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What changed in Amneal Pharmaceuticals, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Amneal Pharmaceuticals, Inc.'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.

+278 added−262 removedSource: 10-K (2025-02-28) vs 10-K (2024-03-14)

Top changes in Amneal Pharmaceuticals, Inc.'s 2024 10-K

278 paragraphs added · 262 removed · 223 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

41 edited+15 added−14 removed3 unchanged
Biggest changeThe year-over-year change in the provision for income taxes was primarily related to the timing and mix of income, and to the release of liabilities for uncertain tax positions in 2022. 54 Generics The following table sets forth the results of operations for our Generics segment (dollars in thousands): Years Ended December 31, Increase (Decrease) 2023 2022 $ % Net revenue $ 1,471,401 $ 1,432,073 $ 39,328 2.7% Cost of goods sold 913,869 896,031 17,838 2.0% Gross profit 557,532 536,042 21,490 4.0% Selling, general and administrative 119,912 109,781 10,131 9.2% Research and development 132,233 167,509 (35,276) (21.1)% In-process research and development impairment charges 26,500 12,970 13,530 104.3% Intellectual property legal development expenses 3,708 4,251 (543) (12.8)% Acquisition, transaction-related and integration expenses — 25 (25) (100.0)% Restructuring and other charges 211 821 (610) (74.3)% Insurance recoveries for property losses and associated expenses — (1,911) 1,911 (100.0)% (Credit) charges related to legal matters, net (64) 22,400 (22,464) (100.3)% Other operating income (1,138) (3,960) 2,822 (71.3)% Operating income $ 276,170 $ 224,156 $ 52,014 23.2% nm - not meaningful Net Revenue Generics net revenue for the year ended December 31, 2023 increased 2.7% as compared to the prior year, primarily due to new generic products launched in 2023 and 2022, which included biosimilars that contributed $62.6 million and new generic products that contributed $47.4 million, partially offset by price erosion.
Biggest changeIncome Taxes for additional information. 56 Affordable Medicines The following table sets forth the results of operations for our Affordable Medicines segment (dollars in thousands): Years Ended December 31, Change 2024 2023 $ % Net revenue $ 1,685,263 $ 1,471,401 $ 213,862 14.5% Cost of goods sold 1,011,363 913,869 97,494 10.7% Gross profit 673,900 557,532 116,368 20.9% Selling, general and administrative 129,578 119,912 9,666 8.1% Research and development 171,771 132,233 39,538 29.9% In-process research and development impairment charges — 26,500 (26,500) (100.0)% Intellectual property legal development expenses 5,685 3,708 1,977 53.3% Restructuring and other charges 70 211 (141) (66.8)% Charges (credit) related to legal matters, net 96,692 (64) 96,756 nm Other operating income — (1,138) 1,138 (100.0)% Operating income $ 270,104 $ 276,170 $ (6,066) (2.2)% nm - not meaningful Net Revenue Affordable Medicines net revenue for the year ended December 31, 2024 increased 14.5% as compared to the prior year, primarily due to new products launched in 2024 and 2023, which included biosimilars that contributed $59.7 million of year-over-year growth and other new products that contributed $144.1 million of year-over-year growth, and strong volume growth, partially offset by price erosion.
The timing and amount of payments may also be accelerated under certain conditions, such as a change of control or other early termination event, which could give rise to our obligation to make TRA payments in advance of tax benefits being realized. For further information, refer to Item 1A. Risk Factors and Note 7. Income Taxes .
The timing and amount of payments may also be accelerated under certain conditions, such as a change of control or other early termination event, which could give rise to our obligation to make TRA payments in advance of tax benefits being realized. For further information, refer to Item 1A. Risk Factors and Note 6. Income Taxes .
Annually, we are also required to calculate the amount of excess cash flow payments, as defined in our term loan agreements. Based on the results of the excess cash flows calculation for the years ended December 31, 2023, 2022 and 2021, no excess cash flows principal payments were required.
Annually, we are also required to calculate the amount of excess cash flow payments, as defined in our term loan agreements. Based on the results of the excess cash flows calculation for the years ended December 31, 2024, 2023 and 2022, no excess cash flows principal payments were required.
In-Process Research and Development Impairment Charges In process research and development (“IPR&D”) impairment charges of $30.8 million for the year ended December 31, 2023 were related to one Generics asset and one Specialty asset, both of which experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows.
In-Process Research and Development Impairment Charges In process research and development (“IPR&D”) impairment charges of $30.8 million for the year ended December 31, 2023 were related to one Affordable Medicines asset and one Specialty asset, both of which experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows.
Debt ), including $225.2 million of available capacity on our Amended New Revolving Credit Facility and $28.0 million of available capacity under the Amended Rondo Revolving Credit Facility as of December 31, 2023 . We believe these sources are sufficient to fund our planned operations, meet our interest and contractual obligations and provide sufficient liquidity over the next 12 months.
Debt ), including $495.2 million of available capacity on our Amended New Revolving Credit Facility and $28.0 million of available capacity under the Amended Rondo Revolving Credit Facility as of December 31, 2024 . We believe these sources are sufficient to fund our planned operations, meet our interest and contractual obligations and provide sufficient liquidity over the next 12 months.
(Credit) Charges Related to Legal Matters, Net For the year ended December 31, 2023, Generics credit related to legal matters, net was $(0.1) million, comprised of a $(10.0) million credit from the settlement of patent infringement matters, net of $3.9 million in charges associated with civil prescription opioid litigation, a $3.0 million charge for the settlement of a customer claim, and a $3.0 million charge for the settlement of commercial antitrust litigation.
For the year ended December 31, 2023, the Affordable Medicines credit related to legal matters, net was $(0.1) million , comprised of $10.0 million received from the settlement of patent infringement matters, net of $3.9 million in charges associated with civil prescription opioid litigation, a $3.0 million charge for the settlement of a customer claim, and a $3.0 million charge for the settlement of commercial antitrust litigation.
The primary objectives of our investment policy are liquidity and safety of principal. 58 Cash Flows For a discussion comparing of our cash flows for the fiscal years 2022 to 2021, see Cash Flows under
The primary objectives of our investment policy are liquidity and safety of principal. Cash Flows For a discussion comparing of our cash flows for the fiscal years 2023 to 2022, see Cash Flows under
Charges Related to Legal Matters, Net For the year ended December 31, 2023, charges related to legal matters, net was $1.8 million, comprised of $3.9 million in charges associated with Generics civil prescription opioid litigation, a $3.0 million charge for the settlement of a Generics customer claim, a $3.0 million charge for the settlement of Generics commercial antitrust litigation, and a $1.9 million charge for the settlement of a corporate stockholder derivative lawsuit, partially offset by a $10.0 million credit from the settlement of Generics patent infringement matters.
For the year ended December 31, 2023, charges related to legal matters, net of $1.8 million were comprised of $3.9 million in charges associated with Affordable Medicines civil prescription opioid litigation, a $3.0 million charge for the settlement of an Affordable Medicines customer claim, a $3.0 million charge for the settlement of Affordable Medicines commercial antitrust litigation, and a $1.9 million charge for the settlement of a corporate stockholder derivative lawsuit, partially offset by $10.0 million from the settlement of Affordable Medicines patent infringement matters.
Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order discussed above. Generics gross profit as a percentage of net revenue increased to 37.9% for the year ended December 31, 2023 from 37.4% in the prior year as a result of the factors described above.
Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order discussed above. Affordable Medicines gross profit as a percentage of net revenue increased to 40.0% for the year ended December 31, 2024 from 37.9% in the prior year as a result of the factors described above.
At various times during the year, our cash balances held in the U.S. may exceed amounts that are insured by the Federal Deposit Insurance Corporation. We make our investments in accordance with our investment policy.
We maintain cash balances at both U.S. based and foreign country based commercial banks. At various times during the year, our cash balances held in the U.S. may exceed amounts that are insured by the Federal Deposit Insurance Corporation. We make our investments in accordance with our investment policy.
Specialty gross profit as a percentage of net revenue decreased to 45.1% for the year ended December 31, 2023 as compared to 51.2% in the prior year as a result of the factors described above.
Specialty gross profit as a percentage of net revenue increased to 54.5% for the year ended December 31, 2024 as compared to 45.1% in the prior year as a result of the factors described above.
Cost of Goods Sold and Gross Profit Generics cost of goods sold for the year ended December 31, 2023 increased 2.0% compared to the prior year primarily due to costs associated with increased sales volume and an increased inventory provision, partially offset by efficiencies in our supply costs.
Cost of Goods Sold and Gross Profit Affordable Medicines cost of goods sold for the year ended December 31, 2024 increased 10.7% compared to the prior year primarily due to costs associated with increased sales volume and increased plant and freight costs and an increased inventory provision, partially offset by efficiencies in our supply costs.
Item 1. Business and Item 1A. Risk Factors in this Form 10-K. Inflation While it is difficult to accurately measure the impact of inflation, we estimate our business experienced an increase in costs due to inflation of approximately $15.0 million for the year ended December 31, 2023.
Item 1. Business and Item 1A. Risk Factors in this Form 10-K. Inflation While it is difficult to accurately measure the impact of inflation, we estimate our business did not experience a material increase in costs due to inflation for the year ended December 31, 2024.
The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the corporate tax rate in effect at the time of realization of our taxable income (the TRA liability is determined based on a percentage of the corporate tax savings from the use of the TRA’s attributes).
The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the corporate tax rate in effect at the time of realization of our taxable income.
Provision For Income Taxes The provision for income taxes was $8.5 million and $6.7 million for the years ended December 31, 2023 and 2022 , respectively. The effective tax rates for the years ended December 31, 2023 and 2022 were (21.0)% and (2.7%), respectively.
Provision For Income Taxes The provision for income taxes was $18.9 million and $8.5 million for the years ended December 31, 2024 and 2023 , respectively. The effective tax rates for the years ended December 31, 2024 and 2023 were (34.3)% and (21.0)% , respectively.
The $15.2 million decrease in the change in fair value of contingent consideration for the year ended December 31, 2023 as compared to the prior year was primarily related to a reduction in promotional focus on LYVISPAH TM .
Change in Fair Value of Contingent Consideration The year-over-year variance of $13.6 million in change in fair value of contingent consideration for the year ended December 31, 2024 as compared to the prior year was primarily related to a reduction in promotional focus on LYVISPAH TM during the year ended December 31, 2023. Refer to Note 18.
A portion of our cash flows are derived outside the U.S. As a result, we are subject to market risk associated with changes in foreign exchange rates. We maintain cash balances at both U.S. based and foreign country based commercial banks.
Cash Balances At December 31, 2024, our cash and cash equivalents consist of cash on deposit and highly liquid investments. A portion of our cash flows are derived outside the U.S. As a result, we are subject to market risk associated with changes in foreign exchange rates.
Cost of Goods Sold and Gross Profit AvKARE cost of goods sold for the year ended December 31, 2023 increased 27.4% as compared to the prior year, and gross profit as a percentage of net revenue increased to 16.3% for the year ended December 31, 2023 from 14.0% in the prior year primarily due to the increase in sales through our higher margin government channel, including higher margin new product introductions.
Cost of Goods Sold and Gross Profit AvKARE cost of goods sold for the year ended December 31, 2024 increased 25.7% as compared to the prior year, and gross profit as a percentage of net revenue decreased to 15.6% for the year ended December 31, 2024 from 16.3% in the prior year primarily due to the increase in sales through our lower margin distribution channel and an increased inventory provision.
Cost of Goods Sold and Gross Profit Specialty cost of goods sold for the year ended December 31, 2023 increased 17.5% as compared to the prior year primarily due to an increase in volumes and a $25.0 million increase in marketed product intangible asset impairment charges primarily related to a reduction in promotional focus on LYVISPAH™ .
Cost of Goods Sold and Gross Profit Specialty cost of goods sold for the year ended December 31, 2024 decreased 5.3% as compared to the prior year due to a marketed product intangible asset impairment charge of $34.1 million in 2023 related to reduced promotional focus on LYVISPAH ® , partially offset by increased sales in our promoted products.
Net revenue for the year ended December 31, 2023 included a non-recurring customer order of $21.0 million. • Growth in our AvKARE segment of $125.6 million primarily driven by growth in our distribution and government channels resulting from new product introductions. • Growth in our Specialty segment of $16.3 million primarily driven by growth in our endocrinology portfolio of $21.0 million, or 23.8% and a $2.2 million, or 1.2% increase in our neurology portfolio, which was negatively impacted by Medicare rebates associated with the Inflation Reduction Act of approximately $6.4 million.
Net revenue for the year ended December 31, 2023 included a non-recurring customer order of $21.0 million. • Growth in our AvKARE segment of $131.2 million primarily driven by growth in our distribution and government channels resulting from new product introductions. • Growth in our Specialty segment of $55.3 million primarily driven by a $44.7 million increase in our promoted Parkinson’s franchise, of which $16.6 million was comprised of sales of ONGENTYS ® , which launched in January 2024, and initial sales of CREXONT ® , which launched in September 2024.
AvKARE The following table sets forth the results of operations for our AvKARE segment (dollars in thousands): Years Ended December, 31 Increase 2023 2022 $ % Net revenue $ 531,749 $ 406,110 $ 125,639 30.9% Cost of goods sold 444,896 349,133 95,763 27.4% Gross profit 86,853 56,977 29,876 52.4% Selling, general and administrative 55,341 53,659 1,682 3.1% Operating income $ 31,512 $ 3,318 $ 28,194 849.7% Net Revenue AvKARE net revenue for the year ended December 31, 2023 increased 30.9% as compared to the prior year primarily driven by growth in our distribution and government channels resulting from new product introductions.
AvKARE The following table sets forth the results of operations for our AvKARE segment (dollars in thousands): Years Ended December, 31 Change 2024 2023 $ % Net revenue $ 662,945 $ 531,749 $ 131,196 24.7% Cost of goods sold 559,335 444,896 114,439 25.7% Gross profit 103,610 86,853 16,757 19.3% Selling, general and administrative 60,709 55,341 5,368 9.7% Operating income $ 42,901 $ 31,512 $ 11,389 36.1% Net Revenue AvKARE net revenue for the year ended December 31, 2024 increased 24.7% as compared to the prior year primarily driven by growth in our distribution and government channels resulting from new product introductions.
Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order in our Generics segment discussed above.
Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order in our Affordable Medicines segment discussed above and a marketed product intangible asset impairment charge of $34.1 million in our Specialty segment related to a reduction in the promotional focus on LYVISPAH ® .
Notwithstanding our estimates, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods. 52 Results of Operations Consolidated Results The following table sets forth our summarized, consolidated results of operations (dollars in thousands): Years Ended December 31, Increase (Decrease) 2023 2022 $ % Net revenue $ 2,393,607 $ 2,212,304 $ 181,303 8.2% Cost of goods sold 1,573,042 1,427,596 145,446 10.2% Gross profit 820,565 784,708 35,857 4.6% Selling, general and administrative 429,675 399,700 29,975 7.5% Research and development 163,950 195,688 (31,738) (16.2)% In-process research and development impairment charges 30,800 12,970 17,830 137.5% Intellectual property legal development expenses 3,828 4,358 (530) (12.2)% Acquisition, transaction-related and integration expenses — 709 (709) (100.0)% Restructuring and other charges 1,749 1,421 328 23.1% Change in fair value of contingent consideration (14,497) 731 (15,228) nm Insurance recoveries for property losses and associated expenses — (1,911) 1,911 (100.0)% Charges related to legal matters, net 1,824 269,930 (268,106) (99.3)% Other operating income (1,138) (3,960) 2,822 (71.3)% Operating income (loss) 204,374 (94,928) 299,302 nm Total other expense, net (244,644) (153,199) (91,445) 59.7% Loss before income taxes (40,270) (248,127) 207,857 (83.8)% Provision for income taxes 8,452 6,662 1,790 26.9% Net loss $ (48,722) $ (254,789) $ 206,067 (80.9)% nm - not meaningful Net Revenue Net revenue for the year ended December 31, 2023 increased 8.2% from the prior year primarily due to: • Growth in our Generics segment of $39.3 million primarily due to new generics products launched in 2023 and 2022, which included biosimilars that contributed $62.6 million and new generic products that contributed $47.4 million, partially offset by price erosion.
