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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                        to                       
Commission file number 001-38485
Amneal Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
Delaware
93-4225266
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
Amneal Pharmaceuticals, Inc.
400 Crossing Boulevard, Bridgewater, NJ
08807
(Address of principal executive offices)(Zip Code)
(908) 947-3120
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01 per shareAMRX
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No
As of April 30, 2024, there were 308,651,373 shares of the registrant’s Class A common stock outstanding, with a par value of $0.01.



Amneal Pharmaceuticals, Inc.
Table of Contents
1


Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q and other publicly available documents of Amneal Pharmaceuticals, Inc. contain “forward-looking statements” within the meaning of the safe harbor provisions of the United States (“U.S.”) Private Securities Litigation Reform Act of 1995. Management and representatives of Amneal Pharmaceuticals, Inc. and its subsidiaries (“the Company”, “we”, “us”, or “our”) also may from time to time make forward-looking statements. Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans, objectives and projections about the future. Forward-looking statements may be identified by the use of words such as “plans,” “expects,” “will,” “anticipates,” “targets,” “estimates,” and other words of similar meaning in conjunction with, among other things: discussions of future operations; expected operating results and financial performance; impact of planned acquisitions and dispositions; our strategy for growth; product development; regulatory approvals; market position and expenditures.

Because forward-looking statements are based on current beliefs, expectations and assumptions regarding future events, they are subject to uncertainties, risks and changes that are difficult to predict and many of which are outside of our control. Investors should realize that if underlying assumptions prove inaccurate, known or unknown risks or uncertainties materialize, or other factors or circumstances change, our actual results and financial condition could vary materially from expectations and projections expressed or implied in our forward-looking statements. Investors are therefore cautioned not to rely on these forward-looking statements.


Summary of Material Risks

Risks and uncertainties that make an investment in the Company speculative or risky or that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to:

our ability to successfully develop, license, acquire and commercialize new products on a timely basis;
the competition we face in the pharmaceutical industry from brand and generic drug product companies, and the impact of that competition on our ability to set prices;
our ability to obtain exclusive marketing rights for our products;
our revenues derived from the sales of a limited number of products, a substantial portion of which are through a limited number of customers;
the impact of a prolonged business interruption within our supply chain;
the continuing trend of consolidation of certain customer groups;
our dependence on third-party suppliers and distributors for raw materials for our products and certain finished goods;
legal, regulatory and legislative efforts by our brand competitors to deter competition from our generic alternatives;
our dependence on information technology systems and infrastructure and the potential for cybersecurity incidents;
our ability to attract, hire and retain highly skilled personnel;
risks related to federal regulation of arrangements between manufacturers of branded and generic products;
our reliance on certain licenses to proprietary technologies from time to time;
the significant amount of resources we expend on research and development (“R&D”);
the risk of claims brought against us by third parties such as those described in Note 17. Commitments and Contingencies - Other Litigation Related to the Company’s Business;
risks related to changes in the regulatory environment, including U.S. federal and state laws related to healthcare fraud abuse and health information privacy and security and changes in such laws;
changes to Food and Drug Administration (“FDA”) product approval requirements;
the impact of healthcare reform and changes in coverage and reimbursement levels by governmental authorities and other third-party payers;
our dependence on third-party agreements for a portion of our product offerings;
our substantial amount of indebtedness and our ability to generate sufficient cash to service our indebtedness in the future, and the impact of interest rate fluctuations on such indebtedness;
our potential expansion into additional international markets subjecting us to increased regulatory, economic, social and political uncertainties;
our ability to identify, make and integrate acquisitions or investments in complementary businesses and products on advantageous terms;
the impact of global economic, political or other catastrophic events;
our obligations under a tax receivable agreement may be significant;
the high concentration of ownership of our Class A common stock and the fact that we are controlled by the Amneal Group (as defined in Item 1. Business in the Company’s 2023 Annual Report on Form 10-K); and
2


such other factors as may be set forth elsewhere in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, particularly in the section entitled 1A. Risk Factors and our public filings with the SEC.
Investors should carefully read our Annual Report on Form 10-K for the year ended December 31, 2023, including the section 1A. Risk Factors, for a description of certain risks that could, among other things, cause our actual results to differ materially from those expressed in our forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described herein and in our Annual Report to be a complete statement of all potential risks and uncertainties. The Company does not undertake to publicly update any forward-looking statement that may be made from time to time, whether as a result of new information or future events or developments.
3


PART I - FINANCIAL INFORMATION
Item 1.    Financial Statements (Unaudited)
Amneal Pharmaceuticals, Inc.
Consolidated Statements of Operations
(unaudited; in thousands, except per share amounts)


Three Months Ended March 31,
20242023
Net revenue$659,191 $557,540 
Cost of goods sold421,131 379,354 
Gross profit238,060 178,186 
Selling, general and administrative112,595 102,096 
Research and development39,298 38,690 
Intellectual property legal development expenses984 1,644 
Restructuring and other charges1,470 510 
Change in fair value of contingent consideration100 2,457 
Charges (credit) related to legal matters, net94,359 (436)
Other operating income (1,224)
Operating (loss) income(10,746)34,449 
Other (expense) income:
Interest expense, net(65,703)(49,315)
Foreign exchange (loss) gain, net(1,197)1,901 
Increase in tax receivable agreement liability(1,948)(826)
Other income, net4,072 4,365 
Total other expense, net(64,776)(43,875)
Loss before income taxes(75,522)(9,426)
Provision for income taxes6,156 668 
Net loss(81,678)(10,094)
Less: Net (income) loss attributable to non-controlling interests(9,965)3,151 
Net loss attributable to Amneal Pharmaceuticals, Inc.
$(91,643)$(6,943)
Net loss per share attributable to Amneal Pharmaceuticals, Inc.'s Class A common stockholders:
   Basic and diluted
$(0.30)$(0.05)
Weighted-average common shares outstanding:
   Basic and diluted
307,279 152,109 







The accompanying notes are an integral part of these consolidated financial statements.
4


Amneal Pharmaceuticals, Inc.
Consolidated Statements of Comprehensive Loss
(unaudited; in thousands)



Three Months Ended March 31,
20242023
Net loss$(81,678)$(10,094)
Less: Net (income) loss attributable to non-controlling interests(9,965)3,151 
Net loss attributable to Amneal Pharmaceuticals, Inc.(91,643)(6,943)
Other comprehensive (loss) income:
Foreign currency translation adjustments arising during the period(390)1,797 
Unrealized gain (loss) on cash flow hedge, net of tax of $0
15,543 (14,270)
Reclassification of cash flow hedge to earnings, net of tax of $0
(6,515) 
Less: Other comprehensive loss attributable to non-controlling interests 6,236 
Other comprehensive income (loss) attributable to Amneal Pharmaceuticals, Inc.8,638 (6,237)
Comprehensive loss attributable to Amneal Pharmaceuticals, Inc.$(83,005)$(13,180)



















The accompanying notes are an integral part of these consolidated financial statements.
5


Amneal Pharmaceuticals, Inc.
Consolidated Balance Sheets
(unaudited; in thousands, except per share amounts)
March 31, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$46,520 $91,542 
Restricted cash5,097 7,565 
Trade accounts receivable, net668,955 613,732 
Inventories570,653 581,384 
Prepaid expenses and other current assets87,298 82,685 
Related party receivables1,521 955 
Total current assets1,380,044 1,377,863 
Property, plant and equipment, net439,815 447,574 
Goodwill598,549 598,629 
Intangible assets, net859,272 890,423 
Operating lease right-of-use assets32,970 30,329 
Operating lease right-of-use assets - related party12,468 12,954 
Financing lease right-of-use assets59,532 59,280 
Other assets73,747 55,517 
Total assets$3,456,397 $3,472,569 
Liabilities and Stockholders' (Deficiency) Equity
Current liabilities:
Accounts payable and accrued expenses$558,518 $534,662 
Current portion of liabilities for legal matters30,130 76,988 
Revolving credit facility179,000 179,000 
Current portion of long-term debt, net33,660 34,125 
Current portion of operating lease liabilities9,508 9,207 
Current portion of operating lease liabilities - related party3,192 2,825 
Current portion of financing lease liabilities3,305 2,467 
Related party payables - short term17,075 7,321 
Total current liabilities834,388 846,595 
Long-term debt, net2,377,707 2,386,004 
Note payable - related party41,893 41,447 
Operating lease liabilities26,786 24,095 
Operating lease liabilities - related party11,969 12,787 
Financing lease liabilities58,809 58,566 
Related party payables - long term11,394 11,776 
Liabilities for legal matters - long term85,479 316 
Other long-term liabilities24,579 29,679 
Total long-term liabilities2,638,616 2,564,670 
Commitments and contingencies (Notes 4 and 17)
Redeemable non-controlling interests47,022 41,293 
Stockholders' (Deficiency) Equity
Preferred stock, $0.01 par value, 2,000 shares authorized at both March 31, 2024 and December 31, 2023; none issued at both March 31, 2024 and December 31, 2023
  
Class A common stock, $0.01 par value, 900,000 shares authorized at both March 31, 2024 and December 31, 2023; 308,623 and 306,565 shares issued at March 31, 2024 and December 31, 2023, respectively
3,086 3,066 
Class B common stock, $0.01 par value, 300,000 shares authorized at both March 31, 2024 and December 31, 2023; none issued at both March 31, 2024 and December 31, 2023
  
