget limitations.
−Removed: 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.
−Removed: The Company evaluated the license and collaboration agreement under Topic 606 and determined that it had four deliverables:
−Removed: (i) the grant of a distinct, right-to-use license of IP to Biogen;
−Removed: (ii) future development services;
−Removed: (iii) clinical supply;
−Removed: and (iv) participation on a joint steering committee with Biogen.
−Removed: The Company’s participation on the joint steering committee was considered to be perfunctory and thus not recognized as a performance obligation.
−Removed: 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: 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.
−Removed: The Company used a discounted cash flow model to estimate the standalone selling price of the license in order to allocate the consideration to the performance obligations.
−Removed: 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 believed captures a market participant’s view of the risk associated with the expected cash flows.
−Removed: The estimate of selling price of the development services and clinical supply were determined through third-party evidence.
−Removed: 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: The Company allocated the $ 150.0 million milestone payment received in November 2019 to the relevant performance obligations as follows:
−Removed: $ 144.8 million to the delivery of the license;
−Removed: and $ 5.2 million to future development services and clinical supply.
−Removed: The amounts allocated to the license were recognized upon receipt of the payments as delivery of the license occurred upon entry into the agreement in 2017.
−Removed: The amounts allocated to the development services and clinical supply were recognized over the course of the development work and as clinical supply was delivered to Biogen in 2020.
−Removed: 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.
−Removed: The Company is also entitled to receive royalties on net sales of products other than VUMERITY covered by patents licensed to Biogen under the license and collaboration agreement, at tiered royalty rates calculated as percentages of net sales ranging from high-single digits to sub-teen double digits.
−Removed: All royalties are payable on a product-by-product and country-by-country basis until the later of (i) the last-to-expire patent right covering the applicable product in the applicable country and (ii) a specified period of time from the first commercial sale of the applicable product in the applicable country.
−Removed: 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: The Company determined that the future development milestones and sales-based royalties that it may be entitled to receive are variable consideration.
−Removed: The Company is using the most likely amount method for estimating the variable consideration to be received related to the milestones under this arrangement.
−Removed: The royalties are subject to the sales-based exception and are recorded when the corresponding sale occurs.
−Removed: 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
+Added: “Long-acting INVEGA products”:
+Added: INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate).
+Added: In October 2022, an arbitration panel found that the Company must return to Acorda $ 16.5 million (inclusive of prejudgment interest and administrative fees) previously paid by Acorda under a license agreement between the Company and Acorda and in November 2022, the panel found that the Company must pay to Acorda an additional $ 1.8 million (inclusive of prejudgment interest).
+Added: These amounts represent a portion of the royalty revenue paid to the Company by Acorda since July 2020 related to AMPYRA.
+Added: The Company paid the $ 16.5 million in October 2022 and paid the additional $ 1.8 million in December 2022.
+Added: In addition, during the three months ended June 30, 2022, the Company had recorded $ 3.2 million of royalty revenue related to AMPYRA as the Company believed that it had met the necessary revenue recognition criteria under the Financial Accounting Standards Board Accounting
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: amendment to such commercial supply agreement and an amendment to the November 2017 license and collaboration agreement with Biogen.
−Removed: 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.
−Removed: 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 services to be performed by the Company in connection with the Tech Transfer.
−Removed: There are other deliverables under the agreements that were determined to be perfunctory or immaterial.
−Removed: 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 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.
−Removed: The Company began performing under this commercial supply agreement in 2020.
+Added: Standards Codification 606, Revenue from Contracts with Customers (“Topic 606”).
+Added: However, as a result of the arbitration ruling, the Company reversed the $ 3.2 million as the panel found that the Company was no longer entitled to be paid those royalties.
+Added: During the three months ended September 30, 2022, the Company recorded both the $ 18.3 million in repayments and the $3.2 million reversal as reversals of royalty revenue within “Manufacturing and royalty revenue” in the accompanying consolidated statements of operations and comprehensive loss.
+Added: As a result of the arbitration ruling, the Company no longer has a contractual obligation to manufacture and supply AMPYRA or a contractual right to receive future manufacturing or royalty revenue related to AMPYRA.
+Added: In January 2023, Acorda filed a petition with the U.S.
+Added: District Court for the Southern District of New York asking the court to confirm in part and modify in part the final arbitral award rendered by the arbitration panel in October 2022 and, as part of the requested modification, seeking an additional approximately $ 66.0 million in damages.
+Added: The Company intend s to contest this petition and believe it is without merit.
+Added: In November 2021, the Company received notice of partial termination of an exclusive license agreement with Janssen.
+Added: Under this license agreement, the Company provided Janssen with rights to, and know-how, training and technical assistance in respect of, the Company’s small particle pharmaceutical compound technology, known as NanoCrystal technology, which it used to develop INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI.
+Added: When the partial termination became effective in February 2022, Janssen ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S.
+Added: and the Company stopped recognizing royalty revenue related to net sales of these products in the U.S.
+Added: In April 2022, the Company commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of the license agreement and Janssen’s royalty and other obligations under the agreement.
+Added: On December 21, 2022, the Company received an interim award (the “Interim Award”) in these proceedings from the arbitral tribunal (the “Tribunal”), in which the Tribunal agreed with the Company’s position that, while Janssen may terminate the agreement, it may not continue to sell Products (as defined in the agreement) developed during the term of the agreement without paying royalties pursuant to the terms of the agreement.
+Added: This award is not yet final.
+Added: The Company will engage with Janssen and the Tribunal in additional proceedings prior to the Tribunal’s issuance of a final award.
+Added: Accordingly, the Company has not recognized royalty revenue related to U.S.
