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

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

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

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

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

The number of the registrant’s ordinary shares, $0.01 par value, outstanding as of April ~~23, 2021~~22, 2022 was ~~160,451,949~~163,426,943 shares.

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

Actual results might differ materially from those expressed or implied by these forward-looking statements because these forward-looking statements are subject to risks, assumptions and uncertainties. ~~These risks, assumptions and uncertainties include, among others:~~

For additional discussion regarding these risks, assumptions and uncertainties, and other material risks to our business, see “Part I, Item 1A—Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”). In light of these risks, assumptions and uncertainties, the forward-looking ~~events~~expectations discussed in this Form 10-Q might not occur. You are cautioned not to place undue reliance on the forward-looking statements in this Form 10-Q, which speak only as of the date of this Form 10-Q. All subsequent written and oral forward-looking statements concerning the matters addressed in this Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except as required by applicable law or regulation, we do not undertake any obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For information about the risks, assumptions and uncertainties of our business, see “Part I, Item 1A—Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, filed

with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”) on February 16, 2022 (our “Annual Report”).

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

Alkermes plc is a fully-integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to research, develop and commercialize, both with partners and on its own, pharmaceutical products that are designed to address unmet medical needs of patients in major therapeutic areas. We have a portfolio of proprietary commercial products focused on ~~addiction~~alcohol dependence, opioid dependence, schizophrenia and ~~schizophrenia,~~bipolar I disorder, and a pipeline of product candidates in development for ~~schizophrenia, bipolar I disorder,~~ neurodegenerative disorders and cancer. Use of terms such as “us,” “we,” “our,” “Alkermes” or the “Company” in this Form 10-Q is meant to refer to Alkermes plc and its consolidated subsidiaries. Except as otherwise suggested by the context, (a) references to “products” or “our products” in this Form 10-Q include our marketed products, marketed products using our proprietary technologies, our licensed products, our product candidates and product candidates using our proprietary technologies, (b) references to the “biopharmaceutical industry” in this Form 10-Q are intended to include reference to the “biotechnology industry” and/or the “pharmaceutical industry” and (c) references to “licensees” in this Form 10-Q are used interchangeably with references to “partners.”

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

The following are trademarks of the respective companies listed: ~~AMPYRA~~ANJESO^® ~~and FAMPYRA~~^®~~—Acorda Therapeutics, Inc. (“Acorda”); ANJESO~~^TM—Baudax Bio, Inc.; BYANNLI^®, INVEGA^®, INVEGA HAFYERA^®, INVEGA SUSTENNA^®, INVEGA TRINZA^®, TREVICTA^®, XEPLION^®, and RISPERDAL CONSTA^®—Johnson & Johnson Corporation (or its affiliates); KEYTRUDA^®—Merck Sharp & Dohme Corp.; and VUMERITY^®—Biogen MA Inc. (together with its affiliates, “Biogen”)~~; and~~ ~~ZYPREXA~~^®—~~Eli Lilly and Company~~. Other trademarks, trade names and service marks appearing in this Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Form 10-Q are referred to without the ^® and ^TM symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

	March 31, 2021	December 31, 2020	March 31, 2022	December 31, 2021
	(In thousands, except share and per share amounts)		(In thousands, except share and per share amounts)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$205,028	$272,961	$282,557	$337,544
Receivables, net			249,942	313,193
Investments—short-term	335,967	362,066	246,315	198,767
Receivables, net	243,514	275,143
Inventory			154,786	150,335
Contract assets	9,279	14,401	20,212	13,363
Inventory	134,178	125,738
Prepaid expenses and other current assets	78,043	60,662	61,018	48,967
Total current assets	1,006,009	1,110,971	1,014,830	1,062,169
PROPERTY, PLANT AND EQUIPMENT, NET	346,327	350,003	336,740	341,054
INVESTMENTS—LONG-TERM			229,825	229,430
RIGHT-OF-USE ASSETS	127,430	131,718	115,321	115,627
INTANGIBLE ASSETS, NET	101,785	111,191	65,077	74,043
GOODWILL	92,873	92,873	92,873	92,873
DEFERRED TAX ASSETS	81,124	86,228	112,515	81,833
INVESTMENTS—LONG-TERM	86,448	24,780
CONTINGENT CONSIDERATION	19,412	24,651
OTHER ASSETS	16,813	17,315	10,664	27,455
TOTAL ASSETS	$1,878,221	$1,949,730	$1,977,845	$2,024,484
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$339,088	$412,171	$173,126	$208,491
Accrued sales discounts, allowances and reserves			265,172	237,216
Operating lease liabilities—short-term	15,833	15,732	16,144	16,240
Contract liabilities—short-term	7,921	7,512	4,919	6,339
Current portion of long-term debt	3,000	2,843	3,000	3,000
Total current liabilities	365,842	438,258	462,361	471,286
LONG-TERM DEBT	294,702	272,118	292,171	292,804
OPERATING LEASE LIABILITIES—LONG-TERM	115,504	119,464	104,014	104,162
CONTRACT LIABILITIES—LONG-TERM	14,745	16,397
OTHER LONG-TERM LIABILITIES	36,273	36,511	43,909	43,648
Total liabilities	827,066	882,748	902,455	911,900
COMMITMENTS AND CONTINGENT LIABILITIES (Note 14)
COMMITMENTS AND CONTINGENT LIABILITIES (Note 15)
SHAREHOLDERS’ EQUITY:
Preferred shares, par value, $0.01 per share; 50,000,000 shares authorized; 0 issued and outstanding at March 31, 2021 and December 31, 2020, respectively	—	—
Ordinary shares, par value, $0.01 per share; 450,000,000 shares authorized; 163,835,905 and 162,269,220 shares issued; 160,198,009 and 159,161,141 shares outstanding at March 31, 2021 and December 31, 2020, respectively	1,638	1,620
Treasury shares, at cost (3,637,896 and 3,108,079 shares at March 31, 2021 and December 31, 2020, respectively)	(136,500)	(126,087)
Preferred shares, par value, $0.01 per share; 50,000,000 shares authorized; 0 issued and outstanding at March 31, 2022 and December 31, 2021, respectively			—	—
Ordinary shares, par value, $0.01 per share; 450,000,000 shares authorized; 167,743,842 and 165,790,549 shares issued; 163,212,411 and 161,937,327 shares outstanding at March 31, 2022 and December 31, 2021, respectively			1,677	1,658
Treasury shares, at cost (4,531,431 and 3,853,222 shares at March 31, 2022 and December 31, 2021, respectively)			(159,727)	(142,658)
Additional paid-in capital	2,703,234	2,685,647	2,818,595	2,798,325
Accumulated other comprehensive loss	(1,950)	(1,349)	(8,234)	(3,723)
Accumulated deficit	(1,515,267)	(1,492,849)	(1,576,921)	(1,541,018)
Total shareholders’ equity	1,051,155	1,066,982	1,075,390	1,112,584
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$1,878,221	$1,949,730	$1,977,845	$2,024,484

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

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2021			2020			2022			2021
	(In thousands, except per share amounts)						(In thousands, except per share amounts)
REVENUES:
Product sales, net	$	129,963		$	129,726		$	171,268		$	129,963
Manufacturing and royalty revenues		119,847			116,251			105,170			119,847
License revenue		1,500			—			2,000			1,500
Research and development revenue		120			243			107			120
Total revenues		251,430			246,220			278,545			251,430
EXPENSES:
Cost of goods manufactured and sold (exclusive of amortization of acquired intangible assets shown below)		41,020			47,211			55,159			41,020
Research and development		92,268			93,279			95,953			92,268
Selling, general and administrative		125,168			133,372			145,052			125,168
Amortization of acquired intangible assets		9,406			9,728			8,966			9,406
Total expenses		267,862			283,590			305,130			267,862
OPERATING LOSS		(16,432	)		(37,370	)		(26,585	)		(16,432	)
OTHER (EXPENSE) INCOME, NET:
OTHER EXPENSE, NET:
Interest income		864			2,760			573			864
Interest expense		(3,970	)		(2,857	)		(2,350	)		(3,970	)
Change in the fair value of contingent consideration		1,278			6,800			(19,067	)		1,278
Other expense, net		(393	)		(658	)
Total other (expense) income, net		(2,221	)		6,045
Other income (expense), net								2,431			(393	)
Total other expense, net								(18,413	)		(2,221	)
LOSS BEFORE INCOME TAXES		(18,653	)		(31,325	)		(44,998	)		(18,653	)
INCOME TAX PROVISION		3,765			7,329
INCOME TAX (BENEFIT) PROVISION								(9,095	)		3,765
NET LOSS	$	(22,418	)	$	(38,654	)	$	(35,903	)	$	(22,418	)
LOSS PER ORDINARY SHARE:
Basic and diluted	$	(0.14	)	$	(0.24	)	$	(0.22	)	$	(0.14	)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING:
Basic and diluted		159,634			158,095			162,483			159,634
COMPREHENSIVE LOSS:
Net loss	$	(22,418	)	$	(38,654	)	$	(35,903	)	$	(22,418	)
Holding (loss) gain, net of a tax (benefit) provision of $(174) and $87, respectively		(601	)		317
Holding loss, net of a tax benefit of $(1,382) and $(174), respectively								(4,511	)		(601	)
COMPREHENSIVE LOSS	$	(23,019	)	$	(38,337	)	$	(40,414	)	$	(23,019	)

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

	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2021			2020			2022			2021
	(In thousands)						(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(22,418	)	$	(38,654	)	$	(35,903	)	$	(22,418	)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization		19,643			20,608			19,197			19,643
Share-based compensation expense		15,451			19,813			18,343			15,451
Deferred income taxes		5,255			3,665			(29,301	)		5,255
Change in the fair value of contingent consideration		(1,278	)		(6,800	)		19,067			(1,278	)
Loss on debt extinguishment		171			—			—			171
Payment made for debt modification		(248	)		—			—			(248	)
Other non-cash charges		195			283			371			195
Changes in assets and liabilities:
Receivables		31,648			10,370			63,290			31,648
Contract assets		5,122			(5,813	)		(6,849	)		5,122
Inventory		(8,652	)		(6,842	)		(4,285	)		(8,652	)
Prepaid expenses and other assets		(16,807	)		13,615			(15,351	)		(16,807	)
Right-of-use assets		4,177			3,926			4,129			4,177
Accounts payable and accrued expenses		(71,949	)		(51,254	)		(5,458	)		(71,949	)
Contract liabilities		(1,243	)		(859	)		(2,980	)		(1,243	)
Operating lease liabilities		(3,996	)		(2,378	)		(4,411	)		(3,996	)
Other long-term liabilities		(217	)		48			1,819			(217	)
Cash flows used in operating activities		(45,146	)		(40,272	)
Cash flows provided by (used in) operating activities								21,678			(45,146	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property, plant and equipment		(7,986	)		(19,799	)		(7,791	)		(7,986	)
Proceeds from the sale of equipment		176			3			—			176
Proceeds from contingent consideration		6,430			—			501			6,430
Return of Fountain Healthcare Partners II, L.P. investment								485			—
Purchases of investments		(122,545	)		(27,212	)		(114,615	)		(122,545	)
Sales and maturities of investments		86,193			64,500			60,779			86,193
Cash flows (used in) provided by investing activities		(37,732	)		17,492
Cash flows used in investing activities								(60,641	)		(37,732	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of ordinary shares under share-based compensation arrangements		2,053			3,070			1,795			2,053
Employee taxes paid related to net share settlement of equity awards		(10,413	)		(7,283	)		(17,069	)		(10,413	)
Proceeds from the issuance of long-term debt		23,567			—			—			23,567
Payment made for debt extinguishment		(262	)		—			—			(262	)
Principal payments of long-term debt		—			(711	)		(750	)		—
Cash flows provided by (used in) financing activities		14,945			(4,924	)
Cash flows (used in) provided by financing activities								(16,024	)		14,945
NET DECREASE IN CASH AND CASH EQUIVALENTS		(67,933	)		(27,704	)		(54,987	)		(67,933	)
CASH AND CASH EQUIVALENTS—Beginning of period		272,961			203,771			337,544			272,961
CASH AND CASH EQUIVALENTS—End of period	$	205,028		$	176,067		$	282,557		$	205,028
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Non-cash investing and financing activities:
Purchased capital expenditures included in accounts payable and accrued expenses	$	995		$	5,242		$	4,058		$	995

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

Accumulated

Additional

Other

Ordinary Shares

Paid-In

Comprehensive

Accumulated

Treasury Stock

Shares

Amount

Capital

Loss

Deficit

Shares

Amount

Total

(In thousands, except share data)

BALANCE — December 31, 2020

162,269,220

$
1,620

$
2,685,647

$
(1,349
)

$
(1,492,849
)

(3,108,079
)

$
(126,087
)

$
1,066,982

Issuance of ordinary shares under employee stock plans

134,163

4

2,049

—

—

—

—

2,053

Receipt of Alkermes’ shares for the exercise of stock options or to satisfy minimum tax withholding obligations related to share-based awards

1,432,522

14

(14
)

—

—

(529,817
)

(10,413
)

(10,413
)
Share-based compensation

—

—

15,552

—

—

—

—

15,552

Unrealized loss on marketable securities, net of tax benefit of $174

—

—

—

(601
)

—

—

—

(601
)
Net loss

—

—

—

—

(22,418
)

—

—

(22,418
)
BALANCE — March 31, 2021
��

163,835,905

$
1,638

$
2,703,234

$
(1,950
)

$
(1,515,267
)

(3,637,896
)

$
(136,500
)

$
1,051,155

							Accumulated
					Additional		Other
	Ordinary Shares				Paid-In		Comprehensive			Accumulated			Treasury Stock
	Shares		Amount		Capital		Loss			Deficit			Shares			Amount			Total
	(In thousands, except share data)
BALANCE — December 31, 2021		165,790,549	$	1,658	$	2,798,325	$	(3,723	)	$	(1,541,018	)		(3,853,222	)	$	(142,658	)	$	1,112,584
Issuance of ordinary shares under employee stock plans		1,953,293		19		1,776		—			—			—			—			1,795
Receipt of Alkermes' shares for the exercise of stock options or to satisfy minimum tax withholding obligations related to share-based awards		—		—		—		—			—			(678,209	)		(17,069	)		(17,069	)
Share-based compensation		—		—		18,494		—			—			—			—			18,494
Unrealized loss on marketable securities, net of tax (benefit) of $(1,382)		—		—		—		(4,511	)		—			—			—			(4,511	)
Net loss		—		—		—		—			(35,903	)		—			—			(35,903	)
BALANCE — March 31, 2022		167,743,842	$	1,677	$	2,818,595	$	(8,234	)	$	(1,576,921	)		(4,531,431	)	$	(159,727	)	$	1,075,390

