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

•Our approved products, including Cortrophin Gel, ILUVIENGel and YUTIQ,ILUVIEN, may not achieve commercialization at levels of market acceptance that will continue to allow us to achievemaintain profitability;

•Cortrophin Gel is our first rare disease pharmaceutical product. To the extent our ongoing and continuing efforts to commercialize Cortrophin Gel, ILUVIEN, and our other products for which we have received marketing approval are not able to continue to achieve commercial success with this product, including expanding the market and gaining market share,unsuccessful, our business, financial condition, and results of operations will be negatively impacted;

•Several of the products we have acquired cannot be manufactured in our facilities and we must secure and maintain qualified and compliant contract manufacturers. Noncompliance by these contract manufacturers or our inability to find qualified contract manufacturers could result in us being unable to commercialize these products; Several of our products are manufactured and/or packaged by single-sourced third parties, which we cannot control and could result in us being unable to market and distribute products;

•FailureIf we fail to comply with data protection laws and regulationsregulations, we could be subject us to government enforcement actions,actions (which could include civil or criminal penalties), private litigation and/or adverse publicity, which could negatively affect our operating results and business;

•Our Medicaid rebate accruals have increased and continue to increase due to our acquisitions and subsequent sales of branded products and authorized generics of branded productsproducts, and the estimates on which our accruals are based are subject to change. Any such change could have a material adverse effect on our business, financial position, and operating results;

•Our accruals for the Medicare Coverage GapManufacturer Discount Program have increased due to growth and acquisitionsacquisitions. Any such change could have a material adverse effect on our business, financial position and operating results;

•We expect to spend a significant amount of resources on research and development efforts, and such efforts may not result in marketable products;

•We may be adversely affected by the expiration of patents that protect key aspects of ourILUVIEN productsand YUTIQ in the near- to medium-term;

•We rely significantly on information technology and any failure, inadequacy, interruption, or security lapse of that technologytechnology, including any cybersecurity incidents, could harm our ability to operate the business effectively;

•We are involved in and may become involved in legal proceedings from time to time, which may result in substantial losses, government enforcement actions, damage to our business and reputation, and place a strain on our internal resources;

•Pharmaceutical product quality standards are steadily increasing on all products,products as set forth by the FDA and other governmental agencies, and if we cannot meet these standards, we may be required to discontinue marketing and/or recall products from the market;

•HealthcareU.S. healthcare reform legislationinitiatives couldmay havematerially aand materialadversely adverse effect onaffect our business, financial position, and operating results;

•Our policies regarding returns, allowances and chargebacks, andas well as marketing programs adopted by wholesalerswholesalers, may reduce revenues in future fiscal periods;

•Our indebtedness and liabilities could limit the cash flow available for our operations and expose us to risks that could adversely affect our business, financial condition and operating results of operation;

•Our New2024 Credit Agreement containcontains restrictive and financial covenants and if we are not in compliance with these covenants, our outstanding indebtedness under this facility could be accelerated and the lenders could terminate their commitments under the facility;

•CertainWe incurred certain risks relating to our 2.25% Convertible Seniorthe Notes due 2029 and related capped call transactions; and

•Raising additional funds by issuing additional equity securities may cause dilution to our current stockholders.stockholders; Raisingraising additional funds by entering into additional credit or other borrowing facilities or issuing debt may subject us to covenants and other requirements that may restrict our operations.

Our approved products, including Cortrophin Gel, ILUVIENGel and YUTIQ,ILUVIEN, may not achieve commercialization at levels of market acceptance that will continue to allow us to achievemaintain profitability and we may face substantial competition from competitors that discover, develop or commercialize competing products before or more successfully than we do, which could have a material adverse effect on our business, financial position, and operating results.

The development and commercialization of new drugs is highly competitive, and the commercial success of our products or any of our future products or product candidates will depend on several factors, including our ability to differentiate any such products or product candidates from our competitors’ current or future products, including the creation of generic competitive products. We seek to develop, license, or acquire products that we can commercialize at levels of market acceptance that would allow us to recoup our costs, grow market share, and achievemaintain profitability. However, we face competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide with respect to our current products and to any future products or product candidates that we may develop or commercialize in the future.

