Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | 16. INCOME TAXES The Company recognizes income taxes under the asset and liability method. Deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In determining future taxable income, the Company is responsible for assumptions that it utilizes, including the amount of Irish and non-Irish pre-tax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that the Company uses to manage the underlying business. As of September 30, 2026, the Company has recognized $120.8 million of deferred tax assets and, based on all available evidence related to the likelihood of realization of the existing and acquired tax attributes and the weight of the available evidence, believes it is more-likely-than-not that these deferred tax assets will be realized. For a discussion about the deferred tax assets and liabilities acquired in connection with the Avadel Acquisition, see Note 3, Business Combination in these “Notes to Condensed Consolidated Financial Statements”. The Company recorded an income tax benefit of $1.6 million and an income tax provision of $0.6 million during the three and nine months ended September 30, 2026, respectively, and tax provisions of $18.0 million and $38.8 million during the three and nine months ended September 30, 2025, respectively. The income tax benefit in the three months ended September 30, 2026 primarily relates to employee equity activity. The income tax provision during the nine months ended September 30, 2026 was primarily attributable to taxes on income earned in the U.S. The income tax provisions during the three and nine months ended September 30, 2025 were primarily attributable to taxes on income earned in Ireland. The Company’s effective tax rates during the nine months ended September 30, 2026 and 2025 were (1.3)% and 16.8%, respectively. The negative effective tax rate during the nine months ended September 30, 2026 was due to taxes on income (including non-deductible expenses) earned in the U.S., and an overall loss before income taxes. The effective tax rate during the nine months ended September 30, 2025 exceeded the Irish statutory tax rate of 12.5%, primarily due to non-deductible expenses and income that was taxable at rates higher than the Irish statutory tax rate. In March 2026, the Company was notified by the U.S. Internal Revenue Service (“IRS”) that Alkermes US Holdings, Inc. (“Alkermes US Holdings”), a wholly-owned subsidiary of the Company, and subsidiaries of Alkermes US Holdings had been selected for examination for the year ended December 31, 2023. The Company is cooperating with the IRS by responding to inquiries and providing requested documentation. As of the date of this report, no adjustments have been proposed by the IRS as a result of this examination. |