Alkermes plc
For the period ended Mar 31, 2025. Filed May 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
ALKS$45.90+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-24.
0000950170-24-116872
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000950170-25-061817
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 97 previous paragraphs and 88 current paragraphs.
57 unchanged; 24 reworded; 6 added; 16 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
ARISTADA and ARISTADA INITIO
Current report
The increase in product sales, gross was due to a 21% increase in the number of LYBALVI units sold and a 3% price increase for each of our proprietary products that went into effect on January 1, 2025. These increases were partially offset by 5% and 9% decreases in the number of units sold for VIVITROL and ARISTADA/ARISTADA INITIO, respectively.
Current report
The decrease in Medicaid rebates, as a percentage of sales, was primarily due to actual Medicaid utilization rebates related to VIVITROL, which were lower than original estimates by approximately $8.7 million.
Current report
The decrease in selling and marketing expense was primarily due to a decrease of $9.2 million in media spend for our proprietary products, partially offset by a $4.2 million increase in sales and marketing-related materials and training and a $1.7 million increase in employee-related expenses, primarily due to a 14% increase in sales and marketing-related headcount.
Current report
The decrease in general and administrative expense was primarily due to decreases of $2.2 million and $2.1 million in professional service fees and employee-related expenses, respectively. The decrease in professional service fees is primarily related to a decrease in legal expenses. The decrease in employee-related expenses is primarily related to a decrease in share-based compensation expense.
Current report
Interest income consists of interest earned on our cash and available-for-sale investments. Interest expense consists of interest incurred on our previously outstanding term loans (the “Former Term Loans”) that were scheduled to become due in 2026 under our former amended and restated credit agreement, which we prepaid in full and terminated in December 2024. See Note 12, Long-Term Debtin the “Notes to Consolidated Financial Statements” accompanying our Annual Report for additional information regarding our Former Term Loans.
Removed paragraphs (16)
Previous report
ARISTADA
Previous report
ARISTADA INITIO
Previous report
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.”
Previous report
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.
Previous report
VIVITROL product sales, gross, increased by 12% and 8% during the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023, due to increases of 9% and 5%, 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 3% during the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023. The increase in ARISTADA and ARISTADA INITIO during the three months ended September 30, 2024, as compared to the three months ended September 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 nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was primarily due to the January 2024 increase in the selling price. LYBALVI product sales, gross, increased by 59% and 57% during the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023, due to increases of 50% and 51%, respectively, in the number of units sold and increases in the selling price of 3.8% and 2.0% that went into effect in January 2024 and July 2024, respectively.
Previous report
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.
Previous 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).
Previous report
The decrease in royalty revenues related to the long-acting INVEGA products during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, was primarily due to the expiration of our royalty on net sales in the U.S. of INVEGA SUSTENNA on August 20, 2024. The decrease in royalty revenues related to the long-acting INVEGA products during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, related to the expiration of the INVEGA SUSTENNA royalty and 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 nine months ended September 30, 2024, Janssen’s worldwide net sales of the long-acting INVEGA products were $1,049.0 million and $3,159.0 million, respectively, as compared to $1,029.0 million and $3,104.0 million during the three and nine months ended September 30, 2023, respectively.
Previous report
The decreases in selling and marketing expense during the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023, were primarily due to decreases of $11.2 million and $21.6 million, respectively, in marketing expense and decreases of $1.7 million and $2.9 million, respectively, in employee-related expenses. The decreases in marketing expense primarily related to disciplined expense prioritization and the decreases in employee-related expenses were primarily due to decreases in salaries and benefits related to an 8% reduction in sales and marketing headcount.
Previous report
The increase in general and administrative expense during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, was primarily due to an increase of $2.0 million related to share-based compensation expense and an increase of $1.5 million related to the branded prescription drug fee. The increase in general and administrative expense during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was primarily due to an increase of $4.4 million in employee-related expenses 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 Compensationin the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q. These increases were partially offset by a $7.9 million decrease in professional service fees, primarily related to a decrease in legal expenses during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.