Additional paid-in capital538,720 539,240 
Stockholders' accumulated deficit(581,819)(490,176)
Accumulated other comprehensive loss(23,711)(32,349)
Total Amneal Pharmaceuticals, Inc. stockholders' (deficiency) equity(63,724)19,781 
Non-controlling interests95 230 
Total stockholders' (deficiency) equity(63,629)20,011 
Total liabilities and stockholders' (deficiency) equity$3,456,397 $3,472,569 
The accompanying notes are an integral part of these consolidated financial statements.
6


Amneal Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows
(unaudited; in thousands)
Three Months Ended March 31,
20242023
Cash flows from operating activities:
Net loss$(81,678)$(10,094)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization55,528 58,150 
Unrealized foreign currency loss (gain)1,511 (1,987)
Amortization of debt issuance costs and discount288 2,058 
Intangible asset impairment charges920  
Change in fair value of contingent consideration100 2,457 
Stock-based compensation6,722 7,596 
Inventory provision22,923 25,204 
Other operating charges and credits, net1,250 2,047 
Changes in assets and liabilities:
Trade accounts receivable, net(55,173)195,970 
Inventories(12,200)(22,508)
Prepaid expenses, other current assets and other assets(11,708)29,160 
Related party receivables(562)470 
Accounts payable, accrued expenses and other liabilities62,174 (150,483)
Related party payables5,495 1,672 
Net cash (used in) provided by operating activities(4,410)139,712 
Cash flows from investing activities:
Purchases of property, plant and equipment(9,198)(9,688)
Acquisition of intangible assets(9,700)(338)
Deposits for future acquisition of property, plant and equipment(862)(1,711)
Net cash used in investing activities(19,760)(11,737)
Cash flows from financing activities:
Payments of principal on debt, revolving credit facilities, financing leases and other(63,377)(72,659)
Borrowings on revolving credit facilities48,000 80,000 
Proceeds from exercise of stock options28  
Employee payroll tax withholding on restricted stock unit vesting(7,212)(2,022)
Tax distributions to non-controlling interests(594)(18,219)
Net cash used in financing activities(23,155)(12,900)
Effect of foreign exchange rate on cash(165)767 
Net (decrease) increase in cash, cash equivalents, and restricted cash(47,490)115,842 
Cash, cash equivalents, and restricted cash - beginning of period99,107 35,227 
Cash, cash equivalents, and restricted cash - end of period$51,617 $151,069 
Cash and cash equivalents - end of period$46,520 $144,674 
Restricted cash - end of period5,097 6,395 
Cash, cash equivalents, and restricted cash - end of period$51,617 $151,069 














The accompanying notes are an integral part of these consolidated financial statements.
7


Amneal Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows (continued)
(unaudited; in thousands)

Three Months Ended March 31,
20242023
Supplemental disclosure of cash flow information:
Cash paid for interest$64,514 $41,066 
Cash (paid) received, net for income taxes$(4,567)$3,421 
Supplemental disclosure of non-cash investing and financing activity:
Tax distributions to non-controlling interests$3,777 $11,548 
















































The accompanying notes are an integral part of these consolidated financial statements.
8


Amneal Pharmaceuticals, Inc.
Consolidated Statements of Changes in Stockholders’ Equity (Deficiency)
(unaudited; in thousands)

New PubCo
Class A Common StockAdditional
Paid-in Capital
Stockholders'
Accumulated Deficit
Accumulated
Other
Comprehensive Loss
Non-
Controlling Interests
Total Equity (Deficiency)Redeemable Non-Controlling Interests
SharesAmount
Balance at December 31, 2023306,565 $3,066 $539,240 $(490,176)$(32,349)$230 $20,011 $41,293 
Net (loss) income— — — (91,643)— (135)(91,778)10,100 
Foreign currency translation adjustments— — — — (390)— (390)— 
Stock-based compensation— — 6,722 — — — 6,722 — 
Exercise of stock options10 — 28 — — — 28 — 
Restricted stock unit vesting, net of shares withheld to cover payroll taxes2,048 20 (7,270)— — — (7,250)— 
Unrealized gain on cash flow hedge, net of tax of $0
— — — — 15,543 — 15,543 — 
Tax distributions, net— — — — — — — (4,371)
Reclassification of cash flow hedge to earnings, net of tax of $0
— — — — (6,515)— (6,515)— 
Balance at March 31, 2024308,623 $3,086 $538,720 $(581,819)$(23,711)$95 $(63,629)$47,022 


Old PubCo
Class A Common
Stock
Class B Common
Stock
Additional
Paid-in Capital
Stockholders'
Accumulated Deficit
Accumulated
Other
Comprehensive Income
Non-
Controlling Interests
Total EquityRedeemable Non-Controlling Interests
SharesAmountSharesAmount
Balance at December 31, 2022151,490 $1,514 152,117 $1,522 $691,629 $(406,183)$9,939 $(114,442)$183,979 $24,949 
Net (loss) income— — — — — (6,943)— (8,688)(15,631)5,537 
Foreign currency translation adjustments— — — — — — 898 899 1,797 — 
Stock-based compensation— — — — 7,596 — — — 7,596 — 
Restricted stock unit vesting, net of shares withheld to cover payroll taxes1,831 18 — — 1,497 — 62 (3,572)(1,995)— 
Unrealized loss on cash flow hedge, net of tax of $0
— — — — — — (7,135)(7,135)(14,270)— 
Tax distributions— — — — — — — (26,808)(26,808)(2,959)
Balance at March 31, 2023153,321 $1,532 152,117 $1,522 $700,722 $(413,126)$3,764 $(159,746)$134,668 $27,527 





















The accompanying notes are an integral part of these consolidated financial statements.
9


Amneal Pharmaceuticals, Inc.
Notes to Consolidated Financial Statements
(unaudited)
1. Nature of Operations
Amneal Pharmaceuticals, Inc. (the “Company”) is a global pharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines, including retail generics, injectables, and biosimilars in our Generics segment and specialty branded pharmaceuticals. The Company operates principally in the United States (“U.S.”), India, and Ireland, and sells to wholesalers, distributors, hospitals, governmental agencies, chain pharmacies and individual pharmacies, either directly or indirectly. The Company is a holding company whose principal assets are 100% of the common units of Amneal Pharmaceuticals, LLC (“Amneal”).
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), should be read in conjunction with the Company’s annual audited financial statements for the year ended December 31, 2023 included in the Company’s 2023 Annual Report on Form 10-K. Certain information and footnote disclosures normally included in annual financial statements have been omitted from the accompanying unaudited consolidated financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company’s financial position as of March 31, 2024, cash flows for the three months ended March 31, 2024 and 2023 and the results of its operations, its comprehensive loss and its changes in stockholders’ equity (deficiency) for the three months ended March 31, 2024 and 2023. The consolidated balance sheet data at December 31, 2023 was derived from the Company’s audited annual financial statements, but does not include all disclosures required by U.S. GAAP.
Except for the updates included in this note, the accounting policies of the Company are set forth in Note 2. Summary of Significant Accounting Policies contained in the Company’s 2023 Annual Report on Form 10-K.
Use of Estimates
The preparation of financial statements 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, 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, 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.
Reclassification
The prior period balance related to the TRA (as defined in Note 5. Income Taxes) of $0.8 million, formerly included in other income, net for the three months ended March 31, 2023, has been reclassified to the income statement caption “increase in tax receivable agreement liability” to conform to the current period presentation in the consolidated statements of operations. This reclassification did not impact total other expense, net or net loss.
The prior period balance related to long-term liabilities for legal matters of $0.3 million, formerly included in other long-term liabilities as of December 31, 2023, has been reclassified to the balance sheet caption “liabilities for legal matters - long term” to conform to the current period presentation in the consolidated balance sheets. This reclassification did not impact total long-term liabilities or total liabilities.
10


Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which provides improvements to reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 requires disclosures to include the title and position of the chief operating decision maker (“CODM”), significant segment expenses that are regularly provided to the CODM, a description of other segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how to allocate resources. ASU 2023-07 also requires all annual disclosures currently required by Topic 280 to be included in interim periods. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted and requires retrospective application to 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 December 2023, the FASB issued 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. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.
3. Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when the Company transfers control of its products to the customer, which typically occurs at a point-in-time, either 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.
License Agreements
Refer to Note 4. Alliance and Collaboration for further information related to revenue recognition associated with license agreements.
Concentration of Revenue
The following table summarizes revenues from each of the Company’s customers which individually accounted for 10% or more of its total net revenue:
Three Months Ended March 31,
20242023
Customer A21 %22 %
Customer B15 %14 %
Customer C23 %20 %
Customer D10 %9 %
11


Disaggregated Revenue
The Company’s significant therapeutic classes for its Generics and Specialty segments and sales channels for its AvKARE segment, as determined based on net revenue for the three months ended March 31, 2024 and 2023, are set forth below (in thousands):
Three Months Ended March 31,
20242023
Generics
Anti-infective$6,110 $5,174 
Hormonal / allergy107,714 104,851 
Antiviral3,866 25,474 
Central nervous system109,456 84,582 
Cardiovascular system45,878 32,503 
Gastroenterology18,197 14,364 
Oncology38,533 10,578 
Metabolic disease / endocrine
11,185 9,265 
Respiratory11,136 12,815 
Dermatology18,975 18,004 
Other therapeutic classes18,523 25,895 
International and other1,721 301 
Total Generics net revenue391,294 343,806 
Specialty
Hormonal / allergy29,375 24,763 
Central nervous system66,276 60,139 
License agreement (1)
4,479  
Other therapeutic classes5,104 6,776 
Total Specialty net revenue105,234 91,678 
AvKARE
Distribution109,713 83,230 
Government label34,952 24,516 
Institutional10,858 8,862 
Other7,140 5,448 
Total AvKARE net revenue162,663 122,056 
Total net revenue$659,191 $557,540 
(1)Refer to Note 4. Alliance and Collaboration for information on revenue recognized under a license agreement.
A rollforward of the major categories of sales-related deductions for the three months ended March 31, 2024 is as follows (in thousands):
Contract
Charge - Backs
and Sales
Volume
Allowances
Cash Discount
Allowances
Accrued
Returns
Allowance
Accrued
Medicaid and
Commercial
Rebates
Balance at December 31, 2023$559,334 $23,892 $136,486 $90,690 
Provision related to sales recorded in the period885,322 30,073 16,220 61,271 
Credits/payments issued during the period(987,202)(26,550)(15,598)(55,250)
Balance at March 31, 2024$457,454 $27,415 $137,108 $96,711 
12


