Alkermes plc. (ALKS) Business

Item 1. Business

The following discussion contains forward-looking statements. Actual results may differ significantly from those expressed or implied in the forward-looking statements. See “Cautionary Note Concerning Forward-Looking Statements” on page 3 of this Annual Report. Factors that might cause future results to differ materially from those expressed or implied in the forward-looking statements include, but are not limited to, those discussed in “Item 1A—Risk Factors” and elsewhere in this Annual Report.

Overview

Alkermes plc is a global biopharmaceutical company that seeks to develop innovative medicines in the field of neuroscience. We have a portfolio of proprietary commercial products for the treatment of alcohol dependence, opioid dependence, schizophrenia, bipolar I disorder and narcolepsy, and a pipeline of clinical and preclinical candidates in development for neurological disorders. Headquartered in Ireland, we also have a corporate office and R&D center in Massachusetts and a manufacturing facility in Ohio.

In October 2025, we and Avadel Pharmaceuticals plc (“Avadel”) entered into a definitive transaction agreement, subsequently amended in November 2025 (the “Transaction Agreement”), pursuant to which we agreed to acquire the entire issued and to be issued ordinary share capital of Avadel for consideration of (i) $21.00 per ordinary share, nominal value $0.01 per share, of Avadel (each, an “Avadel Share”), payable in cash at closing and (ii) a non-transferable contingent value right (the “CVR”) entitling holders of Avadel Shares to a potential additional cash payment of $1.50 per Avadel Share, contingent upon achievement of a certain specified milestone (the “Avadel Acquisition”). On February 12, 2026, we successfully completed the Avadel Acquisition, adding both LUMRYZ to our portfolio of proprietary commercial products and a commercial organization with experience in narcolepsy.

Marketed Products

The key marketed products discussed below have generated, or are expected to generate, significant revenues for us. See the section entitled “Patents and Proprietary Rights” in “Item 1—Business” in this Annual Report for information with respect to the IP protection for these marketed products.

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The following provides summary information regarding our proprietary products that we commercialize:

Proprietary Products

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The following provides summary information regarding certain key third-party products using our proprietary technologies under license and our key licensed product, that are commercialized by our licensees:

Key Third-Party Products Using Our Proprietary Technologies

Our Key Licensed Product

Proprietary Products

We have developed and now commercialize products designed to help address the unmet needs of people living with opioid dependence, alcohol dependence, schizophrenia and bipolar I disorder. See the section entitled “Patents and Proprietary Rights” in “Item 1—Business” in this Annual Report for information with respect to the IP protection for our proprietary products.

ARISTADA and ARISTADA INITIO

ARISTADA (aripiprazole lauroxil) is an extended-release intramuscular injectable suspension approved in the U.S. for the treatment of schizophrenia. ARISTADA utilizes our proprietary LINKERX technology. ARISTADA is a prodrug; once in the body, ARISTADA is likely converted by enzyme-mediated hydrolysis to N-hydroxymethyl aripiprazole, which is then hydrolyzed to aripiprazole. ARISTADA is available in four dose strengths with once-monthly dosing options (441 mg, 662 mg and 882 mg), a six-week dosing option (882 mg) and a two-month dosing option (1064 mg). ARISTADA is packaged in a ready-to-use, pre-filled syringe product format. We exclusively manufacture and commercialize ARISTADA in the U.S.

ARISTADA INITIO (aripiprazole lauroxil) leverages our proprietary LINKERX and NANOCRYSTAL technologies and provides an extended-release formulation of aripiprazole lauroxil in a smaller particle size compared to ARISTADA, thereby enabling faster dissolution and more rapid achievement of relevant levels of aripiprazole in the body. ARISTADA INITIO, combined with a single 30 mg dose of oral aripiprazole, is indicated for the initiation of ARISTADA when used for the treatment of schizophrenia in adults. The first ARISTADA dose may be administered on the same day as the ARISTADA INITIO regimen or up to 10 days thereafter. We exclusively manufacture and commercialize ARISTADA INITIO in the U.S.

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What is schizophrenia?

Schizophrenia is a serious brain disorder marked by positive symptoms (hallucinations and delusions, disorganized speech and thoughts, and agitated or repeated movements) and negative symptoms (depression, blunted emotions and social withdrawal). Schizophrenia affects approximately 1.1% of the U.S. population.

LUMRYZ

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

LUMRYZ employs a version of our MICROPUMP technology. LUMRYZ is manufactured by third parties. The FDA has required implementation of a REMS for LUMRYZ to help ensure the benefits of the drug outweigh any risks of serious adverse outcomes that may result from inappropriate prescribing, misuse, abuse or diversion of the product. Under the LUMRYZ REMS, healthcare providers who prescribe the drug must be specially certified, pharmacies that dispense the drug must be specially certified, and the drug must be dispensed only to patients who have enrolled in the LUMRYZ REMS and completed all REMS requirements, including documentation of safe use conditions.

What is narcolepsy?

Narcolepsy is a chronic, neurological disorder that affects the brain’s ability to regulate the sleep-wake cycle. The hallmark symptom of narcolepsy is excessive daytime sleepiness; additional symptoms can include sleep paralysis, disturbed nighttime sleep and sleep-related hallucinations. There are two types of narcolepsy: narcolepsy type 1 (“NT1”) is characterized by the loss of orexin-producing neurons and is also associated with cataplexy, a sudden loss of muscle control. Narcolepsy type 2 (“NT2”) shares symptoms with NT1, but is not associated with cataplexy. An estimated 100,000 people in the U.S. are diagnosed with narcolepsy.

LYBALVI

LYBALVI (olanzapine and samidorphan) is a once-daily, oral atypical antipsychotic drug approved in the U.S. for the treatment of adults with schizophrenia and for the treatment of adults with bipolar I disorder, as a maintenance monotherapy or for the acute treatment of manic or mixed episodes, as monotherapy or an adjunct to lithium or valproate. LYBALVI is a combination of olanzapine, an atypical antipsychotic, and samidorphan, an opioid antagonist, in a single bilayer tablet. LYBALVI is available in fixed dosage strengths composed of 10 mg of samidorphan and 5 mg, 10 mg, 15 mg or 20 mg of olanzapine. We exclusively manufacture and commercialize LYBALVI in the U.S.

For a discussion of legal proceedings related to LYBALVI, see Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in this Annual Report, and specifically the section entitled “Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we and our licensees have previously and may in the future face claims against IP rights covering our products and competition from generic drug manufacturers.”

What is schizophrenia?

See the disease state description in the section entitled “ARISTADA and ARISTADA INITIO” in “Item 1—Business” in this Annual Report.

What is bipolar I disorder?

Bipolar disorder is a brain disorder that is marked by extreme changes in a person’s mood, energy and ability to function. Individuals with this brain disorder may experience debilitating mood states, including extreme highs (mania) and extreme lows (depression). Bipolar I disorder is characterized by the occurrence of at least one manic episode, with or without the occurrence of a major depressive episode, and affects approximately 1% of the adult population in the U.S. in any given year.

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VIVITROL

VIVITROL (naltrexone for extended-release injectable suspension) is a once-monthly, non-narcotic, injectable medication approved in the U.S. for the treatment of alcohol dependence in patients able to abstain from alcohol in an outpatient setting prior to initiation of treatment with VIVITROL and for the prevention of relapse to opioid dependence, following opioid detoxification. VIVITROL uses our polymer-based microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body through one intramuscular injection every four weeks. We exclusively manufacture and commercialize VIVITROL in the U.S.

For a discussion of legal proceedings related to VIVITROL, see Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report, and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in this Annual Report, and specifically the sections entitled “Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we and our licensees have previously and may in the future face claims against IP rights covering our products and competition from generic drug manufacturers” and “Litigation or arbitration filed against Alkermes, including securities litigation, or actions (such as citizens petitions) filed against regulatory agencies in respect of our products, may result in financial losses, harm our reputation, divert management resources, negatively impact the approval of our products, or otherwise negatively impact our business.”

What are opioid dependence and alcohol dependence?

Opioid dependence is a serious and chronic brain disease characterized by compulsive, prolonged self-administration of opioid substances that are not used for a medical purpose. According to the 2024 U.S. National Survey on Drug Use and Health, an estimated 4.6 million people aged 18 or older in the U.S. had an opioid use disorder* in the prior year. Alcohol dependence is a serious and chronic brain disease characterized by cravings for alcohol, loss of control over drinking, withdrawal symptoms and an increased tolerance for alcohol. According to the 2024 U.S. National Survey on Drug Use and Health, an estimated 27.1 million people aged 18 or older in the U.S. had an alcohol use disorder* in the prior year. Adherence to medication is particularly challenging with these disease states.

Products Using Our Proprietary Technologies and Licensed Product

We have licensed products to third parties for commercialization and have licensed our proprietary technologies to third parties to enable them to develop, commercialize and/or manufacture products. See the sections entitled “Proprietary Technology Platforms” and “Patents and Proprietary Rights” in “Item 1—Business” in this Annual Report for information with respect to our proprietary technologies and the IP protection for these products. We receive royalties and/or manufacturing and other revenues from the commercialization of these products under our collaborative arrangements with these third parties. Such arrangements include, among others, the following:

Products Using Our Proprietary Technologies

INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI

INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate) (collectively, the “long-acting INVEGA products”) are long-acting atypical antipsychotics owned and commercialized worldwide by Janssen. We believe that these products incorporate our technologies.

INVEGA SUSTENNA is approved in the U.S. for the treatment of schizophrenia and for the treatment of schizoaffective disorder as either a monotherapy or adjunctive therapy. Paliperidone palmitate extended-release injectable suspension is approved in the European Union (“EU”) and other countries outside of the U.S. for the treatment of schizophrenia and is marketed and sold under the trade name XEPLION. INVEGA SUSTENNA/XEPLION is manufactured by Janssen.

INVEGA TRINZA is approved in the U.S. for the treatment of schizophrenia in patients who have been adequately treated with INVEGA SUSTENNA for at least four months. TREVICTA is approved in the EU for the maintenance treatment of schizophrenia in adult patients who are clinically stable on XEPLION. INVEGA TRINZA/TREVICTA is manufactured by Janssen.

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INVEGA HAFYERA is approved in the U.S. for the treatment of schizophrenia in patients who have been adequately treated with INVEGA SUSTENNA for at least four months or INVEGA TRINZA for at least three months. BYANNLI is approved in the EU for the maintenance treatment of schizophrenia in adult patients who are clinically stable on XEPLION or TREVICTA. INVEGA HAFYERA/BYANNLI is manufactured by Janssen.

What is schizophrenia?

See the disease state description in the section entitled “ARISTADA and ARISTADA INITIO” in “Item 1—Business” in this Annual Report.

What is schizoaffective disorder?

Schizoaffective disorder is a condition in which a person experiences a combination of schizophrenia symptoms, such as delusions, hallucinations or other symptoms characteristic of schizophrenia, and mood disorder symptoms, such as mania or depression. Schizoaffective disorder is a serious mental illness that affects about one in 300 people.

RISPERDAL CONSTA

RISPERDAL CONSTA (risperidone long-acting injection) is a long-acting atypical antipsychotic owned and commercialized worldwide by Janssen that incorporates our proprietary technologies. RISPERDAL CONSTA is approved in the U.S. for the treatment of schizophrenia and as both monotherapy and adjunctive therapy to lithium or valproate in the maintenance treatment of bipolar I disorder. RISPERDAL CONSTA is approved in numerous countries outside of the U.S. for the treatment of schizophrenia and the maintenance treatment of bipolar I disorder. RISPERDAL CONSTA uses our polymer-based microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body through just one intramuscular injection every two weeks. RISPERDAL CONSTA microspheres are exclusively manufactured by us.

