ALKS 10-K & 10-Q changes, risk factors and insider trading

Sales of our proprietary products comprise a significant portion of our revenues. We developed and exclusively manufacture VIVITROL for the treatment of adults with alcohol dependence and opioid dependence, ARISTADA for the treatment of adults with schizophrenia, ARISTADA INITIO for initiation onto ARISTADA for the treatment of adults with schizophrenia, and LYBALVI for the treatment of adults with schizophrenia and for the treatment of adults with bipolar I disorder,disorder. and weWe exclusively commercialize these productsproducts, and LUMRYZ for the treatment of cataplexy or EDS in patients seven years and older with narcolepsy, in the U.S. Our success depends in large part on our ability to continue to successfully manufacture and/or commercialize such products in the complex markets into which they are sold. Any significant negative developments relating to these products could have a material adverse effect on our revenues from these products and, in turn, on our business, financial condition, cash flows and results of operations and the market price of our ordinary shares.

the perception of physicians and other members of the healthcare community as to our products’ safety and efficacy relative to that of current or future competing products and the willingness or ability of physicians and other members of the healthcare community to prescribe, dispense and/or administer, and patients to use, our productsproducts, including those that are scheduled by the DEA;

regulatory developments and actions related to the manufacture, commercialization or continued use of our products, including FDA actions such as the issuance or modification of a REMS or issuance of an untitled or warning letter, or conduct of an audit by the FDAFDA, the DEA, or another regulatory authority in which a manufacturing or quality deficiency is identified;

The availability of government and private reimbursement for our products and coverage restrictions that may be imposed for our products are uncertain, as is the amount for which our products will be reimbursed. Pricing and reimbursement for our products may be adversely affected by a number of factors, including: changes in, and implementation of, federal or state government regulationsregulations, legislation or private third-party payors’ reimbursement policies; pressure by employers on private health insurance plans to reduce costs; and consolidation and increasing assertiveness of payors and pharmacy benefit managers (“PBMs”) seeking price discounts or rebates in connection with the placement of our products on their formularies and, in some cases, the imposition of restrictions on access or coverage of particular drugs or pricing determined based on perceived value. We cannot predict the availability, amount, or consistency of reimbursement for, or the prevalence and extent of other access barriers to, our products.

In the U.S., federal and state legislatures, health agencies and third-party payers continue to focus on containing the cost of healthcare. The Inflation Reduction Act includes several provisions that will impact our business to varying degrees, including the Drug Price Negotiation Program applicable to Medicare Parts D and B and those provisions that imposeimposed new manufacturer financial liability on all drugs in Medicare Part D beginning in 2025, and require companies to pay rebates to Medicare for drug prices that increase faster than inflation. The negotiated prices for the first ten Part D drugs took effect January 1, 2026. CMS has also identified an additional fifteen Part D drugs for negotiation for 2027, including VRAYLAR, an oral antipsychotic that competes with LYBALVI and ARISTADA. We cannot predict how the negotiated price for products in Medicare Part D, including VRAYLAR, may ultimately affect our products. In addition, the Drug Price Negotiation Program is subject to ongoing litigation, the outcome of which is difficult to predict.

Furthermore, we may face uncertainties as a result of efforts to repeal, substantially modify or invalidate some or all of the provisions of the PPACA, the Inflation Reduction Act and other legislation that impacts us, whether by legislative means or through litigation, and further potential reforms to government negotiation or regulation of drug pricing. The PPACA significantly expanded coverage of mental health and substance use disorders and provided federal parity protections to such coverage benefits. If efforts to reform or repeal PPACA, or to implement differently certain of its provisions, are successful, such efforts and proposed legislation or other future federal or state legislative or administrative changes relating to healthcare reform and drug pricing could adversely affect our business and financial results. Additional discounts, rebates, coverage or plan changes, restrictions or exclusions as described above could have a material adverse effect on sales of our affected products. OurAny failure to obtain or maintain adequate coverage, pricing or reimbursement for our products could have an adverse effect on our business, reputation, revenue, results of operations, financial condition and cash flows.

In the U.S., to help patients afford our approved products, we may utilize programs to assist them, including patient assistance programs and co-pay programs for eligible patients. Government enforcement agencies have shown increased interest in pharmaceutical companies'companies’ product and patient assistance programs, including reimbursement support services, and a number of investigations into these programs have resulted in significant civil and criminal settlements. Our paymentpatient support programs could become the target of similar actions. In addition, in November 2013, CMS issued guidance to the issuers of qualified health plans sold through the PPACA’s marketplaces encouraging such plans to reject patient cost-sharing support from third parties and indicating that CMS intends to monitor the provision of such support and may take regulatory action to limit it in the future. CMS subsequently issued a rule requiring individual market qualified health plans to accept third-party premium and cost-sharing payments from certain government-related entities. In September 2014, the Office of Inspector General of the U.S. Department of Health and Human Services issued a Special Advisory Bulletin warning manufacturers that they may be subject to sanctions under the federal anti-kickback statute and/or civil monetary penalty laws if they do not take appropriate steps to exclude Part D beneficiaries from using co-pay programs. It is possible that changes in insurer policies regarding co-pay programs and/or the introduction and enactment of new legislation or regulatory action could restrict or otherwise negatively affect these patient support programs, which could result in fewer patients using affected products, and therefore could have a material adverse effect on our sales, business, and financial condition.

Biopharmaceutical companies have also been the target of government lawsuits and investigations alleging violations of government regulation, including claims asserting submission of incorrect pricing information, impermissible promotion of pharmaceutical products, improper payments intended to influence the referral of healthcare business, submission of false claims for government reimbursement, antitrust violations, violations related to anti-corruption and anti-bribery laws, and violations related to environmental matters. We have been, and may continue to be, the subject of certain government inquiries or requests for documentation. For example, we have received a subpoena and civil investigative demands from U.S. statefederal and federalstate authorities for documents related to VIVITROL, and have cooperatedcooperated, or are cooperating, with the government in each instance. If, as a result of government requests, proceedings are initiated, including under the U.S. federal Anti-Kickback Statute or False Claims Act, or under state False Claims Acts or other laws, and we are found to have violated one or more applicable laws, we may be subject to significant liability, including without limitation, civil fines, criminal fines and penalties, civil damages and exclusion from U.S. federal funded healthcare programs such as Medicare and Medicaid, any of which could materially affect our reputation, business, financial condition, cash flows and results of operations. Conduct giving rise to such liability could also form the basis for private civil litigation by third-party payers or other persons allegedly harmed by such conduct. Additionally, regardless of whether or not there is merit to claims underlying any investigation or legal proceedings to which we are subject, or whether or not we are found as a result of such investigations or lawsuits to have violated any applicable laws, such lawsuits and inquiries can be expensive to defend or respond to, may divert the attention of our management and other resources that would otherwise be engaged in managing our business, and may further cause significant and potentially irreparable harm to our public reputation. While we have implemented numerous risk mitigation measures, we cannot guarantee that we, our employees, our licensees, our consultants or our contractors are, or will be, in compliance with all applicable laws or regulations. If we or our agents fail to comply with any of those laws or regulations, a range of actions could result, including the suspension or termination of clinical trials, the failure to approve a product, restrictions on sales of our products or our manufacturing processes, withdrawal of our products from the market, significant fines, exclusion from government healthcare programs or other sanctions or litigation.

Changes affecting the healthcare industry, including new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to patent protection and enforcement, access to healthcare, environmental issues or product pricing and marketing, could also adversely affect our revenues, our public reputation or our potential to be profitable. For example, and as discussed above, the Inflation Reduction Act includes several provisions that will impact our business to varying degrees, including those that imposeimposed new manufacturer financial liability on all drugs in Medicare Part D beginning in 2025, allow the U.S. government to negotiate prices for some drugs covered under Medicare Part B and Part D with effect beginning in 2026,D, and require companies to pay rebates to Medicare for drug prices that increase faster than inflation. Additionally, in its 2024 decision in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overruled the “Chevron doctrine,” which gave deference to regulatory agencies’ statutory interpretations in litigation against federal government agencies, such as the FDA, where the law was ambiguous. This U.S. Supreme Court decision may lead to challenges of longstanding decisions and policies of the FDA, and other federal agencies, which could lead to uncertainties in the industry and disrupt or alter such federal agencies’ operations. Any further changes in laws, regulations or decisions or in the interpretation of existing laws, regulations and decisions, could have a material adverse effect on our business, financial condition, cash flows and results of operations.

