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Item 1A. Risk Factors

2026-02-24 compared with 2025-02-26 · 359 added, 273 removed, 696 unchanged (48% of the section changed)

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

In this regard, o ur ability to maintain oxybate revenues and realize the anticipated benefits from our investment in Xywav are subject to a number of risks and uncertainties as discussed in greater detail below, including:

In this regard, o ur ability to mai ntain oxybate revenues and realize the anticipated benefits from our investment in Xywav are subject to a number of risks and uncertainties as discussed in greater detail below, including:

those related to the commercialization of Xywav for the treatment of IH in adults and adoption in that indication;

competition from the introduction of AG versions of high-sodium oxybate and branded products, such as Avadel’s once-nightly dose, high-sodium oxybate branded product Lumryz, for treatment of cataplexy and/or EDS in adults with narcolepsy in the U.S.

market, as well as potential future competition from additional AG and 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;

competition from the introduction of AG versions of high-sodium oxybate and branded products, such as Alkermes’ once-nightly dose, high-sodium oxybate branded product Lumryz (acquired through its acquisition of Avadel), for treatment of cataplexy and/or EDS in adults with narcolepsy in the U.S.

market, as well as potential future competition from generic versions of high-sodium oxybate, including a generic version of high-sodium oxybate from Amneal approved in September 2025, from Ascent approved in November 2025, and from other competitors ;

increased rebates required to maintain access to our products;

challenges to our intellectual property around Xyrem and/or Xywav , including from pending antitrust and intellectual property litigation;

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

In addition, a wholly owned subsidiary of Hikma launched its AG version of high-sodium oxybate in January 2023 and Amneal launched its AG version of high-sodium oxybate in July 2023.

For a discussion of risks associated with maintaining the AG royalty revenue from these AG products, see the risk factor below titled “ The introduction of new products in the U.S.

market that compete with, or otherwise disrupt the market for, our oxybate products has adversely affected and may continue to adversely affect sales of our oxybate products .” We have seen a negative impact and expect to see a further negative impact on our oxybate revenues as a result of these AG products and Avadel’s Lumryz and any generic products and new branded products.

A substantial 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.

challenges to our intellectual property around Xyrem and/or Xywav , including from pending intellectual property litigation;

and continued acceptance of Xywav by physicians and patients .

For a discussion of risks associated with maintaining the AG royalty revenue from the Hikma AG, see the risk factor below titled “ The introduction of new products in the U.S.

market that compete with, or otherwise disrupt the market for, our oxybate products has adversely affected and may continue to adversely affect sales of our oxybate products .” We have seen a negative impact and expect to see a further negative impact on our oxybate revenues as a result of AG products and Alkermes’ Lumryz and any generic products and new branded products that may compete with our oxybate products.

A substantial 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.

The introduction of new products in the U.S.

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Amneal launched its AG version of high-sodium oxybate in July 2023.

At this time, Amneal has rights to sell a low-single-digit percentage of historical Xyrem sales over each 6-month sales period.

At this time, Lupin and Par have elected not to launch an AG product.

Amneal had rights to sell a low-single-digit percentage of historical Xyrem sales over each 6-month sales period.

Lupin and Par never elected to launch an AG product.

AG products are distributed through the same REMS as Xywav and Xyrem.

We also granted each of Amneal, Lupin and Par a license to launch its own generic high-sodium oxybate product under its ANDA on or after December 31, 2025, or earlier under certain circumstances, including the circumstance where Hikma elects to launch its own generic product.

If Amneal, Lupin or Par elects to launch its own generic product under such circumstance, it will no longer have the right to sell an AG product.

In September 2025, Amneal received FDA approval for a generic version of high-sodium oxybate.

In addition, in November 2025, Ascent received FDA approval for a generic version of high-sodium oxybate.

As of December 31, 2025, Amneal’s rights to sell its AG version of high-sodium oxybate terminated.

In our settlements with each of six other ANDA filers, we granted each a license to launch its own generic high-sodium oxybate product under its ANDA on or after December 31, 2025, or earlier under certain circumstances, including circumstances where Hikma launches its own generic high-sodium oxybate product.

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Generic competition often results in decreases in the net prices at which branded products can be sold.

A component of drug pricing is the manufacturer’s list price for a drug to wholesalers or direct purchasers in the U.S.

A component of drug pricing is the manufacturer’s list price for a drug to

wholesalers or direct purchasers in the U.S.

(without discounts, rebates or other reductions) referred to as the WAC.

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using an NDA approval pathway under Section 505(b)(2) and referencing the safety and efficacy data for Xyrem.

For example, we face competition from branded products for treatment of cataplexy and/or EDS in narcolepsy, such as Avadel’s Lumryz.

For example, we face competition from branded products for treatment of cataplexy and/or EDS in narcolepsy, such as Alkermes’ Lumryz (acquired through its acquisition of Avadel).

On May 1, 2023, Avadel announced that it had received FDA approval and ODE through May 1, 2030 for Lumryz, a fixed-dose, high-sodium oxybate which uses its proprietary technology for the treatment of EDS and cataplexy in patients with narcolepsy.

For additional information on litigation involving this matter, see "FDA Litigation" in Note 13, Commitments and Contingencies-Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

Xyrem and Xywav also face increased competition from other branded entrants to treat EDS in narcolepsy such as pitolisant and Sunosi.

We expect that Xywav for the treatment of both cataplexy and EDS in patients with narcolepsy will continue to face competition from generic or AG high-sodium oxybate products or branded entrants in narcolepsy, such as Avadel’s Lumryz, notwithstanding FDA recognizing ODE for Xywav.

For example, we received notices in June 2021 and February 2023, that Lupin and Teva, respectively, filed ANDAs for generic versions of Xywav.

On September 3, 2025, Avadel announced plans to develop and commercialize with XWPharma Ltd.

a no salt, once nightly valiloxybate product for the treatment of narcolepsy and IH.

Xyrem and Xywav also face increased competition from other branded entrants to treat EDS in narcolepsy such as Wakix and Sunosi, which we sold to Axsome in 2022.

Other companies have announced that they have product candidates in various phases of development to treat the symptoms of narcolepsy, such as Axsome’s reboxetine, and various companies are performing R&D on orexin 2 receptor agonists for the treatment of sleep disorders, including narcolepsy and IH, which companies include Takeda, Merck & Co., Inc., Eisai Co., Ltd., Centessa Pharmaceuticals plc and Alkermes.

In this regard, Alkermes acquired Avadel in February 2026, the strategic rationale for which Alkermes has stated includes the combined companies supporting a broad development strategy for Alkermes’ portfolio of orexin 2 receptor agonists and supporting the advancement of clinical studies to support potential label expansion opportunities for Lumryz.

We expect that Xywav for the treatment of both cataplexy and EDS in patients with narcolepsy will continue to face competition from generic or AG high-sodium oxybate products or branded entrants in narcolepsy, such as Alkermes’ Lumryz, notwithstanding FDA recognizing ODE for Xywav.

For example, we received notices in June 2021, February 2023 and July 2025 that Lupin, Teva and Granules, respectively, filed ANDAs for generic versions of Xywav.

On October 13, 2023, Lupin announced that it has received tentative approval for its application to market a generic version of Xywav.

In addition, in July 2025, we received notice from Granules that it has filed with FDA an ANDA for a generic version of Xywav.

Furthermore, in January 2026, we received notices from Tris Pharma that it had filed with FDA a Section 505(b)(2) NDA for generic versions of Xyrem and Xywav.

We have filed patent infringement suits against these ANDA filers.

For additional information see “ Xywav Patent Litigation ” in Note 13, Commitments and

Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

For additional information see “ Xywav Patent Litigation ” and “ Tris Pharma Patent Litigation ” in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

Additional companies may file ANDAs seeking to market a generic version of Xywav which could lead to additional patent litigation or challenges with respect to Xywav and/or additional competition.

Moreover, generic or AG high-sodium oxybate products or branded high-sodium oxybate entrants in narcolepsy, such as Avadel’s Lumryz, as well as non-oxybate products intended for the treatment of EDS or cataplexy in narcolepsy or IH including new market entrants, even if not directly competitive with Xywav or Xyrem, have had and may continue to have the effect of changing treatment regimens and payor or formulary coverage of Xywav or Xyrem in favor of other products, and indirectly adversely affect sales of Xywav and Xyrem.

Examples of such new market entrants of non-oxybate products include pitolisant, a drug that was approved by FDA in 2019 for the treatment of EDS in adult patients with narcolepsy and approved by FDA in 2020 for an adult cataplexy indication in the U.S.

Pitolisant has also been approved and marketed in Europe to treat adult patients with narcolepsy, with or without cataplexy, and to treat EDS in obstructive sleep apnea.

Harmony Biosciences has announced a phase 3 study for pitolisant for IH after receiving a refusal to file from FDA in February 2025.

In addition, we are also aware that prescribers often prescribe branded or generic medications for cataplexy and IH, before or instead of prescribing oxybate therapy including Xywav and Xyrem, and that payors often require patients to try such medications before they will cover Xywav or Xyrem, even if they are not approved for this use.

Moreover, generic or AG high-sodium oxybate products or branded high-sodium oxybate entrants in narcolepsy, such as Alkermes’ Lumryz, as well as non-oxybate products intended for the treatment of EDS or cataplexy in narcolepsy or IH including new market entrants, even if not directly competitive with Xywav or Xyrem, have and may continue to have the effect of changing treatment regimens and payor or formulary coverage of Xywav or Xyrem in favor of other products, and indirectly adversely affect sales of Xywav and Xyrem.

Examples of such new market entrants of non-oxybate products include Wakix, a drug that was approved by FDA in 2019 for the treatment of EDS in adult patients with narcolepsy and approved by FDA in 2020 for an adult cataplexy indication in the U.S.

Wakix has also been approved and marketed in Europe to treat adult patients with narcolepsy, with or without cataplexy, and to treat EDS in obstructive sleep apnea.

Harmony Biosciences announced a phase 3 study for pitolisant for IH after receiving a refusal to file from FDA in February 2025.

In addition, Alkermes acquired Avadel in February 2026, which may strengthen both companies and we may experience increased competition from the combined company.

We are also aware that prescribers often prescribe branded or generic medications for cataplexy and IH, before or instead of prescribing oxybate therapy including Xywav and Xyrem, and that payors often require patients to try such medications before they will cover Xywav or Xyrem, even if they are not approved for this use.

Examples of such products are described in “Business—Competition” in Part I, Item 1 of this Annual Report on Form 10‑K.

We expect that the approval and launch of AG products or other generic versions of Xyrem or Xywav and the approval and launch of any other sodium oxybate product, such as Avadel’s Lumryz, or alternative product that treats narcolepsy will continue to have a negative impact on, and could have a material adverse effect on, our sales of Xywav and Xyrem and on our business, financial condition, results of operations and growth prospects.

We expect that the approval and launch of AG products or other generic versions of Xyrem or Xywav and the approval and launch of any other sodium oxybate product, such as Alkermes’ Lumryz, or alternative product that treats narcolepsy will continue to have a negative impact on, and could have a material adverse effect on, our sales of Xywav and Xyrem and on our business, financial condition, results of operations and growth prospects.

The distribution and sale of our oxybate products are subject to significant regulatory restrictions, including the requirements of a REMS and safety reporting requirements, and these regulatory and safety requirements subject us to risks and uncertainties, any of which could negatively impact sales of Xywav and Xyrem.

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In addition, any new central pharmacy would need to be registered with the DEA, and certified under the REMS and would also need to implement the particular processes, procedures and activities necessary to distribute under the Xywav and Xyrem REMS.

Transitioning to a new pharmacy could result in product shortages, which would negatively affect sales of Xywav and Xyrem, result in additional costs and expenses

for us and/or take a significant amount of time, any of which could materially and adversely affect our business, financial condition, results of operations and growth prospects.

Transitioning to a new pharmacy could result in product shortages, which would negatively affect sales of Xywav and Xyrem, result in additional costs and expenses for us and/or take a significant amount of time, any of which could materially and adversely affect our business, financial condition, results of operations and growth prospects.

In its approval of Hikma’s ANDA, FDA waived the requirement of a single shared REMS with the Xywav and Xyrem REMS, approving Hikma’s ANDA with a generic high-sodium oxybate REMS separate from the Xywav and Xyrem REMS, except for the requirement that the high-sodium oxybate REMS program pharmacies contact the Xywav and Xyrem REMS by phone to verify and report certain information.

The generic high-sodium oxybate REMS was approved with the condition that it be open to all future sponsors of ANDAs or NDAs for high-sodium oxybate products.

In its approval of Avadel’s high-sodium oxybate product, FDA also approved a separate REMS for that product, also with a requirement that the pharmacies in the Avadel-sponsored REMS contact the Xywav and Xyrem REMS to verify and report certain information.

In its approval of Avadel’s high-sodium oxybate product, FDA also approved a separate REMS for that product, also with a requirement that the pharmacies in the Avadel (now Alkermes) -sponsored REMS contact the Xywav and Xyrem REMS to verify and report certain information.

Administration of multiple sodium oxybate REMS systems could increase the risks associated with oxybate distribution, could make it more difficult or expensive for us to distribute Xywav and Xyrem and disrupt patient access to Xywav or Xyrem.

Because patients, consumers and others may not differentiate other high-sodium oxybate products from our sodium oxybate products or differentiate between the different REMS programs, any negative outcomes, including risks to the public, caused by or otherwise related to a separate high-sodium oxybate REMS, could have a significant negative impact in terms of product liability, our reputation and good will, public acceptance of Xywav or Xyrem as a treatment for cataplexy and EDS in narcolepsy or Xywav for the treatment of IH, and prescribers’ willingness to prescribe, and patients’ willingness to take, Xywav or Xyrem, any of which could have a material adverse effect on our business.

Because patients, consumers and others may not differentiate other high-sodium oxybate products from our sodium oxybate products or differentiate between the different REMS programs, any negative outcomes, including risks to the public, caused by or otherwise related to a separate high-sodium oxybate REMS, could have a significant negative impact in terms of product liability, our reputation and goodwill, public acceptance of Xywav or Xyrem as a treatment for cataplexy and EDS in narcolepsy or Xywav for the treatment of IH, and prescribers’ willingness to prescribe, and patients’ willingness to take, Xywav or Xyrem, any of which could have a material adverse effect on our business.

We may face pressure to further modify the Xywav and Xyrem REMS, including sharing data, which may be proprietary, required for the safe distribution of sodium oxybate, in connection with FDA’s approval of the generic sodium oxybate REMS or another oxybate REMS that has been approved or may be submitted or approved in the future.

We cannot predict the outcome or impact on our business of any future action that we may take with respect to FDA’s waiver of the single shared system REMS requirement, its approval and tentative approval of generic versions of sodium oxybate or the consequences of distribution of sodium oxybate through the generic sodium oxybate REMS approved by FDA or another separate REMS.

We cannot predict the

outcome or impact on our business of any future action that we may take with respect to FDA’s waiver of the single shared system REMS requirement, its approval and tentative approval of generic versions of sodium oxybate or the consequences of distribution of sodium oxybate through the generic sodium oxybate REMS approved by FDA or another separate REMS.

REMS programs have increasingly drawn public scrutiny from the U.S.

Congress, the FTC, the USPTO, and FDA, with allegations that such programs are used as a means of improperly blocking or delaying competition.