+Added: sales of the long-acting INVEGA products since February 2022.
+Added: Refer to Note 17, Commitments and Contingent Liabilities within the “Notes to Consolidated Financial Statements” in this Annual Report for additional information regarding the arbitration proceedings with Janssen.
ALKERMES PLC AND SUBSIDIARIES
2 unchanged sentences
Gross Unrealized
−Removed: Allowance for
December 31, 2022
−Removed: Credit Losses
Short-term investments:
19 unchanged sentences
government debt securities
−Removed: Held-to-maturity securities:
−Removed: Fixed term deposit account
Total short-term investments
2 unchanged sentences
Corporate debt securities
+Added: government and agency debt securities
government debt securities
6 unchanged sentences
agencies and backed by non-U.S.
−Removed: 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.
+Added: At December 31, 2022, 280 of the Company’s 289 investment securities were in an unrealized loss position and had an aggregate estimated fair value of $ 422.7 million.
+Added: Approximately 47 % and 45 % of the Company’s investment securities at December 31, 2022 are in corporate debt securities, with a minimum rating of A2 (Moody’s)/A (Standard and Poor’s), and debt securities issued by the U.S.
+Added: government or its agencies, respectively.
+Added: In a rising interest rate environment, the Company expects its fixed-rate investment securities will carry unrealized losses.
+Added: 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.
+Added: The Company has the intent and ability to hold these investments until recovery, which may be at maturity.
In September 2019, the Company purchased $ 1.9 million of convertible promissory notes from Synchronicity Pharma, Inc.
1 unchanged sentence
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.
−Removed: 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: During the years ended December 31, 2021 and 2020, the Company recorded an other-than-temporary credit loss of $ 0.9 million and $ 1.0 million, respectively, against the value of this investment and at December
ALKERMES PLC AND SUBSIDIARIES
1 unchanged sentence
31, 2021, this investment was fully impaired .
−Removed: The loss es w ere recorded within “Other income (expense), net” in the accompanying consolidated statements of operations and comprehensive loss.
−Removed: 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 .
+Added: The loss es w ere recorded within “Other incom e , 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 matured on the earlier of September 30, 2022 , the closing of a preferred equity financing, the closing of a merger, business combination or sale of stock resulting in Synchronicity’s stockholders owning less than 50 % of the surviving entity, or an event of default .
+Added: During the year ended December 31, 2022, the Company determined there was an other-than-temporary loss related to this investment in Synchronicity and the $ 0.5 million was recorded within “Other income, net” in the accompanying consolidated statements of operations and comprehensive loss.
In May 2014, the Company entered into an agreement whereby it is committed to provide up to € 7.4 million to a partnership, Fountain Healthcare Partners II, L.P.
4 unchanged sentences
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.
−Removed: 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.
+Added: The transactions were accounted for under the cumulative earnings approach whereby the return on investment of $ 8.3 million was recorded as a gain within “Other income, net” in the accompanying consolidated statements of operations and comprehensive loss and the return of investment of $ 2.8 million was recorded as a reduction in the Company’s net investment in Fountain.
+Added: During the three months ended March 31, 2022, one of the companies within the Fountain portfolio was acquired by a third party.
+Added: The Company’s proportional share of the proceeds from this transaction was $ 1.1 million, of which $ 1.0 million was received during the three months ended March 31, 2022 and the remaining $ 0.1 million is being held in escrow until May 2023.
+Added: The transaction was accounted for under the cumulative earnings approach whereby the return on investment of $ 0.6 million was recorded as a gain within “Other income, net” in the accompanying consolidated statements of operations and comprehensive loss and the return of investment of $ 0.5 million was recorded as a reduction in the Company’s net investment in Fountain.
The Company’s net investment in Fountain was $ 7.9 million and $ 6.1 million at December 31, 2022 and 2021, respectively, and was included within “Other assets” in the accompanying consolidated balance sheets.
−Removed: 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: During the years ended December 31, 2022, 2021 and 2020, the Company recorded an increase in its investment in Fountain of $ 1.8 million, a decrease of $ 0.4 million and an increase of $ 0.3 million, respectively, which represented the Company’s proportional share of Fountain’s net gains or losses for such periods.
Realized gains and losses on the sales and maturities of investments, which were identified using the specific identification method, were as follows:
10 unchanged sentences
After 1 year through 5 years
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: 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)
+Added: Cash equivalents
government and agency debt securities
1 unchanged sentence
government debt securities
−Removed: Contingent consideration
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Cash equivalents
government and agency debt securities
7 unchanged sentences
Balance, January 1, 2022
+Added: Purchase of corporate debt security
Change in the fair value of contingent consideration
1 unchanged sentence
Impairment of corporate debt security
−Removed: Royalty payments due to the Company related to contingent consideration
Balance, December 31, 2022
4 unchanged sentences
The Company validated the prices developed using the market-observable data by obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active.
−Removed: In April 2015, the Company sold its Gainesville, GA manufacturing facility, the related manufacturing and royalty revenue associated with certain products manufactured at the facility, and the rights to IV/IM and parenteral forms of Meloxicam to Recro Pharma, Inc.
−Removed: (“Recro”) and Recro Gainesville LLC (such transaction the “Gainesville Transaction”).
−Removed: The Gainesville Transaction included in the purchase price contingent consideration tied to low double digit royalties on net sales of the IV/IM and parenteral forms of Meloxicam and any other product with the same active ingredient as Meloxicam IV/IM that is discovered or identified using certain of the Company’s IP to which Recro was provided a right of use, through license or transfer, pursuant to the Gainesville Transaction (such products, the “Meloxicam Products”), and milestone payments upon the achievement of certain regulatory and sales milestones related to the Meloxicam Products.