We rely heavily on our licensees in the commercialization and continued development of products from which we receive revenue and, if our licensees are not effective, or if disputes arise in respect of our contractual arrangements, our revenues could be materially adversely affected.

Our arrangements with licensees are critical to successfully commercializing and/or bringing to market and/or successfully commercializing products using our proprietary technologies and from which we receive manufacturing and/or royalty revenue. We rely on these licensees in various respects, including commercializing such products, conducting development activities with respect to new formulations or new indications for such products, and/or managing the regulatory approval process for such products.

We earn significant royalty revenue from sales by our licensees of our licensed products and third-party products incorporating our proprietary technologies. We also earn manufacturing revenues for products that we currentlythe manufacture of RISPERDAL CONSTA on behalf of other parties.Janssen. The revenues we receive from such products depend primarily upon the success of our licensees in commercializing such products. For example, we receive substantial revenue from Janssen’s sales of XEPLION, INVEGA TRINZA/TREVICTA, INVEGA HAFYERA/BYANNLI and RISPERDAL CONSTA,BYANNLI, and from Biogen’s sales of VUMERITY. We have no involvement in the commercialization efforts for these and other products sold by third parties from which we receive revenue and cannot control the extent or effectiveness of such commercialization efforts. In addition, generic versions of certain of these products arehave currentlybeen subjectlaunched, toand ANDA litigation proceedings to which we are not a party and, if such proceedings are not resolved favorably or are settled by our licensees, generic versions of these productsothers could be launched in the future, and there has been, and may bein anthe future be, adverse impactimpacts on the commercialization of these products and therefore on the revenue that we receive from sales of these products.

an inability to manufacture or obtain sufficient quantities of materials used for clinical trials; and unforeseen governmental or regulatory issues or concerns, including those of the FDAFDA, the DEA and other regulatory agencies, that may impact the strategies for, and design, timelines or feasibility of, our clinical development programs.

In addition, we are currently conducting and enrolling patients in clinical studies in a number of countries where our experience is more limited and in disease areas in which weare havenewer notto previously conducted clinical trials.us. In these instances, we must depend on third parties, including independent clinical investigators, CROs and other third-party service providers, to successfully conduct our clinical trials and to audit, verify and accurately report results from such trials. Though we do not have much control over many aspects of such third-party activities, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Third parties may not complete planned activities on schedule or conduct our trials in accordance with regulatory requirements or our stated protocols.

We must obtain government approvals before marketing or selling our products. The FDA and DEA (to the extent a product is a controlled substance) in the U.S., and comparable regulatory agencies in other jurisdictions, impose substantial and rigorous requirements for the development, manufacture and commercialization of medicines, the satisfaction of which can take a significant number of years and can vary substantially based upon the type, complexity and novelty of the product.

regulatory agencies might not approve our or our licensees’ manufacturing processes or facilities, or those of the CROs and third-party contract manufacturing organizationsmanufacturers who conduct research or manufacturing work on our or our licensees’ behalf;

regulatory agencies may change their requirements for approval or post-approval marketingmarketing, including potential imposition or modification of a REMS; and adverse medical events during our clinical trials or during clinical trials of other product candidates in the same class could lead to requirements that trials be repeated or extended, or that a development program be terminated or placed on clinical hold, even if other studies or trials relating to the program are successful.

In addition, disruptions at the FDA and other regulatory agencies that are unrelated to our company or our products, including those relating to a prolonged U.S. government shutdown, such as the one that occurred in the fall of 2025, significant changes in FDA leadership or personnel, or other global, political or economic conditions,conditions or circumstances, could cause delays to the regulatory approval process for our products.

Even if regulatory approval to market a product is granted by the FDA or other regulatory agencies, the approved label for the product may not be consistent with our initial expectations or commercial plans. For example, the FDA or other regulatory agencies may impose limitations on the clinical data that may be included in the label for the product or the indicated uses for which, or the manner in which, the product may be marketed, or may impose additional post-approval requirements, such as a REMS, with which we would need to comply in order to maintain the approval of such product. Our business could be seriously harmed if we do not complete these post-approval requirements and,or as a result,if the FDA or other regulatory agencies require us to change the label for suchany product, or if such post-approval requirements significantly restrict the marketing, sale or use of any product. For example, we are required to maintain a REMS for LUMRYZ because its API consists of sodium oxybate, a central nervous system depressant known to be associated with serious potential side effects. The REMS imposes, among other requirements, controls and restrictions on the distribution of the product in the U.S. Any failure to demonstrate our substantial compliance with such product.REMS obligations, including as a result of business or other interruptions, or a determination by the FDA that the REMS is not meeting its goals, could result in enforcement action by the FDA , including potential withdrawal of the product from the market or required changes to our REMS obligations, any of which could negatively affect sales of LUMRYZ, result in additional costs and expenses for us or require us to invest a significant amount of resources, any of which could significantly affect our business, financial condition, cash flows and results of operations.

Disruptions at the FDA and other regulatory agencies that are unrelated to our company or our products, including due to changes in government,government or significant changes in leadership or personnel, could increase the time required for new drugs to be reviewed and approved, or otherwise cause delays to the regulatory approval or post-approval processes for our products, which could adversely affect our business. The ability of the FDA or other regulatory agencies to review and approve new products or manage post-approval requirements for marketed products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, political and policy changes. Average review times for product submissions have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely is subject to the impacts of political events, which are inherently fluid and unpredictable.

For example, over the last several years, the U.S. government has shut down several timestimes, including in the fall of 2025, and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, or if other global, political or economic conditions impact the regulatory agencies with which we interact, it could significantly impact the ability of the FDA and the SEC or other agencies to timely review and process our submissions, which could have a material adverse effect on our business.

In addition to our internal development programs, our strategy for pipeline and commercial portfolio expansion includes identifying and evaluating potential transactional opportunities, including mergers and acquisitions, licenses and collaborations, and development and supply, commercialization or co-promotion arrangements, among others, to acquire or license additional products, product candidates, or technologies that could be additive to our business and to our strategy to create value for our shareholders. For example, we recently completed the Avadel Acquisition, which added LUMRYZ to our commercial portfolio and added valiloxybate to our portfolio of development candidates. However, we may not be able to successfully complete any additional transactions in the future, as such transactions are often highly competitive, and many other companies may pursue the same or similar assets to those that we may consider attractive. In particular, larger companies with greater financial resources or development or commercialization capabilities may have a competitive advantage over us. Furthermore, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We may also be unable to enter into transactions on acceptable terms that would allow us to realize an appropriate return on our investment. Even if we succeed in our efforts to obtain rights to suitable products, product candidates, or technologies, the competitive business environment may result in high transaction costs, and our investment in these potential assets remain, or would remainremain, subject to the inherent risks associated with the development and commercialization of new medicines and may not yield the growth or success that we anticipate, which could have a material adverse effect on our business and financial results and the market price of our ordinary shares.

We rely solely on our manufacturing facility in Wilmington, Ohio for the manufacture of VIVITROL, ARISTADA, ARISTADA INITIO, LYBALVILYBALVI, RISPERDAL CONSTA and RISPERDAL CONSTA.VIVITROL. Due to regulatory and technical requirements, we have limited ability to shift production within our facility or to outsource any portions of our manufacturing to third parties in the event of an interruption in manufacturing or demand for manufacturing that exceeds our capacity. Any need to transition our manufacturing processes, or portions thereof, to a third party, whether due to an interruption in our manufacturing or due to demand for a product that exceeds our manufacturing capacity or otherwise, could take a significant amount of time and resources, may not be successful, and could cause significant interruption or delay in our ability to supply products.

Manufacturing facilities also require specialized personnel and are expensive to operate and maintain. Any interruption in manufacturing, delay in a regulatory approval or commercial launch, or recall or suspension of sales of products manufactured in our facilities, may cause operating losses as we continue to operate our facilities and retain the required specialized personnel. In addition, any significant personnel shortages at our manufacturing facilities or the Athlone Facility,facility, whether temporary or prolonged, including shortages related to the labor market, may cause significant interruptions to our supply of products.

