Jazz Pharmaceuticals plc

Previous wording

The following discussion of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10‑Q. This discussion contains forward-looking statements that involve risks and uncertainties. You should review the risks and uncertainties described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of important factors that could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition or results of operations. See the “Cautionary Note Regarding Forward-Looking Statements” that appears at the end of this discussion. These statements, like all statements in this report, speak only as of the date of this Quarterly Report on Form 10‑Q (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments.

Current wording

The following discussion of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10‑Q. This discussion contains forward-looking statements that involve risks and uncertainties. You should review the risks and uncertainties described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as supplemented by the risks and uncertainties described in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition or results of operations. See the “Cautionary Note Regarding Forward-Looking Statements” that appears at the end of this discussion. These statements, like all statements in this report, speak only as of the date of this Quarterly Report on Form 10‑Q (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments.

Previous wording

On August 12, 2021, FDA approved Xywav for the treatment of IH in adults. Xywav remains the first and only FDA-approved therapy to treat IH. We initiated the U.S. commercial launch of Xywav for the treatment of IH in adults in November 2021. In January 2022, we announced that FDA recognized seven years of ODE for Xywav in IH through August 2028. IH is a debilitating neurologic sleep disorder characterized by chronic EDS (the inability to stay awake and alert during the day resulting in the irrepressible need to sleep or unplanned lapses into sleep or drowsiness), severe sleep inertia, and prolonged and non-restorative nighttime sleep. An estimated 37,000 people in the U.S. have been diagnosed with IH and are actively seeking healthcare.

Current wording

On August 12, 2021, FDA approved Xywav for the treatment of IH in adults. Xywav remains the first and only FDA-approved therapy to treat IH. We initiated the U.S. commercial launch of Xywav for the treatment of IH in adults in November 2021. In January 2022, we announced that FDA recognized seven years of ODE for Xywav in IH through August 2028. In connection with the global settlement agreement entered into in October 2025 with Avadel (now Alkermes), Alkermes agreed not to market, offer for sale, take orders for, distribute, promote, or provide patient support services with respect to indications of Lumryz not currently approved by FDA, including for treatment of IH, before March 1, 2028. IH is a debilitating neurologic sleep disorder characterized by chronic EDS (the inability to stay awake and alert during the day resulting in the irrepressible need to sleep or unplanned lapses into sleep or drowsiness), severe sleep inertia, and prolonged and non-restorative nighttime sleep. An estimated 37,000 people in the U.S. have been diagnosed with IH and are actively seeking healthcare.

Previous wording

Since Xywav's launch in November 2020, HCPs and patients continue to drive demand for safer, low-sodium Xywav, and we have seen strong new patient growth in IH since its launch in November 2021. Exiting the second quarter of 2026, there were approximately 17,125 active patients taking Xywav, including approximately 11,275 patients with narcolepsy and approximately 5,850 patients with IH.

Current wording

Since Xywav's launch in November 2020, HCPs and patients continue to drive demand for safer, low-sodium Xywav, and we have seen strong new patient growth in IH since its launch in November 2021. Exiting the third quarter of 2026, there were approximately 17,550 active patients taking Xywav, including approximately 11,375 patients with narcolepsy and approximately 6,175 patients with IH.

Previous wording

We acquired Epidiolex (Epidyolex in certain markets outside the U.S.) in May 2021 as part of the GW Acquisition, which added a durable and long-lived asset in epilepsies to our portfolio. Epidiolex was approved in the U.S. in June 2018 for the treatment of seizures associated with two rare and severe forms of epilepsy, LGS and DS, in patients two years of age and older, and subsequently approved in July 2020 for the treatment of seizures associated with TSC in patients one year of age and older. FDA also approved the expansion of the other indications, LGS and DS, to patients one year of age and older. In September 2019, the EC granted marketing authorization under the trade name Epidyolex for use as adjunctive therapy of seizures associated with LGS or DS, in conjunction with clobazam, for patients two years of age and older. The clobazam restriction is limited to the EU and U.K. Epidyolex was also approved for adjunctive therapy of seizures associated with TSC for patients 2 years of age and older in the EU in April 2021 and U.K. in August 2021, and is approved for this indication in other markets. Since January 1, 2025, the approval in U.K. has been extended automatically to cover Northern Ireland (under the agreed Windsor Framework). Epidyolex is now launched and reimbursed in more than 40 countries.

Current wording

We acquired Epidiolex (Epidyolex in certain markets outside the U.S.) in May 2021 as part of the GW Acquisition, which added a durable and long-lived asset in epilepsies to our portfolio. Epidiolex was approved in the U.S. in June 2018 for the treatment of seizures associated with two rare and severe forms of epilepsy, LGS and DS, in patients two years of age and older, and subsequently approved in July 2020 for the treatment of seizures associated with TSC in patients one year of age and older. FDA also approved the expansion of the other indications, LGS and DS, to patients one year of age and older. In September 2019, the EC granted marketing authorization under the trade name Epidyolex for use as adjunctive therapy of seizures associated with LGS or DS, in conjunction with clobazam, for patients two years of age and older. The clobazam restriction is limited to the EU and U.K. Epidyolex was also approved for adjunctive therapy of seizures associated with TSC for patients 2 years of age and older in the EU in April 2021 and U.K. in August 2021, and is approved for this indication in other markets. Epidyolex is now launched and reimbursed in more than 45 countries.

Previous wording

We completed the Chimerix Acquisition in April 2025 for a total cash consideration of $944.2 million, adding Modeyso, a protease activator of the ClpP that also inhibits DRD2, to our oncology portfolio. In August 2025, Modeyso was granted accelerated approval by FDA for the treatment of adult and pediatric patients 1 year of age and older with diffuse midline glioma harboring an H3 K27M mutation with progressive disease following prior therapy. Modeyso is the first and only treatment option approved by FDA for this ultra-rare and aggressive brain tumor. In connection with the approval by FDA of Modeyso in August 2025, we received a rare pediatric disease PRV, which we sold in January 2026 for total cash consideration of $200.0 million of which 50% is attributable to us.

Current wording

We completed the Chimerix Acquisition in April 2025 for a total cash consideration of $944.2 million, adding Modeyso, a protease activator of the ClpP that also inhibits DRD2, to our oncology portfolio. In August 2025, Modeyso was granted accelerated approval by FDA for the treatment of adult and pediatric patients 1 year of age and older with diffuse midline glioma harboring an H3 K27M mutation with progressive disease following prior therapy. Modeyso is the first and only treatment option approved by FDA for this ultra-rare and aggressive brain tumor. In connection with the approval by FDA of Modeyso in August 2025, we received a rare pediatric disease PRV, which we sold in January 2026 for total cash consideration of $200.0 million of which 50% was attributable to us.

Previous wording

Based on the results from the LAGOON trial of Zepzelca in second-line metastatic SCLC, which were reported in June 2026, and in alignment with FDA, in the third quarter of 2026, we will submit for FDA's review and subsequent action a labeling supplement to remove the second-line indication. The first-line maintenance indication will not be affected.

Current wording

We acquired U.S. development and commercialization rights to Zepzelca in early 2020, and launched with an indication for treatment of patients with metastatic SCLC with disease progression on or after platinum-based chemotherapy. Based on the results from the LAGOON trial of Zepzelca in second-line metastatic SCLC, which were reported in June 2026, FDA approved the updated U.S. label supplement on September 30, 2026, to remove the second-line indication. This label modification does not affect Zepzelca's full FDA approval in the first-line maintenance indication.