Accumulated

Additional

Other

Ordinary Shares

Paid-In

Comprehensive

Accumulated

Treasury Stock

Shares

Amount

Capital

Loss

Deficit

Shares

Amount

Total

(In thousands, except share data)

BALANCE — December 31, 2019

160,489,888

$
1,602

$
2,586,030

$
(1,816
)

$
(1,381,988
)

(2,710,886
)

$
(118,386
)

$
1,085,442

Issuance of ordinary shares under employee stock plans

258,137

3

3,068

—

—

—

—

3,071

Receipt of Alkermes’ shares for the exercise of stock options or to satisfy minimum tax withholding obligations related to share-based awards

1,020,510

10

(10
)

—

—

(372,846
)

(7,283
)

(7,283
)
Share-based compensation

—

—

20,125

—

—

—

—

20,125

Unrealized gain on marketable securities, net of tax provision of $87

—

—

—

317

—

—

—

317

Net loss

—

—

—

—

(38,654
)

—

—

(38,654
)
BALANCE — March 31, 2020

161,768,535

$
1,615

$
2,609,213

$
(1,499
)

$
(1,420,642
)

(3,083,732
)

$
(125,669
)

$
1,063,018

							Accumulated
					Additional		Other
	Ordinary Shares				Paid-In		Comprehensive			Accumulated			Treasury Stock
	Shares		Amount		Capital		Loss			Deficit			Shares			Amount			Total
	(In thousands, except share data)
BALANCE — December 31, 2020		162,269,220	$	1,620	$	2,685,647	$	(1,349	)	$	(1,492,849	)		(3,108,079	)	$	(126,087	)	$	1,066,982
Issuance of ordinary shares under employee stock plans		1,566,685	18			2,035		—			—			—			—			2,053
Receipt of Alkermes' shares for the exercise of stock options or to satisfy minimum tax withholding obligations related to share-based awards		—		—		—		—			—			(529,817	)		(10,413	)		(10,413	)
Share-based compensation		—		—		15,552		—			—			—			—			15,552
Unrealized loss on marketable securities, net of tax (benefit) of $(174)		—		—		—		(601	)		—			—			—			(601	)
Net loss		—		—		—		—			(22,418	)		—			—			(22,418	)
BALANCE — March 31, 2021		163,835,905	$	1,638	$	2,703,234	$	(1,950	)	$	(1,515,267	)		(3,637,896	)	$	(136,500	)	$	1,051,155

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

The accompanying condensed consolidated financial statements of the Company for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 are unaudited and have been prepared on a basis substantially consistent with the audited financial statements for the year ended December 31, ~~2020.~~2021. The year-end condensed consolidated balance sheet data, which is presented for comparative purposes, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. (commonly referred to as “GAAP”). In the opinion of management, the condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, that are necessary to state fairly the results of operations for the reported periods.

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

The condensed consolidated financial statements include the accounts of Alkermes plc and its wholly-owned subsidiaries as disclosed in Note 2, Summary of Significant Accounting Policies, in the “Notes to Consolidated Financial Statements” accompanying the Company’s Annual Report. Intercompany accounts and transactions have been eliminated.

The Company reclassified certain prior year amounts on the condensed consolidated balance sheet to conform to the current year presentation. These reclassifications had no impact on the previously reported total assets, liabilities or shareholders’ equity.

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

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

The Company operates as 1 business segment, which is the business of developing, manufacturing and commercializing ~~medicines.~~medicines designed to address unmet medical needs of patients in major therapeutic areas. The Company’s chief decision maker, the Chief Executive Officer and ~~Chairman~~chairman of the Company’s board of directors, reviews the Company’s operating results on an aggregate basis and manages the Company’s operations as a single operating unit.

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

In March 2020, COVID-19 was declared a global pandemic by the World Health Organization. To date, COVID-19 has surfaced in nearly all regions around the world and resulted in travel restrictions and business slowdowns and/or shutdowns in affected areas. Ireland, all U.S. states, and many local jurisdictions and countries around the world have, at times during the pandemic, issued ~~“shelter-in-place” orders,~~and implemented quarantines, vaccine and masking mandates, restrictive executive orders and other similar government orders, restrictions, and recommendations for their residents to help control the spread of ~~COVID-19.~~COVID-19, and may continue to do so while the pandemic persists. Such orders, mandates, restrictions and/or recommendations, and/or the perception that additional orders, mandates, restrictions or recommendations could occur, have, at times during the pandemic, resulted in widespread interruptions and closures of businesses, including healthcare systems that serve people living with ~~opioid dependence, alcohol dependence~~addiction and ~~schizophrenia,~~serious mental illness, work stoppages, slowdowns and/or delays, ~~work-from-home~~remote work policies and travel restrictions, among other effects.

The COVID-19 pandemic has caused, and the Company ~~continues~~expects may continue to ~~closely monitor~~cause, varying degrees of disruption to its employees and ~~respond~~its business operations. While the Company has continued to operate its manufacturing facilities and supply its medicines without interruption throughout the pandemic, it has at times during the pandemic experienced labor or supply chain disruptions at its manufacturing facilities, and may continue to experience such disruptions while the pandemic persists. In addition, while the Company has continued to conduct R&D activities, including its ongoing clinical trials, the COVID-19 pandemic has at times impacted the timelines of certain of its early-stage discovery efforts and clinical trials, and may continue to impact such timelines while the pandemic persists. The Company works with its internal teams, its clinical investigators, R&D vendors and critical supply chain vendors to continually assess, and mitigate, the potential impact of COVID-19 on its ~~employees, communities~~manufacturing operations and ~~business operations. Due to numerous uncertainties surrounding the ongoing COVID-19 pandemic, the actual impact~~R&D activities.

A number of the ~~pandemic on~~marketed products from which the ~~Company’s financial condition~~Company derives revenue, including manufacturing and ~~operating results may differ from current projections. These uncertainties include, among others, the ultimate severity and duration of the pandemic; governmental, business or other actions~~royalty revenue, are injectable medications administered by healthcare professionals. Given developments that have ~~been, are being or will be, taken~~transpired to date, and may continue to transpire, in response to the pandemic, including ~~restrictions on travel and mobility,~~ business closures, travel restrictions, quarantine, testing and/or vaccine mandates and ~~operating restrictions,~~other protocols, labor shortages, and ~~imposition~~other restrictive measures, commercial sales of ~~social distancing measures; impacts of~~these marketed products have been adversely impacted to varying degrees during the pandemic ~~on the Company’s employees, the vendors or distribution channels in the Company’s supply chain~~ and ~~on the Company’s ability to~~may continue to ~~manufacture its products; impacts of~~be adversely impacted while the pandemic onpersists.

In addition, the conduct of the Company’s clinical trials, including with respect to enrollment rates, availability of investigators and clinical trial sites, and monitoring of data; impacts of the pandemic on healthcare systems that serve people living with opioid dependence, alcohol dependence and schizophrenia; impacts of the pandemic on the regulatory agencies with which the Company interacts in the development, review, approval and commercialization of its medicines; impacts of the pandemic on reimbursement for the Company’s products, including the Company’s Medicaid rebate liability, and for services related to the use of its products; and impacts of the pandemic on the Irish, U.S. and global economies more broadly.

~~The~~ Company relies upon third parties for many aspects of its business, including the provision of goods and services related to the manufacture of its clinical products and its and its partners’ marketed products, the conduct of its clinical trials, and the sale of its proprietary marketed products and the marketed products of its licensees from which the Company receives manufacturing and royalty revenue. Any prolonged material disruption to the third parties on which the Company relies could negatively impact the Company’s ability to conduct business in the manner and on the timelines presently planned, which could have a material adverse impact on the Company’s business, results of operations and financial condition.

~~The marketed products~~Due to numerous uncertainties surrounding the ongoing COVID-19 pandemic, the actual impact of the pandemic on the Company’s financial condition and operating results may differ from its current projections. These uncertainties include, among other things, the ultimate severity and duration of the pandemic and the manner in which it continues to evolve, including the ~~Company derives revenue, including manufacturing~~emergence, prevalence and ~~royalty revenue, are primarily injectable medications administered by healthcare professionals. Given~~severity of new or existing COVID-19 variants, and future developments ~~that have transpired to date, and may continue to transpire,~~ in response tothereto, which are highly uncertain and cannot be predicted as of the ~~pandemic, including business closures, social distancing requirements and other restrictive measures, commercial sales~~date of these marketed products have been adversely impacted to varying degrees and the Company expects commercial sales of these marketed products to continue to be adversely impacted while the pandemic persists.

During the three months ended March 31, 2021, the Company continued to take actions to support uninterrupted access to its proprietary marketed products. However, the Company currently expects commercial sales of its marketed products, particularly VIVITROL, to continue to be impacted by the COVID-19 pandemic over the next few months. These items are discussed in greater detail in the “Results of Operations” section in “Part I, Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q.

The Company continues to operate its manufacturing facilities and supply its medicines. While the Company continues to conduct R&D activities, including its ongoing clinical trials, the COVID-19 pandemic has impacted, and may continue to impact, the timelines of certain of its early-stage discovery efforts and clinical trials. The Company is working with its internal teams, its clinical investigators, R&D vendors and critical supply chain vendors to continually assess, and mitigate, any potential adverse impacts of COVID-19 on its manufacturing operations and R&D activities.

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

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) or other standard-setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

~~In March 2020, the FASB issued~~ ~~Accounting Standards Update (“ASU”) 2020-04,~~ ~~Reference Rate Reform~~, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. This ASU applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This ASU became effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently assessing the impact that this ASU may have on its consolidated financial statements.

~~Under FASB Accounting Standards Codification 606,~~ ~~Revenue from Contracts with Customers~~ (“Topic 606”), the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company recognizes revenues following the five-step model prescribed under Topic 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract(s); (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract(s); and (v) recognize revenues when (or as) the Company satisfies the performance obligation(s).

The Company’s product sales, net consist of sales ~~of VIVITROL and ARISTADA (together with ARISTADA INITIO)~~ in the U.S., of VIVITROL, ARISTADA and ARISTADA INITIO and, following its commercial launch in October 2021, LYBALVI, primarily to wholesalers, specialty distributors and ~~specialty~~ pharmacies. ~~Product sales, net are recognized when the customer obtains control of the product, which is when the product has been received by the customer.~~

During the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, the Company recorded product sales, net, as follows:

	Three Months Ended March 31,				Three Months Ended March 31,
(In thousands)	2021		2020		2022		2021
VIVITROL	$	74,534	$	78,769	$	84,854	$	74,534
ARISTADA and ARISTADA INITIO		55,429		50,957		72,485		55,429
LYBALVI						13,929		—
Total product sales, net	$	129,963	$	129,726	$	171,268	$	129,963

During the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, the Company recorded manufacturing and royalty revenues as follows:

	Three Months Ended March 31, 2021						Three Months Ended March 31, 2022
(In thousands)	Manufacturing Revenue		Royalty Revenue		Total		Manufacturing Revenue		Royalty Revenue		Total
INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA	$	—	$	61,570	$	61,570
Long-acting INVEGA products⁽¹⁾							$	—	$	37,054	$	37,054
VUMERITY								11,395		19,200		30,595
RISPERDAL CONSTA		10,683		3,479		14,162		15,578		1,848		17,426
AMPYRA/FAMPYRA		8,078		6,594		14,672
VUMERITY		2,448		10,992		13,440
Other		3,876		12,127		16,003		11,854		8,241		20,095
	$	25,085	$	94,762	$	119,847	$	38,827	$	66,343	$	105,170

In November 2021, the Company received notice of partial termination in the U.S. of its license agreement with Janssen Pharmaceutica N.V., a subsidiary of Johnson & Johnson Corporation (“Janssen Pharmaceutica”) in respect of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA, pursuant to which Janssen Pharmaceutica received access and rights to Alkermes’ small particle pharmaceutical compound technology, known as NanoCrystal Technology. When the partial termination became effective in February 2022, Janssen Pharmaceutica ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S. and the Company stopped recognizing royalty revenue related to net sales of these products. In April 2022, the Company commenced binding arbitration proceedings related to, among other things, Janssen Pharmaceutica’s partial termination

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

of the license agreement in the U.S. and Janssen Pharmaceutica’s royalty and other obligations under the agreement. Refer to Note 15, Commitments and Contingencies within the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information regarding the arbitration proceedings with Janssen Pharmaceutica.

Contract assets include unbilled amounts resulting from sales under certain of the Company’s manufacturing contracts ~~with customers~~ where revenue is recognized over ~~time. Total~~time, except for $5.0 million of expected consideration from the Company’s collaboration with Biogen related to VUMERITY. The amounts included in the contract assets ~~as of March 31, 2021 included $9.3 million of assets that were~~table below are classified as “Current assets” in the accompanying condensed consolidated balance sheets, as they ~~related~~relate to manufacturing processes that are completed in ten days to eight weeks, and, in the case of the $5.0 million ~~that was classified as “Other assets” in the accompanying condensed consolidated balance sheets, as it consisted~~ of consideration, ~~from the Company’s collaboration with Biogen related~~an amount that is expected to ~~VUMERITY, which the Company expects to receive within the next two years.~~be received in 2022.

(In thousands)	Contract Assets			Contract Assets
Contract assets at December 31, 2020	$	19,401
Contract assets at December 31, 2021				$	13,363
Additions		8,785			11,451
Transferred to receivables, net		(13,907	)		(4,602	)
Contract assets at March 31, 2021	$	14,279
Contract assets at March 31, 2022				$	20,212

Contract liabilities consist of contractual obligations related to deferred revenue.

(In thousands)	Contract Liabilities			Contract Liabilities
Contract liabilities at December 31, 2020	$	23,909
Contract liabilities at December 31, 2021				$	17,830
Additions		—			83
Amounts recognized into revenue		(1,243	)		(3,063	)
Contract liabilities at March 31, 2021	$	22,666
Contract liabilities at March 31, 2022				$	14,850

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

			Gross Unrealized														Gross Unrealized
					Losses														Losses
	Amortized				Less than			Greater than		Allowance for			Estimated		Amortized				Less than			Greater than			Estimated
March 31, 2021	Cost		Gains		One Year			One Year		Credit Losses			Fair Value
March 31, 2022															Cost		Gains		One Year			One Year			Fair Value
Short-term investments:
Available-for-sale securities:
Corporate debt securities	$	154,429	$	730	$	(29	)	$	—	$	—		$	155,130	$	96,729	$	16	$	(483	)	$	—		$	96,262
International government agency debt securities		97,419		289		(19	)		—		—			97,689
U.S. government and agency debt securities		81,079		223		—			—		—			81,302		83,261		7		(356	)		—			82,912
		332,927		1,242		(48	)		—		—			334,121
Held-to-maturity securities:
Fixed term deposit account		1,667		179		—			—		—			1,846
Non-U.S. government debt securities																67,533		14		(406	)		—			67,141
Total short-term investments		334,594		1,421		(48	)		—		—			335,967		247,523		37		(1,245	)		—			246,315
Long-term investments:
Available-for-sale securities:
Corporate debt securities		34,670		—		(47	)		—		—			34,623		132,275		—		(3,055	)		—			129,220
International government agency debt securities		30,165		—		(40	)		—		—			30,125
U.S. government and agency debt securities		19,891		—		(11	)		—		—			19,880		79,824		—		(2,237	)		—			77,587
Non-U.S. government debt securities																21,801		—		(414	)		(189	)		21,198
		84,726		—		(98	)		—		—			84,628		233,900		—		(5,706	)		(189	)		228,005
Held-to-maturity securities:
Certificates of deposit		1,820		—		—			—		—			1,820		1,820		—		—			—			1,820
Total long-term investments		86,546		—		(98	)		—		—			86,448		235,720		—		(5,706	)		(189	)		229,825
Total investments	$	421,140	$	1,421	$	(146	)	$	—	$	—		$	422,415	$	483,243	$	37	$	(6,951	)	$	(189	)	$	476,140

December 31, 2020
December 31, 2021
Short-term investments:
Available-for-sale securities:
Corporate debt securities	$	176,937	$	1,105	$	(7	)	$	—	$	(977	)	$	177,058	$	85,201	$	177	$	(39	)	$	—		$	85,339
U.S. government and agency debt securities		103,011		336		(2	)		—		—			103,345		45,349		35		(24	)		—			45,360
International government agency debt securities		79,346		469		(6	)		—		—			79,809
		359,294		1,910		(15	)		—		(977	)		360,212
Held-to-maturity securities:
Fixed term deposit account		1,667		187		—			—		—			1,854
Non-U.S. government debt securities																68,046		75		(53	)		—			68,068
Total short-term investments		360,961		2,097		(15	)		—		(977	)		362,066		198,596		287		(116	)		—			198,767
Long-term investments:
Available-for-sale securities:
Corporate debt securities		7,908		—		(10	)		—		—			7,898		111,793		—		(654	)		—			111,139
International government agency debt securities		15,077		—		(15	)		—		—			15,062
U.S. government and agency debt securities																81,296		—		(517	)		—			80,779
Non-U.S. government debt securities																35,902		—		(210	)		—			35,692
		22,985		—		(25	)		—		—			22,960		228,991		—		(1,381	)		—			227,610
Held-to-maturity securities:
Certificates of deposit		1,820		—		—			—		—			1,820		1,820		—		—			—			1,820
Total long-term investments		24,805		—		(25	)		—		—			24,780		230,811		—		(1,381	)		—			229,430
Total investments	$	385,766	$	2,097	$	(40	)	$	—	$	(977	)	$	386,846	$	429,407	$	287	$	(1,497	)	$	—		$	428,197

At March 31, ~~2021,~~2022, the Company reviewed its investment portfolio to assess whether the unrealized losses on its available-for-sale investments were ~~other-than-temporary.~~temporary. Investments with unrealized losses consisted primarily of corporate debt securities and debt securities issued ~~by non-U.S. agencies~~ and backed by ~~non-U.S. governments.~~U.S. agencies and the U.S. government. At March 31, 2022, the aggregate estimated fair value of investments in an unrealized loss position was $445.1 million. In making the determination whether the decline in fair value of these securities ~~was other-than-temporary,~~were temporary, the Company

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

evaluated whether it intended to sell the security and whether it was more likely than not that the Company would be required to sell the security before recovering its amortized cost basis.

IfIn January 2022, the Company ~~intends to sell~~purchased a ~~security, or it is more likely than not that~~convertible promissory note in the ~~Company would be required to sell a security prior to recovering its amortized cost basis, an other-than-temporary impairment is deemed to have occurred. The~~ amount of $0.5 million from Synchronicity Pharma, Inc., a related party, that matures on the earlier of September 30, 2022, the closing of a preferred equity financing, the closing of a merger, business combination or sale of stock resulting in Synchronicity’s stockholders owning less than 50% of the surviving entity, or an ~~other-than-temporary impairment related to a credit loss, or investments that the Company intends to sell before recovery, is recognized in earnings.~~event of default. The ~~amount of~~convertible promissory note was classified as an ~~other-than-temporary impairment on~~ available-for-sale investments related to other factors is recorded as a component of accumulated other comprehensive income. During the three months ended March 31, 2021 and 2020, 0 other-than-temporary impairment charges were recognized.corporate debt instrument.

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

In May 2014, the Company entered into an agreement ~~whereby it committed~~ to ~~provide up to €7.4 million to~~invest in a partnership, Fountain Healthcare Partners II, L.P.~~, an Irish partnership~~ of Ireland (“Fountain”), which was created to carry on the business of investing exclusively in companies and businesses engaged in the healthcare, pharmaceutical and life sciences sectors. ~~The Company’s commitment to Fountain represents approximately 7% of Fountain’s total funding.~~ As of March 31, ~~2021,~~2022, the ~~Company had invested €7.0~~Company’s total contribution in Fountain was equal to €7.8 million, ~~in Fountain.~~and its commitment represented approximately 7% of the partnership’s total funding. The Company is accounting for its investment in Fountain under the equity method.

During the three months ended March 31, 2022, 1 of the companies within the Fountain portfolio was acquired by a third party. The Company’s proportional share of the proceeds from this transaction was $1.1 million, of which $1.0 million was received during the three months ended March 31, 2022 and the remaining $0.1 million was held in escrow. The transaction was accounted for under the cumulative earnings approach whereby the return on investment of $0.6 million was recorded as a gain within “Other expense, net” in the accompanying condensed consolidated statements of operations and comprehensive loss and the return of investment of $0.5 million was recorded as a reduction in the Company’s net investment in Fountain. The Company’s net investment in Fountain was ~~$5.6~~$5.8 million and ~~$6.2~~$6.1 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, and was included within “Other assets” in the accompanying condensed consolidated balance sheets.

~~The proceeds from~~During the three months ended March 31, 2022 and 2021, the Company recorded an increase of less than $0.1 million and a decrease of $0.3 million, respectively, in its investment in Fountain, which represented the Company’s proportional share of Fountain’s net gains or losses.

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

	Three Months Ended March 31,				Three Months Ended March 31,
(In thousands)	2021		2020		2022		2021
Proceeds from the sales and maturities of marketable securities	$	86,193	$	64,500
Proceeds from the sales and maturities of investments					$	60,779	$	86,193
Realized gains	$	—	$	9	$	—	$	—
Realized losses	$	—	$	—	$	—	$	—

The Company’s available-for-sale and held-to-maturity securities at March 31, ~~2021~~2022 had contractual maturities in the following periods:

	Available-for-sale				Held-to-maturity				Available-for-sale				Held-to-maturity
	Amortized		Estimated		Amortized		Estimated		Amortized		Estimated		Amortized		Estimated
(In thousands)	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Within 1 year	$	238,884	$	239,281	$	3,488	$	3,667	$	247,523	$	246,315	$	1,820	$	1,820
After 1 year through 5 years		178,768		179,467		—		—		233,900		228,005		—		—
Total	$	417,652	$	418,748	$	3,488	$	3,667	$	481,423	$	474,320	$	1,820	$	1,820

The following table presents information about the Company’s assets and liabilities ~~at March 31, 2021 and December 31, 2020~~ that are measured at fair value on a recurring basis and indicates the fair value hierarchy ofand the valuation techniques that the Company utilized to determine such fair value:

	March 31,								March 31,
(In thousands)	2021		Level 1		Level 2		Level 3		2022		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	31,844	$	31,844	$	—	$	—
U.S. government and agency debt securities		101,182		66,595		34,587		—	$	160,499	$	130,612	$	29,887	$	—
Corporate debt securities		189,753		—		188,776		977		225,482		—		224,982		500
International government agency debt securities		127,814		—		127,814		—
Non-U.S. government debt securities										88,339		—		88,339		—
Contingent consideration		27,282		—		—		27,282		3,440		—		—		3,440
Total	$	477,875	$	98,439	$	351,177	$	28,259	$	477,760	$	130,612	$	343,208	$	3,940

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

	December 31,								December 31,
	2020		Level 1		Level 2		Level 3		2021		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	41,849	$	41,849	$	—	$	—
U.S. government and agency debt securities		103,345		73,451		29,894		—	$	126,139	$	96,597	$	29,542	$	—
Corporate debt securities		184,956		—		183,979		977		196,478		—		196,478		—
International government agency debt securities		94,871		—		94,871		—
Non-U.S. government debt securities										103,760		—		103,760		—
Contingent consideration		32,451		—		—		32,451		23,048		—		—		23,048
Total	$	457,472	$	115,300	$	308,744	$	33,428	$	449,425	$	96,597	$	329,780	$	23,048

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

There were 0 transfers of any securities between ~~the fair value hierarchies~~levels during the three months ended March 31, ~~2021.~~2022. The following table is a rollforward of the fair value of the Company’s ~~assets whose~~investments with fair values that were determined using Level 3 inputs at March 31, ~~2021:~~2022:

(In thousands)	Fair Value			Fair Value
Balance, January 1, 2021	$	33,428
Balance, January 1, 2022				$	23,048
Purchase of corporate debt security					500
Change in the fair value of contingent consideration		1,278			(19,067	)
Milestone payments received by the Company related to contingent consideration		(6,429	)
Milestone and royalty payments received by the Company related to contingent consideration					(501	)
Royalty payments due to the Company related to contingent consideration		(18	)		(40	)
Balance, March 31, 2021	$	28,259
Balance, March 31, 2022				$	3,940

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

In April 2015, the Company sold its Gainesville, GA manufacturing facility, the related manufacturing and royalty revenue associated with certain products manufactured at the facility, and the rights to intravenous/intramuscular (“IV/IMIM”) and parenteral forms of Meloxicam to Recro Pharma, Inc. (“Recro”) and Recro Gainesville LLC (such transaction, the “Gainesville Transaction”). The Gainesville Transaction included in the purchase price contingent consideration tied to low double digit royalties on net sales of the IV/IM and parenteral forms of Meloxicam and any other product with the same active ingredient as Meloxicam IV/IM that is discovered or identified using certain of the Company’s IP to which Recro was provided a right of use, through license or transfer, pursuant to the Gainesville Transaction (such products, the “Meloxicam Products”), and milestone payments upon the achievement of certain regulatory and sales milestones related to the Meloxicam Products.

In November 2019, Recro spun out its acute care segment to Baudax Bio, Inc. (“Baudax”), a publicly-traded pharmaceutical company. As part of this transaction, Recro’s obligations to pay ~~the Company~~ certain contingent consideration from the Gainesville Transaction were assigned and/or transferred to Baudax.

~~In Baudax’s Annual Report on Form 10-K for the period ended December 31, 2020, Baudax included disclosures regarding its ability to continue as a going concern.~~ At March 31, ~~2021,~~2022, the Company determined the fair value of the contingent consideration to be received as follows:

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

In ~~order to address~~Baudax’s Annual Report on Form 10-K for the ~~substantial doubt about Baudax’s~~year ended December 31, 2021, Baudax included disclosures regarding its ability to continue as a going concern ~~the Company split~~and a subsequent event note that announced a plan to reduce expenses including an approximately 80% reduction in its ~~fair value analysis into two scenarios and applied an equal weighting to each.~~workforce, effective in March 2022. In ~~the first scenario, the amounts above were all discounted using a rate~~light of 13~~% at March 31, 2021 and December 31, 2020, which the Company believes captures a market participant’s view of the risk associated with the expected payments assuming Baudax is able~~Baudax’s disclosures regarding its ability to continue as a going ~~concern. In~~concern and the ~~second scenario,~~fact that Baudax paid $0.5 million of the $6.4 million that was due in March 2022, the Company ~~used the undiscounted values derived from the amounts summarized above~~has applied a 100% likelihood that Baudax would default on its obligations and applied a recovery rate of 18~~% at March 31, 2021 and December 31, 2020,~~9% based on an analysis performed by ~~Moody’s Investor Service~~Standard and Poor’s regarding ~~recoveries~~post-default recoveries. However, for avoidance of doubt, the Company has not waived its right to receive any portion of the payments owing by Baudax. For discussion on the calculation of the fair value of the contingent consideration at December 31, 2021, refer to Note 5, Fair Value within the “Notes to Consolidated Financial Statements” in ~~a pandemic-driven default cycle.~~the Annual Report.

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company determined that the fair value of the contingent consideration ~~related to the Gainesville Transaction~~ was ~~$27.3~~$3.4 million and ~~$32.5~~$23.0 million, respectively. At March 31, ~~2021~~2022 and December 31, ~~2020, $7.9~~2021, $3.4 million and ~~$7.8~~$6.4 million, respectively, of the fair value of the contingent consideration was included within “Prepaid expenses and other current assets” in the accompanying condensed consolidated balance sheets, and ~~$19.4 million~~NaN and ~~$24.7~~$16.6 million, respectively, of the fair value of the contingent consideration was included within ~~“Contingent consideration”~~“Other assets” in the accompanying condensed consolidated balance sheets. ~~The Company~~Changes in the fair value of the contingent consideration are recorded ~~an increase of $1.3 million and $6.8 million during the three months ended March 31, 2021 and 2020, respectively,~~ within “Change in the fair value of contingent ~~consideration”~~consideration�� in the accompanying condensed consolidated statements of operations and comprehensive loss.

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

The estimated fair value of the Company’s long-term debt under its amended and restated credit agreement (such debt, the “2026 Term Loans”), which was based on quoted market price indications (Level 2 in the fair value hierarchy) and which may not be representative of actual values that could have been, or will be, realized in the future, was ~~$298.5~~$285.1 million and ~~$275.1~~$285.8 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. ~~See Note 11,~~ ~~Long-Term Debt~~ ~~in these “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for additional information.~~

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

	March 31,		December 31,		March 31,		December 31,
(In thousands)	2021		2020		2022		2021
Raw materials	$	47,788	$	44,944	$	51,430	$	56,125
Work in process		56,081		53,243		64,385		59,105
Finished goods⁽¹⁾		30,309		27,551
Finished goods⁽¹⁾						38,971		35,105
Total inventory	$	134,178	$	125,738	$	154,786	$	150,335

As of March 31, 2021 and December 31, 2020, the carrying value of inventory included $14.0 million and $13.8 million, respectively, associated with LYBALVI, which was capitalized in advance of regulatory approval.

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

	March 31,			December 31,			March 31,			December 31,
(In thousands)	2021			2020			2022			2021
Land	$	6,560		$	6,560		$	6,560		$	6,560
Building and improvements		178,235			178,194			193,101			192,920
Furniture, fixtures and equipment		369,162			366,051			401,161			398,099
Leasehold improvements		52,508			52,508			52,526			52,526
Construction in progress		105,743			102,833			88,638			86,512
Subtotal		712,208			706,146			741,986			736,617
Less: accumulated depreciation		(365,881	)		(356,143	)		(405,246	)		(395,563	)
Total property, plant and equipment, net	$	346,327		$	350,003		$	336,740		$	341,054

Based on the Company’s most recent analysis, amortization of intangible assets included ~~within its~~in the accompanying condensed consolidated balance sheet at March 31, ~~2021~~2022 is expected to be approximately ~~$40.0 million,~~ $35.0 million, $35.0 million and $1.0 million in the years ending December 31, ~~2021~~2022 through 2024, respectively. Although the Company believes such analysis, and the available information and assumptions underlying such analysis, are reasonable, given the inherent risks and uncertainties underlying its expectations regarding such future revenues, there is the potential for the Company’s actual results to vary significantly from such expectations. If revenues are projected to change, the related amortization of the intangible assets will change in proportion to the change in revenues.

Future lease payments under non-cancelable leases ~~as of~~at March 31, ~~2021~~2022 and December 31, ~~2020~~2021 consisted of the following:

	March 31,			December 31,			March 31,			December 31,
(In thousands)	2021			2020			2022			2021
2021	$	12,865		$	16,882
2022		17,001			17,001		$	13,561		$	17,991
2023		17,266			17,266			18,271			17,329
2024		17,536			17,536			18,541			17,535
2025		17,810			17,810			18,814			17,808
2026								14,783			13,777
Thereafter		109,002			109,311			95,293			95,229
Total lease payments	$	191,480		$	195,806
Total operating lease payments							$	179,263		$	179,669
Less: imputed interest		(60,143	)		(60,610	)		(59,105	)		(59,267	)
Total operating lease liabilities	$	131,337		$	135,196		$	120,158		$	120,402

At March 31, ~~2021,~~2022, the weighted average incremental borrowing rate and the weighted average remaining lease term for all operating leases held by the Company were ~~5.25%~~5.19% and ~~12.4~~11.3 years, respectively. During the three months ended March 31, 2022 and 2021, cash paid for lease liabilities was $4.4 million and $3.7 million, respectively. The Company recorded operating lease expense of $4.1 million and $4.2 million during the three months ended March 31, 2022 and 2021, respectively.

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

ended March 31, 2021 and 2020, cash paid for amounts included for the measurement of lease liabilities was $3.7 million and $2.4 million, respectively, and the Company recorded operating lease expense of $4.2 million and $3.9 million, respectively.

	March 31,		December 31,		March 31,		December 31,
(In thousands)	2021		2020		2022		2021
Accounts payable	$	36,097	$	46,034	$	27,697	$	55,721
Accrued compensation		49,357		71,178		54,413		77,256
Accrued sales discounts, allowances and reserves		191,113		218,877
Accrued other		62,521		76,082		91,016		75,514
Total accounts payable and accrued expenses	$	339,088	$	412,171	$	173,126	$	208,491

	March 31,			December 31,			March 31,			December 31,
(In thousands)	2021			2020			2022			2021
2026 Term Loans, due March 12, 2026	$	297,702		$	—		$	295,171		$	295,804
2023 Term Loans, due March 26, 2023		—			274,961
Less: current portion		(3,000	)		(2,843	)		(3,000	)		(3,000	)
Long-term debt	$	294,702		$	272,118		$	292,171		$	292,804

In March 2021, the Company amended and refinanced its existing term loans, ~~previously referred to as~~resulting in the ~~2023~~2026 Term Loans ~~(as so amended and refinanced~~(such refinancing, the ~~“2026~~“Term Loan Refinancing”). The 2026 Term ~~Loans”), in order to, among other things, provide for a new class of replacement term loans equal to $300.0 million; extend the due date from March 26, 2023 to~~Loans mature on March 12, ~~2026; amend the~~2026 and bear interest payable ~~from LIBOR plus 2.25% with 0 LIBOR floor to~~at LIBOR plus 2.50% with a LIBOR floor of ~~0.50%; and increase covenant flexibility (such refinancing, the “Term Loan Refinancing”)~~0.5%.

Under the 2026 Term Loans, the Company is subject to mandatory prepayments of principal if certain excess cash flow thresholds, as defined in the 2026 Term Loans, are met. To date, the Company has not been required to make any such mandatory prepayments. The 2026 Term Loans have an incremental facility capacity in anthe amount of $175.0 million plus additional amounts, ~~as long as~~provided that the Company meets certain conditions, including a specified leverage ratio. The 2026 Term Loans include a number of restrictive covenants that, among other things and subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and certain of its subsidiaries. The 2026 Term Loans also contain customary affirmative covenants and events of default. The Company was in compliance with its debt covenants at March 31, ~~2021.~~2022.

~~The Term Loan Refinancing involved multiple lenders who were considered members~~Included in “Interest expense” in the accompanying condensed consolidated statement of ~~a loan syndicate. In determining whether~~operations and comprehensive loss in the three months ended March 31, 2021 is $2.1 million related to the Term Loan ~~Refinancing should be accounted for as a debt extinguishment or a debt modification,~~Refinancing. Refer to Note 11, Long-Term Debt within the ~~Company considered whether creditors remained the same or changed and whether the changes in debt terms were substantial. A change~~“Notes to Consolidated Financial Statements” in the debt terms was considered to be substantial if the present value of the remaining cash flows under the new terms of the 2026 Term Loans were at least 10% different from the present value of the remaining cash flows under the 2023 Term Loans (commonly referred to as the “10% Test”). The Company performedAnnual Report for a ~~separate 10% Test~~discussion on accounting for each individual creditor participating in the loan syndication. With the exception of 3 lenders with respective holdings ranging from 2%-7% of the total outstanding principal amount of the 2023 Term Loans at the date of the Term Loan ~~Refinancing whose holding amounts were accounted for as a debt extinguishment,~~Refinancing.

The following table presents share-based compensation expense included in the ~~Term Loan Refinancing was otherwise accounted for as a debt modification.~~accompanying condensed consolidated statements of operations and comprehensive loss:

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

~~The Term Loan Refinancing resulted in a $2.1~~ ~~million charge in the three months ended March 31, 2021, which was included in “Interest expense” in the accompanying condensed consolidated statement of operations and comprehensive loss.~~

~~The following table presents share-based compensation expense included in the Company’s condensed consolidated statements of operations and comprehensive loss:~~

At March 31, ~~2021~~2022 and December 31, ~~2020, $2.7~~2021, $2.5 million and ~~$2.6~~$2.3 million, respectively, of share-based compensation expense was capitalized and recorded as “Inventory” in the accompanying condensed consolidated balance sheets.

Basic loss per ordinary share is calculated based upon net loss available to holders of ordinary shares divided by the weighted average number of shares outstanding. For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, as the Company was in a net loss position, the diluted loss per ~~ordinary~~ share calculation did not assume conversion or exercise of stock options and restricted stock unit awards, as they would have had an anti-dilutive effect on loss per ~~ordinary~~ share.

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

	Three Months Ended				Three Months Ended
	March 31,				March 31,
(In thousands)	2021		2020		2022		2021
Stock options		15,451		14,829		13,461		15,451
Restricted stock unit awards		2,877		4,416		5,959		2,877
Total		18,328		19,245		19,420		18,328

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

During the three months ended March 31, 2022, the Company recorded an income tax benefit of $9.1 million, which was primarily due to a change to Section 174 of the Tax Cuts and Jobs Act of 2017 (as amended, the “TCJA”) which became effective on January 1, 2022. Under the TCJA, the Company is required to capitalize, and subsequently amortize R&D expenses over five years for research activities conducted in the U.S. and over fifteen years for research activities conducted outside of the U.S. The capitalization of R&D expenses resulted in an increase to the Company’s taxable income and foreign derived intangible income (“FDII”), resulting in a significant increase in the Company’s FDII deduction.

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated, the Company would accrue a liability for the estimated loss. Because of uncertainties related to claims and litigation, accruals are based on the Company’s best estimates, utilizing all available information. On a periodic basis, as additional information becomes available, or based on specific events such as the outcome of litigation or settlement of claims, the Company may reassess the potential liability related to these matters and may revise these estimates, which could result in material adverse adjustments to the Company’s operating results. At March 31, ~~2021,~~2022, there were 0 potential material losses from claims, asserted or unasserted, or legal proceedings that the Company determined were probable of occurring.

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

On April 19, 2022, Alkermes Pharma Ireland Limited commenced binding arbitration proceedings to settle, among other things, whether, notwithstanding Janssen Pharmaceutica’s partial termination of 2 license agreements with the Company, it has a continuing obligation to pay royalties on sales in the U.S. of INVEGA SUSTENNA, INVEGA TRINZA, INVEGA HAFYERA and CABENUVA, products developed under or enabled by these license agreements. The arbitration is to be conducted pursuant to the Institute for Conflict Prevention and Resolution (CPR) Rules for Non-Administered Arbitration. The request for arbitration seeks, among other remedies, a declaration that Janssen Pharmaceutica is in breach of the license agreements and a resumption of royalty payments for sales of the relevant products in the U.S.

Janssen ~~Pharmaceuticals NV~~Pharmaceutica and Janssen Pharmaceuticals, Inc. initiated patent infringement lawsuits in the U.S. District Court for the District of New Jersey (the “NJ District Court”) in January 2018 against Teva Pharmaceuticals USA, Inc. (“Teva”) and Teva Pharmaceuticals Industries, Ltd. (“Teva PI”) (such lawsuit, the “Teva Lawsuit”), in August 2019 against Mylan Laboratories Limited (“Mylan Labs”), and other Mylan ~~Pharmaceuticals Inc. (“Mylan”~~entities (the “Mylan Lawsuit”)~~, and Mylan Institutional LLC~~ and in December 2019 against Pharmascience, Inc. (“Pharmascience”), Mallinckrodt plc, and SpecGX LLC (the “Pharmascience Lawsuit”), and in the U.S. District Court for the District of Delaware in December 2021 against Tolmar Holding, Inc., Tolmar Pharmaceuticals, Inc., Tolmar Therapeutics, Inc., and Tolmar, Inc. (“Tolmar” and such lawsuit, the “Tolmar Lawsuit”), following the respective filings by each of Teva, Mylan Labs, Pharmascience and ~~Pharmascience~~Tolmar of an Abbreviated New Drug Application (“ANDA”) seeking approval from the FDA to market a generic version of INVEGA SUSTENNA before the expiration of U.S. Patent No. 9,439,906.

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

In October ~~2020,~~2021, the NJ District Court entered a ~~trial was held~~judgment in ~~the lawsuit between~~favor of the Janssen entities ~~and~~in the Teva Lawsuit. In December 2021, the NJ District Court entered a judgment in favor of the Janssen entities in the Mylan Lawsuit, based on the parties’ prior stipulation to be bound by the judgment in the Teva Lawsuit. The Teva entities and ~~closing arguments~~Mylan Labs each filed notices of appeal of their respective judgments with the U.S. Court of Appeals for ~~such~~the Federal Circuit, which were consolidated in January 2022. A trial ~~were heard~~was scheduled in ~~March 2021. Requested judicial remedies in each of~~ the ~~lawsuits include recovery of litigation costs and injunctive relief.~~Tolmar Lawsuit for October 2022. The Pharmascience Lawsuit remains pending. The Company is not a party to any of these proceedings.

In September 2020, Janssen ~~Pharmaceuticals NV,~~Pharmaceutica, Janssen Pharmaceuticals, Inc., and Janssen Research & Development, LLC, initiated a patent infringement lawsuit in the NJ District Court against Mylan Labs, Mylan, and Mylan Institutional LLC following the filing by Mylan Labs of an ANDA seeking approval from the FDA to market a generic version of INVEGA TRINZA before the expiration of U.S. Patent No. 10,143,693. Requested judicial remedies include recovery of litigation costs and injunctive relief. A trial has been scheduled for October 2022. The Company is not a party to this proceeding.

In December 2016, Nanjing Luye Pharmaceutical Co., Ltd., Pharmathen SA, Teva PI and Dehns Ltd (a law firm representing an unidentified opponent) filed notices of opposition with the European Patent Office (the “EPO”) in respect of the Company’s EP 2 269 577 B (the “EP ’577 Patent”), ~~which is~~ a patent directed to certain risperidone microsphere compositions, including RISPERDAL CONSTA. ~~Following a hearing on the matter in January~~In April 2019, the EPO issued a written decision revoking the EP ’577 Patent and in ~~April 2019. The~~June 2019, the Company filed a notice of appeal of the decision to the EPO’s Technical Boards of ~~Appeal in June 2019. Pharmathen SA submitted a reply in November 2019 and Nanjing Luye Pharmaceutical Co., Ltd. and Teva PI submitted replies in December 2019.~~Appeal. The ~~Company will continue to vigorously defend the~~ EP ’577 ~~Patent.~~Patent has since expired, and in February 2022, the Company withdrew its appeal, which terminated the proceedings.