In December 2019, as part of the Further Consolidated Appropriations Act of 2020, the U.S.

In December 2019, as part of the Further Consolidated Appropriations Act of 2020, U.S.

Congress passed legislation known as the CREATES.

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From June 2020 to May 2022, we were served with a number of lawsuits that included allegations that we had used the Xyrem REMS to delay approval of generic high-sodium oxybate.

In December 2020, these cases were centralized and transferred to the United States District Court for the Northern District of California, where the multidistrict litigation will proceed for the purpose of discovery and pre-trial proceedings.

For additional information on these lawsuits, see " Xyrem Antitrust Litigation " (and for other litigation involving our listing of our REMS patent in FDA's publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” or Orange Book, see " Avadel Litigation ") in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

In December 2020, these cases were centralized and transferred to the U.S.

District Court for the Northern District of California, where the multidistrict litigation will proceed for the purpose of discovery and pre-trial proceedings.

As of October 2025, we have resolved the entirety of the Xyrem Antitrust Litigation.

For additional information on these lawsuits, as well as a class settlement agreement with respect thereto, see " Xyrem Antitrust Litigation " (and for other litigation and settlement involving our listing of our REMS patent in the Orange Book), see " Avadel Litigation " in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

It is possible that additional lawsuits will be filed against us making similar or related allegations or that governmental authorities could commence an investigation.

We cannot predict the outcome of these or potential additional lawsuits;

We cannot predict the outcome of any potential additional lawsuits;

however, if the plaintiffs were to be successful in their claims, they may be entitled to injunctive relief or we may be required to pay significant monetary damages, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

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The patient counseling and monitoring requirements of the Xywav and Xyrem REMS provide more extensive information about adverse events experienced by patients taking Xywav and Xyrem, including deaths, than is generally available for other products that are not subject to similar REMS requirements.

As required by FDA and other regulatory agencies, the adverse event information that we collect for Xywav and Xyrem is regularly

reported to FDA and could result in FDA requiring changes to Xywav and/or Xyrem labeling, including additional warnings or additional boxed warnings, or requiring us to take other actions that could have an adverse effect on patient and prescriber acceptance of Xywav and Xyrem.

As required by FDA and other regulatory agencies, the adverse event information that we collect for Xywav and Xyrem is regularly reported to FDA and could result in FDA requiring changes to Xywav and/or Xyrem labeling, including additional warnings or additional boxed warnings, or requiring us to take other actions that could have an adverse effect on patient and prescriber acceptance of Xywav and Xyrem.

As required by FDA, Xywav’s and Xyrem’s current labeling includes a boxed warning regarding the risk of central nervous system depression and misuse and abuse.

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There are many factors that could cause the commercialization of Epidiolex to be unsuccessful, including a number of factors that are outside our control.

The commercial success of Epidiolex depends on the extent to which patients and physicians accept and adopt Epidiolex as a treatment for seizures associated with LGS, DS and TSC , and we do not know whether our or others’ estimates in this regard will be accurate.

The commercial success of Epidiolex depends on the extent to which patients and physicians accept and adopt Epidiolex as a treatment for seizures associated with LGS, DS and TSC .

Physicians may not prescribe Epidiolex and patients may be unwilling to use Epidiolex if coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost.

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In the future, we expect Epidiolex to face competition from generic cannabinoids.

In November and December 2022, we received notices from various ANDA filers that they have each filed with FDA an ANDA for a generic version of Epidiolex (cannabidiol) oral solution.

In January 2023, we filed patent infringement suits against these ANDA filers.

For additional information see “ Epidiolex Patent Litigation ” in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

Additional companies may file ANDAs seeking to market a generic version of Epidiolex which could lead to additional patent litigation or challenges with respect to Epidiolex.

We have settled patent litigation

with each of the ten companies seeking to market a generic version of Epidiolex in the U.S.

by granting each of the Epidiolex ANDA Filers a license to manufacture, market, and sell its own generic version of Epidiolex beginning in the very late 2030s, or earlier under certain circumstances, including but not limited to the launch of another generic Epidiolex product or a final decision that all unexpired claims of the Epidiolex patents are not infringed, or are invalid and/or unenforceable.

However, these settlements do not prevent other third parties from filing additional ANDAs seeking to market a generic version of Epidiolex in the future.

Any such filings could result in additional patent litigation or challenges with respect to Epidiolex and could require substantial financial resources.

An adverse outcome in any such litigation, or the entry into additional settlement agreements, could result in the approval and commercialization of generic versions of Epidiolex earlier than anticipated and may have a material adverse effect on our businesses, financial condition, results of operations and growth prospects.

While we expect Xywav and Epidiolex/Epidyolex to remain our largest products, our success also depends on our ability to effectively commercialize our other existing products and potential future products.

In addition to Xywav, Epidiolex/Epidyolex and our other neuroscience products and product candidates, we are commercializing a portfolio of products, including our other lead marketed products, Zepzelca, Rylaze and Ziihera.

An inability to effectively commercialize our other lead marketed products and to maximize their potential where possible through successful research and development activities could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

An inability to effectively commercialize our other lead marketed products and to maximize their potential where possible through successful R&D activities could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

O ur ability to realize the anticipated benefits from our investment in Zepzelca is subject to a number of risks and uncertainties, including:

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adequate supply of Zepzelca to meet demand;

availability of favorable treatment pathway designations pricing and adequate coverage and reimbursement ;

a vailability of favorable treatment pathway designations pricing and adequate coverage and reimbursement;

the potential for negative trial data read-outs in ongoing or future Zepzelca clinical trials;

our and PharmaMar’s, ability to maintain accelerated approval or successfully complete a confirmatory study of Zepzelca;

competition from a newly approved product for the treatment of extensive-stage metastatic SCLC;

competition from Amgen Inc.’s tarlatamab, a product approved for the treatment of extensive-stage metastatic SCLC in May 2024;

and patients’ access to lung cancer screening, diagnosis and treatment.

In July and August 2024, we received notices from Zepzelca ANDA filers.

On September 11, 2024, we and PharmaMar filed a patent infringement suit against the Zepzelca ANDA Filers in the United States District Court for the District of New Jersey.

On September 11, 2024, we and PharmaMar filed a patent infringement suit against the Zepzelca ANDA Filers in the U.S.

District Court for the District of New Jersey.

For additional information see “ Zepzelca Patent Litigation ” in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

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O ur ability to realize the anticipated benefits from our investments in Rylaze is subject to a number of uncertainties, including our ability to successfully commercialize Rylaze including creating awareness among health care professionals and ensuring that patients with ALL or LBL will be given the appropriate course of therapy and dosing regimen based on the currently approved label.

O ur ability to realize the anticipated benefits from our investments in Ziihera is subject to a number of uncertainties, including our ability to successfully commercialize Ziihera in BTC and clinically develop potential future indications in HER2+ solid tumors, including in GEA and our ability to successfully complete regulatory activities and approvals for Ziihera in other indication s .

We face substantial competition from other companies, including companies with larger sales organizations and more experience working with large and diverse product portfolios, and competition from generic drugs.

Our products compete, and our product candidates may in the future compete, with currently existing therapies, including other branded products, AG and other generic products, product candidates currently under development by us and others and/or future product candidates, including new molecular and chemical entities that may be safer or more effective or more

convenient than our products.

Any products that we develop may be commercialized in competitive markets, and our competitors, which include large global pharmaceutical companies and small research-based companies and institutions, may succeed in developing products that render our products obsolete or noncompetitive.

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The current administration is pursuing policies to reduce regulations and expenditures across government including at HHS, FDA, CMS and related agencies.

These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.

These actions may include directives to reduce agency workforce, rescinding a Biden administration executive order tasking the Center for Medicare & Medicaid Innovation to consider new payment and healthcare models to limit drug spending and eliminating the Biden administration’s executive order that directed HHS to establish an AI task force and develop a strategic plan.

Additionally, in its June 2024 decision in Loper Bright , the U.S.

Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes.

The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by FDA.

Finally, Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.

These actions, primarily directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.

For example, on September 30, 2025, the current administration announced the first several agreements with major pharmaceutical companies that requires drug manufacturers to offer, through a direct-to-consumer platform, U.S.

patients and Medicaid programs prescription drug MFN pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues, in exchange for tariff relief.

Other recent actions, for example, include (1) directing agencies to reduce agency workforce and cut programs;

(2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing MFN pricing for pharmaceutical products;

(3) imposing tariffs on imported pharmaceutical products;

and (4) as part of the MAHA Commission’s Strategy Report released in September 2025, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.

Additionally, the current administration recently called on U.S.

Congress to enact "The Great Healthcare Plan," to codify and expand MFN pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on PBM payment methodologies, among other things.

These actions and policies may significantly reduce U.S.

drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks.

In June 2024, the U.S.

Supreme Court’s Loper Bright decision greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our operations .

Finally, U.S.

Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA as well as PBMs.

We cannot predict which additional measures may be adopted or the impact of current and additional measures on the marketing, pricing and demand for our products, which could have a material adverse effect on our business, financial condition and results of operations.

Adequate coverage and reimbursement from third party payors may not be available for our products and we may be unable to successfully contract for coverage from pharmacy benefit managers and other organizations;

Adequate coverage and reimbursement from third party payors may not be available for our products and we may be unable to successfully contract for coverage from PBMs and other organizations;

conversely, to secure coverage from these organizations, we may be required to pay rebates or other discounts or other restrictions to reimbursement, either of which could diminish our sales or adversely affect our ability to sell our products profitably.

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or elsewhere, deny reimbursement for our products, limit the indications for which our products will be reimbursed, or provide reimbursement only on unfavorable terms.

As part of the overall trend toward cost containment, third party payors often require prior authorization for, and require reauthorization for continuation of, prescription products or impose step edits, which require prior use of another medication, usually a generic or preferred brand, prior to approving coverage for a new or more expensive product.

As part of the overall trend toward cost containment, third party payors often require prior authorization for, and require reauthorization for continuation of, prescription products or alternatively impose step edits, which require prior use of another medication, usually a generic or preferred brand, prior to approving coverage for a new or more expensive product.

Such restrictive conditions for reimbursement and an increase in reimbursement-related activities can extend the time required to fill prescriptions and may discourage patients from seeking treatment.

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We may need to conduct expensive pharmacoeconomic and/or clinical studies in order to demonstrate the cost-effectiveness of our products.

If our competitors offer their products at prices that provide purportedly lower treatment costs than our products, or otherwise suggest that their products are safer, more effective or more cost-effective than our products, this may result in a greater level of access for their products relative to our products, which would reduce our sales and harm our results of operations.

products, which would reduce our sales and harm our results of operations.

In some cases, for example, third party payors try to encourage the use of less expensive generic products through their prescription benefit coverage and reimbursement and co-pay policies.

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Third party PBMs, other similar organizations and payors can limit coverage to specific products on an approved list, or formulary, which might:

not include all of the approved products for a particular indication, exclude drugs from their formularies in favor of competitor drugs or alternative treatments, place drugs on formulary tiers with higher patient co-pay obligations, and/or mandate stricter utilization criteria.

not include all of the approved products for a particular indication;

exclude drugs from their formularies in favor of competitor drugs or alternative treatments;

place drugs on formulary tiers with higher patient co-pay obligations;

and/or mandate stricter utilization criteria.

Formulary exclusion effectively encourages patients and providers to seek alternative treatments, make a complex and time-intensive request for medical exemptions, or pay 100% of the cost of a drug.

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Any delays or unforeseen difficulties in reimbursement approvals could limit patient access, depress therapy adherence rates, and adversely impact our ability to successfully commercialize our products.

In addition, PBMs and other third-party payors could implement alternative funding programs that could have an impact on product revenue.

In addition, PBMs and other third-party payors could implement alternative funding programs that could have an impact on our product revenue.

If we are unsuccessful in maintaining broad coverage for our products, our anticipated revenue from and growth prospects for our products could be negatively affected.

In many countries outside the U.S., procedures to obtain price approvals, coverage and reimbursement can take considerable time after the receipt of marketing authorization.

Many European countries periodically review their reimbursement of medicinal products, which could have an adverse impact on reimbursement status.

In addition, we expect that legislators, policymakers and healthcare insurance funds in the EU member states will continue to propose and implement cost-containing measures, such as lower maximum prices, lower or lack of reimbursement coverage and incentives to use cheaper, usually generic, products as an alternative to branded products, and/or branded products available through parallel import to keep healthcare costs down.

Many European countries periodically review their reimbursement of medicinal products, which could have an adverse impact on reimbursement status or financial conditions.

Moreover, in order to obtain reimbursement for our products in some European countries, including some EU member states, we may be required to compile additional data comparing the cost-effectiveness of our products to other available therapies.

HTA of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU member states, including those representing the larger markets.

The HTA process, which is currently governed by national laws in each EU member state, is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.

The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU member states.

The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between EU member states.

In January 2025, the EU HTA regulation entered into application.

This regulation aims to harmonize the clinical benefit assessment of HTA across the EU.

The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.

The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of other individual EU member states.

In January 2025, the HTA Regulation 2021/2282 entered into application.

This regulation aims to harmonize the clinical benefit assessment of health technologies across the EU by creating a framework of rules, procedures and methodologies for conducting Joint Clinical Assessments at the EU level.

Under this regulation, EU member states must use common HTA tools, methodologies, and procedures across the EU.

However, individual member states remain responsible for determining the overall value of a new health technology within their healthcare systems, as well as making pricing and reimbursement decisions.

If we are unable to maintain favorable pricing and reimbursement status in EU member states that represent significant markets, our anticipated revenue from and growth prospects for our products in the EU could be negatively affected.

For example, the EC granted marketing authorization for Enrylaze in September 2023, and, as part of our rolling launch of Enrylaze in Europe, we are making pricing and reimbursement submissions in European countries.

If we experience setbacks or unforeseen difficulties in obtaining favorable pricing and reimbursement decisions, including as a result of regulatory review delays, planned launches in the affected EU member states would be delayed, which could negatively impact anticipated revenue from and growth prospects for Enrylaze.

However, individual member states remain responsible for determining the overall value of a new health technology within their respective healthcare systems, as well as making pricing and reimbursement decisions.

If we are unable to maintain favorable pricing and reimbursement status in EU member states that represent significant markets for us, our anticipated revenue from and growth prospects for our products in the EU could be negatively affected.

The pricing of pharmaceutical products has come under increasing scrutiny as part of a global trend toward healthcare cost containment and resulting changes in healthcare law and policy, including changes to Medicare, may impact our business in ways that we cannot currently predict, which could have a material adverse effect on our business and financial condition.

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We expect there will continue to be legislative and regulatory proposals to change the healthcare system in ways that could impact our ability to sell our products profitably, as governmental oversight and scrutiny of biopharmaceutical companies is increasing.

For example, we anticipate that the U.S.

Congress, state legislatures, and federal and state regulators may adopt or accelerate adoption of new healthcare policies and reforms intended to curb healthcare costs, such as federal and state controls on reimbursement for drugs (including under Medicare, Medicaid and commercial health plans), new or increased requirements to pay prescription drug rebates and penalties to government health care programs, and additional pharmaceutical cost transparency policies that aim to require drug companies to justify their prices through required disclosures.

