Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Amneal Pharmaceuticals, Inc. (the “Company”, “we,” “us,” or “our”) is a diversified, global biopharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines. Our Affordable Medicines segment includes retail generics, injectables, and biosimilars. In our Specialty segment, we offer a portfolio of branded pharmaceuticals focused primarily on central nervous system and endocrine disorders. Through our AvKARE segment, we are a distributor of pharmaceuticals and other products for the U.S. federal government, retail, and institutional markets. We operate principally in the U.S., India, and Ireland. Refer to the section “Segments” below for an overview of our segments.
Prior to the Reorganization (as defined herein), we were a holding company, whose principal assets were common units (the “Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”). As of September 30, 2023, we held 50.4% of the Amneal Common Units and the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Amneal Group”) held the remaining 49.6%. On November 7, 2023, we implemented a plan pursuant to which we and Amneal reorganized and simplified our corporate structure by eliminating our umbrella partnership-C-corporation structure and converting to a more traditional structure whereby all stockholders hold their voting and economic interests directly through the public company (the “Reorganization”). Effective with the Reorganization, we hold 100% of the Amneal Common Units and consolidate the financial statements of Amneal and its subsidiaries. Refer to Note 1. Nature of Operations in our consolidated financial statements for additional information about the Reorganization.
The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under Item 1A. Risk Factors and under the heading Forward-Looking Statements in this Annual Report on Form 10-K. The following discussion and analysis, as well as other sections in this report, should be read in conjunction with the consolidated financial statements and related notes to consolidated financial statements included elsewhere herein.
For a discussion of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, see “Results of Operations” and “Liquidity and Capital Resources” under Part II,Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on February 28, 2025.
Overview
Segments
We have three reportable segments: Affordable Medicines, Specialty, and AvKARE.
Affordable Medicines
Our Affordable Medicines segment includes over 280 product families covering an extensive range of dosage forms and delivery systems, including both immediate and extended-release oral solids, powders, liquids, sterile injectables, nasal sprays, inhalation and respiratory products, biosimilar products, ophthalmics, films, transdermal patches and topicals. We focus on developing products that have substantial barriers-to-entry due to complex drug formulations or manufacturing, or legal or regulatory challenges.
Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and even more so in periods of market exclusivity, or in periods of limited generic competition. As such, the timing of new product introductions can have a significant impact on our financial results. The entrance into the market of additional competition generally has a negative impact on the volume and/or pricing of the affected products. Additionally, pricing is determined by market place dynamics and is often affected by factors outside of our control.
Specialty
Our Specialty segment is engaged in the development, promotion, sale and distribution of proprietary branded pharmaceutical products, with a focus on products addressing central nervous system disorders, including Parkinson’s disease, and endocrine disorders. Significant products within our Specialty segment include CREXONT® (combination of carbidopa and levodopa extended release capsules), RYTARY® (extended release oral capsule formulation of carbidopa-levodopa), UNITHROID® (levothyroxine sodium), and Brekiya® (dihydroergotamine mesylate) injection. In September 2024, we began selling CREXONT®, which is indicated for the treatment of Parkinson’s disease, Parkinson’s disease caused by infection or inflammation of the brain, or Parkinson’s disease-like symptoms that may result from carbon monoxide or manganese
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poisoning in adults. RYTARY® is indicated for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication or manganese intoxication. UNITHROID®, indicated for the treatment of hypothyroidism, is sold under a license and distribution agreement with Jerome Stevens Pharmaceuticals, Inc.
New product launches are an important growth driver. Brekiya® autoinjector, approved by the FDA in May 2025 and launched in the U.S. in October 2025, is the first and only ready-to-use autoinjector formulation of dihydroergotamine mesylate indicated for the acute treatment of migraine, with or without aura, and for the acute treatment of cluster headache in adults.
Our Specialty products are marketed through skilled specialty sales and marketing teams, who call on neurologists, movement disorder specialists, endocrinologists and primary care physicians throughout the U.S. Our Specialty segment also has other product candidates that are in varying stages of development.
For Specialty products, the majority of such products’ commercial value is usually realized during the period in which the product has market exclusivity. In the U.S., when market exclusivity expires and generic versions of a product are approved and marketed, there can often be substantial and rapid declines in the branded product’s sales. In 2025, an authorized generic version of RYTARY® was launched, and the Company anticipates multiple generic versions of RYTARY® to be introduced in the future.
In 2025, CREXONT® continued to grow within our Specialty segment. CREXONT® was added to three large national formularies, which expanded total U.S. insurance coverage from about 30% of covered lives at the end of 2024 to over 50% at the end of 2025. In December 2025, we announced new positive interim results from our ongoing Phase 4 ELEVATE-PD study, including significant increases in daily “Good On” time and reductions in “Off” time.
AvKARE
Our AvKARE segment provides pharmaceuticals primarily to governmental agencies, predominantly focused on serving the U.S. Department of Defense and the U.S. Department of Veterans Affairs. AvKARE is also a re-packager of bottle and unit dose pharmaceuticals and vitamins under the registered names of AvKARE and AvPAK. AvKARE is also a wholesale distributor of pharmaceuticals, over the counter drugs and medical supplies to its retail and institutional customers that are located throughout the U.S. focused primarily on entities that provide care to low-income and uninsured patients. Operating results for the sale of Amneal products by AvKARE are included in our Affordable Medicines reportable segment.
Certain Market, Industry, and Geopolitical Factors
The Pharmaceutical Industry
The pharmaceutical industry is highly competitive and highly regulated. As a result, we face a number of industry-specific factors and challenges, which can significantly impact our results. For a more detailed explanation of our business and its risks, refer to Item 1. Business and Item 1A. Risk Factors in this Form 10-K.
Inflation
While it is difficult to accurately measure the impact of inflation, we estimate our business did not experience a material increase in costs due to inflation for the year ended December 31, 2025. We do not expect a material impact related to inflation for the year ending December 31, 2026. Notwithstanding our estimates, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods.
Trade Policy and Tariffs
We are subject to certain trade and tariff requirements imposed by the U.S. and various foreign governments. The great majority of our net sales rely on FDF or API produced in the U.S. or India. We have limited reliance on imports from Europe and China, and no reliance on imports from Mexico or Canada.
Since taking office in 2025, President Trump has announced a number of tariff actions, and while there are currently no reciprocal tariffs on pharmaceutical products imported into the U.S., this can change at any moment. On February 1, 2025, the Administration imposed a 10% tariff on all products from China under the International Emergency Economic Powers Act, (50 U.S.C. 1701 et seq) (the “IEEPA”), and related authorities as announced in the Federal Register Notice and Executive Order 14195 dated February 1, 2025 (as amended). On February 20, 2026, the Supreme Court of the United States issued an opinion
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ruling that President Trump’s tariffs exceeded presidential authority under the IEEPA, which had the effect of invalidating the tariffs imposed thereunder to date.
On April 14, 2025, the Department of Commerce Bureau of Industry and Security (“DOCBIS”) announced that it had initiated, as of April 1, 2025, a broad investigation under section 232 of the Trade Expansion Act to determine the effects on national security of imports of pharmaceuticals (i.e. FDF, API, key starting materials, derivatives, and medical countermeasures), including whether trade remedies such as tariffs should be imposed. This investigation covers both generic and brand products. On September 26, 2025, DOCBIS announced that it had initiated, as of September 2, 2025, a separate Section 232 national security investigation of imports of personal protective equipment, medical consumables (including syringes and intravenous bags), and medical equipment (including devices). These Section 232 investigations are ongoing. On February 20, 2026, President Trump imposed a 10% global tariff for 150 days under Section 122 of the Trade Act of 1974. FDF and API are exempt from the Section 122 tariff as of the date of this filing.
Given the global nature of pharmaceutical supply chains, any changes to historically prevailing tariff requirements could impact us and our industry by increasing costs, affecting product availability, and/or disrupting supply chains. The Company is closely monitoring these tariff and trade developments and will take actions to reduce or minimize any material negative impact.
One Big Beautiful Bill Act
On July 4, 2025, President Trump signed OBBBA, which includes a broad range of tax reform provisions affecting businesses, including, but not limited to, extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act and eliminating the requirement to capitalize and amortize U.S.-based research and experimental expenditures over five years, making these expenditures fully deductible in the period incurred. These provisions resulted in a reduction of the Company’s current income tax liabilities of $7.8 million during the year ended December 31, 2025.
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Results of Operations
Consolidated Results
The following table sets forth our summarized, consolidated results of operations (dollars in thousands):
Years Ended December 31, Change
nm - not meaningful
Net Revenue
Net revenue for the year ended December 31, 2025 increased 8.0% from the prior year primarily due to:
•Growth in our Affordable Medicines segment of $60.3 million, primarily due to new products launched in 2025 and 2024, which contributed $122.6 million of year-over-year growth, and strong volume growth, partially offset by price erosion.
•Growth in our Specialty segment of $82.8 million, primarily driven by increases of $58.1 million and $23.7 million of CREXONT® and UNITHROID®, respectively, and growth in our non-promoted products. This growth was partially offset by a year-over-year decrease of $6.0 million in out-licensing revenue associated with IPX203.
•Growth in our AvKARE segment of $81.8 million, primarily driven by growth in our government label channel resulting from new product introductions, partially offset by a decline in our lower margin distribution channel.
Cost of Goods Sold and Gross Profit
Cost of goods sold increased 7.4% for the year ended December 31, 2025 as compared to the prior year. The increase in cost of goods sold was primarily due to increased sales volume from all segments, impairment charges related to non-promoted products of $22.8 million, and increased plant and freight costs, partially offset by manufacturing efficiencies.
Gross profit as a percentage of net revenue increased to 36.9% for the year ended December 31, 2025 from 36.5% in the prior year, primarily as a result of the factors noted above and favorable product mix, as low margin distribution sales decreased.
Selling, General and Administrative
Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2025 increased 10.6% as compared to the prior year primarily due to increases in employee compensation and launch costs associated with CREXONT® and the Brekiya® autoinjector.
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Research and Development
Research and development (“R&D”) expenses for the year ended December 31, 2025 decreased 2.4% from the prior year primarily due to a decrease in in-licensing and upfront milestone payments of $7.5 million, partially offset by an increase in employee compensation.
