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Item 1A. Risk Factors

2026-02-19 compared with 2025-02-20 · 400 added, 358 removed, 653 unchanged (54% of the section changed)

Our business, financial condition, cash flows and results of operations are subject to various risks and uncertainties.

You should carefully consider the risks and uncertainties described below, together with all of the other information in this Form 10-K, including those risks set forth under the heading entitled “Forward-Looking Statements” and in other documents that we file with the SEC and the CSA, before making any investment decision with respect to our common shares or debt securities.

If any of the risks or uncertainties actually occur or develop, our business, financial condition, cash flows, results of operations and/or future growth prospects could change, and such change could be materially adverse.

Under these circumstances, the market value of our common shares and/or debt securities could decline, and you could lose all or part of your investment in our common shares and/or debt securities.

Summary of Risk Factors

The following is a summary of the risk factors our business faces.

The list below is not exhaustive, and investors should read this “Risk Factors” section in full.

Some of the risks we face include:

• the impact of the current market and macroeconomic conditions in one or more of our markets on our business;

• the impact on our business relating to the B+L IPO and the B+L Separation, including the uncertainties with respect to the expected timing of completion of the B+L Separation;

• the impact of ongoing and potential legal proceedings, investigations and inquiries;

• the impact of changes to our pricing practices, whether imposed, legislated or voluntary;

• our dependence on third parties to meet their contractual, legal, regulatory, and other obligations;

• our ability to comply with extensive regulation concerning marketing, promotional and business practices;

• our ability to comply with restrictive covenants in our debt agreements;

• our ability to generate cash in order to service our debt;

• the impact on our business of restrictions imposed by our significant indebtedness;

• our ability to manage the transition of key management positions and to recruit and retain executives and key personnel;

• the potential increase of our effective tax rates, including as a result of proposed changes to applicable tax laws;

• our ability to compete with generic competitors in products that represent a significant amount of our revenue;

• our ability to obtain, maintain, enforce or defend the intellectual property rights required to conduct our business;

• our ability to develop or acquire more competitive pharmaceutical or OTC products or medical devices than our competitors;

• the effect of our commitment to the cessation of or limitation on pricing increases for certain of our products;

• the impact of potential divestitures and acquisitions of assets, products and businesses;

• our ability to maintain and provide appropriate training in our products to our health care providers;

• our ability to successfully commercialize our pipeline products;

• our ability to comply with ongoing regulatory review of our marketed drugs, including our dietary products;

• the impact on our revenues and profits from generic products as a result of changes to regulatory policy;

• the impact on our business of interruptions in our manufacturing processes;

• our dependence on a limited number of sources for certain of our finished products and raw materials;

• our ability to achieve or maintain expected levels of market acceptance for our new products;

• our dependence on reimbursements from governmental and other third-party payors;

• the impact of potential exclusion from formularies developed by managed care organizations and third-party payors;

• the impact of pricing controls, social or governmental pressure to lower the cost of drugs, and consolidation across the supply chain, such as IRA-related legislation and CMS’s selection of Xifaxan ® for the second round of drug price negotiations for initial applicability in 2027, and the outcome thereof;

• the impact of catastrophic events that may disrupt our business;

• the illegal distribution and sale of counterfeit versions of our products;

• the reduction of profits due to imports from countries where our products are available at lower prices;

• the reduction of revenues in future fiscal periods due to our policies regarding returns, allowances, and chargebacks;

• the decline in sales volumes or prices of our products as the result of the concentration of sales to wholesalers;

• the effect of fluctuations in inventory levels or buying patterns by our large distributor and retail customers;

• the decline in pricing and/or volume of our products under our distribution agreements with other companies;

• risks associated with the international scope of our operations;

• the impact of the imposition of and adverse changes to duties, tariffs and other trade protection measures (including any retaliations to such measures);

• foreign currency exposure on the translation into U.S.

dollars of the financial results of our international operations;

• risks associated with the ongoing international conflicts, including between Russia and Ukraine, and in the Middle East involving Israel, Hamas and other countries and militant groups in the region;

• risks associated with the shifting geopolitical tensions between the U.S.

and other members of the North Atlantic Treaty Organization (“NATO”);

• risks associated with the breakdown, interruption, breach or other compromise of our information technology systems;

• our ability to adopt and integrate artificial intelligence solutions into various aspects of our business and operations responsibly and in compliance with applicable legislation, laws, rules, regulations and guidance;

• our ability to comply with applicable laws and regulations and prevail in any litigation related to noncompliance;

• the impact that reforms of the health care system may have on our ability to sell our products profitably;

• our ability to comply with environmental laws and regulations and environmental remediation obligations;

• risks associated with climate change;

• our ability to maintain adequate internal controls and to provide an assertion as to the effectiveness of such controls on an annual basis;

• the potential adverse effect of shareholder activism;

• the impact on our profitability from the potential impairment of goodwill and other intangible assets;

• our ability to effectively monitor and respond to expectations regarding environmental, social and governance matters;

• our potential obligations under our indemnity agreements and arrangements;

• the fluctuation of our operating results and financial condition from quarter to quarter.

Risks Relating to Market and Macroeconomic Conditions

Current market and macroeconomic conditions in one or more of our markets could impact our business, liquidity, financial condition, cash flows and results of operations.

Over the last several years in the U.S.

and globally, market and macroeconomic conditions have been challenging, particularly in light of public health pandemics and, more recently, as a result of uncertainty concerning government shutdowns, debt ceilings, government funding and trade wars.

Any negative impact on economic conditions in one or more of our core markets, including volatility or deterioration in the debt and equity capital markets, heightened inflation, deflation or other

adverse economic conditions may adversely affect our business.

Ongoing uncertain economic and financial market conditions may also adversely affect the financial condition of our customers, suppliers and other business partners.

When our customers’ financial conditions are adversely affected, it could materially and adversely affect our sales and financial results, which could have a material adverse effect on our business.

Our global business may be negatively affected by local economic conditions, including heightened inflation, increasing labor costs, potential recession, the imposition of or adverse amendments to duties, tariffs and other trade restrictions (including any retaliation to such measures) and currency exchange rate fluctuations, which could adversely affect our cost to manufacture and provide our products and services and revenues generated through sales of such products and services.

There is no guarantee that we will be able to fully absorb any such additional costs or declines in the prices for our products and services, which may adversely impact our financial condition, cash flows and results of operations.

Changes in economic conditions, including supply chain constraints, logistics challenges, labor shortages, imposition of or adverse amendments to new or existing duties, tariffs and other trade protection measures (including new or continued retaliation to such measures) and steps taken by governments and central banks, including stimulus and spending programs, have, in the past, led to (and could, in the future, lead to) heightened inflation, resulting in an increase in costs and changes in fiscal and monetary policy, including increased interest rates.

In a heightened inflationary environment, we may be unable to raise the prices of our products and services sufficiently to keep up with the rate of inflation.

Moreover, negative macroeconomic conditions could adversely impact our ability to obtain financing in the future on terms acceptable to us, or at all.

In addition, geopolitical instability (such as the imposition of and adverse changes to U.S.

duty, tariff and other trade protection measures and countermeasures against the United States being taken in retaliation for the same, the ongoing conflict between Russia and Ukraine, the ongoing conflicts and unrest in the Middle East, and tensions between the U.S.

and other members of NATO and related sanctions and other measures could continue to have significant ramifications on global financial markets, including volatility in the U.S.

and global financial markets.

Risks Relating to the B+L Separation

The B+L Separation has been subject to challenge and could be subject to further challenges in the future, any of which could delay or prevent the consummation of such transactions or cause them to occur on terms that are different or less favorable than we originally anticipated.

The B+L Separation, which may include a distribution of all or a portion of our remaining equity interest in Bausch + Lomb to our shareholders, could be subject to further challenge, which could delay or prevent the consummation of such transactions or cause them to occur on worse terms than we currently expect.

In addition, the Company could, in the future, face additional legal proceedings and investigations and inquiries by governmental agencies relating to these or similar matters.

For more information regarding legal proceedings, see Note 21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements elsewhere in this Form 10-K.

We are unable to predict the outcome of any such proceedings, investigations and inquiries, but we may incur significant costs and diversion of management attention as a result of these matters, regardless of the outcome.

Some or all of these proceedings, investigations and inquiries may lead to damages, settlement payments, fines, penalties, consent orders or other administrative sanctions against us.

Furthermore, publicity surrounding these proceedings, investigations and inquiries or any enforcement action as a result thereof, even if ultimately resolved favorably for us could result in additional investigations and legal proceedings.

As a result, these proceedings, investigations and inquiries could have a material adverse effect on our reputation and business.

The B+L Separation is subject to uncertainties, which could delay or prevent the completion of the B+L Separation, cause the B+L Separation to occur on terms or conditions that are different or less favorable than originally anticipated or affect our ability to realize some or all of the anticipated benefits of the B+L Separation.

Unanticipated developments and other challenges could delay or prevent the completion of the B+L Separation (including the Distribution, as defined below), result in changes to the anticipated structure of the B+L Separation (whether by way of “butterfly reorganization” rules in Section 55 of the Canadian Tax Act, return of capital or another form of sale or transfer of the Company’s ownership interest in Bausch + Lomb), cause the B+L Separation to occur on terms or conditions that are different or less favorable than originally anticipated or affect our ability to realize some or all of the anticipated benefits of the B+L Separation.

Such developments and other challenges may include possible delays in obtaining any necessary shareholder, stock exchange, regulatory or other approval or the failure to obtain any such approvals, possible delays in obtaining any required tax opinions or rulings or the failure to obtain any such tax opinions or rulings, failure to satisfy conditions, complications arising from the portion of Bausch Health’s ownership of Bausch + Lomb that is pledged as collateral under certain of the Company’s indebtedness, including the 2025 Credit Agreement and the 2032 Senior Secured Notes (each as defined in Note 10, “FINANCING ARRANGEMENTS” to our audited Consolidated Financial Statements), negotiating challenges, the uncertainty of the financial markets, disruptions to business and commerce induced by changes in global markets, financial and economic conditions (such as international conflicts) and changes in the law.

The Company continues to evaluate the structure of the B+L Separation and other related details, and, subject to the terms of the Company’s agreements with Bausch + Lomb, the Company may consider undertaking the B+L Separation through one or more distributions effected as a dividend or a tax-free reduction of capital, one or more distributions in exchange for Bausch Health shares or other securities, any combination thereof or another form of sale or transfer of the Company’s ownership interest in Bausch + Lomb.

Prior to the completion of any B+L Separation, the Company may also sell a portion of its remaining direct or indirect equity interest in Bausch + Lomb through an offering to third parties.

Further, our Board of Directors could decide, either because of a failure to satisfy conditions or because of market or other factors, to delay, abandon or alter the structure or manner and terms of the B+L Separation.

Additionally, Bausch + Lomb may terminate the existing arrangement agreement between the Company and Bausch + Lomb in accordance with its terms.

No assurance can be given as to whether and when the full B+L Separation will occur, on what terms or structure the B+L Separation will occur or whether the B+L Separation will achieve the benefits originally anticipated.

As a result, there can be no assurance as to the timing of the completion of the B+L Separation or its structure or terms.

Even if the B+L Separation is completed, we may not realize all of the benefits that we originally anticipated.

Even if the B+L Separation is completed, we may not be able to achieve the full strategic and financial benefits originally anticipated to result from the B+L Separation.

The B+L Separation is intended to unlock value by creating an independent business and distinct investment identity with enhanced strategic and management focus that allows more efficient allocation of resources and capital.

In addition, though the proceeds from the B+L IPO facilitated further reductions in the aggregate amount of our outstanding indebtedness, we may not achieve these and other anticipated benefits for a variety of reasons, including, among others:

(i) Bausch + Lomb may prove to be less valuable on an independent basis than we anticipate, including because it is more susceptible to economic downturns and other adverse events than if it were still a part of the Company and because its business will be less diversified than the Company’s business prior to the B+L Separation and (ii) other actions required to separate the respective businesses could disrupt our operations.

We have and will continue to expend significant resources in pursuing the B+L Separation, which could have a material adverse effect on our business.

The B+L Separation has and will continue to require significant resources, time and attention from our senior management and employees, which could cause distractions and divert attention and resources away from other projects and the day-to-day operation of our business.

We may also experience increased difficulties in attracting, retaining, and motivating management and employees in connection with the B+L Separation.

For more information on these and other related risks, see Item 1A.

“Risk Factors—Employment-related Risks” of this Form 10-K.

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In addition, we could be subject to legal proceedings or other claims challenging the B+L Separation, which could result in substantial costs and liability and also divert management’s attention and resources, any of which could harm our business.

Any of the above factors could cause the B+L Separation process (or the failure to consummate the B+L Separation) to have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Any of the above factors could cause the B+L Separation process (or the failure to consummate the B+L Separation) to have a material adverse effect on our business.

If any B+L Separation proceeds in the form of a distribution of the shares in Bausch + Lomb (the “Distribution”) pursuant to the existing arrangement agreement between the Company and Bausch + Lomb, to preserve the tax-free treatment of certain transactions related to the Distribution, we may not be able to engage in certain transactions.

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Our initial intent was to effectuate any potential Distribution pursuant to the public company “butterfly reorganization” rules in Section 55 of the Income Tax Act (Canada) (the “Canadian Tax Act”).

We continue to evaluate the structure of any potential Distribution and its other related details, and we have determined that any B+L Separation could also be implemented through a tax-free reduction of capital, which could provide us and Bausch + Lomb additional flexibility with respect to strategic alternatives following the completion of a Distribution.

strategic alternatives following the completion of a Distribution.

If any potential Distribution is effected pursuant to the public company “butterfly reorganization” rules in Section 55 of the Canadian Tax Act, we and Bausch + Lomb would recognize a taxable gain on the Distribution if, within prescribed periods following the completion of the Distribution, certain transactions specified under the Canadian Tax Act (including an acquisition of control of the Company or Bausch + Lomb that is part of the “series of transactions” that includes the Distribution) are undertaken by us or Bausch + Lomb or a “specified shareholder” as defined for purposes of the “butterfly reorganization” rules in Section 55 of the Canadian Tax Act.

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Furthermore, if we breach any of these tax-related covenants, we may be required to indemnify Bausch + Lomb against any taxes or other losses suffered or incurred from or in connection with such breach.

Certain contracts used in our business may need to be replaced in connection with any B+L Separation and failure to obtain such replacement contracts could increase our expenses or otherwise adversely affect our business, results of operations and financial condition.

In connection with any B+L Separation, we may be required to replace certain shared contracts.

It is possible that, in connection with the replacement process, some parties may seek more favorable contractual terms from us.

If we are unable to obtain such replacement contracts, the loss of these contracts could increase our expenses or otherwise materially adversely affect our business, results of operations and financial condition.

In connection with any B+L Separation, some of our directors and officers may have actual or potential conflicts of interest because of their equity ownership in Bausch + Lomb, and/or because they also serve as officers or directors of Bausch + Lomb, which could impact our ability to grow our business or cause reputational or other harm.

Because of their positions with Bausch + Lomb, in connection with any B+L Separation, some of our directors and executive officers may own common shares of Bausch + Lomb or have options to acquire shares of Bausch + Lomb, and the individual holdings may be significant for some of these individuals compared to their total assets.

In addition, certain of our

current or former officers and directors also serve as officers or directors of Bausch + Lomb.

In addition, certain of our current or former officers and directors also serve as officers or directors of Bausch + Lomb.

A director who has a material interest in a matter before our Board of Directors or any committee on which he or she serves is required to disclose such interest as soon as the director becomes aware of it in accordance with applicable law.

