BIOMARIN PHARMACEUTICAL INC

(10)DEBT

Convertible Notes

As of December 31, 2024, the Company had outstanding fixed-rate convertible notes for an undiscounted aggregate principal amount of $600.0 million. The following table summarizes information regarding the Company’s convertible notes:

(1)The Company’s convertible notes due in 2024 matured on August 1, 2024. Substantially all holders of the 2024 Notes were repaid with cash, totaling approximately $495.0 million. No gain or loss was incurred upon the extinguishment.

(2)The fair value of the Company’s fixed-rate convertible debt is based on open market trades and is classified as Level 1 in the fair value hierarchy. See Note 1 to these Consolidated Financial Statements for additional discussion of fair value measurements.

Interest expense on the Company’s fixed-rate convertible debt consisted of the following:

2027 Notes

In May 2020, the Company issued $600.0 million in aggregate principal amount of senior subordinated unsecured convertible notes with a maturity date of May 15, 2027. The 2027 Notes were issued to the public at par value and bear interest at the rate of 1.25% per annum. Interest is payable semi-annually in cash in arrears on May 15 and November 15 of each year, beginning November 15, 2020. The 2027 Notes are convertible, at the option of the holder into shares of the Company’s common stock. The initial conversion rate for the 2027 Notes is 7.2743 shares per $1,000 principal amount of the 2027 Notes, which represents a conversion price of $137.47 per share, subject to adjustment under certain conditions. Following certain corporate transactions, the Company will, in certain circumstances, increase the conversion rate for a holder that elects to convert its 2027 Notes in connection with such corporate transactions by a number of additional shares of the Company’s common stock. A holder may convert fewer than all of such holder’s 2027 Notes so long as the amount of the 2027 Notes converted is an integral multiple of $1,000 principal amount. Net proceeds from the offering were $585.8 million. In connection with the issuance of the 2027 Notes, the Company recorded a discount on the 2027 Notes of $13.5 million, which will be accreted and recorded as additional interest expense over the life of the 2027 Notes.

The 2027 Notes are senior subordinated, unsecured obligations, and rank (i) subordinated in right of payment to the prior payment in full of all of the Company’s existing and future senior debt, (ii) equal in right of payment with the Company’s existing and future senior subordinated debt, (iii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the notes, (vi) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness, and (v) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries. Upon the occurrence of a “fundamental change,” as defined in the indenture governing the 2027 Notes, the holders may require the Company to repurchase all or a portion of such holder’s 2027 Notes for cash at 100% of the principal amount of the 2027 Notes being purchased, plus any accrued and unpaid interest.

The offer and sale of the 2027 Notes and the shares of the Company’s common stock issuable upon conversion of the 2027 Notes have not been registered under the Securities Act or any state securities laws and the 2027 Notes were offered only to qualified institutional buyers as defined in Rule 144A under the Securities Act.

See Note 17 to these Consolidated Financial Statements for further discussion of the effect of conversion of the Company's convertible debt on earnings per common share.

Revolving Credit Facility

In August 2024, the Company entered into an unsecured revolving credit facility providing for $600.0 million in revolving loan commitments. The credit facility was intended to finance ongoing working capital needs and for other general corporate purposes. The credit facility contains financial covenants including a maximum total net leverage ratio and a minimum interest coverage ratio. The credit facility matures in August 2029. As of December 31, 2024, there wereno amounts outstanding under the credit facility and the Company was in compliance with all covenants.

(11)ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table summarizes changes in the accumulated balances for each component of AOCI, including current period other comprehensive income and reclassifications out of AOCI, for the periods presented.

(12)SEGMENT INFORMATION

The Company operates and is managed asone operating segment which derives revenue from activities related to the development and commercialization of innovative therapies for people with serious and life-threatening rare diseases and medical conditions.

The Company’s commercial organization is responsible for marketing our approved products worldwide. The Company’s R&D organization is responsible for research and discovery of new product candidates and supporting the development and registration efforts for potential new products. The Company’s technical operations group is responsible for the development of manufacturing processes, supplying clinical drug product, and the manufacturing and distribution of our commercial products. The Company is also supported by corporate staff functions.