(Credit) Charges Related to Legal Matters, Net
For the year ended December 31, 2024, (credit) charges related to legal matters, net of $96.7 million were primarily associated with an Affordable Medicines settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against us by political subdivisions and Native American tribes across the U.S. Refer to Note 19. Commitments and Contingencies for additional information.
Other Operating Income
Other operating income for the year ended December 31, 2025 was primarily comprised of income earned from the India Production Linked Incentive Scheme for the Pharmaceutical Sector (the “PLI Scheme”).
Total Other Expense, Net
Total other expense, net decreased 16.2% for the year ended December 31, 2025. The decrease was primarily driven by a$44.1 million favorable year‐over‐year change in tax receivable agreement liability during the year (see Note 5. Income Taxes), a $17.5 million decrease in interest expense due to lower interest rates and lower outstanding balances on our variable‐rate debt, and favorable foreign currency movements, primarily related to the Euro, partially offset by a $31.4 million loss recognized in connection with the refinancing of our debt in August 2025 (see Note 14. Debt).
Provision For Income Taxes
The provision for income taxes was $11.3 million and $18.9 million for the years ended December 31, 2025 and 2024, respectively. The effective tax rates for the years ended December 31, 2025 and 2024 were 8.1% and (34.3)%, respectively. The year-over-year changes in the provision for income taxes and effective tax rate primarily reflected differences in income by jurisdiction, the impact of OBBBA, and items related to share based compensation in the current year. Refer to Note 5. Income Taxes for additional information.
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Affordable Medicines
The following table sets forth the results of operations for our Affordable Medicines segment (dollars in thousands):
Years Ended December 31, Change
Other operating income (5,240) — (5,240) nm
nm - not meaningful
Net Revenue
Affordable Medicines net revenue for the year ended December 31, 2025 increased 3.6% as compared to the prior year, primarily due to new products launched in 2025 and 2024, which contributed $122.6 million of year-over-year growth, and strong volume growth, partially offset by price erosion.
Cost of Goods Sold and Gross Profit
Affordable Medicines cost of goods sold for the year ended December 31, 2025 increased 5.0% compared to the prior year primarily due to increased sales volume and increased plant and freight costs, partially offset by manufacturing efficiencies.
Affordable Medicines gross profit as a percentage of net revenue decreased to 39.2% for the year ended December 31, 2025 from 40.0% in the prior year as a result of the factors described above.
Selling, General, and Administrative
Affordable Medicines SG&A for the year ended December 31, 2025 increased by 9.9% compared to the prior year primarily due to increases in employee compensation, costs of our international expansion, and shipping costs.
Research and Development
Affordable Medicines R&D expense for the year ended December 31, 2025 decreased 9.2% as compared to the prior year primarily due to decreases in in-licensing and upfront milestone payments of $13.5 million and reduced project spend, partially offset by increased employee compensation.
(Credit) Charges Related to Legal Matters, Net
For the year ended December 31, 2024, the Affordable Medicines charges related to legal matters, net of $96.7 million, were primarily associated with a settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases that have been filed and that might have been filed against us by political subdivisions and Native American tribes across the U.S. Refer to Note 19. Commitments and Contingencies for additional information.
Other Operating Income
Other operating income for the year ended December 31, 2025 was primarily comprised of income earned from the PLI Scheme.
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Specialty
The following table sets forth the results of operations for our Specialty segment (dollars in thousands):
Years Ended December 31, Change
Intellectual property legal development expenses 243 160 83 51.9 %
Other operating income — (930) 930 nm
nm - not meaningful
Net Revenue
Specialty net revenue for the year ended December 31, 2025 increased 18.6% as compared to the prior year, primarily driven by increases of $58.1 million and $23.7 million of CREXONT® and UNITHROID®, respectively, and growth in our non-promoted products. This growth was partially offset by a year-over-year decrease of $6.0 million in out-licensing revenue associated with IPX203.
Cost of Goods Sold and Gross Profit
Specialty cost of goods sold for the year ended December 31, 2025 increased 21.2% as compared to the prior year primarily due to an impairment charge related to a non-promoted product of $22.1 million (refer to Note 11. Goodwill and Other Intangible Assets for additional information) andincreased sales volume and product mix.
Specialty gross profit as a percentage of net revenue decreased to 53.5% for the year ended December 31, 2025 as compared to 54.5% in the prior year as a result of the factors described above.
Selling, General, and Administrative
Specialty SG&A expense for the year ended December 31, 2025 increased 23.8% as compared to the prior year primarily due to launch costs associated with CREXONT® and the Brekiya® autoinjector and increases in employee compensation.
Research and Development
Specialty R&D expense for the year ended December 31, 2025 increased 59.2% as compared to the prior year primarily due to increased in-licensing and upfront milestone payments of $6.0 million and higher project spend.
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AvKARE
The following table sets forth the results of operations for our AvKARE segment (dollars in thousands):
Years Ended December, 31 Change
Net Revenue
AvKARE net revenue for the year ended December 31, 2025 increased 12.3% as compared to the prior year primarily driven by growth in our government label channel resulting from new product introductions, partially offset by a decline in our lower margin distribution channel.
Cost of Goods Sold and Gross Profit
AvKARE cost of goods sold for the year ended December 31, 2025 increased 6.9% as compared to the prior year primarily due to higher sales in our government label channel and an increase in our inventory provision, partially offset by decreased sales in our lower margin distribution channel.
Gross profit as a percentage of net revenue increased to 19.7% for the year ended December 31, 2025 from 15.6% in the prior year primarily as a result of the factors noted above.
Selling, General, and Administrative
AvKARE SG&A expense for the year ended December 31, 2025 increased 4.1% as compared to the prior year primarily due to increases in employee compensation and shipping costs.
Liquidity and Capital Resources
Our primary source of liquidity is cash generated from operations, available cash and borrowings under debt financing arrangements (as defined and described in Note 14. Debt), including $595.2 million of available capacity under our 2025 Revolving Credit Facility and $83.0 million of available capacity under the Amended and Restated Rondo Revolving Credit Facility as of December 31, 2025. We believe these sources are sufficient to fund our planned operations, meet our interest and contractual obligations and provide sufficient liquidity over the next 12 months. However, our ability to satisfy our working capital requirements and debt obligations will depend upon economic conditions, our ability to negotiate and maintain satisfactory terms under our borrowing and debt facilities in the future, and demand for our products, which are factors that may be out of our control. Our primary uses of capital resources are to fund operating activities, including R&D expenses associated with new product filings, and pharmaceutical product manufacturing expenses, license payments, spending on production facility expansions, capital equipment, acquisitions, and legal settlements.
We estimate that we will invest approximately $110.0 million during 2026 for capital expenditures to support and grow our existing operations, primarily related to investments in manufacturing equipment, IT and facilities. Our 2026 estimate is net of expected contributions from Metsera, Inc. under our collaboration and supply agreement.
Debt Instruments
Over the next 12 months, we expect to make substantial payments for monthly interest and quarterly principal amounts due for our Term Loan Due 2032, semi-annual interest payments on our Senior Notes Due 2032, and contractual payments for leased premises.Refer to Note 14. Debt, Note 16. Leases, and Commitments and Contractual Obligations under Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.
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Annually, we are also required to calculate the amount of excess cash flow payments, as defined in our term loan agreements. Based on the results of the excess cash flows calculations for the years ended December 31, 2025, 2024 and 2023, no excess cash flows principal payments were required.
Civil Prescription Opioid Litigation
In late April 2024, we reached a nationwide settlement in principle on the primary financial terms, with no admission of wrongdoing, for a nationwide resolution to the opioids cases that have been filed and that might have been filed by Attorneys General, political subdivisions and Native American tribes. During July 2025, we deposited an aggregate of $24.2 million into dedicated accounts as a step in the process to finalize a definitive settlement agreement. These deposits remained our property until a definitive settlement agreement was reached and no amounts were disbursed in 2025.
On January 23, 2026, we determined that we will make effective our nationwide agreement to settle a substantial majority of the opioids-related claims brought against us by various states and subdivisions (the “Nationwide Opioids Settlement Agreement”), having previously secured sufficient participation by those states and subdivisions, including all eligible state and territorial Attorneys General and all subdivisions that previously sued us. The Nationwide Opioids Settlement Agreement was effective on January 29, 2026 and we made our first installment payment of $23.8 million to the trust administrator on that date. An additional installment payment of $12.1 million was made on February 26, 2026. Refer to Note 19. Commitments and Contingencies and Note 25. Subsequent Events for additional information.
Tax Receivable Agreement
As part of the Reorganization (as defined in Note 1. Nature of Operations), our existing tax receivable agreement (“TRA”) was amended to reduce our future obligation to pay 85% of the realized tax benefits subject to the TRA to 75% of such realized benefits. As of December 31, 2025, the unrecorded contingent TRA liability, including the impact of the amendment, was $129.1 million. During the year ended December 31, 2025, we made payments of $3.0 million, associated with the TRA. Subsequent to year‐end, in January 2026, we made TRA payments totaling $38.8 million. These payments had been fully accrued as a liability as of December 31, 2025.
The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the corporate tax rate in effect at the time of realization of our taxable income. The timing and amount of payments may also be accelerated under certain conditions, such as a change of control or other early termination event, which could give rise to our obligation to make TRA payments in advance of tax benefits being realized.
For further information, refer to Part I.,Item 1A. Risk Factors and Note 5. Income Taxes.
Tax-related and Other Distributions
In 2020, we acquired a 65.1% controlling interest in both AvKARE Inc., a Tennessee corporation, now a limited liability company (“AvKARE, LLC”), and Dixon-Shane, LLC d/b/a R&S Northeast LLC, a Kentucky limited liability company (“R&S”). The sellers of AvKARE, LLC and R&S (the “AvKARE Sellers”) hold the remaining 34.9% interest (the “Rondo Class B Units”) in the holding company that directly owns the acquired companies (“Rondo”). We attribute 34.9% of the net income or loss associated with Rondo to redeemable non-controlling interests. During the years ended December 31, 2025, 2024 and 2023, we made cash tax and other distributions of $43.8 million, $19.8 million and $14.2 million, respectively, to the AvKARE Sellers. There was no liability for tax and other distributions payable to the AvKARE Sellers as of December 31, 2025 or 2024.
