Amneal Pharmaceuticals, Inc. (AMRX)

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Amneal Pharmaceuticals, Inc. (the “Company”, “we,” “us,” or “our”) is a diversified, global biopharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines. Our Affordable Medicines segment includes retail generics, injectables, and biosimilars. In our Specialty segment, we offer a portfolio of branded pharmaceuticals focused primarily on central nervous system and endocrine disorders. Through our AvKARE segment, we are a distributor of pharmaceuticals and other products for the U.S. federal government, retail, and institutional markets. We operate principally in the U.S., India, and Ireland.

The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under Item 1A. Risk Factors in our 2025 Annual Report on Form 10-K, in Item 1A. Risk Factors of Part II of this Quarterly Report on Form 10-Q and under the heading Cautionary Note Regarding Forward-Looking Statements included elsewhere in this Quarterly Report on Form 10-Q.

The following discussion and analysis for the three and six months ended June 30, 2026 should also be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements for the year ended December 31, 2025 included in our 2025 Annual Report on Form 10-K.

Overview

We have three reportable segments: Affordable Medicines, Specialty, and AvKARE. Refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report on Form 10-K for a description of our segments.

Agreement to Acquire Kashiv Biosciences, LLC

On April 21, 2026, we entered into a definitive agreement to acquire 100% of the outstanding membership interests in Kashiv BioSciences, LLC (a related party, as described in Note 18. Related Party Transactions in this Quarterly Report on Form 10-Q and Note 22. Related Party Transactions in our 2025 Annual Report on Form 10-K) (“Kashiv”) in a transaction (the “Transaction”) with consideration that includes $375 million of cash and 28,942,108 shares of Class A common stock of the Company at closing, subject to certain purchase price adjustments for cash, and the funding of operations between signing and closing, among others. Consideration also includes up to $350 million in potential contingent payments based on the achievement of certain regulatory milestones in the United States and potential contingent royalties equal to 25% of the amount by which annual aggregate gross profits for certain products exceed specified gross profit hurdle amounts for the corresponding annual royalty periods during the twelve-year period following the closing of the transaction.

The transaction was approved by a vote of the holders of the Company’s common stock not party to the transaction, and the issuance of Class A common stock as consideration was approved by a vote of the Company’s common shareholders on July 31, 2026. Closing of the transaction, which is expected in the third quarter of 2026, remains subject to the satisfaction of customary closing conditions.

Upon closing of the transaction, we will issue 28,942,108 shares of our Class A common stock. As a result, our stockholders will own a smaller percentage of the Company after the acquisition and will thereafter have a reduced voting and economic interest in the Company.

Kashiv is a vertically integrated biopharmaceutical company with numerous commercial and advanced clinical-stage assets and is among the few U.S.-based companies to both manufacture and receive marketing authorization for multiple biosimilars.

Water Damage to India Facility

During the third week of July 2026, severe rain caused water damage to one of our facilities in India. We are currently undertaking remediation efforts and completing repairs. As of the date of this Quarterly Report, we estimate that inventory losses, property damage, remediation costs, and other incremental expenses could range from approximately $10 million to $15 million before any potential insurance recoveries, with most of the impact expected during the second half of 2026. We maintain property and business interruption insurance. The amount and timing of any potential insurance recoveries have not yet been determined. These estimates are preliminary and may change as the assessment and remediation activities continue.

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Since the severe rain and resulting water damage occurred subsequent to June 30, 2026, no amounts related to this event have been recognized in our consolidated financial statements as of and for the three and six months ended June 30, 2026.

We expect production volumes and operating results to be adversely affected during the second half of 2026. In addition, separate from the estimated direct losses and costs described above, we currently estimate that this event could result in approximately $20 million of lost pre-tax profit during the same period. The magnitude of the impact will depend on the timing of repairs and the availability of alternative manufacturing capacity.

Certain Market, Industry, and Geopolitical Factors

The Pharmaceutical Industry

The pharmaceutical industry is highly competitive and highly regulated. As a result, we face a number of industry-specific factors and challenges, which can significantly impact our results. For a more detailed explanation of our business and its risks, refer to our 2025 Annual Report on Form 10-K, as supplemented by Part II, Item 1A “Risk Factors” of our subsequent Quarterly Reports on Form 10-Q.

