Alkermes plc. Income Taxes Disclosure

17. INCOME TAXES

The income tax provisions in 2025 and 2024 were primarily due to taxes on income earned in Ireland. The income tax benefit in 2023 was primarily due to the partial release of the valuation allowance maintained against certain Irish deferred tax assets, partially offset by taxes on income earned in the U.S. and Ireland.

In December 2022, the EU implemented a new corporate minimum tax rate of 15% on companies with consolidated annual revenue of at least €750.0 million, which was transposed into Irish law effective as of January 1, 2024. The Company has determined that this new minimum tax had no material impact for the years ended December 31, 2025 and 2024.

The income tax benefit associated with the Company’s former oncology business, and the tax impact of the Separation, are discussed in further detail in Note 15, Discontinued Operations, in these “Notes to Consolidated Financial Statements” in this Annual Report. The tax benefits included within discontinued operations were $0.7 million, and $1.4 million for the years ended December 31, 2024, and 2023, respectively.

No provision for income tax has been provided on undistributed earnings of the Company’s foreign subsidiaries because such earnings are indefinitely reinvested in the foreign operations. Cumulative unremitted earnings of U.S. subsidiaries totaled approximately $965.7 million at December 31, 2025. In the event of a repatriation of those earnings in the form of dividends or otherwise, the Company may be liable for income taxes, subject to adjustment, if any, for foreign tax credits and foreign withholding taxes payable to foreign tax authorities. The Company estimates that approximately $70.0 million of income taxes would be payable on the repatriation of the unremitted earnings to Ireland.

The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making such assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized. At December 31, 2025, the Company maintained a valuation allowance of $30.5 million against certain U.S. state deferred tax assets and $52.8 million against certain Irish deferred tax assets, as the Company has determined that it is more-likely-than-not that these deferred tax assets will not be realized and some may be abandoned.

If the Company incurs losses in the U.S. or in Ireland in the future, or fails to achieve sufficient profitability in a timely manner, the evaluation of the recoverability of the deferred tax assets could change and a valuation allowance against such deferred tax assets may be required in part or in whole. The Company will continue to monitor the need for a valuation allowance against its deferred tax assets on a quarterly basis.

As of December 31, 2025, the Company had $210.2 million of Irish NOL carryforwards, $13.6 million of U.S. federal NOL carryforwards, $43.2 million of state NOL carryforwards and $35.2 million of state tax credits which will either expire on various dates through 2040 or can be carried forward indefinitely. These loss and credit carryforwards are available to reduce certain future Irish and foreign taxable income and tax. These loss and credit carryforwards are subject to review and possible adjustment by the appropriate taxing authorities and may be subject to limitations based upon changes in the ownership of the Company’s ordinary shares. Included within these loss and credit carryforwards are $13.6 million of U.S. federal NOL carryforwards and $5.3 million of state NOL carryforwards, acquired as part of the acquisition of Rodin Therapeutics, Inc. in November 2019, each of which are subject to a $0.5 million annual limitation.

The unrecognized tax benefits at December 31, 2025, if recognized, would affect the Company’s effective tax rate. The Company has elected to include interest and penalties related to uncertain tax positions as a component of its provision for taxes. For the years ended December 31, 2025, 2024 and 2023, the Company’s accrued interest and penalties related to uncertain tax positions were $1.0 million, $0.1 million and $0.3 million, respectively.

The Company’s major taxing jurisdictions include Ireland and the U.S. (federal and state). These jurisdictions have varying statutes of limitations. In the U.S., the 2022 through 2025 fiscal years remain subject to examination by the respective tax authorities, however, some states have longer statutes of limitations and additional fiscal years remain subject to examination. In Ireland, the 2021 through 2025 fiscal years remain subject to examination by the Irish tax authorities. Additionally, because of the Company’s Irish and U.S. loss carryforwards and credit carryforwards, certain tax returns from fiscal years 2002 onward may also be examined. These years generally remain open for three to four years after the loss carryforwards and credit carryforwards have been utilized.

For the years ended December 31, 2025, 2024, and 2023, the Company paid cash for income taxes, net of refunds received, of $5.2 million, $2.6 million, and $44.2 million, respectively.

A reconciliation of the Company’s cash paid for income taxes, net of refunds received, is as follows: