What changed in this filing

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Item 1. Financial Statements

2026-05-11 compared with 2025-11-03 · 350 added, 232 removed, 746 unchanged (44% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

September 30,

2026 December 31,

10 unchanged sentences

Intangible assets, net 951,955 981,467

Deferred tax assets, net — 3,855

Restricted cash 2,260 2,601

Total assets $ 2,672,719 $ 2,525,323

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300,000 shares authorized;

117,523 and 123,138 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

118,523 and 117,782 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital 27,386 12,002

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

( 12,703 ) ( 18,092 )

6 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Royalties $ 240,681 $ 168,192

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Investment and other income, net

5,333 6,474 19,042 16,499

Interest expense ( 5,508 ) ( 4,525 )

13 unchanged sentences

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Net income $ 150,049 $ 118,095

Other comprehensive income

Unrealized gain on marketable securities, net

312 1,735 466 1,272

Unrealized (loss) gain on marketable securities, net

Foreign currency translation adjustment 45 —

8 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Operating activities

7 unchanged sentences

( 30 ) ( 1,709 )

Realized loss (gain) on marketable securities

Loss on disposal of equipment — 1,678

Lease payments recognized

1 unchanged sentence

Changes in operating assets and liabilities

Accounts receivable, net and other contract assets ( 37,580 ) ( 51,533 )

Accounts receivable, net and contract assets

( 19,547 ) 3,834

Inventories 27,379 ( 586 )

Prepaid expenses and other assets ( 9,108 ) ( 4,995 )

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Proceeds from sales and maturities of marketable securities 9,000 50,167

Proceeds from working capital adjustments on acquisition

Purchases of property and equipment ( 3,741 ) ( 950 )

Net cash provided by (used in) investing activities

Net cash used in investing activities

( 2,877 ) ( 90,422 )

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

Taxes paid related to net share settlement, net of proceeds from issuance of common stock under equity incentive plans

( 1,613 ) ( 3,321 )

Net cash (used in) provided by financing activities

Net cash used in financing activities

( 1,613 ) ( 3,321 )

5 unchanged sentences

$ 312,009 $ 176,328

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets

Cash and cash equivalents $ 309,749 $ 176,328

Restricted cash 2,260 —

Total cash, cash equivalents and restricted cash $ 312,009 $ 176,328

Supplemental disclosure of non-cash investing and financing activities

5 unchanged sentences

(in thousands)

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

Common Stock Additional

3 unchanged sentences

Shares Amount

BALANCE AS OF JUNE 30, 2025 117,621 $ 118 $ — $ ( 28,403 ) $ 361,033 $ 332,748

BALANCE AS OF DECEMBER 31, 2025 117,782 $ 118 $ 12,002 $ ( 18,092 ) $ 54,786 $ 48,814

Share-based compensation expense — — 16,997 — — 16,997

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 )

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock and performance stock units, net 741 — ( 1,613 ) — — ( 1,613 )

Other comprehensive income

1 unchanged sentence

Net income — — — — 150,049 150,049

BALANCE AS OF SEPTEMBER 30, 2025 117,523 $ 118 $ 23,909 $ ( 22,258 ) $ 502,146 $ 503,915

Nine Months Ended September 30, 2025

BALANCE AS OF MARCH 31, 2026 118,523 $ 118 $ 27,386 $ ( 12,703 ) $ 204,835 $ 219,636

Three Months Ended March 31, 2025

Common Stock Additional

Capital Accumulated

Comprehensive Income (Loss)

Retained Earnings

Comprehensive Income (Loss) Retained Earnings

Stockholders’

2 unchanged sentences

Share-based compensation expense — — 10,673 — — 10,673

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

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock and performance stock units, net 484 — ( 3,321 ) — — ( 3,321 )

Repurchase of common stock ( 452 ) — 244 — 244

2 unchanged sentences

Net income — — — — 118,095 118,095

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

Capital Accumulated

Comprehensive Loss

Retained Earnings

Stockholders’

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

Capital Accumulated

Comprehensive Loss

Retained Earnings

Stockholders’

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

BALANCE AS OF MARCH 31, 2025 123,170 $ 123 $ 7,596 $ ( 3,413 ) $ 477,964 $ 482,270

See accompanying notes to condensed consolidated financial statements.

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We license our technology to biopharmaceutical companies to collaboratively develop products that combine ENHANZE with our partners’ proprietary compounds.

We are also developing partner products with Hypercon™ drug delivery technology (“Hypercon technology”) and developing Surf Bio’s drug delivery technology to expand the breadth of our drug delivery technology portfolio.

Hypercon technology is an innovative microparticle technology that has been demonstrated in non-clinical testing to enable hyperconcentration of drugs and biologics and reduce the injection volume for the same dosage and potentially expanding opportunities for at-home and health care provider administration.