Notwithstanding our estimates, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods. 54 Results of Operations Consolidated Results The following table sets forth our summarized, consolidated results of operations (dollars in thousands): Years Ended December 31, Change 2024 2023 $ % Net revenue $ 2,793,957 $ 2,393,607 $ 400,350 16.7% Cost of goods sold 1,773,519 1,573,042 200,477 12.7% Gross profit 1,020,438 820,565 199,873 24.4% Selling, general and administrative 476,436 429,675 46,761 10.9% Research and development 190,714 163,950 26,764 16.3% In-process research and development impairment charges — 30,800 (30,800) (100.0)% Intellectual property legal development expenses 5,845 3,828 2,017 52.7% Restructuring and other charges 2,355 1,749 606 34.6% Change in fair value of contingent consideration (930) (14,497) 13,567 (93.6)% Charges related to legal matters, net 96,692 1,824 94,868 nm Other operating income — (1,138) 1,138 (100.0)% Operating income 249,326 204,374 44,952 22.0% Total other expense, net (304,339) (244,644) (59,695) 24.4% Loss before income taxes (55,013) (40,270) (14,743) 36.6% Provision for income taxes 18,863 8,452 10,411 123.2% Net loss $ (73,876) $ (48,722) $ (25,154) 51.6% nm - not meaningful Net Revenue Net revenue for the year ended December 31, 2024 increased 16.7% from the prior year primarily due to: • Growth in our Affordable Medicines segment of $213.9 million, primarily due to new products launched in 2024 and 2023, which included biosimilars that contributed $59.7 million of year-over-year growth and other new products that contributed $144.1 million of year-over-year growth, and strong volume growth, partially offset by price erosion.
The increase in cost of goods sold was primarily due to increased AvKARE and Generics volume, a $25.0 million increase in marketed product intangible asset impairment charges primarily related to a reduction in promotional focus on LYVISPAH™ in our Specialty segment, and an increase in the inventory provision, partially offset by efficiencies in our supply costs.
The increase in cost of goods sold was primarily due to increased AvKARE and Affordable Medicines volume, increased plant and freight costs, and an increased inventory provision, partially offset by efficiencies in our supply costs.
Specialty The following table sets forth the results of operations for our Specialty segment (dollars in thousands): Years Ended December 31, Increase (Decrease) 2023 2022 $ % Net revenue $ 390,457 $ 374,121 $ 16,336 4.4% Cost of goods sold 214,277 182,432 31,845 17.5% Gross profit 176,180 191,689 (15,509) (8.1)% Selling, general and administrative 88,137 90,031 (1,894) (2.1)% Research and development 31,717 28,179 3,538 12.6% In-process research and development impairment charges 4,300 — 4,300 nm Intellectual property legal development expenses 120 107 13 12.1% Acquisition, transaction-related and integration expenses — 49 (49) (100.0)% Restructuring and other charges 1,105 — 1,105 nm Change in fair value of contingent consideration (14,497) 731 (15,228) nm Operating income $ 65,298 $ 72,592 $ (7,294) (10.0)% nm - not meaningful Net Revenue Specialty net revenue for the year ended December 31, 2023 increased 4.4% as compared to the prior year, driven by the growth in our endocrinology portfolio of $21.0 million, or 23.8%, and a $2.2 million, or 1.2%, increase in our neurology portfolio, which was negatively impacted by Medicare rebates associated with the Inflation Reduction Act of approximately $6.4 million.
Specialty The following table sets forth the results of operations for our Specialty segment (dollars in thousands): Years Ended December 31, Change 2024 2023 $ % Net revenue $ 445,749 $ 390,457 $ 55,292 14.2% Cost of goods sold 202,821 214,277 (11,456) (5.3)% Gross profit 242,928 176,180 66,748 37.9% Selling, general and administrative 109,658 88,137 21,521 24.4% Research and development 18,943 31,717 (12,774) (40.3)% In-process research and development impairment charges — 4,300 (4,300) (100.0)% Intellectual property legal development expenses 160 120 40 33.3% Restructuring and other charges 1,517 1,105 412 37.3% Change in fair value of contingent consideration (930) (14,497) 13,567 (93.6)% Operating income $ 113,580 $ 65,298 $ 48,282 73.9% Net Revenue Specialty net revenue for the year ended December 31, 2024 increased 14.2% as compared to the prior year, primarily driven by a $44.7 million increase in our promoted Parkinson’s franchise, of which $16.6 million was comprised of sales of ONGENTYS ® , which launched in January 2024, and initial sales of CREXONT ® , which launched in September 2024.
In-Process Research and Development Impairment Charges Generics IPR&D impairment charges of $26.5 million for the year ended December 31, 2023 were related to one asset that experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future 55 cash flows.
In-Process Research and Development Impairment Charges Affordable Medicines IPR&D impairment charges for the year ended December 31, 2023 were related to one asset that experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows. 57 Charges (Credit) Related to Legal Matters, Net For the year ended December 31, 2024, Affordable Medicines charges related to legal matters, net of $96.7 million were primarily associated with a settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against us by political subdivisions and Native American tribes across the U.S.
The increase was primarily driven by a $52.3 million increase in net interest expense as a result of higher rates on our variable rate debt and a $40.8 million loss on refinancing the Term Loan Due 2025 and amending the New Revolving Credit Facility.
The increase was primarily driven by a $48.0 million increase in net interest expense as a result of higher rates on our variable rate debt and an increase in the average amount outstanding on our revolving credit facility throughout 2024, and a $47.6 million increase in our tax receivable agreement liability (refer to Note 6.
Selling, General, and Administrative AvKARE SG&A expense for the year ended December 31, 2023 increased 3.1% as compared to the prior year primarily due to higher employee compensation. Liquidity and Capital Resources Our primary source of liquidity is cash generated from operations, available cash and borrowings under debt financing arrangements (as defined and described in Note 16.
Liquidity and Capital Resources Our primary source of liquidity is cash generated from operations, available cash and borrowings under debt financing arrangements (as defined and described in Note 15.
Fair Value Measurements for information about the estimation of our contingent consideration liabilities. The $15.2 million decrease in the change in fair value of contingent consideration for the year ended December 31, 2023 as compared to the prior year was primarily related to a reduction in promotional focus on LYVISPAH TM .
Research and Development Specialty R&D expense for the year ended December 31, 2024 decreased 40.3% as compared to the prior year primarily due to reduced project spend of $8.6 million and reduced infrastructure costs. 58 Change in Fair Value of Contingent Consideration The year-over-year variance of $13.6 million in change in fair value of contingent consideration for the year ended December 31, 2024 as compared to the prior year was primarily related to a reduction in promotional focus on LYVISPAH TM during the year ended December 31, 2023.
Gross profit as a percentage of net revenue decreased to 34.3% for the year ended December 31, 2023 from 35.5% in the prior year, primarily as a result of the factors noted above. 53 Selling, General and Administrative Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2023 increased 7.5% as compared to the prior year primarily due to increases in employee compensation, higher costs associated with our biosimilar launches, higher freight charges driven by increased sales volume, and higher professional fees associated with the Reorganization, partially offset by a decrease of $5.0 million associated with a biosimilar regulatory approval in the prior year.
Gross profit as a percentage of net revenue increased to 36.5% for the year ended December 31, 2024 from 34.3% in the prior year, primarily as a result of the factors noted above. 55 Selling, General and Administrative Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2024 increased 10.9% as compared to the prior year primarily due to increases in employee compensation, promotion associated with ONGENTYS ® and CREXONT ® , increased expenses associated with our growing biosimilars, and annual fees assessed on branded prescription drug manufacturers, which are also applicable to certain of our Affordable Medicines products.
As part of the Reorganization, the TRA was amended to reduce our future obligation to pay 85% of the realized tax benefits subject to the TRA to 75% of such realized benefits. As of December 31, 2023, the contingent TRA liability, including the impact of the amendment, was $185.2 million.
Refer to Note 20. Commitments and Contingencies for additional information. Refer to Note 20. Commitments and Contingencies for additional information. Tax Receivable Agreement As part of the Reorganization, our existing tax receivable agreement (“TRA”) was amended to reduce our future obligation to pay 85% of the realized tax benefits subject to the TRA to 75% of such realized benefits.
We estimate that we will invest approximately $60.0 million to $70.0 million during 2024 for capital expenditures to support and grow our existing operations, primarily related to investments in manufacturing equipment, IT and facilities. 57 Debt Instruments Over the next 12 months, we expect to make substantial payments for monthly interest and quarterly principal amounts due for our Term Loan Due 2028, monthly interest under our Term Loan Due 2025, and contractual payments for leased premises.
We expect such reimbursements to primarily be included in our financing cash flows. Debt Instruments Over the next 12 months, we expect to make substantial payments for monthly interest and quarterly principal amounts due for our Term Loan Due 2028, monthly interest on our Amended New Credit Facility, and contractual payments for leased premises.
Research and Development Generics R&D expense for the year ended December 31, 2023 decreased 21.1% compared to the prior year primarily due to lower project spend of $25.0 million and operating efficiencies in our infrastructure, including reduced employee compensation costs, partially offset by an increase in in-licensing and upfront milestone payments of $2.0 million.
Research and Development Affordable Medicines R&D expense for the year ended December 31, 2024 increased 29.9% as compared to the prior year primarily due to an increase in in-licensing and upfront milestone payments of $30.0 million, including $20.0 million associated with our exclusive license of Omalizumab (refer to Note 23.
Research and Development R&D expenses for the year ended December 31, 2023 decreased 16.2% from the prior year primarily due to lower project spend of $17.3 million, a decrease in in-licensing and upfront milestone payments of $2.5 million and operating efficiencies in our infrastructure.
Research and Development Research and development (“R&D”) expenses for the year ended December 31, 2024 increased 16.3% from the prior year primarily due to an increase in in-licensing and upfront milestone payments of $30.0 million, including $20.0 million associated with our exclusive license of Omalizumab (refer to Note 23.
Excluding these rebates, net revenue from our neurology portfolio increased 4.7%. Cost of Goods Sold and Gross Profit Cost of goods sold increased 10.2% for the year ended December 31, 2023 as compared to the prior year.
Additionally, growth in our promoted endocrinology portfolio of $20.8 million was partially offset by declines in our non-promoted products. Cost of Goods Sold and Gross Profit Cost of goods sold increased 12.7% for the year ended December 31, 2024 as compared to the prior year.
Total Other Expense, Net Total other expense, net increased 59.7% for the year ended December 31, 2023.
For additional information, refer to Note 20. Commitments and Contingencies. Total Other Expense, Net Total other expense, net increased 24.4% for the year ended December 31, 2024.
Selling, General, and Administrative Generics SG&A for the year ended December 31, 2023 increased by 9.2% compared to the prior year primarily due to an increase in employee compensation, higher costs associated with our biosimilar launches, and higher freight charges driven by increased sales volume, partially offset by a decrease of $5.0 million associated with a biosimilar regulatory approval in the prior year.
Selling, General, and Administrative Affordable Medicines SG&A for the year ended December 31, 2024 increased by 8.1% compared to the prior year primarily due to increases in employee compensation driven by infrastructure expansion and promotion associated with our biosimilar launches and the annual fees assessed on branded prescription drug manufacturers, which are also applicable to certain of our affordable medicine products, partially offset by reduced legal fees.
We expect an inflationary impact of approximately $15.0 million to $20.0 million for the year ending December 31, 2024.
We do not expect a material impact related to inflation for the year ending December 31, 2025.
Change in Fair Value of Contingent Consideration Refer to Note 19. Fair Value Measurements for information about the estimation of our contingent consideration liabilities.
Refer to Note 18. Fair Value Measurements for additional information.
Subsequent to the Reorganization, we are no longer obligated to make tax distributions to the Members. There was no liability for tax distributions payable to the Members as of December 31, 2023 and 2022. Cash Balances At December 31, 2023, our cash and cash equivalents consist of cash on deposit and highly liquid investments.
There was no liability for tax distributions payable to the AvKARE Sellers as of December 31, 2024 or 2023.
Selling, General, and Administrative Specialty SG&A expense for the year ended December 31, 2023 decreased 2.1% as compared to the prior year primarily due to a decrease in third-party marketing spend for our promoted products. 56 Research and Development Specialty R&D expense for the year ended December 31, 2023 increased 12.6% as compared to the prior year primarily due to an increase in project related spend of $7.7 million and increased employee compensation, partially offset by a decrease in in-licensing and upfront milestone payments of $4.5 million.
Selling, General, and Administrative AvKARE SG&A expense for the year ended December 31, 2024 increased 9.7% as compared to the prior year primarily due to higher sales-related expenses, increases in employee compensation and higher professional fees.
Removed
IPR&D impairment charges of $13.0 million in the prior year were related to one Generics asset which experienced a delay in its expected launch date and one Generics asset which experienced significant expected price erosion, both of which resulted in significantly lower than expected future cash flows. Change in Fair Value of Contingent Consideration Refer to Note 19.
Added
Related Party Transactions for additional information), partially offset by operating efficiencies in our infrastructure.
Removed
For the year ended December 31, 2022, we recorded charges of $269.9 million primarily for the corporate Opana® ER antitrust litigation of $262.8 million and Generics segment civil prescription opioid litigation of $18.0 million, partially offset by corporate insurance recoveries associated with securities class actions of $15.5 million. For further details, refer to Note 21. Commitments and Contingencies.
Added
Charges Related to Legal Matters, Net For the year ended December 31, 2024, charges related to legal matters, net of $96.7 million were primarily associated with an Affordable Medicines settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against us by political subdivisions and Native American tribes across the U.S.
Removed
Other Operating Income Other operating income for the year ended December 31, 2023 and 2022 was comprised of income earned from the India Production Linked Incentive Scheme for the Pharmaceutical Sector in our Generics segment. Refer to Note 6. Government Grants for additional information.
Added
Income Taxes for additional information), partially offset by a $40.8 million loss on refinancing the Term Loan Due 2025 and amending the New Revolving Credit Facility in 2023 (refer to Note 15. Debt for additional information).
Removed
Generics IPR&D impairment charges of $13.0 million in the prior year were related to one asset that experienced a delay in its expected launch date and one asset that experienced significant expected price erosion, both of which resulted in significantly lower than expected future cash flows .
Added
The change in the effective income tax rate for the year ended December 31, 2024 as compared to the prior year was primarily due to the timing and jurisdictional mix of income and the Reorganization, which resulted in allocating all of Amneal’s income to the Company. Refer to Note 6.
Removed
For the year ended December 31, 2022, Generics charges related to legal matters, net were $22.4 million, primarily comprised of $18.0 million of charges for civil prescription opioid litigation. Refer to Note 21. Commitments and Contingencies for additional information.
Added
Related Party Transactions for additional information), partially offset by operating efficiencies.
Removed
Other Operating Income Generics other operating income for the years ended December 31, 2023 and 2022 was comprised of income earned from the India Production Linked Incentive Scheme for the Pharmaceutical Sector. Refer to Note 6. Government Grants for additional information.
Added
Refer to Note 20. Commitments and Contingencies for additional information.
Removed
Excluding these rebates, net revenue from our neurology portfolio increased 4.7%.
