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What changed in Alkermes plc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Alkermes plc.'s 2023 and 2024 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 2024 report.

+462 added−493 removedSource: 10-K (2025-02-12) vs 10-K (2024-02-21)

Top changes in Alkermes plc.'s 2024 10-K

462 paragraphs added · 493 removed · 374 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

278 edited+56 added−66 removed351 unchanged
Biggest changeFactors that may cause revenues from our products to grow at a slower than expected rate, decrease or cease all together, include, among others: • the perception of physicians and other members of the healthcare community as to our products’ safety and efficacy relative to that of competing products and the willingness or ability of physicians and other members of the healthcare community to prescribe, dispense and/or administer, and patients to use, our products; • unfavorable publicity concerning us, our licensees, our products, similar classes of drugs or the industry generally; • the cost-effectiveness of our products and reimbursement policies of government and third-party payers that may impact use of our products; • the cost and availability of raw materials necessary for the manufacture of our products; • the successful manufacture of our products on a timely and cost-effective basis; • the size of the markets for our products, and patient and physician satisfaction with our products; • significant changes in the competitive landscape for our products, including any approvals of generic versions of our products or other branded products that may compete with our products; • adverse event information relating to our products or to similar classes of drugs; • changes to the product labels of our products, or of products within the same drug classes, to add new significant warnings or restrictions on use; • our continued ability to engage third parties to manufacture, package and/or distribute our products on acceptable terms; • the unfavorable outcome of investigations, arbitrations, litigation or other legal proceedings, including government requests for information regarding VIVITROL, securities litigation, IP litigation, including so-called “Paragraph IV” litigation relating to products from which we receive revenue, litigation or other proceedings before the U.S.
Biggest changeFactors that may cause revenues from our products to grow at a slower than expected rate, decrease or cease all together, include, among others: • the perception of physicians and other members of the healthcare community as to our products’ safety and efficacy relative to that of current or future competing products and the willingness or ability of physicians and other members of the healthcare community to prescribe, dispense and/or administer, and patients to use, our products; • unfavorable publicity concerning us, our licensees, our products, similar classes of drugs or our industry generally; 30 • the cost-effectiveness of our products and reimbursement policies of government and third-party payers that may impact use of our products; • the cost and availability of raw materials necessary for the manufacture of our products; • the successful manufacture of our products on a timely and cost-effective basis; • the size of the markets for our products, and patient and physician satisfaction with our products; • significant changes in the competitive landscape for our products, including any approvals of generic versions of our products or other branded products that may compete with our products; • adverse event information relating to our products or to similar classes of drugs; • changes to the product labels of our products, or of products within the same drug classes, to add new significant warnings or restrictions on use; • our ability to engage third parties to manufacture, package and/or distribute our products on acceptable terms, or at all; • the unfavorable outcome of investigations, arbitrations, litigation or other legal proceedings, including government requests for information related to one or more of our products, securities litigation, IP litigation, including so-called “Paragraph IV” litigation relating to products from which we receive revenue, litigation or other proceedings before the USPTO Patent Trial and Appeal Board (the “PTAB”) or its equivalent in other jurisdictions outside of the U.S., and any other litigation or arbitration related to any of our products; • regulatory developments and actions related to the manufacture, commercialization or continued use of our products, including FDA actions such as the issuance of a REMS or warning letter, or conduct of an audit by the FDA or another regulatory authority in which a manufacturing or quality deficiency is identified; • the extent and effectiveness of the sales, marketing and distribution support for our products, including the size of our and our licensees’ sales forces and investments in marketing strategies, and our and our licensees’ decisions as to the timing and volume of product orders and shipments, the timing of product launches, and product pricing and discounting; • disputes with our licensees relating to the use of our technology in, and marketing and sale of, products from which we received, or currently receive, manufacturing and/or royalty revenue and the amounts and duration of payments to be made with respect to such products; • exchange rate valuations and fluctuations; • U.S. and global political and administrative changes, conflicts and/or instability, public health matters, economic conditions and/or any related changes in applicable laws and regulations or federal and state policy efforts, that may impact resources and markets for our products or the systems and environments in which we operate; and • any other material adverse developments with respect to the commercialization of our products.
Alcohol dependence; Opioid dependence U.S. 7 The following provides summary information regarding our key licensed product, and certain key third-party products using our proprietary technologies under license, that are commercialized by our licensees: Key Third-Party Products Using Our Proprietary Technologies Product Indication(s) Licensee Licensed Territory RISPERDAL CONSTA Schizophrenia; Bipolar I disorder Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica International, a division of Cilag International AG (“Janssen International”) Worldwide INVEGA SUSTENNA / XEPLION INVEGA SUSTENNA : Schizophrenia; Schizoaffective disorder XEPLION : Schizophrenia Janssen Pharmaceutica N.V.
Alcohol dependence; Opioid dependence U.S. 7 The following provides summary information regarding certain key third-party products using our proprietary technologies under license and our key licensed product, that are commercialized by our licensees: Key Third-Party Products Using Our Proprietary Technologies Product Indication(s) Licensee Licensed Territory RISPERDAL CONSTA Schizophrenia; Bipolar I disorder Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica International, a division of Cilag International AG (“Janssen International”) Worldwide INVEGA SUSTENNA / XEPLION INVEGA SUSTENNA : Schizophrenia; Schizoaffective disorder XEPLION : Schizophrenia Janssen Pharmaceutica N.V.
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.
In some cases, these competitors may be working to develop and market other products, systems, or other methods of preventing or reducing disease, or new small-molecule or other classes of drugs. The biopharmaceutical industry is characterized by intensive research, development and commercialization efforts and rapid and significant technological change.
Orphan drug designation does not shorten the duration of the regulatory review process or lower the approval standards, but can provide important benefits, including consultation with FDA.
Orphan drug designation does not shorten the duration of the regulatory review process or lower the approval standards, but can provide important benefits, including consultation with the FDA.
We face intense competition for employees, due, among many factors, to the geographic locations in which we operate and the competitive benefits and compensation practices in our industry, and in recent years, new competition as employees are increasingly able to work remotely.
We face intense competition for employees due to, among many factors, the geographic locations in which we operate and the competitive benefits and compensation practices in our industry, and in recent years, new competition as employees are increasingly able to work remotely.
Achieving compliance with these regulations substantially increases the time, difficulty and costs incurred in obtaining and maintaining approvals to market newly developed and existing products.
Achieving and maintaining compliance with these regulations substantially increases the time, difficulty and costs incurred in obtaining and maintaining approvals to market newly developed and existing products.
If, as a result of government requests, proceedings are initiated, including under the U.S. federal anti-kickback statute and False Claims Act and state False Claims Acts or other laws, and we are found to have violated one or more applicable laws, we may be subject to significant liability, including without limitation, civil fines, criminal fines and penalties, civil damages and exclusion from U.S. federal funded healthcare programs such as Medicare and Medicaid, any of which could materially affect our reputation, business, financial condition, cash flows and results of operations.
If, as a result of government requests, proceedings are initiated, including under the U.S. federal Anti-Kickback Statute or False Claims Act, or under state False Claims Acts or other laws, and we are found to have violated one or more applicable laws, we may be subject to significant liability, including without limitation, civil fines, criminal fines and penalties, civil damages and exclusion from U.S. federal funded healthcare programs such as Medicare and Medicaid, any of which could materially affect our reputation, business, financial condition, cash flows and results of operations.
The GDPR also imposes additional obligations on, and required contractual provisions to be included in, contracts between companies subject to the GDPR and their third-party processors that relate to the processing of personal data.
The GDPR also imposes additional obligations on, and required contractual provisions to be included in, contracts between companies subject to the GDPR and their third-party processors that relate to the processing of personal data.
Regulatory approval by the FDA or other regulatory agencies can be delayed, limited or not granted at all for many reasons, including: • a product may not demonstrate sufficient safety and efficacy or a sufficiently favorable benefit/risk profile for each target indication in accordance with applicable regulatory agencies’ standards; • data from preclinical testing and clinical trials may be interpreted by applicable regulatory agencies in different ways than we or our licensees interpret it; • regulatory agencies may not agree with our or our licensees’ regulatory approval strategies, plans for accelerated development timelines, components of our or our licensees’ filings such as clinical trial designs, conduct and methodologies, or the sufficiency of our or our licensees’ submitted data to meet their requirements for product approval; • regulatory agencies might not approve our or our licensees’ manufacturing processes or facilities, or those of the CROs and contract manufacturing organizations who conduct research or manufacturing work on our or our licensees’ behalf; • failure by our clinical investigational sites and the records kept at such sites, including any clinical trial data, to be in compliance with the FDA’s GCP, or EU legislation governing GCP, or to pass FDA, EMA or EU member state inspections of clinical trials; • regulatory agencies may change their requirements for approval or post-approval marketing; and 33 • adverse medical events during our clinical trials or during clinical trials of other product candidates in the same class could lead to requirements that trials be repeated or extended, or that a development program be terminated or placed on clinical hold, even if other studies or trials relating to the program are successful.