−Removed: In November 2019, Recro spun out its acute care segment to Baudax Bio, Inc.
+Added: In November 2019, Recro Pharma, Inc.
+Added: (“Recro”) spun out its acute care segment to Baudax Bio, Inc.
(“Baudax”), a publicly-traded pharmaceutical company.
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: At December 31, 2021, the Company determined the fair value of the contingent consideration to be received as follows:
−Removed: 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;
−Removed: The Company is entitled to receive future royalties on net sales of Meloxicam Products;
−Removed: The Company is entitled to receive payments of up to $ 80.0 million upon achieving certain sales milestones on future sales of the Meloxicam Products.
−Removed: The fair value of the sales milestones was determined through the use of a real options approach, where net sales are simulated in a risk-neutral world.
−Removed: 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 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.
−Removed: In order to address the substantial doubt about Baudax’s ability to continue as a going concern,
+Added: In Baudax’s Quarterly Report on Form 10-Q for the period ended September 30, 2022, Baudax continued to include disclosures regarding its ability to continue as a going concern, which first appeared in its Annual Report on Form 10-K for the period ended December 31, 2021.
+Added: In March 2022, Baudax reduced its workforce by approximately 80 %, which was designed to reduce its operational expenses and conserve its cash resources.
+Added: As a result of these events and the fact that, as of March 31, 2022, Baudax had only paid $ 0.5 million of the $ 6.4 million milestone payment that was due to the Company in March 2022, the Company recorded a reduction in the fair value of the contingent consideration of $ 19.1 million during the three months ended March 31, 2022.
+Added: In light of Baudax’s disclosures and the fact that, as of September 30, 2022, Baudax had only paid $ 1.2 million of the $ 6.4 million that was due to the Company in March 2022, the Company determined, during the three months ended September 30, 2022, that it was unlikely to collect any further proceeds under this arrangement and recorded a $ 3.6 million charge to reduce the fair value of the contingent consideration to zero within “Change in the fair value of contingent consideration”.
+Added: In addition, during the three months ended September 30, 2022, the Company determined that certain construction in progress related to the manufacture of ANJESO had no future value.
+Added: See Note 7, Property, Plant and Equipment , within the “Notes to Consolidated Financial Statements” in this Annual Report for details related to such construction in progress.
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: the Company split its fair value analysis into two scenarios.
−Removed: 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.
−Removed: This scenario received a weighting of 45 %.
−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 largely on an analysis performed by Moody’s Investor Service regarding recoveries in a pandemic-driven default cycle.
−Removed: This scenario received a weighting of 55 %.
−Removed: 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, 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.
−Removed: 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.
−Removed: 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 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.
−Removed: 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.
+Added: In December 2022, Baudax announced that it would discontinue the sale of ANJESO and on December 28, 2022, the U.S.
+Added: Food and Drug Administration (“FDA”) acknowledged the discontinuation of sale of ANJESO via listing in the Orange Book.
+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 $ 278.9 million and $ 285.8 million at December 31, 2022 and 2021, respectively.
Inventory consists of the following:
5 unchanged sentences
At December 31, 2022 and 2021, the Company had $ 30.9 million and $ 25.1 million, respectively, of finished goods inventory located at its third‑party warehouse and shipping service provider.
−Removed: 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
8 unchanged sentences
Depreciation expense was $ 41.7 million, $ 40.5 million and $ 42.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: Also, during the years ended December 31, 2021, 2020 and 2019, the Company wrote off furniture, fixtures and
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
+Added: Also, during the years ended December 31, 2022, 2021 and 2020, the Company wrote off furniture, fixtures and equipment that had an approximate carrying value of $ 0.5 million, $ 0.1 million and less than $ 0.1 million, respectively, at the time of disposition.
Amounts included as construction in progress in the consolidated balance sheets primarily include capital expenditures at the Company’s manufacturing facility in Wilmington, Ohio.
The Company continues to evaluate its manufacturing capacity based on expectations of demand for its products and will continue to record such amounts within construction in progress until such time as the underlying assets are placed into service.
+Added: The Company expects that approximately $ 44.3 million of construction in progress will be placed into service in the second half of 2023.
The Company continues to periodically evaluate whether facts and circumstances indicate that the carrying value of its long‑lived assets to be held and used may not be recoverable.
+Added: In September 2022, the Company determined that $ 8.7 million of its construction in progress that related to the manufacture of ANJESO had no future value.
+Added: The Company had previously received $ 6.4 million from Baudax related to such equipment which it had recorded as contract liabilities within “Other long-term liabilities” in the accompanying consolidated balance sheets and the net amount of $ 2.3 million was written off through “other income, net” in the accompanying consolidated statements of operations and comprehensive loss.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GOODWILL AND INTANGIBLE ASSETS
15 unchanged sentences
The Company recorded $ 36.4 million, $ 38.1 million and $ 39.5 million of amortization expense related to its finite‑lived intangible assets during the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: 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.
+Added: Based on the Company’s most recent analysis, amortization of intangible assets included within its consolidated balance sheets at December 31, 2022 is expected to be approximately $ 35.0 million and $ 1.0 million in the years ending December 31, 2023 and 2024, respectively.
Although the Company believes such available information and assumptions are reasonable, given the inherent risks and uncertainties underlying its expectations regarding such future revenues, there is the potential for the Company’s actual results to vary significantly from such expectations.
5 unchanged sentences
900 Winter Street
−Removed: The Company leases approximately 231,000 square feet of office and laboratory space located at 900 Winter Street in Waltham, Massachusetts.
