HALOZYME THERAPEUTICS, INC. 10-Q

Item 1. Financial Statements HALOZYME THERAPEUTICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except per share amounts) September 30, 2025 December 31, 2024 ASSETS Current assets Cash and cash equivalents $ 419,665 $ 115,850 Marketable securities, available-for-sale 282,298 480,224 Accounts receivable, net and contract assets 346,035 308,455 Inventories 185,796 141,860 Prepaid expenses and other current assets 94,955 38,951 Total current assets 1,328,749 1,085,340 Property and equipment, net 71,420 75,035 Prepaid expenses and other assets 55,698 80,596 Goodwill 416,821 416,821 Intangible assets, net 348,544 401,830 Deferred tax assets, net — 3,855 Total assets $ 2,221,232 $ 2,063,477 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 15,360 $ 10,249 Accrued expenses 111,183 128,851 Current portion of long-term debt, net 710,685 — Total current liabilities 837,228 139,100 Long-term debt, net 800,072 1,505,798 Other long-term liabilities 71,799 54,758 Deferred tax liabilities, net 8,218 — Total liabilities 1,717,317 1,699,656 Commitments and contingencies (Note 10) Stockholders’ equity Preferred stock - $ 0.001 par value; 20,000 shares authorized; no shares issued and outstanding — — Common stock - $ 0.001 par value; 300,000 shares authorized; 117,523 and 123,138 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 118 123 Additional paid-in capital 23,909 — Accumulated other comprehensive (loss) income ( 22,258 ) 3,829 Retained earnings 502,146 359,869 Total stockholders’ equity 503,915 363,821 Total liabilities and stockholders’ equity $ 2,221,232 $ 2,063,477 See accompanying notes to condensed consolidated financial statements. 3 Table of Contents HALOZYME THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Revenues Royalties $ 236,038 $ 155,061 $ 609,869 $ 400,572 Product sales, net 94,228 86,659 253,779 224,128 Revenues under collaborative agreements 23,998 48,364 81,196 92,616 Total revenues 354,264 290,084 944,844 717,316 Operating expenses Cost of sales 55,242 49,426 150,004 117,362 Amortization of intangibles 17,762 17,762 53,286 53,287 Research and development 17,251 18,458 49,593 58,607 Selling, general and administrative 46,088 41,241 130,064 112,086 Total operating expenses 136,343 126,887 382,947 341,342 Operating income 217,921 163,197 561,897 375,974 Other income (expense) Investment and other income, net 5,333 6,474 19,042 16,499 Interest expense ( 4,296 ) ( 4,524 ) ( 13,215 ) ( 13,555 ) Income before income tax expense 218,958 165,147 567,724 378,918 Income tax expense 43,733 28,136 109,244 71,839 Net income $ 175,225 $ 137,011 $ 458,480 $ 307,079 Earnings per share Basic $ 1.49 $ 1.08 $ 3.80 $ 2.42 Diluted $ 1.43 $ 1.05 $ 3.68 $ 2.37 Weighted average common shares outstanding Basic 117,219 126,850 120,570 126,969 Diluted 122,331 130,134 124,449 129,526 See accompanying notes to condensed consolidated financial statements. 4 Table of Contents HALOZYME THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Net income $ 175,225 $ 137,011 $ 458,480 $ 307,079 Other comprehensive income Unrealized gain on marketable securities, net 312 1,735 466 1,272 Foreign currency translation adjustment ( 3 ) 2 ( 6 ) ( 5 ) Unrealized gain (loss) on derivative instruments, net 3,671 ( 6,919 ) ( 30,599 ) 1,772 Realized loss (gain) on derivative instruments, net 2,165 311 4,052 ( 700 ) Comprehensive income $ 181,370 $ 132,140 $ 432,393 $ 309,418 See accompanying notes to condensed consolidated financial statements. 5 Table of Contents HALOZYME THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended September 30, 2025 2024 Operating activities Net income $ 458,480 $ 307,079 Adjustments to reconcile net income to net cash provided by operating activities: Share-based compensation 34,994 31,923 Depreciation and amortization 8,085 7,610 Amortization of intangible assets 53,286 53,287 Amortization of debt discount 5,556 5,506 Accretion of premium on marketable securities, net ( 3,200 ) ( 8,520 ) Realized loss (gain) on marketable securities 73 ( 7 ) Loss on disposal of equipment — 1,678 Lease payments recognized 680 863 Deferred income taxes 17,402 15,824 Changes in operating assets and liabilities Accounts receivable, net and other contract assets ( 37,580 ) ( 51,533 ) Inventories ( 16,227 ) ( 59,655 ) Prepaid expenses and other assets ( 61,382 ) ( 265 ) Accounts payable and accrued expenses ( 27,638 ) ( 3,193 ) Net cash provided by operating activities 432,529 300,597 Investing activities Purchases of marketable securities ( 247,355 ) ( 596,157 ) Proceeds from sales and maturities of marketable securities 448,873 311,598 Purchases of property and equipment ( 5,543 ) ( 7,644 ) Net cash provided by (used in) investing activities 195,975 ( 292,203 ) Financing activities Repurchase of common stock ( 342,372 ) — Proceeds from issuance of common stock under equity incentive plans, net of taxes paid related to net share settlement 17,683 27,554 Net cash (used in) provided by financing activities ( 324,689 ) 27,554 Net increase in cash and cash equivalents 303,815 35,948 Cash and cash equivalents at beginning of period 115,850 118,370 Cash and cash equivalents at end of period $ 419,665 $ 154,318 Supplemental disclosure of non-cash investing and financing activities Amounts accrued for purchases of property and equipment $ 818 $ 320 Right-of-use assets obtained in exchange for lease obligation $ 425 $ 2,622 See accompanying notes to condensed consolidated financial statements. 6 Table of Contents HALOZYME THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (in thousands) Three Months Ended September 30, 2025 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders’ Equity Shares Amount BALANCE AS OF JUNE 30, 2025 117,621 $ 118 $ — $ ( 28,403 ) $ 361,033 $ 332,748 Share-based compensation expense — — 12,160 — — 12,160 Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net 627 1 16,480 — — 16,481 Repurchase of common stock ( 725 ) ( 1 ) ( 4,731 ) ( 34,112 ) ( 38,844 ) Other comprehensive income — — — 6,145 — 6,145 Net income — — — — 175,225 175,225 BALANCE AS OF SEPTEMBER 30, 2025 117,523 $ 118 $ 23,909 $ ( 22,258 ) $ 502,146 $ 503,915 Nine Months Ended September 30, 2025 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Stockholders’ Equity Shares Amount BALANCE AS OF DECEMBER 31, 2024 123,138 $ 123 $ — $ 3,829 $ 359,869 $ 363,821 Share-based compensation expense — — 34,994 — — 34,994 Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock and performance stock units, net and shares issued under the ESPP plan 1,381 2 17,681 — — 17,683 Repurchase of common stock ( 6,996 ) ( 7 ) ( 28,766 ) ( 316,203 ) ( 344,976 ) Other comprehensive loss — — — ( 26,087 ) ( 26,087 ) Net income — — — — 458,480 458,480 BALANCE AS OF SEPTEMBER 30, 2025 117,523 $ 118 $ 23,909 $ ( 22,258 ) $ 502,146 $ 503,915 Three Months Ended September 30, 2024 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders’ Equity Shares Amount BALANCE AS OF JUNE 30, 2024 126,535 $ 127 $ 30,747 $ ( 2,068 ) $ 260,618 $ 289,424 Share-based compensation expense — — 12,578 — — 12,578 Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net 648 — 18,561 — — 18,561 Other comprehensive loss — — — ( 4,871 ) — ( 4,871 ) Net income — — — — 137,011 137,011 BALANCE AS OF SEPTEMBER 30, 2024 127,183 $ 127 $ 61,886 $ ( 6,939 ) $ 397,629 $ 452,703 Nine Months Ended September 30, 2024 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders’ Equity Shares Amount BALANCE AS OF DECEMBER 31, 2023 126,770 $ 127 $ 2,409 $ ( 9,278 ) $ 90,550 $ 83,808 Share-based compensation expense — — 31,923 — — 31,923 Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock and performance stock units, net and shares issued under the ESPP plan 1,479 1 27,553 — — 27,554 Repurchase of common stock ( 1,066 ) ( 1 ) 1 — — Other comprehensive income — — — 2,339 — 2,339 Net income — — — — 307,079 307,079 BALANCE AS OF SEPTEMBER 30, 2024 127,183 $ 127 $ 61,886 $ ( 6,939 ) $ 397,629 $ 452,703 See accompanying notes to condensed consolidated financial statements. 7 Table of Contents HALOZYME THERAPEUTICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Organization and Business Halozyme Therapeutics, Inc. is a biopharmaceutical company advancing disruptive solutions to improve patient experiences and outcomes for emerging and established therapies. As the innovators of ENHANZE ® drug delivery technology (“ENHANZE”) with our proprietary enzyme, rHuPH20, our commercially validated solution is used to facilitate the subcutaneous (“SC”) delivery of injected drugs and fluids with the goal of improving the patient experience with rapid SC delivery and reduced treatment burden. We license our technology to biopharmaceutical companies to collaboratively develop products that combine ENHANZE with our partners’ proprietary compounds. We also develop, manufacture and commercialize, for ourselves or with our partners, drug-device combination products using our advanced auto-injector technologies that are designed to provide commercial or functional advantages such as improved convenience, reliability and tolerability, and enhanced patient comfort and adherence. Our ENHANZE partners’ approved products and product candidates are based on rHuPH20, our patented recombinant human hyaluronidase enzyme. rHuPH20 works by breaking down hyaluronan, a naturally occurring carbohydrate that is a major component of the extracellular matrix of the SC space. This temporarily reduces the barrier to bulk fluid flow allowing for improved and more rapid SC delivery of high dose, high volume injectable biologics, such as monoclonal antibodies and other large therapeutic molecules, as well as small molecules and fluids. We refer to the application of rHuPH20 to facilitate the delivery of other drugs or fluids as ENHANZE. We license our ENHANZE technology to form collaborations with biopharmaceutical companies that develop and/or market drugs requiring or benefiting from injection via the SC route of administration. In the development of proprietary intravenous (“IV”) drugs combined with our ENHANZE technology, data have been generated supporting the potential for ENHANZE to reduce patient treatment burden, as a result of shorter duration of SC administration with ENHANZE compared to IV administration. ENHANZE may enable fixed-dose SC dosing compared to weight-based dosing typically required for IV administration, extend the dosing interval for drugs that are already administered subcutaneously and potentially allow for lower rates of infusion-related reactions. ENHANZE may enable more flexible treatment options such as home administration by a healthcare professional or potentially the patient or caregiver. Lastly, certain proprietary drugs co-formulated with ENHANZE have been granted additional exclusivity, extending the patent life of the product beyond the patent expiry of the proprietary IV drug. We currently have ENHANZE collaborations and licensing agreements with F. Hoffmann-La Roche, Ltd. and Hoffmann-La Roche, Inc. (“Roche”), Takeda Pharmaceuticals International AG and Baxalta US Inc. (“Takeda”), Pfizer Inc. (“Pfizer”), Janssen Biotech, Inc. (“Janssen”), AbbVie, Inc. (“AbbVie”), Eli Lilly and Company (“Lilly”), Bristol-Myers Squibb Company (“BMS”), argenx BVBA (“argenx”), ViiV Healthcare (the global specialist HIV Company majority owned by GlaxoSmithKline) (“ViiV”), Chugai Pharmaceutical Co., Ltd. (“Chugai”) and Acumen Pharmaceuticals, Inc. (“Acumen”). In addition to receiving upfront licensing fees from our ENHANZE collaborations, we are entitled to receive event and sales-based milestone payments, revenues from the sale of bulk rHuPH20 and royalties from commercial sales of approved partner products co-formulated with ENHANZE. We currently earn royalties from sales of ten commercial products including sales of five commercial products from the Roche collaboration, two commercial products from the Janssen collaboration and one commercial product from each of the Takeda, argenx and BMS collaborations. We have commercialized auto-injector products with Teva Pharmaceutical Industries, Ltd. (“Teva”) and Otter Pharmaceuticals, LLC (“Otter”). We have development programs including our auto-injectors with McDermott Laboratories Limited, an affiliate of Viatris Inc. (“Viatris”). Our commercial portfolio of proprietary products includes Hylenex ® , utilizing rHuPH20, and XYOSTED ® , utilizing our auto-injector technology. Except where specifically noted or the context otherwise requires, references to “Halozyme,” “the Company,” “we,” “our,” and “us” in these notes to our condensed consolidated financial statements refer to Halozyme Therapeutics, Inc. and each of its directly and indirectly wholly owned subsidiaries as disclosed in Note 2, Summary of Significant Accounting Policies . 8 Table of Contents 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared for purposes of and in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) related to a quarterly report on Form 10-Q. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for a complete set of financial statements. These condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 18, 2025. The unaudited financial information for the interim periods presented herein reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial condition and results of operations for the periods presented, with such adjustments consisting only of normal recurring adjustments. Operating results for interim periods are not necessarily indicative of the operating results for an entire fiscal year. The accompanying condensed consolidated financial statements include the accounts of Halozyme Therapeutics, Inc. and our wholly owned subsidiaries, Halozyme, Inc. and Antares Pharma, Inc., and Antares Pharma, Inc.’s wholly owned Swiss subsidiaries, Antares Pharma IPL AG and Antares Pharma GmbH. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that we believe to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from our estimates. Cash Equivalents and Marketable Securities Cash equivalents consist of highly liquid investments, readily convertible to cash, which mature within 90 days or less from the date of purchase. As of September 30, 2025, our cash and cash equivalents consisted of money market funds, bank certificate of deposits and demand deposits at commercial banks. Marketable securities are investments with original maturities of more than 90 days from the date of purchase that are specifically identified to fund current operations. Marketable securities are considered available-for-sale. These investments are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date, which reflects management’s intention to use the proceeds from the sale of these investments to fund our operations, as necessary. Such available-for-sale investments are carried at fair value with unrealized gains and losses recorded in other comprehensive income and included as a separate component of stockholders’ equity. The cost of marketable securities is adjusted for amortization of premiums or accretion of discounts to maturity, and such amortization or accretion is included in investment and other income, net in our condensed consolidated statements of income. We use the specific identification method for calculating realized gains and losses on marketable securities sold. None of the realized gains and losses and declines in value that were judged to be as a result of credit loss on marketable securities, if any, are included in investment and other income, net in our condensed consolidated statements of income. Fair Value of Financial Instruments The authoritative guidance for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our financial instruments include cash equivalents, available-for-sale marketable securities, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and long-term debt. Fair value estimates of these instruments are made at a specific point in time based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. The carrying amount of cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective fair values because of the short-term nature of those instruments. 9 Table of Contents As of September 30, 2025, our available-for-sale marketable securities consisted of corporate debt securities and United States (“U.S.”) Treasury securities, and were measured at fair value using Level 1 and Level 2 inputs. Level 2 financial instruments are valued using market prices on less active markets and proprietary pricing valuation models with observable inputs, including interest rates, yield curves, maturity dates, issue dates, settlement dates, reported trades, broker-dealer quotes, issue spreads, benchmark securities or other market related data. We obtain the fair value of Level 2 investments from our investment manager, who obtains these fair values from a third-party pricing source. We validate the fair values of Level 2 financial instruments provided by our investment manager by comparing these fair values to a third-party pricing source. Accounts Receivable, net and Contract Assets Accounts receivable is recorded at the invoiced amount and is non-interest bearing. Accounts receivable is recorded net of estimated prompt pay discounts, distribution fees and chargebacks. Contract assets are recorded when revenue is earned but an invoice has not been issued for payment. Contract assets relate to development milestones deemed probable of receipt for intellectual property licenses granted to partners in prior periods and for goods or services when control has transferred to the customer, and corresponding revenue is recognized but is not yet billable to the customer in accordance with the terms of the contract. Inventories Inventories are stated at lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventories are reviewed periodically for potential excess, dated or obsolete status. We evaluate the carrying value of inventories on a regular basis, taking into account such factors as historical and anticipated future sales compared to quantities on hand, the price we expect to obtain for products in their respective markets compared with historical cost and the remaining shelf life of goods on hand. Leases We have entered into operating leases primarily for real estate and automobiles. These leases have contractual terms which range from three years to twelve years . We determine if an arrangement contains a lease at inception. Right of use (“ROU”) assets and liabilities resulting from operating leases are included in property and equipment, accrued expenses and other long-term liabilities on our condensed consolidated balance sheets. Operating lease ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the discount rate to calculate the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our leases often include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that we will exercise that option. Short-term leases with an initial term of 12 months or less are not recorded on our condensed consolidated balance sheet. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases, such as automobiles, we account for the lease and non-lease components as a single lease component. Property and Equipment, Net Property and equipment, which includes internal-use software and leasehold improvements, are recorded at cost, less accumulated depreciation and amortization. Equipment and internal-use software are depreciated using the straight-line method over its estimated useful life ranging from three years to ten years and leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset or the lease term, whichever is shorter. Impairment of Long-Lived Assets We account for long-lived assets in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate their carrying value may not be recoverable. Comprehensive Income Comprehensive income is defined as the change in equity during the period from transactions and other events and circumstances from non-owner sources. 10 Table of Contents Convertible Notes The 2027 Convertible Notes and the 2028 Convertible Notes (collectively, the “Convertible Notes”) are accounted for in accordance with authoritative guidance for debt and derivatives. We evaluate all the embedded conversion options contained in the Convertible Notes to determine if there are embedded features that require bifurcation as a derivative as required by U.S. GAAP. Based on our analysis, we account for each of our Convertible Notes as single units of accounting, a liability, because we concluded that the conversion features do not require bifurcation as a derivative under embedded derivative authoritative guidance. Cash Flow Hedges - Currency Risks We utilize a cash flow hedging program to mitigate foreign currency exchange risk associated with forecasted royalty revenue denominated in Swiss francs. Under the program, we can hedge these forecasted royalties up to a maximum of four years into the future. We hedge these cash flow exposures to reduce the risk of our earnings and cash flows being adversely affected by fluctuations in exchange rates. In accordance with the hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge and are highly effective in offsetting changes to future cash flows on hedged transactions. Both at inception of the hedge and on an ongoing basis, we assess whether the foreign currency forward contracts are highly effective in offsetting changes in cash flows of hedged items on a prospective and retrospective basis. If we determine a (i) foreign currency forward contract is not highly effective as a cash flow hedge, (ii) foreign currency forward contract has ceased to be a highly effective hedge or (iii) forecasted transaction is no longer probable of occurring, we would discontinue hedge accounting treatment prospectively. We measure effectiveness based on the change in fair value of the forward currency forward contract and the fair value of the hypothetical foreign currency forward contract with terms that match the critical terms of the risk being hedged. No portion of our foreign currency forward contracts were excluded from the assessment of hedge effectiveness. As of September 30, 2025, all hedges were determined to be highly effective. The assets or liabilities associated with our hedging contracts are recorded at fair market value in prepaid expense and other current assets, prepaid expenses and other assets, accrued expenses, or other long-term liabilities, respectively, in our condensed consolidated balance sheets. Gains and losses related to changes in the fair market value of these hedging contracts are recorded as a component of accumulated other comprehensive income (loss) (“AOCI”) within stockholder’s equity in our condensed consolidated balance sheets and reclassified to royalty revenue in our condensed consolidated statements of income in the same period as the recognition of the underlying hedged transaction. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, within the defined hedge period, we reclassify the gains or losses on the related cash flow hedge from AOCI to royalties revenue in our condensed consolidated statements of income. Settlements from the cash flow hedge are included in operating activities on the condensed consolidated statements of cash flows. Since the fair market value of these hedging contracts is derived from current market rates, the hedging contracts are classified as derivative financial instruments. We do not use derivatives for speculative or trading purposes. As of September 30, 2025, the amount expected to be recognized as a net loss out of AOCI into our condensed consolidated statements of income during the next 12 months is $ 8.5 million. Business Combinations Under the acquisition method of accounting, we allocate the fair value of the total consideration transferred to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. These valuations require us to make estimates and assumptions, especially with respect to intangible assets. We record the excess consideration over the aggregate fair value of tangible and intangible assets, net of liabilities assumed, as goodwill. Costs incurred to complete a business combination, such as legal and other professional fees, are expensed as incurred. If the initial accounting for a business combination is incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our financial statements. During the measurement period, we adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. We record these adjustments to the provisional amounts with a corresponding offset to goodwill. Any adjustments identified after the measurement period are recorded in our condensed consolidated statements of income. 11 Table of Contents Goodwill, Intangible Assets and Other Long-Lived Asset Assets acquired, including intangible assets and in-process research and development (“IPR&D”), and liabilities assumed are measured at fair value as of the acquisition date. Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of the net assets acquired. Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon reaching the end of the relevant research and development project (i.e., upon commercialization), the IPR&D asset is amortized over its estimated useful life. If the relevant research and development project is abandoned, the IPR&D asset is expensed in the period of abandonment. Goodwill and indefinite-lived intangible assets are not amortized; however, they are reviewed for impairment at least annually during the second quarter, or more frequently if an event occurs indicating the potential for impairment. Goodwill and indefinite-lived intangible assets are considered to be impaired if the carrying value of the reporting unit or indefinite-lived intangible asset exceeds its respective fair value. We perform our goodwill impairment analysis at the reporting unit level, which aligns with our reporting and operating segment structure and availability of discrete financial information. During the goodwill impairment review, we assess qualitative factors to determine whether it is more likely than not that the fair values of our reporting unit is less than the carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and our overall financial performance. If, after assessing the totality of these qualitative factors, we determine that it is not more likely than not that the fair value of our reporting unit is less than the carrying amounts, then no additional assessment is deemed necessary. Otherwise, we proceed to compare the estimated fair value of the reporting unit with the carrying value, including goodwill. If the carrying amount of the reporting unit exceeds the fair value, we record an impairment loss based on the difference. We may elect to bypass the qualitative assessment in a period and proceed to perform the quantitative goodwill impairment test. During the indefinite-lived intangible asset impairment review, we may elect to start by performing a qualitative assessment. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, cost factors, asset-specific commercial and regulatory developments and changes to key personnel or strategy. If the qualitative assessment indicates that it is not more likely than not that the fair value of the indefinite-lived intangible asset exceeds its carrying amount, we compare the estimated fair value of the indefinite-lived intangible asset with its carrying value. Determining fair value requires the exercise of judgment about product pricing, market assumptions, discount rates, and the amount and timing of expected future cash flows. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Our identifiable intangible assets with finite useful lives are typically comprised of acquired device technologies and product rights. The cost of identifiable intangible assets with finite lives is generally amortized on a straight-line basis over the assets’ respective estimated useful lives. We perform regular reviews to determine if any event has occurred that may indicate intangible assets with finite useful lives and other long-lived assets are potentially impaired. If indicators of impairment exist, an impairment test is performed to assess the recoverability of the affected assets by determining whether the carrying amount of such assets exceeds the undiscounted expected future cash flows. If the affected assets are not recoverable, we estimate the fair value of the assets and record an impairment loss if the carrying value of the assets exceeds the fair value. Factors that may indicate potential impairment include a significant decline in our stock price and market capitalization compared to the net book value, significant changes in the ability of a particular asset to generate positive cash flows for our strategic business objectives, and the pattern of utilization of a particular asset. Revenue Recognition We generate revenues from payments received (i) as royalties from licensing our ENHANZE technology and other royalty arrangements, (ii) under collaborative agreements and (iii) from sales of our proprietary and partnered products. We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers, we perform the following five steps: (i) identify the promised goods or services in the contract; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligations. 12 Table of Contents ENHANZE and Device Royalties Under the terms of our ENHANZE collaboration and license agreements, our partners will pay us royalties at an on average mid-single digit percent rate of their sales if products under the collaboration are commercialized. All amounts owed to us are noncancelable after the underlying triggering event occurs, and nonrefundable once paid. Unless terminated earlier in accordance with its terms, collaborations generally continue in effect until the last to expire royalty payment term, as determined on a product by product and country by country basis, with each royalty term starting on the first commercial sale of that product and ending the later of: (i) a specified period or term set forth in the agreement or (ii) expiration of the last to expire of the valid claims of our patents covering rHuPH20 or other specified patents developed under the collaboration which valid claim covers a product developed under the collaboration. In general, when there are no valid claims of a specified patent developed under the collaboration covering the product in a given country, the royalty rate is reduced for those sales in that country upon the expiration of our patents covering rHuPH20. Janssen’s patents covering DARZALEX SC do not impact the timing for this royalty reduction. Partners may terminate the agreement prior to expiration for any reason in its entirety or on a target-by-target basis generally upon 90 days prior written notice to us. Upon any such termination, the license granted to partners (in total or with respect to the terminated target, as applicable) will terminate provided; however, that in the event of expiration of the agreement (as opposed to a termination), the on-going licenses granted may become perpetual, non-exclusive and fully paid. Sales-based milestones and royalties are recognized in the period the underlying sales or milestones occur. We do not receive final royalty reports from our ENHANZE partners until after we complete our financial statements for a prior quarter. Therefore, we recognize revenue based on estimates of the royalty earned, which are based on internal estimates and available preliminary reports provided by our partners. We will record adjustments in the following quarter, if necessary, when final royalty reports are received. To date, we have not recorded any material adjustments. We also earn royalties in connection with several of our licenses granted under license and development arrangements with our device partners. These royalties are based upon a percentage of commercial sales of partnered products with rates ranging from mid-single digits to low double digits and are tiered based on levels of net sales. These sales-based royalties, for which the license was deemed the predominant element to which the royalties relate, are estimated and recognized in the period in which the partners’ commercial sales occur. The royalties are generally reported and payable to us within 45 to 60 days after the end of the period in which the commercial sales are made. We base our estimates of royalties earned on actual sales information from our partners when available or estimated prescription sales from external sources and estimated net selling price. We will record adjustments in the following quarter, if necessary, when final royalty reports are received. To date, we have not recorded any material adjustments. Revenue under ENHANZE and Device Collaborative Agreements ENHANZE Collaboration and License Agreements Under these agreements, we grant the collaboration partner a worldwide license to develop and commercialize products using our ENHANZE technology to combine our patented rHuPH20 enzyme with their proprietary biologics directed at up to a specified number of targets. Targets are usually licensed on an exclusive, global basis. Targets selected subsequent to inception of the arrangement generally require payment of an additional license fee. The collaboration partner is responsible for all development, manufacturing, clinical, regulatory, sales and marketing costs for any products developed under the agreement. We are responsible for supply of bulk rHuPH20 based on the collaboration partner’s purchase orders, and may also be separately engaged to perform research and development services. While these collaboration agreements are similar in that they originate from the same framework, each one is the result of an arms-length negotiation and thus may vary from one to the other. We generally collect an upfront license payment from collaboration partners, and are also entitled to receive event-based payments subject to collaboration partners’ achievement of specified development, regulatory and sales-based milestones. In several agreements, collaboration partners pay us annual fees to maintain their exclusive license rights if they are unable to advance product development to specified stages. We earn separate fees for bulk rHuPH20 supplies and research and development services. Although these agreements are in form identified as collaborative agreements, we concluded for accounting purposes they represent contracts with customers and are not subject to accounting literature on collaborative arrangements. This is because we grant to partners licenses to our intellectual property and provide supply of bulk rHuPH20 and research and development services which are all outputs of our ongoing activities, in exchange for respective consideration. Under these collaborative agreements, our