ALKERMES PUBLIC LIMITED COMPANY Directors’ Report and Consolidated Financial Statements For the Year Ended March 31, 2013 ALKERMES PLC Table of Contents Page Directors’ Report .......................................................... 2 Statement of Directors’ Responsibilities .......................................... 56 Independent Auditors’ Report—Group ........................................... 57 Consolidated Profit and Loss Account ........................................... 59 Consolidated Statement of Comprehensive Income (Loss) ............................. 60 Consolidated Balance Sheet ................................................... 61 Consolidated Statement of Cash Flows ........................................... 63 Consolidated Reconciliation of Shareholders’ Funds ................................. 62 Notes to the Consolidated Financial Statements .................................... 64 Independent Auditors’ Report—Company ......................................... 111 Company Balance Sheet ..................................................... 113 Notes to the Company Financial Statements ....................................... 114 1 DIRECTORS’ REPORT For the Year Ended March 31, 2013 The directors present their report and audited consolidated financial statements for the fiscal year ended March 31, 2013. The directors have elected to prepare the consolidated financial statements in accordance with section 1 of the Companies (Miscellaneous Provisions) Act, 2009, which provides that a true and fair view of the state of affairs and profit or loss may be given by preparing the financial statements in accordance with accounting principles generally accepted in the United States of America (‘‘GAAP’’), as defined in Section 1(1) of the Companies (Miscellaneous Provisions) Act 2009, to the extent that the use of those principles in the preparation of the financial statements does not contravene any provision of the Companies Acts or of any regulations made thereunder. Principal Activities Alkermes plc is a fully integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to develop innovative medicines that improve patient outcomes. We have a diversified portfolio of more than 20 commercial drug products and a clinical pipeline of product candidates that address central nervous system (‘‘CNS’’) disorders such as addiction, schizophrenia and depression. Headquartered in Dublin, Ireland, we have a research and development (‘‘R&D’’) center in Waltham, Massachusetts; R&D and manufacturing facilities in Athlone, Ireland; and manufacturing facilities in Gainesville, Georgia and Wilmington, Ohio. We leverage our formulation expertise and proprietary product platforms to develop, both with partners and on our own, innovative and competitively advantaged medications that can enhance patient outcomes in major therapeutic areas. We enter into select collaborations with pharmaceutical and biotechnology companies to develop significant new product candidates, based on existing drugs and incorporating our proprietary product platforms. In addition, we apply our innovative formulation expertise and drug development capabilities to create our own new, proprietary pharmaceutical products. On September 16, 2011, the business of Alkermes, Inc. and the drug technologies business (‘‘EDT’’) of Elan Corporation, plc (‘‘Elan’’) were combined under Alkermes plc (this combination is referred to as the ‘‘Business Combination,’’ the ‘‘acquisition of EDT’’ or the ‘‘EDT acquisition’’). Use of the terms such as ‘‘us,’’ ‘‘we,’’ ‘‘our,’’ ‘‘Alkermes’’ or the ‘‘Company’’ in this Directors’ Report is meant to refer to Alkermes plc and its consolidated subsidiaries, except where the context makes clear that the time period being referenced is prior to September 16, 2011, in which case such terms shall refer to Alkermes, Inc. and its consolidated subsidiaries. Prior to September 16, 2011, Alkermes, Inc. was an independent pharmaceutical company incorporated in the Commonwealth of Pennsylvania and traded on the NASDAQ Global Select Stock Market (the ‘‘NASDAQ’’) under the symbol ‘‘ALKS’’. For a more detailed discussion of the Business Combination, please refer to the notes to our consolidated financial statements, including Note 1, The Company, and Note 3, Acquisitions, in the accompanying consolidated financial statements. 