The Company’s Chief Executive Officer as the CODM manages and allocates resources to the operations of the total company by assessing the overall level of resources available and how to best allocate them to support the Company’s long-term company-wide strategic goals. In making this decision, the CODM uses consolidated financial information for the purposes of evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting for future periods.

The key measure of segment profit or loss used by the CODM to allocate resources and assess the Company's performance is its consolidated Net Income, as reported on the Consolidated Statements of Income. The CODM's analysis includes a comparison to budgeted results. Segment assets provided to the CODM are consistent with those reported on the

Consolidated Balance Sheets with particular emphasis on the Company's available liquidity including cash, cash equivalents, investments, accounts receivable and inventory.

The following table includes information about segment revenue, significant segment expenses, and segment measure of profitability:

(1)Other segment expense (income), net during the years ended December 31, 2024, 2023 and 2022 include Intangible asset amortization, Interest income and expense, Other expense, net and the Provision for income taxes. The years ended December 31, 2024 and 2022 also include Gain on sale of nonfinancial assets.

The following table presents Total Revenues and disaggregates Net Product Revenues by product.

The Company considers there to be revenue concentration risks for regions where Net Product Revenues exceed 10% of consolidated Net Product Revenues. The concentration of the Company’s Net Product Revenues within the regions below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective regions experience difficulties. The table below disaggregates total Net Product Revenues by geographic region, which is based on patient location for Company's commercial products sold directly by the Company, except for ALDURAZYME, which is distributed, marketed and sold exclusively by Sanofi worldwide.

The following table illustrates the percentage of the Company’s total Net Product Revenues attributed to the Company’s largest customers for the periods presented.

Long-lived assets, which consist of net property, plant and equipment and ROU assets are summarized by geographic region in the following table.

Concentration Information

On a consolidated basis, two customers accounted for 20% and 11% of the Company’s December 31, 2024 accounts receivable balance, respectively, compared to December 31, 2023 when two customers accounted for 15% and 12% of the accounts receivable balance, respectively. As of December 31, 2024 and 2023, the accounts receivable balance for Sanofi included $96.8 million and $63.4 million, respectively, of unbilled accounts receivable, which becomes payable to the Company when the product is sold through by Sanofi. The Company does not require collateral from its customers, but does perform periodic credit evaluations of its customers’ financial condition and requires prepayments in certain circumstances.

The Company is mindful that conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters and supply chain disruptions, could affect the Company’s ability to achieve its goals. In addition, the Company sells its products in countries that face economic volatility and weakness. Although the Company has historically collected receivables from customers in certain countries, sustained weakness or further deterioration of the local economies and currencies may cause customers in those countries to delay payment or be unable to pay for the Company’s products. The Company believes that the allowances for doubtful accounts related to these countries, if any, are adequate based on its analysis of the specific business circumstances and expectations of collection for each of the underlying accounts in these countries. The Company will continue to monitor these conditions and will attempt to adjust its business processes, as appropriate, to mitigate macroeconomic risks to its business.

(13)EQUITY COMPENSATION PLANS AND STOCK-BASED COMPENSATION

Equity Compensation Plans

Shares Available Under Equity Compensation Plans

As of December 31, 2024, an aggregate of approximately 49.3 million unissued shares were authorized for future issuance under the Company’s stock plans, which primarily includes shares issuable under the 2017 Equity Incentive Plan (2017 EIP) and the ESPP. Under the 2017 EIP, shares issued and outstanding under the Amended and Restated 2006 Share Incentive Plan (the 2006 Share Incentive Plan) and the 2017 EIP that expire or are forfeited generally become available for future issuance under the 2017 EIP. No additional awards will be granted under the 2006 Share Incentive Plan; however, there are vested and unvested awards outstanding under the 2006 Share Incentive Plan. The Company’s stock-based compensation plans are administered by the Company’s Board of Directors (the Board), or designated Committee thereof, which selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures and other provisions of the awards. See Note 1 to these Consolidated Financial Statements for discussion regarding the valuation of equity awards.