Inflation

While it is difficult to accurately measure the impact of inflation, we do not currently expect a material impact related to inflation for the year ending December 31, 2026. Notwithstanding our estimates, rising inflationary pressures due to higher input costs (including higher material, transportation, supply, labor and other costs whether as a result of supply chain disruption, tariffs or otherwise) could exceed our expectations, which would further adversely impact our operating results in future periods.

Trade Policy and Tariffs

We are subject to certain trade and tariff requirements imposed by the U.S. and various foreign governments. The great majority of our net sales rely on finished dosage forms (“FDF”) or active pharmaceutical ingredients (“API”) produced in the U.S. or India. We have limited reliance on imports from Europe and China, and no reliance on imports from Mexico or Canada.

Since 2025, the U.S. government has taken a number of actions affecting trade policy for pharmaceuticals, including initiating investigations into pharmaceutical imports and announcing various tariff measures, as discussed in Part II., Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2025 Annual Report on Form 10-K. These actions have included the imposition and subsequent invalidation of certain tariffs under the International Emergency Economic Powers Act by the U.S. Supreme Court, as well as the establishment of additional tariffs pursuant to several other authorities that include product‑specific exemptions.

On May 13, 2026, the President announced the findings of a Section 232 investigation into pharmaceutical imports and the imposition of tariffs on certain FDF and API, under which certain branded pharmaceutical products and their APIs are subject to tariffs of up to 100%, with the potential for tariff reductions and various product-, company-, and country-specific exceptions. We are currently evaluating the potential impact of these measures, the ultimate effect of which will depend on the availability and terms of any applicable exceptions, and any additional guidance or actions taken by the Administration. Generic and biosimilar products, as well as their associated APIs, were exempted from this action.

On July 21, 2026, the President announced a preliminary proposal that generic drugs imported into the U.S. would remain subject to no tariffs through July 31, 2028, after which tariffs would increase to 100% for one year and 200% thereafter. As of the date of this Quarterly Report on Form 10-Q, the announced policy has not been formally implemented and significant uncertainties remain regarding its scope, including the treatment of APIs, biosimilars, global supply chains and potential exemptions. Based on the announced timing, we do not expect a material direct impact on our 2026 results; however, if implemented as announced, the tariffs could materially increase the cost of products manufactured by us or third parties outside the U.S., adversely affecting gross margins, product availability and our competitive position. We are evaluating our product-level exposure and potential mitigation actions, including expanding U.S. manufacturing, alternative sourcing, supplier arrangements, pricing actions and portfolio changes, but we cannot currently estimate the impact on our future financial condition, results of operations or cash flows.

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Results of Operations

Comparison of Three Months Ended June 30, 2026 to Three Months Ended June 30, 2025

Consolidated Results

The following table sets forth our summarized, consolidated results of operations for the three months ended June 30, 2026 and 2025 (in thousands):

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Net Revenue

Net revenue for the three months ended June 30, 2026 increased 9.9% from the prior year period, primarily due to:

•Growth in our Affordable Medicines segment net revenue of $56.5 million, primarily due to new products launched in 2026 and 2025, which contributed $44.8 million of year-over-year growth, as well as an increase in sales of women’s health medicines due to market conditions, partially offset by price erosion.

•Growth in our Specialty segment net revenue of $21.3 million, primarily driven by increases in sales of CREXONT® ($17.6 million), BREKIYA® autoinjector ($5.5 million), and UNITHROID® ($5.9 million), partially offset by the expected decline in sales of RYTARY®.

•A decline in our AvKARE segment net revenue of $6.1 million, primarily driven by a reduction in our low margin distribution sales, partially offset by expan

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Amneal Pharmaceuticals, Inc. (the “Company”, “we,” “us,” or “our”) is a diversified, global biopharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines. Our Affordable Medicines segment includes retail generics, injectables, and biosimilars. In our Specialty segment, we offer a portfolio of branded pharmaceuticals focused primarily on central nervous system and endocrine disorders. Through our AvKARE segment, we are a distributor of pharmaceuticals and other products for the U.S. federal government, retail, and institutional markets. We operate principally in the U.S., India, and Ireland. Refer to the section “Segments” below for an overview of our segments.