Even if we are able to obtain regulatory approvals for our pharmaceutical products, if we fail to predict accuratelythe demand for such products,products accurately, or if our competitors more effectively develop competitive products, that have few or less severe adverse side effects and have higher rates of acceptance by physicians, our business, financial position, and operating results could be adversely affected. Levels of market acceptance for our products could be impacted by several factors, including but not limited to:

Cortrophin Gel is our first rare disease pharmaceutical product. To the extent our ongoing and continuing efforts to commercialize thisCortrophin productGel, ILUVIEN, and our other products for which we have received marketing approval are unsuccessful, our business, financial condition and results of operations will be negatively impacted.

OnIn October 29, 2021,addition, we have received approval from the FDA for our Cortrophin Gel productILUVIEN for the treatment of certain chronic autoimmune disorders, including acute exacerbations of multiple sclerosis (“MS”) and rheumatoid arthritis (“RA”),NIU-PS in addition to excessDME, urinaryfor proteinwhich dueILUVIEN was already approved. To the extent we receive FDA approval to nephroticcommercialize syndrome.other Weproducts havein devotedthe future, we expect to devote significant time and money to the development of this product since we acquired the rights to the product in 2016. We have invested and continue to invest significantly in thetowards commercialization of this producteffects in the U.S, including building out aour sales force and developing a patient support program,program. In addition, we are expanding our commercialization efforts with arespect full-scaleto launchCortrophin inGel Januaryto 2022. In October 2023, we announced FDA approval and commercial availability ofinclude a 1-mLvial1 ofmL Cortrophin Gel,vial, appropriate for adjunctive treatment of certain patients with acute gouty arthritis flares. Additionally, on February 28, 2025, the FDA approved a prefilled syringe format for Cortrophin Gel. This new presentation became available in 40 USP units/0.5 mL and 80 USP units/mL single-dose options through Cortrophin Gel’s established specialty pharmacy network during the second quarter of 2025. The prefilled syringe reduces administration steps for patients using Cortrophin Gel, which remains available in 5 mL and 1 mL vials. The ability for us to generate significant net product revenues from ILUVIEN, our Cortrophin Gel products or any other products for which we receive marketing approval will depend upon our ability to successfully sell the product and numerous other factors, including:

•successfully establishing and maintaining effective sales, marketing, and distribution systems in jurisdictions in which Cortrophinour Gelapproved isproducts are approved for sale;

•successfully establishing and maintaining manufacturing capabilities with our third-party suppliers and CMOscontract manufacturers and manufacturing adequate commercial quantities of Cortrophinour Gelapproved products at acceptable cost and quality levels, including maintaining current good manufacturing practice (“cGMP”) and quality systems regulation standards required by various regulatory agencies;

•broad acceptance of Cortrophinthe Gelproducts for which we have received marketing approval by physicians,physicians and patients, andas gainingwell as our ability to gain market access share in the healthcare community;

•the acceptance of pricing and placement of Cortrophinthe Gelproducts for which we have received marketing approval on payers’ formularies and the associated tiers;

•effectively competing with the only other competitorproducts that has anare approved adrenocorticotropicand hormoneavailable (“ACTH”)to therapypatients product onfor the market,same conditions, as well as other products that are in development or may be developed in the future as a treatment optionoptions;

•continued demonstration of safety and efficacy of Cortrophinthe Gelproducts for which we have received marketing approval in comparison to competing products or treatment options;

•our ability to comply with ongoing regulatory obligations and continued regulatory review of the products for which we have received marketing approval, which may result in significant additional expense and may require labeling changes based on new safety information, post-market studies or clinical trials to evaluate safety risks related to the use of Cortrophin Gel; and

If we do not achieve one or more of these factors, we could experience an inability to successfully commercialize or continue to successfully commercialize ILUVIEN, Cortrophin Gel,Gel or any other products for which we receive marketing approval, which would negatively impact our business, financial condition and results of operations. In addition, sales of Cortrophinour Gelproducts that have received marketing approval could be negatively affected by discovery of previously unknown problems with the product, such as adverse events of unanticipated severity or frequency, problems with the facilities where the product is manufactured, or imposition of restrictions on Cortrophinsuch Gel,products, including requiring withdrawal of the product from the market,market by a regulatory agency if it disagrees with the promotion, marketing, or labeling of the product.

From time to time, we may enter into new lines of business that offer new products and/or services. For example, in September 2024 we acquired Alimera, a global pharmaceutical company that specializes in the commercialization and development of ophthalmic retinal pharmaceuticals, which for us iswas a new line of business. Our lack of experience with or knowledge of such business or other new lines of business we may choose to enter, as well as external factors, such as competitive alternatives, potential conflicts of interest, either real or perceived, and shifting market preferences, may impact our implementation and operation of such new lines of business. Other risks of implementing new lines of business include:

We depend on a limited number of suppliers for API. Generally, only a single source of API is qualified for use in each product due to the costs and time required to validate a second source of supply. We may experience lengthy delays if we need to change an API supplier, which could have a material adverse impact on our business and results of operations.

Our ability to manufacture and distribute products is dependent, in part, upon ingredients and components supplied by others, including entities based outside the U.S. During the year ended December 31, 2024,2025, approximately 12%,17%, of our raw materialmaterials inventoryand API purchases were from one domestic supplier. During the year ended December 31, 2024, approximately 12% of our API purchases were from one domestic supplier. During the year ended December 31, 2023, no single vendor represented more than 10% of our raw material inventoryAPI purchases. During the year ended December 31, 2022 approximately 19%, of our raw material inventory purchases were from one domestic supplier. Any disruption in the supply of these ingredients or components or any problems in their quality could materially affect our ability to manufacture and distribute our products and could result in legal liabilities that could materially affect our ability to realize profits or otherwise harm our business, financial,financial condition, and operating results. We source the raw materials and API for our products from both domestic and international suppliers. Generally, we qualify only a single source of API for use in each product due to the cost and time required to validate and qualify a second source of supply. Any change in one of our API suppliers mustgenerally usuallyis required to be approved by the FDA through a Prior Approval Supplement (“PAS”) by the FDA.PAS. The process of obtaining an approval of such a PAS can requiretake between foursix and 18nine months.months, and could take an additional eight to ten months if additional information is required to be submitted by the FDA. While we also generally qualify a single source for non-API raw materials, the process required to qualify an alternative source of a non-API raw material is typically much less rigorous. If we were to change the supplier of a raw material for a product, the cost for the material could be greater than the amount we paid with the previous supplier. Changes in suppliers are rare but could occur as a result of a supplier’s business failing, an issue arising from an FDA inspection, or failure to maintain our required standards of quality. As a result, we carefully select suppliers,suppliers based on various factors including quality, reliability of supply, and long-term financial stability. Certain of the API for our drug products, including those that are marketed without approved NDAs or ANDAs, are sourced from international suppliers. From time to time, we have experienced temporary disruptions in the supply of certain of such imported API due to FDA inspections.inspections, and we may experience future disruptions in the supply of certain imported API due to trade tensions or embargoes, geopolitical tensions and macroeconomic conditions. Any disruptions in our API supply, and particularly with respect to the API used to manufacture Cortrophin Gel and ILUVIEN, could have a material adverse effect on our business, financial condition and operating results.

Please read the following discussion in conjunction with Item 1A. (“Risk Factors”) and our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Some of the statements in the following discussion are forward-looking statements. See the discussion about forward-looking statements on page 1 of this Annual Report on Form 10-K.10-K, as actual results may differ materially from those contained in any forward-looking statements.

This section of this Form 10-K generally discusses 20242025 and 20232024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2024 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023,2024, filed with the SEC on February 29,28, 2024.2025.

ANI Pharmaceuticals, Inc. and its consolidated subsidiaries (together, “ANI,” the “Company,” “we,” “us,” or “our”)Pharmaceuticals is a diversified bio-pharmaceutical companycompany. committedThe to itsCompany's mission ofis “Serving Patients, Improving Lives” by developing, manufacturing, and commercializing innovativetherapeutics through its Rare Disease, Generics, and highBrands quality therapeutics.businesses.