Regulatory approval by the FDA or other regulatory agencies can be delayed, limited or not granted at all for many reasons, including: • a product may not demonstrate sufficient safety and efficacy or a sufficiently favorable benefit/risk profile for each target indication in accordance with applicable regulatory agencies’ standards; • data from preclinical testing and clinical trials may be interpreted by applicable regulatory agencies in different ways than we or our licensees interpret it; 35 • regulatory agencies may not agree with our or our licensees’ regulatory approval strategies, plans for accelerated development timelines, components of our or our licensees’ filings such as clinical trial designs, conduct and methodologies, or the sufficiency of our or our licensees’ submitted data to meet their requirements for product approval; • regulatory agencies might not approve our or our licensees’ manufacturing processes or facilities, or those of the CROs and contract manufacturing organizations who conduct research or manufacturing work on our or our licensees’ behalf; • failure by our clinical investigational sites and the records kept at such sites, including any clinical trial data, to be in compliance with the FDA’s GCP, or EU legislation governing GCP, or to pass FDA, EMA or EU member state inspections of clinical trials; • regulatory agencies may change their requirements for approval or post-approval marketing; and • adverse medical events during our clinical trials or during clinical trials of other product candidates in the same class could lead to requirements that trials be repeated or extended, or that a development program be terminated or placed on clinical hold, even if other studies or trials relating to the program are successful.
The licenses granted to Janssen expire on a country-by-country basis upon the later of (i) the expiration of the last patent claiming the product in such country or (ii) 15 years after the date of the first commercial sale of the product in such country, provided that in no event will the license granted to Janssen expire later than the twentieth anniversary of the first commercial sale of the product in each such country, with the exception of Canada, France, Germany, Italy, Japan, Spain and the United Kingdom, in each case, where the fifteen-year minimum shall pertain regardless.
The licenses granted to Janssen expire on a country-by-country basis upon the later of (i) the expiration of the last patent claiming the product in such country or (ii) 15 years after the date of the first commercial sale of the product in such country, provided that in no event will the license granted to Janssen expire later than the twentieth anniversary of the first commercial sale of the product in each such country, with the exception of Canada, France, Germany, Italy, Japan, Spain and the United Kingdom, in each case, where the 15-year minimum shall pertain regardless.
For information about risks relating to the manufacture of our marketed products and product candidates, see “Item 1A—Risk Factors” in this Annual Report and specifically those sections entitled “We rely on third parties to provide services in connection with the manufacture and distribution of the products we manufacture” and “We are subject to risks related to the manufacture of our products.” Marketed Products We manufacture ARISTADA, ARISTADA INITIO, LYBALVI, VIVITROL and microspheres for RISPERDAL CONSTA at our Wilmington, Ohio facility.
For information about risks relating to the manufacture of our marketed products and product candidates, see “Item 1A—Risk Factors” in this Annual Report and specifically those sections entitled “We rely on third parties to provide goods and services in connection with the manufacture and distribution of the products we manufacture” and “We are subject to risks related to the manufacture of our products.” Marketed Products We manufacture ARISTADA, ARISTADA INITIO, LYBALVI, VIVITROL and microspheres for RISPERDAL CONSTA at our Wilmington, Ohio facility.
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, 26 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, 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.
FDA grants orphan drug designation to drugs or biologics intended to treat a rare disease or condition, which is one that affects fewer than 200,000 individuals in the U.S., or more than 200,000 individuals, but for which there is no reasonable expectation that the cost of developing the product and making it available in the U.S. for the disease or condition will be recovered from U.S. sales of the product.
FDA grants orphan drug designation to drugs intended to treat a rare disease or condition, which is one that affects fewer than 200,000 individuals in the U.S., or more than 200,000 individuals, but for which there is no reasonable expectation that the cost of developing the product and making it available in the U.S. for the disease or condition will be recovered from U.S. sales of the product.
Recent budgetary pressures in many EU countries are causing governments to consider or implement various cost-containment measures, such as price freezes, increased price cuts and rebates, and expanded generic substitution and patient cost-sharing. If budget pressures continue, governments may implement additional cost-containment measures. Other Regulations Foreign Corrupt Practices Act : We are subject to the U.S.
Recent budgetary pressures in many EU countries are causing governments to consider or implement various cost-containment measures, such as price freezes, increased price cuts and rebates, and expanded generic substitution and patient cost-sharing. If budget pressures continue, governments may implement additional cost-containment measures. 26 Other Regulations Foreign Corrupt Practices Act : We are subject to the U.S.
If we or our agents fail to comply with any of those laws, regulations or interpretations, a range of actions could result, including the suspension or termination of clinical trials, the failure to approve a product, restrictions on sales of our products or our manufacturing processes, withdrawal of our products from the market, significant fines, exclusion from government healthcare programs or other sanctions or litigation.
If we or our agents fail to comply with any of those laws or regulations, a range of actions could result, including the suspension or termination of clinical trials, the failure to approve a product, restrictions on sales of our products or our manufacturing processes, withdrawal of our products from the market, significant fines, exclusion from government healthcare programs or other sanctions or litigation.
Other pharmaceutical companies are developing products for the treatment of bipolar disorder that, if approved by the FDA, would compete with LYBALVI. 16 In the treatment of alcohol dependence, VIVITROL competes with generic acamprosate calcium (also known as CAMPRAL) and generic disulfiram (also known as ANTABUSE) as well as currently marketed drugs, including generic drugs, also formulated from naltrexone.
Other pharmaceutical companies are developing products for the treatment of bipolar I disorder that, if approved by the FDA, would compete with LYBALVI. 16 In the treatment of alcohol dependence, VIVITROL competes with generic acamprosate calcium (also known as CAMPRAL) and generic disulfiram (also known as ANTABUSE) as well as currently marketed drugs, including generic drugs, also formulated from naltrexone.
Once approval from a regulatory agency is obtained, if a company makes a material change in manufacturing equipment, location or process, additional regulatory review and approval may be required. Companies also must adhere to cGMP and product-specific regulations enforced by the FDA and other regulatory agencies both in the manufacture of clinical product and following product approval.
Once approval from a regulatory agency is obtained, if a company makes a material change in manufacturing equipment, location or process, 22 additional regulatory review and approval may be required. Companies also must adhere to cGMP and product-specific regulations enforced by the FDA and other regulatory agencies both in the manufacture of clinical product and following product approval.
We rely on these licensees in various respects, including commercializing such products, conducting development activities with respect to new formulations or new indications for such products, and/or managing the regulatory approval process for such products. We earn significant royalty revenue from sales by our licensees of our licensed products and third-party products incorporating our proprietary technologies.
We rely on these licensees in various respects, including commercializing such products, conducting development activities with respect to new formulations or new indications for such products, and/or managing the regulatory approval process for such products. 33 We earn significant royalty revenue from sales by our licensees of our licensed products and third-party products incorporating our proprietary technologies.
Further, certain of our license agreements may be terminated, with or without cause, or assigned in connection with a change in control or other event, and we cannot guarantee that any of these relationships will continue or that our licensees will be able or willing to continue to perform their obligations, including development, commercialization or payment obligations, under such agreements.
Further, certain of our license agreements may be terminated, with or without cause, or assigned in connection with a change in control or other event, and we cannot guarantee that any of these licensing relationships will continue or that our licensees will be able or willing to continue to perform their obligations, including development, commercialization or payment obligations, under such agreements.
For example, the FDA may require, as a condition of approval, restricted distribution and use, enhanced labeling, special packaging or labeling, expedited reporting of certain adverse events, pre-approval of promotional materials or restrictions on direct-to-consumer advertising, any of which could negatively impact the commercial success of a drug.
For example, the FDA may require, as a condition of approval, restricted distribution and use, enhanced labeling, special packaging or 21 labeling, expedited reporting of certain adverse events, pre-approval of promotional materials or restrictions on direct-to-consumer advertising, any of which could negatively impact the commercial success of a drug.
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.
For a discussion of legal proceedings related to patents covering 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.
We routinely monitor our pay programs in order to respond to market trends and maintain equity within our workforce. We offer healthcare and retirement savings plan benefits, paid time off, tuition reimbursement and other benefits designed to support healthy lifestyle choices, financial well-being and work-life balance.
We routinely monitor our pay programs in order to respond to market trends and maintain equity within our workforce. We offer our employees healthcare and retirement savings plan benefits, paid time off, tuition reimbursement and other benefits designed to support healthy lifestyle choices, financial well-being and work-life balance.
The loss of key personnel due to any of these factors or our inability to hire and retain personnel who have technical, scientific, manufacturing, management, regulatory, compliance or commercial backgrounds could materially adversely impact our business, including the achievement of our manufacturing, research and development, commercial, financial and other operational and strategic business objectives.
The loss of key personnel due to any of these factors or our inability to hire and retain personnel who have technical, scientific, manufacturing, management, regulatory, legal, compliance or commercial backgrounds could materially adversely impact our business, including the achievement of our manufacturing, research and development, commercial, financial and other operational and strategic business objectives.
Their failure to secure, maintain, enforce and defend this IP could materially and adversely affect our business, financial condition, cash flows, and results of operations. 37 We also rely on trade secrets, know-how and inventions, which are not protected by patents, to maintain our competitive position.
Their failure to secure, maintain, enforce and defend this IP could materially and adversely affect our business, financial condition, cash flows, and results of operations. We also rely on trade secrets, know-how and inventions, which are not protected by patents, to maintain our competitive position.
Third-party payers are increasingly challenging the prices charged for medical products and examining the medical necessity and cost-effectiveness of medical products, in addition to their safety and efficacy. Medicaid is a joint federal and state program that is administered by the states for low-income and disabled beneficiaries.
