AMARIN CORP PLC\UK 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Annual Report on Form 10-K contains forward-looking statements concerning future events and our performance. When used in this Annual Report on Form 10-K, the words “may,” “would,” “should,” “could,” “expects,” “aims,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” or “continue” or the negative of these terms or other comparable terminology are included to identify forward-looking statements. These statements include but are not limited to statements regarding the commercial success of VASCEPA and factors that can affect such success; interpretation of court decisions; plans with respect to litigation; expectation on determinations and policy positions of the United States Food and Drug Administration, or U.S. FDA; the safety and efficacy of our product and product candidates; expectation regarding the potential for VASCEPA to be partnered, developed and commercialized outside of the United States; expectation on the scope and strength of our intellectual property protection and the likelihood of securing additional patent protection; estimates of the potential markets for our product candidates; estimates of the capacity of manufacturing and other facilities to support our products; our operating and growth strategies; our industry; our projected cash needs, liquidity and capital resources; and our expected future revenues, operations and expenditures. These forward-looking statements are based on our current expectations and assumptions and many factors could cause our actual results to differ materially from those indicated in these forward-looking statements. You should review carefully the factors identified in this Annual Report on Form 10-K in Item 1A, “Risk Factors”. We disclaim any intent to update or announce revisions to any forward-looking statements to reflect actual events or developments, except as required by law. Except as otherwise indicated herein, all dates referred to in this Annual Report on Form 10-K represent periods or dates fixed with reference to our fiscal year ended December 31, 2025. Overview We are a pharmaceutical company focused on the commercialization and development of therapeutics to improve cardiovascular, or CV, health and reduce CV risk. Our commercialized product, VASCEPA ® (icosapent ethyl) was first approved by the United States, or U.S., Food and Drug Administration, or U.S. FDA, in July 2012 for use as an adjunct to diet to reduce triglyceride, or TG, levels in adult patients with severe (≥500 mg/dL) hypertriglyceridemia, or the MARINE indication. On December 13, 2019, the U.S. FDA approved another indication and label expansion for VASCEPA based on the results of our long-term cardiovascular outcomes trial, REDUCE-IT ® , or Reduction of Cardiovascular Events with EPA – Intervention Trial. VASCEPA is approved by the U.S. FDA as an adjunct to maximally tolerated statin therapy for reducing persistent cardiovascular risk in select high risk-patients, or the REDUCE-IT indication. On March 26, 2021, the European Commission, or EC, approved the marketing authorization application for VASCEPA, under the brand name VAZKEPA ® , hereinafter along with VASCEPA, collectively referred to as VASCEPA, in the European Union, or EU, to reduce the risk of cardiovascular events in high-risk statin-treated adult patients who have elevated triglycerides ( > 150 mg/dL) and either established cardiovascular disease or diabetes and at least one additional cardiovascular risk event. On April 22, 2021, we announced that the Medicines and Healthcare Products Regulatory Agency, or MHRA, approved VAZKEPA in England, Scotland and Wales to reduce cardiovascular risk. Collectively, Committee for Medicinal Products for Human Use, or CHMP, EMA, EC and MHRA are referred to herein as the European Regulatory Authorities. We and our seven commercial partners are in various stages; seeking or maintaining regulatory approval, obtaining government or private pricing and reimbursement, and/or commercialization. VASCEPA and VAZKEPA approvals and applications for approval globally reference either the U.S. New Drug Application, or NDA, core dossier or the EMA core dossier. VASCEPA (U.S. NDA Core Dossier) VAZKEPA (EMA Core Dossier) Amarin (US) Recordati Industria Chimica e Farmaceutica S.p.A "Recordati" (Europe) (1) HLS Therapeutics Inc. "HLS" (Canada) CSL Seqirus "CSL"(Australia/New Zealand) Biologix FZCo "Biologix" (Middle East North Africa, or MENA) Lotus Pharmaceuticals, "Lotus" (Southeast Asia) Eddingpharm (Asia) Macao Commercial Offshore Limited "Edding" (China Territory) Neopharm (Israel) 1996 Ltd. "Neopharm" (Israel) (1) - As part of the Recordati partnership, agreements with Vianex S.A "Vianex" (Greece), Magnapharm Marketing & Sales Romania S.R.L. "Magnapharm" (Romania), and Salus, Veletrgovina, d.o.o, "Salus" (Slovenia) will be transitioned to Recordati. We are responsible for supplying VASCEPA to all markets in which the branded product is sold, including countries where the drug is promoted and sold via collaboration with third-party partners that compensate us for such supply. We are not responsible for providing any generic company with drug product. The Company operates in one business segment. 71 United States VASCEPA is sold principally to a limited number of major wholesalers, as well as selected regional wholesalers and retail and mail order pharmacy providers, or collectively, our distributors or our customers, most of whom in turn resell VASCEPA to retail pharmacies for subsequent resale to patients. Since VASCEPA was made commercially available in 2013, approximately 30 million estimated normalized total prescriptions of VASCEPA have been reported by Symphony Health. In 2020, following our unsuccessful appeals of a court ruling in favor of two generic drug companies, Dr. Reddy’s Laboratories, Inc., or Dr. Reddy’s, and Hikma Pharmaceuticals USA Inc., or Hikma, and certain of their affiliates, several of our patents covering the MARINE indication were declared invalid. As a result, the following generic versions of icosapent ethyl have obtained U.S. FDA approval with labeling consistent with the MARINE indication and have entered the U.S. market: Company (ANDA Holder) Distributed / Licensee FDA MARINE Indication Approval 1-gram Launch Date 0.5-gram Launch Date Active Hikma Pharmaceuticals USA Inc. Hikma Pharmaceuticals USA Inc.; Northstar Rx; Bryant Ranch Pre-Pack May 2020 November 2020 March 2023 Yes Dr. Reddy’s Laboratories, Inc. Dr. Reddy’s Laboratories, Inc. August 2020 June 2021 June 2023 Yes Teva Pharmaceuticals USA, Inc. Teva Pharmaceuticals USA, Inc.; AvKare September 2020 January 2023 September 2022 Yes Apotex, Inc. Apotex, Inc.; American Health Packaging; Golden State Medical Supply June 2021 January 2022 – Yes Zydus Lifesciences Zydus Pharmaceuticals USA April 2023 August 2024 June 2024 Yes Onesource Specialty (Amneal Original Filer) Amneal Pharmaceuticals September 2023 April 2024 April 2024 Yes Humanwell Puracap Epic Pharma December 2023 March 2024 – Yes Ascent Pharmaceuticals, Inc. Camber Pharmaceuticals; Northstar Rx; XL Care Pharmaceuticals December 2023 April 2024 February 2024 August 2024 April 2024 – December 2024 Yes Qilu Pharmaceutical Co Ltd – November 2024 – – No PharmaObedient (Spriaso Original Filer) – December 2024 – – No Xiamen LP Pharma Co. Vitruvias Therapeutics August 2025 January 2026 – Yes We obtain data from a third party, Symphony Health, which collects and reports estimates of weekly, monthly, quarterly and annual prescription information. There is a limited amount of information available to determine the actual number of total prescriptions for products like VASCEPA during such periods. The vendor's estimate utilizes a proprietary projection methodology and is based on a combination of data received from pharmacies and other distributors, as well as historical data when actual data is unavailable. Based on data from Symphony Health, the below chart represents the estimated number of normalized total VASCEPA prescriptions in the U.S. 72 Normalized total prescriptions represent the estimated total number of VASCEPA prescriptions dispensed to patients, calculated on a normalized basis (i.e., one month’s supply, or total capsules dispensed multiplied by the number of grams per capsule divided by 120 grams). Inventory levels at wholesalers tend to fluctuate based on seasonal factors, prescription trends and other factors. The previous calculations of prescription levels by this vendor can change between periods and can be significantly affected by lags in data reporting from various sources or by changes in pharmacies and other distributors providing data. Such methods can from time to time result in significant inaccuracies in information when ultimately compared with actual results. These inaccuracies have historically been most prevalent and pronounced during periods of time of inflections upward or downward in rates of use. Further, data for a single and limited period may not be representative of a trend or otherwise predictive of future results. Europe In 2021, we received marketing authorization and regulatory approval in the EU, England, Wales and Scotland. In June 2025, we entered into an exclusive long-term license and supply agreement with Recordati, or the Recordati Licensing Agreement, related to the development and commercialization of VAZKEPA in 59 countries focused in Europe, or the Recordati Territory. As a result of the Recordati Licensing Agreement, Recordati is solely responsible for commercializing VAZKEPA in the Recordati Territory. Recordati may sell VAZKEPA pursuant to the product reimbursements we have already obtained in Europe, as shown below, and the agreements with existing partners in the Recordati Territory being transitioned to Recordati. In addition, Recordati will use commercially reasonable efforts to pursue future product reimbursements and approvals in the Recordati Territory. Launch of VAZKEPA in individual countries depends on the timing of achieving product reimbursement on a country-by-country basis. To date, we have filed 20 dossiers to gain market access in European countries, including in all of the largest countries in Europe. In most European countries, securing product reimbursement is a requisite to launching. In certain countries, such as Denmark, individual patient reimbursement is allowed prior to national reimbursement. In countries where individual price reimbursement is allowed prior to national reimbursement, product can be made available on a patient-by-patient basis, while the national reimbursements negotiations are ongoing. In all countries, securing adequate reimbursement is a requisite for commercial success of any therapeutic. The time required to secure reimbursement varies from country to country and cannot be reliably predicted. While we believe that we have strong arguments regarding the cost effectiveness of VAZKEPA, the success of such reimbursement negotiations have a significant impact on the assessment of the commercial opportunity of VAZKEPA in Europe. Through the date of this Annual Report, we received marketing authorization by the MHRA and the European Medicines Agency, or EMA, and subsequently we have made VAZKEPA available under individual reimbursement or received national reimbursement and launched commercial operations, which has since been licensed to Recordati, in the following countries, respectively. 73 Country Individual Reimbursement National Reimbursement Product Availability Launch Date Sweden – March 2022 March 2022 March 2022 Finland – October 2022 December 2022 December 2022 England/Wales/Northern Ireland – July 2022 October 2022 October 2022 Spain – July 2023 September 2023 September 2023 Netherlands – August 2023 September 2023 September 2023 Scotland – August 2023 August 2023 September 2023 Greece (1) – May 2024 June 2024 June 2024 Portugal – August 2024 August 2024 September 2024 Italy – December 2024 December 2024 January 2025 Slovenia (2) – September 2025 October 2025 October 2025 Austria September 2022 February 2025 September 2022 – Denmark June 2022 – June 2022 – (1) - Vianex will be the sole and exclusive distributor of VAZKEPA in the Greek territory to import, register, distribute and commercialize VAZKEPA. (2) - Salus will be the sole and exclusive distributor of VAZKEPA in the Slovenian territory to import, register, distribute and commercialize VAZKEPA. Patients at high risk for cardiovascular disease tend to be treated more often by specialists, such as cardiologists rather than by general practitioners. Privacy laws and other factors impact the availability of data to inform European commercial operations at an individual physician level. Generally, less data is available and at reduced frequencies than in the U.S. However, this greater concentration of at-risk patients being treated by specialists in Europe should allow for more efficient promotion than in the U.S. In Europe, VAZKEPA has the benefit of 10 years of market protection, and in April 2024 we were issued a patent that extended our exclusivity to 2039. Rest of World (RoW) One of our core areas of focus is continuing to work on generating revenue from our partnerships in key international markets, outside the Recordati Territory. We and our RoW partners have obtained varying levels of indication approvals and initiated or are in the process of initiating commercial launches in various territories where our partners have access. Through the date of this Annual Report, we have filed for regulatory review in 22 countries and regions and have received approval in 17 countries and regions outside of the U.S. and EMA regulatory approval authority. We have agreements in place with the following partners within the respective territories: Partner Agreement Date Country MARINE Approval REDUCE-IT Approval Launch Date Edding (1) February 2015 Mainland China June 2023 June 2024 October 2023 Hong Kong – February 2023 May 2024 Biologix (2) March 2016 Lebanon March 2018 August 2021 June 2018 United Arab Emirates July 2018 October 2021 February 2019 Qatar December 2019 April 2021 May 2022 Bahrain April 2021 April 2022 September 2023 Kuwait December 2021 March 2023 September 2023 Saudi Arabia March 2022 June 2023 September 2023 HLS September 2017 Canada – December 2019 February 2020 CSL February 2023 Australia – November 2022 October 2024 New Zealand – January 2023 – Neopharm (3) August 2023 Israel – March 2023 May 2024 Lotus (4) August 2023 South Korea – May 2025 – Singapore – December 2025 – (1) - VASCEPA is under registration in Macau and Taiwan in the China Territory with Edding. (2) - VASCEPA is under registration in additional countries in the MENA region with Biologix. (3) - VASCEPA is under registration in additional countries in the Israel territory with Neopharm. Revenue earned from sales of VASECPA within the Israel territory are recorded within European revenue. (4) - VASCEPA is under registration in additional countries in the ASEAN region with Lotus. 74 We will be responsible for supplying finished product to these partners. We continue to assess other potential partnership opportunities for VASCEPA with companies with the intention of partnering in all other international markets where VASCEPA receives local regulatory approval. Global Restructuring Program On June 24, 2025, we announced a global restructuring plan, the Global Restructuring Plan, in connection with the execution of an exclusive long-term license and supply agreement with Recordati, with the vast majority of estimated cost savings to come from the elimination of commercial roles in our European operations. We expect these actions will reduce operating costs by approximately $70 million annually. Research and Development Since its inception in 2011, the REDUCE-IT cardiovascular outcomes study of VASCEPA has been the centerpiece of our research and development. We also continue to study the potential mechanisms of action of the single active ingredient in VASCEPA, icosapent ethyl, or IPE. Based on the final positive results of REDUCE-IT, we sought additional indicated uses for VASCEPA in the U.S. and continue to pursue approval for VASCEPA around the world. We also anticipate continuing to publish additional details of the REDUCE-IT study to address scientific interest beyond the primary results of this study derived from the over 35,000 patient years of study experience which were accumulated in the REDUCE-IT study. Based on REDUCE-IT results, as of the date of the filing of this Annual Report, more than 70 global medical societies or journals have recognized the use of IPE in appropriate at-risk patients for CV risk reductions in clinical treatment guidelines, consensus statements, or scientific statements, including those statements which we were informed of by our global partners in Canada, China, Southeast Asia, Australia, and the Middle East as well as guidelines which were newly received during the fourth quarter of 2025 as listed below: • In November 2025, the American Heart Association, or AHA, released a Scientific Statement on Nonobstructive Coronary Artery Disease in Patients with Chest Pain. The following information was included on IPE: o Despite reduction in LDL-C levels, residual risk remains up to 30% at 10 years, representing a needed target for pharmacologic interventions. Among medications with proven Randomized Controlled Trials, or RCT, data improving outcomes from residual risk, IPE has the most supporting data. In the landmark REDUCE-IT, IPE 4 g/day added to statin therapy reduced the composite of cardiovascular death, Myocardial Infarction, or MI, stroke, coronary revascularization, or unstable angina by 25% among patients with established atherosclerotic disease or diabetes and ≥1 additional cardiovascular risk factor and triglyceride levels between 135 and 499 mg/dL (HR, 0.75 [95% CI, 0.68–0.83]; P<0.001). In addition, imaging studies, such as EVAPORATE, or Effect of Vascepa on Improving Coronary Atherosclerosis in People With High Triglycerides Taking Statin Therapy, have shown that treatment with icosapent ethyl can lead to plaque regression. • In November 2025, the French Society of Endocrinology, the Francophone Society of Diabetes, the New Francophone Society of Atherosclerosis, and the French Society of Cardiology released a consensus statement on the management of dyslipidemias in adults. The following recommendations and information was included on IPE: o Only the REDUCE-IT study with high-dose IPE (4 g/day) was associated with a significant reduction in major CV events (CV death, non-fatal MI and stroke, unstable angina, and coronary revascularization) by 25% compared to placebo (paraffin oil) in people with Hypertriglyceridemia, or HTG, in secondary prevention or living with Type 2 Diabetes on statins. o Based on the REDUCE-IT clinical trial, which showed a 26% reduction in CV events despite a moderate decrease in TG concentrations, IPE at 4 g/day is indicated, in addition to a statin, in patients with high or very high CV risk with HTG between 1.35 and 4.99 g/L (1.5 and 5.6 mmol/L). o Class IIa: In individuals with high or very high CV risk and moderate HTG (1.5-5 g/L), IPE (2 g twice daily) should be considered in addition to a statin. • In November 2025, the European Association of Preventive Cardiology, the European Association of Cardiovascular Imaging, of the European Society of Cardiology, or ESC, the ESC Working Group on Atherosclerosis and Vascular Biology, and the ESC Working Group on Cardiovascular Pharmacotherapy, released a scientific statement on therapies leading to coronary atherosclerosis plaque regression. The following information was included on IPE: o An Intravascular Ultrasound randomized controlled trial, CHERRY, assessed whether coronary plaque regression is reinforced by the addition of EPA to high-dose pitavastatin. The study showed greater regression of atheroma volumes over 6 months with the administration of EPA 1800 mg/day compared with pitavastatin alone. 75 o In the EVAPORATE trial, 80 subjects were randomized to EPA vs. optimal medical treatment with more advanced low attenuation and fibrofatty plaque regression on Coronary Computed Tomography Angiography observed in the EPA group. During 2025, we announced and supported the following data which added to our growing body of knowledge on VASCEPA as a result of our continued analysis of the REDUCE-IT trial results: • In March 2025, at the American College of Cardiology, or ACC, Scientific Sessions, we supported two posters, one looking at the antioxidant and anti-inflammatory effects of EPA in combination with a Glucagon-like peptide-1, or GLP-1, agonist on endothelial cells, and another looking at the antioxidant effects of EPA on Lipoprotein little a, or Lp(a), as compared to small, dense, LDL and TG rich lipoprotein. • In April 2025, at the European Society of Cardiology Preventive Cardiology, or ESC-PC, congress in Milan, Italy, we provided grant support for two poster presentations, one evaluating eligibility for and barriers to IPE utilization in a medical clinic, and another reporting on a project aimed to improve lipid lowering for secondary prevention in a primary healthcare facility. • In May 2025, at the EAS Congress in Glasgow, UK, we provided grant support for two poster presentations, both reporting on the potential additive effects of eicosapentaenoic acid and a GLP-1 agonist on changes in protein expression associated with antioxidant and/or anti-inflammatory effects in response to inflammatory stimuli. • In June 2025, at the National Lipid Association scientific sessions in Miami, Florida, we provided grant support for a poster reporting on a pilot implementation strategy to improve post-acute coronary syndrome management of patients with hypertriglyceridemia. • In July 2025, at the Heart UK meeting in Coventry, England, we along with our collaborators provided support for a REDUCE-IT poster presentation analyzing the efficacy of IPE by burden of standard modifiable CV risk factors. This same data analysis was later presented in August of 2025 as an ENCORE poster presentation at the Annual Scientific Meeting of the Cardiac Society of Australia and New Zealand with support from our partners in Australia, CSL. • In August 2025, at the Australasian Diabetes Congress in Queensland, Australia, we along with CSL and our collaborators supported an ENCORE poster presentation analyzing the reduction in ischemic events with IPE in patients with diabetes and prior coronary artery bypass graft. • At the European Society of Cardiology, or ESC, scientific session which occurred from August 29 to September 1, 2025, in Madrid, Spain, we along with our global collaborators