Biosimilar Licensing and Supply Agreement - Denosumab
Pursuant to a licensing and supply agreement with mAbxience S.L. (“mAbxience”) for two denosumab biosimilars referencing Prolia® and XGEVA®, the Company paid mAbxience $7.5 million in February 2026 upon the achievement of regulatory milestones. These amounts had been accrued as of December 31, 2025. Refer to Note 4. Alliance and Collaboration for additional information.
Rondo Redeemable Non-Controlling Interests
Beginning on January 1, 2026, the holders of the Rondo Class B Units have a put right to require us to purchase their units for a purchase price that is based on a multiple of Rondo’s earnings before income taxes, depreciation, and amortization subject to
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the satisfaction of certain financial targets and other conditions. As of December 31, 2025, no conditions have been met that would make redemption probable or otherwise certain.
Cash Balances
At December 31, 2025, our cash and cash equivalents consist of cash on deposit and highly liquid investments. A portion of our cash flows are derived outside the U.S. As a result, we are subject to market risk associated with changes in foreign exchange rates. We maintain cash balances at both U.S. based and foreign country based commercial banks. At various times during the year, our cash balances held in the U.S. may exceed amounts that are insured by the Federal Deposit Insurance Corporation. We make our investments in accordance with our investment policy. The primary objectives of our investment policy are liquidity and safety of principal.
Cash Flows
For a discussion comparing our cash flows for the fiscal years 2024 to 2023, see Cash Flows under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K.
The following table sets forth our summarized, consolidated cash flows for the years ended December 31, 2025 and 2024 (in thousands):
Years Ended December 31, Change
Cash provided by (used in):
Effect of exchange rate changes on cash (1,680) (999) (681) 68.2 %
nm - not meaningful
Cash Flows from Operating Activities
Net cash provided by operating activities was $340.0 million for the year ended December 31, 2025 as compared to $295.1 million for the prior year. Excluding the $52.4 million Opana ER® antitrust litigation settlement payment made in the prior year, net cash from operating activities decreased year-over-year as increases in cash earnings and lower interest rates in the current year were more than offset by changes in working capital.
Cash Flows from Investing Activities
Net cash used in investing activities was $112.3 million for the year ended December 31, 2025 as compared to $63.0 million for the prior year. The year-over-year increase in net cash used in investing activities was primarily due to an increase in capital expenditures and deposits for future acquisition of property, plant, and equipment in the current year, partially offset by proceeds from the sale of a subsidiary in the prior year.
Cash Flows from Financing Activities
Net cash used in financing activities of $31.5 million for the year ended December 31, 2025 as compared to $211.8 million for the prior year. The year-over-year decrease in net cash used in financing activities was primarily due to a net increase in cash inflows from debt of $167.3 million, primarily as a result of the refinancing of our debt in the current year (refer to Note 14. Debt), repayment of notes payable - related party of $44.2 million in the prior year, and cash received from an alliance party of $6.4 million in the current year, partially offset by an increase of $24.0 million in tax and other cash and other distributions to non-controlling interests and an increase in employee payroll tax withholdings on restricted stock unit and performance stock unit vesting of $14.3 million.
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Commitments and Contractual Obligations
Our contractual obligations as of December 31, 2025 were as follows (in thousands):
Payments Due by Period
Total LessThan 1Year 1-3Years 3-5Years MoreThan 5Years
Non-cancelable marketing and royalty obligations (5) 21,077 15,677 5,400 — —
(1)A description of our Term Loan Due 2032 and Senior Notes Due 2032, and related debt service and interest requirements is contained in Note 14. Debt. Interest on our Term Loan Due 2032 and Senior Notes Due 2032 was calculated based on applicable rates at December 31, 2025, excluding the impact of our interest rate swap.
(2)Amounts represent future minimum rental payments under non-cancelable facility leases. A discussion of our operating lease obligations is contained in Note 16. Leases.
(3)Amounts primarily represent future minimum rental payments under a non-cancelable financing lease obligation for a production facility in New York. A discussion of our financing lease obligations is contained in Note 16. Leases.
(4)Represents the tax receivable agreement liability as of December 31, 2025. A discussion of our tax receivable agreement, including the unrecorded contingent liability, is contained in Note 5. Income Taxes.
(5)Represents minimum sales and marketing spending obligations, a minimum royalty obligation, and a minimum purchase obligation.
The foregoing table does not include milestone payments potentially payable by us under our collaboration agreements. Such payments are dependent upon the occurrence of specific and contingent events, and not the passage of time. A discussion of our significant contingent milestones is contained in Note 4. Alliance and Collaboration and Note 22. Related Party Transactions.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of December 31, 2025.
Critical Accounting Policies
Our significant accounting policies are described in Note 2. Summary of Significant Accounting Policies.
Included within these policies are certain policies which contain critical accounting estimates and, therefore, have been deemed to be “critical accounting policies.” Critical accounting estimates are those which require management to make assumptions about matters that were uncertain at the time the estimate was made and for which the use of different estimates, which reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur from period to period could have a material impact on our financial condition or results of operations. We have identified the following to be our critical accounting policies: certain sales-related deductions, business combinations, impairment of goodwill and intangible assets, income taxes and contingencies.
Certain Sales-Related Deductions
Our gross product revenue is subject to a variety of deductions, which are estimated and recorded in the same period that the revenue is recognized. Certain deductions represent estimates of rebates related to gross sales for the reporting period and, as such, knowledge and judgment of market conditions and practice are required when estimating the impact of these revenue deductions on gross sales for a reporting period.
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Historically, our changes of estimates reflecting actual results or updated expectations have not been material to our overall business. If any of our ratios, factors, assessments, experiences or judgments are not indicative or accurate predictors of our future experience, our results could be materially affected. The sensitivity of our estimates can vary by program, type of customer and geographic location. However, estimates associated with Medicaid rebates and sales returns are most at risk for material adjustment because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year. Because of this time lag, in any given quarter, our adjustments to actual can incorporate revisions of several prior quarters.
Business Combinations
We account for acquired businesses using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. The consolidated financial statements and results of operations reflect an acquired business after the completion of the acquisition. The fair value of the consideration paid is assigned to the underlying net assets of the acquired business based on their respective fair values as determined using a market participant concept. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill.
Intangible assets are amortized over the estimated useful life of the asset. Significant judgments are used in determining the estimated fair values assigned to the assets acquired and liabilities assumed and in determining estimates of useful lives of long-lived assets. Fair value determinations and useful life estimates are based on, among other factors, estimates of expected future net cash flows, estimates of appropriate discount rates used to present value expected future net cash flow streams, the assessment of each asset’s life cycle, competitive trends impacting the asset and each cash flow stream, as well as other factors. These judgments can materially impact the estimates used to allocate acquisition date fair values to assets acquired and liabilities assumed and the future useful lives. For these and other reasons, actual results may vary significantly from estimated results.
Impairment of Goodwill and Intangible Assets
Goodwill
Goodwill, which represents the excess of the purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to annual impairment testing during the fourth quarter of each year, or more frequent testing if events or circumstances indicate that the carrying amount may not be recoverable.
We may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. In performing this assessment, we consider a range of qualitative factors, which may include general economic conditions, industry performance, our operating outlook, and recent and projected financial performance, among others. If, based on this assessment, we conclude that it is more likely than not that a reporting unit’s fair value exceeds its carrying amount, no further testing is required. If the qualitative assessment does not support that conclusion, we proceed to perform a quantitative impairment test.
When a quantitative test is required, we estimate the fair value of each reporting unit using a combination of income and market approaches. If the reporting unit’s carrying amount exceeds its fair value, we record a goodwill impairment charge equal to the lesser of (i) the total amount of goodwill allocated to that reporting unit or (ii) the amount by which the reporting unit’s carrying amount exceeds its fair value.
Goodwill is allocated and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below the operating segment level. Our reportable segments are the same as the respective operating segments and reporting units. As of December 31, 2025, $366.3 million, $159.7 million, and $69.5 million of goodwill was allocated to our Specialty, Affordable Medicines, and AvKARE segments, respectively. During the fourth quarter of 2025, we performed a qualitative assessment for each reporting unit. There was no impairment of goodwill in any reporting unit for the year ended December 31, 2025. For more information about goodwill, including our annual impairment test, see Note 11. Goodwill and Other Intangible Assets.
The determination of fair value in a quantitative assessment would require us to make significant estimates and assumptions. These estimates and assumptions primarily include but are not limited to: the selection of appropriate peer group companies, the discount rate, terminal growth rates, forecasts of revenue, operating income, depreciation and amortization, restructuring charges and capital expenditures.
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Significant judgment is used in determining these assumptions, and changes in any of these assumptions could have a material impact on our consolidated results of operations. Additionally, future events and factors may impact future results and the outcome of subsequent goodwill impairment testing. For a list of these factors, see Item 1A.Risk Factors.
Intangible Assets
We review our long-lived assets, including intangible assets with finite lives, for recoverability whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We evaluate assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value which is generally an expected present value cash flow technique. Our policy in determining whether an impairment indicator exists comprises measurable operating performance criteria as well as other qualitative measures. Events giving rise to impairment are an inherent risk in the pharmaceutical industry and cannot be predicted. Factors that we consider in deciding when to perform an impairment review include significant under-performance of a product in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. If our assumptions are not correct, there could be an impairment loss in subsequent periods or, in the case of a change in the estimated useful life of the asset, a change in amortization expense.
Intangible assets with indefinite lives, including IPR&D, are tested for impairment if impairment indicators arise and, at a minimum, annually. However, an entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. The indefinite-lived intangible asset impairment test consists of a one-step analysis that compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. We consider many factors in evaluating whether the value of its intangible assets with indefinite lives may not be recoverable, including, but not limited to the discount rate, terminal growth rates, general economic conditions, our outlook and market performance of our industry and recent and forecasted financial performance.