The Surf Bio hyperconcentration technology has similarly been demonstrated in non-clinical studies to achieve biologic concentrations of up to 500 mg/mL, for potential delivery in a single auto-injector shot for at-home or in a health care provider’s office use.

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.

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(“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.

(“Chugai”), Acumen Pharmaceuticals, Inc.

(“Acumen”), Merus N.V.

(“Merus”), Skye Bioscience, Inc.

(“Skye Bioscience”) and GlaxoSmithKline plc (“GSK”).

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 currently earn royalties from the 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.

Through our recent acquisition of Elektrofi, Inc.

(“Elektrofi”), subsequently renamed Halozyme Hypercon, Inc.

(“Hypercon”), we have Hypercon collaboration and license agreements with Janssen, Lilly, argenx, Vertex Pharmaceuticals Incorporated (“Vertex”) and Oruka Therapeutics, Inc.

In addition to receiving upfront license fees from our Hypercon collaborations, we are entitled to receive event and sales-based milestone payments and royalties from commercial sales for approved partner products co-formulated with Hypercon.

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.

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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.

and our wholly owned subsidiaries, Halozyme, Inc., Antares Pharma, Inc., Antares Pharma, Inc.’s two wholly-owned Swiss subsidiaries, Antares Pharma IPL AG and Antares Pharma GmbH, Halozyme Hypercon, Inc., Halozyme Hypercon, Inc.’s wholly-owned subsidiary, Elektrofi Security Corp., and Halozyme Surf Bio, Inc.

All intercompany accounts and transactions have been eliminated.

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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.

As of March 31, 2026, 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.

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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.

Restricted Cash

Under the terms of the leases of our facilities and other agreements, we are required to maintain letters of credit as security deposits during the terms of such leases.

At March 31, 2026, restricted cash of $ 2.3 million was pledged as collateral for the letters of credit and other agreements.

Fair Value of Financial Instruments

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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.

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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.

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.

As of March 31, 2026, our available-for-sale marketable securities consisted of United States (“U.S.”) Treasury securities, and were measured at fair value using Level 1.

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.

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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.

The 2027 Convertible Notes, the 2028 Convertible Notes, the 2031 Convertible Notes and the 2032 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.

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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.

As of March 31, 2026, 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.

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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.

As of March 31, 2026, 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 $ 6.2 million.

Business Combinations

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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.

Asset Acquisitions

We evaluate acquisitions of assets and other similar transactions to assess whether the transaction should be accounted for as a business combination or asset acquisition by first applying a test to determine if substantially all of the fair value of the gross assets acquired is concentrated into a single identifiable asset or group of similar identifiable assets.

If the test is met, we account for the transaction as an asset acquisition by recognizing net assets based on the consideration paid, which includes transaction costs, on a relative fair value basis.

In an asset acquisition where the cost allocated to acquire in-process research and development (“IPR&D”) has no alternative future use, we immediately recognize the cost of the acquired IPR&D on our condensed consolidated statements of income.

In an asset acquisition, contingent consideration is not recognized as of the acquisition date but instead is recognized as part of the cost of the assets acquired at the time the consideration is paid.

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.

Assets acquired, including intangible assets and 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.

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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.

We perform our goodwill impairment analysis at the reporting unit level, which is one level below our reporting and operating segment structure.

We assigned goodwill to reporting units at the time of acquisition.

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.

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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.

Our identifiable intangible assets with finite useful lives are typically comprised of acquired technologies, customer relationships, 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.

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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.

Janssen’s patents covering the SC formulation of DARZALEX (“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.

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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.

We also earn royalties in connection with our licenses granted under license and development arrangement with our device partner.

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.

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To date, we have not recorded any material adjustments.

Revenue under ENHANZE and Device Collaborative Agreements

Revenue under ENHANZE, Device and Hypercon Technology Collaborative Agreements

ENHANZE Collaboration and License Agreements

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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.

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.

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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.

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.

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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.

Hypercon Technology Collaboration and Licensing Agreements

We have several collaboration and license agreements with collaboration partners who are attempting to formulate Hypercon technology with their existing drugs to develop an additional administrative option.

The collaboration partner is responsible for all development, manufacturing, clinical, regulatory, sales and marketing costs for any products developed under the agreement;

however, the agreement also includes Hypercon performing certain research and development (“R&D”) services to support the collaboration partner in their efforts.

We assessed the nature of the promised goods and services in the contract which includes the license of the Hypercon technology representing a functional license of intellectual property to our customers, R&D services, and manufacturing technology transfer.

These promises are not capable of being distinct performance obligations at this time due to the exclusive proprietary know-how and certain regulatory requirements associated with the manufacturing of the product.

The collaboration partner simultaneously receives and consumes the benefits of the combined performance obligations as data is generated to support regulatory approval submissions.