supported five separate presentations ranging from the effect of IPE on risk and duration of hospitalizations and death in REDUCE-IT to mechanistic data looking at the antioxidant effects of EPA on Lp(a). • In September 2025, at the European Association for the Study of Diabetes Congress in Vienna, Austria, we along with our global collaborators supported an oral presentation analyzing the efficacy of IPE across the spectrum of baseline triglyceride to glucose index. • In October 2025, at the Canadian Cardiovascular Congress in Quebec, Canada, we along with our global collaborators supported two encore presentations from REDUCE-IT on the effects of IPE in secondary prevention patients with cardiovascular-kidney-metabolic syndrome, and on the effects of IPE on the risk and duration of hospitalizations and death. • In November 2025, at the AHA Scientific Sessions meeting in New Orleans, Louisiana, we along with our global collaborators supported four separate presentations ranging from the efficacy of IPE on CV risk reduction by aspirin use in REDUCE-IT to mechanistic data evaluating the effects of EPA on Lp(a) oxidation, and the effect of the combination of EPA and a GLP-1 agonist on protein expression in endothelial cells during inflammation. In total, Amarin and global medical and scientific collaborators supported 45 publications inclusive of accepted abstracts, posters, and manuscripts for the year 2025. Commercial and Clinical Supply We manage the manufacturing and supply of VASCEPA and rely on contract manufacturers in each step of our commercial and clinical product supply chain. These steps include active pharmaceutical ingredient, or API, manufacturing, encapsulation of the API, product packaging and supply-related logistics. Our approach to product supply procurement is designed to mitigate risk of supply interruption and maintain an environment of cost competition through diversification of contract manufacturers at each stage of the supply chain and lack of reliance on any single supplier. We have multiple U.S. FDA-approved international API suppliers, encapsulators and packagers to support the VASCEPA commercial franchise in the U.S. We also have multiple international API 76 suppliers, encapsulators and packagers to support the commercialization of VASCEPA in geographies where the drug is approved outside the U.S. Not all of our suppliers approved by the U.S. FDA are approved in every other geography. The regulatory process generally requires extensive details as part of the submission provided to a country or region in connection with a company's request for regulatory approval. Suppliers must be specifically identified as part of the submission for qualification and approval for commercialization in a country or region. As a result, only supply, as approved, may be used in finished goods available for sale in a specific country or region. The amount of supply we seek to purchase in future periods will depend on the level of growth of VASCEPA revenues and minimum purchase commitments with certain suppliers. Beginning in 2022, we reviewed our contractual supplier purchase obligations and began taking steps to amend supplier agreements to align supply arrangements with current and future market demand, while we decrease our current inventory levels primarily related to North America approved inventory. As of December 31, 2025, we had inventory of $195.9 million, of which approximately 50% is inventory approved for use in North America. We continue to negotiate with our contract suppliers to align our supply arrangements with current and future global market demand. Financial Operations Overview Product revenue, net. All of our product revenue is derived from product sales of 1-gram and 0.5-gram size capsules of VASCEPA, net of allowances, discounts, incentives, rebates, chargebacks and returns. In the U.S., VASCEPA is sold to three major wholesalers, several regional wholesalers along with mail order pharmacy providers that in turn resell the product to retail pharmacies, as well as directly to select regional retail pharmacy chains, or collectively, our distributors or our customers. Most of these customers resell VASCEPA to retail pharmacies for purposes of dispensing VASCEPA to patients. Revenues from VASCEPA sales are recognized upon delivery to the distributor or customer. Timing of shipments to wholesalers, as used for revenue recognition, and timing of prescriptions as estimated by third-party sources such as Symphony Health may differ from period to period. Our product revenue, net included adjustment for co-pay mitigation rebates provided by us to commercially insured patients in the U.S. Outside of the U.S., our product revenue is derived from the sales of VASCEPA to our commercial partners based on the net price for VASCEPA established in our contracts with such partners. These commercial partners then resell the product in their agreed commercial territory. Revenues from sales to our international commercial partners are recognized when the commercial partners obtain control of our product. The net price of VASCEPA sold by us to our customers where we directly sell VASCEPA is generally significantly higher than the net price of VASCEPA that we sell to commercial partners who then incur the cost of promoting and reselling the product in their territories. As a result, even when the net price of VASCEPA to patients is similar in various parts of the world, our gross margin on sales is higher where we sell VASCEPA directly. Licensing and royalty revenue. Licensing and royalty revenue currently consists of revenue attributable to receipt of upfront, non-refundable payments, milestone payments and sales-based payments related to license and distribution agreements for VASCEPA outside the U.S. We recognize revenue from licensing arrangements as we fulfill the performance obligations under each of the agreements. As part of our licensing agreements with certain territories outside of the U.S., we are entitled to a percentage of revenue earned based on sales by our partners. The royalty payments are being recognized when the uncertainty related to the consideration is resolved. Cost of goods sold. Cost of goods sold includes the cost of API for VASCEPA on which revenue was recognized during the period, as well as the associated costs for encapsulation, packaging, shipment, supply management, quality assurance, insurance, and other indirect manufacturing, logistics and product support costs. The cost of the API included in cost of goods sold reflects the average cost method of inventory valuation and relief. This average cost reflects the actual purchase price of VASCEPA API. Our cost of goods sold is not materially impacted by whether we sell VASCEPA directly in a country or we sell VASCEPA to a commercial partner for resale in a country. In the year ended December 31, 2024, we incurred costs within Cost of goods sold - restructuring inventory related to steps taken to amend supplier agreements to align supply arrangements with current and future market demand. Selling, general and administrative expense. Selling, general and administrative expense consists primarily of salaries and other related costs, including stock-based compensation expense, for personnel in our sales, marketing, executive, business development, finance and information technology functions. Other costs primarily include facility costs and professional fees for accounting, consulting and legal services. Research and development expense. Research and development expense consists primarily of fees paid to professional service providers in conjunction with independent monitoring of our clinical trials and acquiring and evaluating data in conjunction with our clinical trials, fees paid to independent researchers, costs of qualifying contract manufacturers, services expenses incurred in developing and testing products and product candidates, salaries and related expenses for personnel, including stock-based compensation expense, costs of materials, depreciation, rent, utilities and other facilities costs. In addition, research and development expenses include the cost to support current development efforts, costs of product supply received from suppliers when such receipt by us is prior to regulatory approval of the supplier, as well as license fees related to our strategic collaboration with Mochida. We expense research and development costs as incurred. 