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 Company’s significant arrangements are discussed below.
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 its 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.
During both the three months ended March 31, 2024 and 2023, the Company recognized $0.6 million as a reduction to R&D expense related to services performed under the Orion Agreement. As of March 31, 2024, deferred income of $10.7 million and $1.2 million was recorded in accounts payable and accrued expenses and other long-term liabilities, respectively. As of December 31, 2023, deferred income of $7.8 million and $4.7 million was recorded in accounts payable and accrued expenses and other long-term liabilities, respectively. As of March 31, 2024, no products have been supplied by Amneal under the Orion Agreement. Refer to Note 5. Alliance and Collaboration in our 2023 Annual Report on Form 10-K for additional information.
ONGENTYS® License Agreement
On December 5, 2023, the Company entered into a license agreement with BIAL-Portela & Ca., S.A. (“BIAL”) for the exclusive royalty-free right to market and distribute ONGENTYS® (opicapone) in the U.S. starting on December 18, 2023 and ending at such time when generic opicapone sales reach certain predetermined thresholds (the “BIAL License Agreement”). ONGENTYS® is BIAL’s proprietary, once-daily, peripherally-acting, highly-selective catechol-O-methyltransferase inhibitor approved by the FDA in 2020 as an add-on treatment to carbidopa/levodopa in patients with Parkinson’s disease experiencing “Off” episodes. Under the BIAL Agreement, the Company is responsible for commercialization and marketing of ONGENTYS® in the U.S. and BIAL is responsible for manufacturing and supply. The BIAL Agreement also requires the Company to spend a minimum of $6.0 million in medical and marketing activities directly related to ONGENTYS®. The Company commenced distribution of ONGENTYS® during the three months ended March 31, 2024.
During December 2023, the Company paid a nonrefundable license fee of $12.5 million to BIAL, which was capitalized as an intangible asset and will be amortized to cost of sales over a period of eight years. The BIAL License Agreement provides for potential future milestone payments totaling $22.5 million, depending on cumulative net sales of ONGENTYS®.
Knight Therapeutics International S.A. License Agreement
On January 24, 2024, the Company entered into a 15-year license, distribution and supply agreement with Knight Therapeutics International S.A. (“Knight”) granting Knight the exclusive rights to seek regulatory approval and commercialize IPX203 in Canada and Latin America (the “Knight License Agreement”). The Knight License Agreement will automatically renew for successive two-year periods unless either party provides notice declining such renewal at least one year in advance of any such renewal.
Knight will be responsible for the performance of all R&D activities, regulatory approval, commercialization, and marketing activities for the territories in the agreement to be conducted to obtain regulatory approval for each product. Upon achieving regulatory approval for products, Amneal will be responsible for manufacturing and supplying products to Knight.
On February 26, 2024, the Company received a nonrefundable license fee of $1.0 million from Knight, which was recorded as net revenue for the three months ended March 31, 2024. The Knight License Agreement provides for potential future milestone payments totaling $10.5 million, contingent upon regulatory approval, launch dates and cumulative net sales targets by Knight. The agreement also includes low-double digit royalty payments based on net sales of IPX203.
13


License Agreement with Zambon Biotech
On February 23, 2024, the Company entered into a license, distribution and supply agreement with Zambon Biotech S.A. (“Zambon”) granting Zambon the exclusive rights to seek regulatory approval and commercialize IPX203 in Europe (the “Zambon License Agreement”). The term for the Zambon License Agreement is 15 years commencing from the commercial launch of the product, which can automatically renew for successive two-year periods unless either party provides notice declining such renewal at least one year in advance of any such renewal. Zambon will be responsible for the performance of all R&D activities, regulatory approval, commercialization, and marketing activities for the territories in the agreement to be conducted to obtain regulatory approval for each product. Upon achieving regulatory approval for products, Amneal will be responsible for manufacturing and supplying products to Zambon.
In connection with the execution of the agreement, the Company was entitled to a non-refundable license fee of €5.0 million, or $5.4 million, which was received in April 2024. Of the license fee, the Company allocated €3.2 million, or $3.5 million, to the delivery of a functional license, which was recorded as net revenue during the three months ended March 31, 2024. In addition, the Company is eligible to receive future milestone payments totaling €71.5 million, or $77.2 million, from Zambon, contingent upon regulatory approval of the product, and achievement of certain annual net sales targets by Zambon. The Zambon License Agreement also includes single-digit to low-double digit royalty payments based on net sales of IPX203.
Biosimilar Licensing and Supply Agreement
Bevacizumab
On May 7, 2018, the Company entered into a licensing and supply agreement with mAbxience S.L. (“mAbxience”), for its biosimilar candidate for Avastin® (bevacizumab). The supply agreement was subsequently amended on March 2, 2021 and the licensing agreement was amended on March 4, 2021. Pursuant to the agreement, the Company will be the exclusive partner in the U.S. market and pay up-front, development and regulatory milestone payments as well as commercial milestone payments on reaching pre-agreed sales targets in the market to mAbxience, up to $78.3 million.
On April 13, 2022, the FDA approved the Company’s biologics license application for bevacizumab-maly, a biosimilar referencing Avastin®. In connection with this regulatory approval and associated activity, the Company paid milestones of $26.5 million during the year ended December 31, 2022, which were capitalized as product rights intangible assets and are being amortized to cost of sales over their estimated useful lives of seven years. During the three months ended March 31, 2024, the Company paid a sales-based milestone of $9.5 million, which was capitalized as a product rights intangible asset and is being amortized to cost of sales.
Denosumab
On October 12, 2023, the Company entered into a licensing and supply agreement with mAbxience to be the exclusive U.S. partner for two denosumab biosimilars referencing both Prolia® and XGEVA®. Denosumab is a monoclonal antibody drug that inhibits bone reabsorption. It is indicated for two major categories of therapy: bone metastasis from various forms of cancer and prevention of bone pain and fractures, including osteoporosis-related injuries. mAbxience is responsible for the clinical and regulatory approval for the two products and regulatory fees will be shared by the parties. Upon approval of each product, mAbxience will be responsible for supply and the Company will be responsible for commercialization.
During the year ended December 31, 2023, the Company recorded R&D expense for a $2.5 million payment made upon execution of the agreement and an additional $2.5 million for a developmental milestone. During the three months ended March 31, 2024, the Company recorded R&D expense for a $3.0 million payment made for a clinical milestone. The agreement provides for potential future milestone payments to mAbxience of up to $66.0 million as follows: (i) up to $3.5 million relating to clinical and developmental milestones; (ii) up to $15.0 million for regulatory approval and initial commercial launch milestones; and (iii) up to $47.5 million for the achievement of annual commercial milestones.
Agreements with Kashiv Biosciences, LLC
For details on the Company’s related party agreements with Kashiv Biosciences, LLC (“Kashiv”), refer to Note 19. Related Party Transactions in this Form 10-Q and Note 24. Related Party Transactions in the Company’s 2023 Annual Report on Form 10-K.
14