+Added: The Company leases approximately 231,000 square feet of office and laboratory space located at 900 Winter Street in Waltham, Massachusetts (the “900 Winter Street Lease”).
The initial term of the lease commenced on January 20, 2020 , expires in 2035 and includes an option to extend the term for an additional ten-year period.
+Added: In December 2022, the Company exercised an early payment option included within the terms of the 900 Winter Street Lease.
+Added: The election of such early payment option resulted in a remeasurement of the remaining lease liability and right-of-use asset as of the remeasurement date of December 1, 2022 of $ 12.8 million.
+Added: Subsequently, the Company made the early lease payment of $ 15.3 million in December 2022.
+Added: As of December 31, 2022, the remeasurement and subsequent payment resulted in an increase in the right-of-use asset of $ 12.8 million and a net decrease in the lease liability of $ 2.5 million.
852 Winter Street
3 unchanged sentences
The lease expires in 2026 and includes a tenant option to extend the term of the lease for an additional five-year period.
−Removed: 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: During the years ended December 31, 2021, 2020 and
+Added: At December 31, 2022 and 2021, the operating leases held by the Company had a weighted average incremental borrowing rate of 5.25 % and 5.25 %, respectively, and a weighted average remaining lease term of 8.9 years and 11.7 years, respectively.
+Added: During the years ended December 31, 2022, 2021 and 2020, cash paid for amounts included for the measurement of lease liabilities was $ 33.2 million, $ 16.8 million and $ 16.3 million, respectively.
+Added: The Company recorded operating lease expense of $ 16.6 million, $ 17.1 million and $ 17.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.
ALKERMES PLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 2019, cash paid for amounts included for the measurement of lease liabilities was $ 16.8 million , $ 16.3 million and $ 9.1 million , respectively .
−Removed: 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, 2022 consisted of the following:
8 unchanged sentences
Accrued compensation
−Removed: Accrued sales discounts, allowances and reserves
Accrued other
Total accounts payable and accrued expenses
+Added: A summary of the Company’s current provision for sales discounts, allowances and reserves is as follows:
+Added: (In thousands)
+Added: Medicaid rebates
+Added: Product discounts
+Added: Medicare Part D
+Added: Total accrued sales discounts, allowances and reserves
LONG‑TERM DEBT
2 unchanged sentences
2026 Term Loans, due March 12, 2026
−Removed: 2023 Term Loans, due March 26, 2023
current portion
5 unchanged sentences
The 2026 Term Loans were also amended to include customary ARRC hardwired benchmark replacement language.
−Removed: 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 have an incremental facility capacity in an amount of $ 175.0 million, plus additional potential amounts, provided that the Company meets certain conditions, including a specified leverage ratio.
The 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.
18 unchanged sentences
Basic loss per ordinary share is calculated based upon net loss available to holders of ordinary shares divided by the weighted average number of shares outstanding.
−Removed: For the years ended December 31, 2021, 2020 and 2019, as the Company was in a net loss position, the diluted loss per share did not assume conversion or exercise of stock options and awards as they would have had an anti-dilutive effect on loss per share.
−Removed: The following potential ordinary share equivalents were not included in the net loss per ordinary share calculation because the effect would have been anti-dilutive:
+Added: For the years ended December 31, 2022, 2021 and 2020, as the Company was in a net loss position, the diluted loss per share calculation did not assume conversion or exercise of stock options and restricted stock unit awards, as they would have had an anti-dilutive effect on loss per share.
+Added: The following potential ordinary share equivalents were not included in the net loss per share calculation because the effect would have been anti-dilutive:
Year Ended December 31,
4 unchanged sentences
Share Repurchase Program
−Removed: On September 16, 2011, the board of directors authorized the continuation of the Alkermes, Inc.
+Added: On September 16, 2011, the Company’s board of directors authorized the continuation of the Alkermes, Inc.
share repurchase program to repurchase up to $ 215.0 million of the Company’s ordinary shares at the discretion of management from time to time in the open market or through privately negotiated transactions.
2 unchanged sentences
The repurchase program has no set expiration date and may be suspended or discontinued at any time.
−Removed: During the years ended December 31, 2021 and 2020, the Company did not acquire any ordinary shares under the repurchase program.
+Added: During the years ended December 31, 2022 and 2021, the Company did no t acquire any ordinary shares under the repurchase program.
ALKERMES PLC AND SUBSIDIARIES
17 unchanged sentences
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.
+Added: On July 7, 2022, the Company’s shareholders approved an amended version of the Alkermes plc 2018 Stock Option and Incentive Plan that served to, among other things, increase the number of ordinary shares authorized for issuance thereunder by 8.3 million.
At December 31, 2022, there were 12.9 million ordinary shares available for issuance in the aggregate under the 2018 Plan.
16 unchanged sentences
At December 31, 2022, there was $ 32.7 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 1.9 years.
−Removed: Included within the outstanding stock option balances at December 31, 2021 was 0.4 million performance-based stock options that were granted in 2019 and valued using a Monte Carlo simulation model.
+Added: Included within the outstanding stock option balances at December 31, 2022 consisted of 382,200 performance-based stock options that were granted in 2019 and valued using a Monte Carlo simulation model.
The weighted average grant date fair value of such performance-based stock options was $ 16.78 .
−Removed: 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.
+Added: The unrecognized compensation cost related to these performance-based stock options was less than $ 0.1 million at December 31, 2022 and is included in the unrecognized compensation cost noted above.