77 Restructuring expense. Restructuring expense consists of restructuring costs incurred under our June 2025 Global Restructuring Plan and July 2023 ORP, which consists of severance pay, incentive compensation, insurance benefits, stock-based compensation and other contract related costs. Interest income, net and other income, net. Interest income, net consists primarily of interest earned on our cash and cash equivalents, as well as our short-term and long-term investments. Other income (expense), net, consists of foreign exchange losses and gains as well as sublease income. Income tax provision. Income tax provision, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. We are subject to income taxes in both the U.S. and foreign jurisdictions. In applying guidance prescribed under ASC 740 and based on present evidence and conclusions around the realizability of deferred tax assets, we determined that any tax benefit related to the pretax losses generated for the year-ended December 31, 2025 and 2024, are not more likely than not to be realized. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements and notes, which have been prepared in accordance with accounting principles generally accepted in the U.S., or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. On an ongoing basis, estimates are assessed and adjusted based on historical experience and current market-specific indicators, environment and assumptions. Actual results may differ from these estimates under different assumptions or conditions. A summary of our critical accounting policies, significant judgments and estimates is presented in Note 2—Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. Revenue Recognition —In accordance with GAAP, under Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers revenue is recognized when product has been delivered to the wholesaler, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of Topic 606, we perform the following five steps: (i) identify the contract(s) with a distributor; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We apply the five-step model to contracts only when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the distributor. At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract, determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. We recognized total revenue, net of $213.6 million and $228.6 million during the years ended December 31, 2025 and 2024, respectively, of which $182.8 million and $204.6 million, respectively, was based on product revenue sales. For a complete discussion of our accounting for net product revenue, licensing and royalty revenues, which make up Total revenue, net, see Note 2—Significant Accounting Policies . We have written contracts with our distributors, and transfer of control typically occurs upon delivery of our product to the distributor. We evaluate the creditworthiness of each of our distributors to determine whether revenues can be recognized upon delivery, subject to satisfaction of the other requirements, or whether recognition is required to be delayed until receipt of payment. We calculate gross product revenues based on the wholesale acquisition cost charged to our distributors for VASCEPA. We estimate our Product revenue, net by deducting from our gross product revenues (a) trade allowances, such as invoice discounts for prompt payment and distributor fees, (b) estimated government and private payor rebates, chargebacks and healthcare discounts, such as Medicaid reimbursements, (c) expected product returns and (d) estimated costs of incentives offered to certain indirect customers, including patients. The gross to net deductions are estimated based on available actual prescription data, historical industry trends, and levels of inventory in the distribution channel. We rely on resale data provided by our distributors as well as prescription data provided by Symphony Health and IQVIA in estimating the level of inventory held in the distribution channel. A hypothetical 5% change in estimated aggregate bottles of channel inventory would result in a change of approximately 1% in net product revenues reported during the years ended December 31, 2025 and 2024. When evaluating licensing arrangements, we perform the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) we satisfy each performance obligation. In determining performance obligations, we evaluate whether the license is distinct from the other performance obligations with the collaborative partner based on the consideration of the relevant facts and circumstances for each 78 arrangement. Factors considered include the stage of development of the license delivered, research and development capabilities of the partner and the ability of partners to develop and commercialize VASCEPA independent of us. If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the distributor and the distributor is able to use and benefit from the license. For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. At the inception of each arrangement that includes development, regulatory and commercial milestone payments, we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the control of the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. We evaluate factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the respective milestone as well as the level of effort and investment required. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such development, regulatory and commercial milestones and any related constraint, and if necessary, adjust its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect licensing revenues and earnings in the period of adjustment. At the inception of each arrangement that includes royalty-based payments, the Company evaluates whether the royalties relate to the license of intellectual property, in which case they are accounted for under the royalty constraint within ASC 606 and recognized when the later of the subsequent sale or usage occurs or when the performance obligations have been satisfied. If the royalties do not relate to the licensing of intellectual property, the royalties are accounted for under the variable consideration constraint within ASC 606 and are recognized in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue will not occur when the uncertainty around the variable consideration is subsequently resolved. Royalty payments that fall within the variable consideration constraint take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The royalties that are considered variable consideration are recognized when the uncertainty related to the variable consideration is subsequently resolved. At the end of each subsequent reporting period, the Company