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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-35299

ALKERMES PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

Ireland |  | 98-1007018
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

Connaught House

1 Burlington Road

Dublin 4, Ireland, D04 C5Y6

(Address of principal executive offices)

+ 353-1-772-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Ordinary shares, $0.01 par value |  | ALKS |  | Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ |  | Accelerated filer ☐
Non-accelerated filer ☐ |  | Smaller reporting company ☐
|  | Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of the registrant’s ordinary shares, $0.01 par value, outstanding as of July 19, 2024 was 164,668,329 shares.

ALKERMES PLC AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

| Page No.
PART I - FINANCIAL INFORMATION |
Item 1. | Condensed Consolidated Financial Statements (unaudited): |
| Condensed Consolidated Balance Sheets — June 30, 2024 and December 31, 2023 | 5
| Condensed Consolidated Statements of Operations and Comprehensive Income — For the Three and Six Months Ended June 30, 2024 and 2023 | 6
| Condensed Consolidated Statements of Cash Flows — For the Six Months Ended June 30, 2024 and 2023 | 7
| Condensed Consolidated Statements of Shareholders’ Equity — For the Three and Six Months Ended June 30, 2024 and 2023 | 8
| Notes to Condensed Consolidated Financial Statements | 10
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 36
Item 4. | Controls and Procedures | 36
PART II - OTHER INFORMATION |
Item 1. | Legal Proceedings | 37
Item 1A. | Risk Factors | 37
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 37
Item 5. | Other Information | 37
Item 6. | Exhibits | 38
Signatures | 39

2

Cautionary Note Concerning Forward-Looking Statements

This document contains and incorporates by reference “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, these statements can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “should,” “would,” “expect,” “anticipate,” “continue,” “believe,” “plan,” “estimate,” “intend,” or other similar words. These statements discuss future expectations and contain projections of results of operations or of financial condition, or state trends and known uncertainties or other forward-looking information. Forward-looking statements in this Quarterly Report on Form 10-Q (this “Form 10-Q”) may include, without limitation, statements regarding:

•
our expectations regarding our financial performance, including revenues, expenses, liquidity, capital expenditures, income taxes and profitability;
•
our expectations regarding our products, including expectations related to product development, regulatory filings, approvals and timelines; therapeutic and commercial value, scope and potential; and the costs and expenses related to such activities and expectations;
•
our expectations regarding the initiation, timing and results of clinical trials of our products;
•
our expectations regarding the competitive, payer, legislative, regulatory and policy landscape, and changes therein, related to our products, including competition from generic forms of our products or competitive products and development programs; barriers to access or coverage of our products and potential changes in reimbursement of our products; and legislation, regulations, executive orders, guidance or other measures that may impact pricing and reimbursement of, and access to, our products;
•
our expectations regarding the financial impact of currency exchange rate fluctuations and valuations;
•
our expectations regarding acquisitions, collaborations, licensing arrangements and other significant agreements with third parties, including those related to our products, development programs and other business development opportunities;
•
our expectations regarding the impacts of new legislation, rules and regulations, the adoption of new accounting pronouncements, potential government shutdowns, or other global, political or economic instability or disruptions;
•
our expectations regarding near-term changes in the nature of our market risk exposures or in our management’s objectives and strategies with respect to managing such exposures;
•
our expectations regarding our ability to comply with restrictive covenants of our indebtedness and our ability to fund our debt service obligations;
•
our expectations regarding future capital requirements and expenditures for our operations and our ability to finance such capital requirements and expenditures;
•
our expectations regarding the timing, outcome and impact of administrative, regulatory, legal and other proceedings related to our products and intellectual property (“IP”), including our patents, know-how, and related rights or obligations;
•
our expectations regarding the tax treatment and other anticipated benefits of the separation of our oncology business; and
•
other expectations discussed elsewhere in this Form 10-Q.

Actual results might differ materially from those expressed or implied by these forward-looking statements because these forward-looking statements are subject to risks, assumptions and uncertainties. In light of these risks, assumptions and uncertainties, the forward-looking expectations discussed in this Form 10-Q might not occur. You are cautioned not to place undue reliance on the forward-looking statements in this Form 10-Q, which speak only as of the date of this Form 10-Q. All subsequent written and oral forward-looking statements concerning the matters addressed in this Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except as required by applicable law or regulation, we do not undertake any obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For information about the risks, assumptions and uncertainties of our business, see “Part I, Item 1A—Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”) on February 21, 2024 (our “Annual

3

Report”).

This Form 10-Q may include data that we obtained from industry publications and third-party research, surveys and studies. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that any industry publications and third-party research, surveys and studies from which data is included in this Form 10-Q are reliable, we have not independently verified any such data. This Form 10-Q may also include data based on our own internal estimates and research. Our internal estimates and research have not been verified by any independent source and are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Part I, Item 1A—Risk Factors” in our Annual Report. These and other factors could cause our results to differ materially from those expressed or implied in this Form 10-Q.

Note Regarding Company and Product References

Alkermes plc is a global biopharmaceutical company that seeks to develop innovative medicines in the field of neuroscience. We have a portfolio of proprietary commercial products for the treatment of alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder, and a pipeline of clinical and preclinical candidates in development for neurological disorders, including narcolepsy. Use of terms such as “us,” “we,” “our,” “Alkermes” or the “Company” in this Form 10-Q is meant to refer to Alkermes plc and its consolidated subsidiaries. Except as otherwise suggested by the context, (a) references to “products” or “our products” in this Form 10-Q include our marketed products, marketed products using our proprietary technologies, our licensed products, our product candidates and product candidates using our proprietary technologies, (b) references to the “biopharmaceutical industry” in this Form 10-Q are intended to include reference to the “biotechnology industry” and/or the “pharmaceutical industry” and (c) references to “licensees” in this Form 10-Q are used interchangeably with references to “partners.”

Note Regarding Trademarks

We are the owner of various U.S. federal trademark registrations (“®”) and other trademarks (“TM”), including ALKERMES®, ARISTADA®, ARISTADA INITIO®, LinkeRx®, LYBALVI®, NanoCrystal® and VIVITROL®.

The following are trademarks of the respective companies listed: BYANNLI®, INVEGA®, INVEGA HAFYERA®, INVEGA SUSTENNA®, INVEGA TRINZA®, TREVICTA®, and XEPLION®—Johnson & Johnson or its affiliated companies; and VUMERITY®—Biogen MA Inc. (together with its affiliates, “Biogen”). Other trademarks, trade names and service marks appearing in this Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Form 10-Q may be referred to without the ® and TM symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

4

PART I. FINANCI AL INFORMATION

Item 1. Condensed Consolid ated Financial Statements:

ALKERMES PLC AND SUBSIDIARIES

CONDENSED CONSOLIDA TED BALANCE SHEETS

(unaudited)

|  | June 30, 2024 |  |  | December 31, 2023 |
|  | (In thousands, except share and per share amounts) |
ASSETS |  |  |  |  |  |
CURRENT ASSETS: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 535,150 |  |  | $ | 457,469 |
Receivables, net |  |  | 366,415 |  |  |  | 332,477 |
Investments—short-term |  |  | 340,967 |  |  |  | 316,022 |
Inventory |  |  | 194,731 |  |  |  | 186,406 |
Prepaid expenses and other current assets |  |  | 101,435 |  |  |  | 98,166 |
Contract assets |  |  | 3,492 |  |  |  | 706 |
Assets held for sale |  |  | — |  |  |  | 94,260 |
Total current assets |  |  | 1,542,190 |  |  |  | 1,485,506 |
PROPERTY, PLANT AND EQUIPMENT, NET |  |  | 222,738 |  |  |  | 226,943 |
INVESTMENTS—LONG-TERM |  |  | 86,402 |  |  |  | 39,887 |
RIGHT-OF-USE ASSETS |  |  | 87,889 |  |  |  | 91,460 |
INTANGIBLE ASSETS, NET AND GOODWILL |  |  | 83,945 |  |  |  | 85,018 |
DEFERRED TAX ASSETS |  |  | 167,382 |  |  |  | 195,888 |
OTHER ASSETS |  |  | 16,296 |  |  |  | 11,521 |
TOTAL ASSETS |  | $ | 2,206,842 |  |  | $ | 2,136,223 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |
CURRENT LIABILITIES: |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 239,774 |  |  | $ | 240,561 |
Accrued sales discounts, allowances and reserves |  |  | 263,457 |  |  |  | 263,641 |
Operating lease liabilities—short-term |  |  | 6,007 |  |  |  | 5,746 |
Contract liabilities—short-term |  |  | 3,311 |  |  |  | 2,730 |
Current portion of long-term debt |  |  | 3,000 |  |  |  | 3,000 |
Liabilities related to discontinued operations |  |  | — |  |  |  | 4,542 |
Total current liabilities |  |  | 515,549 |  |  |  | 520,220 |
LONG-TERM DEBT |  |  | 286,459 |  |  |  | 287,730 |
OPERATING LEASE LIABILITIES—LONG-TERM |  |  | 72,535 |  |  |  | 75,709 |
OTHER LONG-TERM LIABILITIES |  |  | 48,294 |  |  |  | 49,878 |
Total liabilities |  |  | 922,837 |  |  |  | 933,537 |
COMMITMENTS AND CONTINGENT LIABILITIES (Note 17) |  |  |  |  |  |
SHAREHOLDERS’ EQUITY: |  |  |  |  |  |
Preferred shares, par value, $0.01 per share; 50,000,000 shares authorized; and zero issued and outstanding at June 30, 2024 and December 31, 2023 |  |  | — |  |  |  | — |
Ordinary shares, par value, $0.01 per share; 450,000,000 shares authorized; 175,959,272 and 172,569,051 shares issued; and 165,886,689 and 166,979,833 shares outstanding at June 30, 2024 and December 31, 2023, respectively |  |  | 1,760 |  |  |  | 1,726 |
Treasury shares, at cost (10,072,583 and 5,589,218 shares at June 30, 2024 and December 31, 2023, respectively) |  |  | (303,025 | ) |  |  | (189,336 | )
Additional paid-in capital |  |  | 2,804,202 |  |  |  | 2,736,934 |
Accumulated other comprehensive loss |  |  | (3,590 | ) |  |  | (3,110 | )
Accumulated deficit |  |  | (1,215,342 | ) |  |  | (1,343,528 | )
Total shareholders’ equity |  |  | 1,284,005 |  |  |  | 1,202,686 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |  | $ | 2,206,842 |  |  | $ | 2,136,223 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

ALKERMES PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(unaudited)

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | (In thousands, except per share amounts) |
REVENUES: |  |  |  |  |  |  |  |  |  |  |  |
Product sales, net |  | $ | 269,273 |  |  | $ | 231,477 |  |  | $ | 502,809 |  |  | $ | 446,204 |
Manufacturing and royalty revenues |  |  | 129,858 |  |  |  | 385,913 |  |  |  | 246,691 |  |  |  | 458,775 |
Research and development revenue |  |  | — |  |  |  | 7 |  |  |  | 3 |  |  |  | 13 |
Total revenues |  |  | 399,131 |  |  |  | 617,397 |  |  |  | 749,503 |  |  |  | 904,992 |
EXPENSES: |  |  |  |  |  |  |  |  |  |  |  |
Cost of goods manufactured and sold (exclusive of amortization of acquired intangible assets shown below) |  |  | 61,472 |  |  |  | 63,249 |  |  |  | 120,116 |  |  |  | 121,413 |
Research and development |  |  | 59,649 |  |  |  | 68,225 |  |  |  | 127,260 |  |  |  | 131,995 |
Selling, general and administrative |  |  | 168,113 |  |  |  | 195,756 |  |  |  | 347,862 |  |  |  | 363,589 |
Amortization of acquired intangible assets |  |  | 14 |  |  |  | 8,898 |  |  |  | 1,073 |  |  |  | 17,698 |
Total expenses |  |  | 289,248 |  |  |  | 336,128 |  |  |  | 596,311 |  |  |  | 634,695 |
OPERATING INCOME FROM CONTINUING OPERATIONS |  |  | 109,883 |  |  |  | 281,269 |  |  |  | 153,192 |  |  |  | 270,297 |
OTHER INCOME, NET: |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  |  | 10,735 |  |  |  | 6,769 |  |  |  | 20,134 |  |  |  | 11,735 |
Interest expense |  |  | (5,952 | ) |  |  | (5,684 | ) |  |  | (11,930 | ) |  |  | (10,972 | )
Other income (expense), net |  |  | 2,053 |  |  |  | (525 | ) |  |  | 2,235 |  |  |  | (564 | )
Total other income, net |  |  | 6,836 |  |  |  | 560 |  |  |  | 10,439 |  |  |  | 199 |
INCOME BEFORE INCOME TAXES |  |  | 116,719 |  |  |  | 281,829 |  |  |  | 163,631 |  |  |  | 270,496 |
INCOME TAX PROVISION |  |  | 22,061 |  |  |  | 2,728 |  |  |  | 30,025 |  |  |  | 3,445 |
NET INCOME FROM CONTINUING OPERATIONS |  |  | 94,658 |  |  |  | 279,101 |  |  |  | 133,606 |  |  |  | 267,051 |
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX |  |  | (3,300 | ) |  |  | (42,036 | ) |  |  | (5,420 | ) |  |  | (71,831 | )
NET INCOME |  | $ | 91,358 |  |  | $ | 237,065 |  |  | $ | 128,186 |  |  | $ | 195,220 |
EARNINGS (LOSS) PER ORDINARY SHARE: |  |  |  |  |  |  |  |  |  |  |  |
Earnings per ordinary share from continuing operations - basic |  | $ | 0.56 |  |  | $ | 1.68 |  |  | $ | 0.79 |  |  | $ | 1.61 |
Loss per ordinary share from discontinued operations - basic |  | $ | (0.02 | ) |  | $ | (0.25 | ) |  | $ | (0.03 | ) |  | $ | (0.43 | )
Earnings per ordinary share - basic |  | $ | 0.54 |  |  | $ | 1.43 |  |  | $ | 0.76 |  |  | $ | 1.18 |
Earnings per ordinary share from continuing operations - diluted |  | $ | 0.55 |  |  | $ | 1.63 |  |  | $ | 0.78 |  |  | $ | 1.56 |
Loss per ordinary share from discontinued operations - diluted |  | $ | (0.02 | ) |  | $ | (0.25 | ) |  | $ | (0.03 | ) |  | $ | (0.42 | )
Earnings per ordinary share - diluted |  | $ | 0.53 |  |  | $ | 1.38 |  |  | $ | 0.75 |  |  | $ | 1.14 |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 168,321 |  |  |  | 166,279 |  |  |  | 168,152 |  |  |  | 165,686 |
Diluted |  |  | 170,977 |  |  |  | 171,553 |  |  |  | 171,960 |  |  |  | 170,747 |
COMPREHENSIVE INCOME: |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 91,358 |  |  | $ | 237,065 |  |  | $ | 128,186 |  |  | $ | 195,220 |
Holding gain (loss), net of a tax (benefit) provision of $(8), $99, $(83) and $587, respectively |  |  | 11 |  |  |  | 692 |  |  |  | (480 | ) |  |  | 3,452 |
COMPREHENSIVE INCOME |  | $ | 91,369 |  |  | $ | 237,757 |  |  | $ | 127,706 |  |  | $ | 198,672 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