Time‑Based Restricted Stock Unit Awards
13 unchanged sentences
The weighted average grant date fair value of performance-based RSUs granted during the years ended December 31, 2022, 2021 and 2020 were $ 30.73 , $ 23.09 and $ 23.43 , respectively.
−Removed: 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: The total fair value of performance-based RSUs that vested during the years ended December 31, 2022, 2021 and 2020 were none , $ 4.2 million and none , respectively.
At December 31, 2022, there was $ 5.1 million of unrecognized compensation cost related to the performance-based RSUs, which would be recognized in accordance with the terms of the award when the Company deems it probable that the performance criteria will be met.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: RESTRUCTURING
−Removed: On October 18, 2019 , the Company approved a restructuring plan following a review of its operations, cost structure and growth opportunities (the “Restructuring”).
−Removed: The Restructuring included a reduction in headcount of approximately 160 employees across the Company.
−Removed: 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: 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.
−Removed: On November 18, 2019 , the Company entered into a definitive agreement to acquire Rodin Therapeutics, Inc.
−Removed: (“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 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.
−Removed: 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.
−Removed: 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: 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.
−Removed: 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.
−Removed: 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:
−Removed: (In thousands)
−Removed: Prepaid expenses and other current assets
−Removed: Deferred tax assets
−Removed: Right-of-use assets
−Removed: Accounts payable and accrued expenses
−Removed: Operating lease liabilities—short-term
−Removed: Operating lease liabilities—long-term
−Removed: Research and development expense
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
COLLABORATIVE ARRANGEMENTS
4 unchanged sentences
INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI
−Removed: In November 2021, the Company received notice of partial termination in the U.S.
−Removed: of its license agreement with Janssen related to INVEGA SUSTENNA, INVEGA TRINZA, and INVEGA HAFYERA.
−Removed: The basis for this termination is Janssen’s assertion that it does not utilize the Company’s NanoCrystal technology licensed under the license agreement.
−Removed: 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.
−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 injectable pharmaceutical products containing 9 O-H risperidone palimate and related products, which include the long-acting INVEGA products.
−Removed: Under this license agreement, the Company received milestone payments from Janssen upon the achievement of certain development goals from Janssen;
+Added: In November 2021, the Company received notice of partial termination of an exclusive license agreement with Janssen.
+Added: Under this license agreement, the Company provided Janssen with rights to, and know-how, training and technical assistance in respect of, the Company’s small particle pharmaceutical compound technology, known as NanoCrystal technology, which was used to develop INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA, and INVEGA HAFYERA/BYANNLI.
+Added: When the partial termination became effective in February 2022, Janssen ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S.
+Added: and the Company stopped recognizing royalty revenue related to net sales of these products.
+Added: In April 2022, the Company commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of this license agreement and Janssen’s royalty and other obligations under the agreement.
+Added: On December 21, 2022, we received the Interim Award in these proceedings from the Tribunal, in which the Tribunal agreed with our position that, while Janssen may terminate the agreement, it may not continue to sell Products (as defined in the agreement) developed during the term of the agreement without paying royalties pursuant to the term of the agreement.
+Added: This award is not yet final.
+Added: We will engage with Janssen and the Tribunal in additional proceedings prior to the Tribunal’s issuance of a final award.
+Added: Accordingly, the Company has not recognized royalty revenue related to U.S.
+Added: sales of the long-acting INVEGA products since February 2022.
+Added: For additional information about these proceedings, see Note 17, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report.
+Added: Under this license agreement, the Company granted Janssen a worldwide exclusive license under the Company’s NanoCrystal technology to develop, commercialize and manufacture injectable pharmaceutical products containing paliperidone palmitate, which include the long-acting INVEGA products, and the Company received milestone payments from Janssen upon the achievement of certain development goals from Janssen;
there are no further milestones to be earned under this agreement.
3 unchanged sentences
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 These royalty payments may be reduced in any country based on patent litigation or on competing products achieving certain minimum sales thresholds.
+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 in each individual country, subject to expiry of the agreement.
+Added: These royalty payments may be reduced in any country based on patent litigation or on competing products achieving certain minimum sales thresholds.
The license agreement, unless earlier terminated, terminates upon the expiration of the last of the patents subject to the agreement.
2 unchanged sentences
The Company and Janssen have the right to terminate the agreement upon a material breach of the other party, which is not cured within a certain time period, or upon the other party’s bankruptcy or insolvency.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
RISPERDAL CONSTA
8 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,
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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, 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.
6 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 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 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.
−Removed: 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.
−Removed: 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.
+Added: Under a license and collaboration agreement with Biogen, 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.
+Added: Under this license and collaboration agreement, the Company received an upfront cash payment and milestone payments related to the achievement of certain milestones, including FDA approval of the NDA for VUMERITY and amendment of the license and collaboration agreement.
+Added: The Company is also eligible to receive additional payments upon achievement of certain milestones, including milestones relating to the first two products, other than VUMERITY, covered by patents licensed to Biogen under the license and collaboration agreement.
+Added: In addition, the Company receives a 15 % royalty on worldwide net sales of VUMERITY, subject to increases for VUMERITY manufactured and/or packaged by Biogen or its designees, and subject to, under certain circumstances, minimum annual payments for the first five years following FDA approval of VUMERITY.
The Company is also entitled to receive royalties on net sales of products other than VUMERITY covered by patents licensed to Biogen under the license and collaboration agreement, at tiered royalty rates calculated as percentages of net sales ranging from high-single digits to sub-teen double digits.
2 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: 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.