reevaluates the circumstances and recognizes royalties that are no longer constrained. We receive payments from our customers based on billing schedules established in each contract. Upfront payments and fees are either recognized as licensing revenue or recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until we perform our obligations under these arrangements. Amounts are recorded as accounts receivable when our right to consideration is unconditional. We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Income Taxes —Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts and tax bases of assets and liabilities and operating loss carryforwards and other attributes using enacted rates expected to be in effect when those differences reverse. Valuation allowances are provided against deferred tax assets that are not more likely than not to be realized. We provide reserves for potential payments of tax to various tax authorities or do not recognize tax benefits related to uncertain tax positions and other issues. Tax benefits for uncertain tax positions are based on a determination of whether a tax benefit taken by us in our tax filings or positions is more likely than not to be realized, assuming that the matter in question will be decided based on its technical merits. Our policy is to record interest and penalties in the provision for income taxes. We assess our ability to realize deferred tax assets at each reporting period. The realization of deferred tax assets depends on generating future taxable income during the periods in which the tax benefits are deductible or creditable. When making our assessment about the realization of our deferred tax assets as of December 31, 2025, we considered all available evidence, placing particular weight on evidence that could be objectively verified. The evidence considered included the (i) historical taxable profitability of our U.S. operations, (ii) historical pre-tax book loss position, (iii) sources of future taxable income, giving weight to sources according to the extent to which they can be objectively verified, (iv) the provisions of the Tax Cuts and Jobs Act enacted in 2017 and their impact on our future taxable income, and (v) the risks to our business related to the commercialization and 79 development of VASCEPA. Based on our assessment, we concluded that all of our net deferred tax assets are not more likely than not to be realizable as of both December 31, 2025 and 2024. Changes in historical earnings performance, future earnings projections, and changes in tax laws and tax rates, among other factors, may cause us to adjust our valuation allowance on deferred tax assets in the future, which would impact our income tax expense in the period in which we determine that these factors have changed. We intend to maintain the valuation allowance until sufficient positive evidence exists to conclude that it is more likely than not that our deferred tax benefits will be realized. We will continue to monitor the need for valuation allowances in each jurisdiction and may adjust our positions in the future. Excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments are recognized as an income tax benefit and expense, respectively, in the consolidated statement of operations. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 2—Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. Effects of Inflation We believe the impact of inflation on operations has been minimal during the past three years. Results of Operations The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for fiscal years 2025 and 2024. For a comparison of our results of operations and financial condition for fiscal years 2024 and 2023, see “ Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of our 2024 Annual Report on Form 10-K, filed with the SEC on March 12, 2025 . Comparison of Fiscal Years Ended December 31, 2025 and December 31, 2024 Total revenue, net. We recorded total revenue, net, of $213.6 million and $228.6 million during the years ended December 31, 2025 and 2024, respectively, a decrease of $15.0 million, or 7%. Total revenue, net consists primarily of revenue from the sale of VASCEPA in the U.S. As further discussed below, the decrease consists of reductions of $12.6 million in U.S. net product revenue and $9.3 million in net product revenue from sales of VASCEPA to our partners located outside of the U.S., offset by increases of $6.9 million in licensing and royalty revenue. Product revenue, net. We recorded product revenue, net, of $182.8 million and $204.6 million during the years ended December 31, 2025 and 2024, respectively, a decrease of $21.8 million, or 11%. This decrease was due primarily to a 8% decrease in VASCEPA sales in the U.S. We recorded U.S. product revenue, net, of $154.1 million and $166.7 million for the years ended December 31, 2025 and 2024, respectively. This decrease was due to a decline in net selling price as a result of the impact from generic competition in the market. The overall icosapent ethyl market in the U.S., based on prescription levels reported by Symphony Health, increased for the year ended December 31, 2025 by 2% as compared to the year ended December 31, 2024. Our share of the icosapent ethyl market has decreased to approximately 47% in the year ended December 31, 2025 from approximately 53% in the year ended December 31, 2024. Additionally, based on prescription levels reported by Symphony Health, VASCEPA-branded prescriptions decreased by 10% in the year ended December 31, 2025 as compared to the year ended December 31, 2024. In Europe, we recorded product revenue, net, of $18.4 million and $13.7 million as of December 31, 2025 and 2024, respectively, primarily from the UK and Spain. For the year ended December 31, 2025, we recorded RoW product revenue, net, of $10.2 million from our six collaboration partners, comprising multiple distinct geographies, compared to $24.2 million during the year ended December 31, 2024. The decline reflects normal variability across the multiple geographies encompassing this early stage of a developing ex-U.S. market. Licensing and royalty revenue. Licensing and royalty revenue during the years ended December 31, 2025 and 2024 was $30.9 million and $24.0 million, respectively, an increase of $6.9 million, or 29%. This increase was primarily due to the recognition of a $25.0 million upfront payment resulting from the execution of the Recordati Licensing Agreement and higher royalties as a result of an increase in partner sales within their respective territories. During the year ended December 31, 2024, we recognized a $15.0 80 million milestone and $4.0 million change in estimate resulting from the regulatory approval of VASCEPA under the REDUCE-IT indication in China in June 2024. Cost of goods sold. Cost of goods sold during the years ended December 31, 2025 and 2024 was $92.8 million and $147.2 million, respectively, a decrease of $54.5 million, or 37%. Cost of goods sold includes the cost of API for VASCEPA on which revenue was recognized during the period, as well as the associated costs for encapsulation, packaging, shipment, supply management, insurance and quality assurance. The cost of the API included in cost of goods sold reflects the average cost of API included in inventory. This average cost reflects the actual purchase price of VASCEPA API. During 2024, we took steps to amend supplier agreements to align supply arrangements with current and future demand resulting in a $36.5 million charge recorded as cost of goods sold - restructuring inventory. During 