We rely on third parties to provide goods and services in connection with the manufacture and distribution of theour products we manufacture.products.

We rely on third parties for the timely supply of goods and services that play a role in the manufacture and distribution of our manufacturing activities,products, including, among others, specified raw materials, equipment, contract manufacturing, formulation and packaging services, operation of the LUMRYZ REMS, storage and product distribution services, customer service activities and product returns processing, and some of these goods and services for our products are currently only available from a single source or a limited number of qualified sources. These third parties must comply with U.S. federal, state and local regulations applicable to their business, including FDA and, as applicable, DEA regulations. Although we actively manage these third-party relationships to support continuity, quality and compliance with applicable regulations, events beyond our control, including natural disasters and other severe weather events, including those that may occur as a result of climate change, or global disruptions such as the COVID-19 pandemic and ongoing conflicts in various regions in the world, could negatively impact the continuity of supply of such materials and/or services, their quality and their compliance with applicable standards. Any such failure could materially adversely affect our business, financial condition, cash flows and results of operations.

In addition, we rely heavily on the three largest pharmaceutical wholesalers in the U.S. market—Cardinal Health Inc., Cencora, and McKesson Corp—in the distribution of the products that we marketARISTADA and sellARISTADA inINITIO, theLYBALVI U.S.and VIVITROL. If we are unable to maintain our business relationships with these wholesalers on commercially acceptable terms, if these wholesalers experience prolonged business disruptions, if the buying patterns of these wholesalers fluctuate due to seasonality or any other reason or if wholesaler buying decisions or other factors outside of our control change, our business, financial condition, cash flows and results of operations could be materially adversely affected.

We and the third-party providers involved in our manufacturing activities are generally required to comply with cGMP regulations and other applicable non-U.S. standards in the manufacture of our products or components of our products. Additionally, if any of our products or components of our products in the U.S.U.S., the DEA and state-level agencies heavily regulate the manufacturing, holding, processing, security, recordkeeping and distribution of substances, including controlled substances. Our products that are scheduled by the DEA as controlled substances,substances wemake would also beus subject to DEAthe DEA’s regulations. We and our third-party providers are subject to unannounced inspections by the FDAFDA, the DEA and other governmental agencies to confirm compliance with all applicable laws. Any changes to our suppliers or modifications of methods of manufacturing require submission of amendments to our marketing applications to the FDA or other applicable regulatory agencies, and ultimate acceptance by such agencies of such amendments, prior to release of product to the applicable marketplace. Our inability, or the inability of our third-party providers, to demonstrate ongoing compliance with cGMP or other regulatory requirements could require us to withdraw or recall products and interrupt clinical and commercial supply of our products. Any delay, interruption or other issues that may arise in the manufacture, formulation, packaging or storage of our products as a result of a failure of our facilities or operations or the facilities or operations of third-party providers to pass any regulatory agency inspection could significantly impair our ability to develop, obtain and maintain regulatory approval of, and commercialize or supply, products. This interruption could increase our costs, cause us to lose revenue or market share and damage our reputation with our collaboration partners or in the market generally.

In March 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law in the U.S., and served to increase the FDA’s existing authority with respect to drug shortage measures. Under the CARES Act, for each facility where marketed products for certain serious diseases or conditions are manufactured, or where components of such products are manufactured, we are required to have a risk management plan in place that identifies and evaluates risks to the supply of such products or product components, which plans may be subject to review during any FDA inspection. Each of our facilities operates in accordance with a comprehensive quality management system, which includes risk assessment, preventive actions and regular review of inventory levels for each of the marketed products that we manufacture; however, the FDA may not consider our risk management program to be sufficient upon inspection and we may still experience shortages in the supply of marketed products that we manufacture,manufacture or that are manufactured on our behalf by third parties, which could materially adversely affect the patients who rely on such marketed products and our business, financial condition, cash flows and results of operations. The FDA and various regulatory agencies outside the U.S. have inspected and approved our commercial manufacturing facilities.facility. However, the FDA and any other regulatory agencies may not approve any other facility that we or our third-party providers may operate and, once approved, any of these facilities may not remain in compliance with cGMP and other regulations. Any third party we use to manufacture bulk drug product for use in the U.S. must be licensed by the FDA. Failure by us or our third-party providers to gain or maintain regulatory compliance with and approvals from the FDA or other regulatory agencies could materially adversely affect our business, financial condition, cash flows and results of operations.

Our ability to compete and succeed in the highly competitive biopharmaceutical industry and in the disease states in which we market and sell products depends largely upon our ability to attract, recognize and retain highly skilled technical, scientific, manufacturing, management, regulatory, legal, compliance and selling and marketing personnel. Each of our executive officers and all of our employees are employed “at will,” meaning we or each officer or employee may terminate the employment relationship at any time. We face intense competition for employees due to, among many factors, the geographic locations in which we operate and the competitive benefits and compensation practices in our industry, and in recent years, new competition as employees are increasingly able to work remotely. The loss of key personnel due to any of these or other factors or our inability to hire and retain personnel who have technical, scientific, manufacturing, management, regulatory, legal, compliance or commercial backgrounds could materially adversely impact our business, including the achievement of our manufacturing, research and development, commercial, financial and other operational and strategic business objectives.

Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we orand our licensees have previously and may in the future face claims against IP rights covering our products and competition from generic drug manufacturers.

Patents, if issued, may be challenged, invalidated or circumvented. As our products achieve greater commercial sales, potential competitors are more likely to seek to challenge our patents. In the biopharmaceutical industry, there has been, and we expect that there may continue to be, significant litigation, inter partes reviews (“IPRs”), post-grant reviews (“PGRs”) and administrative proceedings regarding patents and other IP rights. A third party may file an IPR, PGR, interference and/or infringement action against us, including in response to patent certifications required under the Hatch-Waxman Act, claiming that certain claims of one or more of our issued patents are invalid or that the manufacture, use, offer for sale, sale or import of our products infringed one or more of such party’s patents. For example, in December 2024, Argentum Pharmaceuticals LLC filed a request with the USPTO for ex parte reexamination (“EPR”) of the validity of certain claims of our U.S. Patent No. 7,919,499 that covers VIVITROL, which request was granted in January 2025 and is pending. And in January 2025, Apotex Inc. filed with the USPTO a petition for IPR of certain claims of U.S.the Patentsame No.patent. 7,919,499In July 2025, the USPTO discretionarily denied institution of the IPR and in October 2025, confirmed the validity of the claims challenged under the EPR and found that coverseveral VIVITROL,additional whichclaims petitionwe hasfiled notwere yetpatentable. beenWhile instituted.both of these challenges were ultimately resolved in our favor, they required expenditure of time, effort and resources and there can be no assurance that we would achieve similar outcomes if our patents continue to be challenged in the future.

In addition, we may need to enforce our IP rights against third parties who infringe on our patents and other IP or challenge our patents, patent applications or trademark applications. In the U.S., generic manufacturers of innovator drug products may file ANDAs and, in connection with such filings, certify that their products do not infringe the innovator’s patents or that the innovator’s patents are invalid. This often results in litigation between the innovator and the ANDA applicant, commonly known in the U.S. as “Paragraph IV” litigation, which can be expensive, protracted and distracting to management, with no certainty of success. For example, Teva entities filed an ANDA seeking approval to engage in the commercial manufacture, use or sale of a generic version of VIVITROL and alleged that one of our Orange-Book patents related to VIVITROL iswas invalid, unenforceable and/or willwould not be infringed by Teva’s proposed product. In response, we initiated a Paragraph IV lawsuit against Teva in September 2020 to dispute such claims.