In September 2020, Alkermes, Inc. and Alkermes Pharma Ireland Limited filed a patent infringement lawsuit in the NJ District Court against Teva and Teva PI following the filing by Teva of an ANDA seeking approval from the FDA to engage in the commercial manufacture, use or sale of a generic version of VIVITROL (naltrexone for extended-release injectable suspension) before the expiration of the Company’s U.S. Patent No. 7,919,499. Teva filed its ~~Answer~~answer in November 2020, which included counterclaims against the Company. The Company filed its ~~Reply~~reply to Teva’s counterclaims in December 2020. The Company intends to vigorously defend its ~~intellectual property.~~IP. The filing of the lawsuit triggered a stay of FDA approval of the ANDA for up to 30 months in accordance with the U.S. Drug Price Competition and Patent

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

On March 17, 2021, Biogen Inc., Biogen Swiss Manufacturing GmbH and Alkermes Pharma Ireland Limited filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware against Teva Pharmaceuticals Development Inc. (“Teva PD”) following the filing by Teva PD of an ANDA seeking approval from the FDA to engage in the commercial manufacture, use or sale of a generic version of VUMERITY (diroximel fumarate) before the expiration of the Company’s U.S. Patent Nos. 8,669,281, 9,090,558 and 10,080,733. The filing of the lawsuit triggered a stay of FDA approval of the ANDA for up to 30 months in accordance with the Hatch-Waxman Act.

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

In December 2018 and January 2019, purported stockholders of the Company filed putative class actions against the Company and certain of its officers in the U.S. District Court for the Eastern District of New York (the “EDNY District Court”) captioned ~~Karimian v. Alkermes plc, et al., No. 1:18-cv-07410 and McDermott v. Alkermes plc, et al., No. 1:19-cv-00624~~, respectively. In March 2019, the EDNY District Court consolidated the two cases and appointed a lead plaintiff. The plaintiff filed an amended complaint in July 2019 naming one additional officer of the Company and one former officer of the Company as defendants. The amended complaint was filed on behalf of a putative class of purchasers of Alkermes securities during the period of July 31, 2014 through November 1, 2018 and alleges violations of

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

Sections 10(b) and 20(a) of the Exchange Act based on allegedly false or misleading statements and omissions regarding the Company’s clinical methodologies and regulatory submission for ALKS 5461 and the FDA’s review and consideration of that submission. The lawsuit seeks, among other things, unspecified money damages, prejudgment and postjudgment interest, reasonable attorneys’ fees, expert fees and other costs. On February 26, 2021, the EDNY District Court entered a final judgment and order dismissing the action in its entirety (the “Final Judgment and Order”). On March 26, 2021, the plaintiff filed a notice of appeal, appealing the Final Judgment and Order to the United States Court of Appeals for the Second Circuit.

The Company is ~~also~~ involved in ~~product liability cases~~litigation and other legal proceedings incidental to its normal business activities, including product liability cases alleging that the FDA-approved VIVITROL labeling was inadequate and caused the users of the product to suffer from opioid overdose and death. The Company intends to vigorously defend itself in these matters. While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing ~~matters~~proceedings would have a material adverse effect on the Company’s business or financial condition.

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

The following discussion should be read in conjunction with ~~our~~the accompanying condensed consolidated financial statements and related notes beginning on page 6 in this Form 10-Q, and ~~“Management’s~~“Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited financial statements and notes thereto included in our Annual Report.

Net loss for the three months ended March 31, ~~2021~~2022 was ~~$22.4~~$35.9 million, or ~~$0.14~~$0.22 per ordinary share—basic and diluted, as compared to a net loss of ~~$38.7~~$22.4 million, or ~~$0.24~~$0.14 per ordinary share—basic and diluted, for the three months ended March 31, ~~2020.~~ 2021.

The ~~decrease~~increase in net loss ~~in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~ was primarily due to a ~~$15.7~~$37.3 million ~~decrease~~increase in operating expenses and a ~~$5.2~~$20.3 million decrease in the fair value of our contingent consideration related to increased risk of non-payment, partially offset by a $41.1 million increase in ~~revenue.~~product sales, net. The ~~decrease~~increase in ~~net loss was partially offset by the $2.1~~operating expenses primarily related to a $19.8 million ~~charge that resulted from the completion~~increase in selling, general and administrative expense and a $14.1 million increase in cost of ~~the Term Loan Refinancing during the three months ended March 31, 2021.~~goods manufactured and sold.

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

WeThe COVID-19 pandemic has caused, and we expect may continue to ~~closely monitor and respond~~cause, varying degrees of disruption to ~~the ongoing impact of COVID-19 on~~ our employees ~~our communities~~ and our business operations. We have adopted a series of precautionary measures in an effort to protect our employees and mitigate the potential spread of COVID-19 in a community setting. For example, we instituted a global remote work policy for those of our employees who are able to work remotely. Certain of our field-based employees have since resumed in-person interactions, as appropriate and on a voluntary basis, in accordance with location-specific guidance.

~~At the same time,~~While we have ~~worked~~continued to ~~continue our critical business functions, including continued operation of~~operate our manufacturing facilities and ~~our laboratories, and have continued to conduct our discovery efforts and~~ supply our ~~medicines. For those of our employees who work in~~medicines without interruption throughout the pandemic, we have, at times during the pandemic experienced labor or supply chain disruptions at our manufacturing facilities, and laboratories or who otherwise enter any of our sites, we have instituted additional safety precautions, including increased sanitization of our facilities, use of personal protective equipment, implementation of a daily health screening application and physical distancing practices to help protect their health and safety. We have also taken actions to support people living with schizophrenia, opioid dependence and alcohol dependence to help assure that they have access to the information, resources and medicines that may assist in their treatment.

The marketed products from which we derive revenue, including manufacturing and royalty revenue, are primarily injectable medications administered by healthcare professionals. Given developments that have transpired to date, and may continue to transpire, in response to the pandemic, including business closures, social distancing requirements and other restrictive measures, commercial sales of these marketed products have been adversely impacted to varying degrees and we expect commercial sales of these marketed products to continue to be adversely impactedexperience such disruptions while the pandemic persists.

~~During the three months ended March 31, 2021,~~ In addition, while we have continued to take actions to support uninterrupted access to our proprietary marketed products. However, we currently expect commercial sales of our marketed products, particularly VIVITROL, to continue to be impacted by the COVID-19 pandemic over the next few months. These items are

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

~~While we continue~~ to conduct R&D activities, including our ongoing clinical trials, the COVID-19 pandemic has at times impacted ~~and may continue to impact,~~ the timelines of certain of our early-stage discovery efforts and clinical ~~trials.~~trials, and may continue to impact such timelines while the pandemic persists. We ~~are working~~work with our internal teams, our clinical investigators, R&D vendors and critical supply chain vendors to continually assess, and mitigate, the potential impact of COVID-19 on our manufacturing operations and R&D activities.

A number of the marketed products from which we derive revenue, including manufacturing and royalty revenue, are injectable medications administered by healthcare professionals. Given developments that have transpired to date, and may continue to transpire, in response to the pandemic, including business closures, travel restrictions, quarantine, testing and/or vaccine mandates and other protocols, labor shortages, and other restrictive measures, commercial sales of these marketed products have been adversely impacted to varying degrees during the pandemic and may continue to be adversely impacted while the pandemic persists.

In addition, we rely upon third parties for many aspects of our business, including the provision of goods and services related to the manufacture of our clinical products and our and our partners’ marketed products, the conduct of our clinical trials, and the sale of our proprietary marketed products and the marketed products of our licensees from which we receive manufacturing and royalty revenue. Any prolonged material disruption to the third parties on which we

rely could negatively impact our ability to conduct business in the manner and on the timelines presently planned, which could have a material adverse impact on our business, results of operations and financial condition.

Due to numerous uncertainties surrounding the ongoing COVID-19 pandemic, the actual impact of the pandemic on our financial condition and operating results may differ from our current projections. These uncertainties include, among other things, the ultimate severity and duration of the ~~pandemic; governmental, business~~pandemic and the manner in which it continues to evolve, including the emergence, prevalence and severity of new or ~~other actions that have been, are being, or will be, taken~~existing COVID-19 variants, and future developments in response ~~to the pandemic, including restrictions on travel~~thereto, which are highly uncertain and ~~mobility, business closures and operating restrictions and imposition of social distancing measures; impacts~~cannot be predicted as of the ~~pandemic on our employees, the vendors or distribution channels in our supply chain and on our ability to continue to manufacture our products; impacts~~date of the pandemic on the conduct of our clinical trials, including with respect to enrollment rates, availability of investigators and clinical trial sites, and monitoring of data; impacts of the pandemic on healthcare systems that serve people living with opioid dependence, alcohol dependence and schizophrenia; impacts of the pandemic on the regulatory agencies with which we interact in the development, review, approval and commercialization of our medicines; impacts of the pandemic on reimbursement for our products, including our Medicaid rebate liability, and for services related to the use of our products; and impacts of the pandemic on the Irish, U.S. and global economies more broadly.this Form 10-Q. For additional information about risks and uncertainties related to the COVID-19 pandemic that may impact our business, our financial condition or our results of operations, see “Part I, Item 1A—Risk Factors” in our Annual ~~Report.~~Report and specifically the section entitled “—Our business, financial condition and results of operations have been, and may continue to be, adversely affected by the ongoing COVID-19 pandemic or other similar outbreaks of contagious diseases.”

~~Our portfolio of~~The key marketed products ~~is designed~~discussed below have generated, or are expected to ~~help address unmet medical needs of patients in major therapeutic areas.~~generate, significant revenues for us. See the descriptions of the marketed products below and ~~see~~ “Part I, Item 1A—Risk Factors” in our Annual Report for important factors that could adversely affect our marketed products. ~~For information with respect to the IP protection for these marketed products, see the descriptions of the marketed products below and~~See the “Patents and Proprietary Rights” section in “Part I, Item 1—Business” in our Annual ~~Report.~~Report for information with respect to the IP protection for these marketed products.

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

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

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

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

~~In April 2021, U.S. Patent No. 10,973,816 relating to ARISTADA was granted. The patent has claims to ARISTADA’s commercial process and expires in 2035.~~

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

In March 2022, U.S. Patent No. 11,273,158 relating to ARISTADA and ARISTADA INITIO was granted. The patent has claims to methods of treating schizophrenia and expires in 2039.

LYBALVI (olanzapine and samidorphan) is a once-daily, oral atypical antipsychotic drug approved in the U.S. for the treatment of adults with schizophrenia and for the treatment of adults with bipolar I disorder, as a maintenance monotherapy or for the acute treatment of manic or mixed episodes, as monotherapy or an adjunct to lithium or valproate. LYBALVI is composed of olanzapine, an established antipsychotic agent, co-formulated with samidorphan, a new chemical entity, in a single bilayer tablet. LYBALVI was launched commercially in October 2021 and is available in fixed dosage strengths composed of 10 mg of samidorphan and 5 mg, 10 mg, 15 mg or 20 mg of olanzapine. We developed LYBALVI and exclusively manufacture and commercialize it in the U.S.

In February 2022, the Company announced positive topline results from ENLIGHTEN-Early, a phase 3b study that evaluated the effect of LYBALVI compared to olanzapine on body weight in young adult patients (ages 16 to 39; mean age: 26 years) with schizophrenia, schizophreniform disorder or bipolar I disorder who were early in their illness.

VIVITROL (naltrexone for extended-release injectable suspension) is a once-monthly, non-narcotic, injectable medication approved in the U.S., Russia and certain countries of the ~~CIS~~Commonwealth of Independent States for the treatment of alcohol dependence and for the prevention of relapse to opioid dependence, following opioid detoxification. VIVITROL uses our polymer-based microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body through one intramuscular injection every four weeks. We developed and exclusively manufacture VIVITROL and we commercialize ~~VIVITROL~~it in the U.S.

For a discussion of legal proceedings related to VIVITROL, see Note ~~14,~~15, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q, and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in our Annual Report and specifically the sections entitled “—Patent and other IP protection for our products is key to our business and our competitive position but is uncertain,” “—Uncertainty over IP in the biopharmaceutical industry has been the source of litigation, which is inherently costly and unpredictable, could significantly delay or prevent approval or negatively impact commercialization of our products, and could adversely affect our business” and “—Litigation or arbitration filed against Alkermes, including securities litigation, or ~~regulatory~~ actions (such as citizens petitions) filed against regulatory agencies in respect of our products, may result in financial losses, harm our reputation, divert management resources, negatively impact the approval of our products, or otherwise negatively impact our business.”

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

INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and ~~RISPERDAL CONSTA~~INVEGA HAFYERA/BYANNLI

In November 2021, we received notice of partial termination in the U.S. of our license agreement with Janssen in respect of INVEGA ~~SUSTENNA/XEPLION (paliperidone palmitate),~~SUSTENNA, INVEGA ~~TRINZA/TREVICTA (paliperidone palmitate 3-month injection)~~TRINZA and ~~RISPERDAL CONSTA (risperidone~~INVEGA HAFYERA, pursuant to which Janssen received access and rights to Alkermes’ small particle pharmaceutical compound technology, known as NanoCrystal Technology. This partial termination became effective in February 2022. In April 2022, we commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of the license agreement in the U.S. and Janssen’s royalty and other obligations under the agreement. For additional information regarding the arbitration proceedings with Janssen, see Note 15, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q and for information about risks relating to this notice of partial termination and our collaborative arrangements more broadly, see “Part I, Item 1A—Risk Factors” in our Annual Report and specifically that section entitled “We rely heavily on our licensees in the commercialization and continued development of products from which we receive revenue and, if our licensees are not effective, or if disputes arise in respect of our contractual arrangements, our revenues could be materially adversely affected.”

