Alkermes plc.
For the period ended Sep 30, 2026. Filed Nov 3, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 3, 2026
ALKS$45.90+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-28.
0001193125-26-319022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-03.
0001193125-26-444507
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 123 current paragraphs.
82 unchanged; 37 reworded; 3 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
ALKS 7290
Current report
ALKS 7290 is a novel, investigational, oral OX2R agonist in development for the treatment of ADHD and as an adjunctive therapy to antidepressants in MDD. On September 21, 2026, the Company announced positive topline results from the phase 1 proof-of-concept study of ALKS 7290 in adults with ADHD. ALKS 7290 is currently being evaluated in phase 2 studies in adults with ADHD and adults with MDD.
Current report
Our effective tax rates during the nine months ended September 30, 2026 and 2025 were (1.3)% and 16.8%, respectively. The negative effective tax rate during the nine months ended September 30, 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 nine months ended September 30, 2025 exceeded the Irish statutory tax rate of 12.5%, primarily due to non-deductible expenses and income that was taxable at rates higher than the Irish statutory tax rate.
Removed paragraphs (2)
Previous report
The increases in Other manufacturing and royalty revenue during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to increases of $17.1 million and $12.0 million, respectively, in RISPERDAL CONSTA manufacturing revenue, primarily due to increases in the number of batches made available to Janssen for sale in the U.S., which has a higher selling price than product sold outside of the U.S., partially offset by decreases in revenues related to certain of our other legacy products.
Previous report
On February 12, 2026, in connection with completion of the Avadel Acquisition and our entry into the Credit Agreement, we terminated the Bridge Credit Agreement originally entered into in order to fund the Avadel Acquisition, as the commitments under the Credit Agreement, together with our cash on hand as of the Closing Date, were sufficient to fund the Avadel Acquisition.
Reworded paragraphs (37)
Previous wording
Net income was $0.5 million or $0.00 per ordinary share—basic and diluted, for the three months ended June 30, 2026 and net loss was $66.0 million or $0.40 per ordinary share—basic and diluted, for the six months ended June 30, 2026, compared to net income of $87.1 million and $109.6 million or $0.53 and $0.67 per ordinary share—basic and $0.52 and $0.65 per ordinary share—diluted, for the three and six months ended June 30, 2025, respectively.
Current wording
Net income was $16.3 million or $0.10 per ordinary share—basic and $0.09 per ordinary share—diluted, for the three months ended September 30, 2026 and net loss was $49.7 million or $0.30 per ordinary share—basic and diluted, for the nine months ended September 30, 2026, compared to net income of $82.8 million and $192.3 million or $0.50 and $1.17 per ordinary share—basic and $0.49 and $1.14 per ordinary share—diluted, for the three and nine months ended September 30, 2025, respectively.
Previous wording
The decrease in net income of $86.6 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, was primarily due to increases in total operating expenses and interest expense of $180.0 million and $25.9, respectively. These increases were primarily related to the Avadel Acquisition. The increase in total revenues of $105.4 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, was primarily due to the addition of LUMRYZ to our proprietary product portfolio.
Current wording
The decrease in net income of $66.5 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, was primarily due to increases in total operating expenses and interest expense of $139.0 million and $27.6 million, respectively. The increase in operating expenses was primarily related to the Avadel Acquisition and the increase in interest expense was related to interest incurred on the Facilities. In addition, our total revenues increased by $85.9 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, which was primarily due to the addition of LUMRYZ to our proprietary product portfolio.
Previous wording
The change in net loss of $175.5 million during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was primarily due to increases in total operating expenses and interest expense of $328.5 million and $46.8 million, respectively, primarily related to the Avadel Acquisition. The increase in total revenues of $191.8 million during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was primarily due to an increase in LYBALVI product sales, net and the addition of LUMRYZ, as previously noted.
Current wording
The change in net loss of $242.0 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, was primarily due to increases in total operating expenses and interest expense of $467.5 million and $74.4 million, respectively. The increase in operating expenses was primarily related to the Avadel Acquisition and the increase in interest expense was related to interest incurred on the Facilities. In addition, our total revenues increased by $277.7 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, which was primarily due to the addition of LUMRYZ to our proprietary product portfolio, as previously noted.