5. Income Taxes
For the three months ended March 31, 2024, the Company’s provision for income taxes and effective tax rate were $6.2 million and (8.2)%, respectively, as compared to $0.7 million and (7.1)%, respectively, for the three months ended March 31, 2023. For the three months ended March 31, 2024, the period-over-period change in the provision for income taxes was primarily related to changes in the jurisdictional mix of income.
The Company recorded deferred tax assets for (i) its outside basis difference in its investment in Amneal on May 4, 2018, (ii) the net operating loss of Impax Laboratories, Inc., which was acquired by the Company in 2018, from January 1, 2018 through May 4, 2018, (iii) certain federal and state credits, and (iv) interest carryforwards of Impax that were attributable to the Company.
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. Estimating future taxable income is inherently uncertain and requires judgment. In projecting future taxable income, the Company considers its historical results and incorporates certain assumptions, including projected new product launches, revenue growth, and operating margins, among others.
The Company established a valuation allowance on its DTAs 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. Since first establishing a valuation allowance, the Company has generated cumulative consolidated three-year pre-tax losses through March 31, 2024. As a result of the losses through March 31, 2024, the Company determined that it is more likely than not that it will not realize the benefits of its gross DTAs and therefore maintained its valuation allowance. As of March 31, 2024 and December 31, 2023, this valuation allowance was $566.0 million and $566.5 million, respectively, and reduced the carrying value of these gross DTAs to zero.
In 2018, the Company entered into a tax receivable agreement (“TRA”) for which it was generally required to pay the holders of Amneal common units on a one-to-one basis, 85% of the applicable tax savings, if any, in U.S. federal and state income tax that it is deemed to realize as a result of certain tax attributes of their Amneal common units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Amneal common units for shares of Class A common stock of the Company prior to the Reorganization (as defined in Note 1. Nature of Operations in our 2023 Annual Report on Form 10-K) and (ii) tax benefits attributable to payments made under the TRA. In conjunction with the valuation allowance recorded on the DTAs, the Company reversed the accrued TRA liability of $192.8 million during 2019. As part of the Reorganization, the TRA was amended to reduce the Company’s future obligation to pay 85% of the tax benefits subject to the TRA to 75% of such realized benefits. This agreement will not cause the acceleration of payments under the TRA.
As noted above, the Company has determined it is more-likely-than-not it will be unable to utilize its DTAs subject to the TRA; therefore, as of March 31, 2024 and December 31, 2023, the Company has not recognized the contingent liability under the TRA related to the tax savings it may realize from common units sold or exchanged. If utilization of these DTAs becomes more-likely-than-not in the future, at such time, these TRA liabilities (which amounted to approximately $185.0 million at March 31, 2024 and December 31, 2023) will be recorded through charges in the Company’s consolidated statements of operations.
The timing and amount of any payments under the TRA may vary depending on the timing of the Company’s taxable income and the tax rate in effect at the time of realization of the Company’s taxable income. Under certain conditions, such as a change of control or other early termination event, the Company could be obligated to make TRA payments in advance of tax benefits being realized. Payments could also be in excess of the tax savings that the Company may ultimately realize.
Although the DTAs were not determined to be realizable as of March 31, 2024 and December 31, 2023, the Company assessed that a TRA liability of $5.7 million and $3.8 million at those dates, respectively, had become probable. For the three months ended March 31, 2024 and 2023, the Company recorded expenses associated with the TRA of $1.9 million and $0.8 million, respectively. In future periods, the Company will continue to evaluate whether any future TRA payments become probable and can be estimated and, if so, an estimate of payment will be accrued.
Any future recognition of these TRA liabilities will be recorded through charges in the Company’s consolidated 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 $5.7 million accrued as of March 31, 2024. Should the Company determine that a DTA with a
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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.
The Company continuously monitors government proposals to make changes to tax laws, including proposed legislation in certain foreign jurisdictions resulting from the adoption of the Organization for Economic Cooperation and Development (“OECD”) policies (refer to Note 7. Income Taxes in the Company’s 2023 Annual Report on Form 10-K). The OECD has issued a two-pillar approach to global taxation, focusing on global profit allocation and a global minimum tax rate of at least 15%. Legislation for the “Pillar Two” proposal, applying to the Company, has been enacted in Ireland, and it is effective with the financial year beginning on January 1, 2024. As the tax rates the other jurisdictions in which the Company operates exceed 15%, the Company does not believe there is any potential additional exposure besides in Ireland.
Since Pillar Two taxes are an alternative minimum tax, deferred taxes will not need to be recorded or remeasured as a result of Pillar Two taxes. Instead, Pillar Two taxes will be expensed as incurred. For interim tax provision purposes, the Pillar Two tax related to Ireland taxes is included in the calculation of the Company’s provision for income taxes.

6. Loss per Share
Following the implementation of the Reorganization on November 7, 2023, all outstanding shares of Old PubCo Class A common stock and Old PubCo Class B common stock were exchanged for an equivalent number of shares of Class A common stock of the Company.
Basic loss per share of the Company’s Class A common stock is computed by dividing net loss attributable to Amneal Pharmaceuticals, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted loss per share of Class A common stock is computed by dividing net loss attributable to Amneal Pharmaceuticals, Inc. by the weighted-average number of shares of Class A common stock outstanding, adjusted to give effect to potentially dilutive securities. The weighted-average number of shares of Class A common stock for all periods prior to the Reorganization includes shares of Old PubCo Class A common stock.
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share of Class A common stock (in thousands, except per share amounts):
Three Months Ended
March 31,
20242023
Numerator:
Net loss attributable to Amneal Pharmaceuticals, Inc.
$(91,643)$(6,943)
Denominator:
Weighted-average shares outstanding - basic and diluted
307,279 152,109 
Net loss per share attributable to Amneal Pharmaceuticals, Inc.’s Class A common stockholders:
Basic and diluted
$(0.30)$(0.05)
Prior to the Reorganization, shares of Old PubCo Class B common stock did not share in the losses of the Company and, therefore, were not participating securities. As such, separate presentation of basic and diluted loss per share of Old PubCo Class B common stock under the two-class method was not presented. Effective with the Reorganization, all outstanding shares of Old PubCo Class B common stock were surrendered and canceled.
The following table presents potentially dilutive securities excluded from the computations of diluted loss per share of Class A common stock (in thousands):
Three Months Ended
March 31,
20242023
Stock options
2,406 (1)2,632 (1)
Restricted stock units
10,837 (1)11,576 (1)
Performance stock units
7,827 (1)7,018 (1)
Shares of Old PubCo Class B common stock
 152,117 (2)
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(1)Excluded from the computation of diluted loss per share of Class A common stock because the effect of their inclusion would have been anti-dilutive since there was a net loss attributable to the Company during the period.
(2)Shares of Old PubCo Class B common stock were considered potentially dilutive shares of Old PubCo Class A common stock. Shares of Old PubCo Class B common stock were excluded from the computations of diluted loss per share of Class A common stock for the three months ended March 31, 2023 because the effect of their inclusion would have been anti-dilutive under the if-converted method.
7. Trade Accounts Receivable, Net
Trade accounts receivable, net was comprised of the following (in thousands):
March 31,
2024
December 31,
2023
Gross accounts receivable$1,156,861 $1,199,980 
Allowance for credit losses(3,037)(3,022)
Contract charge-backs and sales volume allowances(457,454)(559,334)
Cash discount allowances(27,415)(23,892)
Subtotal(487,906)(586,248)
Trade accounts receivable, net$668,955 $613,732 
Concentration of Receivables
Trade accounts receivable from customers representing 10% or more of the Company’s total trade accounts receivable were as follows:
March 31,
2024
December 31,
2023
Customer A32 %40 %
Customer B29 %24 %
Customer C23 %22 %
8. Inventories
Inventories were comprised of the following (in thousands):
March 31,
2024
December 31,
2023
Raw materials
$196,737 $217,744 
Work in process
57,924 59,563 
Finished goods
315,992 304,077 
Total inventories$570,653 $581,384 
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9. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets were comprised of the following (in thousands):
March 31,
2024
December 31,
2023
Deposits and advances$1,935 $2,200 
Prepaid insurance4,780 8,334 
Prepaid regulatory fees4,219 6,331 
Income and other tax receivables12,198 13,168 
Prepaid taxes9,205 11,899 
Other current receivables
12,802 9,929 
Chargebacks receivable (1)
8,575 7,876 
Other prepaid assets33,584 22,948 
Total prepaid expenses and other current assets$87,298 $82,685 
(1)When a sale occurs on a contract item in the Company’s AvKARE segment, the difference between the cost paid to the manufacturer by the Company and the contract cost that the end customer has with the manufacturer is rebated back to the Company by the manufacturer. The Company establishes a chargeback receivable and a reduction to cost of goods sold in the same period as the related sale.
10. Goodwill and Other Intangible Assets
The changes in goodwill for the three months ended March 31, 2024 and for the year ended December 31, 2023 were as follows (in thousands):
March 31,
2024
December 31,
2023
Balance, beginning of period$598,629 $598,853 
Currency translation(80)(224)
Balance, end of period$598,549 $598,629 
As of March 31, 2024, $366.3 million, $162.7 million, and $69.5 million of goodwill was allocated to the Specialty, Generics, and AvKARE segments, respectively. As of December 31, 2023, $366.3 million, $162.8 million, and $69.5 million of goodwill was allocated to the Specialty, Generics, and AvKARE segments, respectively.
Intangible assets as of March 31, 2024 and December 31, 2023 were comprised of the following (in thousands):
March 31, 2024December 31, 2023
Weighted-Average
Amortization Period
(in years)
CostAccumulated
Amortization
NetCostAccumulated
Amortization
Net
Amortizing intangible assets:
Product rights6.2$1,207,469 $(739,351)$468,118 $1,198,971 $(703,297)$495,674 
Other intangible assets3.1111,800 (76,491)35,309 111,800 (72,896)38,904 
Subtotal1,319,269 (815,842)503,427 1,310,771 (776,193)534,578 
In-process research and development355,845 — 355,845 355,845 — 355,845 
Total intangible assets$1,675,114 $(815,842)$859,272 $1,666,616 $(776,193)$890,423 
Amortization expense related to intangible assets for the three months ended March 31, 2024 and 2023 was $39.9 million and $41.1 million, respectively.
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The following table presents future amortization expense for the next five years and thereafter, excluding $355.8 million of in-process research and development (“IPR&D”) intangible assets (in thousands):
Future
Amortization
Remainder of 2024$119,432 
2025121,638 
202673,115 
202752,606 
202833,263 
202926,484 
Thereafter76,889 
   Total$503,427 
The Company reviews 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. Indefinite-lived intangible assets, including IPR&D, are tested for impairment if impairment indicators arise and, at a minimum, annually. Intangible asset impairments were immaterial for the three months ended March 31, 2024 (none for the three months ended March 31, 2023).
On June 30, 2023, the Company received a complete response letter (“CRL”) from the FDA regarding its new drug application (“NDA”) for IPX203 for the treatment of Parkinson’s disease. The CRL indicated that, although an adequate scientific bridge was established for the safety of one ingredient, levodopa, based on pharmacokinetic studies, it was not adequately established for the other ingredient, carbidopa, and the FDA requested additional information. The CRL did not identify any issues with respect to the efficacy or manufacturing of IPX203. During October 2023, the Company met with the FDA to align on the path to approval for IPX203. During the meeting, the FDA asked the Company to perform a QT study, a routine cardiac safety study that is required for new drugs. On February 7, 2024, the Company provided a complete response resubmission to the FDA for IPX203. IPX203 has a Prescription Drug User Fee Act (PDUFA) decision date of August 7, 2024.
No indicators of impairment of the Company’s IPX203 IPR&D intangible asset were identified during 2024. Additionally, there was no impairment recorded during 2023. While management believes the assumptions used in the Company’s 2023 annual impairment test of its IPX203 IPR&D intangible asset were reasonable and continue to be commensurate with the views of a market participant, changes in key assumptions, including increasing the discount rate, lowering forecasts for revenue and operating margin, delaying the potential launch date, and lowering the probability of technical and regulatory success, could result in material future impairments of the Company’s IPX203 IPR&D intangible asset. Refer to Note 13. Goodwill and Other Intangible Assets in the Company’s Annual Report on Form 10-K for additional information.