We may have to expend considerable time, effort and resources to defend such actions, and litigation may be necessary in some instances to determine the validity and scope of certain of our proprietary rights. In order to avoid or resolve timely and costly IP litigation or IPR, PGR or other administrative proceedings, we may enter into settlement agreements in which we grant an adverse party certain rights with respect to our IP. For example, in August 2023, following a trial in the Teva patent infringement lawsuit discussed above, we entered into a confidential settlement and license agreement (the “Settlement Agreement”) with Teva in August 2023 to resolve the proceedings between the parties. Pursuant to the terms of the Settlement Agreement, we granted Teva a non-exclusive, royalty-free, non-transferable, non-sublicensable limited license to market and sell a generic version of VIVITROL in the U.S. beginning on January 15, 2027, or earlier under certain circumstances. And in July 2019, in order to resolve an IPR instituted by Amneal with the PTAB, we entered into a settlement and license agreement with Amneal, pursuant to which we granted Amneal a non-exclusive license under certain patents covering VIVITROL, including the latest to expire patent covering VIVITROL in the U.S., to market and sell a generic formulation of VIVITROL in the U.S. beginning sometime in 20272028 or earlier under certain circumstances.circumstances, and later entered into the AG Agreement with Amneal, pursuant to which we granted Amneal certain rights to distribute and sell in the U.S. an authorized generic version of VIVITROL for a one-year term beginning on the date of a Third Party ANDA Product Launch (as defined in the AG Agreement), subject to certain conditions set forth in the AG Agreement.

We are, and may in the future become, involved in various legal proceedings, including those asserting violations of securities and/or fraud and abuse laws and those asserting claims related to product liability, class actions or antitrust claims, IP and/or contractual arrangements. Such proceedings may include claims for, or the possibility of, damages or fines and penalties involving substantial amounts of money or other relief, including but not limited to civil or criminal fines and penalties. Such legal proceedings and the preparation therefor may result in substantial costs to us and diversion of management’s attention and resources, which in turn could harm our business. Moreover, if any of such legal proceedings were to result in an adverse outcome, such outcome could have a material adverse effect on our business, financial condition, cash flows and results of operations.

At December 31, 2024,2025, our accumulated deficit was $1.0$0.7 billion, which was primarily the result of net losses incurred from continuing operations from 1987, the year Alkermes, Inc. was founded, through December 31, 2022, partially offset by net income from continuing operations over certain fiscal periods, including net income earned during the years ended December 31, 2025, 2024 and December 31, 2023.

Our ability to maintain profitability on a sustained basis will depend on our ability to continue to grow and diversify our revenue and to effectively and efficiently manage our costs. Factors that may impact our future revenue, and in turn our future profitability, include, among others, our, our third-party contract manufacturers or our licensees’ (as applicable) ability to:

successfully commercialize VIVITROL, the ARISTADA product family, LYBALVI, LUMRYZ, VUMERITY, XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI and any other marketed products from which we earn revenue in the countries in which such products are approved;

In December 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Cuts and Jobs Act”) was signed into law. This legislation significantly changed U.S. tax law by, among other things, changing the rules which determine whether a foreign corporation is treated for U.S. tax purposes as a controlled foreign corporation (“CFC”) for taxable years ended December 31, 2017 and onwards. The impact of this change on certain holders of our ordinary shares is uncertain and could be adverse, including potential income inclusions and reporting requirements for U.S. persons (as defined in the U.S. Internal Revenue Code of 1986, as amended (the “Code”)) who are treated as owning (directly or indirectly) at least 10% of the value or voting power of our shares. The determination of CFC status is complex and includes attribution rules, the application of which are not entirely certain. These changes to the attribution rules relating to the determination of CFC status make it possible that one or more of our non-U.S. subsidiaries will be classified as a CFC. The OBBBA reinstated the prohibition on downward attribution of stock from a foreign person to a U.S. person and therefore we do not expect any of our non-U.S. subsidiaries to be classified as CFCs in 2026. Existing and prospective investors should consult their tax advisers regarding the potential application of these rules to their investments in our securities.

In connection with the separation of our oncology business into Mural Oncology plc (“Mural”) completed in November 2023, we sought and received a private letter ruling from the IRS (the “IRS Ruling”) and an opinion from our U.S. tax advisor (the “U.S. Tax Opinion”) regarding U.S. federal income tax consequences of the separation, including that, among other things, the separation would be expected to generally qualify as tax-free for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code. The IRS Ruling and/or the U.S. Tax Opinion were based on and relied on, among other things, certain facts, assumptions, representations, and undertakings from us and Mural Oncology plc,Mural, including those relating to past and future conduct of the companies’ respective business operations and other matters. If any of these facts, assumptions, representations, statements or undertakings are, or become, inaccurate or incomplete, or if we or Mural Oncology plc breach any of our respective covenants in the separation documents, the IRS Ruling and/or the U.S. Tax Opinion may be invalid and the conclusions reached therein could be jeopardized. Notwithstanding the U.S. Tax Opinion or IRS Ruling, the IRS could determine that a distribution or any related transaction is taxable for U.S. federal income tax purposes if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated, or that the distribution should be taxable for other reasons, including if the IRS were to disagree with the conclusions in the U.S. Tax Opinion. The U.S. Tax Opinion will not be binding on the IRS or the courts. Accordingly, the IRS or the courts may challenge the conclusions stated in the U.S. Tax Opinion and such challenge could prevail. If the separation transaction is ultimately determined to be taxable, we and/or our shareholders that are subject to U.S. federal income tax could incur significant tax liabilities.

We have a portfolio of proprietary products that we manufacture, market and/or sell in the U.S.—VIVITROL,U.S., which in 2025 was comprised of ARISTADA, ARISTADA INITIOINITIO, LYBALVI and LYBALVI.VIVITROL. We also earnearned manufacturing and/or royalty revenues on net sales of products commercialized by our licensees, the most significant of which in 20242025 were the long-acting INVEGA products and VUMERITY. We expect VIVITROL, ARISTADA, ARISTADA INITIO, LYBALVILYBALVI, VIVITROL and VUMERITYVUMERITY, and our new product, LUMRYZ, which we acquired and began to market and sell in the U.S. in February 2026, to generate significant revenues for us in the near- and medium-term as we believe these products are singular or competitively advantaged products in their classes.

In 2024,2025, our net income from continuing operations was $372.1$241.7 million, as compared to $519.2$372.1 million in 2023.2024. The decrease in net income from continuing operations of $130.5 million was primarily due to twoan significant one-time eventsincrease in 2023,total whichexpenses wereof the$84.9 receiptmillion and a decrease of $182.8 million in June 2023 of back royaltiesmanufacturing and interestroyalty in respect of 2022 U.S. sales of the long-acting INVEGA products, following the successful outcome of the arbitration proceedings related to such products, and the partial release of our valuation allowance maintained against certain Irish deferred tax assets.revenues. These eventsitems were partially offset by an increase in our product sales, net of $101.1 million and a decrease in our operatingincome expensestax inprovision 2024.of $21.8 million. These items are discussed in further detail within the “Results of Operations” section below.

In May 2024, we completed the sale of the Athlone Facility to Novo and entered into subcontracting arrangements to continue certain development and manufacturing activities performed at the Athlone Facility, which mayconcluded continue throughby the end of 2025.

Our product sales, net, consistconsisted of sales of VIVITROL, ARISTADA, ARISTADA INITIO, LYBALVI and LYBALVI,VIVITROL, primarily to wholesalers, specialty distributors and pharmacies. The following table presents the adjustments deducted from product sales, gross to arrive at product sales, net, for sales of these products during the years ended December 31, 20242025 and 20232024:

The decrease in Medicaid rebates as a percentage of sales was primarily due to thegross-to-net increasefavorability, in sales of LYBALVI, which has lower Medicaid utilization than VIVITROL, ARISTADA and ARISTADA INITIO, andas actual Medicaid utilization ratesrebates related to VIVITROL beingand ARISTADA/ARISTADA INITIO were lower than original estimates,estimates due,by inapproximately part, to $8.7$26.7 million inand actual$13.6 creditsmillion, received in the fourth quarter of 2024 from certain states related to duplicate Medicaid billings.respectively.