partners lead development of assets, and we do not share in significant financial risks of their development or commercialization activities. Accordingly, we concluded our collaborative agreements are appropriately accounted for pursuant to U.S. GAAP. 13 Table of Contents Under all of our ENHANZE collaborative agreements, we have identified licenses to use functional intellectual property as the only performance obligation. The intellectual property underlying the license is our proprietary ENHANZE technology which represents application of rHuPH20 to facilitate delivery of drugs. Each of the licenses grants the partners rights to use our intellectual property as it exists and is identified on the effective date of the license, because there is no ongoing development of the ENHANZE technology required. Therefore, we recognize revenue from licenses at the point when the license becomes effective and the partner has received access to our intellectual property, usually at the inception of the agreement. When partners can select additional targets to add to the licenses granted, we consider these rights to be options. We evaluate whether such options contain material rights, i.e., have exercise prices that are discounted compared to what we would charge for a similar license to a new partner. The exercise price of these options includes a combination of the target selection fees, event-based milestone payments and royalties. When these amounts in aggregate are not offered at a discount that exceeds discounts available to other customers, we conclude the option does not contain a material right, and we consider grants of additional licensing rights upon option exercises to be separate contracts (target selection contracts). Generally, we provide indemnification and protection of licensed intellectual property for our customers. These provisions are part of assurance that the licenses meet the agreements’ representations and are not obligations to provide goods or services. We also fulfill purchase orders for supply of bulk rHuPH20 and perform research and development services pursuant to project authorization forms for our partners, which represent separate contracts. In addition to our licenses, we price our supply of bulk rHuPH20 and research and development services at our regular selling prices, called standalone selling prices (“SSP”). Therefore, our partners do not have material rights to order these items at prices not reflective of SSP. Refer to the discussion below regarding recognition of revenue for these separate contracts. Transaction price for a contract represents the amount to which we are entitled in exchange for providing goods and services to the customer. Transaction price does not include amounts subject to uncertainties unless it is probable that there will be no significant reversal of revenue when the uncertainty is resolved. Apart from the upfront license payment (or target selection fees in the target selection contracts), all other fees we may earn under our collaborative agreements are subject to significant uncertainties of product development. Achievement of many of the event-based development and regulatory milestones may not be probable until such milestones are actually achieved. This generally relates to milestones such as obtaining marketing authorization approvals. With respect to other development milestones, e.g., dosing of a first patient in a clinical trial, achievement could be considered probable prior to its actual occurrence, based on the progress towards commencement of the trial. In order to evaluate progress towards commencement of a trial, we assess the status of activities leading up to our partner’s initiation of a trial such as feedback received from the applicable regulatory authorities, completion of investigational new drug or equivalent filings, readiness and availability of drug, readiness of study sites and our partner’s commitment of resources to the program. We do not include any amounts subject to uncertainties in the transaction price until it is probable that the amount will not result in a significant reversal of revenue in the future. At the end of each reporting period, we re-evaluate the probability of achievement of such milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. When target exchange rights are held by partners, and the amounts attributed to these rights are not refundable, they are included in the transaction price. However, they are recorded as deferred revenues because we have a potential performance obligation to provide a new target upon an exchange right being exercised. These amounts are recognized in revenue when the right of exchange expires or is exercised. Because our agreements have one type of performance obligation (licenses) which are typically all transferred at the same time at agreement inception, allocation of transaction price often is not required. However, allocation is required when licenses for some of the individual targets are subject to rights of exchange, because revenue associated with these targets cannot be recognized. When allocation is needed, we perform an allocation of the upfront amount based on relative SSP of licenses for individual targets. We determine license SSP using an income-based valuation approach utilizing risk-adjusted discounted cash flow projections of the estimated return a licensor would receive where applicable, or an alternative valuation method such as indicative value from historical transactions. When amounts subject to uncertainties, such as milestones and royalties, are included in the transaction price, we attribute them to the specific individual target licenses which generate such milestone or royalty amounts. We also estimate SSP of bulk rHuPH20 and research and development services, to determine that our partners do not have material rights to order them at discounted prices. For supplies of bulk rHuPH20, because we effectively act as a contract manufacturer to our partners, we estimate and charge SSP based on the typical contract manufacturer margins consistent with all of our partners. We determine SSP of research and development services based on a fully-burdened labor rate. Our rates are comparable to those we observe in other collaborative agreements. We also have a history of charging similar rates to all of our partners. 14 Table of Contents Upfront amounts allocated to licenses to individual targets are recognized as revenue when the license is transferred to the partner, as discussed above, if the license is not subject to exchange rights, or when the exchange right expires or is exercised. Development milestones and other fees are recognized in revenue when they are included in the transaction price, because by that time, we have already transferred the related license to the partner. In contracts to provide research and development services, such services represent the only performance obligation. The fees are charged based on hours worked by our employees and the fixed contractual rate per hour, plus third-party pass-through costs, on a monthly basis. We recognize revenues as the related services are performed based on the amounts billed, as the partner consumes the benefit of research and development work simultaneously as we perform these services, and the amounts billed reflect the value of these services to the customer. Device License, Development and Supply Arrangements We have several license, development and supply arrangements with pharmaceutical partners, under which we grant a license to our device technology and provide research and development services that often involve multiple performance obligations and highly-customized deliverables. For such arrangements, we identify each of the promised goods and services within the contract and the distinct performance obligations at inception of the contract and allocate consideration to each performance obligation based on relative SSP, which is generally determined based on the expected cost plus mark-up. If the contract includes an enforceable right to payment for performance completed to date and performance obligations are satisfied over time, we recognize revenue over the development period using either the input or output method depending on which is most appropriate given the nature of the distinct deliverable. For other contracts that do not contain an enforceable right to payment for performance completed to date, revenue is recognized when control of the product is transferred to the customer. Factors that may indicate transfer of control has occurred include the transfer of legal title, transfer of physical possession, the customer has obtained the significant risks and rewards of ownership of the assets, and we have a present right to payment. Our payment terms for development contracts may include an upfront payment equal to a percentage of the total contract value with the remaining portion to be billed upon completion and transfer of the individual deliverables or satisfaction of the individual performance obligations. We record a contract liability for cash received in advance of performance, which is presented as deferred revenue within accrued expense and other long-term liabilities in our condensed consolidated balance sheets and recognized as revenue in our condensed consolidated statements of income when the associated performance obligations have been satisfied. License fees and milestones received in exchange for the grant of a license to our functional intellectual property, such as patented technology and know-how in connection with a partnered development arrangement, are generally recognized at inception of the arrangement, or over the development period depending on the facts and circumstances, as the license is generally not distinct from the non-licensed goods or services to be provided under the contract. Milestone payments that are contingent upon the occurrence of future events are evaluated and recorded at the most likely amount, and to the extent that it is probable that a significant reversal of revenue will not occur when the associated uncertainty is resolved. Refer to Note 4, Revenue , for further discussion on our collaborative arrangements. 