For example, we anticipate that U.S.

rebates and penalties to government health care programs, and additional pharmaceutical cost transparency policies that aim to require drug companies to justify their prices through required disclosures.

In addition, policymakers and federal agencies, including the Center for Medicare & Medicaid Innovation, are advancing new drug pricing models to implement MFN reference pricing, which has been a focus of the Trump Administration’s health policy agenda.

These initiatives, if finalized and implemented, could reduce the net prices for certain products, exert downward pricing pressure, and adversely affect our revenues and profitability.

This includes efforts by individual states in the U.S.

to pass legislation and implement regulations designed to control pharmaceutical and biological product pricing, including by establishing Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and, in some cases, set upper payment limits and implementing marketing cost disclosure and transparency measures.

Further, the IRA, among other things, requires the U.S.

Department of Health and Human Services Secretary to negotiate, with respect to Medicare units and subject to a specified cap, the price of a set number of certain high Medicare spend drugs and biologicals per year starting in 2026, penalizes manufacturers of certain Medicare Parts B and D drugs for price increases above inflation, and makes several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs and a change in manufacturer liability under the program, which could negatively affect our business and financial condition.

The CMS has issued final guidance implementing the Drug Price Negotiation Program in which it finalized certain policies governing the selection of drugs for negotiation.

Among other things, CMS finalized definitions of “qualifying single source drug” and “marketed” that, especially if they persist, could further disincentivize innovation.

Further, HHS imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis.

HHS has also been empowered to negotiate the price of certain single-source drugs that have been on the market for at least 7 years covered under Medicare as part of the Medicare Drug Price Negotiation Program.

Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation Program.

Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis.

In addition, under the Medicaid Drug Rebate Program, rebates owed by manufacturers are no longer subject to a cap on the rebate amount effective January 1, 2024, which may adversely affect our rebate liability.

The foregoing may negatively impact our overall rebate and discount liability, which would have a negative adverse effect on our revenues.

On July 4, 2025, President Trump signed into law the OBBBA, which includes significant changes to Medicaid, Medicare, and the ACA.

These reforms are anticipated to decrease federal health care spending by approximately $1 trillion by significantly reducing Medicaid spending and enrollment, making changes to the Medicare program, and altering ACA marketplace enrollment provisions.

Such decreases to federal health care spending and loss of health care coverage could reduce access to, and reimbursement for, our products, which could have a negative adverse effect on our revenues.

Legislative and regulatory proposals that have recently been considered include, among other things, proposals to limit the terms of patent litigation settlements with generic sponsors, to define certain conduct around patenting and new product development as unfair competition, to address the scope of orphan drug exclusivity and to facilitate the importation of drugs into the U.S.

from other countries.

MFN pricing models have remained an area of significant interest to the Trump Administration.

On July 31, 2025, President Trump issued letters to 17 pharmaceutical companies reiterating the requirements of the May 12, 2025 executive order and demanding that such companies extend MFN pricing to Medicaid patients, guarantee MFN pricing for newly-launched drug products, return increased revenues abroad to American patients and provide for direct purchasing at MFN pricing.

The letters also urged these companies to stipulate that they will not offer other developed nations better prices for new drugs than the prices offered for such products in the U.S.

The letters called for engagement with FDA and CMS within 60 days to implement these changes and threatened to use “every tool in our arsenal” to address what the letter characterized as “abusive drug pricing practices”.

Further, the current administration has announced agreements with several pharmaceutical companies that require the drug manufacturers to offer Medicaid programs prescription drug MFN pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues.

As of January 2026, 16 of the 17 pharmaceutical companies that received the July 2025 letters from President Trump have signed agreements with the Trump Administration.

On November 6, 2025, CMS announced the GENErating cost Reductions for U.S.

Medicaid (GENEROUS) Model, a model under which participating manufacturers may voluntarily offer MFN pricing to state Medicaid programs for covered outpatient drugs.

On December 19, 2025, CMS issued proposed rules to establish the Global Benchmark for Efficient Drug Pricing (GLOBE) Model and the Guarding U.S.

Medicare Against Rising Drug Costs (GUARD) Model, two mandatory MFN pricing models impacting Part B drugs and Part D drugs in select geographic areas, respectively.

Under the proposed rules, a manufacturer would owe rebates to Medicare if prices for their drugs exceeded the prices paid by other economically comparable reference countries, with an initial list of 19 reference countries included in the proposed rule.

Legislative and regulatory proposals to reform the regulation of the pharmaceutical industry and reimbursement for pharmaceutical drugs are continually changing, and all such considerations may adversely affect our business and industry in ways that we cannot accurately predict.

There is also ongoing activity related to health care coverage.

The Affordable Care Act substantially changed the way healthcare is financed by both governmental and private insurers.

The ACA substantially changed the way healthcare is financed by both governmental and private insurers.

These changes impacted previously existing government healthcare programs and have resulted in the development of new programs, including Medicare payment-for-performance initiatives.

Further, federal and state policy makers have taken and may continue to try to take steps regarding health care coverage beyond the Affordable Care Act, which could have ramifications for the pharmaceutical industry.

Further, federal and state policy makers have taken and may continue to try to take steps regarding health care coverage beyond the ACA, which could have ramifications for the pharmaceutical industry.

Additional legislative changes, regulatory changes, or guidance could be adopted, which may impact the marketing approvals and reimbursement for our products and product candidates.

For example, there has been increasing legislative, regulatory, and enforcement interest in the U.S.

with respect to drug pricing practices.

There have been several Congressional inquiries and proposed and enacted federal and state legislation and regulatory initiatives designed to, among other things, bring more transparency to product pricing, evaluate the relationship between pricing and manufacturer patient programs, and reform government healthcare program reimbursement methodologies for drug products beyond the changes enacted by the IRA.

with respect to

drug pricing practices.

There have been several U.S.

Congressional inquiries and proposed and enacted federal and state legislation and regulatory initiatives designed to, among other things, bring more transparency to product pricing, evaluate the relationship between pricing and manufacturer patient programs, and reform government healthcare program reimbursement methodologies for drug products beyond the changes enacted by the IRA.

If new healthcare policies or reforms intended to curb healthcare costs are adopted or if we experience negative publicity with respect to pricing of our products or the pricing of pharmaceutical drugs generally, the prices that we charge for our products may be affected, our commercial opportunity may be limited and/or our revenues from sales of our products may be negatively impacted.

We have periodically increased the price of our products, including Xywav and Xyrem most recently in January 2025, and there is no guarantee that we will make similar price adjustments to our products in the future or that price adjustments we have taken or may take in the future will not negatively affect our sales volumes and revenues.

We have periodically increased the price of our products, including Xywav and Xyrem most recently in January 2026, and there is no guarantee that we will not make similar price adjustments to our products in the future or that price adjustments we have taken or may take in the future will not negatively affect our sales volumes and revenues.

There is no guarantee that such price adjustments will not negatively affect our reputation and our ability to secure and maintain reimbursement coverage for our products, which could limit the prices that we charge for our products, limit the commercial opportunities for our products and/or negatively impact revenues from sales of our products.

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Congressional oversight with respect to drug pricing or our other business practices could cause us to incur significant expense and could distract us from the operation of our business and execution of our strategy.

Any such investigation or hearing could also result in reduced market acceptance and demand for our products, could harm our reputation and our ability to market our products in the future, and could have a material adverse effect on our

business, financial condition, results of operations and growth prospects.

For more information, see the risk factor under the heading “ We are subject to significant ongoing regulatory obligations and oversight, which may subject us to civil or criminal proceedings, investigations, or penalties and may result in significant additional expense and limit our ability to commercialize our products ” in Part I, Item 1A of this Annual Report on Form 10-K.

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These measures could include limitations on the prices we will be able to charge for our products or the level of reimbursement available for these products from governmental authorities or third party payors as well as clawbacks and revenue caps.

For example, in the U.K., the cap on NHS spending on branded medicines agreed between the U.K.

For example, in the U.K., the Voluntary Pricing Access and Growth scheme on NHS spending on branded medicines agreed between the U.K.

government and industry for 2019 to 2023 has remained unaltered despite higher than expected growth in NHS use of branded medicines, resulting in significant increases to the industry level revenue clawback rate payable on sales of branded medicines to the NHS.

In the EU, a trend in some EU member states is for medicinal products to be reimbursed based on competitor products and not in relation with the value or the cost of the product.

On April 26, 2023, the EC adopted proposals for a new Directive and a new Regulation, which revise and replace the existing EU general pharmaceutical legislation.

This proposal includes increased transparency on research and development costs or public contributions to these costs with a view to strengthen the negotiating position of national competent authorities of the EU member states responsible for pricing and reimbursement, as well as reinforced cooperation with these authorities on pricing and reimbursement matters.

On April 10, 2024, the European Parliament adopted its position on the proposals, whose legislative processes are expected to continue in 2025.

In the EU, a trend in some EU member states is for reimbursement price of medicinal products to be assessed against the relative price and cost of treatment of existing standard of care and competitor products, which may hinder the inclusion of newer innovative products in reimbursement lists.

In December 2025, the European Parliament and the Council of the EU reached a provisional agreement on the comprehensive revision of the existing EU general pharmaceutical legislation.

This new legislation includes increased transparency on R&D costs or public contributions to these costs with a view to strengthen the negotiating position of national competent authorities of the EU member states responsible for pricing and reimbursement, as well as reinforced cooperation with these authorities on pricing and reimbursement matters.

The provisional agreement is still subject to the formal approval by the European Parliament and the Council of the EU and subsequent publication in the Official Journal of the EU.

Further, an increasing number of European and other foreign countries use prices for medicinal products established in other countries as “reference prices” to help determine the price of the product in their own territory.

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• the availability of financial or other assistance for patients who are uninsured or underinsured.

other companies, including generic versions of our products, could materially and adversely affect our business, financial condition, results of operations and growth prospects.

Because of our dependence upon market acceptance of our products, any adverse publicity associated with harm to patients or other adverse events resulting from the use or misuse of any of our products or any similar products distributed by other companies, including generic versions of our products, could materially and adversely affect our business, financial condition, results of operations and growth prospects.

Delays or problems in the supply of our products for sale or for use in clinical trials, loss of our single source suppliers or failure to comply with manufacturing regulations could materially and adversely affect our business, financial condition, results of operations and growth prospects.

The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of process controls required to consistently produce the API and the finished product in sufficient quantities while meeting detailed product specifications on a repeated basis.

We and our suppliers may encounter difficulties in production, including difficulties with the supply of manufacturing materials, production costs and yields, process controls, quality control and quality assurance, including testing of stability, impurities and impurity levels and other product specifications by validated test methods, and compliance with strictly enforced U.S., state and non-U.S.

federal, state and non-U.S.

In addition, we and our suppliers are subject to FDA’s cGMP requirements, federal and state controlled substances obligations and equivalent rules and regulations prescribed by non-U.S.

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If we or any of our suppliers encounter manufacturing, quality or compliance difficulties with respect to any of our products, whether due to the ongoing military conflict in Ukraine and related sanctions imposed against Russia (including as a result of disruptions of global shipping, the transport of products, energy supply, cybersecurity incidents and banking systems as well as of our ability to control input costs) or otherwise, we may be unable to obtain or maintain regulatory approval or meet commercial demand for such products, which could adversely affect our business, financial condition, results of operations and growth prospects.

In addition, we could be subject to enforcement action by regulatory authorities for our failure to comply with cGMP with respect to the products we manufacture in our facilities as well as for our failure to adequately oversee compliance with cGMP by any of our third party suppliers operating under contract.

Moreover, failure to comply with applicable legal and regulatory requirements subjects us and our suppliers to possible regulatory action, including restrictions on supply or shutdown, which may adversely affect our or a supplier’s ability to supply the ingredients or finished products we need.

In addition, we could be subject to enforcement actions by regulatory authorities for our failure to comply with cGMP requirements with respect to the products we manufacture in our facilities as well as for our failure to adequately oversee compliance with cGMP by any of our third party suppliers operating under contract.

Moreover, failure to comply with applicable legal and regulatory requirements subjects us and our suppliers to possible regulatory action, including restrictions on supply or shutdown, which may adversely affect our or our supplier’s ability to supply the ingredients or finished products we need.

We have a manufacturing and development facility in Athlone, Ireland where we manufacture Xywav and Xyrem, a manufacturing plant in Villa Guardia, Italy where we produce the defibrotide drug substance and a manufacturing and development facility in the U.K.

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FDA and similar international or national regulatory bodies must approve manufacturers of the active and inactive pharmaceutical ingredients and certain packaging materials used in our products.

If there are delays in qualifying new suppliers or facilities or a new supplier is unable to meet FDA’s or similar international regulatory body’s requirements for approval, there could be a shortage of the affected products for the marketplace or for use in clinical studies, or both, which could negatively impact our anticipated revenues and could potentially cause us to breach contractual obligations with customers or to violate local laws requiring us to deliver the product to those in need.

could negatively impact our anticipated revenues and could potentially cause us to breach contractual obligations with customers or to violate local laws requiring us to deliver the product to those in need.

We are responsible for the manufacture and supply of Epidiolex/Epidyolex for commercial use and for use in clinical trials.

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We must also ensure that our batches conform to complex release specifications.

We have a second site at which we can grow the specific cannabinoid plants that produce the CBD used in Epidiolex/Epidyolex and a second site at which we can crystallize the purified CBD from the liquid plant extract.

If we are unable to manufacture Epidiolex/Epidyolex in accordance with regulatory specifications, including GMP, or if there are disruptions in our manufacturing process due to damage, loss or otherwise, or failure to pass regulatory inspections of our manufacturing facilities, we may not be able to meet current demand or supply sufficient product for use in clinical trials, and this may also harm our ability to commercialize Epidiolex/Epidyolex on a timely or cost-competitive basis, if at all.

We have a second site at which we can grow the specific cannabis plants that produce the CBD used in Epidiolex/Epidyolex and a second site at which we can crystallize the purified CBD from the liquid plant extract.

If we are unable to manufacture Epidiolex/Epidyolex in accordance with regulatory specifications, including cGMP, or if there are disruptions in our manufacturing process due to damage, loss or otherwise, or failure to pass regulatory inspections of our manufacturing facilities, we may not be able to meet current demand or supply sufficient product for use in clinical trials, and this may also harm our ability to commercialize Epidiolex/Epidyolex on a timely or cost-competitive basis, if at all.

Our manufacturing program requires significant time and resources and may not be successful, may lead to delays, interruptions to supply or may prove to be more costly than anticipated.

Vyxeos is manufactured by Simtra, which is a sole source supplier from a single site location.

Moreover, the proprietary technology that supports the manufacture of Vyxeos is not easily transferable.

Consequently, engaging an alternate manufacturer may be difficult, costly and time-consuming.

If we fail to obtain a sufficient supply of Vyxeos in accordance with applicable specifications on a timely basis, our sales of Vyxeos, our future maintenance and potential growth of the market for this product, our ability to conduct ongoing and future clinical trials of Vyxeos, and our business, financial condition, results of operations and growth prospects could be materially adversely affected.

Zepzelca is manufactured by Simtra, which is a sole source supplier from a single site location.

If we fail to obtain a sufficient supply of Zepzelca in accordance with applicable specifications on a timely basis, our sales of Zepzelca, our future maintenance and potential growth of the market for this product, our ability to conduct ongoing and future clinical trials of Zepzelca, and our business, financial condition, results of operations and growth prospects could be materially adversely affected.