Added
Additionally, growth in our promoted endocrinology portfolio of $20.8 million was partially offset by declines in our non-promoted products.
Removed
Based on the results of the excess cash flows calculation for the year ended December 31, 2020, the Company made a $14.4 million additional principal payment towards our Term Loan Due 2025 in March 2021.
Added
Selling, General, and Administrative Specialty SG&A expense for the year ended December 31, 2024 increased 24.4% as compared to the prior year primarily due to increases in promotional costs associated with ONGENTYS ® and CREXONT ® .
Removed
In the year ended December 31, 2023, we paid the remaining outstanding principal under our Rondo Term Loan from cash on hand, of which we made prepayments totaling $63.0 million in excess of planned principal payments (refer to No te 16 . Debt for additional information).
Added
We estimate that we will invest approximately $120.0 million during 2025 for capital expenditures to support and grow our existing operations, primarily related to investments in manufacturing equipment, IT and facilities. Our 2025 estimate includes capital expenditures for our collaboration and supply agreement with Metsera, of which we expect Metsera to reimburse us approximately $20.0 million.
Removed
Legal Settlements In January 2024, we paid $52.4 million to the plaintiffs of the O pana ER® antitrust litigation under the terms of the related settlement agreements with cash on hand (refer to Note 21. Commitments and Contingencies for additional information).
Added
In January 2025, the Company paid the entire remaining principal balance of $192.0 million outstanding on its Term 59 Loan Due 2025, plus accrued interest thereon of $0.7 million, with $190.0 million of new borrowings under the Amended New Revolving Credit Facility and cash on hand.
Removed
Tax Receivable Agreement In 2018, we entered into a tax receivable agreement (“TRA”) for which we were generally required to pay the other holders of Amneal Common Units 85% of the applicable tax savings, if any, in U.S. federal and state income tax that we were deemed to realize as a result of certain tax attributes of their Amneal Common Units sold to us (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Amneal Common Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the TRA.
Added
Settlement in Principle on Nationwide Civil Prescription Opioid Litigation In late April 2024, we reached a nationwide settlement in principle on the primary financial terms, with no admission of wrongdoing, for a nationwide resolution to the opioids cases that have been filed and that might have been filed by Attorneys General, political subdivisions and Native American tribes.
Removed
Because the Amneal Group has exchanged all of its Amneal Common Units pursuant to the Reorganization, the primary remaining factor that could increase the contingent TRA liability is an increase in the effective tax rate.
Added
As of December 31, 2024, the unrecorded contingent TRA liability, including the impact of the amendment, was $133.8 million.
Removed
In addition, any future payments under the TRA may create additional basis adjustments, which may result in an additional layer of depreciation and amortization allocable to the Company, resulting in additional TRA payments.
Added
Tax-related Distributions In 2020, we acquired a 65.1% controlling interest in both AvKARE Inc., a Tennessee corporation, now a limited liability company, and R&S. The sellers of AvKARE, LLC and R&S (the “AvKARE Sellers”) hold the remaining 34.9% interest in the holding company that directly owns the acquired companies (“Rondo”).
Removed
Tax-related Distributions to Amneal Members Prior to the Reorganization, Amneal was obligated to make tax distributions to the Members. For the years ended December 31, 2023, 2022, and 2021, the Company recorded net tax distributions of $56.7 million, $10.6 million, and $53.5 million, respectively, as a reduction of non-controlling interests.
Added
We attribute 34.9% of the net income or loss associated with Rondo to redeemable non-controlling interests. During the year ended December 31, 2024, 2023 and 2022, we made cash tax distributions of $19.8 million, $14.2 million and $6.9 million, respectively, to the AvKARE Sellers.
Added
Development and Supply Agreement Pursuant to a development and supply agreement with Kashiv Biosciences LLC (“Kashiv”) for a long-acting injectable, we paid Kashiv $10.0 million in February 2025 for the achievement of a regulatory milestone, which was accrued as of December 31, 2024. Refer to Note 23. Related Party Transactions for additional information.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

100 edited+23 added−11 removed308 unchanged
Biggest changeLevels of market acceptance for our new products could be affected by several factors, including: • the availability of alternative products from our competitors; • the prices of our products relative to those of our competitors; • the timing of our market entry; • the ability to market our products effectively at the retail level; • the perception of patients and the healthcare community, including third-party payers, regarding the safety, efficacy and benefits of our drug products compared to those of competing products; and • the acceptance of our products by government and private formularies.
Biggest changeLevels of market acceptance for our new products could be affected by several factors, including: • the availability of alternative products from our competitors; • the prices of our products relative to those of our competitors; • the timing of our market entry; • the ability to market our products effectively at the retail level; • the perception of patients and the healthcare community, including third-party payers, regarding the safety, efficacy and benefits of our drug products compared to those of competing products; • the healthcare providers’ willingness to prescribe medication based on perceptions, training, personal experiences and guidelines; • the willingness of payers and insurance companies to cover or add products to their formularies; • the willingness of hospitals and integrated delivery systems to stock or approve products on their formularies; and • the acceptance of our products by government and private formularies.
We rely particularly on trade secrets, trademarks, unpatented proprietary expertise and continuing innovation that we seek to protect, in part, by registering and using marks; and by entering into confidentiality agreements with licensees, suppliers, employees, consultants and other parties. We use this approach to protecting our IP in large part because few of our products are protected by patents.
We rely particularly on trade secrets, trademarks, unpatented proprietary expertise and continuing innovation that we seek to protect, in part, by registering and using marks; and by entering into confidentiality agreements with licensees, suppliers, employees, consultants and other parties. We use this 35 approach to protecting our IP in large part because few of our products are protected by patents.
The result of these developments may have a material adverse effect on our business, financial position and results of operations. We depend to a large extent on third-party suppliers and distributors for the raw materials for our products, particularly the chemical compounds comprising the APIs that we use to manufacture our products, as well as for certain finished goods.
The result of these developments may have a material adverse effect on our business, financial position and results of operations. 28 We depend to a large extent on third-party suppliers and distributors for the raw materials for our products, particularly the chemical compounds comprising the APIs that we use to manufacture our products, as well as for certain finished goods.
The impact of federal regulation of arrangements between manufacturers of brand 32 and generic/biosimilar products, further legislation and the potential for private-party lawsuits associated with such arrangements could adversely affect our business. From time to time we may need to rely on licenses to proprietary technologies, which may be difficult or expensive to obtain.
The impact of federal regulation of arrangements between manufacturers of brand and generic/biosimilar products, further legislation and the potential for private-party lawsuits associated with such arrangements could adversely affect our business. From time to time we may need to rely on licenses to proprietary technologies, which may be difficult or expensive to obtain.
We cannot assure you that 29 our expenses related to clinical trials will lead to the development of brand-name drugs that will generate revenues in the near future. Delays or failure in the development and commercialization of our own branded products could have a material adverse effect on our business, results of operations and financial condition.
We cannot assure you that our expenses related to clinical trials will lead to the development of brand-name drugs that will generate revenues in the near future. Delays or failure in the development and commercialization of our own branded products could have a material adverse effect on our business, results of operations and financial condition.
Continued concerns about the systemic impact of potential geopolitical issues and economic policy uncertainty, particularly in areas in which we operate, could potentially cause economic and market instability in the future and could adversely affect our business, including our financial performance. These conditions may also result in decreased consumer spending, including spending on our products.
Continued concerns about the systemic 42 impact of potential geopolitical issues and economic policy uncertainty, particularly in areas in which we operate, could potentially cause economic and market instability in the future and could adversely affect our business, including our financial performance. These conditions may also result in decreased consumer spending, including spending on our products.
We may also be subject to lawsuits relating to reimbursement programs that could be costly to defend, divert management’s attention and adversely affect our operating results. Most state Medicaid programs have established preferred drug lists, and the process, criteria and timeframe for obtaining placement on the preferred drug list varies from state to state.
We may also be subject to lawsuits relating to reimbursement programs that could be costly to defend, divert management’s attention and adversely affect our operating results. Most state Medicaid programs have established preferred 38 drug lists, and the process, criteria and timeframe for obtaining placement on the preferred drug list varies from state to state.
The generic pharmaceutical industry has also in recent years been the subject of significant publicity regarding the pricing of pharmaceutical products more generally, including publicity and pressure resulting from prices charged by competitors and peer companies for new products as well as price increases by competitors and peer companies on older products that the public has deemed excessive.
The pharmaceutical industry has also in recent years been the subject of significant publicity regarding the pricing of pharmaceutical products more generally, including publicity and pressure resulting from prices charged by competitors and peer companies for new products as well as price increases by competitors and peer companies on older products that the public has deemed excessive.
Following an inspection, agencies have in the past issued, and may in the future issue, a notice listing conditions that are believed to violate cGMP or other regulations, or a warning letter for violations of “regulatory significance” that may result in enforcement action if not 26 promptly and adequately corrected.
Following an inspection, agencies have in the past issued, and may in the future issue, a notice listing conditions that are believed to violate cGMP or other regulations, or a warning letter for violations of “regulatory significance” that may result in enforcement action if not promptly and adequately corrected.
A significant disruption at any of these facilities or otherwise within our supply chain, even on a short-term basis, could impair our ability to produce and ship products to the market on a timely basis or at all, which could have a material adverse effect on our business, financial position and results of operations.
A significant 32 disruption at any of these facilities or otherwise within our supply chain, even on a short-term basis, could impair our ability to produce and ship products to the market on a timely basis or at all, which could have a material adverse effect on our business, financial position and results of operations.
We may be required to change our business practices and policies as a result of such laws and regulations and may incur substantial compliance-related costs. 30 Regulators are also using existing laws and regulations to take enforcement actions related to the deployment of AI in ways that result in non-compliance with current laws and regulations.
We may be required to change our business practices and policies as a result of such laws and regulations and may incur substantial compliance-related costs. Regulators are also using existing laws and regulations to take enforcement actions related to the deployment of AI in ways that result in non-compliance with current laws and regulations.
The materialization of any of these risks could have a material adverse effect on our business, results of operations and financial condition. 21 Operational and Competitive Risks If we are unable to successfully develop or commercialize new products, our operating results will suffer.
The materialization of any of these risks could have a material adverse effect on our business, results of operations and financial condition. Operational and Competitive Risks If we are unable to successfully develop or commercialize new products, our operating results will suffer.
The FDA or foreign regulatory authorities may require us to conduct unanticipated additional clinical trials, which could result in additional expense and delays in bringing our product candidates to market. Any failure or delay in completing clinical trials for our product candidates would prevent or delay the commercialization of our product candidates.
The FDA or foreign regulatory authorities may require us to conduct unanticipated additional clinical trials, which could result in additional expense and delays in bringing our product candidates to market. Any failure or delay in completing clinical trials 30 for our product candidates would prevent or delay the commercialization of our product candidates.
If we are unable to timely obtain these licenses on commercially reasonable terms, our ability to commercially market our products may be inhibited or prevented, which could have a material adverse effect on our business, results of operations and financial condition.
If we are unable to timely obtain these licenses on commercially reasonable terms, our ability to commercially market 34 our products may be inhibited or prevented, which could have a material adverse effect on our business, results of operations and financial condition.
In the event our lenders accelerated the repayment of the borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. Any acceleration of amounts due under the credit agreements would likely have a material adverse effect on us.
In the event our lenders accelerated the repayment of the borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. Any acceleration of amounts due under the credit agreements would 41 likely have a material adverse effect on us.
Further, statements about our ESG-related initiatives and goals, and progress against those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Further, statements about our ESG-related initiatives and goals, and progress against those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are 33 subject to change in the future.
There is no guarantee that any drug that we market will be offered by 36 drug plans participating under the Medicare Part D program or of the terms of any such coverage, or that covered drugs will be reimbursed at amounts that reflect current or historical levels.
There is no guarantee that any drug that we market will be offered by drug plans participating under the Medicare Part D program or of the terms of any such coverage, or that covered drugs will be reimbursed at amounts that reflect current or historical levels.
Any such penalties, sanctions, or exclusion from federal health care programs could have a material adverse effect on our business, financial position and results of operations. From time to time we conduct routine reviews of our government pricing calculations.
Any such penalties, sanctions, or exclusion from federal health care programs could have a material adverse effect on our business, financial position and results of operations. From time to time we conduct routine reviews of our government pricing 39 calculations.
However, as other generic manufacturers receive regulatory approvals for their own generic versions, that market share, and the price of that product, will typically decline depending on several factors, including the number of competitors, the price of the branded product and the 24 pricing strategy of the new competitors.
However, as other generic manufacturers receive regulatory approvals for their own generic versions, that market share, and the price of that product, will typically decline depending on several factors, including the number of competitors, the price of the branded product and the pricing strategy of the new competitors.
We may experience decreases in the sale of our products in the future as a result of actions taken by our competitors, such as price reductions, or as a result of 25 regulatory actions related to our products or to competing products, which could have a material impact on our results of operations.
We may experience decreases in the sale of our products in the future as a result of actions taken by our competitors, such as price reductions, or as a result of regulatory actions related to our products or to competing products, which could have a material impact on our results of operations.
Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross - acceleration or cross - default provision applies which could have a material adverse effect on our business, 39 operations and financial results.
Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross - acceleration or cross - default provision applies which could have a material adverse effect on our business, operations and financial results.
As the patent(s) for a brand name product or the statutory marketing exclusivity period (if any) expires, the first generic manufacturer to receive regulatory approval for a generic equivalent of the product is often able to capture a substantial share of the market.
As the patent(s) for a brand name product 25 or the statutory marketing exclusivity period (if any) expires, the first generic manufacturer to receive regulatory approval for a generic equivalent of the product is often able to capture a substantial share of the market.
We must register our facilities, whether located in the U.S. or elsewhere, with the FDA as well as regulators outside the U.S., and our products must be made in a manner consistent with cGMP, or similar standards in each territory in which we manufacture.
We must register our facilities, whether located in the U.S. or elsewhere, with the FDA as well as regulators outside the U.S., and our products must 27 be made in a manner consistent with cGMP, or similar standards in each territory in which we manufacture.
Some countries may be subject to 40 periods of financial instability, may have reduced resources to spend on healthcare or may be subject to economic sanctions, and our business in these countries may be disproportionately affected by these changes.
Some countries may be subject to periods of financial instability, may have reduced resources to spend on healthcare or may be subject to economic sanctions, and our business in these countries may be disproportionately affected by these changes.
Accompanying the press and media coverage of pharmaceutical pricing practices and public complaints about the same, has been increasing U.S. federal and state legislative and enforcement interest with respect to drug pricing. For instance, the DOJ issued subpoenas to pharmaceutical companies, including us, seeking information about the sales, marketing and pricing of certain generic drugs. See Note 21.
Accompanying the press and media coverage of pharmaceutical pricing practices and public complaints about the same, has been increasing U.S. federal and state legislative and enforcement interest with respect to drug pricing. For instance, the DOJ issued subpoenas to pharmaceutical companies, including us, seeking information about the sales, marketing and pricing of certain generic drugs. See Note 20.
Although we believe our liabilities are adequate as of the date of this report, we cannot provide assurances that our reserves will 41 ultimately prove to be adequate. Increases in sales allowances may exceed our estimates for a variety of reasons, including unanticipated competition or an unexpected change in one or more of our contractual relationships.
Although 43 we believe our liabilities are adequate as of the date of this report, we cannot provide assurances that our reserves will ultimately prove to be adequate. Increases in sales allowances may exceed our estimates for a variety of reasons, including unanticipated competition or an unexpected change in one or more of our contractual relationships.
