10-K – 2026-02-19 – insm-20251231.htm

Chargebacks: Chargebacks are discounts that occur when certain contracted customers, currently public health service institutions and federal government entities purchasing via the Federal Supply Schedule, purchase directly from the Company's specialty distributor. Contracted customers generally purchase the product at a discounted price and the specialty distributor, in turn, charges back to the Company the difference between the price the specialty distributor initially paid and the discounted price paid by the contracted customers. The Company estimates chargebacks provided to the specialty distributor and deducts these estimated amounts from gross product revenues, and from accounts receivable, at the time revenues are recognized.
Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. Based upon the terms of the program and information regarding programs provided for similar specialty pharmaceutical products, the Company estimates the average co-pay mitigation amounts and the percentage of patients that it expects to participate in the program in order to establish accruals for co-payment assistance. These reserves are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue. The Company adjusts its accruals for co-pay assistance based on actual redemption activity and estimates of future redemptions related to sales in the current period.
If any, or all, of the Company's actual experience varies from its estimates, the Company may need to adjust prior period accruals, affecting revenue in the period of adjustment.
The Company also recognizes revenue related to various MAPs in Europe. During the fourth quarter of 2022, the Company agreed with French authorities on the final reimbursement price related to the temporary authorization for use (Autorisation Temporaire d'Utilisation or ATU) program in France. The a ccrued France ATU reimbursement payable as of December 31, 2025 relates to current year sales and is recorded within accounts payable and accrued liabilities in the consolidated balance sheets. See Note 8 - Accounts Payable and Accrued Liabilities for further details.
The following table provides a summary rollforward of the Company's sales allowances and related accruals for the years ended December 31, 2025 and 2024, which have been deducted in arriving at product revenues, net (in thousands):

Customer Credits, Fees and Discounts Rebates, Chargebacks and Co-pay Assistance Total
Balance as of December 31, 2023 $ 15,482   $ 10,177   $ 25,659  
Allowances for current period sales 14,410   41,082   55,492  
Allowances for prior period sales 100   3,380   3,480  
Payments and credits ( 22,415 ) ( 39,958 ) ( 62,373 )
Balance as of December 31, 2024 $ 7,577   $ 14,681   $ 22,258  
Allowances for current period sales 23,746   111,829   135,575  
Allowances for prior period sales —   500   500  
Payments and credits ( 19,876 ) ( 59,102 ) ( 78,978 )
Balance as of December 31, 2025 $ 11,447   $ 67,908   $ 79,355  

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5. Inventory
The Company's inventory balance consists of the following (in thousands):

As of December 31,
2025 2024

Raw materials $ 30,623   $ 19,682  
Work-in-process 41,346   39,932  
Finished goods 60,099   38,964  
$ 132,068   $ 98,578  

Inventory is stated at the lower of cost and net realizable value and consists of raw materials, work-in-process, and finished goods. The Company has not recorded any significant inventory write-downs. The Company currently uses a limited number of third-party CMOs to produce its inventory.
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6. Intangibles, Net and Goodwill
Intangibles, Net
Finite-lived Intangible Assets
As of December 31, 2025, the Company's finite-lived intangible assets consisted of acquired ARIKAYCE R&D, the milestones paid to PARI for the license to use Lamira for the delivery of ARIKAYCE to patients as a result of the FDA and EC approvals of ARIKAYCE in September 2018 and October 2020, respectively, the milestone paid to AstraZeneca as a result of the FDA approval of BRINSUPRI in August 2025, and the milestone payable to AstraZeneca as a result of the EC approval of BRINSUPRI in November 2025. The Company began amortizing its acquired ARIKAYCE R&D and PARI milestone-related intangible assets in October 2018, over ARIKAYCE's initial regulatory exclusivity period of 12 years, and began amortizing its AstraZeneca milestone-related intangible assets in August and November 2025 over BRINSUPRI's regulatory exclusivity period of approximately 14 years. Amortization expense is estimated to be $ 8.3 million per year for the years 2026 through 2029, and approximately $ 7.1 million for 2030.
Indefinite-lived Intangible Assets
As of December 31, 2025, the Company's indefinite-lived intangible assets consisted of acquired IPR&D from the Business Acquisition. Indefinite-lived intangible assets are not amortized.
A rollforward of the Company's intangible assets for the years ended December 31, 2025 and 2024 follows (in thousands):

Intangible Asset December 31, 2024 Additions Amortization December 31, 2025
Acquired ARIKAYCE R&D $ 27,888   $ —   $ ( 4,850 ) $ 23,038  
PARI milestones 1,164   —   ( 202 ) 962  
AstraZeneca milestones     —   45,000   ( 949 ) 44,051  
Acquired IPR&D 29,600   —   —   29,600  
$ 58,652   $ 45,000   $ ( 6,001 ) $ 97,651  

Intangible Asset December 31, 2023 Additions Amortization December 31, 2024
Acquired ARIKAYCE R&D $ 32,738   $ —   $ ( 4,850 ) $ 27,888  
PARI milestones 1,366   —   ( 202 ) 1,164  
Acquired IPR&D 29,600   —   —   29,600  
$ 63,704   $ —   $ ( 5,052 ) $ 58,652  

Goodwill
The Company's goodwill balance of $ 136.1  million as of December 31, 2025 and 2024 resulted from the August 2021 Business Acquisition.
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7. Fixed Assets, Net
Fixed assets are stated at cost and depreciated using the straight-line method, based on useful lives as follows (in thousands):

  Estimated
Useful Life (years)
As of December 31,
Asset Description 2025 2024
Building 39 $ 10,437   $ —  
Land NA 1,963   —  
Laboratory equipment 7
39,127   26,753  
Furniture and fixtures 7
6,428   6,428  
Computer hardware and software 3  -  5
8,425   6,485  
Office equipment 7
171   171  
Manufacturing equipment 7
1,336   1,336  
Leasehold improvements 2  -  10
53,400   38,058  
Construction in progress — 42,410   51,127  
  163,697   130,358  
Less accumulated depreciation   ( 60,755 ) ( 50,306 )
  $ 102,942   $ 80,052  

Depreciation expense wa s $ 10.4 million , $ 6.0 million and $ 5.5 million for the years ended December 31, 2025, 2024 and 2023, respectivel y.

8. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consist of the following (in thousands):

  As of December 31,
2025 2024
Accounts payable and other accrued operating expenses $ 79,907   $ 73,033  
Accrued clinical trial expenses 34,329   26,068  
Accrued professional fees 23,658   17,895  
Accrued technical operation expenses 22,533   18,388  

Accrued compensation and employee related costs 111,514   80,312  
Accrued royalty and milestones payable 17,101   6,324  
Accrued interest payable —   359  
Revenue Interest Payments payable 6,449   4,177  
Accrued sales allowances and related costs 70,869   16,762  
Accrued French rebate payable 6,960   5,988  
Contingent consideration 57,799   24,700  
Accrued milestone payment to AstraZeneca 15,000   —  
Other accrued liabilities 9,941   11,203  
$ 456,060   $ 285,209  

In November 2025, a $ 15.0 million milestone commitment became payable to AstraZeneca upon EC approval of BRINSUPRI. See Note 6 - Intangibles, Net and Goodwill for further details.

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9. Leases
The Company's lease portfolio consists primarily of office and laboratory space, manufacturing facilities, research equipment and fleet vehicles. All of the Company's leases are classified as operating leases, except for the Company's leases of its corporate headquarters and a research facility in San Diego, which are classified as finance leases. The terms of the Company's lease agreements that have commenced range from less than one year to ten years, ten months . In its assessment of the term of each such lease, the Company has not included any options to extend or terminate the lease due to the absence of economic incentives in its lease agreements. Leases that qualify for treatment as a short-term lease are expensed as incurred. These short-term leases are not material to the Company's financial position. Furthermore, the Company does not separate lease and non-lease components for all classes of underlying assets. The Company's leases do not contain residual value guarantees and it does not sublease any of its leased assets.
The Company outsources its manufacturing operations to CMOs. Upon review of the agreements with its CMOs, the Company determined that these contracts contain embedded leases for dedicated manufacturing facilities. The Company obtains substantially all of the economic benefits from the use of the manufacturing facilities, the Company has the right to direct how and for what purpose the facility is used throughout the period of use, and the supplier does not have the right to change the operating instructions of the facility. The operating lease right-of-use assets and corresponding lease liabilities associated with the manufacturing facilities is the sum of the minimum guarantees over the life of the production contracts.
The Company records variable consideration for variable lease payments in excess of fixed fees or minimum guarantees. Variable costs related to CMO manufacturing agreements are direct costs related to the manufacturing of ARIKAYCE and are capitalized within inventory in the Company's consolidated balance sheet, while the variable costs related to other leasing arrangements, not related to the manufacturing of ARIKAYCE, have been classified within operating expenses in the Company's consolidated statements of comprehensive loss. The following table below summarizes the Company's total lease costs included in its consolidated financial statements, as well as other required quantitative disclosures (in thousands):
As of December 31,
2025 2024

Finance lease cost:
Amortization of right-of-use assets $ 2,712   $ 2,712  
Interest on lease liabilities 2,005   2,230  
Total finance lease cost $ 4,717   $ 4,942  
Operating lease cost 10,880   10,415  
Variable lease cost 24,764   25,818  
Total lease cost $ 40,361   $ 41,175  

Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for finance leases $ 2,006   $ 2,230  
Operating cash flows for operating leases $ 11,040   $ 10,389  
Financing cash flows for finance leases $ 2,961   $ 2,610  
Right-of-use assets obtained in exchange for new finance lease liabilities $ —   $ —  
Right-of-use assets obtained in exchange for new operating lease liabilities $ 12,762   $ 8,995  
Weighted average remaining lease term - finance leases 5.7 years 6.6 years
Weighted average remaining lease term - operating leases 2.4 years 2.9 years
Weighted average discount rate - finance leases 7.8   % 7.9   %
Weighted average discount rate - operating leases 8.9   % 9.0   %

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9. Leases (Continued)

The following table below presents the maturity of lease liabilities on an annual basis for the remaining years of the Company's commenced lease agreements (in thousands):

Year Ending December 31, Finance Leases Operating Leases
2026 $ 5,097   $ 11,058  
2027 5,228   9,376  
2028 5,361   2,565  
2029 5,496   954  
2030 4,413   —  
Thereafter 4,248   —  
Total 29,843   23,953  
Less: present value discount
5,779   2,310  
Present value of lease liabilities $ 24,064   $ 21,643  
Balance Sheet Classification at December 31, 2025:

  Current lease liabilities $ 3,345   $ 9,469  
  Long-term lease liabilities 20,719   12,174  
Total lease liabilities $ 24,064   $ 21,643  

In addition to the Company's lease agreements that have previously commenced and are reflected in the consolidated financial statements, the Company has entered into additional lease agreements that have not yet commenced. The Company entered into certain agreements with Patheon related to increasing its long-term production capacity for ARIKAYCE commercial inventory. The Company has determined that these agreements with Patheon contain an embedded lease for the manufacturing facility and the specialized equipment contained therein. As of December 31, 2025, costs of $ 69.5 million incurred by the Company under these additional agreements have been classified within other assets in the Company's consolidated balance sheet. Upon the commencement date, prepaid costs and minimum guarantees specified in the agreement will be combined to establish an operating lease ROU asset and operating lease liability.

10. Debt
Debt, long-term consists of the following commitments as of December 31, 2025 and 2024 (in thousands):

As of December 31,
2025 2024
Convertible notes $ —   $ 567,164  
Term Loans 540,964   536,218  
Debt, long-term $ 540,964   $ 1,103,382  

2028 Convertible Notes
In May 2021, the Company completed an underwritten public offering of $ 575.0 million aggregate principal amount of the 2028 Convertible Notes, including the exercise in full of the underwriters' option to purchase an additional $ 75.0 million in aggregate principal amount of 2028 Convertible Notes. The Company's net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses of $ 15.7 million, were approximately $ 559.3 million. The 2028 Convertible Notes bore interest payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021. The fair value of the liability component of the 2028 Convertible Notes on the date of issuance was estimated at $ 371.6 million using an effective interest rate of 7.1 % and, accordingly, the residual equity component on the date of issuance was $ 203.4 million.
As of December 31, 2024 , holders of seventy-seven thousand dollars of aggregate principal amount of 2028 Convertible Notes elected to convert their notes, resulting in an issuance of an aggregate of 2,362 shares of the Company’s common stock. The 2028 Convertible Notes would have matured on June 1, 2028 but, on April 24, 2025, the Company issued a redemption notice for the 2028 Convertible Notes with a redemption date of June 6, 2025 (the Redemption Date). The
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Company elected to settle any conversions of the 2028 Convertible Notes that occurred on or before the business day prior to the Redemption Date in shares of the Company’s common stock.
Through April 24, 2025, holders of $ 5.5  million of aggregate principal amount of 2028 Convertible Notes elected to convert their notes into shares of the Company’s common stock at a conversion rate of 30.7692 shares of common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $ 32.50 per share of common stock), resulting in an issuance of an aggregate of 168,944 shares of the Company's common stock. After April 24, 2025, holders of $ 567.5  million of aggregate principal amount of the then outstanding 2028 Convertible Notes elected to convert their notes into shares of the Company's common stock at a conversion rate of 31.2861 shares of common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $ 31.96 per share of common stock), resulting in the issuance of an aggregate of 17,756,196 shares of the Company’s common stock. On the Redemption Date, all then outstanding 2028 Convertible Notes were redeemed at a redemption price equal to 100 % of the principal amount of such 2028 Convertible Notes, plus accrued and unpaid interest on such 2028 Convertible Notes to, but excluding, the Redemption Date (the Redemption Price). For each $1,000.00 principal amount of 2028 Convertible Notes, the Redemption Price was equal to approximately $ 1,000.10 .
2025 Convertible Notes
In January 2018, the Company completed an underwritten public offering of $ 450.0 million aggregate principal of the 2025 Convertible Notes, including the exercise in full of the underwriters' option to purchase an additional $ 50.0 million in aggregate principal amount of 2025 Convertible Notes. The Company's net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses of $ 14.2 million, were approximately $ 435.8 million. The 2025 Convertible Notes bore interest payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The fair value of the liability component of the 2025 Convertible Notes on the date of issuance was estimated at $ 309.1 million using an effective interest rate of 7.6 % and, accordingly, the residual equity component on the date of issuance was $ 140.9 million.
The 2025 Convertible Notes would have matured on January 15, 2025 but on June 27, 2024, the Company called the outstanding 2025 Convertible Notes for redemption, which was completed on August 9, 2024. The Company elected to settle any conversions of the 2025 Convertible Notes that occurred on or before the business day prior to the Redemption Date in shares of the Company’s common stock. Holders of $ 224.8  million aggregate principal amount of the then outstanding 2025 Convertible Notes elected to convert their notes into shares of the Company's common stock at a conversion rate of 25.5384 shares of common stock per $1,000 principal amount of 2025 Convertible Notes (equivalent to an initial conversion price of approximately $ 39.16 per share of common stock). These conversions resulted in the issuance of an aggregate of 5,741,063 shares of the Company’s common stock.
The remaining $ 0.2  million aggregate principal amount of 2025 Convertible Notes outstanding were redeemed by the Company on the Redemption Date at a redemption price equal to 100 % of the principal amount of the 2025 Convertible Notes, plus accrued and unpaid interest on the 2025 Convertible Notes to, but excluding, the Redemption Date (the Redemption Price). For each $1,000 principal amount of 2025 Convertible Notes, the Redemption Price was approximately $ 1,001.17 .
The following table presents the carrying value of the Company’s convertible notes balance (in thousands):
 