2017 Equity Incentive Plan

The 2017 EIP provides for awards of RSUs and stock options as well as other forms of equity compensation. RSUs granted to employees generally vest annually over a straight-line four-year period after the grant date. RSUs with Performance-based Vesting Conditions (PRSUs) generally vest over athree-year period on a cliff basis three years after the grant date. Stock option awards granted to employees generally vest over afour-year period on a cliff basis 12 months after the grant date and then monthly thereafter. The contractual term of stock option awards is generally 10 years from the grant date. As of December 31, 2024, approximately 37.2 million shares were authorized and reserved for future issuance under the 2017 EIP.

Employee Stock Purchase Plan

The ESPP was initially approved in June 2006, replacing the Company’s previous plan, and was most recently amended in June 2019. Under BioMarin’s ESPP, employees meeting specific employment qualifications are eligible to participate and can purchase shares on established dates (each purchase date) semi-annually through payroll deductions at the lower of 85% of the fair market value of the stock at the commencement of the offering period or each purchase date of the offering period. Each offering period will span up totwo years. The ESPP permits eligible employees to purchase common stock through payroll deductions for up to 10% of qualified compensation, up to an annual limit of $25,000. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During the year ended December 31, 2024, the Company issued 0.3 million shares under the ESPP. As of December 31, 2024, approximately 7.0 million shares were authorized and 2.3 million shares reserved for future issuance under the ESPP.

Board of Director Grants

On the date of the Company’s annual meeting of stockholders for a given year, each re-elected Independent Director receives an RSU grant valued at $400,000, with the number of RSUs to be granted calculated based on thethirty-day trailing average closing price of the Company’s common stock on the Nasdaq Global Select Market. The annual RSU grant for a director who has served for less than a year is prorated to the nearest quarter of the calendar year. The RSUs subject to the annual award vest in full on theone-year anniversary of the grant date, subject to each respective Director providing service to the Company through such vesting date. Upon election or appointment, a new Independent Director will receive an RSU grant on the same terms as the annual award, pro-rated for amount and vesting to the nearest quarter for the time such new Independent Director will serve prior to the Company’s next annual meeting of stockholders.

Stock-based Compensation

Stock-based compensation expense included on the Company’s Consolidated Statements of Income for all stock-based compensation arrangements was as follows:

Stock-based compensation of $28.3 million, $21.7 million and $21.3 million was capitalized into inventory for the years ended December 31, 2024, 2023 and 2022, respectively. Capitalized stock-based compensation is recognized in Cost of Sales when the related product is sold.

Restricted Stock Units

Restricted Stock Unit Awards with Service-Based Vesting Conditions

Below is a summary of activity related to RSUs with service-based vesting conditions for the year ended December 31, 2024:

The weighted-average grant date fair values per share of RSUs with service-based vesting granted during the years ended December 31, 2024, 2023 and 2022, was $82.98, $88.96 and $79.43, respectively. The total intrinsic values of restricted stock that vested and released in the years ended December 31, 2024, 2023 and 2022, was $152.2 million, $149.8 million and $130.1 million, respectively.

As of December 31, 2024, total unrecognized compensation cost related to unvested RSUs with service-based vesting conditions of $258.6 million was expected to be recognized over a weighted average period of 2.6 years.

Restricted Stock Unit Awards with Performance-based Vesting Conditions

Below is a summary of activity related to RSUs with vesting conditions based on performance targets for the year ended December 31, 2024:

The weighted-average grant date fair value of the PRSUs for the years ended December 31, 2024, 2023 and 2022, was $81.27, $89.22 and $78.27, respectively.

Non-vested PRSUs included grants with vesting contingent upon the achievement ofthree-year orfive-year performance targets for strategic goals, core operating margin or other internal financial measures. The awarded PRSUs vest over athree-year or afive-year service period on a cliff basis. The Company evaluated the targets in the context of its current long-range financial plan and its product candidate development pipeline to determine when attainment of each grant target was probable for accounting purposes. The number of shares that may be earned generally range between 50% and 200% of the base PRSUs granted.

As of December 31, 2024, total unrecognized compensation expense related to non-vested PRSUs of $5.4 million was expected to be recognized over a weighted average period of 3.8 years.

