What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 210 added, 116 removed, 763 unchanged (30% of the section changed)

43 unchanged sentences

JAZZ PHARMACEUTICALS PLC

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Product sales, net $ 964,144 $ 946,987 $ 1,806,246 $ 1,831,206

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Foreign exchange gain (loss) 507 ( 2,382 ) ( 1,186 ) 811

Income (loss) before income tax expense (benefit) and equity in loss of investees ( 1,602 ) 55,101

Income tax expense (benefit) 11,669 ( 15,324 )

Income before income tax benefit and equity in loss of investees 137,927 81,784 136,325 136,885

Income tax benefit ( 30,653 ) ( 24,323 ) ( 18,984 ) ( 39,647 )

Equity in loss of investees 12 1,669 1,359 2,674

Net income (loss) $ ( 14,618 ) $ 69,420

Net income (loss) per ordinary share:

Net income $ 168,568 $ 104,438 $ 153,950 $ 173,858

Net income per ordinary share:

Basic $ 2.68 $ 1.63 $ 2.45 $ 2.73

4 unchanged sentences

JAZZ PHARMACEUTICALS PLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Three Months Ended

Net income (loss) $ ( 14,618 ) $ 69,420

June 30, Six Months Ended

2024 2023 2024 2023

Net income $ 168,568 $ 104,438 $ 153,950 $ 173,858

Other comprehensive income (loss):

1 unchanged sentence

Unrealized gain on cash flow hedging activities, net of income tax expense of $ 529 , $ 1,887 , $ 2,249 and $ 1,887 respectively

1,592 5,679 6,769 5,679

Gain on cash flow hedging activities reclassified from accumulated other comprehensive income (loss) to interest expense, net of income tax expense of $ 446 , $ 256 , $ 897 and $ 256 respectively

( 1,344 ) ( 771 ) ( 2,700 ) ( 771 )

Other comprehensive income (loss) ( 5,833 ) 113,407 ( 46,080 ) 258,686

Total comprehensive income (loss) $ ( 54,865 ) $ 214,699

Total comprehensive income $ 162,735 $ 217,845 $ 107,870 $ 432,544

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Balance at March 31, 2024 63,028 $ 6 4,000 $ 55 $ 473 $ 3,714,283 $ ( 882,394 ) $ 864,038 $ 3,696,461

Issuance of ordinary shares in conjunction with exercise of share options 4 — — — — 54 — — 54

Issuance of ordinary shares under employee stock purchase plan 122 — — — — 10,886 — — 10,886

Issuance of ordinary shares in conjunction with vesting of restricted stock units 49 — — — — — — — —

Shares withheld for payment of employee's withholding tax liability — — — — — ( 2,847 ) — — ( 2,847 )

Share-based compensation — — — — — 56,738 — — 56,738

Shares repurchased ( 1,458 ) — — — — — — ( 161,428 ) ( 161,428 )

Other comprehensive loss — — — — — — ( 5,833 ) — ( 5,833 )

Net income — — — — — — — 168,568 168,568

Balance at June 30, 2024 61,745 $ 6 4,000 $ 55 $ 473 $ 3,779,114 $ ( 888,227 ) $ 871,178 $ 3,762,599

JAZZ PHARMACEUTICALS PLC

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

Ordinary Shares Non-voting Euro Deferred Capital

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Balance at March 31, 2023 63,987 $ 6 4,000 $ 55 $ 472 $ 3,511,732 $ ( 980,230 ) $ 803,006 $ 3,335,041

Issuance of ordinary shares in conjunction with exercise of share options 28 — — — — 2,003 — — 2,003

Issuance of ordinary shares under employee stock purchase plan 81 — — — — 8,863 — — 8,863

Issuance of ordinary shares in conjunction with vesting of restricted stock units 58 — — — — — — — —

Shares withheld for payment of employee's withholding tax liability — — — — — ( 4,188 ) — — ( 4,188 )

Share-based compensation — — — — — 61,705 — — 61,705

Shares repurchased ( 756 ) — — — 1 — — ( 95,595 ) ( 95,594 )

Other comprehensive income — — — — — — 113,407 — 113,407

Net income — — — — — — — 104,438 104,438

Balance at June 30, 2023 63,398 $ 6 4,000 $ 55 $ 473 $ 3,580,115 $ ( 866,823 ) $ 811,849 $ 3,525,675

The accompanying notes are an integral part of these condensed consolidated financial statements.

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(In thousands)

Three Months Ended

Six Months Ended

Operating activities

Net income (loss) $ ( 14,618 ) $ 69,420

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 153,950 $ 173,858

Adjustments to reconcile net income to net cash provided by operating activities:

Intangible asset amortization 310,953 301,848

1 unchanged sentence

Acquisition accounting inventory fair value step-up adjustment 62,186 88,272

Acquired in-process research and development 10,000 1,000

Depreciation 15,465 15,089

1 unchanged sentence

Non-cash interest expense 11,200 10,193

Acquired in-process research and development 10,000 1,000

Deferred tax benefit ( 141,568 ) ( 145,395 )

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Acquisition of investments ( 705,000 ) ( 80,000 )

Acquired in-process research and development ( 10,000 ) ( 1,000 )

Purchases of property, plant and equipment ( 13,995 ) ( 9,561 )

Acquired in-process research and development ( 10,000 ) ( 1,000 )

Proceeds from maturity of investments 200,000 —

1 unchanged sentence

Financing activities

Share repurchases ( 161,428 ) ( 95,595 )

Payment of employee withholding taxes related to share-based awards ( 52,143 ) ( 47,454 )

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coli -derived asparaginase.

In September 2023, the European Commission granted marketing authorization for this therapy under the trade name Enrylaze;

In September 2023, the European Commission granted marketing authorization under the trade name Enrylaze.

This therapy is also approved in Great Britain, Canada and Switzerland.

• Zepzelca® (lurbinectedin) , a product approved by FDA in June 2020 under FDA's accelerated approval pathway and launched in the U.S.

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In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair presentation of our financial position and operating results.

The results for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024, for any other interim period or for any future period.

The results for the three and six months ended June 30, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024, for any other interim period or for any future period.

Our significant accounting policies have not changed substantially from those previously described in our Annual Report on Form 10‑K for the year ended December 31, 2023.

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Significant Risks and Uncertainties

Historically, our business was substantially dependent on Xyrem and while we expect that our business will continue to meaningfully depend on oxybate revenues from both Xywav and Xyrem, there is no guarantee that oxybate revenues will remain at current levels.

