Amneal Pharmaceuticals, Inc.

Previous wording

The following discussion and analysis for the three and six months ended June 30, 2025 should also be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements for the year ended December 31, 2024 included in our 2024 Annual Report on Form 10-K.

Current wording

The following discussion and analysis for the three and nine months ended September 30, 2025 should also be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements for the year ended December 31, 2024 included in our 2024 Annual Report on Form 10-K.

Previous wording

We have three reportable segments: Affordable Medicines, Specialty, and AvKARE. Refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K for a description of our segments. 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 name change did not result in any change to the composition of our reportable segments and, therefore, did not result in any change to our historical results.

Current wording

We have three reportable segments: Affordable Medicines, Specialty, and AvKARE. Refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K for a description of our segments.

Previous wording

During 2025, President Trump has announced a number of tariff actions, and while there are currently no reciprocal tariffs on pharmaceutical products imported into the U.S., this can change at any moment. In addition, on April 14, 2025, the Department of Commerce Bureau of Industry and Security announced that it had initiated, as of April 1, 2025, a broad investigation under section 232 of the Trade Expansion Act to determine the effects on national security of imports of pharmaceuticals (i.e. FDF, API, key starting materials, derivatives, and medical countermeasures). This is currently an investigation into whether trade remedies such as tariffs should be imposed and covers both generic and brand products.

Current wording

During 2025, President Trump has announced a number of tariff actions, and while there are currently no reciprocal tariffs on pharmaceutical products imported into the U.S., this can change at any moment. In addition, on April 14, 2025, the Department of Commerce Bureau of Industry and Security (“DOCBIS”) announced that it had initiated, as of April 1, 2025, a broad investigation under section 232 of the Trade Expansion Act to determine the effects on national security of imports of pharmaceuticals (i.e. FDF, API, key starting materials, derivatives, and medical countermeasures). There is currently an investigation into whether trade remedies such as tariffs should be imposed and covers both generic and brand products. On September 26, 2025, DOCBIS announced that, as of September 2, 2025, it had initiated a separate section 232 national security investigation of imports of personal protective equipment, medical consumables (including syringes and intravenous bags), and medical equipment (including devices).

Previous wording

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of tax reform provisions affecting businesses. The OBBBA includes numerous changes to existing tax law including, extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire. Additionally, the OBBBA permanently eliminates the requirement to capitalize and amortize U.S.-based research and experimental expenditures over five years, making these expenditures fully deductible in the period incurred. The Company expects these provisions to result in a reduction of current income tax liabilities. The Company will continue to analyze the OBBBA and its impact on its financial statements and will reflect any impact in the period of enactment.

Current wording

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act, which includes a broad range of tax reform provisions affecting businesses, including, but not limited to, extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act and eliminating the requirement to capitalize and amortize U.S.-based research and experimental expenditures over five years, making these expenditures fully deductible in the period incurred. These provisions resulted in a reduction of the Company’s current income tax liabilities of $23.5 million during each of the three and nine months ended September 30, 2025.

Previous wording

•Growth in our Affordable Medicines segment net revenue of $6.1 million, primarily due to new products launched in 2025 and 2024, which contributed $33.0 million of year-over-year growth, and strong volume growth, partially offset by price erosion.

Current wording

•Growth in our Affordable Medicines segment net revenue of$33.4 million, primarily due to new products launched in 2025 and 2024, which contributed $24.3 million of year-over-year growth, and strong volume growth, partially offset by price erosion.

Previous wording

•Growth in our AvKARE segment net revenue of$2.4 million, primarily driven bygrowth in our government label channel resulting from new product introductions, partially offset by a decline in our lower margin distribution channel.

Current wording

•Growth in our AvKARE segment net revenue of $39.0 million, primarily driven bygrowth in our government label channel resulting from new product introductions, partially offset by a decline in our lower margin distribution channel.