Previous wording
In June 2026, U.S. Patent No. 12,642,798 relating to ARISTADA INITIO was granted. The patent has claims to the manufacturing process and expires in 2035.
Current wording
In September 2026, U.S. Patent No. 12,746,237 relating to ARISTADA was granted. The patent has claims to ARISTADA’s commercial process and expires in 2035.
Previous wording
LUMRYZ (sodium oxybate) is an extended-release oral suspension product approved by the FDA in May 2023 and October 2024 as the first and only once-at-bedtime treatment for cataplexy or excessive daytime sleepiness (“EDS”) in adults with narcolepsy and in pediatric patients seven years of age and older with narcolepsy, respectively. 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 Pharmaceuticals entities and Avadel entities 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 Avadel Settlement Agreement) on net sales of LUMRYZ sold for narcolepsy and additional royalties on net sales of LUMRYZ sold for any other non-narcolepsy indications. For more information about the Avadel Settlement Agreement and underlying royalty obligations, see “Patents and Proprietary Rights – LUMRYZ” in “Item 1—Business” in our Annual Report.
Current wording
LUMRYZ (sodium oxybate) is an extended-release oral suspension product approved by the FDA in May 2023 and October 2024 as the first and only once-at-bedtime treatment for cataplexy or excessive daytime sleepiness (“EDS”) in adults with narcolepsy and in pediatric patients seven years of age and older with narcolepsy, respectively. The FDA has granted seven years of orphan drug exclusivity 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 Pharmaceuticals entities (“Jazz”) and Avadel entities 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 Avadel Settlement Agreement) on net sales of LUMRYZ sold for narcolepsy and additional royalties on net sales of LUMRYZ sold for any other non-narcolepsy indications. For more information about the Avadel Settlement Agreement and underlying royalty obligations, see “Patents and Proprietary Rights – LUMRYZ” in “Item 1—Business” in our Annual Report.
Previous wording
In May 2026 and June 2026, respectively, U.S. Patent No. 12,629,366 and U.S. Patent No. 12,653,822 relating to ARISTADA were granted. U.S. Patent No. 12,629,366 has claims to the pharmaceutical composition of ARISTADA and expires in 2032. U.S. Patent No. 12,653,822 has claims to the treatment of schizophrenia by rapid and continuous intramuscular injection and expires in 2035.
Current wording
In September 2026 and October 2026, respectively, U.S. Patent Nos. 12,728,110 and 12,766,122 relating to LUMRYZ were granted. U.S. Patent No. 12,728,110 has claims to a powder formulation and expires in 2037. U.S. Patent No. 12,766,122 has claims to a method of titration and expires in 2037.
Previous wording
Alixorexton is a novel, investigational, oral, selective orexin 2 receptor agonist in development for the treatment of narcolepsy type 1 (“NT1”), narcolepsy type 2 (“NT2”) and 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 EDS 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 and in Vibrance-1 and Vibrance-2, phase 2 studies in patients with NT1 and NT2, respectively. On April 1, 2026, we announced the initiation of the Brilliance Studies, a phase 3 program evaluating the safety and efficacy of alixorexton compared to placebo in adults with NT1 and NT2. Alixorexton is also currently being evaluated in Vibrance-3, a phase 2 study in patients with IH. The FDA has granted alixorexton Breakthrough Therapy designation for the treatment of NT1 and Orphan Drug Designation (“ODD”) for the treatment of IH. The European Commission has granted ODD to alixorexton for the treatment of narcolepsy.
Current wording
Alixorexton is a novel, investigational, oral, selective orexin 2 receptor (“OX2R”) agonist in development for the treatment of narcolepsy type 1 (“NT1”), narcolepsy type 2 (“NT2”) and 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 EDS across hypersomnolence disorders, whether or not orexin deficiency is the underlying cause of disease. Alixorexton is currently being evaluated in the phase 3 Brilliance Studies in adults with NT1 and NT2, and in the phase 2 Vibrance-3 study in adults with IH.