In this regard, our ability to maintain oxybate revenues and realize the anticipated benefits from our investment in Xywav are subject to a number of risks and uncertainties including, without limitation, those related to the launch of Xywav for the treatment of IH in adults and adoption in that indication;

Historically, our business was substantially dependent on Xyrem.

While we expect that our business will continue to meaningfully depend on oxybate revenues, there is no guarantee that oxybate revenues will remain at current levels.

In this regard, our ability to maintain oxybate revenues and realize the anticipated benefits from our investment in Xywav are subject to a number of risks and uncertainties including, without limitation, those related to the commercialization of Xywav for the treatment of IH in adults and adoption in that indication;

competition from the introduction of two authorized generic, or AG, versions of high-sodium oxybate and a branded fixed-dose, high-sodium oxybate, Avadel’s Lumryz, for treatment of cataplexy and/or EDS in narcolepsy in the U.S.

market, as well as potential future competition from additional AG versions of high-sodium oxybate and from generic versions of high-sodium oxybate and from other competitors;

increased pricing pressure from, changes in policies by, or restrictions on reimbursement imposed by, third party payors, including our ability to maintain adequate coverage and reimbursement for Xywav and Xyrem;

increased rebates required to maintain access to our products;

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and continued acceptance of Xywav and Xyrem by physicians and patients.

A significant decline in oxybate revenues could cause us to reduce our operating expenses or seek to raise additional funds, which would have a material adverse effect on our business, financial condition, results of operations and growth prospects, including on our ability to acquire, in-license or develop new products to grow our business.

A significant decline in oxybate revenues could cause us to reduce our operating expenses or seek to raise additional funds and would have a material adverse effect on our business, financial condition, results of operations and growth prospects, including on our ability to acquire, in-license or develop new products to grow our business.

In addition to risks related specifically to Xywav and Xyrem, we are subject to other challenges and risks related to successfully commercializing a portfolio of oncology products and other neuroscience products, and other risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with:

ongoing clinical research activity and related outcomes, obtaining regulatory approval of our late-stage product candidates;

ongoing clinical research activity and related outcomes;

obtaining regulatory approval of our late-stage product candidates;

effectively commercializing our approved or acquired products such as Epidiolex, Rylaze and Zepzelca;

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regulatory concerns with controlled substances generally and the potential for abuse;

future legislation, action by the U.S.

future legislation;

action by the U.S.

Federal Government authorizing the sale, distribution, use, and insurance reimbursement of non-FDA approved cannabinoid products;

delays or problems in the supply of our products, loss of single source suppliers or failure to comply with manufacturing regulations;

delays or problems in the supply of our products;

loss of single source suppliers or failure to comply with manufacturing regulations;

delays or problems with third parties that are part of our manufacturing and supply chain;

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All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes.

As of March 31, 2024, we had foreign exchange forward contracts with notional amounts totaling $ 537.1 million.

As of March 31, 2024, the outstanding foreign exchange forward contracts had a net asset fair value of $ 0.4 million.

As of March 31, 2024, we had interest rate swap contracts with notional amounts totaling $ 500.0 million.

These outstanding interest rate swap contracts had an asset fair value of $ 5.5 million as of March 31, 2024.

As of June 30, 2024, we had foreign exchange forward contracts with notional amounts totaling $ 489.1 million.

As of June 30, 2024, the outstanding foreign exchange forward contracts had a net liability fair value of $ 0.7 million.

As of June 30, 2024, we had interest rate swap contracts with notional amounts totaling $ 500.0 million.

These outstanding interest rate swap contracts had an asset fair value of $ 5.8 million as of June 30, 2024.

The counterparties to these contracts are large multinational commercial banks, and we believe the risk of nonperformance is not significant.

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We monitor economic conditions in certain European countries which may result in variability of the timing of cash receipts and an increase in the average length of time that it takes to collect accounts receivable outstanding.

Historically, we have not experienced significant credit losses on our accounts receivable and, as of March 31, 2024 and December 31, 2023, allowances on receivables were not material.

As of March 31, 2024, five customers accounted for 78 % of gross accounts receivable, including Express Scripts Specialty Distribution Services, Inc.

and its affiliates, or ESSDS, which accounted for 41 % of gross accounts receivable, McKesson Corporation and affiliates, or McKesson, which accounted for 12 % of gross accounts receivable and ASD Specialty Healthcare LLC, or ASD, which accounted for 12 % of gross accounts receivable.

Historically, we have not experienced significant credit losses on our accounts receivable and, as of June 30, 2024 and December 31, 2023, allowances on receivables were not material.

As of June 30, 2024, five customers accounted for 80 % of gross accounts receivable, including Express Scripts Specialty Distribution Services, Inc.

and its affiliates, or ESSDS, which accounted for 41 % of gross accounts receivable, ASD Specialty Healthcare LLC, or ASD, which accounted for 13 % of gross accounts receivable and McKesson Corporation and affiliates, or McKesson, which accounted for 11 % of gross accounts receivable.

As of December 31, 2023, five customers accounted for 79 % of gross accounts receivable, including ESSDS, which accounted for 41 % of gross accounts receivable, ASD, which accounted for 13 % of gross accounts receivable and McKesson, which accounted for 11 % of gross accounts receivable.

2 unchanged sentences

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures”, which requires additional enhanced tax disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures”, which requires additional enhanced tax disclosures providing greater disaggregation of information in the Company's effective tax rate reconciliation and disaggregates income taxes paid by jurisdiction.

The amendments are effective on a prospective basis, with the option to apply it retrospectively, for fiscal years beginning after December 15, 2024.

2 unchanged sentences

Cash, cash equivalents and investments consisted of the following (in thousands):

March 31, 2024

June 30, 2024

Losses Estimated

14 unchanged sentences

Cash equivalents and investments are considered available-for-sale securities.

We use the specific-identification method for calculating realized gains and losses on securities sold and include them in interest expense, net in the condensed consolidated statements of income (loss).

We use the specific-identification method for calculating realized gains and losses on securities sold and include them in interest expense, net in the condensed consolidated statements of income.

Our investment balances represent time deposits with original maturities of greater than three months and less than one year.

Interest income from available-for-sale securities was $ 23.3 million and $ 10.6 million in the three months ended March 31, 2024 and 2023, respectively.

Interest income from available-for-sale securities was $ 25.4 million and $ 48.6 million in the three and six months ended June 30, 2024, respectively, and $ 14.7 million and $ 25.3 million in the three and six months ended June 30, 2023, respectively .

Fair Value Measurement

The following table summarizes, by major security type, our available-for-sale securities and derivative contracts as of March 31, 2024 and December 31, 2023, that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands):

March 31, 2024 December 31, 2023

The following table summarizes, by major security type, our available-for-sale securities and derivative contracts as of June 30, 2024 and December 31, 2023, that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands):

June 30, 2024 December 31, 2023

(Level 1) Significant

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Totals $ 780,079 $ 691,715 $ 1,471,794 $ 768,586 $ 441,819 $ 1,210,405

Interest rate contracts $ — $ — $ — $ — $ 3,410 $ 3,410

Foreign exchange forward contracts $ — $ 1,579 $ 1,579 $ — $ 681 $ 681

Interest rate contracts — — — — 3,410 3,410

Totals $ — $ 1,579 $ 1,579 $ — $ 4,091 $ 4,091

As of March 31, 2024, our available-for-sale securities included money market funds and time deposits and their carrying values were approximately equal to their fair values.

As of June 30, 2024, our available-for-sale securities included money market funds and time deposits and their carrying values were approximately equal to their fair values.

Money market funds were measured using quoted prices in active markets, which represent Level 1 inputs and time deposits were measured at fair value using Level 2 inputs.

Level 2 inputs are obtained from various third party data providers and represent quoted prices for similar assets in active markets, or these inputs were derived from observable market data, or if not directly observable, were derived from or corroborated by other observable market data.

Level 2 inputs are obtained from various third party data providers and represent quoted prices for similar assets in active markets, or these inputs

were derived from observable market data, or if not directly observable, were derived from or corroborated by other observable market data.

Our derivative assets and liabilities include interest rate and foreign exchange derivatives that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk as well as an evaluation of our counterparties’ credit risks.

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There were no transfers between the different levels of the fair value hierarchy in 2024 or 2023.

As of March 31, 2024 and December 31, 2023, the carrying amount of investments measured using the measurement alternative for equity investments without a readily determinable fair value was $ 4.3 million.

As of June 30, 2024 and December 31, 2023, the carrying amount of investments measured using the measurement alternative for equity investments without a readily determinable fair value was $ 4.3 million.

The carrying amount, which is recorded within other non-current assets, is based on the latest observable transaction price.

As of March 31, 2024, the estimated fair values of the 1.50 % exchangeable senior notes due 2024, or 2024 Notes, the 2.00 % exchangeable senior notes due 2026, or 2026 Notes, which we refer to collectively as the Exchangeable Senior Notes, the 4.375 % senior secured notes, due 2029, or the Secured Notes, and the seven-year $ 3.1 billion term loan B facility, or the Dollar Term Loan were approximately $ 566 million, $ 1.0 billion, $ 1.4 billion and $ 2.7 billion respectively.

As of June 30, 2024, the estimated fair values of the 1.50 % exchangeable senior notes due 2024, or 2024 Notes, the 2.00 % exchangeable senior notes due 2026, or 2026 Notes, which we refer to collectively as the Exchangeable Senior Notes, the 4.375 % senior secured notes, due 2029, or the Secured Notes, and the seven-year $ 3.1 billion term loan B facility, or the Dollar Term Loan were approximately $ 572 million, $ 1.0 billion, $ 1.4 billion and $ 2.7 billion, respectively.

The fair values of each of these debt facilities was estimated using quoted market prices obtained from brokers (Level 2).

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Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures.

As of March 31, 2024 and December 31, 2023, the notional amount of foreign exchange contracts where hedge accounting is not applied was $ 537.1 million and $ 511.7 million, respectively.

The foreign exchange gain (loss) in our condensed consolidated statements of income (loss) included the following gain (losses) associated with foreign exchange contracts not designated as hedging instruments (in thousands):

As of June 30, 2024 and December 31, 2023, the notional amount of foreign exchange contracts where hedge accounting is not applied was $ 489.1 million and $ 511.7 million, respectively.

The foreign exchange gain (loss) in our condensed consolidated statements of income included the following gains (losses) associated with foreign exchange contracts not designated as hedging instruments (in thousands):

Three Months Ended

June 30, Six Months Ended

Foreign Exchange Forward Contracts:

2024 2023 2024 2023

Gain (loss) recognized in foreign exchange gain (loss) $ ( 825 ) $ 353 $ ( 4,911 ) $ 4,628

1 unchanged sentence

These agreements hedge contractual term loan interest rates.

As of March 31, 2024 , the interest rate swap agreements had a notional amount of $ 500.0 million.

As of June 30, 2024 , the interest rate swap agreements had a notional amount of $ 500.0 million.

As a result of these agreements, the interest rate on a portion of our term loan borrowings is fixed at 3.9086 %, plus the borrowing spread, until April 30, 2026.

The impact on accumulated other comprehensive income (loss) and earnings from derivative instruments that qualified as cash flow hedges for the three months ended March 31, 2024 was as follows (in thousands):

Interest Rate Contracts:

The impact on accumulated other comprehensive loss and earnings from derivative instruments that qualified as cash flow hedges for the three and six months ended June 30, 2024 was as follows (in thousands):

Three Months Ended

March 31, 2024

Gain recognized in accumulated other comprehensive income (loss), net of tax $ 5,177

Gain reclassified from accumulated other comprehensive income (loss) to interest expense, net of tax ( 1,356 )

Assuming no change in the U.S dollar Secured Overnight Financing Rate, or Term SOFR, based interest rates from market rates as of March 31, 2024 , $ 3.7 million of gains, net of tax, recognized in accumulated other comprehensive income (loss) will be reclassified to earnings over the next 12 months.

The cash flow effects of our derivative contracts for the three months ended March 31, 2024 and 2023 are included within net cash provided by operating activities in the condensed consolidated statements of cash flows.

June 30, Six Months Ended

Interest Rate Contracts:

2024 2023 2024 2023

Gain recognized in accumulated other comprehensive loss, net of tax $ 1,592 $ 5,679 $ 6,769 $ 5,679

Gain reclassified from accumulated other comprehensive loss to interest expense, net of tax ( 1,344 ) ( 771 ) ( 2,700 ) ( 771 )

Assuming no change in the U.S dollar Secured Overnight Financing Rate, or Term SOFR, based interest rates from market rates as of June 30, 2024 , $ 3.7 million of gains, net of tax, recognized in accumulated other comprehensive loss will be reclassified to earnings over the next 12 months.