The long-acting ~~injection)~~INVEGA products are long-acting atypical antipsychotics owned and commercialized worldwide by ~~Janssen~~Janssen. We believe that these products were developed using, and incorporate, our ~~proprietary~~ technologies.

INVEGA SUSTENNA is approved in the U.S. for the treatment of schizophrenia and for the treatment of schizoaffective disorder as either a monotherapy or adjunctive therapy. Paliperidone palmitate extended-release injectable suspension is approved in the European Union (“EU”) and other countries outside of the U.S. for the treatment of schizophrenia and is marketed and sold under the trade name XEPLION. INVEGA SUSTENNA/XEPLION uses our nanoparticle injectable extended-release technology to increase the rate of dissolution and enable the formulation of an aqueous suspension for once-monthly intramuscular administration. INVEGA SUSTENNA/XEPLION is manufactured by Janssen.

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

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

For a discussion of legal proceedings related to certain of the patents covering INVEGA SUSTENNA and INVEGA TRINZA, see Note 15, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in our Annual Report and specifically the section entitled “We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”

RISPERDAL CONSTA (risperidone long-acting injection) is a long-acting atypical antipsychotic owned and commercialized worldwide by Janssen that incorporates our proprietary technologies. RISPERDAL CONSTA is approved in the U.S. for the treatment of schizophrenia and as both monotherapy and adjunctive therapy to lithium or valproate in the maintenance treatment of bipolar I disorder. RISPERDAL CONSTA is approved in numerous countries outside of the U.S. for the treatment of schizophrenia and the maintenance treatment of bipolar I disorder. RISPERDAL CONSTA uses our polymer-based microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body through just one intramuscular injection every two weeks. RISPERDAL CONSTA microspheres are exclusively manufactured by us.

For a discussion of legal proceedings related to certain of the patents covering ~~INVEGA SUSTENNA, INVEGA TRINZA and~~ RISPERDAL CONSTA, see Note ~~14,~~15, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in our Annual Report and specifically the section entitled “—We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”

VIVITROL is described more fully under the heading “Proprietary Products” above in this Form 10-Q. We developed and exclusively manufacture VIVITROL for Cilag. Cilag exclusively commercializes VIVITROL in Russia and certain countries of the CIS.Licensed Product

VUMERITY (diroximel fumarate) is a novel, oral fumarate with a distinct chemical structure that ~~was~~is approved in the U.S. ~~in October 2019~~, the European Union and certain European countries for the treatment of relapsing forms of multiple sclerosis in adults, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease.

Under our license and collaboration agreement with Biogen, Biogen holds the exclusive, worldwide license to develop and commercialize VUMERITY. For more information about the license and collaboration agreement with Biogen, see the “Collaborative Arrangements—Biogen” section in “Part I, Item 1—Business” in our Annual Report.

~~For a discussion of legal proceedings related to certain of the patents covering VUMERITY, see Note 14,~~ ~~Commitments and Contingent Liabilities~~ in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q and for information about risks relating to such legal proceedings, see “Part I, Item 1A—Risk Factors” in our Annual Report and specifically the section entitled “—We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”

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

LYBALVI (olanzapine/samidorphan) is an investigational, novel, once-daily, oral atypical antipsychotic drug candidate for the treatment of adults with schizophrenia and for the treatment of adults with bipolar I disorder. LYBALVI is composed of samidorphan, a novel, new molecular entity, co-formulated with the established antipsychotic agent, olanzapine, in a single bilayer tablet.

LYBALVI is designed to provide the robust antipsychotic efficacy of olanzapine while mitigating olanzapine-associated weight gain. The ENLIGHTEN clinical development program for LYBALVI includes two key phase 3 studies in patients with schizophrenia: ENLIGHTEN-1, a four-week study which evaluated the antipsychotic efficacy of LYBALVI compared to placebo, and ENLIGHTEN-2, a six-month study which assessed weight gain with LYBALVI compared to ZYPREXA^® (olanzapine). The program also includes supportive studies to evaluate the pharmacokinetic (“PK”) and metabolic profile and long-term safety of LYBALVI, and PK bridging studies comparing LYBALVI and ZYPREXA.

The LYBALVI NDA is a 505(b)(2) NDA that relies in part on the FDA’s findings of safety and effectiveness for ZYPREXA and in part on original preclinical and clinical data generated by Alkermes. For more information about 505(b)(2) NDAs, see the “Regulatory, Hatch-Waxman Act” section of “Part I, Item 1—Business” in our Annual Report. We are seeking approval of LYBALVI for the treatment of schizophrenia and for the treatment of manic and mixed episodes associated with bipolar I disorder as a monotherapy or adjunct to lithium or valproate and for maintenance treatment of bipolar I disorder, and of fixed dosage strengths of LYBALVI composed of 10 mg of samidorphan co-formulated with 5 mg, 10 mg, 15 mg or 20 mg of olanzapine.

In November 2020, we received a Complete Response Letter (“CRL”), which included a request for information, from the FDA regarding the LYBALVI NDA, following the FDA’s remote review of manufacturing records requested under Section 704(a)(4) of the Federal Food, Drug, and Cosmetic Act (the “FDCA”) relating to the manufacture of LYBALVI at our Wilmington, Ohio facility. In December 2020, we resubmitted the NDA, and the FDA acknowledged receipt of our NDA resubmission and assigned the NDA a Prescription Drug User Fee Act (“PDUFA”) target action date of June 1, 2021. Following our NDA resubmission, the FDA issued a new request for records under Section 704(a)(4) of the FDCA to supplement the information that we previously provided.program.

Nemvaleukin alfa (“nemvaleukin”) is an investigational, novel, engineered fusion protein comprised of modified interleukin-2 (“IL-2”) and the high affinity IL-2 alpha receptor chain, designed to ~~selectively~~preferentially expand tumor-killing immune cells while avoiding the activation of immunosuppressive cells by ~~preferentially~~selectively binding to the intermediate-affinity IL-2 receptor complex. The selectivity of nemvaleukin is designed to leverage the proven anti-tumor effects of existing IL-2 therapy while mitigating certain limitations.

ARTISTRY is our clinical development program evaluating nemvaleukin as a potential immunotherapy for cancer. The ARTISTRY program is comprised of multiple clinical trials evaluating intravenous (“IV”) and subcutaneous (“SC”) dosing of nemvaleukin, both as a monotherapy and in combination with the anti-PD-1 therapy KEYTRUDA (pembrolizumab) in patients with advanced solid tumors. ARTISTRY-1 (evaluating IV nemvaleukin) and ARTISTRY-2 (evaluating SC nemvaleukin) are ongoing phase 1/2 studies evaluating the safety, tolerability, efficacy and PKpharmacokinetic and pharmacodynamic effects of nemvaleukin in patients with refractory advanced solid tumors, in both monotherapy and combination ~~settings with the PD-1 inhibitor pembrolizumab. Nemvaleukin is being evaluated with intravenous (“IV”) administration in ARTISTRY-1 and with subcutaneous (“SC”) administration in ARTISTRY-2.~~settings. ARTISTRY-3 is aan ongoing phase

2 study evaluating the ~~clinical~~efficacy, safety and ~~immunologic~~tolerability of less frequent dosing of IV nemvaleukin and pharmacokinetic and pharmacodynamic effects of IV

nemvaleukin ~~monotherapy on~~in the tumor microenvironment as a monotherapy and in combination with pembrolizumab in a variety of advanced ~~malignant~~ solid tumors.

~~In March 2021, the FDA granted nemvaleukin orphan drug designation for the treatment of mucosal melanoma. In April 2021, we announced the initiation of~~ ARTISTRY-6 ais an ongoing phase 2 study evaluating the anti-tumor activity, safety and tolerability of IV nemvaleukin monotherapy in patients with mucosal melanoma and SC nemvaleukin monotherapy in patients with advanced cutaneous melanoma. ARTISTRY-7 is an ongoing phase 3 study evaluating the efficacy, safety and tolerability of IV nemvaleukin as monotherapy and in combination with pembrolizumab compared to investigator’s choice chemotherapy in patients with platinum-resistant ovarian cancer.

In March 2021 and August 2021, we announced that the FDA granted Orphan Drug Designation and Fast Track designation, respectively, to nemvaleukin for the treatment of mucosal melanoma. In October 2021, we announced that the FDA granted Fast Track designation to nemvaleukin in combination with pembrolizumab for the treatment of platinum-resistant ovarian cancer.

Our product sales, net, consist of sales of VIVITROL, ARISTADA and ARISTADA INITIO, and, following its commercial launch in the U.S., in October 2021, LYBALVI, primarily to wholesalers, specialty distributors and pharmacies. The following table presents the adjustments deducted from product sales, gross to arrive at product sales, net, for sales of VIVITROL, ARISTADA, ~~and~~ ARISTADA INITIO ~~in the U.S.~~and LYBALVI during the three months ended March 31, ~~2021~~2022 and ~~2020:~~2021:

	Three Months Ended														Three Months Ended
	March 31,														March 31,
(In millions, except for % of Sales)	2021			% of Sales				2020			% of Sales				2022			% of Sales				2021			% of Sales
Product sales, gross	$	272.6			100.0		%	$	260.2			100.0		%	$	342.4			100.0		%	$	272.6			100.0		%
Adjustments to product sales, gross:
Medicaid rebates		(70.9	)		(26.0	)	%		(61.9	)		(23.8	)	%		(76.5	)		(22.3	)	%		(70.9	)		(26.0	)	%
Chargebacks		(25.0	)		(9.2	)	%		(22.6	)		(8.7	)	%		(33.8	)		(9.9	)	%		(25.0	)		(9.2	)	%
Product discounts		(21.4	)		(7.9	)	%		(20.2	)		(7.8	)	%		(26.9	)		(7.9	)	%		(21.4	)		(7.9	)	%
Medicare Part D		(13.1	)		(4.8	)	%		(12.3	)		(4.7	)	%		(16.0	)		(4.7	)	%		(13.1	)		(4.8	)	%
Other		(12.2	)		(4.4	)	%		(13.5	)		(5.2	)	%		(17.9	)		(5.2	)	%		(12.2	)		(4.4	)	%
Total adjustments		(142.6	)		(52.3	)	%		(130.5	)		(50.2	)	%		(171.1	)		(50.0	)	%		(142.6	)		(52.3	)	%
Product sales, net	$	130.0			47.7		%	$	129.7			49.8		%	$	171.3			50.0		%	$	130.0			47.7		%

~~Our~~The following table compares product sales, net ~~for VIVITROL in~~revenues earned during the three months ended March 31, ~~2021 were $74.5 million, as compared~~2022 and 2021:

VIVITROL product sales, gross, increased by 9%, primarily due to ~~$78.8 million~~a 7% increase in the ~~three months ended March 31, 2020. Product sales, net for ARISTADA~~number of VIVITROL units sold and ~~ARISTADA INITIO~~a 2% increase in the ~~three months ended March 31, 2021 were $55.5 million, as compared to $50.9 million~~selling price of VIVITROL that went into effect in ~~the three months ended March 31, 2020.~~

April 2021. ARISTADA and ARISTADA INITIO product sales, gross, increased by ~~12% in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020, which was~~31%, primarily due to a 6%27% increase in the number of ARISTADA and ARISTADA INITIO units sold and a 6%3% increase in the selling price of ARISTADA and ARISTADA INITIO that went into effect in April ~~2020. VIVITROL~~2021. The increase in LYBALVI product sales, gross ~~decreased by less than 1% in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020, primarily~~is due to ~~a 6%~~LYBALVI’s commercial launch in October 2021. The decrease in the number of VIVITROL units sold, primarily as a result of COVID-19-related disruptions, partially offset by a 6% increase in the selling price of VIVITROL that went into effect in June 2020. The increase in Medicaid rebates, as a percentage of sales, iswas primarily due to ~~an increase~~a decrease in Medicaid utilization ~~related~~as rates began to ~~the COVID-19 pandemic.~~normalize from pandemic levels.

The following table compares manufacturing and royalty revenues earned induring the three months ended March 31, ~~2021~~2022 and ~~2020:~~2021:

	Three Months Ended							Three Months Ended
	March 31,							March 31,
(In millions)	2021		2020		Change			2022		2021		Change
Manufacturing and royalty revenues:
INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA	$	61.6	$	54.9	$	6.7
Long-acting INVEGA products								$	37.1	$	61.6	$	(24.5	)
VUMERITY									30.6		13.4		17.2
RISPERDAL CONSTA		14.2		27.3		(13.1	)		17.4		14.2		3.2
AMPYRA/FAMPYRA		14.7		15.0		(0.3	)
VUMERITY		13.4		1.7		11.7
Other		15.9		17.4	$	(1.5	)		20.1		30.6		(10.5	)
Manufacturing and royalty revenues	$	119.8	$	116.3		3.5		$	105.2	$	119.8	$	(14.6	)

~~We earn~~Our agreements with Janssen related to the long-acting INVEGA products provide for tiered royalty payments, ~~for INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA,~~ which consist of a patent royalty and a know-how royalty, both of which are determined on a country-by-country basis. The patent royalty, which equals 1.5% of net sales, is payable in each country until the expiration of the last of the ~~royalty-bearing~~ patents with valid claims applicable to the product in such country. The know-how royalty is a tiered royalty of 3.5% on calendar year net sales up to $250 million; 5.5% on calendar year net sales of between $250 million and $500 million; and 7.5% on calendar year net sales exceeding $500 million. The know-how royalty rate resets to 3.5% at the beginning of each calendar year and is payable until 15 years from the first commercial sale of a product in each individual ~~country, subject to the expiry of the license agreement.~~country.

The ~~increase~~decrease in ~~INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA~~ royalty revenues infrom the ~~three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~long-acting INVEGA products was primarily due to the partial termination in the U.S. of our license agreement with Janssen. When the termination of the license agreement became effective in February 2022, we stopped recognizing royalty revenue related to net sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S. The decrease in royalty revenue was partially offset by an increase in Janssen’s ~~end-market~~non-U.S. net sales of ~~INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA.~~these products. During the three months ended March 31, ~~2021,~~2022, Janssen’s ~~end-market~~rest of world net sales ~~of INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA~~ were ~~$965.0~~$387.0 million, as compared to ~~$883.0~~$376.0 million during the three months ended March 31, ~~2020.~~2021.