Previous wording

Cost of goods sold decreased 3.0% for thethree months ended June 30, 2025 as compared to the prior year period. The decrease in cost of goods sold was primarily due to manufacturing efficiencies, partially offset by increased amortization related to CREXONT®.

Current wording

Cost of goods sold increased 17.9% for thethree months ended September 30, 2025 as compared to the prior year period. The increase in cost of goods sold was primarily due to increased sales volume from all segments, increased plant and freight costs, and impairment charges related to non-promoted products of $22.8 million, partially offset by manufacturing efficiencies.

Previous wording

Research and development (“R&D”) expenses for the three months ended June 30, 2025 increased 33.0% as compared to the prior year period, primarily due to increases in employee compensation, increase in project spend and increase in in-licensing and upfront milestone payments.

Current wording

Research and development (“R&D”) expenses for the three months ended September 30, 2025 increased 3.7% as compared to the prior year period, primarily due to increases in employee compensation and a $22.5 million in-licensing payment relating to Omalizumab. R&D expenses for the three months ended September 30, 2024 included $20.0 million in in-licensing payments associated with our exclusive license of Omalizumab.

Previous wording

Total other expense, net for the three months ended June 30, 2025 decreased 20.5% as compared to the prior year period. The decrease was primarily driven by a $9.0 million period-over-period decrease in the increase in tax receivable agreement liability and the favorable impact of foreign exchange, primarily from the Euro.

Current wording

Total other expense, net for the three months ended September 30, 2025 decreased 3.0% as compared to the prior year period. The decrease was primarily driven by a $32.1 million period-over-period decrease in the tax receivable agreement liability (refer to Note 4. Income Taxes), partially offset by a $31.4 million in loss on refinancing (refer to Note 12. Debt) in the current period.

Previous wording

For the three months ended June 30, 2025, our provision for income taxes and effective tax rate were $16.1 million and 31.1%, respectively, as compared to $3.6 million and 17.7%, respectively, for the three months ended June 30, 2024. The period-over-period changes in the provision for income taxes and effective tax rate primarily related to differences in jurisdictional mix of income, the utilization of net operating losses in the prior period and discrete items related to share-based compensation in the current period.

Current wording

For the three months ended September 30, 2025, our (benefit from) provision for income taxes and effective tax rate were $(23.4) million and 447.2%, respectively, as compared to $3.7 million and 23.8%, respectively, for the three months ended September 30, 2024. The period-over-period changes in the (benefit from) provision for income taxes and effective tax rate primarily related to differences in jurisdictional mix of income, the utilization of net operating losses in the prior period, impact of the OBBBA and discrete items related to share-based compensation in the current period.

Previous wording

Affordable Medicines net revenue for the three months ended June 30, 2025 increased 1.4% as compared to the prior year period, primarily due to new products launched in 2025 and 2024, which contributed $33.0 million of year-over-year growth, and strong volume growth, partially offset by price erosion.

Current wording

Affordable Medicines net revenue for the three months ended September 30, 2025 increased 7.8% as compared to the prior year period, primarily due to new products launched in 2025 and 2024, which contributed $24.3 million of year-over-year growth, and strong volume growth, partially offset by price erosion.

Previous wording

Affordable Medicines cost of goods sold for the three months ended June 30, 2025 decreased 3.2% as compared to the prior year period, primarily due to manufacturing efficiencies and favorable product mix, partially offset byincreased plant and freight costs.

Current wording

Affordable Medicines cost of goods sold for the three months ended September 30, 2025 increased 12.5% as compared to the prior year period, primarily due to increased sales volume and increased plant and freight costs, partially offset by manufacturing efficiencies.

Previous wording

Affordable Medicines gross profit as a percentage of net revenue increased to 41.7% for the three months ended June 30, 2025 from 38.9% in the prior year period primarily as a result of the factors noted above.

Current wording

Affordable Medicines gross profit as a percentage of net revenue decreased to 39.1% for the three months ended September 30, 2025 from 41.7% in the prior year period primarily as a result of the factors noted above.