On September 16, 2024, the Company completedacquired its previously announced acquisition of Alimera Sciences, Inc., a Delaware corporation, pursuant to the terms of the Agreement and Plan of Merger, dated as of June 21, 2024 (the “Merger Agreement”), by and among the Company, Alimera and ANIP Merger Sub INC., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub merged with and into Alimera, with Alimera surviving the merger as a wholly-owned subsidiary of the Company (the “Merger”).Alimera. In connection with the Merger, the Company added a growing and durable franchise, ILUVIEN® (fluocinolone acetonide intravitreal implant) 0.19 mg, which has received marketing authorization and reimbursement in the United States (“U.S.”) and 24 countries for the treatment of diabetic macular edema (“DME”) and YUTIQ® (fluocinolone acetonide intravitreal implant) 0.18 mg, available in the U.S. for the treatment of non-infectious uveitis affecting the posterior segment of the eye (“NIU-PS”). InSubsequent connection withto the acquisition of Alimera, we expanded the Companylabel hasfor assessedILUVIEN to include an indication for chronic NIU-PS in addition to its strategicthen-current goalsindication andin aligned its operational initiatives into two reportable segments, and the discussion of the historical results of operations below has been revised, as applicable, to be consistent with the presentation of the revised reportable segments (see Note 19 "Segment ReportingDME in the notes to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K).U.S.

OurThe Company owns and operates three pharmaceutical manufacturing facilities, of whichincluding two are locatedfacilities in Baudette, Minnesota, and one is located in East Windsor, New Jersey, which collectively are together capable of producing oral solid dose products, as well as semi-solids, liquids and topicals, controlled substances, and potent products that must be manufactured in a fully-contained environment. WeThe Company ceased operations at ouranother subsidiarymanufacturing facility in Oakville, Ontario, CanadaOntario as of March 31, 2023. This action was part of ongoing initiatives to capture operational synergies following our acquisition of Novitium Pharma LLC (“Novitium”) in November 2021. We have fully completed the transition of the products manufactured or packaged in Oakville to one of our three U.S. based manufacturing sites. In February 2024, our Canadian subsidiary entered into an agreement for the purchase and sale of the Oakville site, for a purchase price of $19.2 million Canadian Dollars, or approximately $14.2 million, based on the currentthen-current exchange rate. The sale closed on March 28, 20242024. (seeSee Note 4 "Restructuring Canada Operations" in the notes to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K).10-K.

On August 13, 2024, the Company entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the financial institutions party thereto as lenders,lenders (the "New2024 Credit Agreement"), which provides for aggregate principal commitments consisting of (i) a senior secured delayed-draw term loan facility in an aggregate principal amount of $325.0 million, and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $75.0 million,million ($74.9 million of which remains undrawn), which may be used for revolving credit loans, swingline loans and letters of credit.

On August 13, 2024, the Company completed an offering of $316.25 million aggregate principal amount of the Company's Convertible Senior Notes due 2029 (the “Notes”). The Notes are due September 1, 2029, unless earlier repurchased, redeemed, or converted. After deducting the initial purchasers’ discounts and commissions of approximately $9.5 million, but before deducting the Company’s offering expenses, the net proceeds to the Company from the offering of the Notes waswere approximately $306.8 million. In connection with the offering of Notes, on August 7, 2024 and August 8, 2024, the Company entered into capped call transactions with certain financial institutions (“Capped Calls”). After payment of the cost of entering into the Capped Calls transactions, of approximately $40.6 million, the Company used the remainder of the net proceeds from the Notes offering, together with cash on hand, to repay the Company’s existing senior secured credit agreement with Truist Bank, dated as of November 19, 2021.

Fiscal 2024Recent Developments

On September 16, 2024, the Company completed our previously announced merger with Alimera (the “Closing”). At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.01 per share, of Alimera (the “Alimera Common Stock”) outstanding immediately prior to the Effective Time including each Alimera RSA, Alimera PSU, Alimera RSU, and Alimera Warrant (each as defined below), but excluding any treasury shares or shares owned by the Company, Mergermerger Subssubsidiaries or any other subsidiary of the Company or Alimera), was canceled and ceased to exist and was converted into the right to receive (i) $5.50 in cash (“Closing Cash Consideration”), and (ii) one contingent value right (a “CVR”), which represents the right to receive the milestone payments (as defined below) subject to the terms and conditions set forth in the CVR Agreement entered into on September 16, 2024 (clauses (i) and (ii) collectively, the “Merger Consideration”). The Company also repaid $72.5 million of Alimera debt.

