Alkermes plc.

1. THE COMPANY

Alkermes plc is a global biopharmaceutical company that seeks to develop innovative medicines in the field of neuroscience. Alkermes has 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, including late-stage candidates in narcolepsy and idiopathic hypersomnia, and early-stage candidates in ADHD and fatigue associated with multiple sclerosis and Parkinson’s disease. Headquartered in Ireland, Alkermes also has a corporate office and research and development (“R&D”) center in Massachusetts and a manufacturing facility in Ohio.

On February 12, 2026 (the “Closing Date”), the Company completed the acquisition of Avadel Pharmaceuticals plc (now operating as Avadel Pharmaceuticals Limited) (“Avadel”), pursuant to the definitive transaction agreement entered into in October 2025 and subsequently amended in November 2025 (the “Transaction Agreement”), adding both LUMRYZ to the Company’s portfolio of proprietary commercial products and a commercial organization with experience in narcolepsy. Pursuant to the Transaction Agreement, the Company acquired 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”).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company for the three months ended March 31, 2026 and 2025 are unaudited and have been prepared on a basis substantially consistent with the audited financial statements for the year ended December 31, 2025. The year-end consolidated balance sheet data, which is presented for comparative purposes, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. (commonly referred to as “GAAP”). In the opinion of management, the condensed consolidated financial statements include all adjustments of a normal recurring nature that are necessary to state fairly the results of operations for the reported periods.

The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company, which are contained in the Annual Report. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for any full fiscal year.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Alkermes plc and its wholly-owned subsidiaries as disclosed in Note 2, Summary of Significant Accounting Policies in the “Notes to Consolidated Financial Statements” accompanying the Annual Report. Intercompany accounts and transactions have been eliminated. Columns and rows within tables may not sum due to rounding.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in accordance with GAAP requires that Company management make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies, including, but not limited to, those related to revenue from contracts with its customers and related allowances, impairment and amortization of intangibles and long-lived assets, inventory, share-based compensation, income taxes including the valuation allowance for deferred tax assets, valuation of the Avadel Acquisition, investments, contingent consideration and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different conditions or using different assumptions.

Business Combinations

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations(“Topic 805”), acquisitions that meet the definition of a business are recorded using the acquisition method of accounting. The Company recognizes and measures the identifiable assets acquired, liabilities assumed and any non-controlling interest as of the acquisition date at fair value. The excess, if any, of the fair value of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed and any non-controlling interest is recognized as goodwill. Transaction costs incurred as a result of a business combination other than costs related to the issuance of debt or equity securities are recorded in the period the costs are incurred.

Contingent consideration in a business combination may consist of development, regulatory and/or commercial milestone payments and is included as part of the acquisition cost and recognized at fair value as of the acquisition date. Fair value is generally estimated by using a probability-weighted discounted cash flow approach resulting from contingent consideration and is re-measured at each reporting date until the contingency is resolved. Changes in fair value are recognized within “Operating (loss) income” in the accompanying condensed consolidated statements of operations and comprehensive (loss) income.

Reclassification

The Company reclassified certain prior year amounts on the consolidated balance sheet to conform to the current year presentation. These reclassifications had no impact on the previously reported total assets, liabilities or shareholders’ equity.

Intangible Assets

Intangible assets acquired in business combinations, including developed technology, product rights, licenses, and in-process research and development (“IPR&D”), are recorded at fair value as of the acquisition date. Definite-lived identifiable intangible assets are amortized based on the proportion of expected excess earnings over their estimated economic useful life. This method reflects the pattern in which the economic benefits of the intangible assets are expected to be realized.

Acquired IPR&D projects that have not yet received regulatory approval are considered indefinite-lived intangible assets and are required to be capitalized as indefinite-lived intangible assets until completion of the IPR&D project or abandonment. IPR&D projects are not amortized but are tested annually for impairment or more frequently if indicators arise. Upon completion of the development project, an impairment assessment is performed prior to amortizing the asset over its estimated useful life. IPR&D assets related to abandoned IPR&D projects are fully impaired.

