Amneal Pharmaceuticals Inc
For the period ended Dec 31, 2024. Filed Feb 28, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 28, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-14.
0001723128-24-000014
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0001723128-25-000012
Item 7. 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 140 previous paragraphs and 140 current paragraphs.
70 unchanged; 46 reworded; 20 added; 22 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 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 (20)
Current report
During the fourth quarter of 2024, we changed the name of our Generics segment to “Affordable Medicines” to reflect the full product offering of the segment. The segment name change did not result in any change to the composition of our reportable segments and, therefore, did not result in any changes to our historical segment results.
Current report
Net revenue for the year ended December 31, 2024 increased 16.7% from the prior year primarily due to:
Current report
•Growth in our Specialty segment of $55.3 million primarily driven by a $44.7 million increase in our promoted Parkinson’s franchise, of which $16.6 million was comprised of sales of ONGENTYS®, which launched in January 2024, and initial sales of CREXONT®, which launched in September 2024. Additionally, growth in our promoted endocrinology portfolio of $20.8 million was partially offset by declines in our non-promoted products.
Current report
Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2024 increased 10.9% as compared to the prior year primarily due to increases in employee compensation, promotion associated with ONGENTYS® and CREXONT®, increased expenses associated with our growing biosimilars, and annual fees assessed on branded prescription drug manufacturers, which are also applicable to certain of our Affordable Medicines products.
Current report
For the year ended December 31, 2024, charges related to legal matters, net of $96.7 million were primarily associated with an Affordable Medicines settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against us by political subdivisions and Native American tribes across the U.S.
Current report
For additional information, refer to Note 20. Commitments and Contingencies.
Current report
The following table sets forth the results of operations for our Affordable Medicines segment (dollars in thousands):
Current report
Affordable Medicines SG&A for the year ended December 31, 2024 increased by 8.1% compared to the prior year primarily due to increases in employee compensation driven by infrastructure expansion and promotion associated with our biosimilar launches and the annual fees assessed on branded prescription drug manufacturers, which are also applicable to certain of our affordable medicine products, partially offset by reduced legal fees.
Current report
Affordable Medicines R&D expense for the year ended December 31, 2024 increased 29.9% as compared to the prior year primarily due to an increase in in-licensing and upfront milestone payments of $30.0 million, including $20.0 million associated with our exclusive license of Omalizumab (refer to Note 23. Related Party Transactions for additional information), partially offset by operating efficiencies.
Current report
Specialty net revenue for the year ended December 31, 2024 increased 14.2% as compared to the prior year, primarily driven by a $44.7 million increase in our promoted Parkinson’s franchise, of which $16.6 million was comprised of sales of ONGENTYS®, which launched in January 2024, and initial sales of CREXONT®, which launched in September 2024. Additionally, growth in our promoted endocrinology portfolio of $20.8 million was partially offset by declines in our non-promoted products.
Current report
Loan Due 2025, plus accrued interest thereon of $0.7 million, with $190.0 million of new borrowings under the Amended New Revolving Credit Facility and cash on hand.
Current report
Settlement in Principle on Nationwide Civil Prescription Opioid Litigation
Current report
In late April 2024, we reached a nationwide settlement in principle on the primary financial terms, with no admission of wrongdoing, for a nationwide resolution to the opioids cases that have been filed and that might have been filed by Attorneys General, political subdivisions and Native American tribes. Refer to Note 20. Commitments and Contingencies for additional information. Refer to Note 20. Commitments and Contingenciesfor additional information.
Current report
Tax-related Distributions
Current report
In 2020, we acquired a 65.1% controlling interest in both AvKARE Inc., a Tennessee corporation, now a limited liability company, and R&S. The sellers of AvKARE, LLC and R&S (the “AvKARE Sellers”) hold the remaining 34.9% interest in the holding company that directly owns the acquired companies (“Rondo”). We attribute 34.9% of the net income or loss associated with Rondo to redeemable non-controlling interests. During the year ended December 31, 2024, 2023 and 2022, we made cash tax distributions of $19.8 million, $14.2 million and $6.9 million, respectively, to the AvKARE Sellers. There was no liability for tax distributions payable to the AvKARE Sellers as of December 31, 2024 or 2023.
Current report
Development and Supply Agreement
Current report
Pursuant to a development and supply agreement with Kashiv Biosciences LLC (“Kashiv”) for a long-acting injectable, we paid Kashiv $10.0 million in February 2025 for the achievement of a regulatory milestone, which was accrued as of December 31, 2024. Refer to Note 23. Related Party Transactionsfor additional information.
Current report
Net cash provided by operating activities was $295.1 million for the year ended December 31, 2024 as compared to $345.6 million for the prior year. The year-over-year decrease in net operating cash flows for the year ended December 31, 2024 as compared to the prior year period was primarily driven by (i) lower collections of outstanding accounts receivable due to timing of sales in the quarter ended December 31, 2022, which benefited the year ended December 31, 2023 and (ii) receipt of a $21.4 million upfront payment associated with thelicense agreement with Orion Corporation during the year ended December 31, 2023, partially offset by (i) increased profitability adjusted for non-cash items, (ii) lower period over period payments associated with the Opana ER® antitrust litigation settlement and (iii) favorable working capital movements, most notably an increase in days payables outstanding.