Previous report
Interest income consists primarily of interest earned on our cash and available-for-sale investments. The increases in interest income in the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 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.
Previous report
The increase in other income (expense), net, during the nine months ended September 30, 2024, as compared to the nine months ended September 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.
Previous report
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 September 30, 2024, we repurchased approximately 4.4 million of our ordinary shares under the Repurchase Program at a total cost of $115.3 million, exclusive of any fees, commissions or other expenses related to such repurchases. As of September 30, 2024, the remaining amount authorized under the Repurchase Program was $200.0 million.
Previous report
Cash flows provided by operating activities for the nine months ended September 30, 2023 were $294.1 million and primarily consisted of net income of $243.0 million, adjusted for non-cash items including share-based compensation of $75.1 million and depreciation and amortization of $56.4 million, partially offset by changes in working capital of $34.3 million and deferred income taxes of $47.4 million. During the nine months ended September 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.
Previous report
Debt
Previous report
At September 30, 2024, the principal balance of our borrowings consisted of $289.5 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.
Reworded paragraphs (24)
Previous wording
Net income from continuing operations was $92.8 million and $226.4 million or $0.57 and 1.36 per ordinary share—basic and $0.56 and $1.33 per ordinary share—diluted, for the three months and nine months ended September 30, 2024, respectively, compared to net income from continuing operations of $91.6 million and $358.6 million or $0.55 and $2.16 per ordinary share—basic and $0.53 and $2.10 per ordinary share—diluted, for the three and nine months ended September 30, 2023, respectively.
Current wording
Net income from continuing operations was $22.5 million or $0.14 per ordinary share—basic and $0.13 per ordinary share—diluted, for the three months ended March 31, 2025, compared to net income from continuing operations of $38.9 million or $0.23 per ordinary share—basic and $0.23 per ordinary share—diluted, for the three months ended March 31, 2024.
Previous wording
The increase in net income from continuing operations during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, was primarily due to an increase in product sales, net, of $41.2 million and a decrease of $18.4 million in operating expenses, partially offset by a decrease of $44.0 million in manufacturing and royalty revenue and an increase of $16.3 million in the income tax provision. The decrease in net income from continuing operations during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023 was primarily due to a decrease of $256.1 million in manufacturing and royalty revenue and an increase of $42.9 million in the income tax provision, partially offset by a decrease of $56.7 million in operating expenses and an increase of $12.2 million in other income, net. The decreases in manufacturing and royalty revenues 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.
Current wording
The decrease in net income from continuing operations during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to a decrease of $54.8 million in manufacturing and royalty revenue, partially offset by an increase of $11.0 million in product sales, net, a decrease of $14.4 million in operating expenses, an increase of $8.0 million in other income, net and a decrease of $4.9 million in income tax provision.
Previous wording
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.
Current wording
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 and “Part II, Item 1A—Risk Factors” in this Form 10-Q 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.
Previous wording
In April 2024, U.S. Patent No. 11,951,111 relating to LYBALVI was granted. This patent has claims to methods of treating schizophrenia and bipolar I disorder and expires in 2041.
Current wording
In March 2025, U.S. Patent No. 12,251,381 relating to ARISTADA and ARISTADA INITIO was granted. The patent has claims to a method of treating schizophrenia and expires in 2039.
Previous wording
For a discussion of legal proceedings related to certain of the patents covering INVEGA TRINZA, see Note 17, Commitments and Contingent Liabilitiesin the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in our
Current wording
For a discussion of legal proceedings related to certain of the patents covering INVEGA TRINZA, see Note 16, 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 “Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”
Previous wording
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 Liabilitiesin the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in our Annual Report and specifically the section entitled “We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”
Current wording
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 16, Commitments and Contingent Liabilitiesin the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q, and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in our Annual Report and specifically the section entitled “Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”
Previous wording
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.
Current wording
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 and “Part II, Item 1A—Risk Factors” in this Form 10-Q. 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.