Segment Information

Operating segments are defined as components of an enterprise engaging in business activities for which separate financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company has utilized the management approach to determine that the Company is managed asone segment on a consolidated basis and is in the business of developing, manufacturing and commercializing medicines designed to help people living with complex and difficult-to-treat psychiatric and neurological disorders. The Company’s CODM, the Chairman and Chief Executive Officer, reviews the Company’s operating results on an aggregate basis and manages the Company’s operations as a single operating unit. The Company’s CODM measures profitability on a reportable segment basis using net income and utilizes this information in allocating resources and in assessing performance by monitoring budget versus actual results. Please refer to Note 17, Segment Reporting, in these “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for further information.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that are adopted by the Company on or prior to the specified effective date. Unless otherwise described in this Form 10-Q, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income-Expense Disaggregation Disclosures, to improve disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization and depletion) in commonly-presented expense captions, such as cost of sales, selling, general and administrative expenses, and research and development. All disclosure requirements under this guidance are required for public business entities and effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted and the amendments in this guidance will be applied prospectively to financial statements for periods after the effective dates. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software. This ASU updates the requirements for capitalization of internal-use software, removing all reference to prescriptive and sequential software development stages (referred to as “project stages”). This ASU is effective for annual periods beginning after December 15, 2027, and for interim periods within those fiscal years. The Company is currently assessing the impact this ASU will have on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting. The amendments in this update clarify current interim disclosure requirements and provide a comprehensive list of required interim disclosures. The update also incorporates a disclosure principle that requires entities to disclose events that occur after the end of the reporting period. This update is effective for interim periods within annual periods beginning after December 15, 2027, though early adoption is permitted. The Company is currently assessing the impact this ASU will have on its consolidated financial statements and related disclosures.

3. BUSINESS COMBINATION

Acquisition of Avadel Pharmaceuticals plc

On February 12, 2026, the Company successfully completed the Avadel Acquisition, adding both LUMRYZ to the Company’s proprietary commercial products and a commercial organization with experience in narcolepsy. Pursuant to the Transaction Agreement, the Company acquired all of the issued and outstanding Avadel Shares for $21.00 per share in cash anda non-transferable 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 “CVR Milestone”).

Contingent payments of up to $165.7 million may become due to former Avadel shareholders upon the achievement of the CVR Milestone. In connection therewith, the Company recorded a contingent consideration liability of $107.7 million as of the Closing Date to reflect the estimated fair value of such contingent consideration. The estimated fair value of the contingent consideration was determined under an income approach using a Probability-Weighted Discounted Cash Flow Model (“DCF”). The key assumptions considered include probability of milestone achievement and estimated discount rates. At each reporting period after the Avadel Acquisition, the Company will revalue the contingent consideration liability and will record increases or decreases in the fair value of the liability in its condensed consolidated statements of operations and comprehensive (loss) income. Changes in fair value will result from changes in actual and projected achievement of the CVR Milestone, as well as changes to the discount rate. The change in the fair value of the contingent consideration from the Closing Date through March 31, 2026 was not material.

In connection with the Avadel Acquisition, the vesting of certain outstanding Avadel equity awards was accelerated as of the Closing Date and each vested Avadel equity award became entitled to receive cash consideration and the right to receive one CVR per Avadel Share. The purchase price for the Avadel Acquisition includes $134.9 million related to Avadel Shares for which vesting was accelerated in connection with the acquisition and is attributable to pre-combination service. The Company recognized share-based compensation expense of $20.2 million during the three months ended March 31, 2026 related to the acceleration of unvested share-based compensation awards attributable to post-combination service and the fair value related to the contingent CVR payment that could be made to former Avadel employees as of the Closing Date.

The Avadel Acquisition has been accounted for as a business combination, using the acquisition method of accounting in accordance with Topic 805. The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date.

The Company’s purchase price allocation is preliminary and based on the information available as of the reporting date. The Company’s estimates and assumptions are subject to refinement as the Company continues to review information related to the Avadel Acquisition. The Company remains in the process of reviewing and finalizing the measurement of certain assets acquired and liabilities assumed, including but not limited to: tax positions, and other tax-related matters, and the estimated fair values of acquired intangible assets and inventory. Adjustments to the valuation of assets acquired and liabilities assumed will result in a corresponding adjustment to goodwill. The Company expects to complete the purchase price allocation as soon as practicable, but no later than one year from the Closing Date.

The total preliminary purchase consideration related to the Avadel Acquisition was as follows:

The following table summarizes the preliminary estimates of the fair value of assets acquired and liabilities assumed as of the Closing Date:

Acquired Inventory

The fair value of the acquired inventory was estimated using the comparative sales method, which estimated the expected sales price of the product, reduced by all costs expected to be incurred to complete or to dispose of the inventory, as well as a market-participant profit allowance.