15 Table of Contents Product Sales, Net Proprietary Product Sales Our commercial portfolio of proprietary products includes XYOSTED and Hylenex recombinant which we sell primarily to wholesale pharmaceutical distributors and specialty pharmacies, who sell the products to hospitals, retail chain drug stores and other end-user customers. Sales to wholesalers are made pursuant to purchase orders subject to the terms of a master agreement, and delivery of individual packages of products represents performance obligations under each purchase order. We use contract manufacturers to produce our proprietary products and third-party logistics vendors to process and fulfill orders . We concluded we are the principal in the sales to wholesalers because we control access to services rendered by both vendors and direct their activities. We have no obligations to wholesalers to generate pull-through sales. Revenue is recognized when control has transferred to the customer, which is typically upon delivery, at the net selling price, which reflects the variable consideration for which reserves and sales allowances are established for estimated returns, wholesale distribution fees, prompt payment discounts, government rebates and chargebacks, plan rebate arrangements and patient discount and support programs. We recognize revenue from product sales and related cost of sales upon product delivery to the wholesaler location. At that time, the wholesalers take control of the product as they take title, bear the risk of loss of ownership, and have an enforceable obligation to pay us. They also have the ability to direct sales of product to their customers on terms and at prices they negotiate. Although wholesalers have product return rights, we do not believe they have a significant incentive to return the product to us. The determination of certain reserves and sales allowances requires us to make a number of judgments and estimates to reflect our best estimate of the transaction price and the amount of consideration to which we believe we would be ultimately entitled to receive. The expected value is determined based on unit sales data, contractual terms with customers and third-party payers, historical and estimated future percentage of rebates incurred on sales, historical and future insurance plan billings, any new or anticipated changes in programs or regulations that would impact the amount of the actual rebates, customer purchasing patterns, product expiration dates and levels of inventory in the distribution channel. The estimated amounts of credit for product returns, chargebacks, distribution fees, prompt payment discounts, rebates and customer co-pay support programs are included in accrued expenses and accounts receivable, net in our condensed consolidated balance sheets upon recognition of revenue from product sales. We monitor actual product returns, chargebacks, discounts and fees subsequent to the sale. If these amounts differ from our estimates, we make adjustments to these allowances, which are applied to increase or reduce product sales revenue and earnings in the period of adjustment. Selling prices initially billed to wholesalers are subject to discounts for prompt payment and subsequent chargebacks when wholesalers sell our products at negotiated discounted prices to members of certain group purchasing organizations, pharmacy benefit managers and government programs. We also pay quarterly distribution fees to certain wholesalers for inventory reporting and chargeback processing, and to pharmacy benefit managers and group purchasing organizations as administrative fees for services and for access to their members. We concluded the benefits received in exchange for these fees are not distinct from our sales of our products, and accordingly we apply these amounts to reduce revenues. Wholesalers also have rights to return unsold product nearing or past the expiration date. Because of the shelf life of our products and our lengthy return period, there may be a significant period of time between when the product is shipped and when we issue credits on returned product. We estimate the transaction price when we receive each purchase order taking into account the expected reductions of the selling price initially billed to the wholesaler arising from all of the above factors. We have compiled historical experience and data to estimate future returns and chargebacks of our products and the impact of the other discounts and fees we pay. When estimating these adjustments to the transaction price, we reduce it sufficiently to be able to assert that it is probable that there will be no significant reversal of revenue when the ultimate adjustment amounts are known. Each purchase order contains only one type of product, and is usually shipped to the wholesaler in a single shipment. Therefore, allocation of the transaction price to individual packages is not required. 16 Table of Contents In connection with the orders placed by wholesalers, we incur costs such as commissions to our sales representatives. However, as revenue from product sales is recognized upon delivery to the wholesaler, which occurs shortly after we receive a purchase order, we do not capitalize these commissions and other costs, based on application of the practical expedient allowed within the applicable guidance. Partnered Product Sales Bulk rHuPH20 We sell bulk rHuPH20 to partners for use in research and development and, subsequent to receiving marketing approval, we sell it for use in collaboration commercial products. Sales are made pursuant to purchase orders subject to the terms of the collaborative agreement or a supply agreement, and delivery of units of bulk rHuPH20 represent performance obligations under each purchase order. We provide a standard warranty that the product conforms to specifications. We use contract manufacturers to produce bulk rHuPH20 and have concluded we are the principal in the sales to partners. The transaction price for each purchase order of bulk rHuPH20 is fixed based on the cost of production plus a contractual markup, and is not subject to adjustments. Allocation of the transaction price to individual quantities of the product is usually not required because each order contains only one type of product. We recognize revenue from the sale of bulk rHuPH20 as product sales and related cost of sales upon transfer of title to our partners. At that time, the partners take control of the product, bear the risk of loss of ownership, and have an enforceable obligation to pay us. Devices We are party to several license, development, supply and distribution arrangements with pharmaceutical partners, under which we produce and are the exclusive supplier of certain products, devices and/or components. We recognize revenue from the sale of certain products, devices and/or components as product sales and related costs of sales at the point in time in which control is transferred to the customer, which is typically upon shipment of the goods to our partner. Sales terms and pricing are governed by the respective supply and distribution agreements, and there is generally no right of return. We provide a standard warranty that the product conforms to specifications. We use contract manufacturers to produce certain products, devices and/or components, and have concluded we are the principal in the sales to partners. Revenue is recognized at the transaction price, which includes the contractual per unit selling price. Allocation of the transaction price to individual quantities of the product is usually not required because each order contains only one type of product. Cost of Sales Cost of sales consists primarily of raw materials, third-party manufacturing costs, fill and finish costs, freight costs, internal costs and manufacturing overhead associated with the production of proprietary and partnered products. Cost of sales also consists of the write-down of excess, dated and obsolete inventories and the write-off of inventories that do not meet certain product specifications, if any. 17 Table of Contents Research and Development Expenses Research and development expenses include salaries and benefits, allocation of facilities and other overhead expenses, research related manufacturing services, contract services, and other outside expenses related to manufacturing, preclinical and regulatory activities and our partner development platforms. Research and development expenses are charged to operating expenses as incurred when these expenditures relate to our research and development efforts and have no alternative future uses. We are obligated to make upfront payments upon execution of certain research and development agreements. Advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities are deferred. Such amounts are recognized as expense as the related goods are delivered or the related services are performed or such time when we do not expect the goods to be delivered or services to be performed. Share-Based Compensation We record compensation expense associated with stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”) and shares issued under our employee stock purchase plan (“ESPP”) in accordance with the authoritative guidance for share-based compensation. The cost of employee services received in exchange for an award of an equity instrument is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense on a straight-line basis over the requisite service period of the award. Share-based compensation expense for an award with a performance condition is recognized when the achievement of such performance condition is determined to be probable. If the outcome of such performance condition is not determined to be probable or is not met, no compensation expense is recognized and any previously recognized compensation expense is reversed. Forfeitures are recognized as a reduction of share-based compensation expense as they occur. Income Taxes We provide for income taxes using the liability method. Under this method, deferred income tax assets and liabilities are determined based on the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases at each reporting period. We measure deferred tax assets and liabilities using enacted tax rates for the year in which the differences are expected to reverse. Significant judgment is required by management to determine our provision for income taxes, our deferred tax assets and liabilities, and any associated valuation allowances recorded against our net deferred tax assets. Deferred tax assets (“DTA”) and other tax benefits are recorded when they are more likely than not to be realized. On a quarterly basis, we assess the need for valuation allowance on our DTAs, weighing all positive and negative evidence, to assess if it is more-likely-than-not that some or all of our DTAs will be realized. We recorded a provision for income tax of $ 43.7 million and $ 109.2 million with an effective tax rate of 20.2 % and 19.3 % for the three and nine months ended September 30, 2025, respectively. The difference between our effective tax rates and the U.S. federal statutory rate of 21% is primarily due to decreases from share-based compensation windfall tax benefit, Foreign Derived Intangible Income deduction, valuation allowance adjustments, and research and development credit generation, partially offset by state income tax and Section 162(m) disallowance. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA addresses key provisions of the 2017 Tax Cuts and Jobs Act including the immediate expensing of domestic research and development expenditures and 100% bonus depreciation on qualified property. The impacts of the OBBBA are reflected in our condensed consolidated statements of operations for the period ended September 30, 2025, of which there was no material impact to our income tax expense. As of September 30, 2025, certain provisions of the OBBBA will change the timing of cash tax payments in the current fiscal year and future periods. Segment Information We generate revenues from payments received (i) as royalties from licensing our ENHANZE technology and other royalty arrangements, (ii) under collaborative agreements with our partners and (iii) from sales of our proprietary and partnered products. There are no intra-entity sales or transfers. We operate our business in one operating segment, which includes all activities related to the research, development and commercialization of our proprietary enzymes and devices. This operating segment also includes revenues and expenses related to (i) research and development and manufacturing activities conducted under our collaborative agreements with third parties, (ii) product sales of proprietary and partnered products and (iii) associated selling, general and administrative expenses. 