ALKERMES PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED S TATEMENTS OF CASH FLOWS

(unaudited)

|  | Six Months Ended |
|  | June 30, |
|  | 2024 |  |  | 2023 |
|  | (In thousands) |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |
Net income |  | $ | 128,186 |  |  | $ | 195,220 |
Adjustments to reconcile net income to cash flows from operating activities: |  |  |  |  |  |
Depreciation and amortization |  |  | 14,714 |  |  |  | 37,725 |
Share-based compensation expense |  |  | 53,356 |  |  |  | 51,147 |
Deferred income taxes |  |  | 21,724 |  |  |  | (38,137 | )
Gain on sale of the Athlone Facility |  |  | (1,462 | ) |  |  | — |
Other non-cash charges |  |  | 2,136 |  |  |  | 691 |
Changes in assets and liabilities: |  |  |  |  |  |
Receivables |  |  | (33,939 | ) |  |  | (46,511 | )
Contract assets |  |  | (2,786 | ) |  |  | 8,929 |
Inventory |  |  | (9,538 | ) |  |  | (6,879 | )
Prepaid expenses and other assets |  |  | (1,206 | ) |  |  | (774 | )
Right-of-use assets |  |  | 3,571 |  |  |  | 8,498 |
Accounts payable and accrued expenses |  |  | (1,930 | ) |  |  | 19,995 |
Accrued sales discounts, allowances and reserves |  |  | (185 | ) |  |  | (29,347 | )
Contract liabilities |  |  | (1,463 | ) |  |  | (5,032 | )
Operating lease liabilities |  |  | (5,049 | ) |  |  | (8,471 | )
Other long-term liabilities |  |  | 1,009 |  |  |  | 7,354 |
Cash flows provided by operating activities |  |  | 167,138 |  |  |  | 194,408 |
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |
Additions of property, plant and equipment |  |  | (15,453 | ) |  |  | (16,565 | )
Proceeds from the sale of equipment |  |  | 434 |  |  |  | 3 |
Proceeds from the sale of the Athlone Facility |  |  | 97,933 |  |  |  | — |
Purchases of investments |  |  | (209,962 | ) |  |  | (30,284 | )
Sales and maturities of investments |  |  | 138,947 |  |  |  | 240,544 |
Cash flows provided by investing activities |  |  | 11,899 |  |  |  | 193,698 |
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |
Proceeds from the issuance of ordinary shares under share-based compensation arrangements |  |  | 13,833 |  |  |  | 12,000 |
Employee taxes paid related to net share settlement of equity awards |  |  | (29,000 | ) |  |  | (25,284 | )
Payment for the repurchase of ordinary shares |  |  | (84,689 | ) |  |  | — |
Principal payments of long-term debt |  |  | (1,500 | ) |  |  | (1,500 | )
Cash flows used in financing activities |  |  | (101,356 | ) |  |  | (14,784 | )
NET INCREASE IN CASH AND CASH EQUIVALENTS |  |  | 77,681 |  |  |  | 373,322 |
CASH AND CASH EQUIVALENTS—Beginning of period |  |  | 457,469 |  |  |  | 292,473 |
CASH AND CASH EQUIVALENTS—End of period |  | $ | 535,150 |  |  | $ | 665,795 |
SUPPLEMENTAL CASH FLOW DISCLOSURE: |  |  |  |  |  |
Non-cash investing and financing activities: |  |  |  |  |  |
Purchased capital expenditures included in accounts payable and accrued expenses |  | $ | 1,649 |  |  | $ | 4,863 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

ALKERMES PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(unaudited)

|  | Ordinary Shares |  |  | Additional Paid-In |  |  | Accumulated Other Comprehensive |  |  | Accumulated |  |  | Treasury Stock |  |  |  |
|  | Shares |  |  | Amount |  |  | Capital |  |  | Loss |  |  | Deficit |  |  | Shares |  |  | Amount |  |  | Total |
|  | (In thousands, except share data) |
BALANCE — December 31, 2023 |  |  | 172,569,051 |  |  | $ | 1,726 |  |  | $ | 2,736,934 |  |  | $ | (3,110 | ) |  | $ | (1,343,528 | ) |  |  | (5,589,218 | ) |  | $ | (189,336 | ) |  | $ | 1,202,686 |
Issuance of ordinary shares under employee stock plans |  |  | 3,165,169 |  |  |  | 31 |  |  |  | 11,195 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11,226 |
Receipt of Alkermes' ordinary shares for the exercise of stock options or to satisfy minimum tax withholding obligations related to share-based awards |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (960,486 | ) |  |  | (28,349 | ) |  |  | (28,349 | )
Share-based compensation |  |  | — |  |  |  | — |  |  |  | 32,863 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 32,863 |
Unrealized loss on marketable securities, net of tax benefit of $75 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (491 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (491 | )
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 36,828 |  |  |  | — |  |  |  | — |  |  |  | 36,828 |
BALANCE — March 31, 2024 |  |  | 175,734,220 |  |  | $ | 1,757 |  |  | $ | 2,780,992 |  |  | $ | (3,601 | ) |  | $ | (1,306,700 | ) |  |  | (6,549,704 | ) |  | $ | (217,685 | ) |  | $ | 1,254,763 |
Issuance of ordinary shares under employee stock plans |  |  | 225,052 |  |  |  | 3 |  |  |  | 2,604 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,607 |
Receipt of Alkermes' ordinary shares for the exercise of stock options or to satisfy minimum tax withholding obligations related to share-based awards |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (26,692 | ) |  |  | (651 | ) |  |  | (651 | )
Repurchase of Alkermes' ordinary shares |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,496,187 | ) |  |  | (84,689 | ) |  |  | (84,689 | )
Share-based compensation |  |  | — |  |  |  | — |  |  |  | 20,606 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 20,606 |
Unrealized gain on marketable securities, net of tax benefit of $8 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 91,358 |  |  |  | — |  |  |  | — |  |  |  | 91,358 |
BALANCE — June 30, 2024 |  |  | 175,959,272 |  |  | $ | 1,760 |  |  | $ | 2,804,202 |  |  | $ | (3,590 | ) |  | $ | (1,215,342 | ) |  |  | (10,072,583 | ) |  | $ | (303,025 | ) |  | $ | 1,284,005 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

|  | Ordinary Shares |  |  | Additional Paid-In |  |  | Accumulated Other Comprehensive |  |  | Accumulated |  |  | Treasury Stock |  |  |  |
|  | Shares |  |  | Amount |  |  | Capital |  |  | Loss |  |  | Deficit |  |  | Shares |  |  | Amount |  |  | Total |
|  | (In thousands, except share data) |
BALANCE — December 31, 2022 |  |  | 168,951,193 |  |  | $ | 1,690 |  |  | $ | 2,913,099 |  |  | $ | (10,889 | ) |  | $ | (1,699,285 | ) |  |  | (4,574,184 | ) |  | $ | (160,862 | ) |  | $ | 1,043,753 |
Issuance of ordinary shares under employee stock plans |  |  | 2,567,603 |  |  |  | 25 |  |  |  | 2,849 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,874 |
Receipt of Alkermes' ordinary shares for the exercise of stock options or to satisfy minimum tax withholding obligations related to share-based awards |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (885,652 | ) |  |  | (24,744 | ) |  |  | (24,744 | )
Share-based compensation |  |  | — |  |  |  | — |  |  |  | 22,778 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22,778 |
Unrealized gain on marketable securities, net of tax provision of $488 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,760 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,760 |
Net loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (41,845 | ) |  |  | — |  |  |  | — |  |  |  | (41,845 | )
BALANCE — March 31, 2023 |  |  | 171,518,796 |  |  | $ | 1,715 |  |  | $ | 2,938,726 |  |  | $ | (8,129 | ) |  | $ | (1,741,130 | ) |  |  | (5,459,836 | ) |  | $ | (185,606 | ) |  | $ | 1,005,576 |
Issuance of ordinary shares under employee stock plans |  |  | 457,105 |  |  |  | 5 |  |  |  | 9,121 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,126 |
Receipt of Alkermes' ordinary shares for the exercise of stock options or to satisfy minimum tax withholding obligations related to share-based awards |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (17,777 | ) |  |  | (540 | ) |  |  | (540 | )
Share-based compensation |  |  | — |  |  |  | — |  |  |  | 28,518 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 28,518 |
Unrealized gain on marketable securities, net of tax provision of $99 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 692 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 692 |
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 237,065 |  |  |  | — |  |  |  | — |  |  |  | 237,065 |
BALANCE — June 30, 2023 |  |  | 171,975,901 |  |  | $ | 1,720 |  |  | $ | 2,976,365 |  |  | $ | (7,437 | ) |  | $ | (1,504,065 | ) |  |  | (5,477,613 | ) |  | $ | (186,146 | ) |  | $ | 1,280,437 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

9

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited)

1. THE COMPANY

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

On May 1, 2024, the Company completed the previously announced sale of its development and manufacturing facility in Athlone, Ireland (the “Athlone Facility”) to Novo Nordisk (“Novo”). The Company and Novo also entered into subcontracting arrangements to continue certain development and manufacturing activities currently performed at the Athlone Facility for a period of time after the closing of the transaction; these activities may continue through the end of 2025. In connection with the sale of the Athlone Facility, the Company received approximately $97.9 million from Novo, which included a payment of approximately $91.0 million for the facility and certain related assets, and recorded a gain of approximately $1.5 million within “Other income (expense), net” in the accompanying condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2024. At December 31, 2023, the Company classified the assets described under the asset purchase agreement for the sale as “Assets held for sale” in the accompanying condensed consolidated balance sheets.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company for the three and six months ended June 30, 2024 and 2023 are unaudited and have been prepared on a basis substantially consistent with the audited financial statements for the year ended December 31, 2023. The year-end condensed consolidated balance sheet data, which is presented for comparative purposes, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. (commonly referred to as “GAAP”). In the opinion of management, the condensed consolidated financial statements include all adjustments of a normal recurring nature that are necessary to state fairly the results of operations for the reported periods.

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

Principles of Consolidation

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

Reclassification

The Company has presented operations from its former oncology business as discontinued operations in its accompanying condensed consolidated statement of operations and comprehensive income for the three and six months ended June 30, 2023. See Note 3, Discontinued Operations in these “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information.

Discontinued Operations

The Company determined that the separation of its oncology business in November 2023 met the criteria for classification of the oncology business as discontinued operations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205, Discontinued Operations (“Topic 205”). Accordingly, the financial statements have been updated to present the results of the oncology business as discontinued operations for the three and six months ended June 30, 2023 in the accompanying condensed consolidated statement of operations and comprehensive income.

10

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

Assets Held for Sale

In connection with the sale of the Athlone Facility, the Company reviewed FASB ASC 805, Business Combinations (“Topic 805”) and, based on the definitions therein, determined that the Athlone Facility constituted a business. Accordingly, the assets associated with the sale of the Athlone Facility were classified as “Assets held for sale” in the accompanying condensed consolidated balance sheets as of December 31, 2023.

Use of Estimates

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

Segment Information

The Company operates as one business segment, which is the business of developing, manufacturing and commercializing medicines designed to address unmet medical needs of patients in major therapeutic areas. The Company’s chief decision maker, its Chief Executive Officer and chairman of its board of directors, reviews the Company’s operating results on an aggregate basis and manages the Company’s operations as a single operating unit.