Prior to the Reorganization (as defined herein), we were a holding company, whose principal assets were common units (the “Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”). As of September 30, 2023, we held 50.4% of the Amneal Common Units and the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Amneal Group”) held the remaining 49.6%. On November 7, 2023, we implemented a plan pursuant to which we and Amneal reorganized and simplified our corporate structure by eliminating our umbrella partnership-C-corporation structure and converting to a more traditional structure whereby all stockholders hold their voting and economic interests directly through the public company (the “Reorganization”). Effective with the Reorganization, we hold 100% of the Amneal Common Units and consolidate the financial statements of Amneal and its subsidiaries. Refer to Note 1. Nature of Operations in our consolidated financial statements for additional information about the Reorganization.

The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under Item 1A. Risk Factors and under the heading Forward-Looking Statements in this Annual Report on Form 10-K. The following discussion and analysis, as well as other sections in this report, should be read in conjunction with the consolidated financial statements and related notes to consolidated financial statements included elsewhere herein.

For a discussion of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, see “Results of Operations” and “Liquidity and Capital Resources” under Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on February 28, 2025.

Overview

Segments

We have three reportable segments: Affordable Medicines, Specialty, and AvKARE.

Affordable Medicines

Our Affordable Medicines segment includes over 280 product families covering an extensive range of dosage forms and delivery systems, including both immediate and extended-release oral solids, powders, liquids, sterile injectables, nasal sprays, inhalation and respiratory products, biosimilar products, ophthalmics, films, transdermal patches and topicals. We focus on developing products that have substantial barriers-to-entry due to complex drug formulations or manufacturing, or legal or regulatory challenges.

Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and even more so in periods of market exclusivity, or in periods of limited generic competition. As such, the timing of new product introductions can have a significant impact on our financial results. The entrance into the market of additional competition generally has a negative impact on the volume and/or pricing of the affected products. Additionally, pricing is determined by market place dynamics and is often affected by factors outside of our control.

Specialty

Our Specialty segment is engaged in the development, promotion, sale and distribution of proprietary branded pharmaceutical products, with a focus on products addressing central nervous system disorders, including Parkinson’s disease, and endocrine disorders. Significant products within our Specialty segment include CREXONT® (combination of carbidopa and levodopa extended release capsules), RYTARY® (extended release oral capsule formulation of carbidopa-levodopa), UNITHROID® (levothyroxine sodium), and Brekiya® (dihydroergotamine mesylate) injection. In September 2024, we began selling CREXONT®, which is indicated for the treatment of Parkinson’s disease, Parkinson’s disease caused by infection or inflammation of the brain, or Parkinson’s disease-like symptoms that may result from carbon monoxide or manganese

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poisoning in adults. RYTARY® is indicated for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication or manganese intoxication. UNITHROID®, indicated for the treatment of hypothyroidism, is sold under a license and distribution agreement with Jerome Stevens Pharmaceuticals, Inc.

New product launches are an important growth driver. Brekiya® autoinjector, approved by the FDA in May 2025 and launched in the U.S. in October 2025, is the first and only ready-to-use autoinjector formulation of dihydroergotamine mesylate indicated for the acute treatment of migraine, with or without aura, and for the acute treatment of cluster headache in adults.

Our Specialty products are marketed through skilled specialty sales and marketing teams, who call on neurologists, movement disorder specialists, endocrinologists and primary care physicians throughout the U.S. Our Specialty segment also has other product candidates that are in varying stages of development.

For Specialty products, the majority of such products’ commercial value is usually realized during the period in which the product has market exclusivity. In the U.S., when market exclusivity expires and generic versions of a product are approved and marketed, there can often be substantial and rapid declines in the branded product’s sales. In 2025, an authorized generic version of RYTARY® was launched, and the Company anticipates multiple generic versions of RYTARY® to be introduced in the future.