Third-party payers are increasingly challenging the prices charged for medical products and examining the medical necessity and cost-effectiveness of medical products, in addition to their safety and efficacy. 24 Medicaid is a joint federal and state program that is administered by the states for low-income and disabled beneficiaries.
Federal law also requires that any company that participates in the Medicaid Drug Rebate Program also participate in the Public Health Services’ (including the Indian Health Services, “PHS”) pharmaceutical pricing program (the “340B program”), in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B.
Federal law also requires that any company that participates in the Medicaid Drug Rebate Program (“MDRP”) also participate in the Public Health Services’ (including the Indian Health Services, “PHS”) pharmaceutical pricing program (the “340B program”), in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B.
Our manufacturing facilities also require specialized personnel and are expensive to operate and maintain. Any interruption in manufacturing, delay in a regulatory approval or commercial launch, or recall or suspension of sales of products manufactured in our facilities, may cause operating losses as we continue to operate these facilities and retain the required specialized personnel.
Manufacturing facilities also require specialized personnel and are expensive to operate and maintain. Any interruption in manufacturing, delay in a regulatory approval or commercial launch, or recall or suspension of sales of products manufactured in our facilities, may cause operating losses as we continue to operate our facilities and retain the required specialized personnel.
If we are unable to obtain renewal of share issuance authorities from our shareholders, or are otherwise limited by the terms of new share issuance authorities approved by our shareholders, our ability to use our authorized but unissued share capital to effect or to fund acquisition or other transaction opportunities, or to otherwise raise capital, could be adversely affected.
If we are unable to obtain renewal of share issuance authorities from our shareholders, or are otherwise 46 limited by the terms of new share issuance authorities approved by our shareholders, our ability to use our authorized but unissued share capital to effect or to fund acquisition or other transaction opportunities, or to otherwise raise capital, could be adversely affected.
For drugs that, if approved, would represent a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions when compared to standard applications, the FDA may assign “priority review” designation and review the application within six months.
For drugs that, if approved, would represent a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions when compared to standard applications, the FDA may assign “priority review” designation and review the application within six months of filing.
The technology uses proprietary linker-tail chemistry to create new molecular entities derived from known agents. 13 NanoCrystal Technology Our NanoCrystal technology is applicable to poorly water-soluble compounds and involves formulating and stabilizing drugs into particles that are nanometers in size.
The technology uses proprietary linker-tail chemistry to create new molecular entities derived from known agents. NanoCrystal Technology Our NanoCrystal technology is applicable to poorly water-soluble compounds and involves formulating and stabilizing drugs into particles that are nanometers in size.
Though we do not have much control over many aspects of such third-party activities, we are responsible for ensuring that each 32 of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial.
Though we do not have much control over many aspects of such third-party activities, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial.
We maintain extensive environmental, health, safety and security policies, adhere to all health and safety standards set by regulators in the locations in which we operate and routinely assess workplace risks, conduct employee trainings and monitor our sites to reduce the risk of workplace accidents.
We maintain extensive corporate environmental, health, safety and security policies, adhere to all health and safety standards set by regulators in the locations in which we operate, and routinely assess workplace risks, conduct employee trainings and monitor our sites to reduce the risk of workplace accidents.
Our ability to compete and succeed in the highly competitive biopharmaceutical industry and in the disease states in which we market and sell products depends largely upon our ability to attract, recognize and retain highly skilled technical, scientific, manufacturing, management, regulatory, compliance and selling and marketing personnel.
Our ability to compete and succeed in the highly competitive biopharmaceutical industry and in the disease states in which we market and sell products depends largely upon our ability to attract, recognize and retain highly skilled technical, scientific, manufacturing, management, regulatory, legal, compliance and selling and marketing personnel.
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.
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 face competition in the biopharmaceutical industry. We face intense competition in the development, manufacture, marketing and commercialization of our products from many and varied sources, such as research institutions and other biopharmaceutical companies, including companies with similar technologies or medicines, and manufacturers of generic drugs.
We face intense competition in the development, manufacture, marketing and commercialization of our products from many and varied sources, such as research institutions and other biopharmaceutical companies, including companies with similar technologies or medicines, and manufacturers of generic drugs.
In addition, there are many companies developing products for use in similar indications or with similar technologies to ours with whom we and our licensees compete, many of whom are larger and have significantly greater financial and other resources than we do.
In addition, there are many companies developing products for use in similar indications or with similar technologies to ours with whom we and our licensees compete, many of whom are larger and have significantly greater financial, operational and other resources than we do.
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.
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.
If a product is approved for its orphan designated use, it may be 23 entitled to Orphan Drug Exclusivity (“ODE”), which blocks FDA from approving for seven years any other application for a product that is the same drug for the same indication.
If a product is approved for its orphan designated use, it may be entitled to Orphan Drug Exclusivity (“ODE”), which blocks the FDA from approving for seven years any other application for a product that is the same drug for the same indication.
There are no further milestones to be earned under this agreement. The agreement also provides for royalty payments, which consist of a patent royalty and a know-how royalty, both of which are determined on a country-by-country basis.
There are no further milestones to be earned under this agreement. The agreement also provides for royalty 11 payments, which consist of a patent royalty and a know-how royalty, both of which are determined on a country-by-country basis.
Good Manufacturing Practices The FDA, the EMA, the competent authorities of the EU member states and other regulatory agencies regulate and inspect equipment, facilities and processes used in the manufacturing of pharmaceutical and biologic products prior to approving a product.
Good Manufacturing Practices The FDA, the EMA, the competent authorities of the EU member states and other regulatory agencies regulate and inspect equipment, facilities and processes used in the manufacturing of pharmaceutical products prior to approving a product.
Our trademarks, including VIVITROL, ARISTADA, ARISTADA INITIO and LYBALVI, are important to us and are generally covered by trademark applications or registrations with the U.S. Patent and Trademark Office and the patent or trademark offices of other countries.
Our trademarks, including VIVITROL, ARISTADA, ARISTADA INITIO and LYBALVI, are important to us and are generally covered by trademark applications or registrations with the U.S. Patent and Trademark Office (the “USPTO”) and the patent or trademark offices of other countries.
We ask our employees to help us promote and sustain workplace environments that are safe and protective of the health and well-being of our people and in compliance with applicable laws, rules and regulations.
We ask our employees to help us promote and sustain workplace environments that are safe, productive and protective of the health and well-being of our people and in compliance with applicable laws, rules and regulations.
If we or our third-party providers fail to meet the stringent requirements of governmental regulation in the manufacture of our products, we could incur substantial remedial costs and a reduction in sales and/or revenues.
If we or our third-party providers fail to meet the stringent requirements of governmental regulation in the manufacture of our products, we could incur substantial remedial costs and experience a reduction in sales and/or revenues.
A number of products have shown promising results in early clinical trials but subsequently failed to establish sufficient safety and efficacy data in later clinical trials to obtain necessary regulatory approvals.
A number of products have shown promising results in early clinical trials but subsequently failed to establish sufficient safety and/or efficacy data in later clinical trials to obtain necessary regulatory approvals.
Even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition, or may impose additional approval requirements as a result of such petition.
Even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition, or may impose additional approval or post-approval requirements as a result of such petition.
Our licensed products and products using our proprietary technologies also use trademarks that are owned by our licensees, such as the trademarks for INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA, INVEGA HAFYERA/BYANNLI and RISPERDAL CONSTA, which are registered trademarks of Johnson & Johnson or its affiliated companies, VUMERITY, which is a registered trademark of Biogen (and used by us under license) and FAMPYRA, which is a registered trademark of Acorda.
Our licensed products and products using our proprietary technologies also use trademarks that are owned by our licensees, such as the trademarks for INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA, INVEGA HAFYERA/BYANNLI and RISPERDAL CONSTA, which are registered trademarks of Johnson & Johnson or its affiliated companies and VUMERITY, which is a registered trademark of Biogen (and used by us under license).
Our activities, and the activities of our licensees and third-party providers, are subject to extensive government regulation. Government regulation by various national, state and local agencies includes detailed inspections of, and controls over, research and laboratory procedures, clinical investigations, product approvals and manufacturing, marketing and promotion, adverse event reporting, sampling, distribution, recordkeeping, storage, and disposal practices.
Our activities, and the activities of our licensees and third-party providers, are subject to extensive government regulation. Government regulation by various national, state and local agencies includes detailed inspections of, and controls over, research and laboratory procedures, clinical investigations, product approvals and manufacturing, marketing and promotion, adverse event reporting, sampling, distribution, recordkeeping, storage, and disposal practices, among others.
If we are unable to compete successfully in this highly competitive biopharmaceutical industry, our business, financial condition, cash flows and results of operations could be materially adversely affected. Our revenues from sales of our products may decrease or grow at a slower than expected rate due to many factors.
If we are unable to compete successfully in the highly competitive biopharmaceutical industry, our business, financial condition, cash flows and results of operations could be materially adversely affected. Our revenues from sales of our products may decrease or grow at a slower than expected rate due to many factors.
This could increase our costs, cause us to lose revenue or market share and damage our reputation with our collaboration partners or in the market generally.
This interruption could increase our costs, cause us to lose revenue or market share and damage our reputation with our collaboration partners or in the market generally.
ICS, a division of AmerisourceBergen, provides warehousing, shipping and administrative services for VIVITROL, ARISTADA, ARISTADA INITIO and LYBALVI. 15 Under our license agreements with Janssen, Biogen and other licensees and sublicensees, the licensees and sublicensees are typically responsible for the commercialization of any products developed under their respective agreements if and when regulatory approval is obtained.