What is schizophrenia?

See the disease state description in the section entitled “ARISTADA and ARISTADA INITIO” in “Item 1—Business” in this Annual Report.

Licensed Product

VUMERITY

VUMERITY (diroximel fumarate) is a novel, oral fumarate with a distinct chemical structure that is approved in the U.S., the EU and several other countries for the treatment of relapsing forms of multiple sclerosis in adults, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease.

Under our license and collaboration agreement with Biogen, Biogen holds the exclusive, worldwide license to develop and commercialize VUMERITY. For more information about the license and collaboration agreement with Biogen, see the “Collaborative Arrangements—Biogen” section in “Part I, Item 1—Business” in this Annual Report.

What is multiple sclerosis?

Multiple sclerosis (“MS”) is an unpredictable, often disabling disease of the central nervous system (“CNS”), which interrupts the flow of information within the brain, and between the brain and body. MS symptoms can vary over time and from person to person. Symptoms may include extreme fatigue, impaired vision, problems with balance and walking, numbness or pain and other sensory changes, bladder and bowel symptoms, tremors, problems with memory and concentration and mood changes, among others. Approximately 2.5 million people worldwide have MS, and most are diagnosed between the ages of 15 and 50.

Key Development Programs

Our R&D is focused on the development of innovative medicines in the field of neuroscience that are designed to address unmet patient needs. As part of our ongoing R&D efforts, we have devoted, and will continue to devote, significant resources to conducting preclinical work and clinical studies to advance the development of new pharmaceutical products. The discussion below highlights our current key development program. Drug development involves a high degree of risk and investment, and the status, timing and scope of our development programs are subject to change. Important factors that could adversely affect our drug development efforts are discussed in “Item 1A—Risk Factors” in this Annual Report. See the section entitled “Patents and Proprietary Rights” in “Item 1—Business” in this Annual Report for information with respect to the IP protection for our key development program.

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Alixorexton (formerly referred to as ALKS 2680)

Alixorexton is a novel, investigational, oral, selective orexin 2 receptor agonist in development for the treatment of NT1, NT2 and idiopathic hypersomnia (“IH”). Orexin, a neuropeptide produced in the lateral hypothalamus, is considered to be the master regulator of wakefulness due to its activation of multiple, downstream wake-promoting pathways that project widely throughout the brain. Targeting the orexin system may address excessive daytime sleepiness across hypersomnolence disorders, whether or not deficient orexin signaling is the underlying cause of disease. Once-daily oral administration of alixorexton was previously evaluated in a phase 1 study in healthy volunteers and patients with NT1, NT2 and IH. In 2025, we completed, and announced positive topline data from, two phase 2 studies, Vibrance-1 and Vibrance-2, in patients with NT1 and NT2, respectively. We plan to initiate a phase 3 program in narcolepsy in the first quarter of 2026. Alixorexton is also currently being evaluated in Vibrance-3, a phase 2 study in patients with IH. In December 2025, the FDA granted Breakthrough Therapy designation to alixorexton for the treatment of NT1.

LUMRYZ (sodium oxybate)

LUMRYZ (sodium oxybate) extended-release oral suspension is currently being evaluated in REVITALYZ, a double-blind, placebo-controlled, randomized withdrawal, multicenter phase 3 study designed to evaluate efficacy and safety in adult patients with IH. In December 2025, patient enrollment in REVITALYZ was completed.

Collaborative Arrangements

We have entered into several collaborative arrangements to develop and commercialize products and, in connection with such arrangements, to access or provide access to, technological, financial, marketing, manufacturing and other resources, including the arrangements described below.

Janssen

INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI

Under an exclusive license agreement with Janssen, we provided Janssen with rights to, and know-how, training and technical assistance in respect of, our small particle pharmaceutical compound technology, known as NANOCRYSTAL technology, which was used to develop the long-acting INVEGA products, and we received milestone payments from Janssen upon the achievement of certain development goals. There are no further milestones to be earned under this agreement. The agreement also provides for royalty payments, which consist of a patent royalty and a know-how royalty, both of which are determined on a country-by-country basis. The patent royalty, which equals 1.5% of net sales, is payable in each country until the expiration of the last of the patents with valid claims applicable to the product in such country. As of August 30, 2024, all patent royalties had expired. The know-how royalty is a tiered royalty of 3.5% on calendar year net sales up to $250 million; 5.5% on calendar year net sales of between $250 million and $500 million; and 7.5% on calendar year net sales exceeding $500 million. The know-how royalty rate resets to 3.5% at the beginning of each calendar year and is payable until 15 years from the first commercial sale of a product in each individual country, subject to expiry of the agreement. These royalty payments may be reduced in any country based on patent litigation or on competing products achieving certain minimum sales thresholds. The license agreement, unless earlier terminated, terminates upon the expiration of the last of the patents subject to the agreement. After expiration, Janssen retains a non-exclusive, royalty free license to develop, manufacture and commercialize the products subject to certain surviving obligations.

Janssen may terminate the license agreement in whole or in part upon three months’ notice to us. We and Janssen have the right to terminate the agreement upon a material breach of the other party which is not cured within a certain time period, or upon the other party’s bankruptcy or insolvency. In November 2021, we received notice from Janssen of partial termination of the license agreement, following which Janssen ceased paying us royalties related to U.S. sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA. In April 2022, we commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of this license agreement and Janssen’s royalty and other obligations under the agreement. In May 2023, the arbitral tribunal (the “Tribunal”) in the arbitration proceedings issued a final award (the “Final Award”) that served to reinstate the Janssen royalties and required payment by Janssen of back royalties and interest for amounts owed but not yet paid since the effective date of the partial termination. The Final Award also provided, among other things, that we were entitled to royalty revenues from Janssen related to net sales of INVEGA SUSTENNA through August 20, 2024, INVEGA TRINZA through the second quarter of 2030 (but no later than May 2030 when the license agreement expires) and INVEGA HAFYERA through May 2030 (when the license agreement expires).

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RISPERDAL CONSTA

Under a product development agreement, we collaborated with Janssen on the development of RISPERDAL CONSTA. Under the development agreement, Janssen provided funding to us for the development of RISPERDAL CONSTA, and Janssen is responsible for securing all necessary regulatory approvals for the product.

Under two license agreements, we granted Janssen and an affiliate of Janssen exclusive worldwide licenses to use and sell RISPERDAL CONSTA. Under our license agreements with Janssen, we receive royalty payments equal to 2.5% of Janssen’s end-market net sales of RISPERDAL CONSTA in each country where the license is in effect based on the quarter when the product is sold by Janssen. This royalty may be reduced in any country based on lack of patent coverage and significant competition from generic versions of the product. Janssen can terminate the license agreements upon 30 days’ prior written notice to us. Either party may terminate the license agreements by written notice following a breach which continues for 90 days after the delivery of written notice thereof or upon the other party’s insolvency. The licenses granted to Janssen expire on a country-by-country basis upon the later of (i) the expiration of the last patent claiming the product in such country or (ii) 15 years after the date of the first commercial sale of the product in such country, provided that in no event will the license granted to Janssen expire later than the twentieth anniversary of the first commercial sale of the product in each such country, with the exception of Canada, France, Germany, Italy, Japan, Spain and the United Kingdom, in each case, where the 15-year minimum shall pertain regardless. After expiration, Janssen retains a non-exclusive, royalty-free license to manufacture, use and sell RISPERDAL CONSTA.

We exclusively manufacture RISPERDAL CONSTA at our Wilmington, Ohio facility for commercial sale. Under our manufacturing and supply agreement with Janssen, we receive manufacturing revenue based on a percentage of Janssen’s net unit sales price for RISPERDAL CONSTA for the applicable calendar year. This percentage is determined based on Janssen’s unit demand for such calendar year and varies based on the volume of units shipped, with a minimum manufacturing fee of 7.5%. Either party may terminate the manufacturing and supply agreement upon a material breach by the other party, which is not resolved within 60 days after receipt of a written notice specifying the material breach or upon written notice in the event of the other party’s insolvency or bankruptcy. Janssen may terminate the agreement upon six months’ written notice to us. In the event that Janssen terminates the manufacturing and supply agreement without terminating the license agreements, the royalty rate payable to us on Janssen’s net sales of RISPERDAL CONSTA would increase from 2.5% to 5.0%.

Revenues from our collaborative arrangements with Janssen accounted for approximately 9%, 17% and 31% of our consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively.

Biogen

Under a license and collaboration agreement with Biogen, we granted Biogen a worldwide, exclusive, sublicensable license to develop, manufacture and commercialize VUMERITY and other products covered by patents licensed to Biogen under that agreement.

Under this license and collaboration agreement, we received an upfront cash payment and milestone payments related to the achievement of certain milestones. We are also eligible to receive additional payments upon achievement of certain milestones, including milestones relating to the first two products other than VUMERITY covered by patents licensed to Biogen under the license and collaboration agreement.

In addition, we receive a 15% royalty, subject to increases for VUMERITY manufactured and/or packaged by Biogen or its designees, on worldwide net sales of VUMERITY. We are also entitled to receive royalties on net sales of products other than VUMERITY covered by patents licensed to Biogen under the license and collaboration agreement, at tiered royalty rates calculated as percentages of net sales ranging from high-single digits to sub-teen double digits. All royalties are payable on a product-by-product and country-by-country basis until the later of (i) the last-to-expire patent right covering the applicable product in the applicable country and (ii) a specified period of time from the first commercial sale of the applicable product in the applicable country. Royalties for all products are subject to customary reductions, as set forth in the license and collaboration agreement.

Following FDA approval of VUMERITY in 2019, Biogen is responsible for all development and commercialization activities for VUMERITY and all other products covered by the patents that we licensed to Biogen.

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Under the license and collaboration agreement, Biogen appointed us as the toll manufacturer of clinical and commercial supplies of VUMERITY, subject to Biogen’s right to manufacture or have manufactured commercial supplies as a back-up manufacturer. In October 2019, we entered into a commercial supply agreement with Biogen for the commercial supply of VUMERITY, an amendment to such commercial supply agreement and an amendment to the license and collaboration agreement with Biogen, pursuant to which Biogen has, following a completed technology transfer and an agreed manufacturing transition period, assumed all responsibility for the manufacture (itself or through a designee) of clinical and commercial supplies of VUMERITY in exchange for an increase in the royalty rate to be paid by Biogen to us on net sales of product that is manufactured by Biogen or its designee. In May 2024, we completed the sale of our research and development business and manufacturing facility in Athlone, Ireland (the “Athlone Facility”) where VUMERITY was manufactured. In connection with the sale of the Athlone Facility, we entered into a subcontracting arrangement with the purchaser of the Athlone Facility for the manufacture of VUMERITY through the manufacturing transition period, which concluded in August 2025.

Unless earlier terminated, the license and collaboration agreement will remain in effect until the expiry of all royalty obligations. Biogen has the right to terminate the license and collaboration agreement at will, on a product-by-product basis or in its entirety upon 180 days’ prior notice to us. Either party has the right to terminate the license and collaboration agreement following any governmental prohibition of the transactions effected by the agreement, or in connection with an insolvency event involving the other party. Upon termination of the license and collaboration agreement by either party, then, at our request, the VUMERITY program will revert to us.

Revenues from Biogen related to this license and collaboration agreement accounted for approximately 9%, 9% and 8% of our consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively.