Our principal competitors in the U.S. generic/biosimilar pharmaceutical products market, where we primarily compete, are Teva Pharmaceutical Industries Ltd., Viatris Inc., Sandoz Group, Pfizer Inc., Fresenius Kabi KGaA, Hikma Pharmaceuticals PLC, Endo International plc, Dr. Reddy’s Laboratories Ltd., Amphastar Pharmaceuticals, Inc., Sun Pharmaceutical Industries Ltd., Lupin Pharmaceuticals, Inc., Zydus Pharmaceuticals USA Inc., and Aurobindo Pharma Limited.
Our principal competitors in the U.S. generic/biosimilar pharmaceutical products market, where we primarily compete, are Teva Pharmaceutical Industries Ltd., Viatris Inc., Sandoz Group, Pfizer Inc., Fresenius Kabi KGaA, Hikma Pharmaceuticals PLC, Dr. Reddy’s Laboratories Ltd., Amphastar Pharmaceuticals, Inc., Sun Pharmaceutical Industries Ltd., Lupin Pharmaceuticals, Inc., Zydus Pharmaceuticals USA Inc., and Aurobindo Pharma Limited.
For example, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that, if implemented, will impose broad climate-related disclosure obligations on certain companies doing business in California, including us. Other U.S. states’ legislatures are considering enactment of similar rules and regulations.
For example, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us. Other U.S. states’ legislatures are considering enactment of similar rules and regulations.
For example, it could: • increase our vulnerability to adverse economic and industry conditions; • limit our ability to obtain additional financing for future working capital, capital expenditures, raw materials, strategic acquisitions and other general corporate requirements; 38 • expose us to unhedged interest rate fluctuations (such as recent increases in interest rates from 2022 through 2023, which may to continue into 2024 and potentially beyond) because the interest on certain debt under the credit facilities is imposed at variable rates; • require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of cash flow for operations and other purposes; • make it more difficult for us to satisfy our obligations to our lenders, resulting in possible defaults on and acceleration of such indebtedness; • limit our ability to refinance indebtedness or increase the associated costs; • require us to sell assets to reduce debt or influence the decision about whether to do so; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate or prevent us from carrying out capital spending that is necessary or important to our growth strategy and efforts to improve operating margins or our business; and • place us at a competitive disadvantage compared to any competitors that have less debt or comparable debt at more favorable interest rates and that, as a result, may be better positioned to withstand economic downturn.
For example, it could: • increase our vulnerability to adverse economic and industry conditions; • limit our ability to obtain additional financing for future working capital, capital expenditures, raw materials, strategic acquisitions and other general corporate requirements; • expose us to unhedged interest rate fluctuations (such as recent increases in interest rates from 2022 through 2023) because the interest on certain debt under the credit facilities is imposed at variable rates; 40 • require us to dedicate a substantial portion of our cash flow from operations to payments on our debt (including interest payments), thereby reducing the availability of cash flow for operations and other purposes; • make it more difficult for us to satisfy our obligations to our lenders, resulting in possible defaults on and acceleration of such indebtedness; • limit our ability to refinance indebtedness or increase the associated costs; • require us to sell assets to reduce debt or influence the decision about whether to do so; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate or prevent us from carrying out capital spending that is necessary or important to our growth strategy and efforts to improve operating margins or our business; and • place us at a competitive disadvantage compared to any competitors that have less debt or comparable debt at more favorable interest rates and that, as a result, may be better positioned to withstand economic downturn.
Therefore, under the TRA, we will be required to make cash payments to the Members and their permitted transferees equal to 75% of certain attributed tax benefits, if any, that we actually realize. The amount of the cash payments that we will be required to make under the TRA could be significant.
Therefore, under the TRA, we will be required to make cash payments to the Members and their permitted transferees equal to 75% of certain attributed tax benefits, if any, that we actually realize. The amount of cash payments that we will be required to make under the TRA may be significant.
Some of the applicable 37 laws may impose liability even in the absence of specific intent to defraud.
Some of the applicable laws may impose liability even in the absence of specific intent to defraud.
The Amneal Group may have different interests than our other stockholders and may make decisions adverse to such interests. 43 In the ordinary course of their business activities, the Amneal Group may engage in activities where their interests conflict with our interests or those of our other stockholders.
The Amneal Group may have different interests than our other stockholders and may make decisions adverse to such interests. 45 In the ordinary course of their business activities, the Amneal Group may engage in activities where their interests conflict with our interests or those of our other stockholders.
Any of these events could prevent us from conducting our day-to-day activities and could disrupt the operation of our supply chain. For example, we source some of our APIs from the Middle East region, and the armed conflicts that have escalated in the area since October 2023 could threaten our ability to obtain these important inputs.
Any of these events could prevent us from conducting our day-to-day activities and could disrupt the operation of our supply chain. For example, we source some of our APIs from the Middle East region, and the armed conflicts that have escalated in the area since October 2023 could threaten our ability to obtain these important inp uts.
We have been and are currently involved in private antitrust actions involving certain settlement agreements as described in Note 21. Commitments and Contingencies - Other Litigation Related to the Company's Business.
We have been and are currently involved in private antitrust actions involving certain settlement agreements as described in Note 20. Commitments and Contingencies — Other Litigation Related to the Company’s Business.
Our competitors or other third parties may allege that we are infringing upon their IP, forcing us to expend substantial resources in litigation, the outcome of which is uncertain. Any unfavorable outcome of such litigation, including losses related to "at-risk" product launches, could have a material adverse effect on our business, financial position and results of operations.
Our competitors or other third parties may allege that we are infringing upon their IP, forcing us to expend substantial resources in litigation, the outcome of which is uncertain. Any unfavorable outcome of such litigation, including losses related to “at-risk” product launches, could have a material adverse effect on our business, financial position and results of operations.
A decline in our market capitalization, even if otherwise due to macroeconomic or industry - wide factors, could put pressure on the carrying value of our goodwill in both our Generics and Specialty segments and cause us to conduct an interim impairment test.
A decline in our market capitalization, even if otherwise due to macroeconomic or industry - wide factors, could put pressure on the carrying value of our goodwill in both our Affordable Medicines and Specialty segments and cause us to conduct an interim impairment test.
The interests of the Amneal Group may differ from the interests of our other stockholders. As of December 31, 2023, the Amneal Group controlled the majority of the voting power of all of our outstanding shares of common stock.
The interests of the Amneal Group may differ from the interests of our other stockholders. As of December 31, 2024, the Amneal Group controlled the majority of the voting power of all of our outstanding shares of common stock.
Our four largest customers, Cencora, Inc., McKesson Drug Co., Cardinal Health, Inc. and CVS Health Corporation, accounted for approximately 70%, 71% and 75% of total net sales of products for the years ended December 31, 2023, 2022 and 2021, respectively.
Our four largest customers, Cencora, Inc., McKesson Drug Co., Cardinal Health, Inc. and CVS Health Corporation, accounted for approximately 70%, 70% and 71% of total net sales of products for the years ended December 31, 2024, 2023 and 2022, respectively.
The majority of our products are produced at a few locations, and a business interruption at one or more of these locations or within our supply chain could have a material adverse effect on our business, financial position and results of operations.
The majority of our products are produced at a limited number of locations, and a business interruption at one or more of these locations or within our supply chain could have a material adverse effect on our business, financial position and results of operations.
As of December 31, 2023, six out of eleven members of our board of directors (the “Board of Directors”), have been designated by the Amneal Group.
As of December 31, 2024, six out of eleven members of our board of directors (the “Board of Directors”), have been designated by the Amneal Group.
If we fail to take steps to protect our confidential data, trade secrets, IP and personal data, we may be subject to legal, regulatory, financial, and reputational risks. AI technologies present significant opportunities and risks to our business.
If we or our vendors using AI technologies fail to take steps to protect our confidential data, trade secrets, IP and personal data, we may be subject to legal, regulatory, financial, and reputational risks. AI technologies present significant opportunities and risks to our business.
The CMS has issued extensive regulations and other sub-regulatory guidance documents implementing the Medicare Part D benefit, and the OIG has issued regulations and other guidance in connection with the Medicare Part D program. The federal government can be expected to continue to issue guidance and regulations regarding the obligations of Part D sponsors and their subcontractors.
The CMS has issued extensive regulations and other sub-regulatory guidance documents implementing the Medicare Part D benefit, and the Office of Inspector General has issued regulations and other guidance in connection with the Medicare Part D program. The federal government can be expected to continue to issue guidance and regulations regarding the obligations of Part D sponsors and their subcontractors.
We continually assess these threats and make investments to increase internal protection, detection, and response capabilities, as well as ensure our third-party providers have required capabilities and controls, to address these risks.
We continually assess these threats and make investments to increase internal protection, detection, and response 31 capabilities, as well as ensure our third-party providers have required capabilities and controls, to mitigate these risks.
Separately, certain of our products utilize a contract manufacturing company in Taiwan, and an escalation of tensions between China and Taiwan could impair or prevent altogether our ability to source these products.
Separat ely, certain of our products utilize a contract manufacturing company in Taiwan, and an escalation of tensions between China and Taiwan could impair or prevent altogether our ability to source these products.
Any failure by us to comply with applicable laws and regulations and/or any actions by the FDA and other agencies as described above could have a material adverse effect on our business, financial position and results of operations.
Any failure by us to comply with applicable laws and regulations and/or any actions by the FDA and other agencies as described above could have a material adverse effect on our business, financial position and results of operations. Our profitability depends on our major customers.
As a result, branded products typically experience a significant loss in revenues following the introduction of a competing generic product, even if subject to an existing patent.
As a result, branded products typically experience a significant loss in revenues and gross profit following the introduction of a competing generic product, even if subject to an existing patent.
If these trends continue or worsen, or if we experience further difficulty in this market or the specialty market, our revenues and profits in our Generics and Specialty segments may continue to be affected adversely.
If these trends continue or worsen, or if we experience further difficulty in this market or the specialty market, our revenues and profits in our Affordable Medicines and Specialty segments may continue to be affected adversely.
We may also communicate certain initiatives and goals, regarding environmental matters, diversity, responsible sourcing and social investments and other ESG related matters, in our SEC filings or in other public disclosures.
We may also communicate certain initiatives and goals, regarding environmental matters, diversity, responsible sourcing and social investments and other ESG related matters, in our public disclosures.
Even if we are able to obtain regulatory approvals for our new products, the success of those products is dependent upon market acceptance.
Even if we are able to obtain regulatory approvals for our new products, such as for CREXONT ® , the success of those products is dependent upon market acceptance.
The OECD has issued a two-pillar approach to global taxation, focusing on global profit allocation and a global minimum tax rate. The “Pillar One” global profit allocation proposal would not apply to us, since it generally applies to companies with global revenues exceeding €20 billion (approximately $22 billion using the exchange rate as of December 31, 2023).
The OECD has issued a two-pillar approach to global taxation, focusing on global profit allocation and a global minimum tax rate. The “Pillar One” global profit allocation proposal would not apply to us, because it generally applies to companies with global revenues exceeding €20 billion (approximately $21 billion using the exchange rate as of December 31, 2024).
Developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards, including the SEC’s proposed climate-related reporting requirements, and similar proposals by other international regulatory bodies.
Developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards and similar proposals by other international regulatory bodies.
The principal competitive factors in the pharmaceutical market include: • introduction of other generic drug manufacturers’ products in direct competition with our generic drug products; • introduction of authorized generic drug products in direct competition with our products, particularly during exclusivity periods; • the ability of generic drug product competitors to quickly enter the market after the expiration of patents or exclusivity periods, diminishing the amount and duration of significant profits; • consolidation among distribution outlets through mergers and acquisitions and the formation of buying groups; • the willingness of generic drug customers, including wholesale and retail customers, to switch among products of different pharmaceutical manufacturers; • pricing pressures by competitors and customers, even if similar price savings are not passed on to consumers; • a company’s reputation as a manufacturer and distributor of quality products; • a company’s level of service (including maintaining sufficient inventory levels for timely deliveries); • a company’s ability to use and integrate artificial intelligence (“AI”); • product appearance and labeling; and • a company’s breadth of product offerings. 22 Many of our competitors have longer operating histories and greater financial, R&D, marketing and other resources than we do.
The principal competitive factors in the pharmaceutical market include: • introduction of other generic drug manufacturers’ products in direct competition with our generic drug products; • introduction of authorized generic drug products in direct competition with our generic or branded products, particularly during exclusivity periods; • the ability of generic drug product competitors to quickly enter the market after the expiration of patents or exclusivity periods of our branded products, diminishing the amount and duration of significant profits; • consolidation among distribution outlets through mergers and acquisitions and the formation of buying groups; • the willingness of generic drug customers, including wholesale and retail customers, to switch among products of different pharmaceutical manufacturers; • pricing pressures by competitors and customers, even if similar price savings are not passed on to consumers; • a company’s reputation as a manufacturer and distributor of quality products; • a company’s level of service (including maintaining sufficient inventory levels for timely deliveries); • a company’s ability to use and integrate artificial intelligence (“AI”); • product appearance and labeling; and • a company’s breadth of product offerings.
Risks Relating to Our Indebtedness We have a substantial amount of indebtedness, which could adversely affect our financial health. As of December 31, 2023, we had $2.7 billion of total indebtedness, comprised of $2.4 billion, $192.0 million and $179.0 million in borrowings outstanding on the Term Loan Due 2028, Term Loan Due 2025 and Amended New Revolving Credit Facility, respectively.
Risks Relating to Our Indebtedness We have a substantial amount of indebtedness, which could adversely affect our financial health. As of December 31, 2024, we had $2.6 billion of total indebtedness, comprised of $2.3 billion, $192.0 million and $100.0 million in borrowings outstanding on the Term Loan Due 2028, Term Loan Due 2025 and Amended New Revolving Credit Facility, respectively.
The drug pricing reforms in the IRA have impacted, and may impact in the future, the prices of certain of our products. For example, rebates related to the IRA reduced our net revenue for the year ended December 31, 2023 by $7.9 million.
The drug pricing reforms in the IRA have impacted, and may impact in the future, the prices of certain of our products. For example, rebates related to the IRA reduced our net revenue for the years ended December 31, 2024 and 2023 by $8.0 million and $7.9 million, respectively.
The parties agree that there was no change of control from the Reorganization.
The parties agreed that there was no change of control from the Reorganization.
For the year ended December 31, 2023, our significant product families (defined as our top five products by annual revenue including both our Generics and Specialty segments) accounted for 24% of our consolidated net revenue. The sale of our products may be significantly influenced by market conditions, as well as regulatory actions.
For the year ended December 31, 2024, our significant product families (defined as our top five products by annual revenue 26 including both our Affordable Medicines and Specialty segments) accounted for 25% of our consolidated net revenue. The sale of our products may be significantly influenced by market conditions, as well as regulatory actions.
Our profitability depends on our major customers. If these relationships do not continue as expected, our business, condition (financial and otherwise), prospects and results of operations could materially suffer.
If these relationships do not continue as expected, our business, condition (financial and otherwise), prospects and results of operations could materially suffer.
Our principal competitors in the specialty pharmaceutical products market include Supernus Pharmaceuticals, Inc., Jazz Pharmaceuticals PLC, Coherus Biosciences, Inc. and Alkermes PLC. Our competitors in the AvKARE segment are other wholesalers, including Cardinal Health, Inc., Cencora, Inc., McKesson Drug Co., and Golden State Medical Supply.
Our principal competitors in the specialty pharmaceutical products market include Supernus Pharmaceuticals, Inc., Jazz Pharmaceuticals PLC, AbbVie Inc. and Alkermes PLC. Our competitors in the AvKARE segment are other wholesalers, including Cardinal Health, Inc., Cencora, Inc., McKesson Drug Co., and manufacturers / re-packagers such as Golden State Medical Supply.