As of December 31,
2025 2024
Face value of outstanding convertible notes $ —   $ 574,923  
Debt issuance costs, unamortized —   ( 7,759 )

Convertible notes $ —   $ 567,164  

The $ 567.2 million carrying value of the 2028 Convertible Notes as of December 31, 2024 is net of $ 7.8 million of unamortized debt issuance costs.
Secured Senior Term Loan
In October 2022, the Company entered into the $ 350.0  million Tranche A Term Loan with Pharmakon that would have matured on October 19, 2027. The Tranche A Term Loan originally bore interest at a rate based upon the SOFR, subject to a SOFR floor of 2.5 %, in addition to a margin of 7.75 % per annum. Up to 50 % of the interes t payable during the first 24 months from the closing of the Tranche A Term Loan could have been paid-in-kind at the Company's election. If elected, paid-in-kind
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interest would have been capitalized and added to the principal amount of the Tranche A Term Loan. The Tranche A Term Loan, including the paid-in-kind interest, would have been repaid in eight equal quarterly payments starting in the 13th quarter following the closing of the Tranche A Term Loan (i.e., the quarter ending March 31, 2026), except that the repayment start date could have been extended at the Company's option for an additional four quarters, so that repayments start in the 17th quarter following the closing of the Tranche A Term Loan, subject to the achievement of specified ARIKAYCE data thresholds and certain other conditions. Net proceeds from the Tranche A Term Loan, after deducting the lenders fees and deal expenses of $ 15.1 million, were $ 334.9 million.
Amended and Restated Loan Agreement
In October 2024, the Company entered into the A&R Loan Agreement, as amended on July 10, 2025, with BioPharma Credit PLC, BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon, and the guarantors party to such agreement. The A&R Loan Agreement amended and restated the Loan Agreement, dated as of October 19, 2022, pursuant to which the Tranche A Term Loan was provided. The A&R Loan Agreement, among other items, provides an additional $ 150.0 million senior secured term loan tranche. The A&R Loan Agreement extends the maturity of the Term Loans to September 30, 2029, subject to acceleration to February 1, 2028 on the occurrence of certain prespecified events, and amends the interest rate on the Term Loans to a fixed rate of 9.6 % per annum. As consideration for the provision of the Tranche B Term Loan, the Company agreed to pay Pharmakon a fee equal to 2.0 % of the Tranche B Term Loan at the closing date of the Tranche B Term Loan and an additional exit fee of 2.0 % of the amount of each prepayment or repayment of the Term Loans. The Term Loans will be repaid in eight equal quarterly payments starting on January 3, 2028. Net proceeds from the Tranche B Term Loan, after deducting the lenders fees and administrative expenses of $ 3.7  million, were $ 146.3  million.
The Company evaluated whether the A&R Loan Agreement represented a debt modification or extinguishment in accordance with ASC 470-50, Debt – Modifications and Extinguishments. As the present value of the cash flows under the terms of the A&R Loan Agreement was less than 10% different from the remaining cash flows under the terms of the Tranche A Term Loan, the A&R Loan Agreement was accounted for as a debt modification. The unamortized balance of debt issuance costs incurred in connection with the Term Loans are being amortized through September 2029 utilizing the effective interest rate method. The effective interest rate of the Term Loans was 10.6 % at modification.
The following table presents the carrying value of the Company’s Term Loans balance as of December 31, 2025 and 2024 (in thousands):

As of December 31,
2025 2024
Principal $ 500,000   $ 500,000  
Paid-in-kind interest capitalized 46,770   46,770  
Debt discount, net ( 5,806 ) ( 10,552 )
Term Loans $ 540,964   $ 536,218  

As of December 31, 2025, future principal repayments of debt for each of the fiscal years through maturity were as follows (in thousands):
 
Year Ending December 31:  
2026 $ —  
2027 —  
2028 341,731  
2029 205,039  
2030 —  
2031 and thereafter —  
  $ 546,770  

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10. Debt (Continued)

The estimated fair value of the debt (categorized as a Level 2 li ability for fair value measurement purposes) is determined using current market factors and the ability of the Company to obtain debt at comparable terms to those that are currently in place.
Interest expense for the years ended December 31, 2025, 2024, and 2023, is as follows (in thousands):

Years Ended December 31,
2025 2024 2023
Convertible debt contractual interest expense $ 1,680   $ 6,397   $ 8,250  
Term Loans contractual interest expense 53,219   51,587   46,743  
Royalty Financing Agreement non-cash interest expense
20,675   20,044   18,846  
Amortization of debt issuance costs 6,216   6,884   7,320  

Swap interest income —   ( 2,229 ) ( 1,882 )
Total debt interest expense $ 81,790   $ 82,683   $ 79,277  
Finance lease interest expense 2,005   2,230   2,417  
Total interest expense $ 83,795   $ 84,913   $ 81,694  

11. Royalty Financing Agreement
In October 2022, the Company entered into the Royalty Financing Agreement with OrbiMed. Under the Royalty Financing Agreement, OrbiMed paid the Company $ 150.0  million in exchange for the right to receive, on a quarterly basis, royalties in an amount equal to 4.0 % of ARIKAYCE global net sales prior to September 1, 2025 and 4.5 % of ARIKAYCE global net sales on or after September 1, 2025, as well as 0.75 % of brensocatib global net sales, which includes BRINSUPRI. In the event that OrbiMed has not received aggregate Revenue Interest Payments of at least $ 150.0  million on or prior to March 31, 2028, the Company must make a one-time payment to OrbiMed for the difference between the $ 150.0  million and the aggregated Revenue Interest Payments that have been paid. In addition, the royalty rate for ARIKAYCE will be increased beginning March 31, 2028 to the rate which would have resulted in aggregate Revenue Interest Payments as of March 31, 2028 equaling $ 150.0  million. The total Revenue Interest Payments payable by the Company to OrbiMed are capped at 1.8 x of the purchase price or up to a maximum of 1.9 x of the purchase price under certain conditions. Net proceeds from the Royalty Financing Agreement, after deducting the lenders fees and deal expenses of $ 3.6 million, were $ 146.4  million. The Royalty Financing Agreement was amended in October 2024 to, among other things, amend certain restrictions on the Company’s ability to incur indebtedness.
The fair value of the Royalty Financing Agreement at the time of the transaction was based on the Company’s estimates of future royalties expected to be paid to OrbiMed over the life of the arrangement, which was determined using forecasts from market data sources, which are considered Level 3 inputs. This liability is being amortized using the effective interest method over the life of the arrangement, in accordance ASC 470, Debt and ASC 835, Interest. The initial annual effective interest rate was determined to be  12.4 %. The Company is utilizing the prospective method to account for subsequent changes in the estimated future payments to be made to OrbiMed and updates the effective interest rate on a quarterly basis. 
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11. Royalty Financing Agreement (Continued)

The following table presents the activity of the Company’s Royalty Financing Agreement balance for the years ended December 31, 2025 and 2024 (in thousands):

As of December 31,
2025 2024
Royalty Financing Agreement liability - beginning balance $ 163,671   $ 158,162  
Revenue Interest Payments paid and payable ( 19,401 ) ( 14,535 )
Interest expense recognized 20,675   20,044  
  Royalty Financing Agreement liability - ending balance $ 164,945   $ 163,671  
Royalty issuance costs, unamortized - beginning balance $ ( 2,604 ) $ ( 3,128 )
Amortization of issuance costs 524   524  

  Royalty issuance costs, unamortized - ending balance $ ( 2,080 ) $ ( 2,604 )
    Royalty Financing Agreement $ 162,865   $ 161,067  

The Revenue Interest Payments payable in connection with the royalty financing agreement were $ 6.4  million and $ 4.2  million as of December 31, 2025 and 2024, respectively, which were recorded within accounts payable and accrued expenses on the consolidated balance sheets. Non-cash interest expense is recorded within interest expense in the consolidated statements of comprehensive loss.