2025, approximately $0.4 million of inventory was expensed through cost of goods sold due to product dating. During 2024, approximately $8.0 million of inventory was expensed through cost of goods sold due to both product dating and non-product dating unsellable inventory. The API included in the calculation of the average cost of goods sold during the years ended December 31, 2025 and 2024 was sourced from multiple API suppliers. These suppliers compete with each other based on cost, consistent quality, capacity, timely delivery and other factors. In the future, we may see the average cost of supply change based on numerous potential factors including increased volume purchases, continued improvement in manufacturing efficiency, the mix of purchases made among suppliers, currency exchange rates and other factors. The average cost may be variable from period to period depending upon the timing and quantity of API purchased from each supplier. Our overall gross margin on product sales for the years ended December 31, 2025 and 2024 was 49% and 28%, respectively. Excluding the restructuring inventory and inventory write-off charges, gross margin was 49% and 50% for the years ended December 31, 2025 and 2024, respectively. Selling, general and administrative expense. Selling, general and administrative expense for the years ended December 31, 2025 and 2024 was $115.0 million and $152.3 million, respectively, a decrease of $37.3 million, or 24%. Selling, general and administrative expenses for the years ended December 31, 2025 and 2024 are summarized in the table below: Year Ended December 31, In thousands 2025 2024 Selling expense (1) $ 40,592 $ 79,587 General and administrative expenses (2) 65,167 58,557 Non-cash stock-based compensation expense (3) 9,244 14,166 Total selling, general and administrative expense $ 115,003 $ 152,310 (1) Selling expense for the years ended December 31, 2025 and 2024 was $40.6 million and $79.6 million, respectively, a decrease of $39.0 million, or 49%. This decrease is primarily due to a reduction in costs associated with the Global Restructuring Plan, as well as other cost optimization initiatives. (2) General and administrative expense for the years ended December 31, 2025 and 2024 was $65.2 million and $58.6 million, respectively, an increase of $6.6 million, or 11%. This increase is primarily due to fees associated with the ADS Ratio Change and Recordati Licensing Agreement. This increase is offset by a decrease in branded pharma fees as a result of lower sales and the reduction of costs associated with the Global Restructuring Plan. (3) Non-cash stock-based compensation expense for the years ended December 31, 2025 and 2024 was $9.2 million and $14.2 million, respectively, a decrease of $4.9 million, or 35%. Non-cash stock-based compensation expense represents the estimated costs associated with equity awards issued to internal personnel supporting our selling, general and administrative functions. 81 Research and development expense. Research and development expense for the years ended December 31, 2025 and 2024 was $19.8 million and $20.9 million, respectively, a decrease of $1.1 million, or 5%. Research and development expenses for the years ended December 31, 2025 and 2024 are summarized in the table below: Year Ended December 31, In thousands 2025 2024 REDUCE-IT study and presentations (1) $ 1,044 $ 1,202 Fixed-dose combination (2) — 44 Regulatory filing fees and expenses (3) 2,030 2,533 Non-clinical research activities (4) 1,000 2,534 Internal staffing, overhead and other (5) 13,271 11,017 Research and development expense, excluding non-cash expense 17,345 17,330 Non-cash stock-based compensation expense (6) 2,461 3,539 Total research and development expense $ 19,806 $ 20,869 (1) REDUCE-IT study and publications expenses consist primarily of costs incurred to maintain the REDUCE-IT trial data as well as support provided to present at conferences and to provide data to be published in medical journals. (2) Fixed-dose combination expenses are primarily related to cost associated with developmental activities of a fixed-dose combination of VASCEPA and a statin which began in 2022 but was subsequently deprioritized in 2023. (3) Regulatory and quality filing fees are primarily related to the preparation, submission and review defense of regulatory filings as well as assistance with securing and maintaining regulatory approvals for qualifying suppliers for VASCEPA in the U.S. and globally as well as supporting our partners' regulatory filings throughout the rest of the world. (4) Non-clinical research activities are primarily related to ongoing experiments and analyses further exploring the potential biological activities of IPE. (5) Internal staffing, overhead and other research and development expenses primarily relate to the costs of our personnel employed to manage research, development and regulatory affairs activities and related overhead costs including consulting and other professional fees that are not allocated to specific projects. Also included are costs related to qualifying suppliers and costs associated with various other activities, including other costs in collaboration with Mochida. (6) Non-cash stock-based compensation expense represents the estimated costs associated with equity awards issued to personnel supporting our research and development and regulatory functions. Restructuring expense . Restructuring expense for the years ended December 31, 2025 and 2024 was $36.2 million and nil, respectively, an increase of $36.2 million, or 100%. The charge in the current year is due to the implementation of the Global Restructuring Plan associated with the execution of the Recordati Licensing Agreement announced on June 24, 2025, which resulted in the elimination of commercial roles in the Company’s European operations. Refer to Note 2 Significant Accounting Policies for additional information. Interest income, net. Interest income, net, for the years ended December 31, 2025 and 2024 was $10.8 million and $13.4 million, respectively, a decrease of $2.6 million, or 19%. Interest income, net, represents income earned on cash and investment balances. The decrease is primarily due to lower interest rates in the current year period compared to the prior year period. Other income, net . Other income, net, for the year ended December 31, 2025 and 2024 was $3.3 million and $1.2 million, respectively. Other income, net, primarily consists of the gains and losses on foreign exchange transactions and sublease income related to our Bridgewater, NJ facility. Provision for income taxes . Provision for income taxes for the year ended December 31, 2025 and 2024 was $2.8 million and $5.0 million, respectively. The decrease in the provision for income taxes is due to a change in geographic mix of pre-tax income. 