2 Business Overview Commercial Products Our commercial products are described in the table below, including, among other things, the territory in which the marketer has the right to sell the product and the source of revenues for us: Product Indication Technology Territory Revenue Source Marketer RISPERDAL Schizophrenia Extended-release Worldwide Manufacturing and Janssen CONSTA Bipolar I Disorder microsphere Royalty INVEGA Schizophrenia NanoCrystal↧ U.S. Royalty Janssen SUSTENNA/ Worldwide XEPLION AMPRYA/ Treatment to improve Oral Controlled U.S. Manufacturing and Acorda in U.S. FAMPYRA walking in patients Release (‘‘OCR’’) Worldwide Royalty Biogen Idec (ex-U.S. with multiple (MXDAS↧) under sublicense sclerosis (‘‘MS’’), as from Acorda) demonstrated by an increase in walking speed BYDUREON Type 2 diabetes Extended-release Worldwide Royalty Bristol-Myers and microsphere Astra Zeneca VIVITROL Alcohol dependence Extended-release U.S. Product sales Alkermes plc Opioid dependence microsphere Russia and Manufacturing and Janssen Commonwealth of Royalty Independent States (‘‘CIS’’) TRICOR↧ Cholesterol lowering NanoCrystal Worldwide Royalty AbbVie Inc. LIPANTHYL↧ LIPIDIL SUPRALIP ZANAFLEX↧ Muscle spasticity OCR U.S. Manufacturing Acorda; Actavis, Inc. CAPSULES↧ (SODAS↧) (capsules only) and (formerly Watson ZANAFLEX↧ Royalty Pharmaceutical) TABLETS TIZANIDINE HYDROCHLORIDE (AB Rated to ZANAFLEX CAPSULES) AVINZA↧ Chronic moderate to OCR U.S. Manufacturing and Pfizer, Inc. (‘‘Pfizer’’) severe pain (SODAS) Royalty EMEND↧ Nausea associated NanoCrystal Worldwide Manufacturing and Merck & Co. Inc. with chemotherapy Royalty (‘‘Merck’’) and surgery FOCALIN XR Attention Deficit OCR Worldwide Manufacturing and Novartis AG RITALIN LA↧ Hyperactivity (SODAS) Royalty (‘‘Novartis’’) Disorder MEGACE ES Anorexia, Cachexia NanoCrystal U.S. Royalty Strativa associated Pharmaceuticals with AIDS (a business division of Par Pharmaceutical Companies, Inc.) LUVOX CR↧ Obsessive-compulsive OCR U.S. Manufacturing and Jazz disorder (SODAS) Royalty Pharmaceuticals plc (‘‘Jazz’’) RAPAMUNE↧ Prevention of renal NanoCrystal Worldwide Manufacturing Pfizer transplant rejection NAPRELAN↧ Various mild to OCR U.S. Manufacturing Shionogi moderate (IPDAS↧) Canada Sunovion pain indications Pharmaceuticals Canada, Inc. 3 Product Indication Technology Territory Revenue Source Marketer VERAPAMIL SR Hypertension OCR Licensed on Manufacturing and UCB VERELAN↧ (SODAS) country/region Royalty (on select Kremers-Urban; VERELAN PM basis throughout formulations) Cephalon; VERAPAMIL PM the world Aspen Pharma; VERECAPS↧ Orient Europharma; UNIVER Actavis, Inc. DILZEM Hypertension and/or OCR Licensed on Manufacturing and Cephalon; DILZEM SR Angina (SODAS) country/region Royalty (for Pfizer; DILZEM XL basis throughout CARDIZEM CD Roemmers; DILTELAN the world only) Kun Wha; ACALIX CD Orient Europharma; DINISOR Sanofi-Aventis; TILAZEM CR Valeant CARDIZEM CD AFEDitab CR Hypertension OCR U.S. Manufacturing Actavis, Inc. (AB Rated to (MXDAS↧) Adalat CC↧) LYXUMIA↧ Type 2 diabetes in — United Kingdom Royalty Sanofi-Aventis adults ZONEGRAN↧ Hypertension — EU Royalty Eisai Pharmaceuticals We have five principal commercial products which either currently, or in the future, are expected to contribute meaningfully to our revenues. These five products are discussed below: RISPERDAL CONSTA and INVEGA SUSTENNA/XEPLION RISPERDAL CONSTA (risperidone long-acting injection) and INVEGA SUSTENNA/XEPLION (paliperidone palmitate extended-release injectable suspension) are long-acting atypical antipsychotics that incorporate our proprietary technologies. They are products of Janssen. RISPERDAL CONSTA uses our polymer-based microsphere injectable extended-release technology to deliver and maintain therapeutic medication levels in the body through just one injection every two weeks. RISPERDAL CONSTA is exclusively manufactured by us and is marketed and sold by Janssen worldwide. It was first approved for the treatment of schizophrenia in the U.S. in 2003 and in countries in Europe in 2002. The FDA approved RISPERDAL CONSTA as both monotherapy and adjunctive therapy to lithium or valproate in the maintenance treatment of bipolar I disorder in May 2009. RISPERDAL CONSTA is also approved for the maintenance treatment of bipolar I disorder in Canada, Australia and Saudi Arabia. INVEGA SUSTENNA uses our nanoparticle injectable extended-release technology to increase the rate of dissolution and enable the formulation of an aqueous suspension for once-monthly intramuscular administration. INVEGA SUSTENNA was approved for the acute and maintenance treatment of schizophrenia in adults in the U.S. in 2009. Paliperidone palmitate extended-release for injectable suspension is also approved in the European Union (‘‘EU’’) and other countries worldwide, and is marketed and sold in the EU under the trade name XEPLION. INVEGA SUSTENNA/ XEPLION is manufactured and commercialized worldwide by Janssen. Revenues from Janssen accounted for approximately 35%, 48% and 83% of our consolidated revenues for the fiscal years ended March 31, 2013, 2012 and 2011, respectively. See ‘‘Collaborative