Current report
Net cash used in financing activities of $211.8 million for the year ended December 31, 2024 was relatively flat compared to the prior year as a decrease in payments associated with refinancing our Term Loan Due 2025 in the prior year of $162.3 million and a reduction in tax distributions paid to non-controlling interests of $51.1 million were offset by a year-over-year decrease in net debt and financing leases of $207.8 million and an increase inemployee payroll tax withholding on restricted stock unit vesting of $5.6 million. Refer to Note 15. Debt for additional information about the refinancing our Term Loan Due 2025. The decrease in tax distributions was the result of the Reorganization (refer to Note 21. Stockholders’ (Deficiency) Equityfor additional information).
Current report
(5)Represents the tax receivable agreement liability as of December 31, 2024. A discussion on our tax receivable agreement is contained in Note 6. Income Taxes.
Removed paragraphs (22)
Previous report
On June 30, 2023, we received a complete response letter (“CRL”) from the FDA regarding our new drug application (“NDA”) for IPX203 for the treatment of Parkinson’s disease. The CRL indicated that although an adequate scientific bridge was established for the safety of one ingredient, levodopa, based on pharmacokinetic studies, it was not adequately established for the other ingredient, carbidopa, and the FDA requested additional information. The CRL did not identify any issues with respect to the efficacy or manufacturing of IPX203. During October 2023, we met with the FDA to align on the path to approval for IPX203. During the meeting, the FDA asked us to complete a QT study, a routine cardiac safety study that is required for new drugs. We completed the QT study and resubmitted our NDA for IPX203 on February 7, 2024.
Previous report
Net revenue for the year ended December 31, 2023 increased 8.2% from the prior year primarily due to:
Previous report
•Growth in our Specialty segment of $16.3 million primarily driven by growth in our endocrinology portfolio of $21.0 million, or 23.8% and a $2.2 million, or 1.2% increase in our neurology portfolio, which was negatively impacted by Medicare rebates associated with the Inflation Reduction Act of approximately $6.4 million. Excluding these rebates, net revenue from our neurology portfolio increased 4.7%.
Previous report
Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2023 increased 7.5% as compared to the prior year primarily due to increases in employee compensation, higher costs associated with our biosimilar launches, higher freight charges driven by increased sales volume, and higher professional fees associated with the Reorganization, partially offset by a decrease of $5.0 million associated with a biosimilar regulatory approval in the prior year.
Previous report
Other Operating Income
Previous report
Other operating income for the year ended December 31, 2023 and 2022 was comprised of income earned from the India Production Linked Incentive Scheme for the Pharmaceutical Sector in our Generics segment. Refer to Note 6. Government Grants for additional information.
Previous report
The following table sets forth the results of operations for our Generics segment (dollars in thousands):
Previous report
Generics SG&A for the year ended December 31, 2023 increased by 9.2% compared to the prior year primarily due to an increase in employee compensation, higher costs associated with our biosimilar launches, and higher freight charges driven by increased sales volume, partially offset by a decrease of $5.0 million associated with a biosimilar regulatory approval in the prior year.
Previous report
(Credit) Charges Related to Legal Matters, Net
Previous report
Other Operating Income
Previous report
Generics other operating income for the years ended December 31, 2023 and 2022 was comprised of income earned from the India Production Linked Incentive Scheme for the Pharmaceutical Sector. Refer to Note 6. Government Grantsfor additional information.
Previous report
Specialty net revenue for the year ended December 31, 2023 increased 4.4% as compared to the prior year, driven by the growth in our endocrinology portfolio of $21.0 million, or 23.8%, and a $2.2 million, or 1.2%, increase in our neurology portfolio, which was negatively impacted by Medicare rebates associated with the Inflation Reduction Act of approximately $6.4 million. Excluding these rebates, net revenue from our neurology portfolio increased 4.7%.
Previous report
Specialty R&D expense for the year ended December 31, 2023 increased 12.6% as compared to the prior year primarily due to an increase in project related spend of $7.7 million and increased employee compensation, partially offset by a decrease in in-licensing and upfront milestone payments of $4.5 million.
Previous report
In the year ended December 31, 2023, we paid the remaining outstanding principal under our Rondo Term Loan from cash on hand, of which we made prepayments totaling $63.0 million in excess of planned principal payments (refer to Note 16. Debt for additional information).
Previous report
Legal Settlements
Previous report
In January 2024, we paid $52.4 million to the plaintiffs of the Opana ER® antitrust litigation under the terms of the related settlement agreements with cash on hand (refer to Note 21. Commitments and Contingenciesfor additional information).
Previous report
Tax-related Distributions to Amneal Members
Previous report
Prior to the Reorganization, Amneal was obligated to make tax distributions to the Members. For the years ended December 31, 2023, 2022, and 2021, the Company recorded net tax distributions of $56.7 million, $10.6 million, and $53.5 million, respectively, as a reduction of non-controlling interests. Subsequent to the Reorganization, we are no longer obligated to make tax distributions to the Members. There was no liability for tax distributions payable to the Members as of December 31, 2023 and 2022.
Previous report
Net cash provided by operating activities was $345.6 million for the year ended December 31, 2023 as compared to $65.1 million for the prior year. The year-over-year increase was primarily driven by increased profitability adjusted for non-cash items and timing of collections of receivables, partially offset by other working capital uses of cash.
Previous report
Net cash used in financing activities was $212.6 million for the year ended December 31, 2023 as compared to net cash used in financing activities of $106.6 million for prior year. The year-over-year increase was primarily due to: (i) an increase in debt related costs due to the Refinancing (refer to Note 16. Debt) and (ii) an increase in tax distributions, partially offset by (i) a net increase in long-term debt (refer to Note 16. Debt) and (ii) a payment made in the prior year for the acquisition of the baclofen franchise ofcertain entities affiliated with Saol International Limited(refer to Note 3).