Previous wording

In October 2024, we announced positive top-line results from the Phase 3 IMforte trial showing a statistically significant and clinically meaningful progression-free survival and overall survival benefit. In October 2025, FDA approved Zepzelca in combination with atezolizumab as a maintenance treatment for adults with extensive-stage SCLC whose disease has not progressed after first-line induction therapy with atezolizumab, or atezolizumab and hyaluronidase-tqjs, carboplatin and etoposide. Our promotional efforts are wholly focused on educating SCLC-treating physicians on the first-line maintenance setting as utilization is expected to shift from second-line use to the first-line.

Current wording

In October 2024, we announced positive top-line results from the Phase 3 IMforte trial showing a statistically significant and clinically meaningful progression-free survival and overall survival benefit. In October 2025, FDA approved Zepzelca in combination with atezolizumab as a maintenance treatment for adults with extensive-stage SCLC whose disease has not progressed after first-line induction therapy with atezolizumab, or atezolizumab and hyaluronidase-tqjs, carboplatin and etoposide. Our promotional efforts are wholly focused on educating SCLC-treating physicians on the Zepzelca combination in the first-line maintenance setting across academic and community centers.

Previous wording

In November 2025, we announced positive top-line results from the pivotal Phase 3 HERIZON-GEA-01 trial of zanidatamab in combination with chemotherapy, with or without tislelizumab, as first-line treatment for adults with HER2-positive locally advanced or metastatic GEA. In January 2026, we presented late-breaking results from the trial at ASCO GI. The investigational arm containing zanidatamab plus tislelizumab and chemotherapy demonstrated a statistically significant and clinically meaningful overall survival benefit of more than two years of median overall survival. The greater than seven-month improvement in median overall survival represents a 28% reduction in the risk of death versus the control arm. Both investigational arms led to a statistically significant and clinically meaningful median progression-free survival of more than one year, representing a greater than four-month improvement and 35% reduction in the risk of disease progression or death versus the control arm. The results from the trial were published in The New England Journal of Medicine. Our sBLA based on these results is currently under Priority Review with FDA and has a PDUFA date of August 25, 2026.

Current wording

In November 2025, we announced positive top-line results from the pivotal Phase 3 HERIZON-GEA-01 trial of zanidatamab in combination with chemotherapy, with or without tislelizumab, as first-line treatment for adults with HER2-positive locally advanced or metastatic GEA. In January 2026, we presented late-breaking results from the trial at ASCO GI. The investigational arm containing zanidatamab plus tislelizumab and chemotherapy demonstrated a statistically significant and clinically meaningful overall survival benefit of more than two years of median overall survival. In October 2026, we presented a final, formal analysis from the trial at the ESMO Congress demonstrating sustained survival benefit at three years for both Ziihera-containing combinations. Ziihera in combination with chemotherapy led to a statistically significant and clinically meaningful overall survival improvement compared with the control arm. With longer follow-up, the Ziihera plus tislelizumab combination further supports previous positive data that were published in The New England Journal of Medicinein May 2026.

Previous wording

Zanidatamab is currently being evaluated in multiple clinical trials as a treatment for patients with HER2-expressing cancers: a Phase 2 DiscovHER-Pan-206 trial evaluating zanidatamab monotherapy in previously-treated patients with various HER2-positive (IHC3+) cancers, a Phase 2 EmpowHER-BC-208 trial to evaluate zanidatamab in patients with HER2-positive neoadjuvant and adjuvant breast cancer, a Phase 3 trial EmpowHER-BC-303 to evaluate zanidatamab plus chemotherapy or trastuzumab plus chemotherapy in patients with HER2-positive breast cancer whose disease has progressed on previous T-DXd treatment, and a Phase 3 confirmatory trial examining zanidatamab in first-line patients with HER2-positive BTC. FDA recently granted BTD for the treatment of zanidatamab in adults with previously treated, locally advanced, unresectable, or metastatic HER2-positive CRC.

Current wording

Zanidatamab is currently being evaluated in multiple clinical trials as a treatment for patients with HER2-expressing cancers: a Phase 2 DiscovHER-Pan-206 trial evaluating zanidatamab monotherapy in previously-treated patients with various HER2-positive (IHC3+) cancers, a Phase 2 EmpowHER-BC-208 trial to evaluate zanidatamab in patients with HER2-positive neoadjuvant and adjuvant breast cancer, a Phase 3 trial EmpowHER-BC-303 to evaluate zanidatamab plus chemotherapy or trastuzumab plus chemotherapy in patients with HER2-positive breast cancer whose disease has progressed on previous T-DXd treatment, and a Phase 3 confirmatory trial examining zanidatamab in first-line patients with HER2-positive BTC. FDA granted BTD for the treatment of zanidatamab in adults with previously treated, locally advanced, unresectable, or metastatic HER2-positive CRC.

Previous wording

The lead clinical asset acquired from Chimerix, Modeyso, is a novel first-in-class small molecule that is a protease activator of the ClpP that also inhibits DRD2. Modeyso is the first and only treatment option approved by FDA for an ultra-rare and aggressive brain tumor. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the Phase 3 ACTION confirmatory trial. The ongoing Phase 3 ACTION trial is evaluating Modeyso in newly diagnosed, non-recurrent H3 K27M-mutant diffuse glioma patients following radiation treatment, potentially extending this treatment option into the front-line setting.

Current wording

The lead clinical asset acquired from Chimerix, Modeyso, is a novel first-in-class small molecule that is a protease activator of the ClpP that also inhibits DRD2. Modeyso is the first and only treatment option approved by FDA for an ultra-rare and aggressive brain tumor. Full approval for this indication is contingent upon us satisfying post-marketing requirements, including the verification and description of clinical benefit in the Phase 3 ACTION confirmatory trial and other applicable post-marketing commitments. The ongoing Phase 3 ACTION trial is evaluating Modeyso in newly diagnosed, non-recurrent H3 K27M-mutant diffuse glioma patients following radiation treatment, potentially extending this treatment option into the front-line setting.

Previous wording

Mid-2026, we submitted an NDA to FDA for a capsule formulation of cannabidiol to broaden utilization of cannabidiol in currently approved indications and increase flexibility for patients. We also announced a Phase 2/3 trial to evaluate the safety and efficacy of cannabidiol capsule formulation in juvenile myoclonic epilepsy.

Current wording

In mid-2026, we submitted an NDA to FDA for a capsule formulation of cannabidiol to broaden utilization of cannabidiol in currently approved indications and increase flexibility for patients. FDA accepted the NDA and granted a PDUFA target action date of April 16, 2027. We also announced a Phase 2/3 trial to evaluate the safety and efficacy of cannabidiol capsule formulation in juvenile myoclonic epilepsy.

Previous wording

While we have continued to diversify our revenues and commercial portfolio of medicines, including leading therapies addressing rare epilepsies, cancers and sleep disorders, our business continues to meaningfully depend on Xywav revenues. Our current 2026 operating plan assumes that Xywav, with 92% lower sodium compared to high-sodium oxybates (depending on the dose), a dosing titration option and an absence of a sodium warning, will remainthe #1 branded oxybate treatment for narcolepsy; the position it held based on revenue in the second quarter of 2026, and the only FDA-approved therapy for IH. In June 2021, FDA recognized seven years of ODE for Xywav in narcolepsy through July 21, 2027, (which was subsequently extended to January 21, 2028, because FDA granted pediatric exclusivity), stating that Xywav is clinically superior to Xyrem by means of greater safety due to reduced chronic sodium burden. Additionally, in August 2021, FDA recognized ODE for Xywav in IH through August 12, 2028. While we expect that our business will continue to meaningfully depend on Xywav revenues, there is no guarantee that Xywav revenues will remain at current levels.