Proprietary Technology Platforms

We have used our proprietary technology platforms, which include technologies owned and exclusively licensed to us, to establish drug development, clinical development and regulatory expertise and in the development of our products.

Injectable Extended-Release Microsphere Technology

Our injectable extended-release microsphere technology allows us to encapsulate small-molecule pharmaceuticals, peptides and proteins in microspheres made of common medical polymers. The technology is designed to enable novel formulations of pharmaceuticals by providing controlled, extended release of drugs over time. Drug release from the microsphere is controlled by diffusion of the drug through the microsphere and by biodegradation of the polymer. These processes can be modulated through a number of formulation and fabrication variables, including drug substance and microsphere particle sizing and choice of polymers and excipients.

LINKERX Technology

Our long-acting LINKERX technology platform is designed to enable the creation of extended-release injectable versions of antipsychotic therapies and may also be useful in other disease areas in which extended duration of action may provide therapeutic benefits. The technology uses proprietary linker-tail chemistry to create new molecular entities derived from known agents.

NANOCRYSTAL Technology

Our NANOCRYSTAL technology is applicable to poorly water-soluble compounds and involves formulating and stabilizing drugs into particles that are nanometers in size. A drug in NANOCRYSTAL form can be incorporated into a range of common dosage forms, including tablets, capsules, inhalation devices and sterile forms for injection, with the potential for enhanced oral bioavailability, increased therapeutic effectiveness, reduced/eliminated fed/fasted variability and sustained duration of intravenous/intramuscular release.

Oral Controlled Release Technology

Our oral controlled release (“OCR”) technologies are used to formulate, develop and manufacture oral dosage forms of pharmaceutical products with varied drug release profiles.

MICROPUMP Technology

Our MICROPUMP technology allows for the development of modified release solid, oral dosage drug formulations.

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Manufacturing and Product Supply

We own and occupy a manufacturing facility in Wilmington, Ohio. For products that we manufacture, we either purchase active pharmaceutical ingredient (“API”) from third parties or receive it from our third-party licensees. Our manufacturing and development capabilities include formulation through process development, scale-up and full-scale commercial manufacturing and specialized capabilities for the development and manufacture of controlled substances. We also contract with third party suppliers and contract manufacturers for the purchase of certain API or other raw materials or components of our products and for the manufacture of certain drug product. The manufacture of our products for clinical trials and commercial use, whether by us or third parties, is subject to Current Good Manufacturing Practices (“cGMP”) regulations and other regulations.

Although some materials and related services for our products are currently only available from a single source or a limited number of qualified sources, we attempt to acquire an adequate inventory of such materials, establish alternative sources for such materials and related services and/or negotiate long-term supply arrangements. However, we cannot be certain that we will continue to be able to obtain long-term supplies of our manufacturing materials or long-term provision of related services.

Our supply chain includes an external network of third-party service providers involved in the manufacture of our products whose manufacturing facilities and processes are, like ours, subject to inspection by the FDA or comparable agencies in other jurisdictions. Any delay, interruption or other issues that arise in the acquisition of API, raw materials, or components, or in the manufacture, fill-finish, packaging, or storage of our marketed or development products, including as a result of a failure of our facilities or the facilities or operations of third parties to pass any regulatory agency inspection, could significantly impair our ability to manufacture and market our products or advance our development efforts, as the case may be.

In May 2024, we completed the sale of our Athlone Facility and related business to Novo Nordisk (“Novo”) and entered into subcontracting arrangements to continue certain development and manufacturing activities performed at the Athlone Facility for a period of time after the closing of the transaction, which concluded by the end of 2025. For information about risks relating to the manufacture of our marketed products and product candidates, see “Item 1A—Risk Factors” in this Annual Report and specifically those sections entitled “We rely on third parties to provide goods and services in connection with the manufacture and distribution of our products” and “We are subject to risks related to the manufacture of our products.”

Marketed Products

We manufacture ARISTADA, ARISTADA INITIO, LYBALVI, VIVITROL and microspheres for RISPERDAL CONSTA at our Wilmington, Ohio facility. We outsource our packaging operations for ARISTADA, ARISTADA INITIO, LYBALVI and VIVITROL to third-party contractors. Janssen is responsible for packaging operations for RISPERDAL CONSTA. Our Wilmington, Ohio facility has been inspected by U.S., European (including the UK Medicines and Healthcare products Regulatory Agency), Chinese, Japanese, Brazilian, Turkish, Russian and Saudi Arabian regulatory authorities for compliance with required cGMP standards for continued commercial manufacturing. For more information about our Wilmington, Ohio manufacturing facility, see “Item 2—Properties” in this Annual Report.

We purchase LUMRYZ API and outsource the manufacturing of LUMRYZ drug product to several contract manufacturers in the U.S. and outside of the U.S. The manufacture and distribution of LUMRYZ is highly restricted, as its API (sodium oxybate) and finished product are Schedule I and Schedule III controlled substances in the U.S., respectively, subject to regulation by the U.S. Drug Enforcement Administration of the U.S. Department of Justice (the “DEA”) under the Controlled Substances Act (the “CSA”). Quotas from the DEA are required in order to manufacture both sodium oxybate and LUMRYZ in the U.S. and the contract manufacturer facilities are, like ours, subject to inspection and audit by the FDA and the DEA for cGMP compliance.

We were previously party, through various end dates in 2025, to subcontracting arrangements for the manufacture of several products in the Athlone Facility that are marketed by third parties, including VUMERITY. All of our subcontract manufacturing arrangements at the Athlone Facility concluded by the end of 2025.

Clinical Products

We manufacture clinical supplies of injectable extended-release products and solid dosage form products at our Wilmington, Ohio facility. We have also contracted with third-party manufacturers to formulate and manufacture certain products for clinical use. We require that our contract manufacturers adhere to cGMP in the manufacture of our products or components of our products for clinical use.

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Research & Development

We devote significant resources to R&D programs. We focus our R&D efforts on developing novel therapeutics in areas of high unmet medical need. Our R&D efforts include, but are not limited to, areas such as pharmaceutical formulation, analytical chemistry, process development, engineering, scale-up and drug optimization/delivery. Please see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report for additional information relating to our R&D expenditures.

Permits and Regulatory Approvals

We hold various permits, registrations, approvals and/or licenses in respect of our manufacturing and related activities. The primary licenses that we hold in this regard are FDA Registrations of Drug Establishment, and licenses from the DEA. We also hold various authorizations, licenses and certificates from the Health Products Regulatory Authority in Ireland, including an Investigational Medicinal Products Manufacturers Authorization (No. IMP074/00002) and a Manufacturers Authorization (No. M13297/00001) in respect of our offices located in Dublin, Ireland. We also hold current GMP certificates associated with each of these authorizations. Due to certain U.S. state law requirements, we also hold state licenses to cover distribution activities conducted in certain states where required. Additional Manufacturer Authorizations that we previously held in respect of the Athlone Facility were transferred to Novo with the sale of the facility and related business in May 2024.

We do not generally act as the marketing authorization holder for products incorporating our technologies that have been developed on behalf of a licensee of such technologies. In such cases, our licensee usually holds the relevant marketing authorization from the FDA or other relevant regulatory authority, and we support this authorization as needed, including by furnishing a copy of the product’s Drug Master File, or chemistry, manufacturing and controls data, to the relevant regulator. We generally update this information annually with the relevant regulator. For our proprietary products, such as ARISTADA, ARISTADA INITIO, LUMRYZ, LYBALVI and VIVITROL, we hold the marketing authorization and related regulatory documentation ourselves.

Marketing, Sales and Distribution

We are responsible for the marketing of ARISTADA, ARISTADA INITIO, LYBALVI, LUMRYZ and VIVITROL in the U.S. We focus our sales and marketing efforts on physicians in private practice and in public treatment systems. We believe that we use customary pharmaceutical company practices to market our products, including through advertisements, professional symposia, selling initiatives and other methods, and to educate individual physicians, nurses, social workers, counselors and other stakeholders involved in the treatment of opioid dependence, alcohol dependence, schizophrenia, bipolar I disorder and narcolepsy. We provide, and contract with third-party vendors to provide, customer services and other related programs for our products, such as product-specific websites, insurance research services and order, delivery and fulfillment services.

Our sales force for VIVITROL in the U.S. consisted of approximately 105 individuals as of December 31, 2025. VIVITROL is primarily sold to pharmaceutical wholesalers, pharmacies, specialty distributors and treatment providers. Product sales of VIVITROL during the year ended December 31, 2025 to McKesson Corporation, Cardinal Health and Cencora, Inc. (formerly known as Amerisource Bergen, “Cencora”) represented approximately 38%, 15% and 18%, respectively, of total VIVITROL gross sales.

Our sales force for ARISTADA, ARISTADA INITIO and LYBALVI in the U.S. consisted of approximately 435 individuals as of December 31, 2025. ARISTADA, ARISTADA INITIO and LYBALVI are primarily sold to pharmaceutical wholesalers. Product sales of ARISTADA and ARISTADA INITIO during the year ended December 31, 2025 to McKesson Corporation, Cardinal Health and Cencora represented approximately 48%, 22% and 24%, respectively, of total ARISTADA and ARISTADA INITIO gross sales. Product sales of LYBALVI during the year ended December 31, 2025 to McKesson Corporation, Cardinal Health and Cencora represented approximately 32%, 29% and 35%, respectively, of total LYBALVI gross sales.

Our sales force for LUMRYZ in the U.S. became a part of the Company in February 2026 when we completed the Avadel Acquisition. As of the completion of the Avadel Acquisition, this sales force consisted of approximately 60 individuals. LUMRYZ is distributed through a closed network of three commercial specialty pharmacies: CVS, Accredo, and Optum, and one non-commercial specialty pharmacy: Assist Rx.

ICS, a division of Cencora, provides warehousing, shipping and administrative services for ARISTADA, ARISTADA INITIO, LYBALVI and VIVITROL. Eversana provides warehousing, shipping and administrative services for LUMRYZ.

Under our license agreements with Janssen, Biogen and other licensees and sublicensees, the licensees and sublicensees are typically responsible for the commercialization of any products developed under their respective agreements if and when regulatory approval is obtained.

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Competition

We face intense competition in the development, manufacture, marketing and commercialization of our products from many and varied sources, such as research institutions and biopharmaceutical companies, including other companies with similar technologies. Some of these competitors are also our licensees, who control the commercialization of products from which we receive manufacturing and/or royalty revenues. In some cases, these competitors may be working to develop and market other products, systems, or other methods of preventing or reducing disease, or new small-molecule or other classes of drugs.

The biopharmaceutical industry is characterized by intensive research, development and commercialization efforts and rapid and significant technological change. In many cases, there are already products on the market that may be in direct competition with our commercial products or products in development. In addition, there are many companies developing products for use in similar indications or with similar technologies to ours with whom we and our licensees compete, many of whom are larger and have significantly greater financial, operational and other resources than we do. Other smaller or earlier stage companies may also prove to be significant competitors, whether through focused or more abbreviated development programs, or collaborative arrangements with large, established companies. Some of the products being developed by our competitors are being designed to work differently than our products and may prove to be safer or more effective than our products or achieve regulatory approval and be commercialized earlier than our products, which may render our products or technology platforms obsolete or noncompetitive or make it more challenging for us to commercialize our products. With respect to our products, we believe that our ability to successfully compete will depend on, among other things, the existence of competing or alternative products in the marketplace, including generic competition, and the relative price of those products; the efficacy, safety and reliability of our products compared to competing or alternative products; product acceptance by, and preferences of, physicians, other healthcare providers and patients; our ability to comply with applicable laws, regulations and regulatory requirements with respect to the manufacture and/or commercialization of our products, including any imposed REMS program or any other changes or increases to regulatory restrictions; protection of our proprietary rights relating to our products; our ability to obtain reimbursement for our products; our ability to complete clinical development and obtain regulatory approvals for our products, and the timing and scope of any such regulatory approvals; our, or our contract manufacturers’, ability to successfully manufacture and provide a reliable supply of commercial quantities of a product to the market; and our ability to recruit, retain and develop skilled employees.