Previous wording

Affordable Medicines SG&A expense for the six months ended June 30, 2025 increased 5.0% as compared to the prior year period, primarily due to increases in employee compensation and shipping costs.

Current wording

Affordable Medicines SG&A expense for the three months ended September 30, 2025 increased 20.1% as compared to the prior year period, primarily due to increases in employee compensation and expansion of our international sales and marketing organization.

Previous wording

Specialty gross profit as a percentage of net revenue increased to 56.4% for the three months ended June 30, 2025 as compared to 55.7% in the prior year period due to the impact of increased amortization related to CREXONT®.

Current wording

Specialty gross profit as a percentage of net revenue decreased to 41.1% for the three months ended September 30, 2025 as compared to 54.7% in the prior year period primarily due to the impact of the impairment charge.

Previous wording

Specialty SG&A expense for the three months ended June 30, 2025 increased 13.9% as compared to the prior year period, primarily due to launch costs associated with CREXONT® and increases in employee compensation.

Current wording

Specialty SG&A expense for the three months ended September 30, 2025 increased 21.1% as compared to the prior year period, primarily due to launch costs associated with CREXONT® and BREKIYA® and increases in employee compensation.

Previous wording

Specialty R&D expense for the three months ended June 30, 2025 increased 39.4% as compared to the prior year period, primarily due to higher project spend.

Current wording

Specialty R&D expense for the three months ended September 30, 2025 increased 105.8% as compared to the prior year period, primarily due to higher project spend.

Previous wording

AvKARE cost of goods sold for the three months ended June 30, 2025 decreased 10.3% as compared to the prior year period, primarily due to a reduction of sales in our low margin distribution channel partially offset by higher sales in our government label channel.

Current wording

AvKARE cost of goods sold for the three months ended September 30, 2025 increased 19.1% as compared to the prior year period, primarily due to higher sales in our government label channel, partially offset by decreased sales in our lower margin distribution channel.

Previous wording

The following table sets forth our summarized, consolidated results of operations for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table sets forth our summarized, consolidated results of operations for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

•Growth in our Affordable Medicines segment net revenue of$29.5 million, primarily due to new products launched in 2025 and 2024, which contributed $73.8 million of year-over-year growth, and strong volume growth, partially offset by price erosion.

Current wording

•Growth in our Affordable Medicines segment net revenue of$62.9 million, primarily due to new products launched in 2025 and 2024, which contributed $98.1 million of year-over-year growth, and strong volume growth, partially offset by price erosion.

Previous wording

•Growth in our Specialty segment net revenue of$27.1 million, primarily driven by increases of $20.3 million, $3.9 million and $7.7 million in sales of CREXONT®, RYTARY® and UNITHROID®, respectively, partially offset by a decline in our non-promoted products. In addition, the prior year period included $4.5 million of out-licensing revenue associated with IPX203.

Current wording

•Growth in our Specialty segment net revenue of$36.7 million, primarily driven by increases of $37.4 million and $13.1 million of CREXONT® and UNITHROID®, respectively, partially offset by declines in RYTARY® revenues of $6.1 million and our non-promoted products. In addition, there was a period-over-period decrease of $6.0 million in out-licensing revenue associated with IPX203.

Previous wording

•Decline in our AvKARE segment net revenue of $7.4 million, primarily driven bya reduction in our low margin distribution sales partially offset by expansion of our government label channel from new product introductions.

Current wording

•Growth in our AvKARE segment net revenue of$41.4 million, primarily driven bygrowth in our government label channel resulting from new product introductions, partially offset by a decline in our lower margin distribution channel.

Previous wording

Cost of goods sold for the six months ended June 30, 2025 was relatively flat compared to the prior year period, asincreased amortization related to CREXONT® andincreased plant and freight costs, partially offset by manufacturing efficiencies and a decline of sales in our lower margin distribution channel.

