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What changed in Alkermes plc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Alkermes plc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+674 added−349 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-16)

Top changes in Alkermes plc.'s 2023 10-K

674 paragraphs added · 349 removed · 234 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

133 edited+388 added−32 removed174 unchanged
Biggest changeFor a discussion of legal proceedings related to the U.S. patent covering VIVITROL, see Note 17, Commitments and Contingent Liabilities , in the “Notes to Consolidated Financial Statements” in this Annual Report. 19 Table of Contents INVEGA SUSTENNA/XEPLION , INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI Our NanoCrystal technology patent portfolio, licensed to Janssen, contains a number of granted patents and pending patent applications throughout the world, including in the U.S. and in countries outside of the U.S.
Biggest changeUnder the terms of a settlement and license agreement entered into in July 2019 with Amneal Pharmaceuticals LLC (“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. 18 INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI Our NanoCrystal technology patent portfolio, licensed to Janssen, contains a number of granted patents and pending patent applications throughout the world, including in the U.S. and in countries outside of the U.S.
INVEGA SUSTENNA/XEPLION is manufactured by Janssen. INVEGA TRINZA is approved in the U.S. for the treatment of schizophrenia in patients who have been adequately treated with INVEGA SUSTENNA for at least four months. TREVICTA is approved in the EU for the maintenance treatment of schizophrenia in adult patients who are clinically stable on XEPLION.
INVEGA SUSTENNA/XEPLION is manufactured by Janssen. INVEGA TRINZA is approved in the U.S. for the treatment of schizophrenia in patients who have been adequately treated with INVEGA SUSTENNA for at least four months. TREVICTA is approved in the EU for the maintenance treatment of schizophrenia in adult patients who are clinically stable on XEPLION. INVEGA TRINZA/TREVICTA is manufactured by Janssen.
The GDPR imposes significant obligations on controllers and processors of personal data, including high standards for obtaining consent from individuals to process their personal data, robust notification requirements to individuals about the processing of their personal data, a strong individual data rights regime, mandatory data breach notifications, limitations on the retention of personal data, stringent requirements pertaining to health data, and strict rules and restrictions on the transfer of personal data outside of the EU, including to the U.S.
The GDPR imposes significant obligations on controllers and processors of personal data, including high standards for obtaining consent from individuals to process their personal data, robust notification requirements to individuals about the processing of their personal data, a strong individual data rights regime, mandatory data breach notifications, limitations on the retention of personal data and stringent requirements pertaining to health data, and strict rules and restrictions on the transfer of personal data outside of the EU, including to the U.S.
See “Item 1A—Risk Factors” in this Annual Report and specifically those sections entitled “If there are changes in, or we fail to comply with, the extensive legal and regulatory requirements affecting the healthcare industry, we could face costs, penalties and business losses ,” “Revenues generated by sales of our products depend on the availability from third-party payers of reimbursement for our products and the extent of cost-sharing arrangements for patients (e.g., patient co-payment, co-insurance, deductible obligations) and cost-control measures imposed, and any reductions in payment rate or reimbursement or increases in our or in patients’ financial obligation to payers could result in decreased sales of our products and/or decreased revenues ” and “The clinical study or commercial use of our products may cause unintended side effects or adverse reactions, or incidents of misuse may occur, which could adversely affect our products, business and share price .” Laws and regulations have been enacted by the U.S. federal government and various states to regulate the sales and marketing practices of pharmaceutical manufacturers.
See “Item 1A—Risk Factors” in this Annual Report and specifically those sections entitled “If there are changes in, or we fail to comply with, the extensive legal and regulatory requirements affecting the healthcare industry, we could face costs, penalties and business losses,” “Revenues generated by sales of our products depend on the availability from third-party payers of reimbursement for our products and the extent of cost-sharing arrangements for patients (e.g., patient co-payment, co-insurance, deductible obligations) and cost-control measures imposed, and any reductions in payment rate or reimbursement or increases in our or in patients’ financial obligation to payers could result in decreased sales of our products and/or decreased revenues” and “The clinical study or commercial use of our products may cause unintended side effects or adverse reactions, or incidents of misuse may occur, which could adversely affect our products, business and share price.” Laws and regulations have been enacted by the U.S. federal government and various states to regulate the sales and marketing practices of pharmaceutical manufacturers.
The Inflation Reduction Act includes several provisions that will impact our business to varying degrees, including those that impose 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 D beginning in 2026 and Medicare Part B beginning in 2028, and require companies to pay rebates to Medicare beginning in 2023 for drug prices that increase faster than inflation.
The Inflation Reduction Act includes several provisions that will impact our business to varying degrees, including those that impose 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 D beginning in 2026 and Medicare Part B beginning in 2028, and require companies to pay rebates to Medicare for drug prices that increase faster than inflation.
Our Wilmington, Ohio facility has been inspected by U.S., European (including the UK Medicines and Healthcare products Regulatory Agency), Chinese, Japanese, Brazilian, Turkish, Russian and Saudi Arabian regulatory authorities for compliance with required cGMP standards for continued commercial manufacturing. We manufacture several products in our Athlone, Ireland facility that are marketed by third parties, including FAMPYRA and VUMERITY.
Our Wilmington, Ohio facility has been inspected by U.S., European (including the UK Medicines and Healthcare products Regulatory Agency), Chinese, Japanese, Brazilian, Turkish, Russian and Saudi Arabian regulatory authorities for compliance with required cGMP standards for continued commercial manufacturing. We manufacture several products in the Athlone Facility that are marketed by third parties, including FAMPYRA and VUMERITY.
Competition We face intense competition in the development, manufacture, marketing and commercialization of our products from many and varied sources, such as research institutions and biopharmaceutical companies, including other companies with similar technologies. Some of these competitors are also our licensees, who control the commercialization of products from which we receive manufacturing and royalty revenues.
Competition We face intense competition in the development, manufacture, marketing and commercialization of our products from many and varied sources, such as research institutions and biopharmaceutical companies, including other companies with similar technologies. Some of these competitors are also our licensees, who control the commercialization of products from which we receive manufacturing and/or royalty revenues.
Under this license agreement, we provided Janssen with rights to, and know-how, training and technical assistance in respect of, our small particle pharmaceutical compound technology, known as NanoCrystal technology, which was used to develop INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA, and INVEGA HAFYERA/BYANNLI.
Under this license agreement, we provided Janssen with rights to, and know-how, training and technical assistance in respect of, our small particle pharmaceutical compound technology, known as NanoCrystal technology, which was used to develop INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA, INVEGA HAFYERA/BYANNLI, and CABENUVA.
We either purchase active pharmaceutical ingredient (“API”) from third parties or receive it from our third‑party licensees to formulate products using our technologies. The manufacture of our products for clinical trials and commercial use is subject to Current Good Manufacturing Practices (“cGMP”) regulations and other regulations.
We either purchase active pharmaceutical ingredient (“API”) from third parties or receive it from our third-party licensees to manufacture products using our technologies. The manufacture of our products for clinical trials and commercial use is subject to Current Good Manufacturing Practices (“cGMP”) regulations and other regulations.
The primary difference between the two AMP calculations is the requirement to exclude from AMP, for those qualifying 5i drugs not generally dispensed through RCPs, certain payments, rebates and discounts related to sales to non-RCPs; such exclusion often leads to a lower AMP.
The primary difference between the two AMP 25 calculations is the requirement to exclude from AMP, for those qualifying 5i drugs not generally dispensed through RCPs, certain payments, rebates and discounts related to sales to non-RCPs; such exclusion often leads to a lower AMP.
Over the past several years, we have continued to focus on fostering an environment that respects and celebrates Diversity, Inclusion & Belonging (“DIB”) in our workplaces and our communities and have actively evolved our DIB strategy to reflect the needs of our employees and our business.
Over the past several years, we have continued to focus on fostering an environment that respects and celebrates Diversity, Inclusion & Belonging (“DIB”) in our workplaces and our communities and have actively evolved our DIB strategy and programs to reflect the needs of our employees and our business.
Schizophrenia is a serious brain disorder marked by positive symptoms (hallucinations and delusions, disorganized speech and thoughts, and agitated or repeated movements) and negative symptoms (depression, blunted emotions and social withdrawal). Schizophrenia affects approximately 1.1% of the U.S. population.
What is schizophrenia? Schizophrenia is a serious brain disorder marked by positive symptoms (hallucinations and delusions, disorganized speech and thoughts, and agitated or repeated movements) and negative symptoms (depression, blunted emotions and social withdrawal). Schizophrenia affects approximately 1.1% of the U.S. population.
We are committed to supporting our employees’ well-being in a transparent, diverse, inclusive, and collaborative culture and to providing them with access to training, support and resources intended to help them succeed professionally, while appropriately balancing their professional and personal lives.
We are committed to supporting our employees’ well-being in a transparent, diverse, inclusive, and collaborative culture and to providing them with access to training, support and resources intended to help them succeed professionally, while balancing their professional and personal lives.
The know how royalty rate resets to 3.5% at the beginning of each calendar year and is payable until 15 years from the first commercial sale of a product in each individual country, subject to expiry of the agreement.
The know-how royalty rate resets to 3.5% at the beginning of each calendar year and is payable until 15 years 11 from the first commercial sale of a product in each individual country, subject to expiry of the agreement.
The terms of our participation in the rebate program impose a requirement on us to report revisions to AMP or best price within a period not to exceed 12 quarters from the quarter in which the data was originally due.
The terms of our participation in the rebate program impose 24 a requirement on us to report revisions to AMP or best price within a period not to exceed 12 quarters from the quarter in which the data was originally due.
In October 2019, we entered into a commercial supply agreement with Biogen for the commercial supply of VUMERITY, an amendment to such commercial supply agreement and an amendment to the license and collaboration agreement with Biogen , pursuant to which Biogen has elected to conduct a technology transfer and, subject to agreement in respect of a manufacturing transition period, assume responsibility for the manufacture (itself or through a designee) of clinical supplies of VUMERITY and up to 100% of commercial supplies of VUMERITY in exchange for an increase in the royalty rate to be paid by Biogen to us on net sales of that portion of product that is manufactured by Biogen or its designee .
In October 2019, we entered into a commercial supply agreement with Biogen for the commercial supply of VUMERITY, an amendment to such commercial supply agreement and an amendment to the license and collaboration agreement with Biogen, pursuant to which Biogen has elected to conduct a technology transfer and, subject to an agreed manufacturing transition period, assume responsibility for the manufacture (itself or through a designee) of clinical supplies of VUMERITY and up to 100% of commercial supplies of VUMERITY in exchange for an increase in the royalty rate to be paid by Biogen to us on net sales of that portion of product that is manufactured by Biogen or its designee.
Our five ERGs include: Limitless, a network to support people impacted by disability or illness; Mosaic, a multicultural network; Operation Salute, a veterans’ network; Pride@Work, an LGBTQ+ network; and Women Inspired Network (WIN), a women’s network.
Our five ERGs include: Limitless, a network to support people impacted by disability or illness; Mosaic, a multicultural network; Operation Salute, a veterans’ network; Pride@Work, an LGBTQ+ and allies network; and Women Inspired Network (WIN), a women’s network.
With respect to our products, we believe that our ability to successfully compete will depend on, among other things, the existence of competing or alternative products in the marketplace, including generic competition, and the relative price of those products; the efficacy, safety and reliability of our products compared to competing or alternative products; product acceptance by, and preferences of, physicians, other healthcare providers and patients; our ability to comply with applicable laws, regulations and regulatory requirements with respect to the commercialization of our products, including any changes or increases to regulatory 17 Table of Contents restrictions; protection of our proprietary rights relating to our products; our ability to obtain reimbursement for our products; our ability to complete clinical development and obtain regulatory approvals for our products, and the timing and scope of any such regulatory approvals; our ability to successfully manufacture and provide a reliable supply of commercial quantities of a product to the market; and our ability to recruit, retain and develop skilled employees .
With respect to our products, we believe that our ability to successfully compete will depend on, among other things, the existence of competing or alternative products in the marketplace, including generic competition, and the relative price of those products; the efficacy, safety and reliability of our products compared to competing or alternative products; product acceptance by, and preferences of, physicians, other healthcare providers and patients; our ability to comply with applicable laws, regulations and regulatory requirements with respect to the manufacture and/or commercialization of our products, including any changes or increases to regulatory restrictions; protection of our proprietary rights relating to our products; our ability to obtain reimbursement for our products; our ability to complete clinical development and obtain regulatory approvals for our products, and the timing and scope of any such regulatory approvals; our ability to successfully manufacture and provide a reliable supply of commercial quantities of a product to the market; and our ability to recruit, retain and develop skilled employees.
We provide, and contract with third‑party vendors to provide, customer services and other related programs for our products, such as product‑specific websites, insurance research services and order, delivery and fulfillment services. Our sales force for VIVITROL in the U.S. consists of approximately 110 individuals. VIVITROL is primarily sold to pharmaceutical wholesalers, pharmacies, specialty distributors and treatment providers.
We provide, and contract with third-party vendors to provide, customer services and other related programs for our products, such as product-specific websites, insurance research services and order, delivery and fulfillment services. Our sales force for VIVITROL in the U.S. consists of approximately 115 individuals. VIVITROL is primarily sold to pharmaceutical wholesalers, pharmacies, specialty distributors and treatment providers.
Product(s) Covered Expiration Date 8,431,576 ARISTADA; ARISTADA INITIO 2030 8,796,276 ARISTADA; ARISTADA INITIO 2030 10,112,903 ARISTADA; ARISTADA INITIO 2030 10,023,537 ARISTADA 2030 10,351,529 ARISTADA; ARISTADA INITIO 2030 11,518,745 ARISTADA; ARISTADA INITIO 2030 11,273,158 ARISTADA; ARISTADA INITIO 2039 9,034,867 ARISTADA 2032 10,226,458 ARISTADA 2032 9,193,685 ARISTADA 2033 9,861,699 ARISTADA 2033 10,342,877 ARISTADA 2033 10,639,376 ARISTADA 2033 11,097,006 ARISTADA 2033 9,452,131 ARISTADA 2035 9,526,726 ARISTADA 2035 10,064,859 ARISTADA 2035 10,238,651 ARISTADA 2035 10,478,434 ARISTADA 2035 10,813,928 ARISTADA 2035 10,973,816 ARISTADA 2035 11,406,632 ARISTADA 2035 10,016,415 ARISTADA INITIO 2035 10,688,091 ARISTADA INITIO 2035 10,849,894 ARISTADA INITIO 2035 11,115,552 ARISTADA INITIO 2035 VIVITROL and RISPERDAL CONSTA We have a number of patents and pending patent applications covering our microsphere technology throughout the world, which, to some extent, cover VIVITROL and RISPERDAL CONSTA.