With respect to our proprietary injectable product platform, we are aware that there are other companies developing extended-release delivery systems for pharmaceutical products, including but not limited to technology from Pharmathen S.A., which underpins aripiprazole formulations in development, and technology underpinning Teva’s once every two weeks injectable microsphere formulation, each for the treatment of schizophrenia. In the treatment of schizophrenia, ARISTADA, the long-acting INVEGA products and RISPERDAL CONSTA compete with each other and a number of other injectable products, including ZYPREXA RELPREVV ((olanzapine) For Extended Release Injectable Suspension), which is marketed and sold by Lilly; ABILIFY MAINTENA (aripiprazole for extended release injectable suspension), a once-monthly injectable formulation of ABILIFY (aripiprazole) developed by Otsuka Pharm. Co.; ABILIFY ASIMTUFII (aripiprazole), a once-every-two-months injectable formulation of ABILIFY (aripiprazole) developed by Otsuka Pharm. Co.; RYKINDO (risperidone), a once-every-two-weeks injectable formulation of risperidone developed by Luye Pharma Group; UZEDY (risperidone) extended-release injectable suspension, for subcutaneous use, developed and marketed by MedinCell S.A. and Teva; and generic versions of branded injectable products, such as risperidone for extended-release injectable suspension marketed by Lupin Limited and by Amneal Pharmaceuticals, Inc, both of which reference RISPERDAL CONSTA.

In the treatment of schizophrenia, LYBALVI competes with other oral antipsychotic products, including CAPLYTA (lumateperone) marketed by Johnson & Johnson or its affiliated companies.; REXULTI (brexpiprazole), which is co-marketed by Otsuka Pharm Co. and H. Lundbeck A/S plc; VRAYLAR (cariprazine), which is marketed and sold by Abbvie Inc.; COBENFY (xanomeline and trospium chloride), which is marketed and sold by Bristol-Myers Squibb Company; UZEDY; other oral compounds currently on the market; and generic versions of branded oral products. Other pharmaceutical companies are developing products for the treatment of schizophrenia that, if approved by the FDA, would compete with LYBALVI.

In the treatment of bipolar I disorder, LYBALVI and RISPERDAL CONSTA compete with antipsychotics such as oral aripiprazole; VRAYLAR; ABILIFY MAINTENA; ABILIFY ASIMTUFII; CAPLYTA; RYKINDO; UZEDY; risperidone; quetiapine; olanzapine; and ziprasidone. Other pharmaceutical companies are developing products for the treatment of bipolar I disorder that, if approved by the FDA, would compete with LYBALVI.

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In the treatment of alcohol dependence, VIVITROL competes with generic acamprosate calcium (also known as CAMPRAL) and generic disulfiram (also known as ANTABUSE) as well as currently marketed drugs, including generic drugs, also formulated from naltrexone. Other pharmaceutical companies are developing products that have shown some potential in treating alcohol dependence that, if approved by the FDA, would compete with VIVITROL.

In the treatment of opioid dependence, VIVITROL competes with SUBOXONE (buprenorphine HCl/naloxone HCl dehydrate sublingual tablets), SUBOXONE (buprenorphine/naloxone) Sublingual Film, SUBUTEX (buprenorphine HCl sublingual tablets) and SUBLOCADE (once-monthly buprenorphine extended-release injection), each of which is marketed and sold by Indivior plc; BUNAVAIL buccal film (buprenorphine and naloxone) marketed by BioDelivery Sciences; ZUBSOLV (buprenorphine and naloxone) marketed by Orexo US, Inc.; and BRIXADI (buprenorphine) extended-release injection for subcutaneous use (CIII), marketed by Braeburn Inc. VIVITROL also competes with methadone, oral naltrexone and generic versions of SUBUTEX and SUBOXONE sublingual tablets. Other pharmaceutical companies are developing products that have shown potential in treating opioid dependence that, if approved by the FDA, would compete with VIVITROL.

In the treatment of MS, VUMERITY competes with AVONEX (interferon beta-1a), TYSABRI (natalizumab), TECFIDERA (dimethyl fumarate), and PLEGRIDY (peginterferon beta-1a) from Biogen; OCREVUS (ocrelizumab) from Genentech; BETASERON (interferon beta-1b) from Bayer HealthCare Pharmaceuticals; COPAXONE (glatiramer acetate) from Teva; REBIF (interferon beta-1a) and MAVENCLAD (cladribine) from EMD Serono, Inc.; GILENYA (fingolimod), EXTAVIA (interferon beta-1b) and MAYZENT (siponimod) from Novartis AG; AUBAGIO (teriflunomide) and LEMTRADA (alemtuzumab) from Sanofi-Aventis; ZEPOSIA (ozanimod) from Bristol-Myers Squibb Company; PONVORY (ponesimod) from Janssen; and BRIUMVI (ublituximab-xiiy) from TG Therapeutics, Inc.

In the treatment of narcolepsy, LUMRYZ competes with twice-nightly oxybate formulations, such as XYWAV (sodium oxybate) and XYREM (sodium oxybate), as well as a number of daytime wake promoting agents, including VYVANSE (lisdexamfetamine), dextroamphetamine, methylphenidate, amphetamine, modafinil, and armodafinil, which are widely prescribed, as well as SUNOSI (solriamfetol) from Axsome Therapeutics, Inc. and WAKIX (pitolisant) from Harmony Biosciences Holdings, Inc. LUMRYZ also competes with generic versions of XYREM. We and other pharmaceutical companies are developing products, including orexin 2 receptor agonists such as alixorexton and other formulations of sodium oxybate, that have shown or may show potential in treating narcolepsy that, if approved by the FDA, would compete with LUMRYZ.

With respect to our NANOCRYSTAL technology, we are aware that other technology approaches similarly address poorly water-soluble drugs. These approaches include nanoparticles, cyclodextrins, lipid-based self-emulsifying drug delivery systems, dendrimers and micelles, among others, any of which could limit the potential success and growth prospects of products incorporating our NANOCRYSTAL technology. In addition, there are many competing technologies to our OCR technology, some of which are owned by large pharmaceutical companies with drug delivery divisions or other, smaller drug-delivery-specific companies.

Patents and Proprietary Rights

Our success depends, in part, on our ability to obtain and maintain patent protection for our products, including those marketed and sold by our licensees, to maintain trade secret protection and to operate without infringing upon the proprietary rights of others. We have a proprietary portfolio of patent rights and exclusive licenses to patents and patent applications, which includes numerous patents in the U.S. and in other countries directed to compositions of matter, methods of treatment and formulations, and processes of preparation. In the future, we plan to file additional patent applications in the U.S. and in other countries directed to new or improved products and processes, and we intend to continue to vigorously defend our patent positions. In addition, our licensees may own additional patents that cover those products from which we receive royalties.

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ARISTADA and ARISTADA INITIO

We have several U.S. patents and patent applications, and a number of corresponding non-U.S. counterparts, that cover ARISTADA and/or ARISTADA INITIO. Our principal U.S. patents for ARISTADA and/or ARISTADA INITIO and their expiration dates are as follows:

VIVITROL

We have a number of patents and pending patent applications covering our microsphere technology throughout the world, which, to some extent, cover VIVITROL.

We own one unexpired Orange-Book listed U.S. patent covering VIVITROL, which expires in the U.S. in 2029. For a discussion of legal proceedings related to VIVITROL, see Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report.

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Pursuant to the terms of a confidential settlement and license agreement entered into in August 2023 with Teva, we granted Teva a non-exclusive, royalty-free, non-transferable, non-sublicensable limited license under the remaining patent covering VIVITROL to market and sell a generic version of VIVITROL in the U.S. beginning on January 15, 2027 (the “First Entry Date”), or earlier under certain circumstances. Under the terms of a settlement and license agreement entered into in July 2019 with Amneal Pharmaceuticals LLC (“Amneal”), we granted Amneal a non-exclusive license under certain patents covering VIVITROL, including the remaining patent covering VIVITROL in the U.S., to market and sell a generic formulation of VIVITROL in the U.S. beginning on the earlier of the First Entry Date, sometime in 2028 or earlier under certain circumstances. In September 2025, we entered into an authorized generic product supply agreement (the “AG Agreement”) with Amneal, pursuant to which we granted Amneal certain rights to distribute and sell in the U.S. an authorized generic version of VIVITROL (the “Amneal AG Product”) for a one-year term beginning on the date of a Third Party ANDA Product Launch (as defined in the AG Agreement); provided, however, that if a Third Party ANDA Product Launch does not occur within ninety (90) days after the First Entry Date (or an earlier launch date under certain circumstances) (a “Third Party ANDA Product Launch Failure”), Amneal shall no longer have the right to distribute and sell the Amneal AG Product; provided further, that, in such event, upon written request from Amneal, we agreed to consider, for a period of thirty (30) days from the date of the Third Party ANDA Product Launch Failure, whether to allow Amneal a second opportunity to launch the Amneal AG Product. In the event that Amneal launches its own generic version of VIVITROL (other than the Amneal AG Product) pursuant to the July 2019 license grant described above, we would have a right to terminate the AG Agreement.

INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI

Our NANOCRYSTAL technology patent portfolio, licensed to Janssen, contains a number of granted patents and pending patent applications throughout the world, including in the U.S. and in countries outside of the U.S. The latest to expire of the patents subject to our license agreement expires in 2030 in the U.S., the EU and certain other countries. In addition, Janssen has other patents not subject to our license agreement, including, among others, one that covers INVEGA TRINZA in the U.S. and expires in 2036 and two that cover INVEGA HAFYERA in the U.S. and expire in 2041.

VUMERITY

We own U.S. patents and patent applications, and a number of corresponding non-U.S. counterparts, that cover VUMERITY. U.S. Patent Nos. 8,669,281, 9,090,558 and 10,080,733, each expiring in 2033, cover compositions of, or methods of treatment for, VUMERITY.

LYBALVI

We own or have a license to U.S. and worldwide patents and patent applications that cover a class of compounds that includes the opioid modulators in LYBALVI. In addition, we own U.S. and worldwide patents and patent applications that claim formulations and methods of treatment that cover LYBALVI. The principal owned or licensed U.S. patents for LYBALVI and their expiration dates are as follows:

For a discussion of legal proceedings related to patents covering LYBALVI, see Note 19, Commitments and Contingent Liabilities in the “Notes to Consolidated Financial Statements” in this Annual Report.

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LUMRYZ

We own numerous U.S. patents and patent applications, and a number of corresponding non-U.S. counterparts, that cover LUMRYZ with expiration dates spanning from mid-2037 to early-2042. LUMRYZ was also granted seven years of FDA ODE for its approved adult and pediatric narcolepsy patient populations through May 2030 and October 2031, respectively.