A number of companies currently market and/or are developing products to treat addiction, including alcohol and opioid dependence, that may compete with, and negatively impact, future sales of VIVITROL. IncreasedIn competitionaddition, may lead to reduced unit sales of VIVITROL and increased pricing pressure. Thethe latest to expire of our patents covering VIVITROL will expire in 2029 in the U.S. and we expect generic versions of VIVITROL to enter the market in 2027. Pursuant to the terms of a confidential settlement and license agreement entered into in August 2023 with Teva, we granted Teva a non-exclusive, royalty-free, non-transferable, non-sublicensable limited license under the remaining patent covering VIVITROL to market and sell a generic version of VIVITROL in the U.S. beginning on the First Entry Date, or earlier under certain circumstances. Under the terms of a settlement and license agreement entered into in July 2019 with Amneal, we granted Amneal a non-exclusive license under certain patents covering VIVITROL, including the remaining patent covering VIVITROL in the U.S., to market and sell a generic formulation of VIVITROL in the U.S. beginning on the earlier of the First Entry Date, sometime in 2028 or earlier under certain circumstances.circumstances, and in September 2025, entered into an authorized generic product supply agreement (the “AG Agreement”) with Amneal, pursuant to which we granted Amneal certain rights to distribute and sell in the U.S. an authorized generic version of VIVITROL for a one-year term beginning on the date of a Third Party ANDA Product Launch (as defined in the AG Agreement), subject to certain conditions set forth in the AG Agreement. Increased competition may lead to reduced unit sales of VIVITROL and increased pricing pressure.

A number of companies currently market and/or are developing products to treat schizophrenia and/or bipolar I disorder that may compete with and negatively impact future sales of ARISTADA, ARISTADA INITIO and LYBALVI. Increased competition may lead to reduced unit sales of ARISTADA, ARISTADA INITIO and LYBALVI and increased pricing pressure. The latest to expire of our patents covering ARISTADA,ARISTADA and ARISTADA INITIO and LYBALVI in the U.S. will expire in 2039, 2039 and 2041, respectively; and, as such, we do not anticipate any generic versions of these products to enter the market in the near term. The latest to expire of our patents covering LYBALVI in the U.S. will expire in 2041. We are currently engaged in Paragraph IV litigation with certain entities in respect of certain of the Company’s patents related to LYBALVI with expiration dates between 2032 and 2041. For a discussion of these legal proceedings, see Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report and for information regarding the risks relating to these legal proceedings, see “Risks Related to our Intellectual Property—Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we and our licensees have previously and may in the future face claims against IP rights covering our products and competition from generic drug manufacturers”.

ManufacturingSubstantially all of our manufacturing revenue from RISPERDAL CONSTA and VUMERITY arewas recognized at the point in time that the product has been fully manufactured. Royalties earned on our licensees’ net sales of products using our proprietary technologies areand our licensed product were recognized in the period such products arewere sold by our licensees. The following table compares manufacturing and royalty revenues earned in the years ended December 31, 20242025 and 20232024:

The decrease in royalty revenues related to the long-acting INVEGA products was primarily due to the receipt in June 2023 of back royalties of $195.4 million, inclusive of $8.1 million in late-payment interest, related to 2022 U.S. sales of the long-acting INVEGA products following the successful outcome of the arbitration proceedings related to such products and the expiration of our royalty on U.S. net sales of INVEGA SUSTENNA in the U.S. in August 2024. Pursuant to the Final Award issued in the arbitration proceedings,Although we are entitled toexpect royalty revenues from Janssen related to U.S. net sales of INVEGA TRINZA and INVEGA HAFYERA through certain specified dates in 2030.2030, We expecttotal royalty revenues from net sales of the long-acting INVEGA products have been, and we expect will continue to decreasebe further in 2025,lower as the royalty revenues related to U.S. net sales of INVEGA SUSTENNA comprised a significant portion of the overall royalty revenues forfrom the long-acting INVEGA products. In addition, INVEGA SUSTENNA is currently subject to Paragraph IV litigation in response to companies seeking to market generic versions of such product. Though we no longer receive royalties from INVEGA SUSTENNA in the U.S., increased competition from new products or generic versions of any one or more of the long-acting INVEGA products may lead to reduced unit sales of all of the long-acting INVEGA products, including those not yet genericized, and increased pricing pressure.

For additional discussion of our agreements with Janssen related to the long-acting INVEGA products, including the royalty provisions set forth therein and the related completed arbitration proceedings and outcome, see the section entitled “Collaborative Arrangements—Janssen” in “Item 1—Business” in this Annual Report.

The decrease in VUMERITY revenue fromwas RISPERDALdue CONSTAto wasa $22.8 million decrease in manufacturing revenue, primarily due to a decrease of $13.0 million in manufacturing revenue, which was primarily due to a decreasereduction in the number of batches mademanufactured availablefor sale to Janssen.Biogen, Thepartially decreaseoffset by a $19.2 million increase in royalty revenue wasrevenue, due to expirationsan increase in end-market sales of the patents covering RISPERDAL CONSTA, which expired in the U.S. in January 2023 and in the EU in 2021. We expect revenues from RISPERDAL CONSTA to continue to decrease as patents covering RISPERDAL CONSTA continue to expire in markets where end-market net sales of RISPERDAL CONSTA occur. We are aware of potential generic and other competition to RISPERDAL CONSTA that may lead to reduced unit sales and increased pricing pressure.product. For a discussion of our agreements with JanssenBiogen related to RISPERDAL CONSTA,VUMERITY, including the manufacturing and royalty revenue provisions set forth therein, see the section entitled “Collaborative Arrangements—JanssenBiogen” in “Item 1—Business” in this Annual Report.

The decrease in the cost of goods manufactured and sold was primarily duerelated to lowera $43.7 million decrease in the cost of goods manufactured for certain legacy products duefollowing tothe a decrease in volumessale of such products. This includes RISPERDAL CONSTA as well as products manufactured at the Athlone Facility.Facility Thisin decreaseMay was2024. We also had decreases in the cost of goods sold for certain of our proprietary products, primarily due to decreases in costs related to out-of-specification batches and investigation costs. These decreases were partially offset by an increase in the cost of goods sold for certain of our proprietary productsLYBALVI due to increasesan increase in the number of units soldsold, as discussed above, and an increase in costs related to VIVITROL out-of-specification batches and subsequent investigation costs.above.

The increase in expenses related to ALKS 2680alixorexton was primarily due to an increase inincreased spend related to the advancement of the development programsprogram for the product, including completioninitiation of our phase 1b proof-of-concept studies, initiation of ourVibrance-3 phase 2 clinical studies,study, Vibrance-1 and Vibrance-2 and preparatory spend in advance of initiation of our phase 2 study for IH. The increase in expensescosts related to LYBALVI was primarily due to increased spend on our pediatric studies related to the product, partially offset by decreased spend following the completion of our long-term safetyVibrance-1 and tolerabilityVibrance-2 studies.phase 2 studies, startup costs related to planning for our phase 3 clinical program and costs related to our long-term extension study for the product. The decreaseincrease in other external R&D expenses was primarily due to identifying cost-effective resourcing options for clinical programming and outsourced data management services and decreases in spend on activities associated with certain of our researchpreclinical development programs. TheWe decreaseexpect R&D expense to increase in employee-related2026, expensesas waswe primarily dueplan to ainitiate decreasethe phase 3 program for alixorexton and as ALKS 4510 and ALKS 7290, two internal early-stage development candidates which entered the clinic in salaries2025, and benefits related to a 10% reduction in R&D-related headcount during 2024.advance.

Income Tax Provision (Benefit)

The income tax provisionprovisions in 2025 and 2024 waswere primarily due to taxes on income earned in Ireland. The income tax benefit in 2023 was primarily attributable to the partial release of the valuation allowance maintained against certain Irish deferred tax assets, partially offset by taxes on income earned in the U.S. and Ireland. Our effective tax rate during the year ended December 31, 20242025 was 16.1%,17.1%, which exceeds the Irish statutory tax rate of 12.5%, primarily due to non-deductible expenses and income that was taxable at rates higher than the Irish statutory tax rate. Our effective tax rate during the year ended December 31, 2024 was 16.1%. The increase in the effective tax rate was primarily due to an increase in income taxable at rates higher than the Irish statutory tax rate. The new corporate minimum tax rate of 15.0%15% did not have a material impact on our business in 2025 and 2024.