ICS, a division of Cencora, provides warehousing, shipping and administrative services for VIVITROL, ARISTADA, ARISTADA INITIO and LYBALVI. 15 Under our license agreements with Janssen, Biogen and other licensees and sublicensees, the licensees and sublicensees are typically responsible for the commercialization of any products developed under their respective agreements if and when regulatory approval is obtained.
For example, Teva entities filed an ANDA seeking approval to engage in the commercial manufacture, use or sale of a generic version of VIVITROL and alleging that one of our Orange-Book patents related to VIVITROL is invalid, unenforceable and/or will not be infringed by Teva’s proposed product.
For example, Teva entities filed an ANDA seeking approval to engage in the commercial manufacture, use or sale of a generic version of VIVITROL and alleged that one of our Orange-Book patents related to VIVITROL is invalid, unenforceable and/or will not be infringed by Teva’s proposed product.
Unless the price of our ordinary shares increases, we will incur a deferred tax expense as our U.S.-based employees exercise or forfeit their stock options and their restricted stock unit awards vest. This could materially increase our tax expense and may materially adversely affect our financial condition and results of operations.
Unless the price of our ordinary shares increases, we will incur a deferred tax expense as our U.S.-based employees exercise or forfeit their stock options and their restricted stock unit awards vest. This could significantly increase our tax expense and may adversely affect our financial condition and results of operations.
Risk Factors You should consider carefully the risks described below in addition to the financial and other information contained in this Annual Report, including our financial statements and related notes hereto and the matters addressed under the caption “Cautionary Note Concerning Forward-Looking Statements,” and in our other public filings with the SEC.
Risk Factors You should consider carefully the risks described below in addition to the financial and other information contained in this Annual Report, including our financial statements and related notes thereto and the matters addressed under the caption “Cautionary Note Concerning Forward-Looking Statements,” and in our other public filings with the SEC.
If any of our products or components of our products in the U.S. are scheduled by the DEA as controlled substances, we would also be subject to DEA regulations. We and our third-party providers are subject to unannounced inspections by the FDA and other agencies to confirm compliance with all applicable laws.
Additionally, if any of our products or components of our products in the U.S. are scheduled by the DEA as controlled substances, we would also be subject to DEA regulations. We and our third-party providers are subject to unannounced inspections by the FDA and other governmental agencies to confirm compliance with all applicable laws.
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 be subject to investigations, litigation, costs, penalties and business losses,” “Revenues generated by sales of our products depend, in part, 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.
Our manufacturing and development capabilities include formulation through process development, scale-up and full-scale commercial manufacturing and specialized capabilities for the development and manufacturing of controlled substances.
Our manufacturing and development capabilities include formulation through process development, scale-up and full-scale commercial manufacturing and specialized capabilities for the development and manufacture of controlled substances.
We do not believe that the disposition would amount to a significant change or a discontinuance of our existing trade; however, the Irish Tax Authority could assert a contrary position, in which case we could become involved in tax controversy with the Irish Tax Authority regarding possible additional tax liabilities.
We do not believe that the disposition of the Athlone Facility would amount to a significant change or a discontinuance of our existing trade; however, the Irish Tax Authority could assert a contrary position, in which case we could become involved in tax controversy with the Irish Tax Authority regarding possible additional tax liabilities.
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.
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 12,180,164 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 11,969,469 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.
Unexpected refunds to the government, and responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 41 Our business involves environmental, health and safety risks.
Unexpected refunds to the government, and responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 42 Our business involves environmental, health and safety risks.
As such, we expect a material decrease in cash flows provided from operations and a material increase in our net deferred tax assets over the next number of years, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
As such, we expect a material decrease in cash flows provided from operations and a material increase in our net U.S. deferred tax assets over the next number of years, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
In order to achieve our business strategy, we regularly review potential transactions related to technologies, products or product rights, and businesses that are complementary to our business, including mergers and acquisitions, licenses and collaborations, and development and supply, commercialization or co-promotion arrangements, among others.
In order to achieve our business strategy, we regularly review potential transactions related to technologies, products or product rights or other assets, and businesses that are complementary to our business, including mergers and acquisitions, licenses and collaborations, and development and supply, commercialization or co-promotion arrangements, among others.
VIVITROL also competes with methadone, oral naltrexone and generic versions of SUBUTEX and SUBOXONE sublingual tablets. Other pharmaceutical companies are developing products that have shown promise in treating opioid dependence that, if approved by the FDA, would compete with VIVITROL.
VIVITROL also competes with methadone, oral naltrexone and generic versions of SUBUTEX and SUBOXONE sublingual tablets. Other pharmaceutical companies are developing products that have shown potential in treating opioid dependence that, if approved by the FDA, would compete with VIVITROL.
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.
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 a manufacturing facility in Wilmington, Ohio.
Regulatory and legislative changes, and judicial rulings relating to the Medicaid Drug Rebate Program and related policies (including coverage expansion), have increased and will continue to increase our costs and the complexity of compliance, have been and will continue to be time-consuming to implement, and could have a material adverse effect on our results of operations, particularly if CMS or another agency challenges the approach we take in our implementation.
Regulatory and legislative changes, and judicial rulings relating to the Medicaid Drug Rebate Program and related policies, have increased and will continue to increase our costs and the complexity of compliance, have been and will continue to be time-consuming to implement, and could have a material adverse effect on our results of operations, particularly if CMS or another agency challenges the approach we take in our implementation.
Multiple sclerosis, or MS, is an unpredictable, often disabling disease of the central nervous system (“CNS”), which interrupts the flow of information within the brain, and between the brain and body. MS symptoms can vary over time and from person to person.
Multiple sclerosis (“MS”) is an unpredictable, often disabling disease of the central nervous system (“CNS”), which interrupts the flow of information within the brain, and between the brain and body. MS symptoms can vary over time and from person to person.
Any delay, interruption or other issues that arise in the acquisition of API, raw materials, or components, or in the manufacture, fill-finish, packaging, or storage of our marketed or development products, including as a result of a failure of our facilities or the facilities or operations of third parties to pass any regulatory agency inspection, could significantly impair our ability to sell our products or advance our development efforts, as the case may be.
Any delay, interruption or other issues that arise in the acquisition of API, raw materials, or components, or in the manufacture, fill-finish, packaging, or storage of our marketed or development products, including as a result of a failure of our facilities or the facilities or operations of third parties to pass any regulatory agency inspection, could significantly impair our ability to manufacture and market our products or advance our development efforts, as the case may be.
Cyber-attacks have increased in frequency, persistence, sophistication and intensity, often conducted by sophisticated and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage, hactivists and organized crime).
Cyber-attacks have increased in frequency, persistence, sophistication and intensity, often conducted by sophisticated and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage, hacktivists and organized crime).
Any significant negative developments relating to our relationships with our licensees or our collaborative arrangements could have a material adverse effect on our business, financial condition, cash flows and results of operations and on the market price of our ordinary shares. For example, in November 2021 we received notice of partial termination of an exclusive license agreement with Janssen.
Any significant negative developments relating to our relationships with our licensees could have a material adverse effect on our business, financial condition, cash flows and results of operations and on the market price of our ordinary shares. For example, in November 2021 we received notice of partial termination of an exclusive license agreement with Janssen.
We participate in the Medicaid Drug Rebate Program, the 340B program, the U.S. Department of Veterans Affairs, FSS pricing program, and the Tricare program, and have obligations to report the average sales price for certain of our drugs to the Medicare program.
We participate in the Medicaid Drug Rebate Program, the 340B program, the U.S. Department of Veterans Affairs’ FSS pricing program, and the Tricare program, and have obligations to report the average sales price for certain of our drugs to the Medicare program.
There is a risk that the use of social media by us or our employees to communicate about our products or business may cause us to be found in violation of applicable requirements and could result in regulatory actions or legal claims against us related to off-label marketing or other prohibited activities.
There is a risk that the use of social media and AI by us or our employees to communicate about our products or business or for other business purposes may cause us to be found in violation of applicable requirements and could result in regulatory actions or legal claims against us related to off-label marketing or other prohibited activities.
This law and any further changes in laws, regulations or decisions or in the interpretation of existing laws, regulations and decisions could have a material adverse effect on our business, financial condition, cash flows and results of operations.
Any further changes in laws, regulations or decisions or in the interpretation of existing laws, regulations and decisions, could have a material adverse effect on our business, financial condition, cash flows and results of operations.
The disposition of the Athlone Facility may result in (i) a significant change to the existing trade such that the same trade is no longer continued, and (ii) a complete discontinuance of the existing trade and the commencement of a new trade.
The disposition of the Athlone Facility may be deemed to result in (i) a significant change to the existing trade such that the same trade is no longer continued, and (ii) a complete discontinuance of the existing trade and the commencement of a new trade.
If required, a REMS may include various elements, such as publication of a medication guide, a patient package insert, a communication plan to educate health care providers of the drug’s risks, limitations on who may prescribe or dispense the drug, or other measures that the FDA deems necessary to support the safe use of the drug.
If required, a REMS may include various elements, such as publication of a medication guide, a patient package insert, a communication plan to educate healthcare providers of the drug’s risks, limitations on who may prescribe or dispense the drug, or other measures that the FDA deems necessary to support the safe use of the drug.