Each CVR entitles the holder to receive milestone payments for 2026 and 2027. The milestone payments for each CVR equals the product (rounded to the nearest 1/100 of $0.01) of $0.25 multiplied by a fraction (which is no case will exceed one), and (i) for 2026, equals the amount, if any, by which the 2026 Net Revenue (as defined therein) exceeds $140.0 million, divided by $10.0 million (subject to adjustment for the exercise price of eligible options), and (ii) for 2027, equals the amount, if any, by which the 2027 Net Revenue exceeds $160.0 million, divided by $15.0 million (subject to adjustment for the exercise price of applicable Alimera Options).

In addition to the amounts payable to the holders thereof in connection with the Closing,Merger, all of the outstanding awards of restricted stock with respect to shares of Alimera Common Stock (each, an “Alimera RSA”), each Alimera Performance Stock Unit (“Alimera PSU”), each Alimera Restricted Stock Unit (“Alimera RSU”) and each Alimera warrant ("Alimera Warrant") that were outstanding immediately prior to the Effective Time were automatically canceled and converted into the right to receive one (1) CVR per share of Alimera Common Stock then underlying the applicable instrument.

Each stock option previously granted by Alimera to purchase Alimera Common Stock (each, an “Alimera Option”) that was outstanding and unexercised as of the Effective Time and which had a per share exercise price that was less than the Closing Cash Consideration was, in addition to the amounts payable to the holders thereof in connection with the Closing, automatically canceled and converted into the right to receive one (1) CVR per share of Alimera Common Stock then underlying such Alimera Option. No other Alimera Options were cancelled and converted into the right to receive a CVR, provided that each Alimera Option with a per share exercise price greater than or equal to the Closing Cash Consideration but less than the Total Consideration (as defined in the Merger Agreement) may receive a payment in connection with the payout of the CVRs (if any). See Note 3 “Business Combination” to the notes to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information on the acquisition.

New Capital Structure

Refer to the Liquidity and Capital Resources below for further discussion of changes to our capital structure during 2025 and 2024.

We derive substantially all of our revenues from sales of rareour disease,Rare brandsDisease, portfolioBrands and Generics portfolios of pharmaceutical products, generics,as andwell as from other sources of revenue such as royalties on net sales of certain products, and other pharmaceutical services. Essentially all of our genericGenerics products face competition from other generic products, as do many of our brandsBrands products, and we expect them to continue to face competition from generic products in the future. The primary means of competition among generic manufacturers are pricing, contract terms, service levels, and reliability. Increased competition generally results in decreased average selling prices of generic and brands products over time. In addition, due to strategic partnerships between wholesalers and pharmacy chains, we have experienced, and expect to continue to experience, increases in net sales to the wholesalers, with corresponding decreases in net sales to the pharmacy chains.

•Net revenues from Rare Disease and Brands, which includes our rare disease and brands portfolioportfolios of pharmaceutical productsproducts, was $294.3$484.0 million during the year ended December 31, 2024,2025, an increase of $96.8$189.6 million, compared to $197.5$294.3 million,million for the same period in 2023.2024.

•Net revenues for rareRare diseaseDisease pharmaceutical products, include Cortrophin Gel and a full quarter contribution from ILUVIEN and YUTIQ,products were $229.6$422.6 million during the year ended December 31, 2024,2025, an increase of $117.5$193.0 million from $112.1$229.6 million for the same period in 2023.2024. This increase was driven by increased volume in this third year of launch of Cortrophin Gel (product was launched in late January 2022) from overall ACTH market growth and market share growth,gains, and a full quarteryear of sales from ILUVIEN and YUTIQ,YUTIQ. asILUVIEN aand resultYUTIQ ofwere theacquired acquisition offrom Alimera onin September 16, 2024.

•Net revenues for genericBrands andportfolio otherof pharmaceutical products were $320.0$61.3 million during the year ended December 31, 2024,2025, ana increasedecrease of 10.6%$3.4 million compared to $289.3$64.7 million for the same period in 2023,2024, primarilydriven by a resultnet ofdecrease thein following:demand for certain products.

On September 16, 2024, the Company acquired Alimera.Alimera Sciences, Inc. (“Alimera”). In connection with the Merger, the Company added a growing and durable franchise, ILUVIEN (fluocinolone acetonide intravitreal implant) 0.19 mg, which has received marketing authorization and reimbursement in the United States (“U.S.”) and 24 countries for the treatment of diabetic macular edema (“DME”) and YUTIQ (fluocinolone acetonide intravitreal implant) 0.18 mg, available in the U.S. for the treatment of non-infectious uveitis affecting the posterior segment of the eye (“NIU-PS”). Subsequent to the acquisition of Alimera, we expanded the label for ILUVIEN to include an indication for chronic NIU-PS in addition to its then-current indication in DME in the U.S.