+Added: In October 2019, the Company entered into a commercial supply agreement with Biogen for the commercial supply of VUMERITY, an amendment to such commercial supply agreement and an amendment to the license and collaboration agreement with Biogen, pursuant to which Biogen has elected to conduct a technology transfer and, following a transition period, assume responsibility for the manufacture (itself or through a designee) of clinical supplies of VUMERITY and up to 100 % of commercial supplies of VUMERITY in exchange for an increase in the royalty rate to be paid by Biogen to the Company on net sales of that portion of product that is manufactured by Biogen or its designee.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unless earlier terminated, the license and collaboration agreement will remain in effect until the expiry of all royalty obligations.
2 unchanged sentences
Upon termination of the license and collaboration agreement by either party, then, at the Company’s request, the VUMERITY program will revert to the Company.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: The Company’s provision (benefit) for income taxes consists of the following:
+Added: The Company’s (benefit) provision for income taxes consists of the following:
Year Ended December 31,
(In thousands)
−Removed: Current income tax provision (benefit):
+Added: Current income tax provision:
Rest of world
−Removed: Deferred income tax provision (benefit):
−Removed: Total tax provision (benefit)
−Removed: The income tax provision in 2021 and 2020 were primarily due to U.S.
+Added: Deferred income tax (benefit) provision:
+Added: Total tax (benefit) provision
+Added: The income tax benefit in 2022 was primarily due to an enhanced foreign derived intangible income deduction as a result of a change to Section 174 of the Tax Cuts and Jobs Act in relation to capitalization and amortization of R&D expenses.
+Added: The income tax provisions in 2021 and 2020 were primarily due to U.S.
federal and state taxes on income earned in the U.S.
and the tax impact of employee equity activity.
−Removed: 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.
−Removed: Department of the Treasury and the U.S.
−Removed: Internal Revenue Service in March 2019.
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.
−Removed: Cumulative unremitted earnings of overseas subsidiaries totaled approximately $ 452.0 million at December 31, 2021.
+Added: Cumulative unremitted earnings of U.S.
+Added: subsidiaries totaled approximately $ 812.8 million at December 31, 2022.
In the event of a repatriation of those earnings in the form of dividends or otherwise, the Company may be liable for income taxes, subject to adjustment, if any, for foreign tax credits and foreign withholding taxes payable to foreign tax authorities.
The Company estimates that approximately $ 55.0 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 consists of the following:
+Added: The distribution of the Company’s loss before income taxes by geographical area consists of the following:
Year Ended December 31,
1 unchanged sentence
Rest of world
−Removed: Loss before provision (benefit) for income taxes
−Removed: The components of the Company’s net deferred tax assets (liabilities) consists of the following:
+Added: Loss before income taxes
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: The components of the Company’s net deferred tax assets consist of the following:
(In thousands)
1 unchanged sentence
NOL carryforwards
+Added: Research and development expenses
Accrued expenses and reserves
6 unchanged sentences
Net deferred tax assets
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The activity in the valuation allowance associated with deferred taxes consists of the following:
7 unchanged sentences
The (additions)/reductions in each of the periods presented relate primarily to Irish NOLs.
−Removed: 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.
At December 31, 2022, the Company maintained a valuation allowance of $ 25.7 million against certain U.S.
5 unchanged sentences
deferred tax assets may be required in part or in whole.
−Removed: As of December 31, 2021, the Company had $ 1.5 billion of Irish NOL carryforwards, $ 17.1 million of U.S.
+Added: As of December 31, 2022, the Company had $ 1.7 billion of Irish NOL carryforwards, $1
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: 5 .1 million of U.S.
federal NOL carryforwards, $ 43.2 million of state NOL carryforwards, $ 5.7 million of federal R&D credits and $ 29.0 million of state tax credits which will either expire on various dates through 204 2 or can be carried forward indefinitely.
2 unchanged sentences
These loss and credit carryforwards, which may be utilized in a future period, may be subject to limitations based upon changes in the ownership of the Company's ordinary shares.
−Removed: As a result of the acquisition of Rodin, the Company acquired $ 51.3 million of U.S.
−Removed: federal NOL carryforwards, $ 43.2 million of state NOL carryforwards, $ 0.7 million of U.S.
−Removed: federal R&D credit carryforwards and $ 0.4 million of state R&D credit carryforwards.
−Removed: These attributes are subject to multiple limitations based upon prior changes in the ownership of the ordinary shares of Rodin.
+Added: Included within these loss and credit carryforwards are $ 15.1 million of U.S.
+Added: federal NOL carryforwards and $ 6.8 million of state NOL carryforwards, acquired as part of the acquisition of Rodin, each of which are subject to a $ 0.5 million annual limitation.
A reconciliation of the Company’s statutory tax rate to its effective tax rate is as follows:
12 unchanged sentences
federal benefit
−Removed: Federal tax law change (4)
In-process R&D (4)
1 unchanged sentence
Other permanent items (5)
−Removed: Income tax provision (benefit)
+Added: Income tax (benefit) provision
Effective tax rate
−Removed: Represents income or losses of non-Irish subsidiaries, including U.S.
+Added: Represents income or losses of U.S.
subsidiaries, subject to tax at a rate other than the Irish statutory rate.
1 unchanged sentence
Represents income or losses of Irish companies subject to tax at a rate other than the Irish statutory rate.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
Represents the tax effect of the research and development expense recorded in connection with the acquisition of Rodin.
6 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
Balance, December 31, 2021
−Removed: Reductions based on tax positions related to prior periods
+Added: Reductions based on the lapse of applicable statues of limitations
+Added: Additions based on tax positions related to prior periods
Additions based on tax positions related to the current period
1 unchanged sentence
The unrecognized tax benefits at December 31, 2022, if recognized, would affect the Company's effective tax rate.