18 Table of Contents The chief operating decision-maker (“CODM”), our Chief Executive Officer, reviews the operating results on an aggregate basis and manages the operations as a single operating segment. The CODM assesses the segment’s performance and decides how to allocate resources based on consolidated net income that is reported in our condensed consolidated statements of income. The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets. The significant expense categories regularly provided to the CODM include cost of sales, research and development, amortization of intangibles, and selling, general and administrative expenses. These expense categories are reported as separate line items in our condensed consolidated statements of income. Adoption and Pending Adoption of Recent Accounting Pronouncements The following table provides a brief description of recently issued accounting standards, those adopted in the current period and those not yet adopted: Standard Description Effective Date Adoption Method Effect on the Financial Statements or Other Significant Matters In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles-Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software The new guidance includes amendments to clarify and modernize the accounting for costs related to internal-use software, including removing all references to project stages and clarifying thresholds used to begin capitalizing internal-use software development costs. Annual periods beginning after December 15, 2027 (our 2028 Form 10-K), and interim reporting periods within those annual reporting periods (our Q1 2027 Form 10-Q) - Early adoption is permitted. Prospective, Retrospective or Modified Transition Approach We early adopted the new guidance in the interim period ended September 30, 2025, on a prospective basis. The adoption did not have a material impact on our condensed consolidated financial position, results of operations or financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. Annual periods beginning after December 15, 2024 (our 2025 Form 10-K) - Early adoption is permitted. Prospective or Retrospective We do not expect the new guidance to have a material effect on our consolidated financial statements, but will result in expanded financial statement disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance is intended to enhance expense disclosures by requiring disaggregation of certain expenses included in the consolidated statements of income into specified expense categories in the notes to the consolidated financial statements. Annual periods beginning after December 15, 2026 (our 2027 Form 10-K), and interim reporting periods beginning after December 15, 2027 (our Q1 2028 Form 10-Q) - Early adoption is permitted. Prospective or Retrospective We are currently evaluating the impact of the standard on our consolidated financial statements and related disclosures. 19 Table of Contents 3. Fair Value Measurement Available-for-sale marketable securities consisted of the following (in thousands): September 30, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Corporate debt securities $ 71,833 $ 157 $ — $ 71,990 U.S. treasury securities 210,203 120 ( 15 ) 210,308 Total marketable securities, available-for-sale $ 282,036 $ 277 $ ( 15 ) $ 282,298 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Asset-backed securities $ 251 $ — $ — $ 251 Corporate debt securities 102,632 150 ( 207 ) 102,575 U.S. treasury securities 367,700 442 ( 572 ) 367,570 Agency bonds 9,844 — ( 16 ) 9,828 Total marketable securities, available-for-sale $ 480,427 $ 592 $ ( 795 ) $ 480,224 As of September 30, 2025, five available-for-sale marketable securities with a fair market value of $ 63.0 million were in an immaterial gross unrealized loss position. Based on our review of these marketable securities, we believe none of the unrealized loss is as a result of a credit loss as of September 30, 2025 because we do not intend to sell these securities and it is not more-likely-than-not that we will be required to sell these securities before the recovery of their amortized cost basis. The estimated fair value of our contractual maturities of available-for-sale debt securities were as follows (in thousands): September 30, 2025 December 31, 2024 Due within one year $ 251,444 $ 314,978 Due after one year but within five years (1) 30,854 165,246 Total estimated fair value of available-for-sale securities $ 282,298 $ 480,224 (1) These investments are classified as current assets which reflects management’s intention to use the proceeds from the sale of these investments to fund operations, as necessary. 20 Table of Contents The following table summarizes, by major security type, our cash equivalents and available-for-sale marketable securities measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): September 30, 2025 December 31, 2024 Level 1 Level 2 Total Estimated Fair Value Level 1 Level 2 Total Estimated Fair Value Assets Cash equivalents Money market funds $ 346,080 $ — $ 346,080 $ 55,182 $ — $ 55,182 Available-for-sale marketable securities Asset-backed securities — — — — 251 251 Corporate debt securities — 71,990 71,990 — 102,575 102,575 U.S. treasury securities 210,308 — 210,308 367,570 — 367,570 Agency bonds — — — 9,828 — 9,828 Derivative instruments Currency hedging contracts (1) — — — — 4,006 4,006 Total assets measured at fair value $ 556,388 $ 71,990 $ 628,378 $ 432,580 $ 106,832 $ 539,412 Liabilities Derivative instruments Currency hedging contracts (1) $ — $ 27,887 $ 27,887 $ — $ 17 $ 17 (1) Based on observable market transactions of spot currency rates, forward currency rates or equivalently-termed instruments. Carrying amounts of the financial assets and liabilities are equal to the fair value. As of September 30, 2025, the derivative liabilities recorded within accrued expenses and other long-term liabilities in our condensed consolidated balance sheets were $ 8.5 million and $ 19.4 million , respectively. As of December 31, 2024, the derivative assets recorded within prepaid expenses and other current assets and prepaid expenses and other assets in our consolidated balance sheets were $ 2.4 million and $ 1.6 million , respectively. The derivative liabilities recorded within other long-term liabilities in our consolidated balance sheets as of December 31, 2024 were not material. We had no available-for-sale securities that were classified within Level 3 as of September 30, 2025 and December 31, 2024. 21 Table of Contents 4. Revenue Our disaggregated revenues were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Royalties $ 236,038 $ 155,061 $ 609,869 $ 400,572 Product sales, net Proprietary product sales 52,242 39,925 135,035 119,319 Bulk rHuPH20 sales 32,491 31,493 82,787 66,637 Device partnered product sales 9,495 15,241 35,957 38,172 Total product sales, net 94,228 86,659 253,779 224,128 Revenues under collaborative agreements Upfront license and target nomination fees — 27,000 220 27,000 Event-based development and regulatory milestones and other fees — 18,000 24,500 57,500 Sales-based milestones 20,000 — 45,000 — Device licensing and development revenue 3,998 3,364 11,476 8,116 Total revenues under collaborative agreements 23,998 48,364 81,196 92,616 Total revenues $ 354,264 $ 290,084 $ 944,844 $ 717,316 During the three months ended September 30, 2025, we recognized revenue related to licenses granted to partners in prior periods in the amount of $ 256.0 million. This amount represents royalties and a sales milestone earned in the current period. We recognized no revenue during the three months ended September 30, 2025 that had been included in accrued expense and other long-term liabilities in our condensed consolidated balance sheets as of December 31, 2024. During the nine months ended September 30, 2025, we recognized revenue related to licenses granted to partners in prior periods in the amount of $ 679.4 million. This amount represents royalties and a sales milestone earned in the current period, in addition to $ 24.5 million of variable consideration in the contracts where uncertainties were resolved and the development milestones are expected to be achieved or were achieved. We also recognized revenue of $ 2.0 million during the nine months ended September 30, 2025 that had been included in accrued expenses and other long-term liabilities in our consolidated balance sheets as of December 31, 2024. Accounts receivable, net, other contract assets and deferred revenues (contract liabilities) from contracts with customers, including partners, consisted of the following (in thousands): September 30, 2025 December 31, 2024 Accounts receivable, net $ 343,535 $ 288,204 Other contract assets 2,500 20,251 Deferred revenues 8,373 10,343 As of September 30, 2025, the amounts included in the transaction price of our contracts with customers, including collaboration partners, and allocated to goods and services not yet provided were $ 269.3 million, of which $ 260.9 million relates to unfulfilled product purchase orders and $ 8.4 million has been collected and is reported as other long-term liabilities in our condensed consolidated balance sheets. The unfulfilled product purchase orders are estimated to be delivered by the end of 2026. Of the total deferred revenues of $ 8.4 million, no amount is expected to be used by our customers within the next 12 months. We recognized contract assets of $ 2.5 million as of September 30, 2025, which related to development milestones deemed probable of receipt for intellectual property licenses granted to partners in prior periods and for goods or services when control has transferred to the customer, and corresponding revenue is recognized but is not yet billable to the customer in accordance with the terms of the contract. 22 Table of Contents 5. Certain Balance Sheet Items Accounts receivable, net and contract assets consisted of the following (in thousands): September 30, 2025 December 31, 2024 Product sales to partners $ 39,602 $ 37,599 Revenues under collaborative agreements 21,238 29,452 Royalty payments 233,030 164,348 Other product sales 57,469 65,542 Contract assets 2,500 20,251 Total accounts receivable and contract assets 353,839 317,192 Allowance for distribution fees and discounts ( 7,804 ) ( 8,737 ) Total accounts receivable, net and contract assets $ 346,035 $ 308,455 Inventories consisted of the following (in thousands): September 30, 2025 December 31, 2024 Raw materials $ 18,961 $ 24,015 Work-in-process 34,840 30,169 Finished goods 161,590 142,944 Total inventories 215,391 197,128 Less long-term portion (1) ( 29,595 ) ( 55,268 ) Total inventories, current $ 185,796 $ 141,860 (1) Long-term portion of inventories represents inventory expected to remain on hand beyond one year and therefore is included in prepaid expenses and other assets in the condensed consolidated balance sheets. Prepaid expenses and other assets consisted of the following (in thousands): September 30, 2025 December 31, 2024 Prepaid manufacturing expenses $ 56,027 $ 36,317 Other prepaid expenses 47,084 10,562 Long-term inventories 29,595 55,268 Other assets 17,947 17,400 Total prepaid expenses and other assets 150,653 119,547 Less long-term portion ( 55,698 ) ( 80,596 ) Total prepaid expenses and other assets, current $ 94,955 $ 38,951 Prepaid manufacturing expenses include raw materials, slot reservation fees and other amounts paid to contract manufacturing organizations. Such amounts are reclassified to work-in-process inventory as materials are used or the contract manufacturing organization services are complete. 