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Even if we ultimately succeed in recovering from Bausch + Lomb any amounts for which we are held liable, we may be temporarily required to bear these losses.

Each of these risks could negatively affect our business, financial condition, results of operations and cash flows.

Furthermore, any indemnification claim against us by Bausch + Lomb, including for a breach of the tax-related covenants described above, could be substantial, may not be able to be satisfied and may have a material adverse effect on us.

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Legal and Reputational Risks

We are the subject of a number of ongoing legal proceedings, investigations and inquiries respecting certain of our historical distribution, marketing, pricing, disclosure and accounting practices, including our former relationship with Philidor, which have had and could continue to have a material adverse effect on our reputation, business, financial condition, cash flows and results of operations, could result in additional claims and material liabilities, and could cause the market value of our common shares and/or debt securities to decline.

While we have successfully settled or otherwise resolved a number of legacy legal proceedings, investigations and inquiries relating to, among other things, our disclosure and accounting practices and our former relationship with Philidor, including the securities class action litigation matters in both the U.S.

and Canada, the investigation by the SEC, the investigation order from the Autorité des marches financiers (our principal securities regulator in Canada) and certain derivative lawsuits, we are currently still the subject of a number of other ongoing legal proceedings and investigations and inquiries by governmental agencies, including, but not limited to, the following:

(i) a number of pending securities litigations, including certain opt-out actions in the U.S.

(related to the U.S.

Securities Litigation which has been settled) and in Canada (related to the securities class action litigation in Canada which has been settled), the allegations of which relate to, among other things, allegedly false and misleading statements by the Company and/or failures to disclose information about our business and prospects, including relating to drug pricing, our policies and accounting practices, our use of specialty pharmacies, and our former relationship with Philidor and (ii) a lawsuit brought against the Company in the Superior Court of New Jersey asserting claims for common law fraud, negligent misrepresentation, and violations of the New Jersey Racketeer Influenced and Corrupt Organizations Act.

In addition, we could, in the future, face additional legal proceedings and investigations and inquiries by governmental agencies relating to these or similar matters.

For more information regarding legal proceedings, see Note 20, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements.

We are unable to predict how long such proceedings, investigations and inquiries will continue, but we anticipate that we will continue to incur significant costs in connection with some or all of these matters and that some or all of these proceedings, investigations and inquiries will result in a substantial distraction of management’s time, regardless of the outcome.

Some or all of these proceedings, investigations and inquiries will likely result in damages, settlement payments (such as the $1,210 million

payment made by the Company in 2019 in connection with the previously settled U.S.

Securities Litigation), fines, penalties, consent orders or other administrative sanctions (including exclusion from federal programs) against the Company and/or certain of our directors and officers, any of which could be material, or in changes to our business practices, which, in turn, may result in or may contribute to an inability by us to meet the financial covenant contained in our 2022 Amended Credit Agreement (as defined and discussed in Note 10, “FINANCING ARRANGEMENTS” to our audited Consolidated Financial Statements).

As a result, these proceedings, investigations and inquiries could have a material adverse effect on our reputation, business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Our historical business practices, including with respect to past pricing practices, have been under scrutiny, and pricing of pharmaceutical products continues to be subject to regulation in the markets in which we operate.

Any changes to our practices relating to pricing or the current prices of products, whether imposed, legislated or voluntary, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We have been under scrutiny with respect to our historical business practices (including with respect to past pricing practices), including various securities litigations, including certain opt-out actions in the U.S.

(related to the previously settled securities class action) and in Canada (related to the settled securities class action), and certain other lawsuits.

We are unable to predict how such proceedings, investigations and inquiries will impact our current business practices, including with respect to pricing, or the prices of our products, including whether we will be required to impose pricing freezes or controls, pricing reductions (including on a retroactive basis) or other price regulation for some or all of our products.

In addition, in recent years, in the U.S., state and federal governments have considered implementing legislation that would control or regulate the prices of drugs.

Other countries have announced or implemented measures on pricing, including suspensions on price increases, prospective and possibly retroactive price reductions and other recoupments.

These measures and proposed measures vary by country.

These measures and these proposed measures and legislation, if implemented, could lead to impairment of certain of our intangible assets which could be significant, and/or could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We are involved in or may become subject to various other legal and governmental proceedings that are uncertain, costly and time-consuming and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We are involved in a number of other legal and governmental proceedings and may be involved in additional litigation in the future.

Some of these proceedings are complex and extended and occupy the resources of our management and employees.

Some of these proceedings are also costly to prosecute or defend and may involve substantial awards or damages payable by us if not found in our favor.

We may also be required to pay substantial amounts or grant certain rights on unfavorable terms in order to settle such proceedings.

Defending against or settling such claims and any unfavorable legal decisions, settlements or orders could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We are the subject of and may become subject to additional legal and governmental proceedings, which have had and could continue to have a material adverse effect on our reputation and business, and could result in additional claims and material liabilities.

While we have successfully settled or otherwise resolved a number of legacy legal proceedings, investigations and inquiries relating to, among other things, our disclosure and accounting practices and our former relationship with Philidor Rx Services LLC (“Philidor”), including the securities class action litigation matters in both the U.S.

and Canada, the investigation by the SEC, the investigation order from the Autorité des marches financiers (our principal securities regulator in Canada) and certain derivative lawsuits, we are currently still the subject of a number of other ongoing legal proceedings, including, but not limited to, a number of pending securities litigations, the allegations of which relate to, among other things, allegedly false and misleading statements by the Company and/or failures to disclose information about our business and prospects.

In addition, we could, in the future, face additional legal and governmental proceedings relating to these or similar matters.

For more information regarding legal proceedings, see Note 21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements.

For example, the pharmaceutical industry, including our Company, has been the focus of both private payor and governmental concern regarding pricing of pharmaceutical products.

Related actions, including Congressional and other governmental investigations and litigation, are costly and time-consuming, and adverse resolution of such actions or changes in our business practices, such as our approach to the pricing of our pharmaceutical products, could adversely affect our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Further, the pharmaceutical and medical device industries historically have generated substantial litigation concerning the manufacture, use and sale of products and we expect this litigation activity to continue.

As a result, we expect that patents related to our products will be routinely challenged, and the validity or enforceability of our patents may not be upheld.

In order to protect or enforce patent rights, we may initiate litigation against third parties.

Our patents may also be challenged in administrative proceedings in the United States Patent and Trademark Office and patent offices outside of the United States.

We are unable to predict how long such proceedings will continue, but we anticipate that we will continue to incur significant costs in connection with some or all of these matters and that some or all of these proceedings will result in a substantial distraction of management’s time, regardless of the outcome.

Some or all of these proceedings will likely result in damages, settlement payments, fines, penalties, consent orders or other administrative sanctions (including exclusion from federal programs) against the Company and/or certain of our directors and officers, any of which could be material, or in changes to our business practices, which, in turn, may result in or may contribute to an inability by us to meet the financial covenants applicable to the 2030 Revolving Credit Facility contained in our 2025 Credit Agreement (as such terms are defined in Note 10, “FINANCING ARRANGEMENTS” to our audited Consolidated Financial Statements).

Furthermore, publicity surrounding these proceedings or any enforcement action as a result thereof, even if ultimately resolved favorably for us could result in additional investigations and legal proceedings.

As a result, these proceedings, investigations and inquiries could have a material adverse effect on our reputation and business.

We may be involved in additional litigation in the future.

For example, the pharmaceutical and medical device industries historically have generated substantial litigation concerning the manufacture, use and sale of products and we expect this litigation activity to continue.

As a result, we expect that patents related to our products will be routinely challenged, and we may initiate litigation against third parties to protect or enforce our patent rights.

If we are not successful in defending an attack on our patents and maintaining exclusive rights to market one or more of our products still under patent protection, we could lose a significant portion of sales in a very short period.

Even in cases where we prevail in an infringement claim, legal remedies available for harm caused to us may not be sufficient to make us whole.

We may also become subject to, or threatened with, legal proceedings and infringement claims by third parties and may have to

defend against charges that we infringed, misappropriated or otherwise violated patents or the intellectual property or proprietary rights of third parties.

We may also become subject to, or threatened with, legal proceedings and infringement claims by third parties and may have to defend against charges that we infringed, misappropriated or otherwise violated patents or the intellectual property or proprietary rights of third parties.

If we are found to infringe, misappropriate or otherwise violate the intellectual property rights of others, we could lose our right to develop, manufacture or sell products, including our generic products, or could be required to pay monetary damages or royalties to license proprietary rights from third parties, which could be substantial and may include treble damages and attorneys’ fees.

Third parties may also request a preliminary or permanent injunction from a court of law to prevent us from marketing a product.

Even if we believe third-party intellectual property claims are without merit, there is no assurance that a court would find in our favor on questions of infringement, validity, enforceability or priority.

However, we may not be able to obtain any required license on commercially reasonable terms or at all.

Any of the foregoing events could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the value of our common shares.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.

We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.

Some of our competitors or other third parties may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace, including compromising our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties or enter into development collaborations that would help us commercialize our product candidates, if approved.

Any of the foregoing events would harm our business, financial condition, results of operations and prospects.

In addition, in the U.S., it has become increasingly common for patent infringement actions to prompt claims that antitrust laws have been violated during the prosecution of the patent or during litigation involving the defense of that patent.

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For more information regarding legal proceedings, see Note 21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements.

A successful antitrust claim by a private party or government entity against us could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We depend on third parties to meet their contractual, legal, regulatory, and other obligations, and actions by these third parties could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

A successful antitrust claim by a private party or government entity against us could have a material adverse effect on our business.

Furthermore, our products may cause, or may appear to cause, adverse side effects (including death) or potentially dangerous drug interactions that we may not learn about or understand fully until the drug has been administered to patients for some time.

If our products cause, or are alleged to cause, serious or widespread personal injury, we have to withdraw those products from the market and/or incur significant costs, including payment of substantial sums in damages, and we may be subject to exposure relating to product liability claims.

Since March 31, 2014, we have self-insured substantially all of our product liability risk for claims arising after that date.

We periodically evaluate and adjust our claims reserves to reflect trends in our own experience, as well as industry trends.

However, historical loss trends may not be adequate to cover future losses, as historical trends may not be indicative of future losses.

If ultimate results exceed our estimates, this would result in losses in excess of our reserved amounts.

If we were required to pay a significant amount on account of these liabilities for which we self-insure, this could have a material adverse effect on our business and could cause the market value of our securities to decline.

We have been under scrutiny with respect to our historical business practices (including with respect to past pricing practices), including various securities litigations and other lawsuits.

In addition, in recent years, in the U.S., state and federal governments have announced or implemented legislation that would control or regulate the prices of drugs.

Other countries have announced or implemented measures on pricing, including suspensions on price increases, prospective and possibly retroactive price reductions and other recoupments.

These measures and proposed measures vary by country.

The Company has also taken actions in response to certain of these measures, including our decision to cease participation in the Medicaid Drug Rebate Program (“MDRP”) and 340B Drug Pricing Program (“340B”).

These measures and legislation, and any actions taken by the Company in response, could lead to impairment of certain of our intangible assets which could be significant, and/or could have a material adverse effect on our business, results of operations and cash flows.

We depend on third parties to meet their contractual, legal, regulatory, and other obligations, and actions by these third parties could have a material adverse effect on our business.

We rely on distributors, suppliers, contract research organizations, vendors, service providers, business partners and other third parties to research, develop, manufacture, distribute, market and sell many of our products, as well as perform other services relating to our business.

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In addition, we cannot guarantee that the contractual terms and protections and compliance controls, policies and procedures we have put in place will be sufficient to ensure that such third parties will meet their legal, contractual and regulatory obligations or that these terms, controls, policies, procedures and other protections will protect us from acts committed by our agents, contractors, distributors, suppliers, service providers or business partners that violate contractual obligations or the laws or regulations of the jurisdictions in which we operate, including matters respecting anti-corruption, fraud, bribery and kickbacks and false claims, pricing, sales and marketing practices, privacy laws and other legal obligations.

Any failure of such third parties to meet these legal, contractual and regulatory obligations or any improper actions by such third parties or even allegations of such non-compliance or actions could damage our reputation, adversely impact our ability to conduct business in certain markets and subject us to civil or criminal legal proceedings and regulatory investigations, monetary and non-monetary damages and penalties and could cause us to incur significant legal and investigatory fees and, as a result, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

For example, the allegations about the activities of Philidor and our former relationship with Philidor have resulted in a number of investigations, inquiries and legal proceedings against us, which have damaged and may further damage our reputation and result in damages, fines, penalties or administrative sanctions against the Company and/or certain of our officers.

certain of our officers.

For more information regarding legal proceedings, see Note 21, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements.

If our products cause, or are alleged to cause, serious or widespread personal injury, we may have to withdraw those products from the market and/or incur significant costs, including payment of substantial sums in damages, and we may be subject to exposure relating to product liability claims.

In addition, our product liability self-insurance program may not be adequate to cover future losses.

We face an inherent business risk of exposure to significant product liability and other claims in the event that the use of our products caused, or is alleged to have caused, adverse effects.

These product liability proceedings may be costly to prosecute and defend and may involve substantial awards or damages payable by us if not found in our favor.

The withdrawal of a product following complaints and/or incurring significant costs, including the requirement to

pay substantial damages in personal injury cases or product liability cases, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

In addition, since March 31, 2014, we have self-insured substantially all of our product liability risk for claims arising after that date.

We periodically evaluate and adjust our claims reserves to reflect trends in our own experience, as well as industry trends.

However, historical loss trends may not be adequate to cover future losses, as historical trends may not be indicative of future losses.

If ultimate results exceed our estimates, this would result in losses in excess of our reserved amounts.

If we were required to pay a significant amount on account of these liabilities for which we self-insure, this could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Our marketing, promotional and business practices, as well as the manner in which sales forces interact with purchasers, prescribers and patients, are subject to extensive regulation and any material failure to comply could result in significant sanctions against us.

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Debt-related Risks

Our 2022 Amended Credit Agreement and the indentures governing our senior notes impose restrictive covenants on us.

Our failure to comply with these covenants could trigger events, which could result in the acceleration of the related debt, a cross-default or cross-acceleration to other debt, foreclosure upon any collateral securing the debt and termination of any commitments to lend, each of which would have a material adverse effect on our business, financial condition, cash flows and results of operations and would cause the market value of our common shares and/or debt securities to decline and could lead to bankruptcy or liquidation.

Our 2022 Amended Credit Agreement and the various indentures governing our senior notes contain covenants that restrict the way we conduct business and require us to satisfy certain financial tests in order to incur debt or take other actions.

For example, the 2022 Amended Credit Agreement contains a financial covenant that requires us to maintain a certain financial ratio at fiscal quarter end.

The Company’s 2022 Amended Credit Agreement contains a specified quarterly financial maintenance covenant (consisting of a first lien leverage ratio).

As of December 31, 2024, we were in compliance with this financial maintenance covenant.

However, we can make no assurance that we will be able to comply with the restrictive covenants contained in the 2022 Amended Credit Agreement and indentures in the future.

Based on our current forecast for the next twelve months from the date of issuance of this Form 10-K, we expect to remain in compliance with this financial maintenance covenant and meet our debt obligations over that same period.

In the event that we perform below our forecasted levels, we may also implement certain additional cost-efficiency initiatives, such as rationalization of selling, general and administrative expenses and R&D spend, which would allow us to continue to comply with the financial maintenance covenant.

The Company may consider taking other actions, including divesting other businesses, refinancing debt, issuing equity or equity-linked securities, and the monetization of a portion of its holdings of common shares of Bausch + Lomb, as deemed appropriate, to provide additional coverage in complying with the financial maintenance covenant and meeting its debt service obligations, or may negotiate with the applicable lenders for an amendment or modification to such covenant, as deemed appropriate.