−Removed: The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months.
+Added: The Company does not anticipate that the amount of existing unrecognized tax benefits will materially increase or decrease within the next 12 months.
The Company has elected to include interest and penalties related to uncertain tax positions as a component of its provision for taxes.
For the years ended December 31, 2022, 2021 and 2020, the Company's accrued interest and penalties related to uncertain tax positions were not material.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company’s major taxing jurisdictions include Ireland and the U.S.
1 unchanged sentence
These jurisdictions have varying statutes of limitations.
−Removed: In the U.S., the 2017 through 2021 fiscal years remain subject to examination by the respective tax authorities.
+Added: In the U.S., the 2019 through 2022 fiscal years remain subject to examination by the respective tax authorities, however, some states have longer statutes of limitations and additional fiscal years remain subject to examination.
In Ireland, the 2018 through 2022 fiscal years remain subject to examination by the Irish tax authorities.
2 unchanged sentences
These years generally remain open for three to four years after the loss carryforwards and credit carryforwards have been utilized.
−Removed: 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 under examination at this time.
+Added: The years ended December 31, 2018 and 2017 for Alkermes Finance S.à.r.l, a former indirect subsidiary of Alkermes plc that was liquidated during the year ended December 31, 2020, are currently under examination by the Tax Authorities in Luxembourg (the “LTA”).
+Added: In November 2022, the Company received a notice of assessment in the amount of € 2.2 million for the year ended December 31, 2017 from the LTA.
+Added: The Company disagrees with this assessment and believes this assessment to be incorrect.
+Added: The Company will timely appeal the notice of assessment and pursue available administrative and judicial avenues as may be necessary or appropriate.
+Added: As of December 31, 2022, the Company had no t received a notice of assessment from the LTA in relation to the year ended December 31, 2018.
COMMITMENTS AND CONTINGENT LIABILITIES
5 unchanged sentences
At December 31, 2022, there were no potential material losses from claims, asserted or unasserted, or legal proceedings that the Company determined were probable of occurring.
+Added: Janssen Arbitration Proceedings
+Added: In April 2022, Alkermes Pharma Ireland Limited commenced binding arbitration proceedings to settle, among other things, whether, notwithstanding Janssen Pharmaceutica N.V.’s partial termination of two license agreements with the Company, Janssen Pharmaceutica has a continuing obligation to pay royalties on sales in the U.S.
+Added: of INVEGA SUSTENNA, INVEGA TRINZA, INVEGA HAFYERA and CABENUVA.
+Added: The request for arbitration seeks, among other remedies, a declaration that Janssen Pharmaceutica N.V.
+Added: is in breach of the license agreements and a resumption of royalty payments for sales of the relevant products in the U.S.
+Added: On December 21, 2022, the Company received the Interim Award in these proceedings from the Tribunal.
+Added: In the Interim Award, the Tribunal agreed with the Company’s position that, while Janssen Pharmaceutica N.V.
+Added: may terminate the agreements, it may not continue to sell Products (as defined in the agreements) developed during the term of the agreements without paying royalties pursuant to the terms of the respective agreements.
+Added: The Company will engage with Janssen Pharmaceutica N.V.
+Added: and the Tribunal in additional proceedings prior to the Tribunal’s issuance of a final award.
+Added: The arbitration is to be conducted pursuant to the Institute for Conflict Prevention and Resolution (CPR) Rules for Non-Administered Arbitration.
INVEGA SUSTENNA ANDA Litigation
−Removed: Janssen Pharmaceutica NV and Janssen Pharmaceuticals, Inc.
+Added: Janssen Pharmaceutica N.V.
+Added: and Janssen Pharmaceuticals, Inc.
initiated patent infringement lawsuits in the U.S.
3 unchanged sentences
(“Pharmascience”), Mallinckrodt plc, and SpecGX LLC (the “Pharmascience Lawsuit”), and in the U.S.
−Removed: District Court for the District
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: of Delaware in December 2021 against Tolmar Holding, Inc., Tolmar Pharmaceuticals, Inc., Tolmar Therapeutics, Inc., and Tolmar , Inc.
+Added: District Court for the District of Delaware in December 2021 against Tolmar Holding, Inc., Tolmar Pharmaceuticals, Inc., Tolmar Therapeutics, Inc., and Tolmar, Inc.
(“Tolmar” and such lawsuit, the “Tolmar Lawsuit”), following the respective filings by each of Teva, Mylan Labs, Pharmascience and Tolmar of an Abbreviated New Drug Application (“ANDA”) seeking approval from the FDA to market a generic version of INVEGA SUSTENNA before the expiration of U.S.
−Removed: On October 8, 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Teva Lawsuit.
−Removed: 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: In October 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Teva Lawsuit.
+Added: In December 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.
The Teva entities and Mylan Labs each filed notices of appeal of their respective judgments with the U.S.
−Removed: Court of Appeals for the Federal Circuit, which were consolidated in January 2022.
−Removed: The Pharmascience Lawsuit and Tolmar Lawsuit remain pending.
+Added: Court of Appeals for the Federal Circuit, which were consolidated in January 2022 (the “Teva Appeal”).
+Added: A trial has been scheduled in the Tolmar Lawsuit for October 2023.
+Added: The Pharmascience Lawsuit was administratively terminated in July 2022, pending the outcome of the Teva Appeal.
The Company is not a party to any of these proceedings.