Product(s) Covered Expiration Date 8,431,576 ARISTADA; ARISTADA INITIO 2030 8,796,276 ARISTADA; ARISTADA INITIO 2030 10,112,903 ARISTADA; ARISTADA INITIO 2030 10,023,537 ARISTADA 2030 10,351,529 ARISTADA; ARISTADA INITIO 2030 11,518,745 ARISTADA; ARISTADA INITIO 2030 11,273,158 ARISTADA; ARISTADA INITIO 2039 9,034,867 ARISTADA 2032 10,226,458 ARISTADA 2032 9,193,685 ARISTADA 2033 9,861,699 ARISTADA 2033 10,342,877 ARISTADA 2033 10,639,376 ARISTADA 2033 11,097,006 ARISTADA 2033 9,452,131 ARISTADA 2035 9,526,726 ARISTADA 2035 10,064,859 ARISTADA 2035 10,238,651 ARISTADA 2035 10,478,434 ARISTADA 2035 10,813,928 ARISTADA 2035 10,973,816 ARISTADA 2035 11,406,632 ARISTADA 2035 11,883,394 ARISTADA 2035 10,016,415 ARISTADA INITIO 2035 10,688,091 ARISTADA INITIO 2035 10,849,894 ARISTADA INITIO 2035 11,115,552 ARISTADA INITIO 2035 VIVITROL We have a number of patents and pending patent applications covering our microsphere technology throughout the world, which, to some extent, cover VIVITROL.
Most of these jurisdictions have product approval and post‑approval regulatory processes that are similar in principle to those in the U.S. In Europe, there are several tracks for marketing approval, depending on the type of product for which approval is sought. Under the centralized procedure, a company submits a single application to the European Medicines Agency (“EMA”).
Most of these jurisdictions have product approval and post-approval regulatory processes that are similar in principle to those in the U.S. In Europe, there are several mechanisms for marketing approval, depending on the type of product for which approval is sought. Under the centralized procedure, a company submits a single application to the European Medicines Agency (“EMA”).
We try to protect our proprietary position by filing patent applications in the U.S. and in other countries related to our proprietary technology, inventions and improvements that are important to the development of our business. Because the patent position of biopharmaceutical companies involves complex legal and factual questions, enforceability of patents cannot be predicted with certainty.
We try to protect our proprietary position by filing patent applications in the U.S. and in other countries related to our proprietary technologies, inventions and improvements that are important to the development of our business. Because the patent position of biopharmaceutical companies involves complex legal and factual questions, enforceability of patents cannot be predicted with certainty.
The CHMP opinion is not binding, but is typically adopted by the EC. A marketing application approved by the EC is valid in all member states.
The CHMP opinion is not binding, but is typically adopted by the EC. A marketing application approved by the EC is valid in all EU member states.
In addition, we may be subject to third‑party claims, including for natural resource damages, personal injury and property damage, in connection with such contamination. The General Data Protection Regulation (“GDPR”) : The GDPR became effective on May 25, 2018 and replaced the previous EU Data Protection Directive (95/46).
In addition, we may be subject to third-party claims, including for natural resource damages, personal injury and property damage, in connection with such contamination. The General Data Protection Regulation (“GDPR”) : The GDPR became effective in May 2018 and replaced the previous EU Data Protection Directive (95/46).
If, as a result of these inspections or records reviews, it is determined that our equipment, facilities or processes do not comply with applicable regulations and conditions of product approval, regulatory agencies may seek civil, criminal or administrative sanctions and/or remedies against us, including the suspension of our manufacturing operations. 23 Table of Contents Good Clinical Practices The FDA, the EMA and other regulatory agencies promulgate regulations and standards, commonly referred to as Good Clinical Practices (“GCP”), for designing, conducting, monitoring, auditing and reporting the results of clinical trials to ensure that the data and results are accurate and that the trial participants are adequately protected.
If, as a result of these inspections or records reviews, it is determined that our equipment, facilities or processes do not comply with applicable regulations and conditions of product approval, regulatory agencies may seek civil, criminal or administrative sanctions and/or remedies against us, including the suspension of our manufacturing operations. 22 Good Clinical Practices The FDA, the EMA and other regulatory agencies promulgate regulations and standards, commonly referred to as Good Clinical Practices (“GCP”), for designing, conducting, monitoring, auditing and reporting the results of clinical trials to ensure that the data and results are accurate and that the trial participants are adequately protected.
Even if favorable coverage and reimbursement status is attained for one or more products for which we have received regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. 26 Table of Contents Outside the United States Within the EU, products are paid for by a variety of payers, with governments being the primary source of payment.
Even if favorable coverage and reimbursement status is attained for one or more products for which we have received regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Outside the United States Within the EU, products are paid for by a variety of payers, with governments being the primary source of payment.
We have a proprietary portfolio of patent rights and exclusive licenses to patents and patent applications, which includes numerous patents in the U.S. and in other countries directed to compositions of matter, methods of treatment and formulations, as well as processes of preparation.
We have a proprietary portfolio of patent rights and exclusive licenses to patents and patent applications, which includes numerous patents in the U.S. and in other countries directed to compositions of matter, methods of treatment and formulations, and processes of preparation.
Based on new safety information that emerges after approval, the FDA can mandate product labeling changes, impose a REMS or the addition of elements to an existing REMS, require new post‑marketing studies (including additional clinical trials), or suspend or withdraw approval of the product. 22 Table of Contents If we seek to make certain types of changes to an approved product, such as adding a new indication, making certain manufacturing changes, or changing manufacturers or suppliers of certain ingredients or components, the FDA will need to review and approve such changes in advance.
Based on new safety information that emerges after approval, the FDA can mandate product labeling changes, impose a REMS or the addition of elements to an existing REMS, require new post-marketing studies (including additional clinical trials), or suspend or withdraw approval of the product. 21 If we seek to make certain types of changes to an approved product, such as adding a new indication, making certain manufacturing changes, or changing manufacturers or suppliers of certain ingredients or components, the FDA will need to review and approve such changes in advance.
Key Development Program Our R&D is focused on the development of innovative medicines in the fields of neuroscience and oncology that are designed to address unmet patient needs. As part of our ongoing R&D efforts, we have devoted, and will continue to devote, significant resources to conducting preclinical work and clinical studies to advance the development of new pharmaceutical products.
Key Development Program Our R&D is focused on the development of innovative medicines in the field of neuroscience that are designed to address unmet patient needs. As part of our ongoing R&D efforts, we have devoted, and will continue to devote, significant resources to conducting preclinical work and clinical studies to advance the development of new pharmaceutical products.
The FDA is prohibited from accepting any ANDA for a generic drug or 505(b)(2) application referencing the NCE for five years from the date of approval of the NCE, or four years in the case of an ANDA or 505(b)(2) application containing a patent challenge, and in both cases may not approve such generic drug or 505(b)(2) application until expiration of NCE marketing exclusivity.
The FDA is prohibited from accepting any abbreviated new drug application (“ANDA”) for a generic drug or 505(b)(2) application referencing the NCE for five years from the date of approval of the NCE, or four years in the case of an ANDA or 505(b)(2) application containing a patent challenge, and in both cases may not approve such generic drug or 505(b)(2) application until expiration of NCE marketing exclusivity.
Except for dual eligible Medicare Part D beneficiaries who qualify for low - income subsidies, manufacturers, including us, are required to provide a seventy percent ( 7 0%) discount on our brand name prescription drugs utilized by Medicare Part D beneficiaries when those beneficiaries reach the coverage gap in their drug benefits.
Except for dual eligible Medicare Part D beneficiaries who qualify for low-income subsidies, manufacturers, including us, are required to provide a seventy percent (70%) discount on our brand name prescription drugs utilized by Medicare Part D beneficiaries when those beneficiaries reach the coverage gap in their drug benefits.
For a discussion of legal proceedings related to patents covering INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA, see Note 17, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report. VUMERITY We have U.S. patents and patent applications, and a number of corresponding non-U.S. counterparts, that cover VUMERITY. U.S.
For a discussion of legal proceedings related to patents covering INVEGA SUSTENNA and INVEGA TRINZA, see Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report. VUMERITY We have U.S. patents and patent applications, and a number of corresponding non-U.S. counterparts, that cover VUMERITY. U.S.
Activities relating to the sale and marketing of our 24 Table of Contents products may be subject to scrutiny under these laws. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines and civil monetary penalties, as well as the possibility of exclusion from federal healthcare programs (including Medicare and Medicaid).
Activities relating to the sale and marketing of our products may be subject to scrutiny under these laws. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines and civil monetary penalties, as well as the possibility of exclusion from federal healthcare programs (including Medicare and Medicaid).
The patent laws of the U.S. and other countries are distinct, and decisions as to patenting, validity of patents and infringement of patents may be resolved differently in different countries. 20 Table of Contents If patents exist or are issued that cover our products or technologies , we or our licensees may not be able to manufacture, use, offer for sale, sell or import some of our products without first getting a license from the patent holder.
The patent laws of the U.S. and other countries are distinct, and decisions as to patenting, validity of patents and infringement of patents may be resolved differently in different countries. 19 If patents exist or are issued that cover our products or technologies, we or our licensees may not be able to manufacture, use, offer for sale, sell or import some of our products without first getting a license from the patent holder.
These ERGs share a common purpose of supporting and enhancing the inclusiveness of our company culture and providing opportunities for professional development, networking and building deeper connections within Alkermes.
These ERGs share a common purpose of supporting and enhancing the inclusiveness of our company culture and providing opportunities for professional development, networking, learning and building deeper connections 27 within Alkermes.
Each protocol must be submitted to the FDA as part of the applicable IND. • Phase 1 clinical trials—test for safety, dose tolerability, absorption, bio‑distribution, metabolism, excretion and clinical pharmacology and, if possible, to gain early evidence regarding efficacy. • Phase 2 clinical trials—involve a relatively small sample of the actual intended patient population and seek to assess the efficacy of the drug for specific targeted indications, to determine dose‑response and the optimal dose range and to gather additional information relating to safety and potential adverse effects. • Phase 3 clinical trials—consist of expanded, large‑scale studies of patients with the target disease or disorder to obtain definitive statistical evidence of the efficacy and safety of the proposed product and dosing regimen.
Each protocol must be submitted to the FDA as part of the applicable IND. • Phase 1 clinical trials—test for safety, tolerability, absorption, bio-distribution, metabolism, excretion and clinical pharmacology and, if possible, to gain early evidence regarding efficacy. • Phase 2 clinical trials—involve a relatively small sample of the intended patient population and seek to assess the efficacy of the drug for targeted indications, to determine dose-response and the optimal dose range and to gather additional information relating to the safety profile. • Phase 3 clinical trials—consist of expanded, large-scale studies of patients with the target disease or disorder to obtain definitive statistical evidence of the efficacy and safety of the proposed product and dosing regimen.
For a discussion of legal proceedings related to certain of the patents covering INVEGA SUSTENNA and INVEGA TRINZA, see Note 17, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report and for information about risks relating to such legal proceedings, see “Item 1A—Risk Factors” in this Annual Report and specifically the section entitled “We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.” What is schizoaffective disorder?
For a discussion of legal proceedings related to certain of the patents covering INVEGA SUSTENNA and INVEGA TRINZA, see Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report and for information about risks relating to such legal proceedings, see “Item 1A—Risk Factors” in this Annual Report and specifically the section entitled “We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.” What is schizophrenia?
Alcohol dependence is a serious and chronic brain disease characterized by cravings for alcohol, loss of control over drinking, withdrawal symptoms and an increased tolerance for alcohol. According to the 2020 U.S. National Survey on Drug Use and Health, an estimated 27.8 million people aged 18 or older in the U.S. had an alcohol use disorder in the prior year.
Alcohol dependence is a serious and chronic brain disease characterized by cravings for alcohol, loss of control over drinking, withdrawal symptoms and an increased tolerance for alcohol. According to the 2022 U.S. National Survey on Drug Use and Health, an estimated 28.8 million people aged 18 or older in the U.S. had an alcohol use disorder* in the prior year.
Recognizing the value of our employees and their important contributions to the achievement of our business objectives, we offer market-competitive comprehensive total rewards packages, including bonus opportunities at all levels tied to individual and company performance, and for employees at certain levels, company equity opportunities.
In recognition of the value of our employees and their important contributions to the achievement of our business objectives, we offer market-competitive comprehensive total rewards packages, including bonus opportunities at all levels tied to individual and company performance, and for employees at certain levels, company equity opportunities.
We seek to attract, hire, develop, recognize and retain qualified and highly skilled employees with experience in areas such as R&D, including early discovery, translational medicine, formulation and clinical development; intellectual property prosecution, enforcement and defense; medical affairs; manufacturing operations; U.S. federal and state government affairs; sales and marketing; and market access.
We seek to attract, hire, develop, recognize and retain qualified and highly skilled employees with experience in areas such as R&D, including early discovery, translational medicine, formulation development, and clinical trials and operations; IP prosecution, enforcement and defense; medical affairs; manufacturing operations; U.S. federal and state government affairs; sales and marketing; and market access.
After expiration, Janssen retains a non‑exclusive, royalty‑free license to manufacture, use and sell RISPERDAL CONSTA. We exclusively manufacture RISPERDAL CONSTA for commercial sale. Under our manufacturing and supply agreement with Janssen, we receive manufacturing revenue based on a percentage of Janssen’s net unit sales price for RISPERDAL CONSTA for the applicable calendar year.
After expiration, Janssen retains a non-exclusive, royalty-free license to manufacture, use and sell RISPERDAL CONSTA. We exclusively manufacture RISPERDAL CONSTA at our Wilmington, Ohio facility for commercial sale. Under our manufacturing and supply agreement with Janssen, we receive manufacturing revenue based on a percentage of Janssen’s net unit sales price for RISPERDAL CONSTA for the applicable calendar year.
Other Laws : We are subject to a variety of financial disclosure, securities trading regulations and governmental regulations as an Irish-incorporated company publicly-listed in the U.S., including laws relating to the oversight activities of the SEC, the Irish Companies Act 2014, and the regulations of the Nasdaq Stock Market (“Nasdaq”), on which our shares are traded.
Other Laws : We are subject to a variety of financial disclosures, securities trading regulations and U.S. and Irish or EU governmental regulations as an Irish-incorporated company publicly-listed in the U.S., including laws relating to the oversight activities of the SEC, the Irish Companies Act 2014, and the regulations of the Nasdaq Stock Market (“Nasdaq”), on which our shares are traded.
In such cases, our licensee usually holds the relevant marketing authorization from the FDA or other relevant regulatory authority, and we would support this authorization by furnishing a copy of the product’s Drug Master File, or chemistry, manufacturing and controls data, to the relevant regulator. We generally update this information annually with the relevant regulator.
In such cases, our licensee usually holds the relevant marketing authorization from the FDA or other relevant regulatory authority, and we support this authorization as needed, including by furnishing a copy of the product’s Drug Master File, or chemistry, manufacturing and controls data, to the relevant regulator. We generally update this information annually with the relevant regulator.
Bipolar I disorder is characterized by the occurrence of at least one manic episode, with or without the occurrence of a major depressive episode, and affects approximately 1% of the American adult population in any given year.
Bipolar I disorder is characterized by the occurrence of at least one manic episode, with or without the occurrence of a major depressive episode, and affects approximately 1% of the adult population in the U.S. in any given year.
Foreign Corrupt Practices Act (the “FCPA”), which prohibits U.S. corporations and their representatives from paying, offering to pay, promising, authorizing, or making payments of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.
Foreign Corrupt Practices Act (the “FCPA”) and its Irish equivalent, which prohibits corporations and their representatives from paying, offering to pay, promising, authorizing, or making payments of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.
After expiration, Janssen retains a non-exclusive, royalty free license to develop, manufacture and commercialize the products subject to certain surviving obligations. 13 Table of Contents Janssen may terminate the license agreement in whole or in part upon three months’ notice to us.
After expiration, Janssen retains a non-exclusive, royalty free license to develop, manufacture and commercialize the products subject to certain surviving obligations. Janssen may terminate the license agreement in whole or in part upon three months’ notice to us.
In 2022, through the collaboration of these groups, we introduced an annual performance goal focused on DIB for all senior leaders (Vice President level and above) at Alkermes with an emphasis on talent management, including recruiting and development.
Beginning in 2022, through the collaboration of these groups, we introduced an annual performance goal focused on DIB for all senior leaders (Vice President level and above) at Alkermes with an emphasis on talent management, development and engagement.
Opioid dependence is a serious and chronic brain disease characterized by compulsive, prolonged self-administration of opioid substances that are not used for a medical purpose. According to the 2020 U.S. National Survey on Drug Use and Health, an estimated 2.6 million people aged 18 or older in the U.S. had an opioid use disorder in the prior year.
Opioid dependence is a serious and chronic brain disease characterized by compulsive, prolonged self-administration of opioid substances that are not used for a medical purpose. According to the 2022 U.S. National Survey on Drug Use and Health, an estimated 5.9 million people aged 18 or older in the U.S. had an opioid use disorder* in the prior year.
Under our license and collaboration agreement with Biogen, Biogen holds the exclusive, worldwide license to develop and commercialize VUMERITY. For more information about the license and collaboration agreement with Biogen, see “Collaborative Arrangements—Biogen” in “Item 1—Business” in this Annual Report. What is multiple sclerosis?
Under our license and collaboration agreement with Biogen, Biogen holds the exclusive, worldwide license to develop and commercialize VUMERITY. For more information about the license and collaboration agreement with Biogen, see “Collaborative Arrangements—Biogen” in “Item 1—Business” in this Annual Report.
Revenues from our collaborative arrangements with Janssen accounted for approximately 15%, 30% and 33% of our consolidated revenues for the years ended December 31, 2022, 2021 and 2020, respectively.
Revenues from our collaborative arrangements with Janssen accounted for approximately 31%, 15% and 30% of our consolidated revenues for the years ended December 31, 2023, 2022 and 2021, respectively.
The marketing application is similar to the NDA in the U.S. and is evaluated by the Committee for Medicinal Products for Human Use (“CHMP”), the expert scientific committee of the EMA. If the CHMP determines that the marketing application fulfills the requirements for quality, safety, and efficacy, it will submit a favorable opinion to the European Commission (“EC”).
The marketing application is evaluated by the Committee for Medicinal Products for Human Use (“CHMP”), the expert scientific committee of the EMA. If the CHMP determines that the marketing application fulfills the requirements for quality, safety, and efficacy, it will submit a favorable opinion to the European Commission (“EC”).
Headquartered in Dublin, Ireland, Alkermes has a research and development (“R&D”) center in Waltham, Massachusetts; an R&D and manufacturing facility in Athlone, Ireland; and a manufacturing facility in Wilmington, Ohio. Marketed Products The key marketed products discussed below have generated, or are expected to generate, significant revenues for us.
Headquartered in Dublin, Ireland, Alkermes has a research and development center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and a manufacturing facility in Wilmington, Ohio. Marketed Products The key marketed products discussed below have generated, or are expected to generate, significant revenues for us.
In the treatment of opioid dependence, VIVITROL competes with SUBOXONE (buprenorphine HCl/naloxone HCl dehydrate sublingual tablets), SUBOXONE (buprenorphine/naloxone) Sublingual Film, SUBUTEX (buprenorphine HCl sublingual tablets) and SUBLOCADE (once-monthly buprenorphine extended-release injection), each of which is marketed and sold by Indivior plc; BUNAVAIL buccal film (buprenorphine and naloxone) marketed by BioDelivery Sciences; and ZUBSOLV (buprenorphine and naloxone) marketed by Orexo US, Inc.
In the treatment of opioid dependence, VIVITROL competes with SUBOXONE (buprenorphine HCl/naloxone HCl dehydrate sublingual tablets), SUBOXONE (buprenorphine/naloxone) Sublingual Film, SUBUTEX (buprenorphine HCl sublingual tablets) and SUBLOCADE (once-monthly buprenorphine extended-release injection), each of which is marketed and sold by Indivior plc; BUNAVAIL buccal film (buprenorphine and naloxone) marketed by BioDelivery Sciences; ZUBSOLV (buprenorphine and naloxone) marketed by Orexo US, Inc.; and BRIXADI (buprenorphine) extended-release injection for subcutaneous use (CIII), marketed by Braeburn Inc.
VIVITROL uses our polymer-based microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body through one intramuscular injection every four weeks. We exclusively manufacture and commercialize VIVITROL in the U.S.
VIVITROL uses our polymer-based microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body through one intramuscular injection every four weeks. We exclusively manufacture and commercialize VIVITROL in the U.S. What are opioid dependence and alcohol dependence?
Revenues from Biogen related to this license and collaboration agreement accounted for approximately 10%, 7% and 2% of our consolidated revenues for the years ended December 31, 2022, 2021 and 2020, respectively.
Revenues from Biogen related to this license and collaboration agreement accounted for approximately 8%, 10% and 7% of our consolidated revenues for the years ended December 31, 2023, 2022 and 2021, respectively.
See “Patents and Proprietary Rights” in “Item 1—Business” in this Annual Report for information with respect to the IP protection for these marketed products. The following provides summary information regarding our proprietary products that we commercialize: 7 Table of Contents Proprietary Products Product Indication(s) Territory Initiation or re-initiation of ARISTADA for the treatment of Schizophrenia U.S. Schizophrenia U.S.
See “Patents and Proprietary Rights” in “Item 1—Business” in this Annual Report for information with respect to the IP protection for these marketed products. The following provides summary information regarding our proprietary products that we commercialize: Proprietary Products Product Indication(s) Territory Initiation or re-initiation of ARISTADA for the treatment of Schizophrenia U.S. Schizophrenia U.S. 6 Schizophrenia; Bipolar I disorder U.S.
These competitors are working to develop and market other products, systems, and other methods of preventing or reducing disease, and new small‑molecule and other classes of drugs. The biopharmaceutical industry is characterized by intensive research, development and commercialization efforts and rapid and significant technological change.
In some cases, these competitors may be working to develop and market other products, systems, and other methods of preventing or reducing disease, and new small-molecule and other classes of drugs. The biopharmaceutical industry is characterized by intensive research, development and commercialization efforts and rapid and significant technological change.
We try to protect this information by entering into confidentiality agreements with parties that have access to it, such as our corporate partners, collaborators, licensees, employees and consultants. However, any of these parties may breach such agreements and may disclose our confidential information or our competitors might learn of the information in some other way.
We try to protect this information by entering into confidentiality agreements with parties that have access to it, such as our licensees, licensors, contract manufacturers, potential business partners, employees and consultants. However, any of these parties may breach such agreements and may disclose our confidential information, or our competitors might learn of the information in some other way.
In addition, on January 21, 2016, CMS released the final Medicaid covered outpatient drug regulation, which became effective on April 1, 2016.
In addition, in January 2016, CMS released the final Medicaid covered outpatient drug regulation, which became effective in April 2016.
Such provisions apply to pharmaceutical manufacturers with products reimbursed under certain government programs and require those manufacturers to disclose annually to the federal government (for re‑disclosure to the public) certain payments made to, or at the request of, or on behalf of, physicians or to teaching hospitals and, commencing for information to be submitted as of January 1, 2022, certain payments made to physicians assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse-midwives.
Such provisions apply to pharmaceutical manufacturers with products reimbursed under certain government programs and require those manufacturers to disclose annually to the federal government (for re-disclosure to the public) certain payments made to, or at the request of, or on behalf of, physicians or to teaching hospitals and certain payments made to physicians assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse-midwives.
In the treatment of MS, VUMERITY competes with AVONEX, TYSABRI, TECFIDERA, and PLEGRIDY from Biogen; OCREVUS from Genentech; BETASERON from Bayer HealthCare Pharmaceuticals; COPAXONE from Teva Pharmaceutical Industries Ltd.; REBIF and MAVENCLAD from EMD Serono, Inc.; GILENYA, EXTAVIA and MAYZENT from Novartis AG; AUBAGIO and LEMTRADA from Sanofi-Aventis; ZEPOSIA from Bristol-Myers Squibb Company; PONVORY from Janssen; and, once it launches in the U.S., BRIUMVI TM (ublituximab-xiiy) from TG Therapeutics, Inc.
In the treatment of MS, VUMERITY competes with AVONEX, TYSABRI, TECFIDERA, and PLEGRIDY from Biogen; OCREVUS from Genentech; BETASERON from Bayer HealthCare Pharmaceuticals; COPAXONE from Teva; REBIF and MAVENCLAD from EMD Serono, Inc.; GILENYA, EXTAVIA and MAYZENT from Novartis AG; AUBAGIO and LEMTRADA from Sanofi-Aventis; ZEPOSIA from Bristol-Myers Squibb Company; PONVORY from Janssen; and BRIUMVI (ublituximab-xiiy) from TG Therapeutics, Inc.
In 2013, with the publication of the Diagnostic Statistical Manual (“DSM”) 5, the DSM IV diagnoses of substance use disorders as either dependence or abuse (i.e., opioid dependence or alcohol dependence), which reflects the approved indications of VIVITROL, were subsumed under a new diagnostic category of “substance use disorders” (i.e., opioid use disorder or alcohol use disorder) with three categories of disorder severity—mild, moderate or severe.
Adherence to medication is particularly challenging with these patient populations. * In 2013, with the publication of the Diagnostic Statistical Manual (“DSM”) 5, the DSM IV diagnoses of substance use disorders as either dependence or abuse (i.e., opioid dependence or alcohol dependence), which reflects the approved indications of VIVITROL, were subsumed under a new diagnostic category of “substance use disorders” (i.e., opioid use disorder or alcohol use disorder) with three categories of disorder severity—mild, moderate or severe.
Product sales of VIVITROL during the year ended December 31, 2022 to Cardinal Health, McKesson Corporation and AmerisourceBergen Corporation (“AmerisourceBergen”) represented approximately 25%, 22% and 16%, respectively, of total VIVITROL gross sales. Our sales force for ARISTADA, ARISTADA INITIO and LYBALVI in the U.S. consists of approximately 315 individuals. ARISTADA, ARISTADA INITIO and LYBALVI are primarily sold to pharmaceutical wholesalers.
Product sales of VIVITROL during the year ended December 31, 2023 to Cardinal Health, McKesson Corporation and AmerisourceBergen Corporation (“AmerisourceBergen”) represented approximately 27%, 23% and 16%, respectively, of total VIVITROL gross sales. Our sales force for ARISTADA, ARISTADA INITIO and LYBALVI in the U.S. consists of approximately 360 individuals. ARISTADA, ARISTADA INITIO and LYBALVI are primarily sold to pharmaceutical wholesalers.
Product sales of ARISTADA and ARISTADA INITIO during the year ended December 31, 2022 to Cardinal Health, McKesson Corporation and AmerisourceBergen represented approximately 47%, 23% and 23%, respectively, of total ARISTADA and ARISTADA INITIO gross sales.
Product sales of ARISTADA and ARISTADA INITIO during the year ended December 31, 2023 to Cardinal Health, AmerisourceBergen and McKesson Corporation represented approximately 46%, 24% and 23%, respectively, of total ARISTADA and ARISTADA INITIO gross sales.
We also make available on our website (i) the charters for the standing committees of our board of directors, including the audit and risk committee, compensation committee, and nominating and corporate governance committee, and (ii) our Code of Business Conduct and Ethics governing our directors, officers and employees.
We also make available on the Corporate Governance page of the Investors section of our website at www.alkermes.com (i) the charters for the standing committees of our board of directors, including the audit and risk committee, compensation committee, and nominating and corporate governance committee, and (ii) our Code of Business Conduct and Ethics governing our directors, officers and employees.
ARISTADA INITIO ARISTADA INITIO (aripiprazole lauroxil) leverages our proprietary LinkeRx and NanoCrystal technologies and provides an extended-release formulation of aripiprazole lauroxil in a smaller particle size compared to ARISTADA, thereby enabling faster dissolution and more rapid achievement of relevant levels of aripiprazole in the body.
The patent has claims to the crystallization process of aripiprazole lauroxil and expires in 2035. 8 ARISTADA INITIO ARISTADA INITIO (aripiprazole lauroxil) leverages our proprietary LinkeRx and NanoCrystal technologies and provides an extended-release formulation of aripiprazole lauroxil in a smaller particle size compared to ARISTADA, thereby enabling faster dissolution and more rapid achievement of relevant levels of aripiprazole in the body.
Oral Controlled Release Technology Our oral controlled release (“OCR”) technologies are used to formulate, develop and manufacture oral dosage forms of pharmaceutical products with varied drug release profiles. 15 Table of Contents Manufacturing and Product Supply We own and occupy an R&D and manufacturing facility in Athlone, Ireland and a manufacturing facility in Wilmington, Ohio.
Oral Controlled Release Technology Our oral controlled release (“OCR”) technologies are used to formulate, develop and manufacture oral dosage forms of pharmaceutical products with varied drug release profiles. Manufacturing and Product Supply We own and occupy the Athlone Facility and a manufacturing facility in Wilmington, Ohio.
INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate) (collectively, the “long-acting INVEGA products”) are long-acting atypical antipsychotics owned and commercialized worldwide by Janssen. We believe that these products incorporate our technologies.
Such arrangements include, among others, the following: Products Using Our Proprietary Technologies INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate) (collectively, the “long-acting INVEGA products”) are long-acting atypical antipsychotics owned and commercialized worldwide by Janssen. We believe that these products incorporate our technologies.
Information that is contained in and can be accessed through our website is not incorporated into, and does not form a part of, this Annual Report. 29 Table of Contents
Information that is contained in and can be accessed through our website is not incorporated into, and does not form a part of, this Annual Report. 28 Item 1 A.
As of February 10, 2023, we had approximately 2,280 full time employees, of which approximately 1,860 were based in the U.S. and 420 were based in Ireland. Our 2022 global voluntary attrition rate of 9.5% was below industry benchmarks.
As of February 9, 2024, we had approximately 2,100 full time employees, of which approximately 1,700 were based in the U.S. and 400 were based in Ireland. Our 2023 global voluntary attrition rate of 9.5% was below industry benchmarks.
We and Janssen have the right to terminate the agreement upon a material breach of the other party, which is not cured within a certain time period, or upon the other party’s bankruptcy or insolvency. RISPERDAL CONSTA Under a product development agreement, we collaborated with Janssen on the development of RISPERDAL CONSTA.
We and Janssen have the right to terminate the agreement upon a material breach of the other party, which is not cured within a certain time period, or upon the other party’s bankruptcy or insolvency.
Licensed Product VUMERITY VUMERITY (diroximel fumarate) is a novel, oral fumarate with a distinct chemical structure that is approved in the U.S., the EU and several other countries for the treatment of relapsing forms of multiple sclerosis in adults, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease.
See the disease state description under “ARISTADA” in “Item 1—Business” in this Annual Report. 10 Licensed Product VUMERITY VUMERITY (diroximel fumarate) is a novel, oral fumarate with a distinct chemical structure that is approved in the U.S., the EU and several other countries for the treatment of relapsing forms of multiple sclerosis in adults, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease.
Once an NDA or BLA is accepted for filing, the FDA has 10 months, under its standard review process, within which to review the application (for some applications, the review process is longer than 10 months).
The applicant may then resubmit the application and include supplemental information. Once an NDA or BLA is accepted for filing, the FDA has 10 months, under its standard review process, within which to review the application (for some applications, the review process is longer than 10 months).
Co.; PERSERIS (risperidone for extended release injectable suspension), a once-monthly formulation of risperidone marketed by Indivior plc; generic versions of branded injectable products; and, once it launches in the U.S., RYKINDO (risperidone), a once-every-two-weeks injectable formulation of risperidone developed by Luye Pharma Group.
Co.; PERSERIS (risperidone for extended release injectable suspension), a once-monthly formulation of risperidone marketed by Indivior plc; RYKINDO (risperidone), a once-every-two-weeks injectable formulation of risperidone developed by Luye Pharma Group; UZEDY (risperidone) extended-release injectable suspension, for subcutaneous use, developed and marketed by MedinCell S.A. and Teva; and generic versions of branded injectable products.
RISPERDAL CONSTA is approved in numerous countries outside of the U.S. for the treatment of schizophrenia and the maintenance treatment of bipolar I disorder. RISPERDAL CONSTA uses our polymer-based microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body through just one intramuscular injection every two weeks. RISPERDAL CONSTA microspheres are exclusively manufactured by us.
RISPERDAL CONSTA uses our polymer-based microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body through just one intramuscular injection every two weeks. RISPERDAL CONSTA microspheres are exclusively manufactured by us. What is schizophrenia?
Product Covered Expiration Date 7,262,298 LYBALVI 2025 8,680,112 LYBALVI 2030 9,119,848 LYBALVI 2031 10,005,790 LYBALVI 2031 8,778,960 LYBALVI 2032 9,126,977 LYBALVI 2031 9,517,235 LYBALVI 2031 9,943,514 LYBALVI 2031 10,300,054 LYBALVI 2031 10,716,785 LYBALVI 2031 11,185,541 LYBALVI 2031 11,241,425 LYBALVI 2031 11,351,166 LYBALVI 2031 We also have a portfolio of patents and patent applications covering our Key Development Program. nemvaleukin alfa We have U.S. patents and patent applications, and a number of corresponding non-U.S. counterparts, that cover nemvaleukin.
Product Covered Expiration Date 7,262,298 LYBALVI 2025 8,680,112 LYBALVI 2030 9,119,848 LYBALVI 2031 10,005,790 LYBALVI 2031 8,778,960 LYBALVI 2032 9,126,977 LYBALVI 2031 9,517,235 LYBALVI 2031 9,943,514 LYBALVI 2031 10,300,054 LYBALVI 2031 10,716,785 LYBALVI 2031 11,185,541 LYBALVI 2031 11,241,425 LYBALVI 2031 11,351,166 LYBALVI 2031 11,793,805 LYBALVI 2031 11,707,466 LYBALVI 2041 ALKS 2680 We have U.S. patent protection that extends to 2041, several U.S. patent applications, and a number of corresponding non-U.S. counterparts, that cover ALKS 2680.
LinkeRx Technology Our long‑acting LinkeRx technology platform is designed to enable the creation of extended‑release injectable versions of antipsychotic therapies and may also be useful in other disease areas in which extended duration of action may provide therapeutic benefits. The technology uses proprietary linker‑tail chemistry to create new molecular entities derived from known agents.
LinkeRx Technology Our long-acting LinkeRx technology platform is designed to enable the creation of extended-release injectable versions of antipsychotic therapies and may also be useful in other disease areas in which extended duration of action may provide therapeutic benefits.
If issued, they may not provide us with proprietary protection or competitive advantages against competitors with similar technology. Furthermore, others may independently develop similar technologies or duplicate any technology that we have developed outside the scope of our patents.
If issued, they may not provide us with proprietary protection or competitive advantages against competitors with similar technology. Furthermore, others may independently develop similar technologies or duplicate any technology that we have developed outside the scope of our patents. The laws of certain countries do not protect our IP rights to the same extent as the laws of the U.S.
Unless earlier terminated, the license and collaboration agreement will remain in effect until the expiry of all royalty obligations. Biogen has the right to terminate the license and collaboration agreement at will, on a product-by-product basis or in its entirety upon 180 days’ prior notice to us.
Biogen has the right to terminate the license and collaboration agreement at will, on a product-by-product basis or in its entirety upon 180 days’ prior notice to us.
Our Key Licensed Product Product Indication(s) Licensee Licensed Territory VUMERITY Multiple sclerosis Biogen Worldwide 9 Table of Contents Proprietary Products We have developed and now commercialize products designed to help address the unmet needs of people living with opioid dependence, alcohol dependence, schizophrenia and bipolar I disorder.
(together with Janssen Pharmaceuticals, Inc., Janssen International and their affiliates “Janssen”) Worldwide INVEGA TRINZA / TREVICTA Schizophrenia Janssen Worldwide INVEGA HAFYERA / BYANNLI Schizophrenia Janssen Worldwide Our Key Licensed Product Product Indication(s) Licensee Licensed Territory VUMERITY Multiple sclerosis Biogen Worldwide Proprietary Products We have developed and now commercialize products designed to help address the unmet needs of people living with opioid dependence, alcohol dependence, schizophrenia and bipolar I disorder.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease two properties in Waltham, Massachusetts. One facility has approximately 180,000 square feet of space and houses corporate offices, administrative areas and laboratories. This lease expires in 2026 and includes a tenant option to extend the term for an additional five-year period. The second property has approximately 231,000 square feet of office space and laboratory space.
Biggest changeWe serve as the guarantor of a lease assigned to Mural Oncology, Inc. for a facility in Waltham, Massachusetts with approximately 180,000 square feet of corporate offices, administrative areas and laboratories. This lease expires in 2026 and includes a tenant option to extend the term for an additional five-year period.
Item 2. Properties We lease approximately 14,600 square feet of corporate office space in Dublin, Ireland, which houses our corporate headquarters. In 2023, we exercised our option to extend the lease term for a four-year period. This extended lease expires in 2027 and does not include an additional tenant option to further extend the term.
Item 2. P roperties We lease approximately 14,600 square feet of corporate office space in Dublin, Ireland, which houses our corporate headquarters. In 2023, we exercised our option to extend the lease term for a four-year period. This extended lease expires in 2027 and does not include an additional tenant option to further extend the term.
This lease, which commenced in January 2020, expires in 2035 and includes a tenant option to extend the term for an additional ten-year period. We lease approximately 7,000 square feet of corporate office and administrative space in Washington, DC. This lease expires in 2029 and includes a tenant option to extend the term for an additional five-year period.
We lease approximately 7,000 square feet of corporate office and administrative space in Washington, DC. This lease expires in 2029 and includes a tenant option to extend the term for an additional five-year period. We own the Athlone Facility (approximately 400,000 square feet).
We own an R&D and manufacturing facility in Athlone, Ireland (approximately 400,000 square feet) and a manufacturing facility in Wilmington, Ohio (approximately 375,000 square feet). We believe that our current facilities are suitable and adequate for our current and near‑term preclinical, clinical and commercial requirements.
In December 2023, we announced our entry into an agreement to sell this facility, which is expected to occur in mid-2024. We own a manufacturing facility in Wilmington, Ohio (approximately 375,000 square feet). We believe that our current facilities are suitable and adequate for our current and near-term preclinical, clinical and commercial requirements.
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We lease approximately 231,000 square feet of office and laboratory space in Waltham, Massachusetts. This lease, which commenced in January 2020, expires in 2035 and includes a tenant option to extend the term for an additional ten-year period.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings For information regarding legal proceedings, refer to the discussion under the heading “Litigation” in Note 17, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report, which discussion is incorporated into this Item 3 by reference. Item 4. Mine Safety Disclosures Not Applicable. 51 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings For information regarding legal proceedings, refer to the discussion under the heading “Litigation” in Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report, which discussion is incorporated into this Item 3 by reference. Item 4. Mine Saf ety Disclosures Not Applicable. 52 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSuch shareholders must provide the appropriate Irish DWT form to our transfer agent at least seven business days before the record date for the first dividend payment to which they are entitled.
Biggest changeSuch shareholders must provide the appropriate Irish DWT form to our transfer agent at least seven business days before the record date for the first dividend payment to which they are entitled. 53 If any shareholder who is resident in the U.S. receives a dividend subject to DWT, they should generally be able to make an application for a refund from the Irish Revenue Commissioners on the prescribed form.
The comparison assumes $100 was invested on December 31, 2017 in our ordinary shares and in each of the foregoing indices and further assumes reinvestment of any dividends. We did not declare or pay any dividends on our ordinary shares during the comparison period.
The comparison assumes $100 was invested on December 31, 2018 in our ordinary shares and in each of the foregoing indices and further assumes reinvestment of any dividends. We did not declare or pay any dividends on our ordinary shares during the comparison period.
In order for the share registrar to be satisfied as to the application of this Irish stamp duty treatment where relevant, the shareholder must confirm to us that the shareholder would be the beneficial owner of the related book‑entry interest in those ordinary shares recorded in the systems of DTC, and in exactly the same proportions or vice‑versa, as a result of the transfer and there is no agreement for the sale of the related book‑entry interest or the ordinary shares or an interest in the ordinary shares, as the case may be, by the shareholder to a third party being contemplated. 53 Table of Contents Stock p erformance g raph The information contained in the performance graph below shall not be deemed to be “soliciting material” or to be “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
In order for the share registrar to be satisfied as to the application of this Irish stamp duty treatment where relevant, the shareholder must confirm to us that the shareholder would be the beneficial owner of the related book-entry interest in those ordinary shares recorded in the systems of DTC, and in exactly the same proportions or vice-versa, as a result of the transfer and there is no agreement for the sale of the related book-entry interest or the ordinary shares or an interest in the ordinary shares, as the case may be, by the shareholder to a third party being contemplated. 54 Stock performance graph The information contained in the performance graph below shall not be deemed to be “soliciting material” or to be “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
Irish taxes applicable to U.S. holders The following is a general summary of the main Irish tax considerations applicable to the purchase, ownership and disposition of our ordinary shares by U.S. holders. It is based on existing Irish law and practices in effect on February 2, 2023, and on discussions and correspondence with the Irish Revenue Commissioners.
Irish taxes applicable to U.S. holders The following is a general summary of the main Irish tax considerations applicable to the purchase, ownership and disposition of our ordinary shares by U.S. holders. It is based on existing Irish law and practices in effect on January 8, 2024, and on discussions and correspondence with the Irish Revenue Commissioners.
In addition, the last reported sale price of our ordinary shares as reported on the Nasdaq Global Select Market on February 10, 2023 was $27.09. Dividends No dividends have been paid on our ordinary shares to date, and we do not expect to pay cash dividends thereon in the foreseeable future.
In addition, the last reported sale price of our ordinary shares as reported on the Nasdaq Global Select Market on February 9, 2024 was $27.32. Dividends No dividends have been paid on our ordinary shares to date, and we do not expect to pay cash dividends thereon in the foreseeable future.
The following graph compares the cumulative total shareholder return on our ordinary shares from December 31, 2017 through December 31, 2022 with the cumulative returns of the Nasdaq Composite Total Return Index and the Nasdaq Biotechnology Index.
The following graph compares the cumulative total shareholder return on our ordinary shares from December 31, 2018 through December 31, 2023 with the cumulative returns of the Nasdaq Composite Total Return Index and the Nasdaq Biotechnology Index.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market and shareholder information Our ordinary shares are traded on the Nasdaq Global Select Market under the symbol “ALKS.” There were 103 shareholders of record of our ordinary shares on February 10, 2023.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market and shareholder information Our ordinary shares are traded on the Nasdaq Global Select Market under the symbol “ALKS.” There were 100 shareholders of record of our ordinary shares on February 9, 2024.
Any future determination as to the payment of dividends will be at the sole discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors deems relevant.
We anticipate that we will generally retain earnings to support our operations and our proprietary drug development programs. Any future determination as to the payment of dividends will be at the sole discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors deems relevant.
During the three months ended December 31, 2022, we acquired 12,609 of our ordinary shares, at an average price of $23.85 per share, related to the vesting of employee equity awards to satisfy withholding tax obligations.
During the years ended December 31, 2023 and 2022, we did not purchase any ordinary shares under the Prior Repurchase Program. During the three months ended December 31, 2023, we acquired 84,662 of our ordinary shares, at an average price of $28.27 per share, related to the vesting of employee equity awards to satisfy withholding tax obligations.
Repurchase of equity securities On September 16, 2011, our board of directors authorized the continuation of the Alkermes, Inc. program to repurchase up to $215.0 million of our ordinary shares at the discretion of management from time to time in the open market or through privately negotiated transactions.
Repurchase of equity securities On February 15, 2024, our board of directors authorized a share repurchase program to repurchase ordinary shares of the Company in an aggregate amount of up to $400.0 million (exclusive of any fees, commissions or other expenses related to such repurchases) from time to time on the open market (the “2024 Repurchase Program”).
Year Ended December 31, 2017 2018 2019 2020 2021 2022 Alkermes 100 54 37 36 42 48 Nasdaq Composite Total Return 100 97 133 192 235 159 Nasdaq Biotechnology Index 100 91 114 144 144 130 Item 6. [Reserved] Not applicable. 54 Table of Contents
Year Ended December 31, 2018 2019 2020 2021 2022 2023 Alkermes 100 69 68 79 89 94 Nasdaq Composite Total Return 100 137 198 242 163 236 Nasdaq Biotechnology Index 100 125 158 158 142 149 Item 6. [Reserved] Not applicable. 55
Removed
We anticipate that we will retain all earnings, if any, to support our operations and our proprietary drug development programs.
Added
The timing and amount of any share repurchases under the 2024 Repurchase Program will be based on a variety of factors, including but not limited to ongoing assessments of our capital needs, alternative investment opportunities, the market price of our ordinary shares and general market conditions.
Removed
We did not purchase any shares under this program during the year ended December 31, 2022. As of December 31, 2022, we had purchased a total of 8,866,342 shares under this program at a cost of $114.0 million. The 2026 Term Loans include restrictive covenants that impose certain limitations on our ability to repurchase our ordinary shares.
Added
The 2024 Repurchase Program has no set expiration date and may be suspended or discontinued at any time.
Removed
If any shareholder who is resident in the U.S. receives a dividend subject to DWT, they should generally be able to make an application for a refund from the Irish Revenue Commissioners on the prescribed form. 52 Table of Contents Income tax on dividends Irish income tax, if any, may arise in respect of dividends paid by us.
Added
The 2024 Repurchase Program terminates, and supersedes in its entirety, our prior share repurchase program authorized by our board of directors in September 2011 (the “Prior Repurchase Program”) under which we have purchased a total of 8,866,342 ordinary shares at a cost of $114.0 million.
Added
Income tax on dividends Irish income tax, if any, may arise in respect of dividends paid by us.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

76 edited+45 added−72 removed43 unchanged
Biggest changeUnder an agreement with the Centers for Medicare and Medicaid Services, manufacturers are responsible for reimbursement of prescription plan sponsors for the portion of out-of-pocket expenses not covered under their Medicare plans. 64 Table of Contents A rollforward of our provisions for sales and allowances is as follows: (In millions) Medicaid Rebates Chargebacks Product Discounts Product Returns Medicare Part D Other Total Balance, December 31, 2020 $ 182.0 $ 4.3 $ 14.4 $ 23.7 $ 12.9 $ 10.0 $ 247.3 Provision: Current year 344.3 129.1 107.0 11.4 59.8 49.5 701.1 Prior year (12.4 ) — — (1.0 ) — — (13.4 ) Total 331.9 129.1 107.0 10.4 59.8 49.5 687.7 Actual: Current year (173.5 ) (124.4 ) (85.1 ) (9.7 ) (47.6 ) (39.3 ) (479.6 ) Prior year (145.0 ) (3.4 ) (17.8 ) — (10.8 ) (10.6 ) (187.6 ) Total (318.5 ) (127.8 ) (102.9 ) (9.7 ) (58.4 ) (49.9 ) (667.2 ) Balance, December 31, 2021 $ 195.4 $ 5.6 $ 18.5 $ 24.4 $ 14.3 $ 9.6 $ 267.8 Provision: Current year 366.1 157.2 124.1 15.9 68.1 58.8 790.2 Prior year (22.1 ) — — 3.2 — — (18.9 ) Total 344.0 157.2 124.1 19.1 68.1 58.8 771.3 Actual: Current year (186.5 ) (149.9 ) (103.0 ) (13.8 ) (51.1 ) (48.8 ) (553.1 ) Prior year (144.6 ) (4.1 ) (22.3 ) — (12.9 ) (11.6 ) (195.5 ) Total (331.1 ) (154.0 ) (125.3 ) (13.8 ) (64.0 ) (60.4 ) (748.6 ) Balance, December 31, 2022 $ 208.3 $ 8.8 $ 17.3 $ 29.7 $ 18.4 $ 8.0 $ 290.5 Manufacturing Revenue We recognize manufacturing revenues from the sale of products we manufacture for resale by our licensees.
Biggest changeA rollforward of our provisions for sales and allowances is as follows: (In millions) Medicaid Rebates Chargebacks Product Discounts Product Returns Medicare Part D Other Total Balance, December 31, 2021 $ 195.4 $ 5.6 $ 18.5 $ 24.4 $ 14.3 $ 9.6 $ 267.8 Provision: Current year 366.1 157.2 124.1 15.9 68.1 58.8 790.2 Prior year (22.1 ) — — 3.2 — — (18.9 ) Total 344.0 157.2 124.1 19.1 68.1 58.8 771.3 Payments and credits related to: Current year sales (186.5 ) (149.9 ) (103.0 ) (13.8 ) (51.1 ) (48.8 ) (553.1 ) Prior year sales (144.6 ) (4.1 ) (22.3 ) — (12.9 ) (11.6 ) (195.5 ) Total (331.1 ) (154.0 ) (125.3 ) (13.8 ) (64.0 ) (60.4 ) (748.6 ) Balance, December 31, 2022 $ 208.3 $ 8.8 $ 17.3 $ 29.7 $ 18.4 $ 8.0 $ 290.5 Provision: Current year 435.3 189.1 137.7 33.4 74.4 71.5 941.4 Prior year (8.9 ) — — 2.9 — — (6.0 ) Total 426.4 189.1 137.7 36.3 74.4 71.5 935.4 Payments and credits related to: Current year sales (252.0 ) (182.3 ) (111.6 ) (24.9 ) (56.3 ) (56.3 ) (683.4 ) Prior year sales (168.9 ) (6.0 ) (24.3 ) — (15.9 ) (13.0 ) (228.1 ) Total (420.9 ) (188.3 ) (135.9 ) (24.9 ) (72.2 ) (69.3 ) (911.5 ) Balance, December 31, 2023 $ 213.8 $ 9.6 $ 19.1 $ 41.1 $ 20.6 $ 10.2 $ 314.4 65 Manufacturing Revenue We recognize manufacturing revenues from the sale of products we manufacture for resale by our licensees.
Manufacturing revenues for third-party products using our proprietary technologies are mostly recognized over time as products move through the manufacturing process, using an input method based on costs as a measure of progress. Royalties earned on our licensees’ net sales of third-party products using our proprietary technologies are generally recognized in the period such products are sold by our licensees.
Manufacturing revenues for other third-party products using our proprietary technologies are mostly recognized over time as products move through the manufacturing process, using an input method based on costs as a measure of progress. Royalties earned on our licensees’ net sales of products using our proprietary technologies are generally recognized in the period such products are sold by our licensees.
To date, actual Medicaid rebates have not differed materially from our estimates; • Chargebacks —discounts that occur when contracted indirect customers purchase directly from wholesalers and specialty distributors. Contracted customers generally purchase a product at its contracted price.
To date, actual Medicaid rebates have not differed materially from our estimates; 64 • Chargebacks —discounts that occur when contracted indirect customers purchase directly from wholesalers and specialty distributors. Contracted customers generally purchase a product at its contracted price.
A detailed discussion of our 2020 financial condition and results of operations, and of 2021 year-over-year changes as compared to 2020, can be found in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 16, 2022.
A detailed discussion of our 2021 financial condition and results of operations, and of 2022 year-over-year changes as compared to 2021, can be found in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 16, 2023.
The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and negative evidence factors including, but not limited to: • nature, frequency and severity of recent losses; • duration of statutory carryforward periods; • historical experience with tax attributes expiring unused; and • near‑ and medium‑term financial outlook. 67 Table of Contents We utilize a rolling three years of actual and current year anticipated results as the primary measures of cumulative losses in recent years.
The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and negative evidence factors including, but not limited to: • nature, frequency and severity of recent losses; • duration of statutory carryforward periods; • historical experience with tax attributes expiring unused; and • near- and medium-term financial outlook. 67 We utilize a rolling three years of actual and current year anticipated results as the primary measures of cumulative income (losses) in recent years.
Operating cash flow is derived by adjusting our net loss for non-cash operating items such as depreciation, amortization and share-based compensation as well as 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.
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.
The income tax provision in 2021 was primarily due to U.S. federal and state taxes on income earned in the U.S. and the tax impact of employee equity activity. No provision for income tax has been provided on undistributed earnings of our foreign subsidiaries because such earnings are indefinitely reinvested in the foreign operations.
The income tax provision in 2022 was primarily due to U.S. federal and state taxes on income earned in the U.S. and the tax impact of employee equity activity. No provision for income tax has been provided on undistributed earnings of our foreign subsidiaries because such earnings are indefinitely reinvested in the foreign operations.
Two or more components of an operating segment may be aggregated and deemed a single reporting unit for goodwill impairment testing purposes if the components have similar economic characteristics. As of December 31, 2022, we have one operating segment and two reporting units.
Two or more components of an operating segment may be aggregated and deemed a single reporting unit for goodwill impairment testing purposes if the components have similar economic characteristics. As of December 31, 2023, we have one operating segment and two reporting units.
For information related to risks surrounding our deferred tax assets, see “Item 1A—Risk Factors” in this Annual Report and specifically the section entitled “Our deferred tax assets may not be realized.” Recent Accounting Pronouncements Please refer to Note 2, Summary of Significant Accounting Policies , “New Accounting Pronouncements” in our “Notes to Consolidated Financial Statements” in this Annual Report for a discussion of new accounting standards.
For information related to risks surrounding our deferred tax assets, see “Item 1A—Risk Factors” in this Annual Report and specifically the section entitled “Our deferred tax assets may not be realized.” Recent Accounting Pronouncements Please refer to Note 2, Summary of Significant Accounting Policies , “New Accounting Pronouncements” in our “Notes to Consolidated Financial Statements” in this Annual Report for discussion, if any, of new accounting standards.
The latest to expire of our patents covering ARISTADA, ARISTADA INITIO and LYBALVI in the U.S. will expire in 2039, 2039 and 2032, 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 ARISTADA, 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.
Amortization and Impairment of Long‑Lived Assets Long‑lived assets, other than goodwill which is separately tested for impairment, are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.
Impairment of Long-Lived Assets Long-lived assets, other than goodwill which is separately tested for impairment, are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.
At December 31, 2022, we had not recorded a liability related to these milestone payments as none of the future events that would trigger a milestone payment were considered probable of occurring. Information about our cash flows, by category, is presented in the accompanying consolidated statements of cash flows.
At December 31, 2023, we had not recorded a liability related to these milestone payments as none of the future events that would trigger a milestone payment were considered probable of occurring. 62 Information about our cash flows, by category, is presented in the accompanying consolidated statements of cash flows.
Based on this exemption, such royalties are earned in the period the products are sold by our licensee and we have a present right to payment. 65 Table of Contents Certain of our royalty revenues are recognized based on information supplied to us by our licensees and require estimates to be made.
Based on this exemption, such royalties are earned in the period the products are sold by our licensees and we have a present right to payment. Certain of our royalty revenues are recognized based on information supplied to us by our licensees and require estimates to be made.
ARISTADA and ARISTADA INITIO product sales, gross, increased by 11% in 2022 which was primarily due to an increase of 8% in the number of ARISTADA and ARISTADA INITIO units sold and a 3% increase in the selling price of ARISTADA and ARISTADA INITIO that went into effect in April 2022.
ARISTADA and ARISTADA INITIO product sales, gross, increased by 11%, which was primarily due to an increase of 8% in the number of ARISTADA and ARISTADA INITIO units sold and a 3% increase in the selling price of ARISTADA and ARISTADA INITIO that went into effect in January 2023.
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.
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.
The sales price for certain of our manufacturing revenues is based on the end-market sales price earned by our licensees. As end-market sales generally occur after we have recorded manufacturing revenue, we estimate the sales price for such products based on information supplied to us by our licensees, our historical transaction experience and other third-party data.
As end-market sales generally occur after we have recorded manufacturing revenue, we estimate the sales price for such products based on information supplied to us by our licensees, our historical transaction experience and other third-party data.
Cumulative unremitted earnings of overseas subsidiaries totaled approximately $812.8 million at December 31, 2022. In the event of a repatriation of those earnings in the form of dividends or otherwise, we may be liable for income taxes, subject to adjustment, if any, for foreign tax credits and foreign withholding taxes payable to foreign tax authorities.
Cumulative unremitted earnings of overseas subsidiaries totaled approximately $797.0 million at December 31, 2023. In the event of a repatriation of those earnings in the form of dividends or otherwise, we may be liable for income taxes, subject to adjustment, if any, for foreign tax credits and foreign withholding taxes payable to foreign tax authorities.
Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period in which they become known, which is generally within the same quarter. The difference s between our actual and estimated royalty revenues ha ve not been material to date .
Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period in which they become known, which is generally within the same quarter. The differences between our actual and estimated royalty revenues have not been material to date.
We expect our product sales, net will continue to grow as VIVITROL continues to penetrate the alcohol dependence and opioid dependence markets in the U.S., as ARISTADA and ARISTADA INITIO continue to gain market share in the U.S., and as we continue the commercial launch of LYBALVI. 56 Table of Contents Manufacturing and Royalty Revenues Manufacturing revenue from RISPERDAL CONSTA and VUMERITY are recognized at the point in time that the product has been fully manufactured.
We expect our product sales, net will continue to grow as VIVITROL continues to penetrate the alcohol dependence market in the U.S., as ARISTADA and ARISTADA INITIO continue to gain market share in the U.S., and as we continue to grow sales of LYBALVI in the U.S. 57 Manufacturing and Royalty Revenues Manufacturing revenue from RISPERDAL CONSTA and VUMERITY are recognized at the point in time that the product has been fully manufactured.
We estimate that approximately $55.0 million of income taxes would be payable on the repatriation of the unremitted earnings to Ireland.
We estimate that approximately $70.8 million of income taxes would be payable on the repatriation of the unremitted earnings to Ireland.
In an effort to allocate our spending most effectively, we continually evaluate our products under development based on the performance of such products in preclinical and/or clinical trials, our expectations regarding the likelihood of their regulatory approval and our view of their future potential commercial viability, among other factors.
These amounts are not necessarily predictive of future R&D expenses. In an effort to allocate our spending most effectively, we continually evaluate our products under development based on the performance of such products in preclinical and/or clinical trials, our expectations regarding the likelihood of their regulatory approval and our view of their future potential commercial viability, among other factors.
The following table summarizes our cash flows for the years ended December 31, 2022 and 2021: Year Ended December 31, (In millions) 2022 2021 Cash and cash equivalents, beginning of period $ 337.5 $ 273.0 Cash flows provided by operating activities 21.0 101.7 Cash flows used in investing activities (64.4 ) (66.2 ) Cash flows (used in) provided by financing activities (1.6 ) 29.0 Cash and cash equivalents, end of period $ 292.5 $ 337.5 Operating Activities Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities.
The following table summarizes our cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, (In millions) 2023 2022 Cash and cash equivalents, beginning of period $ 292.5 $ 337.5 Cash flows provided by operating activities 401.4 21.0 Cash flows provided by (used in) investing activities 53.3 (64.4 ) Cash flows used in financing activities (289.7 ) (1.6 ) Cash and cash equivalents, end of period $ 457.5 $ 292.5 Operating Activities Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities.
The increases related to VUMERITY and RISPERDAL CONSTA were primarily due to increased manufacturing activity, as discussed above. The increase related to LYBALVI was primarily due to the increase in sales activity, as discussed above.
The increase related to VUMERITY was primarily due to increased manufacturing activity, as described above. The increases related to LYBALVI and ARISTADA were primarily due to the increases in sales activity, as described above.
Based on our most recent analysis, amortization of intangible assets included within our consolidated balance sheet at December 31, 2022 is expected to be approximately $35.0 million and $1.0 million in the years ending December 31, 2023 and 2024, respectively.
Based on our most recent analysis, amortization of intangible assets included within our consolidated balance sheet at December 31, 2023 is expected to be approximately $2.0 million in the year ending December 31, 2024.
As of December 31, 2022, we had $1.7 billion of Irish NOL carryforwards, $15.1 million of U.S. federal NOL carryforwards, $43.2 million of state NOL carryforwards, $5.7 million of federal R&D credits and $29.0 million of state tax credits which will either expire on various dates through 2042 or can be carried forward indefinitely.
As of December 31, 2023, we had $1.3 billion of Irish NOL carryforwards, $14.6 million of U.S. federal NOL carryforwards, $43.2 million of state NOL carryforwards, $9.7 million of federal R&D credits and $31.0 million of state tax credits which will either expire on various dates through 2043 or can be carried forward indefinitely.
The change in the fair value of the contingent consideration was due to the determination that it was unlikely that we would collect any further contingent consideration proceeds from Baudax Bio, Inc.
The change in the fair value of contingent consideration was due to the determination during 2022 that it was unlikely we would collect any further contingent consideration proceeds under our agreements with Baudax Bio, Inc.
The following table compares manufacturing and royalty revenues earned in the years ended December 31, 2022 and 2021: Year Ended December 31, (In millions) 2022 2021 Change Manufacturing and royalty revenues: Long-acting INVEGA products $ 115.7 $ 303.1 $ (187.4 ) VUMERITY 115.5 87.4 28.1 RISPERDAL CONSTA 49.9 50.9 (1.0 ) Other 50.9 100.4 (49.5 ) Manufacturing and royalty revenues $ 332.0 $ 541.8 $ (209.8 ) Our agreements with Janssen related to the long-acting INVEGA products provide for tiered royalty payments, which consist of a patent royalty and a know-how royalty, both of which are determined on a country-by-country basis.
The following table compares manufacturing and royalty revenues earned in the years ended December 31, 2023 and 2022: Year Ended December 31, (In millions) 2023 2022 Change Manufacturing and royalty revenues: Long-acting INVEGA products $ 486.1 $ 115.7 $ 370.4 VUMERITY 129.3 115.5 13.8 RISPERDAL CONSTA 37.3 49.9 (12.6 ) Other 90.7 50.9 39.8 Manufacturing and royalty revenues $ 743.4 $ 332.0 $ 411.4 Our agreements with Janssen related to the long-acting INVEGA products provide for tiered royalty payments, which consist of a patent royalty and a know-how royalty, both of which are determined on a country-by-country basis.
We are obligated to make up to $825.0 million in future payments, $225.0 million of which would be triggered upon achievement of certain specified clinical milestones, $300.0 million of which would be triggered by the achievement of certain regulatory milestones and $325.0 million of which would be triggered upon the attainment of certain sales thresholds.
(“Rodin”) in November 2019, we may become obligated to make up to $825.0 million in future milestone payments to the former shareholders of Rodin, $200.0 million of which would be triggered upon achievement of certain specified clinical milestones, $300.0 million of which would be triggered by the achievement of certain regulatory milestones and $325.0 million of which would be triggered upon the attainment of certain sales thresholds.
Once product is returned, it is destroyed; and • Medicare Part D —we record accruals for Medicare Part D liabilities under the Medicare Coverage Gap 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.
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 Gap 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.
We have no off-balance sheet arrangements that are reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources in the next twelve months. As discussed above, we made a $25.0 million development milestone payment to the former shareholders of Rodin Therapeutics, Inc.
We have no off-balance sheet arrangements that are reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources in the next twelve months. In connection with our acquisition of Rodin Therapeutics, Inc.
Changes in our current estimates, due to unanticipated events or otherwise, could have a material effect on our financial condition and results of operations.
Our accounting for deferred tax consequences represents our best estimate of those future events. Changes in our current estimates, due to unanticipated events or otherwise, could have a material effect on our financial condition and results of operations.
Under the terms of a settlement and license agreement, we granted Amneal a 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 2028 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.
When the partial termination of the license agreement became effective in February 2022, Janssen ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S. and we stopped recognizing royalty revenue related to net sales of these products.
The partial termination became effective in February 2022, at which time Janssen ceased paying us royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA. Accordingly, we ceased recognizing royalty revenue related to sales of these products in February 2022.
Substantially all of our royalties qualify for the sales-and-usage exemption under Topic 606 as (i) such royalties are based strictly on the sales-and-usage by the licensee; and (ii) a license of IP is the sole or predominant item to which such royalties relate.
All of our royalties qualify for the sales-and-usage exemption under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , (“Topic 606”) as (i) such royalties are based strictly on the sales-and-usage by the licensee; and (ii) a license of IP is the sole or predominant item to which such royalties relate.
Ireland Total Cash and cash equivalents $ 208.4 $ 84.1 $ 292.5 $ 88.6 $ 248.9 $ 337.5 Investments—short-term 207.6 108.4 316.0 144.5 54.3 198.8 Investments—long-term 70.3 61.3 131.6 163.0 66.4 229.4 Total cash and investments $ 486.3 $ 253.8 $ 740.1 $ 396.1 $ 369.6 $ 765.7 Outstanding borrowings—short and long-term $ 293.3 $ — $ 293.3 $ 295.8 $ — $ 295.8 At December 31, 2022, our investments consisted of the following: Gross Amortized Unrealized Allowance for Estimated (In millions) Cost Gains Losses Credit Losses Fair Value Investments—short-term available-for-sale $ 320.6 $ — $ (4.6 ) $ — $ 316.0 Investments—long-term available-for-sale 134.6 — (4.8 ) — 129.8 Investments—long-term held-to-maturity 1.8 — — — 1.8 Total $ 457.0 $ — $ (9.4 ) $ — $ 447.6 61 Table of Contents Sources and Uses of Cash We generated $21.0 million and $101.7 million of cash from operating activities during the years ended December 31, 2022 and 2021, respectively.
Ireland Total Cash and cash equivalents $ 317.8 $ 139.7 $ 457.5 $ 208.4 $ 84.1 $ 292.5 Investments—short-term 187.6 128.4 316.0 207.6 108.4 316.0 Investments—long-term 18.0 21.9 39.9 70.3 61.3 131.6 Total cash and investments $ 523.4 $ 290.0 $ 813.4 $ 486.3 $ 253.8 $ 740.1 Outstanding borrowings—short and long-term $ 290.7 $ — $ 290.7 $ 293.3 $ — $ 293.3 At December 31, 2023, our investments consisted of the following: Gross Amortized Unrealized Allowance for Estimated (In millions) Cost Gains Losses Credit Losses Fair Value Investments—short-term available-for-sale $ 315.8 $ 1.4 $ (1.2 ) $ — $ 316.0 Investments—long-term available-for-sale 38.7 — (0.6 ) — 38.1 Investments—long-term held-to-maturity 1.8 — — — 1.8 Total $ 356.3 $ 1.4 $ (1.8 ) $ — $ 355.9 Sources and Uses of Cash We generated $401.4 million and $21.0 million of cash from operating activities during the years ended December 31, 2023 and 2022, respectively.
We expect VIVITROL, ARISTADA, ARISTADA INITIO, LYBALVI and VUMERITY 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 2022, we incurred an operating loss of $142.3 million, as compared to an operating loss of $29.3 million in 2021.
We expect VIVITROL, ARISTADA, ARISTADA INITIO, LYBALVI and VUMERITY 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 2023, our net income from continuing operations was $519.2 million, as compared to net loss from continuing operations of $33.2 million in 2022.
We classify available‑for‑sale investments in an unrealized loss position that do not mature within 12 months as long‑term investments. We have the intent and ability to hold these investments until recovery, which may be at maturity, and it is more‑likely‑than‑not that we would not be required to sell these securities before recovery of their amortized cost.
We have the intent and ability to hold these investments until recovery, which may be at maturity, and it is more-likely-than-not that we would not be required to sell these securities before recovery of their amortized cost.
In November 2021, we received notice of partial termination of our license agreement with Janssen under which we provided Janssen with rights to, and know-how, training and technical assistance in respect of, our small particle pharmaceutical compound technology, known as NanoCrystal technology, which was used to develop INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA, and INVEGA HAFYERA/BYANNLI.
In November 2021, we received notice from Janssen of partial termination of our license agreement under which we provided Janssen with rights to, and know-how, training and technical assistance in respect of, our NanoCrystal technology, which was used to develop the long-acting INVEGA products.
The following table presents the adjustments deducted from product sales, gross to arrive at product sales, net for sales of VIVITROL, ARISTADA, ARISTADA INITIO and LYBALVI in the U.S. during the years ended December 31, 2022 and 2021: Year Ended December 31, (In millions, except for % of Sales) 2022 % of Sales 2021 % of Sales Product sales, gross $ 1,548.9 100.0 % $ 1,315.1 100.0 % Adjustments to product sales, gross: Medicaid rebates (344.0 ) (22.2 ) % (331.9 ) (25.2 ) % Chargebacks (157.2 ) (10.2 ) % (129.1 ) (9.8 ) % Product discounts (124.1 ) (8.0 ) % (107.0 ) (8.1 ) % Medicare Part D (68.1 ) (4.4 ) % (59.8 ) (4.5 ) % Other (77.9 ) (5.0 ) % (59.9 ) (4.6 ) % Total adjustments (771.3 ) (49.8 ) % (687.7 ) (52.2 ) % Product sales, net $ 777.6 50.2 % $ 627.4 47.8 % Product sales, net during the years ended December 31, 2022 and 2021 were as follows: Year Ended December 31, (In millions) 2022 2021 Change VIVITROL $ 379.5 $ 343.9 $ 35.6 ARISTADA and ARISTADA INITIO 302.1 275.4 26.7 LYBALVI 96.0 8.1 87.9 Product sales, net $ 777.6 $ 627.4 $ 150.2 VIVITROL product sales, gross, increased by 7% in 2022 which was primarily due to an increase of 2% in the number of VIVITROL units sold and a 6% increase in the selling price of VIVITROL that went into effect in April 2022.
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, 2023 and 2022: Year Ended December 31, (In millions, except for % of Sales) 2023 % of Sales 2022 % of Sales Product sales, gross $ 1,855.4 100.0 % $ 1,548.9 100.0 % Adjustments to product sales, gross: Medicaid rebates (426.4 ) (23.0 ) % (344.0 ) (22.2 ) % Chargebacks (189.1 ) (10.2 ) % (157.2 ) (10.2 ) % Product discounts (137.7 ) (7.4 ) % (124.1 ) (8.0 ) % Medicare Part D (74.4 ) (4.0 ) % (68.1 ) (4.4 ) % Other (107.8 ) (5.8 ) % (77.9 ) (5.0 ) % Total adjustments (935.4 ) (50.4 ) % (771.3 ) (49.8 ) % Product sales, net $ 920.0 49.6 % $ 777.6 50.2 % VIVITROL product sales, gross, increased by 13%, which was primarily due to an increase of 5% in the number of VIVITROL units sold and a 6% increase in the selling price of VIVITROL that went into effect in January 2023.
Please refer to Note 11, Long‑Term Debt , in the “Notes to Consolidated Financial Statements” in this Annual Report for a discussion of our outstanding term loans. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
For additional information, please refer to Note 3, Discontinued Operations , in the “Notes to Consolidated Financial Statements” in this Annual Report. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Steering committee services that are not inconsequential or perfunctory and that are determined to be performance obligations are combined with other research services or performance obligations required under an arrangement, if any, in determining the level of effort required in an arrangement and the period over which we expect to complete our aggregate performance obligations. 63 Table of Contents Product Sales, Net Our product sales, net consist of sales in the U.S. of VIVITROL, ARISTADA, ARISTADA INITIO and, following its commercial launch in October 2021, LYBALVI, primarily to wholesalers, specialty distributors and pharmacies.
Steering committee services that are not inconsequential or perfunctory and that are determined to be performance obligations are combined with other research services or performance obligations required under an arrangement, if any, in determining the level of effort required in an arrangement and the period over which we expect to complete our aggregate performance obligations.
We also earn manufacturing and/or royalty revenues on net sales of products commercialized by our licensees, the most significant of which in 2022 were the long-acting INVEGA products and VUMERITY.
Overview We have a portfolio of proprietary products that we manufacture, market and sell in the U.S.—VIVITROL, ARISTADA, ARISTADA INITIO and LYBALVI. We also earn manufacturing and/or royalty revenues on net sales of products commercialized by our licensees, the most significant of which in 2023 were the long-acting INVEGA products and VUMERITY.
External R&D expenses include fees for clinical and non-clinical activities performed by CROs, consulting fees, and costs related to laboratory services, the purchase of drug product materials and third-party manufacturing development activities. Internal R&D expenses include employee-related expenses, occupancy costs, depreciation and general overhead.
Research and Development Expenses For each of our research and development (“R&D”) programs, we incur both external and internal expenses. External R&D expenses include fees for clinical and preclinical activities performed by contract research organizations, consulting fees, and costs related to laboratory services, the purchase of drug product materials and third-party manufacturing development activities.
Please refer to Note 9, Leases , in the “Notes to Consolidated Financial Statements” in this Annual Report for additional information related to such early payment.
Please refer to Note 9, Goodwill and Intangible Assets in our “Notes to Consolidated Financial Statements” in this Annual Report for additional information.
For a discussion of these legal proceedings, see Note 17, 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 “Item 1A—Risk Factors” in this Annual Report and specifically the section entitled “Risks Related to our Intellectual Property—We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers”.
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 about risks relating to these legal proceedings, see “Item 1A—Risk Factors” in this Annual Report, and specifically the section entitled “We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.” 58 We receive a 15% royalty on worldwide net sales of VUMERITY manufactured and packaged by us, subject to increases in such royalty rate for VUMERITY manufactured and/or packaged by Biogen or its designees, in the period that the end-market sales of VUMERITY occur.
Certain of our manufacturing and royalty revenues are earned in countries outside of the U.S. and are denominated in currencies in which the product is sold.
The decrease in royalty revenue was primarily due to expirations of the patents covering RISPERDAL CONSTA, which expired in the U.S. in January 2023 and expired in the EU in 2021. Certain of our manufacturing and royalty revenues are earned in countries outside of the U.S. and are denominated in currencies in which the product is sold.
The latest to expire of our patents covering VIVITROL will expire in 2029 in the U.S. and expired in Europe in 2021.
Increased competition may lead to reduced unit sales of VIVITROL and increased pricing pressure. The latest to expire of our patents covering VIVITROL will expire in 2029 in the U.S.
Increased competition from new products or generic versions of these products may lead to reduced unit sales of such products and increased pricing pressure.
In addition, each of INVEGA SUSTENNA and INVEGA TRINZA are currently subject to Paragraph IV litigation in response to companies seeking to market generic versions of such products. Increased competition from new products or generic versions of these products may lead to reduced unit sales of such products and increased pricing pressure.
Amortization of Acquired Intangible Assets Year Ended December 31, (In millions) 2022 2021 Change Amortization of acquired intangible assets $ 36.4 $ 38.1 $ (1.7 ) Our amortizable intangible assets consist of technology and collaborative arrangements acquired as part of the acquisition of EDT in September 2011, which are being amortized over 12 to 13 years.
The increase in general and administrative expense during 2023 was primarily due to an increase in salaries and benefits of $7.6 million and an increase in our branded prescription drug fee of $2.1 million, partially offset by a decrease in professional services fees of $2.4 million, primarily due to decreased legal expenses. 60 Amortization of Acquired Intangible Assets Year Ended December 31, (In millions) 2023 2022 Change Amortization of acquired intangible assets $ 35.7 $ 36.4 $ (0.7 ) Our amortizable intangible assets consist of technology and collaborative arrangements acquired as part of the acquisition of EDT in September 2011, which are being amortized over 12 to 13 years.
(“Baudax”), and accordingly, we reduced the fair value of the contingent consideration to zero, as discussed in Note 5, Fair Value , in the “Notes to Consolidated Financial Statements” in this Annual Report. Interest expense consists primarily of interest incurred on our 2026 Term Loans. Interest income consists primarily of interest earned on our available-for-sale investments.
(“Baudax”) in effect at the time, and accordingly, we reduced the fair value of the contingent consideration to zero, as discussed in Note 6, Fair Value , in the “Notes to Consolidated Financial Statements” in this Annual Report.
The partial termination became effective in February 2022, at which time Janssen ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S. In April 2022, we commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of this license agreement and Janssen’s royalty and other obligations under the agreement.
In April 2022, we commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of this license agreement and Janssen’s royalty and other obligations under the agreement. In May 2023, the Tribunal issued the Final Award, which concluded the arbitration proceedings.
The evaluation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns and future profitability. Our accounting for deferred tax consequences represents our best estimate of those future events.
For additional information related to our assessment of our valuation allowance, see Note 17, Income Taxes in the “Notes to Consolidated Financial Statements” in this Annual Report. The evaluation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns and future profitability.
Other Expense, Net Year Ended December 31, (In millions) 2022 2021 Change Interest income $ 7.6 $ 2.4 $ 5.2 Interest expense (13.0 ) (11.2 ) (1.8 ) Change in the fair value of contingent consideration (21.8 ) (1.4 ) (20.4 ) Other income, net 2.2 0.2 2.0 Total other expense, net $ (25.0 ) $ (10.0 ) $ (15.0 ) The increase in total other expense, net was primarily due to the change in the fair value of contingent consideration and an increase in interest expense, partially offset by increases in interest income and other income, net.
Other Income (Expense), Net Year Ended December 31, (In millions) 2023 2022 Change Interest income $ 30.9 $ 7.6 $ 23.3 Interest expense (23.0 ) (13.0 ) (10.0 ) Change in the fair value of contingent consideration — (21.8 ) 21.8 Other (expense) income, net (0.5 ) 2.2 (2.7 ) Total other income (expense), net $ 7.4 $ (25.0 ) $ 32.4 Interest income consists primarily of interest earned on our available-for-sale investments.
Product sales, net are recognized when the customer obtains control of the product, which is when the product has been received by the customer. Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, healthcare providers or payers.
Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, healthcare providers or payers. Our process for estimating reserves established for these variable consideration components does not differ materially from historical practices.
Our available-for-sale investments consist primarily of short and long-term U.S. government and agency debt securities, corporate debt securities and debt securities issued and backed by non-U.S. governments. Our held-to-maturity investments consist of investments that are held as collateral under certain letters of credit related to certain of our lease agreements.
We mitigate credit risk in our cash reserves by maintaining a well-diversified portfolio that limits the amount of investment exposure as to institution, maturity and investment type. Our available-for-sale investments consist primarily of short and long-term U.S. government and agency debt securities, corporate debt securities and debt securities issued and backed by non-U.S. governments.
On October 31, 2022, we elected to perform a qualitative impairment test and determined that based on the weight of all available evidence, the fair value of the reporting unit more-likely-than-not exceeded its carrying value.
On October 31, 2023, in connection with the Separation, we performed a quantitative impairment test and, while we determined that, based on the weight of all available evidence, the fair value of the reporting unit more-likely-than-not exceeded its carrying value, it was also determined that as a portion of the IP that transferred to Mural was owned by the reporting unit to which our goodwill was assigned, a portion of our goodwill was allocated to Mural.
Debt At December 31, 2022, our borrowings consisted of $294.8 million outstanding under the 2026 Term Loans. The 2026 Term Loans bear interest at LIBOR plus 2.5%, with a LIBOR floor of 0.5%. Principal payments of $0.8 million are to be made quarterly through 2025, with a final payment of $285.8 million due in March 2026.
Principal payments of $0.8 million are to be made quarterly through 2025, with a final payment of $285.8 million due in March 2026.
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.
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. 61 In December 2022, the EU agreed to implement a corporate minimum tax rate of 15% on companies with combined annual revenue of at least €750.0 million.
The increase in royalty revenue was due to an increase in net sales of VUMERITY, which were $553.4 million during 2022, as compared to $410.0 million during 2021.
Manufacturing revenue from VUMERITY increased by $10.4 million during 2023, primarily due to an increase in the number of bulk batches made available to Biogen. Royalty revenue related to VUMERITY increased by $3.4 million during 2023, due to an increase in end-market net sales of VUMERITY, which were $576.3 million during 2023, as compared to $553.4 million during 2022.
See “Item 7A—Quantitative and Qualitative Disclosures about Market Risk” in this Annual Report for information on currency exchange rate risk related to our revenues and “Item 1A—Risk Factors” in this Annual Report, and specifically the section entitled “Currency exchange rates may affect revenues and expenses” for risks related to currency exchange rates. 58 Table of Contents Costs and Expenses Cost of Goods Manufactured and Sold Year Ended December 31, (In millions) 2022 2021 Change Cost of goods manufactured and sold $ 218.1 $ 197.4 $ 20.7 The increase in cost of goods manufactured and sold was primarily due to increases of $6.4 million and $4.8 million, respectively, in the cost of goods manufactured for VUMERITY and RISPERDAL CONSTA and increases of $5.6 million and $10.2 million, respectively, in the cost of goods sold for VIVITROL and LYBALVI.
See “Item 7A—Quantitative and Qualitative Disclosures about Market Risk” in this Annual Report for information on currency exchange rate risk related to our revenues and “Item 1A—Risk Factors” in this Annual Report, and specifically the section entitled “Currency exchange rates may affect revenues and expenses” for risks related to currency exchange rates.
The following table sets forth our external R&D expenses for the years ended December 31, 2022 and 2021 relating to our then-current development programs and our internal R&D expenses, listed by the nature of such expenses: Year Ended December 31, (In millions) 2022 2021 Change External R&D expenses: Development programs: nemvaleukin $ 77.8 $ 80.1 $ (2.3 ) LYBALVI 23.1 26.0 (2.9 ) ALKS 1140 3.5 29.3 (25.8 ) Other external R&D expenses 76.1 65.7 10.4 Total external R&D expenses 180.5 201.1 (20.6 ) Internal R&D expenses: Employee-related 159.0 148.6 10.4 Occupancy 17.8 19.5 (1.7 ) Depreciation 12.0 12.2 (0.2 ) Other 24.5 25.1 (0.6 ) Total internal R&D expenses 213.3 205.4 7.9 Research and development expenses $ 393.8 $ 406.5 $ (12.7 ) These amounts are not necessarily predictive of future R&D expenses.
We track external R&D expenses for each of our development programs; however, internal R&D expenses are not tracked by individual program as they can benefit multiple development programs or our products or technologies in general. 59 The following table sets forth our external R&D expenses for the years ended December 31, 2023 and 2022 relating to our then-current development programs and our internal R&D expenses, listed by the nature of such expenses: Year Ended December 31, (In millions) 2023 2022 (1) Change External R&D expenses: Development programs: ALKS 2680 $ 31.3 $ 15.7 $ 15.6 LYBALVI 15.4 23.1 (7.7 ) Other external R&D expenses 51.7 57.4 (5.7 ) Total external R&D expenses 98.4 96.2 2.2 Internal R&D expenses: Employee-related 128.3 129.7 (1.4 ) Occupancy 12.3 12.4 (0.1 ) Depreciation 9.6 10.7 (1.1 ) Other 22.2 23.7 (1.5 ) Total internal R&D expenses 172.4 176.5 (4.1 ) Research and development expenses $ 270.8 $ 272.7 $ (1.9 ) (1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.
The increase in revenue from VUMERITY was due to increases of $6.7 million and $21.4 million in manufacturing revenue and royalty revenue, respectively.
The decrease in revenue from RISPERDAL CONSTA during 2023 was primarily due to decreases of $6.6 million in manufacturing revenue and $6.1 million in royalty revenue.
The increase related to VIVITROL was primarily due to an increase in costs incurred for out-of-specification batches, as well as an increase in sales activity, as discussed above. Research and Development Expenses For each of our R&D programs, we incur both external and internal expenses.
The increase in the cost of goods sold related to VIVITROL was due to an increase in sales activity, as described above, and an increase in costs related to out-of-specification batches.
The latest to expire patent covering RISPERDAL CONSTA expired in 2021 in the EU and expired in January 2023 in the U.S., and we are aware of potential generic competition for RISPERDAL CONSTA that may lead to reduced unit sales and increased pricing pressure.
We expect revenues from RISPERDAL CONSTA to continue to decrease over time as patents covering RISPERDAL CONSTA 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.
The Company is currently monitoring these developments and assessing the potential impact. Liquidity and Capital Resources Our financial condition is summarized as follows: December 31, 2022 December 31, 2021 (In millions) U.S. Ireland Total U.S.
The Irish government has transposed the corporate minimum tax rules into Irish legislation with effect as of January 1, 2024. Liquidity and Capital Resources Our financial condition is summarized as follows: December 31, 2023 December 31, 2022 (In millions) U.S. Ireland Total U.S.
The decrease in expenses related to ALKS 1140 was primarily due to the termination of the ALKS 1140 clinical development program in the second quarter of 2022, as the initial data did not support further clinical development, and a $25.0 million development milestone in the third quarter of 2021 related to the submission of a clinical trial authorization for ALKS 1140.
The decrease in other external R&D expenses was primarily due to the termination of the ALKS 1140 clinical development program in the second quarter of 2022.
For additional information regarding the arbitration proceedings with Janssen, see Note 17, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report.
For additional information related to discontinued operations, refer to Note 3, Discontinued Operations , in our “Notes to Consolidated Financial Statements” in this Annual Report.
For example, the occurrence of an adverse event could substantially increase the amount of amortization expense associated with our acquired intangible assets as compared to previous periods or our current expectations, which may result in a significant negative impact on our future results of operations. 66 Table of Contents Goodwill We evaluate goodwill for impairment for our reporting units annually, as of October 31, and whenever events or changes in circumstances indicate the carrying value of the reporting units may not be recoverable.
Accordingly, we performed a review of our long-lived intangible assets in accordance with ASC 350, Intangibles — Goodwill and Other and determined that the carrying value of our long-lived assets did not exceed the estimated fair value of such long-lived assets. 66 Goodwill We evaluate goodwill for impairment for our reporting units annually, as of October 31, and whenever events or changes in circumstances indicate the carrying value of the reporting units may not be recoverable.
We record royalty revenue, equal to 2.5% of Janssen’s end-market net sales, in the period that the end-market sales of RISPERDAL CONSTA occur. The decrease in revenue from RISPERDAL CONSTA was primarily due to a decrease of $3.2 million in royalty revenue, partially offset by a $2.2 million increase in manufacturing revenue.
We recognize manufacturing revenue for RISPERDAL CONSTA at the point in time when RISPERDAL CONSTA has been fully manufactured, which is deemed to have occurred when the product is approved for shipment by both us and Janssen. We record royalty revenue, equal to 2.5% of Janssen’s end-market net sales, in the period that the end-market sales of RISPERDAL CONSTA occur.
The increase in the operating loss was primarily due to an increase in operating expenses of $51.0 million and a decrease in revenues of $62.0 million. These items are discussed in further detail within the “Results of Operations” section below.
The increase in manufacturing and royalty revenue primarily relates to the successful outcome of the arbitration proceedings in respect of the long-acting INVEGA products. These items are discussed in further detail within the “Results of Operations” section below.
We expect to spend approximately $35.0 million to $40.0 million during the year ending December 31, 2023 for capital expenditures.
Cash flows used in investing activities during 2022 were primarily due to $28.0 million in net purchases of investments and the purchase of $38.3 million of property, plant and equipment. We expect to spend approximately $35.0 million during the year ending December 31, 2024 for capital expenditures.
The decrease in expenses related to LYBALVI was primarily due to decreased R&D activities for the product in light of its commercial launch in October 2021, partially offset by continued spend on ongoing clinical studies.
The decrease in expenses related to LYBALVI during 2023 was primarily due to decreased spend on certain ongoing long-term safety and tolerability studies as they near completion, partially offset by increased spend on the pediatric study related to the product.
This award is not yet final. We will engage with Janssen and the Tribunal in additional proceedings prior to the Tribunal’s issuance of a final award. Accordingly, we have not recognized royalty revenue related to U.S. sales of long-acting INVEGA products since February 2022.
Following issuance of the Final Award, we recognized royalty revenues related to the back royalties for 2022, as described above, and resumed recognizing royalty revenue related to ongoing U.S. sales of the long-acting INVEGA products.
Financing Activities The change in cash flows from financing activities was primarily due to $23.6 million in proceeds from the Term Loan Refinancing, which we received in 2021, and a $7.3 million decrease in the amount of cash that we received upon the exercise of employee stock options, net of employee taxes.
Cash flows used in financing activities during 2022 primarily related to $18.2 million of employee taxes paid related to the net share settlement of equity awards and $3.0 million of principal payments on our 2026 Term Loans, partially offset by $19.6 million of cash that we received upon exercises of employee stock options.
The Term Loan Refinancing is discussed in Note 11, Long-Term Debt in the “Notes to Consolidated Financial Statements” in this Annual Report.
The Separation and related agreements are more fully described in Note 3, Discontinued Operations , in the “Notes to Consolidated Financial Statements” in this Annual Report.
Accordingly, changes in assumptions described above could have a material impact on the increase or decrease in the fair value of contingent consideration recorded in any given period. Valuation of Deferred Tax Assets We evaluate the need for deferred tax asset valuation allowances based on a more‑likely‑than‑not standard.
Please refer to Note 9, Goodwill and Intangible Assets in our “Notes to Consolidated Financial Statements” in this Annual Report for additional information. Valuation of Deferred Tax Assets We evaluate the need for deferred tax asset valuation allowances based on a more-likely-than-not standard.
Removed
Overview We have a portfolio of proprietary products that we manufacture, market and sell in the U.S.—VIVITROL, ARISTADA, ARISTADA INITIO and most recently, LYBALVI, which we launched commercially in October 2021.
Added
The increase in net income from continuing operations was primarily due to increases of $142.4 million in product sales, net, $411.4 million in manufacturing and royalty revenue and $99.6 million in income tax benefit, partially offset by increases of $34.9 million in cost of goods manufactured and sold and $99.0 million in selling, general and administrative expenses.
Removed
In November 2022, we announced our intent, as approved by our board of directors, to separate our neuroscience business and oncology business. We are exploring a separation of the oncology business into an independent, publicly-traded company as part of an ongoing review of strategic alternatives for the oncology business.
Added
Business Update On November 15, 2023, we completed the separation of our oncology business into Mural Oncology plc (“Mural”), a new, independent, publicly-traded company (the “Separation”).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+2 added−8 removed4 unchanged
Biggest changeFor the year ended December 31, 202 2 , an average 10% strengthening of the USD relative to the currencies in which these products are sold would have resulted in revenues being reduced by approximately $ 1.1 million, as compared to a reduction in revenues of approximately $ 33.1 million for the year ended December 31, 20 2 1 .
Biggest changeFor the year ended December 31, 2023, an average 10% strengthening of the USD relative to the currencies in which these products are sold would have resulted in revenues being reduced by approximately $10.3 million, as compared to a reduction in revenues of approximately $1.1 million for the year ended December 31, 2022. 68 We incur significant operating costs in Ireland and face exposure to changes in the exchange ratio of the USD and the euro arising from expenses and payables at our Irish operations that are settled in euro.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk We hold securities in our investment portfolio that are sensitive to market risks. Our securities with fixed interest rates may have their market value adversely impacted by a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk We hold securities in our investment portfolio that are sensitive to market risks. Our securities with fixed interest rates may have their market value adversely impacted by a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall.
Although we have seen a significant increase in the number of our investment securities in unrealized loss positions, we do not believe our exposure to liquidity and credit risk to be significant as approximately 47% and 45% of our investments at December 31, 2022 are in corporate debt securities with a minimum rating of A2 (Moody’s)/A (Standard and Poor’s) and debt securities issued by the U.S. government or its agencies, respectively.
Although we have seen a significant increase in the number of our investment securities in unrealized loss positions, we do not believe our exposure to liquidity and credit risk to be significant as approximately 36% and 61% of our investments at December 31, 2023 are in corporate debt securities with a minimum rating of A2 (Moody’s)/A (Standard and Poor’s) and debt securities issued by the U.S. government or its agencies, respectively.
The manufacturing and royalty payments on these non‑U.S. sales are calculated initially in the currency in which the sale is made and are then converted into USD to determine the amount that our licensees pay us 68 Table of Contents for manufacturing and royalty revenues.
The manufacturing and royalty payments on these non-U.S. sales are calculated initially in the currency in which the sale is made and are then converted into USD to determine the amount that our licensees pay us for manufacturing and royalty revenues.
For the year ended December 31, 2022, an average 10% weakening in the USD relative to the euro would have resulted in an increase to our expenses denominated in euro of approximately $7.5 million, as compared to an increase in our expenses of approximately $8.3 million in the year ended December 31, 2021.
For the year ended December 31, 2023, an average 10% weakening in the USD relative to the euro would have resulted in an increase to our expenses denominated in euro of approximately $7.7 million, as compared to an increase in our expenses of approximately $7.5 million in the year ended December 31, 2022.
Fluctuations in the exchange ratio of the USD and these non ‑U.S. currencies will have the effect of increasing or decreasing our revenues even if there is a constant amount of sales in non ‑U.S. currencies.
Fluctuations in the exchange ratio of the USD and these non-U.S. currencies will have the effect of increasing or decreasing our revenues even if there is a constant amount of sales in non-U.S. currencies. For example, if the USD weakens against a non-U.S. currency, then our revenues will increase given a constant amount of sales in such non-U.S. currency.
We are currently using the one-month LIBOR rate, which was 4.32% at December 31, 2022. A 10% increase in the one-month LIBOR rate would have increased the amount of interest we owed by approximately $1.3 million.
A 10% increase in the one-month SOFR rate would have increased the amount of interest we owed by approximately $2.3 million. At December 31, 2022, a 10% increase in the one-month LIBOR rate, which was the rate in use at the time, would have increased the amount of interest we owed by approximately $1.3 million.
For a discussion about risks relating to LIBOR, see “Item 1A—Risk Factors” in this Annual Report and specifically the section entitled “Discontinuation, reform or replacement of LIBOR and SOFR, or uncertainty related to the potential for any of the foregoing, may adversely affect us.” Currency Exchange Rate Risk Manufacturing and royalty revenues that we receive on certain of our products and services are a percentage of the net sales made by our licensees, and a portion of these sales are made in countries outside the U.S. and are denominated in currencies in which the product is sold, which is predominantly the euro.
Currency Exchange Rate Risk Manufacturing and royalty revenues that we receive on certain of our products and services are a percentage of the net sales made by our licensees, and a portion of these sales are made in countries outside the U.S. and are denominated in currencies in which the product is sold, which is predominantly the euro.
We have the intent and ability to hold these securities until recovery, which may be at maturity. At December 31, 2022, our borrowings consisted of $294.8 million outstanding under the 2026 Term Loans. The 2026 Term Loans bear interest at the one-, three- or six-month LIBOR rate of our choosing, plus 2.5% with a 0.5% LIBOR floor.
We have the intent and ability to hold these securities until recovery, which may be at maturity. At December 31, 2023, our borrowings consisted of $291.8 million outstanding under the 2026 Term Loans. The 2026 Term Loans mature on March 12, 2026.
Removed
At December 31, 2021, a 10% increase in the three-month LIBOR rate, which was the LIBOR rate in use at the time, would not have increased the amount of interest we owed under this agreement as the LIBOR floor of 0.5% was higher than the then-current LIBOR rate of 0.21% plus 10%. In 2017, the U.K.
Added
In June 2023, we amended the 2026 Terms Loans to transition the interest rate available for borrowings thereunder from a LIBOR-based interest rate to an interest rate based on SOFR and to make other conforming and mechanical changes.
Removed
Financial Conduct Authority announced its intention to phase out LIBOR after 2023. Currently, it is anticipated that LIBOR will be completely phased out by June 30, 2023. On July 29, 2021, the ARRC, a steering committee comprised of large U.S. financial institutions, formally recommended SOFR as its preferred alternative replacement rate for USD LIBOR.
Added
The 2026 Term Loans bear interest at the one-, three- or six-month SOFR rate of our choosing plus a credit spread adjustment applicable to the interest period and an applicable margin of 2.50% with a floor of 0.5%. We are currently using the one-month SOFR rate, which was 5.47% at December 31, 2023.
Removed
The 2026 Term Loans contain customary ARRC hardwired benchmark replacement language to transition from LIBOR to SOFR. At this time, it is not possible to predict the effect that the anticipated discontinuance of LIBOR, or the establishment of alternative reference rates such as SOFR, will have on us or our borrowing costs.
Removed
SOFR is a relatively new reference rate and its composition and characteristics are not the same as LIBOR. Given SOFR’s very limited history and potential volatility as compared to other benchmark or market rates, the future performance of SOFR cannot be predicted based on historical performance.
Removed
The consequences of using SOFR could include an increase in the cost of our variable rate indebtedness. We are monitoring these transition efforts and, although the 2026 Term Loans contain provisions designed to accommodate an alternate reference rate, we may need to amend these and other contracts to accommodate any replacement rate.
Removed
The potential effect of any such event on our cost of capital cannot yet be determined, but we do not expect it to have a material impact on our consolidated financial condition, results of operations, or cash flows.
Removed
For example, if the USD weakens against a non ‑U.S. currency, then our revenues will increase given a constant amount of sales in such non ‑U.S. currency.
Removed
We incur significant operating costs in Ireland and face exposure to changes in the exchange ratio of the USD and the euro arising from expenses and payables at our Irish operations that are settled in euro.

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