Current wording

While we have diversified our revenues and commercial portfolio of medicines, including leading therapies addressing rare epilepsies, cancers and sleep disorders, our business continues to meaningfully depend on Xywav revenues. Our current 2026 operating plan assumes that Xywav, with 92% lower sodium compared to high-sodium oxybates (depending on the dose), a dosing titration option and an absence of a sodium warning, will remainthe #1 branded oxybate treatment for narcolepsy; the position it held based on revenue in the third quarter of 2026, and the only FDA-approved therapy for IH. In June 2021, FDA recognized seven years of ODE for Xywav in narcolepsy through July 21, 2027, (which was subsequently extended to January 21, 2028, because FDA granted pediatric exclusivity), stating that Xywav is clinically superior to Xyrem by means of greater safety due to reduced chronic sodium burden. Additionally, in August 2021, FDA recognized ODE for Xywav in IH through August 12, 2028. While we expect that our business will continue to meaningfully depend on Xywav revenues, there is no guarantee that Xywav revenues will remain at current levels.

Previous wording

Our ability to successfully commercialize Xywav depends on, among other things, our ability to maintain adequate payor coverage and reimbursement for Xywav and acceptance of Xywav by physicians and patients, including of Xywav for the treatment of IH in adults. In an effort to support strong adoption of Xywav and patient success, we are focused on facilitating payor coverage for Xywav through education of its low-sodium and providing robust patient copay and savings programs.

Current wording

Our ability to successfully commercialize Xywav depends on, among other things, our ability to maintain adequate payor coverage and reimbursement for Xywav and acceptance of Xywav by physicians and patients, including of Xywav for the treatment of IH in adults. In an effort to support strong adoption of Xywav and patient success, we are focused on facilitating payor coverage for Xywav through education of its low-sodium formulation and providing robust patient copay and savings programs.

Previous wording

Xywav and Xyrem face competition from branded products, such as Alkermes’ Lumryz, and alternative products that treats narcolepsy, including orexin 2 receptor agonists. In addition, our oxybate products have faced competition from AG and generic versions of high-sodium oxybate. Specifically, a wholly-owned subsidiary of Hikma launched its AG version of sodium oxybate in January 2023, and Amneal launched its AG version of sodium oxybate in July 2023. In September 2023, Hikma elected to continue to sell the Hikma AG product, with royalties to be paid to us, for an additional four years beginning in January 2024.

Current wording

Xywav and Xyrem face competition from branded products, such as Alkermes’ Lumryz, and alternative products that treat narcolepsy. We expect to face intensifying branded competition in narcolepsy type 1 from Takeda's recently approved Orzeyful upon launch, the first FDA-approved oral orexin 2 receptor agonist, and future competition from other alternative products and clinical-stage orexin 2 receptor agonists currently in development for narcolepsy type 1, narcolepsy type 2 and IH. In addition, our oxybate products have faced competition from AG and generic versions of high-sodium oxybate. Specifically, a wholly-owned subsidiary of Hikma launched its AG version of sodium oxybate in January 2023, and Amneal launched its AG version of sodium oxybate in July 2023. In September 2023, Hikma elected to continue to sell the Hikma AG product, with royalties to be paid to us, for an additional four years beginning in January 2024.

Previous wording

Generic competition can decrease the net prices at which branded products, such as Xywav and Xyrem are sold, as can competition from other branded products. In addition, we have increasingly experienced pressure from third party payors to agree to discounts, rebates or restrictive pricing terms, and we cannot guarantee we will be able to agree to commercially reasonable terms with PBMs, or similar organizations and other third party payors, or that we will be able to ensure patient access and acceptance on formularies. Entering into agreements with PBMs or similar organizations and payors to ensure patient access has and may continue to result in decreased net prices for some of our products. Moreover, generic or AG high-sodium oxybate products or branded high-sodium oxybate entrants in narcolepsy, such as Alkermes’ Lumryz, have had and may continue to have the effect of changing payor or formulary coverage of Xywav or Xyrem in favor of other products, and may indirectly adversely affect sales of Xywav and Xyrem.

Current wording

Generic competition can decrease the net prices at which branded products, such as Xywav and Xyrem are sold, as can competition from other branded products. In addition, the entry of new therapeutic classes, such as orexin 2 receptor agonists, alongside generic oxybate options may prompt third-party payors and PBMs to initiate competitive formulary review and request for proposal processes across the sleep disorder category. We have increasingly experienced pressure from third party payors to agree to higher rebates, deeper discounts, or restrictive pricing terms in response to these request for proposal cycles, and we cannot guarantee we will be able to agree to commercially reasonable terms with PBMs, or similar organizations and other third party payors, or that we will be able to ensure unrestricted patient access and preferred acceptance on formularies. Entering into agreements with PBMs or similar organizations and payors to ensure patient access has and may continue to result in decreased net prices for some of our products. Moreover, generic or AG high-sodium oxybate products or branded high-sodium oxybate entrants in narcolepsy, such as Alkermes’ Lumryz, have had and may continue to have the effect of changing payor or formulary coverage of Xywav or Xyrem in favor of other products, and may indirectly adversely affect sales of Xywav and Xyrem.

Previous wording

In any event, we expect that the approval and launch of AG products or other generic versions of Xyrem or Xywav and the approval and launch of any other sodium oxybate product, such as Alkermes’ Lumryz, or alternative product that treats narcolepsy, such as Axsome’s reboxetine or orexin 2 receptor agonists being developed by Takeda, Merck & Co., Inc., Eisai Co., Ltd., Eli Lilly and Company and Alkermes, will continue to have a negative impact on, and could have a material adverse effect on, our sales of Xywav and Xyrem and on our business, financial condition, results of operations and growth prospects.

Current wording

In any event, we expect that the approval and launch of AG products or other generic versions of Xyrem or Xywav and the approval and launch of any other sodium oxybate product, such as Alkermes’ Lumryz, or alternative product that treats narcolepsy, such as Axsome’s reboxetine, Takeda's Orzeyful or orexin 2 receptor agonists being developed by Merck & Co., Inc., Eisai Co., Ltd., Eli Lilly and Company and Alkermes for treatment of narcolepsy type 1, narcolepsy type 2 and IH, will continue to have a negative impact on, and could have a material adverse effect on, our sales of Xywav and Xyrem and on our business, financial condition, results of operations and growth prospects.