Violations of certain of these laws, including the fraud and abuse laws may result in severe penalties against us and/or our responsible employees, including jail sentences, large fines, and the exclusion of our products from reimbursement under federal and state programs. Additionally, these risks may be compounded by our rapid international expansion.
Violations of certain of these laws, including the fraud and abuse laws may result in severe penalties against us and/or our responsible employees, including jail sentences, large fines, and the exclusion of our products from reimbursement under federal and state programs.
Some patent applications in the U.S. are maintained in secrecy or are not published until the resulting patents issue. 33 We also cannot be certain that patents will be issued with respect to any of our patent applications or that any existing or future patents issued to or licensed by us will provide competitive advantages for our products or will not be challenged, invalidated, circumvented or held unenforceable in proceedings commenced by our competitors or other third parties.
We also cannot be certain that patents will be issued with respect to any of our patent applications or that any existing or future patents issued to or licensed by us will provide competitive advantages for our products or will not be challenged, invalidated, circumvented or held unenforceable in proceedings commenced by our competitors or other third parties.
In addition, the European Union (“EU”) enacted the Corporate Sustainability Reporting Directive (“CSRD”) legislation in January 2023 which requires certain reporting and disclosure relating to ESG matters for companies whose business and assets exceed certain thresholds within EU countries.
In addition, the European Union (“EU”) enacted the Corporate Sustainability Reporting Directive (“CSRD”) legislation in January 2023 which requires certain reporting and disclosure starting during the first quarter of 2026 of calendar year 2025 data relating to ESG matters for companies whose business and assets exceed certain thresholds within EU countries.
Natural disasters and adverse weather conditions can be caused or exacerbated by climate change, and the spate of extreme weather events experienced over the past several years presents an alarming trend. As previously disclosed, extreme weather events have compromised our facilities in the past and may do so in the future.
Natural disasters and adverse weather conditions can be caused or exacerbated by climate change, and the spate of extreme weather events experienced over the past several years presents an alarming trend. Extreme weather events have compromised our facilities in the past and may do so in the future. Furthermore, work stoppages, whether union-organized or not, can also disrupt operations.
The FDA may institute changes to its user fee structure, such as implementing new or additional fees similar to the fees imposed by the GDUFA and its third iteration (GDUFA III), which may make it more difficult or expensive for us to obtain approval for our new generic products.
Congress may institute changes to the FDA’s user fee structures, such as implementing new or additional fees similar to the fees imposed under GDUFA III, which may make it more difficult or expensive for us to obtain approval for our new generic products.
The development process, including drug formulation, testing, and FDA review and approval, often takes three or more years. This process requires that we expend considerable capital to pursue activities that do not yield an immediate or near-term return.
The development process, including drug formulation, testing, and FDA review and approval, often takes three or more years, and is informed by factors outside of our control, including but not limited to, FDA staffing and policy changes. This process requires that we expend considerable capital to pursue activities that do not yield an immediate or near-term return.
A 35 determination that we are in violation of these and/or other government regulations and legal requirements may result in civil damages and penalties, criminal fines and prosecution, administrative remedies, the recall of products, the total or partial suspension of manufacturing and/or distribution activities, seizure of products, injunctions, whistleblower lawsuits, failure to obtain approval of pending product applications, withdrawal of existing product approvals, exclusion from participation in government healthcare programs and other sanctions.
A determination that we are in violation of these and/or other government regulations and legal requirements may result in civil damages and penalties, criminal fines and prosecution, administrative remedies, the recall of products, the total or partial suspension of manufacturing and/or distribution activities, seizure of products, injunctions, whistleblower lawsuits, failure to obtain approval of pending product applications, withdrawal of existing product approvals, exclusion from participation in government healthcare programs and other sanctions. 37 Any of these types of investigations or enforcement actions could affect our ability to commercially distribute our products and could materially and adversely affect our business, financial condition, results of operations and cash flows.
We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. As of December 31, 2023, we had approximately $2.7 billion of total indebtedness. During 2024, we expect to make $58.8 million in principal payments on the Term Loan Due 2028.
We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. As of December 31, 2024, we had approximately $2.6 billion of total indebtedness.
As of December 31, 2023, we had an ability to borrow up to an additional $253.2 million under our revolving credit facilities, comprised of $225.2 million and $28.0 million of available capacity under the Amended New Revolving Credit Facility and the Amended Rondo Revolving Credit Facility, respectively. Our substantial level of indebtedness could have important consequences.
As of December 31, 2024, we had an ability to borrow up to an additional $523.2 million under our revolving credit facilities, comprised of $495.2 million and $28.0 million of available capacity under the Amended New Revolving Credit Facility and the Amended Rondo Revolving Credit Facility, respectively.
Our inability to secure our quota allocation, the DEA’s decision to allocate quota in an amount less than the amount we requested, or a delay by the government in the issuance of the quota for these substances can result in a substantial impact to our revenues. 34 State governments have also taken steps to impose surcharges or taxes on opioid manufacturer s or distributors.
Our inability to secure our quota allocation, the DEA’s decision to allocate quota in an amount less than the amount we requested, or a delay by the government in the issuance of the quota for these substances can result in a substantial impact to our revenues.
However, we can provide no assurance that the FDA will approve our NDA for IPX203 timely or at all. Separately, product licensing involves inherent risks including uncertainties due to matters that may affect the achievement of milestones, as well as the possibility of contractual disagreements with regard to terms such as license scope or termination rights.
Separately, product licensing involves inherent risks including uncertainties due to matters that may affect the achievement of milestones, as well as the possibility of contractual disagreements with regard to terms such as license scope or termination rights.
As our competitors introduce their own generic equivalents of our generic drug products, our revenues and gross margin from such products generally decline, often rapidly. Revenues and gross margin derived from generic pharmaceutical products often follow a pattern based on regulatory and competitive factors that we believe are unique to the generic pharmaceutical industry.
Revenues and gross margin derived from generic pharmaceutical products often follow a pattern based on regulatory and competitive factors that we believe are unique to the generic pharmaceutical industry.
Because the Amneal Group has sold or exchanged all of their common units, as of the Reorganization, future Amneal tax deductions and obligations are no longer an associated risk. 42 In certain cases, payments under the TRA to the Members or their permitted transferees may be accelerated or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRA.
Because the Amneal Group has sold or exchanged all of their common units, as of the Reorganization, there is no longer the associated risk of increased future obligations under the TRA (i.e., there cannot be further sales or exchanges giving rise to increased TRA liability occurring subsequent to December 31, 2023). 44 In certain cases, payments under the TRA to the Members or their permitted transferees may be accelerated or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRA.
In addition, increasingly regulators, customers, investors, employees and other stakeholders are focusing on ESG matters and related disclosures. Concern over severe weather may also result in new or additional legal or regulatory requirements designed to mitigate the effects of severe weather on the environment and businesses.
Concern over severe weather may also result in new or additional legal or regulatory requirements designed to mitigate the effects of severe weather on the environment and businesses.
We have begun to evaluate the “Pillar Two” proposal which focuses on a global minimum tax of at least 15%. Legislation for the “Pillar Two” proposal has been enacted or substantively enacted in certain jurisdictions in which we operate. The legislation will be effective with the financial year beginning on January 1, 2024.
The “Pillar Two” proposal focuses on a global minimum tax of at least 15%. Legislation for the “Pillar Two” proposal, applying to us, has been enacted in Ireland, and was effective with the financial year beginning on January 1, 2024.
Any new or stricter regulations imposed by governmental authorities such as the DEA related to opioid products, as well as a potential increase in opioid-related litigation involving us, could result in material adverse effects on our business and results of operations. Refer to Note 21. Commitments and Contingencies - Prescription Opioid Litigation for more information regarding opioid-related litigation involving us.
State governments have also taken steps to impose surcharges or taxes on opioid manufacturer s or distributors. Any new or stricter regulations imposed by governmental authorities such as the DEA related to opioid products, as well as a potential increase in opioid-related litigation involving us, could result in material adverse effects on our business and results of operations.
As of December 31, 2023 and 2022, we had a TRA liability of $3.7 million and $0.6 million, respectively. If utilization of these DTAs becomes more-likely-than-not in the future, at such time, we could incur obligations approximating the $185.2 million unrecorded contingent TRA liability as of December 31, 2023.
If utilization of our DTAs becomes more-likely-than-not in the future, at such time, we could incur obligations approximating the $133.8 million unrecorded contingent TRA liability as of December 31, 2024.
For example, in November 2023, the Houthi movement, which controls parts of Yemen, began attacking merchant ships in the Red Sea disrupting global supply chains.
For example, in November 2023, the Houthi movement, which controls parts of Yemen, began attacking merchant ships in the Red Sea disrupting global supply chains; while the attacks have largely abated since late 2024, it is possible they will resume.
We rely on our network infrastructure and enterprise applications, internal technology systems and websites to run our business as well as our or our third-party partners’ physical facilities, such as our R&D or manufacturing premises. In addition, we rely on third-party hosted services.
Catastrophic events, including severe weather events, war and terrorist attacks, may negatively affect our business and results of operations. We rely on our network infrastructure and enterprise applications, internal technology systems and websites to run our business as well as our or our third-party partners’ physical facilities, such as our R&D or manufacturing premises.
We are subject to United States federal and state laws related to healthcare fraud and abuse and health information privacy and security, and the failure to comply with such laws may adversely affect our business.
Commitments and Contingencies — Civil Prescription Opioid Litigation for more information regarding opioid-related litigation, including a nationwide settlement in principle, involving us. 36 We are subject to United States federal and state laws related to healthcare fraud and abuse and health information privacy and security, and the failure to comply with such laws may adversely affect our business.
We expect to make interest payments totaling $274.6 million, excluding the impact of our interest rate swap and borrowings under our Amended New Revolving Credit Facility, during 2024 related to the Term Loan Due 2028 and the Term Loan Due 2025. Refer to Note 16. Debt and “ Commitments and Contractual Obligations ” under Part II, Item 7.
During 2025, we expect to make $58.8 million in principal payments on the Term Loan Due 2028. We expect to make interest payments totaling $226.9 million, excluding the impact of our interest rate swap and borrowings under our Amended New Revolving Credit Facility, during 2025 related to the Term Loan Due 2028. Refer to Note 15.
However, if the tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRA.
As a result, our future results of operations and earnings could be significantly impacted by these matters. However, if the tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRA.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee of the Board of Directors (the “Audit Committee”) is responsible for overseeing risks from cybersecurity threats. The Audit Committee receives cybersecurity updates from IT leadership at least twice a year.
Biggest changeBoard Oversight and Management’s Responsibilities Board Oversight While our Board of Directors is ultimately responsible for risk oversight, committees of the Board of Directors assist in fulfilling oversight responsibilities in certain areas of risk. The Audit Committee of the Board of Directors (the “Audit Committee”) is responsible for overseeing risks from cybersecurity threats.
Incident response emphasizes rapid containment following detection of a range of threats including: • repeated login failures; • suspicious network traffic; • malware detection; and, • other threats as prioritized through a combination of industry threat intelligence via the Healthcare Information Sharing and Analysis Center and the Company’s security operation center.
Incident response emphasizes rapid containment following detection of a range of threats including: • suspicious repeated login failures; • suspicious network traffic; • malware detection; and • other threats as prioritized through a combination of industry threat intelligence via the Healthcare Information Sharing and Analysis Center and the Company’s security operation center.
As of the date of this report, we do not believe that any risks from any cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to affect us, including our business strategy, results of operations or financial condition.
As of the date of this report, we do not believe that any risks from any cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
We prioritize our mitigation of cybersecurity risks based on relative severity (e.g., critical risk, high risk, low risk) and document a mitigation plan that details a resolution timeline.
We prioritize our mitigation of cybersecurity risks based on relative likelihood and severity (e.g., critical risk, high risk, low risk) and document a mitigation plan that details a resolution timeline.
We prioritize critical or high vulnerabilities for swift remediation. Additionally, we employ a third-party service provider for continuous cybersecurity risk and vulnerability monitoring. We make continuous adjustments to system and network configurations to mitigate or remediate identified vulnerabilities. Incident Response Cybersecurity incident response procedures are informed by NIST Special Publication 800-61, and continuously improved following quarterly exercises and live incidents.
We prioritize critical or high vulnerabilities for swift remediation. Additionally, we employ a third-party service provider for continuous cybersecurity risk and vulnerability monitoring. We make continuous adjustments to system and network configurations to mitigate or remediate identified vulnerabilities. Incident Response Cybersecurity incident response procedures are informed by NIST Special Publication 800-61, and continuously improved following periodic exercises and live incidents.
Risks Identified cybersecurity risks, including third-party risks and internal risks, are documented and managed in a risk register, which is reviewed monthly with leaders of our internal audit, compliance, and IT departments to ensure visibility and consensus in a separation-of-duties structure. Risks are stratified according to a standard calculus of probability, severity and materiality.
Risks Identified cybersecurity risks, including third-party risks and internal risks, are documented and managed in a risk register, which is reviewed regularly with leaders of our internal audit, compliance, and IT departments to ensure visibility and consensus in a separation-of-duties structure. Risks are stratified according to a standard calculus of probability, severity and materiality.
However, a significant cybersecurity incident may materially impact our business strategy, results of operations and financial condition.
However, a significant cybersecurity incident may materially impact our 47 business strategy, results of operations and financial condition.
Such significant cybersecurity incidents include, but are not limited to: 45 • ransomware infiltrating our critical systems resulting in production delays and/or loss of critical information; • cyber theft of our IP; • cyber theft of customer and/or patient information; • cyberattack on a critical partner that disrupts our supply chain and/or services; and, • cyberattacks that significantly impact our brand perception.
Such significant cybersecurity incidents include, but are not limited to: • ransomware infiltrating our critical systems resulting in production delays and/or loss of critical information; • cyber theft of our IP; • cyber theft of employee and family member, customer and/or patient information; • cyberattack on a critical partner that disrupts our supply chain and/or services; and, • cyberattacks that significantly impact our brand perception.
Additionally, we use a variety of detective and preventive technologies, including: 44 • email threat detection; • endpoint detection and response; • a 24 hours a day, 7 days a week security operations center that monitors system log telemetry and threat intelligence via a security incident and event management platform; • vulnerability scanning on both internal and externally - facing infrastructure; • next-generation firewalls with geographic access restriction for sensitive externally - facing systems; • multi factor authentication for remote access and certain internal systems; • domain name service threat detection; and, • internal incident response procedures based on NIST Special Publication 800-61.
Additionally, we use a variety of detective and preventive technologies, including: 46 • email threat detection; • endpoint detection and response; • a 24 hours a day, 7 days a week security operations center that monitors system log telemetry and threat intelligence via a security incident and event management platform; • vulnerability scanning on both internal and externally - facing infrastructure; • next-generation firewalls with geographic access restriction for sensitive externally - facing systems; • multi-factor authentication for remote access and certain internal systems; • data loss prevention for email traffic containing sensitive information; • domain name service threat detection; and • internal incident response procedures based on NIST Special Publication 800-61.
Accordingly, no matter how well designed or implemented our controls are, we will not be able to anticipate all security breaches of these types, and we may not be able to implement effective preventive measures against such security breaches in a timely manner Board Oversight and Management’s Responsibilities Board Oversight While our Board of Directors is ultimately responsible for risk oversight, committees of the Board of Directors assist in fulfilling oversight responsibilities in certain areas of risk.
Accordingly, no matter how well designed or implemented our controls are, we will not be able to anticipate all security breaches of these types, and we may not be able to implement effective preventive measures against such security breaches in a timely manner.
When meeting with the Audit Committee, the IT leadership team highlights significant accomplishments and issues related to our IT infrastructure, including cybersecurity incidents, risks, industry trends, notable incidents facing other companies, incident preparedness and other developments. The Audit Committee also receives updates regarding progress on initiatives to further align with the five pillars of the NIST CSF.