Restricted Stock Unit Awards with Market-based Vesting Conditions

The Compensation Committee and Board may grant RSUs with market-based vesting conditions (base TSR-RSUs) to certain executives. These base TSR-RSUs vest, if at all, in full following athree-year service period only if certain total shareholder return (TSR) results relative to the Nasdaq Biotechnology Index comparative companies are achieved. The number of shares that may be earned range between zero percent and 200% of the base TSR-RSUs with a ceiling achievement level of 100% of the base TSR-RSUs in the event the Company’s TSR is negative on an absolute basis.

Below is a summary of activity related to RSUs with market-based vesting conditions for the year ended December 31, 2024:

The grant date fair values and assumptions used to determine the fair value of TSR-RSUs on grant date during the periods presented were as follows:

As of December 31, 2024, total unrecognized compensation expense of $15.3 million related to base TSR-RSUs was expected to be recognized over a weighted average period of 2.0 years.

Stock Options and Purchase Rights

Stock Options

The following table summarizes activity under the Company’s stock option plans for the year ended December 31, 2024. All stock option grants presented in the table had exercise prices not less than the fair value of the underlying common stock on the grant date:

(1)The aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock on the Nasdaq Global Select Market as of the last trading day for the respective year. The aggregate intrinsic value of options outstanding and exercisable includes options with an exercise price below $65.73, the closing price of the Company’s common stock on the Nasdaq Global Select Market on December 31, 2024.

The weighted-average grant date fair values of stock options granted in the years ended December 31, 2024, 2023 and 2022, were $35.87, $39.30 and $32.45, respectively. The total intrinsic values of options exercised during the years ended December 31, 2024, 2023 and 2022, were $9.5 million, $25.9 million and $32.1 million, respectively, determined as of the date of option exercise. Upon the exercise of the options, the Company issues new common stock from its authorized shares.

The assumptions used to estimate the per share fair value of stock options granted during the periods presented were as follows:

As of December 31, 2024, total unrecognized compensation cost related to unvested stock options of $33.3 million was expected to be recognized over a weighted average period of 2.7 years. The net tax expense from stock options exercised during the year ended December 31, 2024 was not material.

Stock Purchase Rights

The assumptions used to estimate the per share fair value of stock purchase rights granted under the ESPP were as follows:

As of December 31, 2024, total unrecognized compensation cost related to unvested stock purchase rights under the ESPP of $12.4 million was expected to be recognized over a weighted average period of 1.3 years.

(14)OTHER EMPLOYEE BENEFITS

401(k) Plan

The Company sponsors the BioMarin Retirement Savings Plan (the 401(k) Plan) for eligible U.S. employees. The Company pays the direct expenses of the 401(k) Plan and matches 100% of each participating employee’s eligible contributions, up to a maximum of the lesser of 6% of the employee’s annual compensation or the annual statutory contribution limit. The Company’s matching contribution vests immediately and was approximately $34.4 million, $32.7 million and $30.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Deferred Compensation Plan

The Company maintains the NQDC under which eligible directors and key employees may defer compensation. The NQDC prohibits the diversification of deferrals of Company stock. Company stock issued and held by the NQDC is accounted for similarly to treasury stock in that the fair value of the employer stock was determined on the grant date and the shares are issued into the NQDC when the restricted stock vests. The corresponding deferred compensation obligation is classified as equity with no changes in the fair value of Company stock held in the NQDC recognized in earnings. Other contributions held in the NQDC are classified as trading securities, recorded at fair value with the corresponding deferred compensation obligation classified as a liability and subsequent changes in the fair value of these non-BioMarin investments are recognized in earnings in the period they occur.

See Note 7 to these Consolidated Financial Statements for additional discussion on the fair value and presentation of the NQDC assets and liabilities.

(15)RESTRUCTURING

During 2024, in connection with the discontinuation of certain research and development programs and organizational redesign efforts centered around the Company’s strategic priorities, including the acceleration and maximization of VOXZOGO, establishing the ROCTAVIAN opportunity, focusing R&D activities on the assets that management believes will be the most productive and accelerate earnings per share through expanding margins, the Company committed to plans in the second and third quarters of 2024, to reduce its global workforce by approximately 170 and 225 employees, respectively. These workforce reductions were substantially completed by the end of 2024.