Previous wording
ALKS 2680 is a novel, investigational, oral, selective orexin 2 receptor (“OX2R”) agonist in development as a once-daily treatment for narcolepsy type 1, narcolepsy type 2 and idiopathic hypersomnia. Orexin, a neuropeptide produced in the lateral hypothalamus, is considered to be the master regulator of wakefulness due to its activation of multiple, downstream wake-promoting pathways that project widely throughout the brain. Targeting the orexin system may address excessive daytime sleepiness across hypersomnolence disorders, whether or not deficient orexin signaling is the underlying cause of disease. Once-daily oral administration of ALKS 2680 was previously 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 two phase 2 studies. Vibrance-1 in patients with narcolepsy type 1 and Vibrance-2 in patients with narcolepsy type 2. We expect to initiate Vibrance-3, a phase 2 study in patients with idiopathic hypersomnia in 2025.
Current wording
ALKS 2680 is a novel, investigational, oral, selective orexin 2 receptor agonist in development as a once-daily treatment for narcolepsy type 1 (“NT1”), narcolepsy type 2 (“NT2”) and idiopathic hypersomnia (“IH”). Orexin, a neuropeptide produced in the lateral hypothalamus, is considered to be the master regulator of wakefulness due to its activation of multiple, downstream wake-promoting pathways that project widely throughout the brain. Targeting the orexin system may address excessive daytime sleepiness across hypersomnolence disorders, whether or not deficient orexin signaling is the underlying cause of disease. Once-daily oral administration of ALKS 2680 was previously evaluated in a phase 1 study in healthy volunteers and patients with NT1, NT2 and IH and is currently being evaluated in the phase 2 Vibrance-1, Vibrance-2 and Vibrance-3 studies in patients with NT1, NT2 and IH, respectively.
Previous wording
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 nine months ended September 30, 2024 and 2023:
Current wording
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 months ended March 31, 2025 and 2024:
Previous wording
The following table compares product sales, net earned during the three and nine months ended September 30, 2024 and 2023:
Current wording
The following table compares product sales, net earned during the three months ended March 31, 2025 and 2024:
Previous wording
The following table compares manufacturing and royalty revenues earned during the three and nine months ended September 30, 2024 and 2023:
Current wording
The following table compares manufacturing and royalty revenues earned during the three months ended March 31, 2025 and 2024:
Previous wording
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 ended on August 20, 2024. In addition, each of INVEGA SUSTENNA and INVEGA TRINZA is currently subject to Paragraph IV litigation in response to companies seeking to market generic versions of such product. Increased competition from new products or generic versions of any one or more of the long-acting INVEGA products may lead to reduced unit sales of the long-acting INVEGA products, including those not yet genericized, and increased pricing pressure. For a discussion of the legal proceedings related to INVEGA TRINZA, see Note 17, Commitments and Contingent Liabilitiesin the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q, and for information about risks relating to Paragraph IV 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.”
Current wording
The decrease in royalty revenues related to the long-acting INVEGA products was primarily due to the expiration of our royalty on net sales of INVEGA SUSTENNA in the U.S. in August 2024. We expect royalty revenues from net sales of the long-acting INVEGA products to continue to be lower in 2025, as the royalty revenues related to net sales of INVEGA SUSTENNA in the U.S. comprised a significant portion of the overall royalty revenues for the long-acting INVEGA products. In addition, each of INVEGA SUSTENNA and INVEGA TRINZA is currently subject to Paragraph IV litigation in response to companies seeking to market generic versions of such product. Increased competition from new products or generic versions of any one or more of the long-acting INVEGA products may lead to reduced unit sales of the long-acting INVEGA products, including those not yet genericized, and increased pricing pressure. For a discussion of the legal proceedings related to INVEGA TRINZA, see Note 16, 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 “Uncertainty over IP in the biopharmaceutical industry has been the source of litigation and other legal proceedings, and we or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”
Previous wording
The decrease in VUMERITY revenue in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, was due to a $1.0 million decrease in manufacturing revenue and a $0.9 million decrease in royalty revenue. The decrease in manufacturing revenue was primarily due to a reduction in the sales price, which 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. The decrease in royalty revenue was due to a decrease in the end-market sales of VUMERITY. The increase in VUMERITY revenue in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was due to an increase in royalty revenue of $5.3 million, due to an increase in end-market sales of VUMERITY, partially offset by a decrease in manufacturing revenue of $2.1 million, primarily due to the reduction in sales price previously discussed.