Previous wording

Our financial condition, results of operations and growth prospects are also dependent on our ability to maintain or increase sales of Epidiolex/Epidyolex in the U.S. and Europe, which is subject to many risks and there is no guarantee that we will be able to continue to successfully commercialize Epidiolex/Epidyolex for its approved indications. The commercial success of Epidiolex/Epidyolex depends on the extent to which patients and physicians continue to accept and adopt Epidiolex/Epidyolex as a treatment for seizures associated with LGS, DS and TSC. Physicians may not prescribe Epidiolex/Epidyolex and patients may be unwilling to use Epidiolex/Epidyolex if coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost. Additionally, any negative development for Epidiolex/Epidyolex in the market, in clinical development for additional indications, or in regulatory processes in other jurisdictions, may adversely impact the commercial results and potential of Epidiolex/Epidyolex. Moreover, we expect that Epidiolex will face competition from generic products in the future. We have settled patent litigation with each of the ten companies seeking to market a generic version of Epidiolex in the U.S. by granting each of the Epidiolex ANDA Filers a license to manufacture, market, and sell its own generic version of Epidiolex beginning in the very late 2030s, or earlier under certain circumstances, including but not limited to the launch of another generic Epidiolex product or a final decision that all unexpired claims of the Epidiolex patents are not infringed, or are invalid and/or unenforceable. In addition, there are non-FDA approved CBD preparations being made available from companies through the state-enabled medical marijuana industry, which might attempt to compete with Epidiolex. Epidiolex may also face branded competition in the future with potential therapy launches targeting broad developmental and epileptic encephalopathies, including Praxis Precision Medicines, Inc.'s relutrigine, H. Lundbeck A/S' bexicaserin and Bright Minds Biosciences Inc.'s BMB-101. However, the potential competitive impact on Epidiolex remains uncertain. Overall, significant uncertainty remains regarding the commercial potential of Epidiolex/Epidyolex.

Current wording

Our financial condition, results of operations and growth prospects are also dependent on our ability to maintain or increase sales of Epidiolex/Epidyolex in the U.S. and Europe, which is subject to many risks and there is no guarantee that we will be able to continue to successfully commercialize Epidiolex/Epidyolex for its approved indications. The commercial success of Epidiolex/Epidyolex depends on the extent to which patients and physicians continue to accept and adopt Epidiolex/Epidyolex as a treatment for seizures associated with LGS, DS and TSC. Physicians may not prescribe Epidiolex/Epidyolex and patients may be unwilling to use Epidiolex/Epidyolex if coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost. Additionally, any negative development for Epidiolex/Epidyolex in the market, in clinical development for additional indications, or in regulatory processes in other jurisdictions, may adversely impact the commercial results and potential of Epidiolex/Epidyolex. Moreover, we expect that Epidiolex will face competition from generic products in the future. We have settled patent litigation with each of the ten companies seeking to market a generic version of Epidiolex in the U.S. by granting each of the Epidiolex ANDA Filers a license to manufacture, market, and sell its own generic version of Epidiolex beginning in the very late 2030s, or earlier under certain circumstances, including but not limited to the launch of another generic Epidiolex product or a final decision that all unexpired claims of the Epidiolex patents are not infringed, or are invalid and/or unenforceable. In addition, there are non-FDA approved CBD preparations being made available from companies through the state-enabled medical marijuana industry, which might attempt to compete with Epidiolex. Epidiolex may also face branded competition in the future with potential therapy launches targeting broad developmental and epileptic encephalopathies, including Praxis' relutrigine, H. Lundbeck A/S' bexicaserin and Bright Minds Biosciences Inc.'s BMB-101. However, the potential competitive impact on Epidiolex remains uncertain. Overall, significant uncertainty remains regarding the commercial potential of Epidiolex/Epidyolex.

Previous wording

In addition to Xywav, Xyrem and Epidiolex/Epidyolex, our long-term growth strategy relies on successfully commercializing and advancing a portfolio of oncology products, including Ziihera, Modeyso, Zepzelca, Rylaze, Vyxeos and Defitelio. Our success is contingent upon mitigating significant risks related to our oncology portfolio, including our ability to navigate significant and increasing market competition, such as the entry of novel therapeutic products, including for SCLC and our ability to successfully complete confirmatory clinical trials and retain regulatory approvals. Certain of our oncology products rely on accelerated regulatory approval pathways. Our ability to maintain these marketing authorizations is strictly dependent on the timely and successful completion of post-marketing confirmatory clinical trials. FDA and other global regulatory bodies have recently demonstrated increased scrutiny over accelerated approvals. Any delays in trial enrollment, failure to meet primary clinical endpoints, or regulatory determinations that a product's clinical benefit does not justify its risks could lead to the restriction or withdrawal of our products from the market. Additionally, effectively commercializing Ziihera, Modeyso, Zepzelca, Rylaze, Vyxeos and Defitelio requires securing and maintaining favorable formulary status, overcoming increasing pricing and reimbursement pressures from third-party payors, and managing complex global manufacturing and supply chains. An inability to overcome these competitive, commercial, and regulatory hurdles, or to maximize the potential of these products through successful R&D activities, could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Current wording

In addition to Xywav, Xyrem and Epidiolex/Epidyolex, our long-term growth strategy relies on successfully commercializing and advancing a portfolio of oncology products, including Ziihera, Modeyso, Zepzelca, Rylaze, Vyxeos and Defitelio. Our success is contingent upon mitigating significant risks related to our oncology portfolio, including our ability to navigate significant and increasing market competition, such as the entry of novel therapeutic products, including for SCLC, and our ability to successfully complete confirmatory clinical trials and retain regulatory approvals. Certain of our oncology products rely on accelerated regulatory approval pathways. Our ability to maintain these marketing authorizations is dependent on the timely and successful completion of post-marketing confirmatory clinical trials. FDA and other global regulatory bodies have recently demonstrated increased scrutiny over accelerated approvals. Any delays in trial enrollment, failure to meet primary clinical endpoints, or regulatory determinations that a product's clinical benefit does not justify its risks could lead to the restriction or withdrawal of our products from the market. For example, based on the results from the LAGOON trial of Zepzelca in second-line metastatic SCLC, which were reported in June 2026, FDA approved the updated U.S. label supplement on September 30, 2026, to remove the second-line indication. This label modification does not affect Zepzelca's separate, full FDA approval in the first-line maintenance indication. Additionally, effectively commercializing Ziihera, Modeyso, Zepzelca, Rylaze, Vyxeos and Defitelio requires securing and maintaining favorable formulary status, overcoming increasing pricing and reimbursement pressures from third-party payors, and managing complex global manufacturing and supply chains. An inability to overcome these competitive, commercial, and regulatory hurdles, or to maximize the potential of these products through successful R&D activities, could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Previous wording

In addition to continued investment in our R&D pipeline, we intend to continue to grow our business by acquiring or in-licensing, and developing, including with collaboration partners, additional rare-disease products and product candidates that we believe are highly differentiated and have significant commercial potential. Failure to identify and acquire, in-license or develop additional products or product candidates, successfully manage the risks associated with integrating any products or product candidates into our portfolio or the risks arising from anticipated and unanticipated problems in connection with an acquisition or in-licensing, such as the Chimerix Acquisition, could have a material adverse effect on our business, results of operations and financial condition.

Current wording

In addition to continued investment in our R&D pipeline, we intend to continue to grow our business by acquiring or in-licensing, and developing, including with collaboration partners, additional rare-disease products and product candidates that we believe are highly differentiated and have significant commercial potential. Failure to identify and acquire, in-license or develop additional products or product candidates, successfully manage the risks associated with integrating any products or product candidates into our portfolio or the risks arising from anticipated and unanticipated problems in connection with an acquisition or in-licensing, such as the Actio Acquisition, could have a material adverse effect on our business, results of operations and financial condition.