Our principal U.S. patents for LUMRYZ and their expiration dates are as follows:

Pursuant to the Avadel Settlement Agreement, we have a worldwide, non-exclusive, royalty-bearing license under any past, present, or future Jazz patents that could be asserted against LUMRYZ, to market and sell LUMRYZ for narcolepsy and, beginning March 1, 2028, for any non-narcolepsy indications, including idiopathic hypersomnia. In exchange, from October 1, 2025, Jazz will receive a royalty of 3.85% (subject to potential reduction as set forth in the agreement) on net sales of LUMRYZ sold for narcolepsy and, beginning no earlier than March 1, 2028, an additional royalty of 10% (subject to potential reduction as set forth in the agreement) on net sales of LUMRYZ sold for any future FDA-approved indications (other than narcolepsy), in each case through February 18, 2036. Avadel also agreed not to market, sell or provide services for LUMRYZ for any non-narcolepsy indications prior to March 1, 2028, and that any unpermitted sales during such timeframe would be subject to a royalty of 80% of such net sales for any quarter in which such net sales exceed $2.25 million. Among other things, Jazz also agreed not to challenge the approvability of LUMRYZ for any present or future indications and Avadel granted Jazz a covenant not to sue under the patents covering LUMRYZ in connection with Jazz’s marketing and sale of XYWAV and XYREM for any present and future indications.

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Alixorexton

We have U.S. patent protection that extends to 2041, several U.S. patent applications, and a number of corresponding non-U.S. counterparts that cover alixorexton.

Protection of Proprietary Rights and Competitive Position

We have exclusive rights through licensing agreements with third parties to issued U.S. patents, pending patent applications and corresponding patents or patent applications in countries outside the U.S, subject in certain instances to the rights of the U.S. government to use the technology covered by such patents and patent applications. Under certain licensing agreements, we are responsible for patent expenses, and we pay annual license fees and/or minimum annual royalties. In addition, under these licensing agreements, we are typically obligated to pay royalties on future sales of products, if any, covered by the licensed patents.

There may be patents issued to third parties that relate to our products or technologies. The manufacture, use, offer for sale, sale or import of some of our products might be found to infringe on the claims of these patents. A third party might file an infringement action against us. The cost of defending such an action is likely to be high, and we might not receive a favorable ruling. There may also be patent applications filed by third parties that relate to some of our products if issued in their present form. The patent laws of the U.S. and other countries are distinct, and decisions as to patenting, validity of patents and infringement of patents may be resolved differently in different countries.

If patents exist or are issued that cover our products or technologies, we or our licensees may not be able to manufacture, use, offer for sale, sell or import some of our products without first getting a license from the patent holder. The patent holder may not grant us a license on reasonable terms, or it may refuse to grant us a license at all. This could delay or prevent us from developing, manufacturing, selling or importing those of our products that would require the license.

We try to protect our proprietary position by filing patent applications in the U.S. and in other countries related to our proprietary technologies, inventions and improvements that are important to the development of our business. Because the patent position of biopharmaceutical companies involves complex legal and factual questions, enforceability of patents cannot be predicted with certainty. The ultimate degree of patent protection that will be afforded to products and processes, including ours, in the U.S. and in other important markets, remains uncertain and is dependent upon the scope of protection decided upon by the patent offices, courts and lawmakers in these countries. Patents, if issued, may be challenged, invalidated or circumvented. Thus, any patents that we own or license from others may not provide any protection against competitors. Our pending patent applications, those we may file in the future, or those we may license from third parties, may not result in patents being issued. If issued, such patents may not provide us with proprietary protection or competitive advantages against competitors with similar technology. Furthermore, others may independently develop similar technologies or duplicate any technology that we have developed outside the scope of our patents. The laws of certain countries do not protect our IP rights to the same extent as the laws of the U.S.

We also rely on trade secrets, know-how and inventions, which are not protected by patents, to maintain our competitive position. We try to protect this information by entering into confidentiality agreements with parties that have access to such information, such as our corporate partners, collaborators, licensees, employees and consultants. However, any of these parties may breach such agreements and may disclose our confidential information or our competitors might learn of the information in some other way. If any trade secret, know-how or other invention not protected by a patent were to be disclosed to, or independently developed by, a competitor, such event could materially adversely affect our business, financial condition, cash flows and results of operations. For more information, see “Item 1A—Risk Factors” in this Annual Report.

Our trademarks, including ARISTADA, ARISTADA INITIO, LUMRYZ, LYBALVI and VIVITROL, are important to us and are generally covered by trademark applications or registrations with the U.S. Patent and Trademark Office (the “USPTO”) and the patent or trademark offices of other countries. Our licensed products and products using our proprietary technologies also use trademarks that are owned by our licensees, such as the trademarks for INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA, INVEGA HAFYERA/BYANNLI and RISPERDAL CONSTA, which are registered trademarks of Johnson & Johnson or its affiliated companies and VUMERITY, which is a registered trademark of Biogen (and used by us under license). Trademark protection varies in accordance with local law and continues in some countries as long as the trademark is used and in other countries as long as the trademark is registered. Trademark registrations generally are for fixed but renewable terms.

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Regulatory

Regulation of Pharmaceutical Products

United States

Our current and contemplated activities, and the products and processes that result from such activities, are subject to substantial government regulation. Before new pharmaceutical products may be sold in the U.S., preclinical studies and clinical trials of the products must be conducted and the results submitted to the FDA for approval. Clinical trial programs must determine an appropriate dose and regimen, establish substantial evidence of effectiveness and define the conditions for safe use. This is a high-risk process that requires stepwise clinical studies in which the product must successfully meet pre-specified endpoints.

Preclinical Testing: Before beginning testing of any compounds with potential therapeutic value in human subjects in the U.S., stringent government requirements for preclinical data must be satisfied. Preclinical testing includes both in vitro, or in an artificial environment outside of a living organism, and in vivo, or within a living organism, laboratory evaluation and characterization of the safety and efficacy of a drug and its formulation.

Investigational New Drug Application: All available data from animal pharmacology and toxicology studies are included in an Investigational New Drug application (“IND”) submitted to the FDA and are reviewed by the FDA prior to commencement of first-in-human clinical trials. The preclinical data must provide an adequate basis for evaluating both the safety and the scientific rationale for the initial clinical studies in human subjects. In certain cases where human clinical data from ex-U.S. studies are available prior to submitting the IND, these data would also be included in the IND for review by the FDA prior to commencing clinical trials in the U.S. In addition, information pertaining to the composition, manufacturer, stability, and controls used for manufacturing the drug substance and the drug product are included in the IND to support identification, quality, purity, and strength of the investigational drug product.

Clinical Trials: Clinical trials involve the administration of an investigational drug to healthy human volunteers or to patients under the supervision of a qualified investigator pursuant to an FDA-reviewed protocol. Human clinical trials are typically conducted in three sequential phases, although the phases may overlap with one another and, depending upon the nature of the clinical program, a specific phase or phases may be skipped altogether. Clinical trials must be conducted under protocols that detail the objectives of the study, the parameters to be used to monitor safety, and the efficacy criteria, if any, to be evaluated. Each protocol must be submitted to the FDA as part of the applicable IND.

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Phase 1 clinical trials—test for safety, tolerability, absorption, bio-distribution, metabolism, excretion and clinical pharmacology and, if possible, to gain early evidence regarding efficacy.

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Phase 2 clinical trials—involve a relatively small sample of the intended patient population and seek to assess the efficacy of the drug for targeted indications, to determine dose-response and the optimal dose range and to gather additional information relating to the safety profile.

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Phase 3 clinical trials—consist of expanded, large-scale studies of patients with the target disease or disorder to obtain definitive statistical evidence of the efficacy and safety of the proposed product and dosing regimen.

In the U.S., the results of the preclinical and clinical testing of a product are then submitted to the FDA in the form of a New Drug Application (“NDA”) or a Biologics License Application (“BLA”), depending on the nature of the product. The NDA or BLA also include information pertaining to the chemistry, manufacturing and controls (“CMC”) of the product as well as the proposed product packaging and labeling. The submission of an application is not a guarantee that the FDA will find the application complete and accept it for filing. The FDA may refuse to file the application if it is not considered sufficiently complete to permit a review and will inform the applicant of the reason for the refusal. The applicant may then resubmit the application and include supplemental information.

Once an NDA or BLA is accepted for filing, the FDA has 10 months, under its standard review process, within which to review the application (for some applications, the review process is longer than 10 months). For drugs that, if approved, would represent a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions when compared to standard applications, the FDA may assign “priority review” designation and review the application within six months of filing. The FDA has additional review pathways to expedite development and review of new drugs that are intended to treat serious or life-threatening conditions and demonstrate the potential to address unmet medical needs, including: “Fast Track,” “Breakthrough Therapy,” and “Accelerated Approval.” However, none of these expedited pathways ensure that a product will receive FDA approval in a timely manner or at all.

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As part of its review, the FDA may refer the application to an advisory committee for independent advice on questions related to the development of the drug, recommendation as to whether the application should be approved or other guidance that the FDA may seek. The FDA is not bound by the recommendation of an advisory committee; however, historically, it has often followed such recommendations. The FDA may determine that a Risk Evaluation and Mitigation Strategy (“REMS”) is necessary to ensure that the benefits of a new product outweigh its risks. If required, a REMS may include various elements, such as publication of a medication guide, a patient package insert, a communication plan to educate healthcare providers of the drug’s risks, limitations on who may prescribe or dispense the drug, or other measures that the FDA deems necessary to support the safe use of the drug.

In reviewing an NDA or BLA, the FDA may grant marketing approval, or issue a complete response letter to communicate to the applicant the reasons the application cannot be approved in its then-current form and provide input on the additional information that the FDA requires and/or changes that must be made before an application can be approved. Even if such additional information is submitted to the FDA or such changes made, the FDA may ultimately decide that the NDA or BLA still does not satisfy the FDA’s criteria for approval. The receipt of regulatory approval often takes a number of years, involves the expenditure of substantial resources and depends on a number of factors, including the severity of the disease in question, the availability of alternative treatments, efficacy and potential safety signals observed in preclinical tests or clinical trials, and the risks and benefits demonstrated in clinical trials. It is impossible to predict with any certainty whether and when the FDA will grant marketing approval for a given product. Even if a product is approved, the approval may be subject to limitations based on the FDA’s interpretation of the data. For example, the FDA may require, as a condition of approval, restricted distribution and use, enhanced labeling, special packaging or labeling, expedited reporting of certain adverse events, pre-approval of promotional materials or restrictions on direct-to-consumer advertising, any of which could negatively impact the commercial success of a drug. The FDA may also require a sponsor to conduct additional post-marketing studies as a condition of approval to provide data on safety and effectiveness. In addition, prior to commercialization, products that may be deemed controlled substances are subject to review and scheduling by the DEA.

The FDA tracks information on side effects and adverse events reported during clinical studies and after marketing approval. Non-compliance with safety reporting requirements may result in civil or criminal penalties. Side effects or adverse events that are identified during clinical trials can delay, impede or prevent marketing approval. Based on new safety information that emerges after approval, the FDA can mandate product labeling changes, impose a REMS or the addition of elements to an existing REMS, require new post-marketing studies (including additional clinical trials), or suspend or withdraw approval of the product.

If we seek to make certain types of changes to an approved product, such as adding a new indication, making certain manufacturing changes, or changing manufacturers or suppliers of certain ingredients or components, the FDA will need to review and approve such changes in advance. In the case of adding a new indication, we would be required to demonstrate with additional clinical data that the product is safe and effective for the new intended use. Such regulatory reviews can result in denial or modification of the planned changes, or requirements to conduct additional tests or evaluations that can substantially delay or increase the cost of the planned changes.