A significant component of the cost of R&D relates to our clinical trial research consultants, who are assisting with the monitoring of the Hypercon technology to ensure the successful combination of the Hypercon technology with the collaboration partner’s drug.

The agreements include milestone payments, royalties, and an initial upfront payment.

This upfront payment was received from the collaboration partner upon inception of the agreement and recorded as deferred revenue to be recognized as we perform certain R&D services to support the collaboration partner in their efforts to successfully combine Hypercon technology with previously developed products.

While the services are being provided, we allocate a portion of each deferred payment to the individual drug targets.

Revenue is then recognized based upon the expected costs to complete as a percentage of the budget.

These agreements are designed in a way that the R&D services are being completed in partnership with the collaboration partner at the approximate costs;

therefore, the deferred revenue is being recognized as the work is completed for each partner’s drug.

We may incur additional expenses outside of the R&D contract which are invoiced and recognized separately from the upfront payment.

Deferred revenue associated with a target that has not been identified or no work has been performed is classified as other long-term liabilities on the condensed consolidated balance sheets.

Deferred revenue for expenses expected to be incurred within the next 12 months are classified as accrued expenses on the condensed consolidated balance sheets.

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.

We have 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.

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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.

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.

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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.

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.

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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.

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 are party to 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.

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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.

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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.

We recorded a provision for income tax of $ 30.3 million with an effective tax rate of 16.8 % for the three months ended March 31, 2026.

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.

federal statutory rate of 21% is primarily due to decreases from share-based compensation windfall tax benefit, Foreign Derived Deduction Eligible Income benefit, and research and development credit generation, partially offset by state income tax and Section 162(m) disallowance.

Segment Information

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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.

We operate our business in one operating segment, which includes all activities related to the research, development and commercialization of our proprietary enzymes, devices, Hypercon technology and the Surf Bio technology.

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.

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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):

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Prospective or Retrospective We are currently evaluating the impact of the standard on our consolidated financial statements and related disclosures.

Business Combinations

Elektrofi, Inc.

On November 18, 2025, we acquired all outstanding equity interests of Elektrofi, Inc.

according to the terms and conditions of the Agreement and Plan of Merger dated as of September 30, 2025 (the “Elektrofi Merger Agreement”).

Elektrofi is a biopharmaceutical company with an innovative microparticle technology that has been demonstrated in non-clinical testing to enable hyperconcentration of drugs and biologics and reduce the injection volume for the same dosage, potentially expanding opportunities for at-home and health care provider administration.

We acquired Elektrofi as a part of our strategy to expand our drug delivery technology offerings.

Hypercon technology is an innovative microparticle technology that has been demonstrated in non-clinical testing to enable hyperconcentration of drugs and biologics and reduce the injection volume for the same dosage, potentially expanding opportunities for at-home and health care provider administration.

The total purchase consideration of Elektrofi was $ 810.4 million.

Each share of Elektrofi common stock issued and outstanding was converted into the right to receive $ 28.80 per share in cash without interest, less any applicable withholding taxes (“Merger Consideration”).

Additionally, in connection with the transaction, $ 56.5 million was paid to Elektrofi option holders for options granted and outstanding as of November 18, 2025 under the Elektrofi 2015 Equity Compensation Plan.

Other components of purchase consideration included an estimated fair value of contingent consideration of $ 23.0 million related to future milestone payments, and cash paid at closing to settle seller transaction costs of $ 18.4 million paid by us on behalf of Elektrofi.

The acquisition of Elektrofi was funded by cash on hand and rollover equity.

We recognized transaction costs of $ 13.7 million in the year ended December 31, 2025.

These costs are reported in selling, general and administrative expenses in our consolidated statements of income.

Transaction costs include, but are not limited to, investment banker, advisory, legal, and other professional fees.

Purchase Consideration

The total purchase consideration was comprised of the following (in thousands):

Cash consideration payments to stockholders and option holders as of November 18, 2025

Estimated fair value of contingent consideration 23,000

Total purchase consideration

Fair Value of Assets Acquired and Liabilities Assumed

The acquisition of Elektrofi has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations , with Halozyme treated as the accounting acquirer, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair value on the acquisition date.

Acquisition accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement.

The process for estimating the fair values of identifiable intangible assets and certain tangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates.

The table below presents the preliminary estimated fair values of assets acquired and liabilities assumed on the acquisition date based on valuations and management estimates (in thousands).

Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions.

The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our results of operations.

We are still finalizing the allocation of the purchase price, therefore, the fair value estimates assigned to intangible assets, goodwill and the related tax impacts of the acquisition, among other items, are subject to change as additional information is received to complete our analysis and certain tax returns are finalized.

As a result, the

preliminary estimates may be revised during the measurement period.