Acquired Intangible Assets

The identifiable intangible assets acquired included the following:

The fair value of LUMRYZ was estimated based on a multi-period excess earnings method which calculates the present value of the estimated revenues and net cash flows derived from LUMRYZ. Amortization of LUMRYZ is calculated using the percentage of excess earnings over the economic useful life method. The IPR&D relates to the product candidate acquired in the Avadel Acquisition, valiloxybate. Due to the early stage of development of this asset, and given the proximity to the Closing Date of a license agreement entered into by Avadel related to valiloxybate and the lack of suitable market comparables, the valuation was prepared utilizing a cost approach consisting of the upfront payment under the license agreement, together with additional development costs incurred by Avadel through prior to the Closing Date in respect of valiloxybate.

Deferred Tax Liabilities

The deferred tax liability of $183.1 million relates to the tax effect of the difference between the fair value and tax basis of acquired intangible assets owned by an Irish subsidiary of the Company. The deferred tax asset of $1.2 million relates to the tax effect of acquired net operating losses and temporary differences, partially offset by the difference between the fair value and tax basis of acquired intangible assets and inventory owned by a U.S. subsidiary of the Company.

Goodwill

The excess of the estimated fair value of the purchase price consideration over the fair value amounts assigned to the assets acquired and liabilities assumed represents the goodwill amount resulting from the Avadel Acquisition. The factors that contributed to the recognition of goodwill included the synergies that are specific to the Company’s business and not available to market participants, including the acquisition of a commercial organization with experience in narcolepsy which accelerates the Company’s commercial entry into the sleep medicine market and provides a strong foundation for the potential launch of alixorexton, the Company’s lead orexin development candidate. Goodwill is not deductible for tax purposes.

Revenues and Net (Loss) Income of Avadel

The operations of Avadel for the period of the Closing Date through March 31, 2026 have been included in the Company’s condensed consolidated statements of operations and comprehensive (loss) income for the quarter ended March 31, 2026. Total revenues of $39.5 million and net income of $16.2 million were recorded for this period.

Transaction Costs

In conjunction with the Avadel Acquisition, the Company incurred approximately $34.8 million of transaction costs during the three months ended March 31, 2026, all of which were recognized as selling, general and administrative in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. There were no transaction costs for the Avadel Acquisition incurred during the three months ended March 31, 2025.

Pro forma financial information (unaudited)

The following unaudited pro forma information presents the combined results of operations for the three months ended March 31, 2026 and 2025 as if the Avadel Acquisition had been completed on January 1, 2025. The unaudited pro forma financial information is based on the historical financial information for the Company and Avadel, along with certain pro forma adjustments described below. The unaudited pro forma information for the three months ended March 31, 2026 reflects revenues and net loss of Avadel from January 1, 2026 through the Closing Date, and excludes approximately $77.7 million of direct one-time transaction costs incurred by Avadel. The following unaudited pro forma information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations had the Avadel Acquisition occurred on the assumed date, nor is it necessarily an indication of future operating results.

The unaudited pro forma financial information includes, where applicable, adjustments primarily for:

(i)

increased amortization expense related to the LUMRYZ intangible asset acquired;

(ii)

increased costs of goods manufactured and sold related to the amortization of inventory fair value adjustments;

(iii)

increased interest expense to reflect the borrowings under the Facilities (as defined in Note 12, Long-Term Debtin these “Notes to Condensed Consolidated Financial Statements”), including the interest and amortization of deferred financing costs, net of reversal of historical interest expense and loss on extinguishment of Avadel’s royalty financing obligation;

(iv)

adjustment of approximately $44.5 million in direct one-time acquisition transaction costs, including $9.7 million recognized in fiscal year 2025, from the periods incurred to the period these expenses would have been recognized given the assumed transaction date identified above;

(v)

adjustment of $20.2 million related to the acceleration of unvested share-based compensation awards attributable to post-combination service and the fair value related to the contingent CVR payment that could be made to former Avadel employees if the specified CVR milestone is met, from the period incurred to the periods in which these expenses would have been recognized with the assumed transaction date identified above; and

(vi)

the related income tax effects of these adjustments to the income tax provision for the Company.

The unaudited pro forma information does not reflect the cost of any integration activities, benefits from any synergies that may be derived from the Avadel Acquisition or revenue growth that may be anticipated.

4. REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed in accordance with FASB ASC 606, Revenue from Contracts with Customers, or Topic 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations.

Product Sales, Net

The Company’s product sales, net consist of sales in the U.S. of ARISTADA and ARISTADA INITIO, LYBALVI, VIVITROL, and, following the completion of the Avadel Acquisition on February 12, 2026, LUMRYZ, primarily to wholesalers, specialty distributors and specialty pharmacies. Product sales, net are recognized when the customer obtains control of the product, which is when the product has been received by the customer.