We expect revenues from net sales of XEPLION, TREVICTA and BYANNLI to decrease over time. The amount and timing of revenues from sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA depend upon the outcome of our dispute with Janssen related to the basis for its partial termination of our license agreement in respect of these products. In November 2021, we received notice of partial termination of our license agreement with Janssen in respect of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA, pursuant to which Janssen received access and rights to Alkermes’ small particle pharmaceutical compound technology, known as NanoCrystal Technology. When the partial termination became effective in February 2022, Janssen ceased paying royalties related to sales of INVEGA SUSTENNA, INVEGA TRINZA and INVEGA HAFYERA in the U.S. and the Company stopped recognizing royalty revenue related to net sales of these products. In April 2022, we commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of the license agreement in the U.S. and Janssen’s royalty and other obligations under the agreement. For additional information regarding the arbitration proceedings with Janssen, see Note 15, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q. For more information about the license agreement with Janssen in respect of the long-acting INVEGA products, see the “Collaborative Arrangements—Janssen” section in “Part I, Item 1—Business” in our Annual Report. For information about risks relating to the notice of partial termination and our collaborative arrangements more broadly, see “Part I, Item 1A—Risk Factors” in our Annual Report and specifically that section entitled “We rely heavily on our licensees in the commercialization and continued development of products from which we receive revenue and, if our licensees are not effective, or if disputes arise in respect of our contractual arrangements, our revenues could be materially adversely affected.”

In addition, each of INVEGA SUSTENNA and INVEGA TRINZA are currently subject to Paragraph IV litigation in response to companies seeking to market generic versions of such products. Increased competition from new products or generic versions of these products may lead to reduced unit sales of such products and increased pricing pressure. For a discussion of these legal proceedings, see Note 15, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q and for information about risks relating to these legal proceedings, see “Part I, Item 1A—Risk Factors” in our Annual Report, and specifically the section entitled “We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.”

We recognize manufacturing revenue ~~equal to 7.5% of Janssen’s unit net sales price of~~for RISPERDAL CONSTA at the point in time when RISPERDAL CONSTA has been fully manufactured, which is deemed to have occurred when the product is approved for shipment by both us and Janssen. We record royalty revenue, equal to 2.5% of Janssen’s end-market net sales, in the period that the end-market sale of RISPERDAL CONSTA occurs. The ~~decrease~~increase in revenue from RISPERDAL CONSTA ~~in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~ was due to ~~a $13.9~~an increase of $4.9 million ~~decrease~~ in manufacturing revenue, ~~and~~partially offset by a ~~$0.3~~decrease of $1.6 million ~~decrease~~ in royalty revenue. The ~~decrease~~increase in manufacturing revenue ~~in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~ was primarily due to an increase in Janssen’s net selling price for units sold in the U.S., partially offset by a ~~58%~~ decrease in our manufacturing fee from 8.6% to 8.3% pursuant to the ~~amount~~terms of ~~RISPERDAL CONSTA fully manufactured for Janssen.~~our manufacturing and supply agreement with Janssen due to an increase in forecasted manufacturing units. The decrease in royalty revenue was due to a decrease in end-market sales of RISPERDAL CONSTA, which were $129.0 million during the three months ended March 31, 2022, as compared to $157.0 million during the three months ended March 31, ~~2021, as compared to $170.0 million during the three months ended March 31, 2020.~~2021.

We expect ~~revenues~~revenue from ~~our long‑acting, atypical franchise~~RISPERDAL CONSTA to decrease over time. ~~While we expect continued growth from sales of INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA~~The latest to expire patent covering RISPERDAL CONSTA expired in 2021 in the ~~near term,~~EU and will expire in 2023 in the U.S., and we are aware of potential generic competition for RISPERDAL CONSTA that may lead to reduced unit sales and increased pricing ~~pressure in 2021. We are also aware of generic challenges to INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA.~~pressure. For a discussion of legal proceedings related to patents covering RISPERDAL CONSTA, ~~INVEGA SUSTENNA and INVEGA TRINZA,~~ see Note ~~14,~~15, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form ~~10-Q. In addition, a number of companies, including us, are working~~10-Q, and for risks relating to ~~develop new~~such legal proceedings, see “Part I, Item 1A—Risk Factors” in our Annual Report and specifically the section entitled “We or our licensees may face claims against IP rights covering our products ~~to treat schizophrenia and/or bipolar disorder that may compete with INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA~~ and ~~RISPERDAL CONSTA. Increased~~ competition from ~~new products or~~ generic ~~versions of INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA or RISPERDAL CONSTA may lead to reduced unit~~drug manufacturers.”

We receive a 15% royalty on worldwide net sales of ~~INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and RISPERDAL CONSTA, and increased pricing pressure.~~

VUMERITY. We also recognize manufacturing revenue related to VUMERITY at cost plus 15%, upon release for bulk batches of VUMERITY and upon shipment for packaged lots of VUMERITY. ~~We also receive a 15% royalty on worldwide net sales of VUMERITY.~~ The increase in revenue from VUMERITY ~~in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~ was due to ~~a $10.6~~an increase of $9.0 million in manufacturing revenue and an increase of $8.2 million in royalty ~~revenue and a $1.1 million~~revenue. The increase in manufacturing ~~revenue.~~revenue was primarily due to increased manufacturing activity to satisfy increased demand for the product. The increase in royalty revenue was due to an increase in ~~worldwide~~ net sales of VUMERITY, which were ~~approximately~~$128.0 million during the three months ended March 31, 2022, as compared to $73.3 million during the three months ended March 31, 2021, as compared to approximately $2.4 million during the three months ended March 31, 2020. The increase in manufacturing revenue during the three months ended March 31, 2021, as compared to the three months ended March 31, 2020, was primarily the result of increased manufacturing to satisfy increased demand for the product. For a discussion of legal proceedings related to VUMERITY, see Note 14, ~~Commitments and Contingent Liabilities~~ ~~in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q.~~2021.

	Three Months Ended							Three Months Ended
	March 31,							March 31,
(In millions)	2021		2020		Change			2022		2021		Change
Cost of goods manufactured and sold	$	41.0	$	47.2	$	(6.2	)	$	55.2	$	41.0	$	14.2

The ~~decrease~~increase in cost of goods manufactured and sold ~~in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~ was primarily due to ~~a $5.0~~increases of $6.6 million ~~decrease~~and $3.9 million, respectively, in the cost of goods manufactured for VUMERITY and RISPERDAL CONSTA and ~~a $1.3~~increases of $4.5 million ~~decrease~~and $4.4 million, respectively, in the cost of goods sold for ~~VIVITROL. The decreases~~VIVITROL and LYBALVI. These increases were all related to ~~decreases~~an increase in the number of units manufactured ~~for RISPERDAL CONSTA~~ and ~~the number of units~~ sold for ~~VIVITROL,~~ each of these products, as discussed above.

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

The following table sets forth our external R&D expenses for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 relating to our then current ~~key development programs and all other~~ development programs and our internal R&D expenses, listed by the nature of such expenses:

	Three Months Ended							Three Months Ended
	March 31,							March 31,
(In millions)	2021		2020		Change			2022		2021		Change
External R&D Expenses:
External R&D expenses:
Development programs:
nemvaleukin	$	18.6	$	12.3	$	6.3		$	19.5	$	18.6	$	0.9
LYBALVI		6.8		8.1		(1.3	)		5.8		6.8		(1.0	)
ALKS 1140									1.7		1.3		0.4
Other external R&D expenses		15.4		18.2		(2.8	)		15.7		14.1		1.6
Total external R&D expenses		40.8		38.6		2.2			42.7		40.8		1.9
Internal R&D expenses:
Employee-related		37.9		40.7		(2.8	)		40.1		37.9		2.2
Occupancy		4.8		4.8		—			4.2		4.8		(0.6	)
Depreciation		3.4		3.7		(0.3	)		2.8		3.4		(0.6	)
Other		5.4		5.5		(0.1	)		6.2		5.4		0.8
Total internal R&D expenses		51.5		54.7		(3.2	)		53.3		51.5		1.8
Research and development expenses	$	92.3	$	93.3	$	(1.0	)	$	96.0	$	92.3	$	3.7

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

The increase in expenses related to nemvaleukin was primarily due to the advancement of the ARTISTRY development program for the ~~product. The decrease in expenses related to LYBALVI was primarily due to a decrease in~~product, including increased clinical ~~activity across~~spend on the ~~LYBALVI program following submission to the FDA of the NDA for LYBALVI in November 2019.~~ARTISTRY-7 study. For ~~additional~~ details on the ~~status of our key~~ARTISTRY development ~~programs,~~program, see the “Key Development ~~Programs”~~Program” section of this “Part I, Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q.

The ~~decrease~~increase in ~~employee-related~~other external R&D expenses ~~in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~ was primarily due to a ~~$2.1~~$1.4 million increase related to nonclinical studies for early stage development programs and a $1.8 million increase in general clinical operations and medical affairs support. The decrease in expenses related to LYBALVI was primarily due to the product’s commercial launch in October 2021.

The increase in employee-related expense was primarily related to a $1.5 million increase in R&D-related share-based compensation ~~expense, partially as a result of a decrease in R&D headcount of 9% from March 31, 2020 to March 31, 2021~~expense..

	Three Months Ended							Three Months Ended
	March 31,							March 31,
(In millions)	2021		2020		Change			2022		2021		Change
Selling and marketing expense	$	79.7	$	87.8	$	(8.1	)	$	96.2	$	79.7	$	16.5
General and administrative expense		45.5		45.6		(0.1	)		48.9		45.5		3.4
Selling, general and administrative expense	$	125.2	$	133.4	$	(8.2	)	$	145.1	$	125.2	$	19.9

The ~~decrease~~increase in selling and ~~marketing expense during the three months ended March 31, 2021, as compared to the three months ended March 31, 2020, was primarily due~~ ~~to a decrease in marketing expense of $4.7 million, and a decrease in employee-related expenses of $5.6 million. The decrease in~~ marketing expense was primarily due to a ~~reduction~~$7.9 million increase in ~~the number of speaker programs and speaker trainings~~employee-related expenses, a $6.4 million increase in marketing expense and a ~~reduction~~$2.4 million increase in ~~spend related to conferences, primarily due to the impacts of the COVID-19 pandemic and certain targeted expense reductions.~~professional service fees. The ~~decrease~~increase in employee-related expenses was primarily due to a ~~decrease~~4% increase in ~~employee travel related to the impacts of the COVID-19 pandemic.~~

~~We amortize our amortizable intangible assets using the economic-use method, which reflects the pattern that the economic benefits of the intangible assets are consumed as revenue is generated~~selling and marketing headcount from ~~the underlying patent or contract. Based on our most recent analysis, amortization of intangible assets included within our consolidated balance sheet at~~ March 31, 2021 ~~is expected~~ to ~~be approximately $40.0 million, $35.0 million, $35.0 million~~March 31, 2022. The increases in marketing expense and ~~$1.0 million in the years ending December 31, 2021 through 2024, respectively.~~professional service fees were primarily related to commercial launch activities for LYBALVI.

The ~~decrease~~increase in ~~interest income during the three months ended March 31, 2021, as compared to the three months ended March 31, 2020~~general and administrative expense was primarily due to a ~~decrease~~$2.0 million increase in ~~interest rates. Interest income consists~~professional service fees, primarily ~~of interest earned~~due to increased spend on legal fees, and a $1.4 million increase in expenses related to our ~~available-for-sale investments.~~branded prescription drug fee.

The increase in ~~interest~~total other expense, ~~during the three months ended March 31, 2021, as compared~~net was primarily due to the ~~three months ended March 31, 2020~~change in the fair value of contingent consideration as a result of an increase in the risk of non-payment. The reasons for the increase in the risk of non-payment and the valuation approach used to determine the fair value of the contingent consideration are discussed in greater detail in Note 5, Fair Value, in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q. This was partially offset by a decrease in interest expense due to the Term Loan Refinancing completed in March ~~2021. The Term Loan Refinancing resulted~~2021 and proceeds received in ~~a charge of $2.1 million~~connection with the Fountain transaction in ~~the three months ended~~ March ~~31, 2021, partially offset by a decrease in interest rates.~~2022. The Term Loan Refinancing is discussed ~~in greater detail~~ in Note 11, Long-Term Debt in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q.

The decrease in the change in the fair value of contingent consideration in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020, was primarily due to the approval of the NDA for ANJESO by the FDA in February 2020 and an increase in the risk of non-payment. As a result of the product’s approval, we increased the probability of success in our fair value analysis at March 31, 2020 to 100%. In Baudax’s Annual Report on Form 10-K for the period ended December 31, 2020, Baudax included disclosures regarding its ability to continue as a going concern. As a result of this disclosure, we altered the model used to determine the fair value of the contingent consideration. The valuation approach used to determine the fair value of the contingent considerationFountain transaction is discussed in ~~greater detail in~~ Note 5,4, ~~Fair Value Measurements~~Investments, in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q.

	Three Months Ended							Three Months Ended
	March 31,							March 31,
(In millions)	2021		2020		Change			2022			2021		Change
Income tax provision		3.8	$	7.3	$	(3.5	)
Income tax (benefit) provision								$	(9.1	)		3.8	$	(12.9	)

The income tax (benefit) provision in the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 primarily related to U.S. federal and state taxes. The favorable change in the income tax (benefit) provision ~~in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~ was primarily due to an enhanced FDII deduction as a ~~decrease~~result of a change to Section 174 of the TCJA in ~~income earned in the U.S.~~

relation to capitalization and amortization of R&D expenses. The income tax provision in the three months ended March 31, 2021 primarily related to a $3.8 million discrete tax expense related to employee equity activity. The income tax provision in the three months ended March 31, 2020 primarily related to a $2.6 million tax expense on income earned in the U.S. and a $4.7 million discrete tax expense related to employee equity activity.