However, we cannot guarantee that any of the above-noted actions would be achieved.

If we perform below our forecasted levels and the actions referenced above are not effective, we would fail to comply with our financial maintenance covenant.

In that instance, we would be in default, and our lenders would be permitted to accelerate our debt unless we could obtain an amendment.

The 2025 Credit Agreement and the indentures governing our senior notes including those issued in April 2025 and December 2025 by our subsidiary, 1261229 B.C.

Ltd., impose restrictive covenants on us.

Our failure to comply with these covenants could trigger events, which could result in the acceleration of the related debt, a cross-default or cross-acceleration to other debt, foreclosure upon any collateral securing the debt and termination of any commitments to lend, each of which would have a material adverse effect on our business, results of operations and cash flows, and could lead to bankruptcy or liquidation.

The 2025 Credit Agreement and the various indentures governing our senior notes, including those issued in April 2025 and December 2025 by our subsidiary, 1261229 B.C.

Ltd., contain covenants that restrict the way we conduct business and require us to satisfy certain financial tests in order to incur debt or take other actions.

For example, the 2030 Revolving Credit Facility, which is part of the 2025 Credit Agreement, contains financial maintenance covenants that require us to maintain a certain financial ratio at each fiscal quarter end and to maintain minimum amount of liquidity at each fiscal quarter end following the occurrence of a specified triggering event.

We can make no assurance that we will be able to comply with the restrictive covenants contained in the 2025 Credit Agreement and indentures in the future.

Based on our current forecast for the next twelve months from the date of issuance of this Form 10-K, we expect to remain in compliance with the financial maintenance covenants and meet our debt obligations over that same period.

In the event that we perform below our forecasted levels, we may also implement certain additional cost-efficiency initiatives, such as rationalization of SG&A expenses and R&D spend, in order to allow us to continue to comply with the financial maintenance covenants.

The Company may consider taking other actions, including divesting other businesses, refinancing debt, issuing equity or equity-linked securities, and the monetization of a portion of its holdings of common shares of Bausch + Lomb, as deemed appropriate, to provide additional coverage in complying with the financial maintenance covenants and meeting its debt service obligations, or may negotiate with the applicable lenders for an amendment or modification to such covenants, as deemed appropriate.

However, we cannot guarantee that any of the above-noted actions would be effective in enabling us to maintain compliance with our financial maintenance covenants.

If we perform below our forecasted levels and the actions referenced above are not effective, we may fail to comply with our financial maintenance covenants.

In that instance, we would be in default, and our lenders would be permitted to accelerate our debt unless we could obtain an amendment or waiver.

If our debt was accelerated, we would not have sufficient funds to repay our debt absent a refinancing, and we cannot provide assurance that we would be able to obtain a refinancing.

In addition, the AR Facility Agreement (as defined below) contains affirmative and negative covenants applicable primarily to the borrower subsidiaries thereunder, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, dividends and other distributions, and engaging in any business other than as set forth in the AR Facility Agreement.

Other debt instruments we may enter into in the future may contain additional restrictions and covenants.

Our inability to comply with the covenants in our debt instruments could lead to a default or an event of default under the terms thereof, for which we may need to seek relief from our lenders and noteholders in order to waive the associated default or event of default and avoid a potential acceleration of the related indebtedness or cross-default or cross-acceleration to other debt.

There can be no assurance that we would be able to obtain such relief on commercially reasonable terms or otherwise and we may be required to incur significant additional costs.

In addition, the lenders under our 2022 Amended Credit Agreement and holders of our senior notes may impose additional operating and financial restrictions on us as a condition to granting any such waiver.

If an event of default is not cured or is not otherwise waived, a majority of lenders in principal amount under our 2022 Amended Credit Agreement or the trustee or holders of at least 25% in principal amount of a series of our senior notes may accelerate the maturity of the related debt under these agreements, foreclose upon any collateral securing the debt and terminate any commitments to lend, any of which would have a material adverse effect on our business, financial condition, cash flows and results of operations and would cause the market value of our common shares and/or debt securities to decline.

In addition, the lenders under our 2025 Credit Agreement and holders of our senior notes may impose additional operating and financial restrictions on us as a condition to granting any such waiver.

If an event of default is not cured or is not otherwise waived, a majority of lenders in principal amount under our 2025 Credit Agreement or the trustee or holders of at least 25% in principal amount of a series of our senior notes may accelerate the

maturity of the related debt under these agreements, foreclose upon any collateral securing the debt and terminate any commitments to lend, any of which could have a material adverse effect on our business and financial condition.

Furthermore, under these circumstances, we may not have sufficient funds or other resources to satisfy all of our obligations and we may be unable to obtain alternative financing on terms acceptable to us or at all.

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To service our debt, we will be required to generate a significant amount of cash.

Our ability to generate cash depends on a number of factors, some of which are beyond our control, and any failure to meet our debt obligations would have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Our ability to generate cash depends on a number of factors, some of which are beyond our control, and any failure to meet our debt obligations could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We have a significant amount of indebtedness.

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Further, given our capital structure, any refinancing of our senior unsecured debt may be with secured debt, thereby increasing our first lien and/or secured leverage ratios.

Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially reasonable terms, or at all, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Repayment of our indebtedness is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise.

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The agreements governing our indebtedness contain restrictive covenants which impose certain limitations on the way we conduct our business, including limitations on the amount of additional debt we are able to incur, prohibitions on incurring additional debt if certain financial covenants are not met and restrictions on our ability to make certain investments and other restricted payments.

Any additional debt, to the extent we are able to incur it, may further restrict the manner in which we conduct business.

Any additional debt, to the extent we are able to incur it, may further restrict the manner in which we

conduct business.

Such restrictions, prohibitions and limitations could impact our ability to implement elements of our strategy, including in the following ways:

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In the past, our credit ratings have been downgraded.

Any further downgrade in our corporate credit ratings or other credit ratings may increase our cost of borrowing and may negatively impact our ability to raise additional debt capital.

We are exposed to risks related to interest rates, which could have an adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Any further downgrade in our corporate or Bausch + Lomb’s credit ratings or other credit ratings may, among other things, increase our cost of borrowing and may negatively impact our ability to raise additional debt capital.

We are exposed to risks related to interest rates, which could have an adverse effect on our business.

Our senior secured credit facilities bear interest based on a term Secured Overnight Financing Rate (“SOFR”) or U.S.

Prime Rate, or Federal Funds Effective Rate (for U.S.

dollar loans) and Canadian Prime Rate or Canada Bankers’ Acceptance Rate (for Canadian dollar loans).

Thus, a change in the short-term interest rate environment (especially a material change) could have an adverse effect on our business, financial condition, cash flows and results of operations (which adverse effect could be material) and could cause the market value of our common shares and/or debt securities to decline.

dollar loans), Canadian Prime Rate or Canadian Overnight Repo Rate Average (“Term CORRA”) (for Canadian dollar loans) and Euro Interbank Offered Rate (for euro loans).

Thus, a change in the short-term interest rate environment (especially a material change) could have an adverse effect on our business (which adverse effect could be material).

As of December 31, 2025, we did not have any outstanding interest rate swap contracts.

Employment-related Risks

Since the B+L IPO, we have experienced transition in key management positions, and the failure to successfully manage such transitions could adversely impact our business and could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Since the B+L IPO, we have experienced transition in key management positions, and the failure to successfully manage such transitions or attract and retain executives and other key employees could have a material adverse effect on our business.

In connection with the B+L IPO, we appointed a new chief executive officer (“CEO”), chief financial officer (“CFO”), general counsel and other executives and key employees.

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Further, the departure of key leadership personnel often results in the loss of significant knowledge and experience, and the ability of our new management to quickly expand their knowledge of our business will be critical to their ability to make informed decisions about our strategy and operations.

Any significant leadership change or senior management transition involves inherent risks, and any future changes to our management that may occur during the transition could cause significant disruption to the Company and its operations.

failure to adequately manage succession of senior management and other key personnel or the failure of key employees to successfully transition into new roles could cause further disruption to our business.

In addition, changes in senior management may create uncertainty among investors, employees, business partners and others concerning the Company’s future direction and performance.

Any disruption in our operations or adverse impacts from such uncertainty could have a material adverse effect on our business, financial condition, cash flows and results of operations.

The loss of the services of, or our inability to recruit, retain or motivate, our executives and other key employees could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We must continue to retain and motivate our executives and other key employees, and to recruit other executives and employees, in order to strengthen our management team and workforce.

Our ability to retain or recruit executive and other key employees may be hindered or delayed by, among other things, competition from other employers who may be able to offer more attractive compensation packages, the reputational challenges the Company has faced as a result of historical issues and may in the future continue to face and the perceived or actual uncertainty created by the B+L Separation.

A failure by us to retain, motivate and recruit executives and other key employees or the unanticipated loss of the services of any of these executives or key employees for any reason, whether temporary or permanent, could create disruptions in our business, could cause concerns and instability for management and employees, current and potential customers, credit rating agencies and other third parties with whom we do business and our shareholders and debt holders and could cause concern regarding our ability to execute our business strategy or to manage operations in the manner previously conducted and, as a result, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Furthermore, as a result of any failure to retain, or loss of, any executives or key employees, we may experience increased costs in order to identify and recruit a suitable replacement in a timely manner (and, even if we are able to hire a qualified successor, the search process and transition period may be difficult to manage and result in additional periods of uncertainty), which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

In addition, once identified and recruited, the transition of new executives and key employees may be difficult to manage, and we cannot guarantee that new executives and employees will efficiently transition into their roles or ultimately be successful in their roles.

Our ability to retain or recruit executive and other key employees to strengthen our management team and workforce may be hindered or delayed by, among other things, competition from other employers who may be able to offer more attractive compensation packages, the reputational challenges the Company has faced as a result of historical issues and may in the future continue to face and the perceived or actual uncertainty created by the B+L Separation.

Finally, as a result of changes in our executives and key employees, there may be changes in the way we conduct our business, as well as changes to our business strategy.

We cannot predict what these changes may involve or the timing of any such changes and how they will impact our product sales, revenue, business, financial condition, cash flows or results of operations, but any such changes could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Any of these factors could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Any of these factors could have a material adverse effect on our business.

Tax-related Risks

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Such changes could result in a substantial increase in the effective tax rate on all or a portion of our income.

On October 8, 2021, the Organisation for Economic Co-operation and Development (“OECD”) published a statement that outlined the key components of a two-pillar plan to address the tax challenges arising from the digitalisation of the economy.

The statement was agreed by the OECD/G20 inclusive framework on Base Erosion and Profit Shifting (the “Inclusive Framework”) which now includes 145 member jurisdictions.

The timetable for implementation of the two-pillar plan was initially proposed for 2023, then extended to 2024 and, with respect to certain components of the plan, 2025.

Under the pillar one proposals, a portion of the residual profits of multinational enterprise (“MNE”) groups with global turnover above €20 billion and a profit margin above 10% will be allocated to market jurisdictions where such allocated profits would be taxed.

Under pillar two proposals, a global minimum corporate tax rate of 15% will apply to undertaxed profits of MNE groups with consolidated revenue of at least €750 million.

On December 20, 2021, the OECD released model rules on the global minimum tax under pillar two, followed by the OECD’S commentaries, examples, three sets of administrative guidance and certain other

documents relating to the operation and application of the model rules.

Many members of the Inclusive Framework have either introduced or announced their intention to introduce certain components of the global minimum tax in line with the model rules for fiscal years beginning on or after December 31, 2023.

In particular, on December 15, 2022, the Council of the European Union adopted a directive to require the implementation of the pillar two rules by EU member states, with certain elements becoming effective for fiscal years beginning on or after December 31, 2023.

On August 4, 2023, Canada released draft legislation to enact certain components of the pillar two proposals into Canadian law as the Global Minimum Tax Act (“GMTA”) which was enacted on June 20, 2024.

The GMTA is generally aligned with the model rules proposed by the OECD and is effective for fiscal years beginning on or after December 31, 2023.

The United States did not announce plans to enact the tax measures under the two-pillar plan.

On February 1, 2023, the US Financial Accounting Standards Board indicated that they believe the minimum tax imposed under pillar two by other jurisdictions is an alternative minimum tax, and, accordingly, deferred tax assets and liabilities associated with the minimum tax would not be recognized or adjusted for the estimated future effects of the minimum tax but would be recognized in the period incurred.

The OECD has published model rules and other guidance with respect to pillar two, which are generally consistent with the agreement reached by the Inclusive Framework in October 2021.

On February 1, 2023, the Inclusive Framework released a package of technical and administrative guidance on the implementation of pillar two, including the scope of companies that will be subject to the Global Anti-Base Erosion Rules, transition rules, and guidance on domestic minimum taxes that countries may choose to adopt, among other topics.

On December 18, 2023, the OECD announced plans to release additional guidance on model rules and to start the peer review process in 2024.

On June 17, 2024 and January 15, 2025, the OECD published further administrative guidance to clarify the operation of the model rules.

On October 8, 2021, the OECD published a statement that outlined the key components of a two-pillar plan to address the tax challenges arising from the digitalisation of the economy, agreed by the OECD/G20 inclusive framework on Base Erosion and Profit Shifting (the “Inclusive Framework”), which includes 145 member jurisdictions.

Under pillar one, a portion of the residual profits of multinational enterprise (“MNE”) groups with global turnover above €20 billion and a profit margin above 10% would be allocated to (and taxed in) market jurisdictions.

Under pillar two, a global minimum corporate tax rate of 15% would apply to undertaxed profits of MNE groups with consolidated revenue of at least €750 million.

Many jurisdictions in which the Company operates have adopted the global minimum tax provision of the OECD pillar two effective for tax years beginning in January 2024.

On January 20, 2025, U.S.

President Trump signed an executive order stating that the Global Tax Deal, including the OECD two-pillar plan, has no force and effect in the US.

On January 20, 2025, President Trump signed an executive order stating that the Global Tax Deal, including the OECD two-pillar plan, has no force and effect in the U.S.

It further provides for the U.S.

Treasury Secretary to develop options for responding to foreign countries’ tax rules that are extraterritorial in nature or that could disproportionately impact US companies, with findings and recommendations to be delivered to the President.

Treasury Secretary to develop options for responding to foreign countries’ tax rules that are extraterritorial in nature or that could disproportionately impact U.S.

companies, with findings and recommendations to be delivered to the President.

On June 28, 2025, the U.S.

Department of the Treasury announced that an agreement was reached between the U.S.

and other members of the Group of Seven major advanced economies (the “G7”).

Under the terms of this agreement, the U.S.

parented MNEs will be exempt from certain elements of pillar two.

In January 2026, the OECD published the so-called “side by side” arrangement package to implement this exclusion.

However, we cannot predict whether the United States will adopt any other protective measures including with respect to any taxes imposed under pillar one, or whether or how any non-U.S.

countries may change their tax laws, including with respect to taxes imposed under pillar one or pillar two, in response to the executive order, the “side by side” arrangement described above, or otherwise.

It is possible that any changes in U.S.

tax law could have a material adverse effect on our future tax liabilities and our effective tax rate.

We have included the estimated impact of the Inclusive Framework, as currently adopted, in our tax provision beginning in 2024.

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Risks Relating to Intellectual Property and Exclusivity

The expiration or loss of patent protection or regulatory exclusivity rights for our key products could adversely impact our business.

The expiration or loss of patent protection or regulatory exclusivity rights for our key products, including Xifaxan ® could adversely impact our business.

In addition, we have faced generic competition in the past and expect to face additional generic competition in the future.