Previous report
For the year ended December 31, 2022, we recognized a total of $24.1 million of intangible asset impairment charges, of which $11.1 million was recognized in cost of goods sold and $13.0 million was recognized in in-process research and development impairment charges. Cost of sales impairment charges for the year ended December 31, 2022 of $11.1 million related to currently marketed products of which (i) one product experienced significant price erosion during 2022, resulting in significantly lower than expected future cash flows and negative margins, (ii) the supply agreement of one product was terminated during 2022 and therefore the asset was not recoverable and (iii) one product was no longer expected to be sold to a key customer, therefore, the asset was not recoverable. IPR&D impairment charges for the year ended December 31, 2022 of $13.0 million related to (i) one asset that experienced a delay in its expected launch date and (ii) one asset that experienced significant expected price erosion, both of which resulted in significantly lower than expected future cash flows.
Previous report
For further details, see Note 21. Commitments and Contingencies.
Reworded paragraphs (46)
Previous wording
Amneal Pharmaceuticals, Inc. (the “Company”, “we,” “us,” or “our”) is a global pharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines, including retail generics, injectables, biosimilars and specialty branded pharmaceuticals. We operate principally in the United States (“U.S.”), India, and Ireland, and sell to wholesalers, distributors, hospitals, governmental agencies, chain pharmacies and individual pharmacies, either directly or indirectly.
Current wording
Amneal Pharmaceuticals, Inc. (the “Company”, “we,” “us,” or “our”) is a global pharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines. Our Affordable Medicines segment includes retail generics, injectables, and biosimilars. In our Specialty segment, we offer a portfolio of branded pharmaceuticals focused primarily on central nervous system and endocrine disorders. Through our AvKARE segment, we are a distributor of pharmaceuticals and other products for the U.S. federal government, retail, and institutional markets. We operate principally in the United States (“U.S.”), India, and Ireland. Refer to the section “Segments” below for an overview of our segments, including the change in name of the Affordable Medicines segment.
Previous wording
Prior to the Reorganization (as defined herein), the Company was a holding company, whose principal assets were common units (the “Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”). As of September 30, 2023, we held 50.4% of the Amneal Common Units and the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members” or the “Amneal Group”) held the remaining 49.6%. On November 7, 2023, we implemented a plan pursuant to which the Company and Amneal reorganized and simplified our corporate structure by eliminating our umbrella partnership-C-corporation structure and converting to a more traditional structure whereby all stockholders hold their voting and economic interests directly through the public company (the “Reorganization”). Effective with the Reorganization, the Company holds 100% of the Amneal Common Units and consolidates the financial statements of Amneal and its subsidiaries. Refer to Note 1. Nature of Operations in our consolidated financial statements for additional information about the Reorganization.
Current wording
Prior to the Reorganization (as defined herein), we were a holding company, whose principal assets were common units (the “Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”). As of September 30, 2023, we held 50.4% of the Amneal Common Units and the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members” or the “Amneal Group”) held the remaining 49.6%. On November 7, 2023, we implemented a plan pursuant to which we and Amneal reorganized and simplified our corporate structure by eliminating our umbrella partnership-C-corporation structure and converting to a more traditional structure whereby all stockholders hold their voting and economic interests directly through the public company (the “Reorganization”). Effective with the Reorganization, we hold 100% of the Amneal Common Units and consolidate the financial statements of Amneal and its subsidiaries. Refer to Note 1. Nature of Operations in our consolidated financial statements for additional information about the Reorganization.
Previous wording
For a discussion of our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, see“Results of Operations”and“Liquidity and Capital Resources” under Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K.
Current wording
For a discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, see“Results of Operations”and“Liquidity and Capital Resources” under Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on March 14, 2024.
Previous wording
We have three reportable segments: Generics, Specialty, and AvKARE.
Current wording
We have three reportable segments: Affordable Medicines (formerly known as Generics), Specialty, and AvKARE.
Previous wording
Our Generics segment includes over 260 product families covering an extensive range of dosage forms and delivery systems, including both immediate and extended release oral solids, powders, liquids, sterile injectables, nasal sprays, inhalation and respiratory products, ophthalmics, films, transdermal patches and topicals. We focus on developing products with substantial barriers-to-entry resulting due to complex drug formulations or manufacturing, or legal or regulatory challenges. Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and even more so in periods of market exclusivity, or in periods of limited generic competition. As such, the timing of new product introductions can have a significant impact on our financial results. The entrance into the market of additional competition generally has a negative impact on the volume and/or pricing of the affected products. Additionally, pricing is determined by market place dynamics and is often affected by factors outside of our control.
Current wording
Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and even more so in periods of market exclusivity, or in periods of limited generic competition. As such, the timing of new product introductions can have a significant impact on our financial results. The entrance into the market of additional competition generally has a negative impact on the volume and/or pricing of the affected products. Additionally, pricing is determined by market place dynamics and is often affected by factors outside of our control.