For the year ended December 31, 2025, we recognized $22.8 million of intangible asset impairment charges in cost of goods sold. The charges primarily related to a Specialty segment product right for which the Company significantly reduced the cash flow forecast after receipt of a complete response letter dated July 22, 2025 from the U.S. Food and Drug Administration regarding a supplemental new drug application. For the year ended December 31, 2024, intangible asset impairment charges were not material.
Income Taxes
We record valuation allowances against our DTAs when it is more likely than not that all or a portion of a DTA will not be realized. We routinely evaluate the realizability of our DTAs by assessing the likelihood that our DTAs will be recovered based on all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, estimates of future taxable income, tax planning strategies and results of operations. Estimating future taxable income is inherently uncertain and requires judgment. In projecting future taxable income, we consider our historical results and incorporate certain assumptions, including projected new product launches, revenue growth, and operating margins, among others.
A valuation allowance, if needed, reduces DTAs to the amount expected to be realized. When determining the amount of net DTAs that are more likely than not to be realized, we assess all available positive and negative evidence. This evidence includes, but is not limited to, prior earnings history, projected future earnings, carryback and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a DTA. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income to outweigh objective negative evidence of recent financial reporting losses.
As of December 31, 2025, based upon all available objective and verifiable evidence both positive and negative, including historical levels of pre-tax loss and income both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies, we determined that it is more likely than not that we will not realize the benefits of our gross DTAs. Accordingly, as of December 31, 2025, this valuation allowance was $586.6 million and reduced the carrying value of these gross DTAs, net of the impact of the reversal of taxable temporary differences, to zero.
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As described in Item 1A. Risk Factors and Note 5. Income Taxes, we are a party to a TRA under which we are generally required to pay to the Amneal Group 75% of the applicable tax savings, if any, in U.S. federal and state income tax that we are deemed to realize and that are created as a result of tax benefits attributable to payments made under the TRA.
The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the tax rate in effect at the time of realization of the our taxable income. Because the Amneal Group has sold or exchanged all of their Amneal Common Units, effective with the Reorganization, there is no longer the associated risk of increased future obligations under the TRA (i.e., there cannot be further sales or exchanges giving rise to increased TRA liability occurring subsequent to December 31, 2023).
The projection of future taxable income involves significant judgment. Actual taxable income may differ materially from our estimates, which could significantly impact the timing and payment of the TRA. As noted above, we have determined it is more-likely-than-not we will be unable to utilize all of our DTAs subject to the TRA; and, as of December 31, 2025 and 2024, we had not recognized the entire contingent liability under the TRA related to the tax savings we may realize from Amneal Common Units sold or exchanged. If utilization of these DTAs becomes more-likely-than-not in the future, at such time, these contingent TRA liabilities (which amount to approximately $129.1 million as of December 31, 2025, as a result of basis adjustments under Internal Revenue Code Section 754) will be recorded through charges to our statements of operations.However, if the tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRA in excess of the $57.5 million accrued as of December 31, 2025.Should we determine that a DTA with a valuation allowance is realizable in a subsequent period, the related valuation allowance will be reversed and if a resulting TRA payment is determined to be probable, a corresponding TRA liability will be recorded.
Contingencies
We are involved in various litigation, government investigations and other legal proceedings that arise from time to time in the ordinary course of business. Our legal proceedings are complex, constantly evolving and subject to uncertainty. As such, we cannot predict the outcome or impact of our legal proceedings.
While we believe we have valid claims and/or defenses for the matters described in Note 19. Commitments and Contingencies, the nature of litigation is unpredictable and the outcome of the proceedings could include damages, fines, penalties and injunctive or administrative remedies. For any proceedings where losses are probable and reasonably capable of estimation, we accrue for a potential loss. When we have a probable loss for which a reasonable estimate of the liability is a range of losses and no amount within that range is a better estimate than any other amount, we record the loss at the low end of the range. While these accruals have been deemed reasonable by our management, the assessment process relies heavily on estimates and assumptions that may ultimately prove inaccurate or incomplete. Additionally, unforeseen circumstances or events may lead us to subsequently change our estimates and assumptions. The process of analyzing, assessing and establishing reserve estimates relative to legal proceedings involves a high degree of judgment.
The ultimate resolution of any or all claims, legal proceedings or investigations are inherently uncertain and difficult to predict, could differ materially from our estimates and could have a material adverse effect on our results of operations and/or cash flows in any given accounting period, or on our overall financial condition.
For further details, refer to Note 19. Commitments and Contingencies.
Recently Issued Accounting Standards
Recently issued accounting standards are discussed in Note 2. Summary of Significant Accounting Policies.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Our cash is held on deposit in demand accounts at large financial institutions in amounts in excess of the FDIC insurance coverage limit of $250,000 per depositor, per FDIC-insured bank, per ownership category. Our cash equivalents are comprised of highly rated money market funds. We had no short-term investments as of December 31, 2025 and December 31, 2024.
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents and accounts receivable. We limit our credit risk associated with cash equivalents by placing investments with high credit quality securities, including U.S. government securities, treasury bills, corporate debt, short-term commercial paper and highly rated money market funds. As discussed in Note 14. Debt, we are party to the Term Loan Due 2032 and Senior Notes Due 2032 with
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an aggregate principal amount of $2.7 billion, as well as the 2025 Revolving Credit Facility and the Amended and Restated Rondo Revolving Credit Facility under which loans and letters of credit up to a principal amount of $595.2 million and $83.0 million are available as of December 31, 2025, respectively (principal amount of up to $20.2 million and $48.0 millionremain available for letters of credit, respectively). The proceeds for any loans made under our asset backed revolving credit facility are available for capital expenditures, acquisitions, working capital needs and other general corporate purposes.
We limit our credit risk with respect to accounts receivable by performing credit evaluations when deemed necessary. We do not require collateral to secure amounts owed to us by our customers.
By the nature of our global operations, we are exposed to cash flow and earnings fluctuations resulting from foreign exchange rate variation. These exposures are transactional and translational in nature. Since we manufacture and sell our products throughout the world, we believe our foreign currency risk is diversified. Principal drivers of this diversified foreign exchange exposure include the European Euro and the Indian Rupee. Our transactional exposure arises from the purchase and sale of goods and services in currencies other than the functional currency of our operational units. We also have exposure related to the translation of financial statements of our foreign divisions into U.S. dollars, our functional currency. The financial statements of our operations outside the U.S. are measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensive loss. Transaction gains and losses are included in the determination of our net loss in our statements of operations. Such foreign currency transaction gains and losses include fluctuations related to long term intercompany loans that are payable in the foreseeable future.
While it is difficult to accurately measure the impact of inflation, we estimate our business did not experience a material increase in costs due to inflation for the year ended December 31, 2025. We do not expect a material impact related to inflation for the year ending December 31, 2026. However, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods.
In the normal course of operations, we are exposed to market risks relating to our long-term debt arising from adverse changes in interest rates. Market risk is defined for these purposes as the potential change in the fair value of a financial asset or liability resulting from an adverse movement in interest rates. Changes in interest rates impact fixed and variable rate debt differently. For fixed rate debt, a change in interest rates will impact only the fair value of the debt, whereas for variable rate debt, a change in the interest rates will impact interest expense and cash flows.
At December 31, 2025 and 2024, we had $2.09 billion and $2.48 billion, respectively, of variable rate debt. Our total debt of $2.69 billion as of December 31, 2025 was comprised of our Term Loan Due 2032 with principal outstanding of $2.09 billion and our Senior Notes Due 2032 with principal outstanding of $600.0 million. We estimated the fair values of the Term Loan Due 2032, Senior Notes Due 2032, Term Loan Due 2028, and Term Loan Due 2025 using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments. At December 31, 2025, we estimated the fair value of the Term Loan Due 2032 and Senior Notes Due 2032 to be $2.12 billion and $633.0 million, respectively. At December 31, 2024 we estimated the fair value of the Term Loan Due 2028 and Term Loan Due 2025 to be $2.36 billion and $192.6 million, respectively.
In August 2025, we terminated our then existing interest rate swap and entered into a new interest rate lock agreement (the “August 2025 Swap”) by blending and extending the remaining asset position from the prior swap into the new arrangement. The August 2025 Swap has a notional value of $650.0 million associated with the Term Loan Due 2032 and requires us to pay a fixed interest rate of 3.1636% while receiving one‐month SOFR (subject to a 0.50% floor) through May 6, 2030. At December 31, 2025, the fair value of the swap asset was $5.8 million. We estimated that a hypothetical 100 basis point increase in the forward one-month SOFR curve would potentially increase the fair value of this interest rate swap asset by $24.6 million as of December 31, 2025. We estimated that a hypothetical 100 basis point decrease in the forward one-month SOFR curve would potentially decrease the fair value of this interest rate swap asset by $24.4 million as of December 31, 2025. Refer to Note 18. Financial Instruments for additional information.
Increases or decreases in interest rates would affect our annual interest expense. Based on the principal amount of the Term Loan Due 2032 outstanding as of December 31, 2025, a hypothetical 100 basis point increase or decrease in interest rates would have affected our annual interest expense by approximately $20.9 million, before the impact of the interest rate lock agreement discussed above.
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Item 8. Financial Statements and Supplementary Data
The consolidated financial statements listed in Item 15. Exhibits, Financial Statement Schedules are filed as part of this Annual Report on Form 10-K and incorporated by reference herein.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure information required to be disclosed by us in reports that we file or submit 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 Co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation of our Co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, our Co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2025.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on the assessment, management has concluded that our internal control over financial reporting was effective at the reasonable assurance level as of December 31, 2025. Ernst & Young LLP has independently assessed the effectiveness of our internal control over financial reporting and its report is included below.
Changes in Internal Control over Financial Reporting
During the quarter ended December 31, 2025, there were no changes in internal control over financial reporting which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitation on Effective Controls
Management, including our Co-Chief Executive Officers and Chief Financial Officer, does not expect that our disclosure controls and procedures or our system of internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed or operated, can provide only reasonable, but not absolute, assurance that the objectives of the system of internal control are met. The design of our control system reflects the fact that there are resource constraints, and that the benefits of such control system must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control failures and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the intentional acts of individuals, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part on certain assumptions about the likelihood of future events, and there can be no assurance that the design of any particular control will always succeed in achieving its objective under all potential future conditions.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Amneal Pharmaceuticals, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Amneal Pharmaceuticals, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Amneal Pharmaceuticals, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ deficiency and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 27, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Iselin, New Jersey
February 27, 2026
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Item 9B. Other Information
Not applicable.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III.