Timelines for the initiation, conduct and completion of clinical trials may be delayed by many factors, including: • issues with the opening, operation or inspection of a new or ongoing clinical trial site, including those located in or near areas of conflict or areas impacted by political, environmental, public health or economic events; • delays or failures of third-party CROs and other third-party service providers and clinical investigators to manage and conduct the trials, perform oversight of the trials, including data audit and verification procedures, or to meet expected timelines; • an inability to recruit and enroll clinical trial participants at the expected rate or at all, or to adequately follow participants following treatment; • safety or tolerability issues; • an inability to manufacture or obtain sufficient quantities of materials used for clinical trials; and • unforeseen governmental or regulatory issues or concerns, including those of the FDA and other regulatory agencies, that may impact the strategies for, and design, timelines or feasibility of, our clinical development programs.
Timelines for the initiation, conduct and completion of clinical trials may be delayed by many factors, including: • issues with the opening, operation or inspection of a new or ongoing clinical trial site, including those located in or near geographic areas of conflict or areas impacted by political, environmental, public health or economic events; • delays or failures of third-party CROs and other third-party service providers and clinical investigators to manage and conduct the trials, perform oversight of the trials, including data audit and verification procedures, or to meet expected timelines; • an inability to recruit, enroll and retain clinical trial participants at the expected rate or at all, or to adequately follow participants after treatment; • safety or tolerability issues that may arise during clinical trials; • an inability to manufacture or obtain sufficient quantities of materials used for clinical trials; and 34 • unforeseen governmental or regulatory issues or concerns, including those of the FDA and other regulatory agencies, that may impact the strategies for, and design, timelines or feasibility of, our clinical development programs.
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.
Adherence to medication is particularly challenging with these disease states. * 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.
The market price of our ordinary shares is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and industry factors, our results of operations, our ability to maintain and increase sales of our products, the success of our key development programs, our ability to achieve and sustain profitability, the outcomes of business development transactions in which we may participate, our capital allocation decisions, and other factors, including the risk factors described in this Annual Report.
The market price of our ordinary shares is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and industry factors, our results of operations, our ability to maintain and increase sales of our products, the success of our key development programs and expansion of our development pipeline and commercial portfolio, our ability to achieve and sustain profitability, the outcomes of business development transactions in which we may participate, our capital allocation decisions, and other factors, including the risk factors described in this Annual Report.
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.
Product Covered Expiration Date 7,262,298 LYBALVI 2025 8,680,112 LYBALVI 2030 9,119,848 LYBALVI 2031 10,005,790 LYBALVI 2031 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 12,194,035 LYBALVI 2031 8,778,960 LYBALVI 2032 11,707,466 LYBALVI 2041 11,951,111 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.
In addition, there are many competing technologies to our OCR technology, some of which are owned by large pharmaceutical companies with drug delivery divisions and other, smaller drug-delivery-specific companies.
In addition, there are many competing technologies to our OCR technology, some of which are owned by large pharmaceutical companies with drug delivery divisions or other, smaller drug-delivery-specific companies.
Pricing and reimbursement for our products may be adversely affected by a number of factors, including: changes in, and implementation of, federal or state government regulations or private third-party payors’ reimbursement policies; pressure by employers on private health insurance plans to reduce costs; and consolidation and increasing assertiveness of payors seeking price discounts or rebates in connection with the placement of our products on their formularies and, in some cases, the imposition of restrictions on access or coverage of particular drugs or pricing determined based on perceived value.
Pricing and reimbursement for our products may be adversely affected by a number of factors, including: changes in, and implementation of, federal or state government regulations or private third-party payors’ reimbursement policies; pressure by employers on private health insurance plans to reduce costs; and consolidation and increasing assertiveness of payors and pharmacy benefit managers (“PBMs”) seeking price discounts or 31 rebates in connection with the placement of our products on their formularies and, in some cases, the imposition of restrictions on access or coverage of particular drugs or pricing determined based on perceived value.
Although we make reasonable efforts to protect our IP rights and to ensure that our proprietary technology does not infringe the rights of third parties, we cannot ascertain the existence of all potentially conflicting IP claims. Therefore, there is a risk that third parties may make claims of infringement against our products or technologies.
Although we make reasonable efforts to protect our IP rights and to ensure that our proprietary products and technologies do not infringe the IP rights of third parties, we cannot ascertain the existence of all potentially conflicting IP claims. Therefore, there is a risk that third parties may make claims of infringement against our products or technologies.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 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.
Biggest changeItem 2. P roperties We lease an approximately 14,600 square foot corporate office space in Dublin, Ireland, which is our corporate headquarters. This lease expires in 2027 and does not include an additional tenant option to further extend the term. We lease an approximately 231,000 square foot corporate office and R&D center in Waltham, Massachusetts.
We 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.
We serve as the guarantor of a lease assigned to Mural Oncology, Inc., a subsidiary of Mural Oncology plc, 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.
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 lease an approximately 7,000 square foot 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 an approximately 375,000 square foot manufacturing facility in Wilmington, Ohio.
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.
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.
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.
We believe that our current facilities are suitable and adequate for our current and near-term preclinical, clinical and commercial requirements.

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 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
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, in relevant part, 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 changeIn 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.
Biggest changeIn 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.
Similarly, a shareholder who holds ordinary shares through DTC may transfer those ordinary shares out of DTC without giving rise to Irish stamp duty provided that the shareholder would be the beneficial owner of the ordinary shares, and in exactly the same proportions, as a result of the transfer, and at the time of the transfer out of DTC there is no sale of those ordinary shares to a third party being contemplated by the shareholder.
Similarly, a shareholder who 54 holds ordinary shares through DTC may transfer those ordinary shares out of DTC without giving rise to Irish stamp duty provided that the shareholder would be the beneficial owner of the ordinary shares, and in exactly the same proportions, as a result of the transfer, and at the time of the transfer out of DTC there is no sale of those ordinary shares to a third party being contemplated by the shareholder.
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.
The timing and amount of any share repurchases under the 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.
Legislative, administrative or judicial changes may modify the tax consequences described below. The statements do not constitute tax advice and are intended only as a general guide.
Legislative, administrative or judicial changes may modify the tax consequences described below. 53 The statements do not constitute tax advice and are intended only as a general guide.
The 2024 Repurchase Program has no set expiration date and may be suspended or discontinued at any time.
The Repurchase Program has no set expiration date and may be suspended or discontinued at any time.
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.
The comparison assumes $100 was invested on December 31, 2019 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.
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”).
Repurchase of equity securities In February 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 “Repurchase Program”).
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.
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 6, 2025, and on discussions and correspondence with the Irish Revenue Commissioners.
Dividends on our ordinary shares that are owned by residents of the U.S. and held directly (outside of DTC) will not be subject to DWT provided that the shareholder has completed the appropriate Irish DWT form and this form remains valid.
Dividends on our ordinary shares that are owned by residents of the U.S. and held directly (outside of DTC) will not be subject to DWT provided that the shareholder that is the beneficial owner of such ordinary shares has completed the appropriate Irish DWT form and this form remains valid.
However, a shareholder who is neither resident nor ordinarily resident in Ireland and who is entitled to an exemption from DWT, generally has no liability for Irish income tax or to the universal social charge on a dividend from us, unless he or she holds his or her ordinary shares through a branch or agency in Ireland which carries out a trade on his or her behalf.
However, a shareholder who is neither resident nor ordinarily resident in Ireland and who is entitled to an exemption from DWT, generally has no liability for Irish income tax or to the universal social charge on a dividend from us, unless they holds their ordinary shares through a branch or agency in Ireland which carries out a trade on their behalf.
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.
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 87 shareholders of record of our ordinary shares on February 7, 2025.
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.
The following graph compares the cumulative total shareholder return on our ordinary shares from December 31, 2019 through December 31, 2024 with the cumulative returns of the Nasdaq Composite Total Return Index and the Nasdaq Biotechnology Index.
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.
Any future determination as to the payment of dividends, if at all, 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 and management deem relevant.
Such 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.
Such 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.
However, a transfer of our ordinary shares from a seller who holds shares through DTC to a buyer who holds the acquired shares through DTC should not be subject to Irish stamp duty.
However, a transfer of our ordinary shares effected by means of book-entry interests in DTC will not be subject to Irish stamp duty.
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
Year Ended December 31, 2019 2020 2021 2022 2023 2024 Alkermes 100 98 114 128 136 141 Nasdaq Composite Total Return 100 145 177 119 173 224 Nasdaq Biotechnology Index 100 126 126 114 119 118 Item 6. [Reserved] Not applicable. 55
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.
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. We anticipate that we will generally retain a significant portion of our earnings to support our operations and our proprietary drug development programs.
Removed
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
During the year ended December 31, 2024, we repurchased approximately 7.9 million of our ordinary shares under the Repurchase Program at an average price of $25.33, resulting in a total cost, exclusive of any fees, commissions or other expenses related to such repurchase, of $200.0 million. All ordinary shares repurchased were returned to treasury.
Removed
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.
Added
As of December 31, 2024, the remaining amount authorized under the Repurchase Program was $200.0 million, exclusive of any fees, commissions or other related expenses.
Removed
Income tax on dividends Irish income tax, if any, may arise in respect of dividends paid by us.