In addition, the FDA regulates all advertising and promotional activities for products under its jurisdiction. A company can make only those claims relating to safety and efficacy that are consistent with FDA regulation and guidance, and the product’s approved label. However, physicians may prescribe legally available drugs for uses that are not described in the drug’s labeling. Such off-label uses are common across certain medical specialties and often reflect a physician’s belief that the off-label use is the best treatment for a particular patient. The FDA does not regulate the behavior of physicians in their choice of treatments, but the FDA regulations do impose stringent restrictions on manufacturers’ communications regarding off-label uses. Failure to comply with applicable FDA requirements may subject a company to adverse publicity, enforcement action by the FDA and the U.S. Department of Justice, corrective advertising and the full range of civil and criminal penalties available to the FDA and the U.S. Department of Justice.

Controlled Substances Act: The DEA regulates pharmaceutical products that are controlled substances. Controlled substances are those drugs that appear on one of the five schedules promulgated and administered by the DEA under the CSA. Schedule I substances by definition have a high potential for abuse, have no currently “accepted medical use” in the U.S., lack accepted safety for use under medical supervision, and may not be prescribed, marketed or sold in the U.S. Pharmaceutical products approved for use in the U.S. may be listed as Schedule II, III, IV or V, with Schedule II substances considered to present the highest potential for abuse or dependence and Schedule V substances the lowest relative risk of abuse. If a product is classified as a controlled substance, it must undergo the process of scheduling by the DEA into one of these five schedules, which is a process that is separate from FDA approval of the NDA for such product and may delay the commercial launch of such product even after FDA approval. The CSA also governs, among other things, the inventory, distribution, recordkeeping, handling, security and disposal of controlled substances. Schedule I and II drugs are subject to the strictest controls, including manufacturing and procurement quotas, heightened security requirements and additional criteria for importation. In addition, dispensing of Schedule II drugs is subject to additional requirements. Further, companies with a scheduled pharmaceutical product are subject to periodic and ongoing inspections by the DEA and similar state drug enforcement authorities to assess ongoing compliance with the DEA’s regulations.

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Any person or firm that manufactures, distributes, dispenses, imports, or exports any controlled substance, or proposes to do so, must register with the DEA for a specific business activity related to controlled substances, including manufacturing or distributing, and may engage in only the activity or activities for which it is registered. The DEA conducts periodic inspections of registered establishments for compliance with its rules and regulations. Any failure to comply with these regulations could lead to a variety of sanctions, including the revocation, or a denial of renewal, of any DEA registration and injunctions, or civil or criminal penalties. In addition to these U.S. federal statutory obligations, there may be additional U.S. state and local laws and regulations relevant to the handling of controlled substances.

Outside the United States

Certain of our products are commercialized by our licensees in numerous jurisdictions outside the U.S. Most of these jurisdictions have product approval and post-approval regulatory processes that are similar in principle to those in the U.S. In Europe, there are several mechanisms for marketing approval, depending on the type of product for which approval is sought. Under the centralized procedure, a company submits a single application to the European Medicines Agency (“EMA”). The marketing application is evaluated by the Committee for Medicinal Products for Human Use (“CHMP”), the expert scientific committee of the EMA. If the CHMP determines that the marketing application fulfills the requirements for quality, safety, and efficacy, it will submit a favorable opinion to the European Commission (“EC”). The CHMP opinion is not binding, but is typically adopted by the EC. A marketing application approved by the EC is valid in all EU member states.

In addition to this centralized procedure, Europe also has: (i) a nationalized procedure, which requires a separate application to, and approval determination by, each country; (ii) a decentralized procedure, whereby applicants submit identical applications to several countries and receive simultaneous approval; and (iii) a mutual recognition procedure, where applicants submit an application to one country for review and other countries may accept or reject the initial decision. Regardless of the approval process employed, various parties share responsibilities for the monitoring, detection and evaluation of adverse events post-approval, including national authorities, the EMA, the EC, other relevant regulatory authorities and the marketing authorization holder.

Good Manufacturing Practices

The FDA, the EMA, the competent authorities of the EU member states and other regulatory agencies regulate and inspect equipment, facilities and processes used in the manufacturing of pharmaceutical products prior to approving a product. Once approval from a regulatory agency is obtained, if a company makes a material change in manufacturing equipment, location or process, additional regulatory review and approval may be required. Companies also must adhere to cGMP and product-specific regulations enforced by the FDA and other regulatory agencies both in the manufacture of clinical product and following product approval. The FDA, the EMA and other regulatory agencies also conduct regular, periodic visits to re-inspect equipment, facilities and processes following the initial approval of a product and may also request that certain information or records be provided in writing for review in lieu of an on-site visit. If, as a result of these inspections or records reviews, it is determined that our equipment, facilities or processes do not comply with applicable regulations and conditions of product approval, regulatory agencies may seek civil, criminal or administrative sanctions and/or remedies against us, including the suspension of our manufacturing operations.

Good Clinical Practices

The FDA, the EMA and other regulatory agencies promulgate regulations and standards, commonly referred to as Good Clinical Practices (“GCP”), for designing, conducting, monitoring, auditing and reporting the results of clinical trials to ensure that the data and results are accurate and that the trial participants are adequately protected. The FDA, the EMA and other regulatory agencies enforce GCP through periodic inspections of trial sponsors, principal investigators, trial sites, contract research organizations (“CROs”) and institutional review boards. If our studies fail to comply with applicable GCP, patient safety and well-being could be impacted, the clinical data generated in our clinical trials may be deemed unreliable, and relevant regulatory agencies may require us to perform additional clinical trials before approving our marketing applications. Noncompliance can also result in civil or criminal sanctions. We rely on third parties, including CROs, to carry out many of our clinical trial-related activities. Failure of such third parties to comply with GCP can likewise result in rejection of our clinical trial data or other sanctions.

Hatch-Waxman Act

Under the U.S. Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”), Congress created an abbreviated FDA review process for generic versions of pioneer, or brand-name, drug products. The law also provides incentives by awarding, in certain circumstances, non-patent related marketing exclusivities to pioneer drug manufacturers. Newly approved drug products and changes to the conditions of use of approved products may benefit from periods of non-patent-related marketing exclusivity in addition to any patent protection the drug product may have. The Hatch-Waxman Act provides five years of new chemical entity (“NCE”) marketing exclusivity to the first applicant to gain approval of an NDA for a product that contains an active ingredient, known as the active drug moiety, not found in any other approved product. The FDA is prohibited from accepting any

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abbreviated new drug application (“ANDA”) for a generic drug or 505(b)(2) application referencing the NCE for five years from the date of approval of the NCE, or four years in the case of an ANDA or 505(b)(2) application containing a patent challenge, and in both cases may not approve such generic drug or 505(b)(2) application until expiration of NCE marketing exclusivity. A 505(b)(2) application is an NDA in which the applicant relies, in part, on data and the FDA’s findings of safety and efficacy from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Hatch-Waxman Act exclusivities will not prevent the submission or approval of a full NDA (e.g., under 505(b)(1)), as opposed to an ANDA or 505(b)(2) application, for any drug, including, for example, a drug with the same active ingredient, dosage form, route of administration, strength and conditions of use.

The Hatch-Waxman Act also provides three years of exclusivity for applications containing the results of new clinical investigations, other than bioavailability studies, essential to the FDA’s approval of new uses of approved products, such as new indications, dosage forms, strengths, or conditions of use. However, this exclusivity only protects against the approval of ANDAs and 505(b)(2) applications for the protected use and will not prohibit the FDA from accepting or approving ANDAs or 505(b)(2) applications for other products containing the same active ingredient.

The Hatch-Waxman Act requires NDA applicants and NDA holders to provide certain information about patents related to the drug for listing in the FDA’s Approved Drugs Product List, commonly referred to as the Orange Book. ANDA and 505(b)(2) applicants must then certify regarding each of the patents listed with the FDA for the reference product. A certification that a listed patent is invalid or will not be infringed by the marketing of the applicant’s product is called a “Paragraph IV certification.” If the ANDA or 505(b)(2) applicant provides such a notification of patent invalidity or noninfringement, then the FDA may accept the ANDA or 505(b)(2) application four years after approval of the NDA for an NCE. If a Paragraph IV certification is filed and the ANDA or 505(b)(2) application has been accepted as a reviewable filing by the FDA, the ANDA or 505(b)(2) applicant must then, within 20 days, provide notice to the NDA holder and patent owner stating that the application has been submitted and providing the factual and legal basis for the applicant’s opinion that the patent is invalid or not infringed. The NDA holder or patent owner may file suit against the ANDA or 505(b)(2) applicant for patent infringement. If this is done within 45 days of receiving notice of the Paragraph IV certification, a one-time, 30-month stay of the FDA’s ability to approve the ANDA or 505(b)(2) application is triggered. The 30-month stay begins at the end of the NDA holder’s data exclusivity period, or, if data exclusivity has expired, on the date that the patent holder is notified. The FDA may approve the proposed product before the expiration of the 30-month stay if a court finds the patent invalid or not infringed, or if the court shortens the period because the parties have failed to cooperate in expediting the litigation.

Orphan Drug Act

Under the Orphan Drug Act, the FDA may designate drugs or biologics for relatively small patient populations as orphan drugs. FDA grants orphan drug designation to drugs intended to treat a rare disease or condition, which is one that affects fewer than 200,000 individuals in the U.S., or more than 200,000 individuals, but for which there is no reasonable expectation that the cost of developing the product and making it available in the U.S. for the disease or condition will be recovered from U.S. sales of the product. Orphan drug designation does not shorten the duration of the regulatory review process or lower the approval standards, but can provide important benefits, including consultation with the FDA. If a product is approved for its orphan designated use, it may be entitled to orphan drug exclusivity (“ODE”), which blocks the FDA from approving for seven years any other application to market a product that is the same drug for the same indication, except in certain limited circumstances. ODE does not prevent approval of another sponsor’s application for different indications or uses of the same drug, or for different drugs for the same indication.

Sales and Marketing

We are subject to various U.S. federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback laws and false claims laws. Anti-kickback laws make it illegal for a prescription drug manufacturer to solicit, offer, receive, or pay any remuneration in exchange for, or to induce, the referral of business, including the purchase or prescription of a particular drug. Due to the broad scope of the U.S. statutory provisions, the general absence of guidance in the form of regulations, and few court decisions addressing industry practices, it is possible that our practices might be challenged under anti-kickback or similar laws. False claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented, for payment to third-party payers (including Medicare and Medicaid) claims for reimbursed drugs or services that are false or fraudulent, claims for items or services not provided as claimed or claims for medically unnecessary items or services. Activities relating to the sale and marketing of our products may be subject to scrutiny under these laws. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines and civil monetary penalties, as well as the possibility of exclusion from federal healthcare programs (including Medicare and Medicaid). In addition, federal and state authorities are paying increased attention to enforcement of these laws within the pharmaceutical industry and private individuals have been active in alleging violations of the laws and bringing suits on behalf of the U.S. government under the False Claims Act. If we were subject to allegations concerning, or were convicted of violating, these laws, our business could be harmed. See “Item 1A—Risk Factors” in this Annual Report and specifically those sections entitled “If there are changes in, or we fail to comply with, the extensive legal and regulatory requirements affecting the

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healthcare industry, we could be subject to investigations, litigation, costs, penalties and business losses,” “Revenues generated by sales of our products depend, in part, on the availability from third-party payers of reimbursement for our products and the extent of cost-sharing arrangements for patients (e.g., patient co-payment, co-insurance, deductible obligations) and cost-control measures imposed, and any reductions in payment rate or reimbursement or increases in our or in patients’ financial obligation to payers could result in decreased sales of our products and/or decreased revenues” and “The clinical study or commercial use of our products may cause unintended side effects or adverse reactions, or incidents of misuse may occur, which could adversely affect our products, business and share price.”