Current wording
The decrease in VUMERITY revenue was due to a $6.2 million decrease in manufacturing revenue, offset by a $2.7 million increase in royalty revenue. The decrease in VUMERITY manufacturing revenue was primarily due to a reduction in the number of batches manufactured for sale to Biogen, and the increase in VUMERITY royalty revenue was due to an increase in the end-market sales of the product. The increase in RISPERDAL CONSTA revenue was due to a $6.5 million increase in manufacturing revenue, primarily due to an increase in the number of batches made available to Janssen for sale in the U.S., which has a higher selling price than product sold outside of the U.S. The decrease in Other manufacturing and royalty revenue was primarily due to a $10.5 million decrease in revenue from FAMPYRA, as our manufacturing obligations for FAMPYRA concluded on December 31, 2024.
Previous wording
The increases in the cost of goods manufactured and sold during the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023, were primarily related to increases in the cost of goods sold for certain of our proprietary products due to increases in the number of units sold as discussed above, and increases in costs related to out-of-specification batches and investigation costs. These increases were partially offset by decreases in the cost of goods manufactured for certain legacy products that we manufacture, due to a decrease in volume of such products.
Current wording
The decrease in the cost of goods manufactured and sold was primarily related to decreases in the cost of goods sold for VIVITROL and ARISTADA and ARISTADA INITIO due to decreases in the number of units sold, as discussed above, and decreases in costs related to out-of-specification batches and investigations. In addition, following the sale of the Athlone Facility in May 2024, the cost of goods manufactured for certain legacy products that are manufactured at the Athlone Facility decreased. These decreases were partially offset by an increase in the cost of goods sold for LYBALVI due to an increase in the number of units sold, as discussed above.
Previous wording
The following table sets forth our external R&D expenses for the three and nine months ended September 30, 2024 and 2023 relating to our then-current development programs and our internal R&D expenses, listed by the nature of such expenses:
Current wording
The following table sets forth our external R&D expenses for the three months ended March 31, 2025 and 2024 relating to our then-current development programs and our internal R&D expenses, listed by the nature of such expenses:
Previous wording
The increases in expenses related to ALKS 2680 during the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 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 initiation of our first two phase 2 clinical studies for the product. The increases in expenses related to LYBALVI during the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 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 nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023, were primarily due to disciplined prioritization of R&D spend and activities associated with our research programs. The decreases in employee-related expenses during the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023, were primarily due to a decrease in labor and benefits expense related to a 2% decrease in R&D-related headcount.
Current wording
The increase in expenses related to ALKS 2680 was primarily due to increased spend related to the advancement of the development program for the product, including initiation of our Vibrance-3 phase 2 clinical study and costs related to our long-term extension study for the product, partially offset by the completion of our first-in-human phase 1 clinical study for the product in the first half of 2024. The decrease in expenses related to LYBALVI was primarily due to the timing of spend on our pediatric studies for the product. The increase in other external R&D expenses was primarily due to activities associated with our preclinical development programs. The decrease in employee-related expenses was primarily due to a decrease in labor and benefits expense related to a 9% decrease in R&D-related headcount following the completion of the sale of the Athlone Facility in May 2024.
Previous wording
The income tax provisions in the three and nine months ended September 30, 2024, were primarily due to taxes on income earned in Ireland. The income tax provisions in the three and nine months ended September 30, 2023, were primarily due to U.S. federal and state taxes on income earned in the U.S.