The cash flow effects of our derivative contracts for the six months ended June 30, 2024 and 2023 are included within net cash provided by operating activities in the condensed consolidated statements of cash flows.

The following tables summarize the fair value of outstanding derivatives (in thousands):

Classification March 31,

Classification June 30,

2024 December 31,

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The following table summarizes the potential effect on our condensed consolidated balance sheets of offsetting our interest rate and foreign exchange forward contracts subject to such provisions (in thousands):

March 31, 2024

June 30, 2024

Gross Amounts of Recognized Assets/ Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet

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Total inventories $ 542,555 $ 597,039

As of March 31, 2024 and December 31, 2023 inventories included $ 297.3 million and $ 328.0 million, respectively, related to the purchase accounting inventory fair value step-up on inventory acquired as part of our acquisition of GW, which we refer to as the GW Acquisition.

As of June 30, 2024 and December 31, 2023, inventories included $ 264.1 million and $ 328.0 million, respectively, related to the purchase accounting inventory fair value step-up on inventory acquired as part of our acquisition of GW, which we refer to as the GW Acquisition.

Goodwill and Intangible Assets

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Foreign exchange ( 17,199 )

Balance at March 31, 2024 $ 1,739,495

Balance at June 30, 2024 $ 1,735,931

The gross carrying amounts and net book values of our intangible assets were as follows (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Average Useful

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Total finite-lived intangible assets $ 7,753,643 $ ( 2,674,181 ) $ 5,079,462 $ 7,800,209 $ ( 2,382,170 ) $ 5,418,039

The decrease in the gross carrying amount of intangible assets as of March 31, 2024 compared to December 31, 2023 relates to the negative impact of foreign currency translation adjustments primarily due to the weakening of sterling against the U.S.

The decrease in the gross carrying amount of intangible assets as of June 30, 2024, compared to December 31, 2023, relates to the negative impact of foreign currency translation adjustments due to the weakening of the sterling and the euro against the U.S.

The assumptions and estimates used to determine future cash flows and remaining useful lives of our intangible and other long-lived assets are complex and subjective.

They can be affected by various factors, including external factors, such as industry and economic trends, and internal factors such as changes in our business strategy and our forecasts for specific product lines.

Based on finite-lived intangible assets recorded as of March 31, 2024, and assuming the underlying assets will not be impaired and that we will not change the expected lives of the assets, future amortization expenses were estimated as follows (in thousands):

Based on finite-lived intangible assets recorded as of June 30, 2024, and assuming the underlying assets will not be impaired and that we will not change the expected lives of the assets, future amortization expenses were estimated as follows (in thousands):

Year Ending December 31, Estimated Amortization Expense

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Employee compensation and benefits 85,943 121,209

Consulting and professional services 39,539 19,538

Clinical trial accruals 39,043 44,757

Accrued royalties 37,914 30,706

Selling and marketing accruals 25,890 14,743

Accrued collaboration expenses 24,626 10,158

Accrued interest 36,316 36,443

Consulting and professional services 30,543 19,538

Sales return reserve 23,331 20,435

Selling and marketing accruals 21,329 14,743

Current portion of lease liabilities 17,147 19,447

Inventory-related accruals 13,775 13,977

Accrued collaboration expenses 12,554 10,158

Accrued construction-in-progress 9,862 5,141

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dollars (ii) the Euro Term Loan which was drawn by Jazz Lux on the Closing Date in Euros and (iii) the Revolving Credit Facility.

In January 2024, Jazz Lux entered into an amendment, or Repricing Amendment, to the Credit Agreement.

Upon entry into the Repricing Amendment, certain existing lenders converted outstanding Dollar Term Loans into a new tranche of U.S.

dollar term loans, or the Tranche B-1 Dollar Term Loans, and Jazz Lux borrowed $ 201.9 million aggregate principal amount of additional Tranche B-1 Dollar Term Loans, the proceeds of which were used to repay the outstanding Dollar Term Loans that were not converted.

The Tranche B-1 Dollar Term Loans are a separate class of term loans under the Credit Agreement with the same material terms (including with respect to maturity, prepayment, security, covenants and events of default) as the previously outstanding Dollar Term Loans, with the interest rate amended as described below.

The principal amount of Dollar Term Loans outstanding immediately prior to the Repricing Amendment and the outstanding principal amount of Tranche B-1 Dollar Term Loans immediately following the Repricing Amendment, each totaled $ 2.723 billion.

In January 2024, Jazz Lux entered into an amendment, or Repricing Amendment No.1, to the Credit Agreement.

Upon entry into the Repricing Amendment No.1, certain existing lenders converted outstanding Dollar Term Loan into a new tranche of U.S.

In July 2024, Jazz Lux entered into an amendment, or Repricing Amendment No.

2, to the Credit Agreement, or the Amended Credit Agreement.

Upon entry into the Amended Credit Agreement, certain existing lenders converted the outstanding Tranche B-1 Dollar Term Loans into a new tranche of U.S.

dollar term loans, or the Tranche B-2 Dollar Term Loans, and Jazz Lux borrowed $ 289.6 million aggregate principal amount of additional Tranche B-2 Dollar Term Loans, the proceeds of which were used to repay the outstanding Tranche B-1 Dollar Term Loans that were not converted.

The Tranche B-2 Dollar Term Loans are a separate class of term loans under the Amended Credit Agreement with the same material terms (including with respect to maturity, prepayment, security, covenants and events of default) as the previously outstanding Tranche B-1 Dollar Term Loans and the initial Dollar Term Loans incurred on May 5, 2021, with the interest rate amended as described below and the removal of the credit spread adjustment.

The principal amount of Tranche B-1 Dollar Term Loans outstanding immediately prior to the Repricing Amendment No.

2 and the outstanding principal amount of Tranche B-2 Dollar Term Loans immediately following the Repricing Amendment No.2, each totaled $ 2.7 billion.

The Tranche B-2 Dollar Term Loans bear interest at a rate equal to either (a) Term SOFR, or (b) the prime lending rate, in each case, plus an applicable margin.