Competitors (including generic and biosimilar competitors) of our products could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Competitors (including generic and biosimilar competitors) of our products could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The development of new and innovative products, as well as protecting the underlying intellectual property of our product portfolio, is important to our success in all areas of our business.

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The expiration or loss of patent protection or regulatory exclusivity rights for our key products could adversely impact our business.

For example, a substantial amount of our revenue is derived from the Xifaxan ® product line, and we may be materially impacted by the entry of a generic rifaximin product earlier than January 2028, including a competitor launching a generic rifaximin at-risk prior to a final, unappealable decision.

Our ability to obtain, maintain, license, enforce and defend our intellectual property rights over our products, including in connection with the Xifaxan ® Generics Litigation, is critical to our business and financial results and could also impact the B+L Separation.

In addition, even for our products that have patent protection or exclusivity rights, we face competition from similar products in the markets in which we participate.

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Upon the expiration or loss of patent exclusivity or regulatory exclusivity for our products or otherwise upon the introduction of generic, biosimilar or other competitors (which may be sold at significantly lower prices than our products), we could lose a significant portion of sales and market share of the applicable products in a very short period and, as a result, our revenues could be lower.

Given that a substantial amount of our revenue is derived from the Xifaxan ® product line, the entry of a generic rifaximin product earlier than January 2028, including through an at-risk launch prior to a final unappealable decision in the Xifaxan ® Generics Litigation, could have a significant adverse impact on our business, financial condition, results of operations and cash flows.

In addition, the introduction of generic and biosimilar competitors may have a significant downward pressure on the pricing of our branded products which compete with such generics and biosimilars.

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however, even with the launch of an authorized generic, the decline in product sales of such product would still be expected to be significant, and the effect on our future revenues could be material.

The introduction of competing products (including generic products and biosimilars) could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We may fail to obtain, maintain, license, enforce or defend the intellectual property and proprietary rights required to conduct our business, or third parties may allege that we are infringing, misappropriating or otherwise violating their intellectual property rights, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

The introduction of competing products (including generic products and biosimilars) could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We strive to acquire, maintain, enforce and defend patent, trademark and other intellectual property and proprietary protections over our products and the processes used to manufacture these products.

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Our intellectual property and proprietary rights may also be circumvented by third parties.

The failure to obtain, maintain, enforce or defend such intellectual property and proprietary rights, for any reason, could allow third parties to manufacture and sell products that compete with our products or may impact our ability to develop, manufacture and market our own products, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

As a result, we expect that patents related to our products will be routinely challenged, and the validity or enforceability of our patents may not be upheld.

In order to protect or enforce patent rights, we may initiate litigation against third parties.

Our patents may also be challenged in administrative proceedings in the United States Patent and Trademark Office and patent offices outside of the United States.

Even in cases where we prevail in an infringement claim, legal remedies available for harm caused to us may not be sufficient to make us whole.

Third parties may also request a preliminary or permanent injunction from a court of law to prevent us from marketing a product.

However, we may not be able to obtain any required license from any third party on commercially reasonable terms or at all.

For more information, see Note 20, “LEGAL PROCEEDINGS” to our audited Consolidated Financial Statements.

As a result, we expect that patents related to our products will be routinely challenged, and we may initiate litigation against third parties to protect our patent rights.

See “Risk Factors—Legal and Reputational Risks” under Item 1A.

of this Form 10-K.

For certain of our products and manufacturing processes, we rely on trade secrets and other proprietary information, which we seek to protect, in part, through information technology systems discussed in more detail in the following section, and, in part, by confidentiality and nondisclosure agreements with our employees, consultants, advisors and partners.

Trade secrets and proprietary information are difficult to protect.

We also attempt to enter into agreements whereby such employees, consultants, advisors and partners assign to us the rights in any intellectual property they develop in the course of their engagement with us.

We also attempt to enter into agreements whereby such employees,

consultants, advisors and partners assign to us the rights in any intellectual property they develop in the course of their engagement with us.

These agreements may be breached, and we may not have adequate remedies for any breach.

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If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights and face increased competition to our business.

The unauthorized access to or disclosure of our proprietary information or the loss of such intellectual property rights may impact our ability to develop, manufacture and market our own products or may assist competitors in the development, manufacture and sale of competing products, which could have a material adverse effect on our revenues, financial condition, cash flows or results of operations and could cause the market value of our common shares and/or debt securities to decline.

For a number of our commercialized products and pipeline products, including Xifaxan ® , Siliq ® , Plenvu ® , Relistor ® , Jublia ® , Vyzulta ® , Lumify ® , and the pipeline products that are the subject of our licenses with Novaliq GmbH, BHVI and Clearside Biomedical, Inc., we rely on licenses to patents and other technologies, know-how and intellectual property and proprietary rights held by third parties.

Any loss, expiration, termination or suspension of our rights to such licensed intellectual

property would result in our inability to continue to develop, manufacture and market the applicable products or product candidates and, as a result, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

For a number of our commercialized products and pipeline products, we rely on licenses to patents and other technologies, know-how and intellectual property and proprietary rights held by third parties.

Any loss, expiration, termination or suspension of our rights to such licensed intellectual property would result in our inability to continue to develop, manufacture and market the applicable products or product candidates and, as a result, could have a material adverse effect on our business.

If these licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, third parties, including our competitors, could have the freedom to seek regulatory approval of, and to market, products identical or similar to ours, and we may be required to cease our development and commercialization of certain of our products.

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In the future, we may also need to obtain such licenses from third parties to develop, manufacture, market or continue to develop, manufacture or market our products.

If we are unable to timely obtain these licenses on commercially reasonable terms or at all, our ability to develop, manufacture and market our products may be inhibited or prevented, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Intellectual property litigation could cause us to spend substantial resources, distract our personnel from their normal responsibilities and cause the market value of our common shares and/or debt securities to decline.

We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.

Some of our competitors or other third parties may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources.

Any of the foregoing events would harm our business, financial condition, results of operations and prospects and could cause the market value of our common shares and/or debt securities to decline.

Competitive Risks

We operate in extremely competitive industries.

If competitors develop or acquire more effective or less costly pharmaceutical or OTC products or medical devices for our target indications, it could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

If competitors develop or acquire more effective or less costly pharmaceutical or OTC products or medical devices for our target indications, it could have a material adverse effect on our business.

The pharmaceutical, OTC and medical device industries are extremely competitive.

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In addition, academic institutions, government agencies and other public and private organizations conducting research may seek patent protection with respect to potentially competitive products and may also establish exclusive collaborative or licensing relationships with our competitors.

These competitors and the introduction of competing products (that may be more effective or less costly than our products) could make our products less competitive or obsolete, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We cannot predict the timing or impact of the introduction of competitive products, including new market entries, “generic” versions of our approved products, or private label products that treat the same conditions as those of our products.

In addition, the introduction of alternatives in medical devices and medical prescriptions could also alter the market and impede our sales growth.

Our ability to respond to these competitive pressures will depend on our ability to decrease our costs and maintain gross margins and operating results and to introduce new products successfully and on a timely basis, and to achieve manufacturing efficiencies and sufficient manufacturing capacity and capabilities for such products.

Our ability to respond to these competitive pressures will depend on our ability to decrease our costs and

maintain gross margins and operating results and to introduce new products successfully and on a timely basis, and to achieve manufacturing efficiencies and sufficient manufacturing capacity and capabilities for such products.

Risks Relating to Our Business Strategy

We have previously made commitments and public statements with respect to limitations on pricing increases for certain of our products.

These pricing decisions, or decisions to increase prices, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

These pricing decisions, or decisions to increase prices, could have a material adverse effect on our business.

We have formed a Patient Access and Pricing Team which is committed to maintaining patients’ ability to access our branded prescription pharmaceutical products.

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We also cannot predict the impact such pricing decisions or changes will or would have on our business.

However, any such changes could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

However, any such changes could have a material adverse effect on our business.

For example, any pricing changes and programs could affect the average realized prices for our products and may have a significant impact on our revenue trends.

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We have undertaken a number of divestitures of certain of our assets and businesses.

We may, in the future, seek to divest additional assets and/or businesses, some of which may be material and/or transformative, which could adversely affect our business, prospects and opportunities for growth and could cause the market value of our common shares and/or debt securities to decline.

We have completed a number of divestitures of our assets, products or businesses that were not considered core to our ongoing operations or the needs of our primary-customer base, including the divestitures of our Obagi Medical Products business, our iNova Pharmaceuticals business, our Dendreon Pharmaceuticals subsidiary, our Sprout Pharmaceuticals subsidiary, the CeraVe ® , AcneFree ™ and AMBI ® skincare brands and our Amoun Pharmaceutical subsidiary.

We have completed a number of divestitures of our assets, products or businesses that were not considered core to our ongoing operations or the needs of our primary-customer base.

We may, in the future, seek to complete additional divestitures.

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In addition, as was the case with our sale of our Sprout Pharmaceuticals subsidiary, we may recognize a loss on sale in connection with such divestitures.

We may also suffer adverse tax consequences as a result of such divestitures, including capital gains tax or the accelerated use of NOLs or other attributes.

We may also suffer adverse tax consequences as a result of such divestitures, including capital gains tax or the accelerated use of net operating losses (“NOLs”) or other attributes.

Furthermore, divesting certain of our businesses or assets may require us to incur restructuring charges, and we may not be able to achieve the cost savings that we expect from any such restructuring efforts or divestitures.

Any such divestiture could reduce the size or scope of our business, our market share in particular markets, our opportunities with respect to certain markets, products or therapeutic categories or our ability to compete in certain markets and therapeutic categories.

Furthermore, we will be required to use the net proceeds (or substantial portions

thereof) from certain asset sales to repay the term loans under the 2022 Amended Credit Agreement, subject to certain reinvestment rights.

Furthermore, we will be required to use the net proceeds (or substantial portions thereof) from certain asset sales to repay the term loans under the 2025 Credit Agreement, subject to certain reinvestment rights.

In addition, should we seek to divest other of our assets and business, we may be unable to dispose of such businesses and assets on satisfactory or commercially reasonable terms within our anticipated timeline.

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The divestiture process may also further expose us to operational inefficiencies.

In addition, if such transactions are not completed for any reason, the market price of our common shares may reflect a market assumption that such transactions will occur, and a failure to complete such transactions could result in a negative perception by the market of us generally and a decline in the market price of our common shares.

As a result of these factors, any divestiture (whether or not completed) could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

In addition, if such transactions are not completed for any reason, the market price of our common shares may reflect a market assumption that

such transactions will occur, and a failure to complete such transactions could result in a negative perception by the market of us generally and a decline in the market price of our common shares.

As a result of these factors, any divestiture (whether or not completed) could have a material adverse effect on our business.

As part of our business strategy, we seek to identify and acquire certain assets, products and businesses, which may result in substantial costs and diversion of management time.

In addition, we may not be able to consummate proposed acquisitions, and may not realize the benefits we anticipate from any completed acquisitions.

Part of our business strategy includes acquiring and integrating complementary businesses, products, technologies or other assets, including by way of acquisitions or in-license arrangements.

Part of our business strategy includes acquiring and integrating complementary businesses, products, technologies or other assets, including by way of acquisitions or in-license arrangements, including the recent acquisitions of DURECT and Wuhan Shibo Zhenmei Technology Co., Ltd., consisting of the aesthetics distribution business of our full‑service distributor in China, the Shibo Group.

Acquisitions or similar arrangements may be complex, time consuming and expensive.

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Any one of these challenges or risks could impair our ability to realize any benefit from an acquisition or arrangement after we have expended resources on them.

Bausch + Lomb has recently completed a number of acquisitions and in-licensing transactions and may, in the future, seek to identify and acquire certain other assets, products and businesses.

Bausch + Lomb has completed a number of acquisitions and in-licensing transactions and may, in the future, seek to identify and acquire certain other assets, products and businesses.

Bausch + Lomb may experience difficulties in integrating any acquired assets, products and businesses and Bausch + Lomb may fail to realize the anticipated benefits of any such acquisitions.

Bausch + Lomb has recently completed a number of acquisitions and in-licensing transactions.

Over the last several years, Bausch + Lomb has completed a number of acquisitions and in-licensing transactions.

Bausch + Lomb may in the future seek to identify and acquire complementary businesses, products, technologies or other assets to augment its pipeline.

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Potential difficulties that may be encountered in the integration process include the following:

integrating personnel, operations and systems, while maintaining focus on selling and promoting existing and newly-acquired products;

integrating personnel, operations and systems, while maintaining focus on selling and promoting existing and newly-

acquired products;

coordinating geographically dispersed organizations;

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In addition, obtaining necessary government approvals is time-consuming and not assured.

The failure to commercialize certain of our pipeline products could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

The failure to commercialize certain of our pipeline products could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We currently have a number of pipeline products in development.

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Preclinical studies and clinical trials are expensive, complex, can take many years and have uncertain outcomes.

None of, or only a small number of, our research and development programs may actually result in the commercialization of a product.

None of, or only a small number of, our research and

development programs may actually result in the commercialization of a product.

We will not be able to commercialize our pipeline products if preclinical studies do not produce successful results or if clinical trials do not demonstrate safety and efficacy in humans.

In addition, the results of management reviews of our research and development portfolio (including following the receipt of clinical results or feedback from the FDA or other regulatory authorities) has in the past resulted, and could again in the future result in, terminations of specific projects which, in turn, could lead to material impairment charges.

For example, in January 2026, we received the results for the double-blind Phase 3 clinical trials for our two global programs evaluating amorphous-rifaximin soluble solid dispersion (“SSD”) for the primary prevention of hepatic encephalopathy in adults with liver cirrhosis (“RED-C”).

While the treatment was safe and well-tolerated, the clinical trials did not meet their primary endpoints.

As a result of these clinical trial outcomes, we performed preliminary quantitative goodwill analysis as of January 22, 2026 for the Salix reporting unit using revised forecasts, an updated discount rate, and a new long-term growth rate that reflect the Phase 3 clinical trial results.

We anticipate recognizing an impairment charge of approximately $1,400 million for the Salix reporting unit in the first quarter of 2026.

Furthermore, success in preclinical studies or early-stage clinical trials does not ensure that later stage clinical trials will be successful nor does it ensure that regulatory approval for the product candidate will be obtained.

In addition, the process for the completion of pre-clinical and clinical trials is lengthy and may be subject to a number of delays for various reasons, which would delay the commercialization of any successful product.

If our development projects are not successful or are significantly delayed, we may not recover our substantial investments in the pipeline product and our failure to bring these pipeline products to market on a timely basis, or at all, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

In addition, FDA and Health Canada approval must be obtained in the U.S.

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Furthermore, from time to time, changes to the applicable legislation, regulations or policies may be introduced that change these review and approval processes for our products, which changes may make it more difficult and costly to obtain or maintain regulatory approvals.

Our marketed products will be subject to ongoing regulatory review, the results of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We are developing larsucosterol for the treatment of AH and potentially other conditions.

The successful development of larsucosterol is subject to significant risks and uncertainties, including risks relating to the results and timing of clinical trials, the likelihood of future clinical trial results being positive with statistical significance and/or similar to results from previous trials, potential regulatory filings and approvals, and the potential benefits of Breakthrough Therapy Designation and Fast Track Designation.

There can be no assurance that larsucosterol will receive regulatory approval or achieve commercial success, and any failure to successfully develop and commercialize larsucosterol could have a material adverse effect on our business.

Our marketed products will be subject to ongoing regulatory review, the results of which could have a material adverse effect on our business and could cause the market value of our securities to decline.

Following initial regulatory approval of any products, we or our partners may develop or acquire, we will be subject to continuing regulatory review by various government authorities in those countries where our products are marketed or intended to be marketed, including the review of adverse drug events and clinical results that are reported after product candidates become commercially available.