These differences could change the value of the intangible assets acquired, the contingent liability assumed, and the tax impacts related to the acquisition and could have a material impact on our results of operations and financial position.

Amounts recognized as of acquisition date (as initially reported)

Measurement period adjustments (3)

Amounts recognized as of March 31, 2026 (as adjusted)

Assets acquired

Cash and cash equivalents $ 84,427 $ 710 $ 85,137

Accounts receivable, net 4,755 ( 2,831 ) 1,924

Prepaid expenses and other current assets 879 — 879

Total current assets 90,061 ( 2,121 ) 87,940

Property and equipment, net 7,338 — 7,338

Operating lease right-of-use assets 8,441 — 8,441

163,539 1,963 165,502

Intangible assets 705,000 — 705,000

Other assets 182 — 182

Total assets acquired

$ 974,561 $ ( 158 ) $ 974,403

Liabilities assumed

Accounts payable $ ( 929 ) $ — $ ( 929 )

Accrued expenses and other current liabilities ( 26,803 ) 158 ( 26,645 )

Deferred revenue, current ( 5,674 ) — ( 5,674 )

Operating lease liabilities, current ( 3,440 ) — ( 3,440 )

Other current liabilities ( 51 ) — ( 51 )

Total current liabilities ( 36,897 ) 158 ( 36,739 )

Deferred revenue, net of current portion ( 19,974 ) — ( 19,974 )

Operating lease liabilities, net of current portion ( 4,484 ) — ( 4,484 )

Other liabilities (2)

( 102,816 ) — ( 102,816 )

Total liabilities assumed $ ( 164,171 ) $ 158 $ ( 164,013 )

Net assets acquired 810,392 — 810,392

Less cash acquired ( 84,427 ) ( 710 ) ( 85,137 )

Total purchase price, net of cash acquired $ 725,965 $ ( 710 ) $ 725,255

(1) Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected synergies of the combined operations and the assembled workforce acquired in the acquisition.

Goodwill recognized as a result of the acquisition is not expected to be deductible for tax purposes.

(2) Includes $ 102.8 million of deferred tax liabilities.

(3) The measurement period adjustments have been recorded to reflect facts and circumstances that existed as of the acquisition date.

Identifiable Intangible Assets

The estimated fair value of the Hypercon developed technology platform asset was prepared using the replacement cost method which calculates present-day cost of replacing that asset with a similar asset in a similar condition.

The estimated fair value of customer relationship assets were prepared using the multi-period excess earnings method which calculates the present value of the incremental after-tax cash flows attributable solely to each customer relationship.

The estimated fair value of the trade name asset was prepared using the relief from royalty method which calculates the value of the trade name based on royalties that would be paid if licensed by a third party.

The estimated useful lives are based on forecasted periods of benefit for each intangible asset.

Useful lives and preliminary values are presented in the table below.

Amount (in thousands)

Useful life (years)

Hypercon developed technology platform

Customer relationships

Estimated fair value of intangible assets acquired

Surf Bio, Inc.

On December 22, 2025, we acquired all outstanding equity interests of Surf Bio, Inc.

according to the terms and conditions of the Agreement and Plan of Merger dated as of December 18, 2025 (the “Surf Bio Merger Agreement”).

Surf Bio is a preclinical biopharmaceutical company that is transforming how antibodies and biologics are delivered to patients.

We acquired Surf Bio as a part of our strategy to expand our drug delivery technology offerings.

The total purchase consideration of Surf Bio was $ 305.0 million to selling shareholders, inclusive of $ 10.2 million in transaction expenses.

We acquired $ 6.4 million in cash and restricted cash, of which $ 4.3 million was used to fund seller payments and transaction expenses.

An incremental $ 100.0 million in consideration is contingent to the sellers in the form of milestone payments which are dependent on the occurrence of future events.

The acquisition of Surf Bio was not considered a business combination as Surf Bio did not meet the definition of a business under ASC 805-10, Business Combinations.

Rather, the asset purchase transaction was accounted for under the authoritative guidance for asset acquisitions within ASC 805-50, whereby the underlying asset was deemed an IPR&D asset with no alternative future use.

We allocated the cost of the acquisition, or $ 294.2 million, among the assets acquired based on the relative fair value of such assets.

The $ 294.2 million consisted of $ 294.8 million in consideration paid to the sellers, plus $ 10.2 million of transaction expenses, less $ 10.8 million in accelerated stock-based compensation expense.

The acquired assets’ value is predominately concentrated in the IPR&D asset.

In accordance with ASC 805-50, the fair value allocated to the IPR&D asset, or $ 284.9 million, was recorded in the consolidated statements of income in the year ended December 31, 2025.

The fair value of other assets acquired and liabilities assumed were capitalized to the consolidated balance sheet.