The applicable margin for the Tranche B-1 Dollar Term Loans is 3.00 % (in the case of Term SOFR borrowings) and 2.00 % (in the case of borrowings at the prime lending rate), a decrease of 50 basis points from the applicable margin on the Initial Dollar Term Loans.

The Tranche B-1 Dollar Term Loans are subject to a Term SOFR floor of 0.50 %.

The applicable margin for the Revolving Credit Facility ranges from 3.25 % to 2.75 % (in the case of Term SOFR borrowings) and 2.25 % to 1.75 % (in the case of borrowings at the prime lending rate), depending on our first lien secured net leverage ratio level.

The Tranche B-1 Dollar Term Loan is subject to a Term SOFR floor of 0.50 % and loans under the Revolving Credit Facility are not subject to a floor.

The applicable margin for the Tranche B-2 Dollar Term Loans is 2.25 % (in the case of Term SOFR borrowings) and 1.25 % (in the case of borrowings at the prime lending rate), a decrease of 75 basis points from the applicable margin on the Tranche B-1 Dollar Term Loans.

The Tranche B-2 Dollar Term Loan is subject to a Term SOFR floor of 0.50 %.

As of June 30, 2024, the interest rate and effective interest rate on the Tranche B-1 Dollar Term Loans were 8.46 % and 9.04 %, respectively.

At the closing of Repricing Amendment no.

2, the interest rate and effective interest rate on the Tranche B-2 Dollar Term Loans were 7.59 % and 8.27 %, respectively.

The Tranche B-2 Dollar Term Loans will amortize in quarterly installments equal to 0.286294791 % of the initial aggregate principal amount thereof, with the remaining balance payable on May 5, 2028.

The Revolving Credit Facility has a commitment fee payable on the undrawn amount ranging from 0.50 % to 0.40 % per annum based upon our first lien secured net leverage ratio.

As of March 31, 2024, the interest rate and effective interest rate on the Tranche B-1 Dollar Term Loans were 8.44 % and 9.04 %, respectively.

As of March 31, 2024, we had an undrawn Revolving Credit Facility totaling $ 500.0 million.

As of June 30, 2024, we had an undrawn Revolving Credit Facility totaling $ 500.0 million.

Exchangeable Senior Notes

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The effective interest rate of the 2026 Notes is 2.26 %.

During the three months ended March 31, 2024 and 2023, we recognized interest expense of $ 5.5 million, of which $ 5.0 million related to the contractual coupon rate and $ 0.5 million related to the amortization of debt issuance costs, respectively.

During the three months ended June 30, 2024 and 2023, we recognized interest expense of $ 5.6 million, of which $ 5.0 million related to the contractual coupon rate and $ 0.6 million related to the amortization of debt issuance costs, respectively.

During the six months ended June 30, 2024 and 2023, we recognized interest expense of $ 11.1 million, of which $ 10.0 million related to the contractual coupon rate and $ 1.1 million related to the amortization of debt issuance costs, respectively.

The total liability of the 2024 Notes is reflected net of issuance costs of $ 11.4 million which will be amortized over the term of the 2024 Notes.

The effective interest rate of the 2024 Notes is 1.79 %.

During the three months ended March 31, 2024 and 2023, we recognized interest expense of $ 2.5 million, of which $ 2.1 million related to the contractual coupon rate and $ 0.4 million related to the amortization of debt issuance costs, respectively.

Scheduled maturities with respect to our long-term debt principal balances outstanding as of March 31, 2024 were as follows (in thousands):

During the three months ended June 30, 2024 and 2023, we recognized interest expense of $ 2.5 million, of which $ 2.1 million related to the contractual coupon rate and $ 0.4 million related to the amortization of debt issuance costs, respectively.

During the six months ended June 30, 2024 and 2023, we recognized interest expense of $ 5.0 million, of which $ 4.2 million related to the contractual coupon rate and $ 0.8 million related to the amortization of debt issuance costs, respectively.

Scheduled maturities with respect to our long-term debt principal balances outstanding as of June 30, 2024 were as follows (in thousands):

Year Ending December 31, Scheduled Long-Term Debt Maturities

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Assuming the applicability of coverage, the willingness of the insurer to assume coverage, and subject to certain retention, loss limits and other policy provisions, we believe the fair value of these indemnification obligations is not significant.

Accordingly, we did not recognize any liabilities relating to these obligations as of March 31, 2024 and December 31, 2023.

Accordingly, we did not recognize any liabilities relating to these obligations as of June 30, 2024 and December 31, 2023.

No assurances can be given that the covering insurers will not attempt to dispute the validity, applicability, or amount of coverage without expensive litigation against these insurers, in which case we may incur substantial liabilities as a result of these indemnification obligations.

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in the United States District Court for the Northern District of Illinois (hereinafter referred to as the GEHA Lawsuit).

On June 18, 2020, a class action lawsuit was filed in the United States District Court for the Northern District of California by the City of Providence, Rhode Island, on behalf of itself and all others similarly situated, against Jazz Pharmaceuticals plc, and Roxane Laboratories, Inc., West-Ward Pharmaceuticals Corp., Hikma Labs Inc., Hikma Pharmaceuticals USA Inc., and Hikma Pharmaceuticals plc, or, collectively, the City of Providence Defendants.

Pharmaceuticals plc, and Roxane Laboratories, Inc., West-Ward Pharmaceuticals Corp., Hikma Labs Inc., Hikma Pharmaceuticals USA Inc., and Hikma Pharmaceuticals plc, or, collectively, the City of Providence Defendants.

On June 30, 2020, a class action lawsuit was filed in the United States District Court for the Northern District of Illinois by UFCW Local 1500 Welfare Fund on behalf of itself and all others similarly situated, against Jazz Pharmaceuticals Ireland Ltd., Jazz Pharmaceuticals, Inc., Roxane Laboratories, Inc., Hikma Pharmaceuticals plc, Eurohealth (USA), Inc.

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On April 26, 2024, we, Hikma, and the plaintiffs filed motions for summary judgment.

The Court scheduled a hearing for these motions on July 19, 2024.

The Court held oral argument on these motions on

July 19, 2024, and has not yet issued a decision.

On June 13, 2024, we filed a motion to decertify the class.

On June 8, 2024, the plaintiffs filed a motion to amend the definition of the certified class.

The Court scheduled a hearing on these motions for August 22, 2024.

Trial in this matter is scheduled for October 28, 2024.

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On June 3, 2022, we filed a motion to dismiss the Ziegler Lawsuit.