During thethree months ended March 31, 2026 and 2025, the Company recorded product sales, net, as follows:

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, healthcare providers or payers. The Company’s process for estimating reserves established for these variable consideration components does not differ materially from historical practices. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from the Company’s estimates. If actual results vary, the Company adjusts these estimates, which could have an effect on earnings in the period of adjustment. See the “Revenue from Contracts with Customers” section in Note 2, Summary of Significant Accounting Policiesin the “Notes to Consolidated Financial Statements” in the Annual Report for information with respect to the Company’s significant categories of sales discounts and allowances.

The decrease in Medicaid rebates as a percentage of sales was primarily due to gross-to-net favorability, as actual Medicaid rebates related to VIVITROL, ARISTADA/ARISTADA INITIO and LYBALVI were lower than original estimates by approximately $5.4 million, $2.8 million and $0.5 million, respectively.

A rollfor ward of the Company’s provisions for sales discounts and allowances is as follows:

(1)

Amounts consist of beginning balance as of the Closing Date.

(2)

“Contractual Adjustments” include “Medicaid Rebates” and “Medicare Part D” accruals.

(3)

“Discounts” include “Chargebacks” and “Product Discounts.”

Total revenue-related reserves as of March 31, 2026 and December 31, 2025 included in the accompanying consolidated balance sheets are summarized as follows:

Manufacturing and Royalty Revenues

During thethree months ended March 31, 2026 and 2025, the Company recorded manufacturing and royalty revenues from its collaboration arrangements as follows:

(1)

“long-acting INVEGA products”: INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate). The Company’s royalty on net sales of INVEGA SUSTENNA in the U.S. expired in August 2024.

5. INVESTMENTS

Investments consist of the following (in thousands):

At March 31, 2026, the Company’s investments in corporate debt securities had a minimum rating of A2 (Moody’s)/A (Standard and Poor’s), and 47 of the Company’s 120 investment securities were in an unrealized loss position with an aggregate estimated fair value of $83.4 million. The primary reason these securities were in an unrealized loss position is that they are fixed-rate securities that were acquired in a rising interest rate environment. In making the determination whether the decline in fair value of these securities was temporary, the Company evaluated whether it intended to sell the security and whether it was more likely than not that the Company would be required to sell the security before recovering its amortized cost basis. The Company has the intent and ability to hold these investments until recovery, which may be at maturity.

Realized gains and losses on the sales and maturities of investments, which were identified using the specific identification method, were as follows:

The Company’s available-for-sale and held-to-maturity securities at March 31, 2026 had contractual maturities in the following periods:

6. FAIR VALUE

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy and the valuation techniques that the Company utilized to determine such fair value:

The Company transfers its financial assets and liabilities, measured at fair value on a recurring basis, between the fair value hierarchies at the end of each reporting period. There wereno transfers of any securities between levels during thethree months ended March 31, 2026. At March 31, 2026, the contingent consideration resulting from the Avadel Acquisition was valued as a contingent liability utilizing Level 3 inputs as its fair value is based on significant inputs not observable in the market.

The following table is a rollforward of the fair value of the Company’s assets with fair values that were determined using Level 3 inputs at March 31, 2026:

The Company’s investments classified as Level 2 within the fair value hierarchy were initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing market-observable data. The market-observable data included reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validated the prices developed using the market-observable data by obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active. For additional information related to the Company’s contingent consideration, see Note 18, Commitments and Contingent Liabilities in these “Notes to Condensed Consolidated Financial Statements”.

The carrying amounts reflected in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, contract assets, other current assets, accounts payable and accrued expenses, sales discounts, allowances and reserves approximate fair value due to their short-term nature.

The estimated fair value of the Company’s long-term debt under its Facilities (as defined in Note 12, Long-Term Debtin these “Notes to Condensed Consolidated Financial Statements”), which was based on quoted market price indications (Level 2 in the fair value hierarchy) and which may not be representative of actual values that could have been, or will be, realized in the future, was $1,542.6 million at March 31, 2026.

7. INVENTORY

Inventory is stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. Inventory consists of the following:

(1)

At March 31, 2026 and December 31, 2025, the Company had $26.2 million and $31.7 million, respectively, of finished goods inventory located at its third-party warehouse and shipping service provider.