Added
The following table sets forth our share repurchase activity for the three months ended December 31, 2024: Period Total Number of Ordinary Shares Purchased (a) (1) Average Price Paid per Ordinary Share (b) Total Number of Ordinary Shares Purchased as Part of Publicly Announced Program (c) (2) Approximate Dollar Value (in millions) of Ordinary Shares that May Yet Be Purchased Under the Program (d) (2) October 1, 2024 – October 31, 2024 4,686 28.74 — $ 200.0 November 1, 2024 – November 30, 2024 3,727 27.41 — $ 200.0 December 1, 2024 – December 31, 2024 3,413 31.43 — $ 200.0 Totals 11,826 $ 29.10 — (1) Consists of ordinary shares acquired during the three months ended December 31, 2024 to satisfy tax withholding obligations related to the vesting of equity awards.
Added
(2) In February 2024, we announced approval by our board of directors of the Repurchase Program, which authorized the repurchase of our ordinary shares 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.
Added
The specific timing and amounts of repurchases under the Repurchase Program will depend on a variety of factors, including but not limited to ongoing assessments of our needs, alternative investment opportunities, the market price of our ordinary shares and general market conditions. The Repurchase Program has no set expiration date and may be suspended or discontinued at any time.
Added
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. Income tax on dividends Irish income tax, if any, may arise in respect of dividends paid by us.
Added
A shareholder who is an individual and who is temporarily not resident in Ireland may, under Irish anti-avoidance legislation, still be liable for Irish tax on capital gains on any chargeable gain realized upon the disposal of our ordinary shares during the period in which such individual is a non-resident.
Added
Stock performance graph The information contained in the performance graph and related information 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.

Item 7. Management's Discussion & Analysis

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

69 edited+23 added−46 removed49 unchanged
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.
Biggest changeA rollforward of our provisions for sales and allowances is as follows: (In millions) Contractual Adjustments (1) Discounts (2) Product Returns Other Total Balance, December 31, 2022 $ 226.7 $ 26.2 $ 29.7 $ 7.9 $ 290.5 Provision: Current year 509.7 326.9 33.4 71.5 941.5 Prior year (8.8 ) — 2.8 — (6.0 ) Total 500.9 326.9 36.2 71.5 935.5 Payments and credits related to: Current year sales (308.4 ) (293.8 ) — (56.2 ) (658.4 ) Prior year sales (184.8 ) (30.6 ) (24.8 ) (13.0 ) (253.2 ) Total (493.2 ) (324.4 ) (24.8 ) (69.2 ) (911.6 ) Balance, December 31, 2023 $ 234.4 $ 28.7 $ 41.1 $ 10.2 $ 314.4 Provision: Current year 557.7 386.6 28.6 87.4 1,060.3 Prior year (20.6 ) — (3.7 ) — (24.3 ) Total 537.1 386.6 24.9 87.4 1,036.0 Payments and credits related to: Current year sales (369.9 ) (353.6 ) — (70.8 ) (794.3 ) Prior year sales (172.6 ) (18.1 ) (15.5 ) (13.5 ) (219.7 ) Total (542.5 ) (371.7 ) (15.5 ) (84.3 ) (1,014.0 ) Balance, December 31, 2024 $ 229.0 $ 43.6 $ 50.5 $ 13.3 $ 336.4 (1) “Contractual Adjustments” include “Medicaid Rebates” and “Medicare Part D” accruals (2) “Discounts” include “Chargebacks” and “Product Discounts” Manufacturing Revenue We recognize manufacturing revenues from the sale of products we manufacture for resale by our licensees.
To date, actual chargebacks have not differed materially from our estimates; • Product Discounts —cash consideration, including sales incentives, given by us under agreements with a number of wholesaler, distributor, pharmacy, and treatment provider customers that provide them with a discount on the purchase price of products.
To date, actual chargebacks have not differed materially from our estimates; 63 • Product Discounts —cash consideration, including sales incentives, given by us under agreements with a number of wholesaler, distributor, pharmacy, and treatment provider customers that provide them with a discount on the purchase price of products.
Discontinued operations We determined that the separation of our oncology business, which was completed on November 15, 2023, represented a disposal plan that met the criteria for classification of the oncology business as a discontinued operation in accordance with ASC 205-20, Discontinued Operations .
Discontinued operations We determined that the separation of our former oncology business, which was completed on November 15, 2023, represented a disposal plan that met the criteria for classification of the oncology business as a discontinued operation in accordance with ASC 205-20, Discontinued Operations .
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.
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 See 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.
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.
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 2024 were the long-acting INVEGA products and VUMERITY.
Cash flows provided by operating activities during 2023 were $401.4 million and primarily consisted of net income of $355.8 million, adjusted for non-cash items, including share-based compensation of $100.9 million and depreciation and amortization of $74.9 million, partially offset by changes in working capital of $36.7 million and deferred income taxes of $99.9 million.
Cash flows provided by operating activities during 2023 primarily consisted of net income of $355.8 million, adjusted for non-cash items, including share-based compensation of $100.9 million and depreciation and amortization of $74.9 million, partially offset by changes in working capital of $36.7 million and deferred income taxes of $99.9 million.
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.
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 and corporate debt securities.
Financing Activities Cash flows used in financing activities during 2023 primarily related to $275.0 million in cash distributed to Mural in connection with the Separation and $28.5 million of employee taxes paid related to the net share settlement of equity awards, partially offset by $16.8 million of cash that we received upon exercises of employee stock options.
Cash flows used in financing activities during 2023 primarily related to $275.0 million in cash distributed to Mural Oncology plc in connection with the Separation and $28.5 million of employee taxes paid related to net share settlements of equity awards, partially offset by $16.8 million of cash that we received upon exercises of employee stock options.
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.
At December 31, 2024, 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. 61 Information about our cash flows, by category, is presented in the accompanying consolidated statements of cash flows.
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.
For additional information, see 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.
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.
A detailed discussion of our 2022 financial condition and results of operations, and of 2023 year-over-year changes as compared to 2022, can be found in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 21, 2024.
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.
Research and Development Expenses For each of our R&D programs, we incur both external and internal expenses. External R&D expenses include fees for clinical and preclinical activities performed by CROs, consulting fees, and costs related to laboratory services, the purchase of drug product materials and third-party manufacturing development activities.
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 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 2024, our net income from continuing operations was $372.1 million, as compared to $519.2 million in 2023.
(“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.
In connection with our acquisition of Rodin, 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.
We estimate that approximately $70.8 million of income taxes would be payable on the repatriation of the unremitted earnings to Ireland.
We estimate that approximately $72.0 million of income taxes would be payable on the repatriation of the unremitted earnings to Ireland.
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.
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.
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.
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 12 months.
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.
ARISTADA and ARISTADA INITIO product sales, gross, increased by 5%, which was primarily due to a 3% increase in the number of units sold and a 3.0% increase in the selling price that went into effect in January 2024.
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.
Medicaid rebates for our other products 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.
Please refer to Note 12, Long-Term Debt , in the “Notes to Consolidated Financial Statements” in this Annual Report for a discussion of our outstanding term loans. 63 Discontinued Operations Net loss from discontinued operations consists of the results of our oncology business and is reported as a separate component of income.
See Note 12, Long-Term Debt , in the “Notes to Consolidated Financial Statements” in this Annual Report for additional discussion related to our Former Term Loans. 62 Discontinued Operations Net loss from discontinued operations consists of the results of our former oncology business and is reported as a separate component of income.
Our goodwill, which solely relates to the Business Combination, has been assigned to one reporting unit which consists of the former EDT business. We have the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test.
As of December 31, 2024, we have one operating segment and two reporting units. Our goodwill, which solely relates to the Business Combination, has been assigned to one reporting unit which consists of the former EDT business. We have the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test.
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 following table summarizes our cash flows for the years ended December 31, 2024 and 2023: Year Ended December 31, (In millions) 2024 2023 Cash and cash equivalents, beginning of period $ 457.5 $ 292.5 Cash flows provided by operating activities 439.1 401.4 Cash flows (used in) provided by investing activities (111.3 ) 53.3 Cash flows used in financing activities (494.1 ) (289.7 ) Cash and cash equivalents, end of period $ 291.2 $ 457.5 Operating Activities Cash flows provided by operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities.
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.
Cumulative unremitted earnings of U.S. subsidiaries totaled approximately $933.5 million as of December 31, 2024. 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.
We expect that our existing cash, cash equivalents and investments will be sufficient to finance our anticipated working capital and other cash requirements, such as capital expenditures and principal and interest payments on our long-term debt, for at least the twelve months following the date from which our financial statements were issued.
We expect that our existing cash, cash equivalents and investments will be sufficient to finance our anticipated working capital and other cash requirements, including capital expenditures, for at least the twelve months following the date from which our financial statements were issued.
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.
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, 2024 and 2023: Year Ended December 31, (In millions, except for % of Sales) 2024 % of Sales 2023 % of Sales Product sales, gross $ 2,119.5 100.0 % $ 1,855.4 100.0 % Adjustments to product sales, gross: Medicaid rebates (454.0 ) (21.4 ) % (426.4 ) (23.0 ) % Chargebacks (231.5 ) (10.9 ) % (189.1 ) (10.2 ) % Product discounts (155.1 ) (7.3 ) % (137.7 ) (7.4 ) % Medicare Part D (83.0 ) (3.9 ) % (74.4 ) (4.0 ) % Other (112.4 ) (5.4 ) % (107.8 ) (5.8 ) % Total adjustments (1,036.0 ) (48.9 ) % (935.4 ) (50.4 ) % Product sales, net $ 1,083.5 51.1 % $ 920.0 49.6 % 56 VIVITROL product sales, gross, increased by 10%, which was primarily due to a 7% increase in the number of units sold and a 3.2% increase in the selling price that went into effect in January 2024.