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The MDR, for most parts, became applicable on May 26, 2021.

Under the MDR, several transitional measures apply to medical devices that are certified under the MDD or AIMDD prior to May 26, 2021 or, for class I devices, for which a declaration of conformity was drawn up prior to May 26, 2021, allowing these devices to be placed on the market after May 26, 2021 under certain conditions for a transitional period.

May 26, 2021, allowing these devices to be placed on the market after May 26, 2021 under certain conditions for a transitional period.

However, if we make any significant changes in the design or intended purpose of our devices, they will no longer benefit from such transitional periods.

Generally, the MDR imposes stricter requirements on manufacturers, importers and

distributors of medical devices.

Generally, the MDR imposes stricter requirements on manufacturers, importers and distributors of medical devices.

Moreover, the requirements to provide clinical data for medical devices has become stricter and as a result we may need to conduct new time consuming and costly clinical investigations with our existing medical devices to meet the new requirements, including to obtain CE certificates under the MDR.

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While we are working to ensure compliance with these new regulations for all impacted products, we may not be able to achieve compliance for all products within the applicable transition period.

If we fail to achieve compliance, we will not be able to market and sell the non-compliant products in the EEA, nor will we be able to rely on the non-compliant registration for such products in regions outside of the EEA, which could have a material adverse effect on our business, financial condition, cash flows and results of operations in the EEA and, possibly, on a consolidated basis, and could cause the market value of our common shares to decline.

If we fail to achieve compliance, we will not be able to market and sell the non-compliant products in the EEA, nor will we be able to rely on the non-compliant registration for such products in regions outside of the EEA, which could have a material adverse effect on our business in the EEA and, possibly, on a consolidated basis, could cause the market value of our securities to decline.

While EU law is applicable in Northern Ireland, the UK Medical Devices Regulations 2002/68 also need to be complied with in Great Britain.

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In addition, incidents of adverse drug reactions, unintended side effects or misuse relating to our products could result in additional regulatory controls or restrictions, or even lead to the regulatory authority requiring us to recall or withdraw the product from the market.

Further, if faced with these incidents of adverse drug reactions, unintended side effects or misuse relating to our products, we may elect to voluntarily implement a recall or market withdrawal of our product.

A recall or market withdrawal, whether voluntary or required by a regulatory authority, may involve significant costs to us, potential disruptions in the supply of our products to our customers and reputational harm to our products and business, all of which could harm our ability to market our products and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Further, if faced with these incidents of adverse drug reactions, unintended side effects or misuse relating to our products or for other reasons, we may elect to voluntarily implement a recall or market withdrawal of our product.

For example, on March 27, 2025, Bausch + Lomb announced a voluntary recall of certain enVista IOL products in response to reports of toxic anterior segment syndrome (TASS), which stemmed from raw material used in certain lots that was delivered by a different vendor.

This issue has now been resolved.

Complying with existing government regulation of dietary supplements, including our eye vitamins and mineral supplements, in the U.S., Canada and elsewhere could increase our costs significantly and adversely affect our financial results.

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have passed, or have proposed passing, legislation that could have an adverse impact on pharmaceutical manufacturers’ ability to:

(i) settle litigation initiated pursuant to the Hatch-Waxman Act and Biologics Price Competition and Innovation Act (“BPCIA”), (ii) secure the full benefit of first-to-file

regulatory approval status secured under the Hatch-Waxman Act and (iii) change the value of the brand products prior to the launch of generic versions.

(i) settle litigation initiated pursuant to the Hatch-Waxman Act and Biologics Price Competition and Innovation Act (“BPCIA”), (ii) secure the full benefit of first-to-file regulatory approval status secured under the Hatch-Waxman Act and (iii) change the value of the brand products prior to the launch of generic versions.

The Hatch-Waxman Act and BPCIA create various pathways for generic drug manufacturers to secure accelerated approvals of their abbreviated new drug applications and abbreviated biologics license applications.

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If we or our third-party manufacturers are unable to manufacture our products or the manufacturing process is interrupted due to failure to comply with regulations or for other reasons, the interruption of the manufacture of our products could adversely affect our business.

Other manufacturing and supply difficulties or delays may also have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Other manufacturing and supply difficulties or delays may also have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our manufacturing facilities and those of our contract manufacturers must be inspected and found to be in full compliance with CGMP, quality system management requirements or similar standards before approval for marketing.

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could result in enforcement action by the FDA or its foreign counterparts, including, but not limited to, warning letters, fines, injunctions, civil or criminal penalties, recall or seizure of products, total or partial suspension of production or importation, suspension or withdrawal of regulatory approval for approved or in-market products, refusal of the government to renew marketing applications or approve pending applications or supplements, refusal of certificates for export to foreign jurisdictions, suspension of ongoing clinical trials, imposition of new manufacturing requirements, closure of facilities and criminal prosecution.

These enforcement actions could lead to a delay or suspension in production, which could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows and could cause the market value of our common shares and/or debt securities to decline.

These enforcement actions could lead to a delay or suspension in production, which could have a material adverse effect on our competitive position and business.

In addition, our manufacturing and other processes use complicated and sophisticated equipment, which sometimes requires a significant amount of time to obtain and install.

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We could experience substantial production delays or inventory shortages in the event of any such occurrence until we or they repair such equipment or facility or we or they build or locate replacement equipment or a replacement facility, as applicable, and seek to obtain necessary regulatory approvals for such replacement.

Any interruption in our manufacture of products could adversely affect the sales of our current products or introduction of new products and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Any interruption in our manufacture of products could adversely affect the sales of our current products or introduction of new products and could have a material adverse effect on our business.

The supply of our products to our customers (or, in some cases, supply from our contract manufacturers to us) is subject to and dependent upon the use of transportation services.

Disruption of transportation services (including as a result of weather conditions) could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

In addition, any prolonged disruption in the operations of our existing distribution facilities, whether due to technical, labor or other difficulties, weather conditions, equipment malfunction, contamination, failure to follow specific protocols and procedures, destruction of or damage to any facility or other reasons, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Disruption of transportation services (including as a result of weather conditions) could have a material adverse effect on our business and could cause the market value of our securities to decline.

For some of our finished products and raw materials, we obtain supply from one or a limited number of sources.

If we are unable to obtain components or raw materials, or products supplied by third parties, our ability to manufacture and deliver our products to the market would be impeded, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Some components and raw materials used in our manufactured products, and some finished products sold by us, are currently available only from one or a limited number of domestic or foreign suppliers.

For example, with respect to some of our largest or most significant products, the supply of the finished product for each of our Lumify ® , Vyzulta ® , SofLens ® , MIEBO ® , XIIDRA ® , Wellbutrin XL ® , Relistor ® Oral and injection, Trulance ® , Jublia ® , Aplenzin ® , Arestin ® , Bedoyecta ® and PureVision ® products are only available from a single source (either one of our internal manufacturing sites or third party manufacturers) and the supply of active pharmaceutical ingredients for each of our Lumify ® , Vyzulta ® , MIEBO ® , Preservision ® , Relistor ® Oral and injection, Trulance ® , Aplenzin ® , Arestin ® , Bedoyecta ® and Siliq ® products are also only available from a single source.

For example, with respect to some of our largest or most significant products, the supply of the finished product is only available from a single source (either one of

our internal manufacturing sites or third party manufacturers) and the supply of active pharmaceutical ingredients for certain products are also only available from a single source.

In the event an existing supplier fails to supply product on a timely basis and/or in the requested amount, supplies product that fails to meet regulatory requirements, becomes unavailable through business interruption or financial insolvency or loses its regulatory status as an approved source or we are unable to renew current supply agreements when such agreements expire and we do not have a second supplier, we may be unable to obtain the required components, raw materials or products on a timely basis or at commercially reasonable prices.

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In addition, in some cases, only a single source of active pharmaceutical ingredient is identified in filings with regulatory agencies, including the FDA, and cannot be changed without prior regulatory approval, which would involve time and expense to us.

A prolonged interruption in the supply of a single-sourced raw material, including the active pharmaceutical ingredient, or single-sourced finished product could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

In addition, these third-party manufacturers may have the ability to increase the supply price payable by us for the manufacture and supply of our products, in some cases without our consent.

As a result, our dependence upon others to manufacture and supply our products may adversely affect our profit margins and our ability to obtain approval for and produce our products on a timely and competitive basis, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Changes in inventory levels or fluctuations in buying patterns by our large distributor and retail customers may adversely affect our sales and earnings and add to sales variability from quarter to quarter, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of inventory obsolescence because of changing customer requirements, fluctuating commodity prices, changes to our products, product transfers or the life-cycle of our products.

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Conversely, if we underestimate demand and produce insufficient quantities of a product, we could be forced to produce that product at a higher price and forego profitability in order to meet customer demand.

For example, if a competitor initiates a recall and there is an unexpected increase in the demand for our products, we may not be

able to meet such increased demand.

For example, if a competitor initiates a recall and there is an unexpected increase in the demand for our products, we may not be able to meet such increased demand.

Insufficient inventory levels may lead to shortages that result in loss of sales opportunities altogether as potential end-customers turn to competitors’ products that are readily available.

If any of these situations occur frequently or in large volumes or if we are unable to effectively manage our inventory and that of our distribution partners, this could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Commercialization Risks

Our approved products may not achieve or maintain expected levels of market acceptance, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Our approved products may not achieve or maintain expected levels of market acceptance, which could have a material adverse effect on our business.

Even if we are able to obtain and maintain regulatory approvals for our pharmaceutical and medical device products, generic or branded, the success of these products is dependent upon achieving and maintaining market acceptance.

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While we have been successful in launching some of our products, we may not achieve the same level of success with respect to all of our new products.

Our inability to successfully launch our new products may negatively impact the commercial success of such product, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Our inability to successfully launch our new products may negatively impact the commercial success of such product, which could have a material adverse effect on our business.

Our inability to successfully launch our new products could also lead to material impairment charges.

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Further, the market perception and reputation of our products and their safety and efficacy are important to our business and the continued acceptance of our products.

Any negative publicity about our products, such as the discovery of safety issues with our products, adverse events involving our products, or even public rumors about such events, could have a material adverse effect on our business, financial condition, cash flows or results of operation or could cause the market value of our common shares and/or debt securities to decline.

In addition, the discovery of significant problems with a product similar to one of our products that implicate (or are perceived to implicate) an entire class of products or the withdrawal or recall of such similar products could have a material adverse effect on sales of our products.

Accordingly, new data about our products, or products similar to our products, could cause us reputational harm and could negatively impact demand for our products due to real or perceived side effects or uncertainty regarding safety or efficacy and, in some cases, could result in product withdrawal.

If our products fail to gain, or lose, market acceptance, our revenues would be adversely impacted and we may be required to take material impairment charges, all of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

For certain of our products, we depend on reimbursement from governmental and other third-party payors and a reduction in reimbursement could reduce our product sales and/or revenue.

In addition, failure to be included in formularies developed by managed care organizations and coverage by other organizations may negatively impact the utilization of our products, which could harm our market share and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Sales of certain of our products are dependent, in part, on the availability and extent of reimbursement from government health administration authorities, private health insurers, pharmacy benefit managers and other organizations of the costs of our products and the continued reimbursement and coverage of our products in such programs.

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For example, these decisions may be based on the price of our products or our current or former pricing practices and decisions.

Any reduction or elimination of such reimbursement or coverage could result in a negative impact on the utilization of our products and, as a result, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Managed care organizations and other third-party payors try to negotiate the pricing of medical services and products to control their costs.

Managed care organizations and pharmacy benefit managers typically develop formularies to reduce their cost for medications.

Managed care organizations and pharmacy benefit managers typically develop formularies to reduce their

cost for medications.

Formularies can be based on the prices and therapeutic benefits of the available products.

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Failure to be included in such formularies or to achieve favorable formulary status may negatively impact the utilization and market share of our products.

If our products are not included within an adequate number of formularies or adequate reimbursement levels are not provided, or if those policies increasingly favor generic products, this could have a material adverse effect on our business, financial condition, cash flows and results of operations or result in additional pricing pressure on our products and could cause the market value of our common shares and/or debt securities to decline.

If our products are not included within an adequate number of formularies or adequate reimbursement levels are not provided, or if those policies increasingly favor generic products, this could have a material adverse effect on our business and results of operations or result in additional pricing pressure on our products.

We have and may continue to experience pressure on the pricing of certain of our products due to pricing controls, social or government pressure to lower the cost of drugs, and consolidation across the supply chain, which may adversely affect our financial results.

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Thus, our inability to secure adequate prices in a particular country may also impair our ability to obtain acceptable prices in existing and potential new markets and may create the opportunity for third party cross-border trade.

In addition to the impacts of these government-sponsored healthcare systems, in the EU, UK and other international markets, certain governmental agencies have or are considering enacting further measures to decrease the costs of providing healthcare, including government mandated price reductions and/or other forms of price controls, including retrospective “clawback” price reductions as a result of the COVID-19 pandemic or other epidemics and the changing healthcare landscape in those markets.

There has also been increasing U.S.

federal and state legislative and enforcement interest with respect to drug pricing, as well as from international organizations like the United Nations, World Health Organization and Organization for Economic Cooperation and Development, in addition to intense publicity and scrutiny regarding such matters, including publicity and pressure resulting from prices charged by competitors and peer companies for new products as well as price increases by competitors and peer companies on older products that some have deemed excessive.

In addition, there have been executive orders, legislation, and legislative and regulatory proposals, including in connection with government programs such as Medicare, concerning drug prices and related issues, including the perceived need to bring more transparency to drug pricing, reviewing the relationship between pricing and manufacturer patient programs, and reforming government program reimbursement methodologies for drugs.

These include legislation promulgated by the IRA that enables the U.S.

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In January 2025, the CMS selected Xifaxan ® 550 mg tablets as one of the medicines for the second round of negotiation of the drug price negotiation program as part of the IRA with an initial price applicability in 2027.

On November 25, 2025, CMS published the negotiated price for Xifaxan ® 550 mg tablets, which will become effective on January 1, 2027 and is expected to negatively impact revenues and operating results for Xifaxan ® primarily in 2027 due to anticipated generic competition beginning in 2028.

It is possible that other of our products could be selected in future years.

These negotiations could, among other things, accelerate revenue erosion prior to the expiration of intellectual property protections.

The effect of reducing prices and reimbursement for certain of our products could significantly impact our business and consolidated results of operations.

Although we expect to see continued focus in regulating pricing, we cannot predict what, if any, additional legislative or regulatory developments may transpire at the state or country level, or what the ultimate impact may be.

Catastrophic events may disrupt our business and could cause the market value of our common shares and/or debt securities to decline.

Catastrophic events may disrupt our business.

We have operations and facilities which sell and distribute our products in many parts of the world.

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Such events that occur in major markets where we sell our products could reduce the demand for our products in those areas and, as a result, impact our sales into those markets.

In either case, any such disruption could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common shares and/or debt securities to decline.

The illegal distribution and sale of counterfeit versions of our products may reduce demand for our products or have a negative impact on the reputation of our products, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

In either case, any such disruption could have a material adverse effect on our business, financial condition and results of operations.

Third parties may illegally distribute and sell counterfeit versions of our products, which do not meet or adhere to the rigorous quality, safety, manufacturing, storage and handling standards and regulations that apply to our products.

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We may not be able to detect or, if detected, prevent or prohibit the sale of such counterfeit products.

As a result, the illegal sale or distribution of counterfeit products may negatively impact the demand for and sales of our products, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

As a result, the illegal sale or distribution of counterfeit products may negatively impact the demand for and sales of our products, which could have a material adverse effect on our business.