Previous wording
On May 12, 2026, the Company announced positive topline results from REVITALYZ, a double-blind, placebo-controlled, randomized withdrawal, multicenter phase 3 study evaluating the investigational use of LUMRYZ (sodium oxybate) extended-release oral suspension compared to placebo in adults with IH.
Current wording
In May 2026, the Company announced positive topline results from REVITALYZ, a double-blind, placebo-controlled, randomized withdrawal, multicenter phase 3 study evaluating the investigational use of LUMRYZ (sodium oxybate) extended-release oral suspension compared to placebo in adults with IH.
Previous wording
Our product sales, net, consist of sales 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. The following table presents the adjustments deducted from product sales, gross, to arrive at product sales, net, for sales of ARISTADA and ARISTADA INITIO, LUMRYZ, LYBALVI and VIVITROL during the three and six months ended June 30, 2026 and 2025:
Current wording
Our product sales, net, consist of sales 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. The following table presents the adjustments deducted from product sales, gross, to arrive at product sales, net, for sales of ARISTADA and ARISTADA INITIO, LUMRYZ, LYBALVI and VIVITROL during the three and nine months ended September 30, 2026 and 2025:
Previous wording
“Product sales, net” during the three and six months ended June 30, 2026 include LUMRYZ beginning on February 12, 2026. Product sales, net amounts related to LUMRYZ are included within “Product sales, gross”, “Product discounts”, “Medicare Part D” and “Other”.
Current wording
“Product sales, net” during the three and nine months ended September 30, 2026 include LUMRYZ beginning on February 12, 2026. Product sales, net amounts related to LUMRYZ are included within “Product sales, gross”, “Product discounts”, “Medicare Part D” and “Other”.
Previous wording
The increases in product sales, gross, during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to the addition of LUMRYZ and an 18% and 23% increase, respectively, in the number of units sold for LYBALVI. During the six months ended June 30, 2026, there was also an increase of 7% in the number of units sold for ARISTADA/ARISTADA INITIO. In addition, there was a 6% price increase that went into effect on January 1, 2026 for each of LYBALVI, ARISTADA/ARISTADA INITIO and VIVITROL.
Current wording
The increases in product sales, gross, during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily due to the addition of LUMRYZ, a 9% and 7% increase, respectively, in the number of units sold for ARISTADA/ARISTADA INITIO and a 16% and 20% increase, respectively, in the number of units sold for LYBALVI. During the nine months ended September 30, 2026, there was also an increase of 2% in the number of units sold for VIVITROL. In addition, there was a 6% price increase that went into effect on January 1, 2026 for each of ARISTADA/ARISTADA INITIO, LYBALVI and VIVITROL.
Previous wording
The decreases in Medicaid rebates as a percentage of sales during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to gross-to-net favorability, as actual Medicaid rebates were lower than original estimates by approximately $3.5 million and $8.9 million, respectively, for VIVITROL and $5.3 million and $8.1 million, respectively, for ARISTADA/ARISTADA INITIO. In addition, LUMRYZ does not participate in a Medicaid rebate program. The increases in Other adjustments during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily related to the addition of certain gross-to-net deductions related to LUMRYZ.
Current wording
The decreases in Medicaid rebates as a percentage of sales during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily due to gross-to-net favorability, as actual Medicaid rebates were lower than original estimates by approximately $8.3 million and $17.2 million, respectively, for VIVITROL and $3.1 million and $11.2 million, respectively, for ARISTADA/ARISTADA INITIO. In addition, LUMRYZ does not participate in the Medicaid drug rebate program. The increases in Medicare Part D during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily due to increases of $13.5 million and $19.2 million, respectively, in adjustments related to expanded rebate eligibility for units of LYBALVI sold during those periods. The increases in Chargebacks and Other adjustments during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily related to the addition of certain gross-to-net deductions related to LUMRYZ.