Rylaze drug substance is manufactured by AGC Biologics A/S at its facility in Copenhagen, Denmark and the drug product is manufactured and packaged by Patheon at its facility in Greenville, North Carolina.

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If we fail to obtain a sufficient supply of Rylaze in accordance with applicable specifications on a timely basis, our sales of Rylaze, our future maintenance and potential growth of the market for this product, our competitive advantage over competing products that have supply constraints, and our business, financial condition, results of operations and growth prospects could be materially adversely affected.

We currently rely on WuXi, a company based in the PRC, as the sole supplier of Ziihera.

Vyxeos is manufactured by Simtra, which is a sole source supplier from a single site location.

Moreover, the proprietary technology that supports the manufacture of Vyxeos is not easily transferable.

Consequently, engaging an alternate manufacturer may be difficult, costly and time-consuming.

If we fail to obtain a sufficient supply of Vyxeos in accordance with applicable specifications on a timely basis, our sales of Vyxeos, our future maintenance and potential growth of the market for this product, and our ability to conduct ongoing and future clinical trials of Vyxeos, could be materially adversely affected.

We currently rely on WuXi (Hong Kong), a company based in the PRC and subsidiary of WuXi, as the sole supplier of Ziihera.

Accordingly, there is a risk that supplies of Ziihera may be significantly delayed by, or may become unavailable as a result of, manufacturing, equipment, process, regulatory or business-related issues affecting that company.

We may also face additional manufacturing and supply-chain risks due to the regulatory and political structure of the PRC, or as a result of the international relationship between the PRC and the U.S., including but not limited to potential trade restrictions,sanctions, other regulatory requirements, or proposed legislation imposed by the U.S.

We may also face additional manufacturing and supply-chain risks due to the regulatory and political structure of the PRC, or as a result of the international relations between the PRC and the U.S., including but not limited to potential trade restrictions, sanctions, other regulatory requirements, or proposed legislation imposed by the U.S.

government, which could restrict or even prohibit our ability to work with WuXi.

For example, the House of Representatives of the prior Congress (the 118 th Congress) passed the BIOSECURE Act, which proposed targeting U.S.

government contracts, grants and loans for entities that use biotechnology equipment or services from certain named Chinese biotechnology companies, including WuXi, and potentially other biotechnology companies designated in the future.

The language of the proposed BIOSECURE Act would, among other things, prohibit U.S.

federal agencies from entering into or renewing any contract with any entity that uses biotechnology equipment or services produced or provided by a “biotechnology company of concern.” The version of the bill passed by the prior House of Representatives included a “grandfathering” provision, which provided that the BIOSECURE Act’s prohibitions would not apply to pre-existing contracts and agreements entered into prior to the legislation’s effective date until 2032.

The BIOSECURE Act did not become law in the 118 th Congress.

It is unclear whether the current Congress (the 119 th Congress) will introduce the BIOSECURE Act or similar legislation in this congressional session and, if so, how the scope, prohibitions, or designated biotechnology companies of concern may differ from the version of the BIOSECURE Act passed by the House in the prior 118 th Congress.

For example, the House of Representatives of the prior U.S.

Congress (the 118th U.S.

Congress) passed the BIOSECURE Act, which proposed to ban U.S.

government contracts, grants, and loans from being used towards biotechnology equipment and services produced or provided by certain named Chinese biotechnology companies, including WuXi, and would authorize the U.S.

government to name additional Chinese biotechnology companies of concern.

The legislation did not pass the U.S.

Congress in 2024, however, on December 18, 2025, the BIOSECURE Act was passed as part of the final Fiscal Year 2026 National Defense Authorization Act.

Although the statutory language in the NDAA does not explicitly name WuXi, or any other companies, like the BIOSECURE Act, it bans federal procurement or funding associated with “biotechnology companies of concern” and restricting use of their equipment and services in federal contracts, grants, and loans.

The implementation of the act will be phased in over a period of years, and could severely restrict the ability of companies to work with certain Chinese biotechnology companies of concern without losing the ability to contract with, or otherwise receive funding from, the U.S.

Although to date there has been no impact on our ability to obtain supply of Ziihera, there can be no assurance that operations would not be impacted in the future with a negative impact on Ziihera supply.

Modeyso is manufactured by Adare, which is a sole source supplier.

If we fail to obtain a sufficient supply of Modeyso in accordance with applicable specifications on a timely basis, our sales of Modeyso, our future maintenance and potential growth of the market for this product, our ability to conduct ongoing and future clinical trials of Modeyso and our business, financial condition, results of operations and growth prospects could be materially adversely affected.

In addition, in order t o conduct our ongoing and any future clinical trials of, complete marketing authorization submissions for, and potentially launch our other product candidates, we also need to have sufficient quantities of product manufactured.

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In addition, any failure of us or a supplier to obtain approval by the applicable regulatory body to manufacture and supply product or any delay in receiving, or failure to receive, adequate supplies of a product on a timely basis or in accordance with applicable specifications could negatively impact our ability to successfully launch and commercialize products and generate sales of products at the levels we expect.

Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, could adversely impact our business and operations, and reduce the competitiveness of our products and services relative to local and global competitors.

Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, could increase our costs, reduce the competitiveness of our products and otherwise have a material adverse effect on our business, financial condition, results of operations and growth prospects.

There is inherent risk, based on the complex relationships among the U.S.

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export control laws and economic sanctions prohibit the provision of certain products and services to countries, governments and persons targeted by U.S.

and other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods, and could significantly increase tariffs on a broad array of goods.

For example, on February 1, 2025, President Donald Trump signed executive orders imposing a 25% tariff on certain imports

from Mexico and Canada, and a 10% tariff on certain imports from China, which were to take effect on February 4, 2025.

A 30-day pause was granted to Mexico and Canada.

However, these newly proposed and imposed tariffs have resulted in retaliatory tariffs, and threats thereof, against U.S.

The ultimate impact of these potential and actual tariffs on our business and financial condition is unknown.

In addition, ongoing changes in U.S.

and foreign government trade policies, including potential modifications to existing trade agreements, could introduce additional uncertainty.

Trade restrictions and export regulations, or increases in tariffs (including tariffs on imports from Europe) and additional taxes, including any retaliatory measures, can negatively impact end-user demand, increase our supply chain complexity and our manufacturing costs, decrease margins, reduce the competitiveness of our products, or restrict our ability to sell products, provide services or purchase necessary equipment and supplies, any or all of which could have a material and adverse effect on our business, results of operations, or financial condition and, given the nature of our products, relocating the manufacturing supply can be a complex, costly and time-consuming process making it difficult to react quickly to a changing environment.

and other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods, and could continue to significantly increase tariffs on a broad array of goods, including pharmaceutical and biological products.

While we are an Irish company headquartered in Dublin, Ireland, we derive the majority of our revenues from sales of our products in the U.S.

We conduct business globally and our operations, including third-party suppliers, span numerous countries outside the U.S.

In particular, we have a manufacturing and development facility in Athlone, Ireland where we manufacture Xywav and Xyrem, a manufacturing and development facility in Kent Science Park, U.K.

where we produce Epidiolex/Epidyolex, and a manufacturing plant in Villa Guardia, Italy where we produce defibrotide drug substance.

In addition, we rely on our supplier in the PRC for the manufacture of Ziihera.

The ongoing trade tensions between the U.S.

and other jurisdictions have resulted in multiple rounds of tariffs and anticipated tariffs affecting pharmaceuticals and pharmaceutical ingredients, including finished drug products, manufacturing equipment, and related supplies.

Such tariffs may significantly increase our costs for certain products.

The Bureau of Industry and Security, U.S.

Department of Commerce, has initiated an investigation to determine whether pharmaceutical ingredients, including finished drug product, manufactured outside the U.S.

pose a national security risk and should be subject to additional tariffs.

Should current tariffs hold or additional tariffs be imposed specifically targeting pharmaceutical imports, such tariffs will result in additional costs on our business, including costs with respect to APIs and other raw materials upon which our business depends and will generally increase our manufacturing costs.

In addition, such tariffs will increase our supply chain complexity and could also potentially disrupt our existing supply chain.

Moreover, other governments have imposed and may continue to impose retaliatory tariffs, trade restrictions or trade barriers on our products, which may impose additional costs and complexity on our business.

In addition, the dynamic and unpredictable tariff and trade landscape creates substantial uncertainty and significant planning challenges for our operations.

Changes in tariff classifications, country-of-origin requirements or customs procedures can occur with limited notice.

This uncertainty complicates our long-term investment decisions regarding manufacturing facilities, supply chain optimization, and R&D locations.

While we cannot at this time predict the ultimate impact of such tariffs, we anticipate that our margins could be adversely affected beginning as early as fiscal 2026, depending on the ultimate scope and duration of tariffs imposed.

Additionally, it is possible that such tariffs could affect imports of APIs and other raw materials used in our products, or our business may be adversely impacted by retaliatory trade measures taken by other countries, including restricted access to APIs or other raw materials used in our products, further disrupting our supply chain and increasing our costs.

Given the nature of our products, relocating the manufacturing supply in response to tariffs and other trade restrictions would be a complex, costly and time-consuming process making it difficult for us to react quickly to a rapidly changing environment.

In this regard, it would take a significant amount of time and expense to implement and execute the necessary technology transfer to, and to qualify, new suppliers for our products.

Further, the continued threats of new or increased tariffs, sanctions, trade restrictions and trade barriers as well as ongoing changes in U.S.

and foreign government trade policies, including potential modifications to existing trade agreements, have had and may continue to have a generally disruptive impact on the global economy and, therefore, negatively impact revenues from sales of our products.

Given the volatility and uncertainty regarding the scope and duration of such tariffs and other aspects of U.S.

and foreign government trade policies, the ultimate impact on our operations and financial results is uncertain and could be significant.

In any event, further trade restrictions and export regulations, or new or increased tariffs, including further retaliatory measures, could increase our supply chain complexity and our manufacturing costs, decrease our margins, reduce the competitiveness of our products, or restrict our ability to sell our products, provide services or purchase necessary equipment and supplies.

Any of these factors could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Risks Related to Growth of Our Product Portfolio and Research and Development

We may not realize the anticipated benefits from our acquisition of Chimerix.

On April 21, 2025, we completed the acquisition of all the outstanding shares of Chimerix Common Stock.

As a result of this, Chimerix became our indirect wholly owned subsidiary.

The success of the acquisition will depend, in part, on our ability to realize the anticipated benefits from successfully combining our and Chimerix’s operations and we plan on devoting significant management attention and resources to integrating our business practices and operations with Chimerix’s so that we can fully realize the anticipated benefits of the acquisition.

In addition, Modeyso, which we acquired in the acquisition, may not be successful or may require significantly greater resources and investments than originally anticipated.

As a result, the anticipated benefits of the acquisition may not be realized fully within the expected timeframe or at all or may take longer to realize or cost more than expected, which could materially and adversely affect our business, financial condition, results of operations and growth prospects.

Our future success depends on our ability to successfully obtain and maintain regulatory approvals for our late-stage product candidates and, if approved, to successfully launch and commercialize those product candidates.

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FDA requires a REMS and a boxed warning for Xywav and Xyrem, and similar restrictions could be imposed on other products in the future.

Our receipt of approval for narrower indications than sought, restrictions on marketing through a REMS or equivalent obligation imposed in a European or other foreign country, or significant labeling restrictions or requirements in an approved label such as a boxed warning, could have a negative impact on our ability to recoup our research and development costs and to successfully commercialize that product, any of which could materially and adversely affect our business, financial condition, results of operations and growth prospects.

Our receipt of approval for narrower indications than sought, restrictions on marketing through a REMS or equivalent obligation imposed in a European or other foreign country, or significant labeling restrictions or requirements in an approved label such as a boxed warning, could have a negative impact on our ability to recoup our R&D costs and to successfully commercialize that product, any of which could materially and adversely affect our business, financial condition, results of operations and growth prospects.

Regulatory authorities may also impose post-marketing obligations as part of their approval, which may lead to additional costs and burdens associated with commercialization of the product and may pose a risk to maintaining approval of the product.

We are subject to certain post-marketing requirements and commitments in connection with the approval of certain of our products, including Epidiolex /Epidyolex , Defitelio, Vyxeos, Rylaze, Zepzelca and Ziihera.

We are subject to certain post-marketing requirements and commitments in connection with the approval of certain of our products, including Epidiolex /Epidyolex , Zepzelca, Rylaze, Ziihera, Modeyso, Vyxeos and Defitelio.

These post-marketing requirements and commitments include satisfactorily conducting multiple post-marketing trials and safety studies.

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For example, FDA granted accelerated approval to Zepzelca for relapsed SCLC based on data from a Phase 2 trial, which approval is contingent upon verification and description of clinical benefit in a post-marketing clinical trial.

While we and our licensor PharmaMar have reached agreement with FDA regarding a confirmatory clinical development program, our inability to confirm its clinical benefit in the second-line treatment setting for SCLC could result in the withdrawal of approval of Zepzelca, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

In addition, FDA granted accelerated approval to Ziihera for previously treated, unresectable or metastatic HER2-positive BTC based on data from a Phase 2 trial.

Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.

While a Phase 3 confirmatory trial is ongoing to evaluate zanidatamab in combination with standard-of-care therapy versus standard-of-care therapy alone in the first-line setting for patients with HER2-positive BTC, our inability to confirm its clinical benefit in the first-line setting for patients with HER2-positive BTC could result in the withdrawal of approval of Ziihera, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

first-line setting for patients with HER2-positive BTC could result in the withdrawal of approval of Ziihera, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Furthermore, FDA granted accelerated approval to Modeyso for adult and pediatric patients 1 year of age and older with diffuse midline glioma harboring an H3 K27M mutation with progressive disease following prior therapy based on data from a Phase 2 trial, which approval is contingent upon verification and description of clinical benefit in a post-marketing clinical trial.

While the Phase 3 ACTION confirmatory trial is ongoing to evaluate Modeyso in first-line setting for patients with H3 K27M-mutant diffuse glioma, our inability to confirm its clinical benefit in the first-line setting for patients with diffuse midline glioma harboring an H3 K27M mutation could result in the withdrawal of approval of Modeyso, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

In any event, if we are unable to comply with our post-marketing obligations imposed as part of the marketing approvals in the U.S., the EU, or other countries, our approval may be varied, suspended or revoked, product supply may be delayed and our sales of our products could be materially adversely affected.

Any new data relating to Epidiolex/Epidyolex, including from adverse event reports and post-marketing studies in the U.S.

and Europe, and from other ongoing clinical trials, may result in changes to the product label and/or imposition of a REMS

and may adversely affect sales, or result in withdrawal of Epidiolex/Epidyolex from the market.

FDA, EMA and regulatory authorities in other jurisdictions may also consider the new data in reviewing Epidiolex/Epidyolex marketing applications for indications beyond its currently approved uses or impose additional post-approval requirements.

and Europe, and from other ongoing clinical trials, may result in changes to the product label and/or imposition of a REMS and may adversely affect sales, or result in withdrawal of Epidiolex/Epidyolex from the market.

FDA, EMA and regulatory authorities in other jurisdictions may also consider the new data in reviewing Epidiolex/Epidyolex MAAs for indications beyond its currently approved uses or impose additional post-approval requirements.