Previous wording

Our industry has been, and is expected to continue to be, subject to healthcare cost containment and drug pricing scrutiny by regulatory agencies in the U.S. and internationally. If new healthcare policies or reforms intended to curb healthcare costs are adopted or if we experience negative publicity with respect to pricing of our products or the pricing of pharmaceutical drugs generally, the prices that we charge for our products may be affected, our commercial opportunity may be limited and/or our revenues from sales of our products may be negatively impacted. For example, the IRA, among other things, requires the HHS Secretary to negotiate, with respect to Medicare units and subject to a specified cap, the price of a set number of certain high Medicare spend drugs and biologicals per year starting in 2026 and penalizes manufacturers of certain Medicare Parts B and D drugs for price increases above inflation. The IRA also made several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs and a change in manufacturer liability under the program, that could negatively affect our business and financial condition. In addition, under the Medicaid Drug Rebate Program, rebates owed by manufacturers are no longer subject to a cap on the rebate amount, which could adversely affect our rebate liability. Moreover, the current administration continues to pursue MFN pricing for certain prescription drugs, under which U.S. prices would be indexed to the lowest prices available in select OECD countries. As part of this policy initiative, the administration is implementing or considering various Center for Medicare & Medicaid Innovation models that would rely on MFN reference pricing. We are also subject to increasing pricing pressure and restrictions on reimbursement imposed by payors. If we fail to obtain and maintain adequate formulary positions and institutional access for our current products and future approved products, we will not be able to achieve a return on our investment and our business, financial condition, results of operations and growth prospects would be materially adversely affected.

Current wording

Our industry has been, and is expected to continue to be, subject to healthcare cost containment and drug pricing scrutiny by regulatory agencies in the U.S. and internationally. If new healthcare policies or reforms intended to curb healthcare costs are adopted or if we experience negative publicity with respect to pricing of our products or the pricing of pharmaceutical drugs generally, the prices that we charge for our products may be affected, our commercial opportunity may be limited and/or our revenues from sales of our products may be negatively impacted. For example, the IRA, among other things, requires the HHS Secretary to negotiate, with respect to Medicare units and subject to a specified cap, the price of a set number of certain high Medicare spend drugs and biologicals per year starting in 2026 and penalizes manufacturers of certain Medicare Parts B and D drugs for price increases above inflation. The IRA also made several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs and a change in manufacturer liability under the program, that could negatively affect our business and financial condition. In addition, under the Medicaid Drug Rebate Program, rebates owed by manufacturers are no longer subject to a cap on the rebate amount, which could adversely affect our rebate liability. Moreover, the current administration continues to pursue MFN drug pricing policies for certain prescription drugs, which generally seek to align U.S. prices with prices paid in economically comparable countries, based on different methodologies depending on the proposal or policy. As part of this policy initiative, the administration is implementing or considering various CMS Center for Medicare & Medicaid Innovation models, under which manufacturers may owe rebates for certain prescription drugs under Medicaid or Medicare if the price of a drug included in an applicable model exceeds an international benchmark calculated based on prices available in certain economically comparable reference countries. These include the GENErating cost Reductions for U.S. Medicaid (GENEROUS) Model, which focuses on Medicaid covered outpatient drugs and is currently voluntary for manufacturers and states; the finalized Global Benchmark for Efficient Drug Pricing Model (GLOBE) Model for certain Medicare Part B drugs; and the proposed Guarding United States Medicare Against Rising Drug Costs (GUARD) Model for certain Medicare Part D drugs. We are also subject to increasing pricing pressure and restrictions on reimbursement imposed by payors. If we fail to obtain and maintain adequate formulary positions and institutional access for our current products and future approved products, we will not be able to achieve a return on our investment and our business, financial condition, results of operations and growth prospects would be materially adversely affected.

Previous wording

In addition, business practices by pharmaceutical companies, including product formulation improvements, patent litigation settlements, and REMS programs, have increasingly drawn public scrutiny from legislators and regulatory agencies, with allegations that such programs are used as a means of improperly blocking or delaying competition. Government investigations with respect to our business practices, including as they relate to the Xywav and Xyrem REMS, the launch of Xywav, our Xyrem patent litigation settlement agreements or otherwise, could cause us to incur significant monetary charges to resolve these matters and could distract us from the operation of our business and execution of our strategy. In addition, from June 2020 to May 2022, a number of lawsuits were filed on behalf of purported direct and indirect Xyrem purchasers, alleging that the patent litigation settlement agreements we entered with certain generic companies violate state and federal antitrust and consumer protection laws. As of October 2025, we resolved the entirety of these antitrust lawsuits. For additional information on these lawsuits, as well as the settlement agreements with respect thereto and other legal matters, see Note 10, Commitments and Contingencies-Legal Proceedings of the Notes to Condensed Consolidated Financial Statements, included in Part I of this Quarterly Report on Form 10‑Q. It is possible that additional lawsuits will be filed against us making similar or related allegations. We cannot predict the outcome of any potential additional lawsuits; however, if the plaintiffs were to be successful in their claims against us, they may be entitled to injunctive relief or we may be required to pay significant monetary damages. Moreover, we are, and expect to continue to be, the subject of various claims, legal proceedings, and government investigations apart from those set forth above that have arisen in the ordinary course of business that have not yet been fully resolved and that could adversely affect our business and the execution of our strategy. Any of the foregoing risks and uncertainties could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Current wording

In addition, business practices by pharmaceutical companies, including product formulation improvements, patent litigation settlements, and REMS programs, have increasingly drawn public scrutiny from legislators and regulatory agencies, with allegations that such programs are used as a means of improperly blocking or delaying competition. Government investigations with respect to our business practices, including as they relate to the Xywav and Xyrem REMS, the launch of Xywav, our Xyrem patent litigation settlement agreements or otherwise, could cause us to incur significant monetary charges to resolve these matters and could distract us from the operation of our business and execution of our strategy. In addition, from June 2020 to May 2022, a number of lawsuits were filed on behalf of purported direct and indirect Xyrem purchasers, alleging that the patent litigation settlement agreements we entered with certain generic companies violate state and federal antitrust and consumer protection laws. As of October 2025, we resolved the entirety of these antitrust lawsuits. It is possible that additional lawsuits will be filed against us making similar or related allegations. We cannot predict the outcome of any potential additional lawsuits; however, if the plaintiffs were to be successful in their claims against us, they may be entitled to injunctive relief or we may be required to pay significant monetary damages. Moreover, we are, and expect to continue to be, the subject of various claims, legal proceedings, and government investigations apart from those set forth above that have arisen in the ordinary course of business that have not yet been fully resolved and that could adversely affect our business and the execution of our strategy. Any of the foregoing risks and uncertainties could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Previous wording

Moreover, the U.S. government has imposed and may seek to impose additional restrictions on international trade, such as tariffs on goods generally, and pharmaceutical and biological products in particular, imported into the U.S. In anticipation of the potential for increased tariffs on our products, we have increased inventory levels of our products in the U.S. We conduct our business globally and have third-party suppliers located outside the U.S., including in the PRC. In addition, we have a manufacturing and development facility in Athlone, Ireland where we manufacture Xywav and Xyrem, a manufacturing and development facility in Kent Science Park, U.K. where we produce Epidiolex/Epidyolex, and a manufacturing plant in Villa Guardia, Italy where we produce defibrotide drug substance. While we cannot at this time predict the ultimate impact of such tariffs, we anticipate that our margins could be adversely affected, depending on the ultimate scope and duration of tariffs imposed. However, given the volatility and uncertainty regarding the scope and duration of such tariffs and other aspects of U.S. and foreign government trade policies, the ultimate impact on our operations and financial results remains uncertain. Likewise, our financial condition and results of operations may continue to be affected by global volatility and general market disruption resulting from geopolitical tensions, such as the ongoing Russia-Ukraine military conflict and the ongoing military conflict involving the U.S., Israel and Iran. In particular, the continued escalation of hostilities in the Middle East, including involving Iran, could further disrupt global energy markets, fuel prices, transportation networks, and supply chains, which may disrupt or otherwise negatively impact our supply chain, demand for our products and our ability to meet demand for our products, and increase our costs. See “Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, could increase our costs, reduce the competitiveness of our products and otherwise have a material adverse effect on our business, financial condition, results of operations and growth prospects” and “Delays or problems in the supply of our products for sale or for use in clinical trials, loss of our single source suppliers or failure to comply with manufacturing regulations could materially and adversely affect our business, financial condition, results of operations and growth prospects” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