Our revenues and profits could be reduced by imports from countries where our products are available at lower prices.

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Our sales in countries with relatively higher prices may be reduced if products can be imported into those or other countries from lower price markets.

If this happens with our products, our revenues and profits may be adversely affected, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

If this happens with our products, our revenues and profits may be adversely affected, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our policies regarding returns, allowances and chargebacks, and marketing programs adopted by wholesalers, may reduce our revenues in future fiscal periods.

We provide certain rebates, allowances, chargebacks and other credits to our customers with respect to certain of our products.

For example, we make payments or give credits to certain wholesalers for the difference between the invoice price paid to us by our wholesaler customer for a particular product and the negotiated price that such wholesaler sells such products

to its hospitals, group purchasing organizations, pharmacies or other retail customers.

We also give certain of our customers credits on our products that such customers hold in inventory after we have decreased the WAC prices of such products, such credit being for the difference between the old and new price.

In addition, we also implement and maintain returns policies, pursuant to which our customers may return product to us in certain circumstances in return for a credit.

Although we establish reserves based on our prior experience, wholesaler data, then-current on-hand inventory, our best estimates of the impact that these policies may have in subsequent periods and certain other considerations, we cannot ensure that our reserves are adequate or that actual product returns, rebates, allowances and chargebacks will not exceed our estimates, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We may experience declines in sales volumes or prices of certain of our products as the result of the concentration of sales to wholesalers and the continuing trend towards consolidation of such wholesalers and other customer groups and this could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

For certain of our products, a significant portion of our sales are to a relatively small number of customers.

If our relationship with one or more of such customers is disrupted or changes adversely or if one or more of such customers experience financial difficulty or other material adverse changes in their businesses, it could materially and adversely affect our sales and financial results, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

In addition, wholesalers and retail drug chains have undergone, and are continuing to undergo, significant consolidation.

This consolidation may result in these groups gaining additional purchasing leverage and consequently increasing the product pricing pressures facing our business.

The result of these developments could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We have entered into distribution agreements with other companies to distribute certain of our products at supply prices based on net sales.

Declines in the pricing and/or volume, over which we have no or limited control, of such products, and therefore the amounts paid to us, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

The result of these developments could have a material adverse effect on our business.

We have entered into distribution agreements and fulfillment arrangements with other companies to distribute certain of our products at supply prices based on net sales.

Declines in the pricing and/or volume, over which we have no or limited control, of such products, and therefore the amounts paid to us, could have a material adverse effect on our business.

Certain of our products are the subject of third-party distribution or sublicense agreements, pursuant to which we may manufacture and sell products to other companies, which distribute such products in return for a royalty or a supply price, in both cases which are often based on net sales.

Our ability to control pricing and volume of these products may be limited and, in some cases, these companies make all distribution and pricing decisions independently of us.

If the pricing or volume of such products declines, our revenues would be adversely impacted which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

If the pricing or volume of such products declines, our revenues would be adversely impacted which could have a material adverse effect on our business.

In addition, the success of our fulfillment arrangements with Walgreen Co.

and our dermatology cash-pay prescription program is subject to various risks, including market acceptance of, or market reaction to, such arrangements (including by customers, doctors, patients, pharmacy benefit managers, third-party payors and governmental agencies), and the continued compliance of such arrangements with applicable laws.

Any failure of these arrangements to achieve market acceptance or any non-compliance with applicable laws could have a material adverse effect on our business.

Risks Relating to the International Scope of our Business

Our business, financial condition, cash flows and results of operations are subject to risks arising from the international scope of our operations, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Our business is subject to risks arising from the international scope of our operations, any of which could have a material adverse effect on our business.

We conduct a significant portion of our business outside the U.S.

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laws applicable to Canadian companies with U.S.

and foreign operations, such as export and sanctions laws and the FCPA, the Canadian Corruption of Foreign Public Officials Act, and other applicable worldwide anti-bribery laws;

and foreign operations, such as export and sanctions laws and the FCPA, the CFPOA, and other applicable worldwide anti-bribery laws;

▪ price and currency exchange controls;

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▪ political and economic instability;

▪ ongoing uncertainties as a result of instability or changes in geopolitical conditions, including military or political conflicts, such as those caused by the ongoing conflict between Russia and Ukraine or the conflict in the Middle

East involving Israel, Hamas and other countries and militant groups in the region (the potential escalation or geographic expansion of which could heighten other risks identified elsewhere in this “Risk Factors” section);

▪ ongoing uncertainties as a result of unrest, instability or changes in geopolitical conditions including military or political conflicts, such as those caused by the ongoing conflict between Russia and Ukraine, and the conflict in the Middle East involving Israel, Hamas and other countries and militant groups and related unrest in the region (the potential escalation or geographic expansion of which could heighten other risks identified elsewhere in this “Risk Factors” section);

▪ compliance with multiple regulatory regimes;

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▪ new export license requirements;

▪ adverse changes in tariff and trade protection measures, especially in light of recent comments made by the new Trump administration;

▪ tariffs imposed (or proposed to be imposed) by the U.S.

(including in respect of the countries and sectors in which we do business) and counter-tariffs or other retaliatory measures imposed (or that may be imposed) on the U.S.

by other countries, disruptions to global supply chains and the potential results of these developments;

▪ differing labor regulations;

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▪ differing local product preferences and product requirements.

As a result of changes to U.S.

trade policy, especially in light of recent comments made by the new Trump administration, there may be changes to existing trade agreements, the imposition of new tariffs and greater restrictions on trade generally.

In addition, support for protectionism and rising anti-globalization sentiment in the United States and other countries may slow global growth.

In particular, a protracted and wide-ranging trade conflict between the United States and its trading partners, including China, Canada and Mexico, or the imposition of tariffs or other trade protection measures by either country in any other context, could adversely affect global economic growth.

During 2025, the Trump administration imposed increased and new tariffs on various countries.

Additional tariffs and other protective measures are being investigated and may also be imposed.

Counter-tariffs and other retaliatory measures have been threatened and imposed on the United States by various countries.

The United States has negotiated trade agreements with some countries on tariff matters and negotiations with others are ongoing.

These tariffs and counter-tariffs have had and may continue to have an impact on some of the countries in and with which we do business and some of the sectors in which we are engaged.

While we believe we will be able to mitigate some of the impact of these tariffs, counter-tariffs and other trade restrictions through the use of certain levers and other actions, these measures may not be successful in mitigating all of the impacts of these tariffs and other trade matters.

In addition, continued support for protectionism and rapidly escalating anti-globalization sentiment in the United States and other countries may slow global growth.

In particular, a protracted and wide-ranging trade conflict between the United States and its trading partners, or the imposition of tariffs or other trade protection measures by any such partner in any other context, could adversely affect global economic growth.

Concerns also remain around the social, political and economic impacts of the changing political landscape in Europe and other regions.

Broader geopolitical tensions remain high amongst the U.S., Russia, Ukraine, China, and across the Middle East.

Given the international scope of our operations, any of the above factors, including sanctions, export controls, tariffs, including potential new tariffs and/or retaliatory tariffs that have been discussed in recent months, trade wars and other governmental actions, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Broader geopolitical tensions remain high amongst the United States, Russia, Ukraine, China, Venezuela and other parts of South America and across the Middle East as well as between the U.S.

and other members of NATO.

Given the international scope of our operations, any of the above factors, including sanctions, export controls, tariffs, and/or retaliatory tariffs, trade wars and other governmental actions, could have a material adverse effect on our business.

Similarly, adverse economic conditions impacting our customers in these countries or uncertainty about global economic conditions could cause purchases of our products to decline, which would adversely affect our revenues and operating results.

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Moreover, our projected revenues and operating results are based on assumptions concerning certain levels of customer spending.

Any failure to attain our projected revenues and operating results as a result of adverse economic or market conditions could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Due to the large portion of our business conducted in currency other than U.S.

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We face foreign currency exposure in those countries where we have revenue denominated in the local foreign currency and expenses denominated in other currencies.

Both favorable and unfavorable foreign currency impacts to our foreign currency-denominated operating

expenses are mitigated to a certain extent by the natural, opposite impact on our foreign currency-denominated revenue.

Both favorable and unfavorable foreign currency impacts to our foreign currency-denominated operating expenses are mitigated to a certain extent by the natural, opposite impact on our foreign currency-denominated revenue.

In addition, the repurchase of our U.S.

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dollar and/or the devaluation of other countries’ currencies could have a negative impact on our reported international revenue.

As a result of the ongoing conflict between Russia and Ukraine, the current and any future responses by the global community to such conflict and any counter responses by the Russian government or other entities or individuals, and the potential expansion of the conflict to other countries, we may continue to experience an adverse impact on our business and operations in this region, as well as on our business and operations generally, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

The ongoing military conflict between Ukraine and Russia has provoked strong reactions from the United States, the UK, the EU, Canada and various other countries around the world, including the imposition of export controls and broad financial and economic sanctions against Russia, Belarus and specific areas of Ukraine.

Additional sanctions or other measures may be imposed by the global community, and counteractive measures may be taken by the Russian government, other entities in Russia or governments or other entities outside of Russia.

For 2024, we derived approximately 2% of our revenues from sales of our products in Russia and less than 1% of our revenues from sales of our products in both Ukraine and Belarus.

Our revenues attributable to Russia, Ukraine and Belarus for 2025, 2024 and 2023 were approximately 2% of our total revenues each year.

The conflict between Ukraine and Russia has impacted our business in the region, and we are continuously monitoring developments to assess any potential future impact that may arise.

Given the nature of our products, we do not believe that the current sanctions and other measures imposed by the United States and other countries preclude us from conducting business in the region.

However, we anticipate that the ongoing conflict in this region and the sanctions and other actions by the global community in response may continue to hinder our ability to conduct business with customers and vendors in this region.

For example, we have experienced and may in the future experience disruption and delays in the supply of our products to our customers in Russia, Belarus and Ukraine.

We have experienced and may in the future also experience decreased demand for our products in these countries as a result of the conflict and invasion.

In addition, we may experience difficulties in collecting receivables from such customers.

If we are hampered in our ability to conduct business with new or existing customers and vendors in this region, our business, and operations, including our revenues, profitability and cash flows, could be adversely impacted.

However, we anticipate that the ongoing conflict in this region and the sanctions and other

actions by the global community in response may continue to hinder our ability to conduct business with customers and vendors in this region, including disruption and delays in the supply of our products to our customers, decreased demand for our products, and difficulties in collecting receivables from such customers in Russia, Ukraine and Belarus as a result of the conflict and invasion.

Furthermore, if the sanctions and other retaliatory measures imposed by the global community change, we may be required to cease or suspend our operations in the region or, should the conflict worsen, we may voluntarily elect to do so.

For example, the sanctions and export controls that have been imposed by the U.S.

against Russia have impacted our ability to distribute our Solta medical device products to Russia.

Similarly, the sanctions that were imposed by the EU against Russia also required us to obtain licenses for services provided to Russia from the EU and from the relevant EU member states.

The new Trump administration has indicated that it may impose additional sanctions against Russia if negotiations are not commenced respecting a ceasefire or possible end to the conflict in Ukraine.

For example, the former Biden administration imposed U.S.

sanctions and export controls against Russia in response to the ongoing war.

These sanctions have impacted our ability to distribute our Solta medical device products to Russia.

The Trump administration has extended the sanctions imposed by the former Biden administration and has also indicated that it may impose additional sanctions against Russia and/or secondary sanctions against countries doing business with Russia if negotiations are not progressed respecting a ceasefire or possible end to the conflict in Ukraine.

In addition, the European Union (“EU”) has also imposed several rounds of sanctions against Russia.

We have obtained licenses where required, for services provided to Russia from the EU and from the relevant EU member states.

We cannot guarantee that we will be able to obtain licenses or other governmental authorizations for any future sanctions or export controls that may be imposed.

We cannot provide assurance that current sanctions or potential future changes in these sanctions or other measures will not have a material impact on our operations in Russia, Belarus and Ukraine.

The disruption to, or suspension of, our business and operations in Russia, Belarus and Ukraine would adversely impact our business, financial condition, cash flows and results of operations in this region which may, in turn, materially adversely impact our overall business, financial condition, cash flows and results of operations, which impact could be material, and could cause the market value of our common shares to decline.

We cannot provide assurance that current sanctions or potential future changes in these sanctions or other measures will not have a material impact on our operations in Russia, Ukraine and Belarus.

The disruption to, or suspension of, our business and operations in Russia, Ukraine and Belarus would adversely impact our business, financial condition, cash flows and results of operations in this region which may, in turn, materially adversely impact our overall business, financial condition, cash flows and results of operations, which impact could be material, and could cause the market value of our securities to decline.

Finally, we are also subject to risks if exchange controls were to be imposed that would limit the repatriation of profits from our operations in Russia.

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dollar, as well as in an increase in energy and commodity prices globally.

Should the conflict continue or escalate, there may be various economic and security consequences including, but not limited to, supply shortages of different kinds, further increases in prices of commodities, including piped gas, oil and agricultural goods, reduced consumer purchasing power, significant disruptions in logistics infrastructure, telecommunications services and risks relating to the unavailability of information technology systems and infrastructure.

The resulting impacts to the global economy, financial markets, inflation, interest rates and unemployment, among others, could adversely impact economic and financial conditions.

Other potential consequences include, but are not limited to, growth in the number of popular uprisings in the region, increased political discontent, especially in the regions most affected by the conflict or economic sanctions, increase in cyberterrorism activities and attacks, displacement of persons to regions close to the areas of conflict and an increase in the number of refugees fleeing across Europe, among other unforeseen social and humanitarian effects.

In addition, as a result of the ongoing conflict between Russia and Ukraine, we may experience other risks, difficulties and challenges in the way we conduct our business and operations generally.

For example, there may be an increased risk of cybersecurity attacks due to the current conflict between Russia and Ukraine, including cyber security attacks perpetrated by Russia or others at its direction in response to economic sanctions and other actions taken against Russia as a result of its invasion of Ukraine.

Any increase in such attacks on us or our third-party providers or other systems could adversely affect our network systems or other operations.

In order to address the risks associated with cybersecurity attacks from the region (including state-sponsored cybersecurity attacks), we have taken action to consolidate network traffic from Russia and Belarus through a single point, which is designed to allow us to more closely inspect that traffic.

In addition, if required, this consolidation provides a single point to quickly and efficiently disconnect the region from our corporate network.

Other economic and security consequences include, but are not limited to, supply shortages of different kinds, further increases in prices of commodities, reduced consumer purchasing power, significant disruptions in logistics infrastructure, telecommunications services, and risks relating to the unavailability of information technology systems and infrastructure.

In addition, as a result of the ongoing conflict between Russia and Ukraine, we may experience other risks, difficulties and challenges in the way we conduct our business and operations generally, including cybersecurity attacks perpetrated by Russia or others at its direction in response to economic sanctions and other actions taken against Russia as a result of its invasion of Ukraine.

We have taken action to consolidate network traffic from Russia and Belarus through a single point, which is designed to allow us to more closely inspect that traffic and quickly and efficiently disconnect the region from our corporate network if required.

At this time, to the best of our knowledge, we do not believe we have experienced any cyberattacks that are related to the conflict between Russia and Ukraine.

Although we have taken steps to enhance our protections against such attacks, we may not be able to address these cybersecurity threats proactively or implement adequate preventative measures and there can be no assurance that we will promptly detect and address any such disruption or security breach, if at all.

Although we have taken steps to enhance our protections against such attacks, there can be no assurance that we will promptly detect and address any such disruption or security breach, if at all.

In addition, as a result of the risk of collectability of receivables from our customers in Russia, Belarus and Ukraine, we may be required to adjust our accounting practices relating to revenue recognition in this region, with the result that we may not be able to recognize revenue from these customers until collected.