12. Shareholders' Equity
Common Stock —As of December 31, 2025, the Company had 500,000,000 shares of common stock authorized with a par value of $ 0.01 per share and 214,255,853 shares of common stock issued and outstanding. In addition, as of December 31, 2025, the Company had reserved 17,375,581 shares of common stock for issuance upon the exercise of outstanding common stock options, 3,889,230 shares of common stock for issuance upon the vesting of RSUs and 266,443 shares for issuance upon the vesting of PSUs. In connection with the Business Acquisition, the Company reser ved 9,406,112 shares of the Company’s common stock, subject to certain closing-related reductions.
Of the 9,406,112 shares reserved, subject to certain closing-related reductions, the Company issued 2,889,367 shares of the Company's common stock in connection with the Business Acquisition i n the third quarter of 2021, after certain closing-related deductions. 171,427 , 177,203 , and 182,182 shares of the Company’s common stock reserved in connection with the Motus acquisition were issued as acquisition consideration on the first, second and third anniversaries of the closing date of the acquisition, respectively, in each case subject to certain reductions. During the third quarter of 2025, a development milestone in connection with the Motus acquisition was achieved, resulting in the issuance of 364,566 shares of the Company's common stock in October 2025. In February 2026, a development milestone in connection with the Motus acquisition was achieved, pursuant to which 368,867 shares of the Company's common stock, subject to certain reductions, became issuable. Additional shares of the Company's common stock will also be issued upon the achievement of certain development and regulatory milestone events, subject to certain reductions. The shares of the Company’s common stock reserved in connection with the AlgaeneX acquisition will be issued upon the achievement of a development milestone event, subject to certain reductions. As of December 31, 2025, 5,348,572 shares of the Company's common stock remain reserved for the Business Acquisition.
In June 2025, the Company completed an underwritten offering of 8,984,375 shares of the Company's common stock at a public offering price of $ 96.00 per share. 1,171,875 of the shares of common stock were issued pursuant to the exercise in full of the underwriters' option to purchase additional shares. The Company's net proceeds from the sale of the shares, after deducting the underwriting discounts and offering expenses of $ 39.2 million , were $ 823.3 million .
In May 2024, the Company completed an underwritten offering of 14,514,562 shares of the Company's common stock at a public offering price of $ 51.50 per share. 1,893,203 of the shares of common stock were issued pursuant to the exercise in full of the underwriters' option to purchase additional shares. The Company's net proceeds from the sale of the shares, after deducting the underwriting discounts and offering expenses of $ 34.3  million , were $ 713.2  million .
In the second quarter of 2023, in connection with the Company's acquisition of Adrestia, the Company issued 3,430,867 shares of the Company's common stock as consideration at closing. See Note 18 - Acquisitions for further details.
In connection with the Company’s acquisition of Vertuis, the Company reserved 550,000 shares of the Company’s common stock, subject to future adjustment. An aggregate of 500,000 of the reserved shares were issued as acquisition
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12. Shareholders' Equity (Continued)

consideration at closing. In July 2024, the Company issued the Vertuis equityholders an additional 14,773 shares of common stock. See Note 18 - Acquisitions for further details.
In the first quarter of 2021, the Company entered into a sales agreement with Leerink Partners, to sell shares of the Company's common stock, with aggregate gross sales proceeds of up to $ 250.0  million, from time to time, through the ATM program, under which Leerink Partners acts as sales age nt. During the year ended December 31, 2023 , the Company issued and sold an aggregate of 6,503,041 shares of common stock through the ATM program at a weighted-average public offering price of $ 24.12 per share and received net proceeds of $ 152.2 million. In the first quarter of 2024, the Company entered into the new sales agreement with Leerink Partners to sell shares of the Company's common stock, with aggregate gross sales proceeds of up to $ 500.0  million, from time to time, through the new ATM program, under which Leerink Partners acted as sales agent. In connection with entering into the new ATM program, the Company terminated the ATM program. During the third quarter of 2024, the Company issued and sold an aggregate of 5,022,295 shares of common stock through the new ATM program at a weighted-average public offering price of $ 75.64 per share and received net proceeds of $ 371.3  million. I n November 2024, the Company terminated the new sales agreement.
Preferred Stock —As of December 31, 2025 and 2024, the Company had 200,000,000 shares of preferred stock authorized with a par value of $ 0.01 and no shares of preferred stock were issued and outstanding.

13. Stock-Based Compensation
The Company's current equity compensation plan, the Insmed Incorporated Amended and Restated 2019 Incentive Plan (the 2019 Incentive Plan), was approved by shareholders at the Company's Annual Meeting of Shareholders on May 13, 2023. The 2019 Incentive Plan replaced the Insmed Incorporated 2019 Incentive Plan, as amended, pursuant to which the Company was authorized to grant incentive awards up to an aggregate of 13,750,000 shares. At the Company’s 2023 Annual Meeting of Shareholders, in connection with approval of the 2019 Incentive Plan, the Company's shareholders approved the issuance of an additional 10,500,000 shares under the 2019 Incentive Plan. At the Company's 2024 Annual Meeting of Shareholders, the Company's shareholders approved Amendment No. 1 to the 2019 Incentive Plan, which provides for the issuance of an additional 3,000,000 shares under the plan. At the Company's 2025 Annual Meeting of Shareholders, the Company's shareholders approved Amendment No. 2 to the 2019 Incentive Plan, which provides for the issuance of an additional 10,000,000 shares under the 2019 Incentive Plan. As of December 31, 2025,  11,674,577  shares remain available for future issuance under the 2019 Incentive Plan.
The 2019 Incentive Plan is administered by the Compensation Committee of the Board of Directors of the Company. Under the terms of the 2019 Incentive Plan, the Company is authorized to grant a variety of incentive awards based on its common stock, including stock options (both incentive stock options and non-qualified stock options), RSUs, performance options/shares and other stock awards to eligible employees and non-employee directors. The 2019 Incentive Plan will terminate on April 3, 2029 unless it is extended or terminated earlier pursuant to its terms.
In addition, from time to time, the Company makes inducement grants of stock options and RSUs to new hires, which awards are made pursuant to the Nasdaq's inducement grant exception to the shareholder approval requirement for grants of equity compensation. The Company granted inducement stock options and RSUs covering 522,517 , 1,444,850  and 2,674,290 shares of the Company's common stock to new employees during the years ended December 31, 2025, 2024 and 2023, respectively. In February 2025, the Company adopted the Insmed Incorporated 2025 Inducement Plan, under which the Company is authorized to grant a variety of inducement awards, including stock options and RSUs, up to an aggregate of 1,000,000 shares, as an inducement to become an employee of the Company or any of its subsidiaries. As of December 31, 2025, 700,233 shares remain available for future issuance under the Insmed Incorporated 2025 Inducement Plan.
On May 15, 2018, the 2018 Employee Stock Purchase Plan was approved by shareholders at the Company's 2018 Annual Meeting of Shareholders. The ESPP allows eligible employees to acquire an ownership interest in the Company by purchasing common stock, at a discount, through payroll deductions. As of December 31, 2025, 4,359,032 shares remain available for future issuance under the ESPP. The ESPP is compensatory under GAAP and the Company recorded stock-based compensation expense o f $ 4.5 million, $ 3.3  million and $ 1.9  million for the years ended December 31, 2025, 2024 and 2023, respectively.
Stock Options —The Company calculates the fair value of stock options granted using the Black-Scholes valuation model. The following table summarizes the grant date fair value and assumptions used in determining the fair value of all stock options granted, including grants of inducement options, during the years ended December 31, 2025, 2024 and 2023.
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2025 2024 2023
Volatility 61 % - 65 %
61 % - 69 %
62 % - 70 %