The $ 100.0 million in contingent consideration will be recognized in the future when and if milestones are met (i.e., when the contingent consideration is paid or payable) and does not meet the definition of a derivative.

Fair Value Measurement

Available-for-sale marketable securities consisted of the following (in thousands):

September 30, 2025

March 31, 2026

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

Corporate debt securities $ 71,833 $ 157 $ — $ 71,990

treasury securities $ 8,878 $ — $ ( 5 ) $ 8,873

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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

treasury securities $ 9,002 $ — $ ( 2 ) $ 9,000

Agency bonds 9,844 — ( 16 ) 9,828

Total marketable securities, available-for-sale $ 9,002 $ — $ ( 2 ) $ 9,000

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.

As of March 31, 2026, all available-for-sale marketable securities with a fair market value of $ 8.9 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 March 31, 2026 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

March 31, 2026 December 31, 2025

Estimated Fair Value

Due within one year $ 8,873 $ 9,000

Due after one year but within five years

30,854 165,246

Total estimated fair value of available-for-sale securities

$ 8,873 $ 9,000

(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.

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

March 31, 2026 December 31, 2025

Level 1 Level 2 Total Estimated Fair Value

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Available-for-sale marketable

Asset-backed securities — — — — 251 251

Corporate debt securities — 71,990 71,990 — 102,575 102,575

treasury securities 8,873 — 8,873 9,000 — 9,000

Agency bonds — — — 9,828 — 9,828

Derivative instruments

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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.

As of March 31, 2026, the derivative assets recorded within prepaid expenses and other current assets and prepaid expenses and other assets in our consolidated balance sheets were $ 0.4 million and $ 0.3 million , respectively.

The derivative liabilities recorded within accrued expenses and other long-term liabilities in our condensed consolidated balance

sheets were $ 6.6 million and $ 10.5 million , respectively.

As of December 31, 2025, the derivative liabilities recorded within accrued expenses and other long-term liabilities in our condensed consolidated balance sheets were $ 7.7 million and $ 15.1 million , respectively.

We had no available-for-sale securities that were classified within Level 3 as of March 31, 2026 and December 31, 2025.

A contingent liability with a preliminary value of $ 23.0 million was assumed as part of the Elektrofi acquisition related to future milestone payments.

The acquisition date fair value of contingent consideration was measured using the income approach, specifically the probability weighted expected return method for the development milestone payments.

The fair value of the contingent liability will be remeasured quarterly.

Estimates and assumptions used in the valuation include probability of achieving certain milestones, the expected timing of achieving these milestones, and a discount rate.

These unobservable inputs represent a Level 3 measurement because they are supported by little or no market activity and reflect our own assumptions in measuring fair value.

Changes in the fair value subsequent to the acquisition date will be recognized in our condensed consolidated statements of income.

Our disaggregated revenues were as follows (in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Royalties $ 240,681 $ 168,192

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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 5,603 18,628

Total revenues $ 376,708 $ 264,861

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.

During the three months ended March 31, 2026, we recognized revenue related to licenses granted to partners in prior periods in the amount of $ 240.7 million.

This amount represents royalties earned in the current period.

We recognized $ 2.4 million revenue during the three months ended March 31, 2026 that had been included in accrued expense and other long-term liabilities in our condensed consolidated balance sheets as of December 31, 2025.

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

March 31, 2026 December 31, 2025

Accounts receivable, net $ 457,989 $ 426,273

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Deferred revenues 32,945 35,482

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.

As of March 31, 2026, 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 $ 298.7 million, of which $ 265.8 million relates to unfulfilled product purchase orders and $ 32.9 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 first quarter of 2028.

Of the total deferred revenues of $ 32.9 million, $ 5.7 million is expected to be used by our customers within the next 12 months.

There were no contract assets related to collaboration agreements as of March 31, 2026.

While we may become entitled to receive additional event-based development and regulatory milestones and other fees under our collaborative agreements, which relate to development milestones deemed probable of receipt for intellectual property licenses granted to collaboration partners in prior periods, no amounts were deemed probable.

Certain Balance Sheet Items

Accounts receivable, net and contract assets consisted of the following (in thousands):

September 30,

2026 December 31,

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Revenues under collaborative agreements

21,238 29,452

Royalty payments

2 unchanged sentences

54,388 65,117

Other receivable — 1,612

Contract assets — 15,000

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Inventories consisted of the following (in thousands):

September 30,

2026 December 31,

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Prepaid expenses and other assets consisted of the following (in thousands):

September 30,

2026 December 31,

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Property and equipment, net consisted of the following (in thousands):

September 30,

2026 December 31,

10 unchanged sentences

$ 82,230 $ 82,137

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.

Depreciation and amortization expense was approximately $ 4.2 million and $ 2.7 million, inclusive of ROU asset amortization of $ 2.6 million and $ 1.5 million for the three months ended March 31, 2026 and 2025, respectively.