If any of these actions were to occur, it could result in significant expense and delay or limit our ability to generate sales of Epidiolex/Epidyolex.

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We may not be able to successfully identify and acquire or in-license additional products or product candidates to grow our business, and, even if we are able to do so, we may otherwise fail to realize the anticipated benefits of these transactions.

In addition to continued investment in our research and development pipeline, we intend to grow our business by acquiring or in-licensing, and developing, including with collaboration partners, additional products and product candidates that we believe are highly differentiated and have significant commercial potential.

In addition to continued investment in our R&D pipeline, we intend to grow our business by acquiring or in-licensing, and developing, including with collaboration partners, additional products and product candidates that we believe are highly differentiated and have significant commercial potential.

However, we may be unable to identify or consummate suitable acquisition or in-licensing opportunities, and this inability could impair our ability to grow our business.

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Any failure in identifying and managing these risks, liabilities and uncertainties effectively, could have a material adverse effect on our business, results of operations and financial condition.

In addition, product and product candidate acquisitions, particularly when the acquisition takes the form of a merger or other business consolidation, such as our acquisition of GW have required, and any similar future transactions also will require, significant efforts and expenditures, including with respect to transition and integration activities.

In addition, product and product candidate acquisitions, particularly when the acquisition takes the form of a merger or other business consolidation, such as the Chimerix Acquisition has required, and any similar future transactions also will require, significant efforts and expenditures, including with respect to transition and integration activities.

We may encounter unexpected difficulties, or incur substantial costs, in connection with potential acquisitions and similar transactions, which include:

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As a result of these or other factors, products or product candidates we acquire, or obtain licenses to, may not produce the revenues, earnings or business synergies that we anticipated, may not result in regulatory approvals, and may not perform as expected.

For example, in May 2021, we made a substantial investment in Epidiolex and certain other products and technologies acquired in our acquisition of GW.

The total consideration paid by us for the entire issued share capital of GW was $7.2 billion.

The success of our acquisition of GW will depend, in part, on our ability to realize the anticipated benefits from the acquisition, which benefits may not be realized at the expected levels within the expected timeframe, or at all, or may

take longer to realize or cost more than expected, which could materially and adversely affect our business, financial condition, results of operations and growth prospects.

In this regard, in the third quarter of 2022, we recorded a $133.6 million asset impairment charge as a result of the decision to discontinue the nabiximols program that we acquired as part of our acquisition of GW.

In any event, f ailure to manage effectively our growth through acquisitions or in-licensing transactions could adversely affect our growth prospects, business, results of operations and financial condition.

Conducting clinical trials is costly and time-consuming, and the outcomes are uncertain.

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In February 2023, we received notice from Teva that it had filed an ANDA seeking approval to market a generic version of Xywav, which notice included a paragraph IV certification with respect to certain of our patents listed in FDA’s Orange Book for Xywav.

In July 2025, we received notice from Granules that it has filed with FDA an ANDA for a generic version of Xywav, which notice included a paragraph IV certification with respect to fourteen of our patents listed in FDA’s Orange Book for Xywav on the date of the receipt of the notice.

In January 2026, we received notices from Tris Pharma that it had filed with FDA a Section 505(b)(2) NDA seeking approval for generic versions of Xyrem and Xywav, which notices included a paragraph IV certification with respect to seven patents listed in FDA’s Orange Book for Xyrem and fifteen patents listed in FDA’s Orange Book for Xywav, respectively.

For additional information on litigation involving these matters, see Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10-K.

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For example, we have several methods of use patents listed in the Orange Book, that expire in 2033 that cover treatment methods included in the Xyrem label related to a DDI with divalproex sodium.

cannot predict whether a future ANDA filer, or a company that files a Section 505(b)(2) application for a drug referencing Xyrem, may pursue regulatory strategies to avoid infringing our DDI patents notwithstanding FDA’s response to the Citizen Petition, or whether any such strategy would be successful.

Although FDA has stated, in granting a Citizen Petition we submitted in 2016, that it would not approve any sodium oxybate ANDA referencing Xyrem that does not include the portions of the currently approved Xyrem label related to the DDI patents, we cannot predict whether a future ANDA filer, or a company that files a Section 505(b)(2) application for a drug referencing Xyrem, may pursue regulatory strategies to avoid infringing our DDI patents notwithstanding FDA’s response to the Citizen Petition, or whether any such strategy would be successful.

Likewise, we cannot predict whether we will be able to maintain the validity of these patents or will otherwise obtain a judicial determination that a generic or other sodium oxybate product, its package insert or the generic sodium oxybate REMS or another separate REMS will infringe any of our patents or, if we prevail in proving infringement, whether a court will grant an injunction that prevents a future ANDA filer or other company introducing a different sodium oxybate product from marketing its product, or instead require that party to pay damages in the form of lost profits or a reasonable royalty.

Since Xyrem’s regulatory exclusivity has expired in the EU, we are aware that generic or hybrid generic applications have been approved by various EU regulatory authorities, and additional generic or hybrid generic applications may be submitted and approved.

Additionally, in November and December 2022, ten companies sent us notices that they had filed ANDAs seeking approval to market a generic version of Epidiolex, which notices each included a paragraph IV certification with respect to certain of our patents listed in FDA’s Orange Book for Epidiolex on the date of the receipt of the applicable notice.

On January 3, 2023, we filed a patent infringement suit against the ten Epidiolex ANDA filers in the United States District Court for the District of New Jersey.

In June and July 2023, we received notice from certain of the Epidiolex ANDA Filers that they had each filed a paragraph IV certification regarding a newly-issued patent listed in the Orange Book for Epidiolex.

On July 21, 2023, we filed an additional lawsuit against all of the Epidiolex ANDA Filers 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 patent related to a method of treatment using Epidiolex.

For additional information on litigation involving this matter, see “ Epidiolex Patent Litigation ” in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

On May 13, 2021, we filed a patent infringement suit against Avadel and several of its corporate affiliates in the United States District Court for the District of Delaware.

The suit alleges that Avadel’s product candidate FT218 will infringe five of our patents related to controlled release formulations of oxybate and the safe and effective distribution of oxybate.

In March 2024, the jury upheld the validity of both of our asserted patents and awarded us damages for infringement for past sales of Lumryz in the U.S.

We have settled patent litigation with each of the ten companies seeking to market a generic version of Epidiolex in the U.S.

Notwithstanding our patents listed in FDA’s Orange Book for Epidiolex and settlement agreements, additional third parties may also attempt to introduce generic versions of Epidiolex that design around our patents or assert that our patents are invalid or otherwise unenforceable.

In March 2025, we received a notice from Almaject that it had filed with FDA an ANDA for a generic version of Defitelio.

The notice from Almaject included a paragraph IV certification with respect to certain of our patents listed in FDA’s Orange Book for Defitelio.

The listed patents relate generally to the Defitelio drug product and its approved use.

In April 2025, we filed a patent infringement lawsuit against Almaject.

For additional information on litigation involving this matter, see Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10-K.

As a result of this lawsuit, we expect that a stay of approval of up to 30 months will be imposed by FDA on Almaject’s ANDA.

We have entered into a settlement agreement with Avadel, which as of February 2026, is a subsidiary of Alkermes, involving, among other matters, our patent infringement suit against Avadel and several of its corporate affiliates in the U.S.

District Court for the District of Delaware.

For additional information on litigation involving this matter, see “ Avadel Litigation ” in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10-K.

In July and August 2024, Zepzelca ANDA filers sent us notices that they had filed ANDAs seeking approval to market a generic version of Zepzelca (lurbinectedin), which notices each included a paragraph IV certification with respect to our Orange Book listed patent for Zepzelca on the date of the receipt of the applicable notice.

In July and August 2024, Zepzelca ANDA filers sent us notices that they had filed ANDAs seeking approval to market a generic version of Zepzelca, which notices each included a paragraph IV certification with respect to our Orange Book listed patent for Zepzelca.

In September 2024, we filed patent infringement suits against these ANDA filers.

In September 2025, we filed an additional lawsuit against each of the Zepzelca ANDA Filers, alleging that, by filing its ANDA, each party infringed the newly-issued patent related to a method of treatment using Zepzelca.

For additional information on litigation involving this matter, see “ Zepzelca Patent Litigation ” in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10-K.

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Nevertheless, our employees, consultants, advisors and partners may unintentionally or willfully disclose our proprietary information to competitors, and we may not have adequate remedies for such disclosures.

Moreover, if a dispute arises with our employees, consultants, advisors or partners over the ownership of rights to inventions, including jointly developed intellectual property, we could lose patent protection or the confidentiality of our proprietary information, and possibly also lose the ability to pursue the development of certain new products or product candidates.

Moreover, if a dispute arises with our employees, consultants, advisors or partners over the ownership of rights to inventions, including jointly developed

intellectual property, we could lose patent protection or the confidentiality of our proprietary information, and possibly also lose the ability to pursue the development of certain new products or product candidates.

We have incurred, and may in the future incur, substantial costs as a result of litigation or other proceedings relating to patents, other intellectual property rights and related matters, and we may be unable to protect our rights to, or commercialize, our products.

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If we choose to go to court to stop a third party from infringing our patents, our licensed patents or our partners’ patents, that third party has the right to ask the court or an administrative agency to rule that these patents are invalid and/or should not be enforced.

For example, we are pursuing patent infringement proceedings in Germany initiated by Chimerix against a supplier in contravention of certain patents acquired in connection with the Chimerix Acquisition.

These lawsuits and administrative proceedings are expensive and consume time and other resources, and we may not be successful in these proceedings or in stopping infringement.

In addition, the IPR or a post-grant review process under the

Leahy-Smith America Invents Act permits any person, whether they are accused of infringing the patent at issue or not, to challenge the validity of certain patents through a proceeding before the PTAB of the USPTO.

In addition, the IPR or a post-grant review process under the Leahy-Smith America Invents Act permits any person, whether they are accused of infringing the patent at issue or not, to challenge the validity of certain patents through a proceeding before the PTAB.

There is a risk that a court could decide that our patents or certain claims in our patents are not valid or infringed, and that we do not have the right to stop a third party from using the inventions covered by those claims.

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From June 2020 to May 2022, several lawsuits were filed on behalf of purported direct and indirect Xyrem purchasers, alleging that the patent litigation settlement agreements we entered with Hikma and other ANDA filers violate state and federal antitrust and consumer protection laws.

For additional information on these lawsuits, see " Xyrem Antitrust Litigation " in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

As of October 2025, we have resolved the entirety of the Xyrem Antitrust Litigation.

For additional information on these lawsuits, as well as a class settlement agreement with respect thereto, see " Xyrem Antitrust Litigation " in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10-K.

It is possible that additional lawsuits will be filed against us making similar or related allegations.

We cannot predict the outcome of these or potential additional lawsuits;

however, if the plaintiffs in the class action complaints were to be successful in their claims, they may be entitled to injunctive relief or we may be required to pay significant monetary damages, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We cannot predict the outcome of any potential additional lawsuits;

Parties to such settlement agreements in the U.S.

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There is a risk that a court could decide that we or our partners are infringing, misappropriating or otherwise violating third party patent or other intellectual property rights, which could be very costly to us and have a material adverse effect on our business.

If we are sued for patent infringement, we would need to demonstrate that our products or methods do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid or unenforceable, which we may not be able to do.

If we are sued for patent infringement, we would need to demonstrate that our products or

methods do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid or unenforceable, which we may not be able to do.

If we were found to infringe upon a patent or other intellectual property right, if we failed to obtain or renew a license under a patent or other intellectual property right from a third party, or if a third party that we were licensing technologies from was found to infringe upon a patent or other intellectual property rights of another third party, we may be required to pay damages, including damages of up to three times the damages found or assessed, if the infringement is found to be willful, suspend the manufacture of certain products or reengineer or rebrand our products, if feasible, or we may be unable to enter certain new product markets.

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Our competitive position could suffer as a result.

On June 22, 2023, we filed a complaint in the United States District Court for the District of Columbia seeking a declaration that FDA’s approval on May 1, 2023 of the NDA for Avadel's drug Lumryz was unlawful.

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 was held on May 10, 2024, and

on October 30, 2024, the District Court issued an order denying our motion for summary judgment and granting Avadel’s and FDA’s cross-motions for summary judgment.

We have appealed the matter to the United States Court of Appeals for the District of Columbia Circuit.

We cannot predict the timing or ultimate outcome of this litigation or the impact of this litigation on our business, including any potential adverse consequences to, among other things, our reputation, relationships with governmental or regulatory authorities, including FDA.

For additional information, see " FDA Litigation " in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

With respect to our products and product candidates targeting rare indications, relevant regulatory exclusivities such as orphan drug exclusivity or pediatric exclusivity may not be granted or, if granted, may be limited.

The first NDA applicant with an orphan drug designation for a particular active moiety to treat a specific disease or condition that receives FDA approval is usually entitled to a seven-year exclusive marketing period in the U.S.

The first NDA applicant with an orphan drug designation for a particular active moiety to treat a specific rare disease or condition that receives FDA approval is usually entitled to a seven-year exclusive marketing period in the U.S.

for that drug, for that indication.

We rely, in part, on this ODE and other regulatory exclusivities to protect Xywav, Epidiolex, Zepzelca, Ziihera and, potentially, our other products and product candidates from competitors, and we expect to continue relying in part on these regulatory exclusivities in the future.

The duration of our regulatory exclusivity period could be impacted by a number of factors, including FDA’s later determination that our request for orphan designation was materially defective, that the manufacturer is unable to supply sufficient quantities of the drug, that the extension of the exclusivity period established by the Improving Regulatory Transparency for New Medical Therapies Act does not apply, or the possibility that we are unable to successfully obtain pediatric exclusivity.

The duration of our regulatory exclusivity period could be impacted by a number of factors, including FDA’s later determination that our request for orphan designation was materially defective, that the manufacturer is unable to supply sufficient quantities of the drug, that the extension of the exclusivity period for certain new drugs that become controlled substances by the Improving Regulatory Transparency for New Medical Therapies Act does not apply, or the possibility that we are unable to successfully obtain pediatric exclusivity.

There is no assurance that we will successfully obtain orphan drug designation for other products or product candidates or other rare diseases or that a product candidate for which we receive orphan drug designation will be approved, or that we will be awarded ODE upon approval as, for example, FDA may reconsider whether the eligibility criteria for such exclusivity have been met and/or maintained.

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According to FDA, the limited circumstances include a showing that the second drug is clinically superior to the drug with marketing exclusivity through a demonstration of superior safety or efficacy or that it makes a major contribution to patient care.

For example, even though FDA granted seven-year ODE to Xywav, FDA also approved Lumryz and granted Lumryz seven-year ODE based on FDA’s finding that Lumryz makes a major contribution to patient care and is therefore clinically superior to Xywav and Xyrem.

For example, FDA recognized seven years of ODE for Xywav in narcolepsy through July 21, 2027 (which was subsequently extended to January 21, 2028 by pediatric exclusivity), stating that Xywav is clinically superior to Xyrem by means of greater safety due to reduced chronic sodium burden.

Even though FDA granted seven-year ODE to Xywav in narcolepsy, FDA also approved Lumryz and granted Lumryz seven-year ODE based on FDA’s finding that Lumryz makes a major contribution to patient care and is therefore clinically superior to Xywav and Xyrem.