Item 10. Directors, Executive Officers and Corporate Governance
The information required in this Item 10 will be included in the following sections in the 2026 Proxy Statement, which sections are incorporated in this Item 10 by reference: “Proposal No. 1-Election of Directors”, “Our Management”, “Committees of the Board of Directors”, “Audit Committee”, “Corporate Governance” and, if included in the 2026 Proxy Statement, “Delinquent Section 16(a) Reports”.
Code of Business Conduct for Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
We have adopted a Code of Business Conduct that applies to all of our employees, officers and directors. The full text of our Code of Business Conduct is available at the investors section of our website, http://investors.amneal.com. We intend to disclose any amendment to, or waiver from, a provision of the Code of Business Conduct that applies to our principal executive officer, principal financial officer or principal accounting officer in the investors section of our website.
Item 11. Executive Compensation
The information required in this Item 11 will be included in the following sections in the 2026 Proxy Statement, which sections are incorporated in this Item 11 by reference to the extent required by this Item 11: “Compensation Discussion and Analysis,” “Executive Compensation,” “Director Compensation,” “The Board’s Role in Risk Oversight,” “Compensation Committee Interlocks and Insider Participation” and “Report of the Compensation Committee.” Notwithstanding the foregoing, the information in the section entitled “Report of the Compensation Committee” and “Pay Versus Performance” is only “furnished” herein and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Except as set forth below, the information required in this Item 12 will be included in the section entitled “Beneficial Ownership” in the 2026 Proxy Statement, which section is incorporated in this Item 12 by reference.
Securities Authorized for Issuance Under Equity Compensation Plans. The following table summarizes information, as of December 31, 2025, relating to the Amneal Pharmaceuticals, Inc. 2018 Incentive Award Plan (as amended and restated), which was approved by the Company’s stockholders and which authorizes the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other stock or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants.
Equity Compensation Plan Information
Equity compensation plans not approved by security holders — — —
(1)Equity compensation plans approved by security holders which are included in column (a) of the table are the amended and restated 2018 Incentive Award Plan (including 1,225,985 shares of Class A Common Stock to be issued upon exercise of outstanding options and 15,863,509 shares of Class A Common Stock to be issued upon vesting and settlement of outstanding restricted stock units (“RSUs”) and market performance-based restricted stock units (“MPRSUs”) assuming target performance and, in each case, subject to continued employment) and 28,376 of options remaining from the Impax Laboratories, Inc (“Impax”) option conversion associated with the acquisition of Impax on May 4, 2018. RSUs and MPRSUs included in column (a) of the table represent the full
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number of RSUs and MPRSUs awarded and outstanding whereas the number of shares of Class A Common Stock to be issued upon vesting will be lower than what is reflected on the table because the value of shares required to meet employee tax withholding requirements are not issued.
(2)Column (b) relates to stock options and does not include any exercise price for RSUs and MPRSUs because their value is dependent upon attainment of continued employment or service and they are settled for shares of Class A Common Stock on a one-for-one basis.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required in this Item 13 will be included in the following sections in the 2026 Proxy Statement, which sections are incorporated in this Item 13 by reference: “Certain Related Parties and Related Party Transactions,” “Controlled Company Status” and “Committees of the Board of Directors.”
Item 14. Principal Accounting Fees and Services
The independent registered public accounting firm is Ernst & Young LLP, Iselin, NJ, PCAOB ID 42.
The information required in this Item 14 will be included in the section entitled “Independent Registered Public Accounting Firm Fees” in the 2026 Proxy Statement, which section is incorporated in this Item 14 by reference.
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PART IV.
Item 15. Exhibits, Financial Statement Schedules
(a)(1) Consolidated Financial Statements
Index to financial statements and supplementary data filed as part of this Report.
Report of Independent Registered Public Accounting Firm (PCAOB ID 42) F-1
Consolidated Statements of Operations F-4
Consolidated Statements of Comprehensive Income (Loss) F-5
Consolidated Balance Sheets F-6
Consolidated Statements of Changes in Stockholders’ (Deficiency) Equity F-7
Consolidated Statements of Cash Flows F-10
Notes to Consolidated Financial Statements F-12
(a)(2) Financial Statement Schedules
All schedules are omitted because they are not required or because the required information is included in the Consolidated Financial Statements or notes thereto.
(a)(3) Exhibits
See the “Exhibit Index” prior to the signature page of this Annual Report on Form 10-K.
Item 16. Form 10-K Summary
None.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Amneal Pharmaceuticals, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Amneal Pharmaceuticals, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ deficiency and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 27, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F-1
Medicaid Rebates
F-2
Sales Returns
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2008.
Iselin, New Jersey
February 27, 2026
F-3
Amneal Pharmaceuticals, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Years Ended December 31,
In-process research and development impairment charges — — 30,800
Intellectual property legal development expenses 7,632 5,845 3,828
(Credit) charges related to legal matters, net (390) 96,692 1,824
Other (expense) income:
Increase in tax receivable agreement liability (6,588) (50,680) (3,124)
Weighted-average common shares outstanding:
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Amneal Pharmaceuticals, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
Years Ended December 31,
Other comprehensive (loss) income:
Unrealized loss on cash flow hedge, net of tax of $0 (22,423) (1,168) (48,497)
Other, net of tax of $0 (5,340) — —
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Amneal Pharmaceuticals, Inc.
Consolidated Balance Sheets
(in thousands)
Assets
Current assets:
Prepaid expenses and other current assets 98,395 80,717
Related party receivables 470 484
Operating lease right-of-use assets - related party 15,216 10,964
Liabilities and Stockholders’ Deficiency
Current liabilities:
Current portion of liabilities for legal matters 43,256 31,755
Revolving credit facility — 100,000
Current portion of long-term debt, net 6,761 224,213
Current portion of operating lease liabilities 8,668 9,435
Current portion of operating lease liabilities - related party 2,705 3,396
Current portion of financing lease liabilities 3,442 3,211
Operating lease liabilities - related party 14,195 9,391
Liabilities for legal matters - long term 71,819 85,479
Commitments and contingencies (Notes 4, 19 and 22)
Stockholders’ Deficiency:
Total Amneal Pharmaceuticals, Inc. stockholders’ deficiency (70,794) (109,267)
Non-controlling interests (535) (245)
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Amneal Pharmaceuticals, Inc.
Consolidated Statement of Changes in Stockholders’ Deficiency
(in thousands)
New PubCo
Shares Amount
Foreign currency translation adjustments — — — — (18,685) — (18,685) —
Tax and other distributions, net — — — — — — — (43,848)
Other, net of tax of $0 — — — — (5,340) — (5,340) —
The accompanying notes are an integral part of these consolidated financial statements.
F-7
Amneal Pharmaceuticals, Inc.
Consolidated Statement of Changes in Stockholders’ Equity (Deficiency)
(in thousands)
New PubCo
Shares Amount
Foreign currency translation adjustments — — — — (5,788) — (5,788) —
Unrealized loss on cash flow hedge, net of tax of $0 — — — — (1,168) — (1,168) —
Tax and other distributions, net — — — — — — — (19,804)
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Amneal Pharmaceuticals, Inc.
Consolidated Statement of Changes in Stockholders’ Equity
(in thousands)
Old PubCo New PubCo
Shares Amount Shares Amount Shares Amount
Foreign currency translation adjustments — — — — — — — — (433) (626) (1,059) —
Stock-based compensation — — — — — — 26,822 — — — 26,822 —
Tax and other distributions, net — — — — — — — — — (56,684) (56,684) (14,199)
The accompanying notes are an integral part of these consolidated financial statements.
F-9
Amneal Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Years Ended December 31,
Cash flows from operating activities:
Unrealized foreign currency (gain) loss (7,453) 7,191 (768)
Change in fair value of contingent consideration — — (14,497)
Changes in assets and liabilities:
Prepaid expenses, other current assets and other assets (19,163) (959) 37,814
Cash flows from investing activities:
Proceeds from sale of property, plant, equipment and other 2,094 — —
Proceeds from sale of subsidiary — 11,994 —
Cash flows from financing activities:
Payment of principal on notes payable - related party — (44,200) —
Proceeds from alliance party 6,367 — —
Effect of foreign exchange rate on cash (1,680) (999) 65
Long-term restricted cash included in other assets - end of period 2,068 — —
The accompanying notes are an integral part of these consolidated financial statements.
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Amneal Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows (continued)
(in thousands)
Years Ended December 31,
Supplemental disclosure of cash flow information:
Supplemental disclosure of non-cash investing and financing activity:
Payable for acquisition of product rights and licenses $ 8,611 $ 3,900 $ 2,100
Loan for land purchase - related party $ 476 $ — $ —
The accompanying notes are an integral part of these consolidated financial statements.
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Amneal Pharmaceuticals, Inc.
Notes to Consolidated Financial Statements
1. Nature of Operations
Amneal Pharmaceuticals, Inc. (the “Company”) is a diversified, global biopharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines. Our Affordable Medicines segment includes retail generics, injectables, and biosimilars. In our Specialty segment, we offer a portfolio of branded pharmaceuticals focused primarily on central nervous system and endocrine disorders. Through our AvKARE segment, we are a distributor of pharmaceuticals and other products for the U.S. federal government, retail, and institutional markets. We operate principally in the United States (“U.S.”), India, and Ireland. Refer to Note 24. Segment Information for an overview of our segments.
The Company is a holding company, whose principal assets are common units (“Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”). Immediately prior to the Reorganization (as defined herein), the Company held 50.4% of the Amneal Common Units and the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members” or the “Amneal Group”) held the remaining 49.6%. On November 7, 2023, the Company implemented a plan pursuant to which the Company and Amneal reorganized and simplified the Company’s corporate structure by eliminating its umbrella partnership-C-corporation structure and converting to a more traditional C-corporation structure whereby all stockholders hold their voting and economic interests directly through the public company (the “Reorganization”). Effective with the Reorganization, the Company holds 100% of the Amneal Common Units.