Moreover, the U.S. government has imposed and may seek to impose additional restrictions on international trade, such as tariffs on goods generally, and pharmaceutical and biological products in particular, imported into the U.S. In April 2026, the Trump administration announced tariffs of 100% on certain patented pharmaceutical products and associated pharmaceutical ingredients beginning September 29, 2026, subject to certain exemptions and reduced rates. The applicability and impact of these tariffs on our products and operations will depend, in part, on the scope of the tariffs and any applicable exemptions or other preferential treatment. In anticipation of the potential for increased tariffs on our products, we have increased inventory levels of our products in the U.S. We conduct our business globally and have third-party suppliers located outside the U.S., including in the PRC. In addition, we have a manufacturing and development facility in Athlone, Ireland where we manufacture Xywav and Xyrem, a manufacturing and development facility in Kent Science Park, U.K. where we produce Epidiolex/Epidyolex, and a manufacturing plant in Villa Guardia, Italy where we produce defibrotide drug substance. While we cannot at this time predict the ultimate impact of such tariffs, we anticipate that our margins could be adversely affected, depending on the ultimate scope and duration of tariffs imposed. However, given the volatility and uncertainty regarding the scope and duration of such tariffs and other aspects of U.S. and foreign government trade policies, the ultimate impact on our operations and financial results remains uncertain. Likewise, our financial condition and results of operations may continue to be affected by global volatility and general market disruption resulting from geopolitical tensions, such as the ongoing Russia-Ukraine military conflict and the ongoing military conflict involving the U.S. and Iran. In particular, the continued escalation of hostilities in the Middle East, including involving Iran, could further disrupt global energy markets, fuel prices, transportation networks, and supply chains, which may disrupt or otherwise negatively impact our supply chain, demand for our products and our ability to meet demand for our products, and increase our costs. See “Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, could increase our costs, reduce the competitiveness of our products and otherwise have a material adverse effect on our business, financial condition, results of operations and growth prospects” and “Delays or problems in the supply of our products for sale or for use in clinical trials, loss of our single source suppliers or failure to comply with manufacturing regulations could materially and adversely affect our business, financial condition, results of…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The foregoing risks and uncertainties are discussed in greater detail, along with other risks and uncertainties, in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

The foregoing risks and uncertainties are discussed in greater detail, along with other risks and uncertainties, in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as supplemented by the risks and uncertainties described in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Previous wording

(1)Includes Sativex net product sales for the three and six months ended June 30, 2025.

Current wording

(1)Includes Sativex net product sales for the three and nine months ended September 30, 2025.

Previous wording

Xywav product sales increased in the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to volume growth of 12% in both periods, and a higher selling price, offset by higher gross to net deductions. We continue to see Xywav adoption in patients with narcolepsy driven by continued demand, supported by educational initiatives around efficacy and the benefit of lowering sodium intake. In addition, Xywav product sales were positively impacted by adoption in IH. Xywav is the only oxybate therapy approved to treat IH and we see continued growth of new prescribers. Exiting the quarter, there were 11,275 patients taking Xywav for narcolepsy and 5,850 taking Xywav for IH, an increase of approximately 6% and 26%, respectively, compared to the same period in 2025. Xyrem product sales decreased in the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to volume declines of 20% and 21%, respectively.

Current wording

Xywav product sales increased in the three and nine months ended September 30, 2026, compared to the same periods in 2025, primarily due to volume growth of 10% and 12%, respectively, and a higher selling price, offset by higher gross to net deductions. We continue to see Xywav adoption in patients with narcolepsy driven by continued demand, supported by educational initiatives around efficacy and the benefit of lowering sodium intake. In addition, Xywav product sales were positively impacted by adoption in IH. Xywav is the only oxybate therapy approved to treat IH and we see continued growth of new prescribers. Exiting the quarter, there were approximately 11,375 patients taking Xywav for narcolepsy and approximately 6,175 patients taking Xywav for IH, an increase of approximately 6% and 25%, respectively, compared to the same period in 2025. Xyrem product sales decreased in the three and nine months ended September 30, 2026, compared to the same periods in 2025, primarily due to volume declines of 20% and 21%, respectively.

Previous wording

Epidiolex/Epidyolex product sales increased in the three months ended June 30, 2026, compared to the same period in 2025, primarily due to volume growth of 12%, driven by increased demand, lower gross to net deductions, and a higher average selling price. Epidiolex/Epidyolex product sales increased in the six months ended June 30, 2026, compared to the same period in 2025, due to volume growth of 13%, driven by increased demand, the positive impact of foreign exchange rates, and a higher average selling price, offset by higher gross to net deductions.

Current wording

Epidiolex/Epidyolex product sales decreased in the three months ended September 30, 2026, compared to the same period in 2025, primarily due to higher gross to net deductions, driven by a release of reserves following refinement of certain accrual rates in the U.S. in the prior year period, partially offset by a higher average selling price. Epidiolex/Epidyolex product sales increased in the nine months ended September 30, 2026, compared to the same period in 2025, due to volume growth of 9%, driven by increased demand, a higher average selling price, and the positive impact of foreign exchange rates, offset by higher gross to net deductions.

Previous wording

Zepzelca product sales increased in the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to increased sales volumes, reflecting continued adoption in the first-line maintenance ES-SCLC setting following FDA approval of Zepzelca in combination with atezolizumab or atezolizumab and hyaluronidase-tqjs in October 2025 partially offset by a decline in second line use. Rylaze/Enrylaze product sales in thethree months ended June 30, 2026, were in line with the same period in 2025. Rylaze/Enrylaze product sales increasedin the six months ended June 30, 2026, compared to the same period in 2025, primarily due to a higher average selling price, and volume growth of 3%, partially offset by higher gross to net deductions. Defitelio/defibrotide product sales increased in thethree and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to increased sales volumes, partially offset by a lower average selling price due to regional mix. Modeyso product sales were $48.2 million and$89.6 million, respectively, in the three and six months ended June 30, 2026, following its product launch in August 2025. Vyxeos product sales decreased in thethree and six months ended June 30, 2026, compared to the same periods in 2025, due to a decrease in sales volumes, partially offset by a higher average selling price. Ziihera product sales increased in the three and six months ended June 30, 2026, compared to the same periods in 2025, due to increased sales volumes, following its product launch in December 2024.