New Accounting Pronouncements

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

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss and the title and position of the Company’s chief operating decision maker. The amendments in this guidance also expand the interim segment disclosure requirements. All disclosure requirements under this guidance are required for public entities with a single reportable segment. This ASU became effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments in this guidance are required to be applied on a retrospective basis. The Company elected to early adopt this guidance and determined this ASU did not have an impact on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures in order to provide information to assist key stakeholders in better assessing how the Company’s operations and related tax risks and tax planning and operational opportunities affect the Company’s tax rate and prospects for future cash flows. This ASU becomes effective for public companies for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. This guidance will be applied on a prospective basis. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

11

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

3. DISCONTINUED OPERATIONS

Mural Oncology Separation

On November 15, 2023 (the “Separation Date”), the Company completed the separation of its oncology business into Mural Oncology plc (“Mural”), a new, independent, publicly-traded company (the “Separation”). The Separation was effected by means of a distribution of all of the outstanding ordinary shares of Mural to the Company’s shareholders (the “Distribution”), in which each of the Company’s shareholders received one ordinary share, nominal value $0.01 per share, of Mural for every ten ordinary shares, par value $0.01 per share, of the Company (the “Distribution Ratio”) held by such shareholder as of the close of business on November 6, 2023, the record date for the Distribution. The historical results of the oncology business have been reflected as discontinued operations in the Company’s accompanying condensed consolidated financial statements for the three and six months ended June 30, 2023 and as of December 31, 2023.

In connection with the Separation, the Company entered into a separation agreement with Mural, dated as of November 13, 2023 (the “Separation Agreement”), that, among other things, sets forth the Company’s agreements with Mural regarding the principal actions taken or to be taken in connection with the Separation, including the Distribution. The Separation Agreement identified those assets to be transferred to, liabilities to be assumed by, and contracts to be assigned to Mural, including the operating lease for the office and laboratory space at 852 Winter Street in Waltham, Massachusetts, and it provided for when and how such transfers, assumptions and assignments were to occur. The purpose of the Separation Agreement was to provide Mural and the Company with those assets necessary to operate their respective businesses and to retain or assume the respective liabilities related to those assets.

Under the terms of the Separation Agreement, the Company granted Mural a perpetual, worldwide, non-exclusive, royalty-free, fully paid-up license (or, as the case may be, sublicense) to certain IP controlled by the Company as of the date of the Distribution to allow Mural to use such IP for the oncology business, and Mural granted the Company a perpetual, worldwide, non-exclusive, royalty-free, fully paid-up license (or, as the case may be, sublicense) to the IP transferred to Mural as part of the Separation for the Company’s use outside of the oncology business.

Each of Mural and the Company agreed to releases with respect to pre-Distribution claims, and cross-indemnities with respect to post-Distribution claims, that are principally designed to place financial responsibility for the obligations and liabilities allocated to Mural under the Separation Agreement, and financial responsibility for the obligations and liabilities allocated to the Company under the Separation Agreement. The Company and Mural are also each subject to certain confidentiality restrictions and information sharing obligations.

The transfer of assets and liabilities to Mural was effected through a contribution in accordance with the Separation Agreement, as summarized below:

(In thousands) |  | November 15, 2023 |
ASSETS |  |  |
Current Assets: |  |  |
Cash and cash equivalents |  | $ | 275,000 |
Total current assets |  |  | 275,000 |
Property, plant and equipment, net |  |  | 10,096 |
Right-of-use assets |  |  | 14,513 |
Goodwill |  |  | 7,800 |
Deferred tax asset |  |  | 1,799 |
Total assets |  | $ | 309,208 |
LIABILITIES |  |  |
Current Liabilities |  |  |
Operating lease liabilities—short-term |  | $ | 6,036 |
Total current liabilities |  |  | 6,036 |
Operating lease liabilities—long-term |  |  | 9,412 |
Total liabilities |  |  | 15,448 |
Net assets transferred to Mural |  | $ | 293,760 |

12

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

The Company determined that the Separation and the Distribution qualified as tax-free for U.S. federal income tax purposes, which required significant judgment by management. In making such determination, the Company applied U.S. federal tax law to relevant facts and circumstances and obtained: (i) a favorable private letter ruling from the Internal Revenue Service; (ii) a tax opinion; and (iii) other external tax advice related to the concluded tax treatment. If the Separation and Distribution were to ultimately fail to qualify for tax-free treatment for U.S. federal income tax purposes, the Company and/or its shareholders could be subject to significant liabilities, which could have material adverse impacts on the Company’s business, financial condition, results of operations and cash flows in future reporting periods. Furthermore, other than taxes recorded on the transfer of IP, the Company determined that the Separation and related Distribution qualified as tax-free for Irish tax purposes, which required significant judgment by management. In making such determination, the Company applied Irish tax law to relevant facts and circumstances and obtained: (i) a tax opinion; and (ii) other external tax advice related to the concluded tax treatment. If the Separation and Distribution were to ultimately fail to qualify for tax-free treatment for Irish tax purposes, the Company and/or its shareholders could be subject to significant liabilities, which could have material adverse impacts on the Company’s business, financial condition, results of operations and cash flows in future reporting periods.

In connection with the Separation, the Company also entered into a tax matters agreement with Mural, dated as of November 13, 2023. The tax matters agreement governs the Company’s and Mural’s respective rights, responsibilities and obligations with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the Distribution, together with certain related transactions, to qualify as tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and assistance and cooperation in respect of tax matters.

In connection with the Separation, the Company also entered into an employee matters agreement with Mural, dated as of November 13, 2023 (as amended, the “Employee Matters Agreement”). The Employee Matters Agreement governs the Company’s, Mural’s and their respective subsidiaries’ and affiliates’ rights, responsibilities and obligations after the Separation with respect to, employment, benefits and compensation matters relating to employees and former employees (and their respective dependents and beneficiaries) who are or were associated with the Company, including those who became employees of Mural in connection with the Separation; the allocation of assets and liabilities generally relating to employees, employment or service-related matters and employee benefit plans; other human resources, employment and employee benefits matters; and the treatment of equity-based awards granted by the Company prior to the Separation.

The Company entered into two transition services agreements with Mural. On November 13, 2023, Alkermes, Inc., a wholly-owned subsidiary of the Company (“Alkermes US”), and Mural Oncology, Inc., a wholly-owned subsidiary of Mural (“Mural US”), entered into one transition services agreement, pursuant to which the Company and its subsidiaries will provide, on an interim, transitional basis, various services to Mural and its subsidiaries, and a second transition services agreement, pursuant to which Mural and its subsidiaries will provide certain services to the Company and its subsidiaries, in each case for a term of two years, unless earlier terminated in accordance with the terms of the applicable agreement.

Discontinued Operations

The Company determined that the Separation met the criteria for classification of the oncology business as discontinued operations in accordance with Topic 205.The following summarizes the loss from discontinued operations for the three and six months ended June 30, 2024 and 2023:

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Operating expenses from discontinued operations |  |  |  |  |  |  |  |  |  |  |  |
Cost of goods manufactured |  | $ | — |  |  | $ | 11 |  |  | $ | — |  |  | $ | 22 |
Research and development |  |  | 3,913 |  |  |  | 32,563 |  |  |  | 6,429 |  |  |  | 62,430 |
Selling, general and administrative |  |  | — |  |  |  | 9,502 |  |  |  | — |  |  |  | 16,146 |
Total operating expenses from discontinued operations |  |  | 3,913 |  |  |  | 42,076 |  |  |  | 6,429 |  |  |  | 78,598 |
Operating loss from discontinued operations |  |  | (3,913 | ) |  |  | (42,076 | ) |  |  | (6,429 | ) |  |  | (78,598 | )
Income tax benefit from discontinued operations |  |  | (613 | ) |  |  | (40 | ) |  |  | (1,009 | ) |  |  | (6,767 | )
Net loss and comprehensive loss from discontinued operations |  | $ | (3,300 | ) |  | $ | (42,036 | ) |  | $ | (5,420 | ) |  | $ | (71,831 | )

13

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

There were no assets and $4.5 million of liabilities related to the Separation at December 31, 2023. All assets related to the Separation were transferred to Mural as of the Separation Date. The $4.5 million of liabilities classified as “Liabilities related to discontinued operations” in the accompanying condensed consolidated balance sheet related to bonus amounts accrued for employees that transferred to Mural during 2023 and through the Separation Date that were paid by the Company in the first quarter of 2024, in accordance with the terms of the Employee Matters Agreement.

The following table summarizes the significant non-cash items and capital expenditures of the discontinued operations that are included in the accompanying condensed consolidated statements of cash flows for the six months ended June 30, 2023:

|  | Six Months Ended |
(In thousands) |  | June 30, 2023 |
OPERATING ACTIVITIES: |  |  |
Depreciation |  | $ | 240 |
Share-based compensation expense |  |  | 2,937 |
Right-of-use assets |  |  | 4,364 |
Operating lease liabilities |  |  | (2,927 | )
INVESTING ACTIVITIES: |  |  |
Additions of property, plant and equipment |  | $ | (173 | )

4. REVENUE FROM CONTRACTS WITH CUSTOMERS

Product Sales, Net

During the three and six months ended June 30, 2024 and 2023, the Company recorded product sales, net, as follows:

|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
VIVITROL |  | $ | 111,873 |  |  | $ | 102,071 |  |  | $ | 209,532 |  |  | $ | 198,730 |
ARISTADA and ARISTADA INITIO |  |  | 86,049 |  |  |  | 82,409 |  |  |  | 164,919 |  |  |  | 162,486 |
LYBALVI |  |  | 71,351 |  |  |  | 46,997 |  |  |  | 128,358 |  |  |  | 84,988 |
Total product sales, net |  | $ | 269,273 |  |  | $ | 231,477 |  |  | $ | 502,809 |  |  | $ | 446,204 |

Manufacturing and Royalty Revenues

During the three and six months ended June 30, 2024 and 2023, the Company recorded manufacturing and royalty revenues from its collaboration arrangements as follows:

|  | Three Months Ended June 30, 2024 |  |  | Six Months Ended June 30, 2024 |
(In thousands) |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |  |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |
Long-acting INVEGA products(1) |  | $ | — |  |  | $ | 78,739 |  |  | $ | 78,739 |  |  | $ | — |  |  | $ | 141,412 |  |  | $ | 141,412 |
VUMERITY |  |  | 9,863 |  |  |  | 25,371 |  |  |  | 35,234 |  |  |  | 21,987 |  |  |  | 44,501 |  |  |  | 66,488 |
Other |  |  | 10,417 |  |  |  | 5,468 |  |  |  | 15,885 |  |  |  | 28,323 |  |  |  | 10,468 |  |  |  | 38,791 |
|  | $ | 20,280 |  |  | $ | 109,578 |  |  | $ | 129,858 |  |  | $ | 50,310 |  |  | $ | 196,381 |  |  | $ | 246,691 |

|  | Three Months Ended June 30, 2023 |  |  | Six Months Ended June 30, 2023 |
(In thousands) |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |  |  | Manufacturing Revenue |  |  | Royalty Revenue |  |  | Total |
Long-acting INVEGA products(1) |  | $ | — |  |  | $ | 321,239 |  |  | $ | 321,239 |  |  | $ | — |  |  | $ | 334,801 |  |  | $ | 334,801 |
VUMERITY |  |  | 10,369 |  |  |  | 21,926 |  |  |  | 32,295 |  |  |  | 23,018 |  |  |  | 38,151 |  |  |  | 61,169 |
Other |  |  | 21,529 |  |  |  | 10,850 |  |  |  | 32,379 |  |  |  | 47,320 |  |  |  | 15,485 |  |  |  | 62,805 |
|  | $ | 31,898 |  |  | $ | 354,015 |  |  | $ | 385,913 |  |  | $ | 70,338 |  |  | $ | 388,437 |  |  | $ | 458,775 |

(1)
“long-acting INVEGA products”: INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate).

14

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

In November 2021, the Company received notice of partial termination of an exclusive license agreement with Janssen Pharmaceutica N.V., a subsidiary of Johnson & Johnson (“Janssen Pharmaceutica”). Under this license agreement, the Company provided Janssen Pharmaceutica with rights to, and know-how, training and technical assistance in respect of, the Company’s small particle pharmaceutical compound technology, known as NanoCrystal technology, which was used to develop the long-acting INVEGA products. When the partial termination became effective in February 2022, Janssen Pharmaceutica ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA. Accordingly, the Company ceased recognizing royalty revenue related to sales of these products in February 2022. In April 2022, the Company commenced binding arbitration proceedings related to, among other things, Janssen Pharmaceutica’s partial termination of this license agreement and Janssen Pharmaceutica’s royalty and other obligations under the agreement. In May 2023, the arbitral tribunal (the “Tribunal”) in the arbitration proceedings issued a final award (the “Final Award”) which concluded the arbitration proceedings. The Final Award provided, among other things, that the Company was due back royalties and late-payment interest related to 2022 U.S. net sales of the long-acting INVEGA products and is entitled to 2023 and future royalty revenues from Janssen Pharmaceutica related to net sales of INVEGA SUSTENNA through August 20, 2024, INVEGA TRINZA through the second quarter of 2030 (but no later than May 2030 when the license agreement expires) and INVEGA HAFYERA through May 2030 (when the license agreement expires).