As of December 31, 2024,2025, we had $393.9$210.2 million of Irish NOL carryforwards, $14.1$13.6 million of U.S. federal NOL carryforwards, $43.2 million of state NOL carryforwards and $34.0$35.2 million of state tax credits which will either expire on various dates through 20392040 or can be carried forward indefinitely. These loss and credit carryforwards are available to reduce certain future Irish and foreign taxable income and tax. These loss and credit carryforwards are subject to review and possible adjustment by the appropriate taxing authorities, and may be subject to limitations based upon changes in the ownership of our ordinary shares. Included within these loss and credit carryforwards are $14.1$13.6 million of U.S. federal NOL carryforwards and $5.8$5.3 million of state NOL carryforwards, acquired as part of the acquisition of Rodin Therapeutics, Inc. (“Rodin”) in November 2019, each of which are subject to a $0.5 million annual limitation.

We generated $439.1$520.8 million and $401.4$439.1 million of cash from operating activities during the years ended December 31, 20242025 and 2023,2024, respectively. In connection with the Avadel Acquisition, we placed $731.2 million in escrow to finance the portion of the consideration in excess of the commitments secured under the Bridge Credit Agreement. In December 2024, we prepaid our previously outstanding long-term debt without penalty in the amount of $289.5 million and, during the course of 2024, repurchased approximately $200.0 million of our ordinary shares. We expect that our existing cash, cash equivalentsequivalents, restricted cash and investments will be sufficient to finance our anticipated working capital and other cash requirements, including debt services and capital expenditures, for at least the twelve months following the date from which our financial statements were issued. Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures.

Cash flows provided by operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities. Operating cash flow is derived by adjusting our net income (loss) for non-cash operating items such as depreciation, amortization and share-based compensation and changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our results of operations.

Cash flows provided by operating activities during 20242025 primarily consisted of net income of $367.1$241.7 million, adjusted for non-cash items, including share-based compensation of $96.6$98.7 million andmillion, depreciation and amortization of $28.5$27.2 million andmillion, deferred income taxes of $40.5$28.8 million.million and $119.1 million of changes in working capital.

Cash flows provided by operating activities during 20232024 primarily consisted of net income of $355.8$367.1 million, adjusted for non-cash items, including share-based compensation of $100.9$96.6 million andmillion, depreciation and amortization of $74.9$28.5 million and deferred income taxes of $40.5 million, partially offset by changes in working capital of $36.7 million and deferred income taxes of $99.9$97.4 million. During 2023, net income included receipt of $195.4 million from Janssen, inclusive of $8.1 million in late-payment interest, related to 2022 U.S. net sales of the long-acting INVEGA products following the successful outcome of the arbitration proceedings in respect of such products.

Cash flows provided by investing activities during 2025 primarily consisted of $333.1 million of net proceeds from the sale and maturities of investments, partially offset by the purchase of $40.4 million of property, plant and equipment. Cash flows used in investing activities during 2024 primarily consisted of $176.2 million in net purchases of investments and the purchase of $33.5 million of property, plant and equipment. These outflows were partially offset by proceeds from the sale of the Athlone Facility and related business of $97.9 million. Cash flows provided by investing activities during 2023 primarily consisted of $101.1 million in net sales of investments and offset by the purchase of $48.0 million of property, plant and equipment.

Cash flows provided by financing activities during 2025 were due to $43.4 million of cash that we received upon exercises of employee stock options, partially offset by $31.0 million of employee taxes paid related to the net share settlement of equity awards. Cash flows used in financing activities during 2024 primarily related to the prepayment of our previously outstanding long-term debt in the full amount of $289.5 million, payment for the repurchase of our ordinary shares and related expenses in the amount of $200.3 million, and $29.6 million of employee taxes paid related to net share settlements of equity awards, partially offset by $27.6 million of cash that we received upon exercises of employee stock options. Cash flows used in financing activities during 2023 primarily related to $275.0 million in cash distributed to Mural Oncology plc in connection with the Separation and $28.5 million of employee taxes paid related to net share settlements of equity awards, partially offset by $16.8 million of cash that we received upon exercises of employee stock options.

In December 2024, we prepaid in full all Former Term Loans under the Company’s then-in-effect amended and restated credit agreement (the “Former Credit Agreement”) for a total of $289.5 million.million Theand Companyterminated the agreement. We did not incur any early termination penalties in connection with the termination of the Former Credit Agreement (other than customary breakage costs). All liens on the collateral securing the obligations under the Former Credit Agreement were released in connection with the termination. Such prepayment was accounted for as a debt extinguishment. See Note 12,11, Long-Term Debt, in the “Notes to Consolidated Financial Statements” in this Annual Report for additional discussion related to our Former Term Loans.

Our product sales, net consistin 2025 and 2024 consisted of sales in the U.S. of VIVITROL, ARISTADA, ARISTADA INITIOINITIO, LYBALVI and LYBALVI,VIVITROL primarily to wholesalers, specialty distributors and pharmacies. Product sales, net are recognized when the customer obtains control of the product, which is when the product has been received by the customer.

Medicaid Rebates—we record accruals for rebates to U.S. states under the Medicaid Drug Rebate Program as a reduction of sales when the product is shipped into the distribution channel using the expected value. We rebate individual U.S. states for all eligible units purchased under the Medicaid program based on a rebate per unit calculation, which is based on our average manufacturer prices. We estimate expected unit sales to individuals covered by Medicaid and rebates per unit under the Medicaid program and adjust our rebate accrual based on actual unit sales and rebates per unit and changes in trends in Medicaid utilization. In 2025, actual Medicaid utilization rates related to VIVITROL and ARISTADA/ARISTADA INITIO, were lower than original estimates by approximately $26.7 million and $13.6 million, respectively. In 2024, actual Medicaid utilization rates related to VIVITROL were lower than original estimates, due, in part, to $8.7 million in actual credits received from certain states in the fourth quarter of 2024 from certain states related to duplicate Medicaid billings. Medicaid rebates for our other products have not differed materially from our estimatesbillings;

Product Returns—we record an estimate for product returns at the time our customers take control of our product. We estimate this liability using the expected returns of product sold based on our historical return levels and specifically identified anticipated returns due to known business conditions and product expiry dates. Return amounts are recorded as a reduction of sales. Once product is returned, it is destroyed. Actual product returns have not differed materially from our estimates; and Medicare Part D—we record accruals for Medicare Part D liabilities under the Medicare Coverage GapManufacturer Discount Program (“CGDP”) as a reduction of sales. Under the CGDP, patients reaching the annual coverage gap threshold are eligible for reimbursement coverage for out-of-pocket costs for covered prescription drugs. Under an agreement with the Centers for Medicare and Medicaid Services, manufacturers are responsible for reimbursementreimbursing Medicare for a specified percentage discount on the cost of prescriptionapplicable plandrugs sponsors forduring the portioninitial coverage phase and a specified percentage discount during the catastrophic coverage phase of out-of-pocket expenses not covered under theirthe Medicare plans.Part D benefit. Actual MedicaidMedicare Part D rebates have not differed materially from our estimates.

We determined that the separation of our former oncology business, which was completed on November 15, 2023, represented a disposal plan that met the criteria for classification of the oncology business as a discontinued operation in accordance with ASC 205-20, Discontinued Operations. Accordingly, the accompanying consolidated financial statements for all periods have been updated to present the assets and liabilities associated with the oncology business separately as discontinued operations on the consolidated balance sheet and the results of such discontinued operations reported as a separate component of income in the consolidated statements of operations and comprehensive income (loss).income.

Net income was $0.5 million or $0.00 per ordinary share—basic and diluted, for the three months ended June 30, 2026 and net loss was $66.5$66.0 million or $0.40 per ordinary share—basic and diluted, for the threesix months ended MarchJune 31,30, 2026, compared to net income of $22.5$87.1 million and $109.6 million or $0.14$0.53 and $0.67 per ordinary share—basic and $0.13$0.52 and $0.65 per ordinary share—diluted, for the three and six months ended MarchJune 31,30, 2025.2025, respectively.