Previous wording
Our Specialty segment is engaged in the development, promotion, sale and distribution of proprietary branded pharmaceutical products, with a focus on products addressing central nervous system (“CNS”) disorders, including Parkinson’s disease, and endocrine disorders. Our portfolio of products includes RYTARY®, an extended release oral capsule formulation of carbidopa-levodopa for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication or manganese intoxication. In addition to RYTARY®, our promoted Specialty portfolio also includes
Current wording
Our Specialty segment is engaged in the development, promotion, sale and distribution of proprietary branded pharmaceutical products, with a focus on products addressing central nervous system disorders, including Parkinson’s disease, and endocrine disorders. Our portfolio of products includes CREXONT® (combination of carbidopa and levodopa extended release capsules), RYTARY® (extended release oral capsule formulation of carbidopa-levodopa), UNITHROID® (levothyroxine sodium), and ONGENTYS® (opicapone). On August 7, 2024, the FDA approved our new drug application (“NDA”) for CREXONT®, previously referred to as IPX203. In September 2024, we began selling CREXONT®, which is indicated for the treatment of Parkinson’s disease, Parkinson’s disease caused by infection or inflammation of the brain, or Parkinson’s disease-like symptoms that may result from carbon monoxide or manganese poisoning in adults. RYTARY® is indicated for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication or manganese intoxication. ONGENTYS® is an add-on treatment to carbidopa/levodopa in patients with Parkinson’s disease experiencing “Off” episodes, which we commenced selling in early 2024 under a license agreement with BIAL-Portela & Ca., S.A. UNITHROID®, indicated for the treatment of hypothyroidism, is sold under a license and distribution agreement with Jerome Stevens Pharmaceuticals, Inc.
Previous wording
Our AvKARE segment provides pharmaceuticals, medical and surgical products and services primarily to governmental agencies. AvKARE is a re-packager of bottle and unit dose pharmaceuticals under the registered names of AvKARE and AvPAK, which service the Department of Defense and Department of Veteran Affairs. AvKARE is also a wholesale distributor of pharmaceuticals, over the counter drugs and medical supplies to its retail and institutional customers that are located throughout the U.S. focused primarily on offering 340b-qualified entities products to provide consistency in care and pricing.
Current wording
Our AvKARE segment provides pharmaceuticals, medical and surgical products and services primarily to governmental agencies, predominantly focused on the U.S. Department of Defense and the U.S. Department of Veterans Affairs. AvKARE is a re-packager of bottle and unit dose pharmaceuticals under the registered names of AvKARE and AvPAK. AvKARE is also a wholesale distributor of pharmaceuticals, over the counter drugs and medical supplies to its retail and institutional customers that are located throughout the U.S. focused primarily on entities that provide care to low-income and uninsured patients. Operating results for the sale of Amneal products by AvKARE are included in our Affordable Medicines reportable segment.
Previous wording
While it is difficult to accurately measure the impact of inflation, we estimate our business experienced an increase in costs due to inflation of approximately $15.0 million for the year ended December 31, 2023. We expect an inflationary impact of approximately $15.0 million to $20.0 million for the year ending December 31, 2024. Notwithstanding our estimates, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods.
Current wording
While it is difficult to accurately measure the impact of inflation, we estimate our business did not experience a material increase in costs due to inflation for the year ended December 31, 2024. We do not expect a material impact related to inflation for the year ending December 31, 2025. Notwithstanding our estimates, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods.
Previous wording
•Growth in our Generics segment of $39.3 million primarily due to new generics products launched in 2023 and 2022, which included biosimilars that contributed $62.6 million and new generic products that contributed $47.4 million, partially offset by price erosion. Net revenue for the year ended December 31, 2023 included a non-recurring customer order of $21.0 million.
Current wording
•Growth in our Affordable Medicines segment of $213.9 million, primarily due to new products launched in 2024 and 2023, which included biosimilars that contributed $59.7 million of year-over-year growth and other new products that contributed $144.1 million of year-over-year growth, and strong volume growth, partially offset by price erosion. Net revenue for the year ended December 31, 2023 included a non-recurring customer order of $21.0 million.
Previous wording
•Growth in our AvKARE segment of $125.6 million primarily driven by growth in our distribution and government channels resulting from new product introductions.
Current wording
•Growth in our AvKARE segment of $131.2 million primarily driven by growth in our distribution and government channels resulting from new product introductions.
Previous wording
Cost of goods sold increased 10.2% for the year ended December 31, 2023 as compared to the prior year. The increase in cost of goods sold was primarily due to increased AvKARE and Generics volume, a $25.0 million increase in marketed product intangible asset impairment charges primarily related to a reduction in promotional focus on LYVISPAH™ in our Specialty segment, and an increase in the inventory provision, partially offset by efficiencies in our supply costs. Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order in our Generics segment discussed above.
Current wording
Cost of goods sold increased 12.7% for the year ended December 31, 2024 as compared to the prior year. The increase in cost of goods sold was primarily due to increased AvKARE and Affordable Medicines volume, increased plant and freight costs, and an increased inventory provision, partially offset by efficiencies in our supply costs. Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order in our Affordable Medicines segment discussed above and a marketed product intangible asset impairment charge of $34.1 million in our Specialty segment related to a reduction in the promotional focus on LYVISPAH®.
Previous wording
Gross profit as a percentage of net revenue decreased to 34.3% for the year ended December 31, 2023 from 35.5% in the prior year, primarily as a result of the factors noted above.
Current wording
Gross profit as a percentage of net revenue increased to 36.5% for the year ended December 31, 2024 from 34.3% in the prior year, primarily as a result of the factors noted above.
Previous wording
R&D expenses for the year ended December 31, 2023 decreased 16.2% from the prior year primarily due to lower project spend of $17.3 million, a decrease in in-licensing and upfront milestone payments of $2.5 million and operating efficiencies in our infrastructure.