Following issuance of the Final Award and receipt in June 2023 of back royalties of $195.4 million, inclusive of $8.1 million in late-payment interest, the Company recognized such back royalties and resumed recognizing royalty revenue related to ongoing U.S. sales of the long-acting INVEGA products.

Contract Assets

Contract assets include unbilled amounts related to the manufacture of a product that, once complete, will be sold under certain of the Company’s manufacturing contracts. The amounts included in the contract assets table below are classified as “Current assets” in the accompanying condensed consolidated balance sheets, as they relate to manufacturing processes that are completed in ten days to eight weeks.

Total contract assets at June 30, 2024 were as follows:

(In thousands) |  | Contract Assets |
Contract assets at December 31, 2023 |  | $ | 706 |
Additions |  |  | 4,721 |
Transferred to receivables, net |  |  | (1,935 | )
Contract assets at June 30, 2024 |  | $ | 3,492 |

Contract Liabilities

Contract liabilities consist of contractual obligations related to deferred revenue. At June 30, 2024 and December 31, 2023, $3.3 million and $2.7 million of the contract liabilities, respectively, were classified as “Contract liabilities–short-term” in the accompanying condensed consolidated balance sheets and no ne and $2.1 million of the contract liabilities, respectively, were classified as “Other long-term liabilities” in the accompanying condensed consolidated balance sheets.

Total contract liabilities at June 30, 2024 were as follows:

(In thousands) |  | Contract Liabilities |
Contract liabilities at December 31, 2023 |  | $ | 4,775 |
Additions |  |  | 34 |
Amounts recognized into revenue |  |  | (1,498 | )
Contract liabilities at June 30, 2024 |  | $ | 3,311 |

15

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

5. INVESTMENTS

Investments consisted of the following (in thousands):

|  |  |  |  | Gross Unrealized |  |  |  |
|  |  |  |  |  |  |  | Losses |  |  |  |
|  | Amortized |  |  |  |  |  | Less than |  |  | Greater than |  |  | Estimated |
June 30, 2024 |  | Cost |  |  | Gains |  |  | One Year |  |  | One Year |  |  | Fair Value |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency debt securities |  | $ | 214,637 |  |  | $ | 97 |  |  | $ | (69 | ) |  | $ | (340 | ) |  | $ | 214,325 |
Corporate debt securities |  |  | 126,865 |  |  |  | 132 |  |  |  | (52 | ) |  |  | (303 | ) |  |  | 126,642 |
Total short-term investments |  |  | 341,502 |  |  |  | 229 |  |  |  | (121 | ) |  |  | (643 | ) |  |  | 340,967 |
Long-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency debt securities |  |  | 42,808 |  |  |  | — |  |  |  | (107 | ) |  |  | (99 | ) |  |  | 42,602 |
Corporate debt securities |  |  | 43,853 |  |  |  | — |  |  |  | (136 | ) |  |  | (62 | ) |  |  | 43,655 |
|  |  | 86,661 |  |  |  | — |  |  |  | (243 | ) |  |  | (161 | ) |  |  | 86,257 |
Held-to-maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit |  |  | 145 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 145 |
Total long-term investments |  |  | 86,806 |  |  |  | — |  |  |  | (243 | ) |  |  | (161 | ) |  |  | 86,402 |
Total investments |  | $ | 428,308 |  |  | $ | 229 |  |  | $ | (364 | ) |  | $ | (804 | ) |  | $ | 427,369 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency debt securities |  | $ | 199,708 |  |  | $ | 758 |  |  | $ | (36 | ) |  | $ | (611 | ) |  | $ | 199,819 |
Corporate debt securities |  |  | 112,055 |  |  |  | 703 |  |  |  | (15 | ) |  |  | (536 | ) |  |  | 112,207 |
Non-U.S. government debt securities |  |  | 4,004 |  |  |  | — |  |  |  | — |  |  |  | (8 | ) |  |  | 3,996 |
Total short-term investments |  |  | 315,767 |  |  |  | 1,461 |  |  |  | (51 | ) |  |  | (1,155 | ) |  |  | 316,022 |
Long-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency debt securities |  |  | 19,392 |  |  |  | — |  |  |  | (27 | ) |  |  | (315 | ) |  |  | 19,050 |
Corporate debt securities |  |  | 19,306 |  |  |  | — |  |  |  | — |  |  |  | (289 | ) |  |  | 19,017 |
|  |  | 38,698 |  |  |  | — |  |  |  | (27 | ) |  |  | (604 | ) |  |  | 38,067 |
Held-to-maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit |  |  | 1,820 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,820 |
Total long-term investments |  |  | 40,518 |  |  |  | — |  |  |  | (27 | ) |  |  | (604 | ) |  |  | 39,887 |
Total investments |  | $ | 356,285 |  |  | $ | 1,461 |  |  | $ | (78 | ) |  | $ | (1,759 | ) |  | $ | 355,909 |

At June 30, 2024, the Company reviewed its investment portfolio to assess whether the unrealized losses on its available-for-sale investments were temporary. Investments with unrealized losses consisted of corporate debt securities and debt securities issued and backed by U.S. agencies and the U.S. government. At June 30, 2024, 175 of the Company’s 272 investment securities were in an unrealized loss position and had an aggregate estimated fair value of $286.1 million. The Company’s corporate debt securities investments have a minimum rating of A2 (Moody’s)/A (Standard and Poor’s). The primary reason for the unrealized losses in the Company’s investment portfolio is that its investments are fixed-rate securities acquired in a rising interest rate environment. In making the determination whether the decline in fair value of these securities was temporary, the Company evaluated whether it intended to sell the security and whether it was more likely than not that the Company would be required to sell the security before recovering its amortized cost basis. The Company has the intent and ability to hold these investments until recovery, which may be at maturity.

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ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

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

|  | Six Months Ended June 30, |
(In thousands) |  | 2024 |  |  | 2023 |
Proceeds from the sales and maturities of investments |  | $ | 138,947 |  |  | $ | 240,544 |
Realized gains |  | $ | — |  |  | $ | — |
Realized losses |  | $ | — |  |  | $ | — |

The Company’s available-for-sale and held-to-maturity securities at June 30, 2024 had contractual maturities in the following periods:

|  | Available-for-sale |  |  | Held-to-maturity |
|  | Amortized |  |  | Estimated |  |  | Amortized |  |  | Estimated |
(In thousands) |  | Cost |  |  | Fair Value |  |  | Cost |  |  | Fair Value |
Within 1 year |  | $ | 244,162 |  |  | $ | 243,407 |  |  | $ | 145 |  |  | $ | 145 |
After 1 year through 5 years |  |  | 184,001 |  |  |  | 183,817 |  |  |  | — |  |  |  | — |
Total |  | $ | 428,163 |  |  | $ | 427,224 |  |  | $ | 145 |  |  | $ | 145 |

6. FAIR VALUE

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

|  | June 30, |  |  |  |  |  |  |  |  |  |
(In thousands) |  | 2024 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency debt securities |  | $ | 256,927 |  |  | $ | 224,306 |  |  | $ | 32,621 |  |  | $ | — |
Corporate debt securities |  |  | 170,297 |  |  |  | — |  |  |  | 170,297 |  |  |  | — |
Total |  | $ | 427,224 |  |  | $ | 224,306 |  |  | $ | 202,918 |  |  | $ | — |

|  | December 31, |  |  |  |  |  |  |  |  |  |
|  | 2023 |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents |  | $ | 34,316 |  |  | $ | 34,316 |  |  | $ | — |  |  | $ | — |
U.S. government and agency debt securities |  |  | 218,869 |  |  |  | 181,041 |  |  |  | 37,828 |  |  |  | — |
Corporate debt securities |  |  | 131,224 |  |  |  | — |  |  |  | 131,224 |  |  |  | — |
Non-U.S. government debt securities |  |  | 3,996 |  |  |  | — |  |  |  | 3,996 |  |  |  | — |
Total |  | $ | 388,405 |  |  | $ | 215,357 |  |  | $ | 173,048 |  |  | $ | — |

The Company transfers its financial assets and liabilities, measured at fair value on a recurring basis, between the fair value hierarchies at the end of each reporting period.

There were no transfers of any securities between levels during the six months ended June 30, 2024. At June 30, 2024, the Company had no investments with fair values that were determined using Level 3 inputs.

The Company’s investments classified as Level 2 within the fair value hierarchy were initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing market-observable data. The market-observable data included reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validated the prices developed using the market-observable data by obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active.

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

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ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

The estimated fair value of the Company’s long-term debt under its amended and restated credit agreement (such debt, the “2026 Term Loans”), which was based on quoted market price indications (Level 2 in the fair value hierarchy) and which may not be representative of actual values that could have been, or will be, realized in the future, was $290.3 million and $291.0 million at June 30, 2024 and December 31, 2023, respectively.

7. INVENTORY

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

|  | June 30, |  |  | December 31, |
(In thousands) |  | 2024 |  |  | 2023 |
Raw materials |  | $ | 76,117 |  |  | $ | 71,416 |
Work in process |  |  | 69,093 |  |  |  | 68,843 |
Finished goods(1) |  |  | 49,521 |  |  |  | 46,147 |
Total inventory |  | $ | 194,731 |  |  | $ | 186,406 |

(1)
At June 30, 2024 and December 31, 2023, the Company had $37.8 million and $33.9 million, respectively, of finished goods inventory located at its third-party warehouse and shipping service provider.

8. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

|  | June 30, |  |  | December 31, |
(In thousands) |  | 2024 |  |  | 2023 (1) |
Land |  | $ | 957 |  |  | $ | 957 |
Building and improvements |  |  | 131,819 |  |  |  | 132,735 |
Furniture, fixtures and equipment |  |  | 242,823 |  |  |  | 237,728 |
Leasehold improvements |  |  | 39,971 |  |  |  | 39,893 |
Construction in progress |  |  | 49,354 |  |  |  | 45,791 |
Subtotal |  |  | 464,924 |  |  |  | 457,104 |
Less: accumulated depreciation |  |  | (242,186 | ) |  |  | (230,161 | )
Total property, plant and equipment, net |  | $ | 222,738 |  |  | $ | 226,943 |

(1)
In connection with the sale of the Athlone Facility, $92.2 million of the Company’s property, plant and equipment was classified as “Assets held for sale” in the accompanying condensed consolidated balance sheet at December 31, 2023 and was not included in these amounts.

9. GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets consisted of the following:

|  |  |  | June 30, 2024 |
(In thousands) |  | Weighted Amortizable Life (Years) |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |
Goodwill |  |  |  | $ | 83,027 |  |  | $ | — |  |  | $ | 83,027 |
Finite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |
Collaboration agreements |  | 12 |  | $ | 465,590 |  |  | $ | (465,590 | ) |  | $ | — |
Capitalized IP |  | 11-13 |  |  | 118,160 |  |  |  | (117,242 | ) |  |  | 918 |
Total |  |  |  | $ | 583,750 |  |  | $ | (582,832 | ) |  | $ | 918 |

In connection with the sale of the Athlone Facility, the Company reviewed Topic 805 and determined that the Athlone Facility constituted a business and, accordingly, $2.0 million of the Company’s goodwill was allocated to the Athlone Facility and was classified as “Assets held for sale” in the accompanying condensed consolidated balance sheet as of December 31, 2023.

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ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

10. LEASES

Future lease payments under non-cancelable leases at June 30, 2024 consisted of the following:

|  | June 30, |
(In thousands) |  | 2024 |
2024 |  | $ | 5,070 |
2025 |  |  | 10,217 |
2026 |  |  | 10,288 |
2027 |  |  | 9,507 |
2028 |  |  | 9,574 |
Thereafter |  |  | 59,695 |
Total operating lease payments |  | $ | 104,351 |
Less: imputed interest |  |  | (25,809 | )
Total operating lease liabilities |  | $ | 78,542 |

At June 30, 2024, the weighted average incremental borrowing rate and the weighted average remaining lease term for all operating leases held by the Company were 4.2% and 7.9 years, respectively. Cash paid for lease liabilities was $2.5 million and $5.0 million during the three and six months ended June 30, 2024, respectively, as compared to $2.5 million and $5.3 million during the three and six months ended June 30, 2023, respectively. The Company recorded operating lease expense from continuing operations of $1.8 million and $3.6 million during the three and six months ended June 30, 2024, respectively, as compared to $2.8 million and $5.6 million during the three and six months ended June 30, 2023, respectively.

11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

|  | June 30, |  |  | December 31, |
(In thousands) |  | 2024 |  |  | 2023 |
Accounts payable |  | $ | 104,747 |  |  | $ | 65,649 |
Accrued compensation |  |  | 49,390 |  |  |  | 83,107 |
Accrued other |  |  | 85,637 |  |  |  | 91,805 |
Total accounts payable and accrued expenses |  | $ | 239,774 |  |  | $ | 240,561 |

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

|  | June 30, |  |  | December 31, |
(In thousands) |  | 2024 |  |  | 2023 |
Medicaid rebates |  | $ | 212,995 |  |  | $ | 213,845 |
Product discounts |  |  | 16,207 |  |  |  | 15,121 |
Medicare Part D |  |  | 18,246 |  |  |  | 20,569 |
Other |  |  | 16,009 |  |  |  | 14,106 |
Total accrued sales discounts, allowances and reserves |  | $ | 263,457 |  |  | $ | 263,641 |

Included in accounts payable was approximately $50.3 million and $34.5 million of amounts payable related to state U.S. Medicaid rebates as of June 30, 2024 and December 31, 2023, respectively.