Previous wording
The following table compares product sales, net earned during the three and six months ended June 30, 2026 and 2025:
Current wording
The following table compares product sales, net earned during the three and nine months ended September 30, 2026 and 2025:
Previous wording
The following table compares manufacturing and royalty revenues earned during the three and six months ended June 30, 2026 and 2025:
Current wording
The following table compares manufacturing and royalty revenues earned during the three and nine months ended September 30, 2026 and 2025:
Previous wording
The decrease in VUMERITY revenue during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, was due to decreases in manufacturing revenues of $7.4 million and royalty revenue of $1.4 million. The decrease in VUMERITY revenue during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was due to a decrease in manufacturing revenues of $13.4 million, partially offset by an increase in royalty revenue of $4.1 million. The decreases in VUMERITY manufacturing revenue were related to the conclusion of our VUMERITY manufacturing subcontracting obligations for Biogen in August 2025. The decrease in VUMERITY royalty revenue during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, and the increase in VUMERITY royalty revenue during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were due to a decrease and an increase, respectively, in end-market net sales of the product.
Current wording
The decreases in royalty revenues related to the long-acting INVEGA products during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily due to the expiry of our royalty on net sales of XEPLION in certain territories. The decrease in VUMERITY revenue during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, was due to decreases in manufacturing revenue of $3.5 million and decreases in royalty revenue of $2.6 million. The decrease in VUMERITY revenue during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, was due to a decrease in manufacturing revenue of $16.9 million, partially offset by an increase in royalty revenue of $1.4 million. The decreases in VUMERITY manufacturing revenue were related to the conclusion of our VUMERITY manufacturing subcontracting obligations for Biogen in August 2025. The variability in VUMERITY royalty revenue during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, was primarily due to differences in end-market net sales of the product.
Previous wording
In connection with the Avadel Acquisition, we acquired LUMRYZ inventory at its estimated fair value, resulting in a step-up of approximately $121.6 million above its cost. The inventory step-up is recognized in cost of goods manufactured and sold as the underlying inventory is sold. See Note 7, Inventory in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information related to purchase accounting adjustments. The increases in the cost of goods manufactured and sold during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily related to the addition of LUMRYZ and the amortization of such inventory step-up of approximately $31.0 million and $43.7 million, respectively. In addition, the cost of goods sold for ARISTADA/ARISTADA INITIO and VIVITROL increased due to increases in costs related to out-of-specification batches and investigation costs. These increases were partially offset by decreases of $5.1 million and $14.0 million, respectively, in the cost of goods manufactured for certain legacy products following the completion of our subcontracting arrangements for the manufacture of such products by the end of 2025.
Current wording
In connection with the Avadel Acquisition, we acquired LUMRYZ inventory at its estimated fair value, resulting in a step-up of approximately $121.6 million above its cost. The inventory step-up is recognized in cost of goods manufactured and sold as the underlying inventory is sold. See Note 7, Inventory in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information related to purchase accounting adjustments. The increases in the cost of goods manufactured and sold during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily related to the addition of LUMRYZ and the amortization of such inventory step-up of approximately $28.7 million and $72.4 million, respectively. In addition, the cost of goods sold for ARISTADA/ARISTADA INITIO and VIVITROL increased due to increases in costs related to out-of-specification batches and investigation costs. These increases were partially offset by decreases of $5.2 million and $19.2 million, respectively, in the cost of goods manufactured for certain legacy products following the completion of our subcontracting arrangements for the manufacture of such products by the end of 2025.
Previous wording
The following table sets forth our external R&D expenses for the three and six months ended June 30, 2026 and 2025 relating to our then-current development programs and our internal R&D expenses, listed by the nature of such expenses:
Current wording
The following table sets forth our external R&D expenses for the three and nine months ended September 30, 2026 and 2025 relating to our then-current development programs and our internal R&D expenses, listed by the nature of such expenses:
Previous wording
The increases in expenses related to alixorexton during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to increased spend related to the advancement of the development program, including initiation of our phase 3 Brilliance Studies in narcolepsy and costs related to our long-term extension study. The increases in expenses related to LUMRYZ during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were due to the addition, in connection with the Avadel Acquisition, of the REVITALYZ phase 3 development program. The increases in other orexin programs and other external R&D expenses during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to activities associated with our preclinical and clinical development programs.