The Audit Committee receives cybersecurity updates from IT leadership at least twice a year. When meeting with the Audit Committee, the IT leadership team highlights significant accomplishments and issues related to our IT infrastructure, including cybersecurity incidents, risks, industry trends, notable incidents facing other companies, incident preparedness and other developments.
Director of Global Information Security, Compliance, Privacy, is the primary management personnel responsible for our cybersecurity program.
Management Oversight Our IT department, in conjunction with the compliance department, assess and manage risks related to cybersecurity. The Senior Director of Global Information Security, Compliance and Privacy, is the primary management personnel responsible for our cybersecurity program.
These briefings are designed to provide visibility to the Audit Committee about the identification, assessment, and management of critical risks, audit findings, and management’s risk mitigation strategies. Management Oversight Our IT department, in conjunction with the compliance department, assess and manage risks related to cybersecurity. The Sr.
The Audit Committee also receives updates regarding progress on initiatives to further align with the five pillars of the NIST CSF. These briefings are designed to provide visibility to the Audit Committee about the identification, assessment, and management of critical risks, audit findings, and management’s risk mitigation strategies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur properties are generally used to support the operations of our Generics, Specialty and AvKARE segments. 46 Our significant properties are as follows: Property Address Legal Status Purpose Bridgewater, New Jersey Leased Executive Office Glasgow, Kentucky Leased Administrative, Distribution and Warehouse Glasgow, Kentucky Leased Warehouse Yaphank, New York Leased Warehouse Glasgow, Kentucky Owned Warehouse Piscataway, New Jersey Leased Warehouse Piscataway, New Jersey Leased Manufacturing Piscataway, New Jersey Leased R&D, manufacturing Branchburg, New Jersey Leased Manufacturing Branchburg, New Jersey Leased Manufacturing Piscataway, New Jersey Leased Manufacturing Branchburg, New Jersey Leased Warehouse East Hanover, New Jersey Leased Warehouse Bridgewater, New Jersey Leased R&D Yaphank, New York Leased Manufacturing, R&D, Quality and Regulatory Pulaski, Tennessee Leased Warehouse and office space Philadelphia, Pennsylvania Leased Warehouse and office space Fountain Run, Kentucky Leased Warehouse and office space Cashel Co, Tipperary, Ireland Owned R&D, Manufacturing Ahmedabad, Gujarat, India Owned Oral Solids Manufacturing and R&D Matoda, Gujarat, India Leased Oral Solids and Injectables Manufacturing and R&D Ahmedabad, Gujarat, India Leased R&D (Injectables), Corporate Office Ahmedabad, Gujarat, India Leased Corporate Office Ahmedabad, Gujarat, India Leased Warehouse Mahabubnagar, Telangana, India Leased Oncology R&D and Manufacturing Visakhapatam, Apandhra Pradesh, India Owned API Manufacturing and R&D Bharuch, Gujarat, India Leased API Manufacturing Ahmedabad, Gujarat, India Leased R&D Mehsana, Gujarat, India Owned Injectables Manufacturing Ahmedabad, Gujarat, India Leased Office space Ahmedabad, Gujarat, India Owned Biologics manufacturing Ahmedabad, Gujarat, India Owned Injectables Manufacturing and R&D Mumbai, Maharashtra, India Leased Office Space Ahmedabad, Gujarat, India Leased Warehouse Item 3.
Biggest changeOur properties are generally used to support the operations of our Affordable Medicines, Specialty and AvKARE segments. 48 Our significant properties are as follows: Property Address Legal Status Purpose Bridgewater, New Jersey Leased Executive Office Glasgow, Kentucky Leased Administrative, Distribution and Warehouse Glasgow, Kentucky Leased Warehouse Yaphank, New York Leased Warehouse Glasgow, Kentucky Owned Warehouse Glasgow, Kentucky Owned Warehouse Glasgow, Kentucky Leased Warehouse Piscataway, New Jersey Leased Warehouse Piscataway, New Jersey Leased Manufacturing Piscataway, New Jersey Leased R&D, Manufacturing Branchburg, New Jersey Leased Manufacturing Branchburg, New Jersey Leased Manufacturing Piscataway, New Jersey Leased Manufacturing Branchburg, New Jersey Leased Warehouse East Hanover, New Jersey Leased Warehouse Bridgewater, New Jersey Leased R&D Yaphank, New York Leased Manufacturing, R&D, Quality and Regulatory Pulaski, Tennessee Leased Warehouse and office space Philadelphia, Pennsylvania Leased Warehouse and office space Fountain Run, Kentucky Leased Warehouse and office space Cashel Co, Tipperary, Ireland Owned R&D, Manufacturing Ahmedabad, Gujarat, India Owned Oral Solids Manufacturing and R&D Matoda, Gujarat, India Leased Oral Solids and Injectables Manufacturing and R&D Ahmedabad, Gujarat, India Leased R&D (Injectables), Corporate Office Ahmedabad, Gujarat, India Leased Corporate Office Mahabubnagar, Telangana, India Leased Oncology R&D and Manufacturing Visakhapatam, Apandhra Pradesh, India Owned API Manufacturing and R&D Bharuch, Gujarat, India Leased API Manufacturing Ahmedabad, Gujarat, India Leased R&D Mehsana, Gujarat, India Owned Injectables Manufacturing Ahmedabad, Gujarat, India Leased Office space Ahmedabad, Gujarat, India Owned Injectables Manufacturing and R&D Mumbai, Maharashtra, India Leased Office Space Ahmedabad, Gujarat, India Leased Warehouse Item 3.
Legal Proceedings Information pertaining to legal proceedings can be found in Note 21. Commitments and Contingencies and is incorporated by reference herein. Item 4. Mine Safety Disclosures Not applicable. 47 PART II.
Legal Proceedings Information pertaining to legal proceedings can be found in Note 20. Commitments and Contingencies and is incorporated by reference herein. Item 4. Mine Safety Disclosures Not applicable. 49 PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor Specialty products, the majority of the product’s commercial value is usually realized during the period in which the product has market exclusivity. In the U.S., when market exclusivity expires and generic versions of a product are approved and marketed, there can often be very substantial and rapid declines in the branded product’s sales.
Biggest changeIn the U.S., when market exclusivity expires and generic versions of a product are approved and marketed, there can often be very substantial and rapid declines in the branded product’s sales. AvKARE Our AvKARE segment provides pharmaceuticals, medical and surgical products and services primarily to governmental agencies, predominantly focused on the U.S. Department of Defense and the U.S.
On November 7, 2023, we implemented a plan pursuant to which the Company and Amneal reorganized and simplified our corporate structure by eliminating our umbrella partnership-C-corporation structure and converting to a more traditional structure whereby all stockholders hold their voting and economic interests directly through the public company (the “Reorganization”).
On November 7, 2023, we implemented a plan pursuant to which we and Amneal reorganized and simplified our corporate structure by eliminating our umbrella partnership-C-corporation structure and converting to a more traditional structure whereby all stockholders hold their voting and economic interests directly through the public company (the “Reorganization”).
For the years ended December 31, 2023 and December 31, 2022, we utilized the Russell 2000 Index as a broad equity market index for purposes of meeting the disclosure requirements of Regulation S-K Item 201(e)(1)(i) and the Dow Jones U.S. Select Pharmaceuticals Index as a published industry index for purposes of meeting the disclosure requirements of Regulation S-K Item 201(e)(1)(ii)(A).
For the years ended December 31, 2024 and December 31, 2023, we utilized the Russell 2000 Index as a broad equity market index for purposes of meeting the disclosure requirements of Regulation S-K Item 201(e)(1)(i) and the Dow Jones U.S. Select Pharmaceuticals Index as a published industry index for purposes of meeting the disclosure requirements of Regulation S-K Item 201(e)(1)(ii)(A).
The Class A common stock price performance shown on the graph only reflects the change in our Class A common stock price relative to the noted indices and is not necessarily indicative of future price performance. 48 Dividends We have never paid cash dividends on any class of our common stock and have no present plans to do so.
The Class A common stock price performance shown on the graph only reflects the change in our Class A common stock price relative to the noted indices and is not necessarily indicative of future price performance. 50 Dividends We have never paid cash dividends on any class of our common stock and have no present plans to do so.
We focus on developing products with substantial barriers-to-entry resulting due to complex drug formulations or manufacturing, or legal or regulatory challenges. Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and even more so in periods of market exclusivity, or in periods of limited generic competition.
We focus on developing products that have substantial barriers-to-entry due to complex drug formulations or manufacturing, or legal or regulatory challenges. Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and even more so in periods of market exclusivity, or in periods of limited generic competition.
Our current policy is to retain all earnings, if any, for use in the operation of our business or to reduce our debt. Issuer Purchases of Equity Securities We did not purchase any shares of our Class A common stock during the three months ended December 31, 2023. 49 Item 6. Reserved 50 Item 7.
Our current policy is to retain all earnings, if any, for use in the operation of our business or to reduce our debt. Issuer Purchases of Equity Securities We did not purchase any shares of our Class A common stock during the three months ended December 31, 2024. 51 Item 6. Reserved 52 Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Amneal Pharmaceuticals, Inc. (the “Company”, “we,” “us,” or “our”) is a global pharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines, including retail generics, injectables, biosimilars and specialty branded pharmaceuticals.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Amneal Pharmaceuticals, Inc. (the “Company”, “we,” “us,” or “our”) is a global pharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines. Our Affordable Medicines segment includes retail generics, injectables, and biosimilars.
Select Pharmaceuticals Index for the period from December 31, 2018 to December 31, 2023, assuming the investment of $100 on December 31, 2018, and the reinvestment of dividends.
Select Pharmaceuticals Index for the period from December 31, 2019 to December 31, 2024, assuming the investment of $100 on December 31, 2019, and the reinvestment of dividends.
Effective with the Reorganization, the Company holds 100% of the Amneal Common Units and consolidates the financial statements of Amneal and its subsidiaries. Refer to Note 1. Nature of Operations in our consolidated financial statements for additional information about the Reorganization.
Effective with the Reorganization, we hold 100% of the Amneal Common Units and consolidate the financial statements of Amneal and its subsidiaries. Refer to Note 1. Nature of Operations in our consolidated financial statements for additional information about the Reorganization.
As a result, we face a number of industry-specific factors and challenges, which can significantly impact our results. For a more detailed explanation of our business and its risks, refer to
The Pharmaceutical Industry The pharmaceutical industry is highly competitive and highly regulated. As a result, we face a number of industry-specific factors and challenges, which can significantly impact our results. For a more detailed explanation of our business and its risks, refer to
As such, the timing of new product introductions can have a significant impact on our financial results. The entrance into the market of additional competition generally has a negative impact on the volume and/or pricing of the affected products. Additionally, pricing is determined by market place dynamics and is often affected by factors outside of our control.
As such, the timing of new product introductions can have a significant impact on our financial results. The entrance into the market of additional competition generally has a negative impact on the volume and/or pricing of the affected products.
For a discussion of our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, see “Results of Operations” and “Liquidity and Capital Resources” under Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K.
For a discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, see “Results of Operations” and “Liquidity and Capital Resources” under Part II, Item 7.
Overview Segments We have three reportable segments: Generics, Specialty, and AvKARE. Generics Our Generics segment includes over 260 product families covering an extensive range of dosage forms and delivery systems, including both immediate and extended release oral solids, powders, liquids, sterile injectables, nasal sprays, inhalation and respiratory products, ophthalmics, films, transdermal patches and topicals.
Affordable Medicines Our Affordable Medicines segment includes approximately 270 product families covering an extensive range of dosage forms and delivery systems, including both immediate and extended-release oral solids, powders, liquids, sterile injectables, nasal sprays, inhalation and respiratory products, biosimilar products, ophthalmics, films, transdermal patches and topicals.
Specialty Our Specialty segment is engaged in the development, promotion, sale and distribution of proprietary branded pharmaceutical products, with a focus on products addressing central nervous system (“CNS”) disorders, including Parkinson’s disease, and endocrine disorders.
Additionally, pricing is determined by market place dynamics and is often affected by factors outside of our control. 53 Specialty Our Specialty segment is engaged in the development, promotion, sale and distribution of proprietary branded pharmaceutical products, with a focus on products addressing central nervous system disorders, including Parkinson’s disease, and endocrine disorders.
According to the records of our transfer agent, we had 170 holders of record of our Class A common stock as of February 29, 2024. A substantially greater number of holders of our Class A common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
A substantially greater number of holders of our Class A common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
AvKARE is also a wholesale distributor of pharmaceuticals, over the counter drugs and medical supplies to its retail and institutional customers that are located throughout the U.S. focused primarily on offering 340b-qualified entities products to provide consistency in care and pricing. The Pharmaceutical Industry The pharmaceutical industry is highly competitive and highly regulated.
AvKARE is also a wholesale distributor of pharmaceuticals, over the counter drugs and medical supplies to its retail and institutional customers that are located throughout the U.S. focused primarily on entities that provide care to low-income and uninsured patients. Operating results for the sale of Amneal products by AvKARE are included in our Affordable Medicines reportable segment.
Our Specialty products are marketed through skilled specialty sales and marketing teams, who call on neurologists, movement disorder specialists, endocrinologists and primary care physicians in key markets throughout the U.S. Our Specialty segment also has a number of product candidates that are in varying stages of development.
UNITHROID ® , indicated for the treatment of hypothyroidism, is sold under a license and distribution agreement with Jerome Stevens Pharmaceuticals, Inc. Our Specialty products are marketed through skilled specialty sales and marketing teams, who call on neurologists, movement disorder specialists, endocrinologists and primary care physicians in key markets throughout the U.S.
AvKARE Our AvKARE segment provides pharmaceuticals, medical and surgical products and services primarily to governmental agencies. AvKARE is a re-packager of bottle and unit dose pharmaceuticals under the registered names of AvKARE and AvPAK, which service the Department of Defense and Department of Veteran Affairs.
Department of Veterans Affairs. AvKARE is a re-packager of bottle and unit dose pharmaceuticals under the registered names of AvKARE and AvPAK.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Effective December 27, 2023, our Class A common stock began trading under the symbol “AMRX” on the Nasdaq Stock Market LLC (“Nasdaq”). Our Class A common stock previously traded on the New York Stock Exchange.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Our Class A common stock trades under the symbol “AMRX” on the Nasdaq. According to the records of our transfer agent, we had 154 holders of record of our Class A common stock as of February 14, 2025.
In addition to RYTARY®, our promoted Specialty portfolio also includes 51 UNITHROID® (levothyroxine sodium), for the treatment of hypothyroidism, which is sold under a license and distribution agreement with Jerome Stevens Pharmaceuticals, Inc., and ONGENTYS® (opicapone), an add-on treatment to carbidopa/levodopa in patients with Parkinson’s disease experiencing “Off” episodes, which we commenced selling in early 2024 under a license agreement with BIAL.
RYTARY ® is indicated for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication or manganese intoxication. ONGENTYS ® is an add-on treatment to carbidopa/levodopa in patients with Parkinson’s disease experiencing “Off” episodes, which we commenced selling in early 2024 under a license agreement with BIAL-Portela & Ca., S.A.
We operate principally in the United States (“U.S.”), India, and Ireland, and sell to wholesalers, distributors, hospitals, governmental agencies, chain pharmacies and individual pharmacies, either directly or indirectly. Prior to the Reorganization (as defined herein), the Company was a holding company, whose principal assets were common units (the “Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”).
Refer to the section “Segments” below for an overview of our segments, including the change in name of the Affordable Medicines segment. Prior to the Reorganization (as defined herein), we were a holding company, whose principal assets were common units (the “Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”).