In 2025, CREXONT® continued to grow within our Specialty segment. CREXONT® was added to three large national formularies, which expanded total U.S. insurance coverage from about 30% of covered lives at the end of 2024 to over 50% at the end of 2025. In December 2025, we announced new positive interim results from our ongoing Phase 4 ELEVATE-PD study, including significant increases in daily “Good On” time and reductions in “Off” time.

AvKARE

Our AvKARE segment provides pharmaceuticals primarily to governmental agencies, predominantly focused on serving the U.S. Department of Defense and the U.S. Department of Veterans Affairs. AvKARE is also a re-packager of bottle and unit dose pharmaceuticals and vitamins under the registered names of AvKARE and AvPAK. AvKARE is also a wholesale distributor of pharmaceuticals, over the counter drugs and medical supplies to its retail and institutional customers that are located throughout the U.S. focused primarily on entities that provide care to low-income and uninsured patients. Operating results for the sale of Amneal products by AvKARE are included in our Affordable Medicines reportable segment.

Certain Market, Industry, and Geopolitical Factors

The Pharmaceutical Industry

The pharmaceutical industry is highly competitive and highly regulated. As a result, we face a number of industry-specific factors and challenges, which can significantly impact our results. For a more detailed explanation of our business and its risks, refer to Item 1. Business and Item 1A. Risk Factors in this Form 10-K.

Inflation

While it is difficult to accurately measure the impact of inflation, we estimate our business did not experience a material increase in costs due to inflation for the year ended December 31, 2025. We do not expect a material impact related to inflation for the year ending December 31, 2026. Notwithstanding our estimates, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods.

Trade Policy and Tariffs

We are subject to certain trade and tariff requirements imposed by the U.S. and various foreign governments. The great majority of our net sales rely on FDF or API produced in the U.S. or India. We have limited reliance on imports from Europe and China, and no reliance on imports from Mexico or Canada.

Since taking office in 2025, President Trump has announced a number of tariff actions, and while there are currently no reciprocal tariffs on pharmaceutical products imported into the U.S., this can change at any moment. On February 1, 2025, the Administration imposed a 10% tariff on all products from China under the International Emergency Economic Powers Act, (50 U.S.C. 1701 et seq) (the “IEEPA”), and related authorities as announced in the Federal Register Notice and Executive Order 14195 dated February 1, 2025 (as amended). On February 20, 2026, the Supreme Court of the United States issued an opinion

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ruling that President Trump’s tariffs exceeded presidential authority under the IEEPA, which had the effect of invalidating the tariffs imposed thereunder to date.

On April 14, 2025, the Department of Commerce Bureau of Industry and Security (“DOCBIS”) announced that it had initiated, as of April 1, 2025, a broad investigation under section 232 of the Trade Expansion Act to determine the effects on national security of imports of pharmaceuticals (i.e. FDF, API, key starting materials, derivatives, and medical countermeasures), including whether trade remedies such as tariffs should be imposed. This investigation covers both generic and brand products. On September 26, 2025, DOCBIS announced that it had initiated, as of September 2, 2025, a separate Section 232 national security investigation of imports of personal protective equipment, medical consumables (including syringes and intravenous bags), and medical equipment (including devices). These Section 232 investigations are ongoing. On February 20, 2026, President Trump imposed a 10% global tariff for 150 days under Section 122 of the Trade Act of 1974. FDF and API are exempt from the Section 122 tariff as of the date of this filing.

Given the global nature of pharmaceutical supply chains, any changes to historically prevailing tariff requirements could impact us and our industry by increasing costs, affecting product availability, and/or disrupting supply chains. The Company is closely monitoring these tariff and trade developments and will take actions to reduce or minimize any material negative impact.

One Big Beautiful Bill Act

On July 4, 2025, President Trump signed OBBBA, which includes a broad range of tax reform provisions affecting businesses, including, but not limited to, extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act and eliminating the requirement to capitalize and amortize U.S.-based research and experimental expenditures over five years, making these expenditures fully deductible in the period incurred. These provisions resulted in a reduction of the Company’s current income tax liabilities of $7.8 million during the year ended December 31, 2025.

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Results of Operations

Consolidated Results

The following table sets forth our summarized, consolida

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