Risk-free interest rate 3.59 % - 4.45 %
3.51 % - 4.64 %
3.36 % - 4.72 %

Dividend yield 0.0 % 0.0 % 0.0 %
Expected option term (in years) 5.89 6.11 6.05
Weighted average fair value of stock options granted $ 42.52 $ 20.11 $ 13.12

The volatility factor was based on the Company’s historical volatility during the expected option term. The Company accounts for forfeitures as they occur.
From time to time, the Company has granted performance-conditioned options to certain of its employees. Vesting of these options is subject to the Company achieving certain performance criteria established at the date of grant and the grantees fulfilling a service condition (continued employment). As of December 31, 2025 and December 31, 2024 , the Company had performance-conditioned options covering 114,780 shares outstanding. As of December 31, 2025 and December 31, 2024, the performance conditions are not probable and therefore no stock-based compensation was recorded in the consolidated statements of comprehensive loss .
The following table summarizes stock option activity for stock options granted for the year ended December 31, 2025 as follows:

  Number of
Shares Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life in Years
Aggregate
Intrinsic
Value
(in '000)

Options outstanding at December 31, 2024 21,927,128   $ 23.89  

Granted 1,361,710   $ 68.55  
Exercised ( 5,597,272 ) $ 22.20  
Forfeited and expired ( 315,985 ) $ 36.58  
Options outstanding at December 31, 2025 17,375,581   $ 27.82   6.60 $ 2,540,642  
Exercisable at December 31, 2025 9,976,481   $ 22.75   5.62 $ 1,509,208  

The total intrinsic value of stock options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 534.9 million, $ 173.4 million and $ 6.0 million, respectively.
As of December 31, 2025, there was $ 132.3 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of 1.9 years.
Restricted Stock Units —The Company may grant RSUs to employees and non-employee directors. Each RSU represents a right to receive one share of the Company's common stock upon the completion of a specific period of continued service.
RSU awards granted are valued at the market price of the Company's common stock on the date of grant. The Company recognizes non-cash compensation expense for the fair values of RSUs on a straight-line basis over the requisite service period of the awards.
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The following table summarizes RSU awards granted during the year ended December 31, 2025:

  Number of
RSUs
Weighted
Average
Grant Price

Outstanding at December 31, 2024 3,320,341   $ 23.67  
Granted 1,896,360   $ 72.62  
Released ( 1,183,350 ) $ 23.59  
Forfeited ( 144,121 ) $ 38.28  
Outstanding at December 31, 2025 3,889,230   $ 46.96  

The total grant-date fair value of RSU awards vested during the years ended December 31, 2025, 2024 and 2023 was $ 27.9 million, $ 19.6 million, and $ 13.1 million, respectively.
As of December 31, 2025, there was $ 140.7 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted average period of 2.4 years.
Performance Stock Units — In December 2025, the Company granted 91,877 PSUs (the 2025 PSUs) to certain of its employees . The 2025 PSUs are subject to a performance condition and a service condition. The performance condition is the number of INDs cleared by the FDA through December 31, 2028. The service condition is continuous employment with the Company through February 1, 2029. The potential payout of the award ranges from 0 % to 200 % of the target, dependent on the number of INDs cleared through December 31, 2028. The Company will begin recognizing compensation cost on the date that performance condition becomes probable, with an initial recording of the cumulative expense that would have been recognized if the PSU expense had been recognized on a straight-line basis since the date of grant. The remai ning unrecognized compensation cost will then be expensed prospectively on a straight-line basis over the remaining service period. Any forfeitures of unvested awards that occur after compensation cost recognition commences will result in the cumulative reversal of expense in the period in which the forfeiture occurs. A s of December 31, 2025 , no performance condition was probable and therefore no stock-based compensation was recorded in the consolidated statements of comprehensive loss. As of December 31, 2025 , there was an unrecognized expense related to the 2025 PSUs of $ 18.1 million , which assumes a 100 % payout.
In January 2022, the Company issued 271,612 PSUs (the 2022 PSUs). The 2022 PSUs were subject to two performance conditions based on brensocatib milestones, both of which had been achieved as of March 31, 2025, and a service condition, which was three years of continued employment. The Company achieved the first performance condition by issuing a press release announcing certain topline results from the ASPEN trial by June 30, 2024. The Company achieved the second performance condition in February 2025 upon the FDA's notification that the new drug application had been accepted for brensocatib. During the second quarter of 2024, the Company's total shareholder return was compared to the Company's Peer Group and the payout of the awards was determined to be 250 % of the target. During the year ended December 31, 2025, 660,466 shares were issued upon vesting of the 2022 PSUs and $ 10.3  million of stock-based compensation expense was recognized.
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The following table summarizes the aggregate stock-based compensation expense recorded in the consolidated statements of comprehensive loss related to stock options, RSUs, PSUs and ESPP during the years ended December 31, 2025, 2024 and 2023 (in thousands):

Years Ended December 31,
2025 2024 2023
Research and development expenses $ 70,046   $ 47,674   $ 35,880  
Selling, general and administrative expenses 82,664   49,161   38,898  
Total stock-based compensation expense $ 152,710   $ 96,835   $ 74,778  

There was no stock-based compensation expense recorded in the consolidated statements of comprehensive loss related to the 2022 PSUs during the years ended December 31, 2024 and 2023, as the performance conditions associated with the 2022 PSU awards were not probable as of these dates.

14. Income Taxes
For the years ended December 31, 2025, 2024 and 2023, the Company recorded a provision for income taxes of $ 5.0 million, $ 3.7 million and $ 2.6 million, respectively.
The Company's loss before income taxes in the US and globally was as follows (in thousands):

  Years Ended December 31,
2025 2024 2023
US $ ( 1,118,491 ) $ ( 814,531 ) $ ( 666,181 )
Foreign ( 153,258 ) ( 95,534 ) ( 80,831 )
$ ( 1,271,749 ) $ ( 910,065 ) $ ( 747,012 )

The Company's provision for income taxes consisted of the following (in thousands):

  Years Ended December 31,
  2025 2024 2023
Current:      
  Federal $ —   $ —   $ —  
  State 577   356   378  
  Foreign 4,476   3,380   2,231  
  Total current provision 5,053   3,736   2,609  
Deferred:      
  Federal —   —   ( 13 )
  State ( 27 ) ( 29 ) ( 41 )
  Foreign —   —   —  
  Total deferred benefit ( 27 ) ( 29 ) ( 54 )
Provision for income taxes $ 5,026   $ 3,707   $ 2,555  

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14. Income Taxes (Continued)

The reconciliation between the federal statutory tax rate and the Company's effective tax rate, after the retrospective adoption of ASU 2023-09, is as follows (in thousands):

  Years Ended December 31,
  2025 2024 2023
$ % $ % $ %
Statutory federal taxes and tax rate $ ( 267,067 ) 21.0   % $ ( 191,114 ) 21.0   % $ ( 156,873 ) 21.0   %
State and local income taxes, net of federal income tax effect (1)
552   —   % 321   —   % 338   —   %
Foreign tax effects
Switzerland
Changes in valuation allowance 12,746   ( 1.0 ) % 9,056   ( 1.0 ) % 8,462   ( 1.1 ) %
Other 9,843   ( 0.8 ) % 7,955   ( 0.9 ) % 5,308   ( 0.7 ) %
Other foreign jurisdictions 14,071   ( 1.1 ) % 6,432   ( 0.7 ) % 4,813   ( 0.6 ) %
Effects of cross-border tax laws —   —   % —   —   % —   —   %
Tax credits
Research and development tax credits ( 38,872 ) 3.1   % ( 30,861 ) 3.4   % ( 22,330 ) 3.0   %
Changes in valuation allowances 271,336   ( 21.3 ) % 185,366   ( 20.4 ) % 131,040   ( 17.5 ) %
Nontaxable or nondeductible items
Stock-based compensation, net of nondeductible compensation ( 59,412 ) 4.7   % ( 12,574 ) 1.4   % 2,443   ( 0.3 ) %
Change in fair value of contingent consideration 52,919   ( 4.2 ) % 19,253   ( 2.1 ) % 6,026   ( 0.8 ) %
Asset acquisition —   —   % —   —   % 18,217   ( 2.4 ) %
Other 729   ( 0.1 ) % 309   —   % 865   ( 0.1 ) %
Changes in unrecognized tax benefits —   —   % —   —   % —   —   %
Effect of changes in tax laws or rates enacted in the current period —   —   % —   —   % —   —   %
Other adjustments 8,181   ( 0.6 ) % 9,564   ( 1.1 ) % 4,246   ( 0.6 ) %
Provision for income taxes and effective tax rate $ 5,026   ( 0.3 ) % $ 3,707   ( 0.4 ) % $ 2,555   ( 0.1 ) %

(1) The state that contributed to the majority (greater than 50 %) of the tax effect in this category was Texas.
The provisions recorded for the years ended December 31, 2025, 2024 and 2023 are primarily a result of the Company’s international subsidiaries that had taxable income during the periods and certain state taxes in the US which impose
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income tax on modified gross revenues. There was a full valuation allowance recorded against the Company’s deferred tax assets and therefore no tax benefit was recorded.
The amounts of cash paid for income taxes by the Company are as follows:

Years Ended December 31,
  2025 2024 2023
Federal $ —   $ —   $ —  
State
Texas 315   340   201  
Other state (1)
64   62   117  
Foreign
Japan 2,189   1,238   742  
Netherlands 1,034   267   474  
Germany —   300   214  
Italy —   197   —  
Switzerland —   —   110  
Other foreign (1)
539   95   97  
$ 4,141   $ 2,499   $ 1,955  

(1) In a period in which income taxes paid in a jurisdiction do not exceed 5% of total income taxes paid, the taxes paid to that jurisdiction are reported in other state or other foreign.
Deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities consist of the following:

As of December 31,
  2025 2024
Deferred tax assets:    
Net operating loss and other carryforwards $ 956,032   $ 672,735  
General business credits 267,818   217,859  
Capitalized R&D 167,487   178,021  
Stock-based compensation 30,852   30,701  
Other (1)
41,635   38,533  
Deferred tax assets 1,463,824   1,137,849  
Valuation allowance ( 1,456,726 ) ( 1,125,370 )
Deferred tax assets, net of valuation allowance $ 7,098   $ 12,479  
Deferred tax liabilities:    
Intangibles $ —   $ ( 5,581 )
Right-of-use assets ( 7,127 ) ( 6,953 )
Deferred tax liabilities $ ( 7,127 ) $ ( 12,534 )
  Net deferred tax liabilities $ ( 29 ) $ ( 55 )

(1) Prior period amounts have been reclassified for consistency with the current period presentation.
The deferred tax assets, net of valuation allowance, of $ 7.1 million and $ 12.5 million at December 31, 2025 and 2024, respectively, primarily consisted of net operating loss, tax credit carryforwards and capitalized R&D for income tax purposes. As required by the 2017 Tax Cuts and Jobs Act, effective January 1, 2022, and through the year ended December 31, 2024, the Company's research and development expenditures were capitalized, resulting in a deferred tax asset. As amended by the One
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Big Beautiful Bill Act (OBBBA), effective January 1, 2025, the Company’s current year US research and development expenditures are no longer required to be capitalized. Due to the Company's history of operating losses, the Company recorded a valuation allowance on its net deferred tax assets by increasing the valuation allowance by $ 331.4 million and $ 221.3 million in 2025 and 2024, respectively, as it was more likely than not that such tax benefits will not be realized.
At December 31, 2025, the Company had federal net operating loss (NOL) carryforwards for income tax purposes of approximately $ 3.3 billion and federal tax credit carryforwards of $ 270.1 million. Due to the limitation on NOLs as more fully discussed below, $ 3.1 billion of the NOLs are available to offset future taxable income, if any. The NOL carryovers and general business tax credits expire in various years beginning in 2026. For state tax purposes, the Company has approximately $ 2.1 billion of NOLs in various states available to offset against future taxable income and state tax credit carryforwards of $ 23.1 million, expiring in various years beginning in 2026. The Company has $ 301.1 million of non-trading loss carryforwards in Ireland and loss carryforwards in the UK and Switzerland of $ 95.7 million and $ 277.1 million, respectively. The loss carryforwards in Ireland and the UK carry forward indefinitely while the loss carryforward in Switzerland begins to expire in 2030. The Com pany has disallowed interest expense carryover of $ 47.7 million which carries forward indefinitely.
The Company completed an Internal Revenue Code Section 382 (Section 382) analysis in order to determine the amount of losses that are currently available for potential offset against future taxable income, if any. It was determined that the utilization of the Company's NOL and general business tax credit carryforwards generated in tax periods up to and including December 2010 were subject to substantial limitations under Section 382 due to ownership changes that occurred at various points from the Company's original organization through December 2010. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of shareholders that own, directly or indirectly, 5% or more of a corporation's stock, in the stock of a corporation by more than 50 percentage points over a testing period (usually 3 years). Since the Company's formation in 1999, it has raised capital through the issuance of common stock on several occasions which, combined with the purchasing shareholders' subsequent disposition of those shares, have resulted in multiple changes in ownership, as defined by Section 382. These ownership changes resulted in substantial limitations on the use of the Company's NOLs and general business tax credit carryforwards up to and including December 2010. The Company continues to track all of its NOLs and tax credit carryforwards but has provided a full valuation allowance to offset those amounts.
Law Changes
On July 4, 2025, H.R. 1 – OBBBA was signed into law. OBBBA provides for US tax law changes and modifications including effective beginning in 2025, the ability to deduct US based research and development expenditures, a more favorable interest expense limitation and the reinstatement of 100% bonus depreciation on qualified property. OBBBA also includes several changes to the US taxation of foreign activity, including changes to foreign tax credits, global intangible low-taxed income and foreign derived intangible income, among other things. Given the Company’s history of net operating losses, OBBBA did not have a significant impact on the Company’s financial statements.
The Organisation for Economic Co-operation and Development (OECD) recently published a framework to implement a global corporate minimum income tax rate of 15% on income arising in low-tax jurisdictions (Pillar Two). The Pillar Two proposed legislation is applicable to multinational corporations with global revenue exceeding €750 million for at least two years of the preceding four years. Over 140 countries have agreed in principle to implement Pillar Two and many have, or are in the process of, enacting related legislation. In January 2026, the OECD released a "side-by-side" package introducing new safe harbors and providing an exemption for US-based multinational companies from parts of the global minimum tax framework. The Pillar Two legislation is not anticipated to be effective for the Company until the Company’s annual global revenues have exceeded the €750 million threshold for at least two years of the preceding four years. The Company will continue to evaluate the potential consequences of Pillar Two on its longer-term financial position.
The financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If such unrecognized tax benefits were realized and not subject to valuation allowances, the Company would recognize a tax benefit of $ 24.7 million. The following table summarizes the gross amounts of unrecognized tax benefits (in thousands):
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2025 2024
Balance as of January 1, $ 19,014   $ 14,753  
Additions related to prior period tax positions —   —  
Additions related to current period tax positions 5,649   4,261  

Balance as of December 31, $ 24,663   $ 19,014  

The Company is subject to US federal and state income taxes and the statute of limitations for tax audit is open for the federal tax returns for the years ended 2022 and later, and is generally open for certain states for the years 2021 and later. The Company has incurred net operating losses since inception, except for the year ended December 31, 2009. Such loss carryforwards would be subject to audit in any tax year in which those losses are utilized, notwithstanding the year of origin.
The Company's policy is to recognize interest accrued related to unrecognized tax benefits and penalties in income tax expense. The Company has recorded no such expense. As of December 31, 2025 and 2024, the Company has recorded reserves for unrecognized income tax benefits of $ 24.7 million and $ 19.0 million, respectively. As any adjustment to the Company’s uncertain tax positions would not result in a cash tax liability, it has not recorded any accrued interest or penalties related to its uncertain tax positions. If any of these unrecognized tax benefits were released, there would be no impact to the Company's effective tax rate.

15. License and Other Agreements
In-License Agreements
PARI Pharma GmbH —In April 2008, the Company entered into a licensing agreement with PARI for use of the optimized Lamira Nebulizer System for delivery of ARIKAYCE in treating patients with NTM lung infections, CF and bronchiectasis. Under the licensing agreement, the Company has rights under several US and foreign issued patents and patent applications involving improvements to the optimized Lamira Nebulizer System, to exploit the system with ARIKAYCE for the treatment of such indications, but the Company cannot manufacture the nebulizers except as permitted under the commercialization agreement with PARI, which is described in further detail below. The Lamira Nebulizer System has been approved for use in the US (in combination with ARIKAYCE), the EU and Japan. Under the licensing agreement, the Company paid PARI an upfront license fee and certain milestone payments. Upon FDA acceptance of the Company's NDA and the subsequent FDA and EMA approval of ARIKAYCE, the Company paid PARI additional milestone payments of € 1.0 million, € 1.5 million and € 0.5 million, respectively. In October 2017, the Company exercised an option to buy-down the royalties that will be paid to PARI on ARIKAYCE net sales. As a result, PARI is entitled to receive royalty payments in the mid-single digits on the annual global net sales of ARIKAYCE, pursuant to the licensing agreement, subject to certain specified annual minimum royalties. See below for information related to the commercialization agreement with PARI.
Other Agreements
Adrestia Therapeutics Ltd. —In June 2023, the Company acquired all of the issued and outstanding share capital of Adrestia, a privately held, pre-clinical stage company. At the closing of the transaction, the Company issued an aggregate of 3,430,867 shares of the Company’s common stock to Adrestia’s former shareholders (collectively, the Adrestia shareholders). The closing share price on the date of the transaction was $ 21.10 , resulting in a purchase price of $ 72.4 million. The Adrestia shareholders may also become entitled to receive contingent payments up to an aggregate of $ 326.5 million in cash upon the achievement of certain development, regulatory and commercial milestone events, as well as royalty payments based upon a low single-digit percentage of net sales of certain products, both subject to the terms and conditions of the agreement. The Company recognized $ 76.5 million as IPR&D expense for the year ending December 31, 2023, after adjusting for working capital assumed in connection with the asset acquisition.
Vertuis Bio, Inc. —In January 2023, the Company acquired Vertuis, a privately held, pre-clinical stage company. At the closing of the transaction, the Company issued an aggregate of 500,000 shares of the Company’s common stock to Vertuis’ former stockholders and an individual who are entitled to receive a portion of the acquisition consideration (collectively, the Vertuis equityholders). The closing share price on the date of the transaction was $ 18.50 . In July 2024, the Company issued the Vertuis equityholders an additional $ 1.0  million of shares of the Company's common stock, or 14,773 shares of common stock, based on the share price on June 28, 2024. The Company is obligated to pay the Vertuis equityholders up to an aggregate of $ 23.0  million in cash upon the achievement of certain development and regulatory milestone events, and up to an aggregate of
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$ 63.8  million in cash upon the achievement of certain net sales-based milestone events, in each case, subject to certain reductions. The Company recognized $ 10.3 million as IPR&D expense for the year ending December 31, 2023.
PPD Development, L.P.— In April 2020, the Company entered into a master services agreement with PPD pursuant to which it retained PPD to perform clinical development services in connection with certain of its clinical research programs. The master services agreement has an initial term of five years . Either party may terminate (i) any project addendum under the master services agreement for any reason and without cause upon 30 days’ written notice, (ii) any project addendum in the event of the other party’s breach of the master services agreement or such project addendum upon 30 days’ written notice, provided that such breach is not cured within such 30 -day period, (iii) the master services agreement or any project addendum immediately upon the occurrence of an insolvency event with respect to the other party or (iv) any project addendum upon 30 days’ written notice if (a) the continuation of the services under such project addendum would post material ethical or safety risks to study participants, (b) any approval from a regulatory authority necessary to perform the applicable study is revoked, suspended or expires without renewal or (c) in the reasonable opinion of such party, continuation of the services provided under such project addendum would be in violation of applicable law. The Company entered into project addenda with PPD to perform clinical development services over several years for, but not limited to, its PALM-ILD and PAH studies and other trials involving brensocatib and TPIP.
Patheon UK Limited —In October 2017, the Company entered into certain agreements with Patheon related to the increase of its long-term production capacity for ARIKAYCE commercial inventory. The agreements provide for Patheon to manufacture and supply ARIKAYCE for its anticipated commercial needs. Under these agreements, the Company is required to deliver to Patheon the required raw materials, including active pharmaceutical ingredients, and certain fixed assets needed to manufacture ARIKAYCE. Patheon's supply obligations will commence once certain technology transfer and construction services are completed. The Company's manufacturing and supply agreement with Patheon will remain in effect for a fixed initial term, after which it will continue for successive renewal terms unless either party has given written notice of termination. The technology transfer agreement will expire when the parties agree that the technology transfer services have been completed. The agreements may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency. These early termination clauses may reduce the amounts due to the relevant parties.
AstraZeneca AB —In October 2016, the Company entered into a license agreement (AZ License Agreement) with AstraZeneca, a Swedish corporation. Pursuant to the terms of the AZ License Agreement, AstraZeneca granted the Company exclusive global rights for the purpose of developing and commercializing AZD7986 (renamed brensocatib). In consideration of the licenses and other rights granted by AstraZeneca, the Company made an upfront payment of $ 30.0 million. In December 2020, the Company incurred a $ 12.5 million milestone payment obligation upon the first dosing in a Phase 3 clinical trial of brensocat ib. In May 2024, u pon the Company's release of an official public statement that the Company intended to file an NDA, the Company incurred an additional $ 12.5 million milestone payment obligation. Upon regulatory approval by the FDA of an NDA, the Company paid AstraZeneca an additional $ 30.0 million. In November 2025, a $ 15.0 million milestone commitment became payable to AstraZeneca upon EC approval of BRINSUPRI. Subsequent to this milestone, the Company is also obligated to make an additional $ 15.0 million contingent payment upon the achievement of a regulatory filing milestone. If the Company elects to develop brensocatib for a second indication, the Company will be obligated to make an additional series of contingent milestone payments to AstraZeneca totaling up to $ 42.5 million, the first of which occurs at the initiation of a Phase 3 trial in the additional indication. The Company is not obligated to make milestone payments for additional indications. In addition, the Company will pay AstraZeneca tiered royalties ranging from high single-digit to mid-teens on net sales of any approved product based on brensocatib and one additional payment of $ 35.0 million upon the first achievement of $ 1.0 billion in annual net sales. The AZ License Agreement provided AstraZeneca with the option to negotiate a future agreement with the Company for commercialization of brensocatib in chronic obstructive pulmonary disease or asthma. In June 2024, the negotiation period following such exercise of the final option expired. No agreement was reached between the Company and AstraZeneca to permit AstraZeneca to further develop and, if approved, commercialize brensocatib in the indications of COPD or asthma. As a result, the Company retains full worldwide development and commercialization rights for brensocatib in all indications other than COPD or asthma and AstraZeneca has no further development or commercialization rights for brensocatib in COPD, asthma or any other indication.
PARI Pharma GmbH —In July 2014, the Company entered into the Commercialization Agreement for the manufacture and supply of the Device, which is an e-Flow ® nebulizer modified and optimized for use with ARIKAYCE. Under the Commercialization Agreement, PARI manufactures the Device except in the case of certain defined supply failures, when the Company will have the right to make the Device and have it made by third parties (but not certain third parties deemed under
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the Commercialization Agreement to compete with PARI). The Commercialization Agreement has an initial term of fifteen years from the first commercial sale of ARIKAYCE in October 2018. The term of the agreement may be extended by the Company for an additional five years by providing written notice to PARI at least one year prior to the expiration of the Initial Term. Notwithstanding the foregoing, the parties have certain rights and obligations under the agreement prior to the commencement of the Initial Term.
Resilience Biotechnologies Inc. (successor to Therapure Biopharma Inc.) —In February 2014, the Company entered into a contract manufacturing agreement with Therapure Biopharma Inc., which was assumed by Resilience for the manufacture of ARIKAYCE, on a non-exclusive basis, at a 200 kg scale. Pursuant to the agreement, the Company and Resilience collaborated to construct a production area for the manufacture of ARIKAYCE in Resilience's existing manufacturing facility in Canada. The agreement had an initial term of five years , which began in October 2018, and renews automatically for successive periods of two years each, unless terminated by either party by providing the required two years prior written notice to the other party. Notwithstanding the foregoing, the parties have rights and obligations under the agreement prior to the commencement of the initial term. Under the agreement, the Company is obligated to pay a minimum of $ 6.0 million, subject to inflation increases, for commercial ARIKAYCE batches produced and certain manufacturing activities each calendar year.
Patheon Inc. —In January 2024, the Company entered into certain agreements with Patheon Inc. related to the manufacture and supply of brensocatib by Patheon Inc. for the Company’s anticipated long-term commercial needs. Under these agreements, the Company is required to deliver to Patheon Inc. the active pharmaceutical ingredient needed to manufacture brensocatib. The master commercial manufacturing services agreement with Patheon Inc. will remain in effect for a fixed initial term, after which it will continue for successive renewal terms unless either the Company or Patheon Inc. has given written notice of termination. The agreements may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency. Patheon Inc.'s supply obligations are governed by individual product agreements entered into from time to time under the master commercial manufacturing services agreement. The product agreements specify, among other things, the term and pricing for Patheon Inc.’s s upply obligations.
Esteve Química, S.A —In September 2024, the Company entered into a commercial manufacturing and supply agreement with Esteve for the manufacture and supply of brensocatib's active pharmaceutical ingredient. The commercial manufacturing and supply agreement has an initial term of three years , after which it will continue for successive 12 -month renewal terms unless either the Company or Esteve has given written notice of termination. The agreement may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency, the discontinue of specified dosages or changes in the regulatory landscape. Esteve’s supply obligations are based on rolling forecasts of the Company’s anticipated demand for brensocatib.

16. Commitments and Contingencies
Commitments
In September 2018, the Company entered into a lease for its new corporate headquarters in Bridgewater, New Jersey. The initial lease term commenced in October 2019 and expires in September 2030. In July 2016, the Company signed an operating lease for laboratory space, also located in Bridgewater, for which the initial lease term was extended through December 2026. In July 2023, the Company signed an amendment to expand the laboratory space in Bridgewater until 2027. In January 2022, the Company entered into a lease for research activities in San Diego, California. The lease term commenced in February 2022 and expires in June 2032. In February 2023, the Company signed an agreement to lease warehouse space in San Diego through March 2029. Future minimum rental payments under the Bridgewater leases and San Diego leases are $ 14.6 million and $ 18.0 million, respectively.
Rent expense charged to operations was $ 13.6 million, $ 11.9 million and $ 9.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Rent expense is recorded on a straight-line basis over the term of the applicable leases.
In addition to rent, the Company has several firm purchase commitments, primarily related to the manufacturing of ARIKAYCE and annual minimum royalties on global net sales of ARIKAYCE. Future firm purchase commitments under these agreements, the last of which ends in 203 4, t otal $ 63.0 million. These amounts do not represent the Company's entire anticipated purchases in the future, but instead represent only purchases that are the subject of contractually obligated minimum
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purchases. The minimum commitments disclosed are determined based on non-cancelable minimum spend amounts or termination amounts. Additionally, the Company purchases products and services as needed with no firm commitment.
Legal Proceedings
From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

17. Retirement Plan
The Company has a 401(k) defined contribution plan for the benefit of most US employees and permits voluntary contributions by employees subject to IRS-imposed limitations. During the year ended December 31, 2025, the Company matched 100 % of eligible employee contributions on the first 5 % of employee compensation (up to the IRS maximum). During the years ended December 31, 2024 and 2023, the Company matched 100 % of eligible employee contributions on the first 4 % of employee compensation (up to the IRS maximum). Employer contributions for the year ended December 31, 2025, 2024 and 2023 were $ 12.8 million, $ 7.4 million and $ 5.5 million, respectively.

18. Acquisitions
Asset Acquisitions
INS1148
In December 2025, the Company acquired the global rights to O pSCF (renamed INS1148) from Opsidio. At the closing of the transaction, the Company owed an upfront payment of $ 40.0  million, subject to a holdback. The Opsidio shareholders may also become entitled to receive contingent payments up to an aggregate of $ 382  million in cash upon the achievement of certain development, regulatory and sales milestones, as well as earnout payments based upon a low to mid single-digit percentage of net sales of certain products, both subject to the terms and conditions of the agreement.
The Company evaluated the acquisition under ASC 805 and ASU 2017-01 and concluded that substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets and accounted for the transaction as an asset acquisition. The Company determined that the asset acquired did not have any future alternative use and, in accordance with ASC 730, Research and Development, expensed the assets within research and development in the consolidated statement of comprehensive loss as of the date of the acquisition. The Company recognized $ 40.0  million as IPR&D expense for the year ending December 31, 2025.

19. Segment Reporting
The Company manages its business activities on a consolidated basis and operates as a single operating segment. The Company derives its revenues from the development and commercialization of therapies for patients facing serious diseases. The accounting policies of the segment are the same as those described in Note 2 – Summary of Significant Accounting Policies .
The Company has a single management team that reports to the Chief Executive Officer, the chief operating decision maker (CODM), who comprehensively manages the entire business. When evaluating the Company’s financial performance, the CODM regularly reviews total revenues, total expenses, and expenses by function, and makes decisions using this information on a global basis. The CODM uses net loss, as reported in the consolidated statements of comprehensive loss, in evaluating the performance of the segment. Decisions regarding resource allocation are made primarily during the annual budget planning process and augmented as needed throughout the year. The measure of segment assets is reported on the balance sheet as total assets. The Company does not operate separate lines of business with respect to its products or product candidates. Accordingly, the Company has one reportable segment.
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Segment loss, including significant segment expenses, for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):

For the Years Ended December 31,
2025 2024 2023
Product revenues, net $ 606,423   $ 363,707   $ 305,208  
Less:
Cost of product revenues (excluding amortization of intangible assets) 122,938   85,742   65,573  
ARIKAYCE external R&D expenses 41,441   60,269   62,418  
Brensocatib external R&D expenses 96,516   98,569   108,556  
TPIP external R&D expenses 94,201   65,935   50,185  
INS1148 asset acquisition
40,000   —   —  
Other external R&D expenses 129,866   90,604   132,652  
R&D compensation and benefit-related expenses 249,203   194,907   140,861  
SG&A compensation and benefit-related expenses 248,498   168,498   117,926  
Other segment items (a)
563,927   374,947   295,211  
Depreciation 10,449   5,961   5,527  
Amortization of intangible assets 6,001   5,052   5,052  
Change in fair value of deferred and contingent consideration liabilities 251,993   91,682   28,697  
Investment income ( 60,656 ) ( 53,307 ) ( 42,132 )
Interest expense 83,795   84,913   81,694  
Provision for income taxes 5,026   3,707   2,555  
Segment net loss $ ( 1,276,775 ) $ ( 913,772 ) $ ( 749,567 )

(a) Other segment items include stock-based compensation, professional fees, and facility-related expenses.
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