Impacts to our firstsecond quarter 2026 and 2025 results of operations, including to net revenues, operating expenses, interest and other expense, net, and income taxes are described below.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCHJUNE 31,30, 2026 AND 2025

____________________________________________ (1)There were no sales of YUTIQ induring Q1the quarters ended March 31, 2026 and June 30, 2026, as the Company transitioned promotional efforts in the U.S. from YUTIQ to ILUVIEN, which has a combined label of DME and NIU-PS during the second quarter of 2025.

We derive substantially all of our revenues from sales of our Rare Disease, Brands and Generics portfolios of pharmaceutical products, as well as from other sources of revenue such as milestones, royalties on net sales of certain products, and other pharmaceutical services. Our Rare Disease products face competition from other brand products in many of the therapeutic categories in which they are sold. Essentially all of our Generics products face competition from other generic products, as do many of our Brands products, and we expect them to continue to face competition from generic products in the future. The primary means of competition among generic manufacturers are pricing, contract terms, service levels, and reliability. Increased competition generally results in decreased average selling prices of generic and brands products over time. In addition, due to strategic partnerships between wholesalers and pharmacy chains, we have experienced, and expect to continue to experience, increases in net sales to the wholesalers, with corresponding decreases in net sales to the pharmacy chains.

Net revenues for the three months ended MarchJune 31,30, 2026 were $237.5$266.0 million compared to $197.1$211.4 million for the same period in 2025, an increase of 20.5%,25.9%, primarily as a result of the following:

•Net revenues from Rare Disease and Brands, which includes our rareRare diseaseDisease and brandsBrands portfolios of pharmaceutical products, royalties, and other revenues were $128.2$165.4 million during the three months ended MarchJune 31,30, 2026, an increase of $34.2$48.2 million, compared to $94.1$117.2 million for the same period in 2025.

•Net revenues for Rare Disease pharmaceutical products were $94.4$135.8 million during the three months ended MarchJune 31,30, 2026, an increase of $25.4$31.9 million from $69.0$104.0 million for the same period in 2025. This increase was driven by increased volume of Cortrophin Gel from overall ACTH market growth and market share gains. TheILUVIEN increasenet revenues were $18.7 million in salesthe forsecond ILUVIENquarter, wasdown driven16% byfrom the continuedprior executionyear of commercial and patient access initiatives established during 2025.period.

•Net revenues for Brands portfolio of pharmaceutical products were $12.3$11.8 million during the three months ended MarchJune 31,30, 2026, a decrease of $12.8$1.4 million compared to $25.1$13.2 million for the same period in 2025, driven by a net decrease in demand for certain products during the firstsecond quarter.

•Net revenues for Brand royalties and other revenues during the three months ended MarchJune 31,30, 2026, includes a $15.0 million upfront payment and associated royalties of approximately $6.5$9.7 million, and $8.0 million of revenue associated with development milestones satisfied over time, related to the Harmony Agreement.

•Net revenues from Generics and Other, which includes our generic pharmaceutical products, sales of contract manufactured products, royalties on contract manufactured products, and other pharmaceutical services, were $109.2$100.7 million during the three months ended MarchJune 31,30, 2026, an increase of 6.0%6.8% compared to $103.0$94.2 million for the same period in 2025, primarily as a result of the following:

•Generic pharmaceutical products net revenues were $105.4$99.1 million during the three months ended MarchJune 31,30, 2026, an increase of $6.7$8.8 million over the prior year. This increase was driven by a partnered product launched in the third quarter of 2025, and increased volumes from the benefit of new product launches during 2026. From a product perspective, in addition to the partnered product cited above, the increase was principally driven by revenues from year over year increases in products such as Vancomycin and MAS ER, Vancomycin, among others.

•Other generic net revenues were essentiallydown flatmodestly for the three months ended MarchJune 31,30, 20262026, compared to the same periodtime in 2025.the prior year due to fewer contract manufacturing shipments and lower royalties during the period.