Current wording

Zepzelca product sales increased in the three and nine months ended September 30, 2026, compared to the same periods in 2025, primarily due to volume growth of 35% and 43%, respectively, reflecting continued adoption in the first-line maintenance ES-SCLC setting following FDA approval of Zepzelca in combination with atezolizumab or atezolizumab and hyaluronidase-tqjs in October 2025 partially offset by a decline in second line use. FDA approved the updated U.S. label supplement for Zepzelca on September 30, 2026, to remove the second-line indication. Rylaze/Enrylaze product sales increasedin the three and nine months ended September 30, 2026, compared to the same periods in 2025, primarily due to a higher average selling price, and volume growth of 4% and 3%, respectively, partially offset by higher gross to net deductions. Defitelio/defibrotide product sales increased in thethree months ended September 30, 2026, compared to the same period in 2025, primarily due to increased sales volumes, and a higher average selling price. Defitelio/defibrotide product sales increased in thenine months ended September 30, 2026, compared to the same period in 2025, primarily due to increased sales volumes, the positive impact of foreign exchange rates, partially offset by a lower average selling price due to regional mix. Modeyso product sales were $61.1 million and$150.7 million, respectively, in the three and nine months ended September 30, 2026, following its product launch in the U.S. in August 2025 and initial inventory build in Japan following approval in September 2026. Vyxeos product sales decreased in thethree months ended September 30, 2026, compared to the same period in 2025, due to a lower average selling price due to regional mix, partially offset by lower gross to net deductions. Vyxeos product sales decreased in thenine months ended September 30, 2026, compared to the same period in 2025, due to a decrease in sales volumes and a lower average selling price due to regional mix, partially offset by lower gross to net deductions and the positive impact of foreign exchange rates. Ziihera product sales increased in the three and nine months ended September 30, 2026, compared to the same periods in 2025, due to increased sales volume. In August 2026, Ziihera received FDA approval and was subsequently launched for the first-line treatment of adult patients with HER2-positive unresectable locally advanced or metastatic GEA.

Previous wording

Royalties and contract revenues decreased in thethree and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to a decrease in royalty revenue from Hikma, resulting from a reduction in the applicable royalty rate on net sales of their high sodium oxybate AG.

Current wording

Royalties and contract revenues decreased in thethree and nine months ended September 30, 2026, compared to the same periods in 2025, primarily due to a decrease in royalty revenue from Hikma, resulting from a reduction in the applicable royalty rate on net sales of their high sodium oxybate AG.

Previous wording

Cost of product sales in thethree months ended June 30, 2026, were in line with the same period in 2025 as lower fair value step-up expense of $20.5 million was partially offset by higher royalty expenses, driven by higher revenues. Cost of product sales increased in thesix months ended June 30, 2026, compared to the same period in 2025, primarily due to higher royalty expenses, driven by higher revenues, and increased inventory provisions, partially offset bylower fair value step-up expense of $12.8 million. Gross margin as a percentage of total revenues was 90.4% and 89.0% for the three and six months ended June 30, 2026, compared to 88.9% and 88.6% for the same periods in 2025.

Current wording

Cost of product sales decreased in thethree months ended September 30, 2026, compared to the same period in 2025, primarily due to the full recognition of the inventory fair value step-up in the second quarter of 2026, partially offset by higher royalty expenses, driven by higher revenues. Cost of product sales increased in thenine months ended September 30, 2026, compared to the same period in 2025, primarily due to higher royalty expenses, driven by higher revenues, and increased inventory provisions, partially offset bylower fair value step-up expense of $53.2 million. Gross margin as a percentage of total revenues was 91.1% and 89.7% for the three and nine months ended September 30, 2026, compared to 88.6%for the same periods in 2025.

Previous wording

We expect our cost of product sales in 2026 to be broadly in line with 2025, with higher costs, including royalties, driven by higher revenues, offset by a reduction in the fair value step-up expense.

Current wording

We expect our cost of product sales in 2026 to be in line with 2025, with higher costs, including royalties, driven by higher revenues, offset by a reduction in the fair value step-up expense.

Previous wording

Selling, general and administrative expenses increased in the three months ended June 30, 2026, compared to the same period in 2025, primarily due to increased marketing investment of $13.6 million and higher compensation-related expenses of $11.8 million in support of our commercial portfolio. Selling, general and administrative expenses decreased in the six months ended June 30, 2026, compared to the same period in 2025, primarily due to Xyrem antitrust litigation settlements of $172.0 million incurred in the six months ended June 30, 2025, partially offset by an increase in compensation-related expenses of $29.3 million and increased marketing investment of $22.3 million in support of our commercial portfolio, in the six months ended June 30, 2026.

Current wording

Selling, general and administrative expenses decreased in the three months ended September 30, 2026, compared to the same period in 2025, primarily due to the Avadel litigation settlement of $90.0 million and a Xyrem antitrust litigation settlement of $61.5 million in the three months ended September 30, 2025, partially offset by restructuring expenses of $34.2 million related to a proposed re-organization of our European operating model, in the three months ended September 30, 2026. Selling, general and administrative expenses decreased in the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to Xyrem antitrust litigation settlements of $233.5 million and the Avadel litigation settlement of $90.0 million in the nine months ended September 30, 2025, partially offset by restructuring expenses of $34.2 million and increased marketing investment in support of our commercial portfolio of $31.6 million in the nine months ended September 30, 2026.

Previous wording

R&D expenses consist primarily of costs related to clinical studies and outside services, personnel expenses, and other R&D costs. Clinical study and outside services costs relate primarily to services performed by clinical research organizations, materials and supplies, and other third party fees. Personnel expenses relate primarily to salaries, benefits and share-based compensation. Other R&D expenses primarily include overhead allocations consisting of various support and facilities-related costs. We do not track fully-burdened R&D expenses on a project-by-project basis. We manage our R&D expenses by identifying the R&D activities that we anticipate will be performed during a given period and then prioritizing efforts based on our assessment of which development activities are important to our business and have a reasonable probability of success, and by dynamically allocating resources accordingly. We also continually review our development pipeline projects and the status of their development and, as necessary, reallocate resources among our development pipeline projects that we believe will best support the future growth of our business.

Current wording

R&D expenses consist primarily of costs related to clinical studies and outside services, personnel expenses, milestone expenses and other R&D costs. Clinical study and outside services costs relate primarily to services performed by clinical research organizations, materials and supplies, and other third party fees. Personnel expenses relate primarily to salaries, benefits and share-based compensation. Other R&D expenses primarily include overhead allocations consisting of various support and facilities-related costs. We do not track fully-burdened R&D expenses on a project-by-project basis. We manage our R&D expenses by identifying the R&D activities that we anticipate will be performed during a given period and then prioritizing efforts based on our assessment of which development activities are important to our business and have a reasonable probability of success, and by dynamically allocating resources accordingly. We also continually review our development pipeline projects and the status of their development and, as necessary, reallocate resources among our development pipeline projects that we believe will best support the future growth of our business.

Previous wording

R&D expenses increased by $32.9 million in the six months ended June 30, 2026, compared to the same period in 2025, driven by an increase in personnel expenses of $17.7 million and clinical studies and outside services costs, primarily due to higher costs related to zanidatamab and dordaviprone.

Current wording

R&D expenses increased by $13.7 million in the three months ended September 30, 2026, compared to the same period in 2025, driven by an increase in clinical studies and outside services costs of $15.4 million to advance our pipeline programs including zanidatamab. R&D expenses increased by $46.6 million in the nine months ended September 30, 2026, compared to the same period in 2025, driven by an increase in clinical studies and outside services costs of $32.5 million, which included higher costs related to zanidatamab and dordaviprone and an increase in personnel expenses of $19.3 million.