Removed
Our portfolio of products includes RYTARY®, an extended release oral capsule formulation of carbidopa-levodopa for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication or manganese intoxication.
Added
In our Specialty segment, we offer a portfolio of branded pharmaceuticals focused primarily on central nervous system and endocrine disorders. Through our AvKARE segment, we are a distributor of pharmaceuticals and other products for the U.S. federal government, retail, and institutional markets. We operate principally in the United States (“U.S.”), India, and Ireland.
Removed
On June 30, 2023, we received a complete response letter (“CRL”) from the FDA regarding our new drug application (“NDA”) for IPX203 for the treatment of Parkinson’s disease.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 14, 2024. Overview Segments We have three reportable segments: Affordable Medicines (formerly known as Generics), Specialty, and AvKARE.
Removed
The CRL indicated that although an adequate scientific bridge was established for the safety of one ingredient, levodopa, based on pharmacokinetic studies, it was not adequately established for the other ingredient, carbidopa, and the FDA requested additional information. The CRL did not identify any issues with respect to the efficacy or manufacturing of IPX203.
Added
During the fourth quarter of 2024, we changed the name of our Generics segment to “Affordable Medicines” to reflect the full product offering of the segment. The segment name change did not result in any change to the composition of our reportable segments and, therefore, did not result in any changes to our historical segment results.
Removed
During October 2023, we met with the FDA to align on the path to approval for IPX203. During the meeting, the FDA asked us to complete a QT study, a routine cardiac safety study that is required for new drugs. We completed the QT study and resubmitted our NDA for IPX203 on February 7, 2024.
Added
Our portfolio of products includes CREXONT ® (combination of carbidopa and levodopa extended release capsules), RYTARY ® (extended release oral capsule formulation of carbidopa-levodopa), UNITHROID ® (levothyroxine sodium), and ONGENTYS ® (opicapone). On August 7, 2024, the FDA approved our new drug application (“NDA”) for CREXONT ® , previously referred to as IPX203.
Added
In September 2024, we began selling CREXONT ® , which is indicated for the treatment of Parkinson’s disease, Parkinson’s disease caused by infection or inflammation of the brain, or Parkinson’s disease-like symptoms that may result from carbon monoxide or manganese poisoning in adults.
Added
Our Specialty segment also has a number of product candidates that are in varying stages of development. For Specialty products, the majority of the product’s commercial value is usually realized during the period in which the product has market exclusivity.

Item 7. Management's Discussion & Analysis

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

28 edited+7 added−8 removed36 unchanged
Biggest changeDebt ) and (ii) a payment made in the prior year for the acquisition of the baclofen franchise of certain entities affiliated with Saol International Limited (refer to Note 3 ). 59 Commitments and Contractual Obligations Our contractual obligations as of December 31, 2023 were as follows (in thousands): Payments Due by Period Contractual Obligations Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Term Loan Due 2025 (1) $ 191,979 $ — $ 191,979 $ — $ — Interest payments on Term Loan Due 2025 (1) 23,440 17,508 5,932 — — Term Loan Due 2028 (1) 2,351,647 58,791 117,582 2,175,274 — Interest payments on Term Loan Due 2028 (1) 1,067,102 257,107 493,382 316,613 — Amended New Revolving Credit Facility (2) 179,000 179,000 — — — Operating lease obligations (3) 61,340 15,978 25,237 13,209 6,916 Financing lease obligation (4) 110,737 6,856 13,014 11,294 79,573 Opana ER® antitrust litigation settlements and associated interest (5) 52,415 52,415 — — — Non-cancelable marketing and royalty obligations (6) 28,000 13,000 15,000 — — Total $ 4,065,660 $ 600,655 $ 862,126 $ 2,516,390 $ 86,489 (1) A description of our Term Loan Due 2025 and Term Loan Due 2028, and related debt service and interest requirements is contained in Note 16.
Biggest changeStockholders’ (Deficiency) Equity for additional information). 61 Commitments and Contractual Obligations Our contractual obligations as of December 31, 2024 were as follows (in thousands): Payments Due by Period Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Term Loan Due 2025 (1) $ 191,979 $ 191,979 $ — $ — $ — Interest payments on Term Loan Due 2025 (1) 5,271 5,271 — — — Term Loan Due 2028 (1) 2,292,856 58,791 117,582 2,116,483 — Interest payments on Term Loan Due 2028 (1) 735,460 226,929 436,230 72,301 — Amended New Revolving Credit Facility (2) 100,000 100,000 — — — Operating lease obligations (3) 58,754 16,914 24,059 14,762 3,019 Financing lease obligation (4) 105,632 7,508 12,897 11,320 73,907 Tax receivable agreement liability (5) 53,885 2,985 50,900 — — Non-cancelable marketing and royalty obligations (6) 17,068 10,159 6,909 — — Total $ 3,560,905 $ 620,536 $ 648,577 $ 2,214,866 $ 76,926 (1) A description of our Term Loan Due 2025 and Term Loan Due 2028, and related debt service and interest requirements is contained in Note 15.
This evidence includes, but is not limited to, prior earnings history, projected future earnings, carryback and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a DTA. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified.
This evidence 64 includes, but is not limited to, prior earnings history, projected future earnings, carryback and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a DTA. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified.
Included within these policies are certain policies which contain critical accounting estimates and, therefore, have been deemed to be “critical accounting policies.” Critical accounting estimates are those which require management to make assumptions about matters that were uncertain at the time the estimate was made and for which the use of different estimates, which reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur from period to 60 period could have a material impact on our financial condition or results of operations.
Included within these policies are certain policies which contain critical accounting estimates and, therefore, have been deemed to be “critical accounting policies.” Critical accounting estimates are those which require management to make assumptions about matters that were uncertain at the time the estimate was made and for which the use of different estimates, which 62 reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur from period to period could have a material impact on our financial condition or results of operations.
Goodwill is allocated and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. Our reportable segments are the same as the respective operating segments and reporting units.
Goodwill is allocated and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. Our reportable segments are the same as the respective operating segments and reporting 63 units.
As of December 31, 2023, based upon all available objective and verifiable evidence both positive and negative, including historical levels of pre-tax loss and income both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies, we determined that it is more likely than not that we will not realize the benefits of our gross DTAs.
As of December 31, 2024, based upon all available objective and verifiable evidence both positive and negative, including historical levels of pre-tax loss and income both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies, we determined that it is more likely than not that we will not realize the benefits of our gross DTAs.
As noted above, we have determined it is more-likely-than-not we will be unable to utilize all of our DTAs subject to the TRA; and, as of December 31, 2023 and 2022, we had not recognized the entire contingent liability under the TRA related to the tax savings we may realize from Amneal common units sold or exchanged.
As noted above, we have determined it is more-likely-than-not we will be unable to utilize all of our DTAs subject to the TRA; and, as of December 31, 2024 and 2023, we had not recognized the entire contingent liability under the TRA related to the tax savings we may realize from Amneal Common Units sold or exchanged.
While we believe we have valid claims and/or defenses for the matters described in Note 21. Commitments and Contingencies, the nature of litigation is unpredictable and the outcome of the proceedings could include damages, fines, penalties and injunctive or administrative remedies. For any proceedings where losses are probable and reasonably capable of estimation, we accrue for a potential loss.
While we believe we have valid claims and/or defenses for the matters described in Note 20. Commitments and Contingencies, the nature of litigation is unpredictable and the outcome of the proceedings could include damages, fines, penalties and injunctive or administrative remedies. For any proceedings where losses are probable and reasonably capable of estimation, we accrue for a potential loss.
Commitments and Contingencies . Recently Issued Accounting Standards Recently issued accounting standards are discussed in Note 2. Summary of Significant Accounting Policies .
Commitments and Contingencies . 65 Recently Issued Accounting Standards Recently issued accounting standards are discussed in Note 2. Summary of Significant Accounting Policies .
We have identified the following to be our critical accounting policies: certain sales-related deductions, business combinations (including contingent consideration) impairment of goodwill and intangible assets, income taxes and contingencies. Certain Sales-Related Deductions Our gross product revenue is subject to a variety of deductions, which are estimated and recorded in the same period that the revenue is recognized.
We have identified the following to be our critical accounting policies: certain sales-related deductions, business combinations, impairment of goodwill and intangible assets, income taxes and contingencies. Certain Sales-Related Deductions Our gross product revenue is subject to a variety of deductions, which are estimated and recorded in the same period that the revenue is recognized.
IPR&D impairment charges for the year ended December 31, 2023 of $30.8 million were related to one Generics asset and one Specialty asset, both of which experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows.
IPR&D impairment charges for the year ended December 31, 2023 of $30.8 million were related to one Affordable Medicines asset and one Specialty asset, both of which experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows.
The ultimate resolution of any or all claims, legal proceedings or investigations are inherently uncertain and difficult to predict, could differ materially from our estimates and could have a material adverse effect on our results of operations and/or cash flows in any given accounting period, or on our overall financial condition. For further details, see Note 21.
The ultimate resolution of any or all claims, legal proceedings or investigations are inherently uncertain and difficult to predict, could differ materially from our estimates and could have a material adverse effect on our results of operations and/or cash flows in any given accounting period, or on our overall financial condition. For further details, refer to Note 20.
The table assumes the balance outstanding as of December 31, 2023 will be repaid by December 31, 2024. The actual balance outstanding may fluctuate significantly in future periods. The interest rate on borrowings under the Amended New Revolving Credit Facility resets every 30, 90 or 180 days based on the term that we select.
Debt . The table assumes the balance outstanding as of December 31, 2024 will be repaid or refinanced by December 31, 2025. The actual balance outstanding may fluctuate significantly in future periods. The interest rate on borrowings under the Amended New Revolving Credit Facility resets every 30, 90 or 180 days based on the term that we select.
(3) Amounts represent future minimum rental payments under non-cancelable facility leases. A discussion of our operating lease obligations is contained in Note 18. Leases . (4) Amounts primarily represent future minimum rental payments under a non-cancelable financing lease obligation for a production facility in New York. A discussion of our financing lease obligations is contained in Note 18. Leases .
A discussion of our operating lease obligations is contained in Note 17. Leases . (4) Amounts primarily represent future minimum rental payments under a non-cancelable financing lease obligation for a production facility in New York. A discussion of our financing lease obligations is contained in Note 17. Leases .
For more information about goodwill, including our interim impairment test, see Note 13. Goodwill and Other Intangible Assets . There was no impairment of goodwill in any reporting unit for the year ended December 31, 2023. Significant judgment is used in determining the assumptions utilized in our quantitative assessment.
For more information about goodwill, including our interim impairment test, see Note 12. Goodwill and Other Intangible Assets . There was no impairment of goodwill in any reporting unit for the year ended December 31, 2024. Significant judgment is used in determining the assumptions utilized in our quantitative assessment.
For the year ended December 31, 2023, we recognized $66.9 million of intangible asset impairment charges, of which $36.1 million was recognized in cost of goods sold and $30.8 million was recognized in in-process research and development impairment charges.
For the year ended December 31, 2024, intangible asset impairment charges were not material. For the year ended December 31, 2023, we recognized $66.9 million of intangible asset impairment charges, of which $36.1 million was recognized in cost of goods sold and $30.8 million was recognized in in-process research and development impairment charges.
If utilization of these DTAs becomes more-likely-than-not in the future, at such time, these TRA liabilities (which amount to approximately $185.2 million as of December 31, 2023, as a result of basis adjustments under Internal Revenue Code Section 754) will be recorded through charges to our statements of operations.
If utilization of these DTAs becomes more-likely-than-not in the future, at such time, these TRA liabilities (which amount to approximately $133.8 million as of December 31, 2024, as a result of basis adjustments under Internal Revenue Code Section 754) will be recorded through charges to our statements of operations.
However, if the tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRA in excess of the $3.7 million accrued as of December 31, 2023.
However, if the tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRA in excess of the $53.9 million accrued as of December 31, 2024.
Accordingly, as of December 31, 2023, this valuation allowance was $566.5 million and reduced the carrying value of these gross DTAs, net of the impact of the reversal of taxable temporary differences, to zero. As described in Item 1A. Risk Factors and Note 7.
Accordingly, as of December 31, 2024, this valuation allowance was $590.3 million and reduced the carrying value of these gross DTAs, net of the impact of the reversal of taxable temporary differences, to zero. As described in Item 1A. Risk Factors and Note 6.
While 63 these accruals have been deemed reasonable by our management, the assessment process relies heavily on estimates and assumptions that may ultimately prove inaccurate or incomplete. Additionally, unforeseen circumstances or events may lead us to subsequently change our estimates and assumptions.
While these accruals have been deemed reasonable by our management, the assessment process relies heavily on estimates and assumptions that may ultimately prove inaccurate or incomplete. Additionally, unforeseen circumstances or events may lead us to subsequently change our estimates and assumptions. The process of analyzing, assessing and establishing reserve estimates relative to legal proceedings involves a high degree of judgment.
As of December 31, 2023, $366.3 million, $162.8 million, and $69.5 million of goodwill was allocated to our Specialty, 61 Generics, and AvKARE segments, respectively. During the fourth quarter of 2023, we tested our Specialty and Generics reporting units for impairment using a quantitative assessment and utilized a qualitative assessment for our AvKARE reporting unit.
As of December 31, 2024, $366.3 million, $161.7 million, and $69.5 million of goodwill was allocated to our Specialty, Affordable Medicines, and AvKARE segments, respectively. During the fourth quarter of 2024, we tested each of our reporting units for impairment using a quantitative assessment.
The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the tax rate in effect at the time of realization of the our taxable income (the TRA liability is determined based on a percentage of the corporate tax savings from the use of the TRA’s attributes).
The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the tax rate in effect at the time of realization of the our taxable income.
Debt. Interest on our Term Loan Due 2025 and Term Loan Due 2028 was calculated based on applicable rates at December 31, 2023, excluding the impact of our interest rate swap. (2) A description of our Amended New Revolving Credit Facility is contained in Note 16. Debt .
Debt. Interest on our Term Loan Due 2025 and Term Loan Due 2028 was calculated based on applicable rates at December 31, 2024, excluding the impact of our interest rate swap.
Such payments are dependent upon the occurrence of specific and contingent events, and not the passage of time. A discussion of our significant contingent milestones is contained in Note 5. Alliance and Collaboration and Note 24. Related Party Transactions and a discussion of our contingent consideration arrangements is contained in Note 3. Acquisitions and Note 19. Fair Value Measurements .
Such payments are dependent upon the occurrence of specific and contingent events, and not the passage of time. A discussion of our significant contingent milestones is contained in Note 5. Alliance and Collaboration and Note 23. Related Party Transactions. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of December 31, 2024.
(5) Refer to Note 21. Commitments and Contingencies for additional information. (6) Represents minimum sales and marketing spending obligations and a minimum royalty obligation. The foregoing table does not include milestone payments potentially payable by us under our collaboration agreements and potential payments under our contingent consideration arrangements.
(5) Represents the tax receivable agreement liability as of December 31, 2024. A discussion on our tax receivable agreement is contained in Note 6. Income Taxes . (6) Represents minimum sales and marketing spending obligations and a minimum royalty obligation. The foregoing table does not include milestone payments potentially payable by us under our collaboration agreements.