Current wording

Cost of goods sold for the nine months ended September 30, 2025 increased 6.3%compared to the prior year period. The increase in cost of goods sold was primarily due to increased sales volume from all segments, impairment charges related to non-promoted products of $22.8 million, increased amortization related to CREXONT® andincreased plant and freight costs, partially offset by manufacturing efficiencies.

Previous wording

Selling, general, and administrative (“SG&A”) expenses for the three months ended June 30, 2025 increased 6.7% as compared to the prior year period, primarily due to increases in employee compensation and launch costs associated with CREXONT®.

Current wording

SG&A expenses for the nine months ended September 30, 2025 increased 9.4% as compared to the prior year period, primarily due to increases in employee compensation and launch costs associated with CREXONT® and BREKIYA®.

Previous wording

For the six months ended June 30, 2024, charges related to legal matters, net of$95.1 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 16. Commitments and Contingencies for additional information.

Current wording

For the nine months ended September 30, 2024, (credit) charges related to legal matters, net of$94.9 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 16. Commitments and Contingencies for additional information.

Previous wording

Other operating income for the six months ended June 30, 2025 was comprised of income earned from the India Production Linked Incentive Scheme for the Pharmaceutical Sector (the “PLI Scheme”).

Current wording

Other operating income for the nine months ended September 30, 2025 was primarily comprised of income earned from the India Production Linked Incentive Scheme for the Pharmaceutical Sector (the “PLI Scheme”).

Previous wording

Total other expense, net for the six months ended June 30, 2025 decreased 12.4% as compared to the prior year period. The decrease was primarily driven by a $9.4 million decrease in interest expense as a result of lower rates and lower amounts outstanding on our variable-rate debt and the favorable impact of foreign exchange, primarily from the Euro.

Current wording

Total other expense, net for the nine months ended September 30, 2025 decreased 7.1% as compared to the prior year period. The decrease was driven by a period-over-period decrease in the tax receivable agreement liability of $32.4 million (refer to Note 4. Income Taxes)and a $12.1 million period-over-period decrease in interest expense as a result of lower rates and lower amounts outstanding on our variable-rate debt, partially offset by a $31.4 million in loss on refinancing in the third quarter of 2025.

Previous wording

For the six months ended June 30, 2025, our provision for income taxes and effective tax rate were$29.0 million and 32.5%, respectively, as compared to$9.8 million and(17.7)%, respectively, for the six months ended June 30, 2024. The period-over-period changes in the provision for income taxes and effective tax rate primarily related to differences in jurisdictional mix of income, the utilization of net operating losses in the prior period and discrete items related to share-based compensation in the current period.

Current wording

For the nine months ended September 30, 2025, our provision for income taxes and effective tax rate were$5.6 million and 6.7%, respectively, as compared to$13.4 million and(33.9)%, respectively, for the nine months ended September 30, 2024. The period-over-period changes in the provision for income taxes and effective tax rate primarily related to differences in jurisdictional mix of income, the utilization of net operating losses in the prior period, impact of the OBBBA and discrete items related to share-based compensation in the current period.

Previous wording

The following table sets forth results of operations for our Affordable Medicines segment for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table sets forth results of operations for our Affordable Medicines segment for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Affordable Medicines net revenue for the six months ended June 30, 2025 increased 3.6% as compared to the prior year period, primarily due to new products launched in 2025 and 2024, which contributed $73.8 million of year-over-year growth, and strong volume growth, partially offset by price erosion.

Current wording

Affordable Medicines net revenue for the nine months ended September 30, 2025 increased 5.0% as compared to the prior year period, primarily due to new products launched in 2025 and 2024, which contributed $98.1 million of year-over-year growth, and strong volume growth, partially offset by price erosion.

Previous wording

Affordable Medicines cost of goods sold for the six months ended June 30, 2025 decreased 1.1% as compared to the prior year period, primarily due tomanufacturing efficiencies and favorable product mix, partially offset by increased plant and freight costs.