While the motion to dismiss was pending, in December 2022, the parties participated in a mediation and reached a tentative settlement, which remains subject to court approval.

While the motion to dismiss was pending, in December 2022, the parties participated in a mediation and reached a tentative settlement, subject to court approval.

On March 20, 2023, the plaintiffs in the Ziegler Lawsuit filed a motion for preliminary approval of the settlement.

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On April 14, 2022, Avadel sued us in the United States District Court for the District of Delaware.

Avadel’s new suit alleges that we misappropriated trade secrets related to Avadel’s once-nightly sodium oxybate development program and breached certain contracts between the parties.

Avadel’s suit alleges that we misappropriated trade secrets related to Avadel’s once-nightly sodium oxybate development program and breached certain contracts between the parties.

Avadel seeks monetary damages, an injunction preventing us from using Avadel’s confidential information, and an order directing the United States Patent and Trademark Office to modify the inventorship of one of our oxybate patents.

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The suit alleges that the filing of Avadel’s application for approval of FT218 is an act of infringement, and that Avadel’s product would infringe the patent if launched.

The suit seeks an injunction to prevent Avadel from launching a product that would infringe the patent, and an award of damages if Avadel does launch an infringing product.

The suit seeks an injunction to prevent Avadel from launching a product that would

infringe the patent, and an award of damages if Avadel does launch an infringing product.

Avadel filed an answer to the complaint and counterclaims asserting that the patent is invalid, that its product would not infringe, and that by listing the patent in the Orange Book, we engaged in unlawful monopolization in violation of the Sherman Act.

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On February 14, 2024, the Court issued a written opinion and order denying both parties’ motions for summary judgment.

Trial regarding our patent infringement claims against Avadel began on February 26, 2024 and concluded on March 4, 2024, with the jury finding both of our asserted patents valid, and awarding us damages for infringement for Avadel’s

past sales of Lumryz.

On April 12, 2024, we filed a motion for a permanent injunction and ongoing royalties.

The Court scheduled a hearing on that motion for June 4, 2024.

The Court held a hearing on that motion on June 4, 2024, but has not yet issued a decision.

The Court scheduled a trial regarding Avadel’s counterclaims for unlawful monopolization for November 3, 2025 and a trial regarding Avadel’s trade secret misappropriation claims for December 15, 2025.

On March 13, 2024 and March 19, 2024, we filed motions to stay Avadel’s unlawful monopolization counterclaim and trade secret claims, respectively, pending resolution of post-trial motions and potential appeals in the patent infringement suit.

Both motions to stay remain pending.

On May 24, 2024, the Court denied the motion to stay the unlawful monopolization counterclaim and the previously-filed motion to dismiss the same.

On June 7, 2024, we filed a motion for reargument or, in the alternative, to certify the decision for interlocutory appeal.

That motion remains pending and no hearing date has been set.

On July 21, 2022, Avadel filed a lawsuit against FDA in the United States District Court for the District of Columbia, challenging FDA’s determination that Avadel was required to file a paragraph IV certification regarding one of our Orange Book listed patents.

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On January 19, 2023, we filed an additional lawsuit against Lupin in the United States District Court for the District of New Jersey alleging that by filing its ANDA, Lupin infringed the newly-issued patent referenced in its November 2022 paragraph IV certification, as well as another patent that issued in January 2023.

The suit seeks a permanent injunction to prevent Lupin from introducing a generic version of Xywav that would infringe the two patents in suit.

The suit seeks a permanent injunction to prevent Lupin from introducing a generic version of Xywav that would infringe the two patents

On February 15, 2023, the Court consolidated the new lawsuit with the two suits we previously filed against Lupin.

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On January 11, 2024, the Court issued an order granting in part and denying in part our motion to dismiss.

The Court scheduled a claim construction hearing for September 20, 2024 relating to disputed terms in the asserted patents.

The Court in the Epidiolex Patent Litigation scheduled trial for September 2025.

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The specific terms of the Alkem settlement are confidential.

The settlements with Padagis, Teva and Alkem do not resolve the litigation against the other seven Epidiolex ANDA Filers, which is ongoing.

On June 7, 2024, we entered into a settlement agreement with MSN Laboratories Private, Ltd.

and MSN Pharmaceuticals, Inc., or together MSN, that resolved our patent litigation with MSN related to Epidiolex.

Under the settlement agreement, we granted MSN a license to manufacture, market, and sell its generic version of Epidiolex on a date which remains confidential.

The specific terms of the MSN settlement are confidential.

The settlements with Padagis, Teva, Alkem and MSN do not resolve the litigation against the other six Epidiolex ANDA Filers, which is ongoing.

We cannot predict the specific timing or outcome of events in these matters with respect to the remaining defendants or the impact of developments involving any specific parties or patents on other ongoing proceedings with any specific Epidiolex ANDA Filer.

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The suit seeks an order that the effective date of FDA approval of each Epidiolex ANDA Filer’s application shall be a date no earlier than the expiration of the newly-issued patents.

In March and April 2024, we received notice from certain of the Epidiolex ANDA Filers that they had each filed a paragraph IV certification regarding one or more newly-issued patents listed in the Orange Book for Epidiolex.

On July 3, 2024, we filed an additional lawsuit against six of the original Epidiolex ANDA Filers with whom we have not previously settled.

We filed this lawsuit in the United States District Court for the District of New Jersey alleging that, by filing its ANDA, each Epidiolex ANDA Filer infringed the newly-issued patents related to methods of treatment using Epidiolex.

The suit seeks an order that the effective date of FDA approval of each Epidiolex ANDA Filer’s application shall be a date no earlier than the expiration of the newly-issued patents.

Epidiolex also has orphan drug exclusivity, or ODE, for the treatment of seizures associated with LGS or DS in patients 2 years of age and older through September 28, 2025, and for the treatment of seizures associated with LGS or DS in patients between 1 and 2 years of age and for the treatment of seizures associated with TSC through July 31, 2027.

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The MSP complaint alleges that the Defendants conspired to increase the price and quantity dispensed of Xyrem and Prialt, in violation of the Racketeer Influenced and Corrupt Organizations Act and several state laws.

The allegations relate generally to the conduct at issue in the investigation conducted by the United States Department of Justice from 2016-2019, involving the Company’s contributions to certain charitable foundations.

The allegations relate generally to the conduct

at issue in the investigation conducted by the United States Department of Justice from 2016-2019, involving the Company’s contributions to certain charitable foundations.