The restructuring plan includes severance and employee-related costs, asset impairments, and other costs. The asset impairment charges were for abandoned assets-in-progress of being constructed and a ROU Asset related to leased office space the Company decided to exit and sub-lease. The Company utilized the discounted cash flow approach to determine the fair value of the ROU Asset. The ROU Asset impairment is the difference between the existing lease terms and rates and the expected sub-lease terms and rates available in the market. The Other category includes restructuring-related consulting costs, which are expensed as incurred, as well as other obligations related to the leased office space that will be satisfied over the remainder of the lease term.

The restructuring charges and adjustments were included in SG&A in the Consolidated Statements of Income. Restructuring expenses consisted of the following:

The following unpaid balance as of December 31, 2024 was recorded to Accounts Payable and Accrued Liabilities on the Consolidated Balance Sheet:

(16)INCOME TAXES

The Provision for Income Taxes was based on Income before Income Taxes as follows:

The U.S. and foreign components of the Provision for (Benefit from) Income Taxes were as follows:

The following is a reconciliation of the statutory federal income tax benefit to the Company’s effective tax rate:

(1)For the year ended December 31, 2024, the foreign rate differential included foreign local tax expense which was at an effective rate lower than the U.S. statutory rate offset by elimination of intercompany sales. For the year ended December 31, 2023, the foreign rate differential included foreign local tax expense which was at an effective rate lower than the U.S. statutory rate. For the year ended December 31, 2022, the foreign rate differential included foreign local tax expense which was at an effective rate lower than the U.S. statutory rate and was offset by the income from the sale of a priority review voucher that was taxed at a higher tax rate and elimination of intercompany sales.

The significant components of the Company’s net deferred tax assets were as follows:

The decrease in net deferred tax assets is primarily related to utilization of tax credits and a decrease in intangible assets partially offset by additional capitalization of research and development expenses.

Valuation allowances are provided to reduce the amounts of the Company's deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. At the end of each period, the Company will reassess the ability to realize its deferred tax benefits. If it is more likely than not that the Company would not realize the deferred tax benefits, a valuation allowance may need to be established against all or a portion of the deferred tax assets, which will result in a charge to tax expense.

In the third quarter of 2023, the Company determined that it is more likely than not that the deferred tax assets related to a future royalty stream will be realized. In making this determination, the Company analyzed both the consistent historical royalty earnings and the forecast of future royalty earnings and reached the conclusion that it was appropriate to release the valuation allowance reserve. The release is offset by an increase due to the Company’s expectation that state R&D credits generated will not be utilized.

As of December 31, 2024, the Company had the following net operating loss and tax credit carryforwards, which if not utilized, will expire as follows:

Not included in the table above are $182.5 million of state research credit carryovers that will carry forward indefinitely.

The Company’s net operating losses and credits could be subject to annual limitations due to ownership change limitations provided by Internal Revenue Code Section 382 and similar state provisions. An annual limitation could result in the expiration of net operating losses and tax credit carryforward before utilization. There are limitations on the tax attributes of acquired entities however, the Company does not believe the limitations will have a material impact on the utilization of the net operating losses or tax credits.

The financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2024 and 2023, is as follows:

Included in the balance of unrecognized tax benefits as of December 31, 2024 were potential benefits of $312.6 million that, if recognized, would affect the effective tax rate. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items in the income tax expense. The total amount of accrued interest and penalties was not significant as of December 31, 2024. The Company believes it will not have any material decreases in its previously unrecognized tax benefits within the next twelve months.

The Company files income tax returns in the U.S., Ireland and various foreign jurisdictions. The U.S. and foreign jurisdictions have statute of limitations ranging from three tofive years. However, carryforward tax attributes that were generated in 2021 and earlier may still be adjusted upon examination by tax authorities. The Company's 2022 federal income tax return is currently under audit by the IRS.

U.S. income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. This excess totaled approximately $15.6 million as of December 31, 2024, which will be indefinitely reinvested; deferred income taxes have not been provided on such foreign earnings.