LUMRYZ (sodium oxybate) is an extended-release oral suspension product approved by the U.S. Food and Drug Administration (“FDA”) in May 2023 and October 2024 as the first and only once-at-bedtime treatment for cataplexy or excessive daytime sleepiness (“EDS”) in adults with narcolepsy and in pediatric patients seven years of age and older with narcolepsy, respectively. The FDA has granted seven years of orphan drug exclusivity (“ODE”) to LUMRYZ for the adult and pediatric narcolepsy patient populations through May 1, 2030 and October 16, 2031, respectively. We exclusively commercialize LUMRYZ in the U.S. Pursuant to the settlement and license agreement entered into between Jazz Pharmaceuticals entities and Avadel entities in October 2025 (the “Avadel Settlement Agreement”), from October 1, 2025, Jazz receives a royalty of 3.85% (subject to certain adjustments set forth in the Avadel Settlement Agreement) on net sales of LUMRYZ sold for narcolepsy and additional royalties on net sales of LUMRYZ sold for any other non-narcolepsy indications. For more information about the Avadel Settlement Agreement and underlying royalty obligations, see “Patents and Proprietary Rights – LUMRYZ” in “Item 1—Business” in our Annual Report.

Alixorexton is a novel, investigational, oral, selective orexin 2 receptor agonist in development for the treatment of narcolepsy type 1 (“NT1”), narcolepsy type 2 (“NT2”) and idiopathic hypersomnia (“IH”).IH. Orexin, a neuropeptide produced in the lateral hypothalamus, is considered to be the master regulator of wakefulness due to its activation of multiple, downstream wake-promoting pathways that project widely throughout the brain. Targeting the orexin system may address excessive daytime sleepinessEDS across hypersomnolence disorders, whether or not deficient orexin signaling is the underlying cause of disease. Once-daily oral administration of alixorexton was previously evaluated in a phase 1 study in healthy volunteers and patients with NT1, NT2 and IH and in Vibrance-1 and Vibrance-2, phase 2 studies in patients with NT1 and NT2, respectively. InOn April 1, 2026, we announced the initiation of the Brilliance Studies, a phase 3 program evaluating the safety and efficacy of alixorexton compared to placebo in adults with NT1 and NT2. Alixorexton is also currently being evaluated in Vibrance-3, a phase 2 study in patients with IH. AlixorextonThe FDA has receivedgranted alixorexton Breakthrough Therapy designation from the FDA for the treatment of NT1.NT1 and Orphan Drug Designation (“ODD”) for the treatment of IH. The European Commission has granted ODD to alixorexton for the treatment of narcolepsy.

Our product sales, net, consist of sales of ARISTADA and ARISTADA INITIO, LYBALVI, VIVITROL, and, following the completion of the Avadel Acquisition on February 12, 2026, LUMRYZ, primarily to wholesalers, specialty distributors and specialty pharmacies. The following table presents the adjustments deducted from product sales, grossgross, to arrive at product sales, net, for sales of ARISTADA and ARISTADA INITIO, LUMRYZ, LYBALVI and VIVITROL during the three and six months ended MarchJune 31,30, 2026 and 2025:

“Product sales, net” during the three and six months ended MarchJune 31,30, 2026 includesinclude LUMRYZ beginning on February 12, 2026. Product sales, net amounts related to LUMRYZ are included within “Product sales, gross”, “Product discounts”, “Medicare Part D” and “Other”.

The increaseincreases in product sales, grossgross, wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to the addition of LUMRYZ,LUMRYZ and increasesan of 29%, 15%18% and 5%23% increase, respectively, in the number of units sold for LYBALVI,LYBALVI. During the six months ended June 30, 2026, there was also an increase of 7% in the number of units sold for ARISTADA/ARISTADA INITIOINITIO. andIn VIVITROL,addition, respectively,there andwas a 6% price increase that went into effect on January 1, 2026 for each of LYBALVI, ARISTADA/ARISTADA INITIO and VIVITROL that went into effect on January 1, 2026.VIVITROL.

The decreasedecreases in Medicaid rebates as a percentage of sales wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to gross-to-net favorability, as actual Medicaid rebates related to VIVITROL, ARISTADA/ARISTADA INITIO and LYBALVI were lower than original estimates by approximately $5.4 million, $2.8$3.5 million and $0.5$8.9 million, respectively, for VIVITROL and due$5.3 tomillion theand inclusion$8.1 ofmillion, salesrespectively, offor LUMRYZ,ARISTADA/ARISTADA whichINITIO. In addition, LUMRYZ does not participate in a Medicaid rebate program. The increaseincreases in Other adjustments isduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily related to the addition of certain gross-to-net deductions related to LUMRYZ.

The following table compares product sales, net earned during the three and six months ended MarchJune 31,30, 2026 and 2025:

The following table compares manufacturing and royalty revenues earned during the three and six months ended MarchJune 31,30, 2026 and 2025:

The decrease in VUMERITY revenue during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, was due to decreases in manufacturing revenues of $7.4 million and royalty revenue of $1.4 million. The decrease in VUMERITY revenue during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was due to a decrease of $6.0 million in manufacturing revenue,revenues of $13.4 million, partially offset by an increase of $5.5 million in royalty revenue.revenue of $4.1 million. The decreasedecreases in VUMERITY manufacturing revenue waswere related to the conclusion of our VUMERITY manufacturing subcontracting obligations for Biogen in August 2025. The decrease in VUMERITY royalty revenue during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, and the increase in VUMERITY royalty revenue wasduring the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were due to a decrease and an increaseincrease, respectively, in end-market net sales of the product.

The decreaseincreases in Other manufacturing and royalty revenue wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to aincreases $5.0of $17.1 million decreaseand $12.0 million, respectively, in RISPERDAL CONSTA manufacturing revenue, primarily due to a decreaseincreases in the number of batches made available to Janssen for sale in the U.S., which has a higher selling price than product sold outside of the U.S.U.S., andpartially dueoffset toby a decreasedecreases in revenues related to certain of our other legacy products.

In connection with the Avadel Acquisition, we acquired LUMRYZ inventory at its estimated fair value, resulting in a step-up of approximately $121.6 million above its cost. The inventory step-up is recognized in cost of goods manufactured and sold as the underlying inventory is sold. See Note 7, Inventory in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information related to purchase accounting adjustments. The increaseincreases in the cost of goods manufactured and sold wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily related to the addition of LUMRYZ and the amortization of such inventory step-up of approximately $12.7$31.0 million and $43.7 million, andrespectively. toIn addition, the cost of goods sold for ARISTADA/ARISTADA INITIO, LYBALVIINITIO and VIVITROL increased due to increases in thecosts numberrelated ofto unitsout-of-specification sold,batches asand discussedinvestigation above.costs. These increases were partially offset by a decreasedecreases of $8.9$5.1 million and $14.0 million, respectively, in the cost of goods manufactured for certain legacy products following the completion of our subcontracting arrangements for the manufacture of such products by the end of 2025.

The following table sets forth our external R&D expenses for the three and six months ended MarchJune 31,30, 2026 and 2025 relating to our then-current development programs and our internal R&D expenses, listed by the nature of such expenses:

The increaseincreases in expenses related to alixorexton wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to increased spend related to the advancement of the development program, including initiation of our phase 3 Brilliance Studies of the product in narcolepsy and costs related to our long-term extension study. The increaseincreases in expenses related to LUMRYZ wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were due to the addition of the REVITALYZ programaddition, in connection with the Avadel Acquisition.Acquisition, of the REVITALYZ phase 3 development program. The increaseincreases in other orexin programs and other external R&D expenses wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to activities associated with our preclinical and clinical development programs.

The increaseincreases in employee-related expenses wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to anincreases in share-based compensation expense of $1.7 million and $10.0 million, respectively, and increases in labor and benefits expense related to a 16% increase in R&D-related headcount, primarily in connection with the Avadel Acquisition. The increase in share-based compensation expense during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was primarily due to expense of approximately $6.5$6.7 million related to Avadel Shares that were accelerated and settled by us in connection with the Avadel Acquisition and due to increases in labor and benefits expense related to a 20% increase in R&D-related headcount, primarily in connection with the Avadel Acquisition. See Note 3, Business Combination in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information related to purchase accounting adjustments.