MSP seeks monetary damages, restitution, disgorgement, and a declaration that the conduct alleged is unlawful.

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The Court scheduled a hearing on the motion for June 13, 2024.

On June 21, 2024, the Court cancelled the hearing.

On July 22, 2024, the Court granted the motion.

The Court set a deadline of August 12, 2024 to file a second amended complaint.

No trial date has been set for this matter.

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Jazz further alleges that, in doing so, FDA failed to follow its own regulations, failed to follow established agency policy without providing a reasoned explanation for the departure, reversed prior decisions by its own staff and experts without a reasoned explanation, and disregarded the relevant scientific literature and data.

and that approval of the Lumryz NDA was in excess of FDA’s statutory authority and was made without observance of procedure required by law.

The complaint, filed pursuant to the Administrative Procedure Act, seeks to have the Court vacate and set aside FDA’s approval of the Lumryz NDA and seeks a declaration that FDA’s approval of the Lumryz NDA was arbitrary, capricious, an abuse of discretion and otherwise not in accordance with law and that approval of the Lumryz NDA was in excess of FDA’s statutory authority and was made without observance of procedure required by law.

On September 15, 2023, we filed a motion for summary judgment.

On October 20, 2023, Avadel and FDA filed cross motions for summary judgment.

Oral argument on these motions is currently scheduled for May 10, 2024.

Oral argument on these motions was held on May 10, 2024.

The Court has not yet issued a decision.

Qui tam matter

In July 2022, we received a subpoena from the U.S.

Attorney’s Office, or USAO, for the District of Massachusetts requesting documents related to Xyrem and U.S.

8,772,306 (“Method of Administration of Gamma Hydroxybutyrate with Monocarboxylate Transporters”), product labeling changes for Xyrem, communications with FDA and the USPTO, pricing of Xyrem, and other related documents.

On July 18, 2024, the United States District Court for the District of Massachusetts unsealed a qui tam whistleblower lawsuit underlying the USAO’s subpoena, captioned 1:21-cv-10891-PBS and originally filed under seal on May 27, 2021.

The public docket in this matter indicates that on May 24 and June 7, 2024, respectively, the United States and a number of states named in the whistleblower complaint declined to intervene in this matter.

As such, private whistleblower litigation will proceed in the United States District Court for the District of Massachusetts.

From time to time we are involved in legal proceedings arising in the ordinary course of business.

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Share Repurchase Program

In November 2016, our board of directors authorized a share repurchase program and, as of March 31, 2024, had authorized the repurchase of ordinary shares having an aggregate purchase price of up to $ 1.5 billion, exclusive of any brokerage commissions.

In November 2016, our board of directors authorized a share repurchase program and, as of June 30, 2024, had authorized the repurchase of ordinary shares having an aggregate purchase price of up to $ 1.5 billion, exclusive of any brokerage commissions.

Under this program, which has no expiration date, we may repurchase ordinary shares from time to time on the open market.

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The share repurchase program may be modified, suspended or discontinued at any time without prior notice.

During the three months ended March 31, 2024, no shares were repurchased.

As of March 31, 2024, the remaining amount authorized under the share repurchase program was $ 161.4 million, exclusive of any brokerage commissions.

During the three and six months ended June 30, 2024, we spent a total of $ 161.4 million to purchase 1.5 million of our ordinary shares under the share repurchase program at an average total purchase price, including commissions, of $ 110.75 per share.

During the three and six months ended June 30, 2023 , we spent a total of $ 95.6 million to purchase 0.8 million of our ordinary shares under the share repurchase program at an average total purchase price, including commissions, of $ 126.37 per share.

All ordinary shares repurchased were cancelled.

As of June 30, 2024, the remaining amount authorized under the share repurchase program was $ 47,475 , exclusive of any brokerage commissions.

In July 2024, our board of directors authorized a new share repurchase program to repurchase ordinary shares having an aggregate purchase price of $ 500 million, exclusive of any brokerage commissions.

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss as of March 31, 2024 and December 31, 2023 were as follows (in thousands):

The components of accumulated other comprehensive loss as of June 30, 2024 and December 31, 2023 were as follows (in thousands):

Net Unrealized

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Other comprehensive income (loss) before reclassifications 6,769 ( 50,149 ) ( 43,380 )

Amounts reclassified from accumulated other comprehensive income (loss) ( 1,356 ) — ( 1,356 )

Amounts reclassified from accumulated other comprehensive loss ( 2,700 ) — ( 2,700 )

Other comprehensive income (loss), net 4,069 ( 50,149 ) ( 46,080 )

Balance at March 31, 2024 $ 4,056 $ ( 886,450 ) $ ( 882,394 )

During the three months ended March 31, 2024, other comprehensive income (loss) primarily reflects foreign currency translation adjustments, primarily due to the weakening of sterling and the euro against the U.S.

Net Income (Loss) per Ordinary Share

Basic net income (loss) per ordinary share is based on the weighted-average number of ordinary shares outstanding.

Diluted net income (loss) per ordinary share is based on the weighted-average number of ordinary shares outstanding and potentially dilutive ordinary shares outstanding.

Basic and diluted net income (loss) per ordinary share were computed as follows (in thousands, except per share amounts):

Balance at June 30, 2024 $ 4,304 $ ( 892,531 ) $ ( 888,227 )

During the six months ended June 30, 2024, other comprehensive income (loss) primarily reflects foreign currency translation adjustments, primarily due to the weakening of the sterling and the euro against the U.S.

Net Income per Ordinary Share

Basic net income per ordinary share is based on the weighted-average number of ordinary shares outstanding.

Diluted net income per ordinary share is based on the weighted-average number of ordinary shares outstanding and potentially dilutive ordinary shares outstanding.