In connection with the Avadel Acquisition, the Company recorded a fair value step-up adjustment to inventory of $121.6 million, consisting of approximately $19.1 million and $102.5 million in work in process and finished goods, respectively. The inventory step-up is being amortized when inventory is sold to customers, substantially all of which is expected to be within a year of the Closing Date. During the three months ended March 31, 2026, the Company amortized $12.7 million in inventory step-up within “Cost of goods manufactured and sold” in the accompanying condensed consolidated statement of operations and comprehensive (loss) income.

8. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

9. GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets consist of the following:

Based on its most recent analysis, the Company expects to amortize approximately $79.8 million, $103.7 million, $125.5 million, $117.9 million and $115.6 million of its definite-lived intangible asset in the years ending December 31, 2026 through 2030, respectively. Although the Company believes such expectations are reasonable, given the inherent risks and uncertainties underlying its expectations regarding future revenues, there is the potential for the Company’s actual results to vary significantly from such expectations. If revenues are projected to change, the related amortization of the intangible assets will change in proportion to the change in revenues.

In connection with the Avadel Acquisition, the Company recorded the excess of the estimated fair value of the purchase price consideration over the fair value amounts assigned to the assets acquired and liabilities assumed as goodwill. For additional information related to the estimated purchase price consideration see Note 3, Business Combination in these“Notes to Condensed Consolidated Financial Statements”. A rollforward of the Company’s goodwill is as follows:

10. LEASES

Future lease payments under non-cancelable leases at March 31, 2026 consist of the following:

At March 31, 2026, the weighted average incremental borrowing rate and the weighted average remaining lease term for all operating leases held by the Company were 3.6% and 5.6 years, respectively. Cash paid for lease liabilities was $2.8 million during the three months ended March 31, 2026, as compared to $2.5 million during the three months ended March 31, 2025. The Company recorded operating lease expense of $2.2 million during the three months ended March 31, 2026, as compared to $1.8 million during the three months ended March 31, 2025.

11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

A summary of the Company’s current provision for sales discounts, allowances and reserves was as follows:

Included in accounts payable was approximately $38.6 million and $59.6 million of amounts payable related to state U.S. Medicaid rebates as of March 31, 2026 and December 31, 2025, respectively.

12. LONG-TERM DEBT

Long-term debt consisted of the following:

On the Closing Date, the Company entered into a credit agreement (the “Credit Agreement”), by and among Alkermes plc, as the TopCo Borrower, Alkermes, Inc., as the U.S. Borrower, Alkermes Finance LLC, as the U.S. Co-Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Joint Lead Arranger and Joint Bookrunner, BofA Securities, Inc., as Joint Lead Arranger and Joint Bookrunner, and the lenders party thereto. The Credit Agreement provides for (i) a senior secured term loan A facility in an aggregate principal amount of up to $750.0 million (the “TLA Facility”) and (ii) a senior secured term loan B facility in an aggregate principal amount of up to $775.0 million (the “TLB Facility” and together with the TLA Facility, the “Facilities”). The TLA Facility matures on February 12, 2031, and the TLB Facility matures on August 12, 2031. On the Closing Date, the Company borrowed the full $1.525 billion available under the Facilities.

Borrowings under the TLA Facility will bear interest at an annual rate of, at the Company’s option, either (i) the Term SOFR Rate (as defined in the Credit Agreement) plus a Secured Net Leverage Ratio-(as defined in the Credit Agreement)-based margin, which will initially be 2.75% per annum or (ii) the Alternate Base Rate (as defined in the Credit Agreement) plus a Secured Net Leverage Ratio-based margin, which will initially be 1.75% per annum. Borrowings under the TLB Facility will bear interest at an annual rate of, at the Company’s option, either (i) the Term SOFR Rate plus a margin of 2.75% per annum or (ii) the Alternate Base Rate plus a margin of 1.75% per annum. The Company has agreed to pay certain fees and expenses in connection with the Facilities, as set forth in the Credit Agreement and certain related fee letters.

The Credit Agreement (other than with respect to the TLB Facility) requires the maintenance of a maximum Secured Net Leverage Ratio and a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement), in each case, with the levels set forth in the Credit Agreement, as of the last day of any fiscal quarter of the Company ending after the Closing Date. In addition, the Credit Agreement contains customary affirmative and negative covenants that apply after the Closing Date, including limitations on indebtedness, liens, mergers, consolidations, sales of assets, investments, transactions with affiliates, restricted payments and sales and leasebacks. The Credit Agreement also contains certain customary events of default, including upon a change of control.

The Credit Agreement is guaranteed by subsidiary guarantors and secured by a lien on substantially all of the assets of the borrowers and the subsidiary guarantors, whether owned as of the Closing Date or thereafter acquired.