Current wording
Research and development (“R&D”) expenses for the year ended December 31, 2024 increased 16.3% from the prior year primarily due to an increase in in-licensing and upfront milestone payments of $30.0 million, including $20.0 million associated with our exclusive license of Omalizumab (refer to Note 23. Related Party Transactions for additional information), partially offset by operating efficiencies in our infrastructure.
Previous wording
In process research and development (“IPR&D”) impairment charges of $30.8 million for the year ended December 31, 2023 were related to one Generics asset and one Specialty asset, both of which experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows. IPR&D impairment charges of $13.0 million in the prior year were related to one Generics asset which experienced a delay in its expected launch date and one Generics asset which experienced significant expected price erosion, both of which resulted in significantly lower than expected future cash flows.
Current wording
In process research and development (“IPR&D”) impairment charges of $30.8 million for the year ended December 31, 2023 were related to one Affordable Medicines asset and one Specialty asset, both of which experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows.
Previous wording
Refer to Note 19. Fair Value Measurements for information about the estimation of our contingent consideration liabilities. The $15.2 million decrease in the change in fair value of contingent consideration for the year ended December 31, 2023 as compared to the prior year was primarily related to a reduction in promotional focus on LYVISPAHTM.
Current wording
The year-over-year variance of$13.6 million in change in fair value of contingent consideration for the year ended December 31, 2024 as compared to the prior year was primarily related to a reduction in promotional focus on LYVISPAHTM during the year ended December 31, 2023. Refer to Note 18. Fair Value Measurements for additional information.
Previous wording
For the year ended December 31, 2023, charges related to legal matters, net was $1.8 million, comprised of $3.9 million in charges associated with Generics civil prescription opioid litigation, a $3.0 million charge for the settlement of a Generics customer claim, a $3.0 million charge for the settlement of Generics commercial antitrust litigation, and a $1.9 million charge for the settlement of a corporate stockholder derivative lawsuit, partially offset by a $10.0 million credit from the settlement of Generics patent infringement matters. For the year ended December 31, 2022, we recorded charges of$269.9 million primarily for the corporate Opana® ER antitrust litigation of $262.8 million and Generics segment civil prescription opioid litigation of $18.0 million, partially offset by corporate insurance recoveries associated with securities class actions of $15.5 million. For further details, refer to Note 21. Commitments and Contingencies.
Current wording
For the year ended December 31, 2023, charges related to legal matters, net of$1.8 million were comprised of $3.9 million in charges associated with Affordable Medicines civil prescription opioid litigation, a $3.0 million charge for the settlement of an Affordable Medicines customer claim, a $3.0 million charge for the settlement of Affordable Medicines commercial antitrust litigation, and a $1.9 million charge for the settlement of a corporate stockholder derivative lawsuit, partially offset by $10.0 million from the settlement of Affordable Medicines patent infringement matters.
Previous wording
Total other expense, net increased 59.7% for the year ended December 31, 2023. The increase was primarily driven by a $52.3 million increase in net interest expense as a result of higher rates on our variable rate debt and a $40.8 million loss on refinancing the Term Loan Due 2025 and amending the New Revolving Credit Facility.
Current wording
Total other expense, net increased 24.4% for the year ended December 31, 2024. The increase was primarily driven by a $48.0 million increase in net interest expense as a result of higher rates on our variable rate debtand an increase in the average amount outstanding on our revolving credit facility throughout 2024, and a$47.6 million increase in our tax receivable agreement liability (refer to Note 6. Income Taxes for additional information), partially offset by a $40.8 million loss on refinancing the Term Loan Due 2025 and amending the New Revolving Credit Facility in 2023 (refer to Note 15. Debt for additional information).
Previous wording
The provision for income taxes was $8.5 million and $6.7 million for the years ended December 31, 2023 and 2022, respectively. The effective tax rates for the years ended December 31, 2023 and 2022 were (21.0)% and (2.7%), respectively. The year-over-year change in the provision for income taxes was primarily related to the timing and mix of income, and to the release of liabilities for uncertain tax positions in 2022.
Current wording
The provision for income taxes was $18.9 million and $8.5 million for the years ended December 31, 2024 and 2023, respectively. The effective tax rates for the years ended December 31, 2024 and 2023 were (34.3)% and(21.0)%, respectively. The change in the effective income tax rate for the year ended December 31, 2024 as compared to the prior year was primarily due to the timing and jurisdictional mix of income and the Reorganization, which resulted in allocating all of Amneal’s income to the Company. Refer to Note 6. Income Taxes for additional information.
Previous wording
Generics net revenue for the year ended December 31, 2023 increased 2.7% as compared to the prior year, primarily due to new generic products launched in 2023 and 2022, which included biosimilars that contributed $62.6 million and new generic products that contributed $47.4 million, partially offset by price erosion. Net revenue for the year ended December 31, 2023 included a non-recurring customer order of $21.0 million.
Current wording
Affordable Medicines net revenue for the year ended December 31, 2024 increased 14.5% as compared to the prior year, primarily due to new products launched in 2024 and 2023, which included biosimilars that contributed $59.7 million of year-over-year growth and other new products that contributed $144.1 million of year-over-year growth, and strong volume growth, partially offset by price erosion. Net revenue for the year ended December 31, 2023 included a non-recurring customer order of $21.0 million.
Previous wording
Generics cost of goods sold for the year ended December 31, 2023 increased 2.0% compared to the prior year primarily due to costs associated with increased sales volume and an increased inventory provision, partially offset by efficiencies in our supply costs. Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order discussed above.
Current wording
Affordable Medicines cost of goods sold for the year ended December 31, 2024 increased 10.7% compared to the prior year primarily due to costs associated with increased sales volume and increased plant and freight costs and an increased inventory provision, partially offset by efficiencies in our supply costs. Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order discussed above.
Previous wording
Generics gross profit as a percentage of net revenue increased to 37.9% for the year ended December 31, 2023 from 37.4% in the prior year as a result of the factors described above.
Current wording
Affordable Medicines gross profit as a percentage of net revenue increased to 40.0% for the year ended December 31, 2024 from 37.9% in the prior year as a result of the factors described above.
Previous wording
Generics IPR&D impairment charges of $26.5 million for the year ended December 31, 2023 were related toone asset that experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows. Generics IPR&D impairment charges of $13.0 million in the prior year were related to one asset that experienced a delay in its expected launch date and one asset that experienced significant expected price erosion, both of which resulted in significantly lower than expected future cash flows.
Current wording
Affordable Medicines IPR&D impairment charges for the year ended December 31, 2023 were related toone asset that experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows.
Previous wording
(5)Refer to Note 21. Commitments and Contingencies for additional information.
Current wording
For the year ended December 31, 2024, Affordable Medicines charges related to legal matters, net of $96.7 million were primarily associated with a settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against us by political subdivisions and Native American tribes across the U.S. Refer to Note 20. Commitments and Contingencies for additional information.
Previous wording
For the year ended December 31, 2023, Generics credit related to legal matters, net was $(0.1) million, comprised of a $(10.0) million credit from the settlement of patent infringement matters, net of $3.9 million in charges associated with civil prescription opioid litigation, a $3.0 million charge for the settlement of a customer claim, and a $3.0 million charge for the settlement of commercial antitrust litigation. For the year ended December 31, 2022, Generics charges related to legal matters, net were $22.4 million, primarily comprised of $18.0 million of charges for civil prescription opioid litigation. Refer to Note 21. Commitments and Contingencies for additional information.
Current wording
For the year ended December 31, 2023, the Affordable Medicines credit related to legal matters, net was$(0.1) million, comprised of $10.0 million received from the settlement of patent infringement matters, net of $3.9 million in charges associated with civil prescription opioid litigation, a $3.0 million charge for the settlement of a customer claim, and a $3.0 million charge for the settlement of commercial antitrust litigation.
Previous wording
Specialty cost of goods sold for the year ended December 31, 2023 increased 17.5% as compared to the prior year primarily due to an increase in volumes and a $25.0 million increase in marketed product intangible asset impairment charges primarily related to a reduction in promotional focus on LYVISPAH™. Specialty gross profit as a percentage of net revenue decreased to 45.1% for the year ended December 31, 2023 as compared to 51.2% in the prior year as a result of the factors described above.
Current wording
Specialty cost of goods sold for the year ended December 31, 2024 decreased 5.3% as compared to the prior year due to a marketed product intangible asset impairment charge of $34.1 million in 2023 related to reduced promotional focus on LYVISPAH®, partially offset by increased sales in our promoted products. Specialty gross profit as a percentage of net revenue increased to 54.5% for the year ended December 31, 2024 as compared to 45.1% in the prior year as a result of the factors described above.
Previous wording
Specialty SG&A expense for the year ended December 31, 2023 decreased 2.1% as compared to the prior year primarily due to a decrease in third-party marketing spend for our promoted products.
Current wording
Specialty SG&A expense for the year ended December 31, 2024 increased 24.4% as compared to the prior year primarily due to increases in promotional costs associated with ONGENTYS® and CREXONT®.
Previous wording
Generics R&D expense for the year ended December 31, 2023 decreased 21.1% compared to the prior year primarily due to lower project spend of $25.0 million and operating efficiencies in our infrastructure, including reduced employee compensation costs, partially offset by an increase in in-licensing and upfront milestone payments of $2.0 million.
Current wording
Specialty R&D expense for the year ended December 31, 2024 decreased 40.3% as compared to the prior year primarily due to reduced project spend of $8.6 million and reduced infrastructure costs.
Previous wording
Refer to Note 19. Fair Value Measurements for information about the estimation of our contingent consideration liabilities. The $15.2 million decrease in the change in fair value of contingent consideration for the year ended December 31, 2023 ascompared to the prior year was primarily related to a reduction in promotional focus on LYVISPAHTM.
Current wording
The year-over-year variance of$13.6 million in change in fair value of contingent consideration for the year ended December 31, 2024 as compared to the prior year was primarily related to a reduction in promotional focus on LYVISPAHTM during the year ended December 31, 2023. Refer to Note 18. Fair Value Measurements for additional information.
Previous wording
AvKARE net revenue for the year ended December 31, 2023 increased 30.9% as compared to the prior year primarily driven by growth in our distribution and government channels resulting from new product introductions.
Current wording
AvKARE net revenue for the year ended December 31, 2024 increased 24.7% as compared to the prior year primarily driven by growth in our distribution and government channels resulting from new product introductions.
Previous wording
AvKARE cost of goods sold for the year ended December 31, 2023 increased 27.4% as compared to the prior year, and gross profit as a percentage of net revenue increased to 16.3% for the year ended December 31, 2023 from 14.0% in the prior year primarily due to the increase in sales through our higher margin government channel, including higher margin new product introductions.