Basic and diluted net income per ordinary share were computed as follows (in thousands, except per share amounts):

Three Months Ended

Net income (loss) $ ( 14,618 ) $ 69,420

June 30, Six Months Ended

2024 2023 2024 2023

Net income $ 168,568 $ 104,438 $ 153,950 $ 173,858

Effect of interest on assumed conversions of Exchangeable Senior Notes, net of tax 4,878 7,076 9,733 14,039

Net income (loss) for dilutive net income (loss) per ordinary share $ ( 14,618 ) $ 76,383

Net income for dilutive net income per ordinary share $ 173,446 $ 111,514 $ 163,683 $ 187,897

Weighted-average ordinary shares used in per share calculations - basic 62,882 63,991 62,710 63,744

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Weighted-average ordinary shares used in per share calculations - diluted 69,625 73,540 69,684 73,657

Net income (loss) per ordinary share:

Net income per ordinary share:

Basic $ 2.68 $ 1.63 $ 2.45 $ 2.73

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Potentially dilutive ordinary shares from our employee equity incentive and purchase plans are determined by applying the treasury stock method to the assumed vesting of outstanding restricted stock units, or RSUs, and performance-based restricted stock units, or PRSUs, the assumed exercise of share options and the assumed issuance of ordinary shares under our employee stock purchase plan, or ESPP.

Potentially dilutive ordinary shares from the Exchangeable Senior Notes are determined by applying the if-converted method to the assumed issuance of ordinary shares upon exchange of the Exchangeable Senior Notes.

Potentially dilutive ordinary shares from the Exchangeable Senior Notes are determined by applying the if-converted method to the assumed issuance of ordinary shares upon exchange of the

Exchangeable Senior Notes.

In August 2023, we made an irrevocable election to fix the settlement method for exchanges of the 2024 Notes to a combination of cash and ordinary shares of the Company with a specified cash amount per $1,000 principal amount of the 2024 Notes of $1,000.

As a result, the assumed issuance of ordinary shares upon exchange of the 2024 Notes has only been included in the calculation of diluted net income per ordinary share in the three months ended March 31, 2023.

The potential issue of ordinary shares upon exchange of the 2026 Notes was anti-dilutive and had no impact on diluted net loss per ordinary share for the three months ended March 31, 2024.

The following table represents the weighted-average ordinary shares that were excluded from the calculation of diluted net income (loss) per ordinary share for the periods presented because including them would have an anti-dilutive effect (in thousands):

As a result, the assumed issuance of ordinary shares upon exchange of the 2024 Notes has only been included in the calculation of diluted net income per ordinary share in the three and six months ended June 30, 2023.

In July 2024, we made an irrevocable election to fix the settlement method for exchanges of the 2026 Notes and, as a result, an exchanging noteholder will receive (i) up to $ 1,000 in cash per $1,000 principal amount of the 2026 Notes and (ii) any combination of cash and/or ordinary shares of the Company, for any exchange consideration in excess of $ 1,000 per $1,000 principal amount of the 2026 Notes.

The following table represents the weighted-average ordinary shares that were excluded from the calculation of diluted net income per ordinary share for the periods presented because including them would have an anti-dilutive effect (in thousands):

Three Months Ended

Exchangeable Senior Notes 6,418 —

June 30, Six Months Ended

2024 2023 2024 2023

Employee equity incentive and purchase plans 6,928 5,700 4,820 3,386

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Xywav $ 368,472 $ 326,564 $ 683,772 $ 604,325

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

United States $ 924,592 $ 884,706 $ 1,732,806 $ 1,694,822

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

ESSDS 42 % 51 % 42 % 51 %

McKesson 12 % 12 % 12 % 12 %

ASD 10 % 5 % 8 % 5 %

Cardinal Health, Inc.

8 % 10 % 8 % 10 %

Financing and payment

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Selling, general and administrative $ 35,137 $ 40,485 $ 75,350 $ 77,887

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

RSUs granted (in thousands) 55 66 2,010 1,637

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

PRSUs granted (in thousands) 16 5 313 257

Grant date fair value $ 112.60 $ 139.26 $ 134.99 $ 157.72

As the PRSUs granted in each year are subject to a market condition, the grant date fair value for such PRSUs was based on a Monte Carlo simulation model.

For the PRSUs granted that are subject to a market condition, the grant date fair value for such PRSUs was based on a Monte Carlo simulation model.

For PRSUs granted without a market condition, the fair value is determined based on the market price of our ordinary shares on the date of grant.

The Company evaluated the performance targets in the context of its current long-range financial plan and its product candidate development pipeline and recognized expense based on the probable number of awards that will ultimately vest.

As of March 31, 2024, compensation cost not yet recognized related to unvested RSUs, PRSUs, ESPP and share options was $ 435.9 million, $ 51.5 million, $ 8.3 million and $ 0.3 million, respectively, which is expected to be recognized over a weighted-average period of 3.0 years, 1.8 years, 1.1 years and 0.5 years, respectively.

Our income tax expense was $ 11.7 million for the three months ended March 31, 2024, resulting primarily from tax deficiencies from share based compensation.

Our income tax benefit was $ 15.3 million for the same period in 2023, relating to tax arising on income or losses in Ireland, the U.K., the U.S.

and certain other foreign jurisdictions, offset by deductions on subsidiary equity, foreign derived intangible income, or FDII, and patent box benefits.

As of June 30, 2024, compensation cost not yet recognized related to unvested RSUs, PRSUs, ESPP and share options was $ 389.4 million, $ 41.1 million, $ 12.3 million and $ 0.2 million, respectively, which is expected to be recognized over a weighted-average period of 2.8 years, 1.6 years, 1.3 years and 0.5 years, respectively.

Our income tax benefit was $ 30.7 million and $ 19.0 million for the three and six months ended June 30, 2024, respectively, compared to $ 24.3 million and $ 39.6 million for the same periods in 2023, relating to tax arising on income or losses in Ireland, the U.K., the U.S.

and certain other foreign jurisdictions and tax deficiencies from share based compensation, offset by deductions on subsidiary equity, foreign derived intangible income benefits and tax credits.

Our net deferred tax liability is primarily related to acquired intangible assets, and is net of deferred tax assets related to U.S.

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In October 2022 and in January 2023, we received tax assessment notices from the Luxembourg taxing authorities for all years under examination relating to certain transfer pricing and other adjustments.

The notices propose additional Luxembourg income tax of approximately $ 24.2 million, translated at the foreign exchange rate as March 31, 2024.

The notices propose additional Luxembourg income tax of approximately $ 24.0 million, translated at the foreign exchange rate as June 30, 2024.

We disagree with the proposed assessments and are contesting them vigorously.

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2) Act 2023 (the "Finance Act").

The Finance Act closely follows the EU Minimum Tax Directive and OECD Guidance released to date.

The Finance Act closely follows the EU Minimum Tax Directive and certain OECD Guidance released to date.

The Company is within the scope of these rules, which took effect from January 1, 2024.

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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