Similarly, even though FDA also granted seven-year ODE to Xywav in IH, FDA also granted Lumryz ODD based on the plausible hypothesis that Lumryz may be clinically superior to Xywav and Xyrem because Lumryz may provide a major contribution to patient care.

In addition, if a competitor obtains approval and marketing exclusivity for a drug product with an active moiety that is the same as that in a product candidate we are pursuing for the same indication before us, approval of our product candidate would be blocked during the period of marketing exclusivity unless we could demonstrate that our product candidate is clinically superior to the approved product.

In addition, if a competitor obtains approval and marketing exclusivity for a drug product with an active moiety that is the same as that in a product candidate we are pursuing for a different orphan indication, this may negatively impact the market opportunity for our product candidate.

Furthermore, if a competitor obtains approval and marketing exclusivity for a drug product with an active moiety that is the same as that in a product candidate we are pursuing for a different orphan indication, this may negatively impact the market opportunity for our product candidate.

There have been legal challenges, including from us, to aspects of FDA’s regulations and policies concerning the exclusivity provisions of the Orphan Drug Act, including whether two drugs are the same drug product, and our and future challenges could lead to changes that affect the protections potentially afforded our products in ways that are difficult to predict.

In this regard, we have filed a complaint in the United States District Court for the District of Columbia seeking a declaration that FDA’s approval of Lumryz was unlawful and allege that FDA acted outside its authority under the Orphan Drug Act, when, despite the ODE protecting Xywav, FDA approved Lumryz and granted Lumryz seven-year ODE.

However, legal challenges like this are inherently uncertain and there can be no guarantee that the United States District Court for the District of Columbia will agree with our interpretation of applicable laws and regulations or will otherwise agree with any or all of the allegations included in our compliant, or that we will otherwise prevail in this litigation.

We also cannot predict what other adverse consequences to, among other things, our reputation, our relationship with FDA or other governmental or regulatory authorities or the protections afforded our products could result from our decision to proceed with this litigation or the ultimate outcome thereof.

Moreover, in the future, there is the potential for legislative changes or additional legal challenges to FDA’s orphan drug regulations and policies, and it is uncertain how such challenges might affect our business.

In the EU, if a marketing authorization is granted for a medicinal product designated an orphan drug, that product is currently entitled to ten years of marketing exclusivity.

We rely in part on this orphan drug exclusivity and other regulatory exclusivities to protect Epidyolex and Vyxeos.

In the EU, if a marketing authorization is granted for a medicinal product designated as an orphan drug, that product is currently entitled to ten years of marketing exclusivity.

We rely in part on this orphan drug exclusivity and other regulatory exclusivities to protect Epidyolex, Ziihera and Vyxeos.

During the period of marketing exclusivity, subject to limited exceptions, no similar medicinal product may be granted a marketing authorization for the orphan indication.

There is no assurance that we will successfully obtain orphan drug designation for future rare indications or orphan exclusivity upon approval of any of our product candidates that have already obtained designation.

On April 26, 2023, the EC published proposals for a new package of pharmaceutical legislation that would replace the current Medicines Directive and the existing medicinal product regulation (including the pediatric and orphan regulations).

If enacted, the proposal could impact our ability to secure orphan designation for future products, and would impact the scope and duration of market and orphan exclusivities in the EU.

Further, a similar medicinal product may be granted a marketing authorization for the same indication notwithstanding our marketing exclusivity if we are unable to supply sufficient quantities of our product, or if the second product is safer, more effective or otherwise clinically superior to our orphan drug.

In addition, if a competitor obtains marketing authorization and orphan exclusivity for a

product that is similar to a product candidate we are pursuing for the same indication, approval of our product candidate would be blocked during the period of orphan marketing exclusivity unless we could demonstrate that our product candidate is safer, more effective or otherwise clinically superior to the approved product.

In December 2025, the European Parliament and the Council of the EU reached a provisional agreement on the revision of the existing EU pharmaceutical legislation, including the pediatric and orphan regulations.

Under new legislation, there are some changes to the regulatory exclusivity periods.

The provisional agreement is still pending formal approval by the

European Parliament and the Council of the EU and subsequent publication in the Official Journal of the EU.

Dependent on the final version of the text, the new legislation could impact our ability to secure orphan designation for future products, and would impact the scope and duration of market and orphan exclusivities in the EU.

The new legislation could impact our ability to maintain marketing exclusivity for future products in all EU member states if we are unable to meet certain access obligations or if we are unable to supply sufficient quantities of our product in all member states.

Other Risks Related to Our Business and Industry

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Conducting our business in multiple countries subjects us to a variety of risks and complexities that may materially and adversely affect our business, results of operations, financial condition and growth prospects, including:

• the diverse regulatory, financial and legal requirements in the countries where we are located or do business, and any changes to those requirements;

• the diverse regulatory, compliance, financial and legal requirements in the countries where we are located or do business, and any changes to those requirements;

• challenges inherent in efficiently managing employees and commercial partners in diverse geographies, including the need to adapt systems, policies, benefits and compliance programs to differing labor and employment law and other regulations, as well as maintaining positive interactions with our unionized employees;

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Our failure to do so could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Significant disruptions of information technology systems or data security breaches could adversely affect our business.

Significant disruptions of information technology systems or data security incidents could adversely affect our business.

In the ordinary course of our business, we and the third parties upon which we rely collect, store, process and transmit, or collectively, process large amounts of sensitive, proprietary, and/or confidential information, including intellectual property, business information, personal data, and clinical trial data, or collectively, sensitive data.

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In addition, many of those third parties, in turn, subcontract or outsource some of their responsibilities to third parties.

We rely on third party vendors and services to support various aspects of our business operations.

However, these third parties may pose risks related to data security compliance and contractual obligations.

An incident or failure by a third party to adequately protect our data could have adverse consequences for our business and reputation.

Our information technology systems, and those of our vendors, are large and complex and store large amounts of sensitive data.

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In addition to the extraction of important information, such threats could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering, malicious code, credential harvesting, personnel misconduct or error, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, and other threats that affect service reliability and threaten the confidentiality, integrity and availability of our information technology systems and sensitive data.

In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.

business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive data, and could result in adverse consequences to us such as government enforcement actions, additional reporting requirements and/or oversight, restrictions on processing sensitive data, litigation, indemnification obligations, negative publicity, reputational harm, monetary fund diversions, diversion of management attention, interruptions in our operations, financial loss, and other similar harms.

In addition, supply-chain

attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.

If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, or otherwise experience significant disruptions of our, our third party vendors’ and/or business partners’ information technology systems or security incidents, including in our remote work environment, such occurrence could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive data, and could result in adverse consequences to us such as government enforcement actions, additional reporting requirements and/or oversight, restrictions on processing sensitive data, litigation, indemnification obligations, negative publicity, reputational harm, monetary fund diversions, diversion of management attention, interruptions in our operations, financial loss, and other similar harms.

Any such event that leads to unauthorized access, use or disclosure of personal data, including personal data regarding our patients or employees, could harm our reputation, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, notify relevant stakeholders, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal data.

This could disrupt our business, result in increased costs or loss of revenue, and/or result in significant legal and financial exposure.

In addition, security breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may further harm us.

While we have implemented security measures to protect our information technology systems and infrastructure and sensitive data, there can be no assurance that such measures will be effective or prevent service interruptions or security breaches that could adversely affect our business.

In addition, security incidents and other inappropriate access can be difficult to detect, and any delay in identifying them may further harm us.

We may expend significant resources to implement and maintain security measures to try to protect against security incidents.

In addition, failure to maintain effective internal accounting controls related to security breaches and cybersecurity in general could impact our ability to produce timely and accurate financial statements and subject us to regulatory scrutiny.

In addition, failure to maintain effective internal accounting controls related to security incidents and cybersecurity in general could impact our ability to produce timely and accurate financial statements and subject us to regulatory scrutiny.

In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.

Our adoption of AI technologies introduces new risks and uncertainties.

We are adopting and exploring the use of AI technologies in our business, which introduces new risks and uncertainties.

These include potential inaccuracies or biases in AI outputs, cybersecurity vulnerabilities, and evolving global regulatory requirements governing AI use.

Reliance on flawed outputs could result in lower quality decision-making or prevent us from effectively utilizing AI in our business.

We may also become vulnerable to operational disruptions if the AI technologies we use experience downtimes or are compromised by cyberattacks.

If we do not effectively implement guardrails and train our employees or contractors on the safe and proper use of AI, or if our employees or contractors fail to effectively adhere to our established guardrails and training on the use of AI, we may experience adverse effects on our business, including data breaches, the loss of confidential information (including our intellectual property), unintentional disclosure of personal data, or other misuse of our proprietary information.

Further, several governments and regulatory authorities have proposed or passed laws and regulations governing the use of AI.

For example, in March 2024, the European Parliament adopted the AI Act that provides for EU-wide rules on data quality, transparency, human oversight and accountability with respect to the use of AI.

In April 2024, the EU also revised its Cybersecurity Directive NIS2 rules that create new cybersecurity risk management and reporting obligations.

Failure to comply with these current and future laws could result in significant penalties and reputational harm and could have a material adverse effect on our business and results of operations.

We are subject to significant ongoing regulatory obligations and oversight, which may subject us to civil or criminal proceedings, investigations, or penalties and may result in significant additional expense and limit our ability to commercialize our products.

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Regulatory Authorities

Our activities are subject to extensive regulation encompassing the entire life cycle of our products, from research and development activities to marketing approval (including specific post-marketing obligations), manufacturing, labeling, packaging, adverse event and safety reporting, storage, advertising, promotion, sale, pricing and reimbursement, recordkeeping, distribution, importing and exporting.

The failure by us or any of our third party partners, including our corporate development and collaboration partners, clinical trial sites, suppliers, distributors and our central pharmacy for Xywav and Xyrem, to comply with applicable requirements could subject us to administrative or judicial sanctions or other negative consequences, such as delays in approval or refusal to approve a product candidate, restrictions on our products, our suppliers, our other partners or us, the withdrawal, suspension or variation of product approval or manufacturing authorizations, untitled letters, warning letters, fines and other monetary penalties, unanticipated expenditures, product recall, withdrawal or seizure, total or partial suspension of production or distribution, interruption of manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, civil penalties and/or criminal prosecution, any of which could result in a significant drop in our revenues from the affected products and harm to our reputation and could have a significant impact on our sales, business and financial condition.

We monitor adverse events resulting from the use of our products, as do the regulatory authorities, and we file periodic reports with the authorities concerning adverse events.

Our activities are subject to extensive regulation encompassing the entire life cycle of our products, from R&D activities to marketing approval (including specific post-marketing obligations), manufacturing, labeling, packaging, adverse event and safety reporting, storage, advertising, promotion, sale, pricing and reimbursement, recordkeeping, distribution, importing and exporting.

The failure by us or any of our third party partners, including our corporate development and collaboration partners, clinical trial sites, suppliers, distributors and our central pharmacy for Xywav and Xyrem, to comply with applicable requirements could subject us to administrative or judicial sanctions or other negative consequences, such as delays in approval or refusal to approve a product candidate, restrictions on our products, our suppliers, our other partners or us, the withdrawal, suspension or variation of product approval or manufacturing authorizations, untitled letters, warning letters, fines and other monetary penalties, unanticipated expenditures, product recall, withdrawal or seizure, total or partial suspension of production or distribution, interruption of manufacturing or clinical trials, operating restrictions, injunctions, debarment, suspension of licenses, import detentions and bans, civil penalties and/or criminal prosecution, any of which could result in a significant drop

in our revenues from the affected products and harm to our reputation and could have a significant impact on our sales, business and financial condition.

We monitor adverse events resulting from the use of our products, as do the related regulatory authorities, and we file periodic reports with the authorities concerning adverse events.

The authorities review these events and reports and, if they determine that any events and/or reports indicate a trend or signal, they can require a change in a product label, restrict sales and marketing and/or require conduct or other actions, potentially including variation, withdrawal or suspension of the marketing authorization, any of which could result in reduced market acceptance and demand for our products, could harm our reputation and our ability to market our products in the future, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

FDA, the competent authorities of the EU member states on behalf of EMA, and the competent authorities of other European countries, also periodically inspect our records related to safety reporting.

EMA’s Pharmacovigilance Risk Assessment Committee may propose to the Committee for Medicinal Products for Human Use that the marketing authorization holder be required to take specific steps or advise that the existing marketing authorization be varied, suspended or revoked.

EMA’s Pharmacovigilance Risk Assessment Committee may propose to the CHMP that the marketing authorization holder be required to take specific steps or advise that the existing marketing authorization be varied, suspended or revoked.

Failure to adequately and promptly correct the observation(s) can result in further regulatory enforcement action, which could include the variation, suspension or withdrawal of marketing authorization or imposition of financial penalties or other enforcement measures.

Rylaze and Epidyolex are available on a named patient basis or through a compassionate use process in many countries where they are not commercially available.

Epidyolex, Rylaze, Ziihera, Modeyso, Vyxeos and Defitelio are available on a named patient basis or through a compassionate use process in many countries where they are not commercially available.

If any such country’s regulatory authorities determine that we are promoting such products without proper authorization, we could be found to be in violation of pharmaceutical advertising laws or the regulations permitting sales under named patient programs.

In that case, we may be subject to financial or other penalties.

Any failure to maintain revenues from sales of products on a named patient basis and/or to generate revenues from commercial sales

of these products exceeding historical sales on a named patient basis could have an adverse effect on our business, financial condition, results of operations and growth prospects.

Any failure to maintain revenues from sales of products on a named patient basis and/or to generate revenues from commercial sales of these products exceeding historical sales on a named patient basis could have an adverse effect on our business, financial condition, results of operations and growth prospects.

FDA, the competent authorities of the EU member states and other European countries, and other governmental authorities require advertising and promotional materials to be truthful and not misleading, and products to be marketed only for their approved indications and in accordance with the provisions of the approved label.

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Other Regulatory Authorities

We are also subject to regulation by other regional, national, state and local agencies, including the DEA, the DOJ, the FTC, the United States Department of Commerce, the OIG, and other regulatory bodies, as well as similar governmental authorities in those non-U.S.

We are also subject to regulation by other regional, national, state and local agencies, including the DEA, the DOJ, the FTC, the U.S.

Department of Commerce, the OIG, and other regulatory bodies, as well as similar governmental authorities in those non-U.S.

countries in which we commercialize our products.

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For example, in November 2020, the OIG issued a Special Fraud Alert to highlight certain inherent risks of remuneration related to speaker programs sponsored by drug and medical device companies, which may not in all circumstances qualify under either safe harbor or statutory exception protection.

The Special Fraud Alert sent a clear signal that speaker programs will be subject to potentially heightened enforcement scrutiny, in particular for those programs with certain characteristics identified as risk factors by OIG.

Many companies have faced government investigations or lawsuits by whistleblowers who bring a qui tam action under the False Claims Act on behalf of themselves and the government for a variety of alleged improper marketing activities, including providing free product to customers expecting that the customers would bill federal programs for the product, providing consulting fees, grants, free travel and other benefits to physicians to induce them to prescribe the company’s products, and inflating prices reported to private price publication services, which are used to set drug reimbursement rates under government healthcare programs.

For example, we are subject to a qui tam whistleblower lawsuit originally filed under seal on May 27, 2021.