In November 2025, the Company entered into an amended and restated bridge term credit agreement, which provided for a senior secured bridge term loan facility in an aggregate amount of up to approximately $1.5 billion (the “Bridge Credit Facility”) to fund a portion of the consideration for the Avadel Acquisition (the “Bridge Credit Agreement”). Loans under the Bridge Credit Facility were available, subject to the satisfaction of certain conditions set forth in the Bridge Credit Agreement, and were scheduled to mature on the date that is 364 days after the date on which the loans were funded under the Bridge Credit Facility. The commitments under the Bridge Credit Facility were to terminate on the earlier of (i) the date on which all of the consideration payable in respect of the Avadel Acquisition was paid in full without the making of any loans under the Bridge Credit Facility and (ii) the date on which a Mandatory Cancellation Event (as defined in the Bridge Credit Agreement) occurred or existed. Accordingly, on February 12, 2026, in connection with completion of the Avadel Acquisition and the Company’s entry into the Credit Agreement, the Company terminated the Bridge Credit Agreement, as the commitments under the Credit Agreement, together with the Company’s cash on hand, were sufficient to fund the Avadel Acquisition. During the three months ended March 31, 2026, the Company incurred approximately $7.7 million in financing costs related to the Bridge Credit Agreement which was recorded within “Interest expense” in the accompanying condensed consolidated statements of operations and comprehensive (loss) income.

Scheduled maturities with respect to the Facilities are as follows (in thousands):

The Company is subject to mandatory prepayments of principal if certain excess cash flow thresholds, as defined in the Facilities, are met. To date, the Company has not been required to make any such mandatory prepayments. The Facilities also contain customary affirmative covenants and events of default. The Company was in compliance with its debt covenants at March 31, 2026.

At March 31, 2026, the Company’s balance of unamortized deferred financing costs and unamortized original issue discount costs were $4.3 million and $12.0 million, respectively. These costs are being amortized to interest expense over the estimated repayment period of the Facilities using the effective interest method. During the three months ended March 31, 2026, the Company had amortization expense of $0.4 million related to deferred financing costs and original issue discount.

13. SHAREHOLDERS’ EQUITY

In February 2024, the Company’s board of directors approved a share repurchase program authorizing the Company to repurchase ordinary shares of the Company in an aggregate amount of up to $400.0 million (exclusive of any fees, commissions or other expenses related to such repurchases) from time to time on the open market (the “Repurchase Program”), with the specific timing and amounts of repurchases under the Repurchase Program dependent on a variety of factors, including but not limited to ongoing assessments of the Company’s needs, alternative investment opportunities, the market price of the Company’s ordinary sharesand general market conditions. The Repurchase Program has no set expiration date and may be suspended or discontinued at any time. During the three months ended March 31, 2026, the Company repurchased approximately 1.0 million of its ordinary shares under the Repurchase Program at an average purchase price of $27.82 per share, resulting in a total cost, exclusive of any fees, commissions or other expenses related to such repurchases, of $27.7 million. All ordinary shares repurchased were returned to treasury. As of March 31, 2026, the remaining amount authorized under the Repurchase Program was $172.3 million.

14. SHARE-BASED COMPENSATION

The following table presents share-based compensation expense included in the accompanying condensed consolidated statements of operations and comprehensive (loss) income:

At March 31, 2026 and December 31, 2025, $3.3 million and $3.2 million, respectively, of share-based compensation expense was capitalized and recorded as “Inventory”, and $2.1 million and $1.6 million, respectively, of share-based compensation expense was capitalized and recorded as “Other assets” in the accompanying condensed consolidated balance sheets.

During the three months ended March 31, 2026, share-based compensation expense included: (i) $18.4 million in post-combination expense related to Avadel Shares that were accelerated and settled by the Company on the Closing Date in connection with the Avadel Acquisition; (ii) $1.8 million in post-combination expense related to the contingent liability related to the potential CVR paymentto former Avadel employeesand (iii) $4.9 million in expense related to certain equity awards that were modified by the letter agreement entered into in February 2026 between the Company and Richard Pops (the “Letter Agreement”) in connection with Mr. Pops’ upcoming retirement from his position as the Company’s Chief Executive Officer. The share-based compensation expense related to these events consisted of $18.5 million in selling, general and administrative expense and $6.6 million in R&D expense.

The Company expects to record an additional $1.1 million in incremental share-based compensation expense through May 2027 in connection with the equity modification resulting from the Letter Agreement.

15. (LOSS) EARNINGS PER ORDINARY SHARE

Basic (loss) earnings per ordinary share is calculated based upon net (loss) income available to holders of ordinary shares, divided by the weighted average number of ordinary shares outstanding. For the calculation of diluted (loss) earnings per ordinary share, the Company utilizes the treasury stock method and adjusts the weighted average number of ordinary shares outstanding for the potential dilutive effect of outstanding ordinary share equivalents such as stock options and restricted stock unit awards.

The following potential ordinary share equivalents were not included in the net (loss) earnings per ordinary share calculation because the effect would have been anti-dilutive:

16. INCOME TAXES

The Company recognizes income taxes under the asset and liability method. Deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In determining future taxable income, the Company is responsible for assumptions that it utilizes, including the amount of Irish and non-Irish pre-tax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that the Company uses to manage the underlying business.

As of March 31, 2026, the Company has recognized $134.8 million of deferred tax assets and, based on all available evidence related to the likelihood of realization of the existing and acquired tax attributes and the weight of the available evidence, believes it is more-likely-than-not that the deferred tax assets of $134.8 million will be realized. For a discussion about the deferred tax assets and liabilities acquired in connection with the Avadel Acquisition, see Note 3, Business Combinationin these “Notes to Condensed Consolidated Financial Statements”.

The Company recorded income tax provisions of $4.6 million and $3.0 million during the three months ended March 31, 2026 and 2025, respectively. The income tax provision during the three months ended March 31, 2026 was primarily attributable to taxes on income earned in the U.S. and the income tax provision during the three months ended March 31, 2025 was primarily attributable to taxes on income earned in Ireland.

The Company’s effective tax rate during the three months ended March 31, 2026 and 2025 was (7.4)% and 11.9%, respectively. The negative effective tax rate during the three months ended March 31, 2026 was due to taxes on income (including non-deductible expenses) earned in the U.S. and an overall loss before income taxes The effective tax rate during the three months ended March 31, 2025 was less than the Irish statutory rate of 12.5%, due primarily to windfall benefits from employee equity activity.

In March 2026, the Company was notified by the U.S. Internal Revenue Service that Alkermes US Holdings, Inc. (“Alkermes US Holdings”), a wholly-owned subsidiary of the Company, and subsidiaries of Alkermes US Holdings have been selected for examination for the year ended December 31, 2023.

17. SEGMENT REPORTING

Segment Information

The Company’s significant segment expenses that are regularly provided to the Company’s CODM are as follows:

(1)

“Other segment (expense) income” during the three months ended March 31, 2026 and 2025, includes “Amortization of acquired intangible assets”, “Other (expense) income, net” and “Income tax provision”.

18. COMMITMENTS AND CONTINGENT LIABILITIES

The Company records contingent consideration it may owe related to a business combination at fair value on the acquisition date. The fair value of the contingent consideration is estimated through valuation models that incorporate a probability-weighted discounted cash flow model related to the achievement of a certain specified milestone. The contingent consideration is revalued at each subsequent reporting period, with changes in the fair value of contingent consideration recognized within the consolidated statements of operations and comprehensive (loss) income. Changes in the fair value of contingent consideration can result from changes to one or multiple assumptions, including adjustments to the discount rates, changes in the assumed achievement and timing of such specified milestone and changes in the assumed probability associated with regulatory approval.

The period over which the Company discounts its contingent consideration is based on the current development stage of the product candidate, the specific development plan for that product candidate adjusted for the probability of completing the development step, and the date on which contingent payments may be triggered. In estimating the probability of success, the Company utilizes data regarding similar milestone events from several sources, including industry studies and its own experience. These fair value measurements are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions at the acquisition date and for each subsequent reporting period. Accordingly, changes in assumptions described above could have a material impact on the increase or decrease in the fair value of contingent consideration recorded in any given period.

At March 31, 2026, the Company recorded a contingent consideration related to the CVR Milestone issued in connection with the Avadel Acquisition. For additional information related to the contingent consideration, see Note 3, Business Combination in these “Notes to Condensed Consolidated Financial Statements”.

The fair value of the contingent consideration was determined as follows:

•

As part of consideration for the Avadel Acquisition, holders of Avadel Shares as of the Closing Date are entitled to receive a potential additional aggregate cash payment of $165.7 million, or $1.50 per Avadel Share, upon achievement of the CVR Milestone; and

•

The fair value of the contingent consideration was estimated by applying a discount factor, calculated based on the likelihood of achievement of the CVR Milestone, from the expected time the milestone occurs to the end of the reporting period, to the estimated probability of success. The Company expects the regulatory milestone event to occur no later than the end of 2028 and used a discount rate of 5.47%.