Previous wording

Acquired IPR&D expense in the three and six months ended June 30, 2026, includes the upfront payments made in connection with our collaboration and license agreement with AbCellera of $56.0 million and asset purchase agreement with Werewolf of $21.0 million. Acquired IPR&D expense in the three and six months ended June 30, 2025, represents the value allocated to Modeyso in the Chimerix Acquisition.

Current wording

Acquired IPR&D expense in the three and nine months ended September 30, 2026, represents the value allocated to ABS-1230 (JZP6979) in the Actio Acquisition. Additionally, acquired IPR&D expense in the nine months ended September 30, 2026, included the upfront payments made in connection with our collaboration and license agreement with AbCellera of $56.0 million and asset purchase agreement with Werewolf of $21.0 million. Acquired IPR&D expense in the three and nine months ended September 30, 2025, included the upfront payment made in connection with our global license agreement with Saniona. Additionally, acquired IPR&D expense in the nine months ended September 30, 2025, represents the value allocated to Modeyso in the Chimerix Acquisition.

Previous wording

Interest expense, net decreased by $10.3 million and $24.1 million in the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to lower interest expense on the Tranche B-2 Dollar Term Loans and higher interest income as a result of higher cash reserves, offset by lower interest rates.

Current wording

Interest expense, net in the three months ended September 30, 2026, was in line with the same period in 2025. Interest expense, net decreased by $27.2 million in the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to lower interest expense on the Tranche B-3 Dollar Term Loans, reflecting lower interest rates and lower balance outstanding and higher interest income as a result of higher cash reserves, offset by the impact of lower interest rates.

Previous wording

Our income tax expense was $18.1 million and $24.2 million for the three and six months ended June 30, 2026, respectively, compared to an income tax benefit of $17.2 million and $35.0 million for the same periods in 2025, relating to tax arising on income or losses in Ireland, the U.K., the U.S. and certain other foreign jurisdictions and Pillar Two top-up taxes, offset by deductions on subsidiary equity, patent box and foreign-derived deduction eligible income benefits and tax credits. The income tax expense for the six months ended June 30, 2026, also included tax arising on the gain on sale of the PRV, partially offset by excess tax benefits from share-based compensation. The income tax benefit for the six months ended June 30, 2025, was primarily due to the tax impact of certain Xyrem antitrust litigation settlements.

Current wording

Our income tax expense was $24.5 million and $48.7 million for the three and nine months ended September 30, 2026, respectively, compared to an income tax benefit of $242.4 million and $277.4 million for the same periods in 2025, relating to tax arising on income or losses in Ireland, the U.K., the U.S. and certain other foreign jurisdictions and Pillar Two top-up taxes, offset by deductions on subsidiary equity, patent box and foreign-derived deduction eligible income benefits and tax credits. The income tax benefit for the three and nine months ended September 30, 2025, was primarily due to the reversal of a valuation allowance against certain U.S. federal and state deferred tax assets acquired through the Chimerix Acquisition and the income tax benefit for the nine months ended September 30, 2025 also included the tax impact of certain Xyrem antitrust litigation settlements. The income tax expense for the nine months ended September 30, 2026 included tax arising on the gain on sale of the PRV.

Previous wording

As of June 30, 2026, we had cash, cash equivalents and investments of $2.2 billion, borrowing available under our Amended Revolving Credit Facility of $885.0 million and a long-term debt principal balance of $4.4 billion. Our long-term debt included $1.9 billion aggregate principal amount of the Tranche B-2 Dollar Term Loans, $1.5 billion in aggregate principal amount of the Secured Notes, and $1.0 billion aggregate principal amount of the 2030 Notes. We generated cash flow from operations of $823.9 million during the six months ended June 30, 2026, and we expect to continue to generate positive cash flow from operations which will enable us to operate our business and de-lever our balance sheet over time.

Current wording

As of September 30, 2026, we had cash, cash equivalents and investments of $2.9 billion, borrowing available under our Amended Revolving Credit Facility of $885.0 million and a long-term debt principal balance of $5.6 billion. Our long-term debt included $1.9 billion aggregate principal amount of the Tranche B-3 Dollar Term Loans, $1.5 billion in aggregate principal amount of the Secured Notes, $1.3 billion aggregate principal amount of the 2032 Notes and $1.0 billion aggregate principal amount of the 2030 Notes. We generated cash flow from operations of $1.3 billion during the nine months ended September 30, 2026, and we expect to continue to generate positive cash flow from operations which will enable us to operate our business and de-lever our balance sheet over time.

Previous wording

Prior to June 15, 2030, the 2030 Notes will be exchangeable only upon satisfaction of certain conditions, including a condition tied to our share price that is measured as of the end of each quarter, and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. During the quarter ended June 30, 2026, the closing price of our ordinary shares exceeded 130% of the conversion price of the 2030 Notes for more than 20 trading days of the last 30 consecutive trading days of the quarter. As a result, the share price condition was met and the 2030 Notes are exchangeable at the option of the holders during the quarter ended September 30, 2026. Accordingly, the carrying value of the 2030 Notes has been included in current liabilities in our condensed consolidated balance sheet as of June 30, 2026.

Current wording

Prior to June 15, 2030, the 2030 Notes will be exchangeable only upon satisfaction of certain conditions, including the share price, and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. During the quarter ended September 30, 2026, the closing price of our ordinary shares exceeded 130% of the conversion price of the 2030 Notes for more than 20 trading days of the last 30 consecutive trading days of the quarter. As a result, the share price condition was met and the 2030 Notes are exchangeable at the option of the holders during the quarter ended December 31, 2026. Accordingly, the carrying value of the 2030 Notes has been included in current liabilities in our condensed consolidated balance sheet as of September 30, 2026.

Previous wording

Since the closing of the GW Acquisition in May 2021, we have fully repaid our Euro Term Loan. With respect to our Tranche B-2 Dollar Term Loans, we have made voluntary repayments of $1.1 billion, $300.0 million in September 2022, and $750.0 million in January 2025, along with mandatory repayments$155.0 million. In June 2026, we repaid the$1.0 billion aggregate principal amount of our 2026 Notes and, in August 2024, we repaid the $575.0 million aggregate principal amount of our 2024 Notes.

Current wording

Since the closing of the GW Acquisition in May 2021, we have fully repaid our Euro Term Loan. With respect to our Term Loans, we have made voluntary repayments of $1.1 billion, $300.0 million in September 2022, and $750.0 million in January 2025, along with mandatory repayments $162.8 million. In June 2026, we repaid the $1.0 billion aggregate principal amount of our 2026 Notes and, in August 2024, we repaid the $575.0 million aggregate principal amount of our 2024 Notes.

Previous wording

We have a significant amount of debt outstanding on a consolidated basis. For further information, including details relating to our scheduled maturities with respect to our long-term debt, see Note 9, Debt, of the Notes to Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Quarterly Report on Form 10‑Q. This substantial level of debt could have important consequences to our business, including, but not limited to the factors set forth in “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, under the heading “We have incurred substantial debt, which could impair our flexibility and access to capital and adversely affect our financial position, and our business would be adversely affected if we are unable to service our debt obligations.”

Current wording

We have a significant amount of debt outstanding on a consolidated basis. For further information, including details relating to our scheduled maturities with respect to our long-term debt, see Note 9, Debt, of the Notes to Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Quarterly Report on Form 10‑Q. This substantial level of debt could have important consequences to our business, including, but not limited to the factors set forth in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, under the heading “We have incurred substantial debt, which could impair our flexibility and access to capital and adversely affect our financial position, and our business would be adversely affected if we are unable to service our debt obligations.”