11. Other Assets

Other assets were comprised of the following (in thousands):
March 31, 2024December 31, 2023
Interest rate swap (1)
$52,632 $37,089 
Security deposits 3,616 3,602 
Long-term prepaid expenses3,099 3,273 
Deferred revolving credit facility costs4,007 4,427 
Other long term assets10,393 7,126 
Total $73,747 $55,517 

(1)Refer to Note 15. Fair Value Measurements and Note 16. Financial Instruments for information about the Company’s interest rate swap.
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12. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses were comprised of the following (in thousands):
March 31, 2024December 31, 2023
Accounts payable$175,325 $143,572 
Accrued returns allowance (1)
137,108 136,486 
Accrued compensation44,806 71,122 
Accrued Medicaid and commercial rebates (1)
96,711 90,690 
Accrued royalties19,779 23,342 
Commercial chargebacks and rebates10,226 10,226 
Accrued professional fees14,598 11,005 
Accrued other59,965 48,219 
Total accounts payable and accrued expenses$558,518 $534,662 
(1)Refer to Note 3. Revenue Recognition for a rollforward of the balance from December 31, 2023 to March 31, 2024.
13. Debt
There have been no material changes in the Company’s long-term debt since December 31, 2023, except as disclosed below. Refer to Note 16. Debt in the Company’s 2023 Annual Report on Form 10-K for additional information and definitions of terms used in this note.
The following is a summary of the Company’s indebtedness under its term loans (in thousands):
March 31, 2024December 31, 2023
Term Loan Due May 2025$191,979 $191,979 
Term Loan Due May 20282,336,949 2,351,647 
Total debt2,528,928 2,543,626 
Less: debt issuance costs(117,561)(123,497)
Total debt, net of debt issuance costs2,411,367 2,420,129 
Less: current portion of long-term debt(33,660)(34,125)
Total long-term debt, net$2,377,707 $2,386,004 
During the three months ended March 31, 2024, the Company (i) borrowed and repaid $20.0 million under the Amended New Revolving Credit Facility and (ii) borrowed and repaid $28.0 million under the Amended Rondo Revolving Credit Facility. As of each of March 31, 2024 and December 31, 2023, $179.0 million was outstanding on the Amended New Revolving Credit Facility.

14. Other Long-Term Liabilities

Other long-term liabilities were comprised of the following (in thousands):

March 31, 2024December 31, 2023
Uncertain tax positions$504 $497 
Long-term compensation18,073 21,283 
Contingent consideration (1)
433 433 
Other long-term liabilities5,569 7,466 
Total other long-term liabilities$24,579 $29,679 
(1)    Refer to Note 15. Fair Value Measurements for additional information.
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15. Fair Value Measurements
Fair value is the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Value is determined using pricing models, discounted cash flow methodologies, or similar techniques and also includes instruments for which the determination of fair value requires significant judgment or estimation.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification for each reporting period. The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 (in thousands):
Fair Value Measurement Based on
March 31, 2024TotalQuoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Interest rate swap (1)
$52,632 $ $52,632 $ 
Liabilities
Deferred compensation plan liabilities (2)
$9,668 $ $9,668 $ 
Contingent consideration liabilities (3)
$1,021 $ $ $1,021 
December 31, 2023
Assets
Interest rate swap (1)
$37,089 $ $37,089 $ 
Liabilities
Deferred compensation plan liabilities (2)
$9,100 $ $9,100 $ 
Contingent consideration liability (3)
$921 $ $ $921 
(1)The fair value measurement of the Company’s interest rate swap classified within Level 2 of the fair value hierarchy is a model-derived valuation as of a given date in which all significant inputs are observable in active markets including certain financial information and certain assumptions regarding past, present, and future market conditions. Refer to Note 16. Financial Instruments for information on the Company's interest rate swap.
(2)These liabilities are recorded at the value of the amount owed to the plan participants, with changes in value recognized as compensation expense. The calculation of the deferred compensation plan obligation is derived from observable market data by reference to hypothetical investments selected by the participants.
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(3)The fair value measurement of contingent consideration liabilities has been classified as Level 3 recurring liabilities as the valuations require judgment and estimation of factors that are not currently observable in the market. If different assumptions were used for various inputs, the estimated fair values could be higher or lower than what the Company determined. For the three months ended March 31, 2024, there was no material activity or payments related to the contingent consideration liabilities.
There were no transfers between levels in the fair value hierarchy during the three months ended March 31, 2024.
Assets and Liabilities Not Measured at Fair Value on a Recurring Basis
The carrying amounts of cash, accounts receivable and accounts payable approximate their fair values due to the short-term maturity of these instruments.
The following is a summary of the Company’s indebtedness at fair value (in thousands):
March 31, 2024December 31, 2023
Term Loan Due 2025$192,099 $190,779 
Term Loan Due 2028$2,339,870 $2,328,130 
Sellers Notes$41,944 $41,033 
The Term Loan Due 2025 and Term Loan Due 2028 are in the Level 2 category within the fair value level hierarchy. The fair values were determined using market data for valuation. The Sellers Notes are in the Level 2 category within the fair value level hierarchy.
Refer to Note 16. Debt in the Company’s 2023 Annual Report on Form 10-K for detailed information about its indebtedness, including definitions of terms.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
There were no non-recurring fair value measurements during the three months ended March 31, 2024 and 2023.
16. Financial Instruments
The Company uses an interest rate swap to manage its exposure to market risks for changes in interest rates.
Interest Rate Risk
Interest income earned on cash and cash equivalents may fluctuate as interest rates change; however, due to their relatively short maturities, the Company does not hedge these assets or their investment cash flows because the impact of interest rate risk is not material. The Company is exposed to interest rate risk on its debt obligations. The Company’s debt obligations consist of variable-rate and fixed-rate debt instruments. The Company’s primary objective is to achieve the lowest overall cost of funding while managing the variability in cash outflows within an acceptable range. To achieve this objective, the Company initially entered into an interest rate swap on the Term Loan Due 2025. On November 14, 2023, in connection with the refinancing of the Term Loan Due 2025, the Company novated its swap agreement to another counterparty and, in connection with such novation, amended the interest rate swap agreement. Refer to the section “Interest Rate Derivative - Cash Flow Hedge” below and in Note 20. Financial Instruments in the Company’s 2023 Annual Report on Form 10-K for additional information and the definition of certain terms.
Interest Rate Derivative – Cash Flow Hedge
The interest rate swap involves the periodic exchange of payments without the exchange of underlying principal or notional amounts. In October 2019, the Company entered into an interest rate lock agreement for a total notional amount of $1.3 billion to hedge part of the Company's interest rate exposure associated with the variability in future cash flows from changes in the one-month London interbank offered rate (“LIBOR”) associated with the Term Loan Due 2025 (the “October 2019 Swap”). On May 31, 2023, the Company executed an amendment to the October 2019 Swap that, among other things, changed the variable reference rate from LIBOR to the one-month secured overnight financing rate (“SOFR”) (the “Amended October 2019 Swap”). On November 14, 2023, in connection with the Company’s refinancing of the Term Loan Due 2025 and the New Credit Facility
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(refer to Note 16. Debt in the Company’s 2023 Annual Report on Form 10-K for definitions and additional information), the Company novated the Amended October 2019 Swap to another counterparty and subsequently amended the interest rate agreement. Specifically, the amendments modified (i) the fixed rate payable by the counterparty from 1.3660% to a new fixed rate of 2.7877% and (ii) extended the termination date through May 4, 2027 (i.e., one year before the Term Loan Due 2028 matures) (the “November 2023 Swap”). The amendments did not change the notional amount of $1.3 billion. The purpose of the November 2023 Swap is to hedge part of the Company's interest rate exposure associated with the variability in future cash flows from changes in the one-month SOFR associated with the Term Loan Due 2028.
The Company used a strategy commonly referred to as “blend and extend,” which allows the existing asset position of the swap agreement to be effectively blended into the new interest rate swap agreement. As a result of this transaction, on November 14, 2023, the Amended October 2019 Swap was de-designated and the unrealized gain of $66.7 million was recorded within accumulated other comprehensive (loss) income and will be amortized as a reduction of interest expense, net, over the original term of the of the Amended October 2019 Swap (until May 2025), as the hedged transactions affect earnings. Additionally, the November 2023 Swap had a fair value of $66.7 million at inception and will be ratably recorded to accumulated other comprehensive (loss) income and reclassified to interest expense, net, over the term of the November 2023 Swap, as the hedged transactions affect earnings.
During the three months ended March 31, 2024, the Company reclassified a gain of $6.5 million from accumulated other comprehensive loss to interest expense, net. Approximately $26.1 million of net gains included in accumulated other comprehensive loss as of March 31, 2024 are expected to be reclassified into earnings within the next 12 months as interest payments are made on the Company’s Term Loan Due 2028 and amortization of the amounts included in accumulated other comprehensive loss occurs.
As of March 31, 2024, the total gain, net of income taxes, related to the Company’s cash flow hedge of $42.8 million, was recognized in accumulated other comprehensive loss.
A summary of the fair values of derivative instruments in the consolidated balance sheets was as follows (in thousands):
March 31, 2024December 31, 2023
Derivatives Designated as Hedging InstrumentsBalance Sheet
Classification
Fair ValueBalance Sheet
Classification
Fair Value
Variable-to-fixed interest rate swapOther Assets$52,632 Other Assets$37,089 
17. Commitments and Contingencies
Commitments
Commercial Manufacturing, Collaboration, License, and Distribution Agreements
The Company continues to seek to enhance its product line and develop a balanced portfolio of differentiated products through product acquisitions and in-licensing. Accordingly, the Company, in certain instances, may be contractually obligated to make potential future development, regulatory, and commercial milestone, royalty and/or profit-sharing payments in conjunction with collaborative agreements or acquisitions that the Company has entered with third parties. The Company has also licensed certain technologies or IP from various third parties. The Company is generally required to make upfront payments as well as other payments upon successful completion of regulatory or sales milestones. The agreements generally permit the Company to terminate the agreement with no significant continuing obligation. The Company could be required to make significant payments pursuant to these arrangements. These payments are contingent upon the occurrence of certain future events and, given the nature of these events, it is unclear when, if ever, the Company may be required to pay such amounts. Further, the timing of any future payment is not reasonably estimable. Refer to Note 4. Alliance and Collaboration for additional information. Certain of these arrangements are with related parties. Refer to Note 19. Related Party Transactions for additional information.
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Contingencies
Legal Proceedings
The Company's legal proceedings are complex, constantly evolving, and subject to uncertainty. As such, the Company cannot predict the outcome or impact of its significant legal proceedings which are set forth below. Additionally, the Company manufactures and derives a portion of its revenue from the sale of pharmaceutical products in the opioid class of drugs and may therefore face claims arising from the regulation and/or consumption of such products. While the Company believes it has meritorious claims and/or defenses to the matters described below (and intends to vigorously prosecute and defend them), the nature and cost of litigation is unpredictable, and an unfavorable outcome of such proceedings could include damages, fines, penalties and injunctive or administrative remedies.
For any proceedings where losses are probable and reasonably capable of estimation, the Company accrues a potential loss. When the Company has 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, the Company records the loss at the low end of the range. While these accruals have been deemed reasonable by the Company’s management, the assessment process relies heavily on estimates and assumptions that may ultimately prove inaccurate or incomplete. Additionally, unforeseen circumstances or events may lead the Company to subsequently change its estimates and assumptions. Unless otherwise indicated below, the Company is unable at this time to estimate the possible loss or the range of loss, if any, associated with such legal proceedings and claims. Any such claims, proceedings, investigations or litigation, regardless of the merits, might result in substantial costs to defend or settle, borrowings under the Company’s debt agreements, restrictions on product use or sales, or otherwise harm the Company’s business. The ultimate resolution of any or all claims, legal proceedings or investigations are inherently uncertain and difficult to predict, could differ materially from the Company’s estimates and could have a material adverse effect on its results of operations and/or cash flows in any given accounting period, or on its overall financial condition. The Company currently intends to vigorously prosecute and/or defend these proceedings as appropriate. From time to time, however, the Company may settle or otherwise resolve these matters on terms and conditions that it believes to be in its best interest. An insurance recovery, if any, is recorded in the period in which it is probable the recovery will be realized.
For the three months ended March 31, 2024, charges related to legal matters, net of $94.4 million were 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 the Company by states, counties, municipalities, and Native American tribes across the U.S. (refer to the section Civil Prescription Opioid Litigation below). For the three months ended March 31, 2023, credit related to legal matters, net of $0.4 million was comprised of a litigation settlement gain, partially offset by charges for legal proceedings.
Liabilities for legal matters were comprised of the following (in thousands):
MatterMarch 31, 2024December 31, 2023
Opana ER® antitrust litigation$ $50,000 
Opana ER® antitrust litigation-accrued interest
 2,347 
Civil prescription opioid litigation30,130 21,189 
Other
 3,452 
Current portion of liabilities for legal matters$30,130 $76,988 
Civil prescription opioid litigation (Liabilities for legal matters - long term)$85,479 $316 
Refer to the respective discussions below for additional information about the significant matters in the tables above.
Refer to Note 21. Commitments and Contingencies in our Annual Report on Form 10-K for a general discussion of Medicaid Reimbursement and Price Reporting Matters and Patent Litigation.
Other Litigation Related to the Company’s Business
Opana ER® Antitrust Litigation