Significant judgment was employed in determining the appropriateness of these assumptions at the acquisition date. Accordingly, changes in assumptions described above could have a material impact on the increase or decrease in the fair value of contingent consideration we record in any given period. In accordance with the accounting standard for fair value measurements, the fair value of the contingent consideration has been classified as a Level 3 liability as its fair value is based on significant inputs not observable in the market. For additional information related to the fair value classification of the contingent consideration, see Note 6, Fair Value in these “Notes to Condensed Consolidated Financial Statements”.

Litigation

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated, the Company would accrue a liability for the estimated loss. Because of uncertainties related to claims and litigation, accruals are based on the Company’s best estimates, utilizing all available information. On a periodic basis, as additional information becomes available, or based on specific events such as the outcome of litigation or settlement of claims, the Company may reassess the potential liability related to these matters and may revise these estimates, which could result in material adverse adjustments to the Company’s operating results. At March 31, 2026, there wereno potential material losses from claims, asserted or unasserted, or legal proceedings that the Company determined were probable of occurring. For claims that are reasonably possible, no estimable loss or range of loss can be made.

LYBALVI ANDA Litigation

In August 2025, Alkermes Pharma Ireland Limited (“APIL”) and Alkermes, Inc., two wholly-owned subsidiaries of the Company, filed a patent infringement lawsuit against Teva (as defined herein) in the NJ District Court and a patent infringement lawsuit against Apotex in each of the NJ District Court and the U.S. District Court for the District of Delaware. In September 2025, APIL and Alkermes, Inc. filed a patent infringement lawsuit against MSN (as defined herein) in the NJ District Court. As used herein, Teva refers to Teva Pharmaceuticals, Inc., Apotex refers to Apotex Inc. and Apotex Corp., and MSN refers to MSN Laboratories Private Limited (“MSN Labs”), MSN Pharmaceuticals, Inc. and Novadoz Pharmaceuticals LLC. These lawsuits were filed following receipt of a “paragraph IV certification” notice from each of Teva, Apotex and MSN Labs regarding their respective filings of an ANDA with the FDA seeking approval to engage in the commercial manufacture, use or sale of a generic version of LYBALVI (olanzapine and samidorphan tablets, 5mg/10mg, 10mg/10mg, 15mg/10mg and 20mg/10mg) in the U.S. prior to the expiration of certain of the Company’s U.S. patents. The notices alleged that certain of the Company’s patents related to LYBALVI are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of the proposed generic products. The Company intends to vigorously defend its intellectual property. The filing of each lawsuit within 45 days of receipt of each of the respective notices triggered stays of FDA approval of each of the respective ANDAs for up to 30 months in accordance with the U.S. Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”).

Antitrust Class Action Litigation

In October 2025, Value Drug Company filed a complaint asserting antitrust claims against Alkermes, Inc. and APIL in the U.S. District Court for the District of Massachusetts (the “MA District Court”). The complaint was filed on behalf of a putative class of direct purchasers of VIVITROL and alleges that the Company’s U.S. Patent No. 7,919,499 related to VIVITROL was fraudulently obtained, improperly listed in the Orange Book, and wrongfully enforced, resulting in delayed market entry for generic forms of VIVITROL. The lawsuit seeks, among other things, unspecified money damages plus interest, reasonable attorneys’ fees and other costs. The Company intends to vigorously defend itself in this matter. In December 2025, Alkermes, Inc. and APIL filed a motion to dismiss the complaint with the MA District Court.

Government Matters

The Company has received a civil investigative demand from a U.S. state governmental authority. The Company is cooperating with the investigation.

Other Legal Proceedings

The Company is involved in litigation and other legal proceedings incidental to its normal business activities. The Company intends to vigorously defend itself in these matters.

In addition, in January 2023, Acorda Therapeutics, Inc. (“Acorda”) filed a petition with the U.S. District Court for the Southern District of New York (the “NY Southern District Court”) asking the court to confirm in part and modify in part the final arbitral award rendered by an arbitration panel in October 2022 and, as part of the requested modification, seeking an additional approximately $66.0 million in damages. In August 2023, the NY Southern District Court confirmed the final arbitral award and declined to modify the final award to increase the damages awarded thereunder. In September 2023, Acorda filed a notice of appeal of the NY Southern District Court decision to the Federal Circuit Court. In July 2025, the Federal Circuit Court transferred the appeal due to lack of jurisdiction to the U.S. Court of Appeals for the Second Circuit (the “Second Circuit”). Oral arguments in the Second Circuit are scheduled to be held on May 20, 2026.