23 Table of Contents Property and equipment, net consisted of the following (in thousands): September 30, 2025 December 31, 2024 Research equipment $ 10,540 $ 9,811 Manufacturing equipment 43,366 39,760 Computer and office equipment 8,054 7,955 Internal-use software 2,246 1,755 Leasehold improvements 7,428 7,012 Subtotal 71,634 66,293 Accumulated depreciation and amortization ( 31,059 ) ( 25,429 ) Subtotal 40,575 40,864 Right of use of assets 30,845 34,171 Total property and equipment, net $ 71,420 $ 75,035 Depreciation and amortization expense was approximately $ 2.7 million and $ 2.6 million, inclusive of ROU asset amortization of $ 1.5 million and $ 1.4 million for the three months ended September 30, 2025 and 2024, respectively. Depreciation and amortization expense was approximately $ 8.1 million and $ 7.6 million, inclusive of ROU asset amortization of $ 4.5 million and $ 4.3 million for the nine months ended September 30, 2025 and 2024, respectively. Accrued expenses consisted of the following (in thousands): September 30, 2025 December 31, 2024 Accrued compensation and payroll taxes $ 15,831 $ 24,400 Accrued outsourced manufacturing expenses 8,429 16,682 Taxes payable 26,021 30,995 Product returns and sales allowance 48,442 54,588 Other accrued expenses 56,158 26,239 Lease liability 28,101 30,705 Total accrued expenses 182,982 183,609 Less long-term portion ( 71,799 ) ( 54,758 ) Total accrued expenses, current $ 111,183 $ 128,851 Expense associated with the accretion of the lease liabilities was approximately $ 0.6 million and $ 0.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 1.6 million and $ 1.7 million for the nine months ended September 30, 2025 and 2024, respectively. Total lease expense for the three months ended September 30, 2025 and 2024 was $ 2.1 million and $ 2.0 million, respectively, and $ 6.1 million and $ 6.0 million for the nine months ended September 30, 2025 and 2024, respectively. Cash paid for amounts related to leases for the three months ended September 30, 2025 and 2024 was $ 1.9 million and $ 1.6 million, respectively, and $ 5.4 million and $ 5.1 million for the nine months ended September 30, 2025 and 2024, respectively. 24 Table of Contents 6. Goodwill and Intangible Assets, net Goodwill A summary of the activity impacting goodwill is presented below (in thousands): Balance as of December 31, 2024 $ 416,821 Adjustment — Balance as of September 30, 2025 $ 416,821 Intangible Assets, net Our acquired intangible assets are amortized using the straight-line method over their estimated useful lives of seven to ten years . The following table shows the cost, accumulated amortization and weighted average useful life in years for our acquired intangible assets as of September 30, 2025 (in thousands). Weighted Average Useful Life (in years) Gross Carrying Value Accumulated Amortization Net Carrying Value Auto-Injector technology platform 7 $ 402,000 $ 192,663 $ 209,337 XYOSTED proprietary product 10 136,200 45,693 90,507 Total finite-lived intangibles, net $ 538,200 $ 238,356 $ 299,844 ATRS-1902 (IPR&D) Indefinite 48,700 Total intangibles, net $ 348,544 Estimated future annual amortization of finite-lived intangible assets is shown in the following table (in thousands). Actual amortization expense to be reported in future periods could differ from these estimates as a result of acquisitions, divestitures, and asset impairments, among other factors. Year Amortization Expense Remainder of 2025 $ 17,763 2026 71,049 2027 71,049 2028 71,049 2029 36,313 Thereafter 32,621 Total $ 299,844 25 Table of Contents 7. Long-Term Debt, Net 1.00 % Convertible Notes due 2028 In August 2022, we completed the sale of $ 720.0 million in aggregate principal amount of 1.00 % Convertible Senior Notes due 2028 (the “2028 Convertible Notes”). The net proceeds in connection with the issuance of the 2028 Convertible Notes, after deducting the initial purchasers’ fee of $ 18.0 million, was approximately $ 702.0 million. We also incurred additional debt issuance costs totaling $ 1.0 million. Debt issuance costs and the initial purchasers’ fee are presented as a debt discount. The 2028 Convertible Notes pay interest semi-annually in arrears on February 15th and August 15th of each year at an annual rate of 1.00 %. The 2028 Convertible Notes are general unsecured obligations and rank senior in right of payment to all indebtedness that is expressly subordinated in right of payment to the 2028 Convertible Notes, rank equally in right of payment with all existing and future liabilities that are not so subordinated, are effectively junior to any secured indebtedness to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to all indebtedness and other liabilities (including trade payables) of our current or future subsidiaries. The 2028 Convertible Notes have a maturity date of August 15, 2028. Holders may convert their 2028 Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2022, if the last reported sale price per share of common stock exceeds 130 % of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on our common stock, as described in the offering memorandum for the 2028 Convertible Notes; (4) if we call such notes for redemption; and (5) at any time from, and including, February 15, 2028 until the close of business on the second scheduled trading day immediately before the maturity date. As of September 30, 2025, the conditional conversion feature of the 2028 Convertible Notes was triggered, and as a result, the 2028 Convertible Notes were classified to current portion of long-term debt, net in our condensed consolidated balance sheets. Upon conversion, we will pay cash for the settlement of principal, and for the premium, if applicable, we will pay cash, deliver shares of common stock or a combination of cash and shares of common stock, at our election. The initial conversion rate for the 2028 Convertible Notes is 17.8517 shares of common stock per $1,000 in principal amount of 2028 Convertible Notes, equivalent to a conversion price of approximately $ 56.02 per share of our common stock. The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued or unpaid interest. As of September 30, 2025, we were in compliance with all covenants. Capped Call Transactions In connection with the offering of the 2028 Convertible Notes, we entered into capped call transactions with certain counterparties (the “Capped Call Transactions”). The Capped Call Transactions are expected generally to reduce potential dilution to holders of our common stock upon conversion of the 2028 Convertible Notes or at our election (subject to certain conditions) offset any cash payments we are required to make in excess of the principal amount of such converted 2028 Convertible Notes. The cap price of the Capped Call Transactions is initially $ 75.4075 per share of common stock, representing a premium of 75 % above the last reported sale price of $ 43.09 per share of common stock on August 15, 2022, and is subject to certain adjustments under the terms of the Capped Call Transactions. As of September 30, 2025, no capped calls had been exercised. Pursuant to their terms, the capped calls qualify for classification within stockholders’ equity in our condensed consolidated balance sheets, and their fair value is not remeasured and adjusted as long as they continue to qualify for stockholders’ equity classification. We paid approximately $ 69.1 million for the Capped Calls, including applicable transaction costs, which was recorded as a reduction to additional paid-in capital in our condensed consolidated balance sheets. The Capped Call Transactions are separate transactions entered into by us with the Capped Call Counterparties, are not part of the terms of the 2028 Convertible Notes, and do not affect any holder’s rights under the 2028 Convertible Notes. Holders of the 2028 Convertible Notes do not have any rights with respect to the Capped Call Transactions. 26 Table of Contents 0.25 % Convertible Notes due 2027 In March 2021, we completed the sale of $ 805.0 million in aggregate principal amount of 0.25 % Convertible Senior Notes due 2027 (the “2027 Convertible Notes”). The net proceeds in connection with the issuance of the 2027 Convertible Notes, after deducting the initial purchasers’ fee of $ 20.1 million, was approximately $ 784.9 million. We also incurred additional debt issuance costs totaling $ 0.4 million. Debt issuance costs and the initial purchasers’ fee are presented as a debt discount. The 2027 Convertible Notes pay interest semi-annually in arrears on March 1st and September 1st of each year at an annual rate of 0.25 %. The 2027 Convertible Notes are general unsecured obligations and rank senior in right of payment to all indebtedness that is expressly subordinated in right of payment to the 2027 Convertible Notes, rank equally in right of payment with all existing and future liabilities that are not so subordinated, are effectively junior to any secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all indebtedness and other liabilities (including trade payables) of our current or future subsidiaries. The 2027 Convertible Notes have a maturity date of March 1, 2027. Holders may convert their 2027 Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of common stock exceeds 130 % of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on our common stock, as described in the offering memorandum for the 2027 Convertible Notes; (4) if we call such notes for redemption; and (5) at any time from, and including, September 1, 2026 until the close of business on the scheduled trading day immediately before the maturity date. As of September 30, 2025, the 2027 Convertible Notes were not convertible. Upon conversion, we will pay cash for the settlement of principal and for the premium, if applicable, we will pay cash, deliver shares of common stock or a combination of cash and shares of common stock, at our election. The initial conversion rate for the 2027 Convertible Notes is 12.9576 shares of common stock per $1,000 in principal amount of 2027 Convertible Notes, equivalent to a conversion price of approximately $ 77.17 per share of our common stock. The conversion rate is subject to adjustment. As of September 30, 2025, we were in compliance with all covenants. 27 Table of Contents Net Carrying Amounts of our Convertible Notes The carrying amount and fair value of our Convertible Notes were as follows (in thousands). September 30, 2025 December 31, 2024 Principal amount 2027 Convertible Notes $ 805,000 $ 805,000 2028 Convertible Notes 720,000 720,000 Total principal amount $ 1,525,000 $ 1,525,000 Unamortized debt discount 2027 Convertible Notes $ ( 4,928 ) $ ( 7,518 ) 2028 Convertible Notes ( 9,315 ) ( 11,684 ) Total unamortized debt discount $ ( 14,243 ) $ ( 19,202 ) Carrying amount 2027 Convertible Notes $ 800,072 $ 797,482 2028 Convertible Notes 710,685 708,316 Total carrying amount $ 1,510,757 $ 1,505,798 Fair value based on trading levels (Level 2) 2027 Convertible Notes $ 930,685 $ 769,218 2028 Convertible Notes 1,028,858 779,882 Total fair value of outstanding notes $ 1,959,543 $ 1,549,100 Remaining amortization per period of debt discount (in years) 2027 Convertible Notes 1.4 2.2 2028 Convertible Notes 2.9 3.6 28 Table of Contents The following table summarizes the components of interest expense and the effective interest rates for each of our Convertible Notes (in thousands). Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Coupon interest 2027 Convertible Notes $ 503 $ 503 $ 1,509 $ 1,509 2028 Convertible Notes 1,800 1,800 5,400 5,400 Total coupon interest $ 2,303 $ 2,303 $ 6,909 $ 6,909 Amortization of debt discount 2027 Convertible Notes $ 865 $ 859 $ 2,590 $ 2,572 2028 Convertible Notes 792 781 2,369 2,334 Total amortization of debt discount $ 1,657 $ 1,640 $ 4,959 $ 4,906 Interest expense 2027 Convertible Notes $ 1,368 $ 1,362 $ 4,099 $ 4,081 2028 Convertible Notes 2,592 2,581 7,769 7,734 Total interest expense $ 3,960 $ 3,943 $ 11,868 $ 11,815 Effective interest rates 2027 Convertible Notes 0.7 % 0.7 % 0.7 % 0.7 % 2028 Convertible Notes 1.5 % 1.5 % 1.5 % 1.5 % Revolving Credit and Term Loan Facilities In May 2022, we entered into a credit agreement, which was subsequently amended in August 2022 (the “Amendment”), with Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other lenders and L/C Issuers party thereto (the “2022 Credit Agreement”), evidencing a credit facility (the “2022 Facility”) that provides for (i) a $ 575 million revolving credit facility (the “Revolving Credit Facility”) and (ii) a $ 250 million term loan facility (the “Term Facility”). Concurrently, with the entry into the Amendment, we repaid the entire outstanding Term Facility and repaid all outstanding loans under the Revolving Credit Facility under the 2022 Credit Agreement. The 2022 Facility will mature on November 30, 2026 unless either the Revolving Credit Facility or the Term Facility is extended prior to such date in accordance with the 2022 Credit Agreement. The Term Facility requires quarterly scheduled repayments of the term loans in each of the first, second, third and fourth years following the closing in annual amounts equal to 2.50 %, 5.00 %, 7.50 % and 10.00 % of the initial principal amount of the term loans, respectively. The term loans are also subject to mandatory prepayments from the proceeds of certain asset sales, subject to our right to reinvest the proceeds thereof. Borrowings under the 2022 Facility bear interest, at our option, at a rate equal to an applicable margin plus: (a) the applicable Term Secured Overnight Financing Rate (“SOFR”) (which includes a SOFR adjustment of 0.10 %), or (b) a base rate determined by reference to the highest of (1) the federal funds effective rate plus 0.50 %, (2) the Bank of America prime rate, (3) the Term SOFR rate for an interest period of one month plus 1.10 %, and (4) 1.00 %. The margin for the 2022 Facility ranges, based on our consolidated total net leverage ratio, from 0.25 % to 1.25 % in the case of base rate loans and from 1.25 % to 2.25 % in the case of Term SOFR rate loans. In addition to paying interest on the outstanding principal under the Facility, we will pay (i) a commitment fee in respect of the unutilized commitments thereunder and (ii) customary letter of credit fees and agency fees. The commitment fees range from 0.15 % to 0.35 % per annum based on our consolidated net leverage ratio. As of September 30, 2025, the Revolving Credit Facility was undrawn. We incurred a total of $ 3.6 million in third-party costs related to the 2022 Credit Agreement which are recorded as debt issuance cost within prepaid expenses and other assets in our condensed consolidated balance sheets. As of September 30, 2025, the unamortized debt issuance cost related to the revolving credit facility was $ 0.9 million. 29 Table of Contents 8. Stockholders’ Equity Share-based Compensation The following table summarizes share-based compensation expense included in our condensed consolidated statements of income related to share-based awards (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Research and development $ 3,601 $ 3,598 $ 10,375 $ 9,511 Selling, general and administrative 8,559 8,980 24,619 22,412 Total share-based compensation expense $ 12,160 $ 12,578 $ 34,994 $ 31,923 Share-based compensation expense by type of share-based award was as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Stock options $ 3,734 $ 3,922 $ 11,316 $ 12,115 RSUs, PSUs and ESPP 8,426 8,656 23,678 19,808 Total share-based compensation expense $ 12,160 $ 12,578 $ 34,994 $ 31,923 We granted stock options to purchase approximately 0.5 million and 0.6 million shares of common stock during the nine months ended September 30, 2025 and 2024, respectively. The exercise price of stock options granted is equal to the closing price of the common stock on the date of grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model (“Black-Scholes Model”). Expected volatility is based on historical volatility of our common stock. The expected term of options granted is based on analyses of historical employee termination rates and option exercises. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The dividend yield assumption is based on the expectation of no future dividend payments. The assumptions used in the Black-Scholes Model were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Expected volatility 41.23 - 42.14 % 40.35 - 40.46 % 39.68 - 42.14 % 40.01 - 40.46 % Average expected term (in years) 4.8 4.8 4.8 5.0 Risk-free interest rate 3.74 - 3.84 % 3.65 - 4.44 % 3.74 - 4.34 % 3.65 - 4.70 % Expected dividend yield — — — — In February 2021, our Board of Directors approved our 2021 ESPP and our stockholders approved the plan in May 2021. The 2021 ESPP enables eligible employees to purchase shares of our common stock at the end of each offering period at a price equal to 85 % of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower. Share purchases are funded through payroll deduction of at least 1 % and up to 15 % of an employee’s compensation for each payroll period, and no employee may purchase shares under the 2021 ESPP that exceeds $ 25,000 worth of our common stock for a calendar year. As of September 30, 2025, 2.5 million shares were available for future purchase. The offering period is generally for a six-month period. Offering periods shall commence on or about the sixteenth day of June and December of each year and end on or about the fifteenth day of the next December and June, respectively, occurring thereafter. During the nine months ended September 30, 2025, 22,092 shares were issued pursuant to the ESPP. 30 Table of Contents Total unrecognized estimated compensation cost by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized was as follows (in thousands, unless otherwise noted): September 30, 2025 Unrecognized Expense Remaining Weighted-Average Recognition Period (in years) Stock options $ 26,004 2.18 RSUs 55,635 2.56 PSUs 12,954 1.63 ESPP 153 0.16 Share Repurchases In December 2021, our Board of Directors authorized a capital return program to repurchase up to $ 750.0 million of our outstanding common stock over a three -year period which we completed in June 2024. A total of 19.1 million shares were repurchased over the three -year period at an average price per share of $ 39.31 . In February 2024, our Board of Directors authorized a new capital return program to repurchase up to $ 750.0 million of our outstanding common stock. In December 2024, we entered into an Accelerated Share Repurchase (“ASR”) agreement with Bank of America, N.A. to repurchase $ 250.0 million of our outstanding common stock. Pursuant to the agreement, at the inception of the ASR, we paid $ 250.0 million to Bank of America, N.A. and took initial delivery of 4.2 million shares, representing approximately 80 percent of the total shares to be repurchased under the ASR agreement measured based on the closing price of our common stock on the transaction trade date. In March 2025, we finalized the ASR transaction resulting in a total repurchase of 4.7 million shares at an average price of $ 53.95 . In May 2025, we announced a second $ 250.0 million share repurchase under the $ 750.0 million approved program from February 2024. The second $ 250.0 million share repurchase was completed in June 2025, resulting in a total purchase of 4.8 million shares at an average price of $ 52.09 per share. In June 2025, we initiated the third $ 250.0 million share repurchase tranche under the $ 750.0 million approved program from February 2024. As of September 30, 2025, $ 92.3 million has been used to repurchase approximately 1.7 million shares at an average price of $ 52.89 per share. We had the following share repurchase activity under the approved share repurchase program (in thousands, except share and per share amounts): 2025 Total Number of Shares Purchased Weighted-Average Price Paid Per Share Total Cost First quarter (1) 452,453 $ 53.95 $ 24,410 Second quarter (2) 5,818,338 $ 52.16 303,490 Third quarter (2) 725,514 $ 53.59 38,882 6,996,305 $ 52.42 $ 366,782 (1) The shares we repurchased during the first quarter are part of the ASR initiated in December 2024. (2) Included in the total cost of shares purchased is a commission fee of $ 0.02 per share. All shares repurchased under our capital return programs have been retired and have resumed their status of authorized and unissued shares. 31 Table of Contents 9. Earnings per share Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents. Outstanding stock options, unvested RSUs, unvested PSUs, common shares expected to be issued under our ESPP and the Convertible Notes are considered common stock equivalents and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive. Potentially dilutive common shares issuable upon vesting of stock options, RSUs and PSUs are determined using the average share price for each period under the treasury stock method. Potentially dilutive common shares issuable upon conversion of the Convertible Notes are determined using the if-converted method. Since we have committed to settle the principal amount of the Convertible Notes in cash upon conversion only, the number of shares for the conversion spread will be included as a dilutive common stock equivalent. A reconciliation of the numerators and the denominators of the basic and diluted earnings per share computations is as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Numerator Net income $ 175,225 $ 137,011 $ 458,480 $ 307,079 Denominator Weighted average common shares outstanding for basic earnings per share 117,219 126,850 120,570 126,969 Dilutive potential common stock outstanding Stock options 2,178 2,174 2,092 1,844 RSUs, PSUs and ESPP 920 817 897 615 Convertible Notes 2,014 293 890 98 Weighted average common shares outstanding for diluted earnings per share 122,331 130,134 124,449 129,526 Earnings per share Basic $ 1.49 $ 1.08 $ 3.80 $ 2.42 Diluted $ 1.43 $ 1.05 $ 3.68 $ 2.37 Shares which have been excluded from the calculation of diluted earnings per common share because their effect was anti-dilutive include the following (shares in millions): Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Anti-dilutive securities (1) 21.9 24.0 23.3 26.1 (1) The anti-dilutive securities include outstanding stock options, unvested RSUs, unvested PSUs, common shares expected to be issued under our ESPP and Convertible Notes. 32 Table of Contents 10. Commitments and Contingencies From time to time, we may be involved in disputes, including litigation, relating to claims arising out of operations in the normal course of our business. Any of these claims could subject us to costly legal expenses and, while we generally believe that we have adequate insurance to cover many different types of liabilities, our insurance carriers may deny coverage or our policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on our condensed consolidated statements of income and balance sheets. Additionally, any such claims, whether or not successful, could damage our reputation and business. We currently are not a party to any legal proceedings, the adverse outcome of which, in our opinion, individually or in the aggregate, would have a material adverse effect on our condensed consolidated statements of income or balance sheets. 33 Table of Contents