Laws and regulations have been enacted by the U.S. federal government and various states to regulate the sales and marketing practices of pharmaceutical manufacturers. The laws and regulations generally limit financial interactions between manufacturers and healthcare providers and require disclosure to the government and public of such interactions. The laws include federal “sunshine”, or open payments, provisions enacted in 2010 as part of the comprehensive federal healthcare reform legislation and supplemented as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act. Such provisions apply to pharmaceutical manufacturers with products reimbursed under certain government programs and require those manufacturers to disclose annually to the federal government (for re-disclosure to the public) certain payments made to, or at the request of, or on behalf of, physicians or to teaching hospitals and certain payments made to physicians assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse-midwives. Certain state laws also require disclosure of pharmaceutical pricing information and marketing expenditures. Given the ambiguity found in many of these laws and their implementation, our reporting actions could be subject to the penalty provisions of the pertinent U.S. federal and state laws and regulations.

Pricing and Reimbursement

United States

In the U.S., sales of our products, including those sold by our licensees, and our ability to generate revenues on such sales are dependent, in significant part, on the availability and level of reimbursement from third-party payers such as state and federal governments, including Medicare and Medicaid, managed care providers and private insurance plans. Third-party payers are increasingly challenging the prices charged for medical products and examining the medical necessity and cost-effectiveness of medical products, in addition to their safety and efficacy.

Medicaid is a joint federal and state program that is administered by the states for low-income and disabled beneficiaries. Under the Medicaid rebate program, we are required to pay a rebate for each unit of product reimbursed by the state Medicaid programs. The amount of the rebate for each product is set by law as the greater of 23.1% of average manufacturer price (“AMP”) or the difference between AMP and the best price available from us to any commercial or non-federal governmental customer. The rebate amount must be adjusted upward where the AMP for a product’s first full quarter of sales, when adjusted for increases in the Consumer Price Index—Urban, is less than the AMP for the current quarter, with this difference being the amount by which the rebate is adjusted upwards. The rebate amount is required to be recomputed each quarter based on our report of current AMP and best price for each of our products to the Centers for Medicare & Medicaid Services (“CMS”). The terms of our participation in the rebate program impose a requirement on us to report revisions to AMP or best price within a period not to exceed 12 quarters from the quarter in which the data was originally due. Any such revisions could have the impact of increasing or decreasing our rebate liability for prior quarters, depending on the direction of the revision. In addition, if we were found to have knowingly submitted false information to the government, the statute provides for civil monetary penalties per item of false information in addition to other penalties available to the government.

Medicare is a federal program that is administered by the federal government that covers individuals age 65 and over as well as those with certain disabilities. Medicare Part B pays physicians who administer our products under a payment methodology using average sales price (“ASP”) information. Manufacturers, including us, are required to provide ASP information to CMS on a quarterly basis. This information is used to compute Medicare payment rates, with rates for Medicare Part B drugs outside the hospital outpatient setting and in the hospital outpatient setting consisting of ASP plus a specified percentage. These rates are adjusted periodically. If a manufacturer is found to have made a misrepresentation in the reporting of ASP, the statute provides for civil monetary penalties for each misrepresentation and for each day in which the misrepresentation was applied. In October 2025, CMS finalized the CY 2026 Medicare Physician Fee Schedule rule, which, among other provisions, increases documentation requirements for bona fide service fees, establishes a methodology for allocating discounts in bundled arrangements, and requires that sales of Part B units at the Maximum Fair Price be included in ASP calculations. These changes impose additional, complex reporting and documentation obligations, may lower ASP of our products and reimbursement under Medicare Part B and may increase our engagement with CMS in respect of price concessions.

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Medicare Part D provides coverage to enrolled Medicare patients for self-administered drugs (i.e., drugs that do not need to be injected or otherwise administered by a physician) and certain physician-administered drugs reimbursed under a pharmacy benefit. Medicare Part D also covers the prescription drug benefit for dual eligible beneficiaries. Medicare Part D is administered by private prescription drug plans approved by the U.S. government and each drug plan establishes its own Medicare Part D formulary for prescription drug coverage and pricing, which the drug plan may modify from time-to-time. The prescription drug plans negotiate pricing with manufacturers and may condition formulary placement on the availability of manufacturer discounts. The Medicare Part D benefit has distinct phases, where the share of drug costs paid by Medicare Part D enrollees, the Medicare Part D prescription drug plan, drug manufacturers and Medicare varies. Prior to 2025, the phases consisted of the deductible phase, the initial coverage phase, the coverage gap and the catastrophic coverage phase and, except for dual eligible Medicare Part D beneficiaries who qualified for low-income subsidies, drug manufacturers, including us, were required to provide a seventy percent (70%) discount on our brand name prescription drugs utilized by Medicare Part D beneficiaries when those beneficiaries reached the coverage gap in their drug benefits. The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) made substantial changes to the Medicare Part D benefit design and replaced the manufacturer coverage-gap discount program with a new manufacturer discount program that took effect in January 2025. Under the new discount program, the Medicare Part D benefit phases consist of the deductible phase, the coverage phase and the catastrophic coverage phase, and drug manufacturers must provide a ten percent (10%) discount on their brand name prescription drugs utilized by Medicare Part D beneficiaries during the initial coverage phase and a twenty percent (20%) discount during the catastrophic coverage phase. For manufacturers that meet the definition of a “specified manufacturer,” the Inflation Reduction Act provides for Medicare Part D discounts to be phased in over time, starting with a one percent (1%) discount in the initial coverage phase and a one percent (1%) discount in the catastrophic coverage phase in 2025. These discount amounts increase each year, stepping up to a ten percent (10%) discount in the initial coverage phase in 2029 and a twenty percent (20%) discount in the catastrophic coverage phase in 2031. Alkermes meets the criteria of a “specified manufacturer” and, therefore, will follow the phase-in schedule for discounts to the Medicare Part D program.

Federal law also requires that any company that participates in the Medicaid Drug Rebate Program (“MDRP”) also participate in the Public Health Services’ (including the Indian Health Services, “PHS”) pharmaceutical pricing program (the “340B program”), in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B. The 340B program, which is administered by the Health Resources and Services Administration (“HRSA”), requires participating manufacturers to agree to charge statutorily defined covered entities no more than the 340B “ceiling price” for the manufacturer’s covered drugs. These 340B covered entities include certain qualifying community health clinics, a variety of entities that receive health services grants from the Public Health Service, and multiple categories of hospitals, including children’s hospitals, critical access hospitals, free standing cancer hospitals and hospitals that serve a disproportionate share of low-income patients. The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated under the MDRP. A regulation regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities became effective on January 1, 2019. The scope and implementation of the 340B program continue to be the subject of legislative and regulatory interest and ongoing litigation, the outcomes of which are difficult to predict.

We also make our products available for purchase by authorized users of the Federal Supply Schedule (“FSS”) of the General Services Administration pursuant to our FSS contract with the Department of Veterans Affairs. Under the Veterans Health Care Act of 1992 (the “VHC Act”), we are required to offer deeply discounted FSS contract pricing to four federal agencies: the Department of Veterans Affairs; the Department of Defense; the Coast Guard; and the PHS, in order for federal funding to be made available for reimbursement of any of our products by such federal agencies and certain federal grantees. Coverage under Medicaid, the Medicare Part B program and the PHS pharmaceutical pricing program is also conditioned upon FSS participation. FSS pricing is negotiated periodically with the Department of Veterans Affairs. FSS pricing is intended not to exceed the price that we charge our most-favored, non-federal customer for a product. In addition, prices for drugs purchased by the Department of Veterans Affairs, Department of Defense (including drugs purchased by military personnel and dependents through the Tricare Retail Pharmacy (“Tricare”) program), Coast Guard and PHS are subject to a cap on pricing equal to 76% of the non-federal average manufacturer price (“non-FAMP”). An additional discount applies if non-FAMP increases more than inflation (measured by the Consumer Price Index—Urban). In addition, if we are found to have knowingly submitted false information to the government, the VHC Act provides for civil monetary penalties per false item of information in addition to other penalties available to the government.

In addition, in January 2016, CMS released the final Medicaid covered outpatient drug regulation, which became effective in April 2016. This regulation implements those changes made by the Patient Protection and Affordable Care Act (the “PPACA”) to the Medicaid drug rebate statute in 2010 and addresses a number of other issues with respect to the Medicaid program, including, but not limited to, the eligibility and calculation methodologies for AMP and best price, and the expansion of Medicaid rebate liability to include Medicaid managed care organizations. The final Medicaid covered outpatient drug regulation established two calculation methodologies for AMP: one for drugs generally dispensed through retail community pharmacies (“RCP”) and one for so-called “5i drugs” (inhaled, infused, instilled, implanted or injectable drugs) “not generally dispensed” through RCPs. The regulation further made clear that 5i drugs would qualify as “not generally dispensed” and, therefore, able to use the alternative AMP calculation, if not

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more than thirty percent (30%) of their sales were to RCPs or to wholesalers for RCPs. The primary difference between the two AMP calculations is the requirement to include in AMP, for those qualifying 5i drugs not generally dispensed through RCPs, certain payments, rebates and discounts related to sales to non-RCPs; such inclusion often leads to a lower AMP. The decision of which AMP calculation a product is eligible to use must be made and applied on a monthly basis based on the percentage of sales of such product to RCPs or to wholesalers for RCPs.

In September 2024, CMS released a final rule titled “Medicaid Program: Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program,” the provisions of which generally took effect in November 2024. The rule includes several provisions affecting manufacturers that participate in the MDRP, including, but not limited to, addressing manufacturer misclassification of their products in reports required by the MDRP, imposing a 12-quarter deadline for manufacturer disputes or audits of state rebate invoices, and modifying the definition of “covered outpatient drugs” for which manufacturers are required to pay rebates to include certain drugs administered in inpatient settings where the drug is part of an inclusive payment, such inclusive payment includes an amount attributable to the drug and the number of units of the drug administered to the patient, and where the amount paid that is attributable to the drug is based on a reimbursement methodology included in the applicable state plan.

U.S. federal and state governments regularly consider reforming healthcare coverage and lessening healthcare costs. Such reforms may include price controls, value-based pricing and changes to the coverage and reimbursement of our products, which may have a significant impact on our business. In August 2022, the Inflation Reduction Act was signed into law. The Inflation Reduction Act includes several provisions that will impact our business to varying degrees, including those that imposed new manufacturer financial liability on all drugs in Medicare Part D beginning in 2025, allow the U.S. government to negotiate prices for some drugs covered under Medicare Part D beginning in 2026 and Medicare Part B beginning in 2028, and require companies to pay rebates to Medicare for drug prices that increase faster than inflation. Additionally, the One Big Beautiful Bill Act (the “OBBBA”), which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program, which are expected to decrease the number of individuals enrolled in Medicaid and reduce the services covered by Medicaid. The OBBBA also modified the Inflation Reduction Act’s exclusion protecting orphan drugs designated for a single rare disease indication from required Medicare pricing negotiations by expanding it to apply to drugs designated for multiple rare diseases and by prohibiting Medicare price negotiations until seven years after an orphan drug is approved for a non-orphan indication.

Throughout 2025, the U.S. federal government pursued multiple initiatives aimed at tying U.S. drug prices to those paid in certain other developed countries through a “Most‑Favored‑Nation” (“MFN”) pricing framework. These actions included a 2025 Executive Order entitled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” in which CMS was instructed to create plans to impose MFN pricing on drug manufacturers. Following the Executive Order, CMS advanced three MFN-based payment models through the Center for Medicare and Medicaid Innovation (“CMMI”): the “Global Benchmark for Efficient Drug Pricing” (“GLOBE”), which would implement a new, mandatory drug rebate program tied to MFN pricing for select drugs in Medicare Part B and is proposed to go into effect on October 1, 2026; “Guarding U.S. Medicare Against Rising Drug Costs” (“GUARD”), which would implement a similar mandatory drug rebate program for select drugs in Medicare Part D and is proposed to go into effect on January 1, 2027; and “GENErating cost Reductions fOr U.S. Medicaid” (“GENEROUS”), launched in January 2026, under which manufacturers who choose to participate in the model would pay MFN-based supplemental rebates under the Medicaid program in exchange for standardized coverage criteria in participating states. These models are likely to face legal and operational challenges, and the implementation of these models remains uncertain. In parallel to these CMS initiatives, several major pharmaceutical manufacturers have entered into voluntary agreements with the U.S. federal government to provide discounted prices aligned to MFN prices on certain of the manufacturers’ drugs to the Medicaid program and direct to patients.

In addition, emphasis on managed care in the U.S. has increased and we expect will continue to increase the pressure on drug pricing. Private insurers regularly seek to manage drug cost and utilization by implementing coverage and reimbursement limitations through means including, but not limited to, formularies, increased out of pocket obligations and various prior authorization requirements. Even if favorable coverage and reimbursement status is attained for one or more products for which we have received regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

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Outside the United States

Within the EU, products are paid for by a variety of payers, with governments being the primary source of payment. Governments may determine or influence reimbursement of products. Governments may also set prices or otherwise regulate pricing. Negotiating prices with governmental authorities can delay commercialization of products. Governments may use a variety of cost-containment measures to control the cost of products, including price cuts, mandatory rebates, value-based pricing and reference pricing (i.e., referencing prices in other countries and using those reference prices to set a price). Recent budgetary pressures in many EU countries are causing governments to consider or implement various cost-containment measures, such as price freezes, increased price cuts and rebates, and expanded generic substitution and patient cost-sharing. If budget pressures continue, governments may implement additional cost-containment measures.

Other Regulations

Foreign Corrupt Practices Act: We are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”) and its Irish equivalent, which prohibits corporations and their representatives from paying, offering to pay, promising, authorizing, or making payments of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity. In many countries, the healthcare professionals with whom we regularly interact may meet the FCPA’s definition of a foreign government official. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect their transactions and to devise and maintain an adequate system of internal accounting controls.

Environmental, Health and Safety Laws: Our operations are subject to complex and increasingly stringent environmental, health and safety laws and regulations in the countries where we operate and, in particular, where we have manufacturing facilities, namely the U.S. and Ireland. Environmental and health and safety authorities in the relevant jurisdictions, including the Environmental Protection Agency and the Occupational Safety and Health Administration in the U.S. and the Environmental Protection Agency and the Health and Safety Authority in Ireland, administer laws which regulate, among other matters, the emission of pollutants into the air (including the workplace), the discharge of pollutants into bodies of water, the storage, use, handling and disposal of hazardous substances, the exposure of persons to hazardous substances, and the general health, safety and welfare of employees and members of the public. In certain cases, these laws and regulations may impose strict liability for pollution of the environment and contamination resulting from spills, disposals or other releases of hazardous substances or waste and/or any migration of such hazardous substances or waste. Costs, damages and/or fines may result from the presence, investigation and remediation of contamination at properties currently or formerly owned, leased or operated by us and/or off-site locations, including where we have arranged for the disposal of hazardous substances or waste. In addition, we may be subject to third-party claims, including for natural resource damages, personal injury and property damage, in connection with such contamination.

The General Data Protection Regulation (“GDPR”): The GDPR became effective in May 2018 and replaced the previous EU Data Protection Directive (95/46). The GDPR, which governs the processing of personal data (including personal health data), applies to the Company and any of its subsidiaries that are established in the EU to the extent that they process personal data as well as any of its subsidiaries that are established outside the EU to the extent that they process personal data relating to EU residents for certain purposes, including any such data relating to clinical trial participants in the EU. The GDPR imposes significant obligations on controllers and processors of personal data, including high standards for obtaining consent from individuals to process their personal data, robust notification requirements to individuals about the processing of their personal data, a strong individual data rights regime, mandatory data breach notifications, limitations on the retention of personal data, stringent requirements pertaining to health data, and strict rules and restrictions on the transfer of personal data outside of the EU, including to the U.S. The GDPR also imposes additional obligations on, and required contractual provisions to be included in, contracts between companies subject to the GDPR and their third-party processors that relate to the processing of personal data. The GDPR allows EU member states to make additional laws and regulations in order to introduce further conditions, including limitations, with regard to the processing of genetic, biometric or health data.

Other Laws: We are subject to a variety of financial disclosures, securities trading regulations and U.S. and Irish or EU governmental regulations as an Irish-incorporated company publicly-listed in the U.S., including laws relating to the oversight activities of the SEC, the Irish Companies Act 2014, and the regulations of the Nasdaq Stock Market (“Nasdaq”), on which our shares are traded. We are also subject to various laws, regulations and recommendations relating to safe working conditions, laboratory practices, the experimental use of animals, and the purchase, storage, movement, import and export and use and environmental matters, including disposal of hazardous or potentially hazardous substances used in connection with our research work.

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Human Capital Resources

As a global biopharmaceutical company focused on developing innovative medicines in the field of neuroscience, we have built, and continue to devote significant resources to further develop and enhance, a comprehensive cross-functional infrastructure designed to support product development from discovery through commercialization and lifecycle management. We seek to attract, hire, develop, retain and motivate qualified and highly-skilled employees with experience in areas such as R&D, including early discovery, medicinal chemistry, translational medicine, formulation development, and clinical trials operations capabilities; IP prosecution, enforcement and defense; medical affairs; manufacturing operations; U.S. federal and state government affairs; sales and marketing; and market access, among others. Competition for such personnel in our industry and the geographic regions in which we operate is intense, with numerous companies also developing, manufacturing or marketing products, including products against which our products directly compete. We are committed to supporting our employees’ well-being in a transparent, inclusive and collaborative environment and to providing our employees with access to training, support and resources intended to help them succeed professionally while appropriately balancing their professional and personal lives.

As of February 20, 2026, we had approximately 2,050 full time employees, of which approximately 1,950 were based in the U.S. and approximately 100 were based in Ireland. Our 2025 global voluntary attrition rate of 7.0% was below industry benchmarks. None of our employees are covered by a collective bargaining agreement, and we consider our relations with our employees to be good.

We are an equal opportunity employer and fundamentally committed to creating and maintaining a work environment in which employees are treated with respect and dignity. All human resources policies, practices and actions related to hiring, promotion, compensation, benefits and termination are administered in accordance with the principles of equal employment opportunity and other legitimate criteria without regard to race, color, religion, sex, sexual orientation, gender expression or identity, ethnicity, national origin, ancestry, age, mental or physical disability, genetic information, any veteran status, any military status or application for military service, or membership in any other category protected under applicable laws.

In recognition of the value of our employees and their important contributions to the achievement of our business objectives, we offer market-competitive comprehensive total rewards packages, including bonus opportunities at all levels tied to individual and company performance, and for employees at certain levels, company equity opportunities. We are committed to designing and managing our pay programs and decisions to support equitable pay for all employees. We have established our compensation programs based on market and benchmark data and strive to pay all employees equitably, taking into consideration factors such as their role, skills, abilities and relevant experience. We routinely monitor our pay programs in order to respond to market trends and maintain equity within our workforce. We offer our employees healthcare and retirement savings plan benefits, paid time off, tuition reimbursement and other benefits designed to support healthy lifestyle choices, financial well-being and work-life balance.

In support of our business, we seek to cultivate a work environment that reflects collaboration, respect for each voice, and unwavering commitment, and strengthens the sense of belonging among our employees. Reflecting the needs of our employees, we have established a global steering committee, comprised of representatives from all of our locations (including field-based employees), focused on employee engagement, creating connections, fostering conversations, promoting a culture of understanding and inclusion, and helping to support alignment of our efforts across the range of perspectives within our organization. In recent years, we have collaborated with our employees to create five employee resource groups, or ERGs: Limitless, a network to support people impacted by disability or illness; MOSAIC, a multicultural network; Operation Salute, a network to support active duty military members, veterans and their families; Pride@Work, an LGBTQ+ and allies network; and Women Inspired Network (WIN), a women’s network. These ERGs,which are employee-led, voluntary and open to all employees, share a common purpose of building community, providing opportunities for professional development and networking, and having a positive impact on our culture and our business.

We encourage active employee engagement to help ensure that employees feel part of our mission and that they have a voice in the Alkermes community. We conduct periodic employee engagement surveys to understand employee sentiment regarding, and satisfaction with, their work and experience at Alkermes, and have used, and plan to continue to use, the data collected to help inform and evolve our human capital management strategy and initiatives. We survey employees at least annually, which allows our employees to share their insights on a regular basis and provides us with opportunities to regularly assess and address employee feedback. As many of our office-based employees have adapted to a hybrid work model, we have continued to utilize expanded employee communications strategies to keep our employees connected and informed.

We are committed to the professional growth and development of our employees. We conduct a comprehensive on-boarding experience that connects newly hired employees to our business, values, culture, and people. We encourage and support our employees in their adoption of Individual Development Plans designed to identify professional development and growth opportunities to help support their career aspirations. We encourage our employees to seek out professional learning opportunities both within Alkermes and externally, through part-time education and tuition reimbursement programs, and frequent offerings of voluntary Company-hosted trainings that cover topics including performance management, problem-solving, leadership development, diversity

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education and awareness, communication and mentorship, and as appropriate, more specialized skills-based programs. We also provide all employees access to our LinkedIn Learning platform, which provides on-demand learning opportunities.

We ask our employees to help us promote and sustain workplace environments that are safe, productive and protective of the health and well-being of our people and in compliance with applicable laws, rules and regulations. We maintain extensive corporate environmental, health, safety and security policies, adhere to all health and safety standards set by regulators in the locations in which we operate, and routinely assess workplace risks, conduct employee trainings and monitor our sites to reduce the risk of workplace accidents. In 2025, employee health, safety and wellness continued to be of particular focus and importance for the Company.

Available Information and Website Disclosure

Our principal executive offices are located at Connaught House, 1 Burlington Road, Dublin 4, Ireland D04 C5Y6. Our telephone number is +353-1-772-8000 and our website address is www.alkermes.com. Information found on, or accessible through, our website is not incorporated into, and does not form a part of, this Annual Report. We make available free of charge through the Investors section of our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We also make available on the Corporate Governance page of the Investors section of our website at www.alkermes.com (i) the charters for the standing committees of our board of directors, including the audit and risk committee, compensation committee, and nominating and corporate governance committee, and (ii) our Code of Business Conduct and Ethics governing our directors, officers and employees. We intend to disclose on our website any amendments to, or waivers from, our Code of Business Conduct and Ethics that are required to be disclosed pursuant to the rules of the SEC.

From time to time, we may use our website to distribute material information. Our financial and other material information is routinely posted to and accessible on the Investors section of our website, available at www.alkermes.com. Investors are encouraged to review the Investors section of our website because we may post material information on that site that is not otherwise disseminated by us.