Current wording
AvKARE cost of goods sold for the year ended December 31, 2024 increased 25.7% as compared to the prior year, and gross profit as a percentage of net revenue decreased to 15.6% for the year ended December 31, 2024 from 16.3% in the prior year primarily due to the increase in sales through our lower margin distribution channel and an increased inventory provision.
Previous wording
AvKARE SG&A expense for the year ended December 31, 2023 increased 3.1% as compared to the prior year primarily due to higher employee compensation.
Current wording
AvKARE SG&A expense for the year ended December 31, 2024 increased 9.7% as compared to the prior year primarily due to higher sales-related expenses, increases in employee compensation and higher professional fees.
Previous wording
Our primary source of liquidity is cash generated from operations, available cash and borrowings under debt financing arrangements (as defined and described in Note 16. Debt), including $225.2 million of available capacity on our Amended New Revolving Credit Facility and $28.0 million of available capacity under the Amended Rondo Revolving Credit Facility as of December 31, 2023. We believe these sources are sufficient to fund our planned operations, meet our interest and contractual obligations and provide sufficient liquidity over the next 12 months. However, our ability to satisfy our working capital requirements and debt obligations will depend upon economic conditions, our ability to negotiate and maintain satisfactory terms under our borrowing and debt facilities in the future, and demand for our products, which are factors that may be out of our control. Our primary uses of capital resources are to fund operating activities, including R&D expenses associated with new product filings, and pharmaceutical product manufacturing expenses, license payments, spending on production facility expansions, capital equipment, acquisitions, and legal settlements.
Current wording
Our primary source of liquidity is cash generated from operations, available cash and borrowings under debt financing arrangements (as defined and described in Note 15. Debt), including $495.2 million of available capacity on our Amended New Revolving Credit Facility and $28.0 million of available capacity under the Amended Rondo Revolving Credit Facility as of December 31, 2024. We believe these sources are sufficient to fund our planned operations, meet our interest and contractual obligations and provide sufficient liquidity over the next 12 months. However, our ability to satisfy our working capital requirements and debt obligations will depend upon economic conditions, our ability to negotiate and maintain satisfactory terms under our borrowing and debt facilities in the future, and demand for our products, which are factors that may be out of our control. Our primary uses of capital resources are to fund operating activities, including R&D expenses associated with new product filings, and pharmaceutical product manufacturing expenses, license payments, spending on production facility expansions, capital equipment, acquisitions, and legal settlements.
Previous wording
We estimate that we will invest approximately $60.0 million to $70.0 million during 2024 for capital expenditures to support and grow our existing operations, primarily related to investments in manufacturing equipment, IT and facilities.
Current wording
We estimate that we will invest approximately $120.0 million during 2025 for capital expenditures to support and grow our existing operations, primarily related to investments in manufacturing equipment, IT and facilities. Our 2025 estimate includes capital expenditures for our collaboration and supply agreement with Metsera, of which we expect Metsera to reimburse us approximately $20.0 million. We expect such reimbursements to primarily be included in our financing cash flows.
Previous wording
Over the next 12 months, we expect to make substantial payments for monthly interest and quarterly principal amounts due for our Term Loan Due 2028, monthly interest under our Term Loan Due 2025, and contractual payments for leased premises. Annually, we are also required to calculate the amount of excess cash flow payments, as defined in our term loan agreements. Based on the results of the excess cash flows calculation for the years ended December 31, 2023, 2022 and 2021, no excess cash flows principal payments were required. Based on the results of the excess cash flows calculation for the year ended December 31, 2020, the Company made a $14.4 million additional principal payment towards our Term Loan Due 2025 in March 2021.
Current wording
Over the next 12 months, we expect to make substantial payments for monthly interest and quarterly principal amounts due for our Term Loan Due 2028, monthly interest on our Amended New Credit Facility, and contractual payments for leased premises. In January 2025, the Company paid the entire remaining principal balance of $192.0 million outstanding on its Term
Previous wording
In 2018, we entered into a tax receivable agreement (“TRA”) for which we were generally required to pay the other holders of Amneal Common Units 85% of the applicable tax savings, if any, in U.S. federal and state income tax that we were deemed to realize as a result of certain tax attributes of their Amneal Common Units sold to us (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Amneal Common Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the TRA. As part of the Reorganization, the TRA was amended to reduce our future obligation to pay 85% of the realized tax benefits subject to the TRA to 75% of such realized benefits. As of December 31, 2023, the contingent TRA liability, including the impact of the amendment, was $185.2 million.
Current wording
As part of the Reorganization, our existing tax receivable agreement (“TRA”) was amended to reduce our future obligation to pay 85% of the realized tax benefits subject to the TRA to 75% of such realized benefits. As of December 31, 2024, the unrecorded contingent TRA liability, including the impact of the amendment, was $133.8 million.
Previous wording
The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the corporate tax rate in effect at the time of realization of our taxable income (the TRA liability is determined based on a percentage of the corporate tax savings from the use of the TRA’s attributes). Because the Amneal Group has exchanged all of its Amneal Common Units pursuant to the Reorganization, the primary remaining factor that could increase the contingent TRA liability is an increase in the effective tax rate. In addition, any future payments under the TRA may create additional basis adjustments, which may result in an additional layer of depreciation and amortization allocable to the Company, resulting in additional TRA payments. The timing and amount of payments may also be accelerated under certain conditions, such as a change of control or other early termination event, which could give rise to our obligation to make TRA payments in advance of tax benefits being realized.
Current wording
The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the corporate tax rate in effect at the time of realization of our taxable income. The timing and amount of payments may also be accelerated under certain conditions, such as a change of control or other early termination event, which could give rise to our obligation to make TRA payments in advance of tax benefits being realized.
Previous wording
Net cash used in investing activities was $69.2 million for the year ended December 31, 2023 as compared to $174.3 million for the prior year. The year-over-year decrease in net cash used in investing activities was primarily due to $84.7 million of cash paid to acquire the baclofen franchise from entities affiliated with Saol International Limited during the prior year period and a year-over-year decrease in cash paid for intangible assets associated with marketed product licenses.
Current wording
Net cash used in investing activities was $63.0 million for the year ended December 31, 2024 as compared to $69.2 million for the prior year. The year-over-year decreasein net cash used in investing activities was primarily due to$12.0 million in proceeds from the sale of a subsidiary in India to a subsidiary of Kashiv in April 2024 (refer to Note 23. Related Party Transactions for additional information) and a year-over-year decrease in cash paid for intangible assets associated with marketed product licenses, partially offset by higher capital expenditures.
Previous wording
(1)A description of our Term Loan Due 2025 and Term Loan Due 2028, and related debt service and interest requirements is contained in Note 16. Debt. Interest on our Term Loan Due 2025 and Term Loan Due 2028 was calculated based on applicable rates at December 31, 2023, excluding the impact of our interest rate swap.
Current wording
(1)A description of our Term Loan Due 2025 and Term Loan Due 2028, and related debt service and interest requirements is contained in Note 15. Debt. Interest on our Term Loan Due 2025 and Term Loan Due 2028 was calculated based on applicable rates at December 31, 2024, excluding the impact of our interest rate swap. In January 2025, the Company paid the entire remaining principal balance of $192.0 million outstanding on its Term Loan Due 2025, plus accrued interest thereon of $0.7 million, with $190.0 million of new borrowings under the Amended New Revolving Credit Facility and cash on hand.
Previous wording
(2)A description of our Amended New Revolving Credit Facility is contained in Note 16. Debt. The table assumes the balance outstanding as of December 31, 2023 will be repaid by December 31, 2024. The actual balance outstanding may fluctuate significantly in future periods. The interest rate on borrowings under the Amended New Revolving Credit Facility resets every 30, 90 or 180 days based on the term that we select.
Current wording
(2)A description of our Amended New Revolving Credit Facility is contained in Note 15. Debt. The table assumes the balance outstanding as of December 31, 2024 will be repaid or refinanced by December 31, 2025. The actual balance outstanding may fluctuate significantly in future periods. The interest rate on borrowings under the Amended New Revolving Credit Facility resets every 30, 90 or 180 days based on the term that we select. In January 2025, the Company paid the entire remaining principal balance of $192.0 million outstanding on its Term Loan Due 2025, plus accrued interest thereon of $0.7 million, with $190.0 million of new borrowings under the Amended New Revolving Credit Facility and cash on hand.
Previous wording
The foregoing table does not include milestone payments potentially payable by us under our collaboration agreements and potential payments under our contingent consideration arrangements. Such payments are dependent upon the occurrence of specific and contingent events, and not the passage of time. A discussion of our significant contingent milestones is contained in Note 5. Alliance and Collaboration and Note 24. Related Party Transactions and a discussion of our contingent consideration arrangements is contained in Note 3. Acquisitions and Note 19. Fair Value Measurements. Additionally, the foregoing table does not include $44.2 million of aggregate principal and related interest due on the Sellers Notes as of December 31, 2023 (as defined in Note 16. Debt). The Sellers Notes are not included because the timing of the associated payments is dependent on the occurrence of future events. Refer to the section Rondo Acquisitions Financing – Notes Payable-Related Party in Note 16. Debt for a discussion of the terms of this indebtedness and descriptions of terms.
Current wording
The foregoing table does not include milestone payments potentially payable by us under our collaboration agreements. Such payments are dependent upon the occurrence of specific and contingent events, and not the passage of time. A discussion of our significant contingent milestones is contained in Note 5. Alliance and Collaboration and Note 23. Related Party Transactions.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Our Affordable Medicines segment includes approximately 270 product families covering an extensive range of dosage forms and delivery systems, including both immediate and extended-release oral solids, powders, liquids, sterile injectables, nasal sprays, inhalation and respiratory products, biosimilar products, ophthalmics, films, transdermal patches and topicals. We focus on developing products that have substantial barriers-to-entry due to complex drug formulations or manufacturing, or legal or regulatory challenges.
Current report — wording carried from elsewhere
Charges (Credit) Related to Legal Matters, Net
Current report — wording carried from elsewhere
Annually, we are also required to calculate the amount of excess cash flow payments, as defined in our term loan agreements. Based on the results of the excess cash flows calculation for the years ended December 31, 2024, 2023 and 2022, no excess cash flows principal payments were required.
Current report — wording carried from elsewhere
For further details, refer to Note 20. Commitments and Contingencies.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
UNITHROID® (levothyroxine sodium), for the treatment of hypothyroidism, which is sold under a license and distribution agreement with Jerome Stevens Pharmaceuticals, Inc., and ONGENTYS® (opicapone), an add-on treatment to carbidopa/levodopa in patients with Parkinson’s disease experiencing “Off” episodes, which we commenced selling in early 2024 under a license agreement with BIAL.
Previous report — wording carried elsewhere
Goodwill is allocated and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. Our reportable segments are the same as the respective operating segments and reporting units. As of December 31, 2023, $366.3 million, $162.8 million, and $69.5 million of goodwill was allocated to our Specialty,