Following the implementation of the Reorganization, Amneal Pharmaceuticals, Inc. (“Old PubCo”) became a wholly owned subsidiary of a new holding company, Amneal NewCo Inc. (“New PubCo”), which replaced Old PubCo as the public company trading on the New York Stock Exchange under Old PubCo’s ticker symbol “AMRX.” In addition, New PubCo changed its name to “Amneal Pharmaceuticals, Inc.” and Old PubCo changed its name to “Amneal Intermediate, Inc.” In connection with the Reorganization, holders of shares of Class A common stock, par value $0.01 per share, of Old PubCo (“Old PubCo Class A Common Stock”) ceased to hold such shares and received an equivalent number of shares of Class A common stock, par value $0.01 per share, of New PubCo that have the same voting and economic rights as Old PubCo Class A Common Stock. Additionally, holders of shares of Class B common stock, par value $0.01 per share, of Old PubCo (“Old PubCo Class B Common Stock”), ceased to hold such shares and received an equivalent number of shares of Class A common stock, par value $0.01 per share, of New PubCo that have the same voting and economic rights as Old PubCo Class A Common Stock. All outstanding shares of Old PubCo Class B Common Stock were surrendered and canceled. Accordingly, upon consummation of the Reorganization, Old PubCo stockholders automatically became stockholders of New PubCo, on a one-for-one basis, with the same number and ownership percentage of shares they held in Old PubCo immediately prior to the effective time of the Reorganization. On December 27, 2023, the Company voluntarily withdrew the listing of its Class A common stock from the New York Stock Exchange and transferred the listing to the Nasdaq Stock Market LLC under the same name and ticker symbol.
2. Summary of Significant Accounting Policies
Accounting Principles
The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated.
Principles of Consolidation
The consolidated financial statements include the accounts of all entities controlled by the Company, including Amneal and its subsidiaries, through the Company’s direct or indirect ownership of a majority voting interest. The Company records non-controlling interests for the portion of its subsidiaries’ economic interests that it does not hold.
Although the Company had a minority economic interest in Amneal prior to March 31, 2023, it was Amneal’s sole managing member (and it continues to be the sole managing member), having the sole voting power to make all of Amneal’s business decisions and control its management. Therefore, the Company also consolidated the financial statements of Amneal and its subsidiaries for all periods prior to the Reorganization.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the reported financial position at the date of the financial statements and the reported results of operations during the reporting period. Such estimates and assumptions affect the reported amounts of assets, liabilities,
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revenues and expenses, and disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The following are some, but not all, of such estimates: the determination of chargebacks, sales returns, rebates, billbacks, valuation of intangible and other assets acquired in business combinations, allowances for accounts receivable, accrued liabilities, liabilities for legal matters, contingent liabilities, initial and subsequent valuation of contingent consideration recognized in business combinations, stock-based compensation, valuation of inventory balances, the determination of useful lives for product rights and the assessment of expected cash flows used in evaluating goodwill and other long-lived assets for impairment. Actual results could differ from those estimates.
Revenue Recognition
When assessing its revenue recognition, the Company performs the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies the performance obligation. The Company recognizes revenue when it transfers control of its products to customers, in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those products.
From time to time, the Company may enter into arrangements where it licenses certain products to a third-party distributor. Licensing arrangement performance obligations generally include intellectual property (“IP”) rights and research and development (“R&D”) and contract manufacturing services. The Company accounts for IP rights and services separately if they are distinct. The consideration is allocated between IP rights and services based on their relative stand-alone selling prices.
Revenue for distinct IP rights is accounted for based on the nature of the promise to grant the license. In determining whether the Company’s promise is to provide a right to access its IP or a right to use its IP, the Company considers the nature of the IP to which the customer will have rights. IP is either functional IP which has significant standalone functionality or symbolic IP which does not have significant standalone functionality. Revenue from functional IP is recognized at the point in time when control of the distinct license is transferred to the customer. Revenue from symbolic IP is recognized over the access period to the Company’s IP.
Revenue from sales-based milestones and royalties promised in exchange for a license of IP is recognized only when, or as, the later of subsequent sale or the performance obligation to which some or all of the sales-based royalty has been allocated, is satisfied.
For further details on the Company’s revenue recognition policies, refer to Note 3. Revenue Recognition.
Stock-Based Compensation
The Company’s stock-based compensation consists of stock options, restricted stock units (“RSUs”) and market performance-based restricted stock units (“MPRSUs”) awarded to employees and non-employee directors. Stock options are measured at their fair value on the grant date or date of modification, as applicable. RSUs, including MPRSUs, are measured at the stock price on the grant date or date of modification, as applicable. The Company recognizes compensation expense on a straight-line basis over the requisite service and/or performance period, as applicable. Forfeitures of awards are accounted for as a reduction in stock-based compensation expense in the period such awards are forfeited. The Company's policy is to issue new shares upon option exercises and the vesting of RSUs and MPRSUs.
Contingent consideration
Business acquisitions may include future payments that are contingent upon the occurrence of certain pharmaceutical regulatory milestones or net sales of pharmaceutical products. For acquisitions that are accounted for as a business combination, the obligations for such contingent consideration payments are recorded at fair value on the acquisition date. For contingent milestone payments, the Company uses a probability-weighted income approach utilizing an appropriate discount rate. For contingent tiered royalties on net sales, the Company uses a Monte Carlo simulation model. Contingent consideration liabilities are revalued to fair value at the end of each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in fair value of contingent consideration in the consolidated statements of operations.
Foreign Currencies
The Company has operations in the U.S., India, Ireland, and other foreign jurisdictions. Generally, the Company’s foreign operating subsidiaries’ functional currency is the local currency. The results of its non-U.S. dollar based operations are
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translated to U.S. dollars at the average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Translation adjustments are included in accumulated other comprehensive (loss) income and non-controlling interests in the consolidated balance sheets and are included in comprehensive income (loss). Transaction gains and losses are included in net loss in the Company’s consolidated statements of operations as a component of foreign exchange gain (loss), net. Such foreign currency transaction gains and losses include fluctuations related to long-term intercompany loans that are payable in the foreseeable future. Translation gains and losses on intercompany balances of a long-term investment nature are included in foreign currency translation adjustments in accumulated other comprehensive (loss) income and non-controlling interests, and comprehensive income (loss).
Business Combinations
Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, the acquiring entity in a business combination records the assets acquired and liabilities assumed at the date of acquisition at their fair values. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill. Acquisition-related costs are expensed as incurred.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on deposit and highly liquid investments with original maturities of three months or less. A portion of the Company’s cash flows are derived outside the U.S. As a result, the Company is subject to market risk associated with changes in foreign exchange rates. The Company maintains cash balances at both U.S.-based and international-based commercial banks. At various times during the year, cash balances in the U.S. may exceed amounts that are insured by the Federal Deposit Insurance Corporation.
Restricted Cash
At December 31, 2025, the Company had a short-term restricted cash balance of $28.8 million in its bank accounts, of which $24.2 million was associated with a short-term liability for a settlement in principle on the primary financial terms for a nationwide resolution to the opioids cases filed and that might have been filed by state Attorneys General, political subdivisions and Native American tribes (refer to Note 19. Commitments and Contingencies and Note 25. Subsequent Events for additional information). The remainder of the short-term and the long-term restricted cash balance as of December 31, 2025 primarily related to the purchase of certain land and equipment in India. As of December 31, 2024, the Company had a total restricted cash balance of $7.9 million in its bank accounts primarily related to the purchase of certain land and equipment in India.
Accounts Receivable and Allowance for Credit Losses
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company limits its credit risk with respect to accounts receivable by performing credit evaluations when deemed necessary. The Company does not require collateral to secure amounts owed to it by its customers.
Trade accounts receivable are stated at their net realizable value. The allowance for credit losses reflects the best estimate of expected credit losses of the accounts receivable portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. The Company determines its allowance methodology by pooling receivable balances at the customer level. The Company considers various factors, including its previous loss history, individual credit risk associated to each customer, and the current and future condition of the general economy. These credit risk factors are monitored on a quarterly basis and updated as necessary. To the extent that any individual debtor is identified whose credit quality has deteriorated, the Company establishes allowances based on the individual risk characteristics of such customer. The Company makes concerted efforts to collect all outstanding balances due from customers; however, account balances are charged off against the allowance when management believes it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to customers.
Chargebacks Received from Manufacturers
When a sale occurs on a contracted item, the difference between the cost the Company pays to the manufacturer of that item and the contract price that the end customer has with the manufacturer is rebated to the Company by the manufacturer as a chargeback. Chargebacks are recorded as a reduction to cost of sales and either a reduction in the amount due to the manufacturer (if there is a right of offset) or as a receivable from the manufacturer.
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Inventories
Inventories consist of finished goods held for sale, raw materials, and work in process. Inventories are stated at net realizable value, with cost determined using the first-in, first-out method. Adjustments for excess and obsolete inventories are established based upon historical experience and management’s assessment of current product demand. These assessments include inventory obsolescence based on its expiration date, damaged or rejected product, and slow-moving products.
Property, Plant, and Equipment
Property, plant, and equipment are stated at historical cost less accumulated depreciation.Depreciation expense is computed primarily using the straight-line method over the estimated useful lives of the assets, which are as follows:
Asset Classification Estimated Useful Life
Buildings 30 years
Computer equipment 5 years
Furniture and fixtures 7 years
Leasehold improvements Shorter of asset's useful life or remaining life of lease
Machinery and equipment 5 - 10 years
Vehicles 5 years
Upon retirement or disposal, the cost of the asset disposed and the accumulated depreciation are removed from the accounts, and any gain or loss is reflected as part of operating income (loss) in the period of disposal. Expenditures that significantly increase value or extend useful lives of property, plant, and equipment are capitalized, whereas those for normal maintenance and repairs are expensed. The Company capitalizes interest on borrowings during the construction period of major capital projects as part of the related asset and amortizes the capitalized interest into earnings over the related asset’s remaining useful life.
Leases
All significant lease arrangements are recognized as right-of-use (“ROU”) assets and lease liabilities at lease commencement. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments arising from the lease. The Company includes renewal options to extend the lease term where it is reasonably certain that it will exercise these options ROU assets and liabilities are recognized at the commencement date based on the present value of the future lease payments using the Company's incremental borrowing rate.