Current wording
The increases in expenses related to alixorexton during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily due to increased spend related to the advancement of the development program, including initiation of our phase 3 Brilliance Studies in narcolepsy and costs related to our long-term extension study. The increases in expenses related to LUMRYZ during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were due to the addition, in connection with the Avadel Acquisition, of the REVITALYZ phase 3 development program. The increases in other orexin programs and other external R&D expenses during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily due to activities associated with our preclinical and clinical development programs.
Previous wording
The increases in employee-related expenses during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to increases in share-based compensation expense of $1.7 million and $10.0 million, respectively, and increases in labor and benefits expense related to a 16% increase in R&D-related headcount, primarily in connection with the Avadel Acquisition. The increase in share-based compensation expense during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was primarily due to expense of $6.7 million related to Avadel Shares that were accelerated and settled by us in connection with the Avadel Acquisition. See Note 3, Business Combination in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information related to purchase accounting adjustments.
Current wording
The increases in employee-related expenses during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily due to increases in share-based compensation expense of $0.5 million and $10.5 million, respectively, and increases in labor and benefits expense related to a 16% increase in R&D-related headcount, primarily in connection with the Avadel Acquisition. The increase in share-based compensation expense during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, was primarily due to expense of $6.7 million related to Avadel Shares that were accelerated and settled by us in connection with the Avadel Acquisition. See Note 3, Business Combination in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information related to purchase accounting adjustments.
Previous wording
The increases in selling and marketing expense during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to increases in employee-related expenses of $18.0 million and $45.8 million, respectively, and marketing expense of $15.1 million and $19.4 million, respectively. The increases in employee-related expenses were primarily due to a 16% increase in sales and marketing-related headcount due to the addition of the LUMRYZ commercial organization. Also, during the six months ended June 30, 2026, we recorded share-based compensation expense of $13.3 million related to Avadel Shares that were accelerated and settled by us in connection with the Avadel Acquisition. See Note 3, Business Combination in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information related to purchase accounting adjustments. The increases in marketing expense during the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, were primarily due to the addition of marketing costs for LUMRYZ of $13.7 million and $24.2 million, respectively, partially offset by decreases of $4.4 million and $8.3 million, respectively, in direct marketing spend for ARISTADA/ARISTADA INITIO, LYBALVI and VIVITROL.
Current wording
The increases in selling and marketing expense during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily due to increases in employee-related expenses of $17.4 million and $63.1 million, respectively, and marketing expense of $15.1 million and $34.5 million, respectively. The increases in employee-related expenses were primarily due to an 18% increase in sales and marketing-related headcount due to the addition of the LUMRYZ commercial organization. Also, during the nine months ended September 30, 2026, we recorded share-based compensation expense of $13.9 million related to Avadel Shares that were accelerated and settled by us in connection with the Avadel Acquisition. See Note 3, Business Combination in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information related to purchase accounting adjustments. The increases in marketing expense during the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, were primarily due to the addition of marketing costs for LUMRYZ of $12.9 million and $37.1 million, respectively, partially offset by decreases of $3.2 million and $11.5 million, respectively, in direct marketing spend for ARISTADA/ARISTADA INITIO, LYBALVI and VIVITROL.
Previous wording
The increase in general and administrative expense during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, was primarily due to increases of $7.0 million and $3.9 million in employee-related expenses and professional service fees, respectively. The increase in labor and benefits expense was primarily due to an 11% increase in general and administrative-related headcount. The increase in professional service fees was primarily due to increases in legal fees and consulting fees.
Current wording
The increase in general and administrative expense during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, was primarily due to increases of $4.7 million and $5.4 million in professional service fees and employee-related expenses, respectively. The increase in professional service fees was primarily due to increases in legal fees and consulting fees. The increase in employee-related expenses was primarily due to an increase in labor and benefits expense due to a 9% increase in general and administrative-related headcount. These increases were partially offset by a decrease in our estimated branded prescription drug fee.