We may also suffer reputational harm as a result of our continued operations in Russia, which may adversely impact our sales and other businesses in other countries.

We may also suffer reputational harm as a result of our continued operations in Russia.

Finally, we have one global clinical trial involving Russia, Ukraine and Belarus with patients enrolled.

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Plans for any additional trials involving Russia, Ukraine and Belarus have been postponed.

The continuation of the conflict between Ukraine and Russia, any escalation of that conflict, and the financial and economic sanctions and import and/or export controls imposed on Russia by the U.S., the UK, the EU, Canada and others, and the above-mentioned adverse effect on our operations (both in this region and generally) and on the wider global economy and market conditions could, in turn, have a material adverse impact on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflict in the Middle East between Israel, Hamas and other countries and militant groups in the region.

The continuation of the conflict between Russia and Ukraine, any escalation of that conflict, and the financial and economic sanctions and import and/or export controls imposed on Russia by the U.S., the UK, the EU, Canada and others, and the above-mentioned adverse effect on our operations (both in this region and generally) and on the wider global economy and market conditions could, in turn, have a material adverse impact on our business.

Our business could be adversely affected by disruptions in the global economy caused by the ongoing conflict in the Middle East between Israel, Hamas and other countries and militant groups in the region.

The global economy has been negatively impacted by the military conflict in the Middle East between Israel, Hamas and other countries and militant groups in the region.

There could be an expansion of the countries involved, which could lead to significant detrimental effects to the global economy.

With uncertainty surrounding the success of the recent ceasefire, there could be an expansion of the countries involved, which could lead to significant detrimental effects to the global economy.

Although we do not have significant customers or suppliers in the Middle East region, we do have customers and suppliers in surrounding regions which may be affected.

Further escalation of the conflict in the Middle East and geopolitical tensions related to such military conflict, including increased trade barriers or restrictions on global trade, could result in, among other things, cyber-attacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business, financial condition and results of operations.

attacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business.

The effects of the ongoing conflict could heighten many of our known risks described in these “Risk Factors.”

Risks Relating to Information Technology

We have become increasingly dependent on information technology systems and infrastructure and any breakdown, interruption, breach or other compromise of our or our third-party service providers’ information technology systems could compromise sensitive information related to our business or prevent us from accessing critical information and subject us to liability or interrupt the operation of our business, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We are increasingly dependent upon our information technology systems and infrastructure, as well as those of third parties with whom we interact, and internal and public internet sites, data hosting and processing facilities, cloud-based services and hardware, social media sites and mobile technology, in connection with the conduct of our business.

We must constantly update our information technology systems and infrastructure and undertake investments in new information technology systems and infrastructure.

However, we cannot provide assurance that the information technology systems and infrastructure on which we depend, including those of third parties, will continue to meet our current and future

business needs or adequately safeguard our operations.

However, we cannot provide assurance that the information technology systems and infrastructure on which we depend, including those of third parties, will continue to meet our current and future business needs or adequately safeguard our operations.

Furthermore, modification, upgrade or replacement of such systems and infrastructure may be costly or out of our control.

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While we attempt to take appropriate security and cybersecurity measures to protect our information technology systems and infrastructure (including any trade secrets, confidential or other sensitive information) and to prevent and detect breakdowns, unauthorized breaches and cyber-attacks, we cannot guarantee that such measures will be successful and that breakdowns and breaches of, or attacks on, our systems and data, or those of third parties upon which we rely, will be prevented.

Such breakdowns and breaches of, or attacks on, our systems and infrastructure, or the public perception that we or any third party upon which we rely have suffered a cybersecurity incident or breakdown, may cause business interruption and could have a material adverse effect on our business, financial condition, cash flows and results of operations, damage our reputation with customers, employees and third parties with whom we do business and cause the market value of our common shares and/or debt securities to decline, and we may suffer financial damage or other loss, including fines or criminal penalties or may be subject to litigation, including potentially class action lawsuits because of lost or misappropriated information.

Such breakdowns and breaches of, or attacks on, our systems and infrastructure, or the public perception that we or any third party upon which we rely have suffered a cybersecurity incident or breakdown, may cause business interruption and could have a material adverse effect on our business, damage our reputation with customers, employees and third parties with whom we do business and cause the market value of our securities to decline, and we may suffer financial damage or other loss, including fines or criminal penalties or may be subject to litigation, including potentially class action lawsuits because of lost or misappropriated information.

Although we maintain insurance to mitigate a portion of any potential financial impact associated with certain of these risks, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from a breakdown, breach, cyber-attack or other compromise of or interruption to our information technology systems and infrastructure or confidential and other sensitive information.

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Any such incidents could require us to incur costs to remediate possible injury to our customers and employees, to further improve our protective measures or to pay fines or take other action with respect to litigation, judicial or regulatory actions arising out of such incidents, which may be significant.

We also cannot ensure that any limitation of liability or indemnity provisions in our

contracts, including with vendors and service providers, for a security lapse or breach or other security incident would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim.

Any of the foregoing could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We also cannot ensure that any limitation of liability or indemnity provisions in our contracts, including with vendors and service providers, for a security lapse or breach or other security incident would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim.

Any of the foregoing could have a material adverse effect on our business.

We utilize artificial intelligence, which could expose us to liability or could have a material adverse effect on our business and financial condition.

We have begun to incorporate proprietary and third party artificial intelligence (“AI”) into certain aspects of our business and operations, and may continue to do so in the future.

We utilize proprietary and third party artificial intelligence (“AI”) in various aspects of our business and operations, and may continue to do so in the future.

There may be significant risks involved in utilizing AI and no assurance can be provided that our use will enhance our business and operations or produce the intended results.

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In addition, regulation of AI is rapidly evolving worldwide and AI and its uses are subject to a variety of laws and regulations, including intellectual property, privacy, data protection and information security, consumer protection, competition, and equal opportunity laws, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations.

For example, several laws have been enacted at the U.S.

state level that regulate the development and deployment of AI platforms and systems.

Although there are no U.S.

federal laws specifically governing AI development and use, federal agencies in the United States are applying existing laws to address AI-related risks.

An Executive Order issued in December 2025 seeks to establish uniform federal standards and challenge state laws that regulate AI.

In addition, regulators in the United States, the United Kingdom, Canada, and other jurisdictions are developing new guidance or binding rules applicable to AI systems, including algorithmic accountability, explainability, dataset quality, and restrictions on certain high‑risk uses of AI.

We have internal governance processes designed to monitor such developments and to promote compliance with applicable AI‑related legal and regulatory requirements.

In the EU, we are also subject to the European Union Artificial Intelligence Act (the “EU AI Act”), regulating development and deployment of AI systems.

The EU AI Act applies to both public and private actors inside and outside of the EU as long as the AI system is placed on the EU market, or its use has an impact on people located in the EU.

We may not be able to anticipate how to respond to these rapidly evolving laws and regulations, and we may need to expend resources to adjust our use of AI in certain jurisdictions if the legal and regulatory frameworks are inconsistent across jurisdictions.

Conversely, if we are unable or unwilling to adopt AI technologies in our business and operations, we may face competitive risks from our peers, who are utilizing these technologies, which in turn could adversely impact our business.

financial condition, cash flows and results of operations.

In addition, these laws and regulations could have significant effects on our Company and require us to change our AI practices and incur substantial costs and expenses in order to comply.

In addition, the use of AI may subject us to new or heightened ethical or other challenges.

Risks Relating to Specific Legislation and Regulations

We are subject to various laws and regulations, including “fraud and abuse” laws, anti-bribery laws, environmental laws and privacy and security laws, and a failure to comply with such laws and related regulations or prevail in any litigation related to noncompliance could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Pharmaceutical and medical device companies have faced lawsuits and investigations pertaining to violations of health care “fraud and abuse” laws, such as the federal False Claims Act, the federal Anti-Kickback Statute (“AKS”) and other state and federal laws and regulations.

The AKS prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any health care item or service reimbursable under federally financed health care programs.

This statute has been interpreted to apply to arrangements between pharmaceutical or medical device manufacturers, on the one hand, and prescribers, purchasers, formulary managers and other health care related professionals, on the other hand.

More generally, the federal False Claims Act, among other things, prohibits any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government.

Pharmaceutical and medical device companies have been prosecuted or faced civil liability under these laws for a variety of alleged promotional and marketing activities, including engaging in off-label promotion that caused claims to be submitted for non-covered off-label uses.

Pharmaceutical and medical device companies have been prosecuted or faced civil liability under these laws for a variety of alleged promotional and marketing ac tivities, including engaging in off-label promotion that caused claims

to be submitted for non-covered off-label uses.

“ Business — Government Regulations ” of this Form 10-K.

If we are in violation of any of these requirements or any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, this could have a significant impact on our business, including the imposition of significant criminal and civil fines and penalties, exclusion from federal health care programs or other sanctions, including consent orders or corporate integrity agreements.

In addition, the HHS Office of Inspector General recommends, and increasingly states require pharmaceutical companies to have comprehensive compliance programs.

Moreover, the Physician Payment Sunshine Act enacted in 2010 imposes reporting and disclosure requirements on device and drug manufacturers for any “transfer of value” made or distributed to prescribers and other health care providers.

Failure to submit this required information may result in significant civil monetary penalties.

While we have developed corporate compliance programs based on what we believe to be current best practices, we cannot provide assurance that we or our employees or agents are or will be in compliance with all applicable federal, state or foreign regulations and laws.

If we are in violation of any of these requirements or any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant criminal and civil fines and penalties, exclusion from federal health care programs or other sanctions, including consent orders or corporate integrity agreements.

FCPA, the Canadian Corruption of Foreign Public Officials Act and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to officials for the purpose of obtaining or retaining business.

Our policies mandate compliance with these anti-bribery laws.

We operate in many parts of the world that

have experienced governmental corruption and in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices or may require us to interact with doctors and hospitals, some of which may be state controlled, in a manner that is different than in the U.S.

Our policies mandate compliance with anti-bribery laws.

We operate in many parts of the world that have experienced governmental corruption and in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices or may require us to interact with doctors and hospitals, some of which may be state controlled, in a manner that is different than in the U.S.

We cannot provide assurance that our internal control policies and procedures will protect us from reckless or criminal acts committed by our employees, consultants, distributors, third party contractors or agents.

Violations of these laws, or allegations of such violations, could disrupt our business and result in criminal or civil penalties or remedial measures, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

We are also subject to various state, federal and international laws and regulations governing the collection, transmission, dissemination, use, privacy, confidentiality, security, retention, availability, integrity and other processing of health-related and other sensitive and personal information, including HIPAA.

Many states in which we operate have laws that protect the privacy and security of sensitive and personal information, including health-related information.

Certain state laws may be more stringent or broader in scope, or offer greater individual rights, with respect to sensitive and personal information than federal, international or other state laws, and such laws may differ from each other, which may complicate compliance efforts.

For example, the California Consumer Privacy Act of 2018 (“CCPA”) imposes stringent data privacy and security requirements and obligations with respect to the personal information of California residents and provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal data that may increase the likelihood of, and risks associated with, data breach litigation.

The effects on our business of the CCPA and other similar state laws are potentially significant.

State laws are changing rapidly and there is discussion in Congress of a new federal data protection and privacy law to which we may be subject.

For instance, the California Privacy Rights Act (“CPRA”) which was passed in November 2020 and took effect on January 1, 2023, maintains the core framework of the CCPA, while also making a number of substantive changes.

Additionally, some statutory requirements, both in the United States and abroad, include obligations for companies to notify individuals of security breaches involving particular personal information, which could result from breaches experienced by us or our service providers.

For example, laws in all 50 U.S.

states require businesses to provide notice to customers whose personal data has been disclosed as a result of a data breach.

The laws are not consistent, and compliance in the event of a widespread data breach is difficult and may be costly.

Moreover, states have been frequently amending existing laws, requiring attention to changing regulatory requirements.

We are also subject to various state and federal rules and laws governing cybersecurity risks and incidents, including an SEC rule relating to disclosure of material cybersecurity incidents and risks and state laws regarding notification of data breaches.

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Such events may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity, and could cause customers and business partners to lose trust in us, which could have an adverse effect on our reputation and business.

Internationally, laws and regulations in many jurisdictions apply broadly to the collection, transmission, dissemination, use, privacy, confidentiality, security, retention, availability, integrity and other processing of health-related and other sensitive and personal information.

For example, the EU’s GDPR, and the UK’s General Data Protection Regulation (“UK GDPR”), together with national legislation, regulations and guidelines of the EU member states and the UK governing the processing of personal data, impose strict obligations and restrictions on the ability to collect, analyze, store, transfer and otherwise process personal data, including health data from clinical trials and adverse event reporting.

The GDPR authorizes fines for certain violations of up to 4% of global annual revenue or €20 million, (or GBP 17.5 million under the UK GDPR), whichever is greater.

European data protection authorities may interpret the GDPR and national laws differently and impose additional requirements, which contributes to the complexity of processing personal data in or from the EEA or the UK.

Guidance on implementation and compliance practices is often updated or otherwise revised.

These laws require data controllers to implement stringent operational requirements, including, for example, transparent and expanded disclosure to data subjects about how their personal data is collected and processed, grant rights for data subjects to access, delete or object to the processing of their data, mandatory data breach notification requirements (and in certain cases, affected individuals), set limitations on retention of information and outline significant documentary requirements to demonstrate compliance through policies, procedures, training and audits.

The GDPR also provides that EU member states may introduce further conditions, including limitations, and make their own laws and regulations, further limiting the processing of ‘special categories of personal data,’ including personal data related to health, biometric data used for unique identification purposes and genetic information,

which could limit our ability to collect, use and share EU data, and could cause our compliance costs to increase, ultimately having an adverse impact on our business, and harm our business and financial condition.

The withdrawal of the UK from the European Union (“Brexit”) also has created uncertainty with regard to the regulation of data protection in the UK.

Since January 1, 2021, when the transitional period following Brexit expired, we have been required to comply with the GDPR as well as the UK GDPR (combining the GDPR and the UK’s Data Protection Act of 2018), which exposes us to two parallel regimes, each of which authorizes similar fines and may subject us to increased compliance risk based on differing, and potentially inconsistent or conflicting, interpretation and enforcement by regulators and authorities (particularly, if the laws are amended in the future in divergent ways).

With respect to transfers of personal data from the EEA, on June 28, 2021, the European Commission issued an adequacy decision in respect of the UK’s data protection framework, enabling data transfers from EU member states to the UK to continue without requiring organizations to put in place contractual or other measures in order to lawfully transfer personal data between the territories.

While it is intended to last for at least four years, the European Commission may unilaterally revoke the adequacy decision at any point, and if this occurs, it could lead to additional costs and increase our overall risk exposure.

Internationally, laws and regulations in many jurisdictions apply broadly to health-related and other sensitive and personal information, including the EU’s GDPR, and the UK’s General Data Protection Regulation (“UK GDPR”), which, together with national legislation, regulations and guidelines of the EU member states and the UK governing the processing of personal data, impose strict obligations and restrictions on the ability to collect, analyze, store, transfer and otherwise process personal data, including health data from clinical trials and adverse event reporting.

These laws and regulations could limit our ability to collect, use and share data, and could cause our compliance costs to increase, and ultimately could have an adverse impact on our business and financial condition.

In the EU, we are also subject to the new European Union Artificial Intelligence Act (the “EU AI Act”), regulating development and deployment of AI systems.

The new EU AI Act applies to both public and private actors inside and outside of the EU as long as the AI system is placed on the EU market, or its use has an impact on people located in the EU.