	March 31, 2021						December 31, 2020						March 31, 2022						December 31, 2021
(In millions)	U.S.		Ireland		Total		U.S.		Ireland		Total		U.S.		Ireland		Total		U.S.		Ireland		Total
Cash and cash equivalents	$	99.8	$	105.2	$	205.0	$	152.8	$	120.2	$	273.0	$	134.5	$	148.1	$	282.6	$	88.6	$	248.9	$	337.5
Investments—short-term		270.0		66.0		336.0		293.5		68.5		362.0		146.5		99.8		246.3		144.5		54.3		198.8
Investments—long-term		83.4		3.0		86.4		23.2		1.6		24.8		142.6		87.2		229.8		163.0		66.4		229.4
Total cash and investments	$	453.2	$	174.2	$	627.4	$	469.5	$	190.3	$	659.8	$	423.6	$	335.1	$	758.7	$	396.1	$	369.6	$	765.7
Outstanding borrowings—short and long-term	$	297.7	$	—	$	297.7	$	275.0	$	—	$	275.0	$	295.2	$	—	$	295.2	$	295.8	$	—	$	295.8

			Gross											Gross
	Amortized		Unrealized					Allowance for		Estimated		Amortized		Unrealized					Allowance for		Estimated
(In millions)	Cost		Gains		Losses			Credit Losses		Fair Value		Cost		Gains		Losses			Credit Losses		Fair Value
Investments—short-term available-for-sale	$	332.9	$	1.2	$	—		$	—	$	334.1	$	247.5	$	—	$	(1.2	)	$	—	$	246.3
Investments—short-term held-to-maturity		1.7		0.2		—			—		1.9
Investments—long-term available-for-sale		84.7		—		(0.1	)		—		84.6		233.9		—		(5.9	)		—		228.0
Investments—long-term held-to-maturity		1.8		—		—			—		1.8		1.8		—		—			—		1.8
Total	$	421.1	$	1.4	$	(0.1	)	$	—	$	422.4	$	483.2	$	—	$	(7.1	)	$	—	$	476.1

We generated $21.7 million and used $45.1 million of cash from operating activities during the three months ended March 31, 2022 and 2021, respectively. We expect that our existing cash, cash equivalents and investments will be sufficient to finance our anticipated working capital and other cash requirements, such as capital expenditures and principal and interest payments on our long‑term debt, for at least the twelve months following the date from which our financial statements were issued. Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain additional financing in the future, including debt and equity offerings, corporate collaborations, bank borrowings, arrangements relating to assets or other financing methods or structures. In addition, the 2026 Term Loans have an incremental facility capacity in an amount of $175.0 million, plus additional amounts provided that we meet certain conditions, including a specified leverage ratio.

Our investment objectives are, first, to preserve liquidity and conserve capital and, second, to generate investment income. We mitigate credit risk in our cash reserves by maintaining a well-diversified portfolio that limits the amount of investment exposure as to institution, maturity and investment type. However, the value of these securities may be adversely affected by the instability of the global financial markets, which could, in turn, adversely impact our financial position and our overall liquidity. Our available-for-sale investments consist primarily of ~~short-~~short and long-term U.S. government and agency debt securities, corporate debt securities and debt securities issued ~~by non-U.S. agencies~~ and backed by non-U.S. governments. Our held-to-maturity investments consist of investments that are ~~restricted and~~ held as collateral under certain letters of credit related to certain of our lease agreements.

~~Our available‑for‑sale investments consist primarily of short‑ and long‑term U.S. government and agency debt securities and corporate debt securities.~~ We classify available‑for‑sale investments in an unrealized loss position ~~which~~that do not mature within 12twelve months as long‑term investments. We have the intent and ability to hold these investments until recovery, which may be at maturity, and it is more‑likely‑than‑not that we would not be required to sell these securities before recovery of their amortized cost. At March 31, ~~2021,~~2022, we performed an analysis of our investments with unrealized losses for impairment and determined that they were not impaired.

We ~~expect~~have no off-balance sheet arrangements that are reasonably likely to have a material effect on our ~~existing cash and investments balance will be sufficient to finance our anticipated working capital and other cash requirements, such as~~financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, and principal and interest payments, for at least 12 months following the date on which this Form 10-Q is filed. Subject to market conditions, interest rates and other factors, we may pursue opportunities to obtain additional financingor capital resources in the future, including debt and equity offerings, corporate collaborations, bank borrowings, debt refinancings, arrangements relating to assets or other financing methods or structures. We are closely monitoring ongoing developments in connection with the COVID-19 pandemic that may have an adverse impact on our commercial prospects and projected cash position.next twelve months.

~~Information about our cash flows, by category, is presented in “Part I, Item 1—Condensed Consolidated Financial Statements of Cash Flows” in this Form 10-Q.~~ The following table summarizes our cash flows for the three months ended March 31, ~~2021~~2022 and ~~2020:~~2021:

	Three Months Ended
	March 31,						Three Months Ended March 31,
(In millions)	2021			2020			2022			2021
Cash and cash equivalents, beginning of period	$	273.0		$	203.8		$	337.5		$	273.0
Cash flows used in operating activities		(45.1	)		(40.3	)
Cash flows (used in) provided by investing activities		(37.8	)		17.5
Cash flows provided by (used in) financing activities		14.9			(4.9	)
Cash flows provided by (used in) operating activities								21.7			(45.1	)
Cash flows used in investing activities								(60.6	)		(37.8	)
Cash flows (used in) provided by financing activities								(16.0	)		14.9
Cash and cash equivalents, end of period	$	205.0		$	176.1		$	282.6		$	205.0

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

The ~~increase~~change in cash flows ~~used in~~from operating activities ~~in the three months ended March 31, 2021 as compared to the three months ended March 31, 2020, is~~was primarily due to an increase in cash ~~used for~~provided by working capital, ~~primarily due to a decrease in receivables and contract assets and an increase in accounts payable and accrued expenses, partially~~ offset by an increase ~~in inventory and prepaid expenses and other current assets. The increase in cash used for working capital was partially offset by the decrease~~ in our net loss, net of adjustments to reconcile net loss to cash flows from operating activities.

The ~~change~~increase in cash from working capital was primarily related to an increase in cash flows from accounts receivable and decreases in cash flows used in accounts payable and accrued expenses, contract liabilities and operating lease liabilities, partially offset by increases in cash flows used for contract assets, inventory and prepaid expenses and other current assets.

The increase in cash flows used in investing activities ~~in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~ was primarily due to a ~~$73.6~~$17.5 million increase in net purchase of investments ~~partially offset by~~and a ~~$13.2~~$5.9 million decrease in ~~cash paid for property, plant and equipment and a $6.4 million increase in~~ payments we received in connection with the contingent consideration resulting from the Gainesville Transaction.

The change in cash flows from financing activities ~~in the three months ended March 31, 2021, as compared to the three months ended March 31, 2020,~~ was primarily due to $23.6 million in proceeds from the Term Loan Refinancing ~~partially offset by~~and a ~~$4.1~~$6.9 million ~~decrease~~increase in the amount of cash we received upon exercises of employee stock options, net of employee taxes.

At March 31, ~~2021,~~2022, the principal balance of our borrowings consisted of ~~$300.0~~$297.0 million outstanding under our 2026 Term Loans. See Note 11, Long-Term Debt, in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q for further discussion of our 2026 Term Loans.

See the “Contractual Obligations” section in “Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for a discussion of our contractual obligations.

At March 31, 2021, we were not party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources material to investors.

The discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates under different ~~assumptions~~conditions or ~~conditions.~~using different assumptions. See the “Critical Accounting Estimates” section in “Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for a discussion of our critical accounting estimates.

In relation to our contingent consideration and in light of Baudax’s disclosures regarding its ability to continue as a going concern, we increased the likelihood that Baudax would default on its obligations to us to 100% at March 31, 2022 from 55% at December 31, 2021 and adjusted the recovery rate to 9% at March 31, 2022 from 18% at December 31, 2021. For further information regarding the calculation of the fair value of the contingent consideration, refer to Note 5, Fair Value in this Form 10-Q.

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

Market risks related to our investment portfolio, and the ways we manage such risks, are summarized in “Part II, Item 7A—Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report. We regularly review our marketable securities holdings and shift our investment holdings to those that best meet our investment objectives, which are to preserve capital, provide sufficient liquidity to satisfy operating requirements and generate investment income. Apart from such adjustments to our investment portfolio, there have been no material changes to our market risks since December 31, ~~2020,~~2021, and we do not anticipate any near-term changes in the nature of our market risk exposures or in our management’s objectives and strategies with respect to managing such exposures.

We are exposed to non-U.S. currency exchange risk related to manufacturing and royalty revenues we receive on certain of our products, partially offset by certain operating costs arising from expenses and payables in connection with our Irish operations that are settled predominantly in Euro. These non-U.S. currency exchange rate risks are summarized in “Part II, Item 7A—Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report. There has been no material change in our assessment of our sensitivity to non-U.S. currency exchange rate risk since December 31, ~~2020.~~2021.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act), as of March 31, ~~2021.~~2022. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer each concluded that our disclosure controls and procedures were effective as of March 31, ~~2021~~2022 to provide reasonable assurance that the information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

During the period covered by this report, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

For information regarding legal proceedings, see the discussion of legal proceedings in Note ~~14,~~15, Commitments and Contingent Liabilities in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q, which discussion is incorporated into this Part II, Item 1 by reference.

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

On September 16, 2011, our board of directors authorized the continuation of the Alkermes, Inc. program to repurchase up to $215.0 million of our ordinary shares at the discretion of management from time to time in the open market or through privately negotiated transactions. We did not purchase any shares under this program during the three months ended March 31, ~~2021.~~2022. As of March 31, ~~2021,~~2022, we had purchased a total of 8,866,342 shares under this program at aan aggregate cost of $114.0 million.

During the three months ended March 31, ~~2021~~2022, we acquired ~~529,817~~678,209 of our ordinary shares, at an average price of ~~$19.65~~$25.17 per share, to satisfy withholding tax obligations related to the vesting of employee equity awards.

Our policy governing transactions in our securities by our directors, officers and employees permits our directors, officers and employees to enter into trading plans in accordance with Rule 10b5-1 under the Exchange Act. During the three months ended March 31, ~~2021, each of Dr. Craig C. Hopkinson and Messrs. Iain~~2022, Mr. Shane M. ~~Brown, David J. Gaffin, Michael J. Landine and Richard F. Pops, each an executive officer of the Company and Messrs. David W. Anstice and Robert A. Breyer and Dr. Wendy L. Dixon, each~~Cooke, a director of the Company, entered into a trading plan in accordance with Rule 10b5-1 and our policy governing transactions in our securities by our directors, officers and employees. We undertake no obligation to update or revise the information provided herein, including for any revision or termination of an established trading plan.

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


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

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


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


		Page No.
PART I - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets — March 31, ~~2021~~2022 and December 31, ~~2020~~2021	65
	Condensed Consolidated Statements of Operations and Comprehensive Loss — For the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	76
	Condensed Consolidated Statements of Cash Flows — For the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	87
	Condensed Consolidated Statements of Shareholders’ Equity — For the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	98
	Notes to Condensed Consolidated Financial Statements	109
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2322
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3635
Item 4.	Controls and Procedures	36

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

	Three Months Ended March 31, 2020
(In thousands)	Manufacturing Revenue		Royalty Revenue		Total
INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA	$	—	$	54,927	$	54,927
RISPERDAL CONSTA		23,583		3,733		27,316
AMPYRA/FAMPYRA		7,822		7,147		14,969
VUMERITY		1,327		365		1,692
Other		7,479		9,868		17,347
	$	40,211	$	76,040	$	116,251

		March 31, 2021
(In thousands)	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Goodwill		$	92,873	$	—		$	92,873
Finite-lived intangible assets:
Collaboration agreements	12	$	465,590	$	(384,948	)	$	80,642
NanoCrystal technology	13		74,600		(56,168	)		18,432
OCR⁽¹⁾ technologies	12		42,560		(39,849	)		2,711
Total		$	582,750	$	(480,965	)	$	101,785


Product	Indication(s)	Territory

	Initiation or ~~re-~~ ~~initiation~~re-initiation of ARISTADA for the treatment of Schizophrenia	U.S.
	Schizophrenia	U.S.


	Schizophrenia and Bipolar I disorder	U.S.


	Alcohol dependence and Opioid dependence	U.S.



Product	Indication(s)	Licensee	Licensed Territory

RISPERDAL CONSTA	Schizophrenia and Bipolar I disorder	Janssen ~~Pharmaceutica~~Pharmaceuticals, Inc. (“Janssen, Inc.”) and Janssen Pharmaceutica International, a division of Cilag International AG (“Janssen International”)	Worldwide

INVEGA ~~SUSTENNA~~SUSTENNA* / XEPLION	INVEGA SUSTENNA: Schizophrenia and Schizoaffective disorder XEPLION: Schizophrenia	Janssen Pharmaceutica ~~N.V.~~ (together with Janssen, Inc., Janssen International and their affiliates “Janssen”)	Worldwide
INVEGA ~~TRINZA~~TRINZA* / TREVICTA	Schizophrenia	Janssen	Worldwide
INVEGA HAFYERA* / BYANNLI	Schizophrenia	Janssen	Worldwide

Exhibit No.		Description of Exhibit
~~10.1 #~~		Amendment No. 6, dated as of March 12, 2021, to Amended and Restated Credit Agreement, dated as of September 16, 2011, as amended and restated on September 25, 2012, as further amended by Amendment No. 2 on February 14, 2013, as amended by Amendment No. 3 and Waiver to Amended and Restated Credit Agreement dated as of May 22, 2013, as amended by Amendment No. 4 dated as of October 12, 2016, and as amended by Amendment No. 5 dated as of March 26, 2018, among Alkermes, Inc., Alkermes plc, the guarantors party thereto, the lenders party thereto and Morgan Stanley Senior Funding, Inc. as Administrative Agent and Collateral Agent.
31.1 #		Rule 13a-14(a)/15d-14(a) Certification.
31.2 #		Rule 13a-14(a)/15d-14(a) Certification.
32.1 ‡		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCH #		Inline XBRL Taxonomy Extension Schema Document.
101.CAL #		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB #		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE #		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF #		Inline XBRL Taxonomy Extension Definition Linkbase Document.
104 #		Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)


	ALKERMES ~~plc~~PLC

	(Registrant)


	By:	/s/ Richard F. Pops
		Chairman and Chief Executive Officer
		(Principal Executive Officer)


	By:	/s/ Iain M. Brown
		Senior Vice President, Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)