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Revenue from Contracts with Customers
 6 Months Ended
Jun. 30, 2026
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers

4. REVENUE FROM CONTRACTS WITH CUSTOMERS

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

Product Sales, Net

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

During the three and six months ended June 30, 2026 and 2025, the Company recorded product sales, net, as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In thousands)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

VIVITROL

 

$

124,454

 

 

$

121,660

 

 

$

236,888

 

 

$

222,656

 

ARISTADA and ARISTADA INITIO

 

 

96,719

 

 

 

101,295

 

 

 

190,543

 

 

 

174,770

 

LYBALVI

 

 

93,979

 

 

 

84,280

 

 

 

186,343

 

 

 

154,302

 

LUMRYZ

 

 

96,572

 

 

 

—

 

 

 

136,064

 

 

 

—

 

Total product sales, net

 

$

411,724

 

 

$

307,235

 

 

$

749,838

 

 

$

551,728

 

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

The decrease in Medicaid rebates as a percentage of sales was primarily due to gross-to-net favorability, as actual Medicaid rebates related to VIVITROL and ARISTADA/ARISTADA INITIO were lower than original estimates during the six months ended June 30, 2026 by approximately $8.9 million and $8.1 million, respectively.

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

 

 

 

Six Months Ended June 30, 2026

 

(In thousands)

 

Contractual Adjustments(2)

 

 

Discounts(3)

 

 

Product Returns

 

 

Other

 

 

Total

 

Beginning balance — December 31, 2025

 

$

211,440

 

 

$

41,327

 

 

$

55,455

 

 

$

7,813

 

 

$

316,035

 

Avadel beginning balance as of February 12, 2026 (1)

 

 

1,475

 

 

 

15,499

 

 

 

724

 

 

 

11,323

 

 

 

29,021

 

Current provisions relating to sales in current year

 

 

310,678

 

 

 

268,479

 

 

 

13,688

 

 

 

72,764

 

 

 

665,609

 

Adjustments relating to prior years

 

 

(17,719

)

 

 

(5,320

)

 

 

(3,324

)

 

 

210

 

 

 

(26,153

)

Payments relating to sales in current year

 

 

(151,519

)

 

 

(243,525

)

 

 

(137

)

 

 

(53,660

)

 

 

(448,841

)

Payments relating to sales in prior years

 

 

(130,931

)

 

 

(17,281

)

 

 

(5,206

)

 

 

(14,828

)

 

 

(168,246

)

Ending balance — June 30, 2026

 

$

223,424

 

 

$

59,179

 

 

$

61,200

 

 

$

23,622

 

 

$

367,425

 

 

(1)
Amounts consist of beginning balance as of the Closing Date.
(2)
“Contractual Adjustments” include “Medicaid Rebates” and “Medicare Part D” accruals.
(3)
“Discounts” include “Chargebacks” and “Product Discounts.”

Total revenue-related reserves as of June 30, 2026 and December 31, 2025 included in the accompanying consolidated balance sheets are summarized as follows:

 

 

 

June 30,

 

 

December 31,

 

(In thousands)

 

2026

 

 

2025

 

Reduction of accounts receivable

 

$

18,995

 

 

$

21,049

 

Components of accrued sales discounts, allowances and reserves

 

 

295,645

 

 

 

247,126

 

Components of other long-term liabilities

 

 

52,785

 

 

 

47,860

 

Total revenue-related reserves

 

$

367,425

 

 

$

316,035

 

 

Manufacturing and Royalty Revenues

During the three and six months ended June 30, 2026 and 2025, the Company recorded manufacturing and royalty revenues from its collaboration arrangements as follows:

 

 

 

Three Months Ended June 30, 2026

 

 

Six Months Ended June 30, 2026

 

(In thousands)

 

Manufacturing
Revenue

 

 

Royalty
Revenue

 

 

Total

 

 

Manufacturing
Revenue

 

 

Royalty
Revenue

 

 

Total

 

Long-acting INVEGA products(1)

 

$

—

 

 

$

27,451

 

 

$

27,451

 

 

$

—

 

 

$

45,446

 

 

$

45,446

 

VUMERITY

 

 

—

 

 

 

30,587

 

 

 

30,587

 

 

 

—

 

 

 

57,936

 

 

 

57,936

 

Other

 

 

20,901

 

 

 

5,346

 

 

 

26,247

 

 

 

24,969

 

 

 

10,731

 

 

 

35,700

 

 

$

20,901

 

 

$

63,384

 

 

$

84,285

 

 

$

24,969

 

 

$

114,113

 

 

$

139,082

 

 

 

 

Three Months Ended June 30, 2025

 

 

Six Months Ended June 30, 2025

 

(In thousands)

 

Manufacturing
Revenue

 

 

Royalty
Revenue

 

 

Total

 

 

Manufacturing
Revenue

 

 

Royalty
Revenue

 

 

Total

 

Long-acting INVEGA products(1)

 

$

—

 

 

$

30,315

 

 

$

30,315

 

 

$

—

 

 

$

48,060

 

 

$

48,060

 

VUMERITY

 

 

7,383

 

 

 

32,016

 

 

 

39,399

 

 

 

13,358

 

 

 

53,874

 

 

 

67,232

 

Other

 

 

9,184

 

 

 

4,524

 

 

 

13,708

 

 

 

20,536

 

 

 

9,611

 

 

 

30,147

 

 

$

16,567

 

 

$

66,855

 

 

$

83,422

 

 

$

33,894

 

 

$

111,545

 

 

$

145,439

 

 

(1)
“long-acting INVEGA products”: INVEGA SUSTENNA/XEPLION (paliperidone palmitate), INVEGA TRINZA/TREVICTA (paliperidone palmitate) and INVEGA HAFYERA/BYANNLI (paliperidone palmitate). The Company’s royalty on net sales of INVEGA SUSTENNA in the U.S. expired in August 2024.