Previous wording
The increase in general and administrative expense during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was primarily due to increases of $32.8 million, $26.3 million and $9.1 million in expenses related to the Avadel Acquisition, employee-related expenses and professional service fees, respectively. Expenses related to the Avadel Acquisition included stamp duty and transaction-related advisory fees. The increase in employee-related expenses was primarily due to increases of $12.9 million and $9.7 million in labor and benefits expense and share-based compensation expense, respectively. The increase in labor and benefits expense was primarily due to an increase in severance expense of $5.6 million related to the Avadel Acquisition, and the 11% increase in general and administrative-related headcount noted above. The increase in share-based compensation expense was primarily due to the recognition of incremental share-based compensation expense following the modification of certain equity awards and due to Avadel Shares that were accelerated and settled by us in connection with the Avadel Acquisition. The increase in professional service fees was primarily due to an increase in legal fees and expenses incurred in connection with the Avadel Acquisition.
Current wording
The increase in general and administrative expense during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, was primarily due to increases of $33.1 million, $31.7 million and $13.8 million in expenses related to the Avadel Acquisition, employee-related expenses and professional service fees, respectively. Expenses related to the Avadel Acquisition included stamp duty and transaction-related advisory fees. The increase in employee-related expenses was primarily due to increases of $19.9 million and $9.9 million in labor and benefits expense and share-based compensation expense, respectively. The increase in labor and benefits expense was primarily due to an increase in severance expense of $5.5 million related to the Avadel Acquisition, and the 9% increase in general and administrative-related headcount noted above. The increase in share-based compensation expense was primarily due to the recognition of incremental share-based compensation expense following the modification of certain equity awards and due to Avadel Shares that were accelerated and settled by us in connection with the Avadel Acquisition. The increase in professional service fees was primarily due to an increase in legal fees and expenses incurred in connection with the Avadel Acquisition.
Previous wording
We amortize our amortizable intangible assets using the economic-use method, which reflects the pattern that the economic benefits of the intangible assets are consumed as revenue is generated from the underlying patent or contract. Based on our most recent analysis, amortization of intangible assets included within our consolidated balance sheet at June 30, 2026 is expected to be approximately $79.9 million, $103.8 million, $125.6 million, $118.1 million and $115.7 million in the years ending December 31, 2026 through 2030, respectively.
Current wording
We amortize our amortizable intangible assets using the economic-use method, which reflects the pattern that the economic benefits of the intangible assets are consumed as revenue is generated from the underlying patent or contract. Based on our most recent analysis, amortization of intangible assets included within our consolidated balance sheet at September 30, 2026 is expected to be approximately $74.7 million, $83.7 million, $112.7 million, $122.3 million and $128.6 million in the years ending December 31, 2026 through 2030, respectively.
Previous wording
The changes in fair value of contingent consideration during the three and six months ended June 30, 2026 related to an increase in probability of success of achieving the CVR Milestone following receipt of positive topline results from the REVITALYZ phase 3 clinical study of LUMRYZ in IH announced in May 2026. See Note 6, Fair Value, in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information regarding the valuation approach used to determine the fair value of the contingent consideration.
Current wording
The changes in fair value of contingent consideration during the nine months ended September 30, 2026 related to an increase in probability of success of achieving the CVR Milestone following receipt of positive topline results from the REVITALYZ phase 3 clinical study of LUMRYZ in IH announced in May 2026. See Note 6, Fair Value, in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information regarding the valuation approach used to determine the fair value of the contingent consideration.
Previous wording
Interest income consists of interest earned on our cash and available-for-sale investments. The increase in interest expense in both periods is due to financing costs related to the Bridge Credit Agreement through the Closing Date of the Avadel Acquisition and interest incurred on the Facilities. See Note 12, Long-Term Debtin the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information regarding the Bridge Credit Agreement and the Facilities.
Current wording
Interest income consists of interest earned on our cash and available-for-sale investments. The increase in interest expense in both periods is due to financing costs related to the Bridge Credit Agreement through the Closing Date of the Avadel Acquisition, interest incurred on the Facilities and costs incurred in connection with the Credit Agreement Amendment. See Note 12, Long-Term Debtin the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information regarding the Bridge Credit Agreement and the Facilities.