For additional information see “ Qui tam matter ” in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10‑K.

providing consulting fees, grants, free travel and other benefits to physicians to induce them to prescribe the company’s products, and inflating prices reported to private price publication services, which are used to set drug reimbursement rates under government healthcare programs.

For example, we were subject to a qui tam whistleblower lawsuit originally filed under seal on May 27, 2021.

For additional information see “ Qui Tam Matters ” in Note 13, Commitments and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part IV of this Annual Report on Form 10-K.

In addition, the government and private whistleblowers have pursued False Claims Act cases against pharmaceutical companies for causing false claims to be submitted as a result of the marketing of their products for unapproved uses or violations of the federal anti-kickback statute.

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Any investigations or litigation may result in damages, fines, penalties or administrative sanctions against us, negative publicity or other negative actions that could harm our reputation, reduce demand for our products and/or reduce coverage of our products, including by federal health care programs and state health care programs.

If we are found to have violated one of these laws, we could be excluded from participation in federal health care programs.

If any or all of these events occur, our business and stock price could be materially and adversely affected.

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In addition, government agencies and private entities may inquire about our marketing practices or pursue other enforcement activities based on the disclosures in those public reports.

If the data reflected in our reports are found to be in violation of any

of the Sunshine provisions or any other U.S.

If the data reflected in our reports are found to be in violation of any of the Sunshine provisions or any other U.S.

federal, state or local laws or regulations that may apply, or if we otherwise fail to comply with the Sunshine provisions or similar requirements of state or local regulators, we may be subject to significant civil and administrative penalties, damages or fines.

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The OIG has issued guidance for how pharmaceutical manufacturers can lawfully make donations to charitable organizations who provide co-pay assistance to Medicare patients, provided that such organizations, among other things, are bona fide charities, are entirely independent of and not controlled by the manufacturer, provide aid to applicants on a first-come basis according to consistent financial criteria, and do not link aid to use of a donor’s product.

As of August 2024, we have fulfilled the terms and OIG closed out our corporate integrity agreement that required us to maintain our ongoing corporate compliance program.

As of August 2024, we have fulfilled the terms and the OIG closed out our corporate integrity agreement that required us to maintain our ongoing corporate compliance program.

Although we are continuing to implement our corporate compliance program and have structured our programs to follow available guidance, if we or our vendors or donation recipients are deemed to fail to comply with relevant laws, regulations or evolving government guidance in the operation of these programs, such facts could be used as the basis for an enforcement action against us by the federal government or other enforcement agencies or private litigants, or we could become liable for payment of certain stipulated penalties or could be excluded from participation in federal health care programs, which would have a material adverse effect on our sales, business and financial condition.

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Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

We are also subject to federal, state, national and international laws and regulations governing the privacy and security of health-related and other personal data we collect and maintain, including, but not limited to, Section 5 of the Federal Trade Commission Act, the Health Breach Notification Rule, HIPAA, the California Consumer Privacy Act, as amended by California Privacy Rights Act, as well as other similar state privacy laws, and the EU’s and U.K.’s GDPR.

The GDPR, for example, imposes restrictions on the processing (e.g., collection, use and disclosure) of personal data in the EU and the U.K.

We are also subject to federal, state, national and international laws and regulations governing the privacy and security of health-related and other personal data we collect and maintain, including, but not limited to, Section 5 of the Federal Trade Commission Act, the Health Breach Notification Rule, the DOJ’s Bulk Sensitive Data Transfer Rule, HIPAA, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, as well as other similar state privacy laws.

Additionally, the EU’s and U.K.’s GDPR imposes restrictions on the processing (e.g., collection, use and disclosure) of personal data in the EU and the U.K.

and also imposes strict restrictions on the transfer of personal data out of the EU to the U.S.

The GDPR imposes penalties of up to 20 million Euros or up to 4% of annual global revenue.

HIPAA imposes privacy and security obligations on covered entity health care providers, health plans, and health care clearinghouses, as well as their “business associates” – certain persons or covered entities that create, receive, maintain, or transmit protected health information in connection with providing a specified service or performing a function for or on behalf of a covered entity.

Although we are not directly subject to HIPAA, we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

HIPAA imposes privacy and security obligations on covered entity health care providers, health plans, and health care clearinghouses, as well as their “business associates” – certain persons or entities that create, receive, maintain, or transmit protected health information in connection with providing a specified service or performing a function for or on behalf of a covered entity.

Although we are not generally subject to HIPAA, we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

The FTC also sets expectations for failing to take appropriate steps to keep consumers’ personal information secure or failing to provide a level of security commensurate to promises made to an individual about the security of their personal information (such as in a privacy notice);

such failures may constitute unfair or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act.

The FTC expects a company’s data privacy and security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

Additionally, DOJ’s Bulk Sensitive Data Transfer Rule restricts cross-border access to bulk sensitive personal data, which includes personal health data, by specific foreign governments and related covered persons.

The Rule governs specific types of transactions identified in the Rule.

Failure to comply with the DOJ Rule may result in civil and criminal penalties.

Compliance with these laws requires a flexible privacy framework and substantial resources, and compliance efforts will likely be an increasing and substantial cost in the future.

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Any associated claims, inquiries, or investigations or other government actions could lead to unfavorable outcomes that have a material impact on our business including through significant penalties or fines, monetary judgments or settlements including criminal and civil liability for us and our officers and directors, increased compliance costs, delays or impediments in the development of new products, negative publicity, increased operating costs, diversion of management time and attention, or other remedies that harm our business, including orders that we modify or cease existing business practices.

Moreover, as a result of the broad scale release and availability of AI technologies such as generative AI, there is a global trend towards more regulation (e.g., the EU AI Act and AI laws passed in U.S.

states) to ensure the ethical use, privacy, and security of AI and the data that it processes.

Compliance with such laws will likely be an increasing and substantial cost in the future.

Disruptions at FDA, the SEC and other government agencies and regulatory authorities including due to a reduction in such agencies’ workforces, inadequate funding or the current and potential future government shutdowns, could prevent those agencies from performing normal functions on which our business relies, which could negatively impact our business.

The ability of FDA to review and approve new products or review other regulatory submissions can be affected by a variety of factors, including statutory, regulatory and policy changes, inadequate government budget and funding levels, government shutdowns, a reduction in FDA’s workforce and its ability to hire and retain key personnel.

Disruptions at FDA and other agencies may also increase the time to meet with and receive agency feedback, review and/or approve our submissions, conduct inspections, issue regulatory guidance, or take other actions that facilitate the development, approval and marketing of regulated products, which would adversely affect our business.

In addition, government proposals to reduce or eliminate budgetary deficits may include reduced allocations to FDA, the SEC and other government agencies and regulatory authorities on which our operations may rely.

For example, in October 2025, the U.S.

government shut down for 43 days and certain regulatory agencies, including FDA, had to furlough critical employees and stop critical activities.

If a prolonged government shutdown occurs again in the future, it could significantly impact the ability of FDA to review and process our regulatory submissions, which could have a material adverse effect on our business.

It is unclear how these executive actions or other potential actions by the Trump Administration or other parts of the federal government will impact FDA, the SEC or other regulatory authorities that oversee our business.

The reductions in FDA’s workforce and budgetary pressures could

significantly impact the ability of FDA to timely review and process our regulatory submissions or take other actions critical to the marketing of our products which could have a material adverse effect on our business.

If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We participate in the Medicaid Drug Rebate Program, the 340B program, the U.S.

Department of Veterans Affairs’ FSS pricing program, and Tricare program, and have obligations to report the average sales price for certain of our drugs to the Medicare program.

All of these programs are described in more detail under the heading “Business—Pharmaceutical Pricing, Reimbursement by Government and Private Payors and Patient Access” in Part I, Item 1 of our Annual Report on Form 10‑K for the year ended December 31, 2024.

Manufacturers are required to report the average sales price for drugs under the Medicare program regardless of whether they are enrolled in the Medicaid Drug Rebate Program.

We participate in the Medicaid Drug Rebate Program, the 340B program, the VA’s FSS pricing program, and Tricare program, and have obligations to report the ASP for certain of our drugs to the Medicare program.

Manufacturers are required to report the ASP for drugs under the Medicare program regardless of whether they are enrolled in the Medicaid Drug Rebate Program.

In addition, manufacturers must pay refunds to Medicare for single source drugs or biologicals, or biosimilar biological products, reimbursed under Medicare Part B and packaged in single-dose containers or single-use packages for units of discarded drug reimbursed by Medicare Part B in excess of 10 percent of total allowed charges under Medicare Part B for that drug.

Statutory or regulatory changes or guidance from CMS could affect the average sales price calculations for our products and the resulting Medicare payment rate and could negatively impact our results of operations.

Further, the IRA established a Medicare Part B inflation rebate scheme, under which, generally speaking, manufacturers will owe rebates if the average sales price of a Part B drug increases faster than the pace of inflation.

Statutory or regulatory changes or guidance from CMS could affect the ASP calculations for our products and the resulting Medicare payment rate and could negatively impact our results of operations.

Further, the IRA established a Medicare Part B inflation rebate scheme, under which, generally speaking, manufacturers will owe rebates if the ASP of a Part B drug increases faster than the pace of inflation.

Failure to timely pay a Part B inflation rebate is subject to a civil monetary penalty.

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Price recalculations also may affect the ceiling price at which we are required to offer our products under the 340B program and give rise to an obligation to refund entities participating in the 340B program for overcharges during past quarters impacted by a price recalculation.

Civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we are found to have made a misrepresentation in the reporting of our average sales price, if we fail to submit the required price data on a timely basis, or if we are found to have charged 340B covered entities more than the statutorily mandated ceiling price.

Civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we are found to have made a misrepresentation in the reporting of our ASP, if we fail to timely pay a required rebate, if we fail to submit the required price data on a timely basis, or if we are found to have charged 340B covered entities more than the statutorily mandated ceiling price.

CMS could also decide to terminate our Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid or Medicare Part B for our covered outpatient drugs.

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In addition, on September 26, 2024, CMS finalized a rule modifying the regulations implementing the Medicaid Drug Rebate Program in ways that could increase the costs and complexity of compliance and that could increase manufacturer rebate liability, given that the final rule clarified certain aspects of the definition of covered outpatient drugs subject to these rebates, which could expand the number of units of drugs that qualify for this definition, among other changes.

Regulatory and legislative changes, and judicial rulings relating to the Medicaid Drug Rebate Program and related policies (including coverage expansion), have increased and will continue to

increase our costs and the complexity of compliance, have been and will continue to be time-consuming to implement, and could have a material adverse effect on our results of operations, particularly if CMS or another agency challenges the approach we take in our implementation.

Regulatory and legislative changes, and judicial rulings relating to the Medicaid Drug Rebate Program and related policies (including coverage expansion), have increased and will continue to increase our costs and the complexity of compliance, have been and will continue to be time-consuming to implement, and could have a material adverse effect on our results of operations, particularly if CMS or another agency challenges the approach we take in our implementation.

Rebates are no longer subject to a cap on the rebate amount, which negatively impacts our rebate liability.

The HRSA issued a final regulation regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities.

HRSA issued a final regulation regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities.

Implementation of this regulation could affect our obligations and potential liability under the 340B program in ways we cannot anticipate.

We are also required to report the 340B ceiling prices for our covered outpatient drugs to HRSA, which then publishes them to 340B covered entities.

We are also required

to report the 340B ceiling prices for our covered outpatient drugs to HRSA, which then publishes them to 340B covered entities.

If we are found to have knowingly and intentionally charged 340B covered entities more than the statutorily mandated ceiling price, we could be subject to significant civil monetary penalties and/or such failure also could be grounds for HRSA to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs would no longer be eligible for federal payment under the Medicaid or Medicare Part B program, which would have a material adverse effect on our business, financial condition, results of operations and growth prospects, including our ability to acquire, in-license or develop new products to grow our business.

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Further, legislation may be introduced at the state or Federal level that, if passed, would, among other things, modify the requirements of the 340B program.

Medicare Part D generally provides coverage to enrolled Medicare patients for self-administered drugs ( i.e.

, drugs that are not administered by a physician).

Medicare Part D generally provides coverage to enrolled Medicare patients for self-administered drugs (i.e., drugs that are not administered by a physician).

Medicare Part D is administered by private prescription drug plans approved by the U.S.

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The prescription drug plans negotiate pricing with manufacturers and pharmacies and may condition formulary placement on the availability of manufacturer discounts.

In addition, manufacturers, including us, were required through December 31, 2024 to provide to CMS a 70% discount on brand name prescription drugs utilized by Medicare Part D beneficiaries when those beneficiaries are in the coverage gap phase of the Part D benefit design.

Civil monetary penalties could be due if we fail to offer discounts to beneficiaries under the Medicare Part D coverage gap discount program.

The IRA sunsets the coverage gap discount program starting in 2025 and replaces it with a new manufacturer discount program, under which manufacturers are, in general, to provide a 10% discount on a covered Part D drug where a beneficiary is in the initial phase of Part D coverage and a 20% discount where a beneficiary is in the catastrophic phase of Part D coverage.

The IRA ended the coverage gap discount program, under which manufacturers agreed to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during the coverage gap period, starting in 2025 and replaced it with a new manufacturer discount program, under which manufacturers are, in general, required to provide a 10% discount on a covered Part D drug where a beneficiary is in the initial phase of Part D coverage and a 20% discount where a beneficiary is in the catastrophic phase of Part D coverage.

Failure to pay a discount under this new program will be subject to a civil monetary penalty.

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Failure to timely pay a Part D inflation rebate is subject to a civil monetary penalty.

The IRA also creates a drug price negotiation program under which the prices for Medicare units of certain high Medicare spend drugs and biologicals without generic or biosimilar competition will be capped by reference to, among other things, a specified non-federal average manufacturer price starting in 2026.

The IRA also created a drug price negotiation program under which the prices for Medicare units of certain high Medicare spend drugs and biologicals without generic or biosimilar competition will be capped by reference to, among other things, a specified Non-FAMP starting in 2026.

Failure to comply with requirements under the drug price negotiation program is subject to an excise tax and/or a civil monetary penalty.

This or any other legislative change could impact the market conditions for our products.

We further expect continued scrutiny on government price reporting from Congress, agencies, and other bodies.

Pursuant to applicable law, knowing provision of false information in connection with price reporting under the U.S.

Department of Veterans Affairs, FSS or Tricare programs can subject a manufacturer to civil monetary penalties.

We further expect continued scrutiny on government price reporting from U.S.

Congress, agencies, and other bodies.

Pursuant to applicable law, knowing provision of false information in connection with price reporting under the VA, FSS or Tricare programs can subject a manufacturer to civil monetary penalties.

These program obligations also contain extensive disclosure and certification requirements.

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Any recall of our products could materially adversely affect our business by rendering us unable to sell that product for some time and by adversely affecting our reputation.

A recall could also result in product liability claims by individuals and third party payors.

A recall could also

result in product liability claims by individuals and third party payors.

In addition, product liability claims could result in an investigation of the safety or efficacy of our products, our manufacturing processes and facilities, or our marketing programs conducted by FDA, the EC or the competent authorities of the EU member states.

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Such claims could also harm our reputation and the reputation of our products, adversely affecting our ability to market our products successfully.