For the three months ended MarchJune 31,30, 2026, cost of sales increased to $93.6$100.2 million from $73.0$74.6 million for the same period in 2025, an increase of $20.5$25.5 million, or 28.1%.34.2%. The increase is primarily due to significant net growth in sales volumes of pharmaceutical products and significant growth of royalty bearing products, including Cortrophin Gel, and other products in our portfolio.

Cost of sales, as a percentage of net revenues, increased to 39.4%37.6% from 37.1%35.3% for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to a shift in product mix year over year and an increase in sales of products that bear a royalty payable, and the non-recurrence of prior year sales from Prucalopride. These effects were somewhat tempered by the the initial revenue recognized under the Harmony Agreement.

For the three months ended MarchJune 31,30, 2026, total other operating expenses, net increased to $105.0$125.4 million from $97.9$122.9 million for the same period in 2025, an increase of $7.1$2.6 million, or 7.3%,2.1%, primarily as a result of the following factors:

•DepreciationResearch and amortizationdevelopment expenseexpenses was $20.9 million forduring the three months ended MarchJune 31,30, 2026,2026 compareddecreased from $16.5 million to $22.9$14.7 million for the same period in 2025,million, a decrease of approximately $2.0$1.8 million, primarily relateddue to certaintiming definiteof livedactivity intangiblesassociated thatwith haveongoing beenand fullynew amortizedprojects duringto 2025.support future growth of Rare Disease and Generics.

•We recognized a net gain of approximately $0.2$0.6 million for the three months ended MarchJune 31,30, 2026 related to changes in our contingent consideration liabilities, which are measured at fair value. The net gain resulted from the adjustment of future forecasted cash flows and includes primarily: (1) a $0.4$0.5 million reduction related to the Alimera contingent value rights; and (2) a $0.2$0.1 million increasedecrease in contingent consideration related to the Novitium acquisition.

Other Income (Expense),Expense, net

For the three months ended MarchJune 31,30, 2026, we recognized total other income,expense, net of $1.3$3.4 million as compared to total other expense, net of $6.2$3.4 million for the same period in 2025.

•We recorded an unrealized gain on investment in equity securities of approximately $5.8$0.7 million for the three months ended MarchJune 31,30, 2026, compared to an unrealized lossgain of approximately $0.9$0.3 million in the same period in 2025, which is based on the mark to market fair value of equity securities held in CG Oncology as of the balance sheet date.

•Interest expense, net for the three months ended MarchJune 31,30, 2026 consists primarily of coupon interest expense on borrowings under our outstanding debt and amortization of deferred financingsfinancing costs on these debt instruments, interest income earned on our bank balances, and interest earned on our interest rate swap. Interest income earned on our bank balances increased approximately $1.3$1.2 million and interest expense related to our outstanding debt decreased approximately $0.6$0.8 million,million resulting in an increase of interest income of approximately $1.9$2.0 million. This impact was partially offset by a decrease of interest earned on our interest rate swap of approximately $0.2 million, compared to the same period in the prior year.

•Other (expense) income, net, for the three months ended MarchJune 31,30, 2026 and 2025 consists primarily of unrealized foreign exchange gains and losses related to our Alimera UK subsidiary.

For the three months ended MarchJune 31,30, 2026, our income tax expense was approximately $10.7$12.4 million. Our effective tax rate of 26.7%33.4% of pre-tax income for the current year was determined based on our pre-tax income, statutory tax rates and the tax impacts of certain discrete items for the three months ended MarchJune 31,30, 2026, which impact our income tax expense in the period in which they occur. The effective tax rate differed from the federal statutory rate of 21% primarily due to state taxes and disallowed officersofficers' compensation partially offset by excess tax benefits recognized upon settlement of stock-based compensation.

For the three months ended MarchJune 31,30, 2025, our income tax expense was approximately $4.3$2.0 million. Our effective tax rate was 21.5%18.8% of pre-tax income reported in the period, as well as the net effect of certain discrete items for the three months ended MarchJune 31,30, 2025 which impact our income tax expense in the period in which they occur. Discrete items areduring primarilythe relatedsecond quarter of 2025 relate predominately to excessfavorable return to provision adjustments attributable to certain foreign tax benefitsreturns recognizedfiled uponduring settlementthe of stock-based compensation awards.quarter.