From June 2014 to April 2015, a number of complaints styled as class actions on behalf of direct purchasers and indirect purchasers (or end-payors) and several separate individual complaints on behalf of certain direct purchasers (the “opt-out
24


plaintiffs”) of Opana ER® were filed against Endo Pharmaceuticals Inc. and Impax Laboratories, Inc. (“Impax”) and consolidated into multi-district litigation (“MDL”) in the U.S. District Court for the Northern District of Illinois.

Impax subsequently entered into settlement agreements with all of the plaintiffs that were subsequently approved by the court. Pursuant to the settlement agreements, the Company agreed to pay a total of $265.0 million between 2022 and mid-January 2024 to resolve substantially all of the plaintiffs’ claims. As of December 31, 2023, the liability for the final settlement payment of $50.0 million, plus 3% stated interest thereon, was included in the current portion of liabilities for legal matters and was paid in January 2024 with cash on hand. The settlement agreements are not an admission of liability or fault by Impax, the Company or its subsidiaries. Upon court approval of the final settlement agreements as discussed above, substantially all the claims and lawsuits in the litigation were resolved.
United States Department of Justice Investigations

On November 6, 2014, Impax disclosed that one of its sales representatives received a grand jury subpoena from the Antitrust Division of the United States Department of Justice (the “DOJ”). On March 13, 2015, Impax received a grand jury subpoena from the DOJ requesting the production of information and documents regarding the sales, marketing, and pricing of four generic prescription medications. Impax cooperated in the investigation and produced documents and information in response to the subpoenas from 2014 to 2016. However, no assurance can be given as to the timing or outcome of the investigation.

On April 30, 2018, Impax received a CID from the Civil Division of the DOJ (the “Civil Division”). The CID requests the production of information and documents regarding the pricing and sale of Impax’s pharmaceuticals and interactions with other generic pharmaceutical manufacturers regarding whether generic pharmaceutical manufacturers engaged in market allocation and price-fixing agreements, paid illegal remuneration, and caused false claims to be submitted to the federal government. Impax has cooperated with the Civil Division’s investigation. However, no assurance can be given as to the timing or outcome of the investigation.