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.
As of December 31, 2024, we had $393.9 million of Irish NOL carryforwards, $14.1 million of U.S. federal NOL carryforwards, $43.2 million of state NOL carryforwards and $34.0 million of state tax credits which will either expire on various dates through 2039 or can be carried forward indefinitely.
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.
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.
Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain additional financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures.
Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures. Our investment objectives are, first, to preserve liquidity and conserve capital and, second, to generate investment income.
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.
Ireland Total Cash and cash equivalents $ 70.3 $ 220.8 $ 291.1 $ 317.8 $ 139.7 $ 457.5 Investments—short-term 203.6 256.9 460.5 187.6 128.4 316.0 Investments—long-term 24.6 48.5 73.1 18.0 21.9 39.9 Total cash and investments $ 298.5 $ 526.2 $ 824.7 $ 523.4 $ 290.0 $ 813.4 Outstanding borrowings—short and long-term $ — $ — $ — $ 290.7 $ — $ 290.7 At December 31, 2024, 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 $ 459.1 $ 1.5 $ (0.1 ) $ — $ 460.5 Investments—long-term available-for-sale 73.3 — (0.3 ) — 73.0 Investments—long-term held-to-maturity 0.1 — — — 0.1 Total $ 532.5 $ 1.5 $ (0.4 ) $ — $ 533.6 Sources and Uses of Cash We generated $439.1 million and $401.4 million of cash from operating activities during the years ended December 31, 2024 and 2023, respectively.
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.
Changes in our current estimates, due to unanticipated events or otherwise, could have a material effect on our financial condition and results of operations.
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.
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 64 the licensee; and (ii) a license of IP is the sole or predominant item to which such royalties relate.
The following table compares product sales, net earned during the years ended December 31, 2023 and 2022: Year Ended December 31, (In millions) 2023 2022 Change VIVITROL $ 400.4 $ 379.5 $ 20.9 ARISTADA and ARISTADA INITIO 327.7 302.1 25.6 LYBALVI 191.9 96.0 95.9 Product sales, net $ 920.0 $ 777.6 $ 142.4 A number of companies are working to develop products to treat addiction, including alcohol and opioid dependence, that may compete with, and negatively impact, future sales of VIVITROL.
The following table compares product sales, net earned during the years ended December 31, 2024 and 2023: Year Ended December 31, (In millions) 2024 2023 Change VIVITROL $ 457.3 $ 400.4 $ 56.9 ARISTADA and ARISTADA INITIO 346.2 327.7 18.5 LYBALVI 280.0 191.9 88.1 Product sales, net $ 1,083.5 $ 920.0 $ 163.5 A number of companies currently market and/or are developing products to treat addiction, including alcohol and opioid dependence, that may compete with, and negatively impact, future sales of VIVITROL.
LYBALVI product sales, gross, increased by 102%, which was primarily due to an increase of 97% in the number of units sold and increases of 6% and 3% in the selling price of LYBALVI that went into effect in November 2022 and July 2023, respectively.
LYBALVI product sales, gross, increased by 52%, which was primarily due to a 45% increase in the number of units sold and increases of 3.8% and 2.0% in the selling price that went into effect in January 2024 and July 2024, respectively.
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.
The increase in expenses related to LYBALVI was primarily due to increased spend on our pediatric studies related to the product, partially offset by decreased spend following the completion of our long-term safety and tolerability studies.
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.
For additional information related to discontinued operations, see Note 3, Discontinued Operations , in our “Notes to Consolidated Financial Statements” in this Annual Report. 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.
Investing Activities Cash flows provided by investing activities during 2023 were primarily due to $101.1 million in net sales of investments, offset by the purchase of $48.0 million of property, plant and equipment.
Cash flows provided by investing activities during 2023 primarily consisted of $101.1 million in net sales of investments and offset by the purchase of $48.0 million of property, plant and equipment. We expect to spend approximately $45.0 million to $50.0 million during the year ending December 31, 2025 for capital expenditures.
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.
Other Income, Net Year Ended December 31, (In millions) 2024 2023 Change Interest income $ 42.5 $ 30.9 $ 11.6 Interest expense (22.6 ) (23.0 ) 0.4 Other income (expense), net 3.2 (0.5 ) 3.7 Total other income, net $ 23.1 $ 7.4 $ 15.7 Interest income consists of interest earned on our cash and available-for-sale investments.
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.
A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and is reviewed by management. 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.
We amortize our amortizable intangible assets using the economic use method, which reflects the pattern that the economic benefits of the intangible assets are consumed as revenue is generated from the underlying patent or contract.
These intangible assets were amortized over 12 to 13 years using the economic use method, which reflects the pattern that the economic benefits of the intangible assets are consumed as revenue is generated from the underlying patent or contract, and became fully amortized during 2024.
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.
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.
Prior period results of operations and balance sheet information have been recast to reflect this presentation. Product Sales, Net Our product sales, net, consist of sales of VIVITROL, ARISTADA and ARISTADA INITIO, and LYBALVI, primarily to wholesalers, specialty distributors and pharmacies.
Product Sales, Net Our product sales, net, consist of sales of VIVITROL, ARISTADA, ARISTADA INITIO, and LYBALVI, primarily to wholesalers, specialty distributors and pharmacies.
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 following table sets forth our external R&D expenses for the years ended December 31, 2024 and 2023 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) 2024 2023 Change External R&D expenses: Development programs: ALKS 2680 $ 46.0 $ 31.3 $ 14.7 LYBALVI 18.7 15.4 3.3 Other external R&D expenses 36.6 51.7 (15.1 ) Total external R&D expenses 101.3 98.4 2.9 Internal R&D expenses: Employee-related 114.5 128.3 (13.8 ) Occupancy 11.2 12.3 (1.1 ) Depreciation 5.7 9.6 (3.9 ) Other 12.6 22.2 (9.6 ) Total internal R&D expenses 144.0 172.4 (28.4 ) Research and development expenses $ 245.3 $ 270.8 $ (25.5 ) These amounts are not necessarily predictive of future R&D expenses.
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.
In addition, each of INVEGA SUSTENNA and INVEGA TRINZA is currently subject to Paragraph IV litigation in response to companies seeking to market generic versions of such product.
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.
Liquidity and Capital Resources Our financial condition is summarized as follows: December 31, 2024 December 31, 2023 (In millions) U.S. Ireland Total U.S.
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.
For a discussion of legal proceedings related to 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 these legal proceedings, see “Item 1A—Risk Factors” in this Annual Report, and specifically the section entitled “Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.” The increase in VUMERITY revenue was due to an $8.3 million increase in royalty revenue, partially offset by a $3.6 million decrease in manufacturing revenue.
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.
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.
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.
Financing Activities Cash flows used in financing activities during 2024 primarily related to the prepayment of our previously outstanding long-term debt in the full amount of $289.5 million, payment for the repurchase of our ordinary shares and related expenses in the amount of $200.3 million, and $29.6 million of employee taxes paid related to net share settlements of equity awards, partially offset by $27.6 million of cash that we received upon exercises of employee stock options.
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.
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.
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.
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. A reporting unit is an operating segment, as defined by GAAP, or a component of an operating segment.
On December 14, 2023, we announced that we entered into a definitive agreement to sell the Athlone Facility to Novo and plan to enter into subcontracting arrangements to continue certain development and manufacturing activities currently performed at the Athlone Facility for a period of time after the closing of the transaction, which arrangements may continue through the end of 2025.
Business Update In May 2024, we completed the sale of the Athlone Facility to Novo and entered into subcontracting arrangements to continue certain development and manufacturing activities performed at the Athlone Facility, which may continue through the end of 2025.
The decrease in manufacturing revenue was primarily due to a decrease in the number of U.S. batches made available to Janssen and a 7% decrease in the rest of world average selling price of the product.
The decrease in revenue from RISPERDAL CONSTA was primarily due to a decrease of $13.0 million in manufacturing revenue, which was primarily due to a decrease in the number of batches made available to Janssen.
The transaction is expected to close in mid-2024, subject to certain closing conditions. 56 Results of Operations As a result of the Separation, the historical results of our oncology business have been reflected as discontinued operations in our consolidated financial statements through the Separation Date.
Results of Operations As a result of the Separation, the historical results of our former oncology business have been reflected as discontinued operations in our consolidated financial statements through November 15, 2023, the date of the Separation. Prior period results of operations and balance sheet information have been recast to reflect this presentation.
We expect royalty revenues from net sales of the long-acting INVEGA products to decrease in the near-term, as the royalty revenues related to net sales of INVEGA SUSTENNA are expected to end on August 20, 2024, which could have a significant impact on our INEVGA SUSTENNA royalty revenues during 2024.
We expect royalty revenues from net sales of the long-acting INVEGA products to decrease further in 2025, as the royalty revenues related to U.S. net sales of INVEGA SUSTENNA comprised a significant portion of the overall royalty revenues for the long-acting INVEGA products.
We have reviewed these critical accounting estimates and related disclosures with the audit and risk committee of our board of directors. Revenue from Contracts with Customers When entering into arrangements with customers, we identify whether our performance obligations under each arrangement represent a distinct good or service or a series of distinct goods or services.
