Alkermes amends term loan credit agreement, cutting interest spreads

Alkermes plc entered into Amendment No. 1 to its Credit Agreement on August 12, 2026, according to a Form 8-K filed the same day. The original Credit Agreement is dated February 12, 2026. JPMorgan Chase Bank, N.A. is administrative agent and a joint lead arranger and joint bookrunner. BofA Securities, Inc. is also a joint lead arranger and joint bookrunner. The filing does not name the other lenders party to the agreement. The borrowers are Alkermes plc as TopCo Borrower, Alkermes, Inc. as U.S. Borrower and Alkermes Finance LLC as U.S. Co-Borrower.

The credit agreement provides a senior secured term loan A with $745,312,500.00 of principal outstanding, maturing February 12, 2031. It also provides a senior secured term loan B with $773,062,500 outstanding, maturing August 12, 2031. The filing describes no new borrowing.

The amended spreads

The amendment cuts the interest rate spread by 0.75% on term loan A and by 0.50% on term loan B, "among other changes" the filing says without listing them. The full amendment is filed as Exhibit 10.1 to the 8-K.

After the amendment, term loan A bears interest at Term SOFR plus a margin of 1.75% to 2.25% per annum, or at the Alternate Base Rate plus a margin of 0.75% to 1.25%. The margin depends on the secured net leverage ratio. Term loan B bears interest at Term SOFR plus 2.25% per annum, or at the Alternate Base Rate plus 1.25%. The filing does not say what prompted the change or whether the company paid a fee for it.

The Avadel deal and the business

The original credit agreement is dated February 12, 2026, the day Alkermes completed its acquisition of Avadel Pharmaceuticals plc, according to the 10-K. Avadel holders received $21.00 per ordinary share in cash at closing, plus a non-transferable contingent value right to a potential additional cash payment of $1.50 per share on a specified milestone. The 8-K does not say how the term loans were used.

The 10-K describes Alkermes as a global biopharmaceutical company focused on neuroscience, with commercial products for alcohol dependence, opioid dependence, schizophrenia, bipolar I disorder and narcolepsy. Its proprietary products include ARISTADA, approved in the U.S. for schizophrenia, and LUMRYZ (sodium oxybate), which the FDA approved in May 2023 for narcolepsy and in October 2024 for pediatric patients aged seven and older. The 10-K says Jazz receives a royalty of 3.85% on net sales of LUMRYZ for narcolepsy under a settlement between Jazz and Avadel. It gives orphan drug exclusivity for LUMRYZ through May 1, 2030 for adults and October 16, 2031 for pediatric patients. That royalty means Jazz takes a share of LUMRYZ's net sales.

Financial position

Revenue was $1.48 billion in 2025, down from $1.56 billion in 2024. Research and development expense rose to $324.0 million from $245.3 million. Net income fell to $241.7 million in 2025 from $367.1 million in 2024. Cash provided by operations rose to $520.8 million from $439.1 million.

Year-end cash and cash equivalents were $388.6 million for 2025, according to a 10-Q filed July 28, 2026, and $291.1 million for 2024. Short-term investments were $199.6 million at the end of 2025, against $460.5 million a year earlier. At June 30, 2026, cash and cash equivalents were $511.5 million and short-term investments were $145.0 million.

The lower spreads reduce the cost of the secured loans, but they come as net income fell and short-term investments went from $460.5 million at the end of 2024 to $199.6 million at the end of 2025. Against $511.5 million of cash at June 30, 2026, the term loans show principal of $745,312,500.00 and $773,062,500.

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