Previous wording
The income tax benefit in the three months ended June 30, 2026 primarily related to a lower estimated annual effective tax rate. The income tax provision during the six months ended June 30, 2026 was primarily attributable to taxes on income earned in the U.S. The income tax provisions during the three and six months ended June 30, 2025 were primarily attributable to taxes on income earned in Ireland.
Current wording
The income tax benefit in the three months ended September 30, 2026 primarily related to employee equity activity. The income tax provision during the nine months ended September 30, 2026 was primarily attributable to taxes on income earned in the U.S. The income tax provisions during the three and nine months ended September 30, 2025 were primarily attributable to taxes on income earned in Ireland.
Previous wording
We used $20.6 million and generated $249.0 million of cash from operating activities during the six months ended June 30, 2026 and 2025, respectively. We expect that our existing cash, cash equivalents and investments will be sufficient to finance our anticipated working capital and other cash requirements, including debt service and capital expenditures, for at least the twelve months following the date from which our financial statements were issued. Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures.
Current wording
We generated $72.9 million and $350.6 million of cash from operating activities during the nine months ended September 30, 2026 and 2025, respectively. We expect that our existing cash, cash equivalents and investments will be sufficient to finance our anticipated working capital and other cash requirements, including debt service and capital expenditures, for at least the twelve months following the date from which our financial statements were issued. Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures.
Previous wording
Information about our cash flows, by category, is presented in the accompanying condensed consolidated statements of cash flows. The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025:
Current wording
Information about our cash flows, by category, is presented in the accompanying condensed consolidated statements of cash flows. The following table summarizes our cash flows for the nine months ended September 30, 2026 and 2025:
Previous wording
Cash flows used in operating activities for the six months ended June 30, 2026 were $20.6 million and primarily consisted of net loss of $66.0 million, adjusted for non-cash items, including share-based compensation of $67.5 million, depreciation and amortization of $49.7 million, amortization of inventory step-up of $43.7 million, the change in fair value of contingent consideration of $26.4 million and changes in working capital of $147.8 million.
Current wording
Cash flows provided by operating activities for the nine months ended September 30, 2026 were $72.9 million and primarily consisted of net loss of $49.7 million, adjusted for non-cash items, including share-based compensation of $94.2 million, depreciation and amortization of $76.9 million, amortization of inventory step-up of $72.4 million, change in fair value of contingent consideration of $27.0 million and a loss on debt extinguishment incurred in connection with the Credit Agreement Amendment of $0.5 million, partially offset by changes in working capital of $156.8 million.
Previous wording
Cash flows provided by operating activities for the six months ended June 30, 2025 primarily consisted of $109.6 million of net income, adjusted for non-cash items, including $47.8 million of share-based compensation, $15.2 million of depreciation and amortization and changes of $74.1 million in working capital.
Current wording
Cash flows provided by operating activities for the nine months ended September 30, 2025 primarily consisted of $192.3 million of net income, adjusted for non-cash items, including $72.4 million of share-based compensation, $30.5 million in deferred income taxes, $23.3 million of depreciation and amortization and $27.7 million of changes in working capital.
Previous wording
Cash flows used in investing activities for the six months ended June 30, 2026 were primarily used to complete the Avadel Acquisition and purchase $12.2 million of property, plant and equipment, partially offset by $17.9 million in net sales of investments. Total cash consideration paid on the Closing Date was $2,199.2 million, which was accounted for as a business combination, and we recognized $2,085.1 million of assets acquired, net of liabilities assumed and cash transferred as an investing activity during the six months ended June 30, 2026.
Current wording
Cash flows used in investing activities for the nine months ended September 30, 2026 were primarily used to complete the Avadel Acquisition and purchase $15.6 million of property, plant and equipment, partially offset by $41.3 million in net sales of investments. Total cash consideration paid on the Closing Date was $2,199.2 million, which was accounted for as a business combination, and we recognized $2,085.1 million of assets acquired, net of liabilities assumed and cash transferred as an investing activity during the nine months ended September 30, 2026.
Previous wording
Cash flows used in investing activities for the six months ended June 30, 2025 were primarily due to the purchase of $23.1 million of property, plant and equipment, partially offset by $1.3 million in net sales of investments.