+Added: ALKERMES PLC AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
INVEGA TRINZA ANDA Litigation
−Removed: In September 2020, Janssen Pharmaceuticals NV, Janssen Pharmaceuticals, Inc., and Janssen Research & Development, LLC, initiated a patent infringement lawsuit in the NJ District Court against Mylan Labs, Mylan, and Mylan Institutional LLC following the filing by Mylan Labs of an ANDA seeking approval from the FDA to market a generic version of INVEGA TRINZA before the expiration of U.S.
+Added: In September 2020, Janssen Pharmaceutica N.V., Janssen Pharmaceuticals, Inc., and Janssen Research & Development, LLC, initiated a patent infringement lawsuit in the NJ District Court against Mylan Labs, Mylan, and Mylan Institutional LLC following the filing by Mylan Labs of an ANDA seeking approval from the FDA to market a generic version of INVEGA TRINZA before the expiration of U.S.
Requested judicial remedies include recovery of litigation costs and injunctive relief.
+Added: A bench trial concluded on December 9, 2022.
The Company is not a party to this proceeding.
−Removed: RISPERDAL CONSTA European Opposition Proceedings
−Removed: In December 2016, Nanjing Luye Pharmaceutical Co., Ltd., Pharmathen SA, Teva PI and Dehns Ltd (a law firm representing an unidentified opponent) filed notices of opposition with the European Patent Office (the “EPO”) in respect of EP 2 269 577 B (the “EP ’577 Patent”), which is a patent directed to certain risperidone microsphere compositions, including RISPERDAL CONSTA.
−Removed: Following a hearing on the matter in January 2019, the EPO issued a written decision revoking the EP’577 Patent in April 2019.
−Removed: The Company filed a notice of appeal of the decision to the EPO’s Technical Boards of Appeal in June 2019.
−Removed: Pharmathen SA submitted a reply on November 5, 2019 and Nanjing Luye Pharmaceutical Co Ltd.
−Removed: and Teva Pharmaceutical Industries Ltd.
−Removed: submitted replies on December 20, 2019.
−Removed: The Company will continue to vigorously defend the EP ’577 Patent.
VIVITROL ANDA Litigation
1 unchanged sentence
and Alkermes Pharma Ireland Limited filed a patent infringement lawsuit in the NJ District Court against Teva and Teva PI following the filing by Teva of an ANDA seeking approval from the FDA to engage in the commercial manufacture, use or sale of a generic version of VIVITROL (naltrexone for extended-release injectable suspension) before the expiration of the Company’s U.S.
−Removed: Teva filed its Answer on November 16, 2020, which included counterclaims against the Company.
−Removed: The Company filed its Reply to Teva’s counterclaims on December 7, 2020.
−Removed: The Company intends to vigorously defend its intellectual property.
−Removed: 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.
+Added: A bench trial, adjourned from its prior scheduled start date due to COVID-19, is now scheduled to begin on February 16, 2023.
+Added: The Company intends to vigorously defend its IP.
Government Matters
2 unchanged sentences
The Company is cooperating with the investigations.
−Removed: ALKERMES PLC AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Securities Litigation
−Removed: In December 2018 and January 2019, purported stockholders of the Company filed putative class actions against the Company and certain of its officers in the U.S.
−Removed: District Court for the Eastern District of New York (the “EDNY District Court”) captioned Karimian v.
−Removed: Alkermes plc, et al., No.
−Removed: 1:18-cv-07410 and McDermott v.
−Removed: Alkermes plc, et al., No.
−Removed: 1:19-cv-00624 , respectively.
−Removed: In March 2019, the EDNY District Court consolidated the two cases and appointed a lead plaintiff.
−Removed: The plaintiff filed an amended complaint on July 9, 2019 naming one additional officer of the Company and one former officer of the Company as defendants.
−Removed: The amended complaint was filed on behalf of a putative class of purchasers of Alkermes securities during the period of July 31, 2014 through November 1, 2018 and alleges violations of Sections 10(b) and 20(a) of the Exchange Act based on allegedly false or misleading statements and omissions regarding the Company’s clinical methodologies and regulatory submission for ALKS 5461 and the FDA’s review and consideration of that submission.
−Removed: The lawsuit seeks, among other things, unspecified money damages, prejudgment and postjudgment interest, reasonable attorneys’ fees, expert fees and other costs.
−Removed: In February 2021, the EDNY District Court entered a final judgment and order dismissing the action in its entirety (the “Final Judgment and Order”).
−Removed: In March 2021, the plaintiff filed a notice of appeal captioned In re Alkermes Public Limited Co.
−Removed: Securities Litig., No.
−Removed: 21-801 , appealing the Final Judgment and Order to the United States Court of Appeals for the Second Circuit (the “Second Circuit”).
−Removed: 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
−Removed: The Company is also involved in product liability cases and other legal proceedings incidental to its normal business activities, including product liability cases alleging that the FDA-approved VIVITROL labeling was inadequate and caused the users of the product to suffer from opioid overdose and death.
+Added: The Company is involved in litigation and other legal proceedings incidental to its normal business activities, including product liability cases alleging that the FDA-approved VIVITROL labeling was inadequate and caused the users of the product to suffer from opioid overdose and death.
The Company intends to vigorously defend itself in these matters.
−Removed: While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing matters would have a material adverse effect on the Company’s business or financial condition.
+Added: In addition, on January 10, 2023, Acorda filed a petition with the U.S.
+Added: District Court for the Southern District of New York asking the court to confirm in part and modify in part the final arbitral award rendered by an arbitration panel in October 2022 and, as part of the requested modification, seeking an additional approximately $ 66.0 million in damages.
+Added: The Company intends to contest this petition and believes it is without merit.
+Added: While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing proceedings would have a material adverse effect on the Company’s business or financial condition.
Purchase Commitments
2 unchanged sentences
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.