On May 15, 2023, Amneal received a CID from the Civil Division requesting information and documents related to the manufacturing and shipping of diclofenac sodium 1% gel labeled as “prescription only” after the reference listed drug’s label was converted to over-the-counter. The Company is cooperating with the Civil Division’s investigation. However, no assurance can be given as to the timing or outcome of the investigation.
In Re Generic Pharmaceuticals Pricing Antitrust Litigation
Since March 2016, multiple putative antitrust class action complaints have been filed on behalf of direct purchasers, indirect purchasers (or end-payors), and indirect resellers, as well as individual complaints on behalf of certain direct and indirect purchasers, and municipalities (the “opt-out plaintiffs”) against manufacturers of generic drugs, including Impax and the Company. The complaints allege a conspiracy to fix, maintain, stabilize, and/or raise prices, rig bids, and allocate markets or customers for various generic drugs in violation of federal and state antitrust and consumer protection laws. Plaintiffs seek unspecified monetary damages and equitable relief, including disgorgement and restitution. The lawsuits have been consolidated in an MDL in the United States District Court for the Eastern District of Pennsylvania (In re Generic Pharmaceuticals Pricing Antitrust Litigation, No. 2724, (E.D. Pa.)) (“MDL No. 2724”).
On May 10, 2019, Attorneys General of 43 States and the Commonwealth of Puerto Rico filed a complaint in the United States District Court for the District of Connecticut against various manufacturers and individuals, including the Company, alleging a conspiracy to fix, maintain, stabilize, and/or raise prices, rig bids, and allocate markets or customers for multiple generic drugs. On November 1, 2019, the State Attorneys General filed an Amended Complaint on behalf of nine additional states and territories. On June 10, 2020, Attorneys General of 46 States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Territory of Guam, the U.S. Virgin Islands, and the District of Columbia filed a new complaint against various manufacturers and individuals, including the Company, alleging a conspiracy to fix prices, rig bids, and allocate markets or customers for additional generic drugs. On September 9, 2021, the State Attorneys General filed an Amended Complaint on behalf of California in addition to the original plaintiff states.
Both the May 10, 2019 and June 10, 2020 lawsuits seek unspecified monetary damages and penalties and equitable relief including disgorgement and restitution, and both were incorporated into MDL No. 2724. The June 10, 2020 lawsuit was selected for bellwether status. The States of Alabama, Hawaii and Arkansas, and the Territory of Guam voluntarily dismissed all of their claims in the two actions against all defendants, including the Company. American Samoa voluntarily dismissed its claims in the May 10, 2019 action and was not named as a plaintiff in the June 10, 2020 action. On February 27, 2023, the Court addressed defendants’ motions to dismiss the June 10, 2020 action, holding that the states may not pursue certain federal remedies, and otherwise denying Amneal’s joint and individual motion to dismiss. On November 1, 2023, the Attorneys
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General filed a Motion to Remand their cases to the State of Connecticut. On January 21, 2024, the Joint Panel on Multidistrict Litigation (“JPML”) granted the motion, and these cases were formally remanded in April 2024. See Connecticut, et al. v. Teva Pharmaceuticals USA, Inc., et al., 3:19-cv-00710-MPS and Connecticut, et al. v. Sandoz, Inc. et al., 3:20-cv-00803-MPS.
Fact discovery in MDL No. 2724 is proceeding as to both bellwether and non-bellwether cases, and expert discovery as to bellwether cases is also underway. No trial date has been set. No schedule has yet been issued in the May 10, 2019 and June 10, 2020 actions brought by the State Attorneys General, which have now been remanded to the District of Connecticut.
On June 3, 2020, the Company and Impax were also named in a putative class action complaint filed in the Federal Court of Canada in Toronto, Ontario against numerous generic pharmaceutical manufacturers, on behalf of a putative class of individuals who purchased generic drugs in the private sector from 2012 to the present (Kathryn Eaton v. Teva Canada Limited, et. al., No. T-607-20). The complaint alleges price fixing, among other claims. On August 23, 2022, the plaintiff filed a second amended complaint. On May 30, 2023, the plaintiff served materials for their motion to certify the action as a class proceeding, define the class and certify the common questions to be decided, among other things. The certification hearing date is scheduled for December 2024, but subject to court approval, the hearing date may be rescheduled on consent to May 2025. The Company is preparing a response to the motion to certify in advance of that date.
Civil Prescription Opioid Litigation
The Company and certain of its affiliates are named as defendants in over 900 cases filed in state and federal courts relating to the sale of prescription opioid pain relievers. Plaintiffs in these actions include county and municipal governments, hospitals, Native American tribes, pension funds, third-party payors, and individuals. Plaintiffs seek unspecified monetary damages and other forms of relief based on various causes of action, including negligence, public nuisance, unjust enrichment, and civil conspiracy, as well as alleged violations of the Racketeer Influenced and Corrupt Organizations Act, state and federal controlled substances laws and other statutes. All cases involving the Company also name other manufacturers, distributors, and retail pharmacies as defendants, and there have been numerous other cases involving allegations relating to prescription opioid pain relievers against other manufacturers, distributors, and retail pharmacies in which the Company and its affiliates are not named. Nearly all cases pending in federal district courts have been consolidated for pre-trial proceedings in an MDL in the United States District Court for the Northern District of Ohio (In re: National Prescription Opiate Litigation, Case No. 17-mdl-2804) (the “Opioid MDL”). The Company is also named in various state court cases pending in seven states. No firm trial dates have been set except in Texas (January 31, 2025, trial-ready date (Dallas County)).
The Company reached a settlement agreement with the New Mexico Attorney General to resolve its claims against the Company, which was finalized on April 24, 2023. A Consent Judgment dismissing the case was entered on May 15, 2023.

The Company reached a settlement agreement to resolve all pending litigation brought by West Virginia political subdivisions, which was signed on May 25, 2023. The two neonatal abstinence syndrome cases in West Virginia state court were dismissed on May 31, 2023 and were subsequently appealed by the plaintiffs. These appeals remain pending. The hospital cases pending in West Virginia state court were dismissed on May 2, 2023.

The Company reached a preliminary settlement with a group of private hospitals in Alabama in June 2023 to resolve the hospitals’ claims against the Company. The Company anticipates a final determination approving the settlement by the end of the second quarter of 2024. On February 7, 2024, the Company was dismissed from the Mobile County Board of Health case. The Company previously reported an August 12, 2024 trial date for that case.

On January 13, 2023, the Company received a subpoena from the New York Attorney General, seeking information regarding its business concerning opioid-containing products. The Company is cooperating with the request and providing responsive information. On January 4, 2024, the Company received a CID issued by the Alaska Attorney General seeking information regarding its business concerning opioid-containing products. The Company is evaluating the CID.

In late April 2024, the Company reached a 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 against the Company by states, counties, municipalities, and Native American tribes across the U.S. The settlement in principle is subject to the negotiation and execution of a definitive settlement agreement between the parties. The settlement would be payable over ten years. Under the settlement in principle, the Company would agree to pay $92.5 million in cash and provide $180.0 million (valued at $125/ twin pack) in naloxone nasal spray to help treat opioid overdoses. In lieu of receiving product, the settling parties can opt to receive 25% of the naloxone nasal spray’s value (up to $45.0 million) in cash during the last four years of the ten years payment term, which could increase the total amount of cash the Company would agree to pay up to $137.5 million.

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As of March 31, 2024, the Company concluded the loss related to the opioid litigation was probable, and the related loss was reasonably estimable considering the settlement in principle. As a result, the Company recorded a charge of $94.4 million associated with the settlement in principle during the three months ended March 31, 2024 to increase the liability as of March 31, 2024, to $115.6 million, of which $85.5 million was classified as long-term. While this liability has been deemed reasonable by the Company’s management, it could significantly change as the definitive settlement agreement is finalized. As of December 31, 2023, the Company had a liability of $21.5 million related to its prescription opioid litigation, of which $0.3 million was classified as long-term. For the remaining cases not covered by the settlement in principle, primarily brought by other hospitals, schools and individuals, the Company has not recorded a liability as of March 31, 2024 or December 31, 2023, because it concluded that a loss was not probable and estimable.
United States Department of Justice / Drug Enforcement Administration Subpoenas

On July 7, 2017, Amneal Pharmaceuticals of New York, LLC received an administrative subpoena issued by the Long Island, NY District Office of the Drug Enforcement Administration (the “DEA”) requesting information related to compliance with certain recordkeeping and reporting requirements. On or about April 12, 2019 and May 28, 2019, the Company received grand jury subpoenas from the U.S. Attorney’s Office for the Eastern District of New York (the “USAO”) relating to similar topics concerning the Company’s suspicious order monitoring program and its compliance with the Controlled Substances Act. The Company is cooperating with the USAO in responding to the subpoenas and has entered civil and criminal tolling agreements with the USAO through May 15, 2024. It is not possible to determine the exact outcome of these investigations.

On March 14, 2019, Amneal received a subpoena from an Assistant U.S. Attorney for the Southern District of Florida (the “AUSA”). The subpoena requested information and documents generally related to the marketing, sale, and distribution of oxymorphone. The Company intends to cooperate with the AUSA regarding the subpoena. However, no assurance can be given as to the timing or outcome of its underlying investigation.

On October 7, 2019, Amneal received a subpoena from the New York State Department of Financial Services seeking documents and information related to sales of opioid products in the state of New York. The Company is cooperating with the request and providing responsive information. It is not possible to determine the exact outcome of this investigation.

Ranitidine Litigation

The Company and its affiliates were named as defendants, along with numerous other brand and generic pharmaceutical manufacturers, wholesale distributors, retail pharmacy chains, and repackagers of ranitidine-containing products, in In re Zantac/Ranitidine NDMA Litigation (MDL No. 2924), in the Southern District of Florida. Plaintiffs allege that defendants failed to disclose and/or concealed the alleged inherent presence of N-Nitrosodimethylamine (or “NDMA”) in brand-name Zantac® or generic ranitidine and the alleged associated risk of cancer. On July 8, 2021, the MDL Court dismissed all claims by all plaintiffs against the generic drug manufacturers, including the Company, without leave to file further amended complaints, holding all claims were preempted. Plaintiffs appealed the MDL Court’s dismissals to the 11th Circuit Court of Appeals. On November 7, 2022, the 11th Circuit affirmed the MDL Court’s dismissal of cases brought by third-party payors. The 11th Circuit raised questions in the appeals of the other cases about the finality of the MDL Court’s judgments, which were resolved in September 2023. Plaintiffs filed their merits brief on April 10, 2024.

The Company and its affiliates have also been named as defendants in various state lawsuits in five states in which the Company has filed motions to dismiss or plans to file motions to dismiss in the future. On August 17, 2023, the judge in the consolidated Illinois state court cases granted a motion to dismiss all such cases in which the Company and affiliates had been named, holding all claims preempted. There are no trial dates involving the Company in any of the state court cases.
Metformin Litigation

Amneal and AvKARE, LLC (improperly named as AvKARE, Inc.) were named as defendants, along with numerous other manufacturers, retail pharmacies, and wholesalers, in several putative class action lawsuits pending in the United States District Court for the District of New Jersey, consolidated as In Re Metformin Marketing and Sales Practices Litigation (No. 2:20-cv-02324-MCA-MAH) (“In re Metformin”). The lawsuits allege economic loss in connection with their purchase or reimbursements due to the alleged contamination of generic metformin products with NDMA. Plaintiffs have voluntarily dismissed their claims seeking medical monitoring or evaluation due to their consummation of allegedly contaminated metformin. The parties are currently engaged in discovery. On October 17, 2023, co-defendant Rite-Aid filed a suggestion of bankruptcy and automatic stay of proceeding. AvKARE, LLC has been dismissed from this action. Three additional similar putative class action lawsuits filed against Amneal and AvKARE, LLC have been consolidated for discovery and pretrial purposes only, Marcia E. Brice v. Amneal Pharmaceuticals, Inc., No. 2:20-cv-13728 (D.N.J.), Michael Hann v. Amneal
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Pharmaceuticals of New York, LLC et al., No. 2:23-cv-22902 (D.N.J.), and In re Metformin: County of Monmouth, et al. v. Apotex Inc., et al., No. 2:23-cv-21001-MAC-MAH (D.N.J.) (“County of Monmouth”).