Current wording
Cash flows used in investing activities for the nine months ended September 30, 2025 were primarily due to the purchase of $40.4 million of property, plant and equipment, partially offset by $11.8 million in net sales of investments.
Previous wording
Cash flows provided by financing activities for the six months ended June 30, 2026 primarily consisted of $1,511.6 million in net proceeds from borrowings under the Facilities in connection with the Avadel Acquisition and $42.0 million of cash that we received upon exercises of employee stock options. These increases were partially offset by $27.7 million (exclusive of any fees, commissions or other related expenses) used to repurchase our ordinary shares under the Repurchase Program and $24.5 million of employee taxes paid related to the net share settlement of equity awards.
Current wording
Cash flows provided by financing activities for the nine months ended September 30, 2026 primarily consisted of $1,511.6 million in net proceeds from the original borrowings under the Facilities in connection with the Avadel Acquisition and $55.6 million received upon exercises of employee stock options. These inflows were partially offset by $13.3 million in contractual principal payments under the Facilities, $27.7 million (exclusive of any fees, commissions or other related expenses) used to repurchase ordinary shares under our Repurchase Program and $25.2 million of employee taxes paid related to the net share settlement of equity awards. In connection with the Credit Agreement Amendment, financing activities also included $45.5 million in additional proceeds from borrowings under the Facilities and $45.5 million in repayments to exiting lenders, whose debt was accounted for as extinguished under ASC 470-50 based on our lender-by-lender assessment. For additional details regarding the Facilities and the Credit Agreement Amendment, see Note 12, Long-Term Debtin the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q.
Previous wording
Cash flows provided by financing activities for the six months ended June 30, 2025 were due to $31.6 million of cash that we received upon exercises of employee stock options, offset by $30.4 million of employee taxes paid related to the net share settlement of equity awards.
Current wording
Cash flows provided by financing activities for the nine months ended September 30, 2025 were due to $32.2 million of cash that we received upon exercises of employee stock options, offset by $30.8 million of employee taxes paid related to the net share settlement of equity awards.
Previous wording
On February 12, 2026, in connection with the Avadel Acquisition, we entered into the Credit Agreement, which provides for (i) a TLA Facility in an aggregate principal amount of up to $750.0 million and (ii) a TLB Facility in an aggregate principal amount of up to $775.0 million. The TLA Facility matures on February 12, 2031, and the TLB Facility matures on August 12, 2031. On the Closing Date, we borrowed the full $1.525 billion available to us under the Facilities.
Current wording
On the Closing Date, we entered into the Credit Agreement, and on August 12, 2026, we entered into the Credit Agreement Amendment. The Credit Agreement, as amended, provides for (i) a TLA Facility in an outstanding principal amount of up to $745.3 million and (ii) a TLB Facility in an outstanding principal amount of up to $773.1 million. The TLA Facility matures on February 12, 2031, and the TLB Facility matures on August 12, 2031.
Previous wording
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. We expect achievement of the CVR Milestone to be determined by the end of 2027 and used a discount rate of 6.18%;
Current wording
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. We expect achievement of the CVR Milestone to be determined by the end of 2027 and used a discount rate of 7.08%;
Previous wording
Our intangible assets consist primarily of IP related to the existing commercial product and IPR&D product candidates that we acquired as part of the Avadel Acquisition. When significant identifiable intangible assets are acquired, we engage an independent third-party valuation firm to assist in determining the fair values of these assets as of the acquisition date. Discounted cash flow models are typically used in these valuations, which require the use of significant estimates and assumptions, including but not limited to:
Current wording
Our intangible assets consist primarily of IP related to the existing commercial product and IPR&D product candidate that we acquired as part of the Avadel Acquisition. When significant identifiable intangible assets are acquired, we engage an independent third-party valuation firm to assist in determining the fair values of these assets as of the acquisition date. Discounted cash flow models are typically used in these valuations, which require the use of significant estimates and assumptions, including but not limited to:
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For a discussion of legal proceedings related to LUMRYZ, see Note 18, Commitments and Contingent Liabilitiesin the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q, and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in our 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.”