Operating lease expense is recognized on a straight-line basis over the lease term. At each balance sheet date, operating and financing lease liabilities continue to represent the present value of the future payments. Financing lease ROU assets are expensed using the straight-line method, unless another basis is more representative of the pattern of economic benefit, to lease expense. Interest on financing lease liabilities is recognized in interest expense.
Leases with an initial term of 12 months or less (short-term leases) are not recognized in the balance sheet and the related lease payments are recognized as incurred over the lease term. The Company separates lease and non-lease components. A portion of the Company’s real estate leases are subject to periodic changes in the Consumer Price Index (“CPI”). The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.
For further details regarding the Company's leases, refer to Note 16. Leases.
In-Process Research and Development
The fair value of in-process research and development (“IPR&D”) acquired in a business combination is determined based on the present value of each research project’s projected cash flows using an income approach. Revenues are estimated based on relevant market size and growth factors, expected industry trends, individual project life cycles and the life of each research project’s underlying marketability. In determining the fair value of each research project, expected cash flows are adjusted for certain risks of completion, including technical and regulatory risk.
The value attributable to IPR&D projects at the time of acquisition is capitalized as an indefinite-lived intangible asset and tested for impairment until the project is completed or abandoned. Upon completion of the project, the indefinite-lived intangible asset is then accounted for as a finite-lived intangible asset and amortized over the estimated useful life of the asset
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based on the pattern in which the economic benefits are expected to be consumed or otherwise used up or, if that pattern is not readily determinable, on a straight-line basis. If the project is abandoned, the indefinite-lived intangible asset is charged to expense.
Intangible assets with indefinite lives, including IPR&D, are tested for impairment if impairment indicators arise and, at a minimum, annually. However, an entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. The indefinite-lived intangible asset impairment test consists of a one-step analysis that compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company considers many factors in evaluating whether the value of its intangible assets with indefinite lives may not be recoverable, including, but not limited to, expected growth rates, the cost of equity and debt capital, general economic conditions, the Company’s outlook and market performance of the Company’s industry and recent and forecasted financial performance.
Goodwill
Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.
In order to test goodwill for impairment, an entity is permitted to first assess qualitative factors to determine whether a quantitative assessment of goodwill is necessary. The qualitative factors considered by the Company may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. If a quantitative assessment is required, the Company determines the fair value of its reporting unit using a combination of the income and market approaches. If the carrying amount of the reporting unit exceeds its fair value, the Company recognizes a goodwill impairment charge for the reporting unit equal to the lesser of (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount exceeds its fair value. See Note 11. Goodwill and Other Intangible Assets, for further discussion of the Company’s qualitative assessments of goodwill.
Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of future cash flows and the current fair value of the asset.
Amortization of Intangible Assets with Finite Lives
Intangible assets, other than indefinite-lived intangible assets, are amortized over the estimated useful life of the asset based on the pattern in which the economic benefits are expected to be consumed or otherwise used up or, if that pattern is not readily determinable, on a straight-line basis. The useful life is the period over which the assets are expected to contribute directly or indirectly to future cash flows. Intangible assets are not written-off in the period of acquisition unless they become impaired during that period.
The Company regularly evaluates the remaining useful life of each intangible asset that is being amortized to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of the intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. See Note 11. Goodwill and Other Intangible Assets for further discussion of the Company’s intangible assets.
Impairment of Long-Lived Assets (Including Intangible Assets with Finite Lives)
The Company reviews its long-lived assets, including intangible assets with finite lives, for recoverability whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value, which is generally an expected present value cash flow technique. Management’s policy in determining whether an impairment indicator exists comprises measurable operating
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performance criteria as well as other qualitative measures. See Note 11. Goodwill and Other Intangible Assets for further discussion of the Company’s assessment of intangible asset impairments.
Financial Instruments
The Company minimizes its risks from interest fluctuations through its normal operating and financing activities and, when deemed appropriate through the use of derivative financial instruments. Derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. The Company does not use leveraged derivative financial instruments. Derivative financial instruments that qualify for hedge accounting must be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract.
All derivatives are recorded on the balance sheet as assets or liabilities and measured at fair value. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive (loss) income net of income taxes and subsequently amortized as an adjustment to interest expense over the period during which the hedged forecasted transaction affects earnings, which is when the Company recognizes interest expense on the hedged cash flows. Cash flows of such derivative financial instruments are classified consistent with the underlying hedged item.
Highly effective hedging relationships that use interest rate swaps as the hedging instrument and that meet criteria under ASC 815, Derivatives and Hedging (“ASC 815”), may qualify for the “short-cut method” of assessing effectiveness. The short-cut method allows the Company to make the assumption of no ineffectiveness, which means that the change in fair value of the hedged item can be assumed to be equal to the change in fair value of the derivative. Unless critical terms change, no further evaluation of effectiveness is performed for these hedging relationships unless a critical term is changed.
For a hedging relationship that does not qualify for the short-cut method, the Company measures its effectiveness using the “hypothetical derivative method”, in which the change in fair value of the hedged item must be measured separately from the change in fair value of the derivative. At inception and quarterly thereafter, the Company formally assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. The Company compares the change in the fair value of the actual interest rate derivative to the change in the fair value of a hypothetical interest rate derivative with critical terms that match the hedged interest rate payments. After the initial quantitative assessment, this analysis is performed on a qualitative basis and, if it is determined that the hedging relationship was and continues to be highly effective, no further analysis is required.
All components of each derivative financial instrument's gain or loss are included in the assessment of hedge effectiveness. If it is determined that a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting and any deferred gains or losses related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive (loss) income net of income taxes, unless it is probable that the forecasted transaction will not occur. If it is probable that the forecasted transaction will not occur by the originally specified time period, the Company discontinues hedge accounting, and any deferred gains or losses reported in accumulated other comprehensive (loss) income are reclassified into earnings immediately.
The Company is subject to credit risk as a result of nonperformance by counterparties to the derivative agreements. Upon inception and quarterly thereafter, the Company makes judgments on each counterparty’s creditworthiness for nonperformance by counterparties.
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.
ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review
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and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. The Company records its valuation allowances against its deferred tax assets (“DTAs”) when it is more likely than not that all or a portion of a DTA will not be realized. The Company routinely evaluates the realizability of its DTAs by assessing the likelihood that its DTAs will be recovered based on all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, estimates of future taxable income, tax planning strategies and results of operations.
The Company establishes a valuation allowance based upon all available objective and verifiable evidence, both positive and negative, including historical levels of pre-tax income (loss) both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies.
Comprehensive Income (Loss)
Comprehensive income (loss) includes net income (loss) and all changes in stockholders’ (deficiency) equity (except those arising from transactions with stockholders) including foreign currency translation adjustments resulting from the consolidation of foreign subsidiaries’ financial statements and unrealized losses on cash flows hedges, net of income taxes.
Research and Development
R&D activities are expensed as incurred. R&D expenses primarily consist of direct and allocated expenses incurred with the process of formulation, clinical research, and validation associated with new product development. Upfront and milestone payments made to third parties in connection with R&D collaborations are expensed as incurred up to the point of regulatory approval or when there is no alternative future use.
Intellectual Property Legal Development Expenses
The Company expenses external IP legal development expenses as incurred. These costs relate to legal challenges of innovator’s patents for invalidity or non-infringement, which are customary in the generic pharmaceutical industry, and are incurred predominately during development of a product and prior to regulatory approval. Associated costs include, but are not limited to, formulation assessments, patent challenge opinions and strategy, and litigation expenses to defend the IP supporting the Company's regulatory filings.
Shipping Costs
The Company records the costs of shipping product to its customers as a component of selling, general, and administrative expenses as incurred. Shipping costs were $21.4 million, $18.9 million and $21.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Advertising Costs
Advertising costs are expensed as incurred. Advertising costs are included in selling, general and administrative expenses and were $42.0 million, $34.4 million, and $12.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which enhances the transparency and usefulness of income tax disclosures. ASU 2023-09 requires that public business entities on an annual basis disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The Company adopted the annual and interim disclosure requirements of ASU 2023-09 effective December 31, 2025 (refer to Note 5. Income Taxes). The adoption of this ASU only affects the Company’s disclosures, with no impact to its financial condition, results of operations, and cash flows. Certain prior-period disclosures have been conformed to the current-year presentation.
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Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires a public business entity to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning December 15, 2027, with early adoption permitted. Upon adoption, ASU 2024-03 may be applied prospectively for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) (“ASU 2025-07”), which amends the accounting guidance to exclude from derivative accounting non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. ASU 2025-07 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.
In November 2025, the FASB issued ASU 2025‐09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements (“ASU 2025-09”), which are amendments that are intended to better align hedge accounting with entities’ risk‐management activities, including revisions related to assessing similar risk exposure for groups of forecasted transactions, hedging interest payments on choose‐your‐rate debt instruments, and other improvements to cash flow, fair value, and net investment hedge models. ASU 2025‐09 is effective for fiscal years beginning after December 15, 2026, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025‐11, Interim Reporting (Topic 270): Narrow‐Scope Improvements (“ASU 2025-11”), which are amendments intended to improve the navigability and clarity of interim reporting guidance by reorganizing Topic 270, adding a comprehensive list of interim disclosure requirements sourced from other Codification topics, and clarifying when interim reporting guidance applies. The ASU also introduces a disclosure principle requiring entities to disclose events occurring after the end of the most recent annual reporting period that have a material impact on the entity. ASU 2025‐11 is effective for public business entities for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.
Reclassification
The prior period balances of $0.9 million and $14.5 million, formerly included in the caption “change in fair value of contingent consideration” for the year ended December 31, 2024 and 2023, respectively, have been reclassified to the caption “other operating income” in the consolidated statements of operations to conform to the current period presentation. This reclassification did not impact operating income or net loss.
3. Revenue Recognition
Pharmaceutical Product Sales
Performance Obligations
The Company’s performance obligation is the supply of finished pharmaceutical products to its customers. The Company’s customers consist primarily of major wholesalers, distributors, retail pharmacies, managed care organizations, purchasing co-ops, hospitals, government agencies, institutions and pharmaceutical companies. The Company’s customer contracts generally consist of both a master agreement, which is signed by the Company and its customer, and a customer submitted purchase order, which is governed by the terms and conditions of the master agreement. Customers purchase product by direct channel sales from the Company or by indirect channel sales through various distribution channels.