12. LONG-TERM DEBT

Long-term debt consisted of the following:

|  | June 30, |  |  | December 31, |
(In thousands) |  | 2024 |  |  | 2023 |
2026 Term Loans, due March 12, 2026 |  | $ | 289,459 |  |  | $ | 290,730 |
Less: current portion |  |  | (3,000 | ) |  |  | (3,000 | )
Long-term debt |  | $ | 286,459 |  |  | $ | 287,730 |

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ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

The 2026 Term Loans mature on March 12, 2026. The 2026 Term Loans bear interest at the Secured Overnight Financing Rate plus a credit spread adjustment applicable to the interest period and an applicable margin of 2.50% with a floor of 0.5%.

The 2026 Term Loans have an incremental facility capacity in the amount of $175.0 million plus additional amounts, provided that the Company meets certain conditions, including a specified leverage ratio. The Company was in compliance with its debt covenants at June 30, 2024.

13. SHAREHOLDERS’ EQUITY

In February 2024, the Company announced approval by its board of directors of a new share repurchase program authorizing the Company to repurchase its ordinary shares in an aggregate amount of up to $400.0 million (exclusive of any fees, commissions or other expenses related to such repurchases) from time to time (the “Repurchase Program”). The specific timing and amounts of repurchases under the Repurchase Program will depend on a variety of factors, including but not limited to ongoing assessments of the Company’s needs, alternative investment opportunities, the market price of its ordinary shares and general market conditions. The Repurchase Program has no set expiration date and may be suspended or discontinued at any time.

During the six months ended June 30, 2024, the Company repurchased approximately 3.5 million of its ordinary shares under the Repurchase Program at an average purchase price of $24.22 per share, resulting in a total cost of $84.7 million. All ordinary shares repurchased were returned to treasury. As of June 30, 2024, the remaining amount authorized under the Repurchase Program was $315.3 million.

14. SHARE-BASED COMPENSATION

The following table presents share-based compensation expense from continuing and discontinued operations included in the accompanying condensed consolidated statements of operations and comprehensive income:

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Cost of goods manufactured and sold |  | $ | (279 | ) |  | $ | 2,921 |  |  | $ | 2,627 |  |  | $ | 5,603 |
Research and development |  |  | 6,021 |  |  |  | 6,687 |  |  |  | 16,299 |  |  |  | 12,451 |
Selling, general and administrative |  |  | 14,859 |  |  |  | 17,579 |  |  |  | 34,430 |  |  |  | 30,156 |
Share-based compensation expense from continuing operations |  |  | 20,601 |  |  |  | 27,187 |  |  |  | 53,356 |  |  |  | 48,210 |
Cost of goods manufactured and sold |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Research and development |  |  | — |  |  |  | 819 |  |  |  | — |  |  |  | 1,962 |
Selling, general and administrative |  |  | — |  |  |  | 498 |  |  |  | — |  |  |  | 975 |
Share-based compensation expense from discontinued operations |  |  | — |  |  |  | 1,317 |  |  |  | — |  |  |  | 2,937 |
Total share-based compensation expense |  | $ | 20,601 |  |  | $ | 28,504 |  |  | $ | 53,356 |  |  | $ | 51,147 |

At June 30, 2024 and December 31, 2023, $3.3 million and $3.2 million, respectively, of share-based compensation expense was capitalized and recorded as “Inventory” in the accompanying condensed consolidated balance sheets.

In February 2021, the compensation committee of the Company’s board of directors approved the grant of performance-based restricted stock unit awards to employees of the Company at the Senior Vice President level and above, in each case subject to vesting based on the achievement of certain financial, commercial and R&D performance criteria to be assessed over a performance period of three years, and subject, following the end of such three-year performance period, to upward or downward adjustment based on a market condition tied to relative share price performance over the three-year performance period. On February 8, 2024, the compensation committee of the Company’s board of directors determined that the Company partially achieved the financial performance criteria. This was considered a modification in accordance with FASB ASC 718, Compensation—Stock Compensation (“Topic 718”) and resulted in a modification charge of approximately $6.8 million. On February 8, 2024, the compensation committee of the Company’s board of directors also determined that the Company achieved the pipeline performance criteria for these awards, resulting in a $2.6 million incremental share-based compensation expense, as it was deemed such pipeline performance criteria had been met. The share-based compensation expense related to these achievements was recognized in the first quarter of 2024.

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ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

15. EARNINGS (LOSS) PER ORDINARY SHARE

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

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
(In thousands) |  | 2024 |  |  | 2023 (1) |  |  | 2024 |  |  | 2023 (1) |
Numerator: |  |  |  |  |  |  |  |  |  |  |  |
Net income from continuing operations |  | $ | 94,658 |  |  | $ | 279,101 |  |  | $ | 133,606 |  |  | $ | 267,051 |
Net loss from discontinued operations |  |  | (3,300 | ) |  |  | (42,036 | ) |  |  | (5,420 | ) |  |  | (71,831 | )
Net income |  | $ | 91,358 |  |  | $ | 237,065 |  |  | $ | 128,186 |  |  | $ | 195,220 |
Denominator: |  |  |  |  |  |  |  |  |  |  |  |
Weighted average number of ordinary shares outstanding |  |  | 168,321 |  |  |  | 166,279 |  |  |  | 168,152 |  |  |  | 165,686 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |
Stock options |  |  | 839 |  |  |  | 1,896 |  |  |  | 1,284 |  |  |  | 1,634 |
Restricted stock unit awards |  |  | 1,817 |  |  |  | 3,378 |  |  |  | 2,524 |  |  |  | 3,427 |
Dilutive ordinary share equivalents |  |  | 2,656 |  |  |  | 5,274 |  |  |  | 3,808 |  |  |  | 5,061 |
Shares used in calculating diluted earnings (loss) per ordinary share |  |  | 170,977 |  |  |  | 171,553 |  |  |  | 171,960 |  |  |  | 170,747 |

(1)
Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

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

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Stock options |  |  | 14,049 |  |  |  | 12,138 |  |  |  | 12,339 |  |  |  | 12,288 |
Restricted stock unit awards |  |  | 2,765 |  |  |  | 1,180 |  |  |  | 2,507 |  |  |  | 3,024 |
Total |  |  | 16,814 |  |  |  | 13,318 |  |  |  | 14,846 |  |  |  | 15,312 |

16. INCOME TAXES

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

The Company recorded income tax provisions of $22.1 million and $30.0 million during the three and six months ended June 30, 2024, respectively, and of $2.7 million and $3.4 million during the three and six months ended June 30, 2023, respectively. The income tax provisions during the three and six months ended June 30, 2024 were primarily attributable to taxes on income earned in Ireland. The income tax provisions during the three and six months ended June 30, 2023 were primarily due to U.S. federal and state taxes on income earned in the U.S. As of June 30, 2023, the Company maintained a valuation allowance against its Irish deferred tax assets and did no t record an income tax provision in connection with the utilization of its net operating losses to offset the income earned in Ireland during the three and six months ended June 30, 2023.

The Company’s effective tax rate during the six months ended June 30, 2024 was 18.3%, which exceeds the Irish

21

ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

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. The income tax provision recorded as of June 30, 2024 took into account the estimated impact of the global minimum tax rate component, known as Pillar Two, of the Organization for Economic Co-operation and Development’s two-pillar plan on global tax reform, which became effective in Ireland as of January 1, 2024 for multinational companies with consolidated annual revenue of at least €750.0 million. The Company does not expect Pillar Two to have a material impact for the current year.

17. COMMITMENTS AND CONTINGENT LIABILITIES

Litigation

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated, the Company would accrue a liability for the estimated loss. Because of uncertainties related to claims and litigation, accruals are based on the Company’s best estimates, utilizing all available information. On a periodic basis, as additional information becomes available, or based on specific events such as the outcome of litigation or settlement of claims, the Company may reassess the potential liability related to these matters and may revise these estimates, which could result in material adverse adjustments to the Company’s operating results. At June 30, 2024, there were no potential material losses from claims, asserted or unasserted, or legal proceedings that the Company determined were probable of occurring.

INVEGA SUSTENNA ANDA Litigation

Janssen Pharmaceutica and Janssen Pharmaceuticals, Inc. initiated patent infringement lawsuits in the U.S. District Court for the District of New Jersey (the “NJ District Court”) in January 2018 against Teva Pharmaceuticals USA, Inc. (“Teva”) and Teva Pharmaceuticals Industries, Ltd. (“Teva PI”) (such lawsuit, the “Teva Lawsuit”), in August 2019 against Mylan Laboratories Limited (“Mylan Labs”) and other Mylan entities (the “Mylan Lawsuit”), in December 2019 against Pharmascience, Inc. (“Pharmascience”), Mallinckrodt plc, and SpecGX LLC (the “Pharmascience Lawsuit”), in February 2022 against Accord Healthcare, Inc., Accord Healthcare, Ltd. and Intas Pharmaceuticals, Ltd (“Accord” and such lawsuit, the “Accord Lawsuit”), and in June 2024 against Qilu Pharmaceutical Co., Ltd. and Qilu Pharma, Inc. (together, “Qilu”), and in the U.S. District Court for the District of Delaware (the “DE District Court”) in December 2021 against Tolmar Holding, Inc., Tolmar Pharmaceuticals, Inc., Tolmar Therapeutics, Inc., and Tolmar, Inc. (“Tolmar” and such lawsuit, the “Tolmar Lawsuit”), following the respective filings by each of Teva, Mylan Labs, Pharmascience, Accord, Qilu and Tolmar of an Abbreviated New Drug Application (“ANDA”) seeking approval from the FDA to market a generic version of INVEGA SUSTENNA before the expiration of U.S. Patent No. 9,439,906. In October 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Teva Lawsuit. In December 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Mylan Lawsuit, based on the parties’ prior stipulation to be bound by the judgment in the Teva Lawsuit. The Teva entities and Mylan Labs each filed notices of appeal of their respective judgments with the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit Court”), which were consolidated in January 2022 (the “Teva Appeal”). The Pharmascience Lawsuit and the Accord Lawsuit were administratively terminated in July 2022, pending the outcome of the Teva Appeal. In March 2024, the DE District Court issued a decision in the Tolmar Lawsuit, following which both parties filed notices of appeal with the Federal Circuit Court. On April 1, 2024, the Federal Circuit Court issued a decision in the Teva Appeal, affirming in part and vacating and remanding in part the NJ District Court’s judgment, and on June 14, 2024, opening briefs were filed with the NJ District Court for the remanded matters. The Company is not a party to any of these proceedings.

INVEGA TRINZA ANDA Litigation

In September 2020, Janssen Pharmaceutica, Janssen Pharmaceuticals, Inc., and Janssen Research & Development, LLC initiated a patent infringement lawsuit in the NJ District Court against Mylan Labs, Mylan, and Mylan Institutional LLC following the filing by Mylan Labs of an ANDA seeking approval from the FDA to market a generic version of INVEGA TRINZA before the expiration of U.S. Patent No. 10,143,693 (the “’693 Patent”). Requested judicial remedies include recovery of litigation costs and injunctive relief. In May 2023, the NJ District Court issued an opinion in favor of the Janssen entities on the issues of infringement and validity of the ’693 Patent and the Mylan entities filed a notice of appeal of the decision. The Company is not a party to this proceeding.

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ALKERMES PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Unaudited) (Continued)

VUMERITY ANDA Litigation

In July 2023, Biogen Inc., Biogen Swiss Manufacturing GmbH and Alkermes Pharma Ireland Limited filed a patent infringement lawsuit in the DE District Court against Zydus Worldwide DMCC, Zydus Pharmaceuticals (USA) Inc. and Zydus Lifesciences Limited (collectively, “Zydus”) following the filing by Zydus of an ANDA seeking approval from the FDA to engage in the commercial manufacture, use or sale of a generic version of VUMERITY (diroximel fumarate) delayed-release capsules for oral use, 231 mg, before expiration of the Company’s U.S. Patent Nos. 8,669,281; 9,090,558; and 10,080,733. The filing of the lawsuit triggered a stay of FDA approval of the ANDA for up to 30 months in accordance with the U.S. Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”). A bench trial is scheduled to begin on July 28, 2025.

Government Matters

The Company has received a subpoena and civil investigative demands from U.S. state and federal governmental authorities for documents related to VIVITROL. The Company is cooperating with the investigations.

Product Liability and Other Legal Proceedings

The Company is involved in litigation and other legal proceedings incidental to its normal business activities, including a product liability case alleging that the FDA-approved VIVITROL labeling was inadequate and that VIVITROL caused the individual to suffer from opioid overdose and death. The Company intends to vigorously defend itself in these matters.

In addition, in January 2023, Acorda filed a petition with the U.S. District Court for the Southern District of New York (the “NY Southern District Court”) asking the court to confirm in part and modify in part the final arbitral award rendered by an arbitration panel in October 2022 and, as part of the requested modification, seeking an additional approximately $66.0 million in damages. In August 2023, the NY Southern District Court confirmed the final arbitral award and declined to modify the final award to increase the damages awarded thereunder. In September 2023, Acorda filed a notice of appeal of the NY Southern District Court decision to the Federal Circuit Court, and the Company filed a motion to transfer the appeal to the U.S. Court of Appeals for the Second Circuit. In January 2024, the Federal Circuit Court denied without prejudice the Company’s motion to transfer the appeal and instructed the parties to brief the jurisdictional question as part of the merits appeal. Briefing in the Federal Circuit Court is complete, and the matter is pending decision.