The following table sets forth our summarized, consolidated cash flows for the years ended December 31, 2023 and 2022 (in thousands): Years Ended December 31, Increase (Decrease) 2023 2022 $ % Cash provided by (used in): Operating activities $ 345,577 $ 65,100 $ 280,477 430.8 % Investing activities (69,189) (174,309) 105,120 (60.3) % Financing activities (212,573) (106,620) (105,953) 99.4 % Effect of exchange rate changes on cash 65 (5,683) 5,748 (101.1) % Net increase (decrease) in cash, cash equivalents, and restricted cash $ 63,880 $ (221,512) $ 285,392 (128.8) % Cash Flows from Operating Activities Net cash provided by operating activities was $345.6 million for the year ended December 31, 2023 as compared to $65.1 million for the prior year.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K. 60 The following table sets forth our summarized, consolidated cash flows for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, Change 2024 2023 $ % Cash provided by (used in): Operating activities $ 295,099 $ 345,577 $ (50,478) (14.6) % Investing activities (62,996) (69,189) 6,193 (9.0) % Financing activities (211,791) (212,573) 782 (0.4) % Effect of exchange rate changes on cash (999) 65 (1,064) nm Net increase (decrease) in cash, cash equivalents, and restricted cash $ 19,313 $ 63,880 $ (44,567) (69.8) % nm - not meaningful Cash Flows from Operating Activities Net cash provided by operating activities was $295.1 million for the year ended December 31, 2024 as compared to $345.6 million for the prior year.
The year-over-year increase was primarily driven by increased profitability adjusted for non-cash items and timing of collections of receivables, partially offset by other working capital uses of cash. Cash Flows from Investing Activities Net cash used in investing activities was $69.2 million for the year ended December 31, 2023 as compared to $174.3 million for the prior year.
Cash Flows from Investing Activities Net cash used in investing activities was $63.0 million for the year ended December 31, 2024 as compared to $69.2 million for the prior year.
IPR&D impairment charges for the year ended December 31, 2022 of $13.0 million related to (i) one asset that experienced a delay in its expected launch date and (ii) one asset that experienced significant expected price erosion, both of which resulted in significantly lower than expected future cash flows. 62 Income Taxes We record valuation allowances against our DTAs when it is more likely than not that all or a portion of a DTA will not be realized.
Income Taxes We record valuation allowances against our DTAs when it is more likely than not that all or a portion of a DTA will not be realized.
Cash Flows from Financing Activities Net cash used in financing activities was $212.6 million for the year ended December 31, 2023 as compared to net cash used in financing activities of $106.6 million for prior year. The year-over-year increase was primarily due to: (i) an increase in debt related costs due to the Refinancing (refer to Note 16.
Cash Flows from Financing Activities Net cash used in financing activities of $211.8 million for the year ended December 31, 2024 was relatively flat compared to the prior year as a decrease in payments associated with refinancing our Term Loan Due 2025 in the prior year of $162.3 million and a reduction in tax distributions paid to non-controlling interests of $51.1 million were offset by a year-over-year decrease in net debt and financing leases of $207.8 million and an increase in employee payroll tax withholding on restricted stock unit vesting of $5.6 million.
Removed
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K.
Added
The year-over-year decrease in net operating cash flows for the year ended December 31, 2024 as compared to the prior year period was primarily driven by (i) lower collections of outstanding accounts receivable due to timing of sales in the quarter ended December 31, 2022, which benefited the year ended December 31, 2023 and (ii) receipt of a $21.4 million upfront payment associated with the license agreement with Orion Corporation during the year ended December 31, 2023, partially offset by (i) increased profitability adjusted for non-cash items, (ii) lower period over period payments associated with the Opana ER ® antitrust litigation settlement and (iii) favorable working capital movements, most notably an increase in days payables outstanding.
Removed
The year-over-year decrease in net cash used in investing activities was primarily due to $84.7 million of cash paid to acquire the baclofen franchise from entities affiliated with Saol International Limited during the prior year period and a year-over-year decrease in cash paid for intangible assets associated with marketed product licenses.
Added
The year-over-year decrease in net cash used in investing activities was primarily due to $12.0 million in proceeds from the sale of a subsidiary in India to a subsidiary of Kashiv in April 2024 (refer to Note 23.
Removed
Debt ) and (ii) an increase in tax distributions, partially offset by (i) a net increase in long-term debt (refer to Note 16.
Added
Related Party Transactions for additional information) and a year-over-year decrease in cash paid for intangible assets associated with marketed product licenses, partially offset by higher capital expenditures.
Removed
Additionally, the foregoing table does not include $44.2 million of aggregate principal and related interest due on the Sellers Notes as of December 31, 2023 (as defined in Note 16. Debt ). The Sellers Notes are not included because the timing of the associated payments is dependent on the occurrence of future events.
Added
Refer to Note 15. Debt for additional information about the refinancing our Term Loan Due 2025. The decrease in tax distributions was the result of the Reorganization (refer to Note 21.
Removed
Refer to the section Rondo Acquisitions Financing – Notes Payable-Related Party in Note 16. Debt for a discussion of the terms of this indebtedness and descriptions of terms. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of December 31, 2023. Critical Accounting Policies Our significant accounting policies are described in Note 2.
Added
In January 2025, the Company paid the entire remaining principal balance of $192.0 million outstanding on its Term Loan Due 2025, plus accrued interest thereon of $0.7 million, with $190.0 million of new borrowings under the Amended New Revolving Credit Facility and cash on hand. (2) A description of our Amended New Revolving Credit Facility is contained in Note 15.
Removed
For the year ended December 31, 2022, we recognized a total of $24.1 million of intangible asset impairment charges, of which $11.1 million was recognized in cost of goods sold and $13.0 million was recognized in in-process research and development impairment charges.
Added
In January 2025, the Company paid the entire remaining principal balance of $192.0 million outstanding on its Term Loan Due 2025, plus accrued interest thereon of $0.7 million, with $190.0 million of new borrowings under the Amended New Revolving Credit Facility and cash on hand. (3) Amounts represent future minimum rental payments under non-cancelable facility leases.
Removed
Cost of sales impairment charges for the year ended December 31, 2022 of $11.1 million related to currently marketed products of which (i) one product experienced significant price erosion during 2022, resulting in significantly lower than expected future cash flows and negative margins, (ii) the supply agreement of one product was terminated during 2022 and therefore the asset was not recoverable and (iii) one product was no longer expected to be sold to a key customer, therefore, the asset was not recoverable.
Added
Critical Accounting Policies Our significant accounting policies are described in Note 2. Summary of Significant Accounting Policies .
Removed
The process of analyzing, assessing and establishing reserve estimates relative to legal proceedings involves a high degree of judgment.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

18 edited+4 added−2 removed6 unchanged
Biggest changeWe also have exposure related to the translation of financial statements of our foreign divisions into U.S. dollars, our functional currency. The financial statements of our operations outside the U.S. are measured using the local currency as the functional currency.
Biggest changeOur transactional exposure arises from the purchase and sale of goods and services in currencies other than the functional currency of our operational units. We also have exposure related to the translation of financial statements of our foreign divisions into U.S. dollars, our functional currency.
In October 2019, we entered into an interest rate lock agreement for a total notional amount of $1.3 billion whereby we exchanged floating for fixed rate interest payments for our LIBOR based borrowing under our Term Loan Due 2025 (the “October 2019 Swap”).
In October 2019, we entered into an interest rate lock agreement for a total notional amount of $1.3 billion whereby we exchanged floating for fixed rate interest payments for our LIBOR based borrowing under our Term Loan Due 2025 (the 66 “October 2019 Swap”).
On May 31, 2023, we executed an amendment to the interest rate swap that changed the reference rate from LIBOR to the one-month secured overnight financing rate (“SOFR”). On November 14, 2023, in connection with our refinancing of the Term Loan Due 2025 and the New Credit Facility, as defined in Note 16.
On May 31, 2023, we executed an amendment to the interest rate swap that changed the reference rate from LIBOR to the one-month secured overnight financing rate (“SOFR”). On November 14, 2023, in connection with our refinancing of the Term Loan Due 2025 and the New Credit Facility, as defined in Note 15.
We limit our credit risk associated with cash equivalents by placing investments with high credit quality securities, including U.S. government securities, treasury bills, corporate debt, short-term commercial paper and highly rated money market funds. As discussed in Note 16.
We limit our credit risk associated with cash equivalents by placing investments with high credit quality securities, including U.S. government securities, treasury bills, corporate debt, short-term commercial paper and highly rated money market funds. As discussed in Note 15.
Specifically, the amendments modified (i) the fixed rate payable by the counterparty from 1.366% to a new fixed rate of 2.7877% and (ii) extended the termination date through May 4, 2027 (i.e., one year before the Term Loan Due 2028 matures). The amendments did not change the notional amount of $1.3 billion. Refer to Note 20.
Specifically, the amendments modified (i) the fixed rate payable by the counterparty from 1.3660% to a new fixed rate of 2.7877% and (ii) extended the termination date through May 4, 2027 (i.e., one year before the Term Loan Due 2028 matures). The amendments did not change the notional amount of $1.3 billion. Refer to Note 19.
We had no short-term investments as of December 31, 2023 or December 31, 2022. Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents and accounts receivable.
We had no short-term investments as of December 31, 2024 and December 31, 2023. Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents and accounts receivable.
At December 31, 2023 and 2022, we had $2.54 billion and $2.64 billion, respectively, of variable rate debt. Our debt as of December 31, 2023 comprised of our Term Loan Due 2028 with principal outstanding of $2.35 billion and our Term Loan Due 64 2025 with principal outstanding of $192.0 million.
At December 31, 2024 and 2023, we had $2.48 billion and $2.54 billion, respectively, of variable rate debt. Our debt as of December 31, 2024 comprised of our Term Loan Due 2028 with principal outstanding of $2.29 billion and our Term Loan Due 2025 with principal outstanding of $192.0 million.
Based on the principal amount of the Term Loan Due 2028 and Term Loan Due 2025 outstanding as of December 31, 2023, a hypothetical 100 basis point increase or decrease in interest rates would have affected our annual interest expense by approximately $23.5 million and $1.9 million, respectively, before the impact of the interest rate lock agreement discussed above.
Based on the principal amount of the Term Loan Due 2028 outstanding as of December 31, 2024, a hypothetical 100 basis point increase or decrease in interest rates would have affected our annual interest expense by approximately $22.9 million, before the impact of the interest rate lock agreement discussed above.
At December 31, 2023 and 2022, we estimated the fair value of the Term Loan Due 2025 to be $190.8 million and $2.29 billion, respectively. At December 31, 2023, we estimated the fair value of the Term Loan Due 2028 to be $2.33 billion.
At December 31, 2024 and 2023, we estimated the fair value of the Term Loan Due 2025 to be $192.6 million and $190.8 million, respectively. At December 31, 2024 and 2023, we estimated the fair value of the Term Loan Due 2028 to be $2.36 billion and $2.33 billion, respectively.
Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensive (loss) income. Transaction gains and losses are included in the determination of our net (loss) income in our statements of operations.
The financial statements of our operations outside the U.S. are measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensive loss. Transaction gains and losses are included in the determination of our net loss in our statements of operations.
Item 8. Financial Statements and Supplementary Data The consolidated financial statements listed in Item 15. Exhibits, Financial Statement Schedules are filed as part of this Annual Report on Form 10-K and incorporated by reference herein. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.
Exhibits, Financial Statement Schedules are filed as part of this Annual Report on Form 10-K and incorporated by reference herein. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.
Such foreign currency transaction gains and losses include fluctuations related to long term intercompany loans that are payable in the foreseeable future. While it is difficult to accurately measure the impact of inflation, we estimate our business experienced an increase in costs due to inflation of approximately $15.0 million for the year ended December 31, 2023.
Such foreign currency transaction gains and losses include fluctuations related to long term intercompany loans that are payable in the foreseeable future. While it is difficult to accurately measure the impact of inflation, we estimate our business did not experience a material increase in costs due to inflation for the year ended December 31, 2024.
The fair value of the variable-to-fixed interest rate swap was an asset of $37.1 million as of December 31, 2023. We estimated that a hypothetical 100 basis point increase in the forward one-month SOFR curve would potentially increase the fair value of the variable-to-fixed interest rate swap asset to $73.4 million.
The fair value of the variable-to-fixed interest rate swap was an asset of $35.9 million as of December 31, 2024. We estimated that a hypothetical 100 basis point increase in the forward one-month SOFR curve would potentially increase the fair value of the variable-to-fixed interest rate swap asset by $27.0 million as of December 31, 2024.
We estimated that a hypothetical 100 basis point decrease in the forward one-month SOFR curve would potentially change the fair value of the variable-to fixed interest rate swap from an asset of $37.1 million to a liability of $5.0 million as of December 31, 2023. Increases or decreases in interest rates would affect our annual interest expense.
We estimated that a hypothetical 100 basis point decrease in the forward one-month SOFR curve would potentially decrease the fair value of the variable-to fixed interest rate swap asset by $28.2 million as of December 31, 2024. Increases or decreases in interest rates would affect our annual interest expense.
We expect an inflationary impact of approximately $15.0 million to $20.0 million for the year ending December 31, 2024. However, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods.
We do not expect a material impact related to inflation for the year ending December 31, 2025. However, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods.
Debt , we are party to term loans with an aggregate principal amount of $2.5 billion and an asset backed revolving credit facility under which loans and letters of credit up to a principal amount of $225.2 million are available as of December 31, 2023 (principal amount of up to $20.9 million remains available for letters of credit).
Debt , we are party to term loans with an aggregate principal amount of $2.5 billion, the Amended New Revolving Credit Facility and the Amended Rondo Revolving Credit Facility under which loans and letters of credit up to a principal amount of $495.2 million and $28.0 million are available as of December 31, 2024, respectively (principal amount of up to $20.2 million and $18.0 million remain available for letters of credit, respectively).
By the nature of our global operations, we are exposed to cash flow and earnings fluctuations resulting from foreign exchange rate variation. These exposures are transactional and translational in nature. Since we manufacture and sell our products throughout the world, we believe our foreign currency risk is diversified.
These exposures are transactional and translational in nature. Since we manufacture and sell our products throughout the world, we believe our foreign currency risk is diversified. Principal drivers of this diversified foreign exchange exposure include the European Euro and the Indian Rupee.
The proceeds for any loans made under our asset backed revolving credit facility are available for capital expenditures, acquisitions, working capital needs and other general corporate purposes. We limit our credit risk with respect to accounts receivable by performing credit evaluations when deemed necessary. We do not require collateral to secure amounts owed to us by our customers.
The proceeds for any loans made under our asset backed revolving credit facility are available for capital expenditures, acquisitions, working capital needs and other general corporate purposes.
Removed
Principal drivers of this diversified foreign exchange exposure include the European Euro and the Indian Rupee. Our transactional exposure arises from the purchase and sale of goods and services in currencies other than the functional currency of our operational units.
Added
In January 2025, the Company paid the entire remaining principal balance of $192.0 million outstanding on its Term Loan Due 2025, plus accrued interest thereon of $0.7 million, with $190.0 million of new borrowings under the Amended New Revolving Credit Facility and cash on hand.
Removed
At December 31, 2022, we estimated the fair value of the Rondo Term Loan to be $70.9 million.
Added
We limit our credit risk with respect to accounts receivable by performing credit evaluations when deemed necessary. We do not require collateral to secure amounts owed to us by our customers. By the nature of our global operations, we are exposed to cash flow and earnings fluctuations resulting from foreign exchange rate variation.
Added
Based on the principal amount of the Term Loan Due 2025 outstanding as of December 31, 2024, a hypothetical 100 basis point increase or decrease in interest rates would have affected our annual interest expense by approximately $1.9 million.
Added
In January 2025, the Company paid the entire remaining principal balance of $192.0 million outstanding on its Term Loan Due 2025, plus accrued interest thereon of $0.7 million, with $190.0 million of new borrowings under the Amended New Revolving Credit Facility and cash on hand. Item 8. Financial Statements and Supplementary Data The consolidated financial statements listed in Item 15.

Other AMRX 10-K year-over-year comparisons