Pursuant to a Stipulation and Order entered on the docket on May 2, 2024, plaintiffs will file a third amended complaint in In re Metformin which includes the claims and parties in County of Monmouth. The third amended complaint must be filed within three days of entry of the Stipulation and Order. Immediately preceding the filing of the third amended complaint, the County of Monmouth First Amended Complaint will be voluntarily dismissed without prejudice. Defendants may file a motion to dismiss the third amended complaint within thirty days of the filing of the third amended complaint.

On March 29, 2021, a plaintiff filed a complaint in the United States District Court for the Middle District of Alabama asserting claims against manufacturers of valsartan, losartan, and metformin based on the alleged presence of nitrosamines in those products. The only allegations against the Company concern metformin (Davis v. Camber Pharmaceuticals, Inc., et al., C.A. No. 2:21-00254 (M.D. Ala.) (the “Davis Action”)). On May 5, 2021, the United States Judicial Panel on Multidistrict Litigation transferred the Davis Action into the In re: Valsartan, Losartan, and Irbesartan Products Liability Litigation multi-district litigation for pretrial proceedings.

Xyrem® (Sodium Oxybate) Antitrust Litigation

Amneal was named as a defendant, along with Jazz Pharmaceuticals, Inc. (“Jazz”) and numerous other manufacturers of generic versions of Jazz’s Xyrem® (sodium oxybate), in several class action lawsuits filed in the United States District Court for the Northern District of California and the United States District Court for the Southern District of New York, alleging that the generic manufacturers entered into anticompetitive agreements with Jazz in connection with the settlement of patent litigation related to Xyrem®. The actions were consolidated in the United States District Court for the Northern District of California for pretrial proceedings (In re Xyrem (Sodium Oxybate) Antitrust Litigation, No. 5:20-md-02966-LHK (N.D. Cal.)).

Amneal was also named as a defendant in a similar action filed by Aetna Inc. (“Aetna”) in California state court (Aetna Inc. v. Jazz Pharms., Inc. et. al, No. 22CV010951 (Cal. Super. Ct.). The California state court held that it lacks jurisdiction over several defendants, including Amneal, on December 27, 2022, and later issued an order dismissing Amneal without prejudice. On August 25, 2023, Aetna filed a motion seeking leave to file a second amended complaint adding Amneal as a defendant, which the Court tentatively granted on October 20, 2023. Aetna filed a second amended complaint naming Amneal on November 17, 2023.

On February 28, 2023, Amneal executed a $1.9 million settlement agreement with class plaintiffs in the federal litigation. Class plaintiffs filed a motion for final approval of the settlement on November 10, 2023, and entered an order granting final approval, certifying settlement class, and dismissing class plaintiffs’ against Amneal with prejudice on April 17, 2024. On December 18, 2023, Amneal executed a $4.0 million settlement with Aetna, United Healthcare Services, Inc. (“United”), Humana Inc. (“Humana”), Molina Healthcare Inc. (“Molina”), and Health Care Service Corporation (“HCSC”). Pursuant to that settlement, the federal court dismissed United, Humana, Molina and HCSC’s claims against Amneal, with prejudice, on February 26, 2024, and the California state court dismissed Aetna’s claims against Amneal, with prejudice, on February 29, 2024. Thus, all claims against Amneal in the federal and state court have been voluntarily dismissed with prejudice pursuant to settlements. In December 2023, the Company recorded $3.0 million for the settlement of claims associated with Xyrem® antitrust litigation. As of December 31, 2023, the Company had a liability of $2.0 million associated with this settlement, which was paid in January 2024.

UFCW Local 1500 Welfare Fund v. Takeda Pharmaceuticals U.S.A., Inc.

On November 14, 2023, UFCW Local 1500 Welfare Fund and other health plans filed a purported class action lawsuit in the United States District Court for the Southern District of New York against Takeda Pharmaceuticals U.S.A., Inc. (“Takeda”) and other manufacturers of generic versions of Takeda’s Colcrys® (colchicine), including Amneal (UFCW Local 1500 Welfare Fund et al. v. Takeda Pharma. U.S.A., Inc. et al, No. 1:23-cv-10030 (S.D.N.Y.). The plaintiff health plans seek to represent a class of third party payers and alleging that the generic manufacturers conspired with Takeda to restrict output of generic Colcrys® to maintain higher prices, in violation of the antitrust laws. On February 28, 2024, Takeda filed a motion to transfer the case to the United States District Court for the Eastern District of Pennsylvania. On March 13, 2024 and March 27, 2024, Amneal submitted a letter and brief, respectively, informing the Court of its position that the Eastern District of Pennsylvania lacks personal jurisdiction over Amneal. The deadline for defendants to respond to the complaint is 45 days after the date on which the motion to transfer is resolved.

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Indian Tax Authority Matters

Amneal Pharmaceuticals Pvt. Ltd., RAKS Pharmaceuticals Pvt. Ltd., and Puniska Healthcare Pvt. Ltd., which are subsidiaries of the Company, are currently involved in litigations with Indian tax authorities concerning Central Excise Tax, Service Tax, Goods & Services Tax, and Value Added Tax for various periods of time between 2014 and 2017. These subsidiaries have contested certain of these assessments, which are at various stages of the administrative process. The Company strongly believes its Indian subsidiaries have meritorious defenses in the matter.
18. Stockholders’ Equity and Redeemable Non-Controlling Interests
Effective with the Reorganization on November 7, 2023, the Company holds 100% of the Amneal Common Units.
In connection with the Reorganization, the Company amended and restated its certificate of incorporation. The voting rights, dividend rights and participation rights of holders of Class A common stock of the Company did not materially change as a result of the amendment. There were no shares of Class B common stock of the Company outstanding as of December 31, 2023.
Non-Controlling Interests
The consolidated financial statements of the Company 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. Prior to the Reorganization, non-controlling interests were adjusted for capital transactions that impact the non-publicly held economic interests in Amneal.
Prior to the Reorganization, Amneal was obligated to make tax distributions to the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members”). During the three months ended March 31, 2023, the Company recorded net tax distributions to the Members of $26.8 million as a reduction of non-controlling interests. Subsequent to the Reorganization, the Company is no longer obligated to make tax distributions to the Members.
The Company acquired a 98% interest in KSP on April 2, 2021. The sellers of KSP, a related party, hold the remaining interests. The Company attributes 2% of the net income or loss of KSP to non-controlling interests.
Redeemable Non-Controlling Interests
The Company 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”), in 2020.  The sellers of AvKARE, LLC and R&S hold the remaining 34.9% interest (“Rondo Class B Units”) in the holding company that directly owns the acquired companies (“Rondo”). Beginning on January 1, 2026, the holders of the Rondo Class B Units have the right (“Put Right”) to require the Company to acquire the Rondo Class B Units for a purchase price that is based on a multiple of Rondo’s earnings before income taxes, depreciation, and amortization (EBITDA) if certain financial targets and other conditions are met. Additionally, beginning on January 31, 2020, the Company has the right to acquire the Rondo Class B Units based on the same value and conditions as the Put Right. The Rondo Class B Units are also redeemable by the holders upon a change in control. Because the redemption of the Rondo Class B Units is outside of the Company’s control, the units have been presented outside of stockholders’ equity as redeemable non-controlling interests.

The Company attributes 34.9% of the net income or loss associated with Rondo to redeemable non-controlling interests. The Company will also accrete the redeemable non-controlling interests to redemption value upon an event that makes redemption probable. For the three months ended March 31, 2024 and 2023, the Company recorded tax distributions of $4.4 million and $3.0 million, respectively, as a reduction of redeemable non-controlling interests, respectively.
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Changes in Accumulated Other Comprehensive (Loss) Income by Component (in thousands):
Foreign
currency
translation
adjustments
Unrealized gain (loss) on cash
flow hedge, net
of tax
Accumulated
other
comprehensive (loss) income
Balance December 31, 2023$(66,072)$33,723 $(32,349)
Other comprehensive loss before reclassification(390)15,543 15,153 
Reclassification of cash flow hedge to earnings, net of tax of $0
 (6,515)(6,515)
Balance March 31, 2024$(66,462)$42,751 $(23,711)
Balance December 31, 2022$(32,382)$42,321 $9,939 
Other comprehensive loss before reclassification898 (7,135)(6,237)
Reallocation of ownership interests
(195)257 62 
Balance March 31, 2023$(31,679)$35,443 $3,764 
19. Related Party Transactions
The Company has various business agreements with certain parties in which there is some common ownership. However, the Company does not directly own or manage any of such related parties. Except as disclosed below, as of and for the three months ended March 31, 2024, there were no material changes to our related party agreements or relationships as described in Note 24. Related Party Transactions and Note 22. Stockholders’ Equity in our 2023 Annual Report on Form 10-K.
The following table summarizes the Company’s related party transactions (in thousands):
Three Months Ended March 31,
Related Party and Nature of TransactionCaption in Balance Sheet and Statement of Operations20242023
Kashiv Biosciences LLC
Parking space leaseResearch and development$25 $17 
Development and commercialization agreement - Ganirelix Acetate and Cetrorelix AcetateResearch and development$ $50 
Development and commercialization agreement - Filgrastim and Pegfilgrastim - Royalty expense (Releuko and Fylnetra)Cost of goods sold$4,526 $144 
Storage agreementResearch and development$(77)$(48)
Inventory purchases under development and commercialization agreement - Filgrastim and Pegfilgrastim (Releuko and Fylnetra)Inventory and cost of goods sold$1,216 $ 
Generic development supply agreement - research and development materialResearch and development$(48)$ 
Generic development supply agreement - development activity deferred incomeDeferred revenue and net revenue$(422)