Current wording

Affordable Medicines cost of goods sold for the nine months ended September 30, 2025 increased 3.4% as compared to the prior year period, primarily due to increased sales volume and increased plant and freight costs, partially offset by manufacturing efficiencies.

Previous wording

Affordable Medicines gross profit as a percentage of net revenue increased to 41.6% for the six months ended June 30, 2025 from 38.8% in the prior year period, primarily as a result of the factors noted above.

Current wording

Affordable Medicines gross profit as a percentage of net revenue increased to 40.7% for the nine months ended September 30, 2025 from 39.8% in the prior year period, primarily as a result of the factors noted above.

Previous wording

Affordable Medicines SG&A expense for the three months ended June 30, 2025 increased 8.2% as compared to the prior year period, primarily due to increases in employee compensation and shipping costs.

Current wording

Affordable Medicines SG&A expense for the nine months ended September 30, 2025 increased 9.9% as compared to the prior year period, primarily due to increases in employee compensation, costs of our international expansion, and shipping costs.

Previous wording

Affordable Medicines R&D expenses for the three months ended June 30, 2025 increased 32.2% as compared to the prior year period, primarily due to increases in employee compensation, increase in project spend and increase in in-licensing and upfront milestone payments.

Current wording

Affordable Medicines R&D expenses for the nine months ended September 30, 2025 increased 3.9% as compared to the prior year period, primarily due to increases in employee compensation and in-licensing and upfront milestone payments, partially offset by reduced project spend.

Previous wording

For the six months ended June 30, 2024, charges related to legal matters, net of $95.1 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 16. Commitments and Contingencies for additional information.

Current wording

For the nine months ended September 30, 2024, (credit) charges related to legal matters, net of $94.9 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 16. Commitments and Contingencies for additional information.

Previous wording

Other operating income for the six months ended June 30, 2025 was comprised of income earned from the PLI Scheme.

Current wording

Other operating income for the nine months ended September 30, 2025 was primarily comprised of income earned from the PLI Scheme.

Previous wording

The following table sets forth results of operations for our Specialty segment for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table sets forth results of operations for our Specialty segment for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Specialty net revenue for the six months ended June 30, 2025 increased 12.9% as compared to the prior year period, primarily driven by increases of $20.3 million, $3.9 million and $7.7 million in sales of CREXONT®, RYTARY® and UNITHROID®, respectively, partially offset by a decline in our non-promoted products. In addition, the prior year period included $4.5 million of out-licensing revenue associated with IPX203.

Current wording

Specialty net revenue for the nine months ended September 30, 2025 increased 11.3% as compared to the prior year period, primarily driven by increases of $37.4 million and $13.1 million of CREXONT® and UNITHROID®, respectively, partially offset by declines in RYTARY® revenues of $6.1 million and our non-promoted products. In addition, there was a period-over-period decrease of $6.0 million in out-licensing revenue associated with IPX203.

Previous wording

Specialty cost of goods sold for the six months ended June 30, 2025 increased 19.7% as compared to the prior year period, primarily due to increases in amortization related to CREXONT® and sales volume.

Current wording

Specialty cost of goods sold for the nine months ended September 30, 2025 increased 27.5% as compared to the prior year period, primarily due toan impairment charge related to non-promoted product of $22.1 million (refer to Note 9. Goodwill and Other Intangible Assets for additional information), increases in amortization related to CREXONT® and increased sales volume.

Previous wording

Specialty SG&A expense for the six months ended June 30, 2025 increased 18.3% as compared to the prior year period, primarily due to launch costs associated with CREXONT® and increases in employee compensation.

Current wording

Specialty SG&A expense for the nine months ended September 30, 2025 increased 19.3% as compared to the prior year period, primarily due to launch costs associated with CREXONT® and BREKIYA® and increases in employee compensation.