(17)EARNINGS PER COMMON SHARE

Potentially issuable shares of common stock include shares issuable upon the exercise of outstanding employee stock option awards, common stock issuable under the Company’s ESPP, unvested RSUs and contingent issuances of common stock related to the Company's convertible debt.

The following table sets forth the computation of basic and diluted earnings per common share (common shares in thousands):

In addition to the equity instruments included in the table above, the table below presents potential shares of common stock that were excluded from the computation of diluted earnings per common share as they were anti-dilutive (in thousands):

(1) If converted, the Company would issue 4.0 million shares under the 2024 Notes and 4.4 million shares under the 2027 Notes. The Company’s 2024 Notes matured in August 2024 and substantially all holders were repaid in cash. For additional discussion of our convertible debt, see Note 10 to these Consolidated Financial Statements.

(18)LICENSE AND COLLABORATION AGREEMENTS

In October 2012, the Company licensed to Catalyst Pharmaceutical Partners, Inc. (Catalyst) the North American rights to develop and market FIRDAPSE, the Company's former commercial product for the treatment of Lambert-Eaton myasthenic syndrome. In exchange for the North American rights to FIRDAPSE, commencing in the first quarter of 2019 the Company receives royalties of 7% to 10% on net product sales of FIRDAPSE in North America.

On October 1, 2015, the Company entered into an agreement with Ares Trading S.A. (Merck Serono) under which the Company acquired all global rights to KUVAN and PALYNZIQ from Merck Serono, with the exception of KUVAN in Japan. Previously, the Company had exclusive rights to KUVAN in the U.S. and Canada and PALYNZIQ in the U.S. and Japan. Pursuant to the agreement, if future sales milestones were met, the Company was obligated to pay Merck Serono up to a maximum of €60.0 million, all of which were met and paid as of December 31, 2023. Pursuant to the agreement, the Company also paid Merck Serono €125.0 million in cash when the PALYNZIQ development milestones were achieved.

The Company is engaged in R&D collaborations with various other entities. These provide for sponsorship of R&D by the Company and may also provide for exclusive royalty-bearing intellectual property licenses or rights of first negotiation regarding licenses to intellectual property development under the collaborations. Typically, these agreements can be terminated for cause by either party upon written notice.

(19)COMMITMENTS AND CONTINGENCIES

Contingencies

From time to time the Company is involved in legal actions arising in the normal course of its business. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters could adversely affect the Company, its results of operations, financial condition or cash flows. The Company’s general practice is to expense legal fees as services are rendered in connection with legal matters, and to accrue for liabilities when losses are probable and reasonably estimable based on existing information. The Company accrues for the best estimate of a loss within a range; however, if no estimate in the range is better than any other, then the minimum amount in the range is accrued. Liabilities are evaluated and refined each reporting period as additional information is known. Any receivables for insurance recoveries for these liability claims are recorded as assets when it is probable that a recovery will be realized.

As first disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, the Company received a subpoena from the U.S. Department of Justice (DOJ) requesting that the Company produce certain documents regarding sponsored testing programs relating to VIMIZIM and NAGLAZYME. The Company has produced the requested documents in response to the subpoena and is cooperating fully. The Company is unable to make any assurances regarding the outcome of the investigation by the DOJ, or the impact, if any, that such investigation may have on the Company’s business, Consolidated Balance Sheets, Statements of Income or Statements of Cash Flows.

Contingent Payments

As of December 31, 2024, the Company was subject to contingent payments, primarily comprised of development, regulatory and commercial milestones. Those considered reasonably possible totaled $258.1 million, of this amount the Company may pay up to $3.1 million in 2025 if certain contingencies are met.

Other Commitments

The Company uses experts and laboratories at universities and other institutions to perform certain R&D activities. These amounts are included as R&D expense as services are provided. In the normal course of business, the Company enters into various firm purchase commitments primarily to procure active pharmaceutical ingredients, certain inventory-related items and certain third-party R&D services, production services and facility construction services. The Company also has commitments related to enterprise resource planning system implementation costs. As of December 31, 2024, such commitments were estimated at $641.9 million, of which $482.0 million is expected to be paid in 2025 as underlying goods and services are received. The Company has also licensed technology from third parties, for which it is required to pay royalties upon future sales, subject to certain annual minimums.