While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing proceedings would have a material adverse effect on the Company’s business or financial condition.

Guarantees

In connection with the Separation, the Company entered into an assignment and assumption of lease agreement (the “Assignment”) pursuant to which Alkermes US assigned to Mural US an operating lease for approximately 180,000 square feet of corporate office space, administrative areas and laboratories located at 852 Winter Street in Waltham, Massachusetts (the “852 Winter Street Lease”), which is described in more detail in Note 10, Leases in the “Notes to Consolidated Financial Statements” in the Annual Report. Although all of the rights, title and interest in, to and under the 852 Winter Street Lease were transferred to Mural US as of November 15, 2023 pursuant to the Assignment, the Company ratified and reaffirmed for the remainder of the lease term its guarantor obligations in respect of the lease under that certain Guaranty dated as of May 16, 2014. This lease expires in 2026 and includes a tenant option to extend the term for an additional five-year period. Upon completion of the Separation, the Assignment was accounted for as a termination of the original lease and the Company de-recognized the right-of-use asset and lease liability related to the 852 Winter Street Lease. At June 30, 2024, the fair value of the guarantee was no t material to the Company.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the accompanying condensed consolidated financial statements and related notes beginning on page 5 in this Form 10-Q, and “Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited financial statements and notes thereto accompanying our Annual Report.

Executive Summary

Net income from continuing operations was $94.7 million and $133.6 million or $0.56 and 0.79 per ordinary share—basic and $0.55 and $0.78 per ordinary share—diluted, for the three months and six months ended June 30, 2024, respectively, compared to net income from continuing operations of $279.1 million and $267.1 million or $1.68 and $1.61 per ordinary share—basic and $1.63 and $1.56 per ordinary share—diluted, for the three and six months ended June 30, 2023, respectively.

The decreases in net income from continuing operations during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to decreases of $256.1 million and $212.1 million, respectively, in manufacturing and royalty revenues, partially offset by increases of $37.8 million and $56.6 million, respectively, in product sales, net and decreases of $46.9 million and $38.4 million, respectively, in operating expenses.

The decreases in manufacturing and royalty revenues during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to the receipt in June 2023 of back royalties and interest in respect of 2022 U.S. sales of the long-acting INVEGA products, following the successful outcome of the arbitration proceedings related to such products. The decreases in operating expenses during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to decreases of $27.6 million and $15.7 million, respectively, in selling, general and administrative expenses, $8.6 million and $4.7 million, respectively, in research and development expenses and $8.9 million and $16.6 million, respectively, in amortization of acquired intangible assets.

These items are discussed in greater detail later in the “Results of Operations” section in this “Part I, Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q.

Business Update

On May 1, 2024, we completed the sale of the Athlone Facility to Novo. We also entered into subcontracting arrangements with Novo to continue certain development and manufacturing activities currently performed at the Athlone Facility for a period of time after the closing of the transaction; these activities may continue through the end of 2025.

Products

Marketed Products

The key marketed products discussed below have generated, or are expected to generate, significant revenues for us. See the descriptions of the marketed products below and “Part I, Item 1A—Risk Factors” in our Annual Report for important factors that could adversely affect our marketed products. See the “Patents and Proprietary Rights” section in “Part I, Item 1—Business” in our Annual Report for information with respect to the IP protection for these marketed products.

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

Proprietary Products

Product |  | Indication(s) |  |  | Territory
|  | Initiation or re-initiation of ARISTADA for the treatment of Schizophrenia |  |  | U.S.
| Schizophrenia |  |  | U.S.
|  | Schizophrenia; Bipolar I disorder |  |  | U.S.
|  | Alcohol dependence; Opioid dependence |  |  | U.S.

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

Key Third-Party Products Using Our Proprietary Technologies

Product |  | Indication(s) |  | Licensee |  | Licensed Territory
INVEGA SUSTENNA / XEPLION |  | INVEGA SUSTENNA: Schizophrenia; Schizoaffective disorder XEPLION: Schizophrenia |  | Janssen Pharmaceutica (together with Janssen Pharmaceuticals, Inc., Janssen International and their affiliates “Janssen”) |  | Worldwide
INVEGA TRINZA / TREVICTA |  | Schizophrenia |  | Janssen |  | Worldwide
INVEGA HAFYERA / BYANNLI |  | Schizophrenia |  | Janssen |  | Worldwide

Our Key Licensed Product

Product |  | Indication(s) |  | Licensee |  | Licensed Territory
VUMERITY |  | Multiple sclerosis |  | Biogen |  | Worldwide

Proprietary Products

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

ARISTADA

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

ARISTADA INITIO

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

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LYBALVI

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

VIVITROL

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

Products Using Our Proprietary Technologies and Licensed Product

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

Products Using Our Proprietary Technologies

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

The long-acting INVEGA products are long-acting atypical antipsychotics owned and commercialized worldwide by Janssen. We believe that these products incorporate our technologies.

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

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

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

For a discussion of legal proceedings related to certain of the patents covering INVEGA SUSTENNA and INVEGA TRINZA, see Note 17, Commitments and Contingent Liabilities in 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 “We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”

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Licensed Product

VUMERITY

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

Under our license and collaboration agreement with Biogen, Biogen holds the exclusive, worldwide license to develop and commercialize VUMERITY. For more information about the license and collaboration agreement with Biogen, see the “Collaborative Arrangements—Biogen” section in “Part I, Item 1—Business” in our Annual Report. For a discussion of legal proceedings related to certain of the patents covering VUMERITY, see Note 17, Commitments and Contingent Liabilities in 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 “We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”

Key Development Program

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

ALKS 2680

ALKS 2680 is a novel, investigational, oral, selective orexin 2 receptor (“OX2R”) agonist in development as a once-daily treatment for narcolepsy. Orexin neuropeptides are important regulators of the sleep/wake cycle through OX2R activation, and loss of orexinergic neurons in the brain is associated with excessive daytime sleepiness and cataplexy in narcolepsy. ALKS 2680 was designed to address the underlying pathology of narcolepsy with the goal of improving duration of wakefulness and providing cataplexy control. Once-daily oral administration of ALKS 2680 was evaluated in a phase 1 study in healthy volunteers and patients with narcolepsy type 1, narcolepsy type 2 and idiopathic hypersomnia and is currently being evaluated in our Vibrance-1 phase 2 study in patients with narcolepsy type 1. We expect to initiate Vibrance-2, a phase 2 study in patients with narcolepsy type 2, in the third quarter of 2024.

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Results of Operations

As a result of the Separation, the historical results of our oncology business have been reflected as discontinued operations in our condensed consolidated financial statements through the Separation Date. Prior period results of operations and balance sheet information have been recast to reflect this presentation.

Product Sales, Net

Our product sales, net, consist of sales of VIVITROL, ARISTADA and ARISTADA INITIO, and LYBALVI, primarily to wholesalers, specialty distributors and pharmacies. The following table presents the adjustments deducted from product sales, gross to arrive at product sales, net, for sales of VIVITROL, ARISTADA and ARISTADA INITIO, and LYBALVI during the three and six months ended June 30, 2024 and 2023:

| Three Months Ended |  |  |  | Six Months Ended |  |
| June 30, |  |  |  | June 30, |  |
(In millions, except for % of Sales) | 2024 |  |  | % of Sales |  |  |  | 2023 |  |  | % of Sales |  |  |  | 2024 |  |  | % of Sales |  |  |  | 2023 |  |  | % of Sales |  |
Product sales, gross | $ | 533.0 |  |  |  | 100.0 |  | % |  | $ | 469.8 |  |  |  | 100.0 |  | % |  | $ | 1,000.3 |  |  |  | 100.0 |  | % |  | $ | 903.7 |  |  |  | 100.0 |  | %
Adjustments to product sales, gross: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Medicaid rebates |  | (122.6 | ) |  |  | (23.0 | ) | % |  |  | (112.4 | ) |  |  | (23.9 | ) | % |  |  | (227.6 | ) |  |  | (22.8 | ) | % |  |  | (210.3 | ) |  |  | (23.3 | ) | %
Chargebacks |  | (56.5 | ) |  |  | (10.6 | ) | % |  |  | (46.9 | ) |  |  | (10.0 | ) | % |  |  | (107.0 | ) |  |  | (10.7 | ) | % |  |  | (92.5 | ) |  |  | (10.2 | ) | %
Product discounts |  | (38.4 | ) |  |  | (7.2 | ) | % |  |  | (34.8 | ) |  |  | (7.4 | ) | % |  |  | (72.7 | ) |  |  | (7.3 | ) | % |  |  | (69.1 | ) |  |  | (7.6 | ) | %
Medicare Part D |  | (21.5 | ) |  |  | (4.0 | ) | % |  |  | (18.2 | ) |  |  | (3.9 | ) | % |  |  | (38.9 | ) |  |  | (3.9 | ) | % |  |  | (37.1 | ) |  |  | (4.1 | ) | %
Other |  | (24.7 | ) |  |  | (4.6 | ) | % |  |  | (25.9 | ) |  |  | (5.5 | ) | % |  |  | (51.3 | ) |  |  | (5.1 | ) | % |  |  | (48.5 | ) |  |  | (5.4 | ) | %
Total adjustments |  | (263.7 | ) |  |  | (49.5 | ) | % |  |  | (238.3 | ) |  |  | (50.7 | ) | % |  |  | (497.5 | ) |  |  | (49.8 | ) | % |  |  | (457.5 | ) |  |  | (50.6 | ) | %
Product sales, net | $ | 269.3 |  |  |  | 50.5 |  | % |  | $ | 231.5 |  |  |  | 49.3 |  | % |  | $ | 502.8 |  |  |  | 50.2 |  | % |  | $ | 446.2 |  |  |  | 49.4 |  | %

VIVITROL product sales, gross, increased by 9% and 6% during the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023, due to increases of 6% and 2%, respectively, in the number of units sold and a 3.2% increase in the selling price that went into effect in January 2024. ARISTADA and ARISTADA INITIO product sales, gross, increased by 4% and 2% during the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. The increase in ARISTADA and ARISTADA INITIO during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, was due to an increase of 2% in the number of units sold and a 3.0% increase in the selling price that went into effect in January 2024. The increase in ARISTADA and ARISTADA INITIO during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was primarily due to the January 2024 increase in the selling price. LYBALVI product sales, gross, increased by 57% and 56% during the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023, due to increases of 52% and 51%, respectively, in the number of units sold and increases in the selling price of 3.8% and 3.0% that went into effect in January 2024 and July 2023, respectively.

The following table compares product sales, net earned during the three and six months ended June 30, 2024 and 2023:

| Three Months Ended |  |  |  |  |  | Six Months Ended |  |  |  |
| June 30, |  |  |  |  |  | June 30, |  |  |  |
(In millions) | 2024 |  |  | 2023 |  |  | Change |  |  | 2024 |  |  | 2023 |  |  | Change |
VIVITROL | $ | 111.9 |  |  | $ | 102.0 |  |  | $ | 9.9 |  |  | $ | 209.5 |  |  | $ | 198.7 |  |  | $ | 10.8 |
ARISTADA and ARISTADA INITIO |  | 86.0 |  |  |  | 82.4 |  |  |  | 3.6 |  |  |  | 164.9 |  |  |  | 162.5 |  |  |  | 2.4 |
LYBALVI |  | 71.4 |  |  |  | 47.1 |  |  |  | 24.3 |  |  |  | 128.4 |  |  |  | 85.0 |  |  |  | 43.4 |
Product sales, net | $ | 269.3 |  |  | $ | 231.5 |  |  | $ | 37.8 |  |  | $ | 502.8 |  |  | $ | 446.2 |  |  | $ | 56.6 |

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Manufacturing and Royalty Revenues

The following table compares manufacturing and royalty revenues earned during the three and six months ended June 30, 2024 and 2023:

| Three Months Ended |  |  |  |  |  | Six Months Ended |  |  |  |
| June 30, |  |  |  |  |  | June 30, |  |  |  |
(In millions) | 2024 |  |  | 2023 |  |  | Change |  |  | 2024 |  |  | 2023 |  |  | Change |
Manufacturing and royalty revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-acting INVEGA products | $ | 78.7 |  |  | $ | 321.2 |  |  | $ | (242.5 | ) |  | $ | 141.4 |  |  | $ | 334.8 |  |  | $ | (193.4 | )
VUMERITY |  | 35.2 |  |  |  | 32.3 |  |  |  | 2.9 |  |  |  | 66.5 |  |  |  | 61.2 |  |  |  | 5.3 |
Other |  | 16.0 |  |  |  | 32.4 |  |  |  | (16.4 | ) |  |  | 38.8 |  |  |  | 62.8 |  |  |  | (24.0 | )
Manufacturing and royalty revenues | $ | 129.9 |  |  | $ | 385.9 |  |  | $ | (256.0 | ) |  | $ | 246.7 |  |  | $ | 458.8 |  |  | $ | (212.1 | )

Our agreements with Janssen related to the long-acting INVEGA products provide for tiered royalty payments, which consist of a patent royalty and a know-how royalty, both of which are determined on a country-by-country basis. The patent royalty, which equals 1.5% of net sales, is payable in each country until the expiration of the last of the patents with valid claims applicable to the product in such country. The know-how royalty is a tiered royalty of 3.5% on calendar year net sales up to $250 million; 5.5% on calendar year net sales of between $250 million and $500 million; and 7.5% on calendar year net sales exceeding $500 million. The know-how royalty rate resets to 3.5% at the beginning of each calendar year and is payable until 15 years from the first commercial sale of a product in each individual country, subject to expiry of the agreement. For more information about the license agreement with Janssen in respect of the long-acting INVEGA products, see the “Collaborative Arrangements—Janssen” section in “Part I, Item 1—Business” in our Annual Report.