We use hazardous materials in our manufacturing facilities, and any claims relating to the improper handling, storage, release or disposal of these materials could be time-consuming and expensive.

Our operations are subject to complex and increasingly stringent environmental, health and safety laws and regulations in the countries where we operate and, in particular, in Ireland, the U.K.

We and our Third-Party Manufacturers or Suppliers use hazardous materials in our manufacturing facilities, and any claims relating to the improper handling, storage, release or disposal of these materials could be time-consuming and expensive.

Our and any of our third-party manufacturers’ or suppliers’ operations are subject to complex and increasingly stringent environmental, health and safety laws and regulations in the countries where we, our manufacturers and our suppliers operate and, in particular, in Ireland, the U.K.

and Italy where we have manufacturing facilities.

If an accident or contamination involving pollutants or hazardous substances occurs, an injured party could seek to hold us liable for any damages that result and any liability could exceed the limits or fall outside the coverage of our insurance.

We may not be able to maintain insurance with sufficient coverage on acceptable terms, or at all.

If an accident or contamination involving pollutants or hazardous substances occurs, an injured party could seek to hold us, our manufacturers or our suppliers liable for any damages that result and any liability could exceed the limits or fall outside the coverage of our insurance.

We, our manufacturers, and/or suppliers may not be able to maintain insurance with sufficient coverage on acceptable terms, or at all.

Costs, damages and/or fines may result from the presence, investigation and remediation of such contamination at properties currently or formerly owned, leased or operated by us or at off-site locations, including where we have arranged for the disposal of hazardous substances or waste.

In addition, we may be subject to third party claims, including for natural resource damages, personal injury and property damage, in connection with such contamination.

In addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws and regulations, which have tended to become more stringent over time.

These current or future laws and regulations may impair our research, development or production efforts.

Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions or liabilities, which could materially adversely affect our business, financial condition, results of operations and prospects.

Risks Related to Controlled Substances

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For example, they may not be refilled without a new prescription.

Drug products approved for medical use by FDA that contain cannabis or cannabis extracts may be controlled substances and will be rescheduled to Schedules II-V after approval, or, like Epidiolex, removed completely from the schedules by operation of other laws.

Drug products approved for medical use by FDA that contain cannabis or cannabis extracts may be controlled substances and, if so, will be rescheduled to Schedules II-V after approval, or, like Epidiolex, removed completely from the schedules by operation of other laws.

Individual states have also established controlled substance laws and regulations.

Though state-controlled substances laws often mirror federal law, they may separately schedule our products or our product candidates as well.

We or our partners may also be required to obtain separate state registrations, permits or licenses in order to be able to manufacture, distribute, administer or prescribe controlled substances for clinical trials or commercial sale, and failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law.

requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law.

facilities conducting research, manufacturing, distributing, importing or exporting, or dispensing controlled substances must be registered (licensed) to perform these activities and must comply with the security, control, recordkeeping and reporting obligations under the CSA, DEA regulations and corresponding state requirements.

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government on an annual basis.

Although our licenses have been renewed each year since 1998, they may not be in the future, in which case we may not be able to carry on our research and development program in the U.K.

Although our licenses have been renewed each year since 1998, they may not be in the future, in which case we may not be able to carry on our R&D program in the U.K.

In addition, we are required to maintain our existing commercial licenses to cultivate, produce and supply cannabis.

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Most countries are parties to the Single Convention on Narcotic Drugs 1961, which governs international trade and domestic control of narcotic substances, including cannabis extracts.

Countries may interpret and implement their treaty obligations in a way that creates a legal obstacle to our obtaining regulatory approval for Epidyolex in those countries.

Countries may interpret and implement their treaty obligations in a way that creates a legal obstacle for us to obtain regulatory approval for Epidyolex in those countries.

These countries may not be willing or able to amend or otherwise modify their laws and regulations to permit Epidyolex to be marketed, or achieving such amendments to the laws and regulations may take a prolonged period of time.

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In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.

In addition, if we are unable to repay amounts under our Amended Credit Agreement or Secured Notes, the Amended Credit Agreement lenders and note holders could proceed against the collateral granted to them to secure that debt, which would seriously harm our business.

In addition, if we are unable to repay amounts under the Amended Credit Agreement or Secured Notes, the Amended Credit Agreement lenders and note holders could proceed against the collateral granted to them to secure that debt, which would seriously harm our business.

Covenants in the Amended Credit Agreement and indenture governing our Secured Notes restrict our business and operations in many ways and if we do not effectively manage our covenants, our financial conditions and results of operations could be adversely affected.

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In addition, an event of default under the Amended Credit Agreement may permit the lenders to refuse to permit additional borrowings under the Amended Revolving Credit Facility or to terminate all commitments to extend further credit under the Amended Revolving Credit Facility.

Furthermore, if we are unable to repay the amounts due and payable under the Amended Credit Agreement or the Secured Notes, as the case

may be, the lenders and note holders thereof may be able to proceed against the collateral granted to them to secure that indebtedness.

Furthermore, if we are unable to repay the amounts due and payable under the Amended Credit Agreement or the Secured Notes, as the case may be, the lenders and note holders thereof may be able to proceed against the collateral granted to them to secure that indebtedness.

In the event our lenders or note holders, as the case may be, accelerate the repayment of such borrowings, we cannot assure you that we will have sufficient assets to repay such indebtedness.

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and worldwide resulting from the effects of inflationary pressures, potential future bank failures or otherwise.

In addition, under Irish law we must have authority from our shareholders to issue any ordinary shares, including ordinary shares that are part of our authorized but unissued share capital, and we currently have such authorization.

Moreover, as a matter of Irish law, when an Irish public limited company issues ordinary shares to new shareholders for cash, the company must first offer those shares on the same or more favorable terms to existing shareholders on a pro-rata basis, unless this statutory pre-emption obligation is dis-applied, or opted out of, by approval of its shareholders.

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This current pre-emption opt-out authority is due to expire in January 2027.

If we are unable to obtain further pre-emption authorities from our shareholders in the future, or otherwise continue to be limited by the terms of new pre-emption authorities approved by our shareholders in the future, our ability to use our unissued share capital to fund in-licensing, acquisition or other business opportunities, or to otherwise raise capital, could be adversely affected.

If we are unable to obtain further share issuance and pre-emption authorities from our shareholders in the future, or otherwise continue to be limited by the terms of new share issuance and pre-emption authorities approved by our shareholders in the future, our ability to use our unissued share capital to fund in-licensing, acquisition or other business opportunities, or to otherwise raise capital, could be adversely affected or precluded altogether.

In any event, an inability to borrow or raise additional capital in a timely manner and on attractive terms could prevent us from expanding our business or taking advantage of acquisition opportunities and could otherwise have a material adverse effect on our business and growth prospects.

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Events giving rise to impairment are an inherent risk in the pharmaceutical industry and cannot be predicted.

For example, in the third quarter of 2022, we recorded a $133.6 million asset impairment charge as a result of the decision to discontinue our nabiximols program.

Our results of operations and financial position in future periods could be negatively impacted should future impairments of intangible assets or goodwill occur.

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As a result, our effective tax rate is derived from a combination of applicable tax rates in the various jurisdictions where we operate.

Our effective tax rate may fluctuate depending on a number of factors, including, but not limited to, the

distribution of our profits or losses between the jurisdictions where we operate and changes to or differences in interpretation of tax laws.

For example, our income tax expense for the year ended December 31, 2021, included an expense of $259.9 million arising on the remeasurement of our U.K.

net deferred tax liability, which arose primarily in relation to the GW Acquisition, due to a change in the statutory tax rate in the U.K.

following enactment of the U.K.

Finance Act 2021.

We are subject to reviews and audits by the U.S.

IRS, and other taxing authorities from time to time, and the IRS or other taxing authority may challenge our structure, transfer pricing arrangements and tax positions through an audit or lawsuit.

Our effective tax rate may fluctuate depending on a number of factors, including, but not limited to, the allocation of our profits or losses between the jurisdictions where we operate and changes to or differences in interpretation of tax laws.

We are subject to reviews and audits by the IRS, and other taxing authorities from time to time, and the IRS or other taxing authority may challenge our structure, transfer pricing arrangements and tax positions through an audit or lawsuit.

Responding to or defending against challenges from taxing authorities could be expensive and consume time and other resources.

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and other countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect us.

One example is the OECD’s initiative in the area of “base erosion and profit shifting.” In October 2021, the OECD released Pillar Two.

In December 2022, the EU agreed to implement this global minimum tax rate for EU member states by the start of 2024.

In accordance with the EU directive, Ireland adopted legislation implementing Pillar Two on December 18, 2023, with effect from the start of 2024.

Other jurisdictions in which we do business have also adopted legislation implementing Pillar Two.

Pillar Two legislation could have an adverse impact on our effective tax rate, tax liabilities, and cash tax.

Further, the IRA, among other things, introduced new tax provisions, including a 15% corporate alternative minimum tax for certain large corporations, and a one percent excise tax on certain share repurchases by publicly traded corporations, including certain repurchases by specified domestic affiliates of publicly traded foreign corporations.

One example is the OECD’s initiative in the area of “base erosion and profit shifting,” including the 15% global minimum tax under Pillar Two.

Ireland adopted legislation implementing Pillar Two with effect from the beginning of 2024, and a number of other jurisdictions in which we do business have adopted legislation implementing certain key aspects of Pillar Two, with further provisions expected to be enacted in the future.

The OECD has issued (and is expected to continue to issue further) administrative guidance providing transition and safe harbor rules in relation to the implementation of the Pillar Two proposal.

For example, on January 5, 2026, the OECD published a package of administrative guidance providing for, among other things, the extension of the application of certain existing transitional safe harbor rules and the introduction of additional safe harbors.

We are monitoring developments and evaluating the potential impacts of the Pillar Two rules, including on our effective tax rates, and considering our eligibility to qualify for the relevant safe harbor rules.

Any further Pillar Two legislation or guidance could have an adverse impact on our effective tax rate, tax liabilities, and cash tax and may increase our compliance costs.

Further, the IRA, among other things, introduced new tax provisions, including a 15% corporate alternative minimum tax for certain large corporations.

These provisions became effective in 2023.

The IRS has issued limited guidance on the corporate alternative minimum tax, the excise tax and the other tax provisions in the IRA, and much of this guidance has yet to be finalized.

The IRS has issued limited guidance on the corporate alternative minimum tax and the other tax provisions in the IRA, and much of this guidance has yet to be finalized.

Final guidance under the IRA could adversely affect our tax provision, cash tax liability and effective tax rate.

and other jurisdictions in which we operate continue to consider other changes in tax laws and regulations that apply to multinationals, including proposed legislation and guidance with respect to research and development expenditures and other guidance under the 2017 Tax Cuts and Jobs Act.

The new presidential administration has included as part of its agenda a potential reform of U.S.

tax laws, the details of which have not yet emerged.

In addition, certain of the provisions in the 2017 Tax Cuts and Jobs Act will change or expire on December 31, 2025 unless Congress takes action to extend these provisions in their current form.

In particular, a significant portion of our income taxable in the U.S.

qualifies for preferential treatment as foreign-derived intangible income.

Beginning in 2026, the effective tax rate for foreign-derived intangible income will increase from 13% to 16%.

tax rates increase and/or the foreign-derived intangible income deduction is reduced or eliminated, our tax provision, cash tax liability and effective tax rate would be adversely affected.

and other jurisdictions in which we operate continue to consider other changes in tax laws and regulations that apply to multinationals, including proposed legislation and guidance with respect to R&D expenditures and other guidance under the 2017 Tax Cuts and Jobs Act.

On July 4, 2025, the U.S.

adopted legislation that extended certain provisions of the 2017 Tax Cuts and Jobs Act, which would otherwise have expired on December 31, 2025, and introduced a number of other changes to U.S.

tax laws, including immediate expensing of domestic research and experimentation expenditures.

The new legislation also introduced certain amendments to the foreign-derived intangible income provisions, with effect as of 2026.

We are still evaluating the effect of the new legislation on our tax provision, cash tax liability and effective tax rate.

The IRS may not agree with the conclusion that we should be treated as a foreign corporation for U.S.

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common stock when the businesses of Jazz Pharmaceuticals, Inc.

and Azur Pharma Public Limited Company were combined in the Azur Merger, the IRS could assert that we should be treated as a U.S.

and Azur Pharma were combined in the Azur Merger, the IRS could assert that we should be treated as a U.S.

corporation for U.S.

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Future sales and issuances of our ordinary shares, securities convertible into or exercisable or exchangeable for our ordinary shares or rights to purchase ordinary shares or convertible or exchangeable securities could result in additional dilution of the percentage ownership of our shareholders and could cause our share price to decline.

We expect to continue to opportunistically seek access to additional capital to license or acquire additional products, product candidates or companies to expand our operations or for general corporate purposes.

To the extent we raise additional capital by issuing equity securities or securities convertible into or exchangeable for ordinary shares, our shareholders may experience substantial dilution.

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In addition, changes we make to our current and future work environments may not meet the needs or expectations of our employees or may be perceived as less favorable compared to other companies’ policies, which could negatively impact our ability to hire and retain qualified personnel, whether in a remote or in-office environment.

In December 2024, our Chief Executive Officer notified us of his intent to retire from his role as Chief Executive Officer upon the selection and appointment of our next Chief Executive Officer, and to continue serving as Chairperson of the Board of Directors.

Moreover, the loss of services and institutional knowledge of one or more additional members of our executive management team or other key personnel could delay or prevent the successful completion of some of our vital activities and may negatively impact our operations and future growth.

Moreover, the loss of services and institutional knowledge of one or more members of our executive management team or other key personnel could delay or prevent the successful completion of some of our vital activities and may negatively impact our operations and future growth.

We do not carry “key person” insurance.

In addition, changes in our organization as a result of executive management transition may have a disruptive impact on our ability to implement our strategy.

Until we integrate new personnel, and unless they are able to succeed in their positions, we may be unable to successfully manage and grow our business.

In any event, if we are unable to attract, retain and motivate quality individuals, or if there are delays, or if we do not successfully manage personnel and executive management transitions, our business, financial condition, results of operations and growth prospects could be adversely affected.

Anti-diversity, equity and inclusion initiatives could expose us to the risk of litigation or investigations, resulting in injunctions, penalties, or reputational harm.

Our workforce initiatives could expose us to the risk of litigation or investigations, resulting in injunctions, penalties, or reputational harm.

We have talent management efforts designed to build and maintain an inclusive environment with diverse thought, backgrounds, experiences and skillsets throughout our organization.

However, there has been increasing scrutiny on corporate DEI initiatives, including from activists and policymakers challenging how such initiatives comply with civil rights protections.

For example, the U.S.

President recently issued an executive order opposing DEI initiatives in the private sector.

Such anti-DEI initiatives and scrutiny could expose us to the risk of litigation or investigations, resulting in injunctions, penalties, or reputational harm.

However, there has been increasing scrutiny on these types of initiatives, including from activists and policymakers challenging how such initiatives comply with civil rights

Such scrutiny could expose us to the risk of litigation or investigations, resulting in injunctions, penalties, or reputational harm.

In addition, if we become unable to (or are perceived not to) successfully implement certain of our workforce initiatives, including in keeping with current or potential future laws or interpretations thereof, our ability to recruit, attract and retain talent may be adversely impacted.

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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-K

Item 1A. Risk Factors