In the context of the European Strategy for Data, we may also be subject to the European Union’s Data Act, a new regulation intended to make data more accessible and usable, encouraging data-driven innovation and increasing data availability in the area of connected devices.

In addition, in China, the Personal Information Protection Law (the “PIPL”) came into effect in November 2021.

The PIPL is the first national-level law comprehensively regulating issues in relation to personal information protection.

The PIPL provides for very specific administrative requirements and security controls when transferring personal data outside the Peoples Republic of China.

These transfer requirements came into effect on March 1, 2023.

In the context of the European Strategy for Data, we may also be subject to the European Union’s Data Act.

In addition, in China, the Personal Information Protection Law (the “PIPL”) provides for very specific administrative requirements and security controls when transferring personal data outside the Peoples Republic of China.

We are also subject to Canada’s federal Personal Information Protection and Electronic Documents Act and substantially similar equivalents at the provincial level with respect to the collection, use and disclosure of personal information in Canada.

Such federal and provincial legislation impose data privacy and security obligations on our processing of personal information of Canadian residents.

The federal, Quebec and Alberta legislation include mandatory data breach notification requirements.

Canada’s Anti-Spam Legislation (“CASL”) also applies to the extent that we send commercial electronic messages to electronic addresses in Canada.

CASL contains prescriptive consent, form, content and unsubscribe mechanism requirements.

Penalties for non-compliance with CASL are up to CAD $10 million per violation.

These laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible they will be interpreted and applied in ways that will materially and adversely affect our business.

The regulatory framework for data privacy, data security and data transfers worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.

Complying with all of these laws and regulations involves costs to our business, and failure to comply with these laws and regulations can result in the imposition of significant civil and criminal penalties, as well as litigation, all of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

For more information regarding applicable data privacy and security laws and regulations, see Item 1.

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In addition, they are subject to review and challenge by the applicable governmental agencies, and it is possible that such reviews could result in changes that could have material adverse legal, regulatory, or economic consequences.

As of February 12, 2025, the new Trump administration has signed over 60 executive orders on a range of issues, including with respect to diversity, equity, inclusion and accessibility programs, policies and related issues, tariffs and other trade protection measures, environmental and energy-related matters, regulation of artificial intelligence and review of existing legislation and regulations (such as the FCPA and IRA).

The Trump administration has signed many executive orders on a range of issues, including with respect to diversity, equity, inclusion and accessibility programs, policies and related issues, tariffs and other trade protection measures, environmental and energy-related matters, regulation of artificial intelligence and review of existing legislation and regulations (such as the FCPA and IRA).

Additional executive orders are anticipated.

In addition, these executive orders may inform future legislative reform.

We are in the process of monitoring and assessing these executive orders and what, if any, impact they will have on our business and operations, but such impact could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

Legislative or regulatory reform of the health care system may affect our ability to sell our products profitably and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

and certain foreign jurisdictions, there have been a number of legislative and regulatory proposals to change the health care system in ways that could impact our ability to sell our products profitably.

The Patient Protection and Affordable Care Act, as amended by the Health Care Reform Act, may affect the operational results of companies in the pharmaceutical and medical device industries, including the Company and other health care related industries, by imposing on them additional costs.

Effective January 1, 2010, the Health Care Reform Act increased the minimum Medicaid drug rebates for pharmaceutical companies, expanded the 340B drug discount program, and made changes to affect the Medicare Part D coverage gap, or “donut hole.” The law also revised the definition of “average manufacturer price” for reporting purposes, which may affect the amount of our Medicaid drug rebates to states.

Beginning in 2011, the law imposed a significant annual fee on companies that manufacture or import branded prescription drug products.

The Bipartisan Budget Act of 2018 amended the Patient Protection and Affordable Care Act, effective January 1, 2019, to close the donut hole in most Medicare drug plans.

In addition, in April 2018, the Centers for Medicare & Medicaid Services published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the Patient Protection and Affordable Care Act for plans sold through such marketplaces.

Legislative efforts relating to drug pricing, the cost of prescription drugs under Medicare, the relationship between pricing and manufacturer patient programs, and government program reimbursement methodologies for drugs have been proposed and considered at the U.S.

federal and state level.

Legislative or regulatory reform of the health care system may affect our ability to sell our products profitably and could have a material adverse effect on our business.

Legislation promulgated by the IRA enables the U.S.

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The Company’s negotiations with CMS have concluded, and CMS published the negotiated maximum fair prices on November 25, 2025.

The negotiated price for Xifaxan ® will become effective on January 1, 2027.

It is possible that other of our products could be selected in future years.

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Additionally, policy efforts designed specifically to reduce patient out-of-pocket costs for medicines could result in new mandatory rebates and discounts or other pricing restrictions.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing.

We also anticipate that Congress, state legislatures, and third-party payors may continue to review and assess alternative health care delivery and payment systems and may in the future propose and adopt legislation or policy changes or implementations effecting additional fundamental changes in the health care delivery system.

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It is unclear whether other states will follow Florida’s lead or what the impact of the FDA’s novel decision to allow a state to import prescription drugs from another country will be.

Studies to evaluate the related costs and benefits, the

reasonableness of the logistics, and measure the public reaction of such a plan have not been performed.

Studies to evaluate the related costs and benefits, the reasonableness of the logistics, and measure the public reaction of such a plan have not been performed.

We cannot provide assurance as to the ultimate content, timing, effect or impact of such a plan.

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While we do not believe this will have a significant impact on our future cash flows, as additional facts materialize, we cannot provide assurance as to the ultimate content, timing, effect or impact of such regulations.

The Health Care Reform Act and further changes to health care laws or regulatory framework that reduce our revenues or increase our costs could also have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

The Health Care Reform Act and further changes to health care laws or regulatory framework that reduce our revenues or increase our costs could also have a material adverse effect on our business.

We are subject to a broad range of environmental laws and regulations and may be subject to environmental remediation obligations under such safety and related laws and regulations.

The impact of these obligations and the Company’s ability to respond effectively to them may have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

The impact of these obligations and the Company’s ability to respond effectively to them may have a material adverse effect on our business.

We are subject to a broad range of federal, state, provincial and local environmental laws and regulations concerning the environment, safety matters, regulation of chemicals and product safety in the countries where we manufacture and sell our products or otherwise operate our business.

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In particular, legislation and regulation relating to climate change, sustainability and product stewardship including greenhouse gas emissions, are at various stages of consideration and implementation.

As noted above, given recent executive orders, additional proposed changes to such legislation and regulations are also anticipated from the new Trump administration.

As noted above, given the Trump administration’s executive orders, additional proposed changes to such legislation and regulations are also anticipated.

Future events, such as changes in existing laws or regulations or the enforcement thereof or the discovery of contamination at our facilities may, among other things, require us to install additional controls for certain of our emission sources, undertake changes in our manufacturing processes, remediate soil or groundwater contamination at facilities where such cleanup is not currently required, take action to address social expectations or concerns arising from or relating to such changes and our response to such changes or adversely impact our suppliers.

These impacts may be significant and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

These impacts may be significant and could have a material adverse effect on our business.

The consequences of climate change, such as extreme weather and water scarcity, could pose risks to our facilities and disruption of our activities.

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We evaluate these risks in our supply planning, loss prevention and business continuity planning.

The implementation of an Environmental, Health and Safety Management System across our facilities has resulted in the development of processes to prepare and respond to a range of natural emergencies that may occur, including extreme weather events.

We have been placing increased attention on water management, implementing a scarcity-focused approach to water conservation to align with community needs and advance toward sustainable operations.

If our planning and risk management regarding natural disasters and extreme weather events fail, our facilities could be impacted and our activities could be significantly disrupted.

If we fail to maintain adequate internal controls, our business, financial condition, results of operations, cash flows and/or the market value of our common shares and/or debt securities may be adversely affected.

If we fail to maintain adequate internal controls, our business, financial condition, results of operations, cash flows and/or the market value of our securities may be adversely affected.

Effective internal controls are necessary for us to provide reasonable assurance with respect to our financial reports.

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If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, this could have a material adverse effect on our business, financial condition, results of operations, cash flows and/or stock price.

Our business and operations could be negatively affected by shareholder activism, which could cause us to incur significant expenses, hinder execution of our business strategy and impact the market value of our common shares and/or debt securities.

In recent years, shareholder activism involving corporate governance, fiduciary duties of directors and officers, strategic direction and operations has become increasingly prevalent.

One of our investors, which currently owns approximately 9.5% of our outstanding common shares, filed a Schedule 13D with the SEC in February 2021 (and subsequently amended), in which it was indicated that the investor intended to engage in discussions with our management and board regarding ways to enhance shareholder value, including our ongoing strategic review and that it may also seek board representation.

We subsequently entered into a Director Appointment and Nomination Agreement with such investor, pursuant to which they have appointed two members to our Board of Directors.

In the event such investors continue to pursue such proposals or we become the subject of additional shareholder activism, this may create a significant distraction for our management and employees.

The Company has experienced shareholder activism in the recent past and may become subject to it again in the future, which may create a significant distraction for our management and employees.

This could negatively impact our ability to execute our business plans (including the full B+L Separation) and may require our management to expend significant time, resources and costs, including legal fees and other expenses incurred in connection with any proxy contest that may result from any such shareholder activism.

Furthermore, when individuals are elected to our Board with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and create additional value for our shareholders and could lead us to adopt other plans that we cannot predict and which could focus on short-term benefits with longer-term costs or that may not be in the best interests of the Company.

Such shareholder activism may also create uncertainties with respect to our financial position and operations, may adversely affect our ability to attract and retain key employees and may result in loss of potential business opportunities with our current and potential customers and business partners, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

In addition, such shareholder activism may cause significant fluctuations in the market value of our common shares and/or debt securities based on temporary or speculative market perceptions, uncertainties or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business, and could cause the market value of our common shares to decline.

While we will remain responsive

to shareholder demands, there is no assurance that we will achieve their objectives, or that doing so will decrease the likelihood of activist shareholder engagement in the future.

In addition, such shareholder activism may cause significant fluctuations in the market value of our securities based on temporary or speculative market perceptions, uncertainties or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

While we will remain responsive to shareholder demands, there is no assurance that we will achieve their objectives, or that doing so will decrease the likelihood of activist shareholder engagement in the future.

We have significant goodwill and other intangible assets and potential impairment of goodwill and other intangibles may have a significant adverse impact on our financial condition and results of operations.

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In addition to impairments to finite-lived intangible assets, for 2024 there was no impairment to goodwill.

For 2023 and 2022, we recognized $493 million and $824 million, respectively in impairments to goodwill.

For 2025 and 2023, we recognized $145 million and $493

million in impairments to goodwill, respectively.

These impairments to goodwill were primarily the result of revisions to our long-term forecasts as well as increases in market interest rates which resulted in higher discount rates used in the impairment analysis for the reporting units due to changing business dynamics and market conditions.

If market conditions deteriorate, or if the Company is unable to execute its strategies, it may be necessary to record impairment charges in the future.

For example, in January 2026, we received the results for the double-blind Phase 3 clinical trials for two global RED-C clinical programs evaluating amorphous-rifaximin SSD for the primary prevention of hepatic encephalopathy in adults with liver cirrhosis.

While the treatment was safe and well-tolerated, the clinical trials did not meet their primary endpoints.

As a result of these clinical trial outcomes, we performed a preliminary quantitative goodwill analysis as of January 22, 2026 for the Salix reporting unit using revised forecasts, an updated discount rate, and a new long-term growth rate that reflect the Phase 3 clinical trial results.

We anticipate recognizing an impairment charge of approximately $1,400 million for the Salix reporting unit in the first quarter of 2026.

See Note 8, “INTANGIBLE ASSETS AND GOODWILL” to our audited Consolidated Financial Statements included elsewhere in this Form 10-K for further information on these impairment charges.

Events giving rise to impairment are difficult to predict, including the uncertainties associated with the launch of new products, and are an inherent risk in the pharmaceutical and medical device industries.

As a result of the significance of goodwill and intangible assets, our financial condition and results of operations in a future period could be negatively impacted should such an impairment of goodwill or intangible assets occur, which could cause the market value of our common shares and/or debt securities to decline.

We may be required to take additional impairment charges in the future and such impairment charges may be material.

The Company’s ability to effectively monitor and respond to the rapid and ongoing developments and expectations relating to ESG matters, including related social expectations and concerns, have imposed (and may continue to impose) unexpected costs on the Company and/or may result in reputational or other harm to the Company that could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

There are rapid and ongoing developments and regulations and changing expectations relating to ESG matters and factors such as the impact of our operations on climate change, water and waste management, our practices relating to sustainability and product stewardship, product safety, access to health care and affordable drugs, management of business ethics and human capital development, which may result in increased regulatory, social, investor or other scrutiny on us.

Examples of emerging regulations that may apply to us include:

the EU’s Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive, Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act, California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Report regulations, and similar legislation in other countries, if and when they come into force.

Several of these regimes impose significant disclosure requirements, accompanied by potentially significant monetary penalties for non-compliance.

Moreover, if we are not able to adequately recognize and respond to such developments and governmental, investor and social expectations, including expectations of lenders, investors and other stakeholders relating to ESG matters, we may miss corporate opportunities for the Company, become subject to additional regulatory, social, investor or other scrutiny, incur unexpected costs or experience damage to the reputation of the Company or its various brands with governments, customers, employees, investors, third parties and the communities in which we operate, in each case that could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline.

The Company’s ability to effectively monitor and respond to the rapid, diverging and ongoing developments and expectations relating to ESG matters, including related social and regulatory expectations and concerns, have imposed (and may continue to impose) unexpected costs on the Company and/or may result in legal, operational, reputational or other harm to the Company that could have a material adverse effect on our business.

There are rapid, diverging and ongoing developments and regulations and changing expectations relating to ESG matters and factors such as the impact of our operations on climate change, water and waste management, our practices relating to corporate diversity initiatives, sustainability and product stewardship, product safety, access to health care and affordable drugs, management of business ethics and human capital development, which may result in increased regulatory, social, investor or other scrutiny on us.

Several regimes impose significant disclosure, governance, due diligence and other requirements, accompanied by potentially significant monetary penalties for non-compliance.

In addition, we face increasingly diverging expectations and demands from our stakeholders, including investors, lenders, employees and regulators on these topics, and jurisdictions in which we operate have adopted or proposed differing or conflicting laws, regulations or policies on these topics.

If we are not able to adequately recognize and respond to such developments and stakeholder expectations, including with respect to ESG matters, we may become subject to additional legal or regulatory risk, face increased social, investor or other scrutiny, incur unexpected costs or experience damage to the reputation of the Company or its various brands with governments, customers, employees, investors, third parties and the communities in which we operate, in each case that could have a material adverse effect on our business and could cause the market value of our securities to decline.

We have various indemnity agreements and indemnity arrangements in place, which may result in an obligation to indemnify or reimburse the relevant counterparty, which amounts may be material.

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• new legislation or other developments that would control or regulate the prices of drugs;

• protracted and wide-ranging trade conflicts, including between the United States, China, Canada, Mexico and other countries;

• protracted and wide-ranging trade conflicts, including between the United States, China, Canada, Mexico, the EU and others;

• expenditures as a result of legal actions (and settlements thereof), including the defense of our patents and other intellectual property;

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As a result, quarter-to-quarter comparisons of results from operations, or any other similar period-to-period comparisons, may not be reliable indicators of our future performance.

In any quarterly period, our results may be below the expectations of market analysts and investors, which could cause the market value of our common shares and/or debt securities to decline.

In any quarterly period, our results may be below the expectations of market analysts and investors, which could cause the market value of our securities to decline.

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

What changed 10-K

Item 1A. Risk Factors