In November 2021, we received notice from Janssen of partial termination of our license agreement under which we provided Janssen with rights to, and know-how, training and technical assistance in respect of, our NanoCrystal technology, which was used to develop the long-acting INVEGA products. The partial termination became effective in February 2022, at which time Janssen ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA. Accordingly, we ceased recognizing royalty revenue related to sales of these products in February 2022. In April 2022, we commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of this license agreement and Janssen’s royalty and other obligations under the agreement. In May 2023, the Tribunal issued the Final Award, which concluded the arbitration proceedings. The Final Award provided that we were due back royalties and late-payment interest related to 2022 U.S. net sales of the long-acting INVEGA products, and are entitled to 2023 and future royalty revenues from Janssen related to net sales of INVEGA SUSTENNA through August 20, 2024, INVEGA TRINZA through the second quarter of 2030 (but no later than May 2030 when the license agreement expires) and INVEGA HAFYERA through May 2030 (when the license agreement expires).

The decreases in royalty revenues related to the long-acting INVEGA products during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to the receipt in June 2023 of back royalties of $195.4 million, inclusive of $8.1 million in late-payment interest, related to 2022 U.S. sales of the long-acting INVEGA products following the successful outcome of the arbitration proceedings described above. The decreases were partially offset by increases in royalty revenue related to worldwide net sales of the long-acting INVEGA products. During the three and six months ended June 30, 2024, Janssen’s worldwide net sales of the long-acting INVEGA products were $1,054.0 million and $2,110.0 million, respectively, as compared to $1,031.0 million and $2,075.0 million during the three and six months ended June 30, 2023, respectively.

We expect royalty revenues from net sales of the long-acting INVEGA products to decrease in the near-term, as the royalty revenues related to net sales of INVEGA SUSTENNA are expected to end on August 20, 2024, which we anticipate will have a significant impact on our INVEGA SUSTENNA royalty revenues during 2024. In addition, each of INVEGA SUSTENNA and INVEGA TRINZA are currently subject to Paragraph IV litigation in response to companies seeking to market generic versions of such products. Increased competition from new products or generic versions of these products may lead to reduced unit sales of such products and increased pricing pressure. For a discussion of these legal proceedings, see Note 17, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q, and for information about risks relating to these legal proceedings, see “Part I, Item 1A—Risk Factors” in our Annual Report, and specifically the section entitled “We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”

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We receive a 15% royalty on worldwide net sales of VUMERITY manufactured and packaged by us, subject to increases in such royalty rate for VUMERITY manufactured and/or packaged by Biogen or its designees, in the period that the end-market sales of VUMERITY occur. We also recognize manufacturing revenue related to VUMERITY at cost plus 15%, upon making available bulk batches of VUMERITY to Biogen and, to the extent we package such product, then also when packaged batches of VUMERITY are made available to Biogen. Manufacturing revenue from VUMERITY decreased by $0.5 million and $1.0 million during the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. The decreases were primarily due to reductions in the sales price. The reduction in the sales price related to our manufacturing revenue was primarily due to the removal of depreciation expense from the manufacturing cost base as the assets used to manufacture VUMERITY were classified as held for sale and transferred to Novo in connection with the sale of the Athlone Facility in the six months ended June 30, 2024. Royalty revenue related to VUMERITY increased by $3.4 million and $6.4 million during the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. The increases in royalty revenue were due to increases in end-market net sales of VUMERITY from $146.2 million and $254.3 million during the three and six months ended June 30, 2023, respectively, to $166.8 million and $293.3 million during the three and six months ended June 30, 2024, respectively.

Costs and Expenses

Cost of Goods Manufactured and Sold

| Three Months Ended |  |  |  |  |  | Six Months Ended |  |  |  |
| June 30, |  |  |  |  |  | June 30, |  |  |  |
(In millions) | 2024 |  |  | 2023 (1) |  |  | Change |  |  | 2024 |  |  | 2023 (1) |  |  | Change |
Cost of goods manufactured and sold | $ | 61.5 |  |  | $ | 63.2 |  |  | $ | (1.7 | ) |  | $ | 120.1 |  |  | $ | 121.4 |  |  | $ | (1.3 | )

(1)
Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

The decrease in the cost of goods manufactured and sold during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, was primarily due to a decrease of $2.6 million in the cost of goods manufactured for VIVITROL, primarily due to decreases in costs related to out-of-specification batches and investigation costs, and decreases in the cost of goods manufactured for certain legacy products due to reduced sales of such products. These decreases were partially offset by an increase in the number of units manufactured and sold for VIVITROL, as discussed above, and by an increase of $1.1 million in the cost of goods manufactured for ARISTADA and ARISTADA INITIO, primarily due to an increase in the number of units manufactured and sold, as discussed above.

The decrease in the cost of goods manufactured and sold during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was primarily due to decreases in the cost of goods manufactured for certain legacy products due to a decrease in sales of such products, as discussed above, partially offset by an increase of $1.3 million in the cost of goods manufactured for VIVITROL, primarily due to an increase in the number of units manufactured and sold, as discussed above.

Research and Development Expenses

For each of our R&D programs, we incur both external and internal expenses. External R&D expenses include fees for clinical and preclinical activities performed by contract research organizations, consulting fees, and costs related to laboratory services, the purchase of drug product materials and third-party manufacturing development activities. Internal R&D expenses include employee-related expenses, occupancy costs, depreciation and general overhead. We track external R&D expenses for each of our development programs; however, internal R&D expenses are not tracked by individual program as they can benefit multiple development programs or our products or technologies in general.

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The following table sets forth our external R&D expenses for the three and six months ended June 30, 2024 and 2023 relating to our then-current development programs and our internal R&D expenses, listed by the nature of such expenses:

|  | Three Months Ended |  |  |  |  |  | Six Months Ended |  |  |  |
|  | June 30, |  |  |  |  |  | June 30, |  |  |  |
(In millions) |  | 2024 |  |  | 2023 (1) |  |  | Change |  |  | 2024 |  |  | 2023 (1) |  |  | Change |
External R&D expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Development programs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ALKS 2680 |  | $ | 12.5 |  |  | $ | 10.6 |  |  | $ | 1.9 |  |  |  | 23.0 |  |  |  | 12.3 |  |  |  | 10.7 |
LYBALVI |  |  | 3.8 |  |  |  | 3.3 |  |  |  | 0.5 |  |  |  | 8.8 |  |  |  | 6.6 |  |  |  | 2.2 |
Other external R&D expenses |  |  | 10.0 |  |  |  | 12.0 |  |  |  | (2.0 | ) |  |  | 18.8 |  |  |  | 26.3 |  |  |  | (7.5 | )
Total external R&D expenses |  |  | 26.3 |  |  |  | 25.9 |  |  |  | 0.4 |  |  |  | 50.6 |  |  |  | 45.2 |  |  |  | 5.4 |
Internal R&D expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee-related |  |  | 26.3 |  |  |  | 31.0 |  |  |  | (4.7 | ) |  |  | 60.8 |  |  |  | 64.2 |  |  |  | (3.4 | )
Occupancy |  |  | 2.8 |  |  |  | 3.1 |  |  |  | (0.3 | ) |  |  | 5.8 |  |  |  | 6.0 |  |  |  | (0.2 | )
Depreciation |  |  | 1.4 |  |  |  | 2.3 |  |  |  | (0.9 | ) |  |  | 2.8 |  |  |  | 4.7 |  |  |  | (1.9 | )
Other |  |  | 2.8 |  |  |  | 5.9 |  |  |  | (3.1 | ) |  |  | 7.3 |  |  |  | 11.9 |  |  |  | (4.6 | )
Total internal R&D expenses |  |  | 33.3 |  |  |  | 42.3 |  |  |  | (9.0 | ) |  |  | 76.7 |  |  |  | 86.8 |  |  |  | (10.1 | )
Research and development expenses |  | $ | 59.6 |  |  | $ | 68.2 |  |  | $ | (8.6 | ) |  | $ | 127.3 |  |  | $ | 132.0 |  |  | $ | (4.7 | )

(1)
Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

These amounts are not necessarily predictive of future R&D expenses. In an effort to allocate our spending most effectively, we continually evaluate our products under development based on the performance of such products in preclinical and/or clinical trials, our expectations regarding the likelihood of their regulatory approval and our view of their future potential commercial viability, among other factors.

The increases in expenses related to ALKS 2680 during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to increases in spend related to the advancement of the development program for the product, including completion of our phase 1b proof-of-concept study and activities to prepare for the initiation of our phase 2 clinical studies for the product, the first of which was announced in April 2024 in patients with narcolepsy type 1, and the second of which we expect to initiate in patients with narcolepsy type 2 in the third quarter of 2024. The increases in expenses related to LYBALVI during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to increased spend on the pediatric studies related to the product, partially offset by decreased spend following the completion of the long-term safety and tolerability studies for the product. The decreases in other external R&D expenses during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to disciplined prioritization of R&D spend and activities associated with our research programs.

Selling, General and Administrative Expense

|  | Three Months Ended |  |  |  |  |  | Six Months Ended |  |  |  |
|  | June 30, |  |  |  |  |  | June 30, |  |  |  |
(In millions) |  | 2024 |  |  | 2023 (1) |  |  | Change |  |  | 2024 |  |  | 2023 (1) |  |  | Change |
Selling and marketing expense |  | $ | 119.7 |  |  | $ | 137.9 |  |  | $ | (18.2 | ) |  | $ | 245.3 |  |  | $ | 256.4 |  |  | $ | (11.1 | )
General and administrative expense |  |  | 48.4 |  |  |  | 57.9 |  |  |  | (9.5 | ) |  |  | 102.6 |  |  |  | 107.2 |  |  |  | (4.6 | )
Selling, general and administrative expense |  | $ | 168.1 |  |  | $ | 195.8 |  |  | $ | (27.7 | ) |  | $ | 347.9 |  |  | $ | 363.6 |  |  | $ | (15.7 | )

(1)
Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

The decreases in selling and marketing expense during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to decreases of $15.3 million and $10.6 million, respectively, in marketing expense and decreases of $3.1 million and $1.2 million, respectively, in employee-related expenses. The decreases in marketing expense primarily related to disciplined prioritization of selling and marketing expense, partially offset in the six months ended June 30, 2024 by an increase in marketing expense related to the timing and mix of commercial activities, and the decreases in employee-related expenses were primarily due to decreases in salaries and benefits related to a 7% reduction in sales and marketing headcount.

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The decreases in general and administrative expense during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to decreases in legal expenses of $9.1 million and $11.1 million, respectively. The decrease during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was partially offset by an increase of $2.3 million in employee-related expenses, primarily due to increases in certain payroll-related taxes and in share-based compensation expense related to the vesting of certain performance-based restricted stock unit awards in February 2024, as described in Note 14, Share-based Compensation in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q.

Other Income, Net

|  | Three Months Ended |  |  |  |  |  | Six Months Ended |  |  |  |
|  | June 30, |  |  |  |  |  | June 30, |  |  |  |
(In millions) |  | 2024 |  |  | 2023 |  |  | Change |  |  | 2024 |  |  | 2023 |  |  | Change |
Interest income |  | $ | 10.7 |  |  | $ | 6.7 |  |  | $ | 4.0 |  |  | $ | 20.1 |  |  | $ | 11.7 |  |  | $ | 8.4 |
Interest expense |  |  | (5.9 | ) |  |  | (5.7 | ) |  |  | (0.2 | ) |  |  | (11.9 | ) |  |  | (11.0 | ) |  |  | (0.9 | )
Other income (expense), net |  |  | 2.0 |  |  |  | (0.4 | ) |  |  | 2.4 |  |  |  | 2.2 |  |  |  | (0.5 | ) |  |  | 2.7 |
Total other income, net |  | $ | 6.8 |  |  | $ | 0.6 |  |  | $ | 6.2 |  |  | $ | 10.4 |  |  | $ | 0.2 |  |  | $ | 10.2 |

Interest income consists primarily of interest earned on our cash and available-for-sale investments. The increases in interest income in the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily related to increases in interest rates, due to the rising interest rate environment. Interest expense consists of interest incurred on our 2026 Term Loans.

The increases in other income (expense), net, during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, were primarily due to the gain on the sale of the Athlone Facility of approximately $1.5 million, following the completion of the sale in May 2024.

Income Tax Provision

|  | Three Months Ended |  |  |  |  |  | Six Months Ended |  |  |  |
|  | June 30, |  |  |  |  |  | June 30, |  |  |  |
(In millions) |  | 2024 |  |  | 2023 (1) |  |  | Change |  |  | 2024 |  |  | 2023 (1) |  |  | Change |
Income tax provision |  |  | 22.1 |  |  |  | 2.7 |  |  | $ | 19.4 |  |  | $ | 30.0 |  |  | $ | 3.4 |  |  | $ | 26.6 |

(1)
Prior period amounts have been retrospectively adjusted to reflect the effects of the Separation.

The income tax provision in the three and six months ended June 30, 2024 were primarily attributable to taxes on income earned in Ireland. The income tax provision in the three and six months ended June 30, 2023 were primarily due to U.S. federal and state taxes on income earned in the U.S.

Liquidity and Financial Condition

Our financial condition is summarized as follows:

|  | June 30, 2024 |  |  | December 31, 2023 |
(In millions) |  | U.S. |  |  | Ireland |  |  | Total |  |  | U.S. |  |  | Ireland |  |  | Total |
Cash and cash equivalents |  | $ | 210.1 |  |  | $ | 325.1 |  |  | $ | 535.2 |  |  | $ | 317.8 |  |  | $ | 139.7 |  |  | $ | 457.5 |
Investments—short-term |  |  | 186.5 |  |  |  | 154.5 |  |  |  | 341.0 |  |  |  | 187.6 |  |  |  | 128.4 |  |  |  | 316.0 |
Investments—long-term |  |  | 41.9 |  |  |  | 44.5 |  |  |  | 86.4 |  |  |  | 18.0 |  |  |  | 21.9 |  |  |  | 39.9 |
Total cash and investments |  | $ | 438.5 |  |  | $ | 524.1 |  |  | $ | 962.6 |  |  | $ | 523.4 |  |  | $ | 290.0 |  |  | $ | 813.4 |
Outstanding borrowings—short and long-term |  | $ | 289.5 |  |  | $ | — |  |  | $ | 289.5 |  |  | $ | 290.7 |  |  | $ | — |  |  | $ | 290.7 |

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At June 30, 2024 our investments consisted of the following:

|  |  |  |  | Gross |  |  |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Allowance for |  |  | Estimated |
(In millions) |  | Cost |  |  | Gains |  |  | Losses |  |  | Credit Losses |  |  | Fair Value |
Investments—short-term available-for-sale |  | $ | 341.5 |  |  | $ | 0.2 |  |  | $ | (0.7 | ) |  | $ | — |  |  | $ | 341.0 |
Investments—long-term available-for-sale |  |  | 86.7 |  |  |  | — |  |  |  | (0.4 | ) |  |  | — |  |  |  | 86.3 |
Investments—long-term held-to-maturity |  |  | 0.1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 0.1 |
Total |  | $ | 428.3 |  |  | $ | 0.2 |  |  | $ | (1.1 | ) |  | $ | — |  |  | $ | 427.4 |

Sources and Uses of Cash

We generated $167.1 million and $194.4 million of cash from operating activities during the six months ended June 30, 2024 and 2023, respectively. We expect that our existing cash, cash equivalents and investments will be sufficient to finance our anticipated working capital and other cash requirements, such as capital expenditures and principal and interest payments on our long-term debt, 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 additional financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures. In addition, the 2026 Term Loans have an incremental facility capacity in an amount of $175.0 million, plus additional potential amounts, provided that we meet certain conditions, including a specified leverage ratio.

Our investment objectives are, first, to preserve capital and provide sufficient liquidity to satisfy operating requirements and, second, to generate investment income. We mitigate credit risk in our cash reserves by maintaining a well-diversified portfolio that limits the amount of investment exposure as to institution, maturity, sector and investment type. Our available-for-sale investments consist primarily of short and long-term U.S. government and agency debt securities and corporate debt securities.

We classify available-for-sale investments in an unrealized loss position that do not mature within twelve months as long-term investments. We have the intent and ability to hold these investments until recovery, which may be at maturity, and it is more-likely-than-not that we would not be required to sell these securities before recovery of their amortized cost.

We have no off-balance sheet arrangements that are reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources in the next twelve months.

In February 2024, we announced approval by our board of directors of the Repurchase Program, as described in Note 13, Shareholders’ Equity in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q. During the three months ended June 30, 2024, we repurchased approximately 3.5 million of our ordinary shares under the Repurchase Program at a total cost of $84.7 million. As of June 30, 2024, the remaining amount authorized under the Repurchase Program was $315.3 million.

Information about our cash flows, by category, is presented in the accompanying consolidated statements of cash flows. The discussion of our cash flows that follows does not include the impact of any adjustments to remove discontinued operations and is stated on a total company consolidated basis. The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:

|  | Six Months Ended June 30, |
(In millions) |  | 2024 |  |  | 2023 |
Cash and cash equivalents, beginning of period |  | $ | 457.5 |  |  | $ | 292.5 |
Cash flows provided by operating activities |  |  | 167.1 |  |  |  | 194.4 |
Cash flows provided by investing activities |  |  | 12.0 |  |  |  | 193.7 |
Cash flows used in financing activities |  |  | (101.4 | ) |  |  | (14.8 | )
Cash and cash equivalents, end of period |  | $ | 535.2 |  |  | $ | 665.8 |

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Operating Activities

Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities. Operating cash flow is derived by adjusting our net income for non-cash operating items such as depreciation, amortization and share-based compensation and changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our results of operations.

Cash flows provided by operating activities for the six months ended June 30, 2024 were $167.1 million and primarily consisted of net income of $128.2 million, adjusted for non-cash items including share-based compensation of $53.4 million, depreciation and amortization of $14.7 million, deferred income taxes of $21.7 million and gain on the sale of the Athlone Facility of $1.5 million, partially offset by changes in working capital of $51.5 million.

Cash flows provided by operating activities for the six months ended June 30, 2023 were $194.4 million and primarily consisted of net income of $195.2 million, adjusted for non-cash items including share-based compensation of $51.1 million and depreciation and amortization of $37.7 million, partially offset by changes in working capital of $52.2 million and deferred income taxes of $38.1 million. During the six months ended June 30, 2023, net income included receipt of $195.4 million from Janssen, inclusive of $8.1 million in late-payment interest, related to 2022 U.S. net sales of the long-acting INVEGA products following the successful outcome of the arbitration proceedings in respect of such products.

Investing Activities

Cash flows provided by investing activities for the six months ended June 30, 2024 were primarily due to proceeds related to the sale of the Athlone Facility of approximately $97.9 million, which included a payment of approximately $91.0 million for the facility and certain related assets, partially offset by $71.0 million in net purchase of investments and the purchase of $15.5 million of property, plant and equipment. Cash flows provided by investing activities for the six months ended June 30, 2023 were primarily due to $210.3 million in net sales of investments, offset by the purchase of $16.6 million of property, plant and equipment.

Financing Activities

Cash flows used in financing activities for the six months ended June 30, 2024 primarily related to $84.7 million used to repurchase our ordinary shares under the Repurchase Program and $29.0 million of employee taxes paid related to the net share settlement of equity awards, partially offset by $13.8 million of cash that we received upon exercises of employee stock options. Cash flows used in financing activities for the six months ended June 30, 2023 primarily related to $25.3 million of employee taxes paid related to the net share settlement of equity awards, partially offset by $12.0 million of cash that we received upon exercises of employee stock options.

Debt

At June 30, 2024, the principal balance of our borrowings consisted of $290.3 million outstanding under our 2026 Term Loans. See Note 12, Long-Term Debt in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for further discussion of our 2026 Term Loans.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates under different conditions or using different assumptions.

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See the “Critical Accounting Estimates” section in “Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for a discussion of our critical accounting estimates.

New Accounting Standards

See the “New Accounting Pronouncements” section in Note 2, Summary of Significant Accounting Policies in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for discussion of certain recent accounting standards applicable to us.

Item 3. Quantitative and Qualitati ve Disclosures About Market Risk

Market risks related to our investment portfolio, and the ways we manage such risks, are summarized in “Part II, Item 7A—Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report. We regularly review our marketable securities holdings and shift our investment holdings to those that best meet our investment objectives, which are to preserve capital, provide sufficient liquidity to satisfy operating requirements and generate investment income. Apart from such adjustments to our investment portfolio, there have been no material changes to our market risks since December 31, 2023, and we do not anticipate any near-term changes in the nature of our market risk exposures or in our management’s objectives and strategies with respect to managing such exposures.

We are exposed to non-U.S. currency exchange risk related to manufacturing and royalty revenues that we receive on certain of our products, partially offset by certain operating costs arising from expenses and payables in connection with our Irish operations that are settled predominantly in Euro. These non-U.S. currency exchange rate risks are summarized in “Part II, Item 7A—Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report. There has been no material change in our assessment of our sensitivity to non-U.S. currency exchange rate risk since December 31, 2023.

Item 4. Controls and Procedures

a) Evaluation of Disclosure Controls and Procedures

Our management has evaluated, with the participation of our principal executive officer and interim principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2024. Based upon that evaluation, our principal executive officer and interim principal financial officer each concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (b) such information is accumulated and communicated to our management, including our principal executive officer and interim principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

b) Change in Internal Control Over Financial Reporting

During the three months ended June 30, 2024, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding legal proceedings, see the discussion of legal proceedings in Note 17, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q, which discussion is incorporated into this Part II, Item 1 by reference.

Item 1A. Ri sk Factors

For a discussion of our risk factors, see “Part I, Item 1A—Risk Factors” in our Annual Report. There have been no material changes from the risk factors disclosed in our Annual Report.

Item 2. Unregistered Sales of Equi ty Securities and Use of Proceeds

The following table summarizes purchases of our ordinary shares made by or on behalf of us or any of our affiliated purchasers, as defined in Rule 10b-18(a)(3) under the Exchange Act, during the three months ended June 30, 2024:

Period |  | Total Number of Ordinary Shares Purchased (a) |  |  | Average Price Paid per Ordinary Share (b) |  |  | Total Number of Ordinary Shares Purchased as Part of Publicly Announced Program (c)(2) |  |  | Approximate Dollar Value (in millions) of Ordinary Shares that May Yet Be Purchased Under the Program (d)(2) |
April 1, 2024 – April 30, 2024 |  |  | 4,388 |  |  | $ | 26.11 |  |  |  | — |  |  | $ | 400.0 |
May 1, 2024 – May 31, 2024 |  |  | 1,535,566 |  |  |  | 24.08 |  |  |  | 1,533,769 |  |  |  | 363.1 |
June 1, 2024 – June 30, 2024 |  |  | 1,982,925 |  |  |  | 24.33 |  |  |  | 1,962,418 |  |  |  | 315.3 |
Totals |  |  | 3,522,879 |  | (1) | $ | 24.22 |  |  |  | 3,496,187 |  | (1) |  |

(1)
The difference between the total number of ordinary shares purchased shown in column (a) and the total number of ordinary shares purchased as part of the publicly announced Repurchase Program shown in column (c) consists of 26,692 ordinary shares acquired to satisfy withholding tax obligations related to the vesting of equity awards.
(2)
In February 2024, we announced approval by our board of directors of the Repurchase Program, which authorized the repurchase of our ordinary shares in an aggregate amount of up to $400.0 million (exclusive of any fees, commissions or other expenses related to such repurchases) from time to time. The specific timing and amounts of repurchases under the Repurchase Program will depend on a variety of factors, including but not limited to ongoing assessments of our needs, alternative investment opportunities, the market price of our ordinary shares and general market conditions. The Repurchase Program has no set expiration date and may be suspended or discontinued at any time.

Item 5. Other Information

During the three months ended June 30, 2024, no officer (as defined in Rule 16a-1(f) under the Exchange Act) or director of the Company adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (each such term as defined in Item 408 of Regulation S-K).

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Item 6. Exhibits

The following exhibits are filed or furnished as part of this Form 10-Q:

EXHIBIT INDEX

Exhibit No. |  | Description of Exhibit
10.1 # |  | Fifth Amendment to License and Collaboration Agreement between Alkermes Pharma Ireland Limited and Biogen International GmbH (as successor to Biogen Swiss Manufacturing GmbH), effective as of June 7, 2024.
10.2 † |  | Alkermes plc 2018 Stock Option and Incentive Plan, as amended (incorporated by reference from Exhibit 10.1 to the Alkermes plc Current Report on Form 8-K (File No. 001-35299) filed on May 31, 2024).
10.2A #† |  | Form of Non-Employee Director Non-Qualified Stock Option Award Certificate (rev. 2024) under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
10.2B #† |  | Form of Non-Employee Director Restricted Stock Unit Award (Time-Vesting) Award Certificate (rev. 2024) under the Alkermes plc 2018 Stock Option and Incentive Plan, as amended.
31.1 # |  | Rule 13a-14(a)/15d-14(a) Certification.
31.2 # |  | Rule 13a-14(a)/15d-14(a) Certification.
32.1 ‡ |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCH # |  | Inline XBRL Taxonomy Extension Schema Document with Embedded Linkbase Documents.
104 # |  | Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibit 101)

# Filed herewith.

‡ Furnished herewith.

† Indicates a management contract or any compensatory plan, contract or arrangement.

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SIGNA TURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| ALKERMES PLC |
| (Registrant) |
| By: | /s/ Richard F. Pops |
|  | Richard F. Pops |
|  | Chairman and Chief Executive Officer |
|  | (Principal Executive Officer) |
| By: | /s/ Blair C. Jackson |
|  | Blair C. Jackson |
|  | Executive Vice President, Chief Operating Officer |
|  | (Interim Principal Financial Officer) |
Date: July 24, 2024 |  |  |

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