The increaseincreases in selling and marketing expense wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to increases in employee-related expenses of $28.3$18.0 million and $4.3$45.8 million, respectively, and marketing expense of $15.1 million and $19.4 million, respectively. The increases in employee-related expenses and marketing expense, respectively. The increase in employee-related expenses waswere primarily due to the Avadel Acquisition, which resulted in a 15%16% increase in sales and marketing-related headcount due to the addition of the LUMRYZ commercial organization. InAlso, addition,during therethe wassix anmonths increaseended inJune 30, 2026, we recorded share-based compensation expense of approximately $13.0$13.3 million related to Avadel Shares that were accelerated and settled by us in connection with the Avadel Acquisition. See Note 3, Business Combination in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information related to purchase accounting adjustments. The increaseincreases in marketing expense wasduring the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to the addition of $10.5marketing costs for LUMRYZ of $13.7 million inand costs,$24.2 beginningmillion, on the Closing Date, related to marketing for LUMRYZ,respectively, partially offset by adecreases $4.0of $4.4 million decreaseand $8.3 million, respectively, in mediadirect marketing spend for ARISTADA/ARISTADA INITIO, LYBALVI and VIVITROL during the three months ended March 31, 2026.VIVITROL.

The increase in general and administrative expense during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was primarily due to increases of $32.8 million, $18.7$26.3 million and $5.2$9.1 million in expenses related to the Avadel Acquisition, employee-related expenses and professional service fees, respectively. Expenses related to the Avadel Acquisition included stamp duty and transaction-related advisory fees. The increase in employee-related expenses was primarily due to increases of $11.1$12.9 million and $5.6$9.7 million in labor and benefits expense and share-based compensation expense, respectively. The increase in labor and benefits expense was primarily due to an increase in severance expense of $5.6 million related to the Avadel Acquisition, and athe 15%11% increase in general and administrative-related headcount.headcount noted above. The increase in share-based compensation expense was primarily due to the recognition of incremental share-based compensation expense following the modification of certain equity awards and due to Avadel Shares that were accelerated and settled by us in connection with the Avadel Acquisition. The increase in professional service fees was primarily due to an increase in legal fees and expenses incurred in connection with the Avadel Acquisition.

Interest income consists of interest earned on our cash and available-for-sale investments. InterestThe increase in interest expense consistsin primarilyboth ofperiods $7.7is milliondue ofto financing costs related to the Bridge Credit Agreement through the Closing Date of the Avadel Acquisition and $12.8 million of interest incurred on the Facilities. See Note 12, Long-Term Debt in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information regarding the Bridge Credit Agreement and the Facilities.

Income Tax Provision (Benefit)

The income tax benefit in the three months ended June 30, 2026 primarily related to a lower estimated annual effective tax rate. The income tax provision during the threesix months ended MarchJune 31,30, 2026 was primarily attributable to taxes on income earned in the U.S. The income tax provisionprovisions during the three and six months ended MarchJune 31,30, 2025 waswere primarily attributable to taxes on income earned in Ireland.

At MarchJune 31,30, 2026 our investments consisted of the following:

We used $165.7$20.6 million and generated $98.8$249.0 million of cash from operating activities during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. We expect that our existing cash, cash equivalents, restricted cashequivalents and investments will be sufficient to finance our anticipated working capital and other cash requirements, including debt servicesservice and capital expenditures, for at least the twelve months following the date from which our financial statements were issued. Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures.

Information about our cash flows, by category, is presented in the accompanying condensed consolidated statements of cash flows. The following table summarizes our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025:

Cash flows used in operating activities for the threesix months ended MarchJune 31,30, 2026 were $165.7$20.6 million and primarily consisted of net loss of $66.5$66.0 million, adjusted for non-cash items, including share-based compensation of $36.3$67.5 million, depreciation and amortization of $19.4$49.7 million, amortization of inventory step-up of $12.7$43.7 million, deferredthe incomechange taxesin fair value of $8.8contingent consideration of $26.4 million and changes in working capital of $160.3$147.8 million.

Cash flows provided by operating activities for the threesix months ended MarchJune 31,30, 2025 were $98.8 million and primarily consisted of net$109.6 incomemillion of $22.5net million,income, adjusted for non-cash items, including share-based$47.8 compensationmillion of $22.8share-based million,compensation, $15.2 million of depreciation and amortization ofand $7.4 million, deferred income taxeschanges of $2.5$74.1 million and changes in working capital of $43.3 million.capital.

Cash flows used in investing activities for the threesix months ended MarchJune 31,30, 2026 were primarily dueused to the completion ofcomplete the Avadel Acquisition and the purchase of $4.1$12.2 million of property, plant and equipment, partially offset by $12.2$17.9 million in net sales of investments. Total cash consideration paid on the Closing Date was $2,199.2 million.million, Wewhich was accounted for the Avadel Acquisition as a business combinationcombination, and we recognized $2,085.1 million of assets acquired, net of liabilities assumed and cash transferred as an investing activity during the threesix months ended MarchJune 31,30, 2026.

Cash flows providedused byin investing activities for the threesix months ended MarchJune 31,30, 2025 were primarily due to $17.5the purchase of $23.1 million of property, plant and equipment, partially offset by $1.3 million in net sales of investments, partially offset by the purchase of $10.1 million of property, plant and equipment.investments.

Cash flows provided by financing activities for the threesix months ended MarchJune 31,30, 2026 were primarily dueconsisted toof $1,511.6 million in net proceeds from borrowings under the Facilities in connection with the Avadel Acquisition and $15.7$42.0 million of cash that we received upon exercises of employee stock options,options. These increases were partially offset by $27.7 million (exclusive of any fees, commissions or other related expenses) used to repurchase our ordinary shares under the Repurchase Program and $23.4$24.5 million of employee taxes paid related to the net share settlement of equity awards.

Cash flows provided by financing activities for the threesix months ended MarchJune 31,30, 2025 were primarily due to $29.5$31.6 million of cash that we received upon exercises of employee stock options, partially offset by $28.8$30.4 million of employee taxes paid related to the net share settlement of equity awards.

On February 12, 2026, in connection with the Avadel Acquisition, we entered into the Credit Agreement, which provides for (i) a TLA Facility in an aggregate principal amount of up to $750.0 million and (ii) a TLB Facility in an aggregate principal amount of up to $775.0 million. The TLA Facility matures on February 12, 2031, and the TLB Facility matures on August 12, 2031. On the Closing Date, we borrowed the full $1.525 billion available to us under the Facilities.

Also onOn February 12, 2026, in connection with completion of the Avadel Acquisition and our entry into the Credit Agreement, we terminated the Bridge Credit Agreement originally entered into in order to fund the Avadel Acquisition, as the commitments under the Credit Agreement, together with our cash on hand as of the Closing Date, were sufficient to fund the Avadel Acquisition.

We record contingent consideration we may owe related to a business combination at fair value on the acquisition date. We estimate the fair value of contingent consideration through valuation models that incorporate a probability-weighted discounted cash flowDCF model related to the achievement of a certain specified milestone. We revalue our contingent consideration each reporting period, with changes in the fair value of contingent consideration recognized within the consolidated statements of operations and comprehensive (loss) income. Changes in the fair value of contingent consideration can result from changes to one or multiple assumptions, including adjustments to the discount rates, changes in the assumed achievement and timing of any such specified milestone and changes in the assumed probability associated with regulatory approval.

At MarchJune 31,30, 2026, our contingent consideration related to the CVR Milestone issued in connection with the Avadel Acquisition. The fair value of the contingent consideration was determined as follows:

The fair value of the contingent consideration was estimated by applying a discount factor, calculated based on the likelihood of achievement of the CVR Milestone, from the expected time the milestone occurs to the end of the reporting period, to the estimated probability of success. We expect achievement of the CVR Milestone to occurbe nodetermined later thanby the end of 20282027 and used a discount rate of 5.47%6.18%;

Significant judgment was employed in determining the appropriateness of these assumptions at the Closing Date. Accordingly, changes in assumptions described above could have a material impact on the increase or decrease in the fair value of contingent consideration we record in any given period. In accordance with the accounting standard for fair value measurements, the fair value of the contingent consideration has been classified as a Level 3 liability as its fair value is based on significant inputs not observable in the market.