We have reviewed these critical accounting estimates and related disclosures with the audit and risk committee of our board of directors. Revenue from Contracts with Customers We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
Cash flows provided by operating activities during 2022 were $21.0 million and primarily consisted of net loss of $158.3 million, adjusted for non-cash items including share-based compensation of $94.3 million, depreciation and amortization of $77.9 million, change in the fair value of contingent consideration of $21.8 million and changes in working capital of $12.8 million, partially offset by deferred income taxes of $32.8 million.
Cash flows provided by operating activities during 2024 primarily consisted of net income of $367.1 million, adjusted for non-cash items, including share-based compensation of $96.6 million and depreciation and amortization of $28.5 million and deferred income taxes of $40.5 million.
The increase in expenses related to ALKS 2680 during 2023 was primarily due to an increase in early-stage development expenses, including chemistry manufacturing and controls expenses and spend on a phase 1b proof-of-concept study, which was initiated in the second quarter of 2023.
The increase in expenses related to ALKS 2680 was primarily due to an increase in spend related to the advancement of the development programs for the product, including completion of our phase 1b proof-of-concept studies, initiation of our phase 2 clinical studies, Vibrance-1 and Vibrance-2 and preparatory spend in advance of initiation of our phase 2 study for IH.
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.
In November 2023, we completed the separation of our former oncology business into a new, independent, publicly-traded company (the “Separation”), which is more fully described in Note 3, Discontinued Operations , in the “Notes to Consolidated Financial Statements” in this Annual Report.
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 decrease in royalty revenue was due to expirations of the patents covering RISPERDAL CONSTA, which expired in the U.S. in January 2023 and in the EU in 2021. We expect revenues from RISPERDAL CONSTA to continue to decrease as patents covering RISPERDAL CONSTA continue to expire in markets where end-market net sales of RISPERDAL CONSTA occur.
We 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.
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. Royalties earned on our licensees’ net sales of products using our proprietary technologies are recognized in the period such products are sold by our licensees.
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.
On October 31, 2024, 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. 65 Valuation of Deferred Tax Assets We evaluate the need for deferred tax asset valuation allowances based on a more-likely-than-not standard.
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.
This includes RISPERDAL CONSTA as well as products manufactured at the Athlone Facility. This decrease was partially offset by an increase in the cost of goods sold for certain of our proprietary products due to increases in the number of units sold as discussed above, and an increase in costs related to VIVITROL out-of-specification batches and subsequent investigation costs.
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.
The following table compares manufacturing and royalty revenues earned in the years ended December 31, 2024 and 2023: Year Ended December 31, (In millions) 2024 2023 Change Manufacturing and royalty revenues: Long-acting INVEGA products $ 236.5 $ 486.1 $ (249.6 ) VUMERITY 134.0 129.3 4.7 RISPERDAL CONSTA 23.5 37.3 (13.8 ) Other 80.1 90.7 (10.6 ) Manufacturing and royalty revenues $ 474.1 $ 743.4 $ (269.3 ) The decrease in royalty revenues related to the long-acting INVEGA products was primarily due to the receipt in June 2023 of back royalties of $195.4 million, inclusive of $8.1 million in late-payment interest, related to 2022 U.S. sales of the long-acting INVEGA products following the successful outcome of the arbitration proceedings related to such products and the expiration of our royalty on U.S. net sales of INVEGA SUSTENNA in August 2024.
Income Tax (Benefit) Provision Year Ended December 31, (In millions) 2023 2022 (1) Change Income tax (benefit) provision $ (97.6 ) $ 2.0 $ (99.6 ) (1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.
Income Tax Provision (Benefit) Year Ended December 31, (In millions) 2024 2023 Change Income tax provision (benefit) $ 71.6 $ (97.6 ) $ 169.2 The income tax provision in 2024 was primarily due to taxes on income earned in Ireland.
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.
Amortization of Acquired Intangible Assets Year Ended December 31, (In millions) 2024 2023 Change Amortization of acquired intangible assets $ 1.1 $ 35.7 $ (34.6 ) Our amortizable intangible assets primarily consisted of technology and collaborative arrangements acquired as part of the acquisition of Elan Drug Technologies (“EDT”) in September 2011.
Costs and Expenses Cost of Goods Manufactured and Sold Year Ended December 31, (In millions) 2023 2022 (1) Change Cost of goods manufactured and sold $ 253.0 $ 218.1 $ 34.9 (1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.
Costs and Expenses Cost of Goods Manufactured and Sold Year Ended December 31, (In millions) 2024 2023 Change Cost of goods manufactured and sold $ 245.3 $ 253.0 $ (7.7 ) 58 The decrease in cost of goods manufactured and sold was primarily due to lower cost of goods manufactured for certain legacy products due to a decrease in volumes of such products.
Interest expense consists of interest incurred on our 2026 Term Loans. The increases in interest income and interest expense were primarily due to increases in interest rates over the past twelve months, due to the rising interest rate environment during the year.
The increase in interest income was due to an increase in our cash and investments and increases in interest rates due to the rising interest rate environment.
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.
The increase in royalty revenue was primarily due to an increase in end-market sales of VUMERITY to $628.0 million in 2024, as compared to $576.3 million in 2023. The decrease in manufacturing revenue was primarily due to a reduction in the selling price. The manufacturing fee we earn is based on our cost to produce VUMERITY.
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.
Investing Activities Cash flows used in investing activities during 2024 primarily consisted of $176.2 million in net purchases of investments and the purchase of $33.5 million of property, plant and equipment. These outflows were offset by proceeds from the sale of the Athlone Facility and related business of $97.9 million.
Selling, General and Administrative Expenses Year Ended December 31, (In millions) 2023 2022 (1) Change Selling and marketing expense $ 487.5 $ 392.2 $ 95.3 General and administrative expense 202.3 198.6 3.7 Selling, general and administrative expense $ 689.8 $ 590.8 $ 99.0 (1) Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.
Selling, General and Administrative Expenses Year Ended December 31, (In millions) 2024 2023 Change Selling and marketing expense $ 446.2 $ 490.2 $ (44.0 ) General and administrative expense 199.0 199.6 (0.6 ) Selling, general and administrative expense $ 645.2 $ 689.8 $ (44.6 ) 59 The decrease in selling and marketing expense was primarily due to a $34.6 million decrease in marketing expense related primarily to decreased media spend and free goods, a $7.1 million decrease in professional services, primarily due to the decrease in media spend, and a $3.6 million decrease in employee related expenses, primarily due to a 7% decrease in sales and marketing headcount.
Removed
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.
Added
The decrease in net income from continuing operations was primarily due to two significant one-time events in 2023, which were the receipt in June 2023 of back royalties and interest in respect of 2022 U.S. sales of the long-acting INVEGA products, following the successful outcome of the arbitration proceedings related to such products, and the partial release of our valuation allowance maintained against certain Irish deferred tax assets.
Removed
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.
Added
These events were partially offset by an increase in our product sales, net and a decrease in our operating expenses in 2024. These items are discussed in further detail within the “Results of Operations” section below.
Removed
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”).
Added
The decrease in Medicaid rebates as a percentage of sales was primarily due to the increase in sales of LYBALVI, which has lower Medicaid utilization than VIVITROL, ARISTADA and ARISTADA INITIO, and actual Medicaid utilization rates related to VIVITROL being lower than original estimates, due, in part, to $8.7 million in actual credits received in the fourth quarter of 2024 from certain states related to duplicate Medicaid billings.
Removed
The Separation was effected by means of a distribution of all of the outstanding ordinary shares of Mural to our shareholders (the “Distribution”), in which each of our shareholders received one ordinary share, nominal value $0.01 per share, of Mural for every ten ordinary shares, par value $0.01 per share, of Alkermes held by such shareholder as of the close of business on November 6, 2023, the record date for the Distribution.
Added
Pursuant to the Final Award issued in the arbitration proceedings, 57 we are entitled to royalty revenues from Janssen related to U.S. net sales of INVEGA TRINZA and INVEGA HAFYERA through certain specified dates in 2030.
Removed
The effective time of the Distribution was 12:01 a.m. Eastern time on November 15, 2023 (the “Separation Date”). In connection with the Separation, we entered into a separation agreement with Mural that, among other things, sets forth the principal terms of the Separation and the Distribution, and a number of other ancillary agreements.
Added
For additional discussion of our agreements with Janssen related to the long-acting INVEGA products, including the royalty provisions set forth therein and the related arbitration proceedings and outcome, see the section entitled “ Collaborative Arrangements — Janssen ” in “Item 1—Business” in this Annual Report.
Removed
The transaction is subject to various uncertainties and risk, including, without limitation, satisfaction of the conditions to closing of the transaction on the anticipated timeline, potential negative impacts on our relationships with current suppliers or licensees or diversion of management and employee attention from daily business operations, and risks inherent in the transition to subcontracting arrangements.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−4 removed7 unchanged
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.
Biggest changeFor the year ended December 31, 2024, 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 $8.9 million, as compared to a reduction in revenues of approximately $10.3 million for the year ended December 31, 2023.
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.
For the year ended December 31, 2024, 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 $3.9 million, as compared to an increase in our expenses of approximately $7.7 million for the year ended December 31, 2023.
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. 66 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.
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.
We do not believe our exposure to liquidity and credit risk to be significant as approximately 41% and 59% of our investments at December 31, 2024 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.
Removed
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.
Added
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.
Removed
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
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
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.

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