82 Liquidity and Capital Resources As of December 31, 2025, our aggregate sources of liquidity include cash and cash equivalents and restricted cash of $134.9 million and short-term investments of $167.9 million, aggregating $302.8 million. We have no indebtedness. Our cash and cash equivalents primarily include checking accounts and money market funds with original maturities of less than 90 days. Our short-term investments consist of securities that will be due in one year or less. We invest cash in excess of our immediate requirements, in accordance with our investment policy, which limits the amounts we may invest in any one type of investment and requires all investments held by us to maintain minimum ratings from Nationally Recognized Statistical Rating Organizations so as to primarily achieve our goals of liquidity and capital preservation. Our cash flows from operating, investing and financing activities, as reflected in the consolidated statements of cash flows, are summarized in the following table: Year Ended December 31, In millions 2025 2024 2023 Cash provided by (used in): Operating activities $ 6.7 $ (31.0 ) $ 6.9 Investing activities 8.8 (46.0 ) (25.5 ) Financing activities (2.0 ) (1.4 ) 0.2 Increase (decrease) in cash and cash equivalents and restricted cash $ 13.5 $ (78.4 ) $ (18.4 ) Net cash provided by operating activities increased during 2025 as compared to net cash used in operating activities during the same period in 2024. This is primarily driven by the Global Restructuring Plan and the resulting cost savings, including from the elimination of commercial roles in our European operations. Net cash provided by investing activities increased during the year ended December 31, 2025 compared to net cash used in investing activities during the same period in 2024. This is primarily due to the proceeds from the maturity of investment grade interest-bearing instruments of $209.3 million partially offset by $200.5 million from the purchase of investment grade interest-bearing instruments, as compared to the same period in 2024, where purchases of investment grade interest-bearing instruments of $278.8 million were partially offset by $232.8 million from proceeds from the maturity of investment grade interest-bearing instruments. Net cash used in financing activities increased during the years ended December 31, 2025 compared to the same period in 2024, was primarily as a result of taxes paid on stock-based awards. As of December 31, 2025, we had net accounts receivable of $126.8 million and current inventory of $195.9 million. We have incurred annual operating losses since our inception and, as a result, we had an accumulated deficit of $1.7 billion as of December 31, 2025. We anticipate that quarterly net cash outflows in future periods will continue to be variable as a result of the timing of certain items, including our purchases of API, the generic competition in the U.S. and the efforts of our licensee of VAZKEPA in Europe. In June 2025, we announced a Global Restructuring Plan, in connection with the execution of an exclusive long-term license and supply agreement with Recordati, with the vast majority of estimated cost savings to come from the elimination of commercial roles in the Company’s European operations. We expect these actions will reduce operating costs by approximately $70.0 million annually. On January 10, 2024, we announced plans to initiate a share repurchase program to purchase up to $50.0 million of the Company's ordinary shares held in the form of American Depository Shares. We received shareholder and UK High Court approval of the share repurchase plan in April and May 2024, respectively. The Company has not commenced any share repurchases to date, but we will continue to monitor business and market conditions. As of December 31, 2025, we had cash and cash equivalents of $134.7 million and short-term investments of $167.9 million, aggregating $302.6 million. In accordance with ASC 205-40, management is required to evaluate our ability to continue as a going concern for at least one year after the date the financial statements are issued. We believe that our cash and cash equivalents and our short-term investments will be sufficient to fund our projected operations, including, if commenced, the share repurchase program, for at least one year from the issuance date of our audited consolidated financial statements included elsewhere in this Annual Report and is adequate to support continued operations based on our current plans. We have based this estimate on assumptions that may prove to be wrong, including as a result of the risks discussed under Part II, Item IA, “Risk Factors” , and we could use our capital resources sooner than we expect or fail to achieve positive cash flow. We do not have any special purpose entities or other off-balance sheet arrangements. 83 Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk We are exposed to market risks, which include changes in interest rates. We do not use derivative financial instruments in our investment portfolio, and we do not enter into foreign exchange contracts. Our investments meet high credit quality and diversification standards, as specified in our investment policy. Foreign Currency Exchange Risk. Our results of operations and cash flows are subject to fluctuations due to changes in the Euro, Sterling, Swiss Franc and Yen. The majority of cash and cash equivalents, investments, and the majority of our vendor relationships are denominated in U.S. dollars. We therefore believe that the risk of a significant impact on our operating income from foreign currency fluctuations is not substantial. All of our investments are held in U.S. dollars. We maintain a small amount of our cash and cash equivalents in Euro and from time to time, maintain a small amount of our cash and cash equivalents in other currencies. We purchase a portion of our supply based on a U.S. dollar to Euro exchange rate and, as such, remain subject to currency fluctuation risk for such purchases. Based on the size of our international operations and the amount of our expenses denominated in foreign currencies, currency fluctuation would not have a material effect on our financial position or results of operations. We believe the impact of inflation on operations has been minimal during the past three years. Interest Rate Risk. We believe that we are not exposed to significant interest rate risk through market value fluctuations of balance sheet items (i.e., price risk) or through changes in interest income or expenses (i.e., refinancing or reinvestment risk). Interest rate risk mainly arises through interest bearing liabilities and assets. Our portfolio of investments as of December 31, 2025 was composed primarily of U.S. Treasury securities and other government-related securities. At December 31, 2025 and 2024, we had short-term investments of $167.9 million and $173.2 million, respectively. We invest funds to have a continuous inflow of cash from diversified short-term and long-term investments, consisting primarily of investment grade securities. A hypothetical 10 percent change in interest rates would not result in a material decrease or increase in the fair value of our securities due to the balance and diversified investment portfolio. Credit Risk. We monitor our investments with our investment managers with the objective of minimizing concentrations of credit risks. Our short-term investments consist of securities that mature in one year or less. We invest cash in excess of our immediate requirements, in accordance with our investment policy, which limits the amounts we may invest in any one type of investment and requires all investments held by us to maintain minimum ratings from Nationally Recognized Statistical Rating Organizations so as to primarily achieve our goals of liquidity and capital preservation. Additionally, our investment policy is to invest only in institutions that meet high credit quality and diversification standards and established limits on the amount and time to maturity of investments. Item 8. Financial Statement s and Supplementary Data Our consolidated financial statements are annexed to this Annual Report on Form 10-K beginning on page F-1. Item 9. Changes in and Disagreements with Accou ntants on Accounting and Financial Disclosure None.