Revenue is recognized when the Company transfers control of its products to the customer, which typically occurs at a point-in-time, upon shipment or delivery. Substantially all of the Company’s net revenues relate to products which are transferred to the customer at a point-in-time.
F-19
The Company offers standard payment terms to its customers and has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing, since the period between when the Company transfers the product to the customer and when the customer pays for that product is one year or less. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. The consideration amounts due from customers as a result of product sales are subject to variable consideration, as described further below.
The Company offers standard product warranties which provide assurance that the product will function as expected and in accordance with specifications. Customers cannot purchase warranties separately and these warranties do not give rise to a separate performance obligation.
The Company permits the return of product under certain circumstances, mainly upon product expiration, instances of shipping errors or where product is damaged in transit. The Company accrues for the customer’s right to return as part of its variable consideration. See below for further details.
Variable Consideration
The Company includes an estimate of variable consideration in its transaction price at the time of sale, when control of the product transfers to the customer. Variable consideration includes but is not limited to: chargebacks, distribution fees, rebates, group purchasing organization (“GPO”) fees, prompt payment (cash) discounts, consideration payable to the customer, billbacks, Medicaid and other government pricing programs, price protection and shelf stock adjustments, sales returns, and profit shares.
The Company assesses whether or not an estimate of its variable consideration is constrained and has determined that the constraint does not apply, since it is probable that a significant reversal in the amount of cumulative revenue will not occur in the future when the uncertainty associated with the variable consideration is subsequently resolved. The Company’s estimates for variable consideration are adjusted as required at each reporting period for specific known developments that may result in a change in the amount of total consideration it expects to receive.
Chargebacks
In the case an indirect customer purchases product from their preferred wholesaler instead of directly from the Company, and the contract price charged to the indirect customer is lower than the wholesaler pricing, the Company pays the direct customer (wholesaler) a chargeback for the price differential. The Company estimates its chargeback accrual based on its estimates of the level of inventory of its products in the distribution channel that remain subject to chargebacks, current contract terms and historical experience. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.
Rebates
The Company pays fixed or volume-based rebates to its customers based on a fixed amount, fixed percentage of product sales or based on the achievement of a specified level of purchases. The Company’s rebate accruals are based on actual net sales, contractual rebate rates negotiated with customers, and expected purchase volumes / corresponding tiers based on actual sales to date and forecasted amounts.
Group Purchasing Organization Fees
The Company pays fees to GPOs for administrative services that the GPOs perform in connection with the purchases of product by the GPO participants who are the Company’s customers. The Company’s GPO fee accruals are based on actual net sales, contractual fee rates negotiated with GPOs and the mix of the products in the distribution channel that remain subject to GPO fees.
Prompt Payment (Cash) Discounts
The Company provides customers with prompt payment discounts which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period. The Company’s prompt payment discount accruals are based on actual net sales and contractual discount rates.
F-20
Consideration Payable to the Customer
The Company pays administrative and service fees to its customers based on a fixed percentage of the product price. These fees are not in exchange for a distinct good or service and therefore are recognized as a reduction of the transaction price. The Company accrues for these fees based on actual net sales, contractual fee rates negotiated with the customer and the mix of the products in the distribution channel that remain subject to fees.
Billbacks
In the case an indirect customer purchases product from their preferred wholesaler instead of directly from the Company, and the contract price charged to the indirect customer is higher than contractual pricing, the Company pays the indirect customer a billback for the price differential. The Company estimates its billback accrual based on its estimates of the level of inventory of its products in the distribution channel that remain subject to billbacks, current contract terms and historical experience. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.
Medicaid and Other Government Pricing Programs
The Company complies with required rebates mandated by law under Medicaid and other government pricing programs. The Company estimates its government pricing accruals based on monthly sales, historical experience of claims submitted by the various states and jurisdictions, historical rates and estimated lag time of the rebate invoices.
Price Protection and Shelf Stock Adjustments
The Company provides customers with price protection and shelf stock adjustments which may result in an adjustment to the price charged for the product transferred, based on differences between old and new prices which may be applied to the customer’s on-hand inventory at the time of the price change. The Company accrues for these adjustments when its expected value of an adjustment is greater than zero, based on contractual pricing, actual net sales, accrual rates based on historical average rates, and estimates of the level of inventory of its products in the distribution channel that remain subject to these adjustments. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.
Sales Returns
The Company permits the return of product under certain circumstances, mainly due to product expiration, instances of shipping errors or where product is damaged in transit, and occurrences of product recalls. The Company’s product returns accrual is primarily based on estimates of future product returns based generally on actual net sales, estimates of the level of inventory of its products in the distribution and retail channels that remain subject to returns, estimated lag time of returns and historical return rates. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.
Profit Shares
For certain product sale arrangements, the Company earns a profit share upon the customer’s sell-through of the product purchased from the Company. The Company estimates its profit shares based on actual net sales by third parties, estimated inventory sold to our partners not yet sold by them, and historical rates of profit shares earned. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.
License Agreements
Refer to Note 4. Alliance and Collaboration for further information related to revenue recognition associated with a license agreement with multiple performance obligations.
F-21
Concentration of Revenue
The following table summarizes the percentages of net revenues from each of the Company's customers that individually accounted for 10% or more of its net revenues:
For the year ended December 31,
Disaggregated Revenue
The Company’s significant dosage forms within its Affordable Medicines segment, therapeutic classes within its Specialty segment, and sales channels within its AvKARE segment, each determined based on net revenue for the years ended December 31, 2025, 2024 and 2023 are presented below (in thousands):
Year ended December 31,
Affordable Medicines
Specialty
AvKARE
(1)Includes net revenue from sales of transmucosal, ophthalmic, topical, nasal and inhalation dosage forms.
(2)Refer to Note 4. Alliance and Collaboration for information on revenue recognized under license agreements.
F-22
A rollforward of the major categories of sales-related deductions for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):
4. Alliance and Collaboration
The Company has entered into several alliance, collaboration, license, distribution and similar agreements with respect to certain of its products and services with third-party pharmaceutical companies. The consolidated statements of operations include revenue recognized under agreements the Company has entered into to develop marketing and/or distribution relationships with its partners to fully leverage the technology platform and revenue recognized under development agreements which generally obligate the Company to provide R&D services over multiple periods.
The following table summarizes the activity in the Company’s consolidated statements of operations related to alliance and collaboration agreements for the years ended December 31, 2025, 2024 and 2023 (in thousands):
Years Ended December 31,
A. Orion Corporation Research and development (1) $ (2,836) $ (4,029) $ (899)
A. Orion Corporation Research and development (2) $ (1,271) $ (913) $ (463)
B. Zambon Biotech S.A. Net revenue (3) $ — $ 4,527 $ —
C. Knight Therapeutics International S.A. Net revenue (4) $ — $ 2,000 $ —
D. mAbxience S.L. Research and development (5) $ — $ 6,500 $ 5,000
E. Metsera, Inc. Net revenue (6) $ 2,539 $ 316 $ —
(1)Deferred income was recognized as a reduction to R&D expense as services were performed under the Orion Agreement (as defined below).
(2)Reimbursable R&D services performed under the Orion Agreement were recorded as a reduction to R&D expense.
(3)Delivery of a functional license (out-licensing revenue).
(4)Non-refundable license fee.
(5)Clinical, development, and regulatory milestones.
(6)Development activities performed on behalf of Metsera, Inc. on a cost plus margin basis were recorded as net revenue.
F-23
The following table summarizes the balances in the Company’s consolidated balance sheets related to alliance and collaboration agreements as of December 31, 2025 and 2024 (in thousands):
Party Caption in Balance Sheet December 31, 2025 December 31, 2024
A. Orion Corporation Accounts payable and accrued expenses (1) $ 4,811 $ 5,008
A. Orion Corporation Other long-term liabilities (1) $ 814 $ 3,453
B. Zambon Biotech S.A. Other long-term liabilities (1) $ 2,530 $ 2,530
D. mAbxience S.L. Accounts payable and accrued expenses (2) $ 7,500 $ —
E. Metsera, Inc. Prepaid expenses and other current assets (3) $ 321 $ 335
E. Metsera, Inc. Other long-term liabilities (4) $ 9,378 $ —
(1)Comprised of deferred income as of December 31, 2025 and 2024.
(2)Comprised of an accrued milestone as of December 31, 2025 for a Food and Drug Administration (“FDA”) approval.
(3)Comprised primarily of unbilled receivables for R&D services performed as of December 31, 2025 and 2024.
(4)Comprised of construction costs contributed, as defined in the Company’s collaboration agreement with Metsera, Inc. The Company concluded the funding received from Metsera shall be allocated between two performance obligations: (i) a financing obligation in accordance with ASC 470, Debt and (ii) a contract obligation for future manufacturing services. For the year ended December 31, 2025, the Company recorded $6.4 million as a cash inflow from financing activities for the financing obligation and $3.0 million as a cash inflow from operating activities for the contract obligation.
Alliance and Collaboration Agreement Descriptions
A. Orion Corporation License Agreement
On December 28, 2022, Amneal signed a long-term license agreement with Orion Corporation (“Orion”), a globally operating Finnish pharmaceutical company, to commercialize a number of our complex generic products in most parts of Europe, Australia and New Zealand (the “Orion Agreement”). The initial term of the Orion Agreement commences upon commercial launch of the products and will continue for eight years. The Orion Agreement will automatically renew for successive two-year terms unless either party declines such renewal in writing at least one year in advance.
Under the terms of the Orion Agreement, Amneal granted Orion licenses to certain generic products commercially available in the U.S. today and select high-value pipeline products currently under development. In addition, Amneal will be responsible for the performance of all R&D activities to be conducted to obtain regulatory approval for each product. Amneal is entitled to be reimbursed for a percentage of mutually agreed upon R&D expenses from Orion. Orion will be responsible for preparing and filing regulatory documentation, along with paying any application fees seeking regulatory approval for the products.