Current wording
The income tax provisions in the three months ended March 31, 2025 and 2024 were primarily attributable to taxes on income earned in Ireland.
Previous wording
We generated $248.7 million and $294.1 million of cash from operating activities during the nine months ended September 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 12 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.
Current wording
We generated $98.8 million and $21.1 million of cash from operating activities during the three months ended March 31, 2025 and 2024, respectively. We expect that our existing cash, cash equivalents and investments will be sufficient to finance our anticipated working capital and other cash requirements, including capital expenditures, for not less than twelve months following the date from which our financial statements were issued. Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures.
Previous wording
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.
Current wording
Our investment objectives are, first, to preserve liquidity and conserve capital 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 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. Our held-to-maturity investments consist of investments that are held as collateral under certain letters of credit related to certain of our lease agreements.
Previous wording
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 nine months ended September 30, 2024 and 2023:
Current wording
Information about our cash flows, by category, is presented in the accompanying condensed 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 three months ended March 31, 2025 and 2024:
Previous wording
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.
Current wording
Cash flows provided by 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.
Previous wording
Cash flows provided by operating activities for the nine months ended September 30, 2024 were $248.7 million and primarily consisted of net income of $220.6 million, adjusted for non-cash items including share-based compensation of $75.9 million, depreciation and amortization of $21.7 million, deferred income taxes of $32.3 million and gain on the sale of the Athlone Facility of $1.5 million, partially offset by changes in working capital of $105.1 million.
Current wording
Cash flows provided by operating activities for the three months ended March 31, 2024 were $21.1 million and primarily consisted of a net income of $38.9 million adjusted for non-cash items, including share-based compensation of $32.8 million, depreciation and amortization of $8.1 million and deferred income taxes of $7.5 million, partially offset by changes in working capital of $66.3 million.
Previous wording
Cash flows used in investing activities for the nine months ended September 30, 2024 were primarily due to $172.1 million in net purchases of investments and $23.7 million in the purchase of property, plant and equipment, partially offset by 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. Cash flows provided by investing activities for the nine months ended September 30, 2023 were primarily due to $105.4 million in net sales of investments, offset by the purchase of $31.0 million of property, plant and equipment.
Current wording
Cash flows provided by investing activities for the three months ended March 31, 2025 were primarily due to $17.5 million in net sales of investments, partially offset by the purchase of $10.1 million of property, plant and equipment. Cash flows used in investing activities for the three months ended March 31, 2024 were primarily due to $32.0 million in net purchase of investments and the purchase of $8.3 million of property, plant and equipment.
Previous wording
Cash flows used in financing activities for the nine months ended September 30, 2024 primarily related to $200.0 million (exclusive of any fees, commissions or other related expenses) used to repurchase our ordinary shares under the Repurchase Program and $29.3 million of employee taxes paid related to the net share settlement of equity awards, partially offset by $19.4 million of cash that we received upon exercises of employee stock options. Cash flows used in financing activities for the nine months ended September 30, 2023 primarily related to $26.1 million of employee taxes paid related to the net share settlement of equity awards, partially offset by $15.1 million of cash that we received upon exercises of employee stock options.
Current wording
Cash flows provided by financing activities for the three months ended March 31, 2025 were primarily due to $29.5 million of cash that we received upon exercises of employee stock options, partially offset by $28.8 million of employee taxes paid related to the net share settlement of equity awards. Cash flows used in financing activities for the three months ended March 31, 2024 primarily related to $28.3 million of employee taxes paid related to the net share settlement of equity awards, partially offset by $11.2 million of cash that we received upon exercises of employee stock options.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Cash flows provided by operating activities for the three months ended March 31, 2025 were $98.8 million and primarily consisted of net income of $22.5 million, adjusted for non-cash items, including share-based compensation of $22.8 million, depreciation and amortization of $7.4 million, deferred income taxes of $2.5 million and changes in working capital of $43.3 million.