Accrued expenses consisted of the following (in thousands):

September 30,

2026 December 31,

11 unchanged sentences

$ 140,369 $ 156,193

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.

Expense associated with the accretion of the lease liabilities was approximately $ 0.7 million and $ 0.5 million for the three months ended March 31, 2026 and 2025, respectively.

Total lease expense for the three months ended March 31, 2026 and 2025 was $ 3.1 million and $ 2.0 million, respectively.

Cash paid for amounts related to leases for the three months ended March 31, 2026 and 2025 was $ 2.9 million and $ 1.8 million, respectively.

Goodwill and Intangible Assets, net

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Balance as of December 31, 2025

Balance as of September 30, 2025

Measurement period adjustment

Balance as of March 31, 2026

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).

Our acquired intangible assets are amortized using the straight-line method over their estimated useful lives of seven to fifteen years .

The following table shows the cost, accumulated amortization and weighted average useful life in years for our acquired intangible assets as of March 31, 2026 (in thousands).

Weighted Average Useful Life (in years)

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Auto-injector technology platform 7 $ 402,000 $ 221,378 $ 180,622

XYOSTED proprietary product 10 136,200 52,503 83,697

Hypercon developed technology platform 15 230,000 5,665 224,335

Customer relationships (1)

15 470,000 11,576 458,424

Trade name 15 5,000 123 4,877

Total intangible assets, net $ 1,243,200 $ 291,245 $ 951,955

(1) A partner is currently evaluating the potential return of a target.

Through discussions with the partner, we expect the partner will make a decision by September 2026.

If the partner does decide to return the target in the future without nominating an alternative target with similar future cash flows, we would be required to evaluate the impact to our acquired customer relationship intangibles associated with the Elektrofi acquisition, along with other identified intangibles and goodwill of the reporting unit.

Such assessment could result in a material interim impairment charge to intangibles and/or goodwill, depending on the facts and circumstances.

The following table shows the cost, accumulated amortization and weighted average useful life in years for our acquired intangible assets as of December 31, 2025 (in thousands).

Weighted Average Useful Life (in years)

Gross Carrying Value Accumulated Amortization Net Carrying Value

Auto-injector technology platform

7 $ 402,000 $ 207,021 $ 194,979

XYOSTED proprietary product 10 136,200 49,098 87,102

Total finite-lived intangibles, net

Hypercon developed technology platform

15 230,000 1,831 228,169

ATRS-1902 (IPR&D) Indefinite 48,700

Total intangibles, net $ 348,544

Customer relationships 15 470,000 3,743 466,257

15 5,000 40 4,960

Total intangible assets, net

$ 1,243,200 $ 261,733 $ 981,467

Estimated future annual amortization of finite-lived intangible assets is shown in the following table (in thousands).

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0.875 % Convertible Notes due 2032

In November 2025, we completed the sale of $ 750.0 million in aggregate principal amount of 0.875 % Convertible Senior Notes due 2032 (the “2032 Convertible Notes”).

The net proceeds from the issuance of the 2032 Convertible Notes, after deducting the initial purchasers’ fee of $ 15.0 million, was approximately $ 735.0 million.

We also incurred additional debt issuance costs totaling $ 0.5 million.

Debt issuance costs and the initial purchasers’ fee are presented as a debt discount.

The 2032 Convertible Notes pay interest semi-annually in arrears on May 15th and November 15th of each year at an annual rate of 0.875 %.

The 2032 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 2032 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 2032 Convertible Notes have a maturity date of November 15, 2032.

Holders may convert their 2032 Convertible Notes at their option only in the following circumstances:

(1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2026, 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 indenture for the 2032 Convertible Notes;

(4) if we call such notes for redemption;

and (5) at any time from, and including, May 15, 2032, until the close of business on the second scheduled trading day immediately before the maturity date.

As of March 31, 2026, the 2032 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 2032 Convertible Notes is 11.4683 shares of common stock per $1,000 in principal amount of 2032 Convertible Notes, equivalent to a conversion price of approximately $ 87.20 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 March 31, 2026, we were in compliance with all covenants.

2032 Capped Call Transactions

In connection with the offering of the 2032 Convertible Notes, we entered into capped call transactions with certain counterparties (the “2032 Capped Call Transactions”).

The 2032 Capped Call Transactions are expected generally to reduce potential dilution to holders of our common stock upon conversion of the 2032 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 2032 Convertible Notes.

The cap price of the 2032 Capped Call Transactions is initially $ 136.78 per share of common stock, representing a premium of 100 % above the last reported sale price of $ 68.30 per share of common stock on November 5, 2025, and is subject to certain adjustments under the terms of the 2032 Capped Call Transactions.

As of March 31, 2026, no 2032 Capped Call Transactions had been exercised.

Pursuant to their terms, the 2032 Capped Call Transactions 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 $ 106.8 million for the 2032 Capped Call Transactions, including applicable transaction costs, which was recorded as a reduction to additional paid-in capital in our condensed consolidated balance sheets.

The 2032 Capped Call Transactions are separate transactions entered into by us with certain counterparties, are not part of the terms of the 2032 Convertible Notes, and do not affect any holder’s rights under the 2032 Convertible Notes.

Holders of the 2032 Convertible Notes do not have any rights with respect to the 2032 Capped Call Transactions.

0.00 % Convertible Notes due 2031

In November 2025, we completed the sale of $ 750.0 million in aggregate principal amount of 0.00 % Convertible Senior Notes due 2031 (the “2031 Convertible Notes”).

The net proceeds from the issuance of the 2031 Convertible Notes, after deducting the initial purchasers’ fee of $ 15.0 million, was approximately $ 735.0 million.

We also incurred additional debt issuance costs totaling $ 0.5 million.

Debt issuance costs and the initial purchasers’ fee are presented as a debt discount.

The 2031 Convertible Notes will not bear regular interest and the principal amount of the 2031 Convertible Notes will not accrete.

The 2031 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 2031 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 2031 Convertible Notes have a maturity date of February 15, 2031.

Holders may convert their 2031 Convertible Notes at their option only in the following circumstances:

(3) upon the occurrence of certain corporate events or distributions on our common stock, as described in the indenture for the 2031 Convertible Notes;

(4) if we call such notes for redemption;

and (5) at any time from, and including, August 15, 2030, until the close of business on the scheduled trading day immediately before the maturity date.

As of March 31, 2026, the 2031 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 2031 Convertible Notes is 11.4683 shares of common stock per $1,000 in principal amount of 2031 Convertible Notes, equivalent to a conversion price of approximately $ 87.20 per share of our common stock.

The conversion rate is subject to adjustment.

As of March 31, 2026, we were in compliance with all covenants.

2031 Capped Call Transactions

In connection with the offering of the 2031 Convertible Notes, we entered into capped call transactions with certain counterparties (the “2031 Capped Call Transactions”).

The 2031 Capped Call Transactions are expected generally to reduce potential dilution to holders of our common stock upon conversion of the 2031 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 2031 Convertible Notes.

The cap price of the 2031 Capped Call Transactions is initially $ 136.78 per share of common stock, representing a premium of 100 % above the last reported sale price of $ 68.30 per share of common stock on November 5, 2025, and is subject to certain adjustments under the terms of the 2031 Capped Call Transactions.

As of March 31, 2026, no 2031 Capped Call Transactions had been exercised.

Pursuant to their terms, the 2031 Capped Call Transactions 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 $ 104.0 million for the 2031 Capped Call Transactions, including applicable transaction costs, which was recorded as a reduction to additional paid-in capital in our condensed consolidated balance sheets.

The 2031 Capped Call Transactions are separate transactions entered into by us with certain counterparties, are not part of the terms of the 2031 Convertible Notes, and do not affect any holder’s rights under the 2031 Convertible Notes.

Holders of the 2031 Convertible Notes do not have any rights with respect to the 2031 Capped Call Transactions.

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.

The net proceeds from 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.

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(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;

(3) upon the occurrence of certain corporate events or distributions on our common stock, as described in the indenture 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.

As of March 31, 2026, the 2028 Convertible Notes were not convertible.

1 unchanged sentence

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.

In connection with the offering of the 2032 Convertible Notes and 2031 Convertible Notes, we used a portion of the net proceeds of the offering to enter into privately negotiated agreements with certain holders of the outstanding 2028 Convertible Notes to repurchase their 2028 Convertible Notes for cash.

In connection with the repurchases, we paid approximately $ 342.9 million in cash, which included a premium, inducement expense and accrued interest.

As of March 31, 2026, we were in compliance with all covenants.

2028 Capped Call Transactions

2 unchanged sentences

The cap price of the 2028 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 2028 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.

As of March 31, 2026, no 2028 Capped Call Transactions had been exercised.

Pursuant to their terms, the 2028 Capped Call Transactions 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 2028 Capped Call Transactions, including applicable transaction costs, which was recorded as a reduction to additional paid-in capital in our condensed consolidated balance sheets.

The 2028 Capped Call Transactions are separate transactions entered into by us with certain 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 2028 Capped Call Transactions.

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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.

The net proceeds from 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.

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(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;

(3) upon the occurrence of certain corporate events or distributions on our common stock, as described in the indenture 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.

As of March 31, 2026, the 2027 Convertible Notes were not convertible.

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The conversion rate is subject to adjustment.

As of September 30, 2025, we were in compliance with all covenants.

In connection with the offering of the 2032 Convertible Notes and 2031 Convertible Notes, we used a portion of the net proceeds of the offering to enter into privately negotiated agreements with certain holders of the outstanding 2027 Convertible Notes to repurchase their 2027 Convertible Notes for cash.

In connection with the repurchases, we paid approximately $ 676.8 million in cash, which included a premium, inducement expense and accrued interest.

As of March 31, 2026, we were in compliance with all covenants.

Net Carrying Amounts of our Convertible Notes

The carrying amount and fair value of our Convertible Notes were as follows (in thousands).

September 30,

2026 December 31,

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2028 Convertible Notes 469,999 469,999

2031 Convertible Notes 750,000 750,000

2032 Convertible Notes 750,000 750,000

Total principal amount

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2028 Convertible Notes ( 5,040 ) ( 5,561 )

2031 Convertible Notes

( 14,378 ) ( 15,108 )

2032 Convertible Notes

( 14,684 ) ( 15,217 )

Total unamortized debt discount $ ( 34,935 ) $ ( 36,944 )

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2028 Convertible Notes 464,959 464,438

2031 Convertible Notes

735,622 734,892

2032 Convertible Notes

735,316 734,783

Total carrying amount $ 2,144,639 $ 2,142,630

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2028 Convertible Notes 607,107 624,690

Total fair value of outstanding notes $ 1,959,543 $ 1,549,100

Remaining amortization per period of debt discount (in years)

2031 Convertible Notes

733,433 755,655

2032 Convertible Notes

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,

742,245 764,213

Total fair value of outstanding notes $ 2,300,833 $ 2,374,294

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

Coupon interest

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2028 Convertible Notes 1,175 1,800

2032 Convertible Notes 1,641 —

Total coupon interest $ 2,947 $ 2,303

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2028 Convertible Notes 521 787

2031 Convertible Notes 730 —

2032 Convertible Notes

Total amortization of debt discount $ 2,009 $ 1,649

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2028 Convertible Notes 1,696 2,587

2031 Convertible Notes

2032 Convertible Notes

Total interest expense $ 4,956 $ 3,952

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2028 Convertible Notes 1.5 % 1.5 %

2031 Convertible Notes

2032 Convertible Notes

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 %.

In May 2022, we entered into a credit agreement, which was subsequently amended (i) in August 2022 (the “First Amendment”), (ii) in March 2023 (the “Second Amendment”) and (iii) in November 2025 (the “Third 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 credit agreement as amended by the First Amendment, the Second Amendment and the Third Amendment, the “2022 Credit Agreement”), evidencing a credit facility (the “2022 Facility”) that provides for a $ 750 million revolving credit facility (the “Amended Revolving Credit Facility”).

The Amended Revolving Credit Facility will mature on the earlier of (a) November 5, 2030 and (b) the Springing Revolver Maturity Date (as defined in the 2022 Credit Agreement), unless the Amended Revolving Credit Facility is extended prior to such date in accordance with the 2022 Credit Agreement.

Borrowings under the Amended Revolving Credit Facility bear interest at a rate equal to an applicable margin plus:

(a) the applicable Term SOFR (as defined in the Credit Agreement) rate, 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 1.00 %, and (4) 1.00 %.

The applicable margin for the Amended Revolving Credit 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 Amended Revolving Credit 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 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.

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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.

As of March 31, 2026, the Revolving Credit Facility was undrawn.

We incurred a total of $ 7.3 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.

As of March 31, 2026, the unamortized debt issuance cost related to the revolving credit facility was $ 4.4 million.

Stockholders’ Equity

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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

Three Months Ended

Research and development $ 5,044 $ 3,229

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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

Three Months Ended

Stock options $ 5,541 $ 3,809

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Total share-based compensation expense $ 16,637 $ 10,673

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.

We granted stock options to purchase approximately 0.3 million and 0.4 million shares of common stock during the three months ended March 31, 2026 and 2025, respectively.

The exercise price of stock options granted is equal to the closing price of the common stock on the date of grant.

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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

Three Months Ended March 31,

Expected volatility 29.91 - 41.95 %

39.68 - 39.68 %

39.68 - 42.14 %

40.01 - 40.46 %

Average expected term (in years) 4.7 4.8

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4.34 - 4.34 %

3.74 - 4.34 %

3.65 - 4.70 %

Expected dividend yield — —

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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.

As of March 31, 2026, 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.

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

March 31, 2026

Expense Remaining

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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.

During 2024, we repurchased approximately 4.7 million shares for $ 250.0 million at an average price of $ 53.95 per share.

In May 2025, we announced the second $ 250.0 million share repurchase tranche 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 approximately 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):

Total Number of Shares Purchased

Weighted-Average Price Paid Per Share

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.

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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

Three Months